Textbook Notes (367,876)
Canada (161,461)
MGTA01H3 (583)
Chapter 1

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Management (MGT)
Chris Bovaird

Chapter 1: 1 | Define the nature of Canadian business and identify its main goals. THE CONCEPT OF BUSINESS AND PROFIT - business - An organization that seeks to earn profits by providing goods and services. - profit - The money that remains (if any) after a business's expenses are subtracted from its revenues. - expenses - The money a business spends producing its goods and services and generally running the business. Also referred to as “costs.” - revenues - The money a business earns selling its products and services. Also referred to as “sales.” 2 | Describe different types of global economic systems according to the means by which they control the factors of production through input and output markets. ECONOMIC SYSTEMS AROUND THE WORLD Economics: - The study of how businesses, people make choices about: - What things to produce/consume - How best to produce things - How best to distribute wealth. - economic system - The way in which a nation allocates its resources among its citizens. Factors of Production - factors of production - The resources used to produce goods and services: labour, capital, entrepreneurs, and natural resources. Labour - labour - The mental and physical training and talents of people; sometimes called human resources. Capital - money, or machines and technologies that money can buy. - computers, phones, hammers, tractors - capital - The funds needed to operate an enterprise. - a major source of capital for small businesses is a personal investment by owners, which can come from individual entrepreneurs, from partners who start businesses together, or from investors who buy stock Entrepreneurs - entrepreneur - An individual who organizes and manages labour, capital, and natural resources to produce goods and services to earn a profit, but who also runs the risk of failure. Natural Resources - natural resources - Items used in the production of goods and services in their natural state, including land, water, mineral deposits, and trees. Information Resources - information resources - Information such as market forecasts, economic data, and specialized knowledge of employees that is useful to a business and that helps it achieve its goals. Types of Economic Systems - command economy - An economic system in which government controls all or most factors of production and makes all or most production decisions. - market economy - An economic system in which individuals control all or most factors of production and make all or most production decisions. Command Economies - communism - A type of command economy in which the government owns and operates all industries. - socialism - A kind of command economy in which the government owns and operates the main industries, while individuals own and operate less crucial industries. Market Economies - A mechanism for exchange between the buyers and sellers of a particular good or service. Capitalism - Individuals owns/control all factors of production - Individuals make 100% of economic decisions Mixed Market Economies - Individuals own/controls majority of factors - Individuals make most of economic decisions - Governments regulate and tax, run some business - Example: Canada, USA, UK, France - privatization - The transfer of activities from the government to the public sector. - deregulation - A reduction in the number of laws affecting business activity. INTERACTIONS BETWEEN BUSINESS AND GOVERNMENT How Government Influences Business Government as Customer - the government is the largest purchaser of advertising in Canada - many businesses depend on government purchasing, if not for their survival, at least for a certain level of prosperity Government as Competitor - government also competes with business through Crown corporations, which exist at both the provincial and federal level, and account for a significant and wide variety of economic activity in Canada Government as Regulator - federal and provincial governments regulate many aspects of business activity, also through their decisions, which sometimes business people feel is unfair in the way it performs its role as regulator - government regulates business through many administrative boards, tribunals, or commissions - there are several important reasons for regulating business activity: protecting competition, protecting consumers, achieving social goals, and protecting the environment Government as Taxation Agent - taxes are imposed and collected by federal, provincial, and local governments - revenue taxes - Taxes whose main purpose is to fund government services and programs. - progressive revenue taxes - Taxes levied at a higher rate on higher-income taxpayers and at a lower rate on lower income taxpayers. - regressive revenue taxes - Taxes that cause poorer people to pay a higher percentage of income than richer people pay.
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