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9/20 Warm-up. Explain the reasons for Tom Herman leaving govWorks . In your opinion, do you think Tom was being treated fairly?. 9/21 Warm-up. W hat happened to the money invested by the Venture Capitalists (VCs)? Who is responsible for paying the VCs back?. Group Work.

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9 20 warm up
9/20 Warm-up
  • Explain the reasons for Tom Herman leaving govWorks.
  • In your opinion, do you think Tom was being treated fairly?
9 21 warm up
9/21 Warm-up
  • What happened to the money invested by the Venture Capitalists (VCs)?
  • Who is responsible for paying the VCs back?
group work
Group Work
  • Discuss problems faced by govWorks
    • List on poster paper
  • Identify the 3 biggest problems faced by govWorks
    • Ultimately responsible for its failure
  • Categorize the problems
    • Internal – problems resulting the product and decisions made by management
    • External – problems outside the control of the organization
slide4

Political / Legal

Technology

Leadership & Organization

Social / Cultural

Finance

Marketing

Human Resources

Operations

Economic

article annotation
Article Annotation
  • Read article and annotate as you read based on the following;
    • Features of Solyndra’s business/product
      • What does it do?
      • How does it work?
      • How is it different from its competitors?
    • Amounts & sources of financing
      • Who invested in the company?
      • How much money was invested?
    • Reasons for the failure of the business
    • Terms that you do not understand.
9 23 warm up
9/23 Warm-up
  • Describe the impact of Solyndra’s failure
    • Who is impacted and what is the nature of the impact?
group work1
Group Work
  • Use your annotated articles to create a table on poster paper:
individual project
Individual Project

What Happened to Solyndra?

  • Create a 1-page poster that explains:
    • Solyndra’s business
    • Reasons for its failure
    • Impact of its failure
9 27 warm up
9/27 Warm-up
  • Describe the role of the government in the U.S. economy.
objectives
Objectives
  • Distinguish between organizations in the private & public sectors.
  • Distinguish between different types of business organizations and identify their main features.
  • Analyze the extent to which ownership & control differ in organizations.
  • Evaluate the most appropriate form of ownership for an organization.
private vs public sector determined by ownership
Private vs. Public SectorDetermined by Ownership

PUBLIC

Owned or Controlled by the GOVERNMENT

(Federal, State, Local)

PRIVATE

Owned or Controlled by PRIVATE Individuals or Organizations

role of the public sector
Role of the Public Sector?

Involved in all “Fundamental / Strategic” Industries

Provide “Universal Programs” & “Public Services”

Protect property rights, create & enforce laws, settle disputes

Socialism

Large government, sets industrial policy

Libertarian

Small Government

Social Democrat

Ownership of large businesses, provider of social services, redistributes wealth

organization of public sector
Organization of Public Sector

Direct Administration

Goods/Service provided by gov’t & funded through taxation

Government Owned Corporations

Operate like a commercial business

Outsourcing

Goods/Service provided by private sector for public sector

government owned corporations
Government-owned Corporations

Public Policy with a Business Objective

Degree of Government Ownership & Control

LITTLE

A LOT

  • Federal Government Acquired Corporations
  • General Motors
  • AIG
  • Citigroup
  • Federally Chartered & Owned
  • Amtrak
  • Tennessee Valley Authority
  • Center for Public Broadcasting
  • Government Sponsored Enterprises (GSE)
  • FNMA
  • FHLMC
  • Farm Credit
privatization
Privatization
  • Shifting ownership from public to private sector
privatization1
Privatization
  • Shifting ownership from public to private sector
    • Increased efficiency
    • Lower costs of production
    • Increased choice for consumers
    • Innovation
    • Save taxpayer money
    • Source revenue ($) for government
check up
Check-up
  • What’s the difference between organizations in the private versus public sector?
  • Why do public sector organizations exist?
9 28 warm up
9/28 Warm-up
  • List & describe the forms of business organization mentioned in the P&G article.
private sector organizations1
Private Sector Organizations

Profit Based

Profit belongs to owner(s)

Non-Profit Based

Surplus belongs to organization

Sole Traders

Non-profit organizations (NPOs)

Partnerships

Non-governmental organizations (NGOs)

Limited Companies

(Private & Public)

