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Brief Contents
PART 1 01
INTRODUCING THE CONTEMPORARY UNDERSTANDING THE CANADIAN BUSINESS SYSTEM 3
BUSINESS WORLD 2
02
THE ENVIRONMENT OF BUSINESS 23
03
CONDUCTING BUSINESS ETHICALLY AND RESPONSIBLY 45
04
ENTREPRENEURSHIP, SMALL BUSINESS, AND NEW VENTURE CREATION 73
05
THE GLOBAL CONTEXT OF BUSINESS 97
PART 2 06
THE BUSINESS OF MANAGING 120 MANAGING THE BUSINESS ENTERPRISE 121
07
ORGANIZING THE BUSINESS ENTERPRISE 147
08
vii
MANAGING HUMAN RESOURCES AND LABOUR RELATIONS 169
09
MOTIVATING, SATISFYING, AND LEADING EMPLOYEES 197
PART 3 10
MANAGING OPERATIONS AND OPERATIONS MANAGEMENT, PRODUCTIVITY, AND QUALITY 229
INFORMATION 228
11
UNDERSTANDING ACCOUNTING 255
PART 4 12
PRINCIPLES OF MARKETING 290 UNDERSTANDING MARKETING PRINCIPLES AND DEVELOPING
PRODUCTS 291
13
PRICING, PROMOTING, AND DISTRIBUTING PRODUCTS 317
PART 5 14
MANAGING FINANCIAL ISSUES 342 MONEY AND BANKING 343
15
FINANCIAL DECISIONS AND RISK MANAGEMENT 365
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Contents
PART 1
Managing the Canadian Economy 31
LO-3 The Technological Environment 31

INTRODUCING THE CONTEMPORARY Research and Development (R&D) 31
BUSINESS WORLD 2 Product and Service Technologies 32
THE GREENING OF BUSINESS Here Comes the Hydrogen
Fuel Cell … Again 32
01 ENTREPRENEURSHIP AND NEW VENTURES Selling Magic in

a Connected World 33
LO-4 The Political–Legal Environment 33

Understanding the Canadian
Business System 3 LO-5 The Socio-Cultural Environment 34
Customer Preferences and Tastes 34
Combining the Whopper and the Timbit 3 Ethical Compliance and Responsible Business
Behaviour 34
LO-1 The Idea of Business and Profit 4 The Business Environment 34
The Industry Environment 34
LO-2 Economic Systems Around the World 5
MANAGING IN TURBULENT TIMES The Impact of the
Factors of Production 5 Physical Environment 35
Types of Economic Systems 5
ENTREPRENEURSHIP AND NEW VENTURES Riversong: LO-6 Emerging Challenges and Opportunities in the
Revolutionary Canadian Guitars 6 Business Environment 36
There’s an APP for THAT! 8 Outsourcing 36
The Growing Role of Social Media 37
LO-3 Interactions Between Business and Government 9 Business Process Management 37
How Government Influences Business 9 E-BUSINESS AND SOCIAL MEDIA SOLUTIONS Staying
ix
How Business Influences Government 11 Connected in the Skies 37
LO-4 The Canadian Market Economy 12 LO-7 Redrawing Corporate Boundaries 38

Demand and Supply in a Market Economy 12 Mergers and Acquisitions 38
Divestitures and Spinoffs 38
LO-5 Private Enterprise and Competition 14 Employee-Owned Corporations 38
Degrees of Competition 14 Strategic Alliances 39
E-BUSINESS AND SOCIAL MEDIA SOLUTIONS Taking a Bite Subsidiary and Parent Corporations 39
out of Internet Radio 15 Summary of Learning Objectives 39
Summary of Learning Objectives 16 Questions and Exercises 40
Questions and Exercises 17 Team Exercises 41
business case 2 42
Team Exercises 17
business case 1 19
CHAPTER SUPPLEMENT 01 21
03
02 Conducting Business Ethically
and Responsibly 45
The Environment of Business 23
What’s Happening in the Fair Trade Movement? 45
Supermarket Battles: Then There Were Three 23
Ethics in the Workplace 47
LO-1 Organizational Boundaries and Environments 25
LO-1 Individual Ethics 47
Organizational Boundaries 25 Managerial Ethics 48
Multiple Organizational Environments 26 Assessing Ethical Behaviour 49
Encouraging Ethical Behaviour in Organizations 50
LO-2 The Economic Environment 26
Economic Growth 27 LO-2 Corporate Social Responsibility 51
There’s an APP for THAT! 29 LO-3 The Stakeholder Model of Responsibility 52
Economic Stability 30 There’s an APP for THAT! 53
ENTREPRENEURSHIP AND NEW VENTURES Creating
05
Games with a Social Twist 55
MANAGING IN TURBULENT TIMES Should We Pay
Whistle-Blowers? 56
THE GREENING OF BUSINESS Some Frustrations in the
The Global Context of Business 97
Green Movement 60
Implementing Social Responsibility Programs 60 Not My Cup of Tea 97

LO-4 Approaches to Social Responsibility 60 The Contemporary Global Economy 99
Managing Social Responsibility Programs 61
LO-1 The Major World Marketplaces 100
LO-5 Social Responsibility and the Small Business 62 LO-2 Emerging Markets: BRICS and Beyond 100
LO-3 Forms of Competitive Advantage 101
Summary of Learning Objectives 63 The Balance of Trade 103
Questions and Exercises 64 The Balance of Payments 103
Team Exercises 64 Exchange Rates 103
business case 3 65 There’s an APP for THAT! 104
CHAPTER SUPPLEMENT 02 68 LO-4 International Business Management 104
Going International 104
Levels of Involvement in International Business 105
International Organizational Structures 106
04 ENTREPRENEURSHIP AND NEW VENTURES Bugatti-

Sedona: Charting a New Path 107
LO-5 Barriers to International Trade 108

Entrepreneurship, Small Business,
Social and Cultural Differences 108
and New Venture Creation 73 Economic Differences 108
Legal and Political Differences 108
Mr. Ma: King of the Canadian Food Court! 73
LO-6 Overcoming Barriers to Trade 110
Small Business, New Venture Creation, and
Entrepreneurship 75 General Agreement on Tariffs and Trade (GATT) 110
World Trade Organization 111
LO-1 Small Business 75 The European Union 111
The New Venture/Firm 76 The North American Free Trade Agreement 111
x
Entrepreneurship 76
MANAGING IN TURBULENT TIMES The Urge to Move 112
Contents
LO-2 The Role of Small and New Businesses in the Major Agreements in the Works: TPP and CETA 112
Canadian Economy 76 Other Free Trade Agreements 112
Small Businesses 77 Summary of Learning Objectives 113
New Ventures 77 Questions and Exercises 114
Team Exercises 114
LO-3 The Entrepreneurial Process 78
business case 5 115
Identifying Opportunities 78
Crafting a Business Plan 117
E-BUSINESS AND SOCIAL MEDIA SOLUTIONS Teenage
cbc video case 1-1 118
Innovator, Entrepreneur, and Multimillionaire 79
business today video case 1-1 118
ENTREPRENEURSHIP AND NEW VENTURES Harvard business today video case 1-2 119
Dropout Turned Billionaire 80
Accessing Resources 82
There’s an APP for THAT! 83
Building the Right Team 83
Assessing the Fit Between Elements in the Entrepreneurial
PART 2
THE BUSINESS OF MANAGING 120
Process 84
THE GREENING OF BUSINESS Small Businesses
06
Go Green 85
Start-up and Beyond 85

LO-4 Starting up a Small Business 85
Managing the Business
LO-5 Success and Failure in Small Business 87 Enterprise 121
Reasons for Success 87
Reasons for Failure 87 Google Keeps Growing 121
LO-6 Forms of Business Ownership 88
Who Are Managers? 123
Summary of Learning Objectives 91
Questions and Exercises 93 LO-1 The Management Process 123
Team Exercises 93 Planning 123
business case 4 94 Organizing 124
Leading 124 Project Organization 158
Controlling 124 International Organization Structures 160
E-BUSINESS AND SOCIAL MEDIA SOLUTIONS The Truth
Organizational Design for the Twenty-First
About Your Online Customer Service 125
Century 160
Management: Science or Art? 125
Boundaryless Organization 160
Becoming a Manager 125 THE GREENING OF BUSINESS Green Roof
MANAGING IN TURBULENT TIMES Challenges Facing Structures 161
Managers 126 Team Organization 161
What Should You Expect in a Management Job? 126 Virtual Organization 161
Learning Organization 161
LO-2 Types of Managers 127
LO-5 The Informal Organization 162
Levels of Management 127
Areas of Management 128 Informal Groups 162
The Organizational Grapevine 163
LO-3 Management Roles and Skills 129 There’s an APP for THAT! 163
Management Roles 129 MANAGING IN TURBULENT TIMES Gossip on the
Basic Management Skills 129 Grapevine 163
LO-4 Strategic Management 133 Summary of Learning Objectives 164
Setting Business Goals 133 Questions and Exercises 165
Formulating Strategy 134 Team Exercises 165
business case 7 167
THE GREENING OF BUSINESS Some Complications in
Setting Green Goals 134
08
Levels of Strategy 136
LO-5 Contingency Planning and Crisis Management 137

Contingency Planning 137
Crisis Management 138 Managing Human Resources and
Labour Relations 169
LO-6 Management and the Corporate Culture 138
Communicating the Culture and Managing Change 139 Can Different Generations Work Together? 169
xi
Summary of Learning Objectives 140 LO-1 The Foundations of Human Resource
Questions and Exercises 141
Contents
Management 171
Team Exercises 141
business case 6 143
The Strategic Importance of HRM 171
Human Resource Planning 171
LO-2 Recruiting Human Resources 172

Selecting Human Resources 173
07
THE GREENING OF BUSINESS “Green” Jobs in
Surprising Places 174
Organizing the Business LO-3 Developing Human Resources 175
Enterprise 147 New Employee Orientation 176
Training and Development 176
Time to Reorganize! 147
ENTREPRENEURSHIP AND NEW VENTURES LinkedIn:
What is Organizational Structure? 150 Strengthening Your Ability to Connect 177
LO-1 Determinants of Organizational Structure 150 Team Building and Group-Based Training 177
The Chain of Command 151 Evaluating Employee Performance 177
The Building Blocks of Organizational Structure 151 LO-4 Compensation and Benefits 178
LO-2 Specialization 151 Determining Basic Compensation 179
Departmentalization 152 Incentive Programs 179
Benefits 180
Establishing the Decision-Making Hierarchy 153
LO-5 The Legal Context of HRM 181
LO-3 Assigning Tasks 154
Performing Tasks 154 Equal Employment Opportunity 181
Distributing Authority 155 Comparable Worth 181
Three Forms of Authority 155 Sexual Harassment 182
Employee Safety and Health 182
LO-4 Basic Organizational Structures 157 Retirement 182
The Functional Structure 157 MANAGING IN TURBULENT TIMES Defined Benefit Versus
The Divisional Structure 158 Defined Contribution Pension Plans 183
LO-6 New Challenges in the Changing Workplace 183 Modified Work Schedules 211
Managing Workforce Diversity 183 THE GREENING OF BUSINESS The Four-Day Workweek
Managing Knowledge Workers 184 and Telecommuting: Are They Really Green? 213
Managing Contingent Workers 184
LO-6 Leadership and Motivation 214
LO-7 Dealing with Organized Labour 185 Leadership and Power 214
The Development of Canadian Labour Unions 185
Unionism Today 185 LO-7 Approaches to Leadership 215
The Future of Unions 186 There’s an APP for THAT! 216
LO-8 The Legal Environment for Unions in Canada 186 LO-8 Recent Trends in Leadership 217
Federal Legislation—The Canada Labour Code 186
Provincial Labour Legislation 187 Summary of Learning Objectives 219
Union Organizing Strategy 187 Questions and Exercises 221
Union Security 188 Team Exercises 222
Types of Unions 188 business case 9 222
LO-9 Collective Bargaining 189 Crafting a Business Plan 224

cbc video case 2-1 225
Reaching Agreement on the Contract’s Terms 189
Contract Issues 189
When Bargaining Fails 190
Conciliation, Mediation, and Arbitration 191

