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PMC120 by Mind Map: PMC120
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PMC120

1. Understanding The Canadian Business System

Defines: 1. business and profit, 2. outlines the world's major economic systems,3. describes the basic aspects of Canada's market economy, including markets, demand, supply, the business cycle, private enterprise, and degrees of competition. 4. concludes with a brief discussion about the history of business in Canada. 

I. The Concept Of Business And Profit

A business is an organization that seeks to earn profits by providing goods and services to customers.  Profit is what remains after the expenses incurred by a business are subtracted from its sales and revenues.  The opportunity to earn profits is what encourages people to open and expand businesses.  Profits are required in order for the organization to be “a going concern” and continue to operate into the future.  There are also many not-for-profit organizations in Canada (charities, government organizations, educational institutions, unions, etc.). 

II. Economic Systems Around The World

An economic system is the way in which a nation allocates its resources among its citizens.  Various systems differ in who owns or controls these resources, or "factors of production." 

III. Interactions Between Business And Government

Discusses how the government influences business in terms of government being a customer, competitor, regulator, taxation agent, provider of incentives, and a provider of essential services. 

IV. The Canadian Market Economy

V. A Brief History Of Business In Canada

Table 1.4 highlights some important events in Canadian business history. 

2. Understanding The Environments Of Business

All businesses, regardless of their size, location, or mission, operate within a larger external environment. This external environment consists of everything outside an organization’s boundaries that might affect it. The external environment plays a major role in determining the success or failure of any organization. The external environment is made up of several identifiable sub-environments. These include: the economic environment (the conditions of the economic system in which an organization operates),  the technological environment (which includes all the ways by which firms create value for their constituents),  the political-legal environment (which reflects the relationship between business and government),  the socio-cultural environment (the customs, values, and demographic characteristics of the society in which an organization functions), and  the business environment (which includes the competitive situation in which each business finds itself).Successful companies respond to challenges in the external environment with a variety of tactics, including mergers and acquisitions, divestitures and spin-offs, setting up employee-owned corporations, getting involved in strategic alliances, and forming subsidiary and parent corporations. 

I. Organizational Boundries And Environments

Managers must have an accurate understanding of the external environment in which their company operates, as the environment has a significant impact on its success or failure. The external environment consists of everything outside an organization’s boundaries that might affect it. 

II. The Economic Environment

The Economic environment refers to the conditions of the economic system in which an organization operates. The three components of most concern are: the rate of economic growth, level of unemployment and  rate of inflation. 

III. The Technologicial Environment

Technology has a variety of meanings, but as applied to the environment of business, it generally includes all the ways in which firms create value for their constituents. 

IV. The Political-Legal Environment

The relationship between business and government is important in Canada, as businesses are subject to government regulations. Pro- or anti-business sentiment in government can further influence business activity, whether on a federal, provincial or local level. Political stability is an important consideration for firms interested in expanding internationally. Import and export opportunities may be affected by the relations between the Canadian government and the government of a potential trading partner. 

V. The Socio-Cultural Environment

This includes the customs, mores, values, and demographic characteristics of the society in which an organization functions A. Customer Preferences and Tastes

VI. The Business Environment

The business environment includes expectations of customers, suppliers, shareholders, and employees. Current trends such as a more global economy are also an important element of the business environment. 

VII. Redrawing Corporate Boundaries

Companies are joining together in a variety of ways in order to take advantage of opportunities more effectively than is possible alone. Various methods have been used in recent years. 

3. Conducting Business Ethically and Responsibly

The chapter explains: how individuals develop their personal codes of ethics,  why ethics are important in the workplace, and  how management can promote ethical behaviour. The chapter also includes a discussion of social responsibility in terms of the company’s relationship with customers, employees and investors. The four general approaches to social responsibility are discussed and a description of the four steps a firm must take to implement a social responsibility program are presented. 

I. Ethics in the Workplace

Ethics are individual standards or moral values regarding what is right and wrong.  Business ethics refers to ethical or unethical behaviour of managers or employees. 

