WEEK 2/WEEK 3 January 22nd

Organizational Boundaries
● External environment: factors beyond an organization’s boundaries that cannot be controlled.
● Organizational boundaries: that which separates the org from its environment
○ Boundaries are blurring--->no longer a distinction between the two. ^
Economic Environment
● Business cycle
○ Peak: the highest point of growth, economic indicators
○ Recession: gradual decrease in key indicators 2/4
○ Trough: key indicators have reached their lowest level
○ Recovery: key indicators start to increase
● Aggregate output: measure of economic growth
○ Total quantity of goods and services produced by an economic system

● GDP: within the geographic limits of a country

○ GDP per capita takes into account the population, standard of living of that country on an
individual basis
○ Productivity is an important measure of growth; output vs. input
output
---------
input
● GNP: country’s citizens irrespective of the geological location
● Balance of trade: exports - imports
○ Negative (trade deficits)
○ Positive
● Economic stability: money available and quantity of goods and services produced are growing at a
similar rate
● Inflation: widespread price increases in an economic system
○ money in the system (people have more expendable money and buy more than is produced)
exceeds the output available causing prices to inflate
○ CPI is used to measure
● Deflation: a period of economic falling
○ Higher unemployment

● Unemployment: level of joblessness among people actively seeking work in an economic system.
○ Structural: lack of skills
○ Cyclical: economic downturn, recessions cause people to lose jobs
○ Frictional: in between jobs
○ Seasonal: seasonally needed skills (e.g. weather dependent jobs, construction projects)
 ● Fiscal Policies: policies impacting the collection and spending of tax revenue
● Monetary policies: policies impacting the supply of money (e.g. interest rates)
The technological environment
Technology
Research ad development (basic/pure)
WEEK 4 January 29th

Redrawing corporate boundaries

Acquisitions
● One firm buys another

Mergers
● Consolidation of two firms
➔ Verticle integration: organizations that aren’t in the same business that you’re in, but could
be suppliers
➔ Horizontal integration: buying up competitors, looking to expand business

Takovers
Friendly: both parties want merge acquisition to happen
Hostile: acquiring company buys enough of the other company’s stock to take control.
➔ a poison pill is a defensive tactic that management can adopt to make a firm less attractive; make
it unappealing

Divestitures and spin offs

● Divestitures: Selling parts of existing business
● spin offs: Selling parts of a business up as a new corporation

Strategic alliance: two or more companies temporarily join forces; “joint venture”

Ways to fund venture:

● Bootstrapping: how are you making the most out of the resources you have? More for less
● Equity:
○ Personal savings
○ Venture capitalists
○ Private investors (angels)
● Debt
● Financial
Potential midterm question: What are the pros and cons of each way to start a business?
 ● Buying an already existing business
● Taking over a family business

MIDTERM…

WEEK 7 (CHAPTER 6: MANAGING THE BUSINESS ENTERPRISE)

(1)The Management Process
Planning:
● the process of determining the firm’s objectives and developing an action plan to achieve these
objectives.
Strategic plans
associated with senior management who establish long term plans (2-5 years)

Tactical plans
usually created by middle managers; support the strategic plans and define
resource allocation (1-2 years)

Operational plans
executed and finalized by first-line managers for short-term targets of less than
a year (monthly, weekly, daily)

Leading:
● Guiding and motivating employees to meet objectives.
● Managers have various responsibilities with regard to their employees

Organizing:
● Determining how to use existing resources to implement the plan.
● Arranging jobs in a structure to create an efficient task system.

Controlling:
● Managers monitor the firm’s performance
(2)Types of Management
TOP management: responsible for the overall performance of the firm.
MIDDLE management: responsible for implementing decisions of top managers.
FIRST LINE management: responsible for supervising employees.

Areas of management → HR managers, operations managers, information managers, marketing managers,

financial managers
Basic Management Skills Decision Making Process Behavioural Aspects of Decision
Making

=productive use of time. 1. Recognize and define the ➔ Organizational politics

decision situation ➔ Intuition
Leading causes of wasted time: 2. Identify alternatives ➔ Escalation of commitment
● Paperwork 3. Evaluate alternatives ➔ Risk propensity: is a trait
● Telephone 4. Select the best alternative characterized by an
● Meetings 5. Implement the chosen increased probability of
● email alternative engaging in behaviours that
6. Follow up and evaluate have some potential danger
results or harm but also provide an
opportunity for some
benefit.

