Selecting a Form of Business Ownership

 As we continue our studies, I look forward to what is there to add to the meaning of business and the impacts there are in our lives, economy, and everyday matters. These questions are great for understanding how I want to move forward to run or start a business and the type of legal form. 

1. What are you willing to do to set up and operate your business? 5
2. How much control do you want? 4
3. Do you want to share profits with others? 3
4. Do you want to avoid special taxes on your business? 4
5. Do you have all the skills needed to run the business? 5
6. Should it be possible for the business to continue without you? 2
7. What are your financing needs? 5
8. How much liability exposure are you willing to accept? 3

• Review the eight questions identified in section 4.1 of the text that you’d probably ask yourself in choosing the appropriate legal form. Rate each of the questions using this scale: [1] not at all important; [2] not very important; [3] somewhat important; [4] very important; [5] extremely important. Select the two questions that are most important to you and the two questions that are least important to you, and explain your responses to these four questions.

What are you willing to do to set up and operate your business?

I would prefer to have a plan prior to starting and moving forward in starting a business. I would hope that I can have funding, and a business plan so that I can press forward with certainty. 

Do you have all the skills needed to run the business?

I need to have the necessary skills to be able to cope with the challenges that may come up while running a business and be able to survive longevity and hardships. 

Should it be possible for the business to continue without you?

I would like to retire within a certain time and at an age that I can relax and enjoy the rest of my life leaving the business in someone's capable hands. 

How much liability exposure are you willing to accept?

This question should be addressed as a company runs its business and creates the type of business format in which the company can legally form and create opportunities for expansion.

• Why do you think sole proprietorship's account for such a huge portion of US businesses given the many disadvantages compared other forms of business ownership? Explain your reasoning.

The disadvantages outweigh the advantages mainly because of the risks it takes to start and supply a company with adequate knowledge and understanding - financially. The other forms of business include less liability and special abilities to walk away with debt or disaster. 

The Entrepreneurial Alternative

 In Chapter 5, we are able to learn the challenges we can face when starting a business. We learn the three characteristics of entrepreneurial activity - Innovation, Running a business, and Risk-taking. This brings us to understand that an idea leads to providing a service or product, and taking risks in order for the business to thrive long term. 

• The word "entrepreneur" is probably familiar to you. What surprised you as you read about the definition of entrepreneurship and the characteristics of entrepreneurial activity? Explain.

I understand what the word means and I thought it was a position that was unreachable as a career because of the money that is involved with it. I fell under the reservations thinking I did not have any money and lacked ideas and competition. I was surprised by the statistics involved in what small businesses do for the economy. 

• Define "small business" and explain its role in society.

A small business is defined as one that is independently owned and operated, exerts little influence in its industry, and has fewer than 500 employees. These companies provide jobs and opportunities for other people as well as small businessmen. 

Introduction to Economics.

What is Economics? - the study of the production, distribution, and consumption of goods and services. Resources are the inputs used to produce outputs. I took a class earlier in my second year of school and it didn't really come together mentally until I continued my classes that I could understand the lingo and the entire concept of what it meant. 

This figure helps me understand how resources that involve inputs and outputs create a cycle that is necessary for a country to function. I love visuals and being able to understand how a company can make and break a system necessary for an economy to thrive. 

• Discuss the economy of another country (not the one where you currently live). For instance, what type of economy does the country have? What are their major industries and their competitive issues? Which industries or services are privatized and which are government-owned? Also discuss the unemployment rates, monetary policies, and fiscal policies.

Russia is the 6th largest economy in the world. They are a market-based economy following the fall of the Soviet Union, heavily influenced by natural resources, and it has a high level of state involvement. Russia's primary exports are oil and gas. GDP is equivalent to $1.78 trillion. Current government elections are managed to generate predetermined outcomes. Economic assets and wealth are gathered in the hands of the government. Government officials keep the government and business interests aligned, and property rights are weak. Inflation and unemployment rates were at 4.5% in 2019. Economic growth may be weakened due to a shrinking population and reliance on natural resources. (Link) I think this oligarchy of the past has led to the destruction of the future unless they are able to keep their population thriving and natural resources within the country. 

• The text discusses different types of economic systems. Which type of system do you believe is ideal? Explain why.

There are four types of economic systems - Perfect competition, monopolistic competition, oligopoly, and monopoly. Out of these (4) systems I think that monopolistic competition would benefit us for the future as we are allowed multiple sellers, no identical products, a differentiation of products allows variety in the market as well as the type of quality, style, convenience, location, etc. Price will consume the MP to compete within a group setting. Buyers are persuaded through marketing and sales to perform sales for a good or service. There will be downsides including loss of businesses due to inflation thus causing limited control on price. With each system, the risks go hand in hand with the rewards. 

Introduction to Business

 When I think of business, I know that there are many factors that come into play. When one thing is combined with another can create a service or product that we use on a daily basis. For example, our local McDonald’s. They provide a product and service in the food industry. They created the cheeseburger, French fries, and fruit pies. They took food and revolutionized the concept of fast food. This means if you need a quick, affordable lunch, you drive up with your vehicle to the drive-thru window to order then pick up your food at the next window. Who would have thought about that unless you were trying to run a business that changed through the times?

