Notes on Sept. 13
Reading – Understanding Canadian Business
- No two organizations, institutions, or businesses are identical (all are unique in
the way they make decisions).
Some of these influences are external to the firm, such as the cost of borrowing
money, the state of the economy, the relevant government regulations, the level and
intensity of competition, the changing pattern of consumer demand, social values,
international considerations, and even the weather. These and other similar factors are
part of the external business environment.
- The quality of the firm's decisions will, in large part, depend on its knowledge of
the environment in which it functions.
However, the environment is constantly changing. Especially today when we are
living in a dynamic world that is in a constant state of change. This has made
decision making more difficult, but it is also an exciting challenge.
External influences on business firms can be grouped into six major categories:
Canada has a mixed economic system. This means that while many
commodities are produced privately and for profit, a significant number of goods
and services (such as health care, education, police protection, national defence,
the justice system, the welfare system, and a variety of pensions) are produced
by some level of government where profits are not the motivating force.
- In addition, the free market or free enterprise system is constrained to some extent by
government policies and regulations.
- Early governments realized that Canada had access to vast numbers of natural
resources but had few people to take advantage of them. They offered good deals to
outsiders of the country and there was a huge immigration towards Canada.
1900-1930 Canada’s population double to 10 million people. However, there was the
Great Depression in the 1930s which included record business bankruptcies, high
unemployment (20% higher than usual), and a general sense of pessimism. At the time
there were no government social programs to assist people; thus they relied on each
- Environmentalism has become solidly ingrained as a societal ethic; business firms
cannot ignore it even if they want to.
Enterprises that knowingly damage the
environment (and our health with it) are now regarded as social pariahs. Being
"green" is good for business.