X100_Chapter_5_Organization_Options_SPR_11_Handout - X100...

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Unformatted text preview: X100 Chapter 5 The Options for Organizing a Business CEO of the Day. I have a thought to ponder! ponder! Who is ________, ________ a person who is in a country with a high standard of living but the standard of living is ____ ___________ ________ ____ or someone in a less developed country whose standard of living is _______ _______? ______ _____ _______ ______ Mad!!! Mad!!! According to Benjamin M Friedman an Benjamin economics professor at Harvard - the person economics who lives in a _______ country no matter how _______ the country …see things getting better vs. the ______ issues of things getting worse. issues Why is happiness important to the health of an economy? the Happiness…key to higher _____________. Simplicity Bill Jensen Confusion costs more than you think…work complexity’s economic drain…$___to ___ Billion…stress economic drain… ___ $200 billion. $200 stop _________ stop Most people want to do the right thing… them. them worst competitor is your organization’s is _____________. _____________. Clarity…your Clarity…your “Keep It ________” Keep ________ Business Ownership Comparing the Forms of Business Ownership Source: U.S. Bureau of the Census, Statistical Abstract of the U.S. 2003, (Washington, D.C.: U.S. Government Printing Office, 2004), p. 459. 5-8 Sales Profit % of Businesses Sole Prop. ___% ___% ___% Partnerships ___% ___% ___% Corporations ___% ___% ___% 16 What category focused on productivity? productivity? ________________ – Minus number of jobs and minus % of Jobs – Maintaining a 20 to 25% of GDP Goods producing both the % and numbers are #/% down! down! -#/-% +#/+% +#/-% Service Jobs Service Doctor Lawyer Lawyer Consultant McDonalds 15 _________Is the Most Rapid Growing Industry Sector Growing ___/_____% of all new jobs last 20 years Economies transition through ________. USA – Agriculture – Goods Producing – Technology/Service China – Agriculture – Goods Producing – Rural to City Population Shift – Increased Purchasing Power Increased Most Economies Start as ________________? ________________? Why? ______ is Fundamental Need! ______ is Forms of Business Ownership Various Forms of Business Ownership 5-13 Forms of Business Ownership Forms Sole Proprietorship: Sole Businesses owned and operated by _____ Businesses individual; the most ________ form of business ________ organization in the United States _____ 2 x more likely than women to start own business business 5-14 Forms of Business Ownership Forms Advantages of Sole Proprietorship: •Ease and cost of ___________ Ease ___________ Flexibility and control of the business •_____________ Disadvantages of Sole Proprietorship: •_________ liability •Limited sources of funds •Limited _________ Limited _________ •Lack of Qualified ______________ ______________ Lack 5-15 Forms of Business Ownership Forms Partnership: -- A form of business organization -defined by the Uniform Partnership Act as “an association of ___ __ _____ persons who carry on as co-owners of a business for profit” on 5-16 Forms of Business Ownership Forms General Partnership -- A partnership that General involves a complete sharing in both the ____________ and the _______ of the business. ____________ _______ Limited Partnership -- A business organization Limited that has at least _____ general partner, who that assumes unlimited liability, and at least one ______ partner whose liability is limited to his ______ or her __________ in the business. in 5-17 Articles of Partnership Articles _____ documents that set forth the basic agreement _____ between partners. between Get it in ________! Get ________ 5-18 Forms of Business Ownership Forms Corporations -- Legal ________ - whose assets Corporations ________ and liabilities are __________ from its owners. __________ Typically _______ by _____ individuals and/or Typically _______ organizations who own _____ of the business – _____ stock (__________ or ____________) stock ____________ 5-19 Corporations – Stock Terms Corporations Stock – _______ of a corporation that may be _______ ________ or ______. ________ ______. Dividends – _______ of a corporation that are _______ _________ in the form of payments to stockholders. stockholders 5-20 Corporations Corporations A corporation is created (____________) under under the laws of a ______ in which it incorporates. ______ The individuals creating the corporation are called ______________. called ______________ In what state are 58% of all corporations chartered? ___________ Articles of Incorporation -- Legal documents Articles filed with basic information about the business with the appropriate state office (often the _________ __ __________). _________ 5-21 Corporations Types of Corporations: •Private corporation •Public corporation •Non-profit corporation 5-22 Corporations Corporations Private corporation – a corporation whose ________are Private corporation are normally owned by just _____ or a _____ people who are _____ closely involved in __________ the business…to buy shares closely must approach __________. __________. . Public Corporation – a corporation whose stock ________ Public may buy, sell, or trade…traded on a ______ _______…buy ______ …buy and sell on the _____ market. _____ Non-profit corporation – focuses on providing a service Non-profit focuses rather than earning a _______…______ are reward for _______ effort. effort 5-23 Corporations Corporations Initial Public Offering (IPO) – A private Initial corporation who wishes to go “_____” to corporation to raise additional _____ and expand. The _____ IPO is selling a corporation’s ______ on ______ public markets for the _____ time…sold by public ____________ banks...sell mostly to banks or others they want to reward for something…individuals do not buy IPO’s unless the investment bank wants to ______ _____. ______ 5-24 Corporations Corporations Elements of a Corporation •Board of directors •Preferred stock •Common stock 5-25 Corporations Corporations Board of Directors – a group of individuals elected by the Board ________ __________ to oversee the general operation of ________ the corporation who set the corporation’s _____-______ objectives. objectives. Inside Directors – individuals who serve on the board and Inside are ________ by the corporation (usually executives of the ________ corporation). corporation). Outside Directors – individuals who serve on the board who Outside are ____ _______ affiliated with the corporation (usually executives of other corporations). executives 5-26 Corporations Preferred stock – a special type of stock whose owners, though not generally having a ____in running the company, have a claim to _______ before _________ stockholders do…only get a ____-__________ dividend…preferred stock value remains the _____. Common Stock – stock whose owners have _____ rights in the corporation, ______ ___ _______ have to vote dividends & the amount per share…common stock market value _________…over time value fluctuation is where most _________ is accumulated. 5-27 Trends in Business Ownership Trends •Mergers •Acquisitions Merger – the __________ of two companies (usually corporations) to Merger __________ form a ______ company form company Acquisition – the _______ of one company by another, usually by Acquisition of ______ its stock and/or assuming its debt…Pay _____or ________. _____or 5-28 Types of Business Ownership Major Mergers and Acquisitions Worldwide Transaction in millions of U.S. dollars Ran k Yea r Acquirer Target Transactio n Value 1 200 0 AOL Time Warner 2 200 0 Glaxo Welcome SmithKline Beecham PLc $75,961 3 200 4 Royal Dutch Petroleum Shell Transport & Trading $74,559 4 200 6 AT&T BellSouth Corp $72,671 5 200 1 Comcast AT&T Broadband $72,041 $164,747 5-29 Other Types of Business Ownership Leveraged buyout (LBO) – a purchase in which a group of investors borrows money from banks and other institutions to acquire a company (or a division of one) using the _____ of the __________ company to ____________ repayment of the loan. 5-30 ...
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