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LP in Organization
LP in Organization
MANAGEMENT(ABM) STRAND
I. OBJECTIVES:
At the end of the lesson, students are expected to:
a. differentiate the three major types of businesses;
b. discuss the different forms of business ownership and;
c. appreciate the impact of business to economic development.
(A lesson integration highlights the content across curriculum area thru presenting ideas on
impact of business to economic development and the use of Information and
Communication Technology (ICT) in delivering knowledge to learners).
I. subject matter: Forms of Business Organization
reference: Principle of Management pp.84-89
materials: laptop and manila paper, marker, ppt,lcd
strategy: 4As
Time frame: 1 hour
II. learning procedure:
A. Preparatory Activity
a. Checking of attendance
b. Setting of standards
c. Review
B. Developmental Activities
a. Motivation
The students will guess the hidden word based on the given numbers.
2 21 19 9 14 5 19 19
B U S I N E S S
b. Unlocking of difficulties
Proprietor- owner
Pooling- sharing
A. Activity
The students will be grouped into four. Each group will be given different task to do.
Guide questions:
1. Discuss the three major types of business.
2. Give examples in each type.
Guide Questions:
Sole
Proprietorship
Cooperative
Business Partnership
Ownership
Corporation
Guide questions:
1. Discuss the advantages and disadvantages of each business ownership.
2. Based on your learnings, which is the best type of business ownership? Why?
Sole Proprietorship
Partnership
Corporation
Cooperatives
Impacts of Business
B. Analysis
C. Abstraction
The teacher will give additional discussion based on the activity presented in
each group and will answer all the guide questions given.
Guide/Follow up Questions:
1. Service Business
A service type of business provides intangible products (products with no physical
form). Service type firms offer professional skills, expertise, advice, and other similar
products. Example: Salons, repair shops, schools, banks, accounting firms and law firms.
2. Merchandising Business
This type of business buys products at wholesale price and sells the same at retail
price. They are known as “buy and sell” businesses. They make profit by selling the
products at higher than their purchase cost.
A merchandising business sells a product without changing its form.
Example Grocery stores, convenience stores, distributors, and other resellers.
3. Manufacturing business
Unlike a merchandising business, a manufacturing business buys products with the
intention of using them as materials in making a new product. Thus, there is a
transformation of the products purchased.
A manufacturing Business combines raw materials, labor, and overhead costs in its
production process. The manufactures goods will then be sold to customers.
Examples textiles, clothing business, ford motor company, sardines company.
Sole Proprietorship
These firms are owned by one person, usually the individual who has day-to-day
responsibility for running the business. Sole proprietorships own all the assets of the business
and the profits generated by it. They also assume complete responsibility for any of its
liabilities or debts. In the eyes of the law and the public, you are one in the same with the
business.
Advantages of a Sole Proprietorship
Easiest and least expensive
Secrecy
The net income is treated as the personal income of the sole owner is taxed
accordingly.
The business is easy to dissolve, if desired.
2. Partnerships
In a Partnerships, two or more people share ownership of a single business. Like
proprietorships, the law does not distinguish between the business and its owners. The
partners should have a legal agreement that sets forth how decisions will be made made,
profits will be shared, disputes will be resolved, how future partners will be taken to dissolve
the partnership, when needed; Yes, it’s hard to think about the break –up’ when the business
is just getting started, but many partnerships split up at crisis times and unless there is a
defined process, there will be even greater problems. They also must decide up front how
time and capital each will contribute, etc.
Advantages of Partnership
Partnerships are relatively easy to establish; however time should be invested in
developing the partnership agreement.
With more than one owner, the ability to raise funds may be increased.
The profits from the business flow directly through to the partners’ personal tax
return.
Prospective employees may be attracted to the business if given the incentive to
become a partner.
Pooling of knowledge and skills
Disadvantages of a Partnership
Partners are jointly and individually liable for the actions of the other partners.
Profits must be shared with others.
3. Corporations
A Corporation, chartered by the state in which it is headquartered, is considered by law to be
a unique entity, separate and apart from those who own it. A Corporation can be taxed; it can
be sued; it can enter into contractual agreements. The shareholders elect a board of directors
to oversee the major policies and decisions. The corporation has a life of its own and does not
dissolve when ownership changes.
Advantages of Corporation
Shareholders have limited liability
Shareholders can only be held accountable for their investment in stock of the
company
Ease of expansion
Ease of transferring ownership
Relatively Long life
Greater ability to hire specialized management
Disadvantages of a Corporation
More expensive and complicated to organized
Double taxation
More extensive government restrictions and reporting requirements
Employees lack personal identification with and commitment to corporate goals
4. Cooperative
An organization composed of individuals or small businesses that have banded together to
reap the benefits of larger organizations. Cooperatives are not organized for profit, but to
make its individually profitable to save money.
Advantages of Cooperatives
Equal voting rights for members.
Encourages member contribution and shared responsibility.
Liability for members is limited.
There is no limit on the number of members.
Disadvantages of Cooperatives
Limited Capital
Inefficient Management
Evaluation
Directions: Encircle the letter of the correct answer.
1. The three major types of business are service business, merchandising business and
__________________.
a. Manufacturing business c. sole business
b. Profit business d. Open business
2. This type of business ownership is owned by one person only.
a. Partnership c. Sole proprietorship
b. Cooperatives d. Corporation
3. The owners of this business type are are according to shareholders. The shareholders
elect a board of directors to oversee the major policies and decisions.
a. Partnership c. Sole proprietorship
b. Cooperatives d. Corporation
4. This type of business is composed of individuals or small businesses that have banded
together to reap the benefits of a larger organization.
a. Partnership c. Sole proprietorship
b. Cooperatives d. Corporation
5. Groceries, convenience stores, distributors and other resellers are some examples of
_______________ business.
a. Service business c. Merchandising business
b. Manufacturing business d. Profit business
Assignment
Directions: Fill in the information needed in planning a business.
Prepared by:
Jefamy D. Bolanio
Teacher- applicant