Team Exercises 193
PART 3
MANAGING OPERATIONS AND
business case 8 194
INFORMATION 228
09 10
Motivating, Satisfying, Operations Management,
xii
and Leading Employees 197 Productivity, and Quality 229

Contents
Satisfaction, Productivity, and Employee Big Changes in Canadian Manufacturing 229

Engagement 197
LO-1 What Does “Operations” Mean Today? 232
LO-1 Forms of Employee Behaviour 200 Changes in Operations 232
LO-2 Individual Differences Among Employees 201 Creating Value Through Operations 232
Personality 201 LO-2 Differences Between Service and Manufacturing
Other Personality Traits 202 Operations 232
Attitudes at Work 202 THE GREENING OF BUSINESS Producing Green
E-BUSINESS AND SOCIAL MEDIA SOLUTIONS Employers Energy 233
Are Judging Your Social Life 203 LO-3 Operations Processes 235
Business Strategy as the Driver of Operations 236
LO-3 Matching People and Jobs 204
Psychological Contracts 204 LO-4 Operations Planning 237
The Person–Job Fit 204 Capacity Planning 237
Location Planning 237
Motivation in the Workplace 204 Layout Planning 237
Classical Theory 205
MANAGING IN TURBULENT TIMES Will Robots Take
Early Behavioural Theory 205
Your Job? 239
LO-4 The Human Resources Model: Theories X Quality Planning 240
and Y 205 Methods Planning 240
Contemporary Motivation Theory 207 Operations Scheduling 240
LO-5 Strategies for Enhancing Motivation 208 The Master Operations Schedule 240
Detailed Schedules 241
Reinforcement/Behaviour Modification 208
Staff Schedules and Computer-Based Scheduling 241
Goal-Setting Theory 208
Project Scheduling 241
MANAGING IN TURBULENT TIMES Carrot or Stick? 209
Participative Management and Empowerment 210 Operations Control 243
Team Management 210 Materials Management 243
Job Enrichment and Redesign 211 Production Process Control 243
PART 4
LO-5 The Productivity–Quality Connection 244
Meeting the Productivity Challenge 244
Meeting the Quality Challenge 245 PRINCIPLES OF MARKETING 290

LO-6 Managing for Quality 245
12
Tools for Quality Assurance 247

Team Exercises 251 Understanding Marketing
business case 10 252
Principles and Developing
Products 291
11 P&G Marketing: Dealing with a Shrinking

Middle Class 291
LO-1 What Is Marketing? 293
Understanding Accounting 255
Delivering Value 293
Searching for Stolen Maple Syrup: Accounting for Goods, Services, and Ideas 293
Missing Inventory 255 Relationship Marketing and Customer Relationship
Management 294
What Is Accounting, and Who Uses Accounting The Marketing Environment 294
Information? 257 THE GREENING OF BUSINESS Feeling the Pressure
for “Green” 295
LO-1 Who Are Accountants and What Do
They Do? 258 LO-2 Developing the Marketing Plan 296
Financial Versus Managerial Accounting 258 Strategy: The Marketing Mix 297
Professional Accountants 258
Product 297
Accounting Services 259
Pricing 297
Private Accountants 260
Place (Distribution) 298
xiii
LO-2 The Accounting Equation 261 Promotion 298
Assets and Liabilities 261
LO-3 Marketing Strategy: Market Segmentation, Target
Owners’ Equity 261
Contents
Marketing, and Positioning 298
LO-3 Financial Statements 262 Identifying Market Segments 299
Balance Sheets 262
LO-4 Income Statements 263 LO-4 Marketing Research 300
ENTREPRENEURSHIP AND NEW VENTURES Accounting The Research Process 301
Practices for the Small Business 264 Research Methods 301
Statements of Cash Flows 265 LO-5 Understanding Consumer Behaviour 301
The Budget: An Internal Financial Statement 265
E-BUSINESS AND SOCIAL MEDIA SOLUTIONS Retailers Are
LO-5 Analyzing Financial Statements 266 Watching and Tracking You 302
Solvency Ratios: Borrower’s Ability to Repay Debt 266 Influences on Consumer Behaviour 302
MANAGING IN TURBULENT TIMES The Fairness Dilemma: The Consumer Buying Process 303
What Is an Asset’s Real Value? 266
LO-6 Organizational Marketing and Buying
Profitability Ratios: Earnings Power for Owners 267
Behaviour 303
Activity Ratios: How Efficiently Is the Firm Using Its
Resources? 267 Business Marketing 303
B2B Buying Behaviour 304
LO-6 Bringing Ethics into the Accounting Equation 268
Why Accounting Ethics? 268 LO-7 What Is a Product? 304
The Value Package 304
LO-7 The Evolving Role of the Modern Accountant 269 Classifying Goods and Services 304
The Product Mix 305
Questions and Exercises 271 LO-8 Developing New Products and Branding 305
Team Exercises 272
The New Product Development Process 306
Product Life Cycle 307
CHAPTER SUPPLEMENT 03 274 ENTREPRENEURSHIP AND NEW VENTURES This Business
Crafting a Business Plan 287 Is Appsolutely Booming 307
cbc video case 3-1 288 Identifying Products: Branding and Packaging 309
business today video case 3-1 288 Packaging Products 310
business today video case 3-2 289 Labelling Products 310
PART 5
Team Exercises 313
business case 12 314 MANAGING FINANCIAL ISSUES 342
13 14
Pricing, Promoting, and Money and Banking 343
Distributing Products 317
Canadian Mortgages: Bulls, Bears, and Banks 343
Premium Pricing, Rising Market Share 317
LO-1 What Is Money? 345
LO-1 Determining Prices 319 The Characteristics of Money 346
Pricing to Meet Business Objectives 319 The Functions of Money 346
Price-Setting Tools 319 The Spendable Money Supply: M-1 346
M-1 Plus the Convertible Money Supply: M-2 347
LO-2 Pricing Strategies and Tactics 321 Credit Cards and Debit Cards: Plastic Money? 347
Pricing Strategies 321
Pricing Tactics 321 LO-2 The Canadian Financial System 347
There’s an APP for THAT! 321 Financial Institutions 348
LO-3 Promoting Products and Services 322 Financial Pillar #1—Chartered Banks 348
Promotional Strategies 322 Services Offered by Banks 348
The Promotional Mix 322
LO-4 Advertising Promotions and Media 323 E-BUSINESS AND SOCIAL MEDIA SOLUTIONS When
Advertising Media 323 Cash Gets Scarce, Businesses Switch to Internet
Bartering 350
ENTREPRENEURSHIP AND NEW VENTURES Promoting
Music Artists 326 Bank Loans 350
Banks as Creators of Money 350
LO-5 Personal Selling, Sales Promotions, Direct
xiv
Other Changes in Banking 351

(or Interactive) Marketing, Public Relations, and LO-3 The Bank of Canada 351
Publicity 326
Contents
LO-4 Financial Pillar #2—Alternate Banks 353

Personal Selling 326
Sales Promotions 327 Trust Companies 353
Publicity and Public Relations 327 Credit Unions/Caisses Populaires 353
MANAGING IN TURBULENT TIMES Direct Mail: Back from Financial Pillar #3—Specialized Lending and Savings
a Slow Death? 328 Intermediaries 353
LO-6 The Distribution Mix 329 Life Insurance Companies 353
Factoring Companies 353
Intermediaries and Distribution Channels 329
Financial Corporations 353
Distribution Strategies 330
Venture Capital Firms 354
Channel Conflict and Channel Leadership 330
Pension Funds 354
LO-7 The Role of Intermediaries 330
Financial Pillar #4—Investment Dealers 354
Wholesaling 330
Retailing 331
Other Sources of Funds 354
E-BUSINESS AND SOCIAL MEDIA SOLUTIONS Bye-Bye
Government Financial Institutions and Granting
Cash Registers, Hello Tablets! 331
Agencies 354
LO-8 Physical Distribution 333 International Sources of Funds 355
Warehousing Operations 333 LO-5 International Banking and Finance 355

Transportation Operations 333
Currency Values and Exchange Rates 355
Distribution Through Supply Chains as a Marketing Strategy 333
The International Payments Process 356
THE GREENING OF BUSINESS Unexpected Outcomes 334 The International Bank Structure 356
Summary of Learning Objectives 334 MANAGING IN TURBULENT TIMES What’s the Deal
Questions and Exercises 336 with Bitcoin? 357
Team Exercises 337
business case 13 338 Summary of Learning Objectives 358
Crafting a Business Plan 339 Team Exercises 359
cbc video case 4-1 339 business case 14 360
business today video case 4-2 341 CHAPTER SUPPLEMENT 04 362
LO-7 Other Investments 382
15 Mutual Funds 382

MANAGING IN TURBULENT TIMES Short Selling: Herbalife
and Sino-Forest 382
Financial Decisions and Risk Exchange-Traded Funds 383
Management 365 Hedge Funds 383
Commodities 383
Piles of Cash 365 There’s an APP for THAT! 383
LO-1 The Role of the Financial Manager 367 Securities Regulation 384
Objectives of the Financial Manager 367 Financial Management for Small Businesses 384
Responsibilities of the Financial Manager 367
Establishing Bank Credit and Trade Credit 384
LO-2 Why Businesses Need Funds 368 ENTREPRENEURSHIP AND NEW VENTURES Crowdfunding:
Short-Term (Operating) Expenditures 368 Some Changes in the Works 385
Long-Term (Capital) Expenditures 369 Venture Capital 385
Planning for Cash-Flow Requirements 385
LO-3 Sources of Short-Term Funds 369
Trade Credit 369 LO-8 Risk Management 386
Secured Short-Term Loans 370 Coping with Risk 386
Unsecured Short-Term Loans 370
LO-4 Sources of Long-Term Funds 371 Questions and Exercises 389
Team Exercises 389
Debt Financing 371
THE GREENING OF BUSINESS Green Bonds 372
CHAPTER SUPPLEMENT 05 392
LO-5 Equity Financing 373
Hybrid Financing: Preferred Stock 374 Crafting a Business Plan 394
Choosing Between Debt and Equity Financing 375 cbc video case 5-1 394
The Risk–Return Relationship 375 business today video case 5-1 395
Securities Markets 377
Endnotes and Source Notes 397
Investment Banking 377
Name and Organization Index 423
Stock Exchanges 377
xv
Subject Index 434
LO-6 Buying and Selling Securities 378
Financing Securities Purchases 380
Contents
E-BUSINESS AND SOCIAL MEDIA SOLUTIONS Stock
Trading at Your Fingertips 381
Preface
Helping Students Build a Solid Business

