Forms of Business Organizations
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Questions and Answers

What does the Corporate Governance Manual include regarding board governance?

  • The financial statements of the organization
  • Annual reports of the organization's performance
  • Composition, qualifications, and disqualifications of board directors (correct)
  • Stakeholder engagement strategies

    • Why is accountability considered important in corporate governance?

  • It primarily focuses on enhancing profit margins
  • It plays a vital role in the prevention and detection of corruption (correct)
  • It ensures adherence to company dress codes
  • It emphasizes the importance of social activities

    • What risks does a civil society organization face without a proper accountability system?

  • Difficulty in developing community programs
  • Greater financial stability
  • Higher levels of employee satisfaction
  • Increased chances of mismanagement and rumors about abuse of power (correct)

    • What principle does Corporate Governance emphasize that relates to fairness?

    <p>Balancing interests in decision-making processes (C)</p> Signup and view all the answers

    What tool does the Governance Monitoring and Self-Assessment provide to the board?

    <p>A self-rating system to measure performance (D)</p> Signup and view all the answers

    To whom should accountability apply in an organization?

    <p>To all individuals responsible for their actions (A)</p> Signup and view all the answers

    What is a consequence of lacking proper accountability in an organization?

    <p>Loss of respect and legitimacy among stakeholders (A)</p> Signup and view all the answers

    In the context of business organizations, what does fairness involve?

    <p>Considering the interests involved in all decision-making (B)</p> Signup and view all the answers

    What is a sole proprietorship?

    <p>A business owned by one person (C)</p> Signup and view all the answers

    What is one advantage of a sole proprietorship?

    <p>Ease of startup compared to corporations (C)</p> Signup and view all the answers

    What is a primary disadvantage of a sole proprietorship?

    <p>The owner has unlimited liability for debts (B)</p> Signup and view all the answers

    How does tax filing differ for sole proprietorships compared to formal corporations?

    <p>Sole proprietorships do not need separate business tax filings (D)</p> Signup and view all the answers

    Which statement is true regarding the responsibilities of a sole proprietor?

    <p>They are responsible for managing daily operations (C)</p> Signup and view all the answers

    What characterizes the relationship between profit-making and the responsibilities of a business?

    <p>Profit-making involves addressing societal responsibilities as well (B)</p> Signup and view all the answers

    Which of the following is NOT a form of business organization mentioned?

    <p>Limited Liability Company (B)</p> Signup and view all the answers

    What is one characteristic that makes sole proprietorships attractive to small investors?

    <p>Relatively easy and inexpensive startup (C)</p> Signup and view all the answers

    What does the Clean Water Act primarily aim to achieve?

    <p>Protect bodies of water from pollution. (B)</p> Signup and view all the answers

    What is the purpose of the Environmental Compliance Certificate?

    <p>To certify compliance with environmental laws. (D)</p> Signup and view all the answers

    What is established by PD 1586?

    <p>An environmental impact statement system. (C)</p> Signup and view all the answers

    Which act created the Network-Information Network?

    <p>RA 8435: Agricultural and Fisheries Modernization Act of 1997. (C)</p> Signup and view all the answers

    What is required of enterprises engaged in agricultural ventures according to the Agricultural Laws?

    <p>They need knowledge of laws affecting their operations. (B)</p> Signup and view all the answers

    What is the primary role of the Management Association of the Philippines (MAP) concerning business ethics?

    <p>To conduct regular evaluations of business ethical practices. (C)</p> Signup and view all the answers

    Which of the following is NOT mentioned as a requirement under the Consumer Act or RA 7894?

    <p>Enforcement of international trade regulations. (D)</p> Signup and view all the answers

    What is one of the functions of the Philippine Food Chamber of Food Manufacturers Inc. (PFCFM)?

    <p>To encourage self-imposed moral responsibilities in manufacturing. (C)</p> Signup and view all the answers

    Which aspect of the responsibilities outlined in the Consumer Act is aimed at suppliers and traders?

    <p>Informing them of their rights and the penalties for noncompliance. (D)</p> Signup and view all the answers

    What must organizations implement according to the provided responsibilities?

    <p>Protection against unfair and unconscionable sales. (C)</p> Signup and view all the answers

    What type of business purchases finished goods to sell them at a markup?

    <p>Merchandising Business (B)</p> Signup and view all the answers

    Which of the following is an essential part of customer service perception?

    <p>Intangible value (B)</p> Signup and view all the answers

    Manufacturing businesses typically use which of the following to create finished goods?

    <p>Robots and machines (D)</p> Signup and view all the answers

    What do merchandising businesses predominantly sell?

    <p>Goods or merchandise (D)</p> Signup and view all the answers

    What is one role of business organizations in economic development?

    <p>Creating job opportunities (C)</p> Signup and view all the answers

    Which type of business might buy goods wholesaled to sell to the public?

    <p>Retail Business (D)</p> Signup and view all the answers

    Which combination best describes merchandising businesses?

