organizations in capitalist economic systems

business firms

• Canadian business system that comprises business enterprises varying from sole or single proprietorships to partnerships and incorporated entities

  • sale proprietorships

  • partnerships

  • corporations

corporations

• a company or group of people authorized to act as a single entity (legally a person) and recognized as such in law

  • has the right to enter into contracts, loans and borrow money, sue and be sued, hire employees, own assets and pay taxes

  • limited liability

    • smaller employees get hit harder

    • protect assets

• corporations enjoy most of the rights and responsibilities that an individual possesses

doctrine of incorporation

• freedom of association: the association of individuals coming together for some purpose is fundamental to forming a corporation

• when a business incorporate, a separate legal entity is created

view of corporations

who runs corporations

• owners

• board of directors

• managers

owners

• direct ownership

• indirect ownership

board of directors

• elected by shareholders

• must fulfill legal and fiduciary(financial) obligations

managers

• top managers are hired by board of directors

• oversee operations of corporation

corporate governance

• shareholders → board of directors → officers → corporate organization

shareholders

• owns shares of corporation

• elects/removes board

  • votes per share

  • shares may have different rights

board of directors

• ultimate governing body of corporation

• oversees operations

• sets plan and policy

• hires/fires officers

officers

• manages operations

• implements board’s plans and policies

• reports to board

different types of corporations

• privately-owned

• publicly-traded

• crown corporation

privately-owned

• owned privately

• advantage

  • no shareholders to answer to

• disadvantage

  • have to raise capital privately

• examples

  • Samsung, Cargill, Deloitte, Mars

publicly-traded

• traded on the stock market - anyone can buy shares

• advantage

  • can raise capital on stock market

• disadvantage

  • must answer to shareholders

• examples: Apple, Exxon, Petro Canada

crown corporation

• wholly-owned federal or provincial organizations that function like independent companies

• advantage

  • greater freedom than government departments

• disadvantage

  • still subject to constraints of government

• examples

  • CBC, Via Rail, Manitoba Lotteries

others types of organizations

• non-profits

• cooperatives

non-profit organizations

• an organization that uses its surplus revenues to further achieve its purpose or mission, rather than distributing its surplus income to the organization’s shareholders (or equivalents) as profit or dividends

• examples

  • Humane Society

  • Ted Talks

  • Doctors Without Borders

  • Green Peace

  • The Mining Association of Canada

  • Winnipeg Folk Festival

cooperatives

• businesses owned and operated by a group of individuals

  • worker cooperatives

  • consumer cooperatives

  • mixed

• examples

  • mountain equipment co-op

  • home hardware

  • Assiniboine Credit Union