Today’s Schedule – 10/10 Finish Partnership Negotiations PPT: Corp./Mergers/MNCs HW: – Franchise Research – Due Next Friday – Study for Ch. 8 Quiz – Taking Thursday – Read 9.2

Corporations Legal entity owned by individual stockholders – Each has limited liability for firm’s debts – Part owner Stock: Certificate of ownership in a corp. Entity: Legal identity separate from its owners

Corporations Characteristics – Pays taxes, engages in business, sues/can be sued – 20% of all businesses – 90% of all products sold – 70% of national income

Types of Corporations Closely held corporations – Stock given and held by a few Publicly held corporations – Buy and sell stock on an open market (NASDQ, NYSE)

Structure of Corporations Stockholders elect board of directors Board of directors appoints corporate officers Corporate officers run business – Hire/manage employees and production

 Advantages of Corporations  L imited liability Stocks are fluid for stockholders Easier to raise money – Selling of stock – Selling of bonds Contract to repay borrowed money in a set amount of time with a given amount of interest Owners can hire experts to manage corp. Longevity

 Disadvantages of Corporations  Difficult to start up – Application for incorporation Taxes must be paid based on income corp. earns Stockholders also pay taxes on their dividends (profits earned from investment) Must file quarterly stock reports with the SEC

Corporate Combos Horizontal Merger: Firms in the same market Vertical Merger: Firms in the same market at different stages of development Conglomerate: Firms with unrelated goods

Multinational Corporations (MNCs) Corporations that operate in more than one country Headquarters (HQ) in one country with branches in others Must conform to laws in each country where they operate – Including paying taxes ~ 60,000 MNCs today w/$3 trillion in assets

Example: The Americas Brasil Canada Canada(French) Latinoamérica United States Brasil Canada Canada(French) Latinoamérica United States Europe Denmark Deutschland España Finland France Greece Italia The Netherlands Denmark Deutschland España Finland France Greece Italia The Netherlands Middle East and South Africa Middle East South Africa Middle East South Africa Norway Österreich Portugal Россия Schweiz Sweden United Kingdom Magyarország Norway Österreich Portugal Россия Schweiz Sweden United Kingdom Magyarország Asia Pacific Australia Australia China Hong Kong India Japan Korea New Zealand Philippines Singapore Taiwan ThailandChinaHong Kong IndiaJapanKorea New Zealand Philippines SingaporeTaiwan Thailand

Advantages of MNCs Provide jobs Access to multiple buyers Spread technology Improve standard of living in poorer countries  

 Disadvantages of MNCs  Commercialized influence on culture Low wages Poor working conditions