Business Test 1.docx

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Management (MGT)
Chris Bovaird

Management Chapter 1 Business: An organization that produces or sells goods or services in effort to make a profit. Profit: Is the money which remains after the expenses are subtracted from the revenues Expenses: The money spent in producing g/s and generally running a business. (often referred to as costs) Revenue: The made that the business earns (Also known as sales)  Some of the most profitable companies in 2005 were Royal bank of Canada (3.3 billion), Manulife financial (3.2 billion), and Imperial Oil ltd (2.6 billion).  In Canada’s economic system businesses exist to earn profits for owners who are free to set them up. However, consumers also have a freedom of choice  In order for a business to be profitable, the company must recognize a consumer’s needs and wants. If there is no demand for a product the company will be unsuccessful. Companies create opportunities (consumer’s wants and needs) and they are most successful when no other business is supplying it or selling the product. The want for the product increases. Economics: The study of how businesses and people make choices about: -What things to produce/consume -How best to product -How best to distribute wealth Economic Systems: The way a country/nation allocates its resources among its citizens. Economic resources differ in terms of who owns and control these resources also known as factors production. Factors of production: The basic resources a country’s businesses use to produce goods and services.  There are four main resources that are used. Labour, Capital , Entrepreneurs, and th Natural resources. & Now, Information resources is being used more frequently as 5 factor of production  Labour: The physical and mental capabilities/talents of people. Sometimes called human resources; Needs to be a skilled workforce. Those who are knowledge and well trained in their field are a competitive asset to a company  Capital: The financial resources used to operate a business and to obtain resources such as labour. Also the money used to produce goods and services. A major source of capital for small businesses is personal investments by the owner. Investments can be made by the entrepreneur of the business, partners, or investors who purchased a stock Also anything money can buy  Entrepreneurs: People who accept the opportunities and risk involved in creating and operating a business. I.e Bill gates, steve jobs  Natural resources: raw materials used in the production of g/s. For example, Land, water, trees  Information Resources: Information such as market forecasts, economic data, and specialized knowledge of employees that is useful to a business and helps it achieve its goals. Results in the creation of new information or repackaging of old information for different audiences and new users. America online provides online services in exchange for access fees Type of information business. Economic Systems Command/PLanned Economies Market Economies An economic system in which a Individuals (produc. +consum) control centralized govt controls most or all factors of production and make all or factors of products and makes most or most production and allocation dcs’ns all production and allocation dec’ns Communism Socialism Capitalism Mixed Market Economy -karl marx Gov’t owned selected Individuals own all Individuals own a majority of Type of command major industries, while factors of prod. And factors of production and economy where the individuals own and make make 100% make a majority of economic gov’t owns and operate less crucial economic decisions. dec’ns. Mix b/w Command operates all industries. businesses e.g. none and market economy People contributed Most people were E.g Canada, UK, USA, France based on their abilities allowed to pick their Privatization: Converting and received based on occupation but large govt owned enterprises into needs (lack of portion of people privately owned companies motivation) worked for the govt. i.e very few, prob N. Govt owned enterprises Korea
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