summary with your own words no copy
3 page summary for this chapter 1 ,2,4,5,6,7 of the book
so at least i want 18 pages summery for these 6 chapter of the book .it means 3 pages for each chapter
The Context of Business
Understanding the Canadian
Business Environment
Len Karakowsky
York University
Natalie Guriel
York University
Toronto
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10 9 8 [CKV]
Library and Archives Canada Cataloguing in Publication
Karakowsky, Len, author
The context of business: understanding the Canadian business environment/Len Karakowsky,
York University, Natalie Guriel, York University.
Includes bibliographical references and index.
ISBN 978-0-13-291300-3 (pbk.)
1. CanadaEconomic conditions21st centuryTextbooks.
2. CanadaEconomic policyTextbooks. 3. Business enterprises
CanadaTextbooks. 4. International business enterprises
Textbooks. I. Guriel, Natalie, author II. Title.
HC115.K342 2013 338.971 C2013-907169-5
ISBN 978-0-13-291300-3
www.pearsoncanada.ca
Brief Contents
Part 1 A Framework for Study 1
Chapter 1 EXPLORING CANADIAN BUSINESS
ACRITICAL APPROACH: What are
the Major Challenges Facing
Business? 1
Part 2 The Internal Challenges 40
Chapter 2 THE EMPLOYEEEMPLOYER
RELATIONSHIP: What Responsibilities
Do Bosses Have to Their
Employees? 40
Chapter 3 MANAGING THE WORKFORCE:
How Can Business Leaders Best
Manage Their Employees? 77
Chapter 4 ESTABLISHING THE STRUCTURE
OF A BUSINESS: What Does
Organizational Design Have to
Do with Business Success? 116
Chapter 5 BUSINESS STRATEGY: How Do
Businesses Generate a Successful
Strategy? 159
Part 3 The External Challenges 193
Chapter 6 ECONOMIC FORCES: Oh Canada,
What Is Your Economy Like? 193
Chapter 7 COMPETITIVE AND TECHNOLOGICAL
FORCES: How Do Industries Evolve
over Time? 234
Chapter 8 GLOBAL FORCES: How Is Canada
Faring in the Global Village? 268
Chapter 9 POLITICAL FORCES: Where Would
Canadian Business Bewithout Our
Government? 309
Chapter 10 SOCIETAL FORCES: Can Corporations
Be Socially Responsible to All
Stakeholders? 353
Part 4 Adaptation and Change 404
Chapter 11 THE CHALLENGE OF SUSTAINABILITY:
Why Does Business Need to Focus
onSustainability? 404
Chapter 12 CONFRONTING CHANGE: How Do
Businesses Address the Challenge of
Change? 448
iii
iv
Contents
Preface xii
Acknowledgements xvii
About the Authors xviii
Part 1 A Framework for Study 1
1 Exploring Canadian Business: A Critical
Approach
What Are the Major Challenges Facing
Business? 1
Learning Objectives 1
THE BUSINESS WORLD: CAN CANADIAN TIRE
FLOURISH IN A RAPIDLY CHANGING BUSINESS
CONTEXT? 2
The Internal Context of Business 4
The Employment Relationship: Responsibilities
Toward Labour 5
Leadership and Effectively Managing People 5
Developing a Suitable Organizational
Structure 6
TALKING BUSINESS 1.1 Changing GMs
Organizational Structure 6
Generating a Winning Business
Strategy 7
The External Context of Business 7
Specific or Task Environment 7
General Environment 8
Sustainability 11
The Challenge of Change 12
The Canadian Context: Hows Business in
Canada, Eh? 12
Economic Forces in Canada 13
Competitive Forces in Canada 16
Technological Forces in Canada 18
TALKING BUSINESS 1.2 Growth in Provincial
Labour Productivity: A Problem from Coast
toCoast 20
Global Forces in Canada 22
Political Forces in Canada 25
TALKING BUSINESS 1.3 Jobs, Productivity,
andInnovation: How Health Care Drives
theEconomy 25
Societal Forces in Canada 28
CHAPTER SUMMARY 29
CHAPTER LEARNING TOOLS 35
Key Terms 35
Multiple-Choice Questions 35
Discussion Questions 36
CONCEPT APPLICATION: FACEBOOK:
WHEN YOUR FRIENDS ARE WORTH A
BILLION! 36
Part 2 The Internal Challenges 40
2 The EmployeeEmployer Relationship
What Responsibilities Do Bosses Have to Their
Employees? 40
Learning Objectives 40
