RSM100 Textbook PDF

Chapter 1 - Company's best asset : effective human resource 1.) The private enterprise system (Capitalism) - ? : An economic system that rewards firms for being able to perceive and serve the needs and demands of consumers // adam smith is the father of capitalism → the in...

Chapter 1 - Company's best asset : effective human resource 1.) The private enterprise system (Capitalism) - ? : An economic system that rewards firms for being able to perceive and serve the needs and demands of consumers // adam smith is the father of capitalism → the invisible hand of competition 2.) Business ? - All profit seeking activities → provides goods and services necessary to an economic system (tangible goods / services) - Non-for-profit organizations : they place public service above profits, Nevertheless they need to raise money to operate and achieve their projects/goals (ex : The red cross / local libraries etc…) - At the heart of every business endeavor is an exchange between a buyer and a seller - Profits are rewards for businesspeople who take risks / profits as incentives for people to start businesses 3.) The economic factors of production Explications Corresponding factor payment Natural resources All productive inputs Rent for land leased that are useful in for operations their natural states (ex : Agricultural land, building sites, water etc…) Capital technology, tools, Interest for money information and used to acquire physical facilities capital items  Human resources Willingness to take Wages for employees risks to create and operate a business Entrepreneurship Anyone who works for Profit for starting and the firms // Both managing physical and operations intellectual ; Some companies are prioritizing the hiring and motivation of talented employees to differentiate themselves - on - Citizens in the private enterprise enjoys/have rights to : - Entrepreneurship (The willingness of people to start new ventures) leads to economic growth - Share of employment in the private sector in canada 2019 : - 15.6% retail trade - 12.9% manufacturing - 10.3% accommodation and food services 4.) The seven eras in the history of business  - 400 years since the first Europeans settlements in the North American continent, amazing changes have occurred in the Canadian Businesses. (CIA PMRS) → Branding : Process of creating in customers mind an identity for a good, service or company (it’s an important marketing tool in contemporary business) … // creating a feeling → Transaction management ≠ Relationship management : transaction management focuses on selling enough product to cover costs and earn profits VS Relationship management build relationships with customers to mainly gain loyalty from them 5.) Current trends in business - The workforce is changing in 2 different ways : 1. It is aging 2. Is becoming increasingly diverse - The nature of work has shifted toward service (tertiarisation) - More firms rely on outsourcing (Sous-traitance) , offshoring and nearshoring - Workplaces now become much more flexible (different du CDI → emplois plus instables) → employees can work from different locations etc… // and there is a lot of collaboration between employees nowadays → employees are more creative, and they are not constantly supervised by their manager - Covid-19 : adoption of digital technologies by consumers and companies → ex : Amazon benefited from this period were online purchasing has been democratized - - Democratization of work remotely from home - More Partnership between companies → Strategic alliance → for example, a company create a partnership with another company in another country to benefit from its advantages to do business → ex : the strategic alliance between the american Pfizer and the german BioNTech has brought together the capabilities of each company in order to deliver a vaccine to the world - The small-business sector creates 80 percent of all new jobs and generates 45 percent of Canada’s economic output (In Canada 98% of all businesses are small businesses) 6.) Skills and attributes needed for today's manager - Vision → ability to perceive both marketplace needs and the way their firms can satisfy those needs - Critical thinking → the ability to analyze and assess information to pinpoint problems or opportunities. 7.) The characteristics that make for a successful and admired company - Business ethics : the fact that we use moral values in our company - social responsibility : a philosophy that includes non profit resources for employees and the community, to mainly promote the well-being of the general public (ex : Chipotle Cultivate Foundation, which supports sustainable agriculture) - Solid profits, stable growth, safe work environment, high quality goods and services Chapter 2 1.) Microeconomics, the forces of DEMAND and SUPPLY - Microeconomics : the study of economic behavior among individual consumers, families and businesses whose behavior in the marketplace determines the quantity of goods and services demanded and supplied at different prices. - Factors Driving Demand : price, consumer preferences, new needs (ex : food delivery services), income, expectations on the future economic situation - Two goods are substitute, if an increase in the price of one leads to an increase of the demand for the other - Two goods are complements, if an increase in the price of one leads to a fall of the demand of the other - Factors driving supply : cost of inputs and technology resources, taxes and the number of supplier operating in the market - When there is more supply, the supply curve move to the right (rightward shift) ≠ leftward shift 2.) Macroeconomics, and issues that affect the entire economy - Macroeconomics : A larger study of the economy and how it allocates its resources, and how a government's monetary and fiscal policies affect the economy - The 4 models that characterize competition in a private enterprise system : 1. Pure competition → large numbers of buyers and sellers exchange homogeneous products, and no single participant has a significant influence on price. 2. Monopolistic competition → large numbers of buyers and sellers exchange heterogeneous products, so each participant has some control over price (pouvoir de marché)  3. Oligopoly → (ex : airline companies), few sellers compete and high start-up cost from barriers to keep out new competitors 4. Monopoly → one seller dominates trade in good or service for which buyer can't find substitutes - How supply and demand interact ? : - The point where the two curves meet, is the equilibrium price : the price is acceptable for buyers and suppliers - Surplus : when the price is higher than the the Ep, so there is more supply than demand → it leads to a decrease of the price that will lead to the Ep again - Shortage :‫ا‬when the price is lower than the Ep, there is more demand than supply → it lead to an increase of the price, that will lead to the Ep again → Macroeconomics : We can observe three different systems: - Private enterprise systems → Capitalism / businesses meet the needs and demand of customers / government aren't present → competition regulate the economy / 4 types of competition can be observed in this type of system ( pure competition, oligopoly, monopoly, monopolistic competition) - Planned economies : socialism and communism → government ownership of major industries / the economy aims to accomplish government's goals rather than those set by individual firms - Mixed economies : government owned companies operate alongside private companies (ex : in Canada, healthcare, education etc… are run by the government, as well as the public transportation and the defense industry in France) / Privatization (government companies become private companies → Air Canada was a government company until 1989) 3.) How to evaluate economic performance ? - 4 stages of the business cycle : 1. Prosperity → low unemployment, strong consumer confidence 2. Recession → A decline in economic activity / economic slowdown, consumers often postpone major purchases 3. Depression → The economic slowdown continues over a long period of time 4. Recovery → consumers spending begin to increase, business activity increases, increase of jobs - The canadian government measures price level changes by using the consumer price index 4.) Managing an economy's performance  - Monetary policy (politique monétaire) → control the money supply → affect interest rates (therefore affect demand and investment decision) → with the tool of money supply, the government can encourage growth or control inflation - Fiscal Policy (politique budgétaire) → involves decisions regarding government revenues and expenses (implique des décisions concernant les recettes et les dépenses du gouvernement) → governments spendings affect economic growth and employment levels in the private sector // a government must raise money through taxes or borrowing, to finance its expenses - Balanced budget / budget deficit/ budget surplus 5.) The global economic challenges encountered businesses today - The annual World Economic Forum meeting identifies global risks in the following five categories : economic, environmental, geopolitical, societal, technological - Businesses face 10 key global risks in today's economy : Asset bubble in a major economy Failure of a major financial mechanism or institution failure/shortfall of critical infrastructure Fiscal crises in key economies High structural underemployment Illicit trade Trade tensions An energy price shock Unmanageable inflation Chapter 5 : - A small business : independently owned business / less than 100 employee / less than 2 million dollars revenue - Small businesses create new jobs and new industries (especially in canada) - However, small business often fail : managing inexperience / financing problems / difficulty meeting government regulations - The Business plan : 1.) executive summary 2.) an introduction  3.) financial and marketing sections 4.) resumes of the business principles - Also include : company’s mission / what makes the company