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Chapter Menu Chapter Introduction Section 1:Section 1:Types of Businesses Section 2:Section 2:The American Labor Force Section 3:Section 3:Businesses in Our Economy Visual Summary

Chapter Intro 1 Businesses and labor organizations play a major role in our nation and communities. They work separately, as well as together, to make people’s lives better by keeping the economy as healthy as possible.

Chapter Intro 2 Section 1: Types of Businesses Market economies rest upon the fundamental principle of individual freedom for consumers, producers, and workers. The three basic types of business organizations in the United States are sole proprietorship, partnership, and corporation.

Chapter Intro 2 Section 2: The American Labor Force Market economies rest upon the fundamental principle of individual freedom for consumers, producers, and workers. Labor unions represent about 14 percent of U.S. workers and play an important role in the nation’s economy and political life. They negotiate wages and workplace agreements with management.

Chapter Intro 2 Section 3: Businesses in Our Economy Market economies rest upon the fundamental principle of individual freedom for consumers, producers, and workers. Businesses play many different roles in our economy, including that of consumer, employer, and producer. Businesses also have responsibilities to their consumers, owners, employees, and communities.

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Section 1-Main Idea Guide to Reading Big Idea Market economies rest upon the fundamental principle of individual freedom for consumers, producers, and workers.

Section 1-Key Terms Guide to Reading Content Vocabulary sole proprietorshipsole proprietorship financial capitalfinancial capital partnership articles of partnershiparticles of partnership corporation charter stock stockholder board of directorsboard of directors cooperative

Section 1-Key Terms Guide to Reading Academic Vocabulary sole consult clarify

A.A B.B Section 1-Polling Question Should businesses enjoy all the same freedoms that private citizens do? A.Yes B.No

Section 1 Proprietorships The most common, and simplest, form of business organization in the United States is the sole proprietorship.

Section 1 Proprietorships (cont.) Sole proprietorships are the simplest and most common form of American business.Sole proprietorships Advantages: –Easy to start –Quick decisions without the need to consult a boss or partner –No corporate taxes

Section 1 Disadvantages: –Unlimited liability –Difficult to raise financial capitalfinancial capital –Difficult to find good employees Proprietorships (cont.) Forms of Business Organization

A.A B.B Section 1 Do you think it would be easy and fun to run your own business? A.Yes B.No

Section 1 Partnerships A partnership is a business owned by two or more people.

Section 1 Partnerships (cont.) A partnership is a business run jointly by two or more owners.partnership Articles of partnership used to clarify business setupArticles of partnership

Section 1 Advantages: –Easier to raise money –Add partners if needed –No corporate taxes –Partners bring unique talents Partnerships (cont.)

Section 1 Disadvantages: –Complex legal structure –Unlimited liability Partnerships (cont.)

A.A B.B Section 1 Do you think partners should be financially responsible if a customer is injured while being careless at their business? A.Yes B.No

Section 1 Corporations The corporation is a business recognized by law and is the most complicated of the three main types of businesses.

Section 1 Corporations (cont.) A corporation has many of the rights and responsibilities as an individual.corporation –One-fifth of all businesses –Need a charter to establishcharter –Can sell stockstock Corporate Chain of Command

Section 1 Stockholders elect board of directors.board of directors Managers actually run business Corporations (cont.)

Section 1 Advantages: –Easy to raise funds –Can grow to be huge –Can hire professional managers –Limited liability Corporations (cont.)

Section 1 Disadvantages: –Expensive to start –Owners have little control –More government regulation –Double taxation Corporations (cont.)

Section 1 Some organizations are nonprofit: –Churches –Hospitals –Social services –Cooperatives or voluntary associationsCooperatives Corporations (cont.)

A.A B.B C.C D.D Section 1 Which business do you think would best be set up as a corporation? A.Beauty parlor B.Doctor’s office C.Sandwich shop D.Skating rink

Section 1-End

Section 2-Main Idea Guide to Reading Big Idea Market economies rest upon the fundamental principle of individual freedom for consumers, producers, and workers.

Section 2-Key Terms Guide to Reading Content Vocabulary labor union right-to-work lawright-to-work law collective bargainingcollective bargaining mediation arbitration strike boycott Academic Vocabulary comprise technique option

A.A B.B Section 2-Polling Question Are labor unions good for American business? A.Yes B.No

Section 2 Organized Labor Labor unions play an important role in the nation’s economy and political life.

Section 2 Organized Labor (cont.) Labor unions help workers obtain better pay and working conditions.Labor unions Only 14% of U.S. workers are in unions. Right-to-Work States

Section 2 Two types of unions: –Craft or trade unions –Industrial unions Organized Labor (cont.)

Section 2 Different levels of union organization: –Local union –National union Federation – American Federation of Labor-Congress of Industrial Organizations (AFL-CIO) Organized Labor (cont.)

Section 2 Union arrangements: –Closed shops now illegal, but once common –Union shops require employees to join union after being hired –Modified union shop gives hirees a choice Organized Labor (cont.)

Section 2 –Twenty-two states have right-to-work laws right-to-work laws –National Labor Relations Board (NLRB) regulates Organized Labor (cont.)

A.A B.B C.C D.D Section 2 If you were hired by a business that had a modified union shop, would you join the union? A.Yes B.No C.Probably D.Probably not

Section 2 Negotiations Labor and management negotiate workplace agreements.

