If you purchased this book outside the United States or Canada, please note that it has been imported without permission from the publisher or author. To obtain permission(s) to use material from this work, submit a written request to Pearson Canada Inc., Permissions Department, 26 Prince Andrew Place, Don Mills, Ontario, M3C 2T8, or fax your request to or submit a request to Consent Requests at www.pearsoncanada.ca.
05 THE GLOBAL CONTEXT OF BUSINESS 97 Not My Cup of Tea 97
THE BUSINESS OF MANAGING 120
06 MANAGING THE BUSINESS ENTERPRISE 121
Google Keeps Growing 121
04 ENTREPRENEURSHIP, SMALL BUSINESS, AND NEW VENTURE CREATION 73
LO-6 Management and company culture 138 Communication of the culture and management of change 139 Summary of learning objectives 140.
07 ORGANIZING THE BUSINESS ENTERPRISE 147
Time to Reorganize! 147
08 MANAGING HUMAN RESOURCES AND LABOUR RELATIONS 169
09 MOTIVATING, SATISFYING, AND LEADING EMPLOYEES 197
MANAGING OPERATIONS AND INFORMATION 228
10 OPERATIONS MANAGEMENT, PRODUCTIVITY, AND QUALITY 229
11 UNDERSTANDING ACCOUNTING 255 Searching for Stolen Maple Syrup: Accounting for
PRINCIPLES OF MARKETING 290
12 UNDERSTANDING MARKETING PRINCIPLES AND DEVELOPING
P&G Marketing: Dealing with a Shrinking Middle Class 291
13 PRICING, PROMOTING, AND DISTRIBUTING PRODUCTS 317
MANAGING FINANCIAL ISSUES 342
14 MONEY AND BANKING 343
Canadian Mortgages: Bulls, Bears, and Banks 343
15 FINANCIAL DECISIONS AND RISK MANAGEMENT 365
Piles of Cash 365
To wear this hat effectively, you need to understand how to assess the value of what you are buying, your rights as a consumer, etc. Knowing how best to wear all these hats is what this book is about.
PREFACE
You will still need to know your roles and responsibilities, but you will also need to understand how to manage other people – how to motivate and reward them, how to lead them, how to deal with conflicts between them, and the legal lines. parameters that may affect how you treat them. One of them is this book, and the business information you will gain from reading it.
HELPING STUDENTS BUILD A SOLID BUSINESS KNOWLEDGE FOUNDATION
Tests and homework are required, but we hope you will complete this course with new knowledge and increased enthusiasm for the world of business. The fourth - The Greening of Business - analyzes the steps businesses take to be more environmentally friendly.
CHAPTER MATERIAL
END-OF-CHAPTER MATERIAL
END-OF-PART MATERIAL
SUPPLEMENTAL CONTENT
WHAT’S NEW IN THE EIGHTH CANADIAN EDITION?
Chapter 14—New information on plastic money (credit cards and debit cards), Canada's top banks and credit unions, and Big Mac Index statistics. Chapter 15—New information on financial planning, risk management with diversification, return on investment, time value of money, fantasy stock markets, mutual funds, and securities regulation.
SUPPLEMENTS
ADDITIONAL INSTRUCTOR RESOURCES
Armed with experience, training and product knowledge, he or she will support your assessment and adoption of any of the products, services and technologies outlined here to ensure that our offerings are tailored to your individual needs and the needs of your students. fit. . Answers are also provided for the Questions for Discussion at the end of the CBC and Business Today video cases in each of the five main sections of the text.
ACKNOWLEDGMENTS
Previously, he served as chairman of the department, but now devotes considerable energy to his role as International Business Exchange Coordinator. He has served in numerous administrative positions, including Chair of the Department of Business Administration (from 1982 to 1987 and from 1989 to 1994), and as Associate Dean for the Asper School of Business (from 1996 to 2005).
ABOUT THE AUTHORS
He previously served as head of the Department of Management and as director of the Center for Human Resource Management at Texas A&M. He has also served as president of the Southwest Chapter of the Academy of Management and on the board of directors of the Southern Management Association.
BUSINESS ESSENTIALS
INTRODUCING THE CONTEMPORARY BUSINESS WORLD
In order to get approval for the merger from Investment Canada, the new company agreed to keep Tim Hortons. Just three months before the merger was announced, Tim Hortons announced a strategic plan that included opening 300 new locations in the United States.
QUESTIONS FOR DISCUSSION
What are the advantages of the merger for Burger King?
The merger should help Tim Hortons achieve one of its long-term goals: increased market penetration in the giant United States. The merger would accelerate Tim Hortons' growth in the U.S. because its brand could benefit from Burger King's greater knowledge of regional U.S.
What kind of economic system is evident in Canada?
The CEO of Burger King would be CEO of the new company, and the CEO of Tim Hortons would serve as vice chairman. For the past decade, Tim Hortons has pursued a growth strategy by expanding into the United States.
Are the restrictions that were imposed on the merger by the Canadian government consistent with our economic
Also in December 2014, the Ontario Superior Court of Justice issued a final injunction approving the merger.
LO- 1 THE IDEA OF BUSINESS AND PROFIT
HOW WILL THIS HELP ME?
Each of these firms is a business - an organization that produces or sells goods or services in an effort to make a profit. NON-PROFIT ORGANIZATION An organization that provides goods and services to customers but does not seek to make a profit while doing so.
LO- 2 ECONOMIC SYSTEMS AROUND THE WORLD
Charities, educational institutions, hospitals, unions, and government agencies are examples of nonprofit organizations. Business principles are useful to these nonprofit organizations as they strive to achieve their service goals.
LABOUR
Chapter 1Understanding the Canadian Business System5 Many organizations in Canada are not trying to make a profit. These nonprofit organizations use the funds they generate from government grants or the sale of goods or services to provide services to the public.
CAPITAL
Are you thinking of successful companies like Netflix and CN, or less successful companies like Bombardier or Barrick Gold. Businesses produce most of the goods and services that we consume and they employ many of the working people in Canada.
ENTREPRENEURS
NATURAL RESOURCES
INFORMATION
Starbucks uses various factors of production, including labour (a Starbucks barista), entrepreneurs (CEO Howard Schultz), and natural resources (such as coffee beans)
AND NEW VENTURES ENTREPRENEURSHIP
Input and Output Markets A useful model for understanding how factors of production work in a pure market economy is shown in Figure 1.1.8 In an input market, firms buy resources from households, which then supply those resources. . In the production market, firms provide goods and services in response to demand from households.
COMMAND ECONOMIES
It is estimated that China produces 60 percent of the world's toys.6 It is also a huge market for many of the products that Canadian companies produce: chemicals, ores, grains and wood products. Ford Motor Co. for example, buys labor directly from households, which can also provide capital from accumulated savings in the form of stock purchases.
MARKET ECONOMIES
Changes are also taking place in communist Cuba, where more private initiative is encouraged and the role of the state is reduced in some sectors.7 Recent attempts to normalize relations between the US and Cuba may lead to even greater shifts towards the market. economy in Cuba. Individuals are free to work for Ford or another employer and invest in Ford stock or alternative forms of saving or consumption.
The People’s Republic of China has used a planned economic model for many years, but is now moving toward a mixed market
Government bailouts of Chrysler and GM in both Canada and the US meant that the government once again co-owned some business enterprises. The political basis of the free market economy is called capitalism, which allows private ownership of the factors of production and encourages entrepreneurship by offering profit as an incentive.
MIXED MARKET ECONOMIES
This process is in marked contrast to that of a command economy, in which individuals can be told where they can and cannot work, companies can be told what they can and cannot produce, and consumers can have little or no choice about what they buy or how. many pay for articles.
APP FOR THAT!
The Economist App Source: The Economist
Economics App Source: WAGmob
IB Smart Economics Source: IB Smart
A study by the Conference Board of Canada showed that deregulation (at the same time as privatization and increased competition) caused a sharp increase in productivity in sectors such as freight and airlines.11 But this trend has also slowed due to the 2008-2009 recession. sion. Deregulation means a reduction in the number of laws affecting business activity and in the powers of government enforcement agencies.
