Product life cycle in organization.

Like human beings, products also have life-cycle. From birth to death human beings pass through various stages e.g. birth, growth, maturity, decline and death. A similar life-cycle is seen in the case of products.

1. Market introduction stage (high costs, slow sales, no competition, no profits)

2. Growth stage (costs reduced, sales higher, public awareness, competition drives prices down)

3. Maturity stage (low costs, peak of sales, price drops)

4. Saturation and decline stage (sales volume declines, profitability diminishes)

16. Contemporary and future organization forms

The three main forms of business organization are: proprietorships, partnerships, corporations.

Proprietorships – one owner, who has unlimited liabilities for the debt and other legal obligations. Easy to establish, simple decision-making process, profits are taxed once. Problems: owner’s retirement, expensive to raise capital.

Partnerships – two or more owners, both are limited for the debt and other legal obligations. It is taxed only once. Incomes are liabilities are based on the proportional ownership of the partnership. Problems: personal conflicts, risk, expensive capital.

Corporation – owned by its stockholders, the liability is limited to the amount of money they have invested in the firm. Taxed twice: corporate income tax and then tax on incomes of the shareholders. Easy to raise capital. Problems: complex structure, possible bureaucracy, lack of flexibility.

New forms: Domestic Corporation; Foreign Corporation; Voluntary Association; Business Trust.

Business trust - a legal organization set up for the control and management of assets and property. This type of trust has trustees who take responsibility for the management of the assets in the trust. The trustees (опекун) manage the assets not for their own gain and benefit, but for the benefit of one or more beneficiaries.

Date: 2015-02-03; view: 818