BICOL COLLEGE

INC.
Senior High School Department
Daraga, Albay

SELF LEARNING
MODULE
IN
ORGANIZATION AND
MANAGEMENT
1st Quarter - Module 3

Grade 11

(1st Semester S.Y.2020-2021)

Mrs. Melanie A. Pareja

Subject Teacher
Dr. Maricar T. Magcalen
SHS Coordinator

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ORGANIZATION AND MANAGEMENT
Name of Student: ________________________________
Grade & Section: ________________

Good day Learner! Today, you are about to learn the different

FORMS AND ECONOMIC ROLES

OF BUSINESS ORGANIZATIONS

This module explains and discusses the various forms of business organization and its economic roles
in the business organization including the advantages and weaknesses to determine the best
practices in choosing a business.

The following are the things that you will learn after the
lesson:

Here are words that can help you understand thoroughly the lesson:
Business - is an organization or economic system where goods and services are exchanged
for one another or for money.

Hybrid Business - refers to companies that may be classified with more than one type of
business.

Merchandising Business - refers to businesses which buy product at wholesale price and
sell the same at retail price.

Manufacturing Business - refers to businesses which buy productions with the intention of
using them as materials in making a new product.

Sole Proprietor - a business is owned and managed by only one person.

Partnership - a business owned by two or more persons who contribute resources into the
entity.

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ORGANIZATION AND MANAGEMENT
Corporation - is a business organization that has a separate legal personality from its
owners.
Cooperative - is a business organization owned and managed by a group of
individuals for their mutual benefits.

Now, let’s see how far you know…

Cooperative 1. It is a business being run by a group of individuals for mutual benefits.

Hybrid Business 2. A type of business that may be classified with more than one type of
business.

Corporation 3. It is said to be an artificial business created by legal personality from its

owners and its ownership is represented by shares of stock.

__________4. It is an organization of people where good and services are exchanged

from one another or for money.

__________5. This is the easiest and least expensive form of ownership to organize.

__________6. It is a type of business which provides intangible products.

__________7. The business is owned by two or more persons who contributed resources but
may have limited life; it may end upon withdrawal or death of partner.

__________8. Also known as “buying and selling” business.

__________9. A type of business that buy products or raw materials for the purpose of
transforming it into finished product to be sold to the customers.

_________10. It is a type of partnership where partners divide responsibility, liability and

shares of profit or loss in the business.

How do you find the test? Don’t worry if you feel you got a low score. Just remember that
there’s always room for learning. Proceed to the next activity. Learning is fun!

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ORGANIZATION AND MANAGEMENT
 Before you proceed to the discussion, can you identify
the following pictures below?

Activity #1 - Picture Identification as to What Type of Business

Direction: Identify the following pictures below whether it is a service,

merchandising, manufacturing or a hybrid type of business.

1. _____________ 2. ________________ 3. ________________

4.________________ 5._______________

6.______________

7.___________________
Now, try to know this…There are
Different Types
of Business

Business is an entity or enterprise that provides goods and

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ORGANIZATION AND MANAGEMENT
services in exchange for some form of money or another. It can be a privately owned,
nonprofit organization or state-owned business. These entities consider the three basic
problems in economy in establishing their business:
a.) What to produce?
b.) How to produce?
c.) For whom to produce?

There are four major types of businesses:

Service Business a type of business which provides intangible products. Service
type firms offer professional skills, expertise, advice, and other similar products.

Examples of service businesses are schools, repair shops, hair salons, banks, accounting firms
and law firms.

Merchandising Business is a business which buys products at wholesale price and

sells the same at retail price. They are known as “buy and sell” businesses. They
make profit by selling the products at prices higher than their purchase costs.

Examples are grocery stores, convenient stores, distributors and other resellers.

Manufacturing Business unlike a merchandising business, buys products

with the intention of using them as materials in making a new product. A
manufacturing business combines raw materials, labor, and factory
overhead in its production process. The manufactured goods will then be
sold to customers.
Examples are baked good, shoe manufacturing, grape wine production, cosmetic
manufacturing, processed food, canned goods, and others.

Hybrid Business is a company that may be classified in more than one type
business. A restaurant, for example combines ingredients in making a fine
meal (manufacturing), sells a cold bottle of wine (merchandising), and fills
customer orders (service).

Now, I know you can do this out.

Try the next activity. Have fun!

Activity #2 - Business Ownership Identification

Direction: Identify the pictures below whether it is a sole, partnership, corporation,
or a cooperative business.

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ORGANIZATION AND MANAGEMENT
 1. _______________

2.__________________ 3._______________________

4.____________________ 5._______________________

Great, you are nowfinished answeringthe

questions. You may request your facilitator
to check your work. Congratulations and
keep on learning!

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ORGANIZATION AND MANAGEMENT
What more should I
know?
• Business is owned
•Business is by two or more
owned person who
and operated contribute resources
for the entity
by only one
person

Sole
Propriotorship Partnership

Corporation Cooperative

•A business •A business owned

organization that and operated by
has separate group of
personality from individuals for
its owners. their mutual
benefit

Business Ownership

How do they differ from the other?

By considering the advantages and disadvantages of the different business ownership,

best practices will then be recognized in choosing a business to be established.
SOLE PROPRIETORSHIP
ADVANTAGE DISADVANTAGE
• Easiest and least expensive form of • Sole proprietors have unlimited liability
ownership and the business is easy to dissolve, if
desired.
• Sole proprietors are in complete control, and within • May have a hard time attracting high-
the parameter of the law, may make decisions as caliber employees or those that are
they see fit. motivated by the opportunity to own a
part of the business.
• Profit from the business flow-through directly to
the owner’s personal tax return.

