Nature and Forms of Business Organizations

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Questions and Answers

Which of the following emphasizes that all human beings are inherently good and the world is good as well?

  • Taoism
  • Shintoism (correct)
  • Confucianism
  • Islam

What is the core value that Chinese businesses highly prioritize, according to Confucian business ethics?

  • Harmony and stakeholder needs (correct)
  • Individual profit maximization
  • Technological innovation and efficiency
  • Competition and market dominance

Which of the following religions believes that Allah is the creator of the universe and the source of both good and evil?

  • Taoism
  • Confucianism
  • Islam (correct)
  • Shintoism

What is the meaning of "Tao" in Taoism?

<p>The path or the way (C)</p> Signup and view all the answers

What is the primary focus of Shintoism?

<p>Observing rituals and Japanese practices (D)</p> Signup and view all the answers

What is the main principle underlying Islamic business ethics?

<p>Freedom, responsibility, and honesty (D)</p> Signup and view all the answers

Which of the following is NOT prohibited in Islamic business practices?

<p>Engaging in honest business activities (C)</p> Signup and view all the answers

Which of the following is NOT a key aspect of Confucianism's teachings?

<p>Emphasis on individual autonomy and freedom (B)</p> Signup and view all the answers

What is a key characteristic of a sole proprietorship that makes it the simplest to set up?

<p>It is owned and managed by one person, with no additional oversight. (B)</p> Signup and view all the answers

Which of the following best describes the risk that a sole proprietor faces?

<p>They face unlimited liability, where personal assets can be used to cover business debts. (A)</p> Signup and view all the answers

Which of these examples best represents a sole proprietorship?

<p>A small, independent bakery owned and operated by a single individual. (A)</p> Signup and view all the answers

What does it mean for a sole proprietor to have 'unlimited liability' for their business?

<p>They are personally obligated to pay all business debts, even using their personal assets. (B)</p> Signup and view all the answers

What is the primary defining characteristic of a sole proprietorship?

<p>It is owned and managed by a single individual who assumes all risks and responsibilities. (C)</p> Signup and view all the answers

Why might a small sari-sari store be classified as a sole proprietorship?

<p>It is typically owned and operated by a single individual. (B)</p> Signup and view all the answers

What is the primary benefit of a sole proprietorship compared to other organizational structures?

<p>It offers a simple, easy-to-manage structure with direct control for the owner. (C)</p> Signup and view all the answers

What is a significant disadvantage associated with sole proprietorships?

<p>The owner has unlimited liability, exposing their personal assets to business debts. (B)</p> Signup and view all the answers

Which of these traits is NOT considered a negative Filipino trait in the text, according to the provided information?

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

What is Amor Propio?

<p>A feeling of self-respect and personal worth. (C)</p> Signup and view all the answers

What is the Mañana Habit, as described in the text?

<p>The practice of procrastination and postponing tasks. (A)</p> Signup and view all the answers

How does Hiya, or shame, influence Filipino behavior?

<p>It motivates people to act in ways that maintain their reputation and avoid social disapproval. (B)</p> Signup and view all the answers

What is the main point the provided text makes regarding the “Mañana Habit” in the context of business?

<p>It can be detrimental to productivity and efficiency in the workplace. (C)</p> Signup and view all the answers

Which of these is NOT listed as a negative trait in the provided text?

<p>Honesty and Integrity (D)</p> Signup and view all the answers

How is Amor Propio viewed in the context of business?

<p>It is generally considered a negative trait, especially in service-oriented businesses. (B)</p> Signup and view all the answers

What is a double standard, as described in the provided text?

<p>The application of inconsistent principles to similar situations. (D)</p> Signup and view all the answers

What is the minimum number of members required to form a corporation?

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

What does the term "limited liability" imply in the context of a corporation?

<p>Shareholders' liability is limited to the amount of their investment in the corporation. (B)</p> Signup and view all the answers

Which of the following is NOT an advantage of forming a corporation?

<p>Ease of formation and management (C)</p> Signup and view all the answers

Which of the following is a characteristic of a corporation that distinguishes it from a partnership?

<p>It is created by operation of law. (B)</p> Signup and view all the answers

Why does a corporation enjoy the right of succession?

<p>The death or withdrawal of shareholders does not dissolve the corporation. (A)</p> Signup and view all the answers

How does a corporation acquire its powers and attributes?

<p>They are granted by the state through a process of incorporation. (D)</p> Signup and view all the answers

What is the minimum number of members required for a corporation, according to the provided text?

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

What is a key reason why minority shareholders in a corporation can be subservient to the wishes of the majority shareholders?

<p>The board of directors is elected by majority shareholders. (C)</p> Signup and view all the answers

What is the main reason for the separation of management and control in large corporations?

