Management and Organizational Studies 2285 Chapter Notes - Chapter 5: Market Economy, Invisible Hand, Outsourcing

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2285
• Professor: Trevor Hunter

Document Summary

Mos 2285 chapter 1 to 5 notes. Corporations are separate legal entities that are firstly obligated to their shareholders. & are legally required to make as much money as possible (relates back to shareholders responsibility: shareholders, customers, employees, community. Private firms work for their own benefit b/c they do not have shareholders. Profit is earned in 2 ways: lowering costs. 2 biggest costs are labour and raw materials: increasing revenues. Stealing market share difficult to do. Efficiency drivers: make more money be lowering costs: increased competition, investor expectations. Market expansion drivers: make more money by selling more stuff: you want product characteristics that transfer across borders. Don"t have to spend resources on adapting product. What facilitates globalization: the decline of barriers of movement of goods/services/investment etc, technology; computers, communication, transport, etc. Four main aspects of global business environment: social systems. Shared beliefs, values, customs, religion: political systems. System of governance in that country: economic systems.