Knowledge Foundation
Welcome to the eighth Canadian edition of Business Essentials. If you’re you. You’ll still need to know your job duties and responsibilities, but
like many students, you may be starting this term with some questions you’ll also need to understand how to manage other people—how
about why you’re here. You may be taking this course at a community to motivate and reward them, how to lead them, how to deal with
college, CEGEP, or university, and you may be taking it in a traditional conflict among them, and the legal parameters that may affect how
classroom setting or online. Whatever the case, you may be wondering you treat them. Chapters 3, 6, 8, and 9 provide a lot of information
just what you’re supposed to get from this course and how it will benefit about how you can best wear this hat, although information about
you—in short, “How will this help me?” the role of employer is found throughout the book.
This is a survey course designed to introduce you to the exciting • The consumer hat. Even if you don’t work for a business, you will
and challenging world of business, both in Canada and elsewhere. It is still wear the hat of a consumer. Whenever you fill your car with
designed to fit the needs of a wide variety of students. You may be tak- Petro-Canada gasoline, purchase something on Amazon, buy
ing it as the first step toward earning a degree in business, or you may clothes at Zara or Reitmans, or download a song from iTunes,
be thinking about business and want to know more about it, or you may you’re consuming products or services created by businesses. To
know you want to study business but are unsure of the area you want wear this hat effectively, you need to understand how to assess the
to pursue. You may plan to major in another field but want some basic value of what you’re buying, your rights as a consumer, and so on.
business background and are taking this course as an elective. Or you We discuss how you can best wear this hat in Chapters 1, 3, 12,
may be here because this course is required or a prerequisite for another and 13.
course. Whatever your situation, this course will be helpful to you.
• The investor hat. The final business hat many people wear is that
If you don’t have a lot of work experience, you might be uncer-
of an investor. You may buy your own business or work for a com-
tain regarding what the business world is all about. If you have a lot
pany that allows you to buy its stock. You may also invest in other
xvii
of work experience, you might be a bit skeptical about what you
companies through the purchase of stocks or shares of a mutual
can actually learn from an introductory course. One of our biggest
fund. In order for you to invest wisely, you must understand some
challenges is to write a book that meets the needs of such a diverse
basics, such as financial markets, business earnings, and the costs
student population, especially when we acknowledge the legitimacy
of investment. Chapters 4, 11, 14, and 15 will help you learn how
of your right to ask, “How will this help me?” We also want to do
to best wear this hat.
our best to ensure that you find the course challenging, interesting,
and useful. To achieve this goal, we think it is helpful to use the old Most people wear more than one of these hats at the same time.
metaphor about people wearing different “hats” as they go through Regardless of how many hats you wear or when you may be putting
life. Every individual has different roles to play in different settings. For them on, you will interact with many different businesses in different
example, your roles might include student, child, spouse, employee, ways. Knowing how to best wear all of these hats is what this book is
friend, and/or parent. You can think of each of these as requiring a all about.
different hat—when you play the role of a student, for example, you The world is populated with a breathtaking array of businesses
wear one hat, but when you leave campus and go to your part-time and business opportunities. Big and small businesses, established and
job, you put on a different one. From the perspective of studying and new businesses, broad-based and niche businesses, successful and
interfacing with the world of business, there are at least four distinct unsuccessful businesses, global and domestic businesses––regardless
“hats” that you might wear: of where your future plans take you, we hope you will look back on this
course as one of your positive first steps.
• The employee hat. One hat is “worn” as an employee working for Keep in mind that what you get out of this course depends on at
a business. Most people wear this hat throughout their working least three factors. One is this book, and the information about business
career. To wear it successfully, you will need to understand your you will acquire as a result of reading it. Another is your instructor, a dedi-
“place” in the organization—your job duties and responsibilities, cated professional who wants to help you grow and develop intellectually
how to get along with others, how to work with your boss, what and academically. The third is YOU. Learning is an active process that
your organization is all about, and so on. You’ll begin to see how requires you to be a major participant. Simply memorizing the key terms
best to wear this hat as you learn more about organizing business and concepts in this book might help you achieve an acceptable course
enterprises in Chapter 7 and how organizations manage their grade, but true learning requires that you read, study, discuss, question,
human resources in Chapter 8, and as in several other places in review, experience, evaluate––and wear the four hats—as you go along.
this book. Tests and homework are necessary, but we hope you will finish this
• The employer or boss hat. Another business hat many people wear course with new knowledge and increased enthusiasm for the world of
is as an employer or boss. Whether you start your own business business. Your instructor will do his or her part to facilitate your learning.
or get promoted within someone else’s, people will be working for The rest, then, is up to you. We wish you success.
CHAPTER MATERIAL new product or service in the marketplace, and the activities they carried
out in order to be successful. The fourth—The Greening of Business—ana-
NEW & UPDATED! Chapter Opening Cases Each lyzes the steps businesses are taking to be more environmentally friendly.
chapter begins with a description of a problem or opportunity that is fac-M06_EBER0091_08_SE_C06.indd Critical thinking questions appear at/205/PHC00207/9780134000091_EBERT/EBERT_BUSINESS_ESSENTIALS8_SE_9780134000091/SE/
Page 125 1/8/16 9:27 PM s-w-149
the end of each boxed insert to moti- ...
ing a Canadian company, or a general issue that impacts many different vate students to think about what they have read.
M06_EBER0091_08_SE_C06.indd Page 121 1/8/16 9:27 PM s-w-149 /205/PHC00207/9780134000091_EBERT/EBERT_BUSINESS_ESSENTIALS8_SE_9780134000091/SE/ ...
businesses in Canada. These chapter opening cases help students to
bridge the gap between theory and practice. Topics include supermarket
E-BusinEss AnD soCiAl MEDiA soluTions
LO
mergers, the fair trade movement, stories about Canadian entrepreneurs,
corporate reorganizations, changes in Canadian manufacturing, new
After reAding this chApter, you should be Able to: The Truth About Your support, for example, considers speed of
answering the call and respondent’s knowl-
cedures for gathering and processing data,
with specific steps to assure accuracy and
lo-1 describe the four activities that constitute the man-
Online Customer Service
<<<
product marketing, credit-card traps,lo-2and agementmanyprocess. others that will
identify types of managers by level and area.
be of Effective decision making requires good,
edge of the product among its nine mea-
surements. Delivery measurements include
validity.
Recently, in its Independent Auditing
great interest to students. Questionslo-4 forexplain

Discussion at the end
lo-3 describe the five basic management skills.
of each
the importance of goal setting and strategic
timely information. Retailers in particular are
constantly monitoring trends and competitor
delivery time and product accuracy. By com-
bining the various measurements, consumers
Report, KPMG stated that Stella’s methodolo-
gies are complying with their stated policies.
actions in order to improve their standing with can find summary scores for each of the four This confirmation should help in Stella’s latest
opening case direct student attentionlo-5 to management
important issues in the chapter
in organizational success.
discuss contingency planning and crisis manage- consumers. service areas. Results provide rankings of move: offering subscription services to retail-
Online purchases keep increasing as competitors showing where each retailer cur- ers. Subscribers can, for the first time, receive
that they should consider. ment in today’s business world.
lo-6 explain the idea of corporate culture and why it is shoppers enjoy easy access to more and rently stands relative to competitors in each measured data showing their standing, along
M06_EBER0091_08_SE_C06.indd Page 135 1/8/16 9:27 PM s-w-149
important. more products from the comfort of home.
/205/PHC00207/9780134000091_EBERT/EBERT_BUSINESS_ESSENTIALS8_SE_9780134000091/SE/ of the four areas
... of service. Rankings allow with competitors, on phone support, email
However, poor customer service can disap- period-to-period tracking, revealing trends support, delivery, and returns/refunds. This
Google Keeps Growing point and anger customers, resulting in lost

sales. So how good is a company’s online
customer service, especially compared to that
of its online competitors? StellaService Inc.
for improvements in each of the areas across
time for each company.
With these measurements Stella hopes
to better inform consumers on the range
service allows retailers to base decisions on
objective and independent information about
their online customer service. It looks like
the company is on to something. They have
they were satisfied that they had developed something answered that question by providing a better of customer service they can expect from already enlisted major retailers like Walmart
with commercial value, they tried to license the technol- way to measure online service, enabling it to online retailers. Knowing that success and Ralph Lauren, raised more than US$22
become a market winner for online shoppers hinges on the validity and believability of million in venture capital, and received the
ogy to other search companies. As luck would have it,
and retailers alike. their methods, Stella uses an independent greatest compliment (as well as a financial
they couldn’t find a buyer and settled instead for procur- Following its start-up in 2010, third-party rating system. “Secret shoppers” boost) when Google licensed StellaService’s
Analyze the
ing enough investment capital to keep refining and test- StellaService (Stella) spent two years gath- (trained employees) use strict and controlled data in order to rate retailers on its search
organization ering data on customer satisfaction with measurement methods as they engage engine.
ing their product.
thousands of online retailers, including giants online retailers via emails, phone calls, and
In1 2000, Brin and Page ran across the description of Match the
like Amazon.com. They measure satisfaction live chats to purchase, await deliveries, or CRITICAL ThINkING QuESTIONS
Set organization
strategic
a business model on the concept of selling advertising in in four service Formulate
areas—phone support, email make returns for refunds. As added assur- 1. How do the results of customer service
2 and its 3
125
support, delivery, andstrategy
<<<
goals environment
returns/refunds—for ance for validity the company maintains a reports influence a manager’s decisions?
the form of sponsored links and search-specific advertise-
each retailer. Each area includes from 9 to as “Customer Service Measurement Process In answering this question refer to Figure
121
ments. They adapted it to their own concept and went
Chapter 6
many as 25 different measurements. Phone Audit” detailing its measurements and pro- 6.1 (the control process).
Analyze the
into business for themselves, eventually building Google
environment
Eric Carr/Alamy
into the world’s largest search engine. Google processes

more than 11 billion searches a month by a user base of he or she measures your performance, usually through assignments and
Management: science or Art?
Managing the Business Enterprise

>>> figure 6.4 Strategy formulation exams. The instructor then determines whether your performance meets
380 million people in 181 different countries using 146 lan- Many management problems can be approached in ways that are
the standard. If your performance is satisfactory (or unsatisfactory), you
Sergey Brin and Larry Page met at Stanford University

guages. Following an initial public offering (IPO) in 2004, the
company’s market capitalization increased to more than
NEW! Examples of Business Practice
receive feedback in the form of a passing (or failing) grade in the course.
Control can also show where performance is better (or worse) than
In addition to
rational, logical, objective, and systematic. Managers can use quanti-
tative models and decision-making techniques to arrive at “correct”
STEP 2: ANALYZING THE

