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CHAPTER 2

Operational Aspect

One of the key components in starting a business is the Operational

aspect. To do this, management must be able to organize all activities so

that they are profitable and competitive in the market using new

technologies, financial resources, and human resources. This comprises

an examination of the officers and key individuals, fundamental factors in

setting up the business, the ownership structure, the organizational chart,

and the timeline for the project. This plan’s primary goal is to evaluate the

organization setup’s option effectiveness.

The objectives are as follows:

1. To know the project originators, investors, and managers of the

business and to determine how much is the capital contribution.

2. To discuss the activities to do and the time allotted to each.

3. To identify the type of ownership to be formed.

4. To enumerate the different positions, qualifications and their

duties and responsibilities.

5. To adopt an organizational structure for the business.

6. To establish a detailed compensation scheme for the employees

of the business.
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Form of Ownership

The form of corporate ownership favored by the proponents is a

partnership because everyone will invest funds in the enterprise. A

partnership is a company that is held by two or more people who each

contribute money, talent, or industry with the goal of sharing the profits.

A partnership type of business organization was chosen by the

proponents because it is an excellent choice of legal structure for a new

company. Due to the nature of the business relationship, the owners must

necessarily share in the profits, liabilities, and decision-making. One of the

important features of a partnership type of business in the Philippines is

that it has a limited lifespan and that its operations may be terminated

either by the partners' actions or by the operation of law. Another

important feature of a partnership is that it is based on contracts since it

was established because of a contract that the partners entered. While it

is occasionally required that the contract be in writing and that its contents

be expressly stated.

The following are the advantages of partnership form of business

ownership:

 Flexible Capital Sources

 Ease of Formation

 Shared Responsibility

 Better Decision Making

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The following are the disadvantages of partnership form of

business ownership:

 Disagreements

 Unlimited Liability

 Taxation

 Profit Sharing
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Organizational Chart

The organizational chart is a graphical formation that displays the

important details in the organizational structure including the major

functions and their respective relationships among positions according to

authority and responsibility. This refers to the diagram showing the key

functions of the line and staff organizational structure.

Figure 2

Organizational Chart