LECTURE 1 THE CHALLENGES OF BUSINESS What are the fundamental internal and external forces which all organizations

must confront in their struggle to survive and prosper? Chapter 1 Karakowsky Concept application: t.b.a

INTERNAL & EXTERNAL ENVIRONMENTS

INTERNAL FORCES

People Structure Strategy

THE INTERNAL CONTEXT OF ORGANIZATIONS

PEOPLE

Organizations are made up of people Managers must be able to manage people Leadership skills Team work Communication

THE INTERNAL CONTEXT OF ORGANIZATIONS

STRUCTURE

A planned network or pattern of relationships that exists between individuals in various positions in the organization Includes the formal hierarchy of authority, distribution of work and rules or procedures controlling and coordinating behaviour in the organization

THE INTERNAL CONTEXT OF ORGANIZATIONS

STRUCTURE

Also includes the informal hierarchy of authority, distribution of work and rules or procedures controlling and coordinating behaviour in the organization

THE INTERNAL CONTEXT OF ORGANIZATIONS

STRATEGY & GOALS

A key part of all management decision-making activity Goals must be identified Strategy is how the goals can be achieved Managers and employees must understand the importance of strategy and goals and the relationship between the two
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SPECIFIC/ TASK ENVIRONMENT

Parties/ Groups that have a direct influence on the organization e.g.: Customers Suppliers Labour pool Competitors Unions, Distributors Local Public

People Structure Strategy

GENERAL ENVIRONMENT The External Forces

economic competitive

political

The Organization

technological

societal

global

GENERAL ENVIRONMENT - ECONOMIC FORCES

An economic slump can mean downsizing, cuts in training and staff development, end of traditional work practices etc

An economic boom can mean expansion, extra training, R & D etc

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GENERAL ENVIRONMENT - POLITICAL FORCES

Political change can be very influential e.g. deregulation of Canadian Telecoms, banking industry, reduction of trade barriers. It may affect workers rights and work practices. In Canada there is a move towards less government intervention

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GENERAL ENVIRONMENT SOCIETAL FORCES

Changes in attitudes to work & equality are important societal forces, organizational justice & compensation & benefits Health & Safety issues Views on fashion and health Business ethics

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GENERAL ENVIRONMENT - COMPETITIVE FORCES

Competition may be at a local, national or global level. It may be open or restricted What are the advantages and disadvantages of competition?

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GENERAL ENVIRONMENT - TECHNOLOGICAL FORCES

Technology has an important influence on organizations - accessibility influences market entry and operating costs Consider how technology has influenced the role of work and how work is done, e.g. teleworkers

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GENERAL ENVIRONMENT GLOBAL FORCES

Global forces have an international dimension foreign investment in Canada Organizations must now think globally

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TALKING ABOUT CANADA ..

ECONOMIC FORCES Gross Domestic Product EMPLOYMENT CONSUMER SPENDING

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TALKING ABOUT CANADA .

POLITICAL FORCES

Capitalist economy & important government role e.g. R & D incentives

COMPETITIVE FORCES

Open economy, primary industries moving to technological expertise. Government attempts to reduce monopolies by encouraging competition.
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TALKING ABOUT CANADA .

TECHNOLOGICAL FORCES

Resource based economy now moving to manufacturing, technology and service sector
SOCIETAL FORCES

Increasing need for higher education, immigration, aging population, changes in employment law
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TALKING ABOUT CANADA .

GLOBAL FORCES

Proximity to USA ($1.3bn a day in trade) or 85% of all Canadian exports A major trading nation, exporting 40% + of GDP. Average level of foreign ownership is 25%. FDI is also relatively high is this problematic? Many subsidiaries of US based parent companies Reducing trade barrier to create more balanced relations with other nations
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KEY LEARNING POINTS

Role of internal & external environments on organizational performance Nature of internal & external forces Connectivity of internal & external contexts Characteristics of Canadian business context

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Readings: see course outline for
assigned readings!

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