Political factors

Question 1

Political factors

Answer 1

constantly changing
Elements:
Laws, regulations
Taxes
Trade agreements or conditions

Question 2

Significance

Answer 2

• Protection of consumers; ethical business; financial & physical safety
• Support/protection/regulation (domestic businesses); fair competition; entrepreneurship
• Opportunity creation in foreign markets

Question 3

How Business Influence Government

Answer 3

• Lobbying
• Collaboration/Input
• Advertising

Question 4

Lobbying

Answer 4

• Hired to represent company’s/group’s interest; gets a bad name, but is essential
  Incumbent firms can lobby government (increase regulation & increase barriers to entry)
• Lobbying Act – must register & follow rules
• Trade Association – small businesses/individuals join & lobby as an industry group

Question 5

Collaboration/Input

Answer 5

Canadian Radio-television and Telecommunications consults w/ industry members

Question 6

Advertising

Answer 6

Corporations influence voters (e.g. teacher strikes)

Question 7

Government roles

Answer 7

• Service provider (crown corp)
• Business support
• Laws, regulations
• Taxation

Question 8

Forms of Ownership

Answer 8

• Sole proprietorship: 25% businesses in Canada. General, limited
• Partnership: 5% businesses in Canada
• Corporation: 70% businesses in Canada. Private vs public, crown, social enterprise

Question 9

Types of Partnerships

Answer 9

• General Partnerships - all partners have joint & several liability
• Limited Partnerships (silent investors; just want their profits)

Question 10

Corporation

Answer 10

Separate entity from owners (shareholders)
Public→ starts with IPO, Private, Crown
Advantages:
- Competitive advantage in certain industries (more trustworthy) - Allows for sale of company (buy-out); extends life of business
Disadvantages:
- Costly to apply for, include lawyers & accountants, not guaranteed
- Subject to Corporation Act (submit financials & tax returns, separate from owners)

Question 11

Double Taxation

Answer 11

• Private corporation may pay distribute dividends to owners
• If so, corporate profits are taxed once on corporate tax return and the portion of profits paid out as dividends are taxed personally as well

Question 12

Social Enterprise

Answer 12

• Generate social value while operating w/ the financial discipline, determination & innovation of private sector businesses
• Disrupt status quo & transform our world for the better

Question 13

Help overcome market inequities/failures (inefficient allocation of resources)

Answer 13

Often in areas of education, health, environment, food insecurity, poverty

Question 14

Social value is the primary objective BUT financial sustainability imperative

Answer 14

Donor & government funding not reliable/consistent
Must address root of problem, not just short-term fix
Require strong stream of profit to support long-term commitments

Question 15

International Business

Answer 15

Globalization - world becoming single interdependent system
Driving Forces:
Cost & market benefits
Technology makes it easier, faster, cheaper
Competitive pressure

Question 16

Internal International Trade Barriers & Factors

Answer 16

• Knowledge/capabilities
• Production
• Preference
• Finances

Question 17

External International Trade Barriers & Factors

Answer 17

Political
- Quotas, tariffs (only on imported products), subsidies
- Local content laws
Economic
- Exchange rates
- Foreign GDP
Social & Cultural
- Customer needs, “values”
- Language
Technological
- IP laws
- Technology standards

Question 18

Deciding to go International

Answer 18

• Can we? Do we have the basics to even consider it?
• Should we? Is there demand for our product? Is it worth going?
• Where? Where is the best opportunity?
• How? How to do it – tactical strategies.