(3)Setting Goals and Formulating Strategy

● Purpose:
○ Provides direction, guidance, and motivation.
○ Assists in allocating resources.
○ It helps to define corporate culture.
○ It helps managers assess performance.

● Kinds of goals:
○ Long term → 5 or more years.
○ Intermediate → 1 to 5 years.
○ Short term → less than 1 year.

S M A R T

specific measurable attainable relevant time-based

● Mission statement:
○ Organization’s purpose → what business are we in?
○ Clarifies who the organization serves, what it offers, and how it will be provided.
○ Includes core values and ethical commitment.

● Formulating strategy
1. Setting strategic goals (long term goals based on the mission statement)
↓
 2. analyzing the organization and its environment (SWOT)
↓
3. matching the organization to its environment

(4)SWOT Analysis
(5)Strategic Management
● The process of aligning the organization with its external environment.
● Strategic goals → performance objectives that a firm plans to achieve.

(6) ****levels of strategies****

● Corporate level →

○
 ● Business level (competitive) → how will we compete in our chosen area?
○ Cost leadership: being the low cost leader
○ Differentiation: different product/service unique in its industry to add value to buyers
○ Focus: focus on the market segment and serving the customers in that niche better than the
competition

(7)Contingency Planning and Crisis Management

● Contingency planning → identify in advance changes that might occur and ways the company can respond to
changes.
● Crisis management → methods for dealing with emergencies.

Management and Corporate Culture

● Corporate culture:
○ A firm’s personality
○ Shared experience of employees
○ Stories, beliefs, and norms that characterize the organization
○ Culture can direct employee’s efforts

● Communicating the culture:

○ Ensure new and existing managers understand the culture
○ Develop a clear mission statement
○ Communicate the culture to employees
○ Reward those who understand and maintain the culture

● Managing Change
○ Cultural change process (management formulates vision of new company, new systems of
appraisal and compensation)
 WEEK 8 (CHAPTER 9: MOTIVATING, SATISFYING & LEADING
EMPLOYEES)
(1) 4 Management activities
Planning (setting goals) → organizing (structuring) → leading (guiding/motivating) → control (monitor performance)

Forms of Employee Behaviour

1. Performance behaviour
2. Organizational citizenship
3. Counterproductive behaviour (absenteeism, turnover)

(2) Employee Differences

Personality → (agreeableness, conscientiousness, emotionality, extraversion, openness)
Attitudes → (reflection of our beliefs and feelings about ideas and situations and other people)
Job satisfaction → (extent to which people have positive attitudes toward their jobs)
Organizational (job) commitment → reflects an individual’s identification with the organization and its mission

(3) Motivation in the Workplace

● The set of forces that cause people to behave in certain ways

THEORIES OF MOTIVATION
★ Classical theory → workers are motivated primarily by money, therefore paying employees more would result in
higher levels of production.
-Scientific management → analyze jobs and find more efficient ways to perform them (time and motion studies)

★ Behaviour theory
→ HR model {2 opposed perceptions of employees}
→ Maslow’s Hierarchy of Needs model {basic needs <<power, affiliation, achievement >> must be met
before an individua seeks higher level needs}
→ Two-factor model
○ Hawthorne effect is the tendency for workers productivity to increase when they are receiving
special attention from management

★ Contemporary motivation theories

(4) Leadership and Motivation
● The process of motivating others to meet goals

APPROACHES
Trait approach → identifies traits that would distinguish leaders from non-leaders

Behavioural approach → determines how the behaviours of successful leaders differs from those of unsuccessful leaders
(task oriented vs. employee oriented)

LEADERSHIP STYLES
 ● Many managers use one style but some may use a combination of styles depending on the situation.
○ Autocratic
○ Democratic
○ Free-rein

● Transactional leadership → emphasizes routine, regimented activities that focus on maintaining stability of the
status quo.
● Transformational leadership → the ability to recognize the need for change, create a vision to make change
happen.
● Charismatic leadership → possess a high level of confidence, possess a strong need to influence others,
communicate high expectations of subordinates, generally more successful at influencing employees

WEEK 9 (CHAPTER 10: MANAGING OPERATIONS & INFORMATION)

(1) The Supply Chain
The value chain
➔ A group of companies and stream of activities involved in getting the product from raw materials to end
the consumer.
➔ Starts with raw material suppliers and continues adding value through other stages.

