ORGANIZATION AND MANAGEMENT

Senior High School

Name of Learner: _______________________________ Quarter 1 – Week 4

Section: _______________________________________ Date: ________________

FORMS & ECONOMIC ROLES OF BUSINESS ORGANIZATION

Background Information for Learners:

The role of business in social and economic development cannot be overstated. Business plays
a vital role in the economic development and wealth of a country. Success in business translates to the
economic well-being of a company and its environment through job creation and offering improved quality
of life by providing valuable products and services. In addition, taxes paid by businesses serve as the
government revenue to finance projects such as roads, bridges, and other infrastructures which play
significant roles in sustaining the country’s economic environment and society.

Although material wealth accumulation is among the concerns of genuine economic development,
its greater concern is the total improvement of the quality of people’s lives. This, in turn, is related to
sustainable economic development issues in a country which greatly influence business management.

Definition of Terms

Economic development is defined as a total process which includes not only economic growth or the
increase in the given amount of goods and services produced by the country’s economy but also
considers the social, political, cultural and spiritual aspects of the country’s growth.

Business can be defined as an economic unit that brings together resources and efforts for the purpose
of producing goods and services that will be useful to end-users and will bring about good returns or
profits to investors, thus contributing to the economic development and well-being of people.

Business organization is a collection of people working together to achieve a common purpose in

relation to their organization’s mission, vision, goals, and objectives, sharing a common organizational
culture.

Forms of Business Organizations

A. SINGLE PROPRIETORSHIP is the most basic and legal form of business. It has only ONE
OWNER who owns and manages the business and responsible for all business transactions. Its
advantages and disadvantages are as follows:
Advantages:
1) Total undivided authority.
2) Low organizational cost and license fees
3) Tax savings
4) No restrictions on type of business (as long as it is legal
 Disadvantages:
1) Unlimited liability
2) Limitation on size
3) Limited by management’s ability to be jack-of-all trades.

B. PARTNERSHIP is a duly registered association of two or more persons who bind themselves to
contribute money, property or industry to a common fund. Its characteristics are as follows:
1) Association of individuals – based on as simple an act as a handshake.
2) Mutual agency – act of any partner is binding on all other partners.
3) Limited life – Dissolution occurs when a partner withdraws or a new partner is admitted.
4) Unlimited Liability – each partner is individually liable for all partnership liabilities.
5) Co-ownership of property – partnership assets and personal resources of any partner.
Types of Partnerships that should be considered:
1. General Partnership
Partners divide responsibility for management and liability, as well as the shares of profit or loss
according to their internal agreement. Equal shares are assumed unless there is a written
agreement that states differently.
2. Limited Partnership and Partnership with limited liability
“Limited” means that most of the partners have limited liability (to the extent of their investment)
as well as limited input regarding management decision, which generally encourages investors
for short term projects, or for investing in capital assets. This form of ownership is not often used
for operating retail or service businesses. Forming a limited partnership is more complex and
formal than that of a general partnership.
3. Joint Venture
Acts like a general partnership but is clearly for a limited period of time or a single project. If the
partners in a joint venture repeat the activity, they will be recognized as an ongoing partnership
and will have to file as such and distribute accumulated partnership assets upon dissolution of
the entity.

C. CORPORATION is an entity created by operation of law, having the right of succession and the
powers, attributes and properties expressly authorized by law or incident to its existence. Its
characteristics are as follows:
1) Has separate legal existence from its owners
2) The stockholders, as the owners, have limited liability
3) Transferable ownership rights
4) Ability to obtain capital
5) Can have a continuous life
6) Subject to numerous government regulations
7) Double taxation of distributed earnings
8) An artificial/juridical “person”. The management structure is at the discretion of board of
directors

D. COOPERATIVE is an organization established for the purpose of purchasing and marketing the
products of its members, i.e., shareholders, and/or procuring supplies for resale to the members,
whose profits are distributed to the members (in the form of patronage dividends), not on the basis
of the members' equity
According to REPUBLIC ACT 9520 also known as "Philippine Cooperative Code of 2008".
 The primary objective of every cooperative is to help improve the quality of life of its members.
Towards this end, the cooperative shall aim to:
a. Provide goods and services to its members to enable them to attain increased income, savings,
investments, productivity, and purchasing power, and promote among themselves equitable
distribution of net surplus through maximum utilization of economies of scale, cost-sharing and
risk-sharing;
b. Provide optimum social and economic benefits to its members;
c. Teach them efficient ways of doing things in a cooperative manner;
d. Propagate cooperative practices and new ideas in business and management;
e. Allow the lower income and less privileged groups to increase their ownership in the wealth of
the nation; and
f. Cooperate with the government, other cooperatives and people-oriented organizations to further
the attainment of any of the foregoing objectives.

