BA/BCA                                        Name ___________________

Ch. 2 - Business Organization     Date ____________________

 

I.     Motivation of Business

 

       A.   Satisfaction of __________ & __________

              1.    People work and businesses produce to

_______________ needs & wants.

              2.    Needs & wants are satisfied in many different ways.

a.    ___________ - basic items needed for survival.

       1)    __________ - grocery store

       2)    ______________ - building contractors

                     b.    _________- items we desire to enhance or lives.

                           1)    CD player

                           2)    TV

              3.    Needs & Wants of ______________ are based on __________, _______________ and

________________of the good or service.

              4.    Needs & Wants of ________________ are satisfied by ___________________.

              5.    Needs & Wants of individuals provide __________________ for businesses.

 

       B.   ______________ ________________

              1.    Def. - owners work hard to earn a ____________.

              2.    _________:_______ _________  Money remaining in a business after all __________ are paid.

a.    used for ______times

b.              used to purchase _____ equipment, etc.

 

              3.    ________________Income:  Money ____________ by a business from the sale of goods, services, ideas or information.

              4.    Business _____________: __________ of a business that helped earn the business income.

              5.    __________ ____________:  Taxes on business profits to be __________.

a.    This money is used for the armed forces, fire departments, schools, etc.

                     b.    If a business does not earn a profit the money is lost to the government.

6.    Business profits benefit the economy ___________ and _________________.

              7.    What do businesses do with profits?

 

       C.   ______________ ____________ _____________

              1.    ____-_____-________ Organizations - operate to provide a service to the public and ______to make a profit.

                     a.    Examples:  libraries, health service organizations, etc.

                     b.    ____ income is generated and no profit is earned.

              2.    Not-For-Profit money comes from local, state or federal _______________ funds.  (All extra money is spent on services to the public.)

              3.    Governmental organizations serve the needs of the _________________.

a.    public schools

b.    local fire and police departments

c.    national parks

              4.    Most __________ ___________ are provided by the Government through _________ dollars.

5.    Governments do not operate to make a __________ , but do incur ______________ therefore money needed to operate comes from tax dollars collected.

 

II.    Forms of Business Ownership

 

       A.   ________________________ (Sole or Single)

              1.    Def. - A business owned by __________individually.

              2.    Usually _____________ and may or may not have any __________________.

              3.    This is the most ___________ organization type chosen by ______ businesses.

              4.    ___________________ of a Proprietorship

                     a.    you are your ____________ boss

                     b.    you are able to make _________ decisions

                     c.    you _________ all profits __________ taxes

                     d.    pay only personal taxes, no ____________ taxes

              5.    _________________________of a Proprietorship

                     a.    __________________ liability

                     b.    You have the responsibility of making all decisions _______________.

                     c.    limited to your __________________

d.    limited ____________ of business

       B.   ________________________

              1.    2 or _________________ owners

              2.    ______________ decision making, work, talents, & past experiences.

              3.    _____________________Agreement - Before starting the business this should be drawn up and _____________ state how the business will be run.

                     a.    how to handle __________________

                     b.    how to handle ____________& ___________

                     c.    how to handle ____________

              4.    __________________ of a Partnership

                     a.    shared ________________ making

                     b.    ability to share past ____________________

                     c.    shared _____________ ($)

                     d.    shared _______________ (losses)

                     e.    pay personal taxes _________ corporate taxes

              5.    ____________________ of a Partnership

                     a.    may be ______________ to start-up (agreement)

                     b.    shared ________________

                     c.    _____________ decision making (conflicts?)

 

       C.   _____________________________

              1.    A ___________________ legal entity.

              2.    _________ & ___________ businesses are able to incorporate.

                     a.    Must __________ for the "Right to Incorporate."

                     b.    Right to operate ___________________.

                     c.    The right to be treated almost as a __________ in the eyes of the Law.

              3.    _________________/Shareholders

                     a.    ____________________of a Corporation

                     b.    Invest money in the corporation for the ___________________of stock (shares of

ownership).

                     c.    ________________- __________ on each share of stock owned by a stockholders when the business makes a __________________.

              4.    _________________ of a Corporation

                     a.    ________________life - The business continues to operate ________ if the owner dies.

                     b.    _____________liability - You can only lose the investment you have made.

                     c.    _________________are paid to stockholders when the corporation makes a ____________.

                     d.    Easy to raise money - ________ _________ to general public.

              5.    ___________________of a Corporation

                     a.    Stockholders with ______________ stock ownership have ______________ influence on how the corporation is operated.

                     b.    Board of Directors (___________ ___________) make decisions.

                     c.    __________________ to set-up

                     d.    Pay ____________ _________________taxes

 

       D.   Alternative Forms of Businesses

              1.    __________________________

                     a.    Def. - A Not-For-Profit organization owned by its __________________.

                     b.    Examples:  credit unions and housing, health & farming.

              2.    __________________________

                     a.    Def. - An agreement to operate a business under the methods approved by the founder of the co.

                     b.    Very popular in the restaurant business.

              3.    _______________________Partnership

                     a.    Def. - One or more of the partners may have limited liability as long as the other has

unlimited liability.

                     b.    Can be very ______________________.

                     c.    limited ____________- Contribute large sums of money and make a profit usually without contributing _____________.

                     d.    _______________partners - Operate the partnership and share the profits with the limited partners (usually _______contribute any money).

              4.    __________ _________________

                     a.    Def.- An _______________ by 2 companies to form a _____________ business.

                     b.    Very ______________between American and Foreign companies.

                     c.    __________________:  Past experience is brought in by ____________ companies.

 

III.  Features of Business

 

A.   _________________ - Every business _______________ 7 resources in ____________ amounts and combinations to produce the ___________ product.

1.    ___________ ________________

2.    Raw or Natural ________________

3.    _______________

4.    _______________

5.    _______________

6.    _______________

7.    _______________

 

       (Businesses decide what and how much to use.)

 

       B.   _________________

1.    Def. - _________________ of a good, service, idea or information.

              2.    4 Most Common types of Utility

                     a.    __________

                           1)    _________ & ___________ of a product.

                           2)    i.e. converting cotton to a towel

                     b.    ______________ - You must ____it and ____it.

                     c.    ________ - Ability to _______ use of a product.

                     d.    ________ - You must be able to ______ ___the product.

 

       C.   Supply & Demand

              1.    _________________ - Making products _____________ to the consumer.

              2.    _________________- When the consumer wants to _________ a company's product.

 

 

 

 

 

              3.    The _______ of Supply & Demand

                     a.    "If you have an unlimited supply of your product but no one wants it, you __________ sell it."

                     b.    "If there is an unlimited demand for your product and you have only a few items, you will quickly __________ ___________."

 

       D.   _____________- The Chance of Loss

              1.    2 Types of Risk

                     a.    _____________Risks

                           1)    Def. - The loss is ____________by an insurance company.

                           2)    i.e. - fire, accident, personal injury & property damage.

                     b.    ________________Risks

                           1)    Def. - Internal and external risks that are _____________________.

                           2)    i.e. - poor management decisions, employee strikes, bad weather, poor economy.