Supply chain management

● Offers a competitive edge because companies are working together to improve overall flow of goods
○ Customers get better value
○ Smooth flow of accurate information reduces unwanted inventory
○ Materials move faster to business customers and consumers

Operations Management
➔ A set of methods and technologies used in the production of a good or a service.

Service operations → production activities that yield tangible and intangible service products

Goods production → production activities that yield tangible products

(2) Operations processes

➔ Quality
◆ High standards for materials, suppliers
◆ Specialized
 ◆ Expertise and continuous improvement
➔ Low cost
◆ Avoids excess overhead, inventory, staff
➔ Flexibility
◆ Excess capacity
◆ Adaptable equipment, facilities, staff, etc.
➔ Dependability
◆ Automated
◆ Often vertically integrated or supply chain management focus

Goods-producing processes → methods and technologies used in the production of goods and services.
Classified by:

Service-producing processes → customers are involved in and can affect the transformation process low contact
system.

Low-contact system High-contact system

● Customers do not need to be physically ● Customers need to be physically present

present
(3) Operations PLANNING
● Successful operations are carefully planned and implemented.
○ Capacity planning (amount that a firm can produce under normal conditions)
○ Quality
○ Location
○ Layout
○ Methods planning

● Capacity planning (goods/services) → Amount that a firm can produce under normal conditions.
○ Capacity should slightly exceed normal demand
○ Accommodate seasonal changes and peak times
○ Address ways to use excess capacity.
(4) Operations SCHEDULING

CHARTS
(4) Operations CONTROL
● Just in time production → parts are delivered when they are needed.
○ Resources continually flow from raw materials to the finished product
○ Saves on warehouse costs
○ Smooth movement of product components

Productivity-quality connection
● Quality → a product’s fitness for use n terms of offering the features that consumers want.
● Measuring productivity → measured as a ratio of outputs to inputs, often use labor for input because data is easily
available
Labour productivity = GDP
------------------------------------
Total number of workers
WEEK 10 (CHAPTER 12: MARKETING PRINCIPLES & DEVELOPING
PRODUCTS)
(1)What is marketing?
● An organizational function and set of processes for creating, communicating, and delivering value to
customers, and for managing customer relationships in ways that benefit the organization and
shareholders.
○ Value = benefits / costs
● Relationship marketing → building lasting relationships with customers and suppliers. (goal: customer
satisfaction and loyalty/retention)
● Customer Relationship marketing (CRM) → organized methods used to build information connections to
improve company-client relationships.
(2)Creating value
❖ Time utility → making the product/service available when consumers want it.
❖ Place utility → ...where consumers want it.
❖ Ownership (possession) utility → ...consumers use the product, have enjoyment in owning.
❖ Form utility → values consumers see in a finished product.
Marketing can be designed for…
● Consumer goods (B2C): tangible products purchased by individuals for their use.
● Industrial goods (B2B): products purchased by companies to use directly or indirectly to produce other
products.
● Services: intangible products to serve users’ needs
● Ideas: thoughts or philosophies

(3)Organizational Marketing
● Organizational markets → organizations purchase goods and services to be used in the production of other goods
and services.
○ Industrial market.
○ Reseller market.
○ Government and institutional market.

Needs, wants & demand

Need
● State of felt deprivation including physical, social, and emotional needs.
● Essential for human existence.
Want
● Desire for a particular product to satisfy a need.
● Needs and wants are fulfilled through market offerings (products/services).
Demand
● When a what is backed by buying power, a want becomes a demand.