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MCS 1000 (215)
Chapter 1

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Department
Marketing and Consumer Studies
Course
MCS 1000
Professor
Douglas Adlam
Semester
Winter

Description
MGMT* 1000 Textbook Notes Chapter 1 Concept of business and Profit  Businesses produce most goods and services we consume today, and employ the majority of working people. They also create new innovations and provide opportunities for other businesses to serve as suppliers.  Healthy business contributes directly to our quality of life and standard of living. Economic Systems Around the World  Businesses differ all around the world; they operate based on the economic system they are in. Factors of Production  Largest difference between economic systems is the factors of production: labour, capital, entrepreneurs, and natural resources. Information resources are often included as well. Labour  Employees who are well trained and knowledgeable can provide a real competitive advantage for a company. Capital  Capital is needed to keep a company up and running, investments can come from individual entrepreneurs, from partners who start a business together, or from investors that buy stock.  Small businesses provide capital for their business with personal investments. Entrepreneurs (Only definition) Natural Resources (definition) Information Resources  Much of what a business does is a result from either the creation of new information or the repackaging of existing information for new users and difference audiences. Types of Economic Systems  Different economic systems manage factors of production differently, in some systems ownership is private; in others, government owns the factors of production. Command Economies  Two basic forms of command economies are socialism and communism (Karl Marx).  China had the highest opposition towards communism, despite the Chinese government being a supporter of communism ideology.  With socialism most major industries would be owned by the government, although workers can choose their occupations, most will work for government.  Unqualified managers being hired for government operated businesses (making them do poorly) and extensive public welfare systems result in high taxes making socialism decline in popularity. Market Economies  Ecommerce is used for business-to-consumer transactions as well as joining together many business-to-business transactions. B2B transactions far exceed B2C transactions in dollar value.  Markets allow customers freedom of choice, without much government involvement. Input and Output Markets  Input markets, firms buy resources from households  Output market, firm supplies goods and services. Capitalism  Capitalism allows freedom of choice. One can spend or invest money where they would like, and can choose to work wherever they want.  Same goes for a company in a market, they can produce anything they would like, and sell it for whatever price they wish to sell it. This is where competition comes into play. Mixed Market Economies  Command and M
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