LO- 3 INTERACTIONS BETWEEN BUSINESS AND GOVERNMENT
GOVERNMENT AS A CUSTOMER
GOVERNMENT AS A COMPETITOR
GOVERNMENT AS REGULATOR
One highly visible recent case pitted the Competition Bureau against the Canadian Real Estate Association (CREA). In 2011, the Bureau also told the Toronto Real Estate Board (TREB) that its practices were anti-competitive because brokers were not allowed to share information over the Internet.
Hazardous products must have warning labels to protect con- sumers who use them
Keurig said the company needed to audit the quality of the “Keurig experience” and that the allegations were unfounded.18. Companies often complain that the Competition Bureau is too slow to make decisions and that it makes decisions that are unfriendly to business.
GOVERNMENT AS A PROVIDER OF ESSENTIAL SERVICES
There are many other government incentive programs, including municipal tax rebates for companies that locate in certain areas, design assistance programs, and waivers of tariffs on certain advanced technology production equipment. Government stimulus programs may or may not have the desired effect of stimulating the economy.
GOVERNMENT AS A TAXATION AGENT
Chapter 1 Understanding the Canadian Business System11 buyers and long-term loans to foreign buyers of Canadian products), Natural Resources Canada (which provides geological maps of potential Canadian mineral producing areas), and Statistics Canada (which provides data and analysis on almost every aspect of Canadian society). Some critics also argue that companies are too willing to accept government help - whether in the form of incentives or handouts - and that managers should place more emphasis on innovation and creativity so that companies can better cope with economic problems when they arise. such as they did so during the 2008-2009 recession.
GOVERNMENT AS A PROVIDER OF INCENTIVES AND FINANCIAL
For example, the Canadian Cancer Society and the Tobacco Institute present very different positions on cigarette smoking and cigarette advertising. For example, a company can launch an advertising campaign to get people to write to their MPs, MPPs or MLAs asking for admission -.
LO- 4 THE CANADIAN MARKET ECONOMY
Some business lobbyists have industry training, public relations experience, or a legal background. The Federal Lobbying Act requires lobbyists to register with the Commissioner of Lobbying so that it is clear which individuals are being paid for their lobbying activities.
THE LAWS OF SUPPLY AND DEMAND
They also conduct industry-relevant training programs and organize trade shows at which members showcase their products or services to potential customers. It also establishes rules on accountability and transparency and requires lobbyists to report detailed information about their communications with what is known as a Designated Public Office.
DEMAND AND SUPPLY SCHEDULES
TRADE ASSOCIATION An organization dedicated to promoting the interests and assisting the members of a particular industry. Chapter 1Understanding the Canadian Business System13 The quantity of goods demanded and the quantity of goods supplied are equal.
DEMAND AND SUPPLY CURVES
Conversely, if the pizzeria supplies only 800 pizzas, a shortage will occur because the quantity demanded will be greater than the quantity supplied. These items were then sold to scrap yards for cash.31 So are the quantities of pizzas requested and the quantities of pizzas delivered.
SURPLUSES AND SHORTAGES
The pizzeria will "lose" the extra money it could have made by producing 200 more pizzas. The economic activity of a single large country can have an influence on the price of commodities by increasing the demand for the commodity.
LO- 5 PRIVATE ENTERPRISE AND COMPETITION
Canada produces about 80 percent of the world's maple syrup, but the price fluctuates because the weather affects the available supply.28 The price of expensive truffles (an edible root) is also affected by the weather. The rapid increase in car sales in China has caused the price of palladium (used in car catalytic converters) to rise.
PERFECT COMPETITION
Although customers may pay more for pizzas because of the shortage, the restaurant will still earn lower profits than if it had made 1,000 pizzas. For example, as the price of stainless steel and aluminum increased in recent years, thieves began stealing items such as beer kegs, railroad baggage cars, railroad tracks, light poles, and highway guard rails.
Canada is the dominant supplier of maple syrup for the world market. But variable weather conditions can create conditions of
Prices recently fell from around $5,000 per pound to $2,000 per pound because good growing conditions led to large product harvests in 2014.29 China has also reduced its exports of so-called "rare earth" metals such as cerium, lanthanum and neodymium, and this has raised concerns about a supply shortage.30.
MONOPOLISTIC COMPETITION
OLIGOPOLY
AND SOCIAL MEDIA SOLUTIONS E-BUSINESS
MONOPOLY
LEARNING OBJECTIVES
LO-1 DEFINE THE NATURE OF CANADIAN BUSINESS AND IDENTIFY ITS MAIN GOALS
LO-2 DESCRIBE DIFFERENT TYPES OF GLOBAL ECONOMIC SYSTEMS ACCORDING TO THE MEANS BY WHICH THEY CONTROL THE FAC-
LO-3 DESCRIBE THE INTERACTIONS BETWEEN BUSINESS AND GOVERN- MENT IN CANADA
Producers in various industries in Canada operate under a system called supply management, which has some of the features of:
LO-4 SHOW HOW DEMAND AND SUPPLY AFFECT RESOURCE DISTRIBU- TION IN CANADA
LO-5 IDENTIFY THE ELEMENTS OF PRIVATE ENTERPRISE, AND EXPLAIN THE VARIOUS DEGREES OF COMPETITION IN THE CANADIAN
APPLICATION EXERCISES
QUESTIONS AND EXERCISES
QUESTIONS FOR ANALYSIS
BUILDING YOUR BUSINESS SKILLS
ANALYZING THE PRICE OF DOING BUSINESS
Before discussing the situation with your group, and from the perspective of your assigned role, decide which of the three options is the best choice. Bring your group together and in turn reveal each member's comments about the best choice of the three options.
EXERCISING YOUR ETHICS
However, you have become concerned because one of your competitors has just announced that it is reducing membership fees by $10 per month for each of the three membership categories. Residents enjoy the peaceful nature of the area and are concerned about heavy freight traffic once the plant is up and running.
MAKING THE RIGHT DECISION
Increased supply has been the biggest factor in the recent sharp decline in oil prices (from around $110 per barrel in June 2014 to around $53 per barrel in April 2015). This affects the amount of oil produced and contributes to either increased or decreased supply in the world.
WHERE ARE GASOLINE PRICES HEADED?
It said global oil production had peaked and would decline rapidly, causing a major shortage in the amount of oil available. Top oil industry executives say there is a limit to the amount of oil that can be produced annually (about 100 million barrels per day).
BUSINESS CASE 1
In the United States during the same period, prices fell from $3.75 per gallon to just $1.93 per gallon. But there is an estimated 330,000 tcf of methane hydrates in the United States, enough to last 3,000 years.
THE EARLY YEARS
Chapter 1 Understanding the Canadian business system21 In this appendix, we summarize the broad outlines of the development. A more detailed discussion of the evolution of Canadian business activity is available online in MyBizLab.
THE FACTORY SYSTEM AND THE INDUSTRIAL REVOLUTION
THE ENTREPRENEURIAL ERA
THE PRODUCTION ERA
THE SALES AND MARKETING ERAS
THE FINANCE ERA
THE GLOBAL ERA
THE INTERNET ERA
- What are the biggest challenges to long-term success and profitability for Loblaws, Sobeys, and Metro?
- The three main players in the Canadian grocery market each operate under various brands. Why do you think they
- What are the main challenges for suppliers as the industry continues to consolidate?
- How do the external factors other than competition (econ- omy, technology, socio-cultural, political–legal) impact the
He said lower fuel prices had led to increased consumer spending at Metro supermarkets over the past six months. The external environment plays a key role in the potential profitability of supermarket chains and the suppliers that provide the products.
LO- 1 ORGANIZATIONAL BOUNDARIES AND ENVIRONMENTS
Large organizations such as Bauer Performance Sports Limited (which has a 52 percent share of the global hockey equipment market) must cope with external factors beyond their control, such as competitive actions from companies such as Reebok and Easton, and must also to stay. the technological race for new composite sticks. The company must continuously stay ahead of the technological race with its competitors in products such as com-.
Ethical and global issues will be discussed in detail in Chapters 3 and 5, respectively, so they are discussed here only because they directly relate to other areas in this chapter.