unique / identification of customers and competitors / financial evaluation of the industry and market / assessment of the risk → Therefore, Small business have access to assistance : - The business development bank of Canada (BDC) (created in 1944 by an act of parliament) → Improve management skills and financial help → Franchising : - Franchisor : Large firm that allows small business owners (entrepreneurs) to market and sell the firm products under its brand in return for royalties - A franchising agreement → Initial purchase fee + royalties - Franchising is one of the least risky business / quickest way to become a business owner - The franchisee makes first research about the franchisor : the better business bureau / Industry canada / the US federal trade commission … → Chapter 5 & 6 : → Forms of Private Business Ownership - Sole Proprietorship → owner → A and D : own boss, lot of work, own schedule (ex : business consultants) - Partnerships → Co-owners, with a legal agreement → advantages and disadvantages : limited decision making, less control, more capital - Corporations → assets and liabilities, selling of shares, limited liability (responsabilite limitee) (ex : Coca Cola) - Not-for-Profit Corporations → Shareholders (actionnaires) : acquire shares in exchange for ownership → 2 types of shareholders : Preferred shareholders = Common shareholders actionnaires privilégiés - Profit mainly from dividends → lower - Higher return potential → Profit from profit potential but : capital gains (the value can increase - Lower risk → companies have to a lot) and dividends, but :  prioritize preferred shareholders → - Higher risk → stock price can more certainty of the investment decrease // they take what's left returns (during the company’s liquidation for - don’t vote ex) - Gain the most or Lose the most - vote → 5 types of Preferred shareholders Convertible - can be converted to common shares → the investor can gain a lot from the increase of the stock value - but lower dividend interest than regular preferred Redeemable - this share Must be repurchased by the company at a fixed price and a date Participating - be able to get additional percentage of profit + regular dividends (ex : lorsque l’entreprise va très bien, elle peut distribuer plus ) (se rapproche des common shares car tu garde l'excédent aussi, si le business va bien) Cumulative - get the missed dividends payments Callable - this share can be repurchased by the company at a fixed price and a date → can be “called back” → Franchising ( ex : Mcdonald's / Tims) : A and D of a franchisee (celui qui ouvre le business dans un autre pays et non la maison mère ) Advantages Disadvantages - you already have the brand name - the bad reputation of a place can and the reputation (turnkey impact the franchisor reputation ( ex operation) :rates in one mcdo that gives a bad - quicker customer acquisition and image to mcdo in general ) potentially higher sales compared to - the high royalties can impact profit starting a business from scratch  - already tested successful - lack of autonomy of the franchisee management programs and (there are rules etc…) business model - success of the franchisee depends - Savings through volume (economies mainly on the franchisor's image d’echelle = economies of scale) - the franchisee still get the support of the franchisor → Finding Financing : - Seed capital : the initial funding needed - Debt Financing ( Credit cards / family / friends/ bank loans/ finance companies) (A and D): A→ you don't give control to other people → full ownership and control of your business ; there is no profit sharing ; Interest payments on debt are often tax-deductible ( c a d que le montant des intérêts est déduit du revenu de l’entreprise avant de payer les impôts → l'entreprise ne paye pas d'impôts sur les intérêts de l'emprunt), // D → you always need to pay the interests regardless of business’s situation ; Lenders may require collateral to secure the loan - Equity financing (Financement par actions) (Venture capitalists / angel investors) : you sell a part of your business / give control to other people / you can lose control of your organization → Business plan is really important : written documentation / companies vision → Entrepreneurship : have your own business / vision and idea / high energy level / risk taker / self confidence and optimism / tolerance for failure / creativity // a lot of risks but a chance to become really rich (earn more or lose more) - Why ? : succeed financially / be your own boss / quality of life / job security ( pas tjrs facile) … - Challenges ? : A lot of risks (but a lot to win) / … - Small Businesses vs entrepreneurial Businesses : Size difference (small B remain small but EB wants to grow ) / Age / growth goals → David Burch Model → mouse → gazelle → elephants // change directions quickly vs can’t change directions quickly → illustrates different types of companies depending on their size ) → Different forms of private ownerships : - Sole proprietorship : operated by one person → the owner is liable (responsable) for all of the firm’s debts and legal responsibilities - Partnership : operated by two or more people → share of responsibility with a legal agreement / each partner is liable for the actions of the other partner - Corporation : a separate legal entity from its owners → investors receive shares/stocks // assets and liabilities different from the asset and liabilities of the owner // A corporation is like an artificial person created by law. // to incorporate ( a corporate charter) - A non-for-profit corporation → the goal is not to earn profit, but to have social goals to accomplish → Shareholders : they own a certain percentage of the company → Shareholders elect a board of directors → they elect the chief executive officer (CEO) → the CEO elects the managers → Mergers, acquisitions and joint ventures : - A merger → two or more firms combine to form a company → a vertical merger = combines firms operation in the same field but in different part of the supply chain (ex : an automobile firm buys a tire firm) // A horizontal merger = occurs when companies operating in the same or similar industry combine together // conglomerate merger : enterprise qui n’ont rien a voir (pour diversifier les ventes etc…) - An acquisition : one firm purchases another (ex : Amazon's acquisition of Whole Foods Market) - A joint venture : a partnership between companies for a specific objective (ex : two companies may decide to form a joint venture in order to build a new factory together. By sharing the cost of construction, land, and machinery, each company can reduce its individual expenses and benefit from the economies of scale.) Chapter 7 : → Management ? : process of achieving organizational goals through people and other resources  - Hierarchy of management (usually 3 levels) → 1.) Top Managers : overall directions for company 2.) Middle managers : mettre en oeuvre les stratégies du top managers 3.) Supervisors : deal directly with workers - 3 principal managerial skills (THC) : 1.) Technical : the knowledge and capabilities to perform field-specific, specialized tasks 2.) Humans or interpersonal : interact, work effectively with people 3.) Conceptual : the ability tdo apply expertise and … with expertise - 4 basics managerial functions (PODC) : 1.) Planning : setting objectives and determining the best course of action to achieve them.(long term) 2.) Organizing : arranging resources and tasks to achieve the objectives set during the planning phase.(short term) 3.) Directing : leading and motivating people to achieve objective 4.) Controlling : observe results of the objectives that have been set and compare them with the goals objectives, and changing some aspects of the process to have better results (= monitoring ) → Mintzberg’s 10 managerial Roles: (IID) - Interpersonal (How a manager interacts with people) / informational (How a manager exchanges information)/ decisional (How managers uses informations to make decisions) → The importance of Vision and ethical standards : - EX : “Medtronic” → Revenues and profit aren't the most important metrics → but how many seconds it would take until someone else was helped by a Medtronic product. - Vision → ability to perceive marketplace needs → and what an organization needs to do to satisfy it  - Ethical standards → help build success for a firm through job satisfaction and customer loyalty + moral values - Employees needs to believe in the company’s ethics → The importance of planning : EX : Mastercard → “kill cash strategy” → Instead of fighting for a piece of the fifteen percent of electronic transactions, matercard chose to fight for a piece of the 85% that weren't electronic transactions. - Help identifies company's goals, and how to reach them - turn the vision into action - Avoid costly mistakes → STO 1.) Strategic planning → Long term 2.) Tactical planning → focuses on current and short-range activities // medium-term 3.) Operational planning → sets the standards and work targets for functional areas (ex : production/human resources/marketing …) // short-term 4.) Contingency → preparing an organization to be ready to respond effectively in the event of an emergency. → what is the strategic planning process ? : EX : Best Buy → they provide a real service to tech companies such as Apple, Samsung, LG etc… → a bricks-and-mortar presence → thats a win-win - Company's vision → into a mission (purposes and aims) - SWOT analysis → (strengths // weaknesses // opportunities // threats) → used to evaluate a company's competitive position and to develop strategic planning - Managers then develop an action plan : ways of carrying out the strategie → Managers are Decision Makers : (2 basics kinds of Decisions) EX : J.P Morgan → every meeting presentation is prepared in advance → the meetings time need to be used to make decisions → usually trivial issue take much more time that really important issues → Decision making : The process of seeing a problem; or opportunity, assessing possible