THE BUSINESS WORLD: IS WORKING FOR FREE
ILLEGAL? 41
The Labour Environment and Canadian Society 43
Distinguishing Work and Employment 44
TALKING BUSINESS 2.1 Are Unpaid Interns
Employees? 45
What Is an Employee? 46
From Standard to Nonstandard Employment
Relationships 47
Perspectives on Work and Government Policy 48
The Labour Context in Canada: Where Are
We Now? 52
TALKING BUSINESS 2.2 The State of Canadian
UnionsDown but Not Out 53
TALKING BUSINESS 2.3 Are Unions Relevant
inCanada Today? 55
Dismissing Employees 55
Common Law Rules Requiring Notice of
Termination 56
vC o n t e n t s
Statutory Minimum Notice of Termination 57
Unemployment Insurance Programs 58
Current Issues in the Workplace: Managing
WorkforceDiversity 58
Protecting Diversity and Guarding Against
Discrimination in Canadian Law 58
TALKING BUSINESS 2.4 Organizations Seeing
theLight about Faith at Work 61
TALKING BUSINESS 2.5 He Says, She Says:
Gender Gap Persists in Attitudes Toward
Womens Advancement in the Workplace 63
TALKING BUSINESS 2.6 Aboriginal Workers:
Integral to Canadas Ongoing Competitiveness
andPerformance 65
TALKING BUSINESS 2.7 Ontario Employers Have
aNew Tool to Improve Accessibility for People
with Disabilities 67
The Model of the Employment Equity Act 68
TALKING BUSINESS 2.8 Employment Equity
Resources 70
TALKING BUSINESS 2.9 Immigrants
Make Significant Contributions to
Innovation 70
CHAPTER SUMMARY 72
CHAPTER LEARNING TOOLS 72
Key Terms 72
Multiple-Choice Questions 72
Discussion Questions 73
CONCEPT APPLICATION: IMMIGRANTS ARE
SOMETIMES UNSURE ABOUT THEIR LABOUR
RIGHTS 74
3 Managing the Workforce
How Can Business Leaders Best Manage their
Employees? 77
Learning Objectives 77
THE BUSINESS WORLD: LEARNING HOW TO BE AN
EFFECTIVE LEADER: LESSONS FROM THE EXECUTIVE
ROUNDTABLE 78
Why Study Management Thought? 80
What Do Managers Do ? 81
The Roles Managers Play in
Organizations 81
TALKING BUSINESS 3.1 The Visionary Leader:
Steve Jobs 84
TALKING BUSINESS 3.2 Conflict Management:
TheToxic Employee 85
Management Philosophies 88
Classical Approaches to Management 88
The Social Context 88
Scientific Management 89
Administrative Management 92
Bureaucratic Management 92
TALKING BUSINESS 3.3 Leading Teams in a
NewDirection 93
The Classical Approaches in Perspective 96
TALKING BUSINESS 3.4 Is Weber Alive and
Well? 96
Behavioural Approaches to
Management 98
TALKING BUSINESS 3.5 The High Costs of
Workplace Harassment 99
The Human Relations Movement 100
Mary Parker Follett (18681933) 100
Chester Barnard (18861961) 101
Modern Behavioural Science and Motivation-Based
Perspectives 102
The Best Management Philosophy? Contingency
Approach 102
TALKING BUSINESS 3.6 The Myths and
Realities of Motivation 103
The Critical Importance of Trust in the
Workplace 106
TALKING BUSINESS 3.7 How One Canadian
Company Earns Trust 107
Trust, Teamwork, and Citizenship 108
TALKING BUSINESS 3.8 How Teams Learn at
Teleflex Canada 109
CHAPTER SUMMARY 111
CHAPTER LEARNING TOOLS 111
Key Terms 111
Multiple-Choice Questions 111
Discussion Questions 112
CONCEPT APPLICATION: KICKING HORSE
COFFEE 112
vi C o n t e n t s
4 Establishing the Structure of a Business
What Does Organizational Design Have to
Do with Business Success? 116
Learning Objectives 116
THE BUSINESS WORLD: HOW GOOGLE DESIGNED
ITSELF FOR SUCCESS 117
The Changing Nature of Organizations 119
Flat Organizations 120
Fluid Organizations 120
Integrated Organizations 121
TALKING BUSINESS 4.1 Atlantic Canadas
Overseas Playground? 122
Global Organizations 123
Thinking About Organizations 123
What Is an Organization? 123
Using Metaphors to Describe Organizations 124
The Anatomy of an Organization 127
What Constitutes an Organizations
Structure? 127
What Determines Organizational Structure?