in 1995, when both were graduate students in computer $43 billion by 2012, when Google controlled Opportunities
about two- the boxed inserts, each chapter contains numerous examples of how
and threats areexpected
factors and
external
costs. Opportunities
assessed using environmental analysis.
to the
can serve
For example, when
as firm andforare
a basis
the distributor
include
providing rewards or reducing
things likeof the surprise hit movie The
decisions. This approach is especially useful when managers deal with
relatively routine and well-defined issues. But managers also make many
ORGANIZATION AND ITS
science. At the time, Page was working on a software thirds of the search market. That was more than Microsoft decisions that are not routine, and when doing so they must rely heavily
ENVIRONMENT
development project that was designed to create an and Yahoo combined.
actual Canadian and international businesses operate so that students
market demand for new products,March of the Penguins saw how popular the movie was becoming, the
favourable government legislation, or
firm was able to increase advertising and distribution, making the niche on interpersonal skills and on abstract conceptual thinking. Thus, effec-
shortages of raw materials that the company is good at producing. For tive management is a blend of science and art, and successful execu-
index of websites by scouring sites goals
After strategic for keywords
have beenand
set managersGoogle
assessisboth
much more
their than a search
organiza- engine.
example, Services
when can gain a better understanding of the dynamics of business practice in
movie into a major commercial success. In contrast, when the sales of
Pepsi managers recognized
the Chevroleta market opportunity
Super Sport Roadsterfor(abot-
classic, late-1940s pickup-style tives recognize the importance of combining both the science and art
tionhim
other linkages. Brin joined andonitsthe
environment using
project, and a SWOT analysis.
when This involves
include searches for identifying
news, shopping,tled local businesses,
water, they moved quickly to launch of management as their carry out the functions of management.5 The
vehicletheir
with Aquafina
a two-seatbrand and
roadster position
design) were much lower than expected,
both Canada and elsewhere. These examples—which range in length
xviii
organizational Strengths and Weaknesses, and identifying environmental it for rapid growth. Threats include new products
production developed
of the vehicle by com-
was suspended. boxed feature entitled “Challenges Facing Managers” describes some
Opportunities and Threats. Strengths and weaknesses are factors inter- The boxedand
petitors, unfavourable government regulations, insert entitledin“The
changes Truth About Your Online Customer
consumer issues managers have to deal with as they blend the art and science of
nal to the firm, and are assessed using organizational analysis. Strengths from one sentence to several paragraphs—help students understand
Service” illustrates
tastes. For example, online music services how important
such as iTunes provedthe control process is for managers.
a major
management.
Managing
NEW & UPDATED! theThere’s an App for That!
might include surplus cash, a dedicated workforce, an ample supply of
concepts that are discussed in the text.
threat to manufacturers of CDs and CD players. Likewise, the emergence
Each
Preface
managerial talent, technical expertise, or weak competitors. For exam- of digital photography dramatically weakened companies tied to print
ple, Pepsi’s strength in beverage distribution through its network of soft- becoMing A MAnAger
chapter includes
drinka description ofextended
several useful apps related to the
photography. The Province of Ontario
the revenue pharmacies received for NEW
introduced a new law that reduced
How do you acquire&
dispensing prescriptionUPDATED!
the skills necessary to blend the scienceKey Terms
Business Enterprise
135
distributors was successfully to distribution of its Aquafina drugs. Some

and art of Incomplete
university. When you each chapter,
the course, you will have athe key
foundation for
chapter material. These apps allow students to understand
brand of bottled water. Weaknesses might include a cash shortage, external business
threats are unpredictable, management?
like the volcanic eruption
Although thereinareIceland
many in
variations, the most common developing your management skills in more advanced courses. A degree
aging factories, and a poor public image. Garden.com’s reliance on the 2010 that halted air travel in Europe terms
forinvolves
a week.a that students
Commercial of airlines lost should
experience. know areorhighlighted in the text forand career defined
Chapter 6
path combination education and diploma has become almost a requirement advancement
concepts in newinternet-based
and dynamic ways.
e-tailing model was its downfall when the dot-com bub- hundreds of millions of dollars of revenue, while
are alternative
reading thisservice provid-
06
If you text, you are probably doing so because in business, and MBA degrees are increasingly common among suc-
ble burst. ers like trains saw demand for theiryou
CHAPTER
inarethe
services margin.
enrolled
soar. in a management course at a community college or cessful managers. Even after obtaining a degree, managers have not
STEP 3: MATCHING THE NEW & UPDATED! Figures and Tables The latest avail-
THERE’s An
APP foR THAT! ORGANIZATION AND ITS
ENVIRONMENT able data appear in tables and figures throughout the text.
app details platforms The final step in strategy formulation is matching environmental threats
1. mcKinsey insights Apple, Android and opportunities with corporate strengths and weaknesses. Matching
source: McKinsey and Company
companies with their environments lays the foundation for successfully
Key features: The latest thinking on the
biggest issues facing senior executives, planning and conducting business. A firm should attempt to leverage its
everything from leadership and corporate
strategy to globalization and technology’s END-OF-CHAPTER MATERIAL
strengths so as to capitalize on opportunities and counteract threats.
It should also attempt to shield its weaknesses, or at least not allow
impact on business and society. them to derail other activities. For example, knowing how to distribute
UPDATED! Summary of Learning Objectives The

2. sWot Chart Apple, BlackBerry, Windows consumer products (a strength) allows Pepsi to add new businesses
source: K. Kaleeswaran and extend existing ones that use the same distribution models. But a
Key features: Strategic planning method
firm that lacked a strong understanding of consumer product distribution
used to evaluate strengths, weaknesses, material in each chapter is concisely summarized, using the learning
would be foolish to add new products whose success relied on efficient
opportunities, and threats.
3. Goal tracker: smartGoals Android objectives as the organizing scheme. This helps students understand the
distribution. Just because two companies are in the same industry does
not mean they will use the same strategies. The Toronto-Dominion Bank,
source: MSurf Lab
Key features: Tool to help you set SMART main points that were presented in the chapter.
for example, aggressively expanded into the U.S. retail banking industry
(specific, measurable, attainable, reason- by acquiring U.S. banks, but the Royal Bank of Canada has been much
able and timely) goals. less aggressive in this area.30
App Discovery exercise NEW & UPDATED! Assisted-Grading Writing
Since app availability changes, conduct your own search for the
“Top Three” management apps and identify the key features.
Assignments Two types of questions are included at the end
SWOT ANALYSIS Identification and analysis of organizational
strengths and weaknesses and environmental opportunities and
threats as part of strategy formulation.
of each chapter: analysis questions (which require students to think
beyond simple factual recall and apply the concepts they have read
NEW & UPDATED! Boxed Inserts on Key Topics The about) and application exercises (which ask students to apply what they
text contains four series of boxed inserts positioned at strategic points in have learned). The exercises, designed to help students increase their
the chapters. The first—E-Business and Social Media Solutions—describes understanding of how business firms actually operate, require students
how rapidly changing technology has provided business firms with many to engage in practical activities such as interviewing managers about
new ways to connect with customers. The second—Managing in Turbulent concepts and issues discussed in the chapter. Selected end-of-chapter
Times—explains how businesses in Canada and elsewhere are trying to questions (identified by the symbol >>>) have been built as assisted-
cope with the volatility and uncertainty that exists in the contemporary graded assignments within MyBizLab to help assess students’ written
business world. The third—Entrepreneurship and New Ventures—provides communication skills. Each question is built with marking rubrics to help
real-life examples of entrepreneurs who saw an opportunity to provide a facilitate the grading of these assignments.
M06_EBER0091_08_SE_C06.indd Page 141 1/8/16 9:27 PM s-w-149 /205/PHC00207/9780134000091_EBERT/EBERT_BUSINESS_ESSENTIALS8_SE_9780134000091/SE/ ...
Questions And exercises End-of-Part Material

QUESTIONS FOR ANALYSIS
1. How are the four functions of management related to the five skills skills? Can you identify organizations in which conceptual skills are NEW! Video Cases Several video cases are presented at the end
of management? Use examples to clarify your answer. not important at all?
2. What is the relationship between Mintzberg’s roles of management 5. What differences might you expect to find in the corporate cultures of each of the five major parts of the text. Some of the videos are from
and the more traditional functions of management? Use examples of a 100-year-old manufacturing firm based in Winnipeg and a
to clarify your answer.
3. Identify the managers by level and area at your college or university.
5-year-old e-commerce firm based in Ottawa?
6. Consider the various corporate-level strategies discussed in the
the CBC Dragons Den series, others from Pearson’s Business Today
4. Can you identify any organizations where the technical skills of top
managers are more important than human relations or conceptual
chapter (concentration, growth, integration, diversification, invest-
ment, reduction). What is the relationship between these various
series. The instructor can show them in class and then either conduct a
APPLICATION ExERCISES
strategies? Are they mutually exclusive? Complementary? Explain.
discussion using the questions at the end of the written case summary
7. Interview a manager at any level of a local company. Identify the
manager’s job according to level and area. Explain what planning,
9. Interview an administrator at your college or university and get that
person’s views on the school’s strengths and weaknesses and on
as a guide or ask students to complete a written assignment that requires
organizing, directing, and controlling mean in terms of the man-
ager’s job. Give examples. Also indicate which management skills
the threats and opportunities the school is facing. Then use this
information to write up a SWOT analysis for the school. answering the questions at the end of the case. This approach adds a
are most important for the manager’s job. 10. Select any organization of which you are a member (your company,
8. Review the example of the decisions made by Airbus and Boeing your family, your place of worship, or a club). Explain the relevance positive dynamic to classes, because/205/PHC00207/9780134000091_EBERT/EBERT_BUSINESS_ESSENTIALS8_SE_9780134000091/SE/
students will be able to relate text ...
regarding new large aircraft. Then research the most current infor- of the management functions of planning, organizing, directing, and
mation on the status of the two planes. Which company seems to controlling for that organization. material to actual Canadian business situations.
have made the better decision?
TEAM ExERCisEs
building your business skills

NEW & UPDATED! Building Your Business Skills
SPEAKING wITH POwER
CbC ViDEo CAsE 3-1
Exercise This feature asks students
141
GOAL • to examine some specific too many disclaimers (“I’m not sure I have enough information to say
zERONEXT
To encourage students to appreciate effective speaking as a critical this, but …”) THE COMPANY also seemed confident that this product would be a good fit for luxury
aspect of business. While working in •a group context, students gather
Chapter 6 Managing the Business Enterprise