solutions, choose the best plans and assessing the results  1.) Programmed decision → applies a company rule or policy to solve a frequently occurring problem 2.) Non-programmed decision → responds to a complex and unique problem that has important results for the company → The 5 steps approach for decision making : Seeing a problem/opportunity Seeing possible ways of taking action Evaluate the options Perform the chosen option Evaluate the outcome/result - Take risks / use your own intuition … → Managers are Leaders : EX : Nvidia → the best CEO's never make it about themselves (always stay objective) - Leadership ? : - act of motivating or inspiring other to reach goals // - use of influence and power // - Empathy, self-awareness, objectivity - Leadership styles (depending on the leader; the followers and the situation) : Autocratic (Alone) // Democratic (sharing the decision making // autonomy to the employees) // free-rein leadership (a passive or non-intervention leadership style where the leader provides autonomy to their team members.) → Corporate culture : - Ex : Adidas → make high quality products to make athletes win competition (change of the philosophy from profit to make high quality products → the market cap has been multiplied by 10) - Company’s principles, beliefs, ethics and values (principes, croyances et valeurs) → created by a firm’s founder (transmitted to employees through formal programs → training // rituals // ceremonies …and through informal discussions among employees) → The corporate culture can influence a firm’s success (by giving a competitive advantages). → Organisational structures : - Ex : cleveland clinic → “i am a caregiver” to every employees shirt → people feel better / change of all the organisations - Organization chart : diagram of a firm's structure (job positions, functions , hierarchy…) - Departmentalization (based on products / locations / customers / functions / processes) : subdivision of work activities into units  - Centralisation : decision by top management - Decentralization : decisions by lower levels - Every Company uses one or more of these 4 organizational structures : 1.) Line : clair chair of command // better for smaller organizations 2.) Line-and-staff : staff supports lines to make decisions // mis-large organizations 3.) Committee : a group of people make decision // common in product development but slower 4.) Matrix structures : Links employees form different parts of the organization to collaborate // flexible and adaptable but complex - The value of something is the amount the buyer can pay Chapter 8 : Strategic Human Resource Management 1.) The role of Human Resources - Human resources managers are responsible for attracting, developing and retaining the employees who perform - The best companies value their employees as much as they value their customers → because without workers, companies are not able to produce goods or services - The 3 objectives of human resources managers : 1. Provide qualified, well-trained employees for the organization 2. Maximize employee effectiveness in the company 3. Satisfy individual employee needs through monetary compensation, benefits, opportunities to advance and job satisfaction  2.) Recruitment and selection : - Prepare a Human resource inventory → Job analysis → review applications and resumes → Interviews → Employment tests → selection of the candidate and job offer - RH managers use internal and external tools to find the best employees - They can use university job fair / a recommendation from someone they know / linkedin and other recruitment apps - Many companies are hiring based on potential rather than experience 3.) Orientation, training and evaluation : - New employees often complete an orientation program, also called onboarding, when they learn about company policies, practices, norms, values, ethics etc… - Training creates employees loyalty and high-performance employees → Thanks to training, employees can learn new things // These training can prepare them for new jobs opportunities within the company - There is also “on the job training”(formation sur le terrain)  - There is also management development program → (ex : RBC Leadership Development program) → training designed to improve the skills of current or future managers - Performance appraisals → Evaluation that gives employees feedback about their strength and weaknesses and how they can improve 4.) Compensation : - Firms compensate employees with wages, salaries, incentive pay systems (Ex : bonuses) and benefits. - Benefits vary among firms, but most companies offer health care, insurance, retirement plans and sick leave(congé maladie) - Companies also offers flexible work plans (ex : home based fish) - Employee benefits → additional compensation (ex : gym membership, tuition reimbursement etc…) 5.) Employee Separation : - Voluntarily or involuntarily(outsourcing, bad efficiency, or the company needs less employees = Downsizing) Turnover - Negative impact on other workers → anxiety, less productivity - Layoffs = licenciements 6.) The different methods for motivating employees : - Maslow hierarchy of needs → people must satisfy basic needs before they can consider higher needs - Job environment is really important for employees' motivation (job security, working conditions, pay, status, social relations etc…) - A managers attitude impact a lot employees motivation - Herzberg’s Two-Factor Model of Motivation → Hygiene factors / Motivator factors (you need the first to be able to be motivated but you can't be motivated before getting the first) - Is the result is worth it for us ? → yes ? then i am motivated // no? Then i'm not motivated → Expectancy Theory - Expectancy Theory and Equity Theory : The process people use to evaluate the likelihood that their efforts will lead to the results they want and the degree to which they want those results - Equity theory: an individual’s perception of fair and equitable treatment - Safety and security, self esteem, love and belonging , self actualization(you don’t feel that your work is really work) - X Y Z Theories  - Autonomy, Relatedness, Growth, competence 7.) Labour-management relations : - Thanks to labor unions, there have been ameliorations of wages, work hours and work conditions → Working remotely has advantages and drawbacks : - More or less productivity - More flexibility - Better work/life balance - Less costly for the company (office expenses) - Distractions by the work environment (kids, pet, etc…) - Lower change of upgrade opportunities in the company → Promotions (“out of sight, of of mind” phenomenon) - Less social relations - Communication can sometimes be difficult since you must send a email to ask a question for ex - Less connections between employees → What strategies can companies use to mitigate the feeling of loneliness for remote employees ? : virtual social activities, team building activities etc… → Younger people tend to prefer in-person work, while these in their 30-40 prefer to work from home → Companies nowadays value more the output of the employees than their input (ils ne regarde pas le nombre d'heure travaillé, mais les bénéfices) Chapter 4 : Business ethics and social responsibility - Canada adopted a new voluntary international standard on social responsibility : ISO26000 1.) The concepts of business ethics and social responsibility - Ethics ≠ laws : ethics reflect people proper relations with one another and how people should treat others VS laws have been  created to protect us from fraud, violence, and they are more narrow than ethics (legality ≠ morality) - Business ethics : Standards of conduct and moral values regarding right and wrong actions in the business environment → doing what is right VS doing what is profitable - Social responsibility : Obligation to put an equal value on profit, consumer satisfaction and societal well-being when evaluating the firms performance - Why should a business be managed ethically ? : more customers / good reputation / to reduce employee turnover / to avoid government intervention … 2.) Factors that influence business ethics - Many factors shape individual ethics : Personal experience / peer pressure / organizational culture / education / family / cultural and religious standards / companies environment - Sarbanes-Oxley Act of 2002 : US federal legislation designed to punish corporate and accounting fraud and corruption → created to protect the interests of workers and shareholders by requiring enhanced financial disclosures (informations financières) (refer to ENRON case and Arthur Anderson’s Bankrupt) → Many companies now adopt a 3-part approach to ethics and social responsibility : 1. Philanthropy (ex : giving to support causes) 2. Anticipating and managing risks 3. Identifying opportunities to create value by doing the right thing → 4 of the most common ethical challenges that business people face : Conflict of interest It occurs when an action that benefits one person may harm another person (ex : a real estate agent would represent both the buyer and the seller point of view during a transaction) Honesty and integrity Acting regarding your ethics and values / A person immediate self-interest often lead to actions that go against Honesty and integrity Whistle-Blowing When an employee encounters unethical or illegal actions at work, that employee must decide what action to take. Loyalty vs truth Certains employés ne savent pas s' ils doivent dénoncer l’entreprise pour une action qui ne respecte pas ses valeurs, ou rester loyal envers l’entreprise et ne rien dire —> Ethical conflict 3.) How organizations shape ethical behavior → A corporate culture that support business ethics, develop on 4 levels : 1. Ethical awareness (conscience) Use of a “code of conduct” for example, to inform employees of the ethics of the company, what to do or not to do etc… CODE OF CONDUCT : Compliance-Based Increase control and penalize wrongdoers Integrity-Based Define guiding values // Support ethical behavior / Shared accountability 2. Ethical education Businesses