A Rational Perspective 131
Strategy 131
Organizational Size 132
Technology 132
Environment 132
TALKING BUSINESS 4.2 Canadas Trade in a
Digital World 134
Reengineering 136
TALKING BUSINESS 4.3 The Credit
Agency 137
TALKING BUSINESS 4.4 Former Outsourcer
Describes How Job Destruction Works 139
Toward a Virtual Organization 140
Outsourcing 140
TALKING BUSINESS 4.5 Out-of-Control
Outsourcing Ruined Boeings Beautiful
Dreamliner 142
Networking 143
Shedding Noncore Functions 143
Downsizing 145
TALKING BUSINESS 4.6 Loblaw Cuts 700 Head
Office Jobs 146
Methods of Downsizing 147
Consequences of Downsizing 148
TALKING BUSINESS 4.7 What Every Leader
Should Know About Survivor Syndrome 150
Why Has Downsizing Failed to Achieve Anticipated
Results? 150
Downsizing as a Nonrational Approach to
Organizational Structure 152
CHAPTER SUMMARY 155
CHAPTER LEARNING TOOLS 155
Key Terms 155
Multiple-Choice Questions 155
Discussion Questions 156
CONCEPT APPLICATION: PIXAR: NO MICKEY
MOUSE ORGANIZATION! 157
5 Business Strategy
How Do Businesses Generate a Successful
Strategy? 159
Learning Objectives 159
THE BUSINESS WORLD: TIM HORTONS: IS ITS
STRATEGY ALWAYS FRESH? 160
What Is Strategic Management? 162
Analyzing the External Environment 163
The Five-Forces Model 163
TALKING BUSINESS 5.1 Changes in Global
Food Sector Call for Canadian Food
Strategy 165
TALKING BUSINESS 5.2 Foresight and
Innovation: Todays Science Fiction, Tomorrows
Reality? 169
Analyzing the Internal Environment 169
The VRIO Model 170
TALKING BUSINESS 5.3 Groupon 171
SWOT Analysis 172
Different Levels of Strategies 173
Business-Level Strategy 173
TALKING BUSINESS 5.4 Dollarama Cashing in on
Penny-Pinching Canadians 175
TALKING BUSINESS 5.5 FROGBOX: a sustainable
franchising success 177
Corporate-Level Strategy 179
TALKING BUSINESS 5.6 American Airlines
Merges with US Airways 180
viiC o n t e n t s
TALKING BUSINESS 5.7 Loblaw Gets into the
Mobile Phone Market 183
TALKING BUSINESS 5.8 Starbucks Buys Its First
Coffee Farm in Costa Rica 184
TALKING BUSINESS 5.9 Understanding the Deal:
Shoppers Drug Mart and Loblaw 186
CHAPTER SUMMARY 187
CHAPTER LEARNING TOOLS 188
Key Terms 188
Multiple-Choice Questions 188
Discussion Questions 189
CONCEPT APPLICATION: LULULEMON: FOR
THE LOVE OF YOGA 189
Part 3 The External Challenges 193
6 Economic Forces
Oh Canada, What Is Your Economy Like? 193
Learning Objectives 193
THE BUSINESS WORLD: CANADIANS ON THE
MOVE 194
The Economic Environment 197
Individuals 197
Businesses 197
TALKING BUSINESS 6.1 Canadas People
Advantage 199
Government 200
Analyzing the Economy: Two Approaches 200
TALKING BUSINESS 6.2 Growing Gap of
Truck Drivers Will Be Costly to Canadian
Economy 201
Types of Economic Systems 201
Market Economy 202
Communism 202
Socialism 203
Mixed Economy 203
Competition and the Economy 204
Types of Competition in Free Markets 204
TALKING BUSINESS 6.3 Better Farm Management
Separates the Wheat from the Chaff 205
TALKING BUSINESS 6.4 Dont Blame Professional
Athletes for High Ticket Prices 207
