Structures of International Business Organizations

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Presentation transcript:

Structures of International Business Organizations CHAPTER 5 9/19/2018 CHAPTER 5 Structures of International Business Organizations 5-1 Forms of Business Ownership 5-2 Operations of Global Businesses 5-3 Starting Global Business Activities INTERNATIONAL BUSINESS

LESSON 5-1 Forms of Business Ownership GOALS Describe the advantages and disadvantages of a sole proprietorship. Describe the advantages and disadvantages of a partnership. Explain the characteristics of a corporation. Name other forms of business ownership.

Percentage of U.S. Businesses by Method of Organization 5 Percentage of U.S. Businesses by Method of Organization Sole Proprietorships, 72% Partnerships, 9% Corporations, 19%

The Sole Proprietorship 5 The Sole Proprietorship Advantages Ease of starting Freedom to make business decisions Owner keeps all profits Pride of ownership Disadvantages Limited sources of funds Long hours and hard work Unlimited risks Limited life of the business

Partnership 5 Advantages Disadvantages Ease of creation Additional sources of funds Availability of different talents Disadvantages Partners are liable Profits are shared among several owners Potential for disagreement among owners Business can dissolve suddenly

Corporation 5 Advantages Disadvantages More sources of funds Fixed financial liability of owners Specialized management Unlimited life of the company Disadvantages Difficult creation process Owners have limited control Double taxation

Percentage of Sales by Method of Businesses Organization 5 Percentage of Sales by Method of Businesses Organization Sole Proprietorships, 4% Partnerships, 13% Corporations, 83%

Other Forms of Business Organization 5 Other Forms of Business Organization Municipal corporations Nonprofit corporations Cooperatives

LESSON 5-2 Operations of Global Businesses GOALS Describe the activities and characteristics of multinational companies. Identify concerns related to multinational companies.

Multinational Companies 5 Multinational Companies Multinational companies in operation Characteristics of multinational companies Worldwide market view Standardized product Culturally-sensitive hiring International and local perspective Concerns about multinational companies

LESSON 5-3 Starting Global Business Activities GOALS Identify five low-risk methods for getting involved in international business. Discuss higher-risk methods for getting involved in international business.

Methods for Getting Involved in International Business 5 Methods for Getting Involved in International Business

Low-Risk Methods for Getting Involved in International Business 5 Low-Risk Methods for Getting Involved in International Business Indirect exporting Direct exporting Management contracting Licensing Franchising

Higher-Risk Methods for Getting Involved in International Business 5 Higher-Risk Methods for Getting Involved in International Business Joint ventures Turnkey project Foreign direct investment