Exam pure Business Management Notes

Final Exam:

• Thursday 23rd from 1:00pm-2:30pm

• Bring pencil, pencil crayons, must bring a magnifying glass

• Out of 100 marks

• Part 1: MC (23 questions each)

• Part 2: Fill in the tables (24 marks)

  • First table is worth 8 points

  • Second table is worth 11 points

  • Third table is worth 5 points

• Part 3: Cartoon analysis (12 marks)

  • 3 separate cartoons

• Part 4: Statements (9 marks)

  • 3 different statements

  • You must draw a response to illustrate the outcome/understanding of the statement

• Part 5: Short answer questions (18 marks)

  • 6 questions

• Part 6: Long answer question (14 marks)

  • Case study 

September 5, 2024

Lesson #2

Interest rate: The price of borrowing money

One of the main current characteristics of our economy today is Interest Rates. Management must consider interest rates because many businesses borrow money and the interest rate represents the price to borrow that money. Management does not have to borrow money but usually running a business can be too expensive to not borrow money. Currently, the price of borrowing money is higher than previous times but that price is slowly decreasing. 

Lenders

1. Bank

2. Credit Unions

3. Private Lenders

4. Investment Companies

5. Family & Friends (nono)  

Current interest rate is 4.25%, higher than its been in a while due to inflation 

How do higher interest rates impact business?

1. More of your cash will go to paying off your loans

2. The general population or your consumer will have less money to spend on your business

3. Could alter general investment behaviour

4. It will discourage borrowing so the economy may decline further

5. Discourage business from growing or expanding

How do lower interest rates impact business?

1. Less of your cash will go to paying off your loans

2. The general population or your consumer will have more money to spend on your business

3. Could alter general investment behaviour

4. Increases investment risk tolerance and foreign investment 

5. Encourage business to grow and expand

All is not lost

Businesses can still thrive in a high interest rate environment, here is how:

1. Pass on costs to consumers in higher prices (risky)

2. Become risk averse → take less risk → don’t expand your business

3. Explore different ways of reducing supply chain costs → digital

4. Invest in technology and less in hiring people → helps keep costs down

5. Continue to pay off any high interest rate debt (the best you can do)

Businesses can struggle in a low interest rate environment, here is how:

1. Too risky → expanding your business too much

2. Borrowing too much money

3. Businesses face more competition 

September 6, 2024

Lesson #3

To run and operate a business, management must understand the role of money management. The best management strategy is to forecast upcoming interest rates. This can be difficult but can save your business money and wasted time. 

So, what determines interest rates?

1. Examine recent labour (work) market trends → unemployment rates!

2. Examine inflation rates → use the Bank of Canada information!

   1. Inflation means when prices of goods and services are increasing 

   2. Bank of Canada determines interest rates

3. Examine interest rate decisions in other countries → look at the USA information! 

4. Examine economic issues → sales, manufacturing, consumer behaviour, etc. 

5. Political issues

Unemployment increase, interest rates decrease, vice versa

Consumption increase, interest rate increase, vice versa

Inflation increase, interest rate increase, vice versa

September 10, 2024

Lesson #4

Lately, management of all businesses have had to deal with inflation. Inflation is when prices of things increase. From a business standpoint, this means that your costs have increased. 

Costs of operating your business include (Inputs):

1. Loans → more money is being dedicated to paying off loans because of higher interest rates

2. Labour → wages of employees have been rising 

   1. (Private sector job wages are up around 4%)

   2. (Public sector job wages are up 3%)

3. Supplies/equipment → finding new supplies or maintaining equipment costs have increased

4. Administrative costs → basic company operations such as paying rent

5. Advertising costs “have increased” (Mr Stoffman doesn’t agree)

6. Taxes → certain taxes have increased

Here is the good news, inflation is coming way down. Little bits of inflation are good for a business but vast increases in inflation can hurt your business. 

How can your business respond to inflation? → if your input costs increase!

