BUSS1000

BUSS1000–THEFUTUREOFBUSINESSWEEK1:WickedProblems:complexsocialandpolicyproblems

• E.g.waterandfoodshortages,youthUE,popgrowth,poverty,climatechange,inequality,globalsecurityetc.• Manyorgslooktosolvetheseproblems

o ClimateActionNetworkofAustraliaàadvocateforabetterclimatechangeawarenesso BillandMelindaGatesFoundationàcuringeasilypreventablediseaseso Teslaàelectricmotorvehiclestoreducecarbonemissions

• Limitations:o Complexo Stakeholders/shareholderso Manifestationsofbiggersocialtrendsandshifts

MEGATRENDSJohnNaisbitt:large,transformativeprocesseswithglobalreach,broadscope,andafundamentalanddramaticimpactàdirectlinktoWickedproblems

• Evolvingcommunitieso Worldpop7.5b2016à10b2050o 2015-2100growthgenerationfromAsiatoAfricao Millennialsarelargestgenerationinhistoryàwillcontinuetohappeno 8%worldpopover65in2015à13%by2030

• Rapidurbanisationo 2%worldpopincities1800à54%by2015,61%by2030o 750biggestcities(of4146)contribute57%globalGDPo 1.5mperweekjoincities

• Empoweredindividualso 400mconnectedin2000,3.2b2015o Socialmediao Riseinexperientialconsumptiono $5.67trinsociallyresponsibleinvestmentsin2014

• Economicpowershifto Emergingeconomies33%ofworldtotal2015à50%by2025o Emergingeconomiesgrow75%fasterthandevelopedo By2030,80%worldpopinmiddleclasso 2030E7>G7purchasingpower

• Resourcesecurityo WorldEconomicForum(WEF)identifieswateras#1risko Energyconsumptiontoincreaseby35%by2035o Cleanenergymaterialsatcriticallevelso Lifecriticalphosphoroustopeakby2050o 50%increaserequiredinglobalfoodproductionby2050

• Impactfultechnologieso 90%ofworld’sdatacreatedinthelast4yearso 75%ofstocktradestodaycreatedbyalgorithmo 1trillionobjectsconnectedby2025o Artificialintelligence4:1

BUSS1000

WEEK2:NATURE,ROLEANDPURPOSEOFBUSINESS• Organisation:agroupofpeoplewhoworktogetherinanorganisedwayforasharedpurpose• Company:anorganisationthatsellsG/Stomakemoney• Corporation:alargecompanyorgroupofcompaniescontrolledasasingleorganisation• Business:acompanythatbuysandsellsG+S• Stakeholders:anorganisationorperson(e.g.employee,customer)involvedwithanorgà\hasresponsibilities

towardsit+interestinitssuccesso Owners(shareholders)o Customerso Employeeso Suppliers

o Competitorso Communityo Government

MISSION,VISION+VALUES:

• Mission:descriptionoftheaimsofabusiness,charity,Gov.departmentorpublicorg• Vision:statementofwhatanorgwouldliketoachieveinthefuture• Values:principlesthathelpyoutodecidewhatisrightandwrong,andhowtoactinvarioussituations

o Whyanorganisationexistso Understandingofwhatleaderswanttheorgtobecomeo Providescontextforalldecisionsw/inorganisationo Guidingthedevelopmentofstrategy+organisation

• OrganisationalCulture:attitudesandagreedwaysofworkingsharedbyemployeesofanorgo Can’talwaysbecontrolledo Informedbycharacteristicsofowners+employees

CSR,CSV+SE:

• Traditionalroleofbusinesswastoprofit+stimulateeconomicactivity

o 20thcentury=socialdissatisfactiono Humanimpactonenvironment

enteringpublicconsciousness§ Globalwarmingmid20th

century§ Ozonedepletion1970s§ ExxonValdezOilSpill1989

o Directimpactoffirms:§ GreatSmogof1952§ BhopalDisastersin1984

• CorporateSocialResponsibility(CSR):increasingsocialpressurefororgstothinkbeyondprofito “Actionsthatappeartofurthersomesocialgood,beyondtheinterestsofthefirmandthatwhichis

requiredbylaw”(McWilliams2001)§ E.g.donations,sponsorships,fundingcommunityprojects,Fairtradepurchases(e.g.Cadbury)

o Critiques:Ethicsofspendingshareholderfundsonventuresunrelatedtoprofitability• CreatingSharedValue(CSV):drivingmutuallybeneficialchange,reconceivingproductsandmarketsàdrive

innovation+productivitygrowth,reshapecapitalismandrelationshiptosocietyo E.g.GEEcomaginationàre-didentiresupplychaino Critiques:

