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Rotman Commerce (1,103)
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Lecture 4

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Rotman Commerce
John Oesch

RSM100Y1 Lecture4 BusinessSociety 20111005 Agenda 1 Connect with Last week 2 Role of Business in society 3 Wealth Creation the DiamondQuestions to ponderWhat responsibility does business have to provide jobs to those who lost jobs in the recent recession Responsibility Try to help people who are out of work because people are stakeholders some responsibilityMiltons Theoryno responsibilities since owner have to make profits or other extreme No right answer open ended Wealth CreationWealth n the annual produce of the land and labour of society Adam Smith 1776 Wealth creation combining materials ideas labour and technology so that the output can be sold for more than costs This profit brings wealth to the people and society involved in production Role of businesssociety is so create wealth if business creates wealth other good things will be more likely to happen Requires 1Combination of inputs 2Supportive environment 3Means of production 4Someone who will pay more than costs boundaries between artsscience for creation of breadtheres a possibilities of making all bread for the family of Johnhave all the ingredients oven flours and electricityneed time to make bread supportive environmentbarely have time to make bread Means of productionmake bread for around a 1 but due to lack of time hes willing to pay 2 or more for bread Someone who will pay more than costsIf producers can produce bread for 050 and sell it for 250 that is requirement 4save him timeconvenient Profit generated can be invested or put into use again to production
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