human relations skill. the habit of seeking support from others instead of making defini- Mathieu Desjardins and Claude Pinet, entrepreneurs from Montreal, are condo builders in Vancouver. Soon after, Michael Wekerle increased the
tive statements of personal conviction (saying “As Emily stated in her trying to change the look—indeed the very thinking—behind wine cooler stakes when he offered $1 000 000 for 40 percent; he also asked Jim
data about
BACkGROuND
A manager’s an interesting
ability to understand business
and get along with supervisors, peers, issue, and then develop a written
report, I recommend consolidating the medical and fitness func-
technology. The Renoir is a design‐driven, wall‐mounted, silent fridge
that stores 30 bottles and displays them like a piece of artwork. This is
Treliving to join him on the deal. He believed that this product should
be targeted at high‐end hotels. Jim Treliving agreed to join forces with
and subordinates is a critical human relations skill. At the heart of this tions,” instead of “I recommend consolidating the medical and fitness
report
skill, says or
HarvardaUniversity
classprofessorpresentation based
of education Sarah McGinty, is on the information that was gath-
functions”)
not like the standard appliance it attempts to replace. It is unique not only
in aesthetic design but also in functional design, with side access panels
Michael. Arlene Dickinson said she loved the product but only as a
potential consumer not as an investor. Finally, Dave Chilton told the own-
the ability to speak with power and control. McGinty defines “powerful • language fillers (saying “you know,” “like,” and “um” when you are
ered.
speech” Each exercise begins with a list of goals, a description of the situ-
and cutting‐edge electronic cooling that does not require a compressor. ers not to give up the extra equity; he offered exactly what they asked:
in terms of the following characteristics: unsure of your facts or uneasy about expressing your opinion)
It is silent . . . it is beautiful . . . and it comes with five optional art frames $500 000 for 20 percent.
• the ability to speak at length and in complete sentences Step 2 Join with three or four other classmates to evaluate each other’s to complete the look. The Renoir retails for about $4500. For more details
ation, a tostep-by-step
• the ability set a conversational agendamethodology forspeaking proceeding,
styles. and follow-up ques- on the company, go to zeronext.com.
THE OUTCOME
After discussing the pros and cons of the offers, the entrepreneurs
• the ability to deter interruption • Have a 10-minute group discussion on the importance of human
tions to tohelp
• the ability students
argue openly and to express focus their
strong opinions about responses toin business.
relations skills the challenge. THE PITCH
The owners of Zeronext asked for $500 000 in return for 20 percent own-
decided that they would indeed give up 40 percent of the company for
$1 million to Jim Treliving and Michael Wekerle. They believed that giv-
ideas, not people • Listen to other group members, and take notes on the “power”
ership of the company (valued at $2 500 000). Zeronext has projected ing up the higher percentage was worth it if the extra funding could help
• the ability to make statements that offer solutions rather than pose content of what you hear.
NEW
•
& UPDATED! Exercising
questions •
the ability to express humour
Your Ethics: Team Offer constructive criticism by focusing on what speakers say rather
than on personal characteristics (say “Bob, you sympathized with
sales of approximately $1 million dollars (by year-end). Mathieu and Claude
are seeking the investment and the support of the dragons to help them
them expand quicker into the U.S. market.
Exercise A team ethics exercise describes a situation that involves expand and to address existing interest in Europe and the United States. QUESTIONS FOR DISCUSSION
Taken together, says McGinty, “all this creates a sense of confidence in Paul’s position, but I still don’t know what you think,” instead of 1. In this section of the course we cover key accounting terms such
listeners.” “Bob, you sounded like a weakling.”). THE DRAGONS’ POINT OF VIEW as revenues, expenses, margins, and markups. Trace the discus-
anMEThOD
ethical dilemma. Students are then asked several questions that focus The dragons seemed very interested in the product, and they loved the
design, but the consensus was that Zeronext should have charged a
sion that the owners had with the dragons, and highlight the key
accounting terms and how they were used by the dragons to help
Step 1 Working alone, compare your own personal speaking style with FOLLOw-UP QUESTIONS
onMcGinty’s
howdescription
to approach
of powerful speech and
by tapingresolve the dilemma.
yourself as you 1. How do you thinkIn thecontent
the power exercise, students
of speech affects a manager’s
higher price in order to increase the margins after Mathieu revealed that
the Renoir had a 40 percent markup (when sold to distributors). Arlene
them make their points and analyze the situation.
2. Do you think the owners did a good job in this pitch? (From an
speak during a meeting with classmates or during a phone conversation. ability to communicate? Evaluate some of the ways the effects may was concerned; she indicated that they probably only ended up with
take on
(Tape boththe
sides ofrole of employee,
the conversation only if the person to owner,
whom you customer, or investor
differ among supervisors, and
peers, and subordinates. examine 10 percent on the bottom line. Claude said that the margins were going
accounting point of view? From an operations point of view?) What
288
are speaking gives permission.) Listen for the following problems: was the high point and what was the low point from the owners’
2. How do you evaluate yourself and group members in terms of pow- to improve in the coming months because of the economies of scale,
a •chapter-related
unfinished sentences business ethics dilemma through
erful and powerless the
speech? List perspective
the strengths and weaknesses of of which are associated with higher sales volume. However, the dragons
perspective?
3. Do you think it was wise for the owners of Zeronext to sell 40 per-
• an absence of solutions
Managing operations and information
the group. insisted that they should increase the price by a few hundred dollars. cent equity in the company? In the short term? In the long term?
that role. By working as a team, students learn how to cooperate, see an This is a premium product and charging $4999 rather than $4499 would (Support your answers.)
probably not make a huge difference to consumer demand but it would
ethical dilemma from various points of view, and decide what outcome is mean a lot to the company’s bottom line. Source: “ZeroNext,” Dragons’ Den, Season 9, Episode 19 (April 22,
xix
Vikram Vij began the process of negotiation by offering to pay the 2015).
ultimately best in each situation. $500 000 asking price for a 35 percent stake rather than 20 percent. He
NEW & UPDATED! End-of-Chapter Case Each chapter
Preface
businEss ToDAy ViDEo CAsE 3-1
concludes with a case study that focuses on a real Canadian or interna- RUDI’S BAkERY
tional company. The cases are designed to help students apply the chapter Rudi’s Organic Bakery operates a state‐of‐the‐art, small‐batch bakery. for solving the problem. With some research they found they could buy
part 3
The company bakes about 16 million loaves of bread annually and ships a machine that broke air bubbles as the loaves were being produced.
material to a company or an
issue currently in the news. At the end of each its products across the country. When Hanno Holm, the chief operating
/205/PHC00207/9780134000091_EBERT/EBERT_BUSINESS_ESSENTIALS8_SE_9780134000091/SE/ ...
officer, first started working at Rudi’s, there was a lot of discussion among
The result was a more uniform mass of dough and far fewer bubbles.
This reduced consumer complaints. Holm says that quality management
case, several Questions for Discussion guide students in their analysis. employees that there was a quality problem due to excessive variation in
the colour of the loaves being made. In one three‐month period, about
means focusing on how to solve quality problems that consumers talk
about, not just ones that workers talk about.
4.5 million loaves were produced, and the company received just 60
complaints. But none of those complaints were actually about the colour QUESTIONS FOR DISCUSSION
of the bread; they were about bubbles in the bread. 1. How is “quality” defined in the text? Is Hanno Holm’s definition of
Holm realized that the company had to define quality the same way quality consistent with the text definition? Explain.
BusinEss CAsE 6 consumers defined it, and in this case it meant that Rudi’s had to focus 2. How is the concept of total quality management relevant here?
on reducing the number of bubbles instead of the colour. Since the 3. What different tools for quality assurance are available to managers?
CORPORATE CULTURE Which ones would be most appropriate for Rudi’s bakery?
bubbles could be seen in uncut loaves, they had to develop a system
Corporate culture is sometimes defined simply as “the way we do things There were also disagreements about how to share the costs of the
around here.” A corporate culture can emphasize a variety of things. merger. This is an interesting situation, because a few years earlier Inco
Consider the following examples: and Falconbridge had talked about combining their Sudbury assets,
but then Inco was purchased
•
Crafting a Business Plan The business plan project is tailor-
At Telus Corp., customer
by Vale, and Xstrata purchased
service is the cornerstone of its
Falconbridge. Then Glencore
culture; during one quarter in
bought Xstrata.
2014, the company attracted
113 000 new customers, more
vale and inco. When Vale made to match and reinforce text content. It is software-independent
bought Inco, there was also a
•
than either BCE or Rogers.
At competitor Rogers Commu-
“culture clash.” Shortly after the and provides students with an easy-to-understand template that they
purchase, there was a meeting
nications, the culture emphasiz-
es the well-being of employees;
of executives of both companies, work from as they create their business plans. The business plan project
but the meeting ended suddenly
this includes offering employ-
ees discounts on products.
when one of the Brazilian manag-
ers lost his temper. That was the
is divided into logical sections, and each part (e.g., marketing, produc-
• At CIBC, the culture includes first sign the cultures of the com-
tion, finance, and so on) is located at the end of the section where that
nikitos77/Fotolia
three core values: teamwork, panies were different enough that

trust, and accountability; these
three values create a culture of
problems were going to be evi-
dent. Over the next few months, material is covered. With the five parts of the business plan distributed
providing high quality service to many Canadian managers, engi-
customers. neers, and operating staff left throughout the book, students can gradually apply the concepts they’ve
• At MEG Energy, the corporate culture encourages all employees to the company. For example, of 29 managers who were involved in a
share innovative ideas; this leads to advancements in sustainable strategy session shortly after the merger, only 6 were still there a few learned in the chapters to their business plans throughout the course.
technology. months later.
In retrospect, it is clear that the cultures of the companies were
Two interesting questions arise regarding corporate culture:
143
quite different prior to the takeover. At Inco, there was a constant
Supplemental Content
1. What happens if two companies with widely differing cultures exchange of ideas, and decentralized decision making was encour-
merge? aged by top management. But at Vale, top managers gave orders
Chapter 6
2. What happens if there is a culture clash within an organization? That and expected them to be followed. Not surprisingly, Vale encountered
is, what if top managers disagree with lower-level employees about resistance from Inco executives who did not agree with that approach.
the kind of culture the organization should have? There were also differences in the products the companies focused There are five supplements to the text.
on before Vale bought Inco. Vale’s focus was on iron ore, a basic
•
MERGING COMPANIES WITh DIFFERENT CuLTuRES commodity mined using a relatively simple technology. But the under-
During the past few years, there have been several high-profile merg-
ers between companies with different cultures, and these combinations
ground mining of nickel, a key ingredient in stainless steel, is a more
complex undertaking. One Inco manager likened nickel mining to hav-
The first supplement—A Brief History of Business in Canada—is
often caused difficulties.
vale and Glencore plc. In 2014, the Brazilian mining company Vale
ing a PhD, while iron ore mining was like having a high school diploma.
Canadian managers obviously felt some disdain for their new Brazilian
found at the end of Chapter 1. The material in this supplement (sum-
and the Swiss miner Glencore Plc discussed merging their nickel assets
in Sudbury. But the idea was finally abandoned when it became clear
bosses.
The cultural differences between the two companies were not
marized in the text and included in its entirety online in MyBizLab)
outlines the development of business activity in Canada over the
that the two companies had significantly different corporate cultures. limited to the top level of management. Some years earlier, the min-
One point of concern was each company’s view of risk: Vale’s culture er’s union had given up annual wage increases in return for a bonus
was risk-averse, while Glencore’s culture was much more risk-seeking. based on the price of nickel. When the price of nickel soared, workers
past 300 years.
• The second supplement—Business Law—is found at the end of What’s New in the Eighth
Chapter 3. It includes key topics such as contracts, the concept of
Canadian Edition?
agency, warranties, copyrights and trademarks, and bankruptcy.
New content has been included in all chapters. An illustrative (but not
• The third supplement—Using Technology to Manage Information exhaustive) list follows:
in the Internet and Social Media Era—is included at the end of
Chapter 1—New material on the government as a regulator, the activi-
Chapter 11. It focuses on the impact IT has had on the business
ties of the Competition Bureau and its concerns about anti-competitive
world, the IT resources businesses have at their disposal, the
behaviour, the debate about the advisability of government bailouts of
threats that information technology pose for businesses, and how
companies, public–private partnerships (so-called P3s), problems in the
businesses protect themselves from these threats. There is also
provision of essential services to Canadians (e.g., increasing electric-
an important section on the role of social media platforms in the
ity rates in the province of Ontario), and Canada’s supply management
modern business world.
system.
• The fourth supplement—Managing Your Personal Finances:
Chapter 2—New information on the business cycle, the CPI measure,
A Synopsis—is found at the end of Chapter 14. The material in
and mergers and acquisitions.
this supplement (briefly summarized in the text and included in its
entirety online in MyBizLab) presents a down-to-earth, hands-on Chapter 3—New information on corruption and bribes in international
approach that will help students manage their personal finances. business activity, a survey of global managers indicating their percep-
Included in the supplement is a worksheet for determining personal tion of corruption in various countries, how to incorporate various ethical
net worth, insightful examples demonstrating the time value of norms into management decision making, the fair trade movement, price
money, a method for determining how much money to invest now fixing, and counterfeit goods.
in order to build a nest egg of a certain size, suggestions on how to Chapter 4—New information on small business employment, issues in
manage credit-card debt, guidelines for purchasing a house, and a taking over a family business, and the top corporations in Canada.
personalized worksheet for setting financial goals.
Chapter 5—New information about the BRICS nations and the Compre-
• The fifth supplement—Insurance as Risk Management—is found hensive Economic and Trade Agreement (CETA).
at the end of Chapter 15. It provides information on insurable versus
uninsurable risks, the different types of insurance products available, Chapter 6—New information on the planning process managers at
and special forms of business insurance. McDonald’s use to try to improve the company’s performance, what is
expected in a manager’s job, how social media makes the activities of
managers more visible to the public, the importance of managers having
/205/PHC00207/9780134000091_EBERT/EBERT_BUSINESS_ESSENTIALS8_SE_9780134000091/SE/ ...
xx
“soft” skills” (as opposed to technical skills), decision-making skills, and

