FORMS OF BUSINESS ORGANIZATIONS Notes PDF

***[FORMS OF BUSINESS ORGANIZATIONS]*** **SOLE PROPRIETORSHIP** **Sole Proprietorship** are companies owned by one person who is usually hands-on in managing the day-to-day activities. - - **Advantages and Disadvantages of a Sole Proprietorship** - - **PARTNERSHIP** **Partnership**...

***[FORMS OF BUSINESS ORGANIZATIONS]*** **SOLE PROPRIETORSHIP** **Sole Proprietorship** are companies owned by one person who is usually hands-on in managing the day-to-day activities. - - **Advantages and Disadvantages of a Sole Proprietorship** - - **PARTNERSHIP** **Partnership** is a form of business organization where ownership of the business is shared by two or more members. - - **Advantages and Disadvantages of a Partnership** - - **CORPORATION** **Corporation** a private corporation can be established by a minimum offive and a maximum of fifteen owners who are called shareholders. The process by whicha corporation is legally established and recognized by the government is called incorporation. - - **Advantages and Disadvantages of a Corporation** - - **KNOW YOUR JARGON** Affiliate -- a company associate that holds a minority stake in the ownership of the parent company Liabilities -- debts and obligations owed by a company to creditors in the course of its business operations Retail **price** -- the selling price of goods to the consumers Securities and Exchange Commission (SEC) -- the government agency tasked with regulating and monitoring business organizations and corporations Subsidiary -- a company owned by another company or a parent company ***[FOREIGN BUSINESS ORGANIZATIONS]*** - - - - ***[Classification of Businesses]*** - - - **Lesson 7: The Ethical Environment of THE FIRM** **Ethics** - a set of principles that guide people's behavior and judgement. In business, ethical standards are created so that managers can uphold certain values by making meaningful and just decisions in their business activities and various transactions. **Business Ethics and Management** **Ethical Issue** -- refers to a concern on which an individual must decide based on several alternatives of what is morally right or wrong. In business, these issues play a crucial role in decision making. Any manager should be guided by a set of business ethics which are moral principles and standards that guide businesspeople in their transactions. **Perspectives on Ethics** **Universalism** -- states that all people should have certain values like honesty, respect and cooperation. Requires every person to enact these values in the same way under all circumstances and at all times. **Egoism** -- promotes the greatest good to oneself. Focused on the perspective that people ultimately act for self-advancement, no matter how good their intentions are. **Utilitarianism** -- This is the principle which focuses on the greatest good for the greatest number of people. The ultimate concern of managers is to make decisions that are beneficial to the greatest number of people. **Relativism** -- states that ethical behavior is based on a person's own and other relevant people's opinions and viewpoints. Acknowledges that there are different standards for each culture. **Virtue ethics** -- states that morality depends on the maturity of a person with good moral character. Based on society's moral standards, a moral person can interpret these as the application of personal virtues like faith, honesty, and others. Thus, what is right is based on the level of one's moral judgment. **Corporate Integrity** -Refers to that sense of "wholeness" created by the right relationship among members of the corporation. It has five dimensions: cultural, interpersonal, organizational, social, natural. **Cultural** - most impact on the internal relationships in the company. Culture is what unites employees, and cultural aspects such as language, rituals, behavioral patterns, and beliefs form the framework that determines the manner by which people relate with one another and engage with experiences and situations. Managers are encouraged to establish an open atmosphere that will facilitate communication among people with different cultures backgrounds. **Interpersonal** -- focuses on the relationships among people. Important relationships that impact the organization include family relations, civic life, and work relations. **Organizational** -- considers the main purposes of the business, particularly the economic and financial purposes, managerial purpose, and civic purpose. **Social** -- views the organization as actively engaging with society. The business must be seen not only as a business leader, but also as a significant social element in its community. **Natural** -- looks into how the organization relates to nature. Managers should consider how their business operations and activities impact the environment. **Corporate Social Responsibility** -Refers to business operations and activities that have the welfare of society in mind. A firm should aim to pursue long-term goals which will benefit society. Business operations, therefore, should be strategized to pursue economic goals while upholding the welfare of society. **Enhances company's image** **Social Obligation** -- refers to complying with legal and ethical standards to uphold social welfare. **Social Responsiveness** -- goes beyond prescribed standards and implements actions that aim to make an impact on society. It also means that the firms adapts to social conditions and engages in activities that will respond to pressing social needs. All companies strive to incorporate elements of social responsibility in their operations. In terms of **Economic responsibility** -- the company should produce goods and services with resasonable prices. The goods and services should also satisfy the needs of its customers, stakeholders, and other members of society even as they ensure sustainability and growth **Legal responsibility** -- organization should comply with local and international laws that apply to its business operations. **Ethical responsibility** - include establishing norms, standards, mores and practices that reflect fairness to the consumers, employees, shareholders, and the community. **Philanthropic responsibility** -- include the initiation of voluntary activities such as establishing corporate programs, donating to charitable institutions, and other similar charitable causes.