MGTA05H3 Lecture Notes - Lecture 1: Profit Motive
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MGTA05H3 Full Course Notes
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Business: (fundamental definition) organized effort to create or provide something that people want and will pay for in order to make a profit (prime motivation) Is the key reason for a business to exist (desire to get more money) However, (cid:374)ot all orga(cid:374)izatio(cid:374)s are busi(cid:374)ess a(cid:374)d are therefore (cid:862)(cid:374)ot for profit(cid:863) orga(cid:374)izatio(cid:374)s. Hospitals, universities, churches----- provide services but are not intended to gain profit. Profit motive: people give up their time, energy and money if there is incentive to do so. Profit- the chance for owners to create wealth- this is the incentive (intent) Adam smith: (father of liberalism) (cid:862)capitalist(cid:863) thought encouraging people is important to become rich. Leave businessmen, entrepreneurs alone; let them become more rich; Karl marx: (father of communism) thought profit was a symbol of exploitation (thought the opposite); government should control and oversee the production of goods/services.
