buss1000 buss1000 – the future of business · • economic power shift ... , fairtrade purchases...
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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