ADM 1301 Chapter 2: Canadian Business and Society (Delcorde)
23 Jan 2019
School
Department
Course
Professor
The Canadian Business Segment
Introduction
- Business drives the economy of a nation
- Economic system in Canada is a private enterprise system where firms are rewarded for effectively and
efficiently meeting the wants and needs of customers
- Characteristic rights of a private enterprise include: private property, freedom of choice, profit and
competition
- Business have transitioned from parochial trade to international trading
The Current Canadian Business Environment
- Private market system held in the belief of capitalism that provide for the private ownership of the
factors of production with profits determined through the laws of supply and demand in a generally
unrestricted market
- Business activities are found all throughout Canada
- Ontario is recognized internationally expertise in technology clusters, Atlantic Canada is known for life
sciences, ocean technologies and etc, Western Canada and the Yukon is rich in natural resources, the
Northwest territories is rich in minerals, diamonds and etc
- Canada has a range of economic activities so there are many companies active in many sectors
Aerospace
- Accounts for 80% of the industry’s annual revenues
- Canada leads in the design of light armoured vehicles, robotics and telecommunications
Agriculture, Food and Beverages
- World renowned for save and high quality food
- Exports $21 billion worth of processed food and beverage to over 180 countries
- Largest manufacturing industry in Canada
Biotechnology
- World leader in biotechnology
- 5000 bio product related patents between 2003 and 2011
Electric Power and Equipment Services
- Third largest renewable energy capacity
- World’s top producer of uranium; over 30% of global production
Environmental Industries
- World leader in development of water and wastewater treatment technologies, air pollution control
systems and etc
Information and Communication Technologies
- World leader in telecommunications
Health Industries
- World leader in the manufacturing of medical devices
Oil and Gas
- $80 billion in revenue
Business in Canada: Importance of Small Businesses
- Half of businesses in Canada are employer businesses and 98% have fewer than 100 employees
- Large companies are rare and medium sized companies are often found in manufacturing
Canada’s Workforce
An Aging Population and Shrinking Labour Pool
- Various types of demographics in the workplace so managers need to adapt to the style of each
generation
Increasingly Diverse Workforce, Flexibility and Mobility
- Language is a challenge
- Multiculturalism in the workplace
Outsourcing and the Changing Nature of Work
- Manufacturing is being outsourced
- Canadian employment is now shifted to the service sector
Innovation Through Collaboration
- Innovation must be used to be competitive
- innovation must be commercialized in order to provide society with benefits and to generate revenue
- Business make use of collaboration (teams) to be innovative
Forms of Business Ownership
- Four main types and one specialized form (franchise)
The Sole Proprietorship
- Simplest business form
- Form of business owned and operated by one person
- Falls under the jurisdiction of provincial and municipal governments and is available to anyone legally
able to enter into a binding contract
- Advantages
- Simple and inexpensive
- Minimal investment required
- Control of the business rests completely with the owner aka proprietor
- All income generated by the owner is his own
- No separate business tax
- Easy to terminate
- Freedom from government regulation
- Disadvantages
- Unlimited liability - to satisfy business liabilities creditors can to turn to the owner’s
personal assets (could be sued for everything they own)
- The owner is usually the sole manager which would limit the management talent
- Higher risk of business ownership
- Difficult to obtain financing from lending institutions
- Staffing is difficult since it's hard to afford it
- Enormous time commitment (owner must be there to delete all decision making)
- Sole proprietorship dies if the owner dies
The Partnership
- Two or more people share ownership of a single business
- Partners should have a legal partnership agreement that prescribes how
- Decisions will be made
- Profits will be shared
- Disputes will be resolved
- New partners can be brought in and how existing partners could be brought out
- The partnership can be dissolved when needed
- How much time and capital each partner will contribute
- Common law in Canada recognizes two type of partnerships:
- General partnership
- All partners manage the business and are jointly responsible for partnership liabilities
- Personally liable for the consequences of the other partners
- Jointly and severally liable
- Limited partnership
- Some members are general partner (at least one) who control and manage the business
while other partners and “limited”
- Limited partners take no part in control or management
- LLP is often used by public accountants, lawyers, and physicians
- LLPs are governed by provincial legislation
- Several types of partners within the limited partnership structure
- Silent partners: known to the public but have no active role in the
management of the enterprise
- Secret partners: unknown to the public but take active role
- Nominal partners: lend their name for public relations purposes to the
enterprise but are not involved in the operations
- Dormant partners: neither known to the public nor active in
the management of the business
- Advantages
- Simpler than a corporation
- Different partners offer different specialities
- Offers the benefit of raising private funds brought in by each partner
- Potential to become partner in the organization can serve as enticement to high-
calibre talent
- Limited regulation
- Flexibility
- No special business taxes, the profits become part of each partner’s personal
income in accordance to the partnership agreement
- Disadvantages
- Unlimited liability, and jointly and severally liable
- When a partner dies, the partnership dies
- Authority typically must be shared between partners
- Inter partner conflict resolution can be difficult to solve
- Ability to raise capital is restricted to the partners
- Profits must be shared
The Corporation
Document Summary
Economic system in canada is a private enterprise system where firms are rewarded for effectively and efficiently meeting the wants and needs of customers. Characteristic rights of a private enterprise include: private property, freedom of choice, profit and competition. Business have transitioned from parochial trade to international trading. Private market system held in the belief of capitalism that provide for the private ownership of the factors of production with profits determined through the laws of supply and demand in a generally unrestricted market. Business activities are found all throughout canada. Ontario is recognized internationally expertise in technology clusters, atlantic canada is known for life sciences, ocean technologies and etc, western canada and the yukon is rich in natural resources, the. Northwest territories is rich in minerals, diamonds and etc. Canada has a range of economic activities so there are many companies active in many sectors. Accounts for 80% of the industry"s annual revenues.
