COMM 101- Midterm Review

Chapter 1 Exploring the World of Business

Business- An organization that strives for a profit by providing products (goods and/or services) to satisfy society’s needs

Goods -Tangible items manufactured by businesses.

Services -Intangible offerings that we experience.

Not for profit- exists to achieve a social goal or goals as opposed to the usual business goal of profit

Revenue: the money a company earns from providing services or selling goods to a customer

Costs: Expenses for rent, salaries, supplies, transportation and many other items that a business incurs from creating and selling goods and services

Profit: the money left over after all expenses are paid

Risk: The chance that an investments actual return will be different than expected. Potential for losing resources (i.e., time, money) or be unable to accomplish organizational goals.

Factors Impacting Business Environment

Political- Federal, provincial/territorial and municipal governments have an impact on business

Government Role re Business 

1. Stabilize and manage the economy- so you can plan & - Simple, unintended, no changes - Rules,tax, polocies, elections

2. Establish and manage government systems

3. Provide and manage public enterprises-  Sasktel < Saskpower

4. Institutional role – Bank of Canada, CDIC - money in bank

5. Supports for business – workers comp

6. Resource conservation- share, don’t use up

7. Social programs and services- unemployment services, insurances, public health

8. Taxation- redistribute,

Federal government: Section 91 of the Constitution Act, 1867- what gov can and cant do,

• Money and Banking
• Postal Service
• Trade and External Relations
• Defense
• Criminal Law
• Employment Insurance
• Copyrights
• Areas that cross provincial borders (e.g. Transportation))

Provincial Government: Section 92 of the Constitution Act, 1867 Assigns to the province's legislative authority over “all matters of a merely local or private nature in the province (16 areas). (

• Labour laws - Labour law includes minimum working standards such as minimum wages,
• vacations,
• statutory holidays
• Education
• Health and welfare
• Protection of property and civil rights
• Natural resources
• Environment
• Business Incorporation)

Shared: immigration and ag

Municipal Governments: Section 92 (8) province has exclusive responsibility for making laws relating to that municipalities. Municipal services include:

• Water
• Sewer
• Waste Collection Encourages
• Economic Development

Economic and Competitive

Size and health of economy must be considered when making business decisions, and high levels of competition force businesses to cut costs, develop new products, increase marketing efforts

Technological

Innovation in technology has changed how businesses produce and distribute goods and how we communicate. Increase production, larger market, order online,

Social

Changes in demographics influence what products companies offer. SEll to a particular age group,

International & Global

Access to global markets increases competition and need to enhance skills, ship to other counties, affects supply chains-covid, goods from all over,

Climate Change

Carbon tax, stear away from gas

Economics (chpt 1 cont)

Economic Systems:

• A combination of policies, laws, and choices made by governments that determines who owns and controls the factors of production.

o Determines how wealth is made and distributed in a country

o Affects business opportunities to make income and create wealth

o Affects the choices of consumers and the prices they pay

Economy; The way in which people deal with the creation and distribution of wealth

Different Economic Systems

• Capitalism: FREE market individuals own and operate the majority of businesses that provide goods and services
• Invisible Hand: a term created by Adam Smith to describe how an individual’s personal gain benefits others and a country’s economy
• Market economy:Little govern control based on competition in the marketplace in which individuals own and operate the majority of businesses that provide goods and services
• Mixed economy: CANADA, most land and business are privately owned but with various levels of government involvement
• Command economy: Lots gov control the government decides what goods and services will be produced, how they will be produced, for whom available goods and services will be produced, and who owns and controls the factors of production

Factors of Production: Building Blocks of Business

• Natural Resources:
• Labor
• Entrepreneurs
• Knowledge
• Capital- $

Macroeconomics: Economy as a whole, looking at data for large groups, companies, products

• Goals of mixed economy;
• Full employment
• Price stability (inflation)
• Growth economics increase in GDP

Microeconomics: Individual parts of the economy, Inventories,demand and supply, costs, sales incentives

1. Perfect Competition- Agriculture

• Large # of small firms, similar products, available information, low barriers to

entry/exit

• No single buyer or seller is powerful enough to affect the price of that product.

• Prices are decided by the economic concept of supply and demand

1. Monopolistic Comp- Clothing, fast food

• Many buyers, large number of sellers
• Easy entry

1. Oligopoly- Banks and telecommunications

• Few large sellers
• High barrier to entry- money
• Sellers match pricing

1. Monopoly- Government Growns

-1 firm controls all industry sales

- no entry of new firms

Equilibrium price: Price which quantity demanded is equal to the quantity supplied

Changes in demand;

• Change in customer income
• Change in price of relates products
• Changes in trends
• Expectation of future prices- sales

Changes in supply;

• Change in taxes- cost more to make
• Change resources
• New tech
• Change in price of related product

Economic performance;

1. Peak/ boom
2. Recession- 2 or more consecutive 3- month periods of a decline in a country's GDP.
3. Depression- longer downturns
4. Expansion- recovery

Gross Domestic Product (GDP)

Total dollar value of all goods and services produced by all people in country in one year- want growth  

Unemployment Rate- Calculated- number of unemployed divided by employed

• Frictional: Temporary not working, looking for job (Grad)
• Seasonal:not working during some months, not looking for work (farm)
• Structural: No demand for skill, retraining (robots take over job)
• Cyclical: Economic slowdown, looking for job (recession)

Consumer price index (CPI): Monthly index that measures changes in prices of basket of goods, in certain area.

• Inflation; years percentage change in CPI- 2%
• Deflation: decrease- no profits companies
• Hyperinflation: quik rise of prices (more than 50%) in one month
• Stagflation: Period of slow economic growth high unemployment rates

Chapter 3- Global Buisness

Why nations trade

• Absolute advantage: Specialization, stick to what good at, easier to import tea than make
• Comparative Advantage: A country can produce a product at a lower cost

International Business: Transactions that cross border of 2 or more countries

• Exports: Goods and services made in one country and sold to others
• Imports: Goods and services that are bought from other countries
• Trade in Merchandise: trade in goods = exports and imports
• Trade in Services: trade in services (consulting, financial, etc.) = exports and imports

Balance of trade: Diff between value of a countries exports and value of its imports

• Trade surplus: Exports more than it imports
• Trade deficit: Imports more than it exports

SASK HAS TRADE SURPLUS- export more than import

Balance of payments: Diff between money coming into the country and leaving country.

Current world population: 8 billion

Why go Global:

• Earn money
• Cost save as appose to doing yourself
• Market info
• Satuerate domestic markets

Currency valuations- Currency exchange rate: Value of one currency in relation to another

• Interest rates increase to deal with inflation
• Inflation + economic strength
• Balance of trade flow

Licensing: legal process using secret idea 

Contract Manufacturing: foreign company manufactures private label goods under a domestic companies brand- You make sole and ill put it togetheer.

Joint ventures: 2 or more business combine for venture

Direct foreign investment: Active ownership in foreign company

Methods of entering international business;

• export/importing- LOW RISK
• Contractual agreements( forieign licencing, subcontracting)-MED
• International Direct Investment (Joint ventures, acq, overseas division)-HIGH

Organizations promoting Global trade:

• World Trade organization (WTO)
• Bank
• International monetary fund (IMF)

Barriers to Trade

• Political- mistrust
• Economic- infrastructures- roads, airports
• Natural- language, culture, regulatory

Trade restrictions:

• Protect new/weak industries
• Protect domestic jobs
• Protect health
• Security
• Limit choices
• Increase CAN sales

Tariff Barriers:

Tariff: a tax imposed on an imported good

Protective Tariffs: make imports less attractive to buyers than domestic products

Non- Tariff Barriers: 

• Import Quota: Limit on quantity of a certain good that can be imported
• Embargo: Complete ban on imports or exports
• Exchange controls: Sell foreign exchange to a control agency
• Customs Regulation; regulation on products that are diff from generally accepted international standards \n

Globilization:

-Canadians have lost jobs because of imports/production shifts

• Others fear losing their jobs

• Employers often threaten to export jobs when facing labour disputes with employees

• Service and white-collar workers are increasingly seeing their operations moving

offshore

• Competition is beneficial for consumers but can hurt producers

• Global Political/Economic Unrest: We are interconnected

Benifits:

