Administrative Studies Sept 10 2013
The Challenges of Understanding Business
Lack of external goals over large scale businesses
Gullible and greedy investors corrupt organizations and management
An Organization Is?
Agroup of people
Interacting with environment
Gareth Morgan suggests that images are very important in organizations
Machine (more closed system)
Living Organisms (more open)
Political school (power/conflict)
Team (collaboration/ common goal)
Variety of Systems
Mom and Pops stores
The U.S government
Hospital for sick kids
3 Broad Categories
1. Private Sector
2. Private for Profit Sector
3. Private not for profit sector (organizations and unions)
Blackberry Cirque Du Soleil
Great Strategies= great strategic management
Union, Creditors, media, government, local public etc
Primary: resource based- if non renewable
Secondary: manufacturing; much demonstrated by foreign owners
Tertiary: health, education, financial
*Each organization has a different interaction with each environmental factor, including
Chapter 1&8 Sept 17 2013
Society + Business Roles in Society
What is the role of business in our large society?
Business: Private, commercially oriented organizations (includes publically traded
Society: a nation or large group of people with common values, history, tradition,
institution, activities, and interests.
CSR= Corporate Social Responsibility
What is a Steak?
It is an interest or share in an activity
Aright- a legal right/ moral right
Ownership- a legal title to an asset/ property
Steak holder Definition: Asteak holder is any individual or group who can affect or is affected
by the actions decisions, policies, practices or goals of organizations (freeman ‘84)
Consumer Certainly provides goods and services which society demands and is normally prepared
to pay for.
Can think of all organizations as part of the organic “web” constituting society as a
whole- touch one part, and all web is affected to some extent.
‘Subject Organization” will be at the center of wed on which we are focusing attentions.
Bribery and Corruption (Enron)
Workplace Conditions (Workers locked inAsian Sweatshops)
Multinationals and sweatshops (Nike)
Political Influences (Construction and Roads in PQ)
Product Liability (Chrysler Tailgates & Monsanto set up a website forcing people to
respond. They spray seeds with chemicals that are poison and then sell them to people
because they know that they will buy them because they are cheap- killing people).
The obligation of decision makers to take actions which protect and improve the welfare as
society as a whole.
1. Philanthropic Responsibility: employees and wider community
2. Ethical Responsibility- consumers, employees, and all stake holders groups
3. Legal Responsibilities- Owners, employees and customers
4. Economic Responsibility- employees and owners
Main responsibility is to make a proitBusiness should conform to society
Agame with different rules Being socially responsible
Business should not dictate morality Responsibility to other stake holders
Who will be accounted? CSR provides long term benefits
Cost of CSR will be passed onto Could use the power for CSR
Woman Values 1. See changes in values since last century since the suffering of women
2. Lack of universalism in those changes
The Context of Business: A Framework for Study Sept 18 2013
1. Understanding the notion of organizations as open system.
2. Identify the forces that comprise the specific and general environmental organizations.
3. Discuss 7 forces confronting organizations.
4. Explain the forces of each of the external forces within the Canadian business context.
5. Describe the framework that this text will use to examine the environment of business.
What is an Organization? :
1. Public/ gov’t organizations that provide goods and services without getting $.
2. Private non-government goods and services making $.
3. Private organizations that produce goods making $ for benefits of owners.
Different Types of Organization:
1. Organizations are social entities: Made up of people. They are entities that have been
generated and have been maintained by people. They involve some level of human
2. Organizations are created to achieve goals: are goal detected. Whether it is a profit
making organization or a non-profit organization, all organizations have some kind of
goal or objective they were designed to achieve.
3. Organizations Interact with the Environment: an organization obtains input are
transformed by the organization and become outputs: the goods, services or knowledge
that the organization generates.
Economic Forces: whether it is a recession or a strong economic health in Canada, the
economic environment acts as a strong influence on the present and future prospect of
Global Forces: are forces that could be embedded in general economic, political,
technological, or societal forces but are international in nature
*The term Social Responsibility refers to the obligations or responsibility of an
organization that involves going beyond: The product of goods and services at a profit
The requirements of competition, legal regulations or customs.
INPUTS PROCESS OUTPUTS
Technology Transformations to Goods and services
Human Resource goods and services generated.
generated by the
(people + knowledge) organizations.
Responsibility To Stakeholder
Resp. to owners and Respons. To customer and
Respons. To Respons. To creditors
competitors Chapter Summary: This chapter underscores the social context of organizations. Globalization
has generated much more challenges from a CSR (corporate social responsibility) perspective.
