1. 国际商务导论 Fundamentals of Business
Lecture 1:
Introduction
当代商务简介

2. What to cover today： The nature of business
Forms of business ownership
Franchising
Business mission and company profile
Exercises

3. What is business? company money (capital & products profit) (goods
& services)
people
What is
business?
market
communication
countries
&
cultures
conferences,
negotiations
& trips

4. 1. The nature of business Business is:
the exchange or trade for things people want or need
the production, distribution and sale of goods and services for a profit
a goal-directed behaviour aimed at getting and using productive resources to buy, make, trade, and sell goods and services that can be sold at a profit (Source: Jones, Introduction to Business: How Companies Create Value for People)

5. land
productive
resources
enterprise
capital
labor

6. 2. Forms of business ownership
Three basic legal (vs. organizational) forms of business ownership：
sole proprietorship (个人)独资企业
partnership 合伙企业
company 公司
Unlimited Liability Company 无限责任公司
Limited Liability Company (LLC) 有限责任公司
S corporation S型股份有限公司
C corporation C型股份有限公司
enterprise > company > corporation

7. 2.1 Factors to be weighed in decision-making
ease of formation
liability for business debts
control over the operation
management expertise available
financial resources available
taxation policies
continuity
legal capacity

8. 2.2 Sole proprietorship advantages & disadvantages
D4: lack of continuity
If the owner dies or becomes too ill to manage the business, there is no separate legal entity in existence with which the public, creditors, suppliers or employees can deal to ensure the continuity of the business.

9. 2.3 Partnership 2.3.1 Oral vs. written agreement
articles of partnership 合伙章程
names of the partners
name of the partnership
location of the partnership
purposes of the partnership
duration of the partnership
capital contributions by partners
rights and responsibilities of partners
allocation of profits and losses among partners
dissolution (破产清偿) procedures

10. 2.3.2 General partnership 普通合伙企业 vs. limited partnership 有限合伙企业
2.3.3 Advantages & disadvantages

11. 2.4 Company

12. publicly owned companies: established by the government, e.g. the U.S. Postal Service, big 4 banks in China, CNPC, Sinopec, CNOOC
quasi-publicly owned companies: established privately, but operated for public service and with high degree of government regulation and protection, e.g. private schools and hospitals
privately owned companies: established privately and operated for private interests; including the bulk of existing companies

13. profit private companies: established to carry out business for profit-making purposes
non-profit private companies: established for charitable or religious purposes

14. privately held profit private companies: LLC or S corp
privately held profit private companies: LLC or S corp.; do not publicly offer their stock; owned by one or a few shareholders who normally have family or other close ties and also manage the business
publicly held profit private companies: C corp. (also called LLC by share, public company, publicly traded company, public listed company); publicly offer and freely trade their shares on stock exchanges; owned by a number of unrelated shareholders who do not actively manage the company (passive investors, cf. limited partners); go public, IPO 首次公开募股

15. 2.4.1 C corporation
Proportion of Existing Businesses under Each Form of Ownership
Proportion of Business Revenue Generated by Each Form of Ownership

16. 2.4.1.1 Corporate structure and management
incorporators/shareholders
board of directors
president/GM/CEO/managing director
other officials
owners
managers

17. 2.4.1.2 Corporate charter & legal person
Corporate charter 公司章程: a document used to incorporate a business, and filed with the state government
The charter describes important aspects of the corporation, e.g. the name of the firm, the stock issued, and the firm’s operations
Bylaws 公司规章 are established to provide general guidelines for managing the firm

18. 2.4.1.3 Advantages & disadvantages
A4: continuous life (perpetual continuity)
Theoretically, a corporation has a perpetual existence; it continues until dissolved, merged, or terminated for other reasons.
D4: agency problem
High-level managers may make decisions that are in their best interests, at the expanse of shareholders.

