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University of Toronto Scarborough
Management (MGT)
Chris Bovaird

MGTA03H3: INTRO TO MANAGEMENT I September 10, 2012 (Week 1) Professor Chris Bovaird E-mail: [email protected] Purchase of the textbook is mandatory. The textbook used for this course is BUSINESS CUSTOM 2/E VOL. 1 Notes are available online on the UTSC Portal. Lectures will filmed and posted online. Professor Bovaird is usually available in his office (Instructional Centre Room 266) Mondays 1 PM - 3 PM Tuesdays 11 AM - 1 PM Thursdays 11 AM - 12 Noon Important Events In-Class Test Approximate Date: Late September Length: 45 Minutes Format: 25-30 Multiple Choice Questions Weight: 12.5% Coverage: Chapters 1-2 Mid-Term Test Approximate Date: Late October Length: 1.5 Hours Format: 35-45 Multiple Choice Questions and 2-4 Short Answer Questions Weight: 35% Coverage: Chapters 1-4 or 5 Test and examinations dates are arranged by the Registrar. Therefore, do not arrange "parties" around that time. There are weekly reviews which are worth 5%. Buy "Top Hat Monocle" interactive software (online or UTSC Bookstore). There 5-6 multiple choice questions posted to internet after lectures 2-10. Use software app on smartphone to participate in weekly online review. Total: 50 Multiple Choice Questions worth 5% of final grade. Main points of today's lecture: a) Definition of "business" b) Profit and loss c) Factors of production d) Economic systems Business: an organised effort, to make or sell something, to sell to customers, who need or want something, in order to make a profit. The main purpose of the business is for the business' organisers to satisfy the needs/wants of a customer while also making a profit. If businesses can identify either unmet customer needs or a better way of satisfying customer needs, they can be successful. An example of a business would be Pizza Hut. This business would exist because people might be hungry and Pizza Hut would attempt to take advantage of this by making a profit. Lemonade stands can also be businesses. This business would exist because people might be thirsty during the summer. As long as you satisfy the needs/wants of customers while attempting to make a profit, you are a business. Business: Characteristics Customers need and want things and they WILL pay for them. Business: Definitions The $$$ that comes in from business conducted with customers is known as "Revenue" or "Sales". Customers pay to get something in return. Using the example of Pizza Hut, as mentioned beforehand, the business must provide a pizza. In order to generate revenue, expense will occur. For example... Dough = 50 cents Cheese = 50 cents Mushrooms = 40 cents Green peppers = 40 cent Onions = 15 cents Paper plates = 5 cents Profit, or net income, is thus, the difference between the money in (revenue or sales) and the money out (costs or expenses). Profit: Simple example A business sells small, plain pizza. It makes $6 and the expenses are $5. What is the profit? Revenue (sales) = $6.00 Less: Expenses (costs) = $5.00 ----- Profit = $1.00 The profit is $1. Profit is the fundamental reason for a business to exist. Not all organisations, however, are businesses. For example, hospitals, universities and churches are not businesses. These do provide services but are not intended for profit. A major determination of how an organization operates is the kind of economic system that helps define the country in which they do business. Economic system: The way in a which a company distributes its resources among its citizens. What distinguishes one economic system from another are the factors of production. Factors of production: The resou
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