Economic Context Sept 24 2013
Economics is dismal science
To every pair of hands there is a mouth to feed and that’s why economics got a bad name
Page 5- food bank users are in most of the GTA reported the number of food banks
visited surpassed 1 million.
1 third of the adults that attend these food banks hadn’t had a meal in over 24 hours.
What does economic business refer to?
Refers to the conditions of the economic system in which business operates. Canada
reducing into provinces, transfer of jobs so that growing businesses recruit from outside
Canada to fill the gap while other provinces experience high levels on unemployment.
MNR = Resources (Nature): coal, oil, gas, fuel. This can be sold as a form of energizing.
Renewables= wind, sun, tide, hydro-electricity (Niagara falls)
Semi-Renewable= water, food, trees
5 Factors of Production
1. Natural Resources (Land and raw materials)
2. Labor (workers)
3. Capital (assets)
4. Info resource (knowledge workers with specialized training)
5. Entrepreneurs (individuals who startup businesses)
Different types of Economic Systems
1. Command/ communist
3. Marketing Economy
4. Mixed Economy
Market Mixed Socialist Communist 1. Communist: exist when the gov’t owns all the countries resources and makes
economic decisions centrally. Based on Ideology or Marx, where ownership of
capital world held by the gov’t from the common good. Because of communists
regimes and the collapse of the USSR, ideology has fallen into much dispute
among much of Western World. (Cuba)
2. Socialism: was intended as a compromise between the ills of capitalism and the
centralist’s authoritarian tendencies of most communist regimes. Government has
large ownership of its control on major industries essential to the country’s
economy, the attempts to maintain stable systems. (Germany)
3. Market Economy***:Private enterprise typically has four elements: (US)
• Right to own and use private property and transfer ownership
• Freedom of economic choice, to buy and sell etc.
• Acceptability of economic sector to make PROFITS
• Competition among different terms.
4. Mixed Economy: An economy that uses more than one economic systems (Uk).
For example Canada, India.
The Law of Supply and Demand
Demand: the result of the decision from buyers.
Supply: the result of the decisions from sellers.
Competition and the Economy
1. Perfect: Competition. Large number of buyers and sellers acting independently.
2. Monopolistic: Products and services are differentiated usually in a small way and market
sets the price (McDonalds)
3. Oligopoly: When only a few competitors dominate the industry. High barriers of entry.A
4. Monopoly: only when there is one produced in the given market. No substitute product
therefore company sets price. Significant barriers to company.
Economic Stability and Economic Growth
1. The Business Cycle (recession/depression)
2. Aggregate Output (real vs. nominal per capital)
3. Productivity (index of production)
4. The balance of trade (exports less imports) 5. Inflation (the great depression)
6. Unemployment (frictional, seasonal, cyclical, structural)
Economic environment refers to the conditions of the economies.
• Gross domestic product (GDP) How much product in a country
• Gross national product (GNP) How much produced by countries capital
Threats to Economic Stability
Cost of financial and capital funds. Liquid capital as essential resource of capitalist’s economy.
1. Spend the credit (consumers)
2. Invest (businesses)
3. Buy homes, cars, long term durables with long term finances
*** All of the above will boost activity in economy
Strategic Management October 1 2013
Cannot be a stand-alone subject: visions, missions, goals, policy, strategy, and tactics.
Even if the organization does not have goals that are noted, it doesn’t mean that the
organization doesn’t exist. For example: accountants, lawyers, illegal drug rings.
Why are some films more successful then others?
Strategic management attempts to explain different performances.
External and internal models for explaining competitive average.
Mitzberg suggests that strategic planning for long term goals is almost impossible
because there is too much unpredictability.
Roots of Strategy
1. Military (fall of Troy)
2. Political (strategic alignment and alliance)
3. Religious (Holy Roman Empire) Strategic Option
Relative vs. Productive Strategies
Imperial oil became the biggest oil company. Watching and waiting for others to take bigger
Formulate new strategic plans
Economics: Analyzing External Environments
Essential and economists perspective offered in text
The porter 5-focus model attempts to evaluate the attraction or otherwise of an industry
Threat of new
Bargaining power for Industry Bargaining power of
Threat of sustainable
Barriers to Entry
Economies of scale
High switched costs Difficult access to disturbing channels
Outsider’s disadvantages unrelated to scale. (cost: intellectual property and other: gov’t
Bargaining Powers of Suppliers
Are there many suppliers for this industry? Ex Intel andAMD for computer chips
Threats of Substitutes
1. Air vs. rail travel
2. Movie theaters vs. DVD rentals
3. CD and their makers vs. Mp3 downloaders
4. Note newspapers free @ York for a reason, why? Because they are having a hard time
getting them out there.