Charities

Pressure Groups

proctor gamble story
Proctor & Gamble Story
  • Identify the forms of business organization described in article.
  • Consider the advantages & disadvantages of each form.
  • Consider the connection between the form and the size of the business.
slide24

Private Sector Organizations

Sole Trader

Partnership

Limited Companies

sole trader
Sole Trader

William Procter

  • Business owned & managed by 1 person
    • Can employ other people to help run business
  • Business & owner are legally the same
    • Owner liable for ALL taxes, expenses & debts
  • Owner receives all profits (income), bears all losses, makes all decisions
  • Few legal formalities to set-up

James Gamble

partnership
Partnership

Procter & Gamble

  • Business owned & managed by 2 or more people
    • Can employ other people to help run business
  • Partners receive all profits, bear all losses
  • Business & partners are legally the same
    • Partners share liability for ALL taxes, expenses & debts
    • Partners liable for conduct of other partners
  • Advisable to have legal agreement between partners (not required)
important feature the deed of partnership
Important FeatureThe Deed of Partnership
  • Contract between partners
  • Financing contributed
  • Roles, obligations, & responsibilities
  • Sharing of profits
  • Procedure to include new partners
  • Procedure for the departure of a partner or ending the partnership
limited company corporation
Limited Company (Corporation)
  • Business is a separate legal entity (incorporated)
    • separate from owners & managers
    • lives “forever”
  • Owners are shareholders
  • Run by managers
    • selected by shareholders (via board of directors)
  • Company has liability (taxes, expenses & debts incurred by business)
    • Shareholders can only lose their investment
  • Legal requirements to set-up
10 3 warm up
10/3 Warm-up
  • List & describe the forms of business organization mentioned in the P&G article.
10 3 warm up1
10/3 Warm-up
  • Read the case summary and answer the following;
    • Why do you think the brothers created the corporation (Brooks Farms, Inc.)?
    • Explain why the brothers should not be liable for the corporations debt.
    • Identify reasons why the brothers should be liable for the corporation’s debt.
groups create new form of business
GroupsCreate New Form of Business
  • Develop a new form of business organization that combines the advantages of a partnership with the advantages of a limited company (corporation);
  • Create a poster with the following;
    • Name of your new type of business organization (be creative)
    • List & describe its features
      • How is it like a partnership? What is the benefit to the small business owner?
      • How will it be like a limited company? What is the benefit to the small business owner?
groups create new form of business organization
GroupsCreate New Form of Business Organization
  • Your group has been tasked to respond to issues raised by small business owners:
    • Features of a partnership & limited companies aren’t perfectly fitting their needs.
    • They want a new type of business organization that combines the best features of both.
10 3 warm up2
10/3 Warm-up
  • Federal Income Taxes
    • What are they?
    • Who pays them?
    • How is the amount of tax determined?
  • Does a business pay income tax?
    • Who pays them?
    • How is the amount of tax determined?
limited liability company llc
Limited Liability Company (LLC)
  • Explain why an LLC is considered a “hybrid” type of business organization
  • Identify the advantages/disadvantages of the LLC vs. General Partnership
  • Identify the advantages/disadvantages of the LLC vs. Limited Company.
slide39

Private Sector Organizations

Proprietorship

Partnership

Corporation

Limited Liability Company

(LLC)

Private

Public

slide40

Read Article, “BK’s Strategy: Play Catch-up”

  • What is wrong with Burger King?
  • What changes are needed to turn the business around?
  • What does the business need in order to turn things around?
  • How can the buy out by the Private Equity firm help the business?
10 4 warm up
10/4 Warm-up
  • Explain how 3G Capital Management’s buyout can give Burger King what it needs to turn the business around;
    • Time
    • Money
    • Marketing (4Ps)
  • Why would this turnaround have been difficult if they remained a public limited company?
objectives1
Objectives
  • Explain the differences between a private limited company & public limited company.
  • Identify the advantages & disadvantages of each.
slide43

Private Sector Organizations

Sole Trader

Partnership

Limited Companies

Private

Public

private vs public company who can buy own shares
Private vs. Public CompanyWho Can Buy & Own Shares?
  • Private Limited Company
    • Shares NOT available for purchase by general public
    • Shares owned by a small group of people (e.g., family, friends), not traded freely
    • Usually actively managed by owners
  • Public Limited Company
    • Advertise & sell shares to the general public
    • “Listed” on a stock exchange
    • Diverse ownership
    • Managed by Board of Directors
private limited company
Private Limited Company