1. Could raise the prices of your products → ex. apple, dairy, pepsi products

2. Downsize → eliminate employees → this should be a last resort

3. Limit your input costs → cut off all waste  → bring supply chains closer to home

4. Reduce risk → reduce expansion ideas, reduce investment risk, etc.

5. Focus on creating a great product or service or experience

Don’t let inflation be your downfall as a business

September 11, 2024 

Lesson #5

One way to describe our economy is the term PRECARIOUS. Precarious is a term with multiple explanations impacting management and employees. Thus it also impacts all types of businesses and even government. Let’s give some definitions for the term precarious:

1. Unstable

2. Short term

3. Temporary

4. Part time

5. Contract worker

6. Gig worker

7. Not secure

Jobs that are precarious include the following:

1. Uber driver 

2. Comedian 

3. Delivery people for food apps

4. Summer jobs (ex. lawn mowing)

5. Seasonal jobs → ski instructor

6. Entertainment business

Jobs that are less/not precarious:

1. High School Teacher

2. Nurses

3. CEOs, CFOs, C-suite

4. “Lawyers” 

5. Police officer 

Are university professors or college teachers precarious?

1. Some professors earn tenure → job security → No 

2. Always a need for higher education → No

3. Early career professors that don’t have tenure → Yes

   1. Tenure → established yourself and you get job stability for life

To conclude, if university or college professors can’t keep their steady, well paying, highly educated jobs then they are precarious. If these jobs are precarious, then soon other formally stable jobs will become precarious as well. 

September 12, 2024 

Lesson #6

A precarious economy has advantages and disadvantages. No doubt, any employee and employer must examine these factors. 

At the beginning, being an entrepreneur is very precarious, but if you become successful it becomes the opposite.

Lesson #8

Management is concerned about a precarious economy. These concerns can impact their own business and revenue forecasts. However, there are possible responses to a precarious economy. Let’s go over some concerns and some responses to a precarious economy: 

September 17, 2024 

Lesson #9 (End of Unit #1)

So far in this unit, we have examined interest rates and the precarious economy. This lesson is dedicated to another economic characteristic called the Gig Economy. The Gig economy is related closely to the precarious economy. 

How can we define the Gig economy?

1. Smallish jobs based on the digital economy

2. Smallish jobs based on apps on your phone

3. Jobs connected through e-commerce → electronic commerce → business through the WEB

There are clear consequences and benefits to a gig economy. Many of them relate to the precarious economy. 

Here are some issues to PONDER about the gig economy:

1. Is the gig economy too precarious or is there any chance for stability!?

2. It's an economy based on likes and ratings → how can we achieve economic stability!

3. The gig economy is related heavily on customer experience → totally subjective 

4. The gig economy is related to word of mouth → if this word of mouth is negative then that travels faster and wider then positive word of mouth

5. The companies that operate the gig economy are often not based in Canada and are not friendly to unions!

6. If there is an outage on the internet, then the gig economy “employees” are out of a job until it is fixed

Do we want an economy heavily weighted to a gig economy or something else?

—-------------------------------------------------END OF UNIT --------------------------------------------------

Unit 2 Lesson #1 (#10)

This unit focuses on DISRUPTION. Businesses of all sizes can be disrupted by other businesses looking to change the sector or industry. Disruption has its benefits and its downsides. Most businesses must plan for disruption or be left unprofitable. Disruption does not only happen in the private sector but also in the public sector. 

Let's think of some businesses and there their disruptors:

1. Beck Taxi disrupted by Uber!

2. Small grocery stores disrupted by Walmart

3. BlackBerry disrupted by IPhone

4. Indigo disrupted by Amazon

5. Blockbuster disrupted by Netflix

September 19, 2024 

Unit 2 Lesson #2

Let’s go over some characteristics of a disruptor: ← the business that disrupts (you are disrupting!)

1. New Ideas! 

2. Highly innovative

3. Fast paced/Initially → before they get too big 

4. Highly efficient → focused on automation, customer convenience, etc… 

5. Lots of focus on the product or the service and less on the people or labour!

6. Use the gig economy to their advantage

7. Operate in borderless zones → digital → streaming

Let’s go over some characteristics of a disruptee → the business that is being disrupted!

1. Slow to innovate

2. Be behind the current times → less digital reliance

3. Too labour intensive → less efficient

4. Prices too high → pricing models are outdated

5. Poor financial management → lots of debt and weak liquidity

6. Have been around a long time

Can a disruptee still succeed under threat from a disruptor? If so, how?

