PHILOS 1A03 Lecture Notes - Cirque Du Soleil, Mike Lazaridis, Blackberry Limited

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CHAPTER 1
Managing Within the Dynamic Business Environment
LEARNING OBJECTIVES
AFTER YOU HAVE READ AND STUDIED THIS CHAPTER, YOU SHOULD BE ABLE TO:
LO1Describe the relationship of businesses’ profit to risk assumption.
LO2Discuss the importance of stakeholders and non-profit organizations to business activities.
LO3Explain how entrepreneurship is critical to the wealth of an economy, and list the five factors of production
that contribute to wealth.
LO4Review the six elements that make up the business environment and explain why the business environment
is important to organizations.
LO5Understand how the service sector has replaced manufacturing as the principal provider of jobs, but why
manufacturing remains vital for Canada.
PROFILE
Getting to Know Mike Lazaridis of Research In Motion Ltd.
Mike Lazaridis is known in the global wireless community as a visionary, innovator, and engineer of extraordinary
talent. He traces his passion for his work to his hometown of Windsor, Ontario, where his love of science and
fascination with electronics were nurtured in supportive family and school environments. Lazaridis studied electrical
engineering at the University of Waterloo but dropped out two months before graduation. Using a small loan from
his parents and a contract with General Motors, he founded Research In Motion Ltd. (RIM) in 1984.
RIM is a competitor in the ICT (information and communications technology—or technologies) sector. ICT is
an umbrella term that includes any communication device or application encompassing radio, television, cellular
phones, computer and network hardware and software, satellite systems and so on, as well as the various services
and applications associated with them, such as videoconferencing and distance learning. The ICT sector contributed
$57 billion to Canada’s gross domestic product in 2007, accounting for 4.7 percent of Canadian output. Research
and development (R&D) spending in the ICT sector has been steadily increasing over the years and is now at $6.0
billion, representing 38 percent of total Canadian private sector R&D expenditures. ICT sector employment is
characterized by a highly educated workforce. The top three industries that employ the largest share of university-
educated personnel are communications equipment, software and computer services, and computer equipment.
As RIM’s President and Co-CEO, Lazaridis is responsible for product strategy, research and development,
product development, and manufacturing. In fiscal 2009 (ended 28 February 2009), the company generated
approximately US$11 billion in revenues. Today, RIM is a leading designer, manufacturer, and marketer of
innovative wireless solutions for the worldwide mobile communications market. Through the development of
integrated hardware, software, and services that support multiple wireless network standards, RIM provides
platforms and solutions for seamless access to time-sensitive information. RIM technology also enables a broad
array of third-party developers and manufacturers to enhance their products and services with wireless connectivity.
RIM’s portfolio of award-winning products, services, and embedded technologies are used by thousands of
organizations around the world and include the BlackBerry wireless platform, the RIM BlackBerry Smartphone
product line, software development tools, radio-modems, and software/hardware licensing agreements. The brand is
becoming more global with products increasingly being introduced in new markets such as Vietnam, Malawi, and
Egypt. Students and professionals alike have embraced the products. For example, do you know that a secure
BlackBerry Smartphone was developed for U.S. President Barack Obama after he insisted on keeping a BlackBerry?
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Lazaridis advocates for education and scientific research. He is a member of the Natural Sciences and
Engineering Research Council of Canada (NSERC), the Ontario Research and Innovation Council, and a Governor
of the Information Technology Association of Canada. He supports his community and country through generous
philanthropic gifts made possible by his success in business. He has donated $100 million to the University of
Waterloo to help establish the Institute for Quantum Computing. His gift of $150 million established the Perimeter
Institute for Theoretical Physics. As a result of his leadership and tireless effort, more than $100 million has been
generated in additional private and public sector funding for this world centre of excellence, based in Waterloo and
affiliated with more than 30 Canadian universities.
In recognition of his contributions, Lazaridis has won many awards. Some examples include sharing
Canada’s most prestigious innovation prize, The Ernest C. Manning Principal Award. He was named an Officer to
the Order of Canada in 2006, chosen as Canada’s Outstanding CEO of the Year in 2006, listed on the TIME 100
List of Most Influential People in 2005, previously recognized as Canada’s Nation Builder of the Year and was a
recipient of Ontario’s Entrepreneur of the Year award. He has been inducted into both the Canadian Business Hall
of Fame and Canada’s Telecommunications Hall of Fame.
The purpose of this text is to introduce you to the exciting and challenging world of business. Each chapter will
begin with a story similar to this one. You will meet more successful entrepreneurs who have started a business.
You will also learn about people who work for companies and have succeeded far beyond their original
expectations. You will learn about all aspects of business: management, human resource management, marketing,
accounting, finance, and more. You will also learn about businesses of all sizes. We begin by looking at some key
terms and exploring the rapidly changing business environment so that you can prepare to meet tomorrow’s
challenges today.
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Sources: “RIM’s Executive Team – Mike Lazaridis,” Research In Motion Ltd., 2009, http://www.rim.net/newsroom/
media/executive/index.shtml; “RIM 2008 Annual Report,” Research in Motion Ltd., 2009, http://www.shareholder.-
com/visitors/DynamicDoc/document.cfm?DocumentID=2259&CompanyID=RIMM; “Canadian ICT Sector
Profile,” Industry Canada, 10 July 2008, http://www.ic.gc.ca/epic/site/ict-tic.nsf/en/h_it07229e.html; Brian Banks
and Mark Evans, “Two Men and Their Baby,” Financial Post Business, November 2006, 35; and “ICT Definition,”
SearchCIO-Midmarket.com, 14 January 2004, http://searchcio-midmarket.techtarget.com/sDefinition/0,,sid183_gci
928405,00.html#.
<H1>BUSINESS AND ENTREPRENEURSHIP: REVENUES,
PROFITS, AND LOSSES
Thousands of people have learned that one of the best ways to become a success in Canada, or almost anywhere else
in the world, is to have a career in business. A business is any activity that seeks to provide goods and services to
others while operating at a profit. Profit is the amount of money a business earns above and beyond what it spends
for salaries and other expenses. Since not all businesses make a profit, starting a business can be risky. An
entrepreneur is a person who risks time and money to start and manage a business.
business
Any activity that seeks to provide goods and services to others while operating at a profit.
profit
The amount a business earns above and beyond what it spends for salaries and other expenses.
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