Business, Competition, and Labor

Types of Businesses Sole Proprietorship Owned/ operated by single person A: quick decisions D: complete legal responsibility (unlimited liability); hard to raise $ needed (financial capital)

Partnership 2+ people own/ operate A: raise more $; each person’s special talents D: unlimited liability; complex legal structure

Corporation Organized business, recognized by law Many rights/ responsibilities of individual

Largest corporation: Wal-Mart! Structure Create corporation with charter Owners (stockholders) elect board of directors Largest corporation: Wal-Mart!

D: expensive, complicated; more gov’t regulation; pay tax on profits A: easier to get $ (sell stock); can grow a lot; board can hire professional managers; ownership easily transferred (selling stock); limited liability D: expensive, complicated; more gov’t regulation; pay tax on profits

Businesses’ Responsibilities Responsibilities to Consumers Sell safe products Products work as promised Truthful advertising Responsibilities to Owners Corporations: manager + owner are different people Transparency: make financial info public/ available

Responsibilities to Employees No discrimination Meet needs Responsibilities to the Community Social responsibility – benefit society (charity?)

American Labor Force

Organized Labor Labor unions: groups of workers who band together to have better chance to get higher pay/ better working conditions Local Unions: within factory/ company/ geographic area National Unions (AFL-CIO)

Negotiations Collective bargaining: union + company negotiate Mediation: bring in 3rd party to help them compromise Arbitration: bring in 3rd party, who makes legal binding decision Strikes; boycott; lockout; injunction to stop strikes/ picketing