1. Change → adjust → be more mobile, digital, etc… 

2. The disruptee can purchase the disruptor → merge or acquire the disruptor

3. Lower prices to stay competitive. 

“We are living in an age of DISRUPTION” - Mr. Stoffman (2024)

September 27 2024 

Unit 2 Lesson #4

Canadians have a problem with PRODUCTIVITY. Productivity is the amount of output that a worker or machine can produce within a given period of time. Compared to other countries, Canada is lagging in productivity. Productivity is important for the following reasons:

1. Build “efficiency” → produce at the lowest cost while maintaining or enhancing quality

2. The higher rate of profitability → generates wealth for the owners (shareholders) and employees hopefully

3. Allows companies to stay or become competitive!

   1. A productive business will likely be more successful than non-productive business

4. A more profitable business can sustain and cushion themselves during weak economic times

5. Enhances our standard of living → because employees and business owners earn higher salaries or wages

Canada's standard of living has been on the descent 

Productive companies:

1. Amazon

2. Apple

3. Google

4. Microsoft

5. Tesla

6. McDonalds

September 30, 2024 

Unit 2 Lesson #5

Management in Canada seem to have an aversion to building productivity. This might be because many Canadians work for or own small businesses. Small businesses tend to take less risk as their capital is tighter. Also, Canadian culture is pretty risk averse. This means our schools, our government or other institutions don’t encourage risk taking. Risk taking by investing in innovation or automation or other productivity enhancements could increase worker productivity. Contrast this culture with the American culture and you see clear differences in productivity. 

There has been successful canadian companies that are productive and risk takers:

1. Blackberry 

2. Nortel 

3. Shopify 

4. Wealthsimple 

What makes the USA so productive?

1. The mindset is one of risk taking → being wealthy, prosperity, building, innovating, etc

2. The military systems lends to research and development and new productive tools → internet

3. Less rules and regulations surrounding things like taxation, business growth, or other barriers to risk taking

4. They have traditional financial strength to help companies innovate and invest into early business startups 

Productive risk taking companies (USA):

1. Microsoft

2. Google

3. Meta

4. Apple

5. Nvidia

6. Tesla

7. Intel

8. Amazon

October 1, 2024 

Unit 2 Lesson #6

Now that we see that Canada has a productivity problem, what are some solutions to these problems?

1. Invest into R&D → research and development → touchscreen

2. Canadian banks need to fund Canadian companies → especially companies that might fail! 

   1. Need to fund mortgages less and business more (especially DISRUPTORS)

3. Small businesses should be encouraged and even incentivized to take risks! → tax benefits, grants or loans for risk taking

4. Invest into tools that make people work SMARTER → automation of the simple tasks!

5. Eliminate or limit redundancy → don’t have people do the same thing over and over again → invest in software instead!

By doing this, workers will achieve the following (hopefully):

1. Higher wages

2. Work might become more efficient and meaningful

3. More work satisfaction

4. Greater output

5. Our standard of living will increase

October 2, 2024 

Unit 2 Lesson #7

Generally when businesses want to enhance productivity, they think automation. Automation has benefits, harms, but also many questions. 

Management should attempt to answer or at the very least ponder the following questions:

1. Will the automation benefits outweigh the automation pitfalls?

2. What are the startup costs to automation?

3. What impact will automation have on your employees?

4. How will you maintain your automation?

5. How will automation impact your customers?

6. Will automation actually increase productivity?

October 3, 2024 

Unit 2 Lesson #8

Another component that can address our productivity challenges is COMPETITION. Competition between businesses and industries can encourage greater productivity levels. Sadly in Canada, we don’t have much competition in our critical industries. 

Competition is important in our economy for the following reasons:

1. Lower prices for consumers → can find alternatives if they can’t afford the good or service

2. Product or service quality should improve!

3. From a business perspective, you can lower business costs 

1. Competition in the supply chain

2. Lowering business costs can make you more profitable

4. Competition means that businesses are feeling confident that they can enter the marketplace and compete for customers → it feeds itself and propels our economy forward

5. It diversifies our economy → no reliance on one seller!

Consumer Point, Business Point, Both

October 7, 2024 

Unit 2 Lesson #9

We know that competition can encourage productivity. Competition lights a fire for innovation and exploration.  The industries mentioned in the previous lesson do have competition but the levels of competition are not that high. For instance, Canada’s banking sector. Competition is good for consumers but not so good for creating stability in certain industries. For instance, in the USA there are lots of banks but less financial stability while in Canada there are fewer banks but more financial stability. 

