Business Ethics and They do not do

Social Responsibility business. They’re

Second Semi Notes • 2022-2023 established because
of donations.

.·:*¨༺ BUSINESS ORGANIZATION ༻¨*:·.

It is an entity formed for the purpose of
carrying on commercial enterprise.
Types of Business Organization
1. For-Profit Organization
- A profit organization is defined as a
legal organization, which is operated
with the sole aim of earning profit from
the business activities.
2. Nonprofit Organization
- Nonprofit organization has a primary
objective of benefiting the society as a
whole. It is a business that has been
granted tax-exempt status by the
Internal Revenue Service (IRS).
- Nonprofit organizations reinvest profits
into the organization.
★ Ivolunteer
★ Haribon
★ Philippines Red Cross
★ Gawad Kalinga
3. Not-For Profit Organization
- Not-for profit is a tax-exempt
organization that seeks to address a
social, recreational or community need
and in which the owners of the
organization do not earn an income
from the organization’s profits
Nonprofit Not-For Profit
Benefit the public Fulfill an owner’s
good organizational
objectives
Separate legal entity Cannot have a shareholders, with the purpose of
separate legal entity
Funds, charity They do business but
the profit goes to the
business operation
Non-Taxable
Business Organization
1. Sole Proprietorship
- A sole proprietorship is an
unincorporated business with only one
owner who is responsible for paying
personal income tax on the company’s
profits
- Sole Proprietor
2. Partnership
- A formal arrangement by two or more
parties to manage and operate a
business and share its profit.
- Taxed only once (Start-up)
- To be registered at SEC
2 Types of Partnership
A. Limited Partnership
- partners can have limited
liability
- provide capital but cannot
make managerial decisions and
are not responsible for any
debts beyond their initial
investment.
B. General Partnership
- all partners share in the profits,
managerial responsibilities, and
liability for debts equally.
- all partners have an equal right
to control the business and
share in any profits or losses.
3. Corporation
- A corporation is a legal entity created
by individuals, stockholders, or
operating for profit.
- Corporations are allowed to enter into
contracts, sue and be sued, own assets,
remit federal and state taxes, and
borrow money from financial
institutions.
- “legal person”

