Adm 1301 Midterm 1

• Business


  -drives the economy of a nation

  -measured by effectiveness and efficiency
• Basic Rights of a Private Enterprise System

  -private property

  -freedom of choice

  -profits

  -competition
• No competition

  monopoly
• Private Sector Forms of Ownership

  -sole proprietorship

  -partnership

  -corporation

  -co-operation

  -franchises
• Sole Proprietorship


  a business is owned and operated by one person
• Advantages of Sole Proprietorship

  -easy

  -cheap to start

  -you get all profit

  -no special taxes

  -no government regulation
• Disadvantages of Sole Proprietorship

  -limited financial resources

  -one person can't have all the skills

  -limited life span
• Partnership


  2 or more people combine resources and run a business while sharing profits
• Advantages of partnership

  -increased financial resources

  -combined skills

  -shared management
• Disadvantages of Partnership

  -unlimited liability

  -disagreements

  -division of profits
• General Partnership


  each partner is liable for full amount
• Limited Partnership


  -only one partner is required to be a general partner

  -one signs, all are in
• Corporation


  a company or group of people authorized to act as a single entity (legally a person) and recognized as such in law
• Private Corporation


  -sells shares, can't transfer

  -can't sell shares to public
• Public Corporation


  -sells shares to public on stock exchange

  -strict regulation for financial reports
• Advantages of Corporations

  -more money for investment

  -perpetual life

  -size

  -seperation of ownership from management
• Disadvantages of Corporations

  -initial cost

  -two tax returns

  -greater CSR expectations
• Co-operations


  -an organization that emphasizes working together as a way of building community involvement

  -supplies needed good at lower prices to save money
• Franchise


  -someone develops business, someone else runs it
• Governance


  how an organization steers itself;

  -values

  -rules

  -impact

  -responsibility
• Key Planners of Corporate Governance

  -shareholders

  -board of directors

  -officers
• Shareholders


  -de-facto owners of the corporation

  -interested on return and investment
• Board of Directors


  -responsible for governance

  -elected by shareholders to respect their interests

  -responsible to accountability (disclosure, risks, etc)
• Officers


  senior employees who oversee daily operations;

  -president

  -CEO
• Corporate Social Responsibility (CSR)


  - a corporations moral obligation to maximize its positive impact and minimize its negative impact on society
• Positives of CSR

  -business is satisfying society's needs

  -long-term CSR approach

  -business and government can solve problems

  -businesspeople are also concerned citizens
• Negatives of CSR

  -social policy is the governments role

  -primary purpose of business is profit maximization

  -business gains too much power

  -increased costs
• Theories of CSR

  -amoral view

  -personal view

  -social view
• Amoral view


  business is a profit making entity
• Personal view


  Corporations are like people and can therefore be held accountable for their actions
• Social view

  Corporations are social institutions with social responsibilities
• Contemporary CSR Concepts

  -corporate sustainability

  -reputational management

  -social impact management
• Corporate Sustainability


  inclusion of social, environmental and economic responsibilities in business operations
• Five levels of corporate sustainability

  -compliance-driven: follows government regulations

  -profit-driven: considers s,e, and e aspects

  -caring- institutions go beyond profit

  -synergistic: well balanced solutions

  -holistic: full integration of CSR
• Reputational Management


  any effort to enhance the corporations image or good name
• Triple Bottom Line (TBL)


  evaluates corporations preformance based off of the social, environmental, and economic values it adds or detroys
• Corporate Citizenship


  corporation takes into account its social, environmental and economic impacts
• A federal state

  a state that brings together a number of different political communities with a common governments for common purposes

  -separates states or provincial governments for the purposes of each community

  -no one has absolute power
• Constitution


  A document which spells out the principles by which a government runs and the fundamental laws that govern a society

  -where all the laws come from
• Specific rights and freedoms


  documents that forms the bases of which all laws are formed (ex. equality rights)