1. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 SLIDE 1 5-1 5-1Business in the U.S. Economy 5-2 5-2Forms of Business Ownership 5-3 5-3Organizational Structure for Businesses 5 C H A P T E R Economic Decisions and Systems

2. © 2012 Cengage Learning. All Rights Reserved. SLIDE 2 5-1 Business in the U.S. Economy Goal 1 Describe the changing status of U.S. employment. Goal 2 Discuss the role of business in the U.S. economy. Goal 3 Describe three major types of businesses.

3. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 SLIDE 3 KEY TERMS ●contingent worker ●intermediary ●service business

4. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 SLIDE 4 THE CHANGING U.S. JOB MARKET ●Employment data ●6% increase from 03-08, then a 775,000 loss ●Baby boomers start retirement in 2011 ●Mini-boom of young workers  avg. working age will decrease ●More non-whites in work force (currently 32%) ●1960’s: 35% of women worked; doubled by 2000; now makeup almost half work force

5. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 THE CHANGING U.S. JOB MARKET ●Pressures on Employees ●Downsizing  people work harder; more hours ●People need second jobs ●More education required ●Not enough time with family ●People forced to take contingent work (continued)

6. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 SLIDE 6 Checkpoint ●List several groups that will increase as a percentage of the total U.S. workforce in the next decade. ●Younger workers (16–24 years of age) ●Asian-, Hispanic-, African-American groups ●Women

7. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 SLIDE 7 BUSINESS AND THE ECONOMY ●Size of U.S. businesses ●Roles of business ●Impact on a community

8. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 SLIDE 8 PERCENT OF BUSINESSES BY EMPLOYEE SIZE

9. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 ROLES OF BUSINESS ●Make and distribute products and services ●Provide employment ●Owners/investors profit ●Pay taxes  money comes back to us in the form of government services SLIDE 9

10. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 IMPACT ON COMMUNITY ●New businesses bring new money ●Pay wages  employees spend $ in town ●Buy goods/services  businesses spend $ ●Growing business attracts people from out of town ●Increased housing, food, and other needs ●Pay taxes to support community services ●Larger businesses attract small businesses SLIDE 10

11. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 SLIDE 11 BUSINESS ACTIVITIES ●Generating ideas ●Starting ideas, ideas for improvement ●Research & development (R&D) departments ●Raising capital ●Starting capital, daily operation, expansion ●Comes from loans, investors, and/or profits ●Employing and training personnel ●Hire and train new workers ●Train for added procedures & responsibilities

12. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 BUSINESS ACTIVITIES ●Buying goods and services ●Used in manufacturing, resold, operational ●Services needed to operate (delivery, adv., etc.) ●Marketing goods and services ●“Activities directed at providing the goods…” ●Not just trying to make the sale, but keeping customer happy after the sale ●Maintaining business records ●Track performance, tax records, order info, etc. SLIDE 12

13. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 SLIDE 13 Checkpoint ●What are the basic activities completed by all businesses? ●Generating ideas ●Raising capital ●Employing and training personnel ●Buying goods and services ●Marketing goods and services ●Maintaining business records

14. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 SLIDE 14 TYPES OF BUSINESSES ●Producers ●Extractor: takes resources from nature ●Farmer: cultivates land and raises livestock ●Manufacturer: convert materials into products ●Intermediaries ●Wholesalers, retailers, specialized ●Service businesses ●Activities consumed immediately ●Growing fast (60% of U.S. employment)

15. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 SLIDE 15 Checkpoint ●How does a manufacturer differ from an extractor? ●An extractor takes natural resources, such as oil or timber, for direct consumption or for use in developing other products. ●A manufacturer takes resources supplied by others and converts them into useable products.

16. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 Homework: ●5-1 Assessment: 1-5 ●Read Sec. 5-2 ●Bring your phones tomorrow SLIDE 16

17. © 2012 Cengage Learning. All Rights Reserved. SLIDE 17 5-2 Forms of Business Ownership Goal 1Understand the three major forms of business ownership. Goal 2Determine when each form of business ownership is most appropriate. Goal 3Recognize other specialized business ownership forms.

18. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 SLIDE 18 KEY TERMS ●proprietorship ●partnership ●corporation ●partnership agreement ●articles of incorporation ●franchise

19. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 SLIDE 19 BUSINESS OWNERSHIP ●Proprietorship – owned by one person ●Partnership – two or more owners ●Corporation – many owners, called stockholders

20. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 SLIDE 20 Forms of Ownership U.S. Business Comparison by Form of Ownership Form of Ownership Number of Businesses (2006) Total Revenue (Thousands) Percent of All Businesses Percent of Total Revenue Proprietorship22,075,0001,278,000,00071.53%4.06% Corporation5,841,00026,070,000,00018.93%82.82% Partnership2,947,0004,131,000,0009.55%13.12% Total30,863,00031,479,000,000100.00%

21. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 Don’t forget: You can copy- paste this slide into other presentations, and move or resize the poll. Poll: The form of ownership most common among...

22. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 Don’t forget: You can copy- paste this slide into other presentations, and move or resize the poll. Poll: A partnership

23. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 Don’t forget: You can copy- paste this slide into other presentations, and move or resize the poll. Poll: Which of the following is NOT a way in w...

24. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 SLIDE 24 Checkpoint ●What are the differences between the three main forms of business ownership? ●Business forms differ in the ways in which decision-making and investments are made and to whom liabilities are distributed.

25. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 SLIDE 25 CHOOSING A FORM OF BUSINESS OWNERSHIP ●Choosing a proprietorship ●Easiest to start and end ●If fails, personal assets will be seized ●Choosing a partnership ●More capital to invest, more skills ●Must have partnership agreement ●Choosing a corporation

26. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 CORPORATE FACTOIDS ●Popular form of business for large companies ●A corp. is treated like an individual ●Need to submit articles of incorporation to state to become incorporated ●Corporate bylaws dictate operating procedures ●Board of directors makes major policy and financial decisions; issues stock

27. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 Don’t forget: You can copy- paste this slide into other presentations, and move or resize the poll. Poll: The ____________________ is a written le...

28. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 Don’t forget: You can copy- paste this slide into other presentations, and move or resize the poll. Poll: In what type of business organization is...

29. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 Don’t forget: You can copy- paste this slide into other presentations, and move or resize the poll. Poll: The easiest form of business to start an...

30. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 Don’t forget: You can copy- paste this slide into other presentations, and move or resize the poll. Poll: Which form of business ownership is the...

31. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 Don’t forget: You can copy- paste this slide into other presentations, and move or resize the poll. Poll: Who are the people who make the major po...

32. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 SLIDE 32 Checkpoint ●Which form of business ownership is the most complex and difficult to form? ●The corporation is more complex to begin than other business forms. ●Forming a corporation requires much more bureaucracy, is more subject to government regulations, requires the organization of a board, and must have clearly defined bylaws.

33. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 SLIDE 33 OTHER FORMS OF OWNERSHIP ●Specialized partnerships and corporations ●Limited liability partnership ●Joint venture ●S corporation ●Limited liability company ●Nonprofit corporation ●Cooperatives: group of people combining for efficiency ●Franchises: have permission to operate a business a certain way

34. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 Don’t forget: You can copy- paste this slide into other presentations, and move or resize the poll. Poll: Groups of people form consumer cooperati...

35. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 Don’t forget: You can copy- paste this slide into other presentations, and move or resize the poll. Poll: What is a written contract granting perm...

36. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 Don’t forget: You can copy- paste this slide into other presentations, and move or resize the poll. Poll: A(n) ______________________________ iden...

37. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 Don’t forget: You can copy- paste this slide into other presentations, and move or resize the poll. Poll: A unique business organized by two or mo...

38. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 Don’t forget: You can copy- paste this slide into other presentations, and move or resize the poll. Poll: What are the other specialized forms of...

39. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 SLIDE 39 Checkpoint ●What are the other specialized forms of business ownership? ●Limited liability partnership ●Joint venture ●S corporation ●Limited liability company (LLC) ●Nonprofit corporation

40. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 Homework: ●5-2 Assessment: 1-5 (#5 doesn’t have to be a memo) ●Read Sec. 5-3 SLIDE 40

41. © 2012 Cengage Learning. All Rights Reserved. SLIDE 41 5-3 Organizational Structure for Businesses Goal 1Understand important principles in designing an effective organization. Goal 2Compare alternative organizational structures for businesses.

42. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 SLIDE 42 KEY TERMS ●mission statement ●goal ●policies ●procedures ●organization chart

43. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 SLIDE 43 DESIGNING AN EFFECTIVE BUSINESS ORGANIZATION ●Setting direction ●Mission statement vs. goal ●Policies vs. procedures ●Principles of effective organization ●Responsibility, authority, and accountability ●Unity of command ●Span of control

44. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 SLIDE 44 Checkpoint ●What is the difference between a mission statement and a goal? ●A mission statement states the purpose of existence for a business and what it hopes to achieve. ●A goal is a more specific statement of what a business expects to achieve and may be used to measure a business’ success.

45. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 SLIDE 45 TYPES OF ORGANIZATIONAL STRUCTURES ●Functional organization structure ●More traditional; top-down oriented ●Focus on main business functions ●Problems? ●Matrix organizational structure ●Newer type of structure; more horizontal ●More collaborating to get specific projects done ●Needs clear direction though

46. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 SLIDE 46 BUSINESS ORGANIZATION CHART

47. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 5 SLIDE 47 Checkpoint ●What problems can result from the use of a functional organizational structure? ●Employees in a functional organizational structure may tend to lose sight of overall corporate goals. ●Workers tend to be limited to specific duties and may not see their relationship to the organization as a whole. ●This can result in lack of interest and motivation over time.