BESR Week 1 Forms of Business Organization and Business and Socio-Economic Development

Forms of Business Organization and Business and Socio-Economic Development

1. BUSINESS ETHICS & SOCIAL RESPONSIBILITY Forms of Business Organizations & Business and Socio-Economic Development (July 31, 2024)

2. BUSINESS ETHICS & SOCIAL RESPONSIBILITY Forms of Business Organizations & Business and Socio-Economic Development

3. What is a Business Organization? A business organization is the structured arrangement of individuals, resources, and activities orchestrated to achieve specific commercial objectives. It is the framework within which business activities are planned, coordinated, and executed.

4. What is a Business Organization? At its core, a business organization encompasses deploying human capital, financial resources, technology, and other assets systematically to generate goods or services aimed at satisfying customer needs or demands.

5. What is a Business Organization? The fundamental purpose of a business organization revolves around facilitating efficient operations, optimizing resource utilization, managing risks, and, ultimately, driving profitability and growth.

6. What is a Business Organization? It establishes hierarchies, roles, and responsibilities, clearly delineating tasks and fostering coordinated efforts toward common business objectives.

7. What is a Business Organization? Business organizations also establish policies, procedures, and systems to govern operations, ensure compliance with regulations, and adapt to evolving market dynamics.

8. What is a Business Organization? A business organization is the backbone of commercial enterprises, providing structure and direction to mobilize resources effectively and achieve sustainable success in the competitive marketplace.

9. Forms of Business Organizations Single or Sole Proprietorship Partnership Corporation Cooperative

10. 1. Sole Proprietorship Ownership: Sole proprietorships are businesses owned and operated by a single individual. The owner assumes all responsibilities and liabilities.

11. 1. Sole Proprietorship Easy Setup: They are the simplest form of business to establish, requiring minimal legal formalities and paperwork.

12. 1. Sole Proprietorship Profit Retention: The owner retains all profits generated by the business.

13. 1. Sole Proprietorship Unlimited Liability: The owner has unlimited personal liability for business debts and obligations, risking personal assets.

14. 1. Sole Proprietorship Taxation: Profits are taxed as the personal income of the owner.

15. 1. Sole Proprietorship ADVANTAGES Full Control: The owner maintains complete control over business operations and decisions. Ease of Decision-Making: Quick decision-making due to a lack of hierarchical structure.

16. 1. Sole Proprietorship ADVANTAGES Tax Benefits: Potential tax advantages as business losses can offset personal income. Flexibility: Easy to start, manage, and dissolve as per the owner's discretion.

17. 1. Sole Proprietorship DISADVANTAGES Unlimited Liability: The owner is liable for debts, lawsuits, and business obligations, risking personal assets. Limited Capital: Difficulty in raising substantial capital compared to larger business structures.

18. 1. Sole Proprietorship DISADVANTAGES Limited Expertise: Sole proprietors may lack expertise in various business aspects, impacting growth potential. Continuity: Business continuity may be uncertain due to its dependence on the owner's lifespan and health.

19. 2. Partnership Ownership: Partnerships involve two or more individuals sharing ownership, responsibilities, and profits. Types: General partnerships (GP) involve equal management and liability sharing, while limited partnerships (LP) offer limited liability to some partners.

20. 2. Partnership Agreement: Partnerships operate based on a partnership agreement detailing roles, responsibilities, profit-sharing, and decision-making. Taxation: Profits are passed through to partners' personal income tax.

21. 2. Partnership Advantages: Shared Responsibility: Partnerships benefit from shared responsibilities, skills, and expertise among partners. Complementary Skills: Partners can bring the business diverse skills, knowledge, and resources.

22. 2. Partnership Advantages: Capital Access: Easier access to capital due to contributions from multiple partners. Tax Benefits: Profits are taxed as personal income, offering tax flexibility.

23. 2. Partnership Disadvantages: Unlimited Liability (in General Partnerships): Partners share unlimited liability for business debts and obligations.

24. 2. Partnership Disadvantages: Conflict Risks: Disagreements and conflicts among partners can affect decision-making and business operations.

25. 2. Partnership Disadvantages: Shared Profits: Profits are divided among partners based on the partnership agreement, potentially leading to disputes.

