quizlet chapter 1 Flashcards
What is commerce?
exchnage of goods and services
What is an organization?
a collection of people working together to achieve a common goal
What is a business?
an organization that seeks to provide goods and services to customers
What is management?
the pursuit of organizational goals through the use of organizational resources
What are some characteristics of organizations?
(1) goal directed,
(2) structure activities,
(3) linked to the environment,
(4) identifiable boundaries
What are the factors of commerce?
Manufacturing (creates goods) >
Wholesaling (buys from manufacturers, sells to retailers) >
Retailing (sells to customers) >
Service (provides services to customers)
What are the forms of business ownership?
(1) Sole Proprietorship
(2) Partnership
(3) Corporation
What are the characteristics of a Sole Proprietorship?
(1) Ownership: Owned and ran buy one person
(2) Benefits: Complete control, easy and inexpensive, profits of business taxed as personal income
(3) Drawbacks: Complete responsibility, unlimited liability, difficulty obtaining financing
What are the characteristics of a Partnership?
(1) Ownership: Relationship between two or more people to do or trade business
(2) Benefits: More resources/talent than sole proprietorship, relatively easy and inexpensive to form
(3) Drawbacks: More complex than sole proprietorship, potential conflict between or among partners, unlimited liability, difficulty obtaining financing
What are the characteristics of a Corporation?
(1) Ownership: Legal entity separate from owners, both private and public (“C-Corp”)
(2) Benefits: Separate entity, unlimited liability, ease of transferring ownership, access to financing
(3) Drawbacks: Double taxation (corporation + individual), expensive and complex to incorporate, regulations and oversight
What is the common organizational structure of a C-Corp?
Shareholders elect a board of directors who hire top management