19. 2.4.2 S corporation S 公司
for United States Federal income tax purposes, an S corporation is a corporation that makes a valid election to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code.
has 100 or fewer owners and satisfies other criteria
the owners have limited liability, which may be restricted by various rules
the earnings are distributed to the owners and taxed at the respective personal income tax rate of each owner

20. 2.4.3 Limited liability company (LLC)
not a corporation in nature
a hybrid business entity blending a corporation, a partnership, and even a sole proprietor
has all the favorable features of a typical general partnership, but also offers limited liability for the partners (members)
the primary characteristic an LLC shares with a corporation is limited liability, and the primary characteristic it shares with a partnership is the availability of pass-through income taxation.
has fewer restrictions on the number and type of owners and on the liability protection than S corporation

21. 3. Franchising 特许经营
budding period: the early 1900s, filling stations, car dealerships
growth period: since the mid-1960s, paralleling the enormous expansion of the fast food industry

22. Three basic types of franchising:
product franchising: licensing for the right to sell trademarked goods purchased from the franchiser and resold by the franchisee, e.g. car dealers, gasoline stations
manufacturing franchising: licensing for the right to produce and distribute products, using supplies purchased from the franchiser, e.g. soft-drink bottling plants
business-format franchising: licensing for the right to open a business using the franchiser’s name and format for doing business, e.g. fast food chains

23. Advantages of franchising:
triple benefits of franchising according to the president of the International Franchise Association:
“The franchiser wins because he builds a strong foundation for his company. The franchisee wins because he can take advantage of the franchiser’s proven business system. And the general public benefits from the consistency of the product or service.”

24. Case study: A Godsend

25. 4. Business mission and company profile
4.1 Business mission/vision
-- a brief statement that tells stakeholders and the public why the firm is in business, how it intends to satisfy customer needs, and why it will satisfy their needs better than its competitors

26. Sample mission statements
Starbucks
Our mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.
Dell
Dell's mission is to be the most successful computer company in the world at delivering the best customer experience in markets we serve. In doing so, Dell will meet customer expectations of:
Highest quality
Leading technology
Competitive pricing
Individual and company accountability
Best-in-class service and support
Flexible customization capability
Superior corporate citizenship
Financial stability

27. Sample mission statements
Nike
Our mission for the Nike brand is: To bring inspiration and innovation to every athlete in the world.
Alibaba
Alibaba Group (Alibaba for short) is a global e-commerce leader basing in China. Alibaba has 7 subsidiary companies, business involving the B2B, C2C, online payments, software service, search engine, online advertising, local living and consumption community etc. Alibaba is committed to building the world‘s leading e-commerce infrastructure and high quality online living platform.

28. 4.2 Company profile Company history
Founders and/or current top managers
Major line of business
Location and subsidiaries
Markets
Staff size
Production capacity
Annual turnover/sales
Awards

29. Listening:
Listen to a presentation delivered by the PR Department Manager of Oracle China and fill in the blanks in the company profile
Word bank:
headquarters 总部
headcount 员工总数
annual revenue 年收入

30. Oracle China Profile
Status: the world’s ____ enterprise software company, ____ global software giant in ____
Established in: ____
Headquarters: Redwood Shores, ______
Headcount: ______
Annual revenue: ____
Launched on China’s market in ____
Oracle China branches: Beijing, Shanghai, Guangzhou, ____
Services: 9i E-Business platform, E-Business Suite, consulting services, ______, and support services
largest
first
China
1977
California
42,000
$11 billion
1989
Chengdu
education

31. Sample company profileGM
Ecolab
Philips
English version:
Chinese version:
Alibaba
English version:
Chinese version:

32. Exercises 1. Translation 1. 个人独资企业 2. 普通合伙人 3. 有限合伙人 4. 无限责任
1. 个人独资企业 普通合伙人
3. 有限合伙人 无限责任
5. 营业执照 法人
7. 董事会 股息
9. 公司章程 年报
11. 股东年会 特许经营

33. 2. Find out the business focus of the top 10 franchise brands in 2009 listed by Entrepreneur Magazine

35. 3. Compile the mission statement and/or company profile of a well-renowned MNC currently operating in China
4. Group project: observe and guess the business forms of shops or companies operating on your campus or in Guangzhou, and collect necessary information (e.g. through interviews or Internet surfing) to verify your guessing

36. 5. Supplementary reading
Jones’ Chapter 1: “What Is Business?”