Week Two Notes: Business History, Economics, and Notetaking

Week Two Overview

  • Week Two focuses on real university-style notetaking and engaging with course material.
  • Notetaking supports available: visit the peer notetaking supports website or email notetaking@trentu.ca for assistance.
  • This week includes a Friday quiz on Blackboard; available between 8 AM and midnight.
  • There is a spotlight on Natalie Nelson: Academic Skills (referenced as part of academic support).
  • The course will discuss Chapter One and Chapter Two in depth.

Course Announcements

  • Today’s fun note: National Guacamole Day (a light, celebratory aside).
  • Opening remarks hint at broader themes such as Revolution and how they relate to business history.

Chapters Focus

  • Let’s Talk about Chapter One and Chapter Two
  • Explore foundational concepts in business, economics, and the private enterprise system as preparation for deeper study.

What is Business?

  • Definition: Business is all profit-seeking activities and enterprises that provide goods and services necessary to an economic system.
  • Profits: Rewards for businesspeople who take the risks involved in offering goods and services to customers.
  • Emphasis on the link between risk-taking, provision of goods/services, and profits.

Factors of Production

  • Natural Resources
  • Capital
  • Human Resources
  • Entrepreneurship
  • These four/five inputs drive production and economic activity.

The Private Enterprise System: Capitalism

  • Adam Smith is known as the father of capitalism.
  • The "invisible hand" of competition guides resource allocation and gains.
  • Economic system determines ownership, profits, and resources.
  • Firms are rewarded for serving consumer needs.
  • Government intervention is minimized; market competition drives outcomes.

Does Capitalism Work?

  • Hernando de Soto: The Mystery of Capital — Why capitalism triumphs in the West but fails elsewhere.
  • Jeff Rubin: The Expendables — How the middle class got screwed by globalization.
  • These works offer critical perspectives on capitalism’s limits and global implications.

Social and Cultural Forces; Management; Technological Forces; Economic Forces; Globalization Forces; Government and Legal Forces

  • These are the variables within the private enterprise system that shape business behavior and strategy.
  • Interplay among forces affects marketing goals, finance, and overall corporate strategy.

The Entrepreneurship Alternative

  • An Entrepreneur: A risk taker who sees a potentially profitable opportunity.
  • Devises a plan to achieve success in the marketplace and earn profits.
  • Entrepreneurs fuel the economy and provide innovation.

Eight Eras in the History of Business

  • 1600–1800: The Mercantile Era
  • 1750: The Colonial Period (beginning in 1750)
  • 1800: The Industrial Revolution (beginning around 1800)
  • 1850–1930: The Production Era
  • 1930 to today: The Marketing Era
  • 1990 to today: The Relationship Era
  • 2000 to today: The Social Era
  • These eras mark shifts in economic organization, production methods, and consumer relations.

Mercantilism: 1600–1800

  • Eurocentric power and wealth tied to finite gold and silver reserves.
  • Wealth measured by gold/silver, requiring nations to export more than they import.
  • Land acquisition and defense were central to national power.
  • Trade systems were restricted or ignored in favor of national accumulation.

Colonialism: 1750–?

  • European export of governance, trade, religion, and culture to other regions.
  • Doctrine of Discovery framed land as terra nullius, justifying expropriation.
  • Wealth understood through a food-chain view of resources, human capital, and finished goods.
  • Modern forms of colonialism persist in various regions today.

The Industrial Revolution: 1800–1900

  • Shift from small-scale, local production to large-scale factory production.
  • Urbanization increased; rural understandings of the economy gave way to urban economics.
  • Redefined skilled labor and created a need for public education and labor laws (e.g., child labor laws).
  • Emergence of an entrepreneurial class: Bell, Edison, Tesla as iconic figures.

The Production Era: 1850–1930

  • Henry Ford and assembly-line innovations advanced internal processes in factories.
  • Focus shifted from external processes to improving internal efficiency.
  • Emergence of professional managers to run operations (management class).
  • This managerial shift extended into government structures as well.

The Marketing Era: 1930–?

