Textbook Notes (363,528)
Canada (158,397)
MGTA01H3 (583)
Chapter 1

MGTA03 Chapter 1 lecture notes

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University of Toronto Scarborough
Management (MGT)
Chris Bovaird

Management Chapter 1 Notes Business – an organization that seeks to earn profits by providing goods and or services Profit – the money that remains after a business’ expenses are subtracted from its revenue Expenses – money that business spend producing its goods and services and generally running the business (cost) Revenue – money a business earns selling its products and services (sales) - Businesses must take into account what consumers want or need in order to keep a business going - If businesses can identify unmet consumer needs or better satisfying them, then they too can be successful Economic System – The way in which a nation allocates its resources among its citizens - Economic system differ in terms of how they manage the factors of production Factors of Production – The resources used to produce goods and services: labour, capital, entrepreneurs and natural resources. Information resources is now quite often included as the fifth factor as well Labour o Also known as human resources o The mental and physical capabilities of people Capital o The funds needed to operate an enterprise Entrepreneurs o 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 o Items used in the production of goods and services in their natural state, including land, water, mineral deposits, and trees. Information Resources o 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 - Two types of Economic system o Command Economy - And economic system in which government controls all or most factors of production and makes all or most production decisions ▪ Two types of command economy • 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 o Market Economies - An economic system in which individuals control all or most factors of production and make all or most production decisions o Mixed Market Economy – An economic system with elements of both a command economy and a market economy; in practice, typical of most nations’ economies Market – a mechanism for exchange between the buyers and sellers of a particular good or service Capitalism – a kind of market economy offering private ownership of the factors of production and of profits from business activity Privatization – the process of converting government enterprises into privately owned companies Deregulation – a reduction in the number of laws affecting business activity. - Government buys many different products from businesses; many businesses depend on government purchasing. - Government competes with business through Crown corporations www.notesolution.com - Taxes are imposed and collected by federal, provincial, and local governments o Revenue taxes – Taxes whose main purpose is to fund government services and programs o Progressive revenue taxes – Taxes levied at a higher rate on higher-income taxpayers and at a lower rate on lower-income taxpayers o Regressive revenue taxes – Taxes that cause poorer people to pay a higher percentage of income than richer people pay o Restrictive Taxes – Taxes levied to control certain activities that legislators believe should be controlled - Governments offer incentive programs that help stimulate economic development - Governments also offer
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