Business Organizations
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Business Organizations

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Business Organizations Presentation Transcript

  • 1. Business Organizations
  • 2. When I was your age……. In 1969……. New home $27,900 Cost of a stamp $0.06 Gal. of gas $0.35 Gal of milk $1.10 In 1979…… New home $71,800 Stamp $0.15 Gal. of gas $0.86 Gal. of milk $1.62 In 1989….. New home $148,800 Stamp $0.25 Gal. of gas $1.12 Gal. of milk $2.34 In 1999….. New home $195,800 Stamp $0.33 Gal. of gas $1.17 Gal. of milk $3.32
  • 3. Now……
    • New home $234,600
    • Stamp $0.42
    • Gal of Gas $1.93
    • Gal of Milk $3.82
  • 4.
    • Why would the man not want govt. regulation?
    • What is the artist’s attitude towards wall street?
    • Is govt. regulation good for business or bad? Why?
  • 5. Forms of Business Organization
    • What is sole proprietorship?
    • What are the advantages and disadvantages of the partnership?
    • Describe the structure and features of a corporation?
  • 6.  
  • 7. Proprietorships
    • Business owned by one person.
    • Most common form of business.
    • Advantages
      • Easy to start.
      • Easy management
      • Owner doesn’t have to share profits
      • Doesn’t have to pay separate taxes
      • Personal satisfaction
  • 8. Disadvantages of Proprietorship
    • Owner is personally responsible for all losses and debts.
    • Difficulty in raising financial capital
    • Size and efficiency
    • Limited experience
    • Hard to find good help
    • Limited lifespan
  • 9. Partnerships
    • Advantages
      • Easy to start
      • Easy to manage
      • Lack of special taxes on a partnership
      • Can attract more financial capital
      • Larger in size
      • Easy to attract top talent
    • Disadvantages
      • Each partner is responsible for the others.
      • Conflict-not everyone gets along with others.
  • 10. Corporations
    • Form of business organization recognized by law as a separate legal entity having all the rights of an individual.
    • Count for about 20% of the firms in the U.S.
    • Very formal and legal arrangement.
    • Has charter, stockholders, and usually a board that makes decisions.
  • 11. Stock
    • Common stock represents basic ownership in a corporation.
    • Preferred stock is a nonvoting share of the company. Receive dividends before common stockholders.
  • 12. Advantages and Disadvantages
    • Advantages
      • Ease of raising financial capital.
      • Directors can hire professional managers
      • Provides limited liability for the owner.
      • Unlimited life
    • Disadvantages
      • Charters are expensive
      • Shareholders have little say in how the company should be run.
      • Double taxation of profits
      • Subject to more govt. regulation
  • 13. Govt. Regulation
    • In theory, capitalism calls for less govt. intervention.
    • However, some regulation is necessary. Especially for businesses that control utilities such as gas, phone, power, etc.
    • Govts also play a part in attracting business.
  • 14.
    • What does the tourney bracket represent?
    • Why would the artist use the tourney bracket to describe the economic situation?
    • What is the artist trying to tell us about our economy?
  • 15. Business Growth and Expansion
    • How do businesses reinvest their profits to grow?
    • What are the reasons that cause firms to merge?
    • What are the two types of mergers?
  • 16. Growth
    • Companies grow by a number of ways.
    • Two major ways are reinvestment and mergers.
    • Mergers occur when two or more companies combine.
    • Reinvestment is where a company takes some of its revenue to upgrade technology, machinery, buy more property, etc.
  • 17. Reinvestment
    • A company finds its net income by subtracting wages, interest payments, depreciation from its revenue.
    • The company comes up with the bottom line by adding all non-cash charges with net income.
    • Now it takes this cash flow and can purchase upgrades or find a more efficient way to produce.
  • 18. Mergers
    • When a companies merge, one company has to give up a legal identity.
    • One reasons that mergers take place is the desire for growth and to be bigger.
    • Efficiency is another reason, the smaller company might have a management problem so they merger with a more efficient company.
    • Can you think of any mergers that have recently taken place?
  • 19. Types of Mergers
    • Horizontal- two or more firms produce the same type of product and join forces.
    • Vertical- companies purchase companies that produce supplemental goods or capital goods.
  • 20. Conglomerates vs. Multinationals
    • Conglomerates have at least four businesses that make unrelated products. This leads to diversification. Since the 1980’s many conglomerates have declined in the U.S.
    • Multinationals operate in a number of countries. This is a more common type of business. Some examples are UPS, Pepsi, Coca-Cola, etc.
  • 21.
    • What is this cartoon saying about our economy?
    • Do you think that fear is a factor in today’s economic world?
  • 22. Other Organizations
    • What is a non-profit organization?
    • What role does government play in our economy?
    • What is a Co-op?
    • How do labor unions affect our economy?
  • 23. Non Profits
    • Are designed to reap some other kind of reward.
    • Some examples are schools, adoption agencies, welfare, churches, hospitals (yeah, right!), etc.
  • 24. Cooperatives
    • Voluntary association of people that carry out some kind of economic activity.
    • Consumer co-ops buy bulk amounts of a good on behalf of its members.
    • Service co-ops provide a service such as credit, insurance, etc.
    • Producer Co-ops sell their products to help promote its members.
  • 25. Labor Unions and other Organizations
    • Labor unions are organized to benefit its members in employment activities. They served their purpose in the past, but are far more driven by political agendas now.
    • Professional Associations
    • Business Associations
  • 26. Government’s role in economy
    • Direct
      • Produces goods/services to people
        • Ex. FDIC, TVA, Post Office
    • Indirect
      • Acts as a regulator to make sure that the economy operates efficiently.