1. Business, Competition, and Labor

2. 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)

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

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

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

6. 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

7. 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

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

9. American Labor Force

10. 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)

11. 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