BUSINESS

ETHICS
How important do
business organizations in
the society?
Business organizations are an important
component of the modern society.
They help economies grow, offer desired
products for consumption, and create jobs
for the population.
In return, they make profits when people
patronize their products.
•What is Ethics?
•Is there a need to apply ethics
in business?
The Business
Organization
Learning Outcomes
Differentiate the forms of business
organizations
Show how these organizations
contribute to socioeconomic
development.
Business is a combination of
war and sport.
-Andrei
Maurois
The Nature of Business
Organizations
Business Organization
•Is an entity that aims to earn a
profit by providing products to
satisfy the needs of the market.
Products
• Can be tangible or physical objects
(goods and commodities)
• Intangible or nonphysical things
(services)
Profit
• The amount of money a business takes
in after the expenses needed to operate
the business have been deducted from
the revenue.
Revenue
•Is the total amount of money a
business earns during a given
period of time by offering
products to the market.
Non-Profit Organization
• Formed for specific purpose to serve the
common good.
To assist victims of domestic violence, to
promote animal welfare, to care for the
elderly
 Forms of
Business
Organization
Sole Proprietorship
• The business is owned and operated by one
individual.
• The owner has full authority on the business
and owns all assets and profits but, at the
same time, is personally liable for all the
obligations and losses.
Sole Proprietorship
• The simplest form of business
organization and is the easiest to register
through the Bureau of Trade
Regulations and Consumer Protection
(BTRCP) of the Department of Trade
and Industry (DTI)
Examples
•Online Store
•Food Cart Franchise
•Freelance Work
Partnership
• Two or more persons bind themselves to
contribute money, property, or industry to a
common fund with the intention of
dividing the profits and sharing the
liabilities among themselves.
Partnership
• It is registered with the Securities and
Exchange Commission (SEC)
• The most common partnerships are
professional partnerships such as law
firms and accounting firms.
 Types
a. General Partnerships – where the partners
have unlimited liability for the debts and
obligations of the business
b.Limited Partnerships- where one or more
general partners have unlimited liability and
limited partners have the liability only up to the
amount of their capital contributions.
•Partnership is dissolved
upon the death of a partner
or when a partner chooses to
leave.
Corporation
• 5 to 15 persons, who are called incorporators, hold at
least one share and are bound by the articles of
incorporation filed with the SEC. The paid-up capital
(total amount of capital received by a company from
its shareholders in exchange for shares of stocks) of a
Philippine corporation must not be less than P5,000.
Stock Corporation
• Has a capital stock divided into shares
and is authorized to distribute to the
shareholders dividends or allotments of
the surplus profits on the basis on the
shares held.
Nonstock Corporation
• One where no part of its income is distributable
as dividends to its members, trustees, or officers.
• Any profit earned is used to promote the purpose
of the organization.
• May be formed for charity, religious,
educational, professional, or other similar
purposes.
Advantages of Corporation

• Unlimited Life
• Credibility
• Ease of transferring ownership
• Protecting personal assets.
 Business
Organizations and the
Economy
•Economic conditions affect how
businesses fare in the market.
Changes in the economic and the
political system can have an
impact on certain industries or the
whole business system.
Economics
• Is the study of how resources used in the
production of goods and services are distributed
for consumption within a social system.
• Resources, which include natural, human, and
financial resources, are sometimes called
Factors of Production.
Economics
• Business organizations may also have
intangible resources such as good brand
equity for producing credible products.
• Their goal is to turn these resources into a
competitive advantage that they can use in
marketing their products.
Economic Systems
• Describes how a society distributes its
resources to produce goods and services. In
this system, there is an unlimited demand
for goods and services, and the challenge is
how to meet this demand with a limited
supply of resources.
 Capitalism Communism Socialism

Definitio Individuals own and Accdg. To Karl Marx, The gov’t owns and
n operate the majority of communism is a operates basic
businesses that provide society in which the industries, but
goods and services. people, without regard individuals owns
Also known as a free to class, own all the most businesses.
enterprise capitalism nation’s resources. In Socialism’s core
can be pure or his ideal society, benefits is supposed
modified. everyone contributes to be social
according to each equality..
person’s ability, and
people receive goods
and services based on
their needs.
 Capitalism Communism Socialism

Definition In a pure capitalism or In his ideal society, Central planning

a free-market system, everyone contributes determines
all economic decisions according to each production and
are made without person’s ability, and distribution of
government people receive goods goods and services
intervention. In a and services based on while individual
modified capitalism, their needs. The businesses provide
the government government other goods and
intervenes and determines the goods services based on
regulates businesess to and services, as well as consumer demand
some extent (laws, the production and and availability of
regulations, and distribution of goods resources.
policies) and services.
 Capitalism Communism Socialism

Business Business are Businesses are Major

Ownership owned and owned and industries are
operated by operated by the owned and
individuals and government operated by
corporations. the
government;
small
businesses are
owned by
individuals.
 Capitalism Communism Socialism

Competition Competition is There is no Competition

encouraged by competition as restricted in
market forces and the government major industries
government owns and owned and
regulations. operates operated by the
businesses. government but
is encouraged in
small
businesses.
 Capitalism Communism Socialism

Profits Individuals keeps Profits go to the Profits from

profits and decide government. government-
on how to use owned
them. enterprises go to
the government;
small business
owners reinvest
profits.
 Capitalism Communism Socialism

Product Prices of products Prices of Prices of

Availability are determined by products are high products are
and Price supply and with limited determined by
demand, and choices of goods supply and
consumers enjoy a and services. demand, while
wide selection of consumers have
products. some choices of
products.
 Capitalism Communism Socialism

Employme There are Most people Many people

nt Options unlimited choices work in the work in the
of career for government with government,
everyone a little option in with some
choosing a options in
career. choosing a
career.
 Reflect Upon

• What do you think is the ideal economic

system? Explain your choice. Cite the
advantages and disadvantages of your
chosen economic system.