Organizational Development
A Virtual Organizational
Development Course
Adapted from Understanding Business, 10th Edition
Organizational Development
• Welcome to the Woodson Center
Neighborhood Leadership Development
Institute On-Line
(www.woodsoncenter.org) .
• This time series training and development
course is for community and faith based
organizational leaders.
• The course is designed to provide
development in three areas: individual,
organizational, and community.
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Organizational Development
• Each program curriculum track has at least 12
workshops that are presented using social
media to include GoToMeetings, YouTube and
Black Board.
• Each program curriculum track will be recorded
and placed on the Woodson Center web site for
viewing in the convenience of your home or
office. The address is www.woodsoncenter.org.
• Participants will be able to get Continuing
Education Units for each program curriculum
workshop upon completion of quizzes at the end
of each module.
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Organizational Development
• The second discussion will be Organizational
Development. This track has several
components: Forms of Business Ownership,
Ethical Behavior and Community Responsibility,
Leadership and Management, and Financial
Management.
• We will first discuss Forms of Business
Ownership.
• This course in Organizational Development is
adapted from Understanding Business, 10th
Edition (Nickels, McHugh and McHugh).
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Organizational Development
• Lesson Objectives:
– Know and Understand three basic forms of business
ownership for community based organizations.
– Know and understand values, attitudes, norms and
behaviors common to ethical organizational
development.
– Know and understand vision, mission, desired
outcomes, performance measures, and milestones of
key players in the organization and stakeholders
supporting the organization.
– Know and understand management, leadership and
employee empowerment.
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Organizational Development
• Lesson Objectives continued:
– Know and understand financial management
requirements.
– Know and understand compliance
requirements for organizations
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Organizational Development
Basic Forms of Ownership
• How you form your business can make a
tremendous difference in your long-term
success.
• There are three forms of business
ownership:
– Sole Proprietorship
– Partnership
– Corporation
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Organizational Development
Basic Forms of Ownership
• Sole Proprietorships
• An organization that is owned, and usually
managed, by one person is call a sole
proprietorship.
• Sole proprietorships are the most common form
of business ownership.
• All you have to do to start a sole proprietorship is
buy or lease equipment (e.g. lawn mower, paint
brushes, computer, etc.)
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Organizational Development
Basic Forms of Ownership
• Advantages of Sole Proprietorships:
– Sole proprietorships allows you to be your own boss,
but you may have to get a permit or license from the
local government.
– People who own and manage their own businesses
take risks and provide resources for the needed
goods or services.
– Sole proprietorship allows you to lose or keep the
profits made by the organization.
– All of the profits of a sole proprietorship are taxed as
the personal income of the owner, and the owner
pays the normal income tax on the money.
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Organizational Development
Basic Forms of Ownership
• Disadvantages of Sole Proprietorships:
– When you own your business, you and the
business are at the risk of unlimited liability
and losses. This is a serious risk.
– Funds available to the business are limited to
the funds that the one (sole) owner can
gather.
– Sole proprietors have to do it all: keep
inventory, bookkeeping and accounting, tax
preparation, and more.
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Organizational Development
Basic Forms of Ownership
• Disadvantages of Sole Proprietorships
continued:
– A common complaint among sole proprietors
in a community-based setting is the difficulty
to find and keep reliable skilled,
knowledgeable, and able-minded people.
– It is hard to own a business, manage it, train
people, and have time for anything else in life.
– Sole proprietors often put in at least 12 hours
per day at least six days a week.
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Organizational Development
Basic Forms of Ownership
• Disadvantages of Sole Proprietorships
continued:
– Sole proprietors often lose the fringe benefits
that come from working for others. Typically,
sole proprietors have no health insurance, no
disability income, no sick leave, no vacation
pay, etc.
– If the owner becomes incapacitated, the
business often comes to a stand still.
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Organizational Development
Basic Forms of Ownership
• Partnerships, governed by the Uniform
Partnership Act (UPA), have three key
elements:
– Common Ownership,
– Shared profits and losses, and
– The right to participate in managing the
operations of the business.
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Organizational Development
Basic Forms of Ownership
• There are three types of partnerships:
– General Partnerships
– Limited Partnerships
– Master Limited Partnerships
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Organizational Development
Basic Forms of Ownership
• General Partnerships
– All owners share in operating the business.
