1. 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

2. 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.

3. Percentage of U.S. Businesses by Method of Organization5
Percentage of U.S. Businesses by Method of Organization
Sole Proprietorships, 72%
Partnerships, 9%
Corporations, 19%

4. The Sole Proprietorship5
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

5. 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

6. 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

7. Percentage of Sales by Method of Businesses Organization5
Percentage of Sales by Method of Businesses Organization
Sole Proprietorships, 4%
Partnerships, 13%
Corporations, 83%

8. Other Forms of Business Organization5
Other Forms of Business Organization
Municipal corporations
Nonprofit corporations
Cooperatives

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

10. Multinational Companies5
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

11. 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.

12. Methods for Getting Involved in International Business5
Methods for Getting Involved in International Business

13. Low-Risk Methods for Getting Involved in International Business5
Low-Risk Methods for Getting Involved in International Business
Indirect exporting
Direct exporting
Management contracting
Licensing
Franchising

14. Higher-Risk Methods for Getting Involved in International Business5
Higher-Risk Methods for Getting Involved in International Business
Joint ventures
Turnkey project
Foreign direct investment