Political Factors

Question 1

Explain the 3 ways businesses influence over the government

Answer 1

1) lobbying: hired to represent company’s/ groups interests, influence a public official on a certain issue
2) collaboration: getting involved in decision making processes (can be part of trade barriers)
3) advertising: businesses influence their supportive stakeholders to write to the gov for their company

Question 2

How does the government influence businesses

Answer 2

• they can be your customers/ buyers
• they can be a scary competitor bc/ they don’t need to make a profit just to break even
• substitutes- they provide public transportation
• supplier- government provides an educated workforce, complementary goods

Question 3

What is the definition of intellectual property rights?

Answer 3

Legal rights that result from intellectual activity. Exclusive rights to the owner.

Question 4

What are the 3 commons types of intellectual property rights

Answer 4

1) trademark
2) Copyright
3) patent

Question 5

Describe trademark and why businesses do it

Answer 5

Words. Designs, symbols or shapes used to identify goods/ services or a person/ organization
- protection for 15 years
Why? Established and protects your reputation and brand image, licenses

Question 6

Describe copyright and why businesses do it

Answer 6

Any artistic work subject to copyright the moment it is created

• 50 Years after the death of the owner it becomes public
• why? To receive credit, royalties

Question 7

Describe patents and why businesses do it

Answer 7

Government grants that give exclusive rights to the inventions (must be original)

• protection for 20 Years
• why? Provides protection for owner, license owners, details made public after 18 months

Question 8

What are the 3 forms of ownership?

Answer 8

1) sole proprietorship
2) partnership
3) corporation

Question 9

Describe sole proprietorship and it’s advantages and disadvantages

Answer 9

Owned and operated by one person, the business and owner are one legal entity

• adv.: ease of info. (Taxed as personal income), few regulations, complete control over profits/ decisions, government support
• disadvantages: limited resources, lack of continuity, unlimited liability

Question 10

Describe partnership and advantages and disadvantages

Answer 10

Two or more owners, max 50, Business and owners are one legal entity
Adv.: ease of info, more managerial/ financial resources, few regulations
Disadvantages: shared profits, conflicts, unlimited liability

Question 11

What are the 2 types of partnerships and describe them

Answer 11

General: all partners have joint and servers liability, you have a say
Limited partner: people invest but don’t want to be managing

Question 12

Describe private corporation and advantages and disadvantages

Answer 12

Desperate entity from owners, shares not publicly traded, less than 50 shareholders, owner and businesses separate entities
Adv. flat tax rates, limited liability, continuity
Disadvantages: not as easy to get money because not held for sale

Question 13

Describe public corporation and advantages and disadvantages

Answer 13

Several owners, shared publicly available, business and owners are separate entities
Adv. any one of us can become an owner, continuity, limited liability, unlimited shareholders
Disadvantages: double taxation, more costly, regulations, lack of secrecy

Question 14

Describe globalization

Answer 14

World becoming single interdependent system, as countries start to import and export businesses are more affected by and rely on other businesses

Question 15

What are the 3 Forces of globalization

Answer 15

1) grate awareness of benefits
2) technology makes it easier
3) competitive pressure

Question 16

Describe the 3 components of going international

Answer 16

1) should we do it? - is there demand, can the product be modified to fit foreign market, is the foreign business climate suited to imports, so we have the skills to do it
2) barriers we might encounter- political (quotas, tariffs), economic (exchange rates), social (adapting to customer needs), technological (intellectual property rights. Standards)
3) Trade barriers: strategies to overcome- what can the government do to encourage/ lower barriers for entering foreign markets