© SOUTH-WESTERN EDUCATIONAL PUBLISHING LESSON5-1 GOALS  Describe the advantages and disadvantages of a sole proprietorship.  Describe the advantages and disadvantages of a partnership.  Explain the characteristics of a corporation. METHODS OF BUSINESS OWNERSHIP

© SOUTH-WESTERN EDUCATIONAL PUBLISHING Methods of Business Ownership in the U.S. Corporations 20% Partnerships 9% Sole Proprietorships 71%

© SOUTH-WESTERN EDUCATIONAL PUBLISHING The Sole Proprietorship Advantages Ease of starting Freedom to make business decisions Owner keeps all profits Pride of ownership Disadvantages Limited sources of funds Long hours and hard work Unlimited risks Limited life of the business

© SOUTH-WESTERN EDUCATIONAL PUBLISHING Partnership Advantages Ease of creation Additional sources of funds Availability of different talents Disadvantages Partners are liable Profits are shared among several owners Potential for disagreement among owners Business can dissolve suddenly

© SOUTH-WESTERN EDUCATIONAL PUBLISHING Corporation Advantages More sources of funds Fixed financial liability of owners Specialized management Unlimited life of the company Disadvantages Difficult creation process Owners have limited control Double taxation

© SOUTH-WESTERN EDUCATIONAL PUBLISHING Sales by Methods of Business Ownership Corporations 90% Partnerships 6% Sole Proprietorships 4%

© SOUTH-WESTERN EDUCATIONAL PUBLISHING LESSON5-2 GOALS OPERATIONS OF GLOBAL BUSINESSES  Name other forms of business ownership.  Describe the activities, characteristics, and concerns of multinational companies.

© SOUTH-WESTERN EDUCATIONAL PUBLISHING Other Forms of Business Organization Municipal corporations Nonprofit corporations Cooperatives

© SOUTH-WESTERN EDUCATIONAL PUBLISHING Multinational Companies Multinational companies in operation Characteristics of multinational companies World-wide market view Standardized product Culturally-sensitive hiring International and local perspective Concerns about multinational companies

© SOUTH-WESTERN EDUCATIONAL PUBLISHING LESSON5-3 GOALS STARTING GLOBAL BUSINESS ACTIVITIES  Identify five low-risk methods of getting involved in international business.  Discuss higher-risk methods for getting involved in international business.

© SOUTH-WESTERN EDUCATIONAL PUBLISHING Getting Involved in International Business Low-Risk Methods Indirect exporting Direct exporting Management contracting Licensing Franchising Higher-Risk Methods Joint ventures Foreign direct investment Wholly-owned subsidiary