Textbook Notes (363,418)
Canada (158,365)
MGTA01H3 (583)
Chapter 1

Chapter 1

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University of Toronto Scarborough
Management (MGT)
Chris Bovaird

Chapter 1 Understanding the Canadian Business SystemThe Concept of Business and Profit Terms Business An organization that produces or sells goods or services in an effort to make a profitRevenues The money a business earns selling its products and servicesExpenses The money a business spends producing its goods and services and generally running the businessProfit The money that remains if any after a businesss expenses are subtracted from its revenuesEconomic Systems around the World TermsEconomic System The way in which a nation allocates its resources among its citizensFactors of production The resources used to produce goods and services labour capital entrepreneurs and natural resourcesLabour Also referred to as human resources labour is the mental and physical capabilities of people An example can be seen in a major corporation All members of the corporation who contribute to running and maintaining the business its liabilities and assets are forms of labourCapital The funds used to operate an enterprise A major source of capital for small businesses is personal investments which can come from individual entrepreneurs from partners who start businesses together or from investors who buy stock Another form of capital can be the revenue that enters the business once it successful enters the economic market Natural resources Items used in the production of goods and services in their natural state including land water mineral deposits and trees Once just limited to resources that could only be produced in nature it now relates to include all physical resourcesEntrepreneurs The people who accept the opportunities and risks involved in creating and operating businesses An example can be seen in the establishment of Facebook by Mark Zuckerburg who had the technical skills to understand the benefits of connecting to the Internet and realized the potential behind network connections between its users The entrepreneur is able to identify unmet consumer needs such as advertising and selling a good or service The entrepreneur is able to spot a promising opportunity and develop a good plan for capitalizing on itInformation resources information such as market forecasts economic data and specialized knowledge of employees that is used to a business and that helps it achieve its goalsCommand economy an economic system in which government controls all or most factors of production and makes all or most production decisionsMarket economy An economic system in which individuals control all or most factors of production and make all or most production decisionsMixed market economy An economic system with elements of both market and command economiesPrivatization the process of converting government enterprises into privately owned companiesDeregulation reduction in the number of laws affecting business activity
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