14. Forms Of Business Organizations

A business may be privately organised in three different forms, These forms are the sole proprietorship, the partnership and the corporation. Most business firms are created and exist to make a profit.

A sole proprietorship is a form of business organization owned and operated by one person. The reason for their popularity is that they are the easiest and least costly to organize.

The greatest disadvantage of a sole proprietorship is unlimited liability that each proprietor faces.

A partnership is a form of business organization that is owned and run by two or more persons. Partnersnips are easy to form, relatively small to control and often gel tax benefits from the government.

A cooperation is a form of business organization created under a government charter. A corporation may issue and self stock certificates. A person who owns a stock certificate is called a stockholder. Shareholders are the owners of a corporation and their shares of ownership are represented by stock sertificates.

A corporation is managed by the Board of Directors.

It is difficult and expensive to organize a corporation.

15. Four Basic Principles Of Management

The idea of scientific Management was developed by the American management theorist Frederick W. Taylor. The three basic ideas on which F. Taylor based his theory were:

-the development of a true scientific management

-the scientific selection of workers

-the scientific education and development of workers.

Four major principles or functions of management are: planning, organizing, directing, controlling.

Planning involves determining overall company objectives and deciding how these goals can best be achieved.

Organizing, the second management function, is the process of putting the plan into action.

Third is the day-to-day direction and supervision of employees. In directing, managers guide, teach and motivate workers so that they reach their potentional abilities and at the same time achieve the company goals.

In the controlling managers evaluate how well company objectives are being met.

16. Setting Up a Business

People set up their own business for different reasons. Many simply want to work for themselves, and others have an idea or spot a gap in the market and try to exploit it.

The hallmark of any entrepreneur is a drive and determination to succeed. The founder of a business can ruin it if he or she lacks ability to think quickly. This business acumen is often only arrived at through years of experience and by learning the hard way.

Every entrepreneurial venture needs to have the fundamentals in place: business plan, extensive market research, an efficient supply chain, a motivated team and adequate funding.

But not only having enough finance is important for startups. Business education would certainly benefit young people. They should have at least a basic understanding of trading laws, which protect consumers, employees, the general public and business as well.

17. Global Economy

Anyone who follows the news, even casually, is aware that the world economy has become more integrated in recent decades.

Today, global economic ties have rebounded and are generally more extensive and intensive than ever before. This fact illustrates the historical flow of US trade. Because US corporations have international portfolios, they earned essential part of their after-tax profits abroad.

The world economy is closely connected with the process of globalization. The general advantage of globalization is that it increases competition at home at in international markets.

The most important disadvantage is threat of unemployment. Because of the companies looking cheep and skilled labour in China, India.