ORGANIZATION AND MANAGEMENT
Self-Learning Module
PRELIMINARIES
Module # 2 – The Firm and It’s Environment
MODULE OVERVIEW
LEARNING COMPETENCIES
a. identify various forces/elements of the firms’ environment
b. summarize these forces using PEST and SWOT analysis
c. describe the local and international business environment of a firm
d. explain the role of business in relation to the economy
e. discuss the different phases of economic development
INSTRUCTIONAL MATERIALS
Darr, K. (2013). Introduction to Management and Leadership Concepts, Principles and Practices,
Jones and Bartlett Learning, Retrieved from: https://www.google.com.et
Mintzberg, H. (1989). MINTZBERG ON MANAGEMENT. Reprinted by permission of Free
Press, a division of Simon & Schuster, Inc.
Robbins, S., Robbins, S. P. and Coulter, M. (2012). Management -11th ed, Pearson.
Retrieved from: www.pearsonhighered.com
PRE - ASSESSMENT Let us start your journey in learning more on
decimal and percentage. I am sure you are ready and
excited to answer the Pre assessment. Smile and Enjoy!
Fill in the Blank
Directions: Choose the CORRECT word from the table being described by
the statement below and write your answer in the space provided before the
number.
Partnership Single Proprietorship Corporation
Joint Venture Cooperative General Partnership
1. is a type of partnership which divides responsibility for
management and liability, as well as the shares of profit of loss according
to their internal agreement.
2. is an organization established for the purpose of
purchasing and marketing the products of its member.
3. is a juridical entity established under the
Corporation Code and registered with the SEC.
4. is the simplest form of business and the easiest to
register through the Bureau of Trade Regulation and Consumer
Protection (BTRCP).
5. consists of two or more persons who bind themselves
to contribute money or industry to a common fund with the
intention of dividing profits among themselves.
Good Job! You did it well
MOTIVATION
Alright! Now, allow me to introduce to you our new lesson. Let us start by
answering the following activity. Are you now ready? Try this one!
Matching-type
Directions: Match the column A to column B. Write your answer in the space provided
before the number
A B
1. Philippine Cooperative Code of 2008 a. Cooperative
2. The purpose of purchasing and marketing b. RA 9520
the products of its members c. Joint Venture
3. Mixture of the features of a sole proprietorship d. Single Proprietorship
and a corporation. e. One Person
Corporation
4. Simplest form of business and the f. Transitional
Society easiest to register.
5. Acts like a general partnership but is clearly
limited period of time.
INTERACTION
Learning Activities
Hi! I provided you some reading materials and examples in identifying
various forces and elements of the firms; environment. Please take time to read and
analyze for you to be ready in your next task. Enjoy!
Enjoy
BRIEF INTRODUCTION reading…..
After deciding to start a business (and the business to pursue), one of
the important issues is the form of business entity that will serve as the
vehicle in pursuing the business. You may say that the next important issue
is the source of funding, which is correct, but that issue will be discussed
later. Right now, let’s focus on the forms of business.
The choice of the form of business or business organization depends on
various factors. In certain business, like banks, the law requires that the
business entity must be a corporation. A small business, like your friendly
sari-sari store, is better off as a sole proprietorship, although it could also be
converted to another form of business if the circumstances require that shift.
A. Partnership
Partnership consists of two or more persons who bind themselves to
contribute money or industry to a common fund, with the intention of
dividing the profits among themselves. The most common example of
partnerships are professional partnerships, like in the case of law firms and
accounting firms. Just like a corporation, it is registered with the Securities
and Exchange Commission (SEC).
Advantages of a Partnership
Partnerships are relatively easy to establish; however time
should be invested in developing the partnership
agreement.
With more than one owner, the ability to raise funds may be
increased
The profits from the business flow directly through to the partners’
personal tax return.
Prospective employees may be attracted to the business if given the
incentive to become a partner.
The business usually will benefit from partners who have
complementary skills.
Disadvantages of a Partnership
Partners are jointly and individually liable for the actions of the other
partners.
