MGT100H1 Lecture Notes - Lecture 1: Kathleen Wynne, Business Ethics, Capitalism
● 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
find more resources at oneclass.com
find more resources at oneclass.com
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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.