Lets answer some questions about competition:

Why are Canadians seemingly resistant to competition?

• Canadian management is/can be risk averse → culture of malaise → afraid to take risks

• Canadians prefer stability over too much choice → in banking sector especially

  • we don’t complain about a lack of competition → loyal to certain companies

• The governments we have elected have traditionally enforced lots of rules, regulations, and laws preventing competition

• Barriers to entry for some industries are too high for new entrants

We want productivity but we don’t want competition → contradiction

Why have we decided that some Canadian sectors should be protected from competition?

• Limit interruptions 

• They prefer stability over competition in some sectors → airline sector

• Many of these sectors are critical and convenient for everyday life such as the bank and grocery stores

• Cultural preference over stability → Canadians are more risk averse compared to the USA

What is the Canadian competition Bureau?

• The Canadian Competition Bureau is a federal agency responsible for enforcing competition laws, promoting fair business practices, and preventing anti-competitive behaviour like monopolies and price-fixing in Canada.

October 8, 2024 

Unit 3 Lesson #1 (#19)

This unit starts by examining the issue of Red Tape. Red Tape is a phrase used in management that describes the web of rules and regulations around running or starting a business. Some cities implement more red tape than other cities. The idea of red tape is to ensure that businesses follow certain laws, rules and regulations but too much red tape can also hurt or stifle a business from succeeding. 

An industry with lots of red tape: Food → restaurant 

1. Permits to sell food and alcohol

2. Health and safety checks → green pass system

3. Paying quarterly taxes to the government 

4. Limit your hours of operation → can’t be open all night in some areas

5. COVID restrictions → no dining in

6. Employees must be somewhat trained especially those serving alcohol

7. Accessibility

October 9, 2024 

Unit 3 Lesson #2

The people in this class seem to believe that most red tape is an integral element. However, for those people managing businesses, their opinions may differ. If there is too much red tape, there are possible solutions that we can implement to make life easier for our business owners. 

Here they are:

1. One in one out → if one new rule or regulation or law is implemented then one old rule or regulation or law is removed → we do this so businesses are not overwhelmed with the amount of red tape

2. Assess the costs of each piece of red tape → if the costs are too burdensome, then they should be evaluated and possibly removed

3. At the very least, assess red tape every decade → don’t keep outdated red tape that stifles business innovation!

Some cities or provinces have adopted those solutions while others are more or less likely

Who implements red tape?

1. Municipal governments

2. Federal government

3. Provincial government

4. Competition bureau

5. Professional bodies

October 17, 2024 

Unit 3 Lesson #3

One piece of red tape that is often highly controversial is business taxation. Businesses of all sizes must pay tax to all 3 levels of government. Taxes can be considered red tape because it is a cost to doing business and also an administrative task. Businesses that earn higher income usually pay more tax while businesses that earn less income usually pay less tax. Because there is such an emphasis on business productivity, taxes can prevent businesses from achieving full potential and providing goods or services. 

Businesses want to compete. Taxes can slow competition or become too much of a burden on a business. However, business taxes are integral for our well being and as a society. Our business tax system should be fair, simple and transparent

Higher corporate tax rate than the USA

October 18, 2024 

Unit 3 Lesson #4

Today’s lesson is about minimum wage. Minimum wage is a legal wage set by each province to pay employees an hourly wage. Employers essentially must pay this wage or face penalty. Management can be for or against wage practices like minimum wage. A very respected researcher named David Card (A Canadian) determined that employers who pay minimum wage can still have a successful and thriving business. As most minimum wage is paid in the retail or the QSR sector, it is important for us to understand the benefits and consequences from a management perspective regarding minimum wage. 

Ontario minimum wage = $17.20

One option that business managers have if they are unhappy with paying higher minimum wages is to AUTOMATE. Keep in mind that wages are one business expense and if your business struggles to pay wages, it might be because your business is not a good business. Focus on the quality of your product or service and good things should happen. 