26. 2. Partnership Disadvantages: Limited Life Span: The business's continuity may be affected by a partner's withdrawal, death, or bankruptcy.

27. 3. Corporation Ownership: Corporations are legal entities separate from their owners (shareholders), providing limited liability to shareholders. Structure: They have a complex management structure involving shareholders, directors, and officers.

28. 3. Corporation Limited Liability: Shareholders have limited liability, protecting personal assets from business debts and obligations. Taxation: Corporations face double taxation (profits taxed at the corporate level and dividends taxed at the individual shareholder level).

29. 3. Corporation Advantages: Limited Liability: Shareholders' personal assets are protected from business liabilities. Capital Raising: Easier access to capital by selling stocks and attracting investors.

30. 3. Corporation Advantages: Perpetual Existence: Continuity unaffected by changes in ownership or management. Credibility: Corporations may have increased credibility and prestige.

31. 3. Corporation Disadvantages: Double Taxation: Corporations face taxation at both corporate and individual levels, resulting in potential double taxation of profits.

32. 3. Corporation Disadvantages: Complexity and Formalities: Compliance with legal formalities, extensive paperwork, and regulatory requirements. Costs: Higher costs associated with formation, compliance, and operational expenses.

33. 3. Corporation Disadvantages: Lack of Control: Shareholders may have limited control due to the separation between ownership and management.

34. 4. Cooperative Ownership: Cooperatives are owned and democratically operated by their members, who share profits and benefits. Membership: Members can be customers, employees, or producers with shared goals and needs.

35. 4. Cooperative Democratic Control: One member, one vote principle for decision-making and governance. Profit Distribution: Profits are shared among members or reinvested in the cooperative.

36. 4. Cooperative Advantages: Shared Benefits: Members benefit from shared profits, services, or resources. Democratic Structure: Members have an equal say in decision-making regardless of investment or ownership.

37. 4. Cooperative Advantages: Risk Sharing: Members share risks and responsibilities, fostering community and support. Stability: Cooperatives may provide stability by catering to members' needs and local communities.

38. 4. Cooperative Disadvantages: Decision-Making Challenges: Democratic decision-making processes can be time-consuming and may lead to conflicts or inefficiencies.

39. 4. Cooperative Disadvantages: Capital Limitation: Limited access to capital due to members' contributions and potentially fewer external funding sources.

40. 4. Cooperative Disadvantages: Limited Growth: May face challenges in scaling operations due to the cooperative structure and shared governance.

41. 4. Cooperative Disadvantages: Potential Inequality: Disparities in contributions or participation among members could lead to conflicts or dissatisfaction.

42. Forms of Organization Each form of business organization presents distinct features, advantages, and disadvantages. The appropriate structure depends on factors like the business's nature, goals, risk tolerance, ownership preferences, and legal considerations. Entrepreneurs and business owners must carefully evaluate these factors to choose the most suitable form that aligns with their objectives and mitigates potential risks.

43. Business and Socio-Economic Development Business organizations provide jobs, career advancement, information, and training for employees. They do this in areas of low, middle, and high income.

44. Business and Socio-Economic Development This contributes to socioeconomic development by giving community members the opportunity to learn new skills, gain income, and improve their standard of living.

45. Do you have any question?

46. Group Activity

47. Scenario A giant foreign mining company starts taking the steps for a large-scale mining operation in your province. The local officials are excited because it means more taxes for the government. The local people are thrilled because it means more jobs. Your group which is very much involved in environmental watch is cautious.

48. Scenario You have heard of the serious effects to health, livelihood and the environment of the Marcopper Mining in the island of Marinduque. You are also aware that the ancestral land of the natives in your province will be included in the mining exploration. Your group heard as well that some religious sectors in the province are against the said explorations.

49. Task Your task now is to meet as a group and evaluate the situation carefully. You have to come up with a position paper that you will read in a consultation meeting where the governor of the province, other local officials, leaders from different sectors, and the general public are expected to attend.

50. Task Your paper intends to convince the audience that the presence of a large- scale mining in your province is not a good idea even if in the surface it has economic benefits.

51. Thank you for listening! See you on our next meeting!!