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Saturday, March 13, 2010

Differences in PPSA in Ontario and Quebec

Jenna (2010).

Differences in PPSA in Ontario and Quebec

The purpose of the Personal Property Security Act (PPSA) is to establish a framework to govern the right of a creditor to take possession of a debtor’s personal property in the event of insolvency of a loan (Abbott, 2005). Yates, Bereznicki-Korol and Clarke (2008), state that although the PPSA provides “a unified approach toward the use of personal property as security” (p. 343), in which, “formal requirements and procedures” (p. 343) for different types of securities are treated the same, legislation varies across provincial jurisdiction. Two provinces that differ significantly in PPSA legislation are Ontario and Quebec.

Quebec law is unique in Canada. The province of Quebec preserved its civil law after the Confederation initiated the reform of common law throughout the rest of Canada. Civil law originated in France where the French borrowed from the civil code of Roman law (Stewart, 2005). Quebec now uses what is called the Civil Code of Quebec and it has been revised to integrate some concepts of common law (Gervais, 1999).
The Ontario PPSA is similar to the personal property security system described by Article 9 of the U.S Uniform Commercial Code (UCC). Legislation in Quebec parallels the PPSA’s central features (Clark, 2003) however has several differences from Ontario’s personal property security system. One of the most recognized differences between Quebec and Ontario’s PPSA law is the interpretation of the concept of chattel mortgages. In fact, Quebec only added this section to its PPSA in 1994 when the new Quebec Civil Code was introduced. The provincial government decided to call them “hypothecs”. The code states that all “property which would be considered as personal under the PPSA as moveables” (Clark, 2003, Para 14). There is consistency in the Quebec code of hypothecs with the Ontario code of chattels as they both cover all property except real property, or immoveables in Quebec. Furthermore, the code provides provisions for the right to secure debt obligations. One of the differences between the two provisions is how they deal with security transactions.

In the civil law, security is generally understood only as a creditor's conditional right: (i) to extract the value of secured property actually falling within his or her debtor's patrimony (or property); (ii) at a judicial sale or in some other realization; and (iii) to get paid by preference. In principle, security comprises neither a right to take possession nor a right of foreclosure! Leases and title retention sales contracts remain separate and are subject to regimes that prescribe different legal relationships between the parties than those applicable to transactions that create hypothecs (Clark, 2003, n.p).

Although there are many differences between Quebec and Ontario legislation, there are also many similarities. For example, hypothecs can charge on future property and extends new property acquired by debtors to replace charged property that was sold in regular course of business. Also similar to Ontario’s PPSA, Quebec’s hypothec rule allows first registration and publishing priority over an asset. It is important to note however, that the unlike the Ontario PPSA, it does not allow pre-agreement fillings. Furthermore, in registering a debtor in the province of Quebec is quite different from in Ontario and other provinces. There are requirements for French contracts, and the province uses regulations that also limit a creditor to either seize an asset or collect monies, but not both (Carroll, n.d).
Although there are some differences in the interpretations of PPSA law in the different provinces, a common theme is the issue of perfection and priority. Craig and McPherson (2001) state:

Perfection is a concept fundamental to the operation of the PPSA. Once a security interest is perfected, the secured party acquires certain rights in the collateral under the PPSA. Perfection is different from priority. Perfection occurs when a creditor has taken all the necessary steps set out in the PPSA to protect its position as between itself and its debtor. By definition, it is possible for a number of creditors to have taken all those steps and therefore have a perfected security interest in the same collateral. Priority reconciles the competing claims of those creditors who have perfected security interests. Only one party can have priority (Para 6).

Because only one party can have priority over an asset, it is important that perfection in order to establish priority be a legal requirement. If exceptions were permitted, it would be difficult to ensure the title an individual is searching is in fact the same title they wish to register. Eliminating ambiguity in registrations ensures the credibility of the system.

In essence, it is important for any creditor to cross check, and register priority in the assets they are securing in order to protect themselves from insolvency. Understanding the risks involved also require thorough understanding of the provincial legislation they are dealing with. Furthermore, the best protection upon registration is ensuring the contract is perfected.



References

Carroll (n.d). How to cross the border… avoid getting caught with all the wrong
paper work… doing business in Canada. Leasing Logic. Retrieved February 4,
2010 from http://www.litehaus360lease.com/news-article-20080601.pdf.

