1. Activator – Chapter 8 Write down three occupations that you’re considering for your future. Categorize each of your choices based on who your employer might be for each job.
Job
Employer 1. 2. 3.

2. Chapter 8 - Business Organizations
Business organization (firm) – establishment formed to bring goods and services to the market
3 types – 1) Sole proprietorship, 2) Partnership, 3)Corporation
How do they differ?
Each has different structures and levels of liability (responsibility)
Liability – legal obligation to pay debts/injury settlements incurred by the business
Each are engaged in bringing goods, services, or both to consumers in the market

3. Sole Proprietor Sole proprietorship – a business owned by one person
Most common type of business organization
75% of all businesses are sole proprietorships in the U.S.

8. Partnership
Partnership – a business organization owned by two people who agree to split responsibilities and profits
Account for about 5 % of all businesses

9. Partnership
General Partnership – partners share profits, liability and responsibility
Fast food, lawyers, bars, small businesses
Both workers are actively involved in the company

10. Partnership
Limited Partnership – all partners are limited from personal liability, in the case of another partners mistakes.
Legal buffer for one partner from personal liability

11. Partnership
Articles of Partnership – outline the type of partnership, to the state, between partners.

12. Corporation
Corporation – is a separate legal entity, or legal being, owned by individual shareholders, each of whom faces limited liability for the firms debt
Shareholders face no liability for the firm’s obligations
Considered is considered a separate legal entity
Account for 20% of all businesses, but 90% of all products sold

18. Corporation Stock – a certificate of ownership in a corporation
Partial owner , i.e shares, purchase 1, 1/1000th owner of the company
Closely held – privately held corporations, that do not trade stock on the public exchange
Publicly held – sells stock on the market to investors in order to grow the business

19. Google Videos

20. Mergers Merger – combine with another company to become one entity
Horizontal merger – firms in the same market with a similar good or service merge
Half and Ebay
Facebook and Instagram
American Airlines and US Airways

21. Mergers
Vertical merger – firms join two or more firms involved in different stages of producing the same good
Control all phases of the product from production to sales (monopoly)

22. Luxxotica

24. Denied Mergers

25. Mergers
Conglomerates – business mergers with large companies, more than three businesses

26. Multinationals
Multinationals – large corporation that produces and sells its goods and services throughout the world

27. Other Organizations
Business Franchise – semi-independent business that pays fees and royalties to a parent company
Business is granted right to sell using the name, product and brand of the company
Zaxbys, McDonalds, Subway, etc.

28. Other Organizations
Cooperative – Co-0ps, business organization owned and operated by a group of individuals for their shared benefit

29. Other Organizations
Nonprofit Organizations – business that gears towards benefiting society (philanthropy)

30. Other Organizations
Labor Unions – organized group of workers whose aim is to improve working conditions, hours, wages and fringe benefits for its members.

32. Forms of Business Organizations
Description
Advantages
Disadvantages
Sole Proprietorship
Partnership
Most common form of business organization in the US
Owned/run by 1 person
Smallest in size
Easy to start – take an idea and start the business
Complete control
Total profits
Taxed once
No boss
Unlimited liability – personally responsible for all debts and business losses
Difficult to raise money
Difficulty in hiring workers
Inexperience
Lack of fringe benefits
Limited life (s.p. dies, business dies)
Owned/run by 2 or more persons
Easy to start
2 heads are better than 1
Taxed once
Easy to borrow money
Easier to hire
Unlimited liability
Limited life
Potential for conflict

33. Forms of Business Organizations
Description
Forming the Business
Advantages
Disadvantages
Corporation
Franchise
Separate legal entity (person)
Incorporate with the government
Offer stock
Easy to raise money
May sell stock
Shareholders are independent
Limited liability
Unlimited life
More expensive to start
Shareholders lose control of business
Double taxation (taxed twice)
More government regulation
Semi- independent business
Training of owners
Quality products
National advertising
Financial assistance
Bulk purchases bring down cost
Royalties and fees to parent company
Strict operating standards
Buy from specific vendors
Limited creativity with products
Pays fees to a parent company (McDonalds)

34. Business Organization
Advantages
Disadvantages
Sole Proprietorship 6
Partnerships 3
Corporations 5 4
Franchise (pg )
Multinational (pg. 200) 1

35. Binder Check – Due Today
Business Organization Chart
Google Video Questions
Crossword Puzzle (7+8)
Study Guide (7+8)
Ch. 7+8 VIS Terms
Test Corrections-Standards Sheet
Daily Tens
Essential Questions
Chapter 7/8 - Notes

36. Study Guide Chapter 7 + 8 Perfect/Pure competition
a) Many buyers and sellers, b) identical products, c) buyers + sellers are well informed, d) no barrier to entry.
Barrier to entry
Monopoly
Prices are not competitive, dictated by monopolist.
Patent
Government
License
Price discrimination
Market power
Monopolistic
a) Many buyers and sellers, b) product differentiation, c) low barrier to entry, d) some control over price
Perfect competition, products are identical. Monopolistic, products are similar but not identical (brand differentiation)

37. Study Guide Chapter 7 + 8 Oligopoly Closely held
Collusion, price fixing
Business Organization
Sole proprietor
Partnership
General
Limited liability
Articles of partnership
Corporation
Sole proprietorship
Stock/share
Sole Proprietorship/Partnership
Closely held
Publicly held
Partnership
Corporation
Multinational
Horizontal
Vertical
Conglomerate
Franchise
Cooperative

38. Study Guide Chapter 7 + 8 Perfect Competition/Oligopoly
Monopolistic Competition
Perfect
Monopolistic
Monopoly
Oligopoly

39. Extra Credit
List the 4 market structures in order from least competitive to most competitive.
What does it mean for a company to have market power?

40. Include on Paper Name Date (10-12) Class Period ID: A, B, C
Ch. 7+8 Test

41. Essential Question #1 Essential Question #2
How do the 3 business organizations differ?
A sole proprietorship is owned and operated by ___________________
Partnerships are owned by _______________
Corporations are owned by ___________________
one person
2 or more people
Essential Question #2
shareholders
What are the characteristics of each market structure?
Perfect competition, products are ___________________, _____________ firms, consumers are _____________, ________________ barriers to entry.
Monopolistic competition, products are __________________, but not _________________, __________________ firms, __________________ barriers to entry.
Oligopoly, products are ________________ or _____________, and are controlled by ___________ firms. ____________ barriers to entry
Monopoly, ___________ product, controlled by ___________ firm, ______________ barriers to entry
identical
many
informed no
similar
identical
many
low
Identical similar
a few
high
one
one
complete