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Business activity provides the means for improving a nation’s standard of living
At the heart of every business there is exchange between the buyer and seller
o The buyer hopes to gain a good or service in exchange for money
o The seller hopes to gain a profit – a main indicator of business success
Profits serve as incentives for entrepreneurs to conduct business activity
Profits are also a primary source of funds needed to expand operations
Profits are a central point of focus – without them business can’t survive or grow
Not for Profit Organization: An organization whose primary aims are public service, not return a
profit to their owners
Not for profit organizations are business like associations which have primary goals
other than returning profits to their owners
These organizations operate in both public and private sector, and need to raise money
to operate and to achieve their social goals
Private sector Not-for-Profits include:
o Museums
o Libraries
o Trade Associations
Public sector Not-for-Profits include:
o Government agencies
o Political parties
o Labour Unions
Not-for Profits receive funding from both government sources and private sources,
including donations
NFP’s raise more than $112 billion in revenues each year and employ more than 2
million people, and are commonly exempt from federal and provincial taxes
Managers of NFP focus on goals other than making profits, but face many of same
challenges as for-profit businesses
Without funding, organizations cannot do research, obtain raw materials or provide
services
Some NFP’s sell merchandise or set up profit-making businesses to sell goods and
services that people are willing and able to pay for
Merchandising programs and fundraising campaigns need managers who have effective
business skills and experience
Factors of Production: Four basic units for effective economic operation – natural resources,
capital, human resources (labour) and entrepreneurship
Natural Resources: All production inputs that are useful in their natural states, including
agricultural land, building sites and forests
Natural resources are basic inputs required in any economic system and are the genesis
of wealth creation
Capital: Production inputs consisting of tools, technology, information and physical facilities
Human Resources: Production inputs consisting of anyone who works, including both the
physical labour and the intellectual inputs contributed by workers
Human resources include anyone who works, from a CEO of a company to a self-
employed editor
Effective, well trained employees can provide firms with a significant competitive edge
Competitive, effective human resources can be a company’s best asset
Entrepreneurship: The willingness to take risks to create and operate a business
All businesses operate within a large economic system of rules and constraints that
direct how goods are:
o Produced
o Consumed
o Distributed
PES minimizes government interference in business activity
Businesses that are skillful at satisfying customers can gain access to necessary FOP’s
and earn profits
Capitalism: An economic system that rewards firms for their ability to perceive and serve the
needs and demands of consumers, also called the private enterprise system
People who can see marketplace opportunities are able to use their capital, time and
talents to pursue these opportunities for profits
Willingness of people to start new ventures leads to economic growth and keeps
pressure on companies to satisfy consumer needs
Of all new businesses created in Canada, 99 percent are small businesses, and
thousands of new businesses start every year
Entrepreneurships leads to:
o Job Creation
o Innovation
o Selling products
Small companies are more flexible than large companies, so can change products and
processes quicker than large corporations
This means small firms often innovate more than large firms
Large companies are hoping to encourage entrepreneurial thinking amongst employees
to gain
o Enhanced flexibility,
o Improved innovation
o New market opportunities