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Lecture

MGTA02H3 Lecture Notes - Procter & Gamble, Labour Force Survey, Small Business


Department
Management (MGT)
Course Code
MGTA02H3
Professor
H Laurence

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Chapter 3
Interrelationship among Small business, new venture creation, entrepreneurship.
Small Business (=An owner-managed business with less than 100 employees.)
The Canadian Government – Industry Canada is responsible for small business.
Two main distinct information are provided by Statistics Canada. Followings are sub(s):
To be included: At least one paid employee, annual sales revenues of $30000 or more.
1. Business Register
Tracks Businesses
Goods-producing business is small: fewer than 100 employees
Service-producing business is small: fewer than 50 employees
2. Labour Force Survey (Publication Key Small Business Statistics)
Tracks Individuals
- Information from individuals to make estimates of Employmenr and unemployment.
- Self employed: Working oweners of a business (either incorp. Or corp.)
Work for themselves but no business (musicians and etc.)
Work without pay in a family business.
Business Establishments vs. Self-employed (Categories of KSBS)
- 2.2M BE, 2.5M S-E.
- People who have their own business but no employees would not fall in the
category of BE (because they are not incorporated and no employees)
- they overlap, but no way to identify the quantity of overlapping
A study by Panel Study of Entreprenurial Dynamics (PSED), by ERC members shows:
- People who were trying to start business for 4 years -> only 15% reported establishing
an operating business had incorporated their firm.

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The New venture/firm (=A new venture/firm as a recently formed commercial
organization that provides goods and/or services for sale)
Three Criteria:
1) when it was formed
Considered to be new if it has become operational within 12 months
2) whether it was incorporated
Proprietorship, partnership, corporation, or co-operative
3) sell goods or services.
Entrepreneurship (=The process of identifying an opportunity in the marketplace and
accessing the resources needed to capitalized on it)
Entrepreneurs (=People who recognize and seize opportunities)
Small business - independently owned and influenced by unpredictable market force.
- as a result, often provide an environment to use personal attributes
- Large corporations also exhibit similar characteristics
Entreprenuership therefore occurs in a wide range: Small/new/old/large, growth rate, even
non-profitable.
Intrapreneurs: people who exhibit entrepreneurial chracteristics and create something new
within an existing large firm or organization. (Famous case: Procter & Gamble, having
divisions that focus on creating new products for specific markets. – Swiffer product line)
Difference between Intrapreneurs / Entrepreneurs:
They don’t concern themselves with getting the resources needed to bring the new
product to market their employers provide the resources.
The role of Small and New Businesses in the Canadian Economy.

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Before 1980, Large businesses were the focus of economic impact
After, small and new businesses play a key role in the Canadian economy.
Small Businesses
- 98% are small in of all businesses.
- 58%: Ontario and Quebec. Western provinces (36%), Atlantic (6%), (Territories 0.6%)
- Canada USA quite identical in the numbers = 97%, 2%, 0.3%.
- In the small business category – Majority are less than 5 employees.
- Workers work for -> 49% small, 16% medium, 35% large.
- Workers in Small Business -> highest percentage: 5-19 sized small business
- Small businesses take up to 2/3 of employment in four industries
1. Non-institutional health care (90%)
2. The construction industry (77%)
3. Other services (73%)
4. Accommodation and food (69%)
5. In another five industries at least half.
- GDP contribution value 25% but still less than the sectors contribution to employment
but significant nonetheless.
Private sector: the part of the economy that is made up of companies and organizations
that are not owed or controlled by the government.
New Ventures
- Main source of job creation
- Vast majority of new products and services.
- The number of firms grew 12%, Alberta 38%, BC 20%, On 14%.
- Growth firms mostly service-producing and High tech and biotech nearly doubling.
- Goods producing sector, High techs also grew way faster than others.
- SMEs Small and medium sized enterprises. 1991-2003 Business grew 9300 each
year , 8800 were theses SMEs.
- Women played significant role. 800000 women entrepreneurs in Canada, increasing 3%
each year. Female entrepreneurs has grown by 208%, men 38%. Self-employment among
women increased by 43%, 21% men. In 2000, women owned SMEs mostly had annual
revenues of $72 billion 8% renevue from Canada’s SMEs; 974000 full or contract
employees. (New business counted when hired a employee)
- Large business easily outperforms countless number of small businesses. But New
businesses contribute to employment, and lead the way when it comes to innovation and
new technology.
The entrepreneurial process and its three key elements.
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