1. © SOUTH-WESTERN THOMSONINTERNATIONAL BUSINESS LESSON5-1 GOALS  Describe the advantages and disadvantages of a sole proprietorship.  Describe the advantages and disadvantages of a partnership.  Explain the characteristics of a corporation. METHODS OF BUSINESS OWNERSHIP

2. © SOUTH-WESTERN THOMSONINTERNATIONAL BUSINESS 2 Business Ownership in the United States Corporations 20% Partnerships 8% Sole Proprietorships 72%

3. © SOUTH-WESTERN THOMSONINTERNATIONAL BUSINESS 3 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

4. © SOUTH-WESTERN THOMSONINTERNATIONAL BUSINESS 4 Partnership Advantages 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

5. © SOUTH-WESTERN THOMSONINTERNATIONAL BUSINESS 5 Corporation Advantages 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

6. © SOUTH-WESTERN THOMSONINTERNATIONAL BUSINESS 6 Sales by Methods of Business Ownership Corporations 88% Partnerships 8% Sole Proprietorships 4%

7. © SOUTH-WESTERN THOMSONINTERNATIONAL BUSINESS LESSON5-2 GOALS OPERATIONS OF GLOBAL BUSINESSES  Name other forms of business ownership.  Describe the activities, characteristics, and concerns of multinational companies.

8. © SOUTH-WESTERN THOMSONINTERNATIONAL BUSINESS 8 Other Forms of Business Organization Municipal corporations Nonprofit corporations Cooperatives

9. © SOUTH-WESTERN THOMSONINTERNATIONAL BUSINESS 9 Multinational Companies Multinational companies in operation Characteristics of multinational companies World-wide market view Standardized product Culturally-sensitive hiring International and local perspective Concerns about multinational companies

10. © SOUTH-WESTERN THOMSONINTERNATIONAL BUSINESS LESSON5-3 GOALS STARTING GLOBAL BUSINESS ACTIVITIES  Identify five low-risk methods for getting involved in international business.  Discuss higher-risk methods for getting involved in international business.

11. © SOUTH-WESTERN THOMSONINTERNATIONAL BUSINESS 11 Getting Involved in International Business Low-Risk Methods Indirect exporting Direct exporting Management contracting Licensing Franchising Higher-Risk Methods Joint ventures Foreign direct investment Wholly-owned subsidiary