Business

Organization
Lecture 2
Dr. Hadeer Hussein El-Saadawy
Hadeer_Ibrahim@cis.asu.edu.eg
Ain Shams University
Cairo, Egypt, 2022

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 2 hours weekly lecture.

The course mark is 100 (60 final exam +

Course 20 mid-term exam + 20 year work).
Information
There will be a bonus on contribution ☺.

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Business
Organization Forms

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Company’s
1. Taxes
2. Legal liability
form will 3. Costs of formation

affect: 4. Operational costs

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Business Organization Forms
• Sole Proprietorship
• Partnership
• Corporation

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Sole Proprietorship
• Is a business owned and run by someone for their
own benefit.
• The business’ existence is entirely dependent on
the owner’s decisions, so when the owner dies, so
does the business.

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 ✓Easy to set up
✓Privacy
✓Controlled by Owner
✓No many tax requirements
Advantages ✓Owners have flexibility when running the business
✓Very few requirements for starting—often only a
business license

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 ✓Unlimited Liability
✓No asset protection
✓Few financial resources
Disadvantages ✓Limited managerial skills
✓Limited life

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 ✓Private Tutor
✓Farms
✓Local Barber Shop
Examples ✓Auto-Repair Shop
✓Youtuber

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Partnership
• In general partnerships, both owners invest their money,
property, labor, etc. to the business and are both 100%
liable for business debts.
• Even if you invest a little into a general partnership, you
are still potentially responsible for all its debt.
• General partnerships do not require a formal
agreement—partnerships can be verbal or even implied
between the two business owners.
• Limited partnerships require a formal agreement
between the partners.

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 ✓Easy to set up
✓More resources
✓Cost sharing
Advantages ✓Broader skill and experience
✓Shared control
✓Tax advantages

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 ✓Unlimited liability
✓Responsible for partner decision
✓Issues with expansion, success, and termination

Disadvantages ✓Partnership ends when any partner decides to end it

✓Selling the business is difficult—requires finding new
partner

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 ✓Small Shops
Examples ✓Doctor Offices

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Corporation
• Is a legal entity that has the
power to own property and
conduct business corporations.
• Owned by investors who
purchase shares the stock they
are called the shareholders.

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 ✓Better ability to raise capital
✓Profits and losses belong to the corporation
✓Limited liability
Advantages ✓Transfer ownership
✓Unlimited life

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 ✓Harder to set up
✓Higher taxes
✓Managerial demands
Disadvantages ✓Possible loss of control
✓Corporate operations are costly
✓Establishing a corporation is costly

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 ✓Pepsico
Examples ✓Microsoft
✓IKEA

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Exercise: True/False
1. Unlimited Liability, Responsible for partner decision are
from the advantages of partnership business
2. Sole and partnership organizations have limited liability
3. General partnership require a formal agreement in the all
cases
4. Unlimited life is an advantage for the corporate business
5. Taxes are pain for all business organizations

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Exercise: Match
Column A Column B
C 1. Sole Business A. Owners invest their money, property,
labor, etc. to the business and are both
100% liable for business debts.
A 2. Partnership Business B. Owned by investors who purchase shares
the stock they are called the shareholders.
B 3. Corporation Business C. The business’ existence is entirely
dependent on the owner’s decisions, so
when the owner dies, so does the
business.

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Exercises
• What are the main types of organizations?
• List three examples of sole business
• List three examples of partnership business
• List three examples of corporation business
• Differentiate between the different types of business

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 Start-up
VS
Multinational

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 • When you’re fussing about the type of jobs to
apply for.
• Don’t underestimate the importance of the type of
company that suits your personality and career
Choosing an goals as well.
• Think about it.
Employer • No matter how attractive the offer may seem.
• If you don’t fit well into your new company, it’s
unlikely that you’ll be satisfied with your job.

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 A multinational company, known more
Multinational commonly as a multinational corporation, is a
corporations business with branches, offices or production
facilities in more than one country.
(MNCs)

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 • In recent times, the term ‘startup’ is not just a
type of company, it has become a way of living.
• These companies are the lifeblood of our
economy and have encouraged innovation
across the globe, which has resulted in an
Start-ups enhanced way of living for people everywhere.
• Startups are led by entrepreneurs who put in all
their effort to make their dreams come to life.
• Even though most startups have to face the
wrath of failure, some entrepreneurs don’t give
up and manage to change the world.

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 1. Responsibility and Accountability
2. Recognition
3. Learning Curve
Main Points 4. Perks
5. Work-Life Balance
to Think 6. Time Period

About 7.
8.
Job Security
Working Atmosphere

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 • Better paid.
• Numerous perks which, depending on the
company, can include free lunches, gym
membership, trips, transport being paid, bonuses,
a pension, a car and health insurance.
MNCs Pros • Less likely to lose your job through the company
collapsing in a multinational.
• Unlikely to have a hundred tasks to juggle at one
time.
• Multinational will look much better than a random
startup nobody has heard of.

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 • Recognition is rare and you can feel useless.
• Hard to impress.
• Little opportunity to improve your other skills as
often you only have one specialty.

MNCs Cons • Less familiar atmosphere

dependent on your team.
which is totally

• You can’t just roll into work in sweatpants and a

hoodie after a long night. In a multinational you
need to look the part.

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 • An incredibly exciting thing to be involved with. At any
moment, and with enough hard work, you could all
become millionaires...theoretically.
• Your creativity is noticed, your ideas are listened to, and
your work has a more immediate impact on the
business.
• The culture is more focused on keeping employees
Start-ups comfortable and happy; a tactic to compete with the
higher salaries of the beckoning multinationals.

Pros • Having many. It can be stressful, but the likelihood is that

it is far from boring.
• In a small team it is very easy to thank and be thanked
because a person’s influence is more obvious and you
have regular contact with your boss, probably even
working in the same room.
• Small Team: This can be a positive and a negative feature
of the workplace.
• The pace of the small business is fast moving and
exciting. 29
 • High probability to fail.
• Low paid (Until you land that huge investment
deal).
• A lot of responsibility.
Start-ups • The name won’t look impressive on your CV to
future employers.
Cons • The relationships can get intense in such a small
team who are tripping over each other all day in a
small office. Both good and bad relationships get
magnified by proximity – so be prepared.

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Exercise: True/False
1. Working in start-up company may be boring
2. Lack of security is from the cons of working in
multinational corporation
3. Small team in start-ups is always a good thing
4. In multinational corporation, it’s unlikely to have a
hundred tasks to juggle at one time
5. The dense relationships in start-ups are always good

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Exercises
• List three advantages for working in start-up.
• List three disadvantages for working in multinational
corporate.
• Differentiate between working in start-up and multinational
company.

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