GMGT 2010 - Part 1/3, Lecture notes of Business Strategy

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Business & Society

GMGT 1010

Fall 2017

Grant Wainikka, MA (Econ),

MBA

Introduction  (^) Who am I?  (^) Who are you?  (^) What I expect from you.  (^) What do you expect from me? Course GMGT 1010 A03 T/TH 8:30-9:45 103 Drake Text There is a custom publication for GMGT 1010 available at the UM Bookstore. All course readings (other than Sexty) will be posted to the UM Learn site for this course. ISBN Print – 9781259646027 There is also an e-book version of the publication; the ISBN for this version is 9781259651946 Course Outline

Agora – Ancient Greece 600 BC Wrought Iron Guild (c 1290 Europe) Jesus overturning tables (Giotto) Merchants of Babylon – 2000 BC Business has always been part of our societal fabric……

Entrepreneurship: Revenues, Profits, and

Losses

Business: an activity that seeks to provide goods and services to others while operating at a profit. Profit: the amount of money a business earns in revenue above and beyond what it spends on salaries and other expenses. Profit = TR-TC Entrepreneur: a person who risks time and money to start and manage a business.

What does

Business do for

Society?

1. Employs People/Individual Impact

 (^) Provides income for a living  (^) Sense of satisfaction/achievement  (^) Sense of identity/pride

2. Innovation/Tech. Change

 (^) Competitive pressure  (^) Lower cost/enhance quality  (^) Sense of identity/pride What does Business do for Society

5. Social

 (^) Who do you interact with  (^) Sense of community

6. National Income/GDP

What does Business do for Society

Can you think of beneficial goods

or services that are not provided

by profit-seeking businesses?

Parks, tornado sirens, schools, streetlights, roads, ….. What do services like this have in common?

Exercise:

You are starting a travel

business.

What do you need to

consider/analyze before entering

the market?

14 

Complexity of Business & Society: Objectives

 Integrity in Business: Key Terminology

 Three Approaches to Ethical Thinking



Canadian Business System: Key Terminology

 Corporations: The Main Economic Institutions

 The People Who Run Canadian Business



Factors Influencing Attitudes Toward Business

 The Consent of Society



Academic Integrity



Integration of Business and Society

Sole

Proprietorship

 Ease of start/end  (^) Be your own boss  (^) Pride of ownership  (^) Leave legacy  (^) Retain profit  (^) No special taxes  (^) Unlimited liability  (^) Limited financial resources  (^) Management difficulties  (^) Overwhelming time commitment  (^) Few fringe benefits  (^) Limited growth  (^) Limited lifespan

Advantages Disadvantages

Partnerships

 More financial

resources

 Shared

management,

knowledge

 Longer survival

 Shared risk

 No special taxes

 Unlimited liability

 Division of profits

 Disagreements

among partners

 Difficult to

terminate

Advantages

Disadvantages

Corporation

s



Corporation: a federally or provincially

chartered legal entity with authority to

act and have liability separate from its

owners.

 Public corporation: has the right to

issue shares to the public, so its shares

may be listed on a stock exchange.

 Private corporation: is not allowed to

issue stock to the public, so its shares

are not listed on stock exchanges; it is

limited to 50 or fewer shareholders.

Corporations

 (^) Limited liability  (^) More money for investment  (^) Size: may be larger due to increased resources  (^) Perpetual life  (^) Ease of ownership change  (^) Ease of attracting talented employees  (^) Separation of ownership from management  (^) Extensive paperwork  (^) Double taxation  (^) Two tax returns  (^) Size: may become too inflexible to new ideas  (^) Termination difficult  (^) Stockholder and board conflict  (^) High initial cost

Advantages Disadvantages