Unformatted text preview: MGTA03 – Intro to Management – Week 1 MGTA03 Please read Chapter 1: Please Understanding the Canadian Business System Business MGTA03 – Intro to Management – Chap 1 MGTA03 Purpose of Chapter/Lecture: Set the scene Provide basic definitions Explain a few key theories MGTA03 – Intro to Management – Key Points MGTA03 Main points of today’s lecture: Definition of “business” Profit and Loss Factors of production MGTA03 – Intro to Management – Business MGTA03 Business: an organisation that provides Business: an organisation goods or services, to customers, in order to make a profit. This is a business: This is MGTA03 – Profit MGTA03
Profit - The difference between: $$$ in (revenues or sales) $$$ out (costs or expenses) Profit: Simple Example Profit:
Business sells small, plain pizza Revenue (sales) Revenue less Expenses (costs) Profit = $6.00 $6.00 = - $5.00 = $1.00 MGTA03 – Intro to Management – Profit MGTA03 Profit Profit
Fundamental reason for a business to exist Fundamental Not all organisations are businesses, e.g. hospitals, universities, churches hospitals, These provide services, but not for profit These not MGTA03 – Intro to Management – Loss MGTA03 Loss
When expenses are greater than revenues When ii.e. It costs more money to produce the .e. products and run the business, than the business can generate through sales. business MGTA03 – Intro to Management – Loss MGTA03 Examples of loss-making businesses: Air Canada General Motors Chrysler Question: Why did GM not make a profit? not MGTA03 – Intro to Management – Economics MGTA03 Economics: The study of how businesses, people make The choices about: choices What things to produce/consume What How best to produce things How How best to distribute wealth. How MGTA03 – Intro to Management – Factors MGTA03 Start with very basic economic theory. There are basic building blocks used to There produce anything. produce We call those basic building blocks: “Factors of production” MGTA03 – Intro to Management – Factors MGTA03 natural natural resources resources raw materials found in ground, grown from earth, or harvested from nature. Examples: coal, wheat, water, wood Examples: MGTA03 – Intro to Management – Factors MGTA03 Labour human beings, i.e. workers MGTA03 – Intro to Management – Factors MGTA03 capital money, or machines and technologies that money, money can buy. e.g.: computers, phones, hammers, tractors e.g.: MGTA03 – Intro to Management – Factors MGTA03 entrepreneurs
the people who assemble the and organise the other factors of production, the individuals who make it all happen it MGTA03 – Intro to Management – Chap 1 MGTA03 ...
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