Canadian Business Macroenvironment & Capitalism

• The macroenvironment of Canadian business has evolved through several time periods:

Historical Time Periods in Canadian Business

• Colonial: Focused on agricultural production.
• Industrial Revolution: Marked by the rise of the factory system and mass production.
• Industrial Entrepreneurs: Characterized by risk-takers, investors, and technological advancements.
• Production: Focused on assembly lines to increase production speed and volume
• Marketing: Adoption of consumer-oriented strategies, tailoring marketing to individual preferences.
• Relationship: Development of strategic alliances between customers and suppliers.

Fundamentals of Capitalism

• Capitalism operates within a market system that is generally less costly and more responsive than centralized, government-operated systems.
• Businesses are incentivized to innovate quickly to meet market needs.
• A strong ethical framework is essential for capitalism to function without excessive government intervention.

Eight Pillars of Capitalism

• The Right of Private Property: Legal entitlement to own and use economic goods like land and buildings.
• Intellectual property rights include patents, copyrights, trademarks, industrial designs, etc.
• Private property leads to pride of ownership, better maintenance, security, satisfaction, and respect for others' property rights.
• Membership Rights extend to both private property and membership rights.

Indigenous Peoples and Property Rights

• Issues surrounding Indigenous property rights.
• UN Declaration on the Rights of Indigenous Peoples acknowledges these rights.
• Aboriginal Title: Inherent rights of Indigenous peoples to land or territory.
• There's a significant backlog of unresolved rights and claims.

Individualism and Economic Freedom

• Economic Freedom: A business system with minimal restrictions on activities.
• Aspects of economic freedom: property rights, taxation, government intervention, international exchange, foreign investment, money and inflation, and wage and price controls.

Division of Labor

• Division of labor: Individuals and businesses specialize in specific tasks, contributing to the overall production of goods and services.
• Valuing the collective good fosters innovation.
• Ethical Implications:
• A communal view emphasizes collaborative success.
• New collective organizations respond to shared needs.
• Businesses may sometimes disempower employees.

Economic Freedom

• Economic freedom emphasizes the individual as the primary decision-maker, assuming inherent rationality and decency.
• Agency: Individuals' ability to independently make choices and effect change.

Equality of Opportunity

• Gender equality: Equal rights and opportunities for all genders and sexualities.
• Discrimination against gender-diverse individuals, particularly trans individuals, significantly impacts access to economic, health, education, and political equality of opportunities.

Competition

• Competition: Rival sellers seek to provide goods and services to numerous buyers.
• Competition aims to ensure corporations provide desired goods and services.
• Ideally results in lower costs, reduced waste, and increased efficiency.
• Ethical implications: -- Oligopolies or monopolies can arise.
• • Market entry can be challenging for some firms.
• • Corporations might engage in anti-competitive practices.

Profits

• Profits: The excess of revenues over expenses, closely linked to competition.
• Corporations compete to maximize profits.
• Ethical implications:
• • Profits are sometimes viewed negatively or as immoral.
• • Taxation and inflation redistribute profits.
• • Profit doesn't always act as a regulator.
• Three ways to increase profits: increase sales volume at the same price, sell at a higher price, or improve production efficiency.

The Work Ethic

• Work Ethic: A moral code that values work as desirable, natural, and inherently good.
• Assumes unemployment is a temporary setback or individual deficiency.
• Ethical implications:
• • Government programs and societal expectations influence attitudes toward work.
• • Individuals expect more support from governments and corporations.
• • Consumer satisfaction is a primary driver.
• Generational differences in attitudes toward work exist.
• Millennials and Gen Z tend to be team players who are quick, smart, respectful of diversity, and concerned about the environment, justice, innovation, and integrity.

Consumer Sovereignty

• Consumer Sovereignty: Consumers have power over producers through their purchasing decisions.
• The more competitive the market, the more consumer power there is.
• Ethical implications:
• • Consumers may not be aware of all available alternatives.
• • Advertising shapes consumer preferences.
• • Producers can ignore consumer wishes.
• Marketing aims to understand and shape consumer behavior.
• Boycott: Abstaining from dealing with an entity as a form of protest.

The Role of Government

• Role of Government: Provides a legal framework for contracts and regulates/subsidizes industries.
• Government protects business interests through freer trade and shielding Canadian industry via tariffs, quotas, and regulations.
• Government protects society's interests, including low-income individuals, equity-deserving groups, and the environment.
• Consumer protection legislation is enacted.
• Corporations collect and pay taxes.
• Deregulation: Reducing government influence on the economy for a more efficient market.
• Privatization: Strengthening the market at the expense of the state.
• Self-Regulation: Regulation imposed by corporations or industries, not directly by the government or market forces.
• Self-regulatory Organizations (SROs): Industry or professional groups delegated regulatory functions.
• Private (Civil) Regulation: Standards set by non-profit, independent organizations for responsible business practices.
• Third-party certification: Approval by an organization independent of government and business.
• Trust -> Legitimacy and Social License to Operate

Overview of the evolution of the Canadian business macroenvironment through different periods, from colonial times to the relationship era. Fundamentals of capitalism, advantages of market systems and the importance of ethical framework are explored.