LO- 2 THE ECONOMIC ENVIRONMENT
AGGREGATE OUTPUT AND THE STANDARD OF LIVING
The real growth rate of GDP - the growth rate of GDP adjusted for inflation and changes in the value of the country's currency - is what counts. If the growth rate of GDP exceeds the rate of population growth, our standard of living should improve.
THE BUSINESS CYCLE
Today, GDP is a key measure of economic growth as it tracks the performance of the economy over time. As a measure of the economic well-being of the average person, GDP per capita is a better measure than GDP.
GROSS DOMESTIC PRODUCT AND GROSS NATIONAL PRODUCT
When we make this adjustment, we take into account both GDP and purchasing power parity – the principle that exchange rates are set so that prices are comparable. National Debt A country's national debt is the amount of money the government owes to its creditors.
PRODUCTIVITY
Chapter 2The Environment of Business29 Canada received $43 to $47 billion more from exports than it spent on imports annually from 2006 to 2008, but a long trend was reversed in 2009 when Canada ran a trade deficit of $6 billion, mainly due to the sharp rise in the Canadian dollar relative to the US In 2014 a surplus was registered again, at $4.4 billion; however, it was no coincidence that the Canadian dollar fell significantly that year, leading to a boost in exports.16 A trade deficit negatively affects economic growth, because the money flowing out of a country cannot be used to invest in not to invest. productive enterprises, whether at home or abroad.
THE BALANCE OF TRADE AND THE NATIONAL DEBT
APP FOR THAT!
National Debt
The Economist World in Figures Source: The Economist
Gross Domestic Product Source: Samuel Bryant
DEFLATION
UNEMPLOYMENT
INFLATION
For example, when the growth rate of the economy declines, tax cuts will usually stimulate renewed economic growth. The power of the Bank of Canada to make changes in the supply of money is at the center of the Canadian government's monetary policy.
LO- 3 THE TECHNOLOGICAL ENVIRONMENT
The hydrogen fuel cell combines hydrogen (one of Earth's most common elements) with oxygen to produce electricity. These developments have increased investor interest in the hydrogen fuel cell. based in Mississauga) makes fuel cells, and financial analysts predicted it would turn a profit by the end of 2014.
OF BUSINESS THE GREENING
A related challenge is meeting the ongoing demand to reduce cycle time—the start-to-finish time it takes a firm to accomplish certain repetitive activities or functions. The company was an early adopter of internet marketing and still invests significant funds in promoting magic.
LO- 4 THE POLITICAL–LEGAL ENVIRONMENT
For another example of the influence of the external environment, read the Managing in Turbulent Times Box entitled "Influence of the Physical Environment". A particularly critical element of the socio-cultural environment is the practice of ethical behavior and social responsibility.
LO- 5 THE SOCIO-CULTURAL ENVIRONMENT
The socio-cultural environment includes the customs, values, attitudes and demographic characteristics of the society in which a company operates. For many years, Tim Hortons dominated the Canadian coffee industry with its extensive market coverage and strong brand equity.
THREAT OF POTENTIAL ENTRANTS
McDonald's in particular has made some aggressive moves (like free coffee for a week, adding fireplaces and Wi-Fi to McCafé locations, etc.) to gain market share.40.
RIVALRY AMONG EXISTING COMPETITORS
IN TURBULENT TIMES MANAGING
BUYERS
SUBSTITUTES
SUPPLIERS
LO- 6 EMERGING CHALLENGES AND
OPPORTUNITIES IN THE BUSINESS ENVIRONMENT
Chapter 2 Business Environment37 E-Business and Social Media Solutions Box titled “Staying Connected in the Sky” for more information. Given this social media revolution, it's no surprise that people can't transfer outside of their social circle even on an airplane flight.
LO- 7 REDRAWING CORPORATE BOUNDARIES
Business process management means moving away from organizing around departments and moving towards organizing around process-oriented team structures that cross old departmental boundaries. BUSINESS PROCESS MANAGEMENT Approach by which firms move away from department-oriented organization and toward process-oriented team structures that cross old departmental boundaries.
LO-1 EXPLAIN THE CONCEPTS OF ORGANIZATIONAL BOUNDARIES AND MULTIPLE ORGANIZATIONAL ENVIRONMENTS
For example, Hudson's Bay Company (HBC) is the parent company of Home Outfitters. A strategic alliance or joint venture involves two or more companies collaborating to research, develop, manufacture or market a product.
LO-2 EXPLAIN THE IMPORTANCE OF THE ECONOMIC ENVIRONMENT TO BUSINESS AND IDENTIFY THE FACTORS USED TO EVALUATE THE
For example, Rogers and Walmart have teamed up to launch a new 100-page magazine called Walmart Live Better. STRATEGIC ALLIANCE An enterprise in which two or more persons or companies temporarily join forces to undertake a particular project.
LO-3 DESCRIBE THE TECHNOLOGICAL ENVIRONMENT AND ITS ROLE IN BUSINESS
Charlie Spiring, CEO of Wellington West Holdings Inc., says one of the fundamental principles of his business is employee ownership.
LO-4 DESCRIBE THE POLITICAL–LEGAL ENVIRONMENT AND ITS ROLE IN BUSINESS
LO-5 DESCRIBE THE SOCIO-CULTURAL ENVIRONMENT AND ITS ROLE IN BUSINESS
LO-6 IDENTIFY EMERGING CHALLENGES AND OPPORTUNITIES IN THE BUSINESS ENVIRONMENT
LO-7 UNDERSTAND RECENT TRENDS IN THE REDRAWING OF CORPO- RATE BOUNDARIES
Weather patterns can play a significant role in the short-term success or failure of many businesses, and Rona was undoubtedly influenced by this uncontrollable factor in this case. Are adverse natural weather patterns more dangerous for major retailers like Rona or for small businesses.
FEELING THE HEAT FROM BAD RESULTS
Despite impressive growth, good strategic decisions over the past decade, and locations across the country, Rona's results are still largely susceptible to natural weather patterns. What plans, if any, should each organization develop in the event of similar future events.
PRAYING FOR GOOD WEATHER
For example, in the first quarter of last year, the retailer lost 23 cents per share based on a 12.6 percent decline in same-store sales from the previous year. The reason, according to the CEO, was that "the spring failed to materialize." The extra long winter that year meant customers didn't rush out to buy things like home gardening supplies, which traditionally cover the bottom line during this sales period.
PRESCRIBING A DOSE OF COMPETITIVE MEDICINE
Do the same exercise for small businesses and entrepreneurs and highlight some of the unique challenges they face. The initial success story was based on the DVD home delivery service in the United States, a new idea at the time.
NETFLIX: VIDEO STREAMING REVOLUTION
But the initial success would soon fade if Netflix didn't keep up with the times. As a pioneer, Netflix has entered into lucrative content rights deals with movie studios and TV show producers.
BUSINESS CASE 2
The "fair trade" movement tries to ensure that small farmers in developing countries receive fair prices for their crops. First, a divide has developed in the movement that can blur what the term "fair trade" means.
ETHICS IN THE WORKPLACE
Do you think fair-trade is a good solution to child labour and related problems? Explain
Are you willing to pay more for fair-trade products? Why or why not?
Under what circumstances could unethical parties abuse the fair trade concept?
If the manufacturer then asks the buyer to increase the size of an order, the buyer may feel an obligation to do so. The buyer may also conclude that more large orders will result in another holiday next year.
BEHAVIOUR TOWARD OTHER ECONOMIC AGENTS
INDIVIDUAL VALUES AND CODES
BEHAVIOUR TOWARD EMPLOYEES
BEHAVIOUR TOWARD THE ORGANIZATION
Would it be ethical to submit the illegal bill because the manager only does it to get reimbursed for what is owed to him. Suppose we have the following factual information (Step 1): A manager takes a client to dinner while traveling on business and spends $100; handing over a bill for that dinner and expecting to be reimbursed for $100 is clearly appropriate.
DEMONSTRATE TOP MANAGEMENT COMMITMENT TO VALUES AND HIGH
If ethical rules are to be effective, there must be a system of control and consistent enforcement when unethical behavior occurs. On one occasion, Enron's board voted to override the code to complete a deal that would have violated it.
