Professional Documents
Culture Documents
ORGANIZING THE
ENTERPRISE
ORGANIZING THE
ENTERPRISE
When one starts to organize a business
enterprise, it is presumed that he conducted
a feasibility or market study. That is, he
knows his resources, the needs of the
community, the strengths if his competitors,
and so forth.
However, what count most are the
personal characteristics of the entrepreneur.
Handwork, determination, creativity,
enthusiasm and human relations can make
the difference between success and failures.
Levis
Story
More than one hundred years ago, a young man
from Bavaria went to the United States as an
immigrant. His objective was to seek his fortune.
Little success at first encouraged him to return to
his country. But he decided to try prospecting for
gold in California. At the time all roads led to
California. Likewise, luck was not for him as a gold
prospector.
However, the young man recognized the needs
of his fellow gold prospectors for sturdy and
durable work pants. Exploiting his talent in tailoring
and using his last money, he put up his tailoring
shop. Over the years his business prospered.
Why do you go to
Business?
Here
are the reasons why people go to business:
1. Personal satisfaction- They enjoy challenges and
risk-taking ventures. Their business gives them a sense
of fulfillment.
2. Family involvement- They feel it is their
responsibility to continue the business of their parents,
especially if it is profitable.
3. Independence and power- They want to be boss.
They love to make their own decisions and implement
them.
4. Social activities. There are people who are really
born socializer. They love social activities.
5. Profit expectation- Some individuals are greatly
motivated by profit or the chance to amass wealth.
Thus, they go to business.
3. About a partner
What is an Organization?
An organization is a group of two or
more persons who work together to
attain a common set of goals.
Organizing is a process of
combining and coordinating resources
and activities in order to accomplish
efficiently and effectively certain
objectives. The best resources of the
organization are its employee not
money, machines, materials or
buildings.
Organizational Structure
Every organization has a structure which indicates positions
and relationship. There are shown by an organizational chart.
ManagerOwner
Office
Supervisor
Accountant
Clerk
Sales
Supervisor
Messenger
Salesman
Salesman
Salesman
Forms of Business
Organization
The disadvantages
are:
1. Unlimited liability. This is the other side of profit. In
case the business fails, the owner assumes all the financial
obligations. All his personal properties, including savings,
could be seized and sold to pay creditors.
2. Lack of stability. If the owner dies, it is the end of the
business. However, members of the family or close relatives
can continue the business. This happens only if such
relatives are interested and the business is profitable.
3. Limited access to credit. Banks and other financial
institutions are usually not willing to lend large amounts of
money to single proprietorships. Assets of owners are
generally small to be used as security or collateral.
4. Limited business skills and knowledge. In many
cases the owner is the manager, salesman, bookkeeper,
messenger and janitor. There is no specialization.
Partnership.
It is an association of two or more
persons who act as co-owners of a
business. Each partner contributes money,
property or service to their organization.
Most partnerships have two partners. They
are usually engaged in accounting, law,
advertising, real estate and retailing. There
are two types of partners: general partners
and limited partners. The liability of a
general partner extends up to his personal
properties while a limited partner is only
liable to the extent of his contribution to
business.
The
Disadvantages:
1. Unlimited liability. Each general partner is
personally responsible for all the debts of the business.
Even the personal property of a general partner can be
taken to pay creditors. However, in the case of a limited
partner, only his investment is subject to risk.
2. Lack of stability. A partnership is terminated in case
of the death, withdrawal or legally declared insanity of
any one of the general partners.
3. Management disagreement. It is true that two or
more heads are better than one. But if they do not work
in unity, conflicts arise.
4. Idle investment. It is quite easy to invest money in
partnership. But sometimes it is difficult to get it out. For
example, when a partner decides to leave the
organization, his remaining partners may not buy hi
share.
Corporation.
It is an artificial being created by operation of
law, having the right of succession, and the powers,
attributes and properties expressed authorized by
law or incident to its existence. United States
Chief Justice John Marshall defined corporation in
his famous 1819 decisions as an artificial being
invisible, tangible and existing only in
contemplation of the law.
Stocks
The shares or the certificates of ownership
of a corporation
Stockholders or Shareholders
The owners of stocks
Two types of corporations:
Private or close corporation- The first
one is owned by few individuals, usually
relatives and friends.
Open Corporation.- is owned by any
individual who buys shares of stock which are
openly traded in the stock markets.
Objectives of
cooperatives
Types of
cooperatives
Organizing a cooperative
For the membership, there should be a minimum of
15 person natural persons. They should be citizens of
the Philippines who are residing or working in the
intended area of operation of the cooperative. However,
before organizing a cooperative, the Core
Group(leader)should first study the following factors:
1. Felt need
2. Volume and business
3. Availability of qualified officers
4. Adequacy of facilities
5. Opportunity for growth
Departmentalization
1. Function. All jobs that pertain to the same activity
are grouped.
2. Product. All activities related to a particular
product or product group are put together.
3. Location. Activities are grouped based on a
particular geographic are.
4. Customer. Grouping of activities in accordance to
the needs of various customers.
Decentralization of
Authority
Delegation
When a part of a managers work and power is
assigned to a subordinate.
The latter involves the granting of responsibility,
authority and accountable.
Responsibility -is a duty to do the job.
Authority -is the power to do the job.
Accountability -is an obligation to do the job.
Decentralization of
Authority
President
President
Consultan
Consultan
tt
Vice
Vice
President
President
Legal
Legal
adviser
adviser
Marketing
Marketing
Manager
Manager
-------
Line authority
Staff authority
Production
Production
Manager
Manager
Finance
Finance
Manager
Manager
Entrepreneurial
Consideration
Evaluating an existing
enterprise
1.
Reasons for selling
- Retirement Opportunities somewhere
- Illness
- Going abroad
- Employment - Financial problems
2. Earning power
- Profitability of firm
- Financial statement for the last five years
3. Other factor
- Demand for the firms product/services
- Number of competitors
- Future trend of the industry
- Present location of the business
THE END