Textbook Notes (362,789)
Canada (158,053)
RSM100Y1 (431)
Chapter 2

Chapter 2 Summary

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University of Toronto St. George
Rotman Commerce
Michael Szlachta

Chapter 2 Organizational Boundaries and Environments External environment consists of everything outside an organizations boundaries that might affect it Plays a major role in determining the success of any organization Managers must have an accurate understanding of the environment that they are facing Organizational Boundary separates the organization from its environment When you go in a grocery store, your crossing the boundary into a business During the time that distributors of various products enter the store, they are essentially part of the business Mcdonalds has a contract with coke to distribute only coke products - Our neighborhood grocery will be influenced not only by an increase in unemployment in the area but also by the pricing and other marketing policies of its nearest competitor The Economic Environment Economic environment refers to the conditions of the economic system in which an organization operates. E.g. mcdonalds Canadian operations are functioning in an economic environment characterized by negative growth, rising unemployment, and low inflation Rising unemployment means that people are mostly likely going to eat out at mcdonalds because its cheaper than other restaurants many people are also searching for work, easy to hire low inflation means the mcdonalds has constant prices for its supplies Three key goals to a Canadian economic system: economic growth, stability and full employment www.notesolution.com
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