II. Social Responsibility

Whereas ethics guide an individual's behaviour, social responsibility refers to the way in which a business tries to balance its commitments to certain groups and individual in its social environment. 

III. Implementing Social Responsibility Programs

Opinions on the appropriateness of social responsibility as a business goal differ widely, and the motivation behind beliefs differ widely as well. 

4. Understanding Entrepreneurship, Small Business, And New Venture Creation

The chapter identifies: Identifies the link between small businesses, new ventures and entrepreneurship Describes the role small and new businesses play in the Canadian economy.  The entrepreneurial process is then explored and examples are provided.  The various ways in which a person can start up a small business are outlined, with the advantages and disadvantages of each discussed.  The four forms of business ownership are described, including their advantages and disadvantages.  The chapter concludes with a discussion of the reasons for success and failure of small businesses.

I. Small Business, New Venture Creation, And Entrepreneurship

New businesses create the most jobs, are noted for their entrepreneurship, and are typically small, but this does not mean that most small businesses are entrepreneurial. 

II. The Role Of Small And New Businesses In The Canadian Economy

Small and new businesses play a key role in the Canadian economy. 

III. The Entrepreneurial Process

The entrepreneurial process involves the identification of a business opportunity and accessing the needed resources, but must also consider the social, economic, political, and technological factors in the environment which influence the success in bringing the opportunity to a successful implementation. 

IV. After The Start-Up

An entrepreneur must consider not only the start up of the business, but how the business will be run beyond the start-up phase. 

V. Forms Of Business Ownership

Business Legal Structures ==> Business Formation. Entrepreneurs must decide on the legal form of ownership of the business they are starting.  See Table 4.7 for a comparison of the characteristics of the four types of business ownership. 

VI. Success And Failure In Small Business

Interpreting available data is difficult because it excludes businesses with no employees, and includes all businesses that ceased operations, which will include business that stopped operating for reasons other than failure, such as retirement of the owner. 

5. The Global Context of Business

Identifies the major world markets. Forms of competitive advantage are described in the context of imports and exports, and factors affecting the balance of trade and balance of payments are considered. The importance of fluctuating exchange rates in international business is discussed. Examines relevant issues for a business considering moving into international markets. Once a firm has decided to go international, the various levels at which a firm may participate in international business activities and the organizational structures that are available to conduct business in foreign countries are described. Identifies barriers to international trade, and describes the organizations and agreements that are designed to overcome barriers to international trade.

I. The Contemporary Global Economy

Globalization means that more and more firms are engaging in international business. Factors motivating the increase in globalization include: greater awareness of the benefits of globalization, new technologies making international travel and communications much faster and cheaper than before, and competitive pressures. As the world becomes more globalized, the number of imports—goods that are produced and grown abroad and shipped into Canada and exports—goods that are produced or grown in Canada but shipped abroad will continue to increase. International trade is not a new concept, yet it is increasingly becoming central to the fortunes of most nations and their businesses.

II. International Business Management

The success of a business depends largely on how well it is managed. The basic functions of management (planning, organizing, directing and controlling) are much more difficult to carry out when the business operates in many different countries around the globe. The three most basic issues a company’s management must resolve when faced with the prospect of globalization are discussed.

III. Barriers to International Trade

A number of difference between countries affect the success of international operations.

6. Managing The Business Enterprise

This chapter presents an introduction to the foundations of effective management.  It describes the nature of management and identifies the four basic functions that constitute the management process and the different types of managers likely to be found in an organization. It discusses the basic skills required of managers, the importance of strategic management and effective goal setting in organizational success, as well as contingency planning and crisis management and the importance of corporate culture. What makes a good manager? How do you measure management effectiveness? Think back to a favorite manager with whom you have worked. What made that manager effective? Perhaps the manager assigned special roles in setting organizational goals. Or perhaps he or she was an exceptional communicator, expressed empathy, or was an effective motivator. Now think back to a bad manager you’ve worked with. What made that manager ineffective? Maybe he or she was too controlling, lacked communication skills, or showed favoritism toward subordinates. Whatever the reason, many people’s future managerial roles will be affected by their past experiences.

