Chapter Assessment - Introduction To Business - ثاني ثانوي

Chapter 2 Assessment Review Business Concepts 2.1 Business in the Saudi Economy • The Saudi economy is transforming, with the launch of Saudi Vision 2030. A range of initiatives are in place to diversify the economy, reduce the reliance upon oil, decrease unemployment among Saudi nationals, encourage women to join the workforce, promote small business growth, and invest in the youth. • Businesses play several key roles in the Saudi economy. They make and distribute products and services needed by consumers, government, and businesses. They provide employment for millions of people. They compensate owners and investors. The three major categories of businesses are producers, intermediaries, and service businesses. Producers create the products and services used by individuals and other businesses. Intermediaries sell goods and services. A service business carries out activities that are consumed by its customers. 2.2 Forms of Business Ownership ● Most businesses are organized as proprietorships, partnerships, or corporations. A proprietorship, or establishment as it is often referred to in Saudi Arabia, is a business owned and run by one person. A partnership is a business owned and controlled by two or more people. A corporation is a separate legal entity owned by one or more shareholders and managed by a board of directors. For people who want to work and make decisions independently, do not want to be exposed to significant regulation, and are willing to take on the risk of a business, the proprietorship is an effective form of ownership. A partnership is good for people who share an idea for a business, want to cooperate in managing and investing, and want to share the risks and rewards of the business. A corporation is more difficult to form and is subject to more regulations. Investors' liability is limited to the amount invested, and they can invest without taking part in the day-to-day management of the business. • Other forms of ownership include limited liability partnership, joint venture, corporation, nonprofit corporation, cooperative, and franchise. 2.3 Organizational Structure for Businesses Successful businesses have an effective organizational structure. A mission statement, goals, policies, and procedures guide them. ⚫ The specific structure of a business can be illustrated with an organizational chart. Traditionally, businesses have used a functional structure but now many use a matrix organizational structure. Think Critically About Business 1. What are some rapidly growing employment opportunities? What types of jobs are declining in numbers? How can you predict what job categories may grow or decline in the future? وزارة التعليم Ministry of Education 2024-1446 Assessment | 79

2. Why do most businesses have no employees other than the owner? Do you believe most of those business owners earn their entire income from that business? Why or why not? 3. Identify several businesses from your community that fit within each of the three categories of businesses listed in Lesson 2-1. Do you believe your community has more producers, intermediaries, or service businesses? Justify your answer. 4. Would you like to start and own your own business? Why or why not? What do you believe are the risks and benefits you would face if you decided to start a business? 5. Farah states that she wants to be her own boss. If she starts a business, it will be a proprietorship rather than a partnership or corporation. Explain to Farah why she might want to consider another ownership form. Is it possible for her to be her own boss and yet not use the proprietorship form of ownership? 6. Use a business directory to identify several nonprofit corporations in your area. What public service is each providing? Why do you think each is a public rather than a private corporation? 7. "An effective organizational structure is as important to a business as the quality of its products and services." Do you agree or disagree with that statement? Discuss your beliefs with another student who has the opposing view. 8. You are starting a shopping service for elderly people in your community who cannot leave their homes. Write a mission statement that clearly communicates the purpose of your business. 9. How will the appearance of an organizational chart for a business using a functional organizational structure be different from one using a matrix organizational structure? What should you be able to learn about a business by studying its organizational chart? 80 Chapter 2 | Business Organization Ministry of Education 2024-1446

Develop Your Business Language Match the terms listed with the definitions. Term 10. articles of incorporation 11. corporation 12. franchise 13. goal 14. intermediaries Your Choice Definition a. A business owned and controlled by two or more people who have entered into a written agreement. 15. mission statement 16. organization chart g. 17. partnership b. C. d. e. f. h. I. A short, specific written statement of the reason a business exists and what it wants to accomplish. Descriptions of the way work is to be done. A specific statement of results the business expects to achieve. A written legal document that identifies ownership and operating procedures and conditions for the business. Businesses involved in selling the goods and services of producers to consumers and other businesses. A separate legal entity, formed by documents filed with the state, which is owned by one or more shareholders and managed by a board of directors. A written contract granting permission to operate a business to sell products and services in a prescribed way. A business that completes activities that are consumed by customers rather than offers products for sale. A business owned and controlled by just one person. A written agreement among all owners that specifies the rules and procedures that guide ownership and operations. Guidelines used in making consistent decisions. m. A diagram that shows the structure of an organization, classifications of jobs, and the relationships among those classifications. 18. partnership agreement i. 19. proprietorship j. 20. policies k. 21. procedures 22. service business Make Academic Connections 23 Technology Use a spreadsheet and graphics program to make a chart or graph showing one of the following sets of data: (a) the five largest employers in the world and the number of employees for each, (b) the composition of the Saudi workforce by the age of employees, (c) the average size of Saudi business by annual sales revenues. وزارة التعليم Ministry of Education 2024-1446 Assessment | 81

