What is a corporation?

Transcription

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2 What is a corporation? A business that is owned by individual stock holders Accounts for 20% of businesses but more than 80% of all sales

3 If you own a share of stock Then you are a stock holder and part owner of the business!

4 How much liability would you have if this happened? Stock holders have limited liability! You only lose the money that you invest.

5 What is a corporation? A business that is owned by individual stock holders Considered a legal entity They are legally treated like people! They can

6 Pay taxes Make contracts Sue other parties

7 I m so suing that guy

8 Corporate Structure Board of Directors Corporate Officers Managers & Employees

9 Board of Directors Approves decisions for the corporation and manages executives Stockholders vote who will be the directors

10 Corporate Officers Appointed by the board of directors They run the corporation Usually called the Chief Executive (CEO)

11 Managers and Employees Everyone else working for the corporation

12 Top 10 Biggest Corporations 1. Wal-Mart (USA) 2. State Grid (China) 3. Sinopec Group (China) 4. China National Petroleum (China) 5. Royal Dutch Shell (Netherlands) 6. Toyota (Japan) 7. Volkswagen (Germany) 8. BP 9. Exxon Mobil (USA) 10. Berkshire Hatahway (USA)

13 Advantages 1.Limited liability for owners 2.Transferable ownership 3.Ability to attract capital 4.Long life

14 Disadvantages 1. Difficulty of start-up 2. Double taxation 3. Potential loss of control by the founders 4. More legal requirements and regulations

15 Types of Corporations Closely/Privately Held Publicly Held Only a few people own stock, usually family members Stock is sold on the open market

16 Corporate Combinations

17 Corporate Combinations When corporations merge (combine) with another firm Usually by buying out the other firms Three Types.

18 Horizontal Mergers Merges with firms competing in the same market.

19 Vertical Mergers Merge with firms that are involved in different stages of making the same product.

20 Conglomerates Merge with firms that make unrelated products

21 Multinational Corporations (MNC s)

22 Multinational Corporations Large corporation that produces and sells its goods and services throughout the world. Leads to globalization Connecting countries economically by opening trade

23 Multinationals have positive and negative effects on the world

24 Globalization Look at the tags of the clothes you are wearing and the products you currently have with you. Where are they made? 24

25 Walmart v Amazon? 1. Describe the rise of both Walmart and Amazon. 2. Which corporation had a higher revenue from last year? 3. Which corporation has a higher net worth? 4. Which corporation do you think will win in the long run? Why?

26 Walmart: Good Or Bad Facts about Walmart Video ows/walmart/view/ 26

27 Questions for video What does Walmart do that helps keep them organized and ready to keep their stores stocked? How did Walmart change the way retailers and producers do business? Use Rubbermaid as an example What is Walmarts strategy to attract business? Why did Walmart start importing goods from other countries in the 90 s? How did the plan of opening up trade with China work? Was it going as planned? 27