MGMT
UNIT 01 – WORLD OF BUSINESS AND ECONOMICS
1. Why Study Business?
Studying business is useful in many ways:
Choosing a Career – Learning business helps you understand different jobs and industries. You also learn how to start your own business if you want.
Improving Your Career – You learn skills that help you get promoted or manage your own company. Important skills include:
Interpersonal skills: Working well with people
Analytical skills: Solving problems
Technical skills: Using technology or tools
Conceptual skills: Understanding the big picture
Being a Smart Consumer and Investor – Understanding how businesses work helps you make better buying choices and smarter money decisions.
Being an Influential Community Member – You can choose to support businesses that match your values, making a positive impact on your community.
Key takeaway: Learning business can lead to better jobs, higher pay, and stronger communities.
2. What is a Business?
A business is an organization that tries to make profit by selling goods or services.
Goods: Things you can touch (like clothes or phones)
Services: Things you can’t touch (like haircuts or car repairs)
Profit: Money a business makes after paying all its costs.
Businesses exist in all parts of the economy:
Private sector → regular businesses
Public sector → government
Non-profit sector → charities
Resources a business needs:
Material resources: Buildings, machines, raw materials
Human resources: Workers
Financial resources: Money to run the business
Information: Data about how well the business is doing
3. How Businesses Help Society
Goods and Services: Businesses create products that people want or need.
Example: Some people want a luxury car with all features, some just want a simple car.
Employment: Businesses hire people to make and sell their products.
Improving Quality of Life:
Pay taxes that support schools, roads, hospitals
Donate to charities or help communities
Boost the economy by creating jobs
Key takeaway: Businesses improve our daily life, but they need to be responsible and care about society.
4. Concerns About Business
Businesses can also have negative effects:
Health & Safety: Workers may be in risky environments; products may be unsafe.
Environment: Factories can pollute air, water, and land if not careful.
Social Impact:
Can cause traffic, overcrowding, or change a community’s culture
Layoffs or low pay hurt families
Big questions for the future:
How to create more good jobs?
How to grow businesses without hurting the environment?
How can small businesses compete globally?
5. Factors That Affect Businesses
Businesses don’t work alone—they’re affected by five main factors:
Economic factors: How strong the economy is (jobs, profits, growth)
Competitive factors: Other businesses selling similar products
Global factors: International competition and trade
Technology: New tech changes how businesses make and sell products
Social factors: Changes in population, age, culture, or family types
Key takeaway: Understanding these helps businesses make smarter decisions.
6. Economic Systems
Economic system: How a country produces, owns, and distributes wealth.
Types of economies:
Capitalist / Free Market: Individuals own businesses, supply and demand sets prices
Adam Smith called the “invisible hand”: when people try to help themselves, it can help society too
Mixed Economy: Combines private businesses with government control (Canada)
Socialist Economy: Government owns important industries
Communist / Command Economy: Government controls everything
Four economic questions every system answers:
What goods and services will be produced?
How will they be produced?
Who gets them?
Who owns and controls resources?
Key takeaway: Economic systems affect jobs, income, product prices, and what we can buy.
7. Degrees of Competition
Perfect competition: Many sellers & buyers, price decided by supply and demand; rare today (some farm products).
Monopolistic competition: Many sellers, small differences in products (e.g., clothing brands).
Oligopoly: Few big sellers, expensive to start, sometimes use game theory to set prices (e.g., cars, airlines).
Monopoly: Only one seller; high barriers for others to enter; sometimes government regulated (e.g., electricity).
Key takeaway: Competition affects product choices, prices, and business strategy.
8. Supply and Demand
Supply: How much of a product businesses make
Demand: How much people want to buy it
Equilibrium / Market price: The price where supply = demand
Example: If prices drop, people buy more (demand rises), but sellers may make less (supply drops).
9. Measuring the Economy
Business Cycle: Shows economic ups & downs:
Expansion → economy grows
Contraction → economy shrinks
Recession → economy shrinks for 6 months+, jobs lost
GDP (Gross Domestic Product): Total value of goods & services made in a country in a year
Higher GDP = more jobs & income
Unemployment Rate: % of people who want jobs but can’t find them
Inflation: Prices rising over time
Low inflation (~2%) = good
High inflation = money loses value
Deflation: Prices drop
Might sound good, but usually means economy is shrinking
CPI (Consumer Price Index): Measures how prices change for everyday goods
Key takeaway: These numbers show how healthy the economy is and help plan for the future.
Unit 2 – Ethics, Social Responsibility, and International Business (Lesson 2: Being Ethical and Socially Responsible)
1. What is Ethics in Business?
Ethics = knowing what’s right and wrong, and doing the right thing.
Business ethics = using moral standards when making business decisions.
Why it’s tricky in business:
People face pressure to make money quickly.
Some decisions affect many people, making it hard to know what’s truly “right.”
Three main areas of business ethics:
Competing fairly and honestly
Avoiding conflicts of interest
Being transparent
2. Competing Fairly and Honestly
Businesses must follow the law and treat people fairly.