– All owners assume equal liability for the
business debt.
– Active in managing the organization.
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Organizational Development
Basic Forms of Ownership
• Limited Partnerships
– Has one or more limited partners.
– Risks are equal to the investment in the
organization, but enjoys limited liability.
– Cannot legally help manage the organization.
– Not responsible for the debts of the business
beyond the amount of their investment.
– Personal assets are not at risk.
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Organizational Development
Basic Forms of Ownership
• Master Limited Partnership
– Looks much like a corporation.
– Acts like a corporation.
– Traded on the stock exchanges like a
corporation.
– Taxed like a partnership and avoids corporate
income taxes.
– Examples – Burger King and Perkins Family
Restaurants
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Organizational Development
Basic Forms of Ownership
• Advantages of Partnerships:
– More financial resources
– Shared management and pooled knowledge
– Longer survival.
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Organizational Development
Basic Forms of Ownership
• Disadvantages of Partnerships
– Unlimited liability unless you have a MLP
– Division of profits.
– Disagreement among partners
– Difficult to terminate
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Organizational Development
Basic Forms of Ownership
• Corporations
– It is not necessary to be big in order to
incorporate.
– Many corporation a convention or a ‘C’
Corporation which is a state-chartered legal
entity with authority to act and have liability
separate from its owners.
– An ‘S’ Corporation is a unique government
creation that looks like a corporation but is
taxed like sole proprietorships and
partnerships.
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Organizational Development
Basic Forms of Ownership
• Advantages of Corporations
– More money for investment
– Limited liability
– Size
– Perpetual Life
– Ease of Ownership Change
– Ease of Drawing Talented Employees
– Separation of Ownership from Management.
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Organizational Development
Basic Forms of Ownership
• In summary, to continuously improve our
effectiveness in personal, organizational,
and community development, we must
constantly examine and challenge our
mindsets.
• The most important mindset is to
remember the importance of positive and
trusting relationships with yourself and
people.
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Organizational Development
Basic Forms of Ownership
• Disadvantages of Corporations
– Initial cost.
– Paperwork.
– Two Tax Returns.
– Size.
– Difficulty of Termination
– Double Taxation
– Possible Conflict with Board of Directors.
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Organizational Development
Basic Forms of Ownership
• Limited Liability Companies (LLC)
• Similar to an ‘S’ Corporation, but without
the special eligibility requirements.
• LLCs offer the best of corporate world for
many new businesses.
• Personal Asset Protection
• Choice to be taxed as a corporation or as
a partnership.
• Flexible ownership rules
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Organizational Development
Basic Forms of Ownership
• Special Forms of Business Ownership
• Franchises
– Defined – the right to use a specific
business’s name and sell its products or
services in a given territory.
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Organizational Development
Basic Forms of Ownership
• Special Forms of Business Ownership
• Cooperatives
– A business owned and controlled by the
people who use it – producers, consumers, or
workers with similar needs who pool their
resources for mutual gain.
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Organizational Development
Basic Forms of Ownership
• Nonprofit Corporation
– An organization that doesn’t seek personal
profit for its owners.
– Most of the organizations in the Woodson
Center network are nonprofit.
– Nonprofits have to be ran like a corporation
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• Next Steps
• We have placed an exit questionnaire on
survey monkey for you to complete to
assess how well you have retained this
module’s information.
• Complete the survey by going to
www.surveymonkey.com web link.
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Organizational Development
Basic Forms of Ownership
• You must first determine which form of
business you are going to start.
• You then must confer with an Attorney and
a Certified Public Accountant.
• You must give consideration to the
organizational chart will picture the relation
between board of directors, officers,
managers, and employees.
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Organizational Development
Basic Forms of Ownership
• End of the Day Review
• What did you Learn today?
• What do you wish you would have learned
today?
• What will you do differently by the next
session to ensure that you learn what you
need to know?
• Other comments and questions?
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Organizational Development
Basic Forms of Ownership
• Next Steps
• We have placed an exit questionnaire on
survey monkey for you to complete to
assess how well you have retained this
module’s information.
• Complete the survey by going to
www.surveymonkey.com web link.
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