Advantages

Disadvantages

  • Maintain control
  • Public does not have access to financial accounts
  • Fewer rules & regulations (than public limited company)
  • Unable to raise money from the public
    • Limits growth
  • Usually rely on borrowing to finance expansion
    • Can’t sell shares to the public
public limited companies
Public Limited Companies

Advantages

Disadvantages

  • Grow company by accessing huge amounts of financing by selling shares.
    • Lower production costs (economies scale).
    • Dominate market (because of size)
  • Easier & cheaper to obtain credit
  • Very expensive
    • sell shares & follow disclosure requirements
  • Rules & regulations that protect shareholders
  • Lose control
  • Public access to financial accounts
  • Divorce of ownership and control
  • Large company
    • Difficult to deal with customers at a personal level.
    • Inflexible
group work2
Group Work
  • Read the case summary and discuss the following.
    • Advantages to keeping the business private.
      • What does the family gain by remaining private?
    • Disadvantages of keeping the business private.
      • What does the family lose by not becoming a public?
10 5 warm up
10/5 Warm-up
  • Considering that Cargill is a private limited company, explain where they likely got the financing to expand.
  • Describe the impact (positive & negative) of remaining a private limited company;
    • On the company
    • On the family
slide49

File

  • Articles of Incorporation
  • (WA Secretary of State)
  • Number & Type of Shares
  • Effective Date
  • Tenure (length of existence)
  • Registered Agent
  • Incorporators
  • Pay Fee ($180)
  • Choose Name
  • Must be unique
  • Contain a corporate designation (Corp., Inc., etc.)
  • File
  • Initial Annual Report
  • (WA Secretary of State)
  • Registered Agent
  • Business Address
  • Corporate Directors
  • Corporate Officers
  • Business Description

Records & Reporting Requirements

Obtain Local & Industry Licenses

File

Master Business Application

(WA Dept. of Licensing)

Certificate of Existence

group discussion
Group Discussion
  • For-profit vs. Non-profit organizations
    • How are they similar & how are they different?
non profit organizations
Non-Profit Organizations
  • Nature & Goals
    • Does not issue shares
    • Does not distribute profits (surplus) to owners
      • Self preservation, expansion, or plans
    • Primary goal is not to earn profit
  • Formation & Structure
    • Legal entity (bylaws or articles of incorporation)
      • Entity created by the state
    • Board of Directors oversees organization
      • Selected by “members”
      • Self-selected board
charities vs ngos
Charities vs. NGOs

Charities

Non-governmental Organizations

  • Collect donations from individuals & organizations
    • Public foundations
    • Private foundations
  • Support a cause that is beneficial to society
  • Not owned or controlled by government
    • Receive funding from the government
  • Run for the benefit of others in society
    • Operational
    • Advocacy
charities in u s tax exempt 501 c 3
Charities in U.S.Tax Exempt “501(c)(3)”
  • Registered organization (state) engaged exclusively in “exempt” activities for the public benefit
    • Relief of the poor, the distressed, or the underprivileged,
    • Advancement of religion,
    • Advancement of education or science,
    • Erection or maintenance of public buildings, monuments, or works,
    • Reduce burdens of government,
    • Reduce neighborhood tensions,
    • Elimination of prejudice and discrimination,
    • Defense of human and civil rights
    • Combating community deterioration and juvenile delinquency.
10 7 warm up
10/7 Warm-up
  • In your opinion, which is the correct approach to marketing;
    • Analyze a market, identify your target customer, determine their needs & wants, then develop a product with benefits that satisfies them
    • Develop a product, then identify your market and target customer based on the product’s benefits and market to them.
charity research project
Charity Research Project

http://www.charitynavigator.org/

  • Select a charity and research the following information and create 1 page PowerPoint slide.
    • Name of Charity
    • Brief description of their mission
      • Include pictures & images
    • Annual revenue
    • Annual Expenses
      • Total Functional
      • Program
      • Admin
      • Fundraising
    • Leadership (president/CEO)
      • Name & picture
      • Annual Compensation
warm up
Warm-up
  • Read the case summary and answer the following;
    • Why do you think the brothers created the corporation (Brooks Farms, Inc.)?
    • Explain why the brothers should not be liable for the corporations debt.
    • Identify reasons why the brothers should be liable for the corporation’s debt.