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[RSM100Y1] - Final Exam Guide - Ultimate 165 pages long Study Guide!


Department
Rotman Commerce
Course Code
RSM100Y1
Professor
John Oesch
Study Guide
Final

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UTSG
RSM100Y1
FINAL EXAM
STUDY GUIDE

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RSM100 Textbook Notes
Chapter 1: Business in a Global Environment
Factors of Production: four basic inputs for effective operation: natural resources, capital,
human resources, and entrepreneurship.
Natural Resources: All production inputs that are useful in their natural states,
including agricultural land, building sits, forests, and mineral deposits.
Capital: Production inputs consisting of technology (machinery, equipment, etc.;
things designed to improve production), tools, information, and physical facilities.
Human Resources: Production inputs consisting of anyone who works, including
both the physical labour and the intellectual inputs contributed by workers.
Entrepreneurship: The willingness to take risks to create and operate a business.
The Private Enterprise System: an economic system that rewards firms for their ability to
identify and serve the needs and demands of customers. Business functions within this
system in Canada. Also known as Capitalism.
Adam Smith: The father of Capitalism
o First described the idea of capitalism in his book “The Wealth of Nations,”
published in 1776
o Believed an economy is best regulated by the “invisible hand” of
competition
Competition among firms would lead to consumers’ receiving the
best possible products and prices because less efficient producers
would gradually be driven from the marketplace
Competitive Differentiation: The unique combination of organizational abilities,
products, and approaches that sets one company apart from its competitors in the
minds of customers.
Basic Rights in the Private Enterprise System:
o Private Property: the most basic right the right to own, use, buy, sell, and
hand down land, buildings, machinery, equipment, patents, individual
possessions, and various intangible kinds of property.
o Profits: the right to all after-tax profits earned through business’ activities
o Freedom of Choice: A private enterprise system relies on citizens to
choose their own employment, purchases and investments. They can
change jobs, discuss and agree on wages, join labour unions, and choose
among many different brands of goods and services
o Competition: Fair competition is set by allowing the public to set the rules
for competitive activity. The Canadian government has passed laws to
prohibit excessively aggressive competitive practices designed to remove
the competition (price discrimination, fraud in financial markets, deceptive
advertising and packaging, are all illegal)
The 6 Eras in the History of Business:
1. The Colonial Period: Prior to 1776, primarily rural and agricultural production.
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2. Industrial Revolution: 1760 1850. Business moved to a factory system. Mass
production by semiskilled workers, aided by machines things like agriculture
became mechanized.
3. Industrial Entrepreneurs: In the late 1800s. Advances in technology and increased
demand for manufactured goods, leading to enormous entrepreneurial
opportunities. E.g. Alexander Graham Bell and the Telephone.
4. The Production Era: Through the 1920s. Emphasis on producing more goods
faster, leading to production innovations such as assembly lines.
5. The Marketing Era: Since the 1950s. Consumer orientation, seeking to understand
and satisfy needs and preferences of customer groups. Development of the idea of
branding.
6. The Relationship Era: Began in the 1990s. Benefits derived from deep ongoing
links with individual customers, employees, suppliers, and other businesses
promotion of Customer loyalty by carefully managing every interaction.
Managing Relationships through Technology:
Relationship Management: the collection of activities that build and maintain
ongoing, mutually beneficial ties with customers and others.
o Done through the forms of cellphone, Internet, and social media.
Strategic Alliances:
A partnership formed to create a competitive advantage for the business involved.
In international business, the business strategy of one company partnering with
another company in the country where it wants to do business.
o E-business firms whose entire business is conducted online, such as
Amazon, team up with traditional retailers who have expertise in
distribution and in buying the right amount of the right merchandise
The Green Advantage:
The need to develop environmentally friendly products and processes is a major
new force in business today.
o Saving energy, cutting emissions and pollution, reducing waste, saving
company money and increasing profits
Clean solar energy, fluorescent lighting, etc.
Energy among one of the biggest costs for most firms
Thinking green satisfies both consumers’ environmental concerns but also
shareholders’ concerns about saving money and earning profits.
Today’s Business Workforce:
Changes in the Workforce: Companies face several trends that challenge their
skills for managing and developing human resources. These include:
Aging Population and Shrinking Labour Pool: Baby boomers, born between
1946-1964, are soon going to retire thus, leading to a shrinkage in the labour
pool
Increasingly Diverse Workforce: 2/3 of Canada’s pop. growth is due to
international immigration, particularly from Asia.
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