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Lecture 1

BUS 201 Lecture Notes - Lecture 1: Consumer Product Safety Act, Bc Hydro, Environment And Climate Change CanadaPremium


Department
Business Administration
Course Code
BUS 201
Professor
A L L
Lecture
1

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BUS 201: Introduction to Business - Lecture 1: Ch. 1 – Understanding the Canadian Business System
LO-1 The Idea of Business and Profit
Managers should pay attention to (1) actions of competitors, (2) rapid technological change, (3) new
product development, (4) corporate strategy, (5) stock prices, etc.
Key words: business, profit, non-profit/not-for-profit organization
LO-2 Economic Systems around the World
Major determinant of how organizations operate is their economic system
The key difference between economic systems is the way in which they manage the Factors of
Production
oLabour/Human Resources
Mental or physical capabilities of people (ex. Imperial Oil needs geologist and drives)
oCapital
Funds needed to start a business and to keep it operating and growing (ex. Imperial Oil
needs to pay for its drilling costs)
Major sources of capital come from personal investments by owners, sales from stock,
profits from sales, and funds borrowed from banks
oNatural Resources
The physical resources such as land, water, mineral deposits, etc. (ex. Imperial Oil
needs crude oil and land)
oInformation Resources
The specialized knowledge and expertise of people who work in businesses and info
found in market forecasts and forms of economic data
Information is a key factor because it can be shared without it being dismissed
Types of Economic Systems
oCommand Economies
Two forms are: (1) communism and (2) Socialism
Karl Marx envisioned a society where individuals would ultimately contribute their
abilities and receive benefits to their needs
Government ownership was temporary
‘Communist’ countries like China, Vietnam, Cuba contain market-based economies

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In socialism, gov’t only owns and operates select major industries
Can choose own job, but most work for gov’t
Management positions are decided on political considerations
High taxes because of extensive public welfare systems
oMarket Economies
Market : A mechanism for exchange between the buyers and sellers of a particular good
or service (ex. Internet)
B2B transactions exceed B2C transactions
Exchanges can take place without much gov’t involvement
China and Cuba (communists) are starting to adopt market economies
Input and Output markets
In input market, firms buy resources from households which the supply those
resources
In output markets, firms supply goods and services in response to demand on
the part of households
For ex. Ford buys labour from households and may supply capital from
accumulated savings from stock purchases
Consumer buying patterns help companies decide when models to produce and
when to discontinue
oMixed Market Economies
Most countries rely on mixed market economies
Contains characteristics of both command and market economies
Privatization became a trend in the 1990’s
Canadian National Railway and Air Canada became private companies
Some pursue nationalization
Deregulation: A reduction in the number of laws affecting business activity and in the
powers of gov’t enforcement agencies
Trend in the 1990’s in airlines, pipelines, banking, etc.
Because of the recession in 2008, mixed market economies are characterized by more
government involvement
Gov’ts attempt to stabilize the economy but it usually leads to higher deficits
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