PROVIDE ETHICS TRAINING
Chapter 3 Ethical and Responsible Business51 The Canadian Institute of Chartered Accountants and the Ontario Human Rights Commission are all pushing for corporations to adopt codes of ethics.16 Many Canadian and US
ADOPT WRITTEN CODES OF ETHICS
LO- 2 CORPORATE SOCIAL RESPONSIBILITY
ORGANIZATIONAL STAKEHOLDERS Groups, individuals and organizations that are directly affected by the practices of an organization and therefore have a stake in its performance. Gas Ltd.—was fined a total of $2 million by the Competition Bureau for fixing gas prices.30 Other countries are also concerned about price fixing.
RESPONSIBILITY TOWARD CUSTOMERS
Ethical Barcode
In 2010, new laws aimed at making it easier for the Competition Bureau to convict price fixers came into force (since 1980, only three price-fixing convictions have been handed down in the 23 cases brought before the Bureau). The maximum prison sentence for price fixing has been tripled to 14 years, and the maximum fine has been increased from $10 million to $25 million.32
The Eco Activist Source: Bright Beam
Arctic eventually paid $12.5 million in fines.28 The Canadian Competition Bureau launched an investigation after hearing allegations from a confidential informant that Mars, Hershey, Nestlé and Cadbury had colluded in a price-fixing scheme.29 In 2012, three gas companies in Kingston and Brockville – Canadian Tire, Pioneer Energy and Mr. In Germany, the competition watchdog recently fined companies in three different industries – meat, sugar and beer – for conspiring to fix prices.
Stealth (stealth) advertising, a variant of viral marketing (see Chapter 2), involves companies paying individuals to extol the virtues of their products to other individuals who are unaware that they are listening to a paid company spokesperson. The ethicality of this is questionable when the paid individuals do not disclose that they are being paid by the company, so the recipient of the advertisement is not aware that it is advertising.
In 2014, the International Chamber of Commerce estimated the value of the global trade in counterfeit goods at $1.7 trillion.40 Counterfeiting is clearly harmful to companies that have spent a lot of time and money developing branded goods for sale. The models then spoke to unsuspecting real tourists about the advantages of the new product.
Under normal circumstances, an adult driver will miss about 3 percent of the simulated
While it may seem like consumers benefit because they get low prices for goods that look like the real thing, in reality consumers often pay far too much for counterfeit goods because they are of very low quality. While a fake handbag simply costs money, counterfeit medicines, electrical products and motorcycles can cause death to people who use them.41 Nearly a third of counterfeit goods seized in Canada last year were deemed harmful to human health by the RCMP user considered. .42.
For example, Student Workforce hires people between the ages of 18 and 30 to market products to other people in the same age range.43 One advertising agency hired models to pose as tourists. In 2014, Lululemon filed a lawsuit against several China-based companies, claiming they were selling counterfeit versions of their popular yoga pants online.36 In 2015, the Chinese government charged that Alibaba, the e-commerce giant, was not doing enough to increase sales of ban counterfeit goods on its websites.37.
RESPONSIBILITY TOWARD EMPLOYEES
In Canada, whistleblower programs such as the one established by the Investment Industry Regulatory Organization of Canada (IIROC) do not pay whistleblowers for reporting illegal acts. They also argue that whistleblowers can make dubious charges because they put their own financial interests above those of the company they work for.
RESPONSIBILITY TOWARD SUPPLIERS
A check from the second account can also be used to top up the money in the first account and the process starts over. Insider trading Using confidential information to obtain when buying or selling shares is called insider trading.
RESPONSIBILITY TOWARD LOCAL AND INTERNATIONAL COMMUNITIES
The trader uses information not available to the general investor by either buying stocks just before their price rises or selling stocks just before their stock goes down.
RESPONSIBILITY TOWARD INVESTORS
Australia is the world's largest greenhouse gas emitter per capita, contributing 7.3 percent of the world's total. The foundation also has a youth leadership program currently offered at two locations in Ontario.64 A survey of 93 large Canadian companies found that 97 percent made a charitable contribution of some kind and that the median value of their contributions was more than 80 percent of companies said they made contributions because it was a good thing to do, regardless of the financial benefits they could gain from giving.66.
RESPONSIBILITY TOWARD THE ENVIRONMENT
Canada is the only one of the three major emitters to sign the 1997 Protocol, but in 2006 the Conservative government said Canada would not be able to meet its pollution reduction targets and would only proceed with the Protocol if the targets were were renegotiated.68 The 2009 meetings in Copenhagen on this issue ended without an agreement. Billions of dollars worth of fraud has already taken place in the European Union's carbon trading market, and Europol's criminal finance and technology section estimates that up to 90 percent of the entire carbon market volume in some EU countries is fraudulent.71.
Air pollution is a major problem in some large cities in China because power plants and factories have not installed proper
In normally icy Greenland, for example, a warmer climate will result in a longer growing season for grains and vegetables, and farmers may begin raising livestock because of the increased forage that would be available during summer. A study of 5,296 products by TerraChoice, an environmental marketing company, found that there was at least one misleading green claim for 95.6 percent of the products they studied.
IMPLEMENTING SOCIAL RESPONSIBILITY PROGRAMS
The study also found that 100 percent of toy manufacturers and 99.2 percent of baby product manufacturers are guilty of greenwashing. misleading consumers about the product's environmental benefits). Levi Strauss has a policy of donating 2.4 percent of its pre-tax earnings to worthy causes.
OBSTRUCTIONIST STANCE
Management of social responsibility programs can be carried out at formal and informal levels. A designated executive must be empowered to act as director of the company's social agenda.
DEFENSIVE STANCE
Some companies appoint a committee of senior managers to develop plans that outline the level of support that will be provided for the company's social responsibility initiatives. The Practice your ethics exercise at the end of this chapter gives you the opportunity to think about the advantages and disadvantages of the different attitudes towards CSR.
ACCOMMODATIVE STANCE
For example, the company may decide to set aside a percentage of profits for social programs. All of the organization's formal activities are summarized in a social audit, a systematic analysis of how a company uses resources dedicated to its social responsibility goals, and how effective these expenditures have been.85 An important related element in a social responsibility The program is the idea of sustainable development, which means pursuing activities that meet current needs but will not place future generations at a disadvantage when trying to meet their needs.
PROACTIVE STANCE
Employee whistle-blowing behavior is another aspect of informal activities that can increase social responsibility (although some members of top management may view such behavior negatively). How an organization responds to whistleblowers provides some insight into its actual position on social responsibility.
INFORMAL ACTIVITIES
Whistleblowing usually doesn't become a truly formal activity until the employee can get some satisfaction within the company. The Global 100 list of the world's most sustainable corporations is based on factors such as energy productivity (the ratio of sales to energy consumption) and water productivity (sales to water use).
LO- 5 SOCIAL RESPONSIBILITY AND THE SMALL BUSINESS
LO-1 EXPLAINS HOW AN INDIVIDUAL'S PERSONAL CODES OF ETHICS DEVELOP AND WHY ETHICS ARE IMPORTANT IN THE WORKPLACE.
LO-1 EXPLAIN HOW INDIVIDUALS DEVELOP THEIR PERSONAL CODES OF ETHICS AND WHY ETHICS ARE IMPORTANT IN THE WORKPLACE
LO-2 DISTINGUISH ETHICS FROM SOCIAL RESPONSIBILITY AND IDENTIFY ORGANIZATIONAL STAKEHOLDERS
LO-3 SHOW HOW THE CONCEPT OF SOCIAL RESPONSIBILITY APPLIES BOTH TO ENVIRONMENTAL ISSUES AND TO A FIRM’S RELATION-
LO-4 IDENTIFY FOUR GENERAL APPROACHES TO SOCIAL RESPONSI- BILITY AND DESCRIBE THE FOUR STEPS A FIRM MUST TAKE TO
LO-5 EXPLAIN HOW ISSUES OF SOCIAL RESPONSIBILITY AND ETHICS AFFECT SMALL BUSINESSES
Choose a product or service and explain the social responsibility concerns that are likely to be apparent in relation to the environment, customers, employees and investors. If you were faced with any of the ethical dilemmas described in Step 1, how would you handle them.