Productivity grows faster with a comparative advantage

• Global competition keeps prices down, less likely to face

inflation

• Open economy spurs innovation

• Export jobs often pay more than other jobs available

Chapter 4- Choosing form of ownership

1. Sole Proprietorship: 1 person starts and sells, usually no employees

2. Partnership: 2 or more individuals run together

• General: share in management and profit
• Limited Partnership: liability is limited to the amount of their investment

3. Cooperation:Separate entity created by law, existence and life span is separate from owners. Owners not personally liable for the entities debt

• Legal rights of a person, buy/sell property, sue, be sued, borrow money
• Public: Shares are wildly held and available to public
• Private cooperation:shareholders is limited, not on stock
• Crown cooperation: government owned
• Cooperate structure- sharholderrs, board directors, CEO, CLO,etc-many, Managers, teams

Cooperatives: allocation of profits based on how much the members use it

Shared Principles of Co-operatives:

1. Voluntary and Open Membership

2. Democratic Member Control – one member one vote

3. Member Economic Participation

4. Autonomy and Independence

5. Education, Training, and information

6. Cooperation among cooperatives

7. Concern for community

Consumer co-op: a co-op that provides products or services to its members

Producer Coop: markets goods or services produced by its members or reduces costs through group purchasing

Worker coop: owned and operated by its employment and limited liability

Multi-stakeholder coop: Includes more than one membership group

Mergers: combination 2 or more companies to form new company

• Horizontal Mergers: firms same stage of the same industry
• Vertical Merger: firms at diff stages of same industry merg
• Conglomerate merger: Firms unrelated merg
• Hostile Takeover: Goes against wishes of target companies management and board of directors

Acquisition: Purchase of a company by another company or by an investor group

Chapter 5- Considering small business

Classic entrepreneur: Accept risk that comes with starting their own company based on innovation/ ideas

Multipreneur: start a series of companies.

Intrepreneurs: apply their entrepreneurial spirit within large corporation rather than

starting companies of their own.

Factors contributing to entrepreneurship:

1. Culture: idea well respected, and supported, promote,
2. Advances in tech:
3. Downsizing and outsourcing; Laid off- spirit

Opportunities:

1.  Tech advances, app, drome  
2. Demographic and society, aging specific, LGBTQ5
3. Economic changes- electric car, uber

Options for starting own business:

1. Start own
2. Buy an existing business- twisted
3. Buy a franchise- mcdonalds

Age at start up- 25-34- 71%

Business plan: written doc describes opportunity, goals, plans

• Purposes: communication, management, monitor, evaluate, plan, guide
• \

Business model: explains how business will make money

Small businesses in CAN: wholesale and retail

Equity: funds raised through the sale of shares in business

Types of investors:

• ANgel investors: like risk, provide early stage finacining for start up business in exchange for ownership
• Venture capital: invest in high growth company that have potential, voice in management, risk adverse.

Crowdfunding: invite ppl to contribute to a business, via online, no ownership, reward for contributing.

• easiest businesses to start have the least growth and greatest failure rate (e.g.

restaurants)

• The easiest business to keep alive are difficult ones to get started (e.g.

manufacturing)

• The ones that can make you rich are the ones that are both hard to start and hard to

keep going (e.g. biotech R&D)

Chapter 7- understanding the management process

Functions of Management

1. Planning

EStablish goal, SMART,

• 1. Strategic planning: Long range (one to five years) broad, plan to expand
• 3. Operational planning: specific standards, polices, procedures,
• 4. Contingency planning: identify alternative courses of action, unforeseen events, covid
• 2. Tactical planning: short time frame, less than 1 year, specific, how going to expand

Vision statement: Values, goals, inspire

Mission statement: How company will achieve goal

SWOT_ Strengths, Weakness, Opportunities, Threats

2. Organizing

Arrange resources and activities so you accomplish goals.

• Dividing up tasks
• Grouping- departments
• Assign authority

TOp manager- ceo

Middle manager

Supervisory management

• Finance: Primarily responsible for an organization’s financial resources

• Operations: Manages the systems that convert resources into goods and services

• Marketing: Responsible for facilitating the exchange of products between an

organization and its customers or clients

• Human Resources: Charged with managing an organization’s human resources

programs

• Administrative: A manager who is not associated with any specific functional

area, but who provides overall administrative guidance and leadership

• Research and Development: responsible for the development of new products,

processes, etc.