Goals of Canadas Economic System 210
Economic Growth 210
TALKING BUSINESS 6.5 The US Subprime
Mortgage Crisis and Recession 212
TALKING BUSINESS 6.6 Canadas World-Class
Economy 213
TALKING BUSINESS 6.7 Canadas Productivity
Challenge 216
TALKING BUSINESS 6.8 Canadas Growing but
Invisible Trade: Services 217
Economic Stability 223
Employment 226
TALKING BUSINESS 6.9 Todays High Youth
Unemployment: A Solution for Skill
Shortages? 227
CHAPTER SUMMARY 229
CHAPTER LEARNING TOOLS 229
Key Terms 229
Multiple-Choice Questions 229
Discussion Questions 230
CONCEPT APPLICATION: SASKATOON:
CANADAS FASTEST-GROWING
ECONOMY 231
7 Competitive and Technological Forces
How Do Industries Evolve Over Time? 234
Learning Objectives 234
THE BUSINESS WORLD: FROM PERSONAL COMPUTERS
TO NEWSPAPERS: TECHNOLOGY AND CREATIVE
DESTRUCTION 235
The Industry Life-Cycle Model 236
The Introduction Phase: Industry Emergence and
Creation 238
TALKING BUSINESS 7.1 The Birth of
Biotech 239
TALKING BUSINESS 7.2 The Early Years of the
Automobile Industry 240
TALKING BUSINESS 7.3 The Anti-Aging
Industry 242
TALKING BUSINESS 7.4 Gray Goo and the
Promising Future of the Nanotechnology
Industry 243
The Growth Phase: Dominant Designs and
Shakeouts 245
viii C o n t e n t s
TALKING BUSINESS 7.5 The Smartphone
Industry 246
The Maturity Phase: A Critical Transition 248
TALKING BUSINESS 7.6 The Aging Personal
Computer Industry 250
The Decline Phase: Difficult Choices 251
TALKING BUSINESS 7.7 Are Mobile Devices
Killing The Video Game Console Industry? 252
Innovation and Technology 254
Types of Innovation 254
TALKING BUSINESS 7.8 Is Canada on the Leading
Edge? 255
TALKING BUSINESS 7.9 The Linked World: How
ICT Is Transforming Societies, Cultures, and
Economies 256
The Evolution of Technology 258
TALKING BUSINESS 7.10 Embracing Disruption:
Lessons from Building the First Quantum
Computer 258
Technological Forecasting 260
Technology and the Changing Workplace 261
TALKING BUSINESS 7.11 Will Technology Replace
Middle-Class Jobs? 262
CHAPTER SUMMARY 263
CHAPTER LEARNING TOOLS 263
Key Terms 263
Multiple-Choice Questions 264
Discussion Questions 264
CONCEPT APPLICATION: HAS SODA LOST
ITS FIZZ? 265
8 Global Forces
How Is Canada Faring in the Global
Village? 268
Learning Objectives 268
THE BUSINESS WORLD: FOREIGN OUTSOURCING
AND RBC 269
What Is Globalization? 271
Sources Encouraging Global Business
Activity 271
Pull Factors 272
Push Factors 272
TALKING BUSINESS 8.1 Canadas Dairy Industry
Under Pressure 273
Channels of Global Business Activity 274
Exporting and Importing 274
TALKING BUSINESS 8.2 Canadas Exports to
China: Still Hewers of Wood and Drawers of
Water 277
TALKING BUSINESS 8.3 What are Canadas
New Export Strengths? 279
Outsourcing/Offshoring 280
Licensing and Franchising Arrangements 280
Direct Investment in Foreign Operations 281
TALKING BUSINESS 8.4 What Helps a Country
Obtain Foreign Direct Investment? 282
Joint Ventures and Strategic Alliances 284
Mergers and Acquisitions 284
TALKING BUSINESS 8.5 Is Canada Being
Hollowed Out by Foreign Takeovers?