  • Aligns with the Great Depression: firms focused more on consumer needs and market opportunities.
  • After 1945, branding and consumer orientation became increasingly important.
  • Brand awareness and brand loyalty became significant competitive advantages.

The Relationship Era: 1990–?

  • Business becomes a longer-term, relationship-based process.
  • Customer loyalty is pursued through managed interactions across multiple touchpoints.
  • An era of connections: between businesses and customers, employers and employees, technology and manufacturing, and contractors.
  • Tom Peters and Robert Waterman contributed foundational ideas around flat management and managing chaos.

The Social Era: 2000–?

  • Organizations rely on networks and platforms to manage relationships.
  • Emergence of platform-based business models and algorithm-driven daily life.
  • The era emphasizes data-driven relationship management and social connectivity.

How to Make Sense of History

  • A collection of theories is used to explain business history and economic changes.
  • Some scholars argue for an entire academic discipline to describe the patterns of buying and selling.

Economics: A Social Science

  • Economics analyzes choices made by people and governments in allocating scarce resources.
  • Demand: The willingness and ability of buyers to purchase goods and services.
  • Supply: The willingness and ability of sellers to provide goods and services.
  • In notation:
    • Demand relation: QD=f(P,I,T,extotherfactors)Q_D = f(P, I, T, ext{other factors})
    • Supply relation: QS=g(P,extinputcosts,exttechnology,extotherfactors)Q_S = g(P, ext{input costs}, ext{technology}, ext{other factors})
  • Equilibrium occurs where demand equals supply: Q<em>D=Q</em>SQ<em>D = Q</em>S

Trickle-Down Economics and Debates

  • David Stockman criticized supply-side economics as a cover for trickle-down policies.
  • The horse-and-sparrow theory: “If you feed the horse enough oats, some will pass through to the road for the sparrows.”
  • John Kenneth Galbraith: Once you realize trickle-down economics doesn’t work, tax cuts for the rich redistribute income upward rather than creating universal wealth.
  • Ha-Joon Chang (Cambridge): Trickle-down economics critiques and debates about policy effectiveness.

Microeconomics and Macroeconomics

  • Microeconomics: The study of small economic units (individuals, families, businesses) and the forces of demand and supply.
  • Macroeconomics: The study of a nation’s overall economic issues, such as how an economy maintains and distributes resources and how government policies affect living standards.

Real-World Example: Bullocks World Famous Fish and Chips

  • A humorous or illustrative example from Yellowknife, Northwest Territories (satirical/real signage on page 26).
  • Reminds us of the cultural and geographic variety in economic activity and business branding.

Current Economic News Clips

  • Europe’s economy and ECB rate decisions as Europe faces recession risks.
  • The eurozone economy is described as limping along with persistent inflation concerns.
  • A question posed: What does the euro have to do with “me”? highlighting personal relevance.

The News Bits and Practical Reflections

  • The course highlights that business and profit can be understood beyond monetary terms, incorporating value, influence, and societal impact.
  • Acknowledges that the instructor adds historical time periods or theories beyond the textbook.
  • Lighthearted aside about fish and chips as an illustrative cultural touchpoint.

Capstone Reflections for This Week

  • What did we learn today? Emphasis on core concepts: definitions, eras, forces shaping business, and the economics lens (demand and supply).
  • The importance of linking theory to historical periods and real-world examples.

What’s Next: Reading and Quizzes

  • Reading for next week: Boone Chapter 4.
  • Don’t forget to complete the quiz on Friday.

News and Case Studies to Watch For

  • “In the news” sections highlight real-world business dynamics, office culture shifts (return-to-office movements), and AI regulation sentiment (e.g., 85% of Canadians want governments to regulate AI).
  • Case study reference: Newfoundland’s Crosbie Group pivot after losing a contract, illustrating resilience and strategic pivots in business.

Closing Thought: Needs vs. Wants

  • This week’s closing prompt: read stories that help distinguish needs from wants in business and consumer behavior, and reflect on how this distinction affects marketing, product strategy, and policy.

Reading for Next Week

  • Boone Chapter 4 (continue with economic and business history themes).
  • Reminder: complete Friday quiz.