Ch.1 The Challenges of Business: Managing the Internal & External Forces Sept. 17 (Session 1)
How’s Business in Canada?
Canada can be thought of a good neighbour, with no fences.
U.S. expansions and relocations ending up in Canada
High quality infrastructure, open regime for foreign trade and favourable market opportunities
SUMMARY: Business World Article says Canada is a great place where businesses can operate and
QUESTIONS POSED: What determines a successful bus.? => What factors play the strongest role in
deciding whether a bus. will prosper or fail.
INTERNAL ENVIRONMENT OF BUSINESS- p. 6-9
• People management – criticized as poor – low wages, little investment in training. Will
this eventually harm their profitability? Perhaps.
• Structure – They have benefited from a highly centralized decision-making structure.
That is the control and authority of the operations of Walmart is concentrated in the top
level of management. This has resulted in effective control over costs and the ability to
have reliable and consistent performance across different branches of Walmart.
• Strategy – “big box” retailer, providing a wide range of products (from electronics to
groceries) at “low everyday prices”. This successfully met consumer needs for
convenience and price consciousness.
3 concepts of Internal Environment PEOPLE, STRUCTURE, STRATEGY
Effectively Managing People (p.6) or slide 7-- (details in ch.3)
People are a key component of organizations recruit the right people
Any type of organization must be managed leadership as a key influence on employee
Using a productive engagement model people can provide a competitive advantage
Developing a Suitable Structure (p.8) and slide 6—(details in ch.4)
A planned network of relationships between individuals in various positions of the organization
Generating a Winning Business Strategy—(details in ch.5) Ch.1 The Challenges of Business: Managing the Internal & External Forces Sept. 17 (Session 1)
GENERAL EXTERNAL ENVIRONMENT OF BUSINESS- 6 EXTERNAL FORCES
1) Economic Forces (p.11, 17):
An economic slump can mean downsizing, cuts in training and staff development, end of
traditional work practices
Ex. Recession in 1990s led to massive layoffs and downsizing of permanent members and the
development of a temporary and part-time workforce.
International economic environments affect Canada’s economic health, especially the U.S.
GDP= total value of annual production (goods and services)
GDP and Unemployment= indicators of economic health
Money from the product. goes to employees, business owners’ and the govern’t (through taxes)
2) Global Forces (refer to p. 25, 131)
Global forces have an international dimension Globalization: process of involving world
Organizations must now think globally Canada exports 40% of its GDP compared to 25% a
Setting up business operations globally to gain competitive advantage or even having foreign
ownership of Canadian companies The sale of HBC, car parts made in various
3) Political Forces (p. 16,19)
Political change can be very influential @ specific and general levels talking about
deregulating industries such as telecommunications, banking, reduction of trade barriers
changing political leaders
Ex. Protected industries in 80s and 90s now had competition, where none existed before (Bell)
The purpose of deregulation was to bring competitors and free create a freer trade btw Canada
and the U.S.
In Canada, there is a move towards less govern’t intervention
Although we have Capitalist Economy, govern’t has an important role in the bus. environment
*Ex. Taxes, global trade agreements, ‘incentive programs to encourage managers to conduct bus. in a
desired gov’t manner+
4)Technological Forces (p.13, 21 – slide 17)
Technology plays a central role in how an organization functions, how it obtains resources and
how effectively it competes
Technology has an important influence on organizations- accessibility influences market entry
and operating costs For example, in telecommunications, small business’ were able to enter
the market with technological advances but operating costs had to be reduced, as a result. This
led more competitors, in the case of Bell Canada, who could now afford to enter the
Consider how technology has influenced the role of work and how it is done.
[e.g. People can work from home, shifting from the traditional inflexible office setting to
Resource based economy (farming,mining, forestry) because less labour due to technological
advancements/mechanization now moving to the industrial (manufacturing) and service (hotel
& restaurants) sectors. Ch.1 The Challenges of Business: Managing the Internal & External Forces Sept. 17 (Session 1)
[E.g. Agricultural employment decreasing b/c need for hu