Putting Mergers and Acquisitions in Historical
Perspective 285
Establishment of Subsidiaries 286
The Multinational Corporation 286
The Borderless Corporation 287
TALKING BUSINESS 8.6 Whats the Third
World? 287
TALKING BUSINESS 8.7 Think Global, Act
Local 288
International Trade 290
The Logic of Trade 290
Mercantilism 290
Trade Protectionism 291
TALKING BUSINESS 8.8 Made in Canada: How
Globalization Has Hit the Canadian Apparel
Industry 292
TALKING BUSINESS 8.9 The Futility of
Protectionism 294
Promoting International Trade 294
Facilitating Global Business: Regional Economic
Integration 295
European Union (EU) 296
Asian Trading Bloc 297
North American Trading Bloc and NAFTA 298
Where Is Canada Headed? 303
ixC o n t e n t s
CHAPTER SUMMARY 304
CHAPTER LEARNING TOOLS 304
Key Terms 304
Multiple-Choice Questions 305
Discussion Questions 305
CONCEPT APPLICATION: BEIJING AND THE
CALGARY OIL SANDS 306
9 Political Forces
Where Would Canadian Business Be Without
Our Government? 309
Learning Objectives 309
THE BUSINESS WORLD: JAPANS TOYOTA AND
CANADAS SUBSIDIES 310
The Canadian Business Enterprise System:
Fundamental Features 312
Canadian Government Structure and Roles 313
Levels of Government 314
Federal Government Structure 316
Government as Guardian of Society 317
The Tax Collector Role 317
TALKING BUSINESS 9.1 Should Pop Drinkers Pay
More? 319
The Business Owner Role: Crown
Corporations 320
TALKING BUSINESS 9.2 Canada Post Faces
BillionDollar Operating Loss by 2020 321
TALKING BUSINESS 9.3 Should the LCBO Be
Privatized? 324
The Regulator Role 325
Government as Guardian of the Private Business
Sector 328
Government Assistance to Private Business 328
TALKING BUSINESS 9.4 Auto Bailouts: Good or
Bad Idea? 330
Government as Guardian of Business in the Global
Context 332
Why Should Government Play the Role of Guardian
of Business in the Global Context? 333
TALKING BUSINESS 9.5 More Cheese,
Please 335
Why Government Should Not Play the Role of
Guardian of Business 337
Should Government Mind Its Own Business? 339
Deregulation 339
TALKING BUSINESS 9.6 The Dangers of
Deregulation 343
Privatization 344
CHAPTER SUMMARY 348
CHAPTER LEARNING TOOLS 348
Key Terms 348
Multiple-Choice Questions 349
Discussion Questions 349
CONCEPT APPLICATION: THE WIRELESS
SERVICE INDUSTRY IN CANADA 350
10 Societal Forces
Can Corporations Be Socially Responsible to
All Stakeholders? 353
Learning Objectives 353
THE BUSINESS WORLD: THE NEW BLOOD DIAMOND:
CELLPHONES 354
Defining Business Ethics 356
TALKING BUSINESS 10.1 High-Level Barriers
to Public Trust in Organizations 357
Ethical Behaviour as a Social Phenomenon 358
Business Ethics as Managing Stakeholder Interests 359
TALKING BUSINESS 10.2 Lac-Mgantic: Disaster
in Quebec 359
Models for Judging the Ethics of Decisions 360
End-Point Ethics 361
Rule Ethics 363
Applying the Models: A Scenario 364
TALKING BUSINESS 10.3 The Business of Bribery 366
Do Organizations Make Us Unethical? 367
Unethical Behaviour as a Consequence of
Corporate Culture 368
Unethical Behaviour as a Consequence of
Decoupling 371
Unethical Behaviour as a Consequence of Work
Routinization 372
TALKING BUSINESS 10.4 The Global
Pharmaceutical Industry and Human
Guinea Pigs 374
Unethical Behaviour as a Consequence of
Organizational Identity 375
x C o n t e n t s
Unethical Behaviour as a Consequence of
Organizational Roles 377
Judging the Ethics of Organizations 378
Business and Society 380
Managing the Forces of Business and the Stakeholders
of Business 381
Managing the Challenges of the Societal
Force 383
Corporate Social Responsibility 383
The CSR Debate 385
TALKING BUSINESS 10.5 Dragons Den 386
TALKING BUSINESS 10.6 IBM and Nazi
Germany 388
TALKING BUSINESS 10.7 Corporate Strategy and
Long-Term Well Being: Crime Doesnt Pay 392
TALKING BUSINESS 10.8 Should These Corporate
Behaviours Be Mandated? 394
