Start working ASAP on New Venture Concept (Due: Oct 15) MANAGEMENTS PRIMARY OBJECTIVE To devise and implement

strategies that will allow the organizationto achieve the critical success factors in a manner that meets legitimate stakeholder expectations. In attempting to achieve this primary objective all managers must be able to analyze two different sets of environmental factors. Factors operating within the firm are external business environment. Factors operating within the firm are internal business environment. CHARACTERISTICS OF THE EXTERNAL BUSINESS ENVIRONMENT Extremely dynamic and constantly changing Increasingly competitive Increasingly globalized Complex, interactive, two-way phenomena (Bank of Canada raised interest rates will have a ripple effect on companies and businesses. They will then come up with a strategy to deal with these increases. The environment impacts on a business, then the business reimpacts the environment) Largely uncontrollable from the perspective of the individual firm or manager PEST: A MODEL FOR ANALYZING THE EXTERNAL ENVIRONMENT Because the external business environment is largely uncontrollable, it must be constantly monitored by management Goal is to be proactive vs. reactive The PEST model breaks the external environments down into four subenvironments (discussed in Chapter 2 of your textbook) Political (Arab nations dont let Blackberry because they are so secure and unable to be monitered hence they will not use them) A FIRMs INTERNAL ENVIRONMENT Unlike the external environment a firms internal environment is largely controllable (Marketing: We can control how much money to allocate to advertising.) Consists of four key functionals areas (BU121) Marketing Finance and Accounting Operations Management (Production) Human Resources Management and Industrial Relations LEVELS OF MANAGEMENT In most organizzations (except very small businesses) there are three different levels of management. Top or Executive Level Management Mid Management First Line(Supervisory) Mangement

Each level has different but interrelated responsibilites. TOP MANAGEMENT The primary responsibility of top management is to both develop and implement the strategies that will be employed by the firm to realize the critical success factors. The steps involved in the formulation of business strategy outlined in our model will be examined in detail later in BU111. (Comes up with a strategy, a mission and look at environments; come up with a good final strategy and send it down to the next level) MID MANAGEMENT Mid Managers manage other managers. They are responsible for implementing the strategic plans devised by top management. They device both the tactical plans and functional strategies (ie. Marketing, financial, operational, and human resource plans and strategies) necessary to achieve the strategic plans developed by top management. FIRST LINE MANAGEMENT First line managers supervise non-managerial employees. They are responsible for implementing the tactical plans and functional strategies developed by mid-management. First line supervisors manage the day to day and week to week activities of the individuals who do the actual work involved in building a firms products or providing firms services. The PROCESS OF MANANGEMENT All managers, irrespective of their level in the organiation must master the process of management. The basic tasks performed by all levels of management in order to realize the firms primary objective ie. Achieving the critical success factors in a manner that meets legitimate stakeholder expectations. These basic tasks are: planning, organizing, Directing (leading, motivating and empowering) Controlling Communicating Now we will start our journey into EXTERNAL BUSINESS ENVIRONMENT. As we proceed down our path is Factors of Production. (Chapter 1 of reading) There are five basic factors of production: Capital: the financial resources needed to operate a business Labour: the mental and physical capabilities of an organizations workforce Natural Resources: physical resources such as land, minerals, water, etc. Entrepreneurs: people who accept the risk involved in creating and operating a business.

Information Resources: information such as economic data, market information, various measures of performance (sales, costs, etc.) and the means whereby this information can be quickly summarized, retrieved, and used by managers. Factors of Production: Capital We will begin our discussion of the economic environment of business by examining how firms and government raise the capital (money) necessary to operate Reference: Lab Manual p7-24 Overview of the Canadian Financial System reading This is commonly referred to as the Capital Formation Process