the importance of contingency planning.
Preface
03
CHAPTER suPPlEMEnT
Chapter 7—New information on the obstacles to effective delegation of
authority, “tall” and “flat” organization structures, and structural issues
Using Technology to Manage that Canadian companies must address when they “go global.”
Information in the Internet and Social Chapter 8—New information on the concept of the realistic job preview,
Media Era behaviour-based interviewing, the legal status of random drug testing of
employees, needs analysis in making training decisions, mentoring pro-
Throughout the text, we examine how the internet and the emergence of Email, texting, and instant messaging have become staples in business, grams, guidelines for ensuring performance appraisal is effective, work-
social media have improved communications, revolutionized distribution, and even such traditionally “low tech” businesses as hair salons and
augmented human resource practices, revolutionized industries (and garbage collection companies are becoming dependent on the internet, force management systems, retirement trends in Canada, workforce di-
threatened others), developed new marketing communication channels, computers, and networks. As consumers, we interact with databases
and changed the most basic business systems. In this supplement, every time we withdraw money from an ATM, order food at McDonald’s, versity, the development of Canadian labour unions, union membership
we will begin by providing additional information about the internet and use an Apple or Android application to order food or movie tickets, or
social media. We will also examine the evolving role of technology in
managing information.
check on the status of a package at UPS or FedEx.
IT has had an immense effect on businesses—in fact, the growth of IT
in Canada, and union organizing strategies and their success rate.
has changed the very structure of business organizations. Its adoption has
INTERNET USAGE
Before we look into the specific impact of the internet on business, let’s
altered workforces in many companies, contributed to greater flexibility in
dealing with customers, and changed how employees interact with each
Chapter 9—New material on personality traits (including concepts such
examine some of the key Canadian internet statistics. As regards speed,
Hong Kong has the fastest internet connections in the world; Canada
other. E-commerce has created new market relationships around the globe.
We begin by looking at how businesses are using IT to bolster pro-
as locus of control, self-efficacy, and authoritarianism), attitudes (includ-
274
ranks 17th.1 However, Canada ranks ninth among G20 countries in terms
of internet contribution to GDP. Canadian also spend an average of 36.3
ductivity, improve operations and processes, create new opportunities,
and communicate and work in ways not possible before. ing cognition, affect, and intention), McClelland’s acquired needs theory,
Managing Operations and Information
the concept of power (legitimate, reward, coercive, expert, and referent

hours per month on their computers (not including the vast amount of time
spent on mobile devices) which ranks first in the world.2 In addition, 94 per- THE IMPACT OF THE INTERNET
cent of Canadians who live in households with incomes above $85 000 are ON MARkETING
connected (only 56 percent for households with incomes below $30 000 E-commerce refers to buying and selling processes that make use of
power), and three leadership theories (path-goal, decision-tree, and lead-
per year).3 These figures will continue to increase for the next few years.
er–member exchange theories).
electronic technology, while internet marketing refers to the promotional
The federal government has also set its sights on increasing and efforts of companies to sell their products and services to consumers
improving the connectivity in rural settings. The improved infrastructure over the internet.5
will help increase rural access, build further opportunities for companies
wishing to sell to rural Canadian clients, and provide more incentive and
opportunity for small businesses to operate in rural settings.4
Chapter 10—New material on the difference between “make-to-order”
THE IMPACT OF INFORMATION
and “make-to-stock” production strategies, capacity planning, process
TECHNOLOGY (IT)
and product layouts, operations scheduling, international productivity
Part 3
No matter where we go, we can’t escape the impact of information

technology (IT)—the various devices for creating, storing, exchanging,
and using information in diverse modes, including images, voice, multi-
comparisons, and supply chain disruptions.
media, and business data. We see ads all the time for the latest smart-
phones, laptops, iPads and other tablets, and software products, and
Chapter 11—Updated information about the new CPA accounting des-
Photoshot/Newscom
most of us connect daily to the internet (many of you never disconnect).
INFORMATION TECHNOLOGY (IT) The various devices for creat-

ignation, the transition process currently taking place, and the evolving
ing, storing, exchanging, and using information in diverse modes,
including visual images, voice, multimedia, and business data. role of the modern accountant.
E-COMMERCE Buying and selling processes that make use of
<<<
In 2015, Barack Obama was still an avid BlackBerry user.

electronic technology.
Chapter 12—New material on the steps in developing a marketing plan,
Despite calls for him to join the iPhone crowd, he resisted. The
INTERNET MARKETING The promotional efforts of companies to BlackBerry provides a superior encryption system for secure
sell their products and services to consumers over the internet. messaging with advisors and colleagues.
marketing strategy, and market research.
Chapter 13—New information on the unique challenges faced by e-busi- plines of business, marketing, management, and more. In addition
nesses in pricing their products, online consumer engagement, mobile to the videos that have been specifically correlated to this text, you
and other advertising media, direct (interactive) marketing, publicity, and will find new videos posted regularly. Check back regularly to see
public relations. up-to-date video examples that are perfect for classroom use.
Chapter 14—New information on plastic money (credit cards and debit

• NEW Learning Catalytics. Learning Catalytics is a “bring your
own device” student engagement, assessment, and classroom
cards), the top banks and credit unions in Canada, and the Big Mac Index
intelligence system. It allows instructors to engage students in
statistics.
class with a variety of question types designed to gauge student
Chapter 15—New information on financial planning, managing risk with understanding.
diversification, return on investment, the time value of money, fantasy • Glossary Flashcards. The Glossary Flashcards provide a targeted
stock markets, mutual funds, and securities regulation. review of the Key Terms in each chapter. They allow learners to
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eText The Pearson eText gives students access to their textbook
xxi
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Preface
the valuable learning experiences from the presentations.
Rich media options may include videos, animations, interactive figures,
• NEW Study Plan. MyBizLab offers students an engaging and
and built-in assessments, all embedded in the text. Instructors can share
focused self-study experience that is driven by a powerful new
their comments or highlights, and students can add their own, creating
Study Plan. Students work through assessments in each chapter to
a tight community of learners within the class.
gauge their understanding and target the topics that require addi-
The Pearson eText may include a responsive design for easy viewing
tional practice. Along the way, they are recognized for their mastery
on smartphones and tablets. Many of these eTexts now have configu-
of each topic and guided toward resources in areas that they might
rable reading settings, including resizable type and night-reading mode.
be struggling to understand.
• NEW Dynamic Study Modules. These new study modules allow
students to work through groups of questions and check their ADDITIONAL INSTRUCTOR
understanding of foundational business topics. As students work RESOURCES
through questions, the Dynamic Study Modules assess their knowl- Instructor resources are password-protected and available for download
edge and only show questions that still require practice. Dynamic via www.pearsoncanada.ca/highered.
Study Modules can be completed online using your computer,
tablet, or mobile device. UPDATED! Test Bank The updated Test Bank, in Microsoft
• BizSkills and Decision-Making Simulations. BizSkills are real- Word format, contains approximately 4000 multiple-choice, critical think-
world scenarios that invite students to assume the role of a deci- ing, true/false, short-answer, and essay questions. Bloom’s Taxonomy
sion maker at a company to apply the concepts they have just tagging and textbook page references tied to each question will help in
learned. Decision-Making Mini-Simulations walk students through assessing students. This robust Test Bank is also available in computer-
key business decision-making scenarios to help them understand ized format (see below).
how business decisions are made. Students are asked to make
Computerized Test Bank Pearson’s computerized test banks
important decisions relating to core business concepts. At each
allow instructors to filter and select questions to create quizzes, tests, or
point, students receive feedback to help them understand the impli-
homework. Instructors can revise questions or add their own, and may
cations of their choices in the business environment. Both types of
be able to choose print or online options. These questions are also avail-
simulations can now be assigned by instructors and graded directly
able in Microsoft Word format.
through MyBizLab.
• NEW Business Today Video Database. Business Today is a UPDATED! Instructor’s Resource Manual The
dynamic and expanding database of videos that covers the disci- Instructor’s Resource Manual contains chapter synopses, chapter
outlines, teaching tips, in-class exercises, solutions to case studies, course materials are tailored to meet your specific needs. This highly
and answers to the critical thinking questions found at the end of each qualified team is dedicated to helping schools take full advantage of a
boxed insert. The manual also provides answers to the end-of-chapter wide range of educational resources, by assisting in the integration of a
exercises, including Building Your Business Skills and Exercising Your variety of instructional materials and media formats. Your local Pearson
Ethics. Answers are also provided for the Questions for Discussion at Canada sales representative can provide you with more details on this
the end of the CBC and Business Today video cases in each of the five service program.
major parts of the text.
Your Pearson Education Canada Sales Represen
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Presentations offer an average of 40 slides per chapter, outlining the
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check questions are provided. The slides also include lecture notes,
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Learning Solutions Managers Pearson’s Learning Solutions on TestGen software or specific content files for your new online course,
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xxii
Preface
Acknowledgments
We owe special thanks to Rodney Rawlings, copyeditor; Jessica Hellen, Matt Archibald, University of Ottawa
Project Manager; Carolin Sweig, Acquisitions Editor; Karen Townsend, Robert Maher, University of New Brunswick
Program Manager; Paul Donnelly, Developmental Editor; and others at Jeff May, McMaster University
Pearson Canada who assisted with the production, marketing, and sales Bill McConkey, University of Toronto Scarborough
of this edition. Carolan McLarney, Dalhousie University
We also appreciate the insights and suggestions of the following Frank Saccucci, Macewan University
individuals, who provided feedback on the seventh edition or reviewed Les Schiller, Dawson College
the manuscript for the new edition:
xxiii
Another random document with
no related content on Scribd:
This suit had the very great disadvantage of limiting the range of
motion to the length of the hose. Because of this, a Tissot type mask
was used in place of the helmet and hose connections. The hood
was made of the same special oilcloth as the suit, enveloped the
head and neck and extended a short distance down the back and
over the chest. The canister was slung on the left hip by an oilcloth
harness and was kept from swinging by an oilcloth belt around the
waist. The canister was much larger than the standard box
respirator, had a much longer life with lower resistance and weighed
about 3.5 lbs.
Fig. 80.—Impervious Overall Suit