must provide the tools employers need to evaluate the options and arrive at suitable decisions // Some companies use outsourcing to give ethics program to their employees (ex : The Skald Group) // Interactive and educational games to teach employees about the corporation’s ethics 3. Ethical action Decision making need to be turned into ethical action 4. Ethical leadership Managers must not just talk about ethical behavior, they also need to show it in their actions - Businesses can use code of conduct/ethics , to show to the employees the expectations - Businesses can use training, to develop employees’ ethics awareness  - Managers must also provide ethical leadership, by showing ethical behavior in all their decisions and actions to give the example to new employees 4.) How Businesses can act responsibly to satisfy society → Businesses’ social responsibilities : To the general public Protecting the environment / Public Health / Corporate philanthropy/ developing the quality of workforce To customers Consumerism / high quality goods / right to be heard / right to be safe / right to choose (freedom of choice) / Right to be informed To employees The work quality / workplace safety (workplace safety and insurance board in Ontario) / Quality of life (balance work and private life)/ ensuring equal opportunity on the job / Sexual harassment and sexism To investors and the financial community (ex : shareholders) Obligation to lake profits for shareholders / Protection of investors by provincial regulations such as the Ontario securities commission 5.) Ethical responsibilities of businesses to investors and the financial community - Businesses must be honest in reporting their profits and financial performance to avoid misleading investors (shareholders etc…) - Provincial securities regulators investigate suspicions on these cases (ex : Ontario Securities commission etc…) —> Case study : Ashley Madison Ashley Madison is a cheating website , with 70 million users in 2020 - Is it ethically correct to be able to cheat one of your partners with this app ? - The apps create fake account and make money illegally which is not respecting business ethics at all - The stakeholders that were harmed by this are the customers - I don’t think the ttc should authorise Ashley Madison ads on the ttc, because it is the contrary of the society moral values and ethics, for me this company has to be banned - Ashely Madison isn’t ethically correct with all members of the ethics responsibility - investors : it is very risky for shareholders to invest in this company, since they’re activity is near illegal and if people start knowing about the reality of this app, the share will go down by a lot  - customers : The app push customers doing unethical things and they even need to pay to interact with people on the app - general public : The app has a negative impact on people, even when they don’t use the app, since when in a relationship, one of the member uses the app it directly impact the other member, which in specific cases can lead to divorce and even to suicide - employees : Working for this company is unethical since you need to create fake accounts and pretend to be real accounts, employees must act in an unethical way if they want to be paid/ you have a bad reputation for your carrier (ex : on LinkedIn or on your resume) —-> Lisa LaFlamme case: I don’t think it was a good idea for city news to hire her after she has been dismissed by ctv News, since the owners of these two companies are in competition and it is like provocation for the other company from rogers to Bell / I think it was a good idea, since Bell customers who don’t agree with the decision will become Rogers customers , it's a competitive move - Customers : not really negative for the customers perspective because they don’t care about the presenter they just need informations - employee : create new opportunities for younger people for this job / - general public : fuel ageism and sexism / negative —-> Case study : Wells Fargo The employees created fake accounts to benefit the company / —-> Case study : The Enron scandal : - created in 1985, with the horizontal merger of two energy company (Houston natural gas and interNorth) - 7th largest company in the US - Richard Causey leaves Arthur Anderson and become Chief : accounting officer at Enron - Enron started creating off balance sheet special purpose entities (SPE) - Small partnerships used to hide depts - The U.S. Securities and Exchange Commission (the SEC), becomes suspicious and launches an inquiry (enquete) on Enron’s finances - Complex illegal transactions : tax avoidance / SPE / Fake trading room / fees to accountants, lawyers, bankers, advisors and corruption - Results : the rise and fall of ENRON’s stock price :  - The big 5 consulting firms became the big 4 after the bankrupt of Arthur Anderson : KPMG / Deloitte / Ernest and young / PwC - creditors owed more than 6.3 M $ to Enron have to settle for about ⅕ of the total sum - 5600 people lose their jobs - US congress pass new laws for accounting under the Sarbanes-Oxley Act → Chapter 3 : International business and competing world markets 1.) Why do nations trade ? - Businesses have opportunities to expand in new markets for their goods and services (with a high standard of living that increase foreign interest in their goods and services) - New source of material and labor (ex : cheaper labor) - Reduce company’s dependance on economic conditions in its home market (a firm can enjoy economic conditions in another country) - Countries that encourage international trade enjoy higher levels of economic activity, employment, and wages than those that restrict it → Boost economic growth - International Trade depends on Factors of Production  - Absolute and Comparative advantage : Absolute advantage : a country has an absolute advantage in making a product for which it can maintain a monopoly or that it can produce at a lower cost than any other competitor. Comparative advantage : a country has a comparative advantage in a product, if it can supply this product more efficiently or at a lower cost than it can produce other items 2.) How is trade measured between nations ? - Balance of trade : difference between exports and imports → Trade surplus VS Trade deficit - Balance of payments : The overall flow of money into or out of a country Factors affecting balance of payments → loans and borrowing/international investments/ profits from such investments —> Balance of payments surplus VS Balance of payments deficit - Exchange rate : The value of one country’s currency relative to the currency of another country 3.) The barriers to international trade - companies must pay attention to social and cultural differences before selling their products in another country (languages, values, religions…) - Economic differences : It includes standard-of-living variations and levels of infrastructures development, inflation rate  1. Tariffs : taxes, surcharges, duties on foreign products → generate income for the government // created to raise the retail price of imported products, to exceed the price of local products (So local productors aren’t victim of low imported price products) 2. Protective tariffs VS Revenue tariffs 3. Quotas : Limits the amounts of products that can be imported during specific time - Dumping : Selling products in other countries at prices below production prices - Embargo : Imposes a total ban on importing a specified product or even a total halt to trading with a particular country (the US and China) - Exchange control : Companies that gain foreign currencies through exporting are required to sell those currencies to the central bank or another agency - Legal and political barriers are among the most difficult to judge → Each country set his own laws regulating business practices - Infrastructures : Basic system of communications, transportation and energy facilities - Political climate 4.) Reducing barriers to international trade - Many international organizations seek to promote international trade by reducing trade barriers among nations (ex : The World Trade Organization / The World Bank / The International Monetary Fund) - The General Agreement on Tariffs and Trade (GATT) → international trade accord that has sponsored a series of negotiations, called rounds, to substantially reduce worldwide tariffs and other barriers. - There are also some multinational economic organizations that try to remove barriers to the flow of goods, capital and people across their countries → Canada-United States-Mexico Agreement / the Central America-Dominican Republic Free Trade Agreement / European Union - The General Agreement on Tariffs and Trade (GATT) international trade accord that sponsors rounds, to reduce worldwide tariffs and other barriers.  - WTO has monitored GATT agreements among its member nations and reduce trade barriers around the world. - WTO’s focus on lowering trade barriers encourages businesses to keep costs down through practices that may increase pollution and human rights abuses. - The World Bank primarily funds projects that build or expand nations’ infrastructure, such as transportation, education, and medical systems and facilities. - The International Monetary Fund (IMF) was created to promote trade through financial cooperation and, in the process, eliminate barriers. - The IMF makes short-term loans to member nations that are unable to meet their expenses. It operates as a lender of last resort for troubled nations. - Free-trade area : Members trade freely among themselves - Customs union: Free-trade area and a uniform tariff structure, trade with nonmembers. - Common market (or economic union): Attempt to bring all trade rules into agreement. 