Is Corporate Social Responsibility on the Rise? 395
TALKING BUSINESS 10.9 Social Media Gives
Power to Customers 395
CHAPTER SUMMARY 399
CHAPTER LEARNING TOOLS 399
Key Terms 399
Multiple-Choice Questions 399
Discussion Questions 400
CONCEPT APPLICATION: JOE FRESH AND THE
BANGLADESH TRAGEDY 400
Part 4 Adaptation and Change 404
11 The Challenge of Sustainability
Why Does Business Need to Focus on
Sustainability? 404
Learning Objectives 404
THE BUSINESS WORLD: CAN CANADIAN BUSINESSES
AFFORD TO IGNORE CLIMATE CHANGE? 405
What Is Sustainability? 408
Economic Factors 410
TALKING BUSINESS 11.1 Cree Village Eco lodge,
a Sustainable Travel Destination 411
Social Factors 411
Environmental Factors 412
TALKING BUSINESS 11.2 How Sustainable Is
Canadas Water? 414
TALKING BUSINESS 11.3 Fracking Fracas: Pros
and Cons of Controversial Gas Extraction
Process 416
Benefits and Limitations of the Triple Bottom
Line Framework 418
Benefits of the TBL Approach 418
Limitations of the TBL Approach 419
Measuring Sustainability 420
Living Planet Index 420
Ecological Footprint 422
Index of Sustainable Economic
Welfare 424
Genuine Progress Indicator 425
The Business Case for Implementing Sustainable
Practices 426
Reducing Costs 426
Reducing Risk 428
Improving Public Relations 429
Obstacles to Change 430
TALKING BUSINESS 11.4 Canada Isnt Cleaning
Up on Green Technology Exports 431
Implementing Sustainable Practices 433
Raw Materials 433
Manufacturing 434
TALKING BUSINESS 11.5 Leading Change in the
Food Sector 435
Distribution 437
Retailing 437
Marketing 438
TALKING BUSINESS 11.6 Convenience versus
Sustainability: The Plastic and Paper Bag
Debate 439
Consumer Use/Consumption 440
End-of-Life/Disposal 441
CHAPTER SUMMARY 443
CHAPTER LEARNING TOOLS 443
Key Terms 443
Multiple-Choice Questions 443
Discussion Questions 444
CONCEPT APPLICATION: IS LOCAL FOOD
SUSTAINABLE? 444
xiC o n t e n t s
12 Confronting Change
How Do Businesses Address the Challenge of
Change? 448
Learning Objectives 448
THE BUSINESS WORLD: INDIGO: WRITING THE NEXT
CHAPTER IN CANADAS BOOK INDUSTRY 449
Change and the Environment of Business 451
Forces for Change 451
TALKING BUSINESS 12.1 Making Skills Work in
Ontario 453
TALKING BUSINESS 12.2 Yes, There Is a Future
for Manufacturing in Canada 454
TALKING BUSINESS 12.3 Digital Health: More
Than Just Health and Technology 456
TALKING BUSINESS 12.4 Pro Sports and
Globalization 457
TALKING BUSINESS 12.5 How Canada Welcomed
Bangladeshi Clothing Imports 459
TALKING BUSINESS 12.6 Slow-Motion
Demographic Tsunami About to Hit Canadas
Economy 460
Types of Change 461
Developmental Change 461
Transitional Change 462
Transformational Change 462
TALKING BUSINESS 12.7 Transformational
Change: Starbucks Risks Core Business for New
Unknown Ventures 463
Methods of Change: Theory E and Theory O
Change 464
The Process of Transformational Change: An
Illustration 467
Understanding the Forces for Change 467
The Change Vision and Implementation 467
Creating a Learning Organization 471
TALKING BUSINESS 12.8 The Learning
Manager 473
Double-Loop Learning and Shifting Paradigms 474
Do Organizations Encourage or Discourage Learning
and Change? 475
TALKING BUSINESS 12.9 Facebooks Culture
Promotes Learning and Change 476
Implementing Change Through Tipping Point
Leadership 479
What Is the Tipping Point? 479
Three Rules of the Tipping Point 479
Applying the Tipping Point to Organizational
Change 481
CHAPTER SUMMARY 482
CHAPTER LEARNING TOOLS 483
Key Terms 483
Multiple-Choice Questions 483
Discussion Questions 484
CONCEPT APPLICATION: WHEN GOOD
COMPANIES GO BAD: THE CASE OF KODAK 484
Appendix: Answers to Multiple-Choice Questions 487
Glossary 488
Index 503
xii
Preface
There is much to be proud of with regard to the Canadian business sector. According to
many observers, Canada is poised to earn a distinguished reputation on the world scene.
