GMGT 1010 Business And Society Review Notes for
GMGT1010 FINALS EXAM COMPLETE UPDATE
University of Manitoba
Lecture Notes
Detailed Notes on The Canadian Business System (Class 2)
Overview of the Canadian Business System
• Defines how society organizes its economic activities, involving:
o Business firms.
o Government.
o Labour.
o Financial markets and investors.
Capitalism in Canada
• Key Features:
1. Wage Labour: Workers sell their labor for wages.
2. Private Ownership: Ownership of means of production by individuals or
, enterprises.
3. Production for Profit: Goods and services are produced for exchange in
markets with profit as the goal.
• Different Types of Capitalism:
o Laissez-Faire Capitalism: Minimal government intervention, restricted to
essentials like police and fire protection.
o Stakeholder Capitalism: Balances shareholder and stakeholder needs (e.g.,
employees, customers, communities).
o Clean Capitalism: Considers social, economic, and ecological costs and
benefits, integrating externalities into market pricing.
Types of Business Firms
1. Sole Proprietorships:
o Owned and operated by a single individual.
o Advantage: Full control over operations.
o Disadvantage: Unlimited personal liability.
2. Partnerships:
o Owned by two or more individuals.
o Advantage: Shared resources and expertise.
, o Disadvantage: Shared liability.
3. Corporations:
o Separate legal entities created through incorporation.
o Types of Corporations:
▪ Privately-Owned:
▪ Owned by individuals or families.
▪ Advantage: No shareholders to answer to.
▪ Disadvantage: Limited ability to raise capital.
▪ Example: Cargill.
▪ Publicly-Traded:
▪ Shares are available on the stock market.
▪ Advantage: Easier capital raising.
▪ Disadvantage: Accountability to shareholders.
▪ Example: Apple.
▪ Crown Corporations:
▪ Owned by federal or provincial governments but operate like
businesses.
▪ Example: CBC, Via Rail.
4. Other Organizations:
o Not-for-Profits: Surplus revenues are used to further their mission.
▪ Examples: Humane Society, Doctors Without Borders.
o Cooperatives: Owned and operated by a group of individuals.
▪ Examples: Mountain Equipment Co-op, Home Hardware.
Governance of Corporations
• Owners:
o Direct: Shareholders.
o Indirect: Mutual fund holders.
• Board of Directors:
o Elected by shareholders.
o Responsible for legal and fiduciary obligations.
• Managers:
o Hired by the board.
o Oversee day-to-day operations.
Attitudes Toward Business Firms
1. Legitimacy:
o Reflects public belief in the appropriateness of the business system to
supply goods and services.
2. Social License:
, o Privilege to operate with minimal formal restrictions by maintaining public
trust and meeting stakeholder expectations.
Summary
• The Canadian business system is rooted in capitalism with varying forms of
business ownership.
• The system's success depends on its legitimacy and ability to maintain a social license
to operate.
• It includes diverse forms of business entities like corporations, cooperatives, and not-
for- profits.
• Government and stakeholder relationships are integral to its sustainability.
Detailed Notes on Canadian Capitalism (Class 3)
Key Assumptions of Capitalism
1. Private Property:
o Legal right to own and use economic goods (e.g., land, buildings).
o Discussion: Should some goods (e.g., healthcare, water) be publicly
owned instead of private?
2. Individualism:
o Emphasis on individuals as the primary decision-makers in society.
o Assumes individuals are inherently decent and rational.
o Global Context: Countries like the USA, Canada, and Australia are
highly individualistic, while Guatemala and South Korea are less so.
3. Economic Freedom:
o Few restrictions on business activities, allowing for voluntary entry,
contracts, and location freedom.
o Measures:
▪ Property rights.
▪ Regulation and taxation levels.
▪ Foreign investment policies.
▪ Inflation controls and wage regulations.
4. Equality of Opportunity:
GMGT1010 FINALS EXAM COMPLETE UPDATE
University of Manitoba
Lecture Notes
Detailed Notes on The Canadian Business System (Class 2)
Overview of the Canadian Business System
• Defines how society organizes its economic activities, involving:
o Business firms.
o Government.
o Labour.
o Financial markets and investors.
Capitalism in Canada
• Key Features:
1. Wage Labour: Workers sell their labor for wages.
2. Private Ownership: Ownership of means of production by individuals or
, enterprises.
3. Production for Profit: Goods and services are produced for exchange in
markets with profit as the goal.
• Different Types of Capitalism:
o Laissez-Faire Capitalism: Minimal government intervention, restricted to
essentials like police and fire protection.
o Stakeholder Capitalism: Balances shareholder and stakeholder needs (e.g.,
employees, customers, communities).
o Clean Capitalism: Considers social, economic, and ecological costs and
benefits, integrating externalities into market pricing.
Types of Business Firms
1. Sole Proprietorships:
o Owned and operated by a single individual.
o Advantage: Full control over operations.
o Disadvantage: Unlimited personal liability.
2. Partnerships:
o Owned by two or more individuals.
o Advantage: Shared resources and expertise.
, o Disadvantage: Shared liability.
3. Corporations:
o Separate legal entities created through incorporation.
o Types of Corporations:
▪ Privately-Owned:
▪ Owned by individuals or families.
▪ Advantage: No shareholders to answer to.
▪ Disadvantage: Limited ability to raise capital.
▪ Example: Cargill.
▪ Publicly-Traded:
▪ Shares are available on the stock market.
▪ Advantage: Easier capital raising.
▪ Disadvantage: Accountability to shareholders.
▪ Example: Apple.
▪ Crown Corporations:
▪ Owned by federal or provincial governments but operate like
businesses.
▪ Example: CBC, Via Rail.
4. Other Organizations:
o Not-for-Profits: Surplus revenues are used to further their mission.
▪ Examples: Humane Society, Doctors Without Borders.
o Cooperatives: Owned and operated by a group of individuals.
▪ Examples: Mountain Equipment Co-op, Home Hardware.
Governance of Corporations
• Owners:
o Direct: Shareholders.
o Indirect: Mutual fund holders.
• Board of Directors:
o Elected by shareholders.
o Responsible for legal and fiduciary obligations.
• Managers:
o Hired by the board.
o Oversee day-to-day operations.
Attitudes Toward Business Firms
1. Legitimacy:
o Reflects public belief in the appropriateness of the business system to
supply goods and services.
2. Social License:
, o Privilege to operate with minimal formal restrictions by maintaining public
trust and meeting stakeholder expectations.
Summary
• The Canadian business system is rooted in capitalism with varying forms of
business ownership.
• The system's success depends on its legitimacy and ability to maintain a social license
to operate.
• It includes diverse forms of business entities like corporations, cooperatives, and not-
for- profits.
• Government and stakeholder relationships are integral to its sustainability.
Detailed Notes on Canadian Capitalism (Class 3)
Key Assumptions of Capitalism
1. Private Property:
o Legal right to own and use economic goods (e.g., land, buildings).
o Discussion: Should some goods (e.g., healthcare, water) be publicly
owned instead of private?
2. Individualism:
o Emphasis on individuals as the primary decision-makers in society.
o Assumes individuals are inherently decent and rational.
o Global Context: Countries like the USA, Canada, and Australia are
highly individualistic, while Guatemala and South Korea are less so.
3. Economic Freedom:
o Few restrictions on business activities, allowing for voluntary entry,
contracts, and location freedom.
o Measures:
▪ Property rights.
▪ Regulation and taxation levels.
▪ Foreign investment policies.
▪ Inflation controls and wage regulations.
4. Equality of Opportunity:
