MGT100H1 Lecture Notes - Lecture 1: Kathleen Wynne, Business Ethics, Capitalism

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22 Jun 2018
School
Department
Course
Professor
Business and Society
Businesses and society are interdependent
Society contributes to business
■ Environment
Environment where businesses can succeed, promote
entrepreneurship, financial systems set up that help businesses
■ Resources
Ex: ring of fire (northern ontario)
Business contributes to society
Wealth creation
Granting business license for the people of society
Governments generally don't create wealth, they may set up
systems that might though
Wealth (n) - “the annual produce of the land and labor of society”
Adam Smith, 1776
Wealth creation: combining materials, ideas, labor, technology so
that the output can be sold for more than costs. The profit brings
wealth to the people and society involved in production
● Requires
Combination of inputs
Ex: bread, inputs need flour, yeast or kosher, water
(any type of moisture), oven, pans, etc.
Supportive environment
Need to be able to build a factory, get a business
license, find labor
Means of production
Needs employees, need people to bring the inputs,
etc.
Someone who will pay more than costs
● Benefits:
Personal income for labor
Social good (education, healthcare, etc.)
Pay taxes, property taxes, etc
Asset utilization
If a company is doing well, it builds another factory,
and make use of that asset and contributing more
to society, make use of what you’re invested in
Business income
Supports everyone who’s invested in the business
Environmental good
Taking care of physical environment, taking care of
waste material, recycling, also benefits society
Transactional and income taxes
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Everyone who works in Ontario is subjected to
income tax which goes to the province and federal
government
Transaction taxes: every time you buy something
there is an HST (13.3%)
Beneficial technologies
○ Etc.
Canada’s mixed Economy
Free enterprise reigns in Canada, yet
Government continues to own businesses
Many of these are legacies of scale
Privatization continues
Ex: HydroOne made not to create wealth but to provide
infrastructure, then later they said it should be privatized and they
sold assets, generating stations, etc.
Ontario premier kathleen wynne unveiled a plan to
privatize HydroOne, a major government-owned electricity
agency. If it goes through, it will be one of the largest
privatizations of a government asset in the generation of
canada.
The Diamond
Public policy systems
Help to supply human resources, natural resources
Infrastructure (energy, transportation, housing, etc)
Fiscal stimulus
Tax breaks, blatant grants (corporate welfare), etc
Trade policy (a fine balance)
Federal government is engaged in trying to come up with trade
policies to sell stuff we’re good at producing and buy stuff we
aren’t
Fine balance: we could build everything and make everything
ourselves and we’ll have more labor but we wouldn’t be bringing
wealth back to canada
Effective financial system
Must be trustworthy
Fair lending policies (good times and bad)
Markets for investing and borrowing
Insurance
Vibrant entrepreneurship
Support for entrepreneurial process (roles of other three corners of
diamond)
Sole proprietor, partnership, corporation, cooperative (eg. MEC)
Sole proprietor files one tax return
Corporation: legal entity separate from you
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MGT100H1 Full Course Notes
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MGT100H1 Full Course Notes
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Document Summary

Environment where businesses can succeed, promote entrepreneurship, financial systems set up that help businesses. Granting business license for the people of society. Governments generally don"t create wealth, they may set up systems that might though. Wealth (n) - the annual produce of the land and labor of society . Wealth creation: combining materials, ideas, labor, technology so that the output can be sold for more than costs. The profit brings wealth to the people and society involved in production. Ex: bread, inputs need flour, yeast or kosher, water (any type of moisture), oven, pans, etc. Need to be able to build a factory, get a business license, find labor. Needs employees, need people to bring the inputs, etc. Someone who will pay more than costs. If a company is doing well, it builds another factory, and make use of that asset and contributing more to society, make use of what you"re invested in. Supports everyone who"s invested in the business.

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