5.) The levels of international business operations - Exporting and Importing - Contractual agreement (ex : franchising, foreign licensing, subcontracting) - Companies can form joint ventures with local companies for a specific goal (ex : enter a new market) - Indirect exporting: Companies manufacture a product that becomes part of another product sold in foreign markets - Direct exporting: Companies seek to sell their products in markets outside. - Countertrade: A sizable share of international trade often involves payments made in the form of local products, not currency. - Foreign licensing agreement: one firm allows another firm to produce or sell its product or use its trademark. In return, receives a royalty or other compensation. - Subcontracting: hiring local companies to produce, distribute, or sell goods or services. This move allows a foreign firm to take advantage of the subcontractor’s expertise in local culture, contacts, and regulation - Investing directly in production and marketing operations in a foreign country is the ultimate level of global involvement. - A multinational corporation (MNC) is an organization with significant foreign operations. - International Direct Investment 6.) Developing a strategy for international business - A global strategy (standardization) : A company that develops a single, standardized product and marketing strategy for other countries - A multi-domestic strategy (adaptation) : A company develops different treatment for each foreign market (en fonction des préférences de chaque pays, et en fonction des caractéristiques des clients dans chaque pays différent) → Chapter 17 : The Financial system 1.) Understanding the financial system - The Financial system : The process by which funds are transferred between those who have excess funds (they have surplus funds) (savers) and those who need additional funds (they have a shortfall, since they need to spend more than their income) (users). - Savers and Users : individuals , businesses and governments - Savers expect to earn a rate of return in exchange for the use if their funds - Financial intermediaries - Who makes the financial system ? Financial markets, financial institutions and financial instruments Direct transfer: the user raises the needed funds directly from savers. 2.) The various types of securities (= titres financiers) - Securities = Financial instruments : Represent the obligations of the issuers (business and governments) to provide purchasers with the expected or stated returns on the funds invested or loaned (ex : dividends) - There are 3 categories of securities / financial instruments (titres financiers) : 1. Money market instruments (dept instruments) Short term debt securities that tend to be low risk securities / issued by governments, financial institutions and corporations (ex : bank certificate of deposit: Canadian Treasury bills, commercial paper …) 2. Bonds (dept instruments) Longer-term debt securities and pay a fixed amount of interest each year (sold by the canadian government or by corporations (canada saving bonds) and corporations // (there is a risk rating system for bond) 3. Shares Represent ownership in corporations - Mortgage-backed securities : titres adossés à des créances hypothécaires (very safe since they are insured by the canada mortgage and housing corporation) (similar to the subprimes mortgages but much more safe) ​ Call provision: redeem, or cash, the bond before its maturity at a specified price. → Quality ratings for Bonds : - 2 factors affect the price of a bond : 1. Its risk 2. Its interest rate - Some investment firms rate the bonds such as : S&P Global Ratings / Moody’s and Fitch Rating (the highest rating rating is AAA and the lowest rating is D.  - A stock split : when a corporation decides de divide its existing shares into multiple shares (ex : 2-for-1 → 20 M shares at 100$ each becomes 40 M shares at 50$ each) - 3.) Financial markets - A Financial market : A market where securities are bought and sold - The Primary market for securities Market that serves businesses and governments that want to sell new securities issues to raise funds → Securities in the primary market are either sold through the :  An open auction A process called Underwriting - The Secondary market Handles transactions of previously issued securities between investors (ex : the Toronto Stock Exchange) // handle securities that have 4 to 5 times the dollar value of the securities in the primary market 4.) Stock markets - The best-known financial markets are stocks markets, or exchanges - (canada’s largest stock exchange is the Toronto Stock Exchange → TSX) - The two largest stock exchange are the NYSE and the NASDAQ (an electronic stock market where buy and sell orders are entered into a computerized communications system for execution) - ECN (electronic communication system) : An electronic trading system used in the major stock markets - Market order : the highest price when selling and the lowest price when buying - Limit order : it sets a price ceiling when buying or a price floor when selling. 5.) Financial institutions and the growth of financial technology (fintech)  - Financial institutions act as intermediaries between savers and borrowers (ex : commercial banks) - Depository institutions : - Credit unions: co-operative financial institutions owned by their depositors. Credit unions were originally designed to serve consumers, not businesses, and raise funds by offering members several different checking and saving accounts - Nondepository Financial Institutions: accept funds from businesses and households and then invest it. Companies determine whom to insure and how much to charge - Insurance Companies: Households and businesses buy insurance to transfer risk from themselves to the insurance company in return for a series of payments called premiums (les primes d’assurances). - Pension fund: provide retirement benefits to workers and their families - mutual funds and exchange traded funds (ETF) : financial intermediaries that raise money from investors by selling shares in those securities // ETF’s combines characteristics of mutual funds and stocks (seek to match markers index like S&P 500) - Financial companies : offer short-term loans to borrowers (ex : ford credit) What are the two main types of financial institutions? depository and non-depository institutions. 6.) The Role of the Bank of Canada - Created in 1935, the” bank of canada” is the central bank of Canada, and important part of canada's financial system → Monetary policy : regulating the supply of money - Money supplies are called M1 and M2 - M1 : consists of currency in circulation and the balances in bank chequing accounts.  - M2 : M1 + balances in some savings accounts and money market mutual funds. → The Bank has two major policy tools for controlling growth in the supply of money and credit : 1. the discount rate : interest rate at which banks make short-term loans to member banks.  2. open market operations : technique of controlling the money supply growth rate by buying or selling Canadian government securities Reserve requirement: the percentage of cash that banks were required to maintain for immediate withdrawal by customers (it's a types security to manage safety against any kind of financial crisis) 7.) Regulation of the financial system - Banks are among the nation’s most regulated businesses → to ensure public confidence in the safety and security of the banking system (since banks are really important in the overall function of the economy) → The Bank Act : say that the federal government is responsible for regulating the banking sector → Government regulation of the financial markets - Ex : Ontario Securities Commission - Provincial regulators pay a lot of attention to insider trading (the use of material, non-public information about a company to make investments profit - Judgment call : refers to a decision made by investors, traders, or financial analysts based on their assessment of market conditions, trends, and other qualitative factors rather than strictly adhering to quantitative models or rules → Industry self-regulation - The financial markets are also self-regulated by associations and the major financial markets → To ensure fair and orderly markets → Market Surveillance - The TSX outsources market surveillance to an independent third party : the Investment Regulatory Organization of Canada (IIROC) → Ensure that trading rules are respected at any time in the market (with high qualified employees and high technology) 8.) The financial system : a global perspective - Of the 50 largest banks in the world, 4 are canadians : RBC / TD / Scotiabank and the bank of Montreal ( RBC is the largest of four and ranked 11th worldwide) // JPMorgan Chase is the largest bank in the world ( market capitalization of over $466.2 Billion) - The Muslim special banks and financial institutions : (without interest-based transactions) : Guidance Financial / Hakim wealth management / the ISlamic Credit Union of Canada etc… → Islamic finance assets total more than $2 trillion. - Globally, financial institutions such as Citigroup and Lloyds Bank, have seen their assets grow at an annual rate of more than 20% in this emerging market. Chapter 16 : accounting and financial statements 1.) Who uses accounting information ? and what are the three basic accounting activities ? - ACCOUNTING : The process of measuring, interpreting and communicating financial information to enable people inside and outside the firm to make informed business decisions → Accountants gather, record and interpret information for : Management Owners / Shareholders / Potential investors / Creditors (ex : banks) Employee / Union officials (open-book management) Lensers / Suppliers Government agencies / Economic planners / Consumer groups - Why show financial statements to employees (open-book management) ? : In order for employees to understand how their work contributes to the company's success // Employees and Union officials can also use financial informations to negotiate good employment contract with the firm → The 3 basic accounting activities : 1. Financing activities : help to start and expand an organization 2. Investing activities : provide the assets a comp any needs to continue operating 3. Operating activities : focus on selling goods and services and paying