Transcript Business Organization

CHAPTER
5
SLIDE 1
CHAPTER
5
Economic Decisions
and Systems
5-1
Business in the U.S. Economy
5-2
Forms of Business Ownership
5-3
Organizational Structure for
Businesses
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Principles of Business, 8e
5-1
Business in the
U.S. Economy
Goal 1 Describe the changing status of
U.S. employment.
Goal 2 Discuss the role of business in the
U.S. economy.
Goal 3 Describe three major types of
businesses.
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SLIDE 2
CHAPTER
5
SLIDE 3
KEY TERMS
● contingent worker
● intermediary
● service business
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Principles of Business, 8e
CHAPTER
THE CHANGING
U.S. JOB MARKET
5
SLIDE 4
● Employment data
● 6% increase from 03-08, then a 775,000 loss
● Baby boomers start retirement in 2011
● Mini-boom of young workers  avg. working
age will decrease
● More non-whites in work force (currently 32%)
● 1960’s: 35% of women worked; doubled by
2000; now makeup almost half work force
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Principles of Business, 8e
CHAPTER
THE CHANGING
U.S. JOB MARKET
5
(continued)
● Pressures on Employees
● Downsizing  people work harder; more hours
● People need second jobs
● More education required
● Not enough time with family
● People forced to take contingent work
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Principles of Business, 8e
CHAPTER
5
SLIDE 6
Checkpoint 
● List several groups that will increase as
a percentage of the total U.S. workforce
in the next decade.
● Younger workers (16–24 years of age)
● Asian-, Hispanic-, African-American groups
● Women
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Principles of Business, 8e
CHAPTER
BUSINESS AND
THE ECONOMY
5
SLIDE 7
● Size of U.S. businesses
● Roles of business
● Impact on a community
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Principles of Business, 8e
CHAPTER
PERCENT OF BUSINESSES
BY EMPLOYEE SIZE
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5
SLIDE 8
Principles of Business, 8e
CHAPTER
5
SLIDE 9
ROLES OF BUSINESS
● Make and distribute products and services
● Provide employment
● Owners/investors profit
● Pay taxes  money comes back to us in
the form of government services
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Principles of Business, 8e
CHAPTER
5
SLIDE 10
IMPACT ON COMMUNITY
● New businesses bring new money
● Pay wages  employees spend $ in town
● Buy goods/services  businesses spend $
● Growing business attracts people from out
of town
● Increased housing, food, and other needs
● Pay taxes to support community services
● Larger businesses attract small businesses
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Principles of Business, 8e
CHAPTER
5
SLIDE 11
BUSINESS ACTIVITIES
● Generating ideas
● Starting ideas, ideas for improvement
● Research & development (R&D) departments
● Raising capital
● Starting capital, daily operation, expansion
● Comes from loans, investors, and/or profits
● Employing and training personnel
● Hire and train new workers
● Train for added procedures & responsibilities
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Principles of Business, 8e
CHAPTER
5
SLIDE 12
BUSINESS ACTIVITIES
● Buying goods and services
● Used in manufacturing, resold, operational
● Services needed to operate (delivery, adv., etc.)
● Marketing goods and services
● “Activities directed at providing the goods…”
● Not just trying to make the sale, but keeping
customer happy after the sale
● Maintaining business records
● Track performance, tax records, order info, etc.
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Principles of Business, 8e
CHAPTER
5
SLIDE 13
Checkpoint 
● What are the basic activities completed
by all businesses?
● Generating ideas
● Raising capital
● Employing and training personnel
● Buying goods and services
● Marketing goods and services
● Maintaining business records
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Principles of Business, 8e
CHAPTER
5
SLIDE 14
TYPES OF BUSINESSES
● Producers
● Extractor: takes resources from nature
● Farmer: cultivates land and raises livestock
● Manufacturer: convert materials into products
● Intermediaries
● Wholesalers, retailers, specialized
● Service businesses
● Activities consumed immediately
● Growing fast (60% of U.S. employment)
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Principles of Business, 8e
CHAPTER
5
SLIDE 15
Checkpoint 
● How does a manufacturer differ from an
extractor?
● An extractor takes natural resources, such
as oil or timber, for direct consumption or
for use in developing other products.
● A manufacturer takes resources supplied
by others and converts them into useable
products.
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Principles of Business, 8e
CHAPTER
5
SLIDE 16
Homework:
● 5-1 Assessment: 1-5
● Read Sec. 5-2
● Bring your phones tomorrow
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Principles of Business, 8e
5-2
Forms of Business
Ownership
Goal 1 Understand the three major forms of
business ownership.
Goal 2 Determine when each form of business
ownership is most appropriate.
Goal 3 Recognize other specialized business
ownership forms.
