Class Notes (807,475)
Canada (492,652)
MGTA01H3 (348)

Chapter 1-4 Notes.docx

14 Pages
Unlock Document

University of Toronto Scarborough
Management (MGT)
Chris Bovaird

Chapter 1 Understanding the Canadian Business System BUSINESS An organised effort, to make or sell something, to sell to customers, who need or want something, in order to make a profit Characteristics: o Customers need and want things and will pay for them o Customers pay, get something in return PROFIT Revenue (total sales) total expenses Reward owners for taking risks or investing $ Good business take into account consumers needs/wants o Satisfy an unmet need OR o Supply the product more efficiently Some organizations provide services w/o profit intention but are not businesses o ie) hospitals, churches, universities o do provide services but not intended for profit Fundamental reason for business to exist LOSS Expenses > Revenue (sales) Costs more to produce/run business than the business can generate through sales ECONOMICS Study of how businesses, people make choices about: o What to o How to produce produce/consume o How to distribute ECONOMIC SYSTEMS (GLOBAL) o Distribute a nations resources amongst its citizens o Characterized by factors of production FACTORS OFPRODUCTION Basic building blocks used to produce anything Labour (human resources) Mental/physical capability of ppl working for a company Well trained employees = competitive advantage Capital Financial ($) resources needed to operate an enterprise Or the machines and technologies that money can buy Form of investment from entrepreneurs, partners, investors ie) Computers, hammers, tractors, phones Entrepreneurs (one type of HR) Ppl who accept opportunities & risks involved in running a business Solely organize & manage other factors of prod to earn a profit Willing to start a business, assemble the factors of production 1 Natural Resources All physical resources, raw material Grown from the earth Items used in the production of goods/services in their natural state ie) land, water, mineral deposits, trees, silk, wool Information Resources Info (market forecasts, econ data & specialized knowledge of employees) that helps a business achieve its goals TYPESO FECONOMIC SYSTEMS Characteristics: the way decisions are made about prod & allocation/ownership of the factors of production Who should own the factors of production? Who should controls the factors of production? Who decides what should be produced, with the factors? Different countries answer these differently: o Government in control o Individuals in control Command or Planned Economies o Governments own/control factors of production o Governments make all / most of decisions Communist Economies o Government owns/controls all factors of production makes 100% of economic decisions o ie) North Korea o Proposed by Karl Marx Individuals contribute to society based on their ability & receive econ benefits based on their need Socialist Economies o Government owns/controls majority of the factors of production, including principal industries, makes most of economic decisions o Government owns & operates only selected major industries Smaller/less important biz = privately owned (ie. Barber shop) o Workers can choose occupation (most work for govt) Job positions - political favourability>ability o ie) Cuba Market Economies Market a bunch of activities o Exchange between buyers & sellers Individuals own/control factors of production Individuals make all / most of decisions Capitalist Economies: Individuals owns/control all factors of production Individuals make 100% of economic decisions 2 ie) none Mixed Market Economies: Individuals own/controls majority of factors Individuals make most of economic decisions Governments regulate and tax, run some business ie) Canada, USA, UK, France o CANADA Majority of factors owned by private individuals Most decisions about factors made by individuals Government does intervene and is involved in the economy Taxation & regulation Provide some services Characteristics of command & market economies Privation govt activities become privately owned o ie) Canadian private air traffic control system o Generally reduces payroll, boosts efficiency &productivity, profitable Deregulation decrease affecting biz activity o ie) less govt intervention companies free Market = place where buyer & seller exchange for products Business are free to charge w/e they want Customers free to choose who to buy from o ie) 2 companies seller same quality apples at prices $1 and $2 respectively customers will choose cheaper company Capitalism private ownership of FOP, encourages entrepreneurship b/c profit incentive GOVERNMENT INFLUENCES ONBUSINESS Customer role Buyers services/goods from business o ie) Office supplies, highways, water treatment plants Many biz rely on government purchasing (survival or prosperity) Competitor crown corps, fed & provincial level Regulator Regulate biz through decisions via admin boards, tribunals, commissions o ie) Canadian Transmit Commission (CTC) decisions on route & rate for commercial air & rail companies Why? Protect competition, customers environment & achieve social goals Taxation Agent Revenue Taxes (ie. Income tax) fund services & programs Progressive (ie sales tax) same rate, regardless of income Restrictive (ie. Tax on alcohol, cigs) - legislative body feels these prods should be controlled Provide Incentives 3
More Less

Related notes for MGTA01H3

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.