§ VirtuallythesameasCSR§ Naivetyaroundcompliance(assumptions)§ Doesn’taddresssystematicproblemswithincapitalism

• SocialEntrepreneurship(SE):entrepreneurshipdistinguishedby3factorso 3KeyFactors:

§ Sociality:addressingsocialproblemsàreducedexternalities,genderempowermentetc.§ Innovation:resourcefulness,changinginstitutions,reconfiguringneeds,wants,demands§ MarketOrientation:performance,stakeholdernotjustshareholder,marketfailure

o Profitvs.Non-profito Critiques:

§ Unmetsocialneeds§ HowcanexistingfirmsengageinSE

BUSS1000 WEEK3:THEEXTERNALENVIRONMENTLAYERSOFTHEBUSINESSENVIRONMENT:

• MacroEnvironment:highestlayer,factorsimpactallorgstosomedegreeo PESTLE:longtermfocus

§ AllowsforEXTERNALshocksthatmayoccurregularly§ Toidentify“keydriversofchange”§ Elements:

• Political:stability,rent-seeking,activism• Economic:IR,inflation,costofkeyinputs,

disposableY,UE• Social:consumerpreferences,culturalshifts,demographicstructure• Tech:communication,info,physical,transportinfrastructure• Legal:consumerlaws,competitionlaws• Environmental:resources,weather,seasonality

§ Limitations:• Notindustry,sectororsegmentanalysis=verybroadview• Notinternalanalysis• Broad=lotstocoverànospecificrelevancetothecompany/industry• Someshocksarehardtoanticipate

o CaseStudy:Nintendo(USA)§ P:Trump(satisfaction,policiese.g.internalproduction),isolationism(nationalsentiment),Trans-PacificPartnership(TPP)§ E:disposableincomehasbeenstableinUS,TPP§ S:Americansworkingmorehours=traveltime(reduceleisuretime)§ T:Moore’sLaw(poweroftech),73%UScitizensonlineeveryday=increaseduse§ L:potentiallylooseningregulationsarounde-waste,rulesshifting(wayspeopleareemployed–overtime,sickleaveetc.)§ E:climatechange,e-wasteincreasing

• Industry/Sector:allorgsthatproducethesameG+So Defineindustryboundariesbyidentifyingrelevantmarket,abilitytosubstituteG+S,geo.boundarieso Porter’s5Forces:awayofassessingtheattractiveness(profitpotential)ofdifferentindustries

§ CompetitiveRivalry:• No.competitors• Qualitydifferences

• Switchingcosts• Customerloyalty

§ ThreatofNewEntry:• Time+costofentry• Specialistknowledge• Economiesofscale

• Techprotection• Barrierstoentry

§ BuyerPower:• No.customers• Sizeofeachorder• Differencesb/w

competitors

• Pricesensibility• Abilitytosubstitute• Costofchanging

§ SupplierPower:• No.suppliers• Sizeofsuppliers• Uniquenessofservice

• Abilitytosubstitute• Costofchanging

§ ThreatofSubstitution:• Substituteperformance• Costofchange

§ E.g.Nintendo(USA)• Threatofnewentry(Microsoft,Sonyetc.)àmediumtolowerpower

o Marketisdifficulttoenter(saturated,strongcompetitors(oligopoly))• Suppliers:existingagreementsw/orgsàmediumtolowpower• Buyers:switchingcosts,loyalfollowers,costofgame+consoleàhighpower• Substitution:externalfirmsetc.àmediumtohighpower

§ Criticisms:• Definingtherightindustry• Convergingindustries• Complementaryproducts• Assumptionsmaynotalwayshold• Sometimesblindtodynamicsofmarkets• Powerandthreatsnotsousefulforentrepreneurialfirms

• Competitors:layerclosesttoorganisation,withinanindustry/sector