1. Business and Labor

2. Business Organization: an establishment formed to carry on commercial enterprise…a business/firm.

3. – Sole proprietorship: a business owned and managed by a single individual. 75% of businesses in U.S. are solely owned Benefits: easy to startup, few regulations, 100% of profit, full control Limits: 100% personal liability, limited resources, lack of permanence

4. Partnership: a business organization owned by two or more people who agree on a specific division of responsibilities and profits. – Types: General partnership: equal shares of responsibility, ownership, and liability exist for partners Limited partnership: only one partner has unlimited liability while the other(s) contribute only money and do not actively manage work. Limited Liability Partnership (LLP): all partners are limited in how liable they are. Not all businesses may be LLPs. – Advantages: easy start-up, shared decision making, specialization, more capital, taxation (partners tax on their share of profit…no corporate tax) – Disadvantages: unlimited liability in some forms, potential for conflict between partners

5. Corporations: a legal entity owned by stockholders. Corps. pay taxes, make contracts, can sue and be sued. – 20% of US businesses…doing 90% of businesses – Types: closely held (private), publicly held – Advantages: limited liability and easily transferable, ability to raise capital (bonds and stocks) – Disadvantages: difficult and expensive start-up, double taxation (corporate and individual), loss of control, more regulation Mergers: combining multiple firms (related or not) Multinationals (MNC): corporations that produce and sell their goods and services thoughout the world.

6. Other organizations Business franchise: a semi-independent business that pays fees to a parent company Cooperative: a business organization owned and operated by a group of individual for their shared benefit. Nonprofit organization: functioning like a business but not for the purpose of generating profit…exempt from income taxes. – Professional organizations, business associations, trade associations, labor unions

7. Wages and skill levels – Unskilled labor: requires no specialized skills, education or training. – Semi-skilled labor: requires minimal skills like operation of certain types of equipment. – Skilled labor: specialized abilities and training working with complicated equipment requiring little supervision. – Professional labor: advanced skill and education.

8. Wage discrimination Civil Rights Act of 1964: prohibits discrimination on the basis of race, sex, color, religion, or nationality. Pay levels for women: despite laws a wage gap exists between men and women – Causes: “women’s work” cultural attitude, traditionally less human capital investment, – Glass ceiling: the “invisible” barrier where women are passed over for promotion at the upper levels.

10. Unions An organization that tries to improve working conditions, wages and benefits for its members. Unions may depress the wages of non-union workers – Unions encourage higher wages for union members – Higher wages = less demand for labor – Unions then cut jobs – Greater supply of nonunion labor = lower rate for nonunion jobs

11. Labor and management Unions have had conflicts with business owners and consequently government over the course of US history Unions have been protected or discouraged during different times and in different states Collective bargaining: the process in which union and company representatives negotiate labor contracts (which spell out rights and responsibilities of all parties) – Wages, benefits, working conditions, job security Strike: union members discontinue work until labor dispute is resolved Mediation: a neutral party meets with both sides and tries to reach a resolution. Arbitration: a neutral party imposes a legally binding decision