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MGTA01H3 (348)


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University of Toronto Scarborough
Management (MGT)
Chris Bovaird

MANAGEMENTUnderstanding the Canadian Business Chapter 1Businessan organization that produces or sells goods or services in an effort to make a profitin 2002 most profitable company in Canada was the Canadian Wheat Board 42 Billion in profit Businesses produce most of the goods services we consume and employ the majority of working peopleEconomic SystemsHow a nation allocates its resources among its citizens They differ in who owns and controls these resources1 Command Economy CommunismSocialism Government owns all or almost all2 Market Economy Capitalism InputOutput Markets3 Mixed Market Economy Canada Elements of both commandmarket economiesInputOutput Markets FirmsSUPPLY goods services DEMAND labor capital entrepreneurs resourcesHouseholdsDEMAND goods services SUPPLY labor capital entrepreneurs resourceFactors of Production basic resources a countrys businesses use to produce goodsservices1 Natural Resources 2 Human Resources Labor physical and mental3 Capital4 Entrepreneurs people that accept the opportunities and risks involvedHow Government Influences Business Government as Customer buys products and especially services from many firms Government as Competitor through Crown corporations Hydro Liquor and Lottery Government as Regulator to protect competition regulate prices protect customers etc Government as Taxation Agent levels of income taxes to fund various public services Government as Provider of Incentives interestfree loans to lower unemployment rates Government as Provider of Essential Services highways postal services minting moneyHow Business Influences Government Lobbyists Person hired by businesses to represent its interests with government officials Trade Associations small businesses join together because they cant afford a lobbyist also to hold trade shows to display their products Advertising indirectly influence voters vote for passage on a certain billPrivate Enterprise minimal government restriction requires 4 elements1 Private Property Rightsownership of the resources used2 Freedom of Choice you choose what to sell who to hire and what to produce3 Profitsprofits lure people to take risks and also to supply what is demanded4 Competitionencourages companies to be efficientDegrees of CompetitionPerfect CompetitionLOTS of competitors with identical goods Local FarmerMonopolistic Competitionlots of competitors with similar goods Convenient Store Oligopolyfew competitors with similar or different goods Canadian BanksMonopoly1 company rules all Natural Monopolywhen 1 would be more efficient electric companyBrief History of Business in CanadaEarly YearsEuropeans came to Canada for the fishing industry and our furs Canadian manufacturing was slow to develop due to mercantilismFactory SystemIndustrial RevolutionFactory all workers in one place end of cottage system Industrial mass productionspecialized laborEntrepreneurial EraAdam Smith argued for less government interference and it led to the emergence of more entrepreneurs willing to take risks This resulted in a few companies colluding and driving competition out of the market finally causing more government interference to impose regulationsProduction EraMore focus on improving productivity and efficiency not on advertising Begin selling stock Rise of Labor UnionsSalesMarketing ErasBusinesses focus on advertisinghaving products readily available Businesses begin to meet consumer wants in order to raise profitsFinance EraTime of many mergers and much buyingselling of business enterprisesGlobal EraContinuation of technological advances in production and communication Emergence of a more Global EconomyInternet Era a Gives dramatic boost to trade in all sectorsb Helps level the playing field between bigger and smaller businessesc EffectiveEfficient networking mechanism among businesses3 Countervailing Powers Business Labor Government all are big all are strong but none are totally dominant
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