Business

A not-for-profit organization e xists to achieve some other goal than the usual business goal of profit. Business –An organization that strives for a profit by providing goods and services (products) desired by its customers.Consumerism –A movement to increase the rights and powers of buyers vis-à-vis sellers.Federal Government: Money and banking, Trade regulation, External relations, Defence, Criminal law, TransportationMunicipal Governments: Water, sewer, and waste collection, Encourage economic development, Use bylaws to regulateProfit: Revenue –The money a company earns.Costs –Expenses to generate the revenue mProfit –The difference between revenue and costs.Protecting Creators: Patents – Protection for inventors/ Copyrights –Protection for creators of works of art, music, literature, or other intellectual property. Trademarks –Design, name, or other distinctive marks that a manufacturer uses to identify its products in the marketplace.Protecting Consumers: Right of choice/ safety/ honesty/ be informed.Provincial/Territorial Governments: Protecting Rights (Administration of labour laws, Education,Health/welfare, Protection of property and civil rights, Natural resources, EnvironmentQuality of life –General level of human happiness.Risk –Potential for losing resources.Standard of living –Measurement of outputs of products (private and public) that people can buy with the money they have.Strict liability –Manufacturer/seller is responsible for any damage or harm done caused by defective products. Taxes:Income/ Property /Payroll /Sales/Excise taxesThe Governments’ Other Roles: Customer, Competitor, Provider of Essential Services, Provider of Incentives, Taxation Agent, RegulatorTrademarks –Design, name, or other distinctive marks that a manufacturer uses to identify its products in the marketplace.Warranties–A guarantee of performance (either implied or expressed).Product liability – Responsibility of the manufacture and sellers for the defects in the products they sell.Component lifestyle –A lifestyle made up of a complex set of interests, needs,Corporate Governance: The way in which an organization is governed, directed, and administered.Board of directors is responsible for the organization being managed in the best interest of the corporation. Ethics–A set of moral standards for judging whether something is right or wrong.Factors Influencing Individual Business Ethics: Utilitarianism/Individual Rights/JusticeEthical Development: Preconventional(selfish)/ Conventional (social)/ Postconventional (principled)Influencing Ethical Conduct: Lead by Example/Offer Ethics Training Programs/Establish a Formal Code of EthicsSocial trends –Social change and its impact on business.Social responsibility –T he responsibility a business has to its stakeholders.and choices.Social factors – Attitudes, values, and lifestyles.Different lifestyles, different choicesWomen’s contribution to the Canadian economyDemographic trends – Age, race, ethnicity, and location.Stakeholders: Any person or organization with a vested interest or to who the company has a responsibility.~~~~Economics – The study of how a society uses scarce resources to produce and distribute goods and services.Microeconomics–The sub-area of economics that focuses on individual parts of the economy, such as households or firms.Macroeconomics–The sub-area of economics that focuses on the economy as a whole by looking at aggregate data for large groups of people, companies, or products.Resources Used to Create Products:Natural Resources,Labour,Capital,Knowledge,Entrepreneurship Economic Systems:An economic system is the combination of policies, laws, and choices made by a nation’s governments to esta blish the systems that determine what goods and services are produced and how they are allocated.Primary economic systems: market/command/socialism/mixed EconomiesFour types of market structures: perfect/monopolistic/oligopoly/pure CompetitionEquilibrium:The quantity of a product demanded equals the quantity supplied.Changes in demand: change in customer income/fashion or taste/price of related products/expectations about future prices/# of buyersChanges in supply: new technology/in rice of resources/in price of related products/#of producers/ in taxesMacroeconomic Main Goals:Striving for Economic Growth/Full Employment/Price StabilityAchieving macro goals: (1)monetary policy: contractionary policy/expansionary policy(2)fiscal policy: spending/taxationThe Future of Economics:Lack of confidence in the markets/ Meeting competitive challenges/ Increasing entrepreneurship worldwide.~~!!Money: scarcity/durability/ portability/divisibilityMoney (function):Medium of Exchange/Standard of Value/Store of ValueCurrency – Bank notes and coins.Demand deposits – Money kept in an account that can be withdrawn on demand.Time deposits – Money invested for a specific period.Term deposits – Are paid interest but cannot be withdrawn on demand.The Bank of Canada Activities:Conducts monetary policy/Supplies quality bank notes/Promotes the safety and efficiency of our financial system/Provides funds-management services/Communicates its objectives openly and effectively.Monetary Policy- Tools :Open Market Operations; Target for the Overnight RateFinancial Institutions:(1)Depository(chartered banks; trust companies; credit unions/caisses populaires (2)Non-Depository: insurance companies; pension funds; brokerage companies; finance companies International Banking:Provides Loans;Offers Trade-Related Services;Provides global cash management services; Helps companies manage cash flows; Improves payment efficiency; Reduces exposure to operational risksShares and Bonds(1)Securities:Investment certificates that represent either equity or debt. (2)Shares: Common and preferred (3) Bonds:Corporate and governmentShares(1) Common(Voting rights; May pay dividends) (2)Preferred:Dividends set at issuance; No voting rightBonds:Long-term debt obligations; Principal–Par value; Interest –Coupon rateCorporate Bonds:High-yield (junk) bonds – High risk/high return; Mortgage bonds – Secured by property; Debentures – Unsecured bonds; Convertible – Option to convert to shares.Other Types of Securities:1.Mutual funds –Financial services company that pools investors’ funds to buy a selection of securities. (2)Futures contracts – Legally binding obligations to buy or sell commodities or financial instruments at a later date. (3)Options – Entitles holders to buy or sell specified quantities of financial instruments at a set price during a specified time.Securities Markets (1) Investment bankers – Help companies raise long-term financing (a process called underwriting). (2) Stockbroker – A person licensed to buy and sell securities on behalf of clients. (3) Online investing – Improvement in Internet technology.Markets: -Primary(New securities are sold to the public) –Secondary:Old (already issued) securities are traded among investors.The Future of the Financial Industry:Changing the way we bank/ Increased financial responsibilities。