October 21, 2024 

                                                 Unit 3 Lesson #5  → David Card Minimum Wage

1. How do we respond to increases in minimum wage → does it cut employment?

2. It's important to compare similar businesses when trying to answer questions! → QSR → McDonalds & Burger King

3. Politics does play a role in increasing minimum wages → your vote matters!

4. Economic conditions matter

5. Minimum wage increases can create greater demand for products/services in the greater community → the multiplier effect

6. Restaurants continued to succeed even though they increased minimum wage 

7. New entrants into the QSR space were not afraid even though they would pay higher wages to employees

8. It's possible that increased minimum wages meant reduced fringe benefits → reduced meal prices

9. Teenage employment increased

10. It's rare but possible that menu prices increases when minimum wage increases

October 23, 2024 

Unit 3 Lesson #7

Some employers prefer to pay a living wage instead of a minimum wage. A living wage is not a minimum wage. A living wage is higher than a minimum wage. A living wage considers an employee’s expenses like housing, food, transportation, and day care, then deducts certain government transfers of money to the employee and comes up with a living wage. In Ontario, a living wage is usually around $25/hr. Companies that offer living wages are certified to give them a competitive advantage and enhanced branding. This certification is supposed to increase sales and brand loyalty to the company. This certification is fluid. This means that some years if the living wage is too costly for the organization, the organization does not have to pay a living wage. Recently, during our inflation many companies thought living wages were not possible but now since inflation has eased some companies are back to paying living wages. 

October 24, 2024 

Unit 3 Lesson #8

Workers are also called labour supply. The supply of labour fluctuates year to year or month to month in Canada. When there are too few workers for Canadian companies, these companies must adjust. When there are too many workers for Canadian companies, these companies must also adjust. What are the opportunities and what are the problems in each scenario?

Too few workers → less supply of labour

Too many workers → more supply of labour

Where Canada is currently regarding labour supply can be tough to know. It depends on economic conditions like the unemployment rate, immigration levels, population growth, graduation rates and if our economy is growing or shrinking. 

Conclusions for the activity:

1. In certain sectors employers can’t find enough staff!

2. For industries with too few workers, examine wages, work life balance, and work conditions!

3. It seems that Canadians are lacking the skills or means to enter certain professions!

4. According to our brief analysis, immigration into Canada is a good thing for our economy! → fills the void of having too few workers

5. Companies will have to automate if too few workers persist for too much longer!

October 28, 2024 

Unit 4 Lesson #1 (#27)

This unit examines workplace conditions. The first condition that we examine is Paid Sick Days. Paid sick days are days that an employee can take off because they are sick but still get paid as if they are working. Each business however does not offer uniform paid sick days. In fact, it largely depends on if the business is in the public or private sector, unionized or non-unionized, the size of the organization, and which province the worker works in. Some provinces offer or legislate organizations to implement paid sick days. Ontario (where we live) tends to legislate 3 paid sick days per year. This number bounced up to 5 paid sick days during covid but since has fallen back to 3. FYI → highschool teachers receive 11 paid sick days per year. In this instance, teachers are in the public sector, unionized, and work for a large board. 

Some points about paid sick days:

1. Hard to define what “sick” means → basic illness (cold), pain (physical or mental), appointment, sick child or parent

2. There seems to be some misunderstanding or distrust to what sick means

3. There seems to be social pressure to work even when technically sick → culture plays a role

4. Paid sick days reduce the precariousness of the workplace

5. How should doctors and the provincial government play a role in establishing rules around paid sick days?

October 31, 2024 

Unit 4 Lesson #2

Offering paid sick or other workplace benefits like maternity leave, paternity leave, or other health benefits gives your business a potential business case. A business case is something that shows how your business can be profitable or more long lasting. Every successful business has a business case. If your business is struggling with attracting good employees, offering paid sick days could represent a business case and attract better employees. By understanding your business case, you are understanding what makes your business profitable. 

Questions to answer!

1. What is the business case for automation in your business? → less money spent on wages and more on productivity

2. What is the business case for having a woman as CEO of your business? → it can diversify your customer base and increase profits 

3. What is the business case to lowering prices of your product or service? → it makes your product or service more accessible to those who were originally priced out

4. What is the business case for offering maternity leave? → it allows your business to retain good employees and worry less about employee turnover

November 4th, 2024 

Unit 4 Lesson #3

In Canada around 30% of workers are unionized. A union which comes from the word unity is used to support employees to earn better wages, better work conditions, better benefits, and even better pensions. Unions can be in the public sector or private sector, but most unions in Canada are in the public sector. Italy has very high unionization rates while the USA has smaller rates than Canada. The large private sector union is in the construction industry. Public sector unions include teachers, police officers, TTC employees, and any government affiliated position except for management. All unions however, are NOT created equally. Some unions are strong while other unions are weak. 

