Problem
Forms of business organization and ethics in financial decisions
Part 1
Historically, business organization forms have been classified into three general categories: (i) sole proprietorships; (ii) partnerships and (iii) corporations (public and private). However, with the evolution of markets, many hybrid ways of organizing business have developed in our economy, which combine benefits from the three original categories of business organization.
Instructions:
Do a search and explain at least three of these new hybrid ways of organizing business. Identify what are the advantages they offer their owners compared to the original forms of business organization.
Part 2
The beginning of the first decade of the 2000s was characterized by the rise of large corporate fraud scandals. Many highly-regarded, large-cap companies were prosecuted, and their top executives and employees had to pay large sums of money and even serve prison terms.
One of the first scandals to come to light was the case of Enron Corporation. Other companies were also prosecuted and some were directly related to the Enron case.
Do a search on the companies Enron Corporation, Arthur Andersen, Merrill Lynch, and WorldCom and develop an analysis that includes what corporate fraud consisted of for each of them. Explain what was the impact it had on the company, on the industry in which the company operated and on the socioeconomic level. Discuss what element or elements you understand the authors who originated these corporate fraud schemes that led the economy to one of its worst moments in the economic history of the United States had in common.