Why Study Business Understanding the Value of Business

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Why Study Business?Understanding the Value of
Business
St. Francis Xavier University
Professor Neil Maltby
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Introduction

• On her deathbed, Gertrude Stein is purported to
  have asked her lifelong companion Alice B.
  Toklas, What is the answer? When Alice could
  not bring herself to speak, Gertrude asked, In
  that case, what is the question?

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Objectives

• Introduce some basic business concepts
• Introduce business ideology for discussion (i.e.
  ask some interesting questions re how we think
  about business)

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Overview of Sessions

• Why should we study business?
• A Business example
• What is a business? 
• Why study business?
• What value do businesses create?
• What issues do businesses create?

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Business Profile

• Sobeys.com
• Overview of operations
• Recent performance
• 2006 results
• Recent developments
• Sobeys privatized
• Sobeys purchased Thrifty Foods for 260 million
• AP Canada purchased by Metro for 1.7 billion
• Competition with Loblaws, Metro and increasingly
  general discount merchandisers like Wal-Mart
• Future
• Growth (private labels, gas, partnerships)
• Focus (food, service, efficiency)

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Small Group Tasks

• What is a business?
• Why study business?
• What value do businesses create?
• What issues do businesses create?

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What is a business?

• An organization that produces and/or sells goods
  or services in an effort to make a profit
  (Ebert, Griffin and Starke, 2009, p.4)

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Why study business?

• Personal reasons
• Interests and career aspirations, to develop an
  understanding of organizations and/or management
  theory and practice
• Economic, social and political impact
• Scope and scale of business today
• Value (positives and negatives) to society
• Government involvement (p. 10)
• Customer
• Competitor
• Regulator
• Protecting competition, consumers, environment
• Taxation agent
• Provider of incentives and financial assistance
• Provider of essential services
• Ideology
• Economics and capitalism

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The Foundations of Business Ideology

• Economics is concerned with the allocation of a
  nations scarce resources (e.g. labour, capital,
  resources) (p. 5)
• What is Capitalism?
• Capitalism is an economic system in which markets
  decide what, when, and for whom to produce
  (Ebert, Griffin and Starke, 2009, p. 8) (i.e.
  demand driven, or consumer driven, or you-and-me
  driven)
• Greed is good speech
• Private Enterprise (p. 17)
• Choice
• Competition, the motivation to provide value
  efficiently and/or effectively via strategic
  maneuvering
• Private property (individual ownership)
• Profit (motivation for efficient use of resources
  and for assuming risk)

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The Foundations of Business Ideology

• Individualism
• Social theory advocating liberty, rights and
  independence of individual
• The responsibility and right to influence
  economic, political and social progress lies
  primarily with individuals
• Through individualism society aims to achieve
  prosperity and efficient use of scarce resources
  because the individual has a vested self-interest
  
• Central to individualism is choice
• Choice is good -- the heart of capitalism and
  business is choice

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Maslows Hierarchy of Needs
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Conclusions

• Businesses are organizations of a capitalist
  economic system
• Capitalism promotes choice
• Businesses are the economic organizational
  facilitators of choice

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Administration

• Notes and PowerPoint slides
• Next class http//people.stfx.ca/rdelorey/course
  s/?BSAD101/Schedule
• Website access password protection
• Username Webfx\x2006xxx
• Password _ _ _ _ _ _ _ _
• Seating Plan
• Clicker Registration

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New Venture Challenge

• Friday September 12, 215pm (note the new time),
  NH B33
• Form Groups (see sign up sheet)
• Each group should bring
• 1 paper punch, 1 stapler, and 1 ruler

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