Pob 9e Chap05

CHAPTER 5
CHAPTER
5 Business Organization
5.1 Business in the U.S. Economy

5.2 Forms of Business Ownership
5.3 Organizational Structure for
Businesses
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accessible website, in whole or in part.
Principles of Business, 9e
CHAPTER 5
SLIDE 2
5.1 Business in the U.S.

Economy
Learning Outcomes
5.1.1 Describe the changing status of U.S.
employment.
5.1.2 Discuss the role of business in the
U.S. economy.
5.1.3 Describe three major types of
businesses.
CHAPTER 5
SLIDE 3
KEY TERMS
● contingent worker
● intermediaries
● service business
CHAPTER 5
THE CHANGING U.S. SLIDE 4
JOB MARKET
● Employment data
● Pressures on employees
CHAPTER 5
SLIDE 5
Checkpoint 
List several groups that will increase as a

percentage of the total U.S. workforce in
the next decade.
● Younger workers (16–24 years of age)
● Asian-, Hispanic-, African-American groups
● Women
CHAPTER 5
BUSINESS AND SLIDE 6
THE ECONOMY
● Size of U.S. businesses
● 21.7 million businesses with no employees
● 5.8 million with less than 20 employees
● 526,000+ with 20–99 employees
● 109,000 with 100 or more employees, 981
of these with more than 10,000 employees
CHAPTER 5
PERCENT OF BUSINESSES BY SLIDE 7
EMPLOYMENT SIZE
CHAPTER 5
SLIDE 8
ROLES OF BUSINESS
● Make and distribute products for

consumers, government, and other
businesses
● Provide employment for people
CHAPTER 5
SLIDE 9
IMPACT ON A COMMUNITY
● Money introduced to a community

● Taxes for the community to support
community services
● More jobs
● More income
CHAPTER 5
SLIDE 10
BUSINESS ACTIVITIES
● Generating ideas
● Raising capital
● Employing and training personnel
● Buying goods and services
● Marketing goods and services
● Maintaining business records
CHAPTER 5
SLIDE 11
Checkpoint 
What are the six basic activities completed

by all businesses?
● Generating ideas
● Raising capital
● Employing and training personnel
● Buying goods and services
● Marketing goods and services
● Maintaining business records
CHAPTER 5
SLIDE 12
TYPES OF BUSINESSES
● Producers
● Extractors
● Farmers
● Manufacturers
● Intermediaries
● Service businesses
CHAPTER 5
SLIDE 13
Checkpoint 
How does a manufacturer differ from an

extractor?
● An extractor takes natural resources, such
as oil or timber, for direct consumption or
for use in developing other products.
● A manufacturer takes resources supplied
by others and converts them into useable
products.
CHAPTER 5
SLIDE 14
5.2 Forms of Business

Ownership
Learning Outcomes
5.2.1 Understand the three major forms of
business ownership.
5.2.2 Determine when each form of business
ownership is most appropriate.
5.2.3 Recognize other specialized business
ownership forms.
CHAPTER 5
SLIDE 15
KEY TERMS
● proprietorship
● partnership
● corporation
● partnership agreement
● articles of incorporation
● franchise
CHAPTER 5
SLIDE 16
BUSINESS OWNERSHIP
● Proprietorship
● Business owned and run by just one person
● Partnership
● Business owned and controlled by two or
more people
● Corporation
● Separate legal entity formed by documents
filed with a state
CHAPTER 5
SLIDE 17
Checkpoint 
What are the differences between the

three main forms of business ownership?
● Business forms differ in the ways in
which decision making and investments
are made and to whom liabilities are
distributed.
CHAPTER 5
CHOOSING A FORM OF SLIDE 18
BUSINESS OWNERSHIP
● Choosing a proprietorship
● Choosing a partnership
● Partnership agreement is a written
agreement among all owners.
● Choosing a corporation
● Articles of incorporation is a written legal
document that defines ownership and
operating procedures and conditions for the
business.
CHAPTER 5
SLIDE 19
Checkpoint 
Which form of business ownership is the

most complex and difficult to form?
● The corporation is more complex to begin
than other business forms.
● Forming a corporation requires much more
bureaucracy, is more subject to
government regulations, requires the
organization of a board, and necessitates
the establishment of clearly defined bylaws.
CHAPTER 5
OTHER FORMS OF SLIDE 20
OWNERSHIP
● Specialized partnerships and corporations
● Limited liability partnership
● Joint venture
● S corporation
● Limited liability company
● Nonprofit corporation
● Cooperatives and franchises
CHAPTER 5
SLIDE 21
Checkpoint 
What are the other specialized forms of

business ownership?
● Limited liability partnership
● Joint venture
● S corporation
● Limited liability company
● Nonprofit corporation
CHAPTER 5
SLIDE 22
5.3 Organizational Structure

for Businesses
Learning Outcomes
5.3.1 Understand important principles in
designing an effective organization.
5.3.2 Compare alternative organizational
structures for businesses.
CHAPTER 5
SLIDE 23
KEY TERMS
● mission statement
● goal
● policies
● procedures
● organization chart
CHAPTER 5
DESIGNING AN EFFECTIVE SLIDE 24
BUSINESS ORGANIZATION
● Setting direction
● Mission statement
● Goals
● Policies and procedures
● Principles of effective organization
● Responsibility, authority, and accountability
● Unity of command
● Span of control
CHAPTER 5
SLIDE 25
Checkpoint 
What is the difference between a mission

statement and a goal?
● A mission statement communicates the
purpose of existence for a business and
what it hopes to achieve.
● A goal is a more specific statement of what
a business expects to achieve and may be
used to measure a business’ success.
CHAPTER 5
TYPES OF ORGANIZATIONAL
SLIDE 26
STRUCTURES
● Functional organization structure
● Work is arranged within main business
functions such as production, operations,
marketing, and human resources.
● Matrix organizational structure
● Work is structured around specific projects,
products, or customer groups.
CHAPTER 5
BUSINESS ORGANIZATION SLIDE 27
CHART
CHAPTER 5
SLIDE 28
Checkpoint 
What problems can result from the use of a
functional organizational structure?
● Employees in a functional organizational
structure may tend to lose sight of overall
corporate goals.
● Workers tend to be limited to specific duties
and may not see their relationship to the
organization as a whole.
● This can result in lack of interest and
motivation over time.

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CHAPTER 5

5.1 Business in the U.S. Economy

5.1 Business in the U.S.

List several groups that will increase as a

● Make and distribute products for

● Money introduced to a community

What are the six basic activities completed

How does a manufacturer differ from an

5.2 Forms of Business

What are the differences between the

Which form of business ownership is the

What are the other specialized forms of

5.3 Organizational Structure

What is the difference between a mission

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