5-1 business in the u.s. economy 5-2 forms of business ownership

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e

C H A P T E R 5SLIDE 1

5-15-1 Business in the U.S. Economy

5-25-2 Forms of Business Ownership

5-35-3 Organizational Structure for Businesses

55C H A P T E R

Economic Decisions Economic Decisions and Systemsand Systems


C H A P T E R 5SLIDE 2BUSINESS AND

THE ECONOMY

● Size of U.S. businesses

● Roles of business

● Impact on a community


C H A P T E R 5SLIDE 3PERCENT OF BUSINESSES

BY EMPLOYEE SIZE



BUSINESS ACTIVITIES

● Generating ideas

● Raising capital

● Employing and training personnel

● Buying goods and services

● Marketing goods and services

● Maintaining business records



TYPES OF BUSINESSES

● Producers

● Intermediaries

● Service businesses



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.



BUSINESS OWNERSHIP

● Proprietorship

● Partnership

● Corporation



Forms of Ownership

U.S. Business Comparison by Form of Ownership

Form of Ownership

Number of Businesses

(2006)

Total Revenue (Thousands)

Percent of All Businesses

Percent of Total Revenue

Proprietorship 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%

Total 30,863,000 31,479,000,000 100.00% 100.00%


C H A P T E R 5SLIDE 9CHOOSING A FORM OF

BUSINESS OWNERSHIP

● Choosing a proprietorship

● Choosing a partnership

● Choosing a corporation



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.



Checkpoint

● What are the other specialized forms of business ownership?● Limited liability partnership● Joint venture● S corporation● Limited liability company (LLC)● Nonprofit corporation


C H A P T E R 5SLIDE 12DESIGNING AN EFFECTIVE

BUSINESS ORGANIZATION

● Setting direction

● Principles of effective organization● Responsibility, authority, and accountability● Unity of command● Span of control



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.


C H A P T E R 5SLIDE 14TYPES OF ORGANIZATIONAL

STRUCTURES

● Functional organization structure

● Matrix organizational structure


C H A P T E R 5SLIDE 15BUSINESS ORGANIZATION

CHART



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.

5-1 business in the u.s. economy 5-2 forms of business ownership

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