24. Communication The school council in your school is planning to open a store to sell school supplies, school-related apparel, and other items before and after school. Prepare a mission statement for the store. Write one goal that identifies a specific result the store should achieve. Write a policy statement for accepting returns of merchandise purchased by customers. 25. Science Identify five types of natural resources that are extracted in Saudi Arabia for use in manufacturing. For each, identify the leading regions where the natural resources are extracted and important products for which the natural resource is needed. 26. Public Service Most communities have nonprofit corporations that support education. Find out if one or more organizations is working to support your school. If so, contact a leader of the organization. Determine how the organization is structured, if it is has articles of incorporation and bylaws, and its purpose. Find out how students in your school can support the organization through volunteer activities. 82 Chapter 2 | Business Organization Ministry of Education 2024-1446

Make Your Case Asad started a gardening service. He could not charge as much as he needed to make the profit he desired. His competitors only charged SAR 250 per garden while he charged SAR 300, but he did a superior job gardening. Still, potential customers did not want to pay the extra SAR 50. A friend, Ahmed, suggested that they work together. He was good at trimming shrubs and had ideas for improving landscapes with flowers and lawn ornaments. They would offer a unique service when they combined their businesses. They could charge an amount that would result in a good profit for both of them. They would seek out homes in neighborhoods with above-average income levels. 27. What will be special about the services that Asad and Ahmed can offer together? What other services might they include? 28. Why would they target above-average income levels? 29. Should Asad continue to run his business as a proprietorship and hire Ahmed as an employee? If not, what other form of business ownership would you recommend? Justify your choice. Interactions and Connections 30. Interview a financial advisor in your community about the process of selecting and purchasing stock. Ask the professional to share information about how people decide which stock to purchase and how a stockholder can track the stock's performance. Ask the broker or advisor if he or she has any general advice for young investors. وزارة التعليم Ministry of Education 2024-1446 Assessment | 83

31. Saudi Vision 2030 aims to improve the Saudi Arabian economy and encourages the development of small- and medium-sized enterprises (SMEs). Browse or search for information about forms of ownership that SMEs might consider. Be sure to read the advantages and disadvantages of each form or ownership. 32. Use information from your textbook and the Internet to identify and make a list of factors that influence the form of ownership choice. 33. Provide an example of a business that might benefit from choosing the proprietorship form of ownership. Provide an example for each of these other types of ownership: partnership and corporation. 34. Based on one of your examples from above, write a short scenario describing the advantages and disadvantages of the chosen form of ownership. Describe how the business plans to use the form of ownership to its advantage and how it plans to deal with the disadvantages. LL 84 Chapter 2 | Business Organization Ministry of Education 2024-1446

Small Business Management Team Event Your team has expertise in working at quick-serve and full-serve restaurants. Team members have college degrees in finance, hospitality marketing, and culinary arts. Your team is very excited about opening an Italian restaurant in a growing city with a population of 75,000 people. Currently there are two Italian restaurants associated with national franchises located in the community. Your team must describe the advantages associated with operating the restaurant as a sole proprietorship, partnership, corporation, and franchise. Then your team must decide upon the best type of ownership for your proposed restaurant and explain the rationale for your decision. The Small Business Management Team Event involves a 90-minute test and a 10-minute oral presentation followed by a five-minute question and answer session with the judges. Your team may use one laptop/notebook computer, posters, flip charts, or graphs for the presentation. Performance Indicators Evaluated Evaluate, prioritize, interpret, and communicate analysis of data. Negotiate business solutions with the team. Organize ideas and communicate orally in a group presentation. • Apply an understanding of forms of business ownership. Your team will be evaluated for Equality of responsibilities among team members of required tasks Demonstration of teamwork skills needed to function in a business setting Demonstration of self-esteem, self- and team-management, and integrity Demonstration of a working knowledge of business management/ownership concepts Demonstration of critical thinking skills to make decisions and solve problems Think Critically 1. What advantages are offered by choosing to operate the restaurant as a partnership? 2. What advantages are offered by choosing the franchise form of business? 3. Why should tax laws be considered when deciding on the form of business ownership? وزارة التعليم Ministry of Education 2024-1446 Assessment | 85