工商導論Chapter教學課件演示文稿

1、工商導論Chapter課件演示文稿Topics CoveredForms of Business OrganizationsThe Advantages and Disadvantages of Different Business OrganizationsObjectives of Business OrganizationsTypes of business formsForms of Business OrganizationsBusiness can be organized as three types: Sole Proprietorship Partnership Corpor

2、ationBusiness Organization Differs in terms of : Their Owners Liabilities The Life of the Entity The Ability to Raise Capital The TaxationSole ProprietorshipA business owned and controlled by one person. It is the simplest form of business organization to start and maintain. - It is not a corporatio

3、n. Small ventures can be owned and managed by a single individual such as restaurants, street grocery stores, florists, beauty saloons, drug stores etc.-The business has no existence apart from you, the owner. Its liabilities are your personal liabilities. You undertake the risks of the business for

4、 all assets owned, whether used in the business or personally owned. You include the income and expenses of the business on your own tax return. Sole ProprietorshipAdvantagesEase of Organization - simple to establish (a small fee, a few minutes and procedure) - freer in decision making (compared wit

5、h other business organizations, more freedom on management and operation) - easy to keep operational and financial secrecy (not necessarily report to shareholders or board)Sole ProprietorshipAdvantagesSubject to fewer government policy - Less tax burden (e.g. in the US the tax rates for sole proprie

6、torship are often half those for corporations) - Exclusive use of profits (being your own boss means being the boss of your own money)Sole ProprietorshipDisadvantagesUnlimited liability (the owner is personally responsible for all aspects of the business)Limited access to capital (lack of long perio

7、d relation with banks and less security guarantee mean inability to raise large amounts of moneyLimited managerial expertise (one field expert does not mean expert in every aspect of business, i.e. marketing, finance, HR, operation etc)Life of the business is limited to the life of the proprietorshi

8、p (the only way to transfer ownership of a sole proprietorship is to sell the entire business, otherwise, the life of the business ends when the sole proprietor dies)PartnershipDefinition: An association of two or more people to carry on as co-owners of a business for profit. - many professional bus

9、inesses, such as accounting and legal firms are partnerships.Types of partnership: - general partnerships (all the partners share the profits and losses of the business) - limited partnerships (the partners are not involved in the daily operations and are only responsible for losses up to the amount

10、 they contribute to the business).PartnershipFeatures:It can be created by an express agreement.The partners can be held responsible for the actions and business debts of the other partners.All the assets of the business are personally owned by the partners.Partners are not eligible for employment i

11、nsurance if the business fails-partners are not paid a salary but they can take money from the business through personal drawings. PartnershipAdvantagesEase of organizationfairly easy to establish, not expensive and complicated.Improved access to capital and credit compared with sole proprietorship.

12、Greater possibility for good management-a partnership allows two or more people to work together and bring different skills and resources to the business.Definite legal framework-a definite legal framework has developed for partnerships. Therefore, settling legal problems concerning partnerships is

13、relatively simpler than solving problems of other forms of business.Better prospects for growth-increased capital and credit, better management and a more definite legal framework stands a better chance to survive possible setbacks and has better prospects to expand and grow. PartnershipDisadvantage

14、sUnlimited personal liability- because the partnership is not considered to be separated from its owners, the general partners are personally responsible for liabilities of the partnership. If the business fails, the partners will be personally responsible to pay all of the debts and obligations of

15、the partnership. Moreover, because each partner is an agent for the business and for the other partners, each partner is personally responsible for the actions of the other partners.Difficult to transfer ownership-because a partnership is based on the individual partners, and it is not a separate le

16、gal entity, it is difficult to buy or sell a partnership interest. Buying or selling a partnership interest will involve rewriting the partnership agreement and determining exactly how the partnership will change.Internal conflicts- although the resolution of disagreements among partners is generall

17、y covered under a partnership agreement or case law, it usually is very difficult. Differences in opinion surely hurt the operation and well-being of the firm.Problem of continuity-if one of the partners dies, the partnership ends. This means that the remaining partners have to re-establish the part

18、nership.Case: Kings Brothers and MarkFor nearly four decades Kings Brothers and Mark, a general partnership has been a leader in industrial construction operating on an international scale. Now the two Kings brothers are planning to retire, but Mark is not, the brothers would remain general partners

19、, although they realize the risk they will take if they do so. Both brothers would like to find a way to retain a financial interest with a minimum of financial responsibility. Mark is agreeable to working out a feasible plan. There is evidence that several of the employees would like to become part

20、 owners of the business. As many as twenty employees at lower management levels might be interested in becoming part owners.Case: Kings Brothers and MarkQuestions:Can the existing partnership be enlarged without revising the partnership agreement?What would you recommend as a feasible solution to th

21、e problem?CorporationCorporations are legal entities separate from their owners. It is responsible for its own debts, assets and lawsuits.To form a corporation, at least three incorporators (shareholders, stockholders) are needed-the shares they hold represent ownership of the company.Almost all lar