November 11th, 2024 

Unit 4 Lesson #4

The ultimate question that people have regarding unions is the following: Are unions good for the economy? Here’s the thing: Unionized members or people that are in a union tend to earn more income than non-unionized members. However, this changes in a growing or expanding economy, where non-union members can earn more income than union workers. So, in essence, when the economy is doing well, it’s not good to be a union member but when the economy is performing poorly (recession) it is good to have a union. Because union workers sign contracts that usually last 4-5 years, they can’t take advantage of a growing economy and thus not increase their wages because of these contracts. So, they can’t get increased wages during the term of the contract. No matter what, the important element about unionization is PUBLIC SUPPORT. If the greater public supports unions than the union will feel stronger and negotiate harder for higher wages and better work conditions. If public support is not strong or not apparent the union has less power to bargain for better wages and working conditions. 

November 12th, 2024 

Unit 4 Lesson #5

Unions are good because… 

1. Job security

2. Worker protection around issues like downsizing, discrimination, etc…

3. Increase wages → especially during inflation

4. Better work benefits → pensions, health, etc… 

Unions are not good because… 

1. They can contribute to inflation because of higher wages

2. Workers can’t take advantage of a growing economy

3. Divide between the employee and the employer

4. Bad for the economy during strike action

Unions are worried about… 

1. Artificial Intelligence replacing jobs

2. Automation replacing jobs

3. Public support

4. Reducing bargaining power

5. Keeping up with inflation

6. Political environment

Conclusions:

1. Unions typically help workers

2. Lots of union activity currently → strikes or threat of strike

3. With inflation comes the threat of union action

4. Who has the power? The employee or the employer? → cyclical (occurs in cycles)

November 13th, 2024 

Unit 4 Lesson #6

ESG stands for Environmental, Societal, and Governance. These days many businesses in all sectors are not just trying to earn profits but to also have a responsibility for the greater good. This is debatable but today we will examine the positive benefits for management to implement ESG criteria into their business. 

E → Environmental 

1. Shorten supply chains → shortening travel distances between the supplier and the consumer → lowering carbon emissions 

2. Use eco-friendly products 

3. Implement climate friendly practices → using solar panels, etc… 

4. Consider commute times for your employees → implement remote work policies

S → Societal

1. No child labour

2. Be more ethical

3. Give back to the community → sponsor kids sports

4. Support LGBTQ2S

5. Accommodate customers with disabilities

G → Governance

1. The act of running or managing a business

2. CEO pay

3. Diversity in leadership → women, different ethnicities, indigenous peoples

4. Age → how old or young are the management

November 18th, 2024 

Unit 4 Lesson #7

There are some important and significant points to make about ESG: 

1. Companies do not have to disclose ESG metrics unless your company is federally regulated and this really only applies to the “G” → canadian banks, canadian insurance companies

2. Investors (retail & institutional) want to know if you implement or don’t implement ESG metrics 

3. There is lots of backlash on ESG → businesses want to spend more time running a successful business not necessarily ESG metrics → ESG could be outdated

4. Some businesses prefer to focus on 1 or 2 components of ESG not all 3

5. Be weary of GREENBERGWASHING → your business is saying all these great things about helping the environment but in reality you are doing nothing → deception

November 19th, 2024 

Unit 4 Lesson #8

There is a BUSINESS CASE to implementing ESG. 

What is the business case?

1. Attract socially conscious customers

2. More appealing to potential investors → both retail and institutional

3. Because businesses live and exist in our communities, so they want to be seen as being “good” to our environment and society

4. Can make your business more profitable → lots of research has shown that diversity in management increases profits for companies

5. Enhances company reputation → company brand

For the purposes of this class, diversity means more than the colour of your skin or what you look like. Diversity is more nuanced and much more complex. 

Therefore, what is real diversity?