TO LIE OR NOT TO LIE: THAT IS THE QUESTION
Identify some specific social responsibility issues that small business managers and employees may face in each of the following areas: environment, customers, employees, and investors. Over the past five years, your company has worked closely with several manufacturers in Bangladesh.
ON THE VERGE OF COLLAPSE
Foreign companies found it financially advantageous to work with manufacturers in Bangladesh because wages were low. After the building collapsed, consumer groups began encouraging people to boycott companies with production in Bangladesh.
THE PROBLEM OF CONSUMER SKEPTICISM
However, your company's risk manager is concerned about continuing to do business in Bangladesh given the negative press about unsafe working conditions and extremely low wages. From the perspective of your assigned role, and before hearing any of your group's comments about this situation, decide what Luxury Brands should do.
BUSINESS CASE 3
ŢFor improved water quality: on average, respondents were willing to pay a premium of 7.5 percent on the average amount of their water bill. ŢFor organic food: 30 percent said they were not willing to pay any premium; a third said they would pay a premium of between 1 and 5 percent; 2 percent were willing to pay a premium of 50 percent.
SOURCES OF LAW
THE COURT SYSTEM
BUSINESS LAW
CONTRACTS
TRANSFERRING PROPERTY
WARRANTY
AGENCY
BAILMENT
THE LAW OF PROPERTY
Product liability means that businesses are liable for injuries caused to product users due to negligence in design or manufacture. Strict product liability means that a business is liable for injuries caused by their products, even if there is no evidence of negligence in the design or manufacture of the product.
NEGOTIABLE INSTRUMENTS
For example, if a maintenance crew in a store mops the floors without posting warning signs around the area, a customer who slips and falls could file a negligence lawsuit against the store.
TRADEMARKS, PATENTS, AND COPYRIGHTS
TORTS
THE INTERNATIONAL FRAMEWORK OF BUSINESS LAW
BANKRUPTCY
What are the reasons for Mr. Ma’s success where so many others have failed (particularly in the food service
How does the case demonstrate the important relation- ships between franchisors and franchisees in the modern
How does the decision to list MTY on the Toronto Stock Exchange relate to the overall strategy pursued by MTY in
Each of these examples gives us a glimpse into an important element of the Canadian business landscape. Some of the difficulties in defining a small business can be understood by looking at the way the Canadian government collects and reports information about small businesses.
SMALL BUSINESS, NEW VENTURE CREATION, AND ENTREPRENEURSHIP
We begin by outlining the role of small and new businesses in the Canadian economy. The company employs 70 people and sells coffee nationwide and in the United States.12.
Kicking Horse Coffee is a small-town success story with a large reach across Canada and in the United States. Entrepreneurs
Entrepreneurship is the process of identifying a market opportunity and accessing the resources necessary to take advantage of it.10 People start new businesses because they want to control their own destiny and prefer to take a chance rather than looking for a secure job. . Kicking Horse Coffee is a small town success story with a large reach across Canada and the United States.
LO- 2 THE ROLE OF SMALL AND NEW BUSINESSES IN THE CANADIAN ECONOMY
While there is clearly overlap, that total of 2.2 billion active users represents roughly a third of the world's population. But on the negative side, women lead only 12 percent of small and medium-sized businesses that export goods and services.23.
LO- 3 THE ENTREPRENEURIAL PROCESS
IDEA GENERATION
The more of the following characteristics an idea has, the greater the opportunity it presents. Other frequent sources of new venture ideas include a personal interest/hobby (16 percent) or a chance occurrence (11 percent).33 The latter refers to a situation in which a venture idea comes to unexpected way.
SCREENING
SALES FORECAST An estimate of how much of a product or service will be purchased by prospective customers over a specific period of time. Identify the key players—the management team, active investors and directors—and state the experience and competence they possess.
DEVELOPING THE OPPORTUNITY
Trade credit can be helpful for getting started because inventory can be acquired without paying cash, freeing up money to pay other start-up costs. Regus is also present in smaller cities and regions.44 important to concentrate on the problems that can be handled, and it will.
FINANCIAL RESOURCES
Office furniture can be rented, premises can be shared and production can be subcontracted, thus avoiding the costs of procurement of material, equipment and facilities. The chosen form of legal organization affects whether ownership can be shared and whether resources can be accessed.
OTHER RESOURCES
Expensify Source: Expensify
For example, the Royal Bank of Canada (RBC) has a great website that provides checklists, business plan formats and examples, and advice on choosing business structures and more (www.rbcroyalbank.com/business/ . startingabusiness/index.html) . There are also government websites such as the Canada Business Network dedicated to providing information and advice on all aspects of starting a business, including access to government grants (www.canadabusiness.ca/eng).
Entrepreneur Magazine Source: Entrepreneur Media
Chapter 4Entrepreneurship, Small Business and New Business Creation83 institution wholly owned by the Government of Canada. The Internet There are numerous resources available online that can help budding entrepreneurs gather research information, write a business plan, and access government grants.
Success Magazine Source: Success Partners
According to the Canadian Association of Business Incubation (CABI), business survival rates are greatly improved by being involved with an incubator. The survival rate after five years is about 80 percent, much higher than the average rates for businesses that do not use incubators.
THE ENTREPRENEUR–OPPORTUNITY FIT
THE OPPORTUNITY–RESOURCES FIT
THE ENTREPRENEUR–RESOURCES FIT
OF BUSINESSTHE GREENING
BUYING AN EXISTING BUSINESS
START-UP AND BEYOND
So if you have a great new idea for the breakfast menu for your outlet and have creative promotional ideas, franchising might not be for you. You should carefully read the agreement and make sure that your territory is protected and that you have the right of first refusal on new potential stores within a certain distance (eg 10-15 kilometers or exclusivity for your particular city).
BUYING A FRANCHISE
Small business owners must be committed to succeeding and be willing to invest the time and effort to make it happen. Careful analysis of market conditions can help small business people assess the likely reception of their products.
LO- 5 SUCCESS AND FAILURE IN SMALL BUSINESS
In the eyes of the law, a partnership is nothing more than two or more people working together. According to the law, each partner can be personally liable for all debts of the company.
THE SOLE PROPRIETORSHIP
The limited partners cannot participate in the day-to-day management of the business or they risk losing their limited liability status. Benefits of a Partnership The most notable benefit of a general partnership is the ability to grow by adding talent and money.
THE PARTNERSHIP
Corporate officers are top managers hired by the board of directors to run the corporation on a day-to-day basis. If they are equal under the social contract, they may struggle to decide what to do.
THE CORPORATION
By this they mean that the company has to pay income tax on its profits, and then the shareholders also have to pay income tax on the dividends they receive from the company. Since dividends paid by a company are paid with after-tax dollars, this means double taxation.
THE CO-OPERATIVE
Disadvantages of a cooperative One of the main disadvantages of cooperatives is related to the attraction of capital investment. Advantages of a Cooperative Cooperatives have many of the same advantages as investor-owned corporations, such as limited owner liability and continuity.
LO-1 EXPLAIN THE MEANING AND INTERRELATIONSHIP OF THE TERMS SMALL BUSINESS, NEW VENTURE CREATION, AND ENTREPRE-
Thus, income can only be taxed at the individual member level rather than at both the cooperative and member level.66. The cooperative's initial capital usually comes from shares purchased by the cooperative's members.
LO-2 DESCRIBE THE ROLE OF SMALL AND NEW BUSINESSES IN THE CANADIAN ECONOMY
Since the benefits of being a member of a co-operative arise through the level of utilization of the co-operative rather than the level of invested equity, members have no incentive to invest in the co-operative's equity. Sometimes all it takes to qualify for membership in a cooperative is to buy one share with a fixed (and often par) value.
LO-3 EXPLAIN THE ENTREPRENEURIAL PROCESS AND DESCRIBE ITS THREE KEY ELEMENTS
New businesses are also important to the Canadian economy because they are the main source of new products and services.