Example of unethical behaviour:
Juan Cuya tricked Spanish-speaking customers into paying for fake products. He got prison time.
Example of ethical company:
Deere & Company expects employees to deal fairly with everyone and not use manipulation or hidden info.
Key takeaway: Being honest and fair is not just about following the law—it’s about doing what’s right, even when no one is watching.
3. Avoiding Conflicts of Interest
Conflict of interest = when a person benefits personally instead of doing what’s best for the company.
Examples:
Accepting bribes to make a business decision
Taking credit for someone else’s work
Pressuring coworkers to act unethically
Unethical behaviour hurts the company and investors, because they need to trust the company is honest.
Rule of thumb: If something could unfairly influence a decision, it’s probably unethical.
4. Being Transparent
Transparency = sharing important information openly with employees, investors, customers, and the public.
Transparency discourages cheating, lying, or hiding conflicts.
Example: Volkswagen falsely advertised “clean diesel” cars; this led to massive fines because they were dishonest.
Example: Companies like BMO and Suncor use social responsibility audits to check suppliers and ensure ethical practices.
Key takeaway: Transparency makes businesses accountable and helps everyone make better decisions.
5. Factors That Affect Ethics
People don’t always make ethical decisions, even if they know right from wrong. These factors include:
Individual factors: personal knowledge, values, and goals
Example: A new accountant accidentally shares confidential info because they didn’t know the rules.
Social factors: laws, culture, and norms
Example: Someone from another country gives a “gift” that counts as a bribe in Canada.
Opportunity: competitive environment, supervision, enforcement
Example: A cashier gives too much change because the manager doesn’t monitor them.
Key takeaway: Understanding these factors helps people avoid unethical decisions.
6. Ethical Grey Areas
Some situations aren’t clearly right or wrong.
Example: You find $100 in a lost envelope. Keep it or try to find the owner?
Tip: Think about laws, fairness, honesty, and how your decision affects others.
7. Encouraging Ethical Behaviour in Organizations
Businesses don’t just rely on employees to be ethical—they actively promote ethics through:
a) Government
Makes rules and laws, like Bill 198 / C-SOX for financial transparency.
Laws help, but people can still try to cheat.
b) Trade Associations
Groups within industries set ethical guidelines for members.
Example: Pharma associations limit gifts to doctors.
c) Companies Themselves
Businesses can promote ethics by:
Leadership commitment – managers set the example
Code of ethics – written rules employees follow
Ethics officer – person in charge of ethics
Whistle-blower protection – employees can report problems safely
Key takeaway: Companies that actively support ethical behaviour have fewer problems and stronger reputations.
8. Social Responsibility
Social responsibility = recognizing how business decisions affect society.
There are Two models of responsibility:
Economic Model:
Business exists mainly to make money, create jobs, and sell needed products.
Society benefits indirectly.
Management focuses on profit first.
Socioeconomic Model:
Business has responsibility to shareholders, employees, customers, suppliers, and the public.
Companies should balance profit with social good.
Example: Donating to charity, reducing environmental impact, or supporting employees.
Most companies fall somewhere in the middle, balancing profit and social responsibility.
9. Responsibility to Stakeholders
Stakeholders = anyone who is affected by a business:
Investors → care about profits
Employees → care about pay, safety, jobs
Customers → care about quality and price
Consumers → care about usability
Local community → care about economic, social, and environmental impact
Government → cares about taxes and regulations
Key takeaway: Businesses must consider the effects of decisions on all stakeholders and try to balance interests.
10. Protecting Consumer Rights
Historically, caveat emptor = “buyer beware.”
Today, consumers have four key rights:
Right to safety → products must be safe
Right to be informed → must know all info about products
Right to choose → access to many options
Right to be heard → complaints must be listened to
Example: Companies now provide detailed manuals, 24-hour customer service, and review sites for feedback.
11. Concern for Employees
Businesses should provide:
Equal opportunity for all qualified employees
Fair pay based on ability
Safe working conditions
Programs for work-life balance
Laws in Canada:
Canadian Human Rights Act (1977) → no discrimination
Employment Equity Act (1986) → equal opportunities for women, minorities, disabled, Indigenous people
Companies like Google also go beyond laws by offering perks, parental leave, and diversity programs.
Anti-bullying and harassment programs are important to create a safe, supportive workplace.
12. Environmental Responsibility & Green Marketing
Businesses affect water, land, and air through production and waste.
Environmental protection = reducing pollution through laws, voluntary compliance, and monitoring.
Sustainability = using resources in a way that doesn’t harm the ability of future generations to meet their needs.
Green Marketing
Green marketing = promoting products or services as environmentally friendly.
It can involve:
Using eco-friendly materials in products or packaging
Producing goods in ways that reduce energy or waste
Marketing products with an environmental message to appeal to eco-conscious consumers
Example: Freshii uses biodegradable packaging and promotes “Mission Green” to show they care about the environment.
