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York University
Administrative Studies
ADMS 1000
Keith( Kalman) Weiser

Study Notes ADMS 1000: Intro to Admin Studies LECTURE 1 THE CHALLENGES OF BUSINESS Organization, Management and Business:  An Organization is a group of people with common goals interacting with the environment. Images/Metaphors  Gareth Morgan suggested many images/metaphors, to understand concept of organization:  Machine (more closed system)  Living organism (more open system)  Political system (power/conflict/resolution)  Theatre (roles/performances/drama/acts)  Team (collaboration/co-operation/common goal to succeed) 3 broad categories  Public Sector  Private for-profit Sector  Private not-for-profit Sector (includes NGOs, voluntary orgs, co-ops, credit unions et al) The Internal & External Environments General Environment Specific Environment Inside the Environment General Environment includes: 1. Economic Forces Specific Environment 2. Political Forces  Parties/groups having a direct 3. Societal Forces influence on a organization  e.g. suppliers, customers, 4. Competitive Forces employees, unions, competitors, 5. Technological Forces 6. Global Forces creditors, unions, distributors, 7. Labour Forces local public, government and media Inside the Environment includes: 1. People 2. Structure 3. Strategy Lecture 2 Societal Forces & Business’s Role in Society WHAT IS BUSINESS & SOCIETY?  Business: private, commercially oriented organizations (includes “publicly traded corporations”  Society: a nation or large group of people with common values, history, traditions, institutions, activities & interests Business valuable component of society?  It certainly provides goods and services, which society demands (needs?), and is normally prepared to pay for.  We can think of all organizations (including businesses) as part of organic “web” constituting society as a whole –touch one part, and all web affected, to some extent STAKEHOLDERS, BUSINESS & SOCIETY  Stake: An Interest or share in an activity  A Right: a legal right e.g. to fair treatment or a moral right, e.g. to expect satisfactory service  Ownership: a legal title to an asset/ property (but more loosely used now, to include ‘moral ownership’)  A stakeholder is any individual or group who can affect or is affected by the actions, decisions, policies, practices or goals of the organization. Continuum of interest of stakeholder  Commitment (owner?)  High participation (management?)  Involvement (junior employees?)  Interest (local public? Media?  Indifference (casual labour?)  Hostility (environmental groups? Union leaders?) STAKEHOLDER VIEW OF THE FIRM: Primary & Secondary Stakeholders Primary Stakeholders  Suppliers/creditors  Employees/unions  Local communities  Shareholders/owners  Customers/Consumers/Clients  Government & Regulators Secondary Stakeholders  Social Pressure Groups  Competitors  Media & Academics  Trade Bodies CORPORATE SOCIAL RESPONSIBILITY  The obligation of decision makers to take actions, which protect and improve the welfare of society as a whole along with their own interests.  The social responsibility of business, encompassing the economic, legal, ethical and discretionary (philanthropic) expectations that society has of organizations at a given point in time. The CSR PYRAMID 1) Philanthropic responsibilities: Be a good corporate citizen 2) Ethical responsibilities: Be ethical 3) Legal responsibilities: Obey the law 4) Economic responsibilities: Be Profitable THE CSR PYRAMID: A STAKEHOLDER PERSPECTIVE  Philanthropic responsibilities: employees & the wider community  Ethical responsibilities: consumers, employees & all stakeholders groups including future generations (equity)  Legal responsibilities: owners, employees & consumers  Economic responsibilities: owners & employees DEBATING CORPORATE SOCIAL RESPONSIBILITY IS CSR ON THE RISE?  There is greater pressure for corporate social responsibility from some social responsibility from some sources/stakeholders. Role of Leadership  Leaders set tone for CSR throughout organization  Formal Management (“good governance”)  But also informal leaders (G. Homans: The Human Group)  Leaders of primary stakeholders (e.g. Union leaders)  Organizations, esp. multi-nationals, must weave their way through this morass of diverse, conflicting and changing values, re women’s roles as an example, but other contentious issues too –e.g. health! Role of NGOs among Stakeholders, in improving CSR: organizational watchdogs  Social Accountability International –specifically against Sweatshops (maquilladoras): conditions, abuse, and wages  Transparency International (anti-corruption)  Adbusters (anti-false/inflated advertizing/promotion Environmental NGOs  WWF  Greenpeace  Both have large financial budgets, and have gained respectability at international level; so their voices are heard by other stakeholders, as well as organizational ‘targets’ Human Rights NGO’s  Human Rights Watch  Amnesty International Can businesses afford to ignore CSR?  