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Lecture

MGTA01 Sep 9- Lecture 1.docx

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Department
Management (MGT)
Course
MGTA01H3
Professor
Chris Bovaird
Semester
Fall

Description
Sept 9, 2013- Lecture 1 Example of Profit: Business sells small, plain pizza Revenue (sales) = $6.00 less Expenses (costs) = - $5.00 Profit = $1.00 Profit: A key reason for a business to exist Not all organisations are businesses  Hospitals, universities, churches  They provide services but not intended for profit  They are “not for profit” organisations Loss When expenses more than sales  Costs more to produce the products, and run the business, than the business generates through sales. Loss-Making Businesses Examples of loss-making businesses: General Motors (2008) – loss of $31 bn (they didn’t sell enough cars; price of metal went up; recession meant people didn’t buy enough; maybe had recalls; making too many types of cars; ugly, inefficient cars; they did everything wrong) Chrysler (2008) – loss of $6 bn Phoenix Coyotes Question: Why did GM not make a profit? Economics: The study of how businesses, people make choices about: What things to produce/consume How best to produce things How best to distribute wealth. Factors of Production: Start with basic theory: There are basic building blocks used to produce anything. We call those basic building blocks: “Factors of production” natural resources: raw materials found in ground, grown from earth, or harvested from nature. Examples: coal, whe
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