for Mustard Gas.
Another type of impervious overall suit was developed which

protected against mustard gas for over 100 minutes. The material
was a cotton sheeting which was impregnated with linseed oil
containing a suitable non-drying material, which was thoroughly
oxidized in the fabric. These suits proved to be very uncomfortable,
especially in warm weather, because they entirely prevented the
escape of perspiration from the body.
Semi-permeable suits were then prepared, in which the cotton
sheeting was impregnated or coated with a solution of gelatin and
glycerine. The fabric was then “tanned” to render the gelatin
insoluble in water. Such a suit is valuable for factory wear, but the
impregnating material is easily leached out and the suit is therefore
not recommended for field service.
This was built with an inside layer of dry cloth together with an
outside layer of treated cloth to afford the necessary chemical
protection against mustard gas. Work of fabrication consisted in
treating the cloth with simplexene, cutting the suits to design and
size, and sewing them together.
Treatment consisted in passing the fabric through a dye machine,
then through the wringer rolls where the excess oil was expressed.
The inner layer of dry cloth was found necessary, since the cloth was
cut as soon as treated. Simplexene does not attain the maximum
degree of “tackiness” for two or three days, owing to the presence in
the oil of a small amount of volatile spirits. However, by allowing the
cloth to air for 48 hours before cutting, the inner lining could probably
be dispensed with.
The fighting suits were distributed among various detachments
using mustard gas in field tests, and in other places where protection
against vapor was needed and where field conditions were
approximated. The tests showed that the suit gave satisfactory
protection for considerable periods against mustard gas vapors. No
other suit, equal both in porosity and protection, has yet been
submitted, although samples furnishing better protection with much
higher resistance have been examined. The protection of the
simplexene suit is about 30 minutes against saturated gas. A large
number of these suits were made and taken abroad for field tests at
the front.
Protective Gloves
Protective gloves have been made with a variety of impregnating
agents. The one which was selected for large scale production was
impregnated with a solution of cellulose nitrate because of the
availability of materials and the protection offered by the finished
product. The material is impregnated after being made up. The one
finger type of glove is used. The gloves are placed on wooden forms
and dipped into the impregnating solution. After draining a few
minutes, the gloves are turned upside down on racks and run
through a drying oven. Finally they are removed from the forms and
conditioned by drying at a moderate temperature for several hours.
After being properly cured they are fitted with two straps on the
gauntlet of each glove. They should offer protection to chloropicrin
(standard method of test) for 30 minutes. When subjected to rough
work they will last from one to two weeks.
Fig. 81.—Coated Gloves for
Protection against Mustard Gas.
Protective Ointments
The extensive use of mustard gas on the field caused the men to
be exposed to low concentrations of the vapors for extended periods
of time. Since it did not seem feasible to furnish the men with special
fighting suits, which would protect them against these vapors, it was
desirable to provide protection in the form of an ointment which could
be applied to the body. In order to be satisfactory an ointment should
have the following properties:
(a) It should protect against saturated mustard
gas during the longest possible exposure.
(b) Its protective action should last as long as
possible after the application of the
ointment. It was felt that the ointment
should give protection for 24 hours after it
is applied, even if the body is perspiring
freely.
(c) The material should not be easily rubbed off
under the clothing.
(d) It should be non-irritating to the membranes
of the body.
(e) There should be no likelihood of toxic after-
effects on long use.
(f) It should be of a good consistency under a
fairly wide temperature range and give a
good coating at the temperature of the
body.
(g) Its method of manufacture should be
simple and rapid, and the raw materials
required should be abundant.
(h) The cost should not be excessive.
An extensive study of this question was made both in the
laboratories and on the field. At first it was believed that successful
results could be obtained by the use of such ointments. Careful
investigation showed, however, that while these ointments really did
protect against rather high concentrations of vapor for short times of
exposure, they were probably not so valuable when used against low
concentrations over an extended period of time. It was further
demonstrated that the protection furnished by a coating of linseed oil
is practically equal to the best ointment which has been developed.
About 150 ointments were prepared and tested. These consisted of
two parts or components, the metallic soap or other solid material
and the oil or liquid part which bound and held the solid. The latter is
called the base. The best base is lanolin, containing 30 per cent of
water. A solution of wax in olive oil was next best. Of the metallic
soaps the oleates and linoleates are better than the stearates. A
satisfactory ointment has the following composition:
Zinc oxide 40
Linseed oil (raw) 20
Lard 20
Lanolin 20
A modification of this formula is:
Zinc oxide 45
Linseed oil 30
Lard 10
Lanolin 15
The physical properties of this ointment are very good. It forms a
smooth, even coating on the skin, sticks well enough not to rub off
easily on the clothing and yet is not sticky. Its consistency is such
that it can be readily pressed from an ointment tube. A. E. F. reports
indicate that sag paste (zinc stearate and vegetable oil) is as
satisfactory as any of the preparations tried.
The great difficulties of such preparation from a field point of view
are: Extra weight to be carried by the soldiers, necessity for keeping
in tight boxes or tubes, thereby adding to the difficulty of carrying,
and finally, the difficulty encountered when applying it properly to the
body in the field, where gas contaminated hands may cause harm.
The paste was too late a development for thorough field trial. It
was used just enough to cause severe partisan controversies
between its advocates and those opposed to it. Unquestionably, it
proved of decided value in preventing mustard gas burns when
properly applied. There are many authentic cases where men
alongside each other were similarly gassed except as to burns. The
difference in burns arose from the use or non-use of the paste, and
in some cases of poor application. Fries is of the opinion that had the
war lasted another year the use of pastes would have become
universal unless some thoroughly successful substance for
impregnating the uniform or underclothing had been developed. This
is likewise his belief for the future.
Protection of Animals
Horse Mask. The need of protection for animals (horses and
dogs), although not as great as in the case of men, was of sufficient
importance so that masks and boots were developed for the horse
and a mask for the dog.
The German horse mask was the first produced. It was of the
nose bag type, enveloping the mouth and nose of the animal. It was
fitted with a complicated drawstring and with snap hooks fastening it
to the harness. The interior contains a plate of stiff material to
prevent the collapse of the bag. The mask itself was apparently not
impregnated, but was used wet or with a filling of wet straw or rags
to act as the absorbent.
Fig. 82.—German Respirator for Horses.
The French had two types of horse masks impregnated with a

glycerine-nickel hydroxide mixture. One type had a closed bottom,
while in the other, the bottom was open.
The British horse mask has a two-layer flannelette bag, with a
canvas mouth pad and elastic drawstring. It was impregnated with a
mixture of phenol, formaldehyde, ammonia, canister soda and
glycerine.
The first type of American horse mask was modelled after the
British and was impregnated with the Komplexene mixture
(hexamethylenetetramine, glycerine, nickel sulfate mixture). This
mask had too high a resistance and caused complete exhaustion in
running horses. The second mask was made of a large number of
layers of very open cheesecloth. It consists of two bags,
impregnated with different mixtures (Komplexene and Simplexene).
Horses can run two miles with this mask without showing evidences
of exhaustion.
Dewey gives the following method of manufacture:
The chemical employed consisted of a mixture of
hexamethylenetetramine (to give protection against phosgene),
nickel sulfate (to protect against the possible use of hydrocyanic
acid), sodium carbonate and glycerine. This solution was mixed in a
heavy steam jacketed mixing kettle with heavy geared stirrers. The
mixture was conducted by pipes to the impregnating apparatus
which consisted of a rotary laundry washing machine. The masks
were treated in this machine for 15 minutes, and then placed in a
power operated wringer and the solution driven off to a given weight.
Following this operation, they were suspended on wire supports and
conducted through a hot air drying machine and dried to a definite
weight. 378,000 horse masks were produced at the rate of 5,000 per
day.
Fig. 83.—Horse Mask—American Type.
Theoretically, horse masks and horse boots are very valuable,—

practically, they did very little actual good in the field, not that they
would not protect or that animals would not wear them. The trouble
was with the riders and drivers. Gas attacks, coming usually at night,
made adjustment of horse masks difficult at best, while in the
confusion of bursting shell and smoke, the drivers absolutely forgot
the horse masks or after putting on their own masks feared to try
putting masks on the animals. This last was natural as most animals
fight the adjustment of the mask and in so doing there is great risk
that the man’s mask may be torn off and the man gassed. In the
future, such masks will have even more importance than in the past,
for the present methods of manufacture of mustard gas coupled with
its all-round effectiveness will cause a use of it ten-fold greater than
at any time in the World War. In such cases, operations will
necessarily be frequently carried on over large areas thoroughly
poisoned with mustard gas. Here the animals will be masked and
booted before entering the gassed area, and remain so until they
leave it. In the torn and broken ground around the front line there will
always be need for animal transportation,—wagon, cart and horse—
as in such places it is far better in nearly all cases than motor
transport.
Dog Mask. The use of dogs in messenger service and in Red
Cross work, in which gassed areas must be passed, led to the
designing of a mask to give the animals suitable protection. The
same materials and method of impregnation were used as in the
horse mask. With eight layers of cheesecloth, adequate protection
against mustard gas was secured with practically no pressure drop.
The eyepieces were made of thin sheets of cellulose acetate
bound around the edge with adhesive tape and sewed directly over
openings cut through the mask fabric. The ear pockets were made
round and full enough to fit pointed or lop-eared animals. The mask
is continued to form a wide neck band which may be drawn up by
two adjustable straps. It is made sufficiently full to allow a free
movement of the dog’s jaws and yet tight enough around the neck to
avoid the possibility of being pawed off. The dog apparently soon
became accustomed to wearing the mask.
Horse Boots. The increasing amount of mustard gas used on
the Western front made it seem necessary to develop some form of
protection for the horse’s hoof and fore-leg. It has been found that
mustard gas vapors attack the fleshy portion of the leg, especially
around the coronary band and causes inflammation of the frog of the
foot. The problem was solved by devising a special hoof pad and a
boot. The pad was made of sheet iron imbedded in a hoof protector
(composition rubber) to which the shoe is applied. The shoe just
overlaps the metal plate on the inside and provides a solid metal
surface for the bottom of the foot. Such a pad not only offers
protection against gas but against shell splinters, barbed wire, etc.,
and would be useful at all times on the front.
Fig. 84.—Impervious Boots and Pads to Protect
Horses’ Legs and Hoofs against Mustard Gas.
Fig. 85.—Protective Gas Outfit—Gas Mask, Gas
Suit,
Gloves, Boots, Horse Mask, Horse Boots, Horse
Pads.
The boot was made of satin, treated so as to be impervious to

mustard gas. It covers all of the foot except the bottom and extends
to just below the knee. The boot is held in contact with the hoof by a
sewed cloth strap, which passes around the bottom of the hoof and
is held in position by projections extending from the spur or toe clip.
Special care is taken to insure a perfect joint at the rear of the boot
since the small cavity in the back of the hoof is one of the most
sensitive parts. The boot is wrapped about one and a half times
around the leg and is clipped with five loops through which passes a
¾-inch strap.
Dugout Blankets. Dugout protection is intended to prevent
entrance of any gases, lethal, lachrymatory or irritant, into the
enclosed space. This has been most efficiently accomplished by
means of curtains hung upon wooden frames and fitting closely
against all edges of the opening to be closed. These curtains have
usually been of heavy material and have generally been spoken of
as dugout blankets. Since they were designed to exclude all toxic
gases, they had to be devised upon general mechanical principles
rather than upon principles of chemical action with specific gases.
Permeability to air has not been considered a necessity, it being held
that sufficient ventilation is secured by means of the air entering
through the soil. For large dugouts and extended use large air filters
were designed to draw pure air into the dugout with a fan.
The qualities aimed at, to which both fabric and treatment should
contribute, are the following:
(a) Impermeability to gas.

