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Administrative Studies
ADMS 1000
Peter Tsasis

ADMS 1000 Notes Chapter 1 – The Context of Business  An organization consists of people with formally assigned roles, who work together to achieve stated goals within an identifiable boundary. What makes an organization an organization?  A social entity – composed of people, interacting with each other to perform essential functions.  Goal directed – exists for a purpose  Deliberately structured – characterized by formally assigned roles deliberately divided into sets of activities  In an identifiable boundary - maintaining itself as an entity distinct from the environment The Internal Context of Business  Strategy – a plan or a course of action leading to the allocation of the organization’s resources in reaching an identifiable goal (s)  Structure – a pattern of relationships that exist between individuals in the organization o It is characterized by the organizational chart (I.e. functional, decentralized etc.) o Reflects the formal hierarchy of authority in the organization  Systems – procedures and routinized processes controlling and coordinating behavior in the organization  Shared Values – significant meanings or guiding principles that the organization instills in the members  Skills – distinctive capabilities of key personnel  Style – characterization of how key managers behave in achieving the organization’s goals ORGANIZATIONS AS OPEN SYSTEMS  A system – interdependent elements working together to achieve a goal(s) o Relation to Organizations: guide our understanding of what organizations are all about and how they function and survive  An open system – declares that organizations are entities that are embedded in and dependent on exchanges with the environment they operate within.  A closed system – fully self –sufficient entities requiring no interaction with the environment The External Context of Business Defined the environment of an organization along two dimensions: 1. Specific or Task Environment o External stakeholders – these are the parties/groups that have direct influence on the organization’s ability to obtain resources and generate outputs. They have some kind of stake or interest in the organization and could include such parties as the organization’s customers, suppliers, labour pool, local public, and the government. 2. General Environment o The forces that make up the general environment ultimately shape the specific environment. o Influence the organization’s ability to obtain resources o Economic Forces o An economic slump can mean downsizing, cuts in training and staff development, end of traditional work practices etc. o An economic boom can mean expansion, extra training, R & D etc. o Competitive Forces o Business must think about who their competitors will be o Competition may be at a local, national or global level. It may be open or restricted o Technological Forces o Technology has an important influence on organizations - accessibility influences market entry and operating costs o Consider how technology has influenced the role of work and how work is done, e.g. teleworkers, flexible work practices o Global Forces o Forces that can be embedded in general economic, political, technological or societal forces – but are international in nature o Global forces have resulted in business outsourcing in order to gain a competitive advantage o Labour Forces o The changing nature of the workforce o The increasingly diverse nature of the workforce o As a “voice” for the labour force, consider how unions have impact work and society o Political Forces o Political change can be very influential e.g. deregulation of Canadian Telecoms, banking industry, reduction of trade barriers, changing political leaders o In Canada there is a move towards less government intervention o Societal Forces o How can society impact businesses? o What responsibilities does business have to society? o Has the increasingly global nature of business created new responsibilities for business? The Modern management environment is characterized by: Globalized competition Technology revolution Uncertainty Fast and flexible New competitors  Turbulence  Responsive Changing consumer tastes Rapid change Adaptive Deregulation Changing political systems Sam the Record Man + Facebook Case Study Chapter 2 – The Economic Context Factors of Production  The basic resources that a country’s businesses use to produce goods and services  Labour – the people who work for a company; the mental and physical capabilities of people  Capital – the funds that are needed to start a business and to keep it operating and growing; major sources are personal investments by owners, the sale of stick to investors, profits and funds borrowed  Entrepreneurs – people who accept the opportunities and risks involved in creating and operation businesses  Natural Resources  Information Resources – specialized knowledge and expertise of people who work in businesses as well as info that is found in market forecasts and various other forms of economic data Types of Economic Systems  Command Economy – relies on a centralized government to control all or most factors of production and to make all or most production and allocation decisions o Communism – a system in which the government owns and operates all sources of production o Socialism – the government owns and operates only selected major industries. Smaller businesses may be privately owned, but still under strong governmental control.  Market Economy – individuals – producers and consumers – control production and allocation decisions through supply and demand o Also known and private enterprise system/capitalism  Profit  Freedom of Choice  Private Property  Competition  Mixed Market Economy – features characteristics of both command and market o Privatization – converting governmental enterprises into privately owned companies o Nationalization – converting private firms into government –owned firms Supply and Demand  Demand – willingness and ability of buyers to purchase a product or service o Law of Demand – buyers will purchase more of a product as its price drops  Supply – willingness and ability of producers to offer a good or service for sale o Law of Supply – producers will offer more for sale as the price rises Degrees of Competition  Perfect Competition – small in size but big in numbers; the products of each firm are almost identical, both buyers and sellers know the price that others are paying and receiving in the marketplace; firms find it easy to enter and leave the market; prices are set by supply and demand; no firm Is powerful enough individually to influence the price of its product in the marketplace – Agriculture  Monopolistic – fewer sellers than pure competition, but still many buyers; sellers try to make their products look slightly different from those of their competitors with brand names, design and style and advertising; may be large or small because it is relatively easier for a firm to enter/leave; product differentiation gives sellers some control over the price they charge. Ralph Lauren Polo can be priced with little regard for the price of shirts sold at the Bay.  Oligopoly – only a handful of very large sellers; competition is fierce because the actions of any one firm can significantly affect the sales of all other firms; firms avoid price competition because it reduces profit; entry into market is difficult because large capital investment is usually necessary; as the trend toward globalization continues, it is likely that more global oligopolies will come into being. – Four major cereal makers (Kellogg, Quaker Oats, General Foods and General Mills) charge roughly the same price for their cereals. Rather than compete on price, they emphasize on advertising.  Monopoly – only one producer; being the only supplier gives a firm complete control over the price; only constraint is how much consumer demand will fall as its price rises; Natural Monopolies – are closely watched by provincial utilities boards, and the assumption that there is such a thing as a natural monopoly is increasingly being challenged. Economic Growth  Aggregate Output – main measure of growth; the total quantity of goods/services produced by an economic system during a given period. When output grows more quickly than the population two things usually follow: output per captia goes up and the system provides relatively more of the goods/services that people want  Gross Domestic Product (GDP) – total value of all goods and services produced within a given time period by a national economy through domestic factors of production  Recession -- a decline in GDP for at least two consecutive quarters  Gross National Product (GNP) – total value of all goods and services produced by a national economy within a given period regardless of where the factors of production are located  Business Cycles – upward and downward in an economy (peak, recession, trough and recovery)  Productivity – a major factor in the growth of an economic system; measure of economic growth that compares how much a system produces with the resources needed to produce it.  Balance of trade – the economic value of all products that a country exports
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