7. Explain the reasons for the survival and popularity of sole proprietorship.
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Answer:
Cause’s of Survival of sole proprietorship Business is Some typical disadvantages are associated with sole proprietorship business. Yet this type of business is prevailing at every nook and corner of the world. Some absolute advantages or unique causes provide the foundation of survival and expansion of the sole proprietorship business. Sole proprietorship are the most common types of business in the United States, accounting for 72 percent of all enterprises. However, corporation account for 72 percent of the profits earned by U,S business (Ranchman)” Though the join proprietorship business enjoy a number of advantages, the sole proprietorship business is also surviving side. Some of the causes of this survival are as follow:
A Combination of Effort and Reward
In the production system, there should be a positive correlation of effort and reward, which is a precondition of motivation for more work and risk-taking. Unlike other organizations, effort and reward are directly related in proprietorship business. Profit and goodwill are also the result of the effort of the proprietor is more active, which is one of the causes of survival of sole proprietorship business in the face tough competition from the giant corporation.Intensive technology as is possible in case of
Intensive technology as is possible in case of joint proprietorship, partnership or company.
A Good Training Field
The proprietor of this type of business managers and control the business, and thus get practical training about the business management, which helps efficient management of the business and offers incentive for survival.
Explanation:
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