Profits must be shared with others.
Since decisions are shared, disagreements can occur.
Some employee benefits are not deductible from business income on tax
returns.
The partnership may have a limited life; it may end upon the
withdrawal or death of a partner.
Types of Partnerships that should be
considered: 1. General Partnership
Partners divide responsibility for management and liability, as well as
the shares of profit or loss according to their internal agreement. Equal
shares are assumed unless there is a written agreement that states
differently.
1. Limited Partnership and Partnership with limited liability
“Limited” means that most of the partners have limited liability (to the
extent of their investment) as well as limited input regarding
management decision, which generally encourages investors for short
term projects, or for investing in capital assets. This form of
ownership is not often used for operating retail or service businesses.
Forming a limited partnership is more complex and formal than that
of a general partnership.
2. Joint Venture
Acts like a general partnership but is clearly for a limited period of
time or a single project. If the partners in a joint venture repeat the
activity, they will be recognized as an ongoing partnership and will
have to file as such and distribute accumulated partnership assets upon
dissolution of the entity.
B. Sole proprietorship
Also referred to as “single proprietorship,” a sole proprietorship is the
simplest form of business and the easiest to register, through the Bureau of
Trade Regulation and Consumer Protection (BTRCP) of the Department of
Trade and Industry (DTI). It is owned by an individual who has full
control/authority of its own and owns all the assets, as well as personally
answers all liabilities or losses. The fact that it is run by the individual
means that it is highly flexible and the owner retains absolute control over
it.
Advantages of a Corporation
a. Shareholders have limited liability for the corporation’s debts
or judgments against the corporation.
b. Generally, shareholders can only be held accountable for their
investment in stock of the company. (Note however, that officers
can be held personally liable for their actions, such as the failure to
withhold and pay employment taxes.
c. Corporations can raise additional funds through the sale of stock.
d. A Corporation may deduct the cost of benefits it provides to officers and
employees.
e. Can elect S Corporation status if certain requirements are met.
This election enables company to be taxed similar to a
partnership.
Disadvantages of a Corporation
a. The process of incorporation requires more time and money than
other forms of organization.
b. Corporations are monitored by federal, state and some local
agencies, and as a result may have more p
c. Paperwork to comply with regulations.
Incorporating may result in higher overall taxes. Dividends paid to shareholders are not
deductible from business income; thus this income can be taxed
C. Cooperative
A cooperative is an organization established for the purpose of
purchasing and marketing the products of its members, i.e., shareholders,
and/or procuring supplies for resale to the members, whose profits are
distributed to the members (in the form of patronage dividends), not on the
basis of the members' equity
According to REPUBLIC ACT 9520 also known as "Philippine Cooperative Code of
2008".
The primary objective of every cooperative is to help improve the
quality of life of its members. Towards this end, the cooperative shall aim
to:
a. Provide goods and services to its members to enable them to attain
increased income, savings, investments, productivity, and purchasing
power, and promote among themselves equitable distribution of net
surplus through maximum utilization of economies of scale, cost-
sharing and risk-sharing;
b. Provide optimum social and economic benefits to its members;
c. Teach them efficient ways of doing things in a cooperative manner;
d. Propagate cooperative practices and new ideas in business and
management;
e. Allow the lower income and less privileged groups to increase their
ownership in the wealth of the nation; and
f. Cooperate with the government, other cooperatives and
people-oriented organizations to further the attainment of any
of the foregoing objectives.
EXERCISES AND DRILLS
Activity 1: Independent Activity
Directions: Give your own descriptions on the various forms of business
organizations in 3 to 5 sentences only. Write your answer in the space
provided in bullet form.
To discuss Answer
1. Sole proprietorship
2. Partnership
3. Corporation
4. Cooperative
Activity 2: Independent Activity
In 5 to 8 sentences, discuss in a yellow paper how learning this lesson can
improve your relationship with the people around you, your parents,
guardians, or family. Ask an elder at home to comment on your answers.