Section 2 Negotiations (cont.) Unions engage in collective bargaining for their members.collective bargaining Negotiations focus on: –Wages –Health care –Holidays –Working conditions –Procedures for changing rules

Section 2 Options for coming to agreement: –MediationMediation –ArbitrationArbitration Negotiations (cont.)

Section 2 Labor tools: –Strike so business has to shut down or give inStrike –Encourage public to boycott until business changesboycott Negotiations (cont.) Labor Union Trends

Section 2 Management tools: –Lockout workers until they accept new contract Negotiations (cont.) Government may step in under extreme circumstances. Public employees may also join labor unions.

A.A B.B C.C D.D Section 2 Which seems like the most effective method for a business and a union to come to an agreement? A.Strike B.Lockout C.Mediation D.Arbitration

Section 2-End

Section 3-Main Idea Guide to Reading Big Idea Market economies rest upon the fundamental principle of individual freedom for consumers, producers, and workers.

Section 3-Key Terms Guide to Reading Content Vocabulary transparency discrimination social responsibilitysocial responsibility Academic Vocabulary foundation crucial reveal

A.A B.B C.C D.D Section 3-Polling Question What is a business’ first responsibility to? A.its owners B.its employees C.the community D.its customers

Section 3 Roles of Business Businesses play many different roles in our economy. Businesses also have many responsibilities.

Section 3 Roles of Business (cont.) Businesses do more than produce goods or services. Other roles in economy: –Consumer –Employer –Donor, often through foundation

A.A B.B Section 3 Do you know of any companies in your city that do community service? A.Yes B.No

Section 3 Responsibilities Businesses have responsibilities to their consumers, owners, employees, and communities.

Section 3 Responsibilities (cont.) Responsibilities to consumers: –Safety –Honesty –Fairness –Government enforces

Section 3 Responsibilities to owners: –Transparency or full financial disclosureTransparency Responsibilities (cont.)

Section 3 Responsibilities to employees: –Safety –No discriminationdiscrimination Responsibilities (cont.)

Section 3 Responsibility to community: –Social responsibility, such as gifts to charitySocial responsibility –Volunteer programs –Support education –Disaster relief –Public environmental awareness Responsibilities (cont.)

A.A B.B Section 3 Do you agree that businesses should have social responsibility? A.Agree B.Disagree

Section 3-End

VS 1 Business Sole proprietorships are small, easy-to-manage enterprises owned by one person. Proprietorships are relatively numerous and profitable. Disadvantages include raising financial capital and attracting qualified employees. Partnerships are owned by two or more persons. Corporations are owned by shareholders.

VS 2 Business One of the major advantages of a corporation is limited liability. A major disadvantage of corporations is that they are taxed more heavily than other forms of business organizations.

VS 3 Responsibilities Businesses have a responsibility to provide safe, working products to their customers. Businesses have an obligation to pursue goals that benefit society as a whole as well as themselves.

VS 4 Labor For much of its history, organized labor in the United States has been split into two groups: craft unions and industrial unions

VS 5 Labor Organized labor operates at three levels: local union national union federation The closed shop (now illegal) required that employers hire only union members.

VS 6 Collective Bargaining Collective bargaining is the process by which unions and employers negotiate the conditions of employment. When collective bargaining fails, several other methods are available to settle labor disputes.

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Vocab1 sole proprietorship a business owned and operated by a single person

Vocab2 financial capital money used to buy the tools and equipment used in production

Vocab3 partnership a business owned by two or more people

Vocab4 articles of partnership formal legal papers specifying the arrangement between partners

Vocab5 corporation type of business organization owned by many people but treated by law as though it were a person

Vocab6 charter a written document granting land and the authority to set up colonial governments; or a government document granting permission to organize a corporation

Vocab7 stock ownership share of a corporation

Vocab8 stockholder an individual who has invested in a corporation and owns some of its stock

Vocab9 board of directors people elected by the shareholders of a corporation to act on their behalf

Vocab10 cooperative a voluntary association of people formed to carry on some kind of economic activity that will benefit its members

Vocab11 sole being the only one

Vocab12 consult to seek information or advice from a person or resource

Vocab13 clarify to make something more understandable

Vocab14 labor union association of workers organized to improve wages and working conditions

Vocab15 right-to-work laws state laws forbidding unions from forcing workers to join

Vocab16 collective bargaining process by which unions and employers negotiate the conditions of employment

Vocab17 mediation situation in which union and company officials bring in a third party to try to help them reach an agreement

Vocab18 arbitration situation in which union and company officials submit the issues they cannot agree on to a third party for a final decision

Vocab19 strike when workers deliberately stop working in order to force an employer to give in to their demands

Vocab20 boycott the refusal to purchase certain goods

Vocab21 comprise to consist or be made up of

Vocab22 technique procedures or methods by which something is done

Vocab23 option an alternative or choice

Vocab24 transparency process of making business deals more visible to everyone

Vocab25 discrimination unfair treatment based on prejudice against a certain group

Vocab26 social responsibility the obligation a business has to pursue goals that benefit society as well as themselves

Vocab27 foundation the basis or groundwork of a structure or idea; an organization

Vocab28 crucial of vital importance

Vocab29 reveal to make known or show plainly

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