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 - They earn from dividends and stocks.
- Funds are from equity financing and
debt financing.
- Ownership - stocks
- Owners - common and
preferred stockholders
Conglomerate - group of corporations
3 Types of Corporation
A. C Corporation
- It is a fully separate legal entity,
responsible for paying corporate taxes
and issuing annual reports.
- C Corporation is the most common
form of incorporation among
businesses and contains almost all of
the attributes of a corporation.
- Owners receive profits and are taxed at
the individual level, while the
corporation itself is taxed as a business
entity.
B. S Corporation
- S Corporation is created in the same
way as a C Corporation but is different
in owner limitation and tax purposes.
- Consists of up to 100 shareholders and
is not taxed as separate – instead, the
profits/losses are shouldered by the
shareholders on their personal income
tax returns.
C. Non-Profit Corporation
- Commonly used by charitable,
educational, and religious organizations
to operate without generating profits. A
non-profit is exempt from taxation. Any
contributions, donations, or revenue
received are retained in the entity to
spend on operations, expansion, or
future plans.
D. Open Corporation - open for public
E. Close Corporation - open only for their
relatives
4. Cooperative
- It is an autonomous association of
persons united voluntarily to meet their
common needs and aspirations through
a jointly owned enterprise.
- Separate from the government from
they’re under the Office of the
President
- They register at CDA (Cooperative
Development Authority)
- At least 15 members to start a
Cooperative
- Non-Taxable
7 Principles of Cooperative
1. Voluntary and Open Membership
2. Democratic Member Control
3. Economic Participation by Members
4. Autonomy and Independence
5. Education, Training and Information
6. Cooperation among Cooperatives
7. Concern for Community
Nature of Business Organization
1. Agribusiness
- It is related to farming and
farming-related commercial activities.
- It involves all the steps required to send
an agricultural goods to
market:production, processing, and
distribution.
★ Poultry raising
★ Hog raising
★ Farmers cooperative
★ Fertilizer distribution
2. Service Business
- It is a type of business that provides
intangible products to its clients.
- It is a company that performs tasks for
the benefit of their customers. These
tasks can include transportation,
cleaning, traveling, hospitality,
maintenance or consulting.
- Service business offers professional
skills, expertise, advice, and other
similar products.
Common Types of Service Business
A. Professional Services
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 - It includes the services of professional
lawyers, engineers, architects,
accountants, and so much more.
B. Transportation
- These are anything that helps the
people in their travels and commutes.
C. Medicine and Wellness
- These are any services that are related
to health such as medical services of
doctors and hospitals, fitness gyms,
wellness spas and the like.
D. Financial Services
- These are anything that has a
connection to money or finance. Some
examples of financial services are
insurance, banking, investment and all
the same services.
3. Manufacturing Business
- It is engaged in buying raw materials
and supplies to be processed into
finished products
5 M’s of Production
1. Money
2. Method
3. Manpower
4. Machine
5. Materials
4. Merchandising Business
- Merchandising is the presentation and
promotion of goods that are available
for purchase for both wholesale and
retail sales.
- Buy and sell
- Grocery, clothing, and convenience
stores
- You do not alter the product
Types of Merchandising Business:
A. Retail Company - sells products directly
to customers.
B. Wholesale Company - buying in bulks
then selling it to littler stores
5. Hybrid Business
- A hybrid business can be classified in
more than one nature of business.
★ Hotels - Service and
Manufacturing/Merchandising
★ Restaurant - Service,
Merchandising, Manufacturing
.·:*¨༺ THE ECONOMY ༻¨*:·.
GDP (Gross Domestic Product)
GNP (Gross National Product)
Economics
- It is the study of resources used in the
system
- Production, distribution, consumption
Resources
1. Natural Resources (Land)
2. Human Resources (Labor)
3. Financial Resources (Capital)
.·:*¨༺ ECONOMIC SYSTEMS ༻¨*:·.
It describes how a society distributes its
resources to produce goods and services.
1. Capitalism (Free Enterprise)
- Individuals own and operate the
majority of businesses that provide
goods and services.
- Businesses are owned by individuals
and corporations
- Competition is encouraged by market
forces and government regulations
- Individuals keep profit and decide on
how to use it
- Prices of products are determined by
supply and demand, and the consumers
enjoy a wide selection of products
- There are unlimited choices of career
for everyone
Types of Capitalism
A. Pure Capitalism
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 - Free market system
- All economic decisions are made
without government interventions.
B. Modified Capitalism
- The government intervenes and
regulates businesses to some extent.
- Laws, regulations, and policies
Government Policies and Regulations that
limit businesses in the PH
1. TRAIN LAW - Tax Acceleration
- 2019 ; 20%
2. Foreign Ownership Restriction
- 40% – Foreign
- 60% – Domestic
3. Labor Rights
- Wage - 360/day
- Benefits
- Pag-Ibig (house loans)
- SSS (protection)
- PhilHealth (health insurance)
4. Intellectual Properties
- Patent, copyright
5. Human Rights Violation
- Child labor, prostitution
6. Suggested Retail Price (SRP)
- Dept. of Trade and Industry (DTI)
- To regulate the prices of the
commodities
2. Communism
- Proposed by Karl Marx
- Command government
- Controlled and financed by the
government
- No competition is occurring
- A political and economic ideology that
positions itself in opposition to liberal
democracy and capitalism, advocating
instead for a classless system in which
the means of production are owned
communally and private property is
non-existent or severely curtailed.
- It is a society in which people, without
regard to class, own all the nation's
resources.
- Everyone contributes according to each
person’s ability and people receive
goods and services based on their
needs.
- Businesses are owned by the
government, so they get all the profits.
- Prices of products are high with limited
choices of goods and services.
3. Socialism
- Heavily regulated
- A populist economic and political
system based on collective, common, or
public ownership of the means of
production.
- The government owns and operates
basic industries, but individuals own
most businesses.
- Its core benefit is the social equity
- Competition is restricted, but
encouraged in small businesses.
- Profits of the big industries go to the
government, while small business
owners reinvest their profits.
Principles of Free Enterprise System
1. Right to own a private property
2. Right to own a business and keep all
profits
3. Right to freedom of competition
4. Right to freedom of choice
.·:*¨༺ THE ROLES OF BUSINESS
ORGANIZATION IN THE SOCIETY ༻¨*:·.
1. Providing goods and services that are
valuable
- Beneficial and safe to use
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 Valuable - serves its purpose,
safe, and has benefits.

2. Creating employment opportunities

3. Advancing the economy
4. Promoting sustainability
Factors:
A. Good Management Practice
B. Adherence to Government
Policy
C. Public Opinion
D. New Opportunities
5. Investing in innovation and excellence

sevdiors: AY ‘22-’23