This week, we were able to understand what business means and how we use it every day. We also got to read a talk by Kim B. Clark who described the role of business in society. He continues to talk about 3 Forces that businesses can exploit to shape society. 

3 forces affecting business: 

1. Changes in Technology - Information: dramatic changes in the way organizations work, changes in the way Markets work, changes in the way people interact and work. 

2. Changes in Geopolitically - opening up new trade patterns, new patterns of investment, and dramatic change in the nature of the world political scene. 

3. Increasing reliance on markets to solve problems in society; business is front and center and become a powerful, dynamic force in society. 

My personal notes and excerpts from the video are examples of what we read in Chapter 1- Sections 1.1 and 1.2. I like that he was able to break it down so that I could understand what he meant by what business is affected by and where the modern student can learn from the past and apply it to the future. 

• Why is business so important to an individual's spiritual life and a country's economy?

I feel like business allows an individual to grow and flourish spiritually by making the right choices ethically and becoming a business-minded person which allows one to perfect oneself in the spiritual realm. Much like the mind, the spirit feeds off faith and hope for better things like making weak things become strong.

• Elder Kim B. Clark, former President of BYU-Idaho, suggests that business is the most dynamic force in society. He states, "the world is increasingly reliant on markets to solve problems in society." Describe at least one example where a business has solved a societal problem.

A business can either hinder or provide for a society depending on its purpose. A business can lose its purpose along the way to finding its footing. I found my example through google.com under 'companies that have taken a bold stand on social issues.' In 2019, Walmart CEO Doug McMillon announced that they would discontinue selling handguns and ammunition. The CEO also continued to send letters to the White House and Congressional leaders regarding background checks prior to gun purchases. As we know this may be a small feat from the largest retailer in the U.S.A. but it solved one of many issues in society. Elder Clark was referring to how much of an influence a business can have on us all.

References:

Link - Walmart excerpt

Business Ethics & Social Responsibility

 In the world of business, there is the possibility of choices being made that may cause strife or deceit. This entails business ethics and social responsibility. In chapter 2, we read the first paragraphs about the Enron situation as well as Bernie Madoff and his Ponzi scheme. I am sure there are many more issues that have arrived due to the nature in which ethics is applied in the business world. Excerpt from the text states “business ethics is the application of ethical behavior in a business context” I think having a sense of strong morals will help a business flourish and survive the changing market. I have not heard about social responsibility but I can get the gist of the understanding that it means we have a duty to be accountable for how we act, talk, etc in terms of representation as an employee, manager, etc. we are to act fairly, using the golden rule and taking responsibility for your actions. As I continued my reading I found this excerpt very pertinent for the future generations as well as what we face in the current climate. “The next generation entering business—which includes most of you—will find a world much different than the one that waited for the previous generation. Recent history tells us in no uncertain terms that today’s business students, many of whom are tomorrow’s business leaders, need a much sharper understanding of the difference between what is and isn’t ethically acceptable. As a business student, one of your key tasks is learning how to recognize and deal with the ethical challenges that will confront you.” 

As I am hitting my years here on earth, I look back and see a huge transition between baby boomers, and the generations in front of them. If we are not wise, we may fall into the perils of immoral, and unethical behaviors. A business cannot surpass the setbacks that unethical choices of which will take away opportunities for success and longevity. I find it true as I witness it everyday at my job. The choices I make will either lift you up or knock you down. I know the way we react to these type of dilemmas we become experienced in how to overcome them. The (5) steps introduced are great points in how to deal with them. 

1. Define the problem, and collect the relevant facts. 

2. Identify feasible options.

3. Assess the effects of each options on stakeholders.

4. Establish criteria for determining the most appropriate action. 

5. Select the best option based on the established criteria. 

I learned about ethical decisions (right-versus-wrong) where there’s a right (ethical) and wrong (unethical) and when a mistake is made there is the terminology of an ethical lapse. The official definition of social responsibility is from the excerpt “Corporate social responsibility refers to the approach that an organization takes in balancing its responsibilities toward different stakeholders when making legal, economic, ethical, and social decisions. ” I know that we may feel like we are responsible for the choices of others when it should be taken as how we influence those around us. If we choose good, most likely your neighbor will choose the same. The same goes to our leaders - managers and/or supervisors. 

It is interesting to learn about the stages of Corporate Social Responsibility so I included it in my post today. 

1. Defensive. When companies are first criticized over some problem or issue, they tend to take a defensive, often legalistic stance. They reject allegations of wrongdoing and refuse to take responsibility, arguing that fixing the problem or addressing the issue isn’t their job.
2. Compliant. During this stage, companies adopt policies that acknowledge the wishes of the public. As a rule, however, they do only what they have to do to satisfy their critics, and little more. They’re acting mainly to protect brands or reputations and to reduce the risk of litigation.
3. Managerial. When it becomes clear that the problem won’t go away, companies admit that they need to take responsibility and action, so they look for practical long-term solutions.
4. Strategic. At this point, they may start to reap the benefits of acting responsibly. They often find that responding to public needs gives them a competitive edge and enhances long-term success.
5. Civil. Ultimately, many companies recognize the importance of getting other companies to follow their lead. They may promote participation by other firms in their industries, endorsing the principle that the public is best served through collective action.

I did not know this existed so I can post this and reflect on it later in the course.