BUS 150 CORRECT STUDYS ANSWERS AND
QUESTIONS SET A+
✔✔Stakeholders - ✔✔Individuals or groups to whom a business has a responsibility;
include employees, customers,
the general public, and investors.
✔✔What are the advantages and disadvantages of the sole proprietorship form of
business organization? - ✔✔The advantages of sole proprietorships include ease and
low cost of formation, the owner's rights to all profits, the owner's control of the
business, relative freedom from government regulation, absence of special taxes, and
ease of dissolution. Disadvantages include owner's unlimited liability for debts and
personal absorption of all losses, difficulty in raising capital, limited managerial
expertise, difficulty in finding qualified employees, large personal time commitment, and
unstable business life.
✔✔What are the advantages of operating as a partnership, and what downside risks
should partners consider? - ✔✔The advantages of partnerships include ease of
formation, availability of capital, diversity of managerial skills and expertise, flexibility to
respond to changing business conditions, no special taxes, and relative freedom from
government control. Disadvantages include unlimited liability for general partners,
potential for conflict between partners, sharing of profits, and difficulty exiting or
dissolving the partnership.
✔✔How does the corporate structure provide advantages and disadvantages to a
company, and what are the major types of corporations? - ✔✔Its organizational
structure includes stockholders who own the corporation, a board of directors elected by
the stockholders to govern the firm, and officers who carry out the goals and policies set
by the board. Stockholders can sell or transfer their shares at any time and are entitled
to receive profits in the form of dividends. Advantages of corporations include limited
liability, ease of transferring ownership, unlimited life tax deductions, and the ability to
attract financing. Disadvantages include double taxation of profits, the cost and
complexity of formation, and government restrictions.
, ✔✔What other options for business organization does a company have in addition to
sole proprietorships, partnerships, and corporations? - ✔✔Businesses can also
organize as limited liability companies, cooperatives, joint ventures, and franchises.
✔✔What makes franchising an appropriate form of organization for some types of
business, and why does it continue to grow in importance? - ✔✔Franchising is one of
the fastest-growing forms of business ownership. It involves an agreement between a
franchisor, the supplier of goods or services, and a franchisee, an individual or company
that buys the right to sell the franchisor's products in a specific area. With a franchise,
the business owner does not have to start from scratch but buys a business concept
with a proven product or service and operating methods.
✔✔Why are mergers and acquisitions important to a company's overall growth? - ✔✔In
a merger, two companies combine to form one company. In an acquisition, one
company or investor group buys another. Companies merge for strategic reasons to
improve overall performance of the merged firm through cost savings, eliminating
overlapping operations, improving purchasing power, increasing market share, or
reducing competition.
✔✔What current trends will affect the business organizations of the future? -
✔✔Americans are getting older but continue to open new businesses, from sole
proprietorships to partnerships, corporations to franchise operations. The service sector
is booming in efforts to meet the demand for fitness, health, and eldercare. Other key
trends include an escalation of worldwide foreign investment through the number of
mergers taking place. All forms of business organization can benefit from outsourcing,
tapping into the intellectual capital of developing countries.
✔✔Advantages and disadvantages of franchising - ✔✔Advantages
-Increased ability for franchisor to expand.
-Recognized name, product, and operating concept.
-Management training and assistance.
-Financial assistance.
Disadvantages
-Loss of control.
-Cost of franchising.
-Restricted operating freedom.
✔✔Franchisor - ✔✔In a franchising arrangement, the company that supplies the product
or service concept to the franchisee.
✔✔Franchisee - ✔✔In a franchising arrangement, the individual or company that sells
the goods or services of the franchisor in a certain geographic area.
✔✔Merger - ✔✔The combination of two or more firms to form one new company.
QUESTIONS SET A+
✔✔Stakeholders - ✔✔Individuals or groups to whom a business has a responsibility;
include employees, customers,
the general public, and investors.
✔✔What are the advantages and disadvantages of the sole proprietorship form of
business organization? - ✔✔The advantages of sole proprietorships include ease and
low cost of formation, the owner's rights to all profits, the owner's control of the
business, relative freedom from government regulation, absence of special taxes, and
ease of dissolution. Disadvantages include owner's unlimited liability for debts and
personal absorption of all losses, difficulty in raising capital, limited managerial
expertise, difficulty in finding qualified employees, large personal time commitment, and
unstable business life.
✔✔What are the advantages of operating as a partnership, and what downside risks
should partners consider? - ✔✔The advantages of partnerships include ease of
formation, availability of capital, diversity of managerial skills and expertise, flexibility to
respond to changing business conditions, no special taxes, and relative freedom from
government control. Disadvantages include unlimited liability for general partners,
potential for conflict between partners, sharing of profits, and difficulty exiting or
dissolving the partnership.
✔✔How does the corporate structure provide advantages and disadvantages to a
company, and what are the major types of corporations? - ✔✔Its organizational
structure includes stockholders who own the corporation, a board of directors elected by
the stockholders to govern the firm, and officers who carry out the goals and policies set
by the board. Stockholders can sell or transfer their shares at any time and are entitled
to receive profits in the form of dividends. Advantages of corporations include limited
liability, ease of transferring ownership, unlimited life tax deductions, and the ability to
attract financing. Disadvantages include double taxation of profits, the cost and
complexity of formation, and government restrictions.
, ✔✔What other options for business organization does a company have in addition to
sole proprietorships, partnerships, and corporations? - ✔✔Businesses can also
organize as limited liability companies, cooperatives, joint ventures, and franchises.
✔✔What makes franchising an appropriate form of organization for some types of
business, and why does it continue to grow in importance? - ✔✔Franchising is one of
the fastest-growing forms of business ownership. It involves an agreement between a
franchisor, the supplier of goods or services, and a franchisee, an individual or company
that buys the right to sell the franchisor's products in a specific area. With a franchise,
the business owner does not have to start from scratch but buys a business concept
with a proven product or service and operating methods.
✔✔Why are mergers and acquisitions important to a company's overall growth? - ✔✔In
a merger, two companies combine to form one company. In an acquisition, one
company or investor group buys another. Companies merge for strategic reasons to
improve overall performance of the merged firm through cost savings, eliminating
overlapping operations, improving purchasing power, increasing market share, or
reducing competition.
✔✔What current trends will affect the business organizations of the future? -
✔✔Americans are getting older but continue to open new businesses, from sole
proprietorships to partnerships, corporations to franchise operations. The service sector
is booming in efforts to meet the demand for fitness, health, and eldercare. Other key
trends include an escalation of worldwide foreign investment through the number of
mergers taking place. All forms of business organization can benefit from outsourcing,
tapping into the intellectual capital of developing countries.
✔✔Advantages and disadvantages of franchising - ✔✔Advantages
-Increased ability for franchisor to expand.
-Recognized name, product, and operating concept.
-Management training and assistance.
-Financial assistance.
Disadvantages
-Loss of control.
-Cost of franchising.
-Restricted operating freedom.
✔✔Franchisor - ✔✔In a franchising arrangement, the company that supplies the product
or service concept to the franchisee.
✔✔Franchisee - ✔✔In a franchising arrangement, the individual or company that sells
the goods or services of the franchisor in a certain geographic area.
✔✔Merger - ✔✔The combination of two or more firms to form one new company.
