Lecture Note for MGTA03, Lecture 1

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Department
Management (MGT)
Course
MGTA01H3
Professor
Ingrid L.Stefanovic
Semester
Fall

Description
Lecture Notes: Chapter 1 ¾ Business Æ an organization that provides goods and services to customers in order to make a profit o People began to get their act together o Organized effortÆ to provide goods and services o They are supposed to make a profit ¾ Goods and Services o Items that people need or want o Items that people are willing to spend money on ¾ Customers o People who buy goods and services from a business ¾ NOT ALL ORGANIZED EFFORTS ARE BUSINESSES o EXAMPLE: CHURCH, SPORT TEAMS, UTSC ¾ Difference between business and other organized efforts is the PROFIT MOTIVE ¾ Profit o Motive Difference between the money in(revenue/sales) and the money out (cost/expenses) ¾ 60% of businesses have only 1 employee ¾ GM LVDEXVLQHVVWKDWWULHVWRPDNHDSURILWEXWLWGRHVQ¶W ¾ GM asked for a 25 billion dollar loan from US government ¾ Bad idea for US to do this because economy is in bad shape, comes out of tax payers money and GM is going under anyways ¾ USA bailed out two major mortgage corporations: Fanny May and Freddy Mac(banks) ¾ The study of business is how to run an organization o Students/Profs of business is how GM lost their money ¾ The study of economics is high level theories; the theories why customers buy what they do, why they pay so much money for different products, why business sell what they do o Students/Profs of economics think of environments that GM can thrive in ¾ Factors of Production o Natural Resources www.notesolution.com  Example: Steel, paper, concrete, iron, copper, cotÆ every business needs these o Labour  Employees: Newspaper company needs ÆReporters, editors, researchers etc  &DQ¶WUXQDEXVLQHVVZLWKRXWDWOHDVWHPSOR\HH o Capital  Money or the machinery/technology that money will buy 9 Newspaper Company NeedsÆ blackberry¶s , printers, typewriters, computers, etc o Entrepreneurs  Are the people who have the vision and the ambition (desire to make money) to pull the other factors of production together and make a business. Assemble/Organize ¾ Economic Systems o )DQF\ZD\RIVD\LQJD³FRXQWU\´³QDWLRQ´³VWDWH´ o Every country on earth is figuring out the best way of selling goods and services o Every country on earth takes a slightly different approach on how we use or mix the factors of production  Command/Planned Economy 9 Government makes most of the decisions regarding economics o Most extreme form of command economyÆcommunist economy( North Korea ) o Another type of command economy Æ Socialist Economy ( Cuba )  Market Economy 9 Individuals make most of the decisions regarding economics o Own/control the majority of the factors of production Æ Mixed Market Economy ( Canada, USA, Britain ) o Private Individuals make ALL economic decisionsÆCapitalist Economy ( No examples ) www.notesolution.com ¾ Sellers want to get as much as they can ¾ Buyers want to pay as little as they can ¾ Different Types of Markets ( Page 16 ) o Perfect/Pure Market Competition  Lots of suppliers selling the same product and same price  Example of Products that are similar price: carton of milk, salt, bread, water o Monopolistic Competition  Similar to Perfect, however not all are small, not all are the same and not all of them sell same product at the same priceÆfew charge a little more  Example: clothing stores, coffee shops vs. Starbucks, pizza stores o Oligopoly Market  Relatively small, you can count the number of people trying to sell your products by using your hand(aka small number of people)  Great number of branches, great number of employees, they are well known and are large by the space they occupy  We aware of them, and they are aware of each other and try to differentiate themselves from each other 9 ExampleÆCanadian banking industry: CIBC, Bank of Nova Scotia, Bank of Canada, TD Bank, National Bank 9 ExampleÆ Gas Stations: Petro Canada, ESSO, Sunoco, Shell 9 ExampleÆPhone Services: Bell , Rogers, Fido, TELUS o Monopoly Market  The game called monopoly is called that because the point is to own all the property, and therefore you can charge more. If you own everything, you can charge what you like.  100% market share by definition and they can set prices 9 Example: LCBO; they can set prices to whatever they like. People HLWKHUDFFHSWWKHSULFHDQGEX\LWRUGRQ¶W www.notesolution.comLecture Notes: Chapter 1 Business an organization that provides goods and services to customers in order to make a profit o People began to get their act together o Organized effort to provide goods and services o They are supposed to make a profit Goods and Services o Items that people need or want o Items that people are willing to spend money on Customers o People who buy goods and services from a business NOT ALL ORGANIZED EFFORTS ARE BUSINESSES o EXAMPLE: CHURCH, SPORT TEAMS, UTSC Difference between business and other organized efforts is the PROFIT MOTIVE Profit o Motive Difference between the money in(revenuesales) and the money out (costexpenses) 60% of businesses have only 1 employee
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