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Commerce 1B03 Notes.doc

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Department
Commerce
Course
COMMERCE 1B03
Professor
Rita Cossa
Semester
Fall

Description
Commerce 1E03 Business Environment and OrganizationJanuary 11 2012Chapter 1 Managing Within the Dynamic Business Environment 2Business any activity that seeks to provide goods and services to others while operating a profit Starting a business can be extremely risky behavior Business provides people the opportunity to be wealthy Business are not solely there just to help entrepreneurs to make money they also exists to provide people with necessities such as food clothing housing medical care transportation etc Profit the amount a business earns above and beyond what it spends for salaries and other expenses Entrepreneur a person who risks time and money to start and manage a business Risk the chance an entrepreneur takes of losing time and money on a business that may not prove profitable Revenue the total amount of money a business takes in during a given period by selling goods and services Loss when a businesss expenses are more than its revenues Business failures or closures are not always bad but most business failures are due to poor management or problems associated with cash flow When some companies file for bankruptcy it means that the business is unable to pay outstanding debts and after a lot of legal paperwork the assets that the company holds will go towards paying its debts and after all of the assets are spent the debtor is relieved of the debt obligations incurred prior to filing for bankruptcy Even companies that do manage to make a profit none of those profits are the same amount the companies that make more risks usually make more profit As an entrepreneur you need to read business articles and talk to business professionals to find a happy medium between risk and profit that suits you best The more risks you take the more successful you may become but be wary because a risk is a risk and it could turn out badly Stakeholders all the people who stand to gain or lose by the policies and activities of a business customers employees financial institutions ie banks and credit unions investors ie stock holders environmentalists government ie federal provincial and municipal etc The products policies and practices of businesses affect all of these groups and their concerns need to be addressed by the business Usually stakeholders will conflict with each other and the business needs to address these conflicts and try its best to resolve them for the sake of the businessA big challenge for businesss to handle is balancing the needs of allthe stakeholders ex the need for businesses to make profits must be balanced against the needs of employees for sufficient income Offshoring sourcing part of the purchased input outside of the country Outsourcing assigning various functions such as accounting production security maintenance and legal work to outside organizations Outsourcing decisions affect the boundaries of the firmwhat production takes place within the firm and what is purchased from outside the firm Changes in offshoring may be but are not necessarily related to changes in outsourcing A lot of companies are now outsourcing a lot of their research and development and design functions which is a risky decision giving different countries your research which they could potentially use to produce their own competitive products The US feels safe to offshore their products to Canada because they know they will receive the same education a concern for privacy and individual rights as well as polite friendly and helpful people at a lesser costthis is most often the case when it comes to software development related to business intelligence industryspecified applications business process outsourcing and customerservice oriented call centers NonProfit Organization an organization whose goals do not include making a personal profit for its owners and organizers ex schools hospitals and charities Nonprofit organizations make a contribution to the welfare of society Nonprofit organizations do strive towards financial gains but these gains are not for the business they are for meeting the social or educational goals that the organization has set Social Entrepreneurs people who use business principles to start and manage nonprofit organizations and help countries with their social issues If you want to start work for a nonprofit organization you still need business skills such as information management leadership marketing and financial management Starting any business is risky and once an entrepreneur has started a business there is usually a need for good managers and others to work to keep the business running There are two ways to succeed in business1Rise up through the ranks of large companies such as Royal Bank of Canada or Manulife Financial There is an advantage to this as somebody else assumes the entrepreneurial risk and provides you with benefits like vacation time and health insurance 2Start your own business and become an entrepreneur This choice can make you extremely wealthy but it is extremely risky You need to be brave and realize that you may fail as many small businesses fail every year You also wont receive any benefits you will have to provide them yourself Businesss grow and prosper in a healthy environment which results in a high quality of life The right business environment is the foundation of social progress good schools clean air and water good health care and low rates of crime There are five factors that contribute to wealth of a country and they are known as the factors of production Factors of production 1Land or natural resources2Labour workers3Capital Goods this includes machines tools buildings or whatever else is used in the production of goods It does not include money Money is used to buy factors of productionit is not a factor itself4Entrepreneurship5KnowledgeThere used to only be 4 factors of production but according to Peter Ducker the most important factor of production is and always will be knowledge Information is not the same as knowledge Even if countries have some of the factors of production it will not make them wealthy What makes countries wealthy is the combination of entrepreneurship and the effective use of knowledgeBusiness Environment the surrounding factors that either help or hinder the development of business There are 6 elements in the business environment and they are 1The legal and regulatory environmentaTax lawsiThe government sets low taxes on businesses so that entrepreneurs will get a high return on investment ROI so that entrepreneurship is more attractive bContract lawsiPeople are a lot more willing to start businesses if the risk is great and there are acts set up by the government that help lessen the risk of starting a business ex Canada Small Business Financing Act Consumer Packaging and Labeling Act Trade Union Act etciiEach legislation authorizes an agency to write regulations that interpret the law in more detail and indicate how it will be implemented and enforced iiiRegulations rules or orders made by the government to carry out the purposes set in statutes These regulations exist to help protect the consumer and the businesscElimination of corruption2The economic environmentaIncome and expendituresbCurrency shiftsiA currency shift will make either the dollar stronger or weaker compared to other countries and that will impact our imports and exports
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