© 2011 South-Western | Cengage Learning

Structures of International Business

Organizations

5-15-1 Forms of Business Ownership

5-25-2 Operations of Global Businesses

5-35-3 Starting Global Business Activities

CHAPTER 5

INTERNATIONAL BUSINESS, 4e CHAPTER

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5LESSON 5-1

Forms of Business Ownership

GOALSGOALSDescribe the advantages and

disadvantages of a sole proprietorship.

Describe the advantages and disadvantages of a partnership.

Explain the characteristics of a corporation.

Name other forms of business ownership.

INTERNATIONAL BUSINESS, 4e CHAPTER

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5Percentage of U.S. Businesses by Method of Organization

Sole Proprietorships, 72% Partnerships, 9% Corporations, 19%

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5

The Sole Proprietorship

Advantages Ease of startingFreedom to make

business decisionsOwner keeps all profitsPride of ownership

DisadvantagesLimited sources of

fundsLong hours and hard

workUnlimited risksLimited life of the

business

INTERNATIONAL BUSINESS, 4e CHAPTER

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5

Partnership

Advantages Ease of creationAdditional sources of

fundsAvailability of different

talents

DisadvantagesPartners are liableProfits are shared

among several ownersPotential for

disagreement among owners

Business can dissolve suddenly

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5

Corporation

Advantages More sources of fundsFixed financial liability

of ownersSpecialized

managementUnlimited life of the

company

DisadvantagesDifficult creation

processOwners have limited

controlDouble taxation

INTERNATIONAL BUSINESS, 4e CHAPTER

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5Percentage of Sales by Method of Businesses Organization

Sole Proprietorships, 4% Partnerships, 13% Corporations, 83%

INTERNATIONAL BUSINESS, 4e CHAPTER

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5Other Forms of Business Organization

Municipal corporationsNonprofit corporationsCooperatives

INTERNATIONAL BUSINESS, 4e CHAPTER

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5LESSON 5-2

Operations of Global Businesses

GOALSGOALSDescribe the activities and

characteristics of multinational companies.

Identify concerns related to multinational companies.

INTERNATIONAL BUSINESS, 4e CHAPTER

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5

Multinational Companies

Multinational companies in operationCharacteristics of multinational companies

Worldwide market viewStandardized productCulturally-sensitive hiringInternational and local perspective

Concerns about multinational companies

INTERNATIONAL BUSINESS, 4e CHAPTER

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5LESSON 5-3

Starting Global Business Activities

GOALSGOALSIdentify five low-risk methods for

getting involved in international business.

Discuss higher-risk methods for getting involved in international business.

INTERNATIONAL BUSINESS, 4e CHAPTER

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5Methods for Getting Involved in International Business

INTERNATIONAL BUSINESS, 4e CHAPTER

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5Low-Risk Methods for Getting Involved in International Business

Indirect exportingDirect exportingManagement contractingLicensingFranchising

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5Higher-Risk Methods for Getting Involved in International Business

Joint venturesTurnkey projectForeign direct investment