Forms of Business

Organizations and A
Flexible Organization:
Caselet
Forms of Business Organizations
• An organization is defined as having two or more individuals working
toward the attainment of a goal or goals. A business organization may
take any of the following forms:
1. Sole proprietorship- an individual owns all the assets, is the simpliest
business form
2. Partnership- where an association of two or more persons carry on as
co-owners of a business for profit. ( It includes contract of partnership
with dividing profits among themselves ).
3. Corporation- where a separate body consisting of at least five
individuals is treated by lae as a unit. (It is being created by right of
succession and power attributes, properties which is authorized by
law)
Sole proprietorship- an individual owns all the assets, is
the simpliest business form

Advantages
- Flexibility of operations (Less
regulations by government in
operating decisions)
- Less conflict and disagreements
in manner of management
- Easier to increase or decrease
capital; hence greatest flexibility
in decision making (only one
person decides)
- Best suited for small businesses
Disadvantages
- Unlimited liability of owner
- Limited source of capital
- Limited management expertise
especially if there are no other
professional managers
(management may be limited to
the owner’s capabilities)
Partnership- where an association of two or more persons carry on as co-
owners of a business for profit. ( It includes contract of partnership with
dividing profits among themselves ).

Advantages
- Easy to form (minimal
government requirements)
- Flexibility of operations
- (accounting or law firm)
Disadvantages
- Limited capital
- Limited terms of
existence
(transfer of shares may be done w/o
the consent of stockholders, exit of
partner dissolves the partnership.
The consent of existing partners is
required in the admission of new
partners. Thus, partnershiphas an
unlimited life only for as long as
there is no change in the relations
of the partners.
• general partner – one whose liability extends to his separate
property (two or more individuals agree to share in all assets, profits
and financial and legal liabilities of a jointly-owned business
structure)
• Limited partner one whose liability is limited to his capital
contribution (one GP and at least one limited partner)
• Managing partner -
 One of the perspectives in the balanced scorecard, and a reccomended
goal in strategy maps, is organizational learning. Enterprises must
encourage advances and innovation. Relationship lines, hierarchies, and
levels exist to support the organizational goal, but most not prevent
improvement.
• Chain of Command- an official hierarchy of authority that dictates who
is in charge of whom and whom permission must be asked.
Example:
- When an employee reports to the manager who reports to a
senior manager who reports to the Vice President who reports to the
CEO.
The same is true in the business arena, where operations personnel in
their respective fields with agreed goals with senior executives perform
excellently when a degree of flexibility is granted.
A Flexible Organization: Caselet
• One in which workers can easily adapt to their customers’ needs ,
effeciently complete their work and expedite decision-making when
necessary.
• Several types of internal organizational structures are flexible enough to
meet these objectives.
• It is also one that is able to adapt and respond relatively quickly to
change in its external environment in order to gain advantage and
sustain its competitive position.
Thank You !
• Management is the process of coordinating resources to meet
organizational goals – T
• One of the four management functions - leading - means "being
aware of available resources such as land labor, capital, and
information – F
• One of the four manangement functions - ORGANIZING - is the
primary function in which all others depend. During this time,
managers develop strategies for success, establish goals and
objectives for the organization, and translate their strategies and
goals into action plans- F