(b) Flexibility, especially at low temperatures.
(c) Non-inflammability.
(d) Freedom from stickiness and from tendency to lose
material by drainage under action of gravity.
(e) Mechanical strength.
(f) Simplicity of manufacture and treatment.
(g) Low cost.
Army blankets, both those for men and those for horses, proved
suitable materials for curtains, but the scarcity of wool made it
desirable to select an all cotton fabric.
A large number of oils were studied as impregnating agents. The
most satisfactory mixture consisted of 85 per cent of a heavy steam
refined cylinder oil and 15 per cent of linseed oil. This is taken up to
the extent of about 300 per cent increase in weight of the blanket
during impregnation. It becomes oxidized to some extent upon the
surface of the blanket, which becomes less oily than the soft, central
core. The finished blanket possessed the following properties: It
resists penetration of 400-600 p.p.m. of chloropicrin for 8 hours
(dugout test) and mustard gas for 100-400 minutes (machine test). It
is sufficiently flexible after standing for 2 hours at 18° F. to unroll of
its own weight, and may be unrolled by applying a slight force at 6°
F.; it is not ignited by lighted matches and shows but little loss by
drainage.
Two types of machines were designed for impregnation, one for
use on large scale behind the line, and a field apparatus for use at
the front.
CHAPTER XVI
SCREENING SMOKES
The intelligent use of screening smokes in modern infantry tactics

offers innumerable advantages through concealment and deception.
It confers upon daylight operations many of the advantages which
were gained by conducting operations at night with few of the
disadvantages of the latter.
Smoke screens have been frequently used by the Navy and by
Merchantmen; a common method of escape was to shut off the air
from the fire with consequent incomplete combustion of the fuel, thus
causing a cloud of dense black smoke. This is often mentioned in the
blockade runners of the days in the Civil War, where wood, high in
pitch and rosin, was freely introduced into the furnaces, in order that
they might escape under cover of this smoke.
Early in the present war it was found that black smoke had a low
obscuring power, showed frequent rents or holes and were difficult to
standardize. Their production also caused a considerable loss in the
speed of the vessel. They therefore fell into disuse except for
emergency purposes and today the standard smoke for screening
purposes of all kinds is, without exception, white.[33]
Properties of Smoke Cloud

The properties most desired in a screening smoke, apart from
low cost, are: (a) Maximum screening power, which refers to the
question of density, i.e., a relatively thin layer must completely
obscure any object behind it, and (b) Stability, which implies, among
other things, a low rate of settling or dissipation. There is little reason
to doubt that, within limits, the smaller the particles of a smoke cloud,
the more completely will the smoke possess these qualities. The
screening power of a smoke cloud depends very largely upon the
scattering of the light coming through it, and by analogy with those
peculiar solutions which we call colloidal, we should expect the
scattering to increase as the degree of subdivision increases, within
limits. The rate of settling is unquestionably an inverse function of
the size of the particles. The chief aim, therefore, in smoke
production is to attain as high a degree of subdivision as possible.
Methods may be classified as good or bad, in so far as they satisfy
or fail to satisfy this criterion.
Raw Materials for Smoke Clouds

It is obvious that only gases or substances capable of being
brought into the vapor state or into a very fine state of subdivision
can be used for producing smoke clouds. The reaction product, of
which the smoke particles consist, should preferably be:
(a) Solid. Otherwise the particles will tend to
grow in size by condensation of the liquid particles
present in the cloud.
(b) Non-volatile. If volatile, the particles will
disappear by evaporation as the cloud is diluted by
air currents. Larger particles will also form at the
expense of the smaller ones.
(c) Non-deliquescent. If the particles are
deliquescent, they will tend to grow by condensation
of water vapor upon them.
(d) Stable towards the usual components of the
atmosphere, especially moisture.
While it might seem that it would be difficult to fulfill these
conditions, there are several chemical compounds which have been
successfully used as smoke producers. This does not mean that
they fulfill all the conditions, but they represent a compromise
between the various requirements.
Phosphorus. One of the earliest materials to be used in smoke
clouds was phosphorus. This is prepared on a commercial scale by
heating phosphate rock (which contains calcium phosphate) with
sand and coke in an electric furnace. Phosphorus occurs in two
forms, white and red. White phosphorus, which is formed when the
vapor of the substance is quickly cooled, is, in the pure state, almost
colorless, melts at 44° C., boils at 287° C., is readily soluble in
various solvents, and is luminous in the air, at the same time emitting
fumes (the oxidation product, phosphorus pentoxide). On gentle
warming in the air, it takes fire and burns with a brightly luminous
flame. Red phosphorus is obtained by heating white phosphorus out
of contact with the air, to a temperature of 250° to 300° C. Red
crusts then separate out from the colorless liquid phosphorus, and
almost the entire amount is gradually converted into a red, solid
mass. If this is freed by suitable solvents from the small amounts of
unchanged white phosphorus, a dark red powder is obtained, which
remains unchanged for a long time in the air, does not appreciably
dissolve in the solvents for white phosphorus, does not become
luminous, and can be heated to a fairly high temperature without
igniting. Further, red phosphorus is not poisonous, while white
phosphorus is highly so.
Either form burns to phosphorus pentoxide, which is converted by
the moisture of the air to phosphoric acid,
4P + 5O₂ = 2 P₂O₅
2P₂O₅ + 6H₂O = 4H₃PO₄
Since one pound of phosphorus takes up 1.33 pounds of oxygen
and 0.9 pound of water, it is not surprising that phosphorus is one of
the best smoke producers per pound of material. Comparison of the
value of the two forms for shell purposes have invariably pointed to
the superiority of the white variety.
In addition to its use as a smoke producer, it is used in incendiary
shell and in tracer bullets. For incendiary purposes a mixture of red
and white phosphorus is superior.
Chlorosulfonic Acid. Chlorosulfonic acid, ClSO₂OH, was first
employed by the Germans to produce white clouds, both on land and
on sea. For this purpose, they sprayed or dropped it onto quicklime,
the reaction between it and the lime furnishing the heat necessary
for volatilization, though in this way about 30 per cent of the acid is
wasted.
Chlorosulfonic acid is obtained from sulfur trioxide and hydrogen
chloride, which combine when gently heated:
SO₃ + HCl = ClSO₂OH
Fig. 86.—75 mm. White Phosphorus Shell.

2 seconds after bursting.
On a commercial scale, hydrogen chloride is passed into 20 per

cent oleum, until saturation is reached. This is heated in a nitric acid
still, when the chlorosulfonic acid distills over between 150°-160° C.
With 30 per cent oleum, the conversion factor is about 42 per cent.
The residue in the still is about 98 per cent sulfuric acid.
It forms a colorless liquid, boiling at 152° C., and having a density
of 1.7.
Chlorosulfonic acid fumes in the air, because reaction with water
forms sulfuric acid and hydrochloric acid.
ClSO₂OH + H₂O = H₂SO₄ + HCl

This material was not used by the United States since oleum was
found superior.
Oleum. Oleum is a solution of 20 to 30 per cent sulfur trioxide
(SO₃) in concentrated sulfuric acid. It has been used by the
Germans to produce clouds on land and sea, by its contact with
quicklime, and by the Americans for screening tanks and
aeroplanes. Sulfur trioxide has been found to be superior as a shell
filling. It is believed that the smoke producing power of oleum is due
solely to its sulfur trioxide content, the sulfuric acid itself acting only
as a solvent. The rather high freezing point of the oleum containing
high percentages of sulfur trioxide is a disadvantage.
Sulfur Trioxide. Sulfur trioxide, SO₃, is a colorless mobile liquid,
which boils at 46° C. and solidifies to a transparent ice-like mass,
melting at 15° C. It is prepared by passing a mixture of sulfur dioxide
and oxygen over finely divided platinum or other catalysts at a
temperature between 400 and 450° C. Sulfur trioxide can only be
used as a filler for shell and bombs, and is probably the best
substitute for phosphorus.
Tin Tetrachloride. Tin tetrachloride, SnCl₄, is obtained by the
action of chlorine on metallic tin. It is a liquid, boiling at 114° C., and
having a density of 2.2. It fumes in the air, because it hydrolyzes to
stannic hydroxide:
SnCl₄ + H₂O = Sn(OH)₄ + 4 HCl

It makes a better and more irritating smoke for shell and hand
grenades, than either silicon or titanium tetrachlorides. Since there is
practically no tin in this country, the other tetrachlorides were
developed as substitutes.
Silicon Tetrachloride. Silicon tetrachloride, SiCl₄, is prepared
from silicon or from impure silicon carbide by heating it with chlorine
in an electric furnace. The raw material (silicon carbide) is a by-
product in the manufacture of carborundum. It is a colorless liquid,
boiling at about 58° C., and fumes in moist air, owing to hydrolysis:
SiCl₄ + 4 H₂O = Si(OH)₄ + 4 HCl

It is not very valuable in shell, though it is more effective on
moist, cool days than on warm, dry ones. Its greatest use is found in
the smoke cylinder, combined with ammonia. By the action of the
moisture of the air, the following reaction takes place:
SiCl₄ + 4 NH₃ + 4 H₂O = Si(OH)₄ + 4NH₄Cl

The addition of a lachrymator gives a mixture which works well in
hand grenades for mopping up trenches.
Titanium Tetrachloride. Titanium tetrachloride, TiCl₄, is made
from rutile, TiO₂, by mixing with 30 per cent carbon and heating in an
electric furnace. A carbonitride is formed, which is said to have the
composition Ti₅C₄N₄, but the actual composition may vary from this
to the carbide TiC. This product is heated to 600-650° C., and
chlorine passed through, giving the tetrachloride. It is a colorless,
highly refractive liquid, which boils at about 136° C., is stable in dry
air and fumes in moist air. The best smoke is produced by using 5
parts of water to one of the tetrachloride, instead of the theoretical 4
parts [which would form Ti(OH)₄.] Since it is more expensive to
manufacture and not as effective as silicon or tin tetrachloride, it is
used only as an emergency material.
Berger Mixture. One of the most important smoke materials was
the zinc-containing mixture, which was used in the smoke box, the

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LO-3 The Technological Environment 31

01 ENTREPRENEURSHIP AND NEW VENTURES Selling Magic in

LO-4 The Political–Legal Environment 33

LO-4 The Canadian Market Economy 12 LO-7 Redrawing Corporate Boundaries 38

Implementing Social Responsibility Programs 60 Not My Cup of Tea 97

04 ENTREPRENEURSHIP AND NEW VENTURES Bugatti-

LO-5 Barriers to International Trade 108

Start-up and Beyond 85

LO-5 Contingency Planning and Crisis Management 137

LO-2 Recruiting Human Resources 172

LO-9 Collective Bargaining 189 Crafting a Business Plan 224

Summary of Learning Objectives 191

and Leading Employees 197 Productivity, and Quality 229

Satisfaction, Productivity, and Employee Big Changes in Canadian Manufacturing 229

Meeting the Quality Challenge 245 PRINCIPLES OF MARKETING 290

Summary of Learning Objectives 250

11 P&G Marketing: Dealing with a Shrinking

Other Changes in Banking 351

LO-4 Financial Pillar #2—Alternate Banks 353

Warehousing Operations 333 LO-5 International Banking and Finance 355

15 Mutual Funds 382

Helping Students Build a Solid Business

great interest to students. Questionslo-4 forexplain

Google Keeps Growing point and anger customers, resulting in lost

into the world’s largest search engine. Google processes

Managing the Business Enterprise

Sergey Brin and Larry Page met at Stanford University

STEP 2: ANALYZING THE

distributors was successfully to distribution of its Aquafina drugs. Some

UPDATED! Summary of Learning Objectives The

Questions And exercises End-of-Part Material

building your business skills

Exercise This feature asks students

Chapter 6 Managing the Business Enterprise

NEW & UPDATED! End-of-Chapter Case Each chapter

three core values: teamwork, panies were different enough that

quite different prior to the takeover. At Inco, there was a constant

“soft” skills” (as opposed to technical skills), decision-making skills, and

the concept of power (legitimate, reward, coercive, expert, and referent

No matter where we go, we can’t escape the impact of information

most of us connect daily to the internet (many of you never disconnect).

INFORMATION TECHNOLOGY (IT) The various devices for creat-

In 2015, Barack Obama was still an avid BlackBerry user.

Chapter 14—New information on plastic money (credit cards and debit

Fig. 80.—Impervious Overall Suit

Another type of impervious overall suit was developed which

Fig. 82.—German Respirator for Horses.

The French had two types of horse masks impregnated with a

Theoretically, horse masks and horse boots are very valuable,—

The boot was made of satin, treated so as to be impervious to

(a) Impermeability to gas.

The intelligent use of screening smokes in modern infantry tactics

Properties of Smoke Cloud

Raw Materials for Smoke Clouds

SO₃ + HCl = ClSO₂OH

Fig. 86.—75 mm. White Phosphorus Shell.

On a commercial scale, hydrogen chloride is passed into 20 per

ClSO₂OH + H₂O = H₂SO₄ + HCl

SnCl₄ + H₂O = Sn(OH)₄ + 4 HCl

SiCl₄ + 4 H₂O = Si(OH)₄ + 4 HCl

SiCl₄ + 4 NH₃ + 4 H₂O = Si(OH)₄ + 4NH₄Cl

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