MGTA03, Chapter 1 Textbook Notes (Highly detailed), Bovaird

18 Pages
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Department
Management (MGT)
Course Code
MGTA01H3
Professor
Mc Conkey& Bovaird

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Description
MGTA03 - C1 CHAPTER 1 - UNDERSTANDING CANADIAN BUSINESS SYSTEM THE CONCEPT OF BUSINESS & PROFIT, p5 Business BUSINESS - organization that strives to earn profit by producing & selling goods/services PROFIT - $ remaining (if at all) after subtracting the business's revenue by the business's expenses - are the "reward" the business owners get for taking risks dealing with investing time & $ - given the business is managed well, the amt can be large - ex. RBC - $3.3bil; Manulife Financial - $3.2bil; Imperial Oil Ltd - $2.6bil. EXPENSES - aka "costs"; $ business spends for prod'ing goods & services, and for running the business REVENUE - aka "sales"; $ earned by business after selling its prod's & services Business in Canadian Economic System (2) - exist for the owners who are free to set them up to earn profits - must consider the consumer's demands (ie. want/needs) when going for profits, as they have freedom of choice - ie. can choose to buy or not buy => if there is no demand for goods or services that a business offers, then business will not be successful, regardless of how efficient it may be at prod'ing them - ex. snow-blower shop set up near equator, or skirt-shop set up in Antarctica Business (3) - businesses can be successful if they a) offer the consumer needs that are not met by other businesses or b) have better ways to satisfy the consumer's neds - oppurtunity to succed, if no one else is supplying that need, or other businesses are not providing it efficiently or completely THE CONCEPT OF BUSINESS & PROFIT, p6 Businesses - prod. majority of goods & services ppl consume and employ most working ppl - potential to introduce new innovations - can provide oppurtunities for other businesses, which are their suppliers - quality of business situation affects quality of life & standard of living - prod'ion, consumption & employmt are guaranteed to grow on and on given new forms of: - tchnology - service businesses - international oppurtunties. .. arise - business profits - can improve personal income of numerous owners & stockholders - business taxes - help to support gov. at any lvl - other businesses support charities, provide community leadership Chapter - introduces Canadian business via learning about its role on economy & society - how do the dominant economic sys's work? - what effect do Canadian businesses have (if any)? ECONOMIC SYSTEMS AROUND THE WORLD, p6 - businesses are diff. from one country to another in many ways - key dictator of how organizations operate is the type of economic sys. that their country they do business in is ECONOMIC SYSTEM - way in which nation allocates its resources among its civilians - "factors of production" - who owns & controls resources - makes one economic sys. differ from another Factors of Production, p6 FACTORS OF PRODUCTION = basic resources used by a country's businesses to produce goods & services 1. LABOUR = mental & phys. capabilities & talents of ppl - aka human resources - ppl who work for company - ex. Imperial Oil - huge company - req. its labour department consisting of ppl w/ various skills - ex. managers, geologists, truck drivers - company can attain a true competitive advantage over other companies if its employees are - well trained - knowledgable 2. CAPITAL = financial resources (aka funds) req. to run an enterprise (aka organization/business) - needed - for obtaining & using resources, ex. labour - to begin a new business - to keep business progressing and ongoing - ex. Inco - req. $mil. to run its operations, buy & replace new equipment - small businesses have personal investment by owners as a major source of capital - coming from individual entrepreneurs, partners who begin business together, or investors who purchase stock - IMPT & ongoing source of capital as soon as business starts = revenue coming from selling prod's 3. ENTREPRENUERS = person who organizes & manages labour, capital & natural resources to earn a profit by prod'ing goods & services, but also has risk of failure - those ppl that accept the oppurtunties & risks that're assoc. w/ running a business - ex. Jimmy Pattison, Izzy Asper - ex. AOL creator Jimmy Kimsey - technical skills to comprehend the mechanics of the internet (labour) - conceptual skills to realize its future potential (labour) - had the skill to make correct decisions, while being risky 4. NATURAL RESOURCES = items used to prod. goods & services, they are present in their natural state - ex. land, water, mineral deposits, trees - can also include all phys. resources as welll - ex. Imperial Oil - uses multifarious natural resources - also uses land where oil is stationed, and land for refineries & pipelines (phys.) 5. INFORMATION RESOURCES - info that business can utilize & rely upon, and can help it achieve its goals - ex. market forecasts, economic data, and specialized knowledge coming from employees - these have replaced phys. good production in the role of importance - creating new info OR - modifying existing info for new users & diff. audiences - ex. America Online - in exchange for monthly access fees, it provides numerous online services for its subscribers - ex. AOL Types of Economic Systems - each type of economic sys has distinguished ways of managing factors of prod'ion - ex. ownership of these factors varies from being private, to gov.-owned - ex. how are decisions made about prod'ion & allocation allocate /l..ket/ verb [ T ] to give something to someone as their share of a total amount, for them to use in a particular way 1. COMMAND ECONOMIES = gov: - controls all/most factors of prod'ion - makes all/most prod'ion decisions - "government-centralized" economy Two Basic Types of Command Economies SOCIALISM COMMUNISM = gov. owns & runs MAIN industries, but = gov. owns & runs all industries individuals own & run LESS impt industries
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