Presentation

Title: Key Concepts in Business Organization and

Ethics
Subtitle: Understanding Goals, Ethics,
Governance, and Conflicts
Presented by: Hasan Saeed (22012120-040)
Hussain Imran (22812120-001)
Hazair Abdullah (22012120-036)
Forms of Business Organization
Sole Proprietorship:
Single ownerFull control and responsibilityUnlimited liability
Partnership:
Two or more ownersShared control and profitsJoint and several liability
Corporation:
Separate legal entityLimited liability for ownersEasier capital accumulation
Limited Liability Company (LLC):
Hybrid structureLimited liabilityFlexibility in management and taxation
Goals of Business Finance
Maximizing Shareholder Wealth:
Increasing stock valuePaying dividends
Ensuring Financial Health:
Maintaining liquidityManaging debt and equity
Sustainable Growth:
Investing in profitable projectsBalancing short-term and long-term goals
Business Ethics
Definition:
Principles and standards guiding behavior in business
Importance:
Builds trust with stakeholdersEnhances company reputationPrevents legal
issues
Consequences of Unethical Behavior
Legal Consequences:
Fines and penaltiesLegal battles and settlements
Reputation Damage:
Loss of customer trustNegative publicity
Financial Loss:
Decreased salesIncreased costs (e.g., legal fees)
How Should Employees Deal with Unethical
Behavior?
Report Internally:
I'mUse established reporting channelsSpeak with a supervisor or HR
Whistleblowing:
Report to external authorities if necessaryProtection under whistleblower laws
Document Evidence:
Keep records of unethical actionsEnsure a clear and factual report
Corporate Governance

Definition:
System of rules and practices by which a company is directed and controlled
KeyElements:
Board of DirectorsManagementShareholders
Objectives:
Align interests of stakeholdersEnsure accountability and transparency
Conflicts between Managers, Stockholders, and
Bondholders
Managers vs. Stockholders:
Agency problemManagers may pursue personal goalsSolutions
performance-based compensation, shareholder voting
Stockholders vs. Bondholders:
Different risk appetitesStockholders prefer riskier projectsBondholders seek
stable returnsSolutions: covenants in bond agreements, monitoring
mechanisms
Shareholder Value Creation
Definition:
Activities that increase the stock price and dividends
Strategies:
Efficient operationsStrategic investmentsShare buybacks
Metrics:
Earnings per share (EPS)Return on equity (ROE)Total shareholder return (TSR)
 Conclusion
Summary:
Importance of ethical behavior and good
governanceBalancing interests of different
stakeholdersFocus on sustainable value
creation