Textbook Notes (280,000)
CA (160,000)
UTSC (20,000)
MGT (800)
MGTA01H3 (600)
Chapter 3

Chapter 3 Notes


Department
Management (MGT)
Course Code
MGTA01H3
Professor
Chris Bovaird
Chapter
3

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Most small businesses are not entrepreneurial
Small business
Industry Canada is the main federal government agency responsible for this
Business Register (which tracks businesses)
At least one paid employee
Annual sales revenues of $30000 or more, or be incorporated
Goods-producing business = fewer than 100 employees
Service-producing business = fewer than 50 employees
Labour Force Survey (which tracks individuals)
Make estimates of employment and unemployment levels
Individuals are classified as self-employed if
they are working owners of a business that is either incorporated or
unincorporated
they work for themselves but do not have a business (e.g. musicians)
they work without pay in a family business
Not count inbusiness establishments, the register
an unincorporated business operated by a self-employed person (with
no employees)
Entrepreneurs – people who were trying to start a business over four years
Small business – an owner-managed business with less than 100 employees
Medium (100-499 employees)
Large (500+ employees)
New venture/firm – a recently formed commercial organization that provides goods
and/or services for sale
it was formed
was incorporated
it sold goods and/or services
new if it has become operational within the previous 12 months
if it adopts any of the main organizational forms (proprietorship,
partnership, corporation, or co-operative
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Entrepreneurshipthe process of identifying an opportunity in the marketplace and
accessing the resources needed to capitalize on it
not only occurs in small or new firms
also in old firms, in large firms, in firms that grow slowly/rapidly
in non-profit organizations
in the public sector
Entrepreneurspeople who recognize and seize opportunities
Exhibit Entrepreneurial Characteristics
small business owners - often provide an environment to use personal attributes
such as creativity
many successful managers in large organizations in both the public and private
sectors
Intrapreneurspeople who exhibit entrepreneurial characteristics and create some
thing new within an existing large firm or organization
Difference between intrapreneurs and entrepreneurs
intrapreneurs typically dont have to concern themselves with getting the
resources needed to bring the new product to market since their employer
provides the resources
The Role of Small and New Businesses in the Canadian Economy
Small businesses
98% of businesses in Canada are small
58% of all business establishments in Canada (whether small or large) are in ON
and Quebec
49% of employees worked for small businesses
Private sectorthe part of the economy that is made up of companies and
organizations that are not owned or controlled by the government
Small businessss contribution to Canada’ s GDP is 25% (less than the sectors
contribution to employment)
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New Ventures (1991-2003 grew a lot)
Main source for job creation
Responsible for the vast majority of new products and services
Services-producing sector - most of the growth in firms (with high-technology)
A lot of Small-and-Medium Enterprises
Increasing by 3% each year for women entrepreneurs
Self-employment among women increased by 43%
A business counted as “new could have been operating for several years before being
statistically counted as a new business
An unincorporated business operated by a self-employed person(with no
employees) would not be included in Statistics Canadas Business Register
One large business easily outperforms the contribution of a countless number of
small businesses
SMEs outperform large business in many areas, particularly in terms of their
contribution to employment
New businesses lead the way when it comes to innovation and new technology
The Entrepreneurial Process
To start-up of a new venture, the entrepreneur must identify a business
opportunity and access and resources needed to capitalize on it
Along the way, social, economic, political, and technological factors in the
broader environment will have an influence
3 elements
the entrepreneur
the opportunity
and resources – and how they interact
they might bemismatched” or “well-matched”
After start-up, the ventures next phase of development will result in one of the
following outcomes:
Growth
Stability
Decline
Demise (ceasing to exist)
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