1. Country of birth

2. Language spoken

3. Religious beliefs

4. Physical and mental abilities/disabilities

5. Sexual orientation

6. Age 

7. Income

8. Education levels

9. Where you live or where you were educated 

10. Indigenous 

November 21st, 2024 

Unit 4 Lesson #9

November 25th, 2024 

Unit 4 Lesson #10

When examining compensation (like a salary) for Chief Executive Officers or the leaders of certain institutions, remember to compare CEOs in like minded industries. For example, compare CEO pay in the banking sector but don’t compare banking sector to the Airline sector. 

How does a CEO of a bank actually get paid → there are many different ways of determining the pay of a bank CEO:

1. Client satisfaction → are customers happy? 

2. Business strategy → is the business profitable and taking appropriate risks?

3. What are the social and governance standards → are diversity metrics being met?

4. Sustainability practices → are banks loaning too much money to businesses that harm our planet?

5. Stock market returns → is the stock price increasing?  Is the dividend increasing? Is the value of the company increasing?

Some compensation is qualitative and some compensation is quantitative. Some compensation is AT RISK while other types of compensation are NOT AT RISK. For example, some compensation is guaranteed while other types of compensation are not guaranteed. From an equity standpoint (fairness), the CEO of for instance TD earns 13 million a year, while a teller earns $43,000 a year. The board of directors actually determines the pay of a CEO based on factors 1-5. 

December 3rd, 2024 

Unit 5 Lesson #1 (#37)

This unit begins by examining how work has changed since the pandemic. It looks at working from home, going to work, or a combination of these 2 called hybrid. Mr. Stoffman coined a term called the keyboard class vs the working class. The keyboard class are the people who can work from home on their computer while the working class are the people who must go to work and be there physically to earn income. 

December 5th, 2024 

Unit 5 Lesson #3

Is working from home a right or a privilege?

Right: 

1. Freedom 

2. Something you're entitled to

3. Something society has accepted for a longtime

4. Something earned over time

Privilege: 

1. Lucky to have

2. No guarantees 

3. An option for some people 

4. Something you deserve 

Let’s break this down:

1. It depends on the job → keyboard class vs working class

2. People working from home may have socioeconomic advantages vs people that go off to work → rideshare workers vs Lawyers

3. Other factors can impact if you work from home and if you want to work from home → family life/responsibilities → disabilities

Conclusion: Employees may have become too used to working from home and believe it is now their right. However, exercise caution as employers believe working from home is more of a privilege. This is where employees and employers will have confrontations. Is the hybrid model then the best model for both? 

The following issues will help determine if it is a right or a privilege:

1. The economy → in a growing economy, employees have power, in a shrinking economy, employers have power

2. Is the business succeeding, struggling, declining, expanding, etc… 

3. Is it a small business, medium sized, or big business

4. How important is employee satisfaction?

5. Does the business provide an essential good or service

6. Is the job unionized

January 6th, 2025

Unit 5 Lesson #6

Many employers force their employees to sign a legal document called a Non Disclosure Agreement (NDA). An NDA keeps the internal operations of a business private. This includes how workers treat other workers, how workers treat suppliers, and how management treats its employees. The problem with NDA’s lies mostly in the fact that things like harassment, sexism, ageism, or other forms of bad behaviour can go unchecked and unpenalized. From the management perspective, it is wise to get employees to sign NDA’s so their dirty laundry is not publicized. From an employee perspective, NDA’s can be a problem as things may not improve in the workplace. 

So, are NDA’s critical or not and what are the upsides and downsides to NDA’s?

Technology is a sector that is common to have NDA’s

January 7th, 2025

Unit 5 Lesson #7

Another document (legal) that an employer could ask employees to sign is a Non-Compete Clause. A non-compete clause means that if an employee leaves an organization, they are not allowed to go and work for a competing organization in the same sector. 

Why would an employer want to establish a non-compete clause?

1. Don’t want to lose clients or customers to another like minded organization

2. Don’t want former employees sharing secrets with other like minded organizations → designs, recipes, manufacturing processes, intellectual property (ideas)

3. Your employees can play one organization against the other 

Some jurisdictions in North America ban non-compete clauses while some do not. 

What are the benefits to banning non-compete clauses?

1. Low cost way for employees to work where they are most needed

2. Creating better economic growth opportunities → in silicon valley, non-compete clauses are banned → allows tech workers to thrive and better grow tech companies