How Are Companies Organized? 5Just as a stool needs all three legs to stand, a successful company must have all
three attributes: skilled people, strong external relationships, and sufficient capital.The MBA, Finance, and Your Career
Tobesuccessful,acompanymustmeetitsfirstgoal—theidentification,creation,and
delivery of highly valued products and services. This requires that it possess all three
ofthekeyattributes.Therefore,it’snotsurprisingthatmostofyourMBAcoursesare
directly related to these attributes. For example, courses in economics, communica-
tion,strategy,organizationalbehavior,andhumanresourcesshouldprepareyoufora
leadership role and enable you to effectively manage your company’s work force.
Othercourses,suchasmarketing,operationsmanagement,andinformationtechnol-
ogy are designed to develop your knowledge of specific disciplines, enabling you to
develop the efficient business processes and strong external relationships your com-
pany needs. Portions of this corporate finance course will address raising the capital
yourcompanyneedstoimplementitsplans.Inparticular,thefinancecoursewillen-
able you to forecast your company’s funding requirements and then describe strate-
giesforacquiringthenecessarycapital.Inshort,yourMBAcourseswill giveyouthe
skillstohelpacompanyachieveitsfirstgoal—producinggoodsandservicesthatcus-
tomerswant.
Recall, though, that it’s not enough just to have highly valued products and satis-
fied customers. Successful companies must also meet their second goal, which is to
generate enough cash to compensate the investors who provided the necessary capital.
To help your company accomplish this second goal, you must be able to evaluate any
proposal, whether it relates to marketing, production, strategy, or any other area, and
implement only the projects that add value for your investors. For this, you must have
expertise in finance, no matter what your major is. Thus, corporate finance is a critical
part of an MBA education and will help you throughout your career.What are the goals of successful companies?
What are the three key attributes common to all successful companies?
How does expertise in corporate finance help a company become successful?How Are Companies Organized?
There are three main forms of business organization: (1) sole proprietorships, (2)
partnerships, and (3) corporations. In terms of numbers, about 80 percent of busi-
nesses are operated as sole proprietorships, while most of the remainder are divided
equally between partnerships and corporations. Based on dollar value of sales, how-
ever, about 80 percent of all business is conducted by corporations, about 13 percent
by sole proprietorships, and about 7 percent by partnerships and hybrids. Because
most business is conducted by corporations, we will concentrate on them in this
book. However, it is important to understand the differences among the various
forms.Sole Proprietorship
A sole proprietorshipis an unincorporated business owned by one individual. Going
into business as a sole proprietor is easy—one merely begins business operations.
However, even the smallest business normally must be licensed by a governmental
unit.Consulthttp://www.
careers-in-finance.comfor
an excellent site containing
information on a variety of
business career areas, list-
ings of current jobs, and
other reference materials.