THE CHALLENGES OF BUSINESS: A FRAMEWORK
What are the fundamental internal and external forces which all organizations must confront in their
struggle to survive and prosper?
CANADA: A GREAT PLACE TO DO BUSINESS?
Taxes & Spending
Employment & Labour
The Business Environment
Technological opportunities and facilities
INTERNAL ENVIRONMENT PEOPLE
People are a key component of all organizations
People as a competitive advantage
Recruiting the right people
Managing people and teams
Leadership as a key influence on employee satisfaction & performance
INTERNAL ENVIRONMENT STRUCTURE
A planned network of relationships between individuals in various positions in the
Includes the formal hierarchy of authority, e.g. distribution of work rules or
procedures controlling and coordinating behaviour
Many organizations are changing their structure (restructuring). This may include
INTERNAL ENVIRONMENT STRUCTURE
A HIERARCHICAL ORGANIZATIONAL STRUCTURE
LINE MANAGERS OFFICE & ADMIN STAFF
A FLATTER ORGANIZATIONAL STRUCTURE
HEADS OF DEPTS
CLERICAL & ADMIN STAFF
Also includes the informal hierarchy of authority, who influences whom and who is
involved in activities like decision making
What might influence someones position in the informal structure of an organization?
INTERNAL ENVIRONMENT STRATEGY
A key part of all management decision-making activity
Goals must be identified
Strategy is how goals are achieved, e.g. will the business be a low cost provider or a niche provider?
Why must managers and employees understand organizational strategy and goals and the relationship
between the two?
EXTERNAL ENVIRONMENT THE SPECIFIC/TASK ENVIRONMENT
Parties/ Groups that have a direct influence on the organization
People Structure Strategy
EXTERNAL ENVIRONMENT THE GENERAL ENVIRONMENT
Global Forces Competitive Forces
GENERAL ENVIRONMENT - ECONOMIC FORCES
An economic slump can mean downsizing, cuts in training and staff development, end of traditional
work practices etc
An economic boom can mean expansion, extra training, R & D etc
GENERAL ENVIRONMENT - POLITICAL FORCES
Political change can be very influential e.g. deregulation of Canadian Telecoms, banking industry,
reduction of trade barriers, changing political leaders
In Canada there is a move towards less government intervention
GENERAL ENVIRONMENT SOCIETAL FORCES
Changes in attitudes to work & equality are important societal forces, organizational justice &
compensation & benefits
Health & Safety issues
Views on fashion and health
GENERAL ENVIRONMENT - COMPETITIVE FORCES
Business must think about who their competitors will be
Competition may be at a local, national or global level. It may be open or restricted
What are the advantages and disadvantages of competition?
GENERAL ENVIRONMENT - TECHNOLOGICAL FORCES
Technology has an important influence on organizations - accessibility influences market entry
and operating costs
Consider how technology has influenced the role of work and how work is done, e.g.
teleworkers, flexible work practices
GENERAL ENVIRONMENT GLOBAL FORCES
Global forces have an international dimension e.g. the events of September 11th, BSE crisis. Organizations must now think globally
Global forces have resulted in business outsourcing in order to gain a competitive advantage
EXTERNAL FORCES IN CANADA
Gross Domestic Product (total value of a countrys annual output of goods and services)
Canadas economy grew at 0.5% in 2008.
In last quarter of 2008 GDP declined by 3.4%.
Unemployment is another important economic force in Canada, currently at 7%.
Capitalist economy but the government also has an important role in the business environment, e.g. R &
D incentives, global trade agreements etc.
Open economy. Government attempts to reduce monopolies by encouraging competition so goods and
services are available to fit the needs of the market
Resource based economy (farming, mining, forestry etc) now moving to manufacturing, technology and
service sector e.g. telecommunications, energy etc
Increasing need for higher education, immigration, aging population, changes in employment law,
declining birthrates, women in the workforce
Proximity to USA ($1.3bn a day in trade) or 85% of all Canadian exports
Canada exports over 40% of its GDP a major trading nation through agreements such
Foreign ownership of Canadian companies is becoming increasingly common, e.g. the
sale of Canadian companies like HBC
There is a good deal of FDI with many subsidiaries of US based parent companies e.g.