In fact, Canada has been consistently cited in the media as one of the best countries to
do business in. Recently Forbes ranked Canada fifth overall in the world for business,
based on such factors as low corporate tax rates and one of the most stable banking
systems.
Beyond its economic stability, Canada is also reputed for its world-class university
system, which is much more affordable than most privately funded colleges in the United
States. In turn, Canada is known for its ability to attract and retain a highly educated
workforce. Our strong business reputation is also based on having among the highest
investment rates in education as a percentage of its GDP. Its enviable status is also based
on comparatively low poverty and crime rates.
The positive climate for business has also made this country a popular location for
entrepreneurs. Based on a study conducted by management consulting firm Ernst & Young,
Canada was ranked among the top five places in the world to start a business, given its
strong entrepreneurial culture. The Ernst & Young report considered such factors as small
business tax burden, access to financing, and intangibles such as the value placed on research
and innovation as well as attitudes toward entrepreneurs in the business community.
There is no doubt that Canada is fast becoming a major player on the global scene.
However, at the same time significant challenges exist. The past two decades have
witnessed tremendous change and turmoil across our organizational landscapefrom
numerous bankruptcies of once-great Canadian companies to massive reductions in the
workforce of many others to the growth in foreign ownership across corporate Canada. Is
all this cause for concern or just the natural evolution of business? Are we headed for the
best of times or the worst of times?
Indeed, what lies ahead for Canadian business? To address that question, we need to
systematically examine the context of business and the factors that shape our business
environment. To do so we must look both inside and outside of the corporate walls.
That is, we need to consider key challenges and opportunities that exist within the bound-
aries of the organization, as well in the organizations external environment.
The aim of this book is to help facilitate the following learning goals for students:
1. To examine the context within which all businesses operate. Specifi cally, we
consider the internal context and the external context of business and the range of
unique challenges and opportunities each possesses.
2. To obtain a deeper understanding of the nature of the Canadian business environment.
What differentiates Canada from other business environments? What are the major
strengths and weaknesses of Canada as a place to do business? What does the future
hold for Canadian business?
3. To encourage critical thinking regarding the nature of business and its environment.
This text presents a range of ideas, perspectives, and conceptual frameworks for
identifying and analyzing key issues in the business environment.
xiiiP r e f a c e
4. To gain exposure to major voices and leading thinkers in the fi eld of business and
organizational studies. This book draws upon many ideas from a wide range of
business scholars, experts, and practitioners.
The study of business is really about the study of society. It is an obvious fact that we
are a society of organizationsfrom our hospitals to our schools to our multinational
organizations, it is hard to imagine life without organizations. And, for better or worse,
those very institutions and organizations that we have grown up with are continuing to
undergo dramatic change. We need to understand where change is coming from and how
organizations can best respond to the changing business context.
The Context of Business takes the reader on a journey that explores the environment
within which business operatesboth within the Canadian context and within the global
context. The reader will be introduced to a variety of perspectives, theories, and concepts
that shed light on real business issues. While this text does introduce the reader to many
fundamentally important business terms and concepts, our emphasis is on helping students
develop analytical thinking skills. Our aim is to present ideas, frameworks for discussion,
and concepts that students can use as tools to help analyze what is going on out there in
the real business world.
We hope that The Context of Business takes you on an enriching journey into the
environment of business. There is much to learn about Canadian business and, as you
will see, there is also much to be proud of. As a current or prospective member of the
Canadian workforce, you have every reason to be interested in what the future holds for
Canadian business. We hope this book helps you think more critically and thoughtfully
about what lies ahead.
Enjoy the journey!
Len Karakowsky
Natalie Guriel
STRENGTHS AND FEATURES OF THIS TEXT
This text differs in a number of significant ways from the typical introductory business
textbook. There are at least three key areas of emphasis that distinguish this text, as
outlined below.
1. Emphasis on Critical Thinking Skills
The Context of Business will be the foundation for an introductory course in business that
first introduces students to the business environmentboth internal and external. The