expenses 2.) The various types of accounting professionals → Accounting professionals work for business firms / government agencies / not-for-profit organizations Public accountant : Provide accounting services to other forms or individuals for a fee ( They do : auditing / tax return preparation / management consulting) Management accountants : employed by a firm, where they collect and record financial transactions, prepare financial statements and interpret financial data for managers Government and not-for-profit accountant : they perform many of the same functions as management accountants, but instead of dealing with profit and losses, they look at how efficiency the organization strategy or agency is operating 3.) The foundations of the accounting system  - GAAP stands for generally accepted accounting principles, which set the standard accounting rules for preparing, presenting, and reporting financial statements in the U.S and Canada → The GAAP includes IFRS / ASPE Accounting Standards for Private Enterprises) ( same for not-for-profit organizations, for pensions plans and for governments) - The IFRS (international financial reporting standards), is used for firms that trade in a public stock exchange - Basic qualitative characteristics of financial statements : consistency / relevance / representational faithfulness / reliability / timeliness / understandability / verifiability / comparability - The Accounting Standards Board (AcSB), is an independent body made up of accounting professionals - Companies must also comply with the Corruption of Foreign Public Officials Act (CFPO) → A federal law that prohibits canadian citizens and companies from bribing (corruption) foreign officials to win or continue business 4.) The steps in the accounting cycle Recording … Classifying … Summarizing … Data about financial transactions → Used to produce financial statements (état financier) for the firm’s managers and other individuals - Transactions are recorded chronologically in the order they occur in … : 1. Journals 2. Then on ledgers 3. Then summarized on accounting statements  - - One of the basic accounting equation to always respect : a company’s assets (what a firm owns) must always equal liabilities (what a firm owes creditors) , plus owners’ equity (the owners’ investments in the firms) → Assets = Liabilities + Owners’ Equity - This equation illustrates double-entry bookkeeping, the process used to record accounting transactions (each individual transaction must be balanced by another transactions)  - → The impact of technology on the accounting process : - In the past, bookkeepers would manually record accounting transactions as entries in journals, then they transferred the information, or posted it, to individual accounts listed in ledgers → Computers have simplified this process, making it faster and easier - AI can also have a huge impact on accountants decision making // A lot of softwares are used nowadays by accountants (Quickbooks) 5.) The 4 types of Financial Statements 1. The balance sheet (bilan) : shows a firm’s financial position on a particular date (focuses on assets / liabilities / owners’ equity) (its the only permanent statement) 2. The income statement (compte de résultat) : shows the results of a firm’s operations over a specific time period (focuses on revenues and expenditures / profit or loss) (= profit-and-loss statement) 3. The statement of changes in equity (L’état des variations des capitaux propres) : shows the change in owners’ equity from the end of the previous year to the end of the current year 4. The statement of cash flows (flux de trésorerie) : shows a firm’s cash receipts and cash payments during an accounting period (it outlines the sources and uses of cash in the basic activities of operating, investing and financing) 6.) Financial ratios analysis : analyze a company’s strength and weaknesses Liquidity ratios : measure a firm’s ability to meet ot’s short term obligations (ex : acid-test ratio) (a ratio of 2 asset :1 liability is considered to provide satisfactory liquidity) (ratio : assets/liabilities) Activity ratios : measure how effectively a firm uses its resources , such as inventory turnover ratio / the accounts receivable turnover ratio / total asset turnover ratio (ex : inventory turnover ratio → Cost of goods sold / Average inventory) Profitability ratios : assess the overall financial performance of the business (ex : gross profit margin / net profit margin / return on owners’ equity) (ability for a firms to generate revenues that are greater than its expenses and operating costs) Leverage ratios : measure the extent to which the firm relies on debt to finance its operations, such as the total liabilities to total assets ratio / long term debt to equity ratio Financial ratios : help managers and outside evaluators compare a firm’s current financial information with that of previous years and with results for other forms in the same industry 7.) Budgeting - Budgets are financial guidelines for future periods → they show a firm’s expected sales revenues, operating expenses, cash receipts and cash -  - The budget of a company often include : production budget / cash budget / capital expenditures budget / advertising budget / sales budget - expenses // how a company will raise and spend money during a specific period of time - Budgets reflect management’s expected outcomes for the future and are based on plans that have been made - Ex : Cash budget → estimates cash inflows and outflows over a period of time - Nowadays Technology helps for the budgeting process that can be really time consuming for big companies → One of the most important part of budgeting is the part concerning the cash budget → tracks the firm’s cash inflows and outflows (usually prepared each month) 8.) International Accounting - One accounting issue that affects global business exchange is exchange rates → Daily changes in exchange rates affect the accounting entries for the sales and purchases of firms dealing in international markets (it create either losses or gains for companies) (However, softwares can help accountants in this process) Chapter 18 : Financial management → Big Data, Machine Learning and AI  - “Information is the oil of the 21st century, and analytics is the combustion engine” (Peter Sondergaard) → Just as oil fueled machinery and drove economic growth, information powers decision-making and innovation today // Analytics, in this analogy, represents the tools and processes that convert raw information into actionable insights, much like a combustion engine transforms fuel into motion // They highlight the importance of not just having access to data, but also being able to analyze and utilize it effectively to drive progress and success in various fields → Objectives : Overview : Big data , Machine Learning and AI Relationship and connection between each concept Understand companies use this technology to their advantages Moral implications - What is big data ? : - Examples of Big data : - 5 V’s of Big data : Volume (qantity) / Variety (different types…) / velocity (the speed of data generation) / Veracity (accurate or not) / Value (some data are more valuable than other for certain firms for ex) → Use of Data in the Corporate Environment - What is a database ? - What is the CIA Triangle ? (confidentiality / Integrity / Availability) - What are some common security risks with Data Management ? : access to the data is really - What is the role of a CIO in an organization ? (Chief information officer) : responsible fo related wtith big data (us election and the Canadian immigration website) - Why has the role received prominence in recent years ? : - Internet of Things : A network of physical objects that are connected to the internet a → Thanks to Big Data, we can : Predict demand Point out gaps Turnout analysis In-store vs online retail → Challenges faced by big data : Capital intensive (cost constraints) Too much data (how do we figure out which data is relevant)  Recruitment (Hiring the qualified resources)(master in data analytics) Training (developing talent) - What is machine learning ? (Big data = input for machine learning) - Big data will become a reality will everyone - case : Target knowing when a women is pregnant even before the family knows (based on a since sometimes womens don’t want to share their pregnancy … —> Privacy issue → Guest speaker : Fahad Tariq → Climate change and its impact on business 1. Threat of climate change Anthropogenic climate change : - Human activity is causing climate change - Scientific consensus (97% + climate scientists agree) - IPCC : “Scientific evidence for warming - of the climate system is unequivocal” (= preuve clair qui ne peuvent pas etre réfuté) - Tipping point : 1.5 degrees above pre-industrial levels (Paris agreement): beyond thus there are severe physical consequences - Key risks to all species : habitat destruction, ecosystem collapse, biodiversity loss, property damage , disturbtion of business - Key risks to humans : direct physical harm, flooding, crop failure, human migration and conflict - The temperatures in earth started to increase since the Industrial Revolution (because of machinery and mass production —> requirement of a lot of energy —> a lot of CO2 emissions)  2. Who must respond ? - Everyone ! → Individual / Municipal / Provincial / Federal / Global // (business and bigger organizations pollute much more than every individual -> their responsibilities are more important than individual’s responsibilities) - Governments and businesses have more responsibility (scale - matters) - Important framework: Shareholder Capitalism (Milton Friedman) VS Stakeholder Capitalism - shareholder capitalism : to be a successful business, you need to think about one group of people : your shareholders - stakeholder : to be a successful business, you need to take into account all stackeholders (the business world is moving from shareholder capitalism to stakeholder capitalism) 3. Options to respond Minimize own negative impact Prepare for