LO-4 DESCRIBE THREE ALTERNATIVE STRATEGIES FOR BECOMING A BUSINESS OWNER—STARTING FROM SCRATCH, BUYING AN
LO-5 IDENTIFY FOUR KEY REASONS FOR SUCCESS IN SMALL BUSINESSES AND FOUR KEY REASONS FOR FAILURE
LO-6 DESCRIBE FOUR FORMS OF LEGAL ORGANIZATION FOR A
BUSINESS AND DISCUSS THE ADVANTAGES AND DISADVANTAGES OF EACH
A cooperative is an organization formed to benefit its owners in the form of reduced prices and/or distribution of profits at the end of the year. You may want to do some online research to find out more about some of the loan programs identified in the text.
A TASTY IDEA
To what extent does this product or service have the "screening" properties described in the chapter (adding value, providing a competitive advantage, etc.). Both partners work four days each week, except when both are in the shop due to busy seasons.
BREAKING UP IS HARD TO DO
While Mark's enthusiasm remained high, Connie's time was increasingly occupied by travel, recreation, and community service activities. Identify the ethical issues, if any, regarding Mark's and Connie's respective positions on Mark's proposed $2000 salary increase.
ENTREPRENEURIAL SPIRIT: BEYOND THE RACK
He recommended transferring the $2,000 savings to his salary due to his increased workload, but this time Connie disagreed, arguing that Mark's current $4,000 salary already compensated him for his contributions. To avoid a full-blown argument, Connie eventually gave in, even though she felt it was unfair that Mark's salary increased from $4,000 a month to $6,000.
BUSINESS CASE 4
However, this did not prevent Starbucks from entering one of the fastest growing consumer markets in the world. We will examine some of the social, cultural, economic, legal and political factors that affect international business.
THE CONTEMPORARY GLOBAL ECONOMY
- What motivates companies like Starbucks to expand into international markets with little perceived interest for their
- How has Starbucks adapted to Chinese culture?
- Are you concerned that Starbucks’ expansion into China threatens their traditional culture? Why or why not?
- If China wished to slow Starbucks’ expansion, what legal barriers would be most helpful? How would these barriers
China is now the region's largest trading partner with trade totaling more than $114 billion, just ahead of China. However, South Korea (Samsung and Hyundai), Taiwan (China National Petroleum Corporation and manufacturing for foreign companies), and Hong Kong (a major financial center) are also successful players in the global economy.
DISTINCTIONS BASED ON WEALTH
Motors, Volkswagen, Nissan and Ford all operate large assembly plants, and major suppliers have also built facilities in the region. Fueled by strong entry into the automotive, electronics and banking industries, the economies of these countries have grown rapidly over the past three decades.
GEOGRAPHIC CLUSTERS
Managers involved in international business must have a good understanding of the global economy, including major global markets. The establishment of the New Development Bank is a clear sign of the times, and the emerging BRICS countries have announced their increasingly influential role in the global economy.
The first chairman of the board will be Russian and the first chairman of the board will be from India.11. A year later, Bangladesh still produced more than US$22 billion in apparel exports, but many of the companies (like H&M) they supplied raised new security questions.
NATIONAL COMPETITIVE ADVANTAGE
Seventeen of these factories were closed and major repairs were completed on 100.16.2005.
ABSOLUTE ADVANTAGE
COMPARATIVE ADVANTAGE
280–$460 in China
A country that imports more than it exports has an unfavorable trade balance or deficit. SURPLUS A situation in which a country exports more than it imports, creating a favorable trade balance.
EXCHANGE RATES AND COMPETITION
XE Currency App Source: XE.COM Inc
One of the most important developments in foreign exchange was the introduction of the euro - a common currency among 18 members of the European Union (Denmark, Sweden and the United Kingdom and other EU members do not participate). The primary reason for the initial decline was the economic instability that raised concerns about the long-term survival of the currency.
Business Anywhere APK Source: Lothar Katz
International Business Guide Source: Avant Web Solutions
LO- 4 INTERNATIONAL BUSINESS MANAGEMENT
GAUGING INTERNATIONAL DEMAND
EXPORTERS AND IMPORTERS
ADAPTING TO CUSTOMER NEEDS
LICENSING ARRANGEMENTS
BRANCH OFFICES
STRATEGIC ALLIANCES
INTERNATIONAL FIRMS
MULTINATIONAL FIRMS
INDEPENDENT AGENTS
Bugatti-Sedona is in a major expansion phase as they look to expand their sales in the United States and take advantage of new partnerships abroad. Differences in the average age of the local population can also influence product development and marketing.
LO- 5 BARRIERS TO INTERNATIONAL TRADE
In Japanese, the word hai (pronounced "hi") means "yes." In conversation, however, this word is used much like people in the United States use "uh-huh"; it moves the conversation forward or shows the person you're talking to that you're paying attention. For example, Japanese people are on average slimmer and shorter than Canadians, which is an important factor for companies planning to sell clothing.
QUOTAS, TARIFFS, AND SUBSIDIES
For example, crossing your legs in a business meeting in Saudi Arabia is inappropriate, as showing the sole of your foot is an insult to other people in the room. The Court ultimately considered this to be an excessive case of protectionism; Frito-Lay was taken on an “administrative drive” for an innocent clerical error.44.
LOCAL-CONTENT LAWS
Transparency International (TI) publishes a "Corruption Perceptions Index", which ranks countries based on the amount of corruption perceived to exist according to ratings by business professionals, academics and risk analysts. According to Perrin Beatty, former president of the Canadian Chamber of Commerce, interprovincial trade barriers put Canadian companies at a huge disadvantage.
BUSINESS-PRACTICE LAWS
Cartels and dumping A cartel is an association of producers whose purpose is to control the supply and price of a good. Many countries prohibit dumping: selling a product abroad for less than the comparable price charged in the home country.
LO- 6 OVERCOMING BARRIERS TO TRADE
Meanwhile, between 2009 and 2015, seven car assembly plants were built in Mexico; no plant was built in the United States or Canada.61. Moser had the company's entire manufacturing center in Mexico in the 1990s, but moved it to China in 2002.
LO-1 DESCRIBE THE GROWING COMPLEXITY IN THE GLOBAL BUSINESS ENVIRONMENT AND IDENTIFY THE MAJOR WORLD MARKETPLACES
LO-2 IDENTIFY THE EVOLVING ROLE OF EMERGING MARKETS AND HIGHLIGHT THE IMPORTANCE OF THE BRICS NATIONS
LO-3 EXPLAIN HOW DIFFERENT FORMS OF COMPETITIVE ADVANTAGE, IMPORT–EXPORT BALANCES, EXCHANGE RATES, AND FOREIGN
LO-4 DISCUSS THE FACTORS INVOLVED IN CONDUCTING BUSINESS INTERNATIONALLY AND IN SELECTING THE APPROPRIATE
LEVELS OF INTERNATIONAL INVOLVEMENT AND INTERNATIONAL ORGANIZATIONAL STRUCTURE
LO-1 DESCRIBE THE GROWING COMPLEXITY IN THE GLOBAL BUSINESS ENVIRONMENT AND IDENTIFY THE MAJOR WORLD MARKETS. LO-5 DESCRIBE SOME WAYS IN WHICH SOCIAL, CULTURAL, ECONOMIC, LEGAL, AND POLITICAL DIFFERENCES WORK.
LO-5 DESCRIBE SOME OF THE WAYS IN WHICH SOCIAL, CULTURAL, ECONOMIC, LEGAL, AND POLITICAL DIFFERENCES ACT AS
LO-6 EXPLAIN HOW FREE TRADE AGREEMENTS ASSIST WORLD TRADE
WEIGHING THE TRADE-OFFS
Your boss is pushing you for a recommendation, and you are weighing the pros and cons of both options. You have just finished meetings with local officials and you are pessimistic about your ability to get things moving quickly.
PAYING ATTENTION TO FOREIGN PRACTICES
For example, you learned that it will take ten months to obtain a construction permit for a needed facility. Furthermore, if you don't pay and one of your competitors does, you are at a major competitive disadvantage.
SCOTIABANK’S GLOBAL FOOTPRINT
When you look at the competition, you'll notice that many have offshored their operations - hiring employees in other countries to provide support. You are willing to provide outplacement services to ensure they can find new jobs, but you are still concerned about the impact of layoffs on your remaining employees.