Clark, D. (January, 2005). Revised article 9 and the PPSA- a comparison of the

American and Canadian secured property legal regimes. The Secured Lender.
Retrieved on February 5, 2010 from: www.allbusiness.com

Craig, D. & McPherson, D. (2001). The personal property securities act. Bell gully
publication. Retrieved February 7, 2010 from:
http://www.bellgully.com/resources/resource.00035.asp

Gervais, M. (May, 1999). Harmonization and dissonance: language and law in

Canada and Europe. Department of Justice Canada. Retrieved February 5,
2010 from: www.justice.gc.ca

Stewart, W. (1948). The civil code of Quebec. The Encyclopedia of Canada, Vol. II.
Toronto: University Associates of Canada.

Yates, A., Bereznicki-Korol, T. & Clarke, T. (2008). Business law in Canada (8th ed). Canada: Pearson Education Canada

Automotive Industry Overview (Macroeconomics)

Jenna Doucet (2010).

The Automotive Industry Overview

Abstract

The paper analyzes and summarizes how the automotive industry is impacted by the macro economy. The paper includes brief history of the automotive industry, how it impacts the GDP, the unemployment rate, and the inflation rate as measured by the Consumer Price Index (CPI).

The supply and demand of the automotive industry as well as the profits derived from the sector are clearly impacting by then macroeconomic policies. The industry’s history demonstrates the trends it follows in the business cycle and how economic indicators have impacted the performance of the industry over the years. The measure of production, interest rates, real GDP, automotive sales and inflation and unemployment are some of the most compelling instruments that can be used to assess the state of the automotive industry.

Automotive Industry History
In the initial stages of the automotive industry, motoring was considered a sport rather than a means of transportation. It took many centuries from the creation of the first successful self-propelled road vehicle in 1770 for motorcars to generate enough demand for widespread production. After the formation of the Automobile Board of Trade, which eased the monopoly in the industry and promoted the sharing of patent rights there were many successful automakers. Later, as competition began to rise three corporations came to flourish and dominated the industry in the United States. The “big Three” that made headlines were Ford, GM and, Chrysler (Smith, 1996).

Auto Production Business Cycle
The U.S automotive industry saw a steady expansion from its inception until 1978 in which where production reached its all-time peak. The industry showed a small contraction and a quick recovery leading to its peak between 1972 and 1976. In the early 1980 there was a big drop in production units and the industry fell into its first true recession. The industry recovered in the mid 80s peaking in 1988, but never reached its previous high before falling into another recession that lasted from 1990 to 1992 (Smith, 1996). The automotive industry’s production rates have been cycling through different business phases throughout history. In 1999 the automotive industry finally recovered and reached its previous high. Now the automotive industry is again experiencing a recession. Traditionally, during times of expansion the inflation in the economy is stable, and firms invest more capital to meet increased demand. Expansions also contribute to a higher rate of employment. The final stages of expansion, at the peak “demand begins to outstrip the capacity of the economy to supply it. Labour and product shortages in the industry are evident in this stage. Contractions and recessions in a business are usually associated with a decrease in the economy’s real GDP. “ Firms faced with unwanted inventories and declining profits reduce production, postpone investment, curtail hiring and may lay off employees”. (Canadian securities textbook, 2008. Ch. 4 p.17). A through is characterized by the curtailing of falling demand and excess capacities. An overall contraction in the business cycle of real GDP lowers inflation and interest rates. “ The trough is reached when consumers who postponed purchases during the recession are spurred by lower interest rates to begin satisfying some of their pent-up demand” (Canadian securities textbook, 2008. Ch. 4 p.17). A recovery in a business cycle only occurs when GDP or business activity returns to its previous peak.

Interest rates
Interest rates are an important determinant of the performance of an industry. For consumers, interest rates represent the available funds they are willing to borrow to satisfy today’s needs. For businesses they represent the cost of borrowing money to invest in the growth of a company. The following graph represents interest rates changes over the years along side automotive production rates and real GDP. Production rates and real GDP decline as interest rates increase (Canadian securities textbook, 2008. Ch. 4 p. 29).

Real GDP
According to economists Ballew and Schnorbus (1994) the automotive industry is one of the best examples of how durable goods drive economic activity. In the US the automotive industry can influence economic change up to as much as 40% but contributes about 4% of the economy’s GDP (Helmut, 1994). The effects of how the cyclical change of the durable goods sector impacts the automotive industry can be exemplified by the industry’s trends in between the years of 1970 and 1991 respectively. The peaks and lows of the expansions following the troughs of 1970, 1975, and 1982 have been significantly above par the gains and losses of 1991. The industry’s cyclical recovery pattern during those years was very similar to the country’s recovery pattern in both GDP and CPI at that time (Ballew & Schnorbus, 1994). In 1970, the annual percentage change of real GDP was low, just as it was in 1975 and 1982. Over the years, peaks, and troughs in the automotive industry’s production rate follow closely with the time frames of the peaks and troughs in the economy’s real GDP.

