lecture #1 - introduction to adms 1000

8/13/2019 Lecture #1 - Introduction to ADMS 1000

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Introduction toAdministrative StudiesADMS1000

Petrenko Anton, PhDOffice Hours: By appointment

E-Mail: [email protected]


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Language and Meaning

What is an organization?


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Defining Organization

So, what are some ofthe things organizations

have in common?

Organizations are social entitiesthey are made up of

people, and they involve human interaction.

Organizations are created to achieve goals (whether

profit or non-profit); they are goal-directed.

Organizations interact with the environmentorganization

obtains inputs (e.g. sources, labour, materials) from the

environment and transforms then into outputs (e.g. goods,

services).


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What difference does a

perspective do?

How do we conceptualize

the object when we

interpret its boundaries?
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Viewing Organization as an Open System

Applying metaphors is a useful way of gaining insight into a concept. Viewing theconcept of organization through a metaphor can guide our thinking conceptualizing of

the nature of organization and its function.Organization used to be viewed asclosed systems. This approach focuseson the internal aspect of the organizationand sees it as independent and self-sufficient entity.

Viewing organization asan open system focuses

our attention on its relation

to and interaction with itsenvironment.

Organizations environment containsboth challenges and opportunities forthe organization.


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What are the critical

environmental factors

affecting the success ofthe business?


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External Context of Business:Specific and General Environment

ORGANIZATION

Unions

Distributors

Creditors

Local Public

Competitors

Employees

Suppliers

Customers Government

PoliticalForces EconomicForces

GlobalForces

TechnologicalForces

CompetitiveForces

LabourForces

SocietalForces

Organization is surrounded by specific or task

environment that contains stakeholders (groups or

parties) who have directinfluence on the ability of

the organization to obtain resources and produce

outputs.

Surrounding the specific environment is the sphere

of general environment, which is made up of forces

that shape the specific environment. Thus, it also

affects the ability of organizations to obtain

recourses and produce outputs.


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1. Economic Forces

How do economicforces affect

business?

Whether the economy is strongor weakcan dramatically affect the operations and

the strategy of business, forcing it to adopt to changing conditions. The changing

economic environment can affect competition, consumer behavior, availability of

financial and labour resources, employee-employer relationship, etc

So, what are someof the indicators ofeconomic health?

earned from producing goods and services goes

to business, employees, and the government (in

taxes).

1979-1989: Canadas GDP grew 3.2% annually

2001-2009: Compound annual growth was 1.6%

Expected compound annual growth is 2.5% until 2025.

GDPor Gross Domestic

Productis one of the main

indicators of the health of

the economy. It is the totalvalue of countrys output in

goods and services in a

given year. The money

Severe recession in 2008-2009


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2. Competitive Forces

How docompetitive forcesaffect business?

Level of competition can have a dramatic effect on the cost of doing business,

revenues, business strategy, and the overall economy. Without competition, the

provider of goods has very little incentive to innovate or improve the product or sell

it at a fair price. Competition provides such incentives.

Pure competition: a

(perfect) competition where

many small firms produce

an identical product (no

one has control over price)

Monopolistic competition: a large number of small firms

producing slightly different products (some influence on price).

Oligopoly: a small number of producers with different products (significant

control over price) . Monopoly: one producer of product (controls price).

When industry is relatively concentrated, the producers can dictate

market price. Some criticize Canada for not having as strict legislation

against industry concentration as present in US. In Canada, 25 large

firms are responsible for 25% of total profits and 41% of all assets.


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3. Technological Forces

How dotechnologicalforces affect

business?

Technological development not only can affect the business's productivity, efficiency,

and ultimately its bottom-line, it can dramatically reshape the whole industry and

ultimately the economy in general.

Canada traditionally has been a

resource oriented economy

(forestry, mining, fisheries,

energy, minerals, and

agriculture). However, it hadbeen changing.

If at the start of the 20th century there was a balance between employment

in primary sectors (resource) and provision of goods and services, over the

course of the century employment shifted towards manufacturing (1945-1960) and then to services (42% in 1950; 72% in 1993) .

Technology is largely responsible for the shift (improved productivity).