<p>The sheer size and complexity of large corporations necessitate this separation. (B)</p> Signup and view all the answers

Which of the following is a characteristic of a single proprietorship, according to the provided text?

<p>It is owned by a single person. (B)</p> Signup and view all the answers

What is the practice of what is morally and ethically right in the conduct of business called?

<p>Business Ethics (C)</p> Signup and view all the answers

What does the text suggest about managers and fulfilling their commitments?

<p>Managers should strive to keep their word and fulfill commitments, even if it is difficult. (D)</p> Signup and view all the answers

What is the macro level of ethics, according to the text?

<p>The ethical principles of business operations within a specific social and political system. (A)</p> Signup and view all the answers

Which of the following is NOT a principle of ethical business conduct mentioned in the text?

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

What is the purpose of creating a caring environment for employees?

<p>To foster a positive chain reaction among stakeholders, including customers. (D)</p> Signup and view all the answers

What is a potential ethical concern that businesses may face, as indicated in the text?

<p>Misleading consumers through false advertising. (C)</p> Signup and view all the answers

According to the provided content, which of these is NOT a core belief in Hinduism?

<p>The world is inherently materialistic and people should detach from possessions. (A)</p> Signup and view all the answers

What is the key reason provided as to why Hindu businesspeople should treat stakeholders with honesty and fairness?

<p>It is a fundamental principle of ethical conduct that aligns with Hindu spiritual principles. (C)</p> Signup and view all the answers

Which of the following statements accurately describes the core essence of the Buddhist perspective on business ethics?

<p>Businesses should strive to become wealthy but not allow wealth to control them. (B)</p> Signup and view all the answers

What is the concept of karma, as it pertains to the content provided, best understood as?

<p>The inevitable consequence of actions, influencing both this life and future rebirths. (A)</p> Signup and view all the answers

Based on the information provided, what is a key distinction between the origins of Hinduism and Buddhism?

<p>Hinduism has a specific founder while Buddhism does not. (B)</p> Signup and view all the answers

What is the significance of the practice of asceticism in Hinduism?

<p>It is primarily a way to purify the body and mind for future rebirths. (D)</p> Signup and view all the answers

What is the ultimate goal shared by both Hinduism and Buddhism?

<p>To attain enlightenment and escape the cycle of suffering. (A)</p> Signup and view all the answers

According to the provided content, what is a key characteristic of Islamic business ethics?

<p>It encourages businesses to operate in a way that promotes social justice and ethical conduct. (B)</p> Signup and view all the answers

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<h1>=</h1> <h1>=</h1> Signup and view all the answers

Flashcards

Reporting Ethical Concerns

Informing management about unethical practices in business, like poor quality ingredients.

Business Organization

How a business is structured, including its people and enterprise type.

Forms of Business Organizations

The types of business structures: sole proprietorship, partnership, corporation.

Sole Proprietorship

A business owned and managed by one person, who assumes all risks.

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Single Ownership

One person holds full ownership and responsibility of the business.

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No Sharing of Profit and Loss

The owner keeps all profits and has full control over business decisions.

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One Man’s Capital

The owner's assets like equipment and cash are the capital of the business.

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Unlimited Liability

A sole proprietor is personally liable for all business debts, risking personal assets.

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Artificial Being

A corporation exists as a legal entity distinct from its shareholders.

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Created by Operation of Law

A corporation must be legally formed through state authority, not just an agreement.

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Right of Succession

Corporations can continue existing beyond changes in ownership or death of shareholders.

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Centralized Management

A corporation's management is directed by a board of directors.

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Complicated Formation

Setting up a corporation involves complex legal processes and costs.

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Heavier Taxation

Corporations often face higher taxes compared to other business forms.

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Transfer of Shares

Ownership in a corporation can change without others' permission.

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Macro Level

Represents business operations bound by societal norms and virtues.

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Business Ethics

Practice of acting morally and ethically in business conduct.

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Loyalty in Management

Managers should prioritize company interests over personal interests.

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Fairness

Acting impartially in all business transactions.

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Respectfulness

Being courteous in all dealings, regardless of rank.

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Obeying the Law

All employees must follow rules and regulations set by management.

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False Claims in Advertising

Advertisements that mislead consumers with false promises.

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Commitment Fulfillment

Managers must keep their promises despite challenges in business.

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Bahala Na

A Filipino mindset affecting decision-making in business, especially in ethical dilemmas.

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Mañana Habit

Procrastination; delaying tasks that could be done today, rooted in Filipino time perception.

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Amor Propio

Self-love or self-respect; feeling of worth that influences behavior and decisions.

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Hiya

A Filipino term for shame that governs social behavior and personal reputation.

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Filipino Family Values

Core values of Filipinos emphasizing hospitality, resilience, and hard work.

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Bribery

Offering something of value to gain an unfair advantage, often illegal.

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Double Standards

Unequal application of rules or principles to similar situations, often unjust.

