The Office in Relation to the Total Organization Chapter 1-2

Understanding the Organization An organization is built on information used by its employees In order for employees to carry out their tasks they need to have an understanding about their company

Types of Organizations Businesses are created to make a profit- financial gain They do this by providing goods and or services that people want and or need. All new businesses must file certain paperwork and legal documents with the government in order to open a business.

Sole Proprietorships A business owned by only one person. Can have employees Files their taxes under the owners Social Security number If the business goes bankrupt the owners personal assets are at risk.

Partnership A business that has 2 or more owners. Partners can be silent and only contribute financially All owners may take an active role in the business decisions If the business fails all owners personal assets are at risk. One owner can leave the business the others have to buy their part

Limited Liability Company LLC 1 or more owners Personal assets are protected if business fails Still files taxes with owners social

Corporations Business that has multiple owners Must secure a charter in the states they would like to inhabit. The company sells shares which are partial ownerships of the company Can be public or private If public all financial records must be reported Files taxes under own Tax ID number If the company fails the owners personal assets are protected.

Professional Service Organizations Doctors, Lawyers, accountants. Can be either sole, partnership, LLC, or Corporation. Members of these groups are financially responsible for the debts of the company and pay damages. Provide a service

Not-for- Profit These are businesses that provide services but there intention is not to make money Examples: girl scouts, boy scouts, schools, hospitals. Monies come from many sources such as: donations, government, participants.

Goals of Organizations Service businesses such as government and not for profit seek to provide a service and not profit Government Roads, trash, police Businesses seek a profit Profits allow for expansion New equipment Better technology More employees Better products

Financial Documents Public Businesses must publish their financial documents these are: Income statement Balance sheet

Income Statement Shows the businesses operations for a certain period of time Lists the revenues (profit) and Expenses (loss) Businesses can have net income If income is greater than expenses Net Loss If income is less than expenses

Balance Sheet A report that show the financial status of a company Shows the company’s assets, liabilities, and owner’s equity. Assets Plant, money, inventory Liabilities Debts Owner’s Equity Owners money that is involved in the business

Structure of Organizations Different levels of employees in each company Each employee is responsible for some different task in the company Each level has different authorities Knowing the levels in your company will allow you to move through the channels and get your job done better

Board of Directors Owners elect the board Board set up business policies and help the senior or top management in the running of the company In the board there are committees Financial Operational Research and Development

Senior management Direct persons that receive policies set by the board Chief Executive Officer CEO, Chief Operating Officer COO, Chief Financial Officer CFO. These people have the most responsibility when things happen in the company

Middle management Direct the daily operations of the company Not as many middle managers as there once was Workers now take more responsibility for their own actions and tasks.

Department employees Employees are organized into departments or areas of specialty to carry out a certain task. Each department works on a particular task usually different from the rest of the departments.