Unavoidable consequences 4. Case study : Shift (Nonprofit) (converts animal waste into clean energy in developing countries) Waste to Energy (WTE), is a term that is used to describe various technologies that convert non-recyclable waste into usable forms of energy including heat, fuels and electricity - Started in 2017 - Vision : Transform the potential of something discarded into something valuable (Transformez le potentiel de quelque chose qui n’est normalement pas utilisé, en quelque chose de précieux) - Real life example of addressing climate change  - Shift was created out of a business case competition → Mission : Provide safe, reliable and inexpensive energy for those who need it → Problem : Lack of access to safe, reliable, inexpensive energy for the world’s poor // Climate change caused by animal waste greenhouse gases → Solution : Convert animal & human waste into clean energy for cooking fuel & lighting // Closed-loop approach; proven anaerobic digestion technology → Benefit : Reduce smoke inhalation caused by traditional firewood energy source // Limit methane release into atmosphere, preventing greenhouse gas emissions // Provide lighting at night, leading to increased work/learning outcomes → Strategy : Scalable energy domes in agriculture-based communitie // Leverage leading anaerobic digestion technology // Mix of private (incl. institutional) + public funding streams → Team : On-the-ground presence in target communities // Global leaders in cleantech + waste-to-energy —> impact : Global level / Community level / Individual level 5. Role of Technology - Technology along with government regulations will help address climate change - Obvious technologies for climate change : Electric vehicles / renewable power (energies renouvelables) (ex : Wind, Solar) - Less Obvious technologies : nuclear power / hydrogen / carbon capture;sequestration / lab-grown meat - Out of left field : Insect consumption / refreeze arctic / send sulfur dioxide into stratosphere / turning poop into power (shift) 6. Sustainability Trends - ESG : Environmental, Social, Governance - Greta Thunberg effect X Larry Fink’s letter (relation between climate change and the change that it will have on finance) - ⅓ of US assets under management (AUM) is sustainable investing → Sustainable investing refers to investment approaches that consider the risk and opportunity impacts of ESG (environmental, social, governance) factors on investment returns, or seek to bring about positive societal change through one or more ESG factors - Inflation reduction Act (IRA) : Major piece of legislation in the US encouraging investment in clean energy (ex : subsidies on green energy vehicles) - UN climate conference → COP29 in Bakou (Azerbaijan)  - Carbon emissions are the main contributor to climate change → Principal factors : rising populations / Growing energy use per capita (as income per capita rises energy use per capita increases as well)(mostly in emerging countries) - World`s top emitters of carbon dioxide : China -> US -> EU -> India… (Moyen de defense des pays emergents : ils peuvent dire que le siècle deniers les pays developpe emettaient plus qu’eux, donc aujourdhui cest a lemur tour de produire plus pour se developer) → The traditional Model for Sustainability : Environment / Equity / Economics (In a circle with sustainability in the middle) → The new model for sustainability : Economy / Society / Environment Chapter 9 : Empowerment, Teamwork and Communication 1.) Empowering employees (responsabiliser les employés) - Empowerment is a very important aspect of effective management - Organizations empower employees by giving them the authority, responsibility to make decisions about their work (these decision were originally made by managers) - Empowerment tries to use the brainpower of all workers to find improved ways to achieve company’s goals → It motivates workers by adding challenges to their daily life and since they fell more important to the firm - Empowerment is often linked to rewards linked to company performance (ex : stocks / share of the firm) → Employee share ownership plan (ESOPs) and stock options  - Sharing information about the company and sharing company’s performance is a good way to empower employees (“employees think like owners”) - Empowering employees leads to more loyalty from employees / increase in productivity / less absenteeism etc… 2.) The 5 types of teams → Work teams : permanent group of co-workers who perform the day-to-day tasks needed to operate the organization 1. Work teams Permanent groups of co-workers who perform the day-to-day tasks needed to operate the organization 2. Problem-solving teams Temporary groups of employees who gather to solve specific problems and then disband 3. Self-managed teams Teams that have the authority to make decisions about how their members complete daily tasks 4. Cross-functional teams Teams that are made up of members from different units, such as production, marketing and finance (to achieve a common goal) 5. Virtual teams Groups of geographically or organizationally separated co-workers who use telecommunications and information technologies to accomplish an organizational task 3.) Team Characteristics and the stages of team development 3 important characteristics of a team 1. Its Size The ideal size is 6-7 members 2. Its Level Correspond to the team’s average level of ability, experience, personality (or any other factor) 3. Its Diversity Correspond to the team’s differences in ability, experience, personality (or any other factor) // (its an important factor to take into consideration in a team in order for the team to achieve a wide range of goals and tasks Teams pass through 5 stages if development 1. Forming The orientation period when members get to know each other and learn what behaviors are acceptable to the group 2. Storming The stage when individual personalities come out as members clarify their roles and expectations 3. Norming The stage when differences are resolved / Members accept each other and they agree about the roles of the team leader and other participants 4. Performing Characterized by problem solving and a focus on task accomplishment 5. Adjourning The final stage, with a focus on wrapping up and summarizing the team’s experiences and accomplishments 4.) Team Cohesiveness and Norms - Team cohesiveness is the extent to which team members feel attracted to the team and motivated to remain on it (builded through team-building for example) - Team norms are the standards of conduct shared by team members that guide their behavior (it's like a code of conduct in a company) 5.) Team Conflict - Conflict and disagreement can be experiences in most teams - Conflict can come from different sources such as disagreements about goals and priorities / task related issues / personalities that can’t get along / scarce resources and being overtired or overstressed - Cognitive conflict focuses on problem-related differences of opinion (resolving these conflicts and differences strongly improves team performance) - Affective conflict is the emotional reactions that can occur when disagreements become personal instead of remaining professional (it can strongly decrease team performance) → A team leader can manages team conflict by encouraging good communication so team members view each other accurately, understand what is expected of them and obtain the information they need 6.) The importance of effective Communication - Managers spend about 80% of their time in direct communication with others (interpersonal skills) - One of the most important skills for recruiters when hiring employees (listening/effective communication/conversing and giving feedback) The communication process involves interactions among 6 elements 1. Sender 2. Message 3. Channel 4. Audience 5. Feedback 6. Context 7.) The basic forms of communication - People communicate in many different ways : oral and written / formal and informal / verbal and non-verbal - Effective written communication reflects its audience, its channel and a suitable degree of formality - Formal communication channels carry messages within the chain of command - Informal communication channels carry messages outside the formal chain of command - Non-verbal communication plays a larger role that most people think (sometimes verbal and non-verbal communication can lead to conflict or misunderstanding by the receiver (the receiver tend to believe the meaning conveyed by non-verbal communication) 8.) External communication and Crisis management - External communication is a meaningful exchange of information using messages sent between an organization and its major audices : customers / suppliers / other firms / general public / government officials - Every communication with customers (ex : sales presentations and advertisements) should create goodwill dn contribute to customer satisfaction - However, firms can experience a public crisis → Businesses should respond quickly and honestly, and a member of top management should be available to answer questions Chapter 10 : Production and Operations Management 1.) The strategic importance of production - Production creates form utility by converting raw materials and other inputs into finished products and services - Operations management are vital business functions - A company needs a quality good or service to create profits (otherwise the company would fail) - The production process is also important for non-for-profit organizations - Operations management can lower the costs of production, increase output quality and allow the firm to respond flexibly and dependably to customers’ demand - Production ≠ manufacturing : production spans both manufacturing and non-manufacturing industries - Mass production : A system for manufacturing products in large quantities by using effective combinations of employees with specialized skills, mechanizations and standardization (ex : fordisme / taylorisme) → As a result of mass production, outputs (goods and services) are available in large quantities at lower