REMEMBER
Walk Whitman Rostow, also known as W.W. Rostow was an economist in the Lyndon B.
Johnson administration from 1966-1969. He also published articles and developed models on
economic development.
The Five Stages of Economic Development model is developed by Walt Withman Rostow. The
five stages are 1) Traditional Society, 2) Preconditions for Take-off, 3) Take-Off, 4) Drive to
maturity, and 5) Age of Mass Consumption.
Partnership consist of two or more persons who bind themselves to contribute money or
industry to a common fund, with the intention of dividing the profits among themselves.
Types of partnership are 1) General Partnership, 2) Limited Partnership and Partnership with
limited liability, and 3) Joint Venture.
Sole proprietorship is the simplest form of business and the easiest to register, through the
Bureau of
Trade Regulation and Consumer Protection (BTRCP) of the Department of Trade and Industry
(DTI). It is owned by an individual who has full control/authority of its own and owns all the
assets, as well as personally answers all liabilities or losses.
Corporation is a juridical entity established under the Corporation Code and registered with the
SEC.
Cooperative is an organization established for the purpose of purchasing and marketing the
products or its members, i.e., shareholders, and/or procuring supplies for resale to the members,
whose profits are distributed to the members (in the form of patronage dividends),
REFLECTIVE LEARNING SHEETS
Reflective Question: If you have an existing sari-sari store, what are the
possible things you will consider in terms of business registration based on
the topic discussed to respond to the COVID-19 pandemic? Cite at least two
and explain. Write your answer in the space provided.
POST – ASSESSMENT
MULTIPLE CHOICE: Choose the letter of the correct answer.
Write your answer in the space provided.
1. The followings are the disadvantages of Corporation except ONE.
a. Incorporation requires more time and money that other forms of
organization.
b. Monitored by federal, state and some local agencies.
c. May result in higher overall taxes.
d. May deduct the cost of benefits it provides to offices and employees.
2. Which of the following is advantage of Corporation?
a. Can raise additional funds through the sale of stock.
b. Requires more time and money than other forms of organization.
c. Processes of paperwork to comply with the regulation.
d. All of the above
3. Which of the following is CORRECT about Sole Proprietorship?
a. Not easiest and highly expensive form of ownership to organize.
b. The business is easy to dissolve, if desired.
c. Cannot control within the parameters of the law.
d. Profits from the business are divided into the employees.
4. The following are the advantages of partnership except ONE.
a. The Business usually will benefit from partners who have
complementary skills.
b. With more than one owner, the ability to raise funds may be increased.
c. Partners are jointly and individually liable for the actions of the other
partners.
d. Prospective employees may be attracted to the business if
given the incentive to become partner.
5. It means that most of the partners have limited liability, as well as
limited input regarding management decision.
a. Abundant
b. Unlimited
c. Single
d. Limited
6. Which of the following are disadvantages of Sole Proprietorship?
a. Have limited liability and are legally responsible for all
debts against the business.
b. Some employees benefits such as owner’s medical insurance
premiums are not directly deductible from business income
c. Have a hard time attracting high-caliber employees
d. All of the above
7. It is registered in the same manner as other corporations with the SEC,
except that
it is composed of only one person, just like a sole proprietorship.
a. One Person Corporation
b. Partnership
c. Double Person Corporation
d. Cooperative
8. Republic Act 9520 also known as:
a. Philippine Cooperative Code of 2008
b. Philippine Cooperative Code of 2009
c. Philippine Corporation Code of 2008
d. Philippine Corporation Code of 2009
9. The following are the objectives and Goals of a Cooperative except ONE.
a. Provide good and services to its members to enable them to
attain increase income, savings, investments and purchasing
power.
b. Allow the higher income and higher privileged group to
increase their ownership in the wealth of the nations.
c. Teach them efficient ways of doing things in a cooperative manner.
d. Provide optimum social and economic benefits to its members.
10. SEC stands for:
a. Securities and Exchange Corporation
b. Security and Exchange Commission
c. Securities and Exchange Commission
d. Security and Exchange Corporation