SWOT= Strength, Weakness, Opportunities, Threats.
3 Generic Strategies
1. Cost leadership thought:
• Economies of scale
• Learning curve economies
• Low cost access to factor of production
• Most effective when business has all 3
• Higher margins (more profit)
• Ability to adapt to changes in the industrial life cycle and competitive pressures (cushion
for hard times)
Business level strategies:
2. Product Differentiation through:
• Product feature
• Links between product function
• Location (yorkville)
• Product mix and bundling (Canadian tire parts and services)
• Links with other firm products (pizza hut) • Customer service
• Premium price for higher received values
• Ability to withstand competitive pressure
3. Focus on Specific Market or Product
• Focus differentiation or focused low cost (IKEA)
Both 2 and 3 are oriented to marketing strategies. Exemplifies the Conglomerate approach.
Related products in markets.
• Generate synergies and economies of scope.
• Backward/upstream= suppliers: product and resource
• Forward/downstream= distributers and retailers
• Conglomerates and holding companies
Longer time frame
Requires major commitment of resources to new development
Course website: jacinth.eso.yorku.ca (sectionA)/ course outline/ syllabus in the website
text/ exploring the Canadian Business Environment/ sec edition/ karakowsky. L (2013)
*DO THE CASE STUDIES
Oct 8 2013
Industrial and Technological Revolution
Curtis Lecture Hall I (section F- chemistry building) Right at the back of the lecture hall
Be there for 6:00 pm
Case study, tested for session 1-5
10 multiple choice questions.
40% of final marks
Number of competitors follows a U shaped curve. Industry sales follow and S shaped curve.
Each stages effects the completion, organizational structure and strategy of the lifecycle.
Industry Emergence and Creation
New industries emerge following major innovations:
• Combination (ex. Legislating more green energy, wind and solar power, battery
tech for hybrid cars)
Nascent industries are highly uncertain and risky and some never make it past the early
Early agents tend to be smaller, entrepreneurial firms with a high degree of technological
innovation, as competitors search for the industries dominant design and standard. (ex.
Automobiles rejecting 3 wheelers, steam and electric propulsith: industry coalesced
around internal combustion gasoline/diesel engine, in early part of the 20 century)
New industries seek legitimacy through collective action and institutional
Despite the increased competition, the entry of large incumbent films into new markets
help legitimize the new industry (Walmart into internet sales)
Characteristics of the emergence phase: • Low intra-industry rivalry (between the people or organizations in the industry)
• Intense R&D
• Slow growth
• Organic structure
Growth and Stakeout
The growth stage begins once there is convergence around a dominant design or technical
Organizations whose approach does not conform to the dominant model either change or
exit during a stakeout. Ex. Wintel standard (MS windows+ Intel) in PCs
Market growth begins to slow down and rivalry becomes very fierce. Products become
commoditized and undifferentiated, innovations are incremental and more confined to
process improvements. Successful firms are efficient and mechanistic! Shift in successful
strategy and structure explains why few firms survive as industry leaders.
The Decline Phase
Industries begin to go down as a result of changes in any or all of:
Demographics (baby food in the 60s)
Consumer’s needs and tasks (cigarettes)
Obsolescence in existing technology (typewriters and VCR’s)
Firms can pursue different strategies to cope:
Maintain industry leadership
Target niche markets (Ferrari, Rolls Royce)
Consolidate the remaining industry players
Look at chart in chapter 3-4**
“the planning reduction in the breadth of an organizations operations” (k.p.74)
Example. Blackberry shrinking from 20,000 to 10,000, and now planning to shrink again
by 50% Some succeed and others don’t
Strategy is not a panacea- concentrates on cost reduction by firing, getting rid of
Downsizing is always painful
1. Cuts across whole organization
2. Offering early retirement and voluntary severance- least painful;:may gain goodwill
3. Delayering- eliminating a level of mid-management and releasing workers
4. Outsourcing or contracting out- legal dept. or payroll
5. Elimination of product lines: no more classical Greek courses at U/V.
Texts outline methods
1. Efficient parts of organization hurts as much as inefficient
2. Not usually part of strategic plan
3. Loss of corporate memory
4. Loss of control or expertise
5. Pain to concentrate (where did my other branch go?)
Cost benefits are often short term and are outweighed by productivity losses, plus customer
alienation through bad performance= revenue losses.
1. Constraining forces