Auto Sales: Unemployment and inflation
The peaks and valleys of the GDP also trend in the industry with auto sales. After the peak in 1978 the cycle of sales have risen and fallen. The amount of sales foreseen will not reach the same level it once did because of the advances in technology, creating more long lasting durable vehicles. In addition to technological advances the unemployment rate and inflation rates affect the number of vehicles sold. Auto sales in a positive direction generate the production levels, which in turn contribute to the employment rate (Dolbeck, 2002). One of the trends of employment in the business cycle is that it declines during a recession. This trend is evident and corresponds to the statistics in both the business cycle and employment rates in the U.S between 1970-2009. The weekly unemployment insurance claims both peeked in 1975 and 1982 during the respective recessions. In the current recession numbers for unemployment insurance have more than doubled (Shedlock, 2009). Unemployment and inflation have a direct relationship with one another. Inflation also imposes many cost on society. From 1970-1980, inflation rates in the U.S were high relative to unemployment rates, a characteristic that could be attributed to the growing economy. During these years of high volatility the automotive industry was also generally following trends of expansion. Newer data suggests that higher rates of unemployment are correlated with lower rates of inflation

Conclusion
Many factors effect the performance of an industry and as each industry makes up a portion of real GDP, they in turn can impact the cycle of the economy. The automotive industry is clearly impacted by macroeconomic policy and auto production and sales rates in relation to interest rates, real GDP, inflation and unemployment make this evident.

References

Ballew, P. & Schnorbus, R. (March, 1994). The impact of the auto industry on the economy. The Chicago fed letter. Retrieved on January 29, 2010 from: Bnet database.

Canadian Securities Course Volume 1 (2008). The Canadian Regulatory Environment. Toronto: The Canadian Securities Institute

Dolbeck, A. (2002). Auto industry accelerates as economy slows. Weekly Corporate
Growth. Retrieved January 31, 2010.

Helmut, H. (October, 1994). The automotive industry and monetary policy: an
international perspective. Business Economics. Retrieved February 1, 2010
from: http://www.allbusiness.com/finance/473760-1.html

International organization of motor vehicles- OICA (2009). U.S auto production
statistics. Retrieved January 16 2010 from: http://www.oica.net

Shedlock, M. (July, 2010). U.S unemployment claims: how bad are the “real” numbers?
Economics: recession 2008-2010. Retrieved February 1, 2010. Retrieved from:
http://www.marketoracle.co.uk/Article11934.html

Smith, D. (1996). Automobile industry. History encyclopaedia: World almanac education group. Retrieved January 19, 2010 from: www.history.com

U.S Department of commerce: bureau of economic analysis (2010). Real GDP statistics.
Retrieved January 16, 2010 from: http://www.bea.gov/

Thursday, March 11, 2010

Extracting Tacit Knowledge in the Financial Services Industry

Jenna Doucet (2009).


Extracting Tacit Knowledge in the Financial Services Industry

The financial services industry directly affect a country’s economic integrity and is thus a highly regulated industry where organizations and professionals alike are confronted with a continuous flow of complex rulings and must successfully implement compliance systems in order to report relevant information back to regulatory agencies. Much of the information that is reported back from agency to industry and industry to agency is in the form of explicit knowledge which is often articulated through formal documentation. However, both the financial services industries and their regulatory agencies are often confronted with issues regarding the sharing and communication of tacit information. The tacit information that is relevant to the financial investment services industries are generally related to undocumented knowledge of the ins and outs of approval processes or the best methods to resolve issues in different provinces or states (Andrews, 1998). Another form of tacit information in the investment industry are the closely guarded secrets of trading platform technologies and more specifically algorithm or black-box trading. Not only is technology in organizations a large function that contains much tacit information, but technology itself can play a role in decoding tacit information. Lastly, the present state of the economy is causing many financial services companies and investment companies to merge, which renders the transfer of tacit knowledge between individuals from institution to institution crucial.

The first example of tacit knowledge involved in the financial services industry occurs in the investment banking sector whereby an employee maintains knowledge and understanding of a firm’s approval process for taking risks and regulatory issues across different provinces and states. The types of firm-specific skills required to successfully function as an investment banker require that an individual not only be familiar with explicit knowledge of trading policies and underwriting risks, but a thorough grasps of the firms communication policies, that is one must come to understand how to communicate to executives why a particular investment is worth risking the firm’s capital over. As Morrison and Wilhelm (2007) state, much of these skills are tacit and may require “ an understanding of a private company language” (p.285), and that “ this type of knowledge is hard to acquire, and is notoriously hard to write down. We refer to it as the firm’s culture” (p.285). The best way to extract this type of tacit information is through mentorship, the most effective way to gain from the experience of a mentor in a firm is from participating in an internship, which in itself is a competitive task.

