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Summary of chapter 6 - Essay Example

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The sixth chapter of the book BUSN by written by the authors Marcella Kelly and Jim McGowan explores the various forms of businesses and also looks at the process of selecting the most suitable one that will fit an individual’s or organizational aspirations.
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Summary of chapter 6
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Download file to see previous pages Sole proprietorship is a kind of business formation where the enterprise is under the ownership of one individual. Some of the advantages of this type of business form include, profit retention, it is very easy to form, ownership pride, control retention and tax related advantages. Disadvantages for this type of business form include financial limitations, unavailability of permanence and unlimited liability.
Corporations are business entities that are separated from owners completely and are thus considered as legal entities. The stockholders are the real owners of the entities but they have a board of directors who are responsible for the formulation of objectives and missions. The stockholders elect the board for their interest’s representation.
Apart from these, other business forms that exist in the world are acquisitions and mergers. Acquisitions result from the buying or take over of one business enterprise by another. Mergers occur when two business organizations make an agreement to combine and form a single organization. These mergers are of three types and these are vertical, horizontal and conglomerate.
A business may also adopt a divestiture approach where spin offs and carve outs are done on the business. This allows the business to streamline its focus and operations. Another mode of a business specialization is franchising where a new franchise that uses the original business’ practices and trademark is formulated. An example of a successful company that has used this model is ...Download file to see next pagesRead More
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