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BUSINESS STRUCTURE AND ARRANGEMENTS


Percentage of foreign ownership

Businesses were asked to provide the percentage of foreign ownership as at 30 June 2006 for the business by selecting one of the four available options. A definition of foreign ownership was not specified on the survey form and responses were not checked against any other data sources.

Percentage of foreign ownership, 2005-06, by employment size
			Employment size
			0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
Number of businesses(a)		'000	466	195	52	^4	716
Percentage of foreign ownership(b)(c)
	Wholly Australian owned	%	98.4	97.2	94.9	70.7	97.7
	Greater than 0% and less than 10%	%	0.5	0.3	0.3	2.6	0.4
	10% to 50%	%	0.4	0.4	0.9	2.9	0.4
	Greater than 50%	%	0.9	2.3	3.8	23.8	1.6
^ estimate has a relative standard error of 10% to less than 25% and should be used with caution
(a) See Explanatory Notes 28 and 29.
(b) Proportions are of all businesses in each employment size category.
(c) The sum of the component items within employment size categories may not equal 100.0% due to rounding.

The proportion of businesses wholly Australian owned was highest for businesses with 0-4 persons employed (98%) and lowest for businesses with 200 or more persons employed (71%). There was a marked difference across the employment size ranges in the proportions of businesses with greater than 50% foreign ownership, with the three smallest employment sizes ranging from 1% to 4%, compared to 24% for businesses with 200 or more persons employed.

Types of business arrangements

In separate questions, businesses were asked whether they were involved in any franchising agreements or cooperative arrangements with other businesses during the year ended 30 June 2006. Businesses could identify as a franchisee (i.e. operated a franchise), franchisor (i.e. controlled a franchise system) or both. Cooperative arrangements was defined on the survey form as arrangements where businesses work together for mutual benefit. This includes informal cooperative arrangements but excludes straight fee for service and franchising arrangements. Cooperative arrangements may be viewed as a proxy for business collaboration.

Types of business arrangements, 2005-06, (a), by employment size
		Employment size
		0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
		%	%	%	%	%
Franchising agreements(b)
	Franchisee (i.e. operated a franchise)	2.3	5.5	7.0	2.3	3.5
	Franchisor (i.e. controlled a franchise system)	0.5	1.1	0.4	4.1	0.6
No franchising agreement		97.3	93.5	92.6	93.7	95.9
Cooperative arrangements
	Joint research and development	1.9	2.3	3.2	7.4	2.1
	Joint buying	1.6	5.8	5.4	4.5	3.1
	Joint manufacturing	0.5	0.8	0.5	3.3	0.6
	Integrated supply chain(c)	2.0	1.3	3.0	4.9	1.9
	Joint marketing or distribution	3.7	7.5	6.9	9.2	5.0
	Other cooperative arrangements	2.2	3.4	5.1	5.8	2.8
	Any cooperative arrangements	8.4	13.6	18.0	22.4	10.6
No cooperative arrangements		91.6	86.4	82.0	77.6	89.4
(a) Proportions are of all businesses in each employment size category.
(b) Businesses could identify as both a franchisee and franchisor.
(c) Integrated supply chain refers to ongoing coordinated activity between two or more businesses to maximise the storage and production efficiency of a mutual client.

In total, 4% of businesses were identified as franchisees. A higher proportion of businesses with 20-199 persons employed were franchisees (7%) compared to businesses in each of the other three employment size ranges. The proportion of franchisors was highest for businesses with 200 or more persons employed (4%), compared to the next highest rate of 1% for businesses with 5-19 persons employed. In total, 1% of businesses were identified as franchisors.

The proportion of businesses reporting any type of cooperative arrangement increased with each successive employment size range, from 8% to 22%. The most frequently reported type of cooperative arrangement for each employment size range was joint marketing or distribution.