Learning Competency with code:

Analyze the forms and economic roles of business organizations. (no code from MELCs)

ACTIVITIES

Directions/ Instructions: Read the instructions carefully in answering the given activities.
All answers will be written in the OM notebook.
ACTIVITY 1
Directions: Read the following questions and write the letter of the correct answer in a ¼ sheet
of white pad paper.

1. A positive difference between the amount earned and the amount spent in buying,
operating or producing something.
A. business C. expense
B. profit D. loss
2. It is an activity that is part and parcel of human society: It is an entity in which economic
resources or inputs, such as materials and labor, are put together and process to provide
goods or outputs to customers.
A. business C. inputs
B. process D. outputs
3. A form of business owned by one person.
A. partnership C. single proprietorship
B. corporation D. none of the above
4. An association of two or more people called as partners.
A. corporation C. cooperative
B. single proprietorship D. partnership
5. One of the characteristics of partnership is the co-ownership of property which means?
A. Each partner is individually liable for all partnership liabilities.
B. Partnership assets and personal resources of any partner.
C. Based on as simple an act as a handshake.
D. None of the above.
 6. Corporation is an entity created by operation of law, having the right of succession and
the powers, attributes and properties expressly authorized by law or incident to its
existence. What is the term used for the owner of the corporation?
A. stockholder C. proprietor
B. partner D. member
7. Limitation in size is one of the characteristics of what form of business organization?
A. partnership C. single proprietorship
B. cooperative D. corporation
8. It is defined as an entity created by operation of law, having the right of succession and
the powers, attributes and properties expressly authorized by law or incident to its
existence.
A. partnership C. single proprietorship
B. cooperative D. corporation
9. Which among the given characteristics belongs to a Corporation’s form of business?
A. has separate legal existence from its owners.
B. dissolution occurs when a partner withdraws or a new partner is admitted.
C. mutual agency – act of any partner is binding on all other partners.
D. none of the above.
10. Which among the given characteristics belongs to a partnership’s form of business?
A. has separate legal existence from its owners.
B. dissolution occurs when a partner withdraws or a new partner is admitted.
C. mutual agency – act of any partner is binding on all other partners.
D. none of the above.

ACTIVITY 2
Directions: Supposed you will be starting your dream business, create your business name and
logo which give emphasis on the form of business organization you prefer? Draw your output in
your OM notebook.
Example:

PRINTING SERVICES INC.

Rubrics for grading your output: Total points: 15

Criteria 5 4 3 2 1
Concept and Idea
Aesthetic Quality of Output
Originality
ACTIVITY 3

Directions: Complete the table (nos. 2-5) by listing your contributions to the society as a student
and as a business person (assuming that you already own a business). First number is done for
you as your guide.

Contributions as a Student Contributions as a Business person

1. Participates in the civic activities of our 1. By paying business taxes.
school.
2.
3.
4.
5.
6.
7.
8.
9.
10.

ACTIVITY 4

Directions: Expound your understanding on the following concepts in 3-5 sentences per
concept:

1. Corporation
2. Single Proprietorship
3. Partnership
4. Economic Development
5. Cooperative

Reflection: Based from your learning, write your insights about the given topic. Write your
reflection in your OM notebook using the format below:
Name: Section: Date
Topic:
Reflection:

References
Cortez, F.G. (2018). Business Ethics and Social Responsibility: Vibal Group Incorporated.
Cabrera, Altarejos, Riaz ((2016). Organization and Management: Vibal Group Incorporated
https://bizfluent.com/info-7745795-roles-business-organizations-economic-development.html
Answer’s Key
ACTIVITY 1

1. B 6. A
2. A 7. C
3. C 8. D
4. D 9. A
5. B 10. B

ACTIVITY 2 Answer may vary.

ACTIVITY 3 Answer may vary.

ACTIVITY 4 Answer may vary.

Prepared:
REGINA C. SAJONIA
Teacher II-Tibag High School