    <p>A mix of buying and manufacturing goods (B)</p> Signup and view all the answers

    Which of the following accurately describes a manufacturing business?

    <p>Uses components and raw materials to make finished goods (D)</p> Signup and view all the answers

    What is the primary method through which managers acquire their skills?

    <p>Formal education followed by training and experience (C)</p> Signup and view all the answers

    Which skills are most crucial at lower levels of management?

    <p>Technical skills (D)</p> Signup and view all the answers

    What do human skills in the workplace foster?

    <p>Interpersonal trust and enthusiasm (C)</p> Signup and view all the answers

    Which of the following is NOT one of the reasons why businesses should act ethically?

    <p>Competitive advantage reasons (C)</p> Signup and view all the answers

    What characteristic is common in a manager with strong human skills?

    <p>Capacity to empathize with others (A)</p> Signup and view all the answers

    What type of skills does conceptual thinking belong to?

    <p>Conceptual skills (A)</p> Signup and view all the answers

    How does business ethics impact society as a whole?

    <p>It destroys relationships and threatens survival. (A)</p> Signup and view all the answers

    Which element is NOT a part of ethical business reasons?

    <p>Cultural traditions (C)</p> Signup and view all the answers

    Study Notes

    Forms of Business Organizations

    • A business is an entity that combines resources (materials and labor) to produce goods or services for customers.
    • The main goal of a business is often profit-making, but also includes societal welfare.
    • Three common forms are sole proprietorships, partnerships, and corporations.

    Sole Proprietorship

    • Owned by one person.
    • Person holds all business assets and makes all decisions.
    • Relatively easy to set up, with simple documentation requirements compared to other structures.
    • Owner is personally liable for business debts.
    • Lacks the complexities of a partnership or corporation.
    • Tax benefits are generally simpler; however, owner pays taxes on all business profits personally.
    • Decisions are made by the single owner.

    Partnership

    • Owned by two or more people.
    • Contributes money, property, or labor.
    • Profits or losses are shared according to agreement.
    • Owners are called partners.
    • Relatively easy and inexpensive to form.
    • Partners are personally liable for business debts.
    • The decision-making process can be more complex because there is more than one decision-maker.

    Corporation

    • Created by law, separate from its owners (stockholders).
    • Ownership is transferable through shares.
    • Owners (stockholders) are not directly responsible for business debts.
    • More complex to set up, with extensive documentation requirements compared to other structures.
    • Tax implications are more complex due to corporate tax.
    • More investors are often attracted to corporations due to ease of transferring ownership.
    • Decision-making is often spread throughout the board of directors and managers.

    Business Continuity

    • The responsibility of business decisions rests with the owner.
    • The business can be suspended if the owner is incapacitated, deceased, or wishes to conclude the business.
    • Transfer of the sole proprietorship happens as the owner dictates.

    Business Decision-Making

    • Sole Proprietorship: decisions are made by the owner.
    • Partnership: decisions are made by the partners, agreed upon beforehand.
    • Corporation: decisions are made by the board of directors.

    Business Ethics and Conduct

    • Ethics is the discipline of good and bad, morality, and duty, in business.
    • Business ethics are the principles of good conduct in business.
    • Mission statements outline a company's purpose, and vision assists in setting targets.
    • Principles are the moral rules or beliefs that guide a business.
    • Ethical practices include honesty, hard work, and good behavior
    • Unethical practices include misleading advertising, overbilling, and unfair treatment of employees.

    Business Organizations and Their Responsibilities

    • Business organizations play a vital role in economies, generating jobs and promoting development.
    • Codes of ethics and legal responsibilities guide corporations' conduct, which ensures adherence to societal standards and laws.

    Types of Business Organizations

    • Service involves providing activity (e.g., consulting, transportation)
    • Manufacturing involves using inputs (materials, labor) to create products.
    • Merchandising involves purchasing and selling goods.

    Corporate Governance

    • Corporate Governance is a set of procedures that ensures that the company acts in the interests of shareholders.
    • It outlines the framework for achieving a company's objectives while balancing the interests of stakeholders. Corporate Governance entails: Board Governance, Board Committees,Stockholders' Rights, Governance Monitoring and Self-Assessment.
    • Corporate governance, in business, is a system of rules, practices and processes by which a company is directed and controlled.
    • This framework outlines ethical standards for businesses to abide by and promote transparency.
    • Companies with good corporate governance create trust with stakeholders and investors, which in turn strengthens their image and enhances operations' effectiveness.

    Stakeholders

    • Stakeholders include investors, customers, suppliers, employees, and the community.
    • Each stakeholder group holds a unique interest in the business. They have an influence on the success and continuity of the corporation. Businesses and stakeholders have a two-way relationship.

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    2nd Sem Midterm Lessons - Forms of Business Organizations PDF

    Description

    This quiz explores the various types of business organizations, including sole proprietorships, partnerships, and corporations. Understand their characteristics, advantages, and disadvantages as well as the decision-making processes involved. Perfect for students learning about business structures.

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