I. Who Are Managers?

Managers work in all kinds of organizations, including businesses, and are responsible for planning, organizing, directing and controlling day-to-day operating activities.

II. The Management Process

Management is the process of planning, organizing, leading, and controlling an organization's resources (i.e., financial, physical, human and informational) in order to achieve the organization's goals.

III. Types of Managers

All managers perform the four functions of management, but they differ in the emphasis they put on the four functions.

IV. Basic Management Skills

The success that people enjoy in managerial positions is often limited by their skills and abilities. Effective managers must possess several skills: technical, human relations, conceptual, decision-making, and time management skills. Figure 6.3 shows how the different levels in an organization require different combination of managerial skills.

V. Strategic Management: Setting Goals and Formulating Strategy

The starting point in effective management is setting goals—objectives that a business hopes (and plans) to achieve. Every business needs goals.

VI. Contingency Planning and Crisis Management

Due to the dynamic nature of the business environment, managers must recognize that even the best plans sometimes become impractical. Therefore, managers often develop alternative plans in case things go awry. Two common methods are contingency planning and crisis management.

VII. Management and The Corporate Culture

When recruiting new managers, organizations must make sure that these managers will fit into the organization's culture. Corporate culture is the shared experiences, stories, beliefs and norms that characterize a firm (i.e. its style). It is important to establish and maintain a strong, clear culture. The advantages of a strong corporate culture are noted.

11. Producing Goods and Services

This chapter examines the management of the production (operations) process and the utility it provides. Topics include: The operations process, Characteristics that distinguish service operations from goods production, An explanation of the main differences in the services focus, A description of the factors involved in operations planning, An explanation of some of the activities in operations control.

I. What Does “Production” Mean Today?

While the term “production” has traditionally referred to the manufacture of a physical product, today it refers to both the manufacture of goods and the delivery of services. The growth of electronic communications has had a profound impact on business today, increasing customer involvement in production and increasing the pace of order and delivery times and production scheduling.

II. Creating Value Through Production

Production of goods and services provides businesses with economic and non-economic benefits. Production also provides customers with four types of utility: time, place, ownership, and form utility. The term operations management has replaced production management to be inclusive of the production of goods and the delivery of services.

III. Operations Planning

Figure 11.2 shows the steps in an operations planning and control system. These concepts apply to both production of goods and delivery of services. Managers develop the firm's long-range production plan by forecasting future demand. The long-range production plan details plants, technology, labour, machinery, and transportation and storage facilities that will be needed in the upcoming two to five years.

IV. Operations Scheduling

This involves the development of timetables for acquiring resources for production.

V. Operations Control

This involves the monitoring of production activities, and taking corrective action when actual performance doesn't correspond with planned performance.

12. Increasing Productivity And Quality

Productivity and quality are two important issues in business today. We begin with a look at the current situation in Canada in comparison to our global competitors, and why Canadians should be concerned about increasing productivity and quality. There is an explanation of how productivity is measured. The role of total quality management in achieving quality improvements as a part of increased productivity is introduced, and the tools that are available for total quality management are described.

I. The Productivity-Quality Connection

By producing more of the right things with fewer resources, everyone—the economy, businesses and workers—benefits. Productivity is a measure of economic performance that compares how much is produced relative to the resources used to produce it. Quality means the product’s fitness for use through offering features that customers want.

II. Total Quality Management

Following the Second World War, Edwards Deming, an American, failed to convince American businesses that they needed to improve quality as much as quantity, but he did convince the Japanese. The success of the Japanese created such strong competition that the American industry had to respond. To facilitate quality improvements, tools have been developed to help identify problems.

III. Tools For Quality Management

One tool is competitive product analysis, where a company analyzes competitors’ products to identify desirable improvements to their own products. There are many other tools, including:

IV. Productivity And Quality As Competitive Tools

A company wanting to improve quality and productivity must have participation from all parts of the firm. The following company wide strategies are important to developing company-wide commitment: