Business Organizations PDF

THE NATURE AND FORMS OF BUSINESS ORGANIZATIONS  OBJECTIVES: 1. Define business; 2. Explain why people engage in business; 3. Give the advantages and disadvantages of each form of business organizations; 4. Create their own business and logo; and 5. Classify the given characteristi...

THE NATURE AND FORMS OF BUSINESS ORGANIZATIONS  OBJECTIVES: 1. Define business; 2. Explain why people engage in business; 3. Give the advantages and disadvantages of each form of business organizations; 4. Create their own business and logo; and 5. Classify the given characteristics of organizations. BUSINESS It is an active process which is an integral part of human society. It is an organization where economic resources or inputs, such as materials and services, are brought together and distributed to deliver or to give consumers goods, products, or outputs. AIM OF BUSINESS? PROFIT It refers to the difference between the amount received and the amount spent on something purchased, produced, or manufactured.  MORAL POINT OF VIEW The business organizations should, in principle, help promote the common good and protect the rights and interests of individuals. THREE TYPES OF BUSINESS ORGANIZATIONS 1. Service businesses provide services to customers rather than products. Examples: computer repair, laundry services, tutoring, delivery services, wellness (such as gym or spa), etc. 2. Merchandising businesses sell to customers products they buy from other businesses. Examples: sari-sari stores, bookstores, department stores, groceries, supermarkets, etc. 3. Manufacturing businesses turn basic inputs into products which are sold to consumers. Examples: shoe manufacturing, baked goods, candle manufacturing, cosmetics manufacturing, wine production, etc. THE NATURE AND FORMS OF BUSINESS ORGANIZATIONS SOLE / SINGLE PROPRIETORSHIP - A sole proprietorship is the What form of Business Organization most basic and legal form of does the picture depict? business - It has only ONE OWNER - A proprietor owns and manages the business and responsible for all business transactions. Ex: Cellphone repair services, laundry shop and small-scale businesses selling and bakery.  WHAT ARE THE POSSIBLE ADVANTAGES AND DISADVANTAGES OF SOLE PROPRIETORSHIP? ADVANTAGES DISADVANTAGES A sole proprietor has  Proprietor has limited ability to complete control and raise capital decision-making power over the business  and unlimited personal liability for the obligations of the Generally has uncomplicated business transactions and business minimal regulatory requirements and cost With one only decisions can be arrived in less time and implemented faster  PARTNERSHIP  It is an association of two or What form of Business Organization does the picture depict? more persons who bind themselves to contribute money, property or industry to a common fund.  Governed by the Civil Code of the Philippines  Partners AGREE among different things (Manage business, contributions capital, profit/ losses, form and mode of settlement)  WHAT ARE THE POSSIBLE ADVANTAGES AND DISADVANTAGES OF PARTNERSHIP? ADVANTAGES DISADVANTAGES ▪ Easier to organize The life of a partnership is fragile compared corporation The liability of the partners ▪ can raise more capital for the debts of the business compared to sole is unlimited. proprietorships  T YPES OF PARTNERSHIP General partners -who invest in the partnership, participate in the day-to-day operations and are liable for debts and lawsuits of the partnership Limited partners -who invest in the partnership but who have no participation in day-to-day operations and who are not usually considered to have liability.  CORPORATION  A corporation is the most What form of Business Organization complex form of business does the picture depict? organization.  A corporation is a legal entity that is separate and distinct from its owners.  A corporation has standardized procedures for its creation, organization ,  Corporations are subject to greater scrutiny, regulations, control and supervision by the government  What are the possible advantages and disadvantages of CORPORATION? ADVANTAGES DISADVANTAGES ▪ The liability of the owners  Cost of forming and managing towards the creditors is  Complex process and requires limited to their investment in registration with the central the company. regulatory authority and ▪ Additional capital can be listing on a stock exchange raised easily through stock which required fulfillment of markets certain requirements related to the amount of capital, number of directors  Corporations are subject to a high income tax rate EXAMPLES OF CORPORATION  COOPERATIVE In recent years, a fourth form of business organizations was included in the list—the cooperative. Filipino legislators fully accepted the significance of this alternative form of business when it enacted the first law on cooperatives in the Philippines—R.A. 6938 also knows as “An Act to Ordain a Cooperative Code of the Philippines,” promulgated in 1990. This law was amended and at present, R.A. 9520, otherwise known as The Philippine Cooperative Code of 2008, governs the provisions on the nature, principles, operations, and other rules on cooperatives.  COOPERATIVE Cooperatives are defined by the International Cooperative Alliance’s Statement on the Cooperative Identity as “Autonomous associations of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through jointly owned and democratically controlled enterprises ” EXAMPLES OF COOPERATIVE  What are the possible advantages and disadvantages of COOPERATIVE? ADVANTAGES DISADVANTAGES  Lack of membership and  It is subject to less taxation. participation  and has more funding  Inefficient management- the opportunities.. management of a cooperative society is generally inefficient because the  It operates at reduced costs managing committee consists of part - and has improved products and time and inexperienced people. services. Qualified managers are not attracted  It is perpetual in existence. to a cooperative on account of its limited capacity to pay adequate  And it is run as a democratic remuneration. organization  Differences and factionalism among members.  ASSESSMENT: IDENTIFICATION 1. It is an independent entity distinct from its owners. CORPORATION 2. It is a business owned by one person only. SOLE PROPRIETORSHIP 3. It involves important operations like advertising, marketing, etc. BUSINESS 4. It is a business venture by two or more people. PARTNERSHIP 5. It is the amount received minus the amount spent. PROFIT  Business and socio-economic Development 1. It is undeniable that the business institutions is a mighty force for economic development. 2. The business institution is a significant factor in the improvement of our standard of living. 3. The different forms of business organizations are also the major players in creating employment. 4. The business institution is the main enhancer of the entrepreneurial mind- the mind for innovation and creativity.  Business and socio-economic Development 5. The business institution helps the government and other social agencies in responding to the basic needs of many Filipinos. 6. Business is also a powerful institution that can challenge and change the common practices of a particular society. 7. Powerful businesspersons in the Philippines hold influence not just in the economic sphere but also in the world of politics.