3. Leading and motivating

Formal authority: Do it cuz i said so, boss

Influence and persuasion: Motivate

Leadership Styles:

• Autocratic: directive, little input from others
• Participative: share decisions with employees
• Laissez- faire: little input from boss, get vision, advisor,lose direction,
• \

Power:

Legitimate power; The position

Reward Power: The Goods

Coercive Power: The bad

Expert power: the skills

Referent power: The respect

4. Controlling

• Set performance standards
• Measure performance
• Taking corrective action
• \

Chapter 8- Creating Flex organization

Centralization: degree to which authority is concentrated in one area of the level of organization

Decentralization: pushing decision making authority down the organizational hierarchy.

• Efficiency: the ability to complete a task using the minimum

amount of resources

• Control: the ability to make decisions and specify how those

decisions will be carried out

• Responsiveness: speed at which an organization can improve its products in response to customer feedback, employee suggestions, or competitive pressures

• Empowerment: degree to which employees can make decisions on their own

Departmentalization types: group employees

• Function
• Product
• Location
• customer

Span of control; number of employees manager directly supervisees

• Narrow- more levels
• Wide span- fewer  levels

Forms of organizational Structures

• Line structure; chain of command  directly from person to person

• Line- and -staff structure staff employees assist the line prof in achieving orginizations goal

• Matrix structure: individuals from diff functional areas work on projects teams
• Cross functional team; vary specialties come together to achieve a common task.

Chapter 8- Attracting best employees

Human resources: acquire, maintaining, develop people, policies, work life balance,

Replacement chart: key employees and their possible replacements within a company

Skills inventory: Info about all employees and current skills/ experience

Internal labour market: inside the company- transfer to  a diff job

External labour market: outside company hire new guy

Recruitment and selection

1. Attract
2. Screen
3. Interview
4. Compare
5. Check ref
6. Make job offer

Compensation: paycheck

• Salary/ wage
• Incentives- tips, bonus, commission
• Benefits

Fringe Benifits: indirect compensation- vacation times, education, private health insurance

Purpose of HR:

• Protect employee rights
• Promote job safety
• Eliminate discrimination

Chapter 9- Motivating Employees and teams

Motivation- comes from within a person

Old views on motivation;

Frederick W. Taylor system of management:

• Increase productivity studying efficient ways
• pay=motivation
• Address productivity not motivation

Hawthorn Effect: Employees preform better when they receive attention or feel management is concerned about their welfare.

• Good enviro
• Pay is not all motivation
• Human relations movment

Maslows hierarchy of needs: behavior motivated by needs

• Physiological needs- self actualization

Alderfers ERG theory: expand maslows by saying the needs can over lap

• Existence
• Relatedness
• Growth

Theories X: 

• Dislike work, avoid, ppl must be controlled, not ambitious,

Theory Y: 

• Love work, natural, motivated using positive things, seeeks responsibility

Herzbergs- 2 factor theory;

• Satisfaction and dissatisfaction are distinct
• 2 diff continums

Contemparary views on  motivation:

1. Reinforcement Theory

-postive (Praise, bonus,  pay) and neg reinforcement (Reduce pay, layoff)

2. Equity theory

Actions are guided by fairness and discrepancies in the workplace

• Job inputs/ job outputs

1. Expectancy theory

Motivation depends on how much we want something and how likely we are going to get it- expectations. Is the reward worth the effort?

4. Goal setting theory

Intention to work towards a goal is the source of  motivation. Specific

Non- Monetary Incentives:

• Recognition
• Empowerment
• Job enlargement
• Job redesign
• Job enrichment
• \

Monetary Incentives

• Piece-Rate Plans
• Profit Sharing
• Gain Sharing
• Bonuses
• Stock Options
• Employee ownership
• Job sharing
• Hybrid working
• Telecommuting
• Flextime

Functional teams: same area of specilization

Cross- functional: interprofessional, diverse skill set

Virtual teams: Do not interact in real life

Self managed teams: no leaders, manager no, manage themselves

Chapter 10- Managing Labour Relations

Current event:

The Industrial Revolution and Poor Working Conditions

factory system of manufacturing, in which all the materials, machinery, and workers required to manufacture a product are assembled in one place.

