chpt 1 and 2

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Department
Management (MGT)
Course
MGTA01H3
Professor
Chris Bovaird
Semester
Fall

Description
Business- an organization that produces or sells good to make a profit Profit = expense revenue Businesses must take into account what consumers demand Businesses succeed when business can identify unmet consumer needs or better ways of satisfying consumer needs Business = good, improve our quality of life, help support government and charities Economic system- the way a nation allocates its resources among citizens Factors of production- natural resources labour capital, entrepreneurs information? Labour- also called human resources, to work for people Capital- financial resources. Small businesses get capital from personal investment from owners Entrepreneurs- people who accept the risks in creating and operating business james Kinsey- invented AOL who understood how internet works and its potential Natural resources- items used in production of goods and services in natural state Information- economic data, market forecasts which help a business achieve its goals eg create new information or repackage existing information for new users Types of economic systems Command economy- relies on government to control all or most factors of productionallocation decisions Market economy- individuals producers and suppliers control production through supply and demand Command economies- proposed by karl marx, Communism- govt owns and operates all sources of production . individuals would contribute according to abilities and receive economic benefits according to their needs. Govt would then wither away once society has matured Socialism- govt only owns major industries smaller eg restaurants or clothing stores can be privately owned. Very high taxes, management positions are filled on political considerations rather than on ability. Govt operated enterprises are inefficient Market economies- mechanism for exchange between buyers and sellers Capitalism- private ownership of factors of production encouraging entrepreneurship by offering profits as an incentive producers can supply whatever they want however they want and consumers can purchase what they want however they want Mixed market economies contains both command and market characteristics of economy Privatization- process of converting government enterprises into privately owned companies eg Canada air traffic control system this makes it more efficient productive and profitable Deregulation reduced # of laws which affect business activity ( less govt intervention) eg airlines banking communication Interactions between business and govt ( how govt influences business) (CCRETI- customer competitor regulator essential services taxation agent incentives) Govt as a customer--? Govt buys many things from businesses ( eg office supplies buildings many businesses depend on the govt for survival Govt as a competitior competes with business through crown corporations www.notesolution.com
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