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ORGANIZATION AND MANAGEMENT
  Some employees benefit
such are owner medical insurance
premium are not directly
deductible from
business income.

Examples: Law firms, medical clinics, and Travel and Tours

Types of Partnerships that you should consider:
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.
2. Limited Partnership and Partnership with limited liability. “Limited” means that
most of the partners have limited liability as well as limited input regarding management
decision, which generally encourages investors for short term projects, or for investing in
capital assets.
3. Joint Venture is like a general partnership, but is clearly for a limited period of time
or a single project. If the partners in as 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.
CORPORATION
ADVANTAGES DISADVANTAGES
• Shareholders have limited liability for the • The process of incorporation requires more
corporation’s debts or judgements against time and money that other forms of
the corporation. organization.

• Generally, shareholders can only be held • Corporations are monitored by federal, state
accountable for their investment in stock of and some local agencies, and as a result
the company. (Note however, that officers can may have more paperwork to comply with
be held personally liable for their actions, such regulations.
as the failure to withhold and pay
employment taxes. • Corporations may result in higher overall
taxes. Dividends paid to shareholders are
• Corporations can raise additional funds not deductible from business income; thus
through the sale of stock. this income can be taxed twice.

• A corporation may deduct the cost of benefits

it provides to officers and employees.

• Can elect Corporation status if certain

requirements are met. This election enables
company to taxed similar to a partnership.

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ORGANIZATION AND MANAGEMENT
 Examples: Smart Communications, Inc, SM Development Corporation, Medical
Doctors, Inc. (Makati Medical Center), Avida Land Corporation
COOPERATIVE
ADVANTAGES DISADVANTAGES
• Less Taxation • Less Operational Control
• Funding opportunities • Fixed Pricing
• Further marketing reach • Cooperative may suffer from slow cash
• Reduce costs and improve product flow since a member’s incentive to
and services contribute depends on how much they
• Perpetual existence, members can use the cooperative’s services and products.
join or leave the business without causing • Lack of membership and participation
dissolution. may cause risk of losing members.
• Democratic organization, monetary
investment does not affect the weight of each
vote, so no member owner can dominate the
decision-making process.

Example: water and electricity (utility) cooperatives, Cooperative banking,

Credit Unions, and Housing Cooperatives

Practice Task 1
Direction: Read and identify the statements below. Underline your answer from the given options.
1. It can be privately owned, state-owned or non-profit organizations that produce goods and services
for the exchange of money or for one another. (Business, Proprietorship)
2. (Service Business, Hybrid Business) is classified for more than one type of business.

3. (Manufacturing Business, Merchandising Business) they are known as “buy and sell” business.
4. A business that produces intangible products. (Service Business, Manufacturing Business)
5. A (corporation, cooperative) is a business owned by a group of individual and operated a business for
their common good.
6. The (Sole Proprietorship, Partnership) is the easiest and least costly to set up when planning a
business.
7. It is owned and managed by two or more person who contributed their resources for the entity. (Sole
Proprietorship, Partnership)

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ORGANIZATION AND MANAGEMENT
 Practice Task 2
Direction: Write your answer in the crossword puzzle by reffering to the
statement below.

1. A type of business that buys product for the intention of using them to create
finished products to be sold to customers.

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ORGANIZATION AND MANAGEMENT
2. A business that is owned and managed by a group of people for their common
good.

3. It is a combination of different types of business.

4. It is a business owned by two or more person who contributed resources and

shares profit among themselves.

5. A type of business that concerns with buying and selling of the commodities.

6. The ownership of this business is through a share of stock.

7. This business offers intangible products to its customers.

are now about to

Good job! You
complete the module by answering the final test
prepared for you. Good luck learner! POST-
TEST

Direction: Encircle the letter from the given options that corresponds to the
statement in each item.

1. It is an organization of people where goods and services are exchanged for one another or
for money.
A. Business C. Commodities
B. Partnership D. Services

2. It is an artificial business created by legal personality from its owners and its ownership is
represented by shares of stock.
A. Corporation C. Sole Proprietor
B. Cooperative D. Partnership

3. A type of business which provides intangible products to the customers.

A. Hybrid business C. Manufacturing business
B. Merchandising business D. Service business

4. A certain business managed by a group of individuals for mutual benefits.

A. Sole Proprietorship C. Partnership
B. Cooperative D. Corporation

5. The business is owned by two or more persons who contributed resources but may have
limited life; it may end upon withdrawal or death of partner.

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ORGANIZATION AND MANAGEMENT
 A. Corporation C. Partnership
B. Sole Proprietorship D. Cooperative
6. This business is classified as having more than one type of business.
A. Service business C. Manufacturing business
B. Merchandising business D. Hybrid business
7. This is the easiest and least expensive form of ownership to organize.
A. Sole Proprietorship C. Partnership
B. Cooperative D. Corporation

8. A type of business where they buy products or raw materials for the purpose of
transforming it into finished product to be sold to the customers.
A. Service business C. Manufacturing business
B. Merchandising business D. Hybrid business

9. A partnership where partners divide responsibility, liability and shares of profit or loss in
the business.
A. General Partnership C. Joint Venture B. Limited Partnership
D. Preferred Partnership

10. This business is also known as “buying and selling” business.

A. Service business C. Manufacturing business
B. Merchandising business D. Hybrid business

Conduct an interview to the owner of a store near you. Know the type and form of the
business. Ask why he/she chooses such business? For how long now he/she manages
and operates his/her business?

Reference:

Samar, Gregorio L. et al. (2016) Introduction to Organization and Management. Hunt

Publishing Center, 41-47.extracted
from:http://www.mayalaw.com/2015/06/26/advantagesand-disadvantages-of-a-cooperative/

Thank you learner. You

did great! Stay safe.

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ORGANIZATION AND MANAGEMENT