BUSINESS CASE 5
Companies in your industry are just beginning to enter foreign markets, and you have been appointed to lead your company's new operations in a Latin American country. Ţthe boss's perspective (assuming that, despite your assumptions, this manager is actually well informed about business practices in this country).
GOAL OF THE EXERCISE
THE CONTEMPORARY BUSINESS ENVIRONMENT
What else, if anything, can McDonald's do to improve its image as a health-conscious brand. Yahoo Finance columnist Rick Newman discusses how this change could affect McDonald's and the fast food industry.
MCDONALD’S EYEING NATURAL CHICKEN
Insiders believe McDonald's is trying to refresh its image and better compete with fast-casual restaurants like Chipotle. McDonald's wants to create an image as a more health-conscious brand that is transparent to its customers.
BUSINESS TODAY VIDEO CASE 1-1
Over the next two years, McDonald's plans to phase out the purchase of chicken products treated with antibiotics that people commonly use. With this latest move, it seems as if McDonald's is choosing to create positive change.
VELOFIX
This move seems to be in line with the trend towards healthy eating habits and the increase in consumer interest in natural ingredients.
CBC VIDEO CASE 1-1
Have you ever said to a friend, “Don't go see that movie, it's 5.5” (out of 10), even though you haven't seen it yourself. How does this video demonstrate the power of technology and the dangers that are ever present in this technological age.
AMAZON CRACKS DOWN ON FAKE REVIEWS
Would you be shocked to learn that between 10 and 30 percent of all reviews are made up. If a company has 16 reviews and 10 are false positives, which can greatly influence your decision, you may be making a wrong choice based on false information.
BUSINESS TODAY VIDEO CASE 1-2
PART 2 THE BUSINESS OF MANAGING
- What are the functions of management? How are these functions illustrated in this case?
- What are the skills of management? Which skills are most exemplified in Sergey Brin and Larry Page?
- What role do goals and strategy play at Google?
- Describe the corporate culture at Google
Google estimates that 15 percent of searches made each day are new and have never been searched before. One of the most successful is an algorithm for auctioning ad placements that ensures the highest possible prices.
WHO ARE MANAGERS?
Regardless of the type of organization they work in, managers perform many of the same basic functions, are responsible for many of the same tasks, and have many of the same responsibilities.
LO- 1 THE MANAGEMENT PROCESS
No part of the company's performance can go too far before it is noticed and resolved. By combining the different measures, consumers can find summary scores for each of the four service areas.
BECOMING A MANAGER
The results provide competitor rankings that show where each dealer currently stands against competitors in each of the four service areas. Rankings allow tracking from period to period, revealing trends of improvement in each area over time for each company.
Prospective managers usually complete at least one degree in business, taking courses in finance, marketing, accounting, man-
Under the terms of the Canada Labor Code, individuals in supervisory roles are not entitled to overtime pay for work in excess of 40 hours per week. In June 2012, the Ontario Court of Appeal refused to certify CN's case, concluding that it would not function as a class action because it depended on the definition of “manager” and “employee,” which would have to be determined. case by case.6.
LO- 2 TYPES OF MANAGERS
For example, unless a person's occupation is specifically excluded by legislation, that person is entitled to overtime pay for each hour worked in excess of the provincial maximum (in Ontario that is 44 hours per week). If someone who has not been a manager is promoted to a management job, he or she may be dismayed to find that there is no overtime pay, regardless of the number of hours per week he or she works.
TOP MANAGERS
Glendale contested the claim, arguing that Sanago was a manager and was not entitled to overtime pay because he only performed cooking duties in an emergency. Non-executives usually receive overtime pay when they work more than 40 hours a week or when they work on weekends or holidays.
OPERATIONS MANAGERS
Smaller companies may have a single department, while very small organizations may have a single person responsible for all human resource activities.
MIDDLE MANAGERS
FIRST-LINE MANAGERS
HUMAN RESOURCE MANAGERS
FINANCIAL MANAGERS
OTHER MANAGERS
INFORMATION MANAGERS
MARKETING MANAGERS
LO- 3 MANAGEMENT ROLES AND SKILLS
CONCEPTUAL SKILLS
TIME MANAGEMENT SKILLS
TECHNICAL SKILLS
HUMAN RELATIONS SKILLS
Identifying alternatives Once the need for a decision has been recognized and defined, the second step is to identify possible alternative ways of effective action. If the decision involves a multimillion-dollar move, much time and expertise must be devoted to identifying alternatives, but if the decision.
DECISION-MAKING SKILLS
Understanding exactly what the problem or opportunity is comes from careful analysis and careful consideration of the situation. Monitoring and evaluating results The final step in the decision-making process requires managers to evaluate the effectiveness of their decision—that is, they must ensure that the chosen alternative has served its original purpose.
BEHAVIOURAL ASPECTS OF DECISION MAKING
Risk appetite Risk appetite refers to the extent to which a manager is willing to gamble when making decisions. Managers who are very careful in making decisions are more likely to avoid mistakes, and are unlikely to make decisions that lead to large losses (or large profits).
LO- 4 STRATEGIC MANAGEMENT
Other managers are extremely aggressive in making decisions and are willing to take risks.23 They rely heavily on intuition, make quick decisions and often risk large sums of money on their decisions. These managers are more likely than their conservative counterparts to achieve great success, but they are also more likely to incur greater losses.24 Organizational culture is an important ingredient in promoting different levels of risk-taking.
THE PURPOSES OF GOAL SETTING
Managers can avoid such over-involvement by setting specific goals in advance regarding the time and money they are willing to spend on a particular project. Escalation of Commitment When a manager makes a decision and then remains committed to implementing it, despite clear evidence that it was a bad decision, there has been an escalation of commitment.22 A good example of this is Expo 86, the world's fair held in Great Britain is held. Colombia.
KINDS OF GOALS
SETTING STRATEGIC GOALS
Regardless of a company's purpose and mission, it should set long-term, medium-term, and short-term goals. Ţ Long-term goals refer to longer periods of time, typically five years or more into the future.
MATCHING THE ORGANIZATION AND ITS
Chapter 6Managing the Business Enterprise135 Opportunities and threats are factors outside the firm and are assessed using environmental analysis. For example, online music services such as iTunes have been a major threat to manufacturers of CDs and CD players.
ANALYZING THE ORGANIZATION AND ITS
- McKinsey Insights
- SWOT Chart
- Goal Tracker: SmartGoals Source: MSurf Lab
For example, when Pepsi executives recognized a market opportunity for bottled water, they moved quickly to launch their Aquafina brand and position it for rapid growth. McDonald's, for example, draws up operational plans when it explains exactly how Big Macs are to be cooked, heated and served.
CORPORATE-LEVEL STRATEGIES
A corporate-level strategy identifies the different businesses a business will be in and how they will relate to each other. A business-level (competitive) strategy identifies the ways in which a company will compete in its chosen line of products or services.
A HIERARCHY OF PLANS
Functional strategies identify the basic courses of action that each department will follow in order to contribute to overall business goals. Investment Reduction Investment reduction means reducing the company's investment in one or more of its business lines.
BUSINESS-LEVEL (COMPETITIVE) STRATEGIES
One of the most famous examples of divestment occurred in 2015 when Target pulled out of the Canadian market after failing to attract enough customers to its retail stores.35 Divestment involves the sale or liquidation of one or more of the company's businesses.
FUNCTIONAL STRATEGIES
LO- 5 CONTINGENCY PLANNING AND CRISIS MANAGEMENT
Ţ In 2014, Malaysian Airlines faced a crisis when one of their flights simply disappeared (perhaps in the southern Indian Ocean). Ţ In 2008, Maple Leaf Foods faced a crisis when listeria (tainted meat) was discovered at one of its processing plants.
Contingency plans also involve making sure that planes are not stranded at airports that are experiencing snow delays
Ţ In 2010, BP faced a crisis when an explosion on an oil rig in the Gulf of Mexico resulted in the deaths of 11 workers and caused a massive oil spill. Ţ In 2009, Toyota faced a crisis when consumers claimed that some models of its cars were going out of control.
LO- 6 MANAGEMENT AND THE CORPORATE CULTURE
Maple Leaf quickly recalled 686,000 kg of meat (an action that cost the company $19 million). If a problem arises with a company's products, it can create pressure for change in the company's culture.
