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Lecture

MGTA01 Lecture 2.docx

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

Description
th MGTA01 – Lecture 2 Thursday, 16 January Today’s lecture (pages 7 – 12 from textbook) Factors of Productions: The basic/fundamental building blocks used to produce anything are called factors of production. There are 4 factors of production of a business are: 1) Natural Resources – raw material found in the ground, grown from the earth, or harvested from nature. For example: coal, wheat water, wood, oil. Four of the five most profitable businesses in the world rely on natural resources (oil, carbon, gas) 2) Labour – people to do your work for you; employees 3) Capital – money, or the machines and technologies that money can buy. For example, phones, hammer, tractors, software, etc. Most businesses require some amount of money to start and some kind of technology. th 4) In much of the 20 century people believed that governments were responsible for organizing and running businesses, they were nationalized and state-owned. In the 70s and 80s, people realized that government wasn’t doing a pretty good job. So since the 1970s one more factor of production was added: Entrepreneurship: Society needs people who want to assemble and organize the other factors as without motivation and ambition, no businesses would exist. You don’t need to have all of them to run a business except entrepreneurship. Who controls the factors of production? Different countries have had different approaches about who should own the factors of production. Should the government be in control or the individuals be in control? Government in control - Communist or socialist countries Market Economy: Capitalist countries – countries where the government does not play a part in nay businesses and everything is done by and in control of the people. There are no purely capitalist economies in the world right now. - Mixed market economies: most of the decisions and factors and industries are made by the people. For example, countries like Canada, USA, UK, France, China, India.
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