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The Forms of Organization

 SOLE PROPRIETORSHIP (Single Entrepreneurship)


 Company owned by one person who usually is hands-on in managing day to day activities

CHARACTERISTICS:

1. One man control


2. Single Ownership
3. No sharing of profit and loss
4. One man’s capital
5. Unlimited liability
6. Less legal formalities

ADVANTAGES DISADVANTAGES
 Easy to Start  Limited Capital
 Easy to Wind-Up  Unlimited Liability
 Quick decision and Prompt Action  Lack of Continuity
 Flexibility in Operations  Limited Size
 Direct Maintenance of Business  Lack of Managerial Expertise

 PARTNERSHIP (Judicial Person)


 A form of business organization where ownership of the business is shared by two or more members

KINDS OF PARTNERSHIP:

1. General Partnership – partners have unlimited liability for the debts and obligations of the partnership
2. Limited Partnership – one or more general partners have unlimited liability and the limited partners have liability
that is only up to the amount equal to their capital contributions.

ADVANTAGES DISADVANTAGES
 Extra Set of Hands  Less Independence
 Additional Knowledge  Potential Conflict
 Reduced Financial Burden  Divided Profits
 Less Paperwork  Lack of Separation from Business
 Fewer Tax Forms  Individual Taxation

 CORPORATION
 A legal entity created by individuals, stockholders, and shareholders with the purpose of operating for profit

TYPES OF CORPORATION

1. Stock Corporation – has capital stock divided into shares and dividends
2. Non-stock Corporation – do not issue shares of stock and is established primarily for public interests

ADVANTAGES DISADVANTAGES
 Owner’s have unlimited liability.  Shareholders are exposed to double taxation.

 Easy access to capital markets.  Cost of running a corporation is relatively high.

 Infinite life unless go bankrupt or merge by  May suffer from potentially serious governance
others. problems.
 INCORPORATION
 Involves a legal process where legal documents containing the primary purpose of the business, name and
location, and the number of shares and types of stocks issued, are drafted (5,000)

Classification of Business According to Product

 SERVICE – an enterprise composed of a professional or team of experts that deliver work or aid in
completing a task for the benefit of its customers.
 MERCHANDISING – a type of business that purchase products from other businesses and sells them to
customers at a higher retail price.
 MANUFACTURING – where raw materials are transformed into finished goods through product
processing, labor and other manufacturing processes. (Agriculture, Aquaculture, Mining)

Planning…

 Is the primary management function.


 Continuous process
 It involves setting the direction and goals of an organization establishing system that will greatly define
the activities of the organization and formulating a plan to ensure that system works towards
achieving goals.
 Initial task that defines the management function.
 Intellectual exercise

Mission and Vision Statements

VISION describes what the company wants to achieve and where it want to go in the future. It determines the
course direction of the company.

CHARACTERISTICS OF EFFECTIVELY WORDED VISION:

GRAPHIC
– it projects to the market the kind of company aspires to be.
DIRECTIONAL
– it describes the path where the company wants to go. It presents specific plan in order to move from the
future.
FOCUSED
– is very specific to managers.
FLEXIBLE
– it allows room for managers to change based on technological advertisements.
FEASIBLE
– achievable or realistic.
DESIRABLE
– it should serve the interest of your client in a long-term aspect.
EASY TO COMMUNICATE
– easy to understand or straightforward.

MISSION describes a company’s reason for its existence.

CHARACTERISTICS OF MISSION:

Identifies the company’s products and services


Identifies the customer’s needs that the company seek to satisfy
Identifies the target market that that it wants to serve
Identifies the approach to be taken to satisfy customer needs
It should present the company’s unique identity that distinguish itself from competitors
GOALS OBJECTIVES
Are specific accomplishments or action plans that are Refers to action plans that involve shorter periods and
usually attained after a long period. more measurable outputs.

KINDS OF PLANS:

 Strategic Plan is the company’s vision and these are designed by the top management such as the CEO or the
President.
 Tactical Plan creates specific plans for specific areas of the company.
 Operational Plan these are specific procedures and processes made by frontline or low-level managers.

Ongoing plans can be in any of the following forms…

1. POLICY – guide that managers used in addressing a particular issue.


2. RULE – a regulation that describes the rules of the company.
3. PROCEDURE – step-by-step procedure.

 Contingency Plan is a special plan created for unexpected scenarios or changes.


- THE CRISIS MANAGEMENT PLAN
- SCENARIO PLANNING

THE PLANNING PROCESS

 Formulate the goals and objectives


 Identify the courses of action
 Assign responsibilities
 Document the plan and distribute to people connected
 Review the plan and adjust accordingly

TECHNIQUES AND TOOLS:

 Brainstorming
- Common technique
- Stimulate thinking in order to generate ideas
 Nominal Group Technique
- Highly structured method
- It allows others to input
 Delphi Technique
- Similar to nominal group technique
- Formulating the courses of action
 Decision tree
- Excellent tool for selecting different alternatives
- Uses graph
 Payback method
- Evaluating purchase

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