Business Forms

Business Forms

ETH/321

Business Forms

Business organizations come in different types, forms, and sizes such as sole proprietorships, partnerships, and corporations. These various forms of organizations offer flexibility depending on the needs and expectations of the business owner; however, ethics does play an essential role in the success and sustainability of the company. Therefore, it is imperative to examine the scenario involving Adam, Laura, and Dazzling Doggie’s Day Spa and its organizational form as well as ethical practices.

Which Business Organizational Form Would be Best? Why?

Based on the needs of the business owners of Dazzling Doggies Day Spa, it is evident that they should consider adopting a partnership form of business. A partnership is a type of business organization that has two or more individual owners. Its benefit is that partners share factors such as liability, risk, and management, depending on the percentage of ownership agreed. Partnership businesses are linked to its core activities and focus on a specific supply chain. (Kolk, Van Tulder & Kostwinder 2008); however, Beth may act as a limited partner hence personal liability will only be limited to her capital investment and the other partner(s) may not involve her in the day to day operations of the business.

A partnership disperses burden among several people, which makes the business flexible thus increasing the potential for growth and profit making. The partners share responsibility and can divide tasks according to one’s specialization and abilities; for example, if one partner is useful in computing figures, he or she can deal with the bookkeeping and accounting aspect, while another partner who has marketing skills can be the chief salesperson for the business. Therefore, dividing responsibilities will allow them to make the most of their abilities. Partnerships do, however, have some pitfalls. Since profit sharing should be equal and there is also an equitable distribution of responsibilities among the partners’, several inconsistencies may occur. For instance, a few partners may be limiting their share of effort into running and managing the business but are still reaping the rewards. Partners are likely to have contradictory ideas on running the company such as who should be functioning in what capacity and what and how best to serve the interests of the business? This issue will lead to disagreements and conflicts among the partners. Therefore, it is advisable to draft a deed of partnership that highlights the procedures of conflict resolution and what would occur when dissolving the partnership.

Are the Actions of Adam Ethical or Not?

Ethics refer to whether an action or behavior is right or wrong. Business ethics, therefore, is the application of general noble ideas to business behavior. Moral, ethical business behavior fosters business relations and enhances employee productivity (Fernando, 2010). As such, in the scenario, Adam’s actions were extremely unethical as he should not have been using the business’ checking account to pay his bills. Therefore, once Laura and Beth become aware of this unethical behavior, the fundamental issue of integrity and trust arose. Lack of integrity and trust would, in turn, affect the business relationship and hamper the partners’ ability to deliver on the company’s mandate.

Conclusion

Overall, when choosing a business form such as a sole proprietorship, partnership, or corporation, it is imperative to take note of specific needs and expectations for the business. More importantly, it is critical to maintaining ethical standards to create, operating and secure the success of the organization for years to come.

References

Fernando, A. C. (2010). Business Ethics and Corporate Governance. Pearson Education India.

Kolk, A., Van Tulder, R., & Kostwinder, E. (2008). Business and Partnerships for Development. European Management Journal.