ABM Prelim

TOP ACHIEVERS PRIVATE SCHOOL, INC.
(TAPS)
Alicia; Cauayan; Santiago; Sta. Ana; Roxas; Ilagan; Solano
“The School of the Future”
The Role of Business in Social and Economic Development
Profit Sharing System at San Jose Kitchen Cabinets Manufacturing
From the start of business in 1982, San Jose Kitchen Cabinets was already sharing profits with
employees. Although this practice is not common, Mr Chan, founder and manager, had always been
of the belief that profit-sharing can aid economic stability and decrease unemployment.
The profit share percentage of employees was arbitrary, until in 1987, Mr Chan realized that, in any
economic activity or business enterprise, there are always two partners: labor and capital, and one
cannot exist without the other.
Thus, it followed that a 50/50 percent share would be logical. This profit share is over and above the
salaries and social security paid to the employees.
In addition, there was a cap on executive compensation: there is a policy that the compensation, both
salary and profit share, of the highest ranking employee should not exceed ten times that of the
lowest ranking employee.
All in all, a lot of efficiencies have been gained: the average return on equity from 1987 to the present
has been 30%, and high levels of job satisfaction have been felt throughout the organization.
Mission : To contribute in the study and promotion of social justice (in particular profit sharing)
Strategy for Sustainability : To develop a profit sharing system that is both advantageous to the
owners of business and the employees. A system that results in better net profit to the company in
the long term and much larger total compensation for the employees. A win-win formula. In the end,
society also benefits.
Profit-sharing has a positive effect of minimizing productivity-reducing conflict and generating

productivity-enhancing cooperation and innovation.
Businesses have a multiplicative effect.

1. In any economic activity or business enterprise, there are always two partners that are necessary.
2. The similarity of both partners is that before we can talk of profit sharing, we first have to satisfy
the basic needs of each partner.
3. In any business organization, weight of responsibility differs on each category of position.
Business and Business Organization
A business is an activity that is part of human society: it is an entity in which economic resources or inputs, such as materials and
labor, are put together and processed to provide goods or services or outputs to customers.
Businesses are usually complex enterprises involving major activities like purchasing, manufacturing, marketing, advertising
selling, and accounting.
Profit is the difference between the amount received and the amount spent in buying, operating, or producing goods or services.
Businesses make the goods and services you use each day.
Types of Business
Service Business provide services rather than products to customers.
Merchandising businesses sell products they purchase from other businesses to customers.
Manufacturing business convert basic inputs into products that are sold to customers.
The Various Forms of Business Organization
Sole Proprietorship - A business owned by one person.
a. Total undivided authority

b. b. Low organizational cost, license, and registration fees
c. Tax savings
d. d. Less restrictions on this type of business.
Disadvantages of Sole Proprietorship

a. Unlimited liability
b. Limitation on size
c. Limited by management's ability to be jack-of-all-trades.
Partnership - A partnership is a voluntary association of two or more people as partners.

a. Association of individuals
b. Mutual agency
c. Limited life
d. Unlimited liability
e. Co ownership of property
State the agreement in writing

a. A partnership is a legal entity for certain purposes.
b. A partnership is an accounting entity for financial reporting purposes.
c. The net income of a partnership is not taxed as a separate entity.
3. Corporation - A corporation is an entity created by law that is separate and distinct from its owners.
Based on the Revised Corporation Code of the Philippines (February 2019), a corporation shall have perpetual existence
unless its articles of incorporation provide otherwise.
The characteristics that distinguish a corporation from proprietorships and partnerships are:
a. The corporation has separate legal existence from its owners.
b. The stockholders have limited liability.
c. It has transferable ownership rights (ownership is in shares of stock)
d. It has the ability to obtain higher capital (relative ease)
e. The corporation can have a continuous life.
f. The corporation is subject to numerous government regulations.
g. The corporation must pay an income tax on its earnings.
h. It has an artificial/juridical "person", endowed with the ability for self-management, and has a Board of Directors as
chief governing authority.
Compare and Contrast the Various Forms of Business Organization

The owner of a sole proprietorship has complete control over the company's finances and operations.
Sole proprietors are not required to consult with anyone when it comes to making business decisions.
All partners of a partnership have input regarding how the company's resources are used and other important business
decisions.
In a partnership business, all partners are responsible for making decisions that will impact the business. This may provide
multiple viewpoints, which could potentially lead to better business decisions.
The sole proprietor can maintain complete control over all aspects of the business.
Corporations have an advantage when it comes to raising capital for the business-the ability to raise funds through the
issuance of stock.
Form of Business Entity Characteristics
Proprietorship is owned by one individual. - 40% of business in the Philippines.

- Easy and cheap to organize.
- Resources are limited to those of the owner.
- Used by small businesses.
Partnership is owned by two or more - 5% of businesses in the Philippines.

individuals. - Combines the skills and resources of more
than one person.
Corporation is organized under national - 55% of businesses in the Philippines.

statutes as a separate legal taxable entity. - Ownership is divided into share called stocks.
- Can obtain large amount of resources by issuing
stock.
- Used by large businesses.
The Role of Each Business Organization on the Economy

Small businesses owned by sole proprietors are well recognized worldwide as vital and significant contributors to
economic development, job creation, and the general health and welfare of economies.
Micro businesses form a dynamic, integral part of the market economy, providing goods and services and a gateway by
which millions enter the economic and social mainstream of society.
Industrial Revolution
Corporations provide such benefits as: links with suppliers, increased consumer spending, the transfer of knowledge from
one firm to another, and the sharing of pools of workers.

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TOP ACHIEVERS PRIVATE SCHOOL, INC.

The Role of Business in Social and Economic Development

Profit Sharing System at San Jose Kitchen Cabinets Manufacturing

Profit-sharing has a positive effect of minimizing productivity-reducing conflict and generating

Businesses have a multiplicative effect.

Business and Business Organization

Service Business provide services rather than products to customers.

The Various Forms of Business Organization

Sole Proprietorship - A business owned by one person.

a. Total undivided authority

Disadvantages of Sole Proprietorship

Partnership - A partnership is a voluntary association of two or more people as partners.

State the agreement in writing

Compare and Contrast the Various Forms of Business Organization

Proprietorship is owned by one individual. - 40% of business in the Philippines.

Partnership is owned by two or more - 5% of businesses in the Philippines.

Corporation is organized under national - 55% of businesses in the Philippines.

The Role of Each Business Organization on the Economy

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