prices than individually made items - Flexible Production : Mass production is based on large quantities of production for one single item, while flexible production is more cost-effective for producing smaller runs (it uses 3 resources : IT / programmable equipment to fill the orders / skilled people) - Customer-Driven Production : A types of production that asses customer demand to make a connection between the products that are manufactured and the products people want to buy 2.) The Production process The 4 main categories of production processes 1. The analytic production system → Reduces a raw material to its component, or individual, parts to extract one or more marketable products 2. The synthetic production system → Combines two or more raw materials or parts to produce finished products 3. The continuous production process → Creates finished products over a long period of time 4. The intermittent production process → Creates products in short production runs 3.) Technology in the production process - Computer-driven automation allows companies to design, create and adapt products quickly - Important design and production technologies include robots, computer-aided design (CAD), computer-aided manufacturing (CAM) and computer-integrated manufacturing (CIM) - Green Manufacturing Processes : Many firms invest resources into developing processes that result in less waste, lower energy use and little or no pollution (more sustainability) - Companies are also using more and more Robots (replacing repetitive work for employees) 4.) The factors involved in a location decision The factors for choosing the best site for a production facility fall into 3 categories 1. Transportation → Include the availability of transportation options and closeness to markets and raw materials 2. Human → Include the area’s labor supply, local regulations, taxes and living conditions 3. Physical factors → Include water supply, weather conditions, available energy and options for disposing of hazardous wastes (ex : Walt Disney parks are always in hot weather locations to attract people all year-round) 5.) The Job of production managers (work more on it) - Productions and operations managers use people and machinery to convert inputs (material and resources) into finished goods and services 4 Major tasks are involved - The managers must plan the overall production process - They must select the best layout for their facilities - They carry out their production plan - Finally, they control the production process and assess the results to maintain the highest possible quality 6.) Controlling the production process The production control process has 5 steps → Coordination of all of these steps should result is high production efficiency and low production costs -> Planning managers decide on the amount of resources needed to produce a certain output -> Routing managers decide on the sequence of work throughout the facility, who will perform each part of the work and where the work will be done (it depends on the nature of the good and the facility layout) -> Scheduling Managers develop timetables that show how long each operation in the production process takes and when workers should perform it (managers can use Gantt chart → this method tracks projected and actual work progress over time ) -> Dispatching Management instructs each department on the work it needs to do and the time allowed for the work to be completed -> Follow-up Managers instruct and employees spot problems in the production process and come up with solutions (ex : machine malfunctions, delayed shipments, absent employees etc…) - Quality control is an important consideration throughout this production process 7.) Importance of Quality - Quality control involves evaluating goods and services against quality standards - Firms use duality control to spot defective products and to avoid delivering poor-quality goods to customers - Devices for monitoring quality levels of the firm’s output include : visual inspection, electronic sensors, robots and X-rays → Companies can also the 6 Sigma concept : → ISO Standards - For many firms, an important measure of quality is being able to meet standards of the International Organization for Standardization , known as ISO (founded in 1947), there is also the American National Standards Institute (canadian work with both standards organizations) - ISO9000 standards help organizations ensure their products and services are of high quality and provide a basis of perpetual improvement - ISO14000 standards for environmental management (ISO itself develops but does not carry out the auditing and certification) Guest Speaker ; Coca Cola (listen to the audio) - Chief customer officer for coca Canada - shopper marketing vs customer marketing - Tim McNerney - head office ; Atlanta - North America is a mature market for Coca Cola (18 percent) - Europe , Middle East and. Africa ; 28 percent of the market - Coca Cola constantly try to grow by creating brands in new categories (ex ; buying a new company of milk ; fairlife) - Sustainability : people call this (social licence) —> customers must accept your product considering the wast and the environmental aspect in general - In Brampton coca bottling company participate a lot to the taxes - What are the advantages and constraints for KO ? - What are the advantages and constraints for local bottlers ? Advantages ; existing equity (you don’t have to wonder about the branding and marketing part, but just about the perfect execution) Disadvantages ; the fact of paying royalties / a single bottler can have an impact on the while Coca Cola company) / expectation and pressure from the company to the bottler - Why invest/diversity in a bottler operation (ex ; Kilmer Group purchasing Coca Cola Canada bottling limited) (construction / sport and entertainment company) / diversification is good for growth (adding a sector to your portfolio) / revenue and profit improvement / opening new markets and appealing new stockholders / high long term future value than what hey have to pay for it now Case study : The ILC Skincare story  - Important aspect of acquiring a business ; Market research / Growth potential / Synergies (create value) / evaluating your opportunities (Financial analysis / Market position / Operational efficiency) - Cedar valley Group - Presenting an offer : Negotiating the agreement 1. Initial offer 2. Negotiation process 3. Final Agreement - Securing Capital and Financing : Funding the acquisition 1. Equity financing ; venture capitalists / angel investors … 2. Creative funding ; crowdfunding / seller financing etc… 3. Debt Financing ; bank loans / asset-base lending etc… 4. Careful planning ; Develop a comprehensive financing strategy that balances risk, cost and the long term sustainability of the acquired business - Transitioning to New Ownership ; Smoothing the takeover 1. Communication ; very important to communicate effectively with stakeholders, including employees, customers and suppliers to ensure a good transition (ex ; why employees are i;portant to the business and why were not gonna fire them) 2. Cultural Integration ; Foster a positive cultural alignment by aligning values, goals and operational practices between the acquired and the target 3. Strategic alignment ; Clearly define strategic vision, synergies, and growth plans - Integrating and optimizing the business ; Driving growth 1. Set clear objectives : 2. Leverage synergies ; in order to drive efficiency and profitability 3. Innovate and expand ; invest in product development … 4. Empower the team Amazon (in the final exam for sure !!!) ; - what are the key success factors at amazon related to operations management ; they focus on the customer, customer experience, use humans to help robots, use of a lot of robotics, processing orders as quickly as possible - What is the cheetah and gazelle concept and how does it apply to amazon ? ; they act like a cheetah, they always focus on the weakest supplier (baby gazelle), they try to make as much profit as possible,  - what strategic decisions made amazon so successful (exam question for sure) ; forgone profit for a very long term to focus in long term profit and push other companies to bankruptcy, they sell really cheap products in order to make other companies quit the market since they lose too much money —> how amazon stayed while losing money ; amazon web services funded theyre growth. - Amazon and big data analytics ; predicting what are customers needs, amazon order products even before customers order them, - Amazon was charged by the European Union in an antitrust lawsuit, should Canada do the same ? ( anticompetitive behaviour ? ) ; they are squeezing small firm outside of the market// yes but they lost a lot of money for a long time (very common for a startup) —> Argument on both side Yes/No - What is the most profitable sector for amazon ; check the slides - How profitable is the international sector ; it is losing money - Should Amazon continue their international operation ? ; they are amazingly developing countries which is a good opportunity for amazon to expand and make more money in the future (the loss is getting smaller over time) // having activities in developing countries can be more costly than in other countries (less infrastructure, higher production cost, higher transportation cost, etc…) - Check min 25 of the audio recording - Is Amazon ethical ? : argument on both sides ; convenience for the customers but at the same time Alexa listens to people discussions // general public // employees// investors perspective // - Do you think amazon is a good investment right now ? ; ? —> What will come to mind when you think about this course in the future : - Final Exam : same format as the midterm but longer // cumulative but focus on post midterm content // same difficulty level as the midterm // know your sequence number // testable ; lecture and lecture slides / video shown in class / what’s new in the world of business / textbook / everything !! // - Progress over perfection