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SLIDE 17
CHAPTER
5
SLIDE 18
KEY TERMS
● proprietorship
● partnership
● corporation
● partnership agreement
● articles of incorporation
● franchise
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Principles of Business, 8e
CHAPTER
5
SLIDE 19
BUSINESS OWNERSHIP
● Proprietorship – owned by one person
● Partnership – two or more owners
● Corporation – many owners, called
stockholders
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Principles of Business, 8e
CHAPTER
5
SLIDE 20
Forms of Ownership
U.S. Business Comparison by Form of Ownership
Form of
Ownership
Proprietorship
Number of
Businesses
(2006)
Total Revenue
(Thousands)
Percent of All
Businesses
Percent of
Total Revenue
22,075,000
1,278,000,000
71.53%
4.06%
Corporation
5,841,000
26,070,000,000
18.93%
82.82%
Partnership
2,947,000
4,131,000,000
9.55%
13.12%
30,863,000
31,479,000,000
100.00%
100.00%
Total
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Principles of Business, 8e
CHAPTER
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5
Principles of Business, 8e
CHAPTER
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Principles of Business, 8e
CHAPTER
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Principles of Business, 8e
CHAPTER
5
SLIDE 24
Checkpoint 
● What are the differences between the
three main forms of business
ownership?
● Business forms differ in the ways in which
decision-making and investments are made
and to whom liabilities are distributed.
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Principles of Business, 8e
CHAPTER
CHOOSING A FORM OF
BUSINESS OWNERSHIP
5
SLIDE 25
● Choosing a proprietorship
● Easiest to start and end
● If fails, personal assets will be seized
● Choosing a partnership
● More capital to invest, more skills
● Must have partnership agreement
● Choosing a corporation
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Principles of Business, 8e
CHAPTER
5
CORPORATE FACTOIDS
● Popular form of business for large companies
● A corp. is treated like an individual
● Need to submit articles of incorporation to state
to become incorporated
● Corporate bylaws dictate operating procedures
● Board of directors makes major policy and
financial decisions; issues stock
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Principles of Business, 8e
CHAPTER
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5
Principles of Business, 8e
CHAPTER
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5
Principles of Business, 8e
CHAPTER
© 2012 Cengage Learning. All Rights Reserved.
5
Principles of Business, 8e
CHAPTER
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5
Principles of Business, 8e
CHAPTER
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5
Principles of Business, 8e
CHAPTER
5
SLIDE 32
Checkpoint 
● Which form of business ownership is the
most complex and difficult to form?
● The corporation is more complex to begin
than other business forms.
● Forming a corporation requires much more
bureaucracy, is more subject to
government regulations, requires the
organization of a board, and must have
clearly defined bylaws.
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Principles of Business, 8e
CHAPTER
OTHER FORMS
OF OWNERSHIP
5
SLIDE 33
● Specialized partnerships and corporations
●
●
●
●
●
Limited liability partnership
Joint venture
S corporation
Limited liability company
Nonprofit corporation
● Cooperatives: group of people combining for
efficiency
● Franchises: have permission to operate a
business a certain way
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Principles of Business, 8e
CHAPTER
© 2012 Cengage Learning. All Rights Reserved.
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Principles of Business, 8e
CHAPTER
© 2012 Cengage Learning. All Rights Reserved.
5
Principles of Business, 8e
CHAPTER
© 2012 Cengage Learning. All Rights Reserved.
5
Principles of Business, 8e
CHAPTER
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5
Principles of Business, 8e
CHAPTER
Poll: What are the other specialized forms of ...
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5
Principles of Business, 8e
CHAPTER
5
SLIDE 39
Checkpoint 
● What are the other specialized forms of
business ownership?
● Limited liability partnership
● Joint venture
● S corporation
● Limited liability company (LLC)
● Nonprofit corporation
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Principles of Business, 8e
CHAPTER
5
SLIDE 40
Homework:
● 5-2 Assessment: 1-5 (#5 doesn’t have to
be a memo)
● Read Sec. 5-3
© 2012 Cengage Learning. All Rights Reserved.
Principles of Business, 8e
5-3
Organizational
Structure
for Businesses
Goal 1 Understand important principles in
designing an effective organization.
Goal 2 Compare alternative organizational
structures for businesses.
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SLIDE 41
CHAPTER
5
SLIDE 42
KEY TERMS
● mission statement
● goal
● policies
● procedures
● organization chart
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Principles of Business, 8e
CHAPTER
DESIGNING AN EFFECTIVE
BUSINESS ORGANIZATION
5
SLIDE 43
● Setting direction
● Mission statement vs. goal
● Policies vs. procedures
● Principles of effective organization
● Responsibility, authority, and accountability
● Unity of command
● Span of control
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Principles of Business, 8e
CHAPTER
5
SLIDE 44
Checkpoint 
● What is the difference between a
mission statement and a goal?
● A mission statement states the purpose of
existence for a business and what it hopes
to achieve.
● A goal is a more specific statement of what
a business expects to achieve and may be
used to measure a business’ success.
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Principles of Business, 8e
CHAPTER
TYPES OF ORGANIZATIONAL
STRUCTURES
5
SLIDE 45
● Functional organization structure
● More traditional; top-down oriented
● Focus on main business functions
● Problems?
● Matrix organizational structure
● Newer type of structure; more horizontal
● More collaborating to get specific projects done
● Needs clear direction though
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Principles of Business, 8e
CHAPTER
BUSINESS ORGANIZATION
CHART
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5
SLIDE 46
Principles of Business, 8e
CHAPTER
5
SLIDE 47
Checkpoint 
● What problems can result from the use of a
functional organizational structure?
● Employees in a functional organizational structure
may tend to lose sight of overall corporate goals.
● Workers tend to be limited to specific duties and
may not see their relationship to the organization
as a whole.
● This can result in lack of interest and motivation
over time.
© 2012 Cengage Learning. All Rights Reserved.
Principles of Business, 8e