COMMUNICATING THE CULTURE
An investigation revealed that the culture at GM (which emphasized cost cutting) was partly to blame for the problem.
MANAGING CHANGE
LO-1 DESCRIBE THE FOUR ACTIVITIES THAT CONSTITUTE THE MANAGE- MENT PROCESS
LO-2 IDENTIFY TYPES OF MANAGERS BY LEVEL AND AREA
LO-3 DESCRIBE THE FIVE BASIC MANAGEMENT SKILLS
LO-4 EXPLAIN THE IMPORTANCE OF GOAL SETTING AND STRATEGIC MANAGEMENT IN ORGANIZATIONAL SUCCESS
LO-5 DISCUSS CONTINGENCY PLANNING AND CRISIS MANAGEMENT IN TODAY’S BUSINESS WORLD
LO-6 EXPLAIN THE IDEA OF CORPORATE CULTURE AND WHY IT IS IMPORTANT
Explain what planning, organizing, managing and controlling mean in relation to the manager's job. Explain the relevance of the management functions of planning, organizing, directing and controlling for the organization in question.
FOLLOW-UP QUESTIONS
Review the example of the decisions made by Airbus and Boeing regarding new large aircraft. Only record both sides of the conversation if the person you are talking to gives permission.).
SPEAKING WITH POWER
Interview an administrator at your college or university and ask for that person's views on the school's strengths and weaknesses and on the threats and opportunities the school faces. What is the relationship between Mintzberg's management roles and more traditional management functions?
CLEAN UP NOW OR CLEAN UP LATER?
Do you agree, or do you believe that people express themselves in similar ways no matter where they are. In our age of computers and e-mail, why do you think personal presentation remains important in management?
CORPORATE CULTURE
BUSINESS CASE 6
Vale's CEO said the two companies' cultures would simply have to adapt. The three most common are: (1) whether to emphasize centralization or decentralization, (2) whether to use geographic or product departmentalization, and (3) whether to split one company into two (or more) companies.
WHAT IS ORGANIZATIONAL STRUCTURE?
Of course, an actual organizational chart would be much more complex and involve individuals at many more levels. 36+%2->%8-32',%68A physical description of the company structure showing the titles of employees and their relationships to each other.
THE BUILDING BLOCKS OF ORGANIZATIONAL STRUCTURE
For example, BlackBerry's organizational chart until recently showed two CEOs and two board chairmen. But in 2011, investor pressure made the company change its structure so that only one person handled each job.1.
SPECIALIZATION AND GROWTH
For example, one person cuts the material for the body of the shirt, another person cuts the material for the sleeves, and the third person cuts the material for the collar.
GEOGRAPHIC
DEPARTMENTALIZATION
FUNCTIONAL DEPARTMENTALIZATION
CUSTOMER DEPARTMENTALIZATION
PRODUCT DEPARTMENTALIZATION
PROCESS DEPARTMENTALIZATION
Concentrating different products in different areas of the store makes shopping easier for customers
ESTABLISHING THE DECISION-MAKING HIERARCHY
If your team members have performance improvement opportunities, offer them the training they need to become more effective at their jobs. Encourage them to succeed, praise them for it, and share your team's success with the rest of the organization.
TALL AND FLAT ORGANIZATIONS
SPAN OF CONTROL
LINE AUTHORITY
STAFF AUTHORITY
For example, if the manufacturing department at Clark has an employee with a drinking problem, the line manager of the department might consult a human resource specialist for advice on how to handle the situation. But at Office Overload, the director of personnel is a line manager because the primary purpose of that firm is to provide staff to other firms.
COMMITTEE AND TEAM AUTHORITY
But if the line manager decides that the job is too dangerous to be handled by a person whose judgment is impaired by alcohol, the line manager's decision will most likely prevail. At Aluminum Company of Canada, for example, the director of personnel has personnel authority because the personnel department supports the primary function of the company (the production and marketing of aluminum).
LO- 4 BASIC ORGANIZATIONAL STRUCTURES
At PepsiCo, for example, each of its three major beverage brands—Pepsi, Gatorade, and Tropicana—is the former. A matrix organization is a version of a project structure in which a project manager and regular line managers share authority.
ORGANIZATIONAL DESIGN FOR THE TWENTY-FIRST CENTURY
International divisions, international divisions, or an integrated global organization are all variations of the international organizational structure. As an organization's needs change, its managers bring in temporary workers, rent space, and outsource basic support services to meet the demands of each specific situation.
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As the situation changes, the temporary workforce changes in parallel, with some people leaving the organization and others entering it. As a result, when Walmart distribution centers start to run out of, say, blue Wrangler jeans, the manufacturer gets the information as soon as the retailer does.
LO- 5 THE INFORMAL ORGANIZATION
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Let’s Get Organized Source: AppWarrior
My Teams
SAP Business One Source: SAP AG
LO-1 DISCUSS THE ELEMENTS THAT INFLUENCE A FIRM’S ORGANIZA- TIONAL STRUCTURE
LO-2 EXPLAIN HOW SPECIALIZATION AND DEPARTMENTALIZATION ARE THE BUILDING BLOCKS OF ORGANIZATIONAL STRUCTURE
LO-3 DISTINGUISH BETWEEN RESPONSIBILITY AND AUTHORITY AND EXPLAIN THE DIFFERENCES IN DECISION MAKING IN CENTRALIZED
LO-4 EXPLAIN THE DIFFERENCES BETWEEN FUNCTIONAL, DIVISIONAL, PROJECT, AND INTERNATIONAL ORGANIZATION STRUCTURES,
LO-5 UNDERSTAND HOW THE INFORMAL ORGANIZATION IS DIFFERENT FROM THE FORMAL ORGANIZATION
GETTING WITH THE PROGRAM
She likes the team members, enjoys the team's work, and is somewhat bored with her team's current assignment. Before hearing your group's comments on this situation and, from the perspective of your assigned role, decide whether you believe the Team B member should be allowed to join Team A.
TO POACH OR NOT TO POACH
As the founder of the company, how willing would you be to make major organizational changes in light of the shortage of qualified programmers? Kalle Lasn, one of the founders of Adbusters, said critics don't understand that Occupy is a new-style revolution.
WHAT HAPPENED TO THE “OCCUPY WALL STREET” MOVEMENT?
Occupy Wall Street began with Vancouver-based Adbusters, an organization that publishes a magazine critical of excessive consumer consumption. The Occupy Wall Street movement struck a chord with both Canadians and Americans who were frustrated with a political-economic system that they believed favored corporations and wealthy individuals.
BUSINESS CASE 7
The conclusion then is that HR managers must meet the different characteristics and demands of three different generations: Baby Boomers (who were born in the "baby boom" in 1946–. After reading the material in this chapter, you will be better able to understand – from a manager's perspective – the importance of properly managing human resources in a department or business you own or oversee.
LO- 1 THE FOUNDATIONS OF HUMAN RESOURCE MANAGEMENT
Penny Masear, former director of human resources at Toronto-based Trotter Morton Group, says companies now need to be more flexible in dealing with different generations. The implications for the human resources of baby boomers, GenXers and millennials are very interesting, but that is not the case.
JOB ANALYSIS
They argue that the stereotypes floating around across generations are not only unhelpful, but actually harmful to businesses. Consider this statement: All the hype about the differences between millennials, baby boomers and GenXers is meaningless.
MATCHING HR SUPPLY AND DEMAND
Such a system can quickly find any company employee who is qualified for a position that requires, for example, a degree in chemical engineering, three years of experience in an oil refinery, and fluency in French. For example, how does a manager predict how many electrical engineers will be looking for work in Ontario or British Columbia in three years.
LO- 2 RECRUITING HUMAN RESOURCES
Once the recruitment process has attracted a pool of applicants, the next step is to choose someone to hire. The goal of the selection process is to gather information from applicants that will predict their success on the job and then hire the candidates who may be most successful.
APPLICATION FORMS
To reduce uncertainty, managers use a variety of selection techniques, the most common of which are shown in Figure 8.1. Each organization develops its own mix of selection techniques and can use them in almost any order.
TESTS
HR Management
