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Chapter 1

Chapter 1


Department
Management (MGT)
Course Code
MGTA01H3
Professor
Chris Bovaird
Chapter
1

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Introduction to Management Chapter One
Business: an organized effort to provide goods or services, to customers, in order to make a
profit.
Profit: the money that remains after a businesss expenses are subtracted from its
revenues.
Profit is the fundamental reason for a business to exist. Not all organizations are
businesses, ex. Hospitals, universities, churches. They provide services, but not for a profit.
Loss: when expenses are greater than revenues. (It cost more money to produce the
products and run the business, than the business can generate through sales.)
Economics: the study of how businesses and people make choices about:
What things to produce/consume
How best to produce things
How best to distribute wealth
The basic economic theory states that There are basic building blocks used to produce
anything, we call those building blocks Factors of production.
1.Natural Resources raw materials found in ground, grown from earth, or
harvested from nature. Examples include: coal, wheat, water, wood
2.Labour human beings, example workers.
3.Capital money, or machines and technologies that money can buy. Examples
Include: computers, phones, hammers, tractors
4.Entrepreneurs the people who assemble and organize the other factors of
production, the individuals who make it all happen.
Economic systems are countries ex. Canada
The way different countries try to answer basic economic questions:
Who should own of control the factors of productions?
What should be produced, with the available factors?
Two types of economic systems
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