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Negative Filipino Traits

Unfavorable behaviors such as bribery and gossiping that disrupt ethical standards.

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Muhammad as Prophet

Muslims believe Muhammad is the last prophet of God.

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Islamic Moral Standards

Islam establishes moral standards based on love for God and humanity.

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Allah's Sovereignty

Allah is seen as the Almighty and creator, influencing good and evil.

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Islamic Ethics in Business

Business ethics in Islam stress freedom, responsibility, and honesty.

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Confucianism Overview

A philosophy from Confucius, emphasizing stability and the common good.

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Profit and Righteousness in Confucianism

Confucianism states profit should be earned righteously, prioritizing harmony.

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Taoism Principles

Taoism promotes harmony and inner peace by following the 'Tao' or path.

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Shintoism Overview

Shintoism, an ethnic religion of Japan, centers on rituals and reverence for nature.

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Origins of Hinduism

Hinduism is the oldest among major world religions, derived from 'Sindhu'.

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Nature of Hinduism

Hinduism lacks a single founder and unified belief system.

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Cycles in Hinduism

The universe and life undergo endless cycles of creation and rebirth.

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Karma in Hinduism

Hindus believe in karma where good actions lead to liberation.

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Hindu business ethics

Hindus view business positively and emphasize honesty with stakeholders.

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Buddhism overview

Buddhism began in India, focusing on karma, reincarnation, and nirvana.

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Buddhist business ethics

Buddhists dismiss materialism and prioritize the environment and animals.

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Islamic business ethics

Islamic practices began with Muhammad, influencing business conduct.

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Study Notes

Nature and Forms of Business Organizations

  • Businesses are a necessary part of modern life.
  • Business is defined as making, buying, or selling goods/services in exchange for money, work, or activity by a store, company, or factory.

Business Ethics

  • Business ethics is the practice of doing what is morally and ethically right in a workplace.
  • Top management should set and uphold ethical conduct.

Levels of Business Ethics

  • Macro Level: Business ethics bound by the virtues and norms of social systems.
  • Corporate Level: How a company interprets industry rules and standards.
  • Individual Level: The employee's own moral principles.

Business Organizations

  • Business organization refers to the structure of a commercial or industrial enterprise and its people.
  • Forms of business organization include sole proprietorship, partnership, and corporation.

Sole Proprietorship

  • Owned and managed by one person.
  • Simplest form of business in Philippines.
  • Owner assumes all risks.
  • Unlimited liability (owner's personal assets are at risk).
  • Easy to establish.
  • Limited access to capital.
  • Limited life of the business (ends with the owner).
  • Business is restricted to a certain size.

Partnership

  • Two or more owners.
  • Shares profits and losses jointly.
  • Simpler than a corporation.
  • Two or more owners.

Corporation

  • Has a separate legal personality from its owners.
  • Owners are shareholders with limited liability
  • Separate legal entity distinct from the owners; they have limited liability;
  • Easier to raise capital than sole proprietorships.

The Role of Business in Society

  • Businesses create wealth by efficiently utilizing resources and providing services.
  • Businesses meet people's needs through taxes, hospitals, schools, roads, etc.
  • Businesses must create a safe and peaceful environment.

Ethical and Unethical Behavior

  • Ethical Behavior: Honesty, integrity, keeping promises, loyalty, fairness, caring, respect, obedience to law, and excellence.
  • Unethical Behavior: Accounting manipulations, overbilling, misleading advertisements, making false claims, and customer service failures.

Classical Philosophies

  • Socrates: Socratic method, knowledge of self, morality, responsibility.
  • Plato: City-state classes (Rulers, Guardians, Workers).
  • Aristotle: Virtue ethics (excellence), good people, rationality, and sociability.

Belief Systems and Ethics

  • Judaism: Honesty, integrity, loyalty, respect for human dignity, and accountability.
  • Christianity: Importance of human person, social doctrine, and just compensation.
  • Hinduism: Ethics, business, reincarnation, and liberation (karma).
  • Buddhism: Law of karma, reincarnation, liberation (nirvana).
  • Islam: Guided by freedom, responsibility, honesty, and avoidance of gambling.
  • Confucianism: Social harmony, righteousness, stakeholders’ needs.
  • Shintoism: Good people, group effort, divine nature.

Filipino Value System

  • Utang na Loob: Debt of gratitude (meaningful obligations).
  • Filial Piety: Respect for parents, elders, and ancestors.
  • Padrino System: Patronage and favoritism in business.
  • Suki: Loyal customer relationships.
  • Bahala Na: Filipino fatalism, trusting fate.
  • Mañana Habit: Delaying tasks till tomorrow.
  • Amor Propio: Self-respect and personal pride.

Negative Filipino Traits

  • Bribery and corruption, double standards, disregarding rules, gossiping, ningas-cogon.

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