Chapter Five: Business and Labor Flashcards
Sole Proprietorship
An unincorporated business that has just one owner who pays personal income tax on profits earned from the business. (ex: grocery store, repair shop, beauty parlor)
Advantages of Sole Proprietorship
-Ease of Start-up
-Relatively few regulations
-Sole receiver of profits
-Full control
-Easy to discontinue
Disadvantages of Sole Proprietorship
-Unlimited personal liability
-Limited access to resources
-Lack of permanence
Partnerships
A type of business that two or more individuals own.
Two main types of Partnerships
-General: Working arrangements defined by a written agreement
-Limited: One partner is liable for the debt, while the other is not.
Advantages of a Partnership
-Ease of Start-up
-Shared decision-making and specialization
-Large pool of capital
-Taxation
Disadvantage of a Partnership
-Unlimited liability
-Potential for conflict
Corporations
A legal entity that is separate and distinct from its owners.
Advantages of a Corporation
-Limited liability
-Transferable ownership
-Ability to attract capital
-Long life
Disadvantages of a Corporation
-Difficulty and expense of start-up
-Double taxation
-Loss of control
-More regulations
Business Franchise
A business in which the operator pays a mixture of upfront and ongoing fees in order to license the brand name and supporting resources of a parent company.
Advantages of a Franchise
-Management training and support
-Standardized quality
-National advertising
-Financial assistance
-Centralized buying power
Disadvantages of a Franchise
-High franchising fees and royalties
-Strict operating standards
-Purchasing restrictions
-Limited product line
Vertical Integration
A strategy that allows a company to streamline its operation by taking direct ownership of various stages of its production process rather than relying on external contractors or suppliers.
Horizontal Acquisition
A new combined entity when one company acquires another company in the same industry and works at the same production stage.
Conglomerate
A corporation made up of several different independent businesses.
Multinational Corporation
A company that has business operations in at least one country other than its home country.
Cooperative Organizations
-Consumer
-Service
-Producer
Consumer Cooperative
The primary purpose is to procure and distribute commodities to members and non-members.
Producer Cooperative
Undertakes joint production whether agriculture or industrial
Service Cooperative
Engages in medical and dental care, hospitalization, insurance, housing, labor, electric lights and power, communication and other sources.
Non-Profits
-Professional organizations
-Business Organizations
-Trade associations
-Labor Unions
Employment
When all available labor resources are being used in the most efficient way possible.
Employed if you are 16 and older and meet one of the following:
-Work at least one hour for pay in the last week
-Work 15 hours or move without pay in a family store or farm, or
-Held jobs but did not work due to illness, vacation, labor disputes, or bad weather.
Discourage Workers
Gave up looking for a job
Unemployment
A situation where a person actively searches for employment buy is unable to find work. Unemployment to is considered to be a key measure of the health of the economy.
Bureau of Labor Statistics
-Produces special reports on developments in various sectors of the job market in a series of career outlook articles
-Collect and analyze data, and provide the resulting economic information to the public
Occupational Trends
-Changing economy
-Fewer goods and more services
-Effects of international competition
Outsourcing
The business practice of hiring a party outside a company to perform services or create goods that were traditionally performed in-house by the company’s own employees and staff.
Offshoring
The transferring activities or ownership of a complete business process to a different country from the country (or countries) where the company receiving the services is located. Mostly done for reduced costs, less rules & regulation, and tax benefits
Changing Labor Forces
-College graduates
-Women at work
-Temporary workers
-Guest workers
Labor Demand
-Productivity
-Labor supply
-Equilibrium wage
Wage and Skill Levels
-Unskilled Labor
-Semi-Skilled Labor
-Skilled Labor
-Professional Labor
Wage Discrimination
-Laws
-Women
-Minorities
Featherbedding
Unions force firms to hire more workers than are required or to impose work rules that reduce output per worker. The result is on increase in the demand for labor.
Labor Unions
An organization formed by workers in a particular trade, industry, or company to improve pay, benefits, and working conditions
The Labor Movement
-Strikes
-Employer resistance
-Congressional protections
Decline of the Labor Movement
-Right-To-Work Laws
-Loss of traditional strongholds
Collective Bargaining
-Wages and benefits
-Working conditions
-Job security
Strikes and Settlement
-Mediation
-Arbitration