Organizations ignore expectations of CSR at their risk –politically, socially and ultimately, financially. Lecture 3 ECONOMIC CONTEXT Economic Environment  “‘Economic environment’ refers to the conditions of the economic system in which business operates” The Idea of Business & Profit  Business: an organization that produces or sells goods or services in an effort to make a profit”  Profit: surplus of revenues over expenses  Non-profit: not-for-profit Factors of Production  Businesses make economic choices based on their needs for the five factors of production 1. Natural resources: land and raw materials 2. Labour: workers 3. Capital: sources of funds for assets; ex. (Buildings, machinery, tools and equipment etc.) 4. Information resources: knowledge workers with specialized education, skills and experience 5. Entrepreneurs: individuals who start up businesses MNR: Min. of Natural Resources  Colloquially: Non-Renewable vs. Renewable  Continuum: Non-Renewable – Partly-Renewable – Renewable Factors of Production Types of Economic Systems: 1) Command/communism  Communism exists when the government owns all the country’s resources and makes economic decisions centrally. 2) Socialism  It is an economic system whereby the government has large ownership or control of its major industries essential to the country’s economy, and attempts to maintain stable system. 3) Market economy (Free Enterprise)  Private enterprise typically has four elements: a. Right to own and use private property, and transfer ownership b. Freedom of economic choice, to buy, sell etc. c. Acceptability of economic (primarily business) sector to make Profits d. Competition among different firms 4) Mixed economy  An economy that uses more than one economic system.  Eg. Canada, U.K., India The Laws of Supply and Demand  Demand: is the result of the decisions from buyers on whether or not to purchase a good or service.  Supply: is the result of the decisions of sellers whether to produce and offer a good or service for sale.  The law of supply and demand: states that more of a good or service will be demanded (by society) as the price drops, and more of a good/service will be supplied (by producers) as the price rises. Competition and the economy Types of Barriers of Number of Is the Product Size Competition Entry Sellers Firm Differentiation of a Price Firms Setter? Perfect None Many No None Small (or Pure) (Very competitive) Monopolistic Low Many No Small Small / Imperfect (Very differentiation competitive) Oligopoly High Few Yes Some Large (Somewhat differentiation competitive) Monopoly No entry is One Yes None Large achievable. (No (Ford’s Black competition) Model T!) Types/degrees of Competition 1) Perfect (or Pure) competition  large number of buyers and sellers acting independently  product or service is undifferentiated  the market determines the price (a price taker)  low barriers to entry 2) Monopolistic competition  Fewer companies compared to pure competition compete with each other, but still as many buyers  Products and services are differentiated at least in a small way  market sets the price 3) Oligopoly  when only a few competitors dominate an industry  high barriers of entry  a price setter 4) Monopoly  a monopoly occurs when there is only one producer in a given market  no substitute products exist  the company is able to determine the selling price (a price setter) ECONOMIC INDICATORS 1) The Business Cycle  Recession (short) sometimes -> Depression (long)  Trough (flat period of no growth/decline)  Recovery/Expansion  Peak 2) GDP, GNP  Aggregate output & standard of living  Gross domestic product (GDP): how much produced within country  Gross national product (GNP): how much produced by country’s capital, regardless of whereabouts; 3) Productivity  GDP per hour worked 4) Balance of Trade & National Debt  The balance of trade (exports less imports, or vice versa)  A budget deficit (Government spending in excess of revenues –usually calculated annually)  The national debt (accumulated government budget deficits) ECONOMIC STABILITY  When amount of money available and goods/services produced grow at roughly same rate.  Threats to economic stability: 1. INFLATION 2. DEFLATION 3. UNEMPLOYMENT  How to measure inflation?  Consumer Price Index (base year, using representative ‘basket of goods’; needs to change, to keep abreast of spending trends)  What is deflation? (general level of prices falling);when lots of stock, but no one has cash to buy! Unemployment  Why is unemployment a problem?  Personal (loss of income, so maintaining life increasingly problematic)  Communal (potential cause of strife in community, esp. if unemployment concentrated regionally/ethnically/by age)  Economic (loss of demand; exacerbation of recession/depression)  Types: frictional (tempora
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