• job specialization, separating the manufacturing process into distinct tasks

• poor working conditions

•Demand for factory workers who worked in poor, unsafe working conditions

•Persistence of harsh working conditions forced workers to band together and demand improvements

•Resulted in formation of labour unions

Labor Movement

Labour Union: An organization that represents workers in dealing with management over issues involving wages, hours and working conditions

Strikes: Temporary work stoppages by employees, calculated to add force to their demands

Today, fewer than 30% of Canada’s workforce are unionized

Membership is concentrated in a few industries and job sectors

Three of Canada’s largest unions:

-Canadian Union of Public Employees (CUPE)

-Unifor (private sector)

-National Union of Public and General Employees (NUPGE)- gov employees in each province

Objective of Unionization

• Fair compensation
• Improved work rules and working conditions
• Increased job security
• Defined grievance procedures
• Power through solidarity

Grievance procedures: A formally established course of action for resolving employee complaints against management. Unfair behavior that the manager has done.

Labour-Management Legislation

• Businesses opposed to unionization used courts to ban strikes, picketing and union membership drives
• Pro-union legislation resulted in rapid rise of unions
• Led to creation of Canada Industrial Relations Board (CIRB), a federal agency that interprets and administers provisions of labour law to support constructive labour-management relations
• Subsequent legislation curtailed some of unions’ power and correct union abuses
• Each province is responsible for provincial trade union legislation

The Unionization Process

• Workers contact union
• Workers sign cards applying for membership in the union, and authorizing the union to represent them in negotiations with their employer.
• If at least 45 per cent of the workers sign membership cards, the Saskatchewan Labour Relations Board (SLRB) will hold a vote to see if workers want a union.
• The SLRB holds a secret ballot vote. Anyone who is in the bargaining unit the union applied to represent can vote. If the majority of workers who cast ballots vote to unionize, the union is certified.
• Labour Relations Board issues formal “certificate” establishing union as exclusive agent for employees within the bargaining unit
• The union will serve notice to your employer to begin bargaining your first contract.
• Newly certified union establishes its identity and structure
• Negotiating committee is struck to begin collective bargaining

Union Management Negotiation Tactics

• Collective bargaining: the process of negotiating a labour agreements that provide for compensation and working arrangements mutually acceptable to the union and to management

• Labour contract: a written agreement between labour and management that is in force for a set period of time

• Labour’s Goals- WORKER: High pay, secure jobs

• Management’s Goals: Quality workforce, controlled cost and flexibility

• Negotiating tactics are used before and during the bargaining process

Process of Negotiating Labour Agreements

Union Management Negotiation Tactics

Workers:

Picketing- marching back and forth in front of a place of employment with signs that may occur prior to engaging in a strike. Alert members of what’s wrong

Slowdowns- DO bare minimum- Put financial pressure on the organization by working at a slower pace, and by encouraging union members and the public to not purchase the organization’s products.

Boycotts- refusals to do business with a particular company

Publicity- gain public support by publicizing the union’s position or conducting informational picketing outside the workplace.

Strikes- Inflict financial damage on the organization through a work stoppage. Some services that are seen to be critical do not have the option of a strike.

Court Injunctions- Limit management’s options by requesting a court order that specifies what tools they can and cannot use during negotiations.

___________________________________________

Management;

Replacement workers- Put pressure on the union by hiring non-union replacement workers in the event of a strike, or by threatening to move production to another facility in the event a contract is not reached.

Lockout- Put financial pressure on employees by refusing to allow them to enter the workplace. This is essentially management’s version of a strike.

Injunction- a court order requiring a person or group either to perform some act or  to refrain from performing  some act

Publicity- Gain public support by publicizing the organization’s position.

Intervention - Required when negotiation process is stalled

Mediation: The process of settling issues in which the parties present their case to a neutral mediator.

• Objective: promote compromise between both parties
• Mediators cannot issue binding decisions or impose settlement

Arbitration: The use of a neutral third party who conducts a formal hearing on an unresolved dispute, and then decides on a solution.

• Arbitration may be binding or non-binding
• If binding, the union and management must adhere to the final decision

Future of Labour – Management Relations

• Organized labour has been integral in improving compensation and working conditions for average Canadian workers during the past century
• Union membership has dropped to its lowest level since 1916
• Pressure on public-sector unions
• Increased partnership between employers and private sector unions
• Increased responsiveness of management