The importance technology plays for financial institutions cannot be overemphasized. A good trading platform is one of the core components of any successful investment firm. While some Banks such as BMO Financial Group choose to licence their software from companies like Bloomberg, other financial institutions such as First New York Securities develop their own trading platforms internally. The key to their competitive advantages rest in closely guarding trade secrets so to speak. Many papers have been published about trading algorithms, time series and other relevant material that expert developers and programmers can use and refer to in developing complex trading platforms, however successfully combining efficient market hypothesis, market heterogeneities, forecasting, data filtering, scaling laws, time series, volatility models, Bayesian estimation theories, distributed processing, and other complex processes into meaningful software that allow traders to accurately interpret market information involves a great deal of tacit information. Extracting tacit information from professionals in the field of technology requires a great deal of technical knowledge to begin with and individuals who have achieved such levels of expertise are not eager to give it away.

Although there is a great deal of implicit information in the creation of technology, some technologies exist specifically to help organizations extract tacit information and record it for the internal use of employees. An example of such technology is the Knowledge Management (KM) System. These systems privately track the expertise of individuals within the organization and conveniently store the information into a database or a “network of experts”, who can later be probed (Boghani, Long, and Jonash).Mergers render the transfer of tacit information important because each of the different companies undergoing the process have accumulated different expertise and tacit employee knowledge over the years. In order to benefit from each other’s areas of expertise such information needs to be transferred to and from each organization. There is no protocol manual on how to best accomplish this task, however it certainly requires the willingness of key employees to share information and collaborate with others to take effect. A Knowledge Management System would certainly be an asset.

Conclusion

In conclusion the financial services industry is very complex and involves many facets of tacit information. In some instances organizations and individuals benefit from protecting the knowledge they have require, but at the expense of their competitors or others seeking to enter the workforce. In some instances, for example with mergers, the extracting of tacit information is crucial and can be accomplished through networking, the willingness of employees to share information and with the aid of a Knowledge Management System.

References

Andrews, L. (November, 1998). Regulatory Information Overload. KM World Magazine. Retrieved on September 8th 2009 from: www.kmworld.com

Ashok, B. & Boghani, D. & Jonash, R.Technology intelligence and monitoring

System (TIMS). Retrieved on September 9th 2009 from ProQuest database.

Morrison, A. &Wilhelm, W. (2007). Investment banking: institutions, politics, and law,Volume 10. New York: Oxford University Press.

Sale and Leaseback

Jenna Doucet, Camile-Lyn Mundy, Richard Davidson,
Charles Tranhike Mary Moroso (2010).

Sale and Leaseback

The U.S. economy is slowly recovering from a credit crisis that has gravely impacted the housing market. Although, the recession take took place through most of 2008 and 2009 is now mostly over, the devastating consequences it has had for many homeowners will not be soon forgotten. Before the recession began the housing market was booming, individuals’ were borrowing more money than they could afford to finance homes that were grossly overpriced. As the recession made way, individuals’ were losing their jobs, forgoing mortgage payments and forced to sell their homes or undergo foreclosure. The possibility of losing their homes, sparked creativity in some individuals and a new trend in sale- and leasebacks emerged. The article Homeowners should steer clear of sale-leasebacks, provides valuable insight into this new trend, the intended purpose of the sale-leaseback, and on the legal implications of going from homeowner to tenant.

Traditionally, sale and leasebacks have been used in commercial real-estate as a way for businesses to generate capital to fund expansions or to take advantage of tax deductibles. For one lease payments are one-hundred percent tax deductable and renting instead of owning assets impacts the company’s balance sheet as those assets are converted into contingent liabilities (Lecky, 2009). Large corporations such as the New York Times, Bank of America, SunTrust and Citibank have all benefited from multi-billion-dollar sale and leaseback agreements says the article, however it is a completely different ball game in residential real-estate. The article quotes, Steve Goddard, an experienced realtor in California who says “ These deals are pretty complex things” (Para, 3), “ And even people that have some expertise or real estate acumen call attorneys before signing anything, much less homeowners” (Para, 3). As the purpose behind the sale-leaseback, is often to give desperate homeowners a way to stay in their homes, it is unlikely that the homeowner will have the resources to pay for a proper leaseback agreement. According to the article the supposed win-win of the homeowner receiving capital to pay his or her bills, and the buyer’s built-in tenant is just a façade for bigger risks. Accordingly, if the buyer runs into his or her own financial potholes, the original homeowner, now tenant will have little legal recourse of staying in their home. Furthermore, in residential real estate sale-leasebacks “ often end up costing more money