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CHAPTER 2
Operational Aspect
One of the key components in starting a business is the Operational
aspect. To do this, management must be able to organize all activities so
that they are profitable and competitive in the market using new
technologies, financial resources, and human resources. This comprises
an examination of the officers and key individuals, fundamental factors in
setting up the business, the ownership structure, the organizational chart,
and the timeline for the project. This plan’s primary goal is to evaluate the
organization setup’s option effectiveness.
The objectives are as follows:
1. To know the project originators, investors, and managers of the
business and to determine how much is the capital contribution.
2. To discuss the activities to do and the time allotted to each.
3. To identify the type of ownership to be formed.
4. To enumerate the different positions, qualifications and their
duties and responsibilities.
5. To adopt an organizational structure for the business.
6. To establish a detailed compensation scheme for the employees
of the business.
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Form of Ownership
The form of corporate ownership favored by the proponents is a
partnership because everyone will invest funds in the enterprise. A
partnership is a company that is held by two or more people who each
contribute money, talent, or industry with the goal of sharing the profits.
A partnership type of business organization was chosen by the
proponents because it is an excellent choice of legal structure for a new
company. Due to the nature of the business relationship, the owners must
necessarily share in the profits, liabilities, and decision-making. One of the
important features of a partnership type of business in the Philippines is
that it has a limited lifespan and that its operations may be terminated
either by the partners' actions or by the operation of law. Another
important feature of a partnership is that it is based on contracts since it
was established because of a contract that the partners entered. While it
is occasionally required that the contract be in writing and that its contents
be expressly stated.
The following are the advantages of partnership form of business
ownership:
Flexible Capital Sources
Ease of Formation
Shared Responsibility
Better Decision Making
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The following are the disadvantages of partnership form of
business ownership:
Disagreements
Unlimited Liability
Taxation
Profit Sharing
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Organizational Chart
The organizational chart is a graphical formation that displays the
important details in the organizational structure including the major
functions and their respective relationships among positions according to
authority and responsibility. This refers to the diagram showing the key
functions of the line and staff organizational structure.
Figure 2
Organizational Chart