Sustainability strategies can also include:
Product design improvements → less energy, less pollution, less waste
Facility and vehicle improvements → energy efficiency, alternative energy, less waste
Community outreach → recycling campaigns, environmental cleanup
Why it matters:
Helps society and the environment
Can save costs long-term
Improves company reputation and appeals to eco-conscious customers
Unit 2, Lesson 3 – Exploring Global Business Pt.2
Global Business Basics
Global business involves all activities where goods, services, or resources cross country borders.
A company is engaged in international business when it buys parts or sells products in a foreign country.
Benefits of global business:
Companies can make more profit
Consumers get more choice and lower prices
Access to new cultural experiences
Challenges:
Political and economic differences
Currency issues
Trade restrictions
Political & Economic Influence
Trade is very important to a country’s economy; ~50% of what is manufactured is exported.
Trade imbalances happen when a country imports more than it exports or vice versa; these can affect the economy.
Government policies in domestic and foreign countries impact trade opportunities.
Businesses must consider opportunities and threats when creating a global strategy.
Economic Infrastructure
Infrastructure = roads, ports, communications, and technology that support business.
Strong infrastructure makes it easier to do business in a country.
Strong economies mean higher purchasing power for consumers.
Currency differences affect how profitable international trade can be.
3-1: Basis and Benefits of International Trade
Some countries are naturally better at producing certain goods due to:
Natural resources
Labour supply
Cultural or technological expertise
Absolute advantage: A country can produce a good better than any other country.
Example: Canada and wheat production
Comparative advantage: A country produces a product more efficiently than other products it could produce.
Example: Canada in energy, mining, financial services
Trade allows countries to:
Specialize in what they produce efficiently
Exchange goods they cannot produce efficiently
3-1a: Exporting (Selling to Other Countries)
Exporting = selling products or raw materials to other countries.
Benefits of exporting:
More customers → more jobs & income
Economic growth (e.g., China, Brazil)
Promotes technology exports (e.g., aerospace, clean tech in Canada)
3-1b: Importing (Buying from Other Countries)
Importing = buying products from other countries.
Why importing is needed:
Access to resources not available domestically
Lower costs (other countries may produce goods cheaper)
More variety for consumers (e.g., wines from France, Italy)
Allows countries to focus on high-value industries
Trade deficit: Occurs when imports > exports.
3-3: Currency Exchange & Trade
Trade originally relied on barter; now, countries use money/currency.
Foreign exchange: System to trade one currency for another.
Exchange rates affected by:
Interest rates
Inflation
Economic strength
Imports/exports
Currency devaluation: Lowering a country’s currency to boost exports.
Changes in currency affect:
Prices of imported/exported goods
Trade volumes
Employment, inflation, economic growth
3-5: Trade Restrictions
Countries sometimes limit trade to protect domestic interests.
Types of restrictions:
Tariffs: Taxes on imports
Revenue tariffs = generate government income (e.g., Scotch whisky in Canada)
Protective tariffs = protect domestic industries
Quotas: Limit on quantity of imports
Embargo: Total ban on trading with a country (e.g., Canada vs Iran & North Korea)
Cultural barriers: Customer perceptions can affect product acceptance
Reasons for restrictions:
Protect new or weak industries
Protect jobs
Protect citizens’ health
Retaliate against unfair trade practices
Protect national security
Consequences:
Higher prices for consumers
Fewer choices
Resources used inefficiently
Possible international tension
3-7: International Trade & Organizations
WTO (World Trade Organization):
Opens markets, reduces trade barriers, mediates disputes
IMF (International Monetary Fund):
Stabilizes economies, helps with currency/financial crises
World Bank:
Provides loans/grants to developing countries, builds infrastructure, reduces poverty
Goal of all three: Promote global economic development
3-9: Economic Communities (Regional Integration)
Economic communities = countries working together to reduce trade barriers.
Example: USMCA (formerly NAFTA)
Benefits:
Increased trade & investment
Job creation
Better prices & selection for consumers
Criticisms:
Lower wages/labour standards
Environmental concerns
National sovereignty issues
Effects on agriculture
Trend: Regional economic integration is increasing globally.
3-11: Methods of Entering International Business
1. Exporting & Importing
Low risk, low control
Uses letters of credit and bills of lading to safely handle payments and shipments
2. Contractual Agreements
Licensing
A company allows another company to use its brand, design, or product in exchange for a fee. The licensor doesn’t manage daily operations.
Control: limited
Risk: low
Example: Yoplait’s brand used by a Canadian company to make/sell the yogurt.
Franchising
A business lets someone open a location of their brand and follow a specific system (same menu, rules, training). The franchisor oversees quality but doesn’t run each store.
Control: higher
Risk: moderate
Example: McDonald’s or Subway restaurants.
Subcontracting
A company hires another business to complete a specific task—often manufacturing. The main company sets standards but the work is done elsewhere.
Control: high
Risk: higher because mistakes affect the brand.
Example: Apple hiring factories instead of owning them.
3. International Direct Investment
Most control, most risk
Includes:
Acquisition: Buying a foreign company (Marriott & Delta Hotels)
Joint Venture: Partnership to achieve a specific goal (shared company)
Strategic Alliance: Partnership for competitive advantage (Toyota & GM NUMMI)
Direct investment helps companies fully control operations but requires large investment