Mechanization in agriculture (reaper), and then in manufacturing allowed

to produce the same output with less people. So, more people are

available for service sectors where they are hard to replace.


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4. Labour Forces

What is the effectof labour forces on

business?

Demographics comprise characteristics of a population, such as age, sex, income,

employment, health, etc Since labour forces are essential to business activities

and planning, demographic trends have a significant effect on business operations.

Examples:

Veterans returning from WWII, assisted with

government grants, married and bought houses, which

led to a 20 year industry boom in housing, baby

clothing, etc

Recent trend is the aging of the population (in 1921: median age

24; in 1993: over 33; in 2036 could be 50). Youth population is

decreasing due to low birth rate (in 2011, 20% is 6-19). Business

will likely cater to older population: health care, recreation, travel

projected to benefit.Another trend is the increasing proportion of

women in the labour forces and the increasing

racial, and cultural diversity of the workforce.

Business practices, from employment to training

will have to adjust to the trends.


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5. Global Forces

How do globalforces affectbusiness?

Global factors (trade agreements, competition, geographic proximity, etc) have

tremendous effect on Canadas business activity. One of the major such influencing

factors is Canadas proximity to US.

International Trade.

Canada exports 40% of is GDP

(compared to 25% 10 years ago).

The questions is whether

Canada exports more than it

imports (trade deficit).

US gets 85% of Canadas export, but Canada runs trade

deficit with most other trading partners (except UK). In

2010 the trade balance: US (36, 719.3 mil); Japan (-

350.6 mil); UK (7,425.2 mil); EU (-11,312.5); OECD

(11,104.6 mil); rest (-30,375.4)

The level of foreign ownership is relatively high in Canada. We want to

attract business investment, but a lot of investment ends up being branch

plants rather than full manufacturing (sales offices). Over 20 years,

11,380 companies were taken over worth 548.494 billion but resulting in

only 18.040 billion new investment. Now 30% of economy is foreignowned.


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6. Political Forces

What is the effectof political forces

on business?

Canadian economy is a mixed systema capitalist system with government playing

some important role. Historically, the government used tariffs on imports to protect

domestic producers.

Some argue that a large portion of Canadas

industrial development is due to tariffs imposed in

1879 by Sir john Macdonalds National Policy.

The government can exercise some control over the

business decisions by offering incentive programsor financial support, favouring its desired choice.

But to what extent

should the governmentinterfere with the

Canadian business inthis way?

There is a controversy over

Canadian subsidies to the

aerospace giant Bombardier, which

is competing with the BrazilianEmbraer SA on the global stage.


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7. Societal Forces

How can societalforces affect

business?

Canada has a high reputation as one of the best (or best) countries in the world where

to conduct business, but it also faces challenges that can undermine this reputation

and affect business operations. Society has certain expectations of responsible

behaviour; falling short of these expectations can have serious impact on business.

Examples:

Bear Creek Mining Corp.

wanted to open a silver mine

in Peru, which led to violentprotests from local residents

concerned with pollution of

waterfive people died and

dozens were injured.

In 2011, Calgary-based Niko Resource Ltd. was found guilty of bribingofficials in Bangladesh (22 other companies are investigated).

Montreal engineering company SNC Lavalin Group Inc. was recently

exposed in the media as participating in building prisons in Libya for the

regime of Moammar Gadhafi.


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This course offers an examination of the external context of business and the

challenges of managing in the Canadian business environment. Our exploration of

the external context of business includes consideration of such key areas as

economic, competitive, labour, technological, societal, global, and political issues.

The broad aim is to provide insight into current challenges and opportunities that

play a dramatic role in the business landscape and affect business strategy.

Course Objectives

1. To identify the key factors which comprise the external environment ofbusiness.

2. To understand the potential impact of these external factors on business.

3. To obtain an understanding of the challenges & opportunities present in the

Canadian business context.

4. To encourage critical thinking regarding the external challenges that must be

addressed as part of successful business strategy.


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Course Requirements

Mid-Term (40%) closed book

Final Exam (60%) closed book

Total: 100%

lecture #1 - introduction to adms 1000

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