Textbook Notes (363,074)
Canada (158,173)
MGTA01H3 (583)


4 Pages
Unlock Document

University of Toronto Scarborough
Management (MGT)
Bill Mc Conkey

MGTA01 Chapter:1  A business is an organization that produces or sells goods and services in an effort to make a profit. A profit is what remains after expenses have been subtracted from the revenues. Expenses is the money a business spends to produce its goods and services to run the business; also known as costs. Revenues is the money a business earns by selling its products and services; also known as sales. Someone who can spot an opportunity and then develop a good plan to capitalize on it can succeed. Business produce most of the goods and services we use, employ people, create new innovations, provide opportunities for other businesses/ suppliers, enhances quality of life. Profits helps owners earn money and the taxes help support government while others support charities. Expenses (costs) - Revenues (sales) = Profit (reward)  Economic systems: An economic system allocates a nation's resources among its citizens. The key difference between economic systems is the way in which they manage the factors of production. Factors of production are the resources used to produce goods and services: labour, capital, entrepreneurs, natural resources and information resources or technology.  Labour: The mental and physical training and talents of people; human resources. Example: Imperial Oil is a huge company that requires a wide labour force with variety of skills such as managers, geologists, truck drivers etc.  Capital: The funds needed to operate an enterprise. Obtaining and using labour and other resources requires capital. A major source of income for small businesses is personal investment by owners. The investments can also come from individual entrepreneurs, partners, or stock investors. Revenue from the sales is the key and source of capital once a business starts.  Entrepreneurs: They are the individuals who organize and manage labour, capital, and natural resources to produce goods and services to earn profit; also run a risk of failure. Jimmy Pattison is a Canadian entrepreneur.  Natural resources: Items used in the production of goods and services in their natural state including land, water, minerals, trees etc. Imperial oil uses large quantities of crude oil to process but it also needs land where the oil is located and for refineries and pipelines.  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; technology. AOL is in the information business. It provides online services for its subscribers in exchange for a fee.  Types of Economic systems:  Command economy: The government controls all or most factors of production and makes all or most production decisions; relies on central government.  Communism: A type of command economy in which the government owns and operates all industries. Proposed by Karl Marx in the19th century; wanted individuals to contribute according to their abilities and receive economic benefits; expected the governments to temporarily take ownership of production factors; things didn't got his way.  Socialism: A kind of command economy in which the government owns and operates the main industries while individuals own and operate less crucial industries such as restaurants etc. Large proportion of people work for government; many government- operated enterprises are inefficient as management positions are filled with political considerations; extensive public welfare systems result in high taxes; popularity is declining.  Market economy: The individuals control all or most factors of production and make all or most f the production decisions.  Market: A mechanism for exchange between the buyers and sellers of a particular good or service. Sellers are free to charge what they want wile buyers are free to buy what they choose.  Capitalism: A kind of economy offering private ownership of factors of production and of profits from business activity. The economic basis of market processes is the operation of demand and supply.  Mixed market economy: An economic system in with elements of both a command economy and a market economy: in practice, typical of most nations' economies.  Privatization: The transfer of activities from the government to the public; spreading to many countries in recent years; e.g. Canada has privatized its air traffic control system. The new enterprise reduced its payroll, boosted efficiency and productivity, and quickly became profitable.  Deregulation: A reduction in the number of laws affecting business activity; frees companies to do what they want without government intervention and simplifies management; evident in many industries such as airlines, pipelines, baking, trucking, and communication.  In Canada: How government influences business  Government as customer: Government buys thousands of different products and services from business firms, including office supplies, office buildings, computers, battleships, helicopters, highways, water treatment plants, and management and engineering consulting services; also larger purchaser of advertising; many businesses depend on government purchasing; amounts to billions of dollars each year.  Government as competitor: competes with business through Crown corporations who are accountable to a minister of parliament for their conduct; exist at both federal and provincial level; account for wide economy activity.  Government as regulator: Federal and provincial both regulate; Government regulates through many administrative boards, tribunals or commission; Examples at federal level include Canadian Radio television and telecommunications Commission (CRTC), which issues and renews broadcast licenses, the Canadian Transport Commission (CTC), which makes decisions about route and rate applications for commercial air and railway companies, and the Canadian Wheat Board (CWB) regulates the prices of wheat. Provincial boards and commissions also regulate business through their decisions; people sometimes feel its unfair. Reasons to regulate include: 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 are the taxes whose main purpose is to fund government services and progress such as income taxes. Progressive revenue taxes are the taxes leveled at a higher rate on higher-income taxpayers and at a lower rate on lower income taxpayers. Regressive revenue taxes are the taxes that cause poorer people to pay a higher percentage of income than richer people pay such as sales tax. Restrictive taxes are the taxes leveled to control certain activities that legislators believe should e controlled such as taxes on alcohol, tobacc
More Less

Related notes for MGTA01H3

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.