Textbook Notes (369,072)
Canada (162,367)
MGTA01H3 (583)
Chapter 01

Chapter 01.docx

2 Pages
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Department
Management (MGT)
Course Code
MGTA01H3
Professor
Chris Bovaird

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Chapter 1 Understanding the Canadian Business System The Concept of Business and Profit Business – organization seeks to earn profits by providing G&S - dependent on consumer wants & needs → supply & demand - produce most of G&S consumed & employ majority of working ppl - create new innovations & provide opportunities for others (suppliers) & contributes to quality of life & standard of living → new technology, services & opportunities keep production, consumption, & employment growing - profits enhance personal incomes of millions of owners & stockholders & taxes help support gov’t at all lvls - support charities & provide community leadership Profit – $ remaining (if any) after REV – EXP → reward for taking risk & taking up time & $ Expenses – $ spent producing G&S & generally running business Revenues – $ earned selling G&S Economic Systems Around the World Economic System – way nation allocates resources among citizens Factors of Production – resources used to produce G&S: labour, capital, entrepreneurs, natural resources Labour – mental & physical training &talents of people; sometimes human resources → competitive advantage for company Capital – funds needed to start, operate & continue business → REV from sales key & ongoing source - personal investments by owners major source for small business → from individual entrepreneurs, partners, investors Entrepreneurs – uses opportunity to organize & manage other factors of production to produce G&S for profit, while risking failure Natural Resources – items used in product’n of G&S in natural state: land, water, mineral deposits, trees Information Resources – info (market forecasts, economic data, specialized knowledge of employees) useful & helps achieve goals Types of Economic Systems Command Economies – gov’t controls all / most factors of production & makes all / most production decisions Communism – gov’t owns & operates all industries - Karl Marx > individuals in society contribute according to abilities & receive benefits according to needs > gov’t has ownership of production factors until society matures, workers gradually gain ownership →didn’t work out, most countries abandoned communism Socialism – gov’t owns & operates main industries while individuals own & operate less crucial industries - workers allowed to choose occupation / profession, most work for gov’t - most gov’t-operated enterprises inefficient, management positions frequently filled by political considerations, no ability - extensive public welfare systems result in high taxes~ declining in popularity - may be told where to work, what to manufacture, what to buy & how much to pay Market Economies – individs control all / most factors of production & make all / most production decisions Market – mechanism for exchange btw buyers & seller of particular G&S > free to choose for buyers & sellers Capitalism – private ownership of factors of production & of profits from business activity Mixed Market Economies – elements of both command & market economy; in practice, typical of most nations’ economies Privatization – transfer of activities from gov’t to public → reduced payroll, boosted efficiency & productivity & profitable Deregulation – reducing # of laws affecting businesses → free to do w/out gov’t intervention > simplifying task of management - airlines, pipelines, banking, trucking, communication Interactions Between Business and Government How Government Influences Business Government as Customer - billions/yr to buy thousands of G&S; office supplies, office buildings, PCs, battleships, helicopters, highways, water treatment plants, management & engineering consulting services, advertising (largest buyer) - many depend on gov’t purchasing for certain lvl of prosperity, maybe survival Government as Competitor - Crown corps follows conduct of minister of parliament & accounts for variety of economic activity @ provincial & federal lvls Government as Regulator - regulates business thru administrative boards, tribunals, commissions - federal: Canadian Radio-television & Telecommunications Commission (CRTC) > issues & renews broadcast licences Canadian Transport Commission (CTC) > decides route & rate applications for commercial air & railway companies Canadian Wheat Board > regulates $ of wheat - provincial boards & commissions regulate business thru decisions Government as Taxation Agent Revenue Taxes – mainly to fund gov’t services & programs > income tax Progressive Revenue Taxes – levied higher rate for high-income families & lower rate for low-income families Chapter 1 Understandin
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