22、ge and medium-sized businesses are organized as corporations, e.g. General Motors, Bank of China, Microsoft etc. They are backbones of modern economies.CorporationWhen a corporation is first established, its shares may all be held by a small group of investors. In this case the shares are not public

23、ly traded and the company is closely held. Eventually, when the firm grows and new shares are issued to raise additional capital, its shares will be widely traded. Such corporations are known as public companies.A corporation is a legal person, which means it is treated like a private person under t

24、he law. It can receive, own and transfer property, enter into contracts, sue and be sued.CorporationsAdvantagesLimited liability-the shareholders of the corporation cannot be held responsible for the debts and obligations of the corporation unless they provide a personal guarantee.Unlimited life-bec

25、ause a corporation is a separate legal entity, the corporation will continue to exist even if the shareholders die or leave the business, or if the ownership of the business changes.Easy to expand-through the issuance of shares, bonds, corporations may be able to access the money they will need for

26、expansion. In addition, using their relatively huge assets as collateral, corporations may be able to take out large loans from banks or other financial institutions. Separation of ownership and management and easy transfer of ownership-shareholders are not responsible for the daily management. Prof

27、essional managers in marketing, finance, production etc mean more efficient and effective management CorporationsDisadvantagesDouble taxation-because the corporation is a separate legal entity, it is taxed separately. Corporations pay tax on their profits and shareholders pay tax on any dividends th

28、at they received from the company.Start-up can be costly-the registration and set up fees for a corporation are higher than the set up fees for a sole proprietorship or a partnership. Incorporating a business is also a more complicated process than starting a sole proprietorship or partnership.Subje

29、ct to more government regulations-taxation, annual report requirements as well as maintaining proper corporate records.Lack of secrecy-upon the request of the shareholders and government, corporations must issue annual report on its financial position and release statements on important issues.Agenc

30、y problem-managers may not always act in the best interests of the owners, which arouse agency costs, the direct and indirect costs of ensuring that agents act in the best interest of principals.Forms of Business OrganizationsSole ProprietorshipsCorporationsPartnershipsLimited LiabilityCorporate tax

31、 on profits +Personal tax on dividends Unlimited LiabilityPersonal tax on profitsCorporationsThe Objectives of CorporationSurvival-there are circumstances where the overriding objective becomes the survival of the corporations. Severe economic or market shock may force managers to focus purely on sh

32、ort-term issues to ensure the continuance of the business. They end up paying little attention to long-term growth and return to owners.Avoid financial distress and bankruptcy-some managers may insist on avoidance of large risks which endanger the corporations future. The Objectives of CorporationAc

33、hieving a target market share-in some industrial sectors to achieve a high share of the market gives high rewards.Creating an ever-expanding empire- this is an objective which is rarely openly discussed, but it seems reasonable to propose that some managers drive a firm forward, via organic growth o

34、r mergers, because of a desire to run an ever-larger enterprise. The Objectives of CorporationMaximisation of profit and minimisation of cost-a much more acceptable objective.The Objectives of CorporationMaximisation of long-term shareholder wealth: corporations benefit their shareholders by providi

35、ng them with cash either by paying dividends or by reinvesting to increase future dividends. This cash gives shareholders the money to consume goods and services.Maximisation of shareholder wealth can be defined as maximisation of shareholder purchasing powerMaximisation of shareholder wealth means

36、maximising the flow of dividend through timeThe future dividend should be reflected in the share price. FranchisingFranchising is a licensing agreement, under which the franchisor grants the franchisee the right to sell or use the formers product, service or method in return for a royalty（特許權使用費）fro

37、m the latter. The franchisor also assists the franchisee in financing, selecting business site, organizing, training, purchasing, advertising and other management activities, e.g., McDonalds, KFC, Starbucks etc. FranchisingAdvantagesYour business is based on a proven idea. You can check how successf

38、ul other franchises are before committing yourself.You can use a recognized brand name and trade marks. You benefit from any advertising or promotion by the owner of the franchise - the franchisor.The franchisor gives you support - usually including training, help setting up the business, a manual t

39、elling you how to run the business and ongoing advice.FranchisingAdvantagesYou usually have exclusive rights in your territory. The franchisor wont sell any other franchises in the same region, though there will be competition from other businesses.Financing the business may be easier. Banks are som

40、etimes more likely to lend money to a franchise with a good reputation.Risk is reduced and is shared by the franchisor.You have an existing customer base and you do not have to invest time looking to set one up.Relationships with suppliers have already been established. FranchisingDisadvantagesCosts

41、 may be higher than you expect. As well as the initial costs of buying the franchise, you pay continuing royalties and you may have to agree to buy products from the franchisor. The franchise agreement usually includes restrictions on how you run the business. You might not be able to make changes to suit your local market. The franchisor might go out of business, or change the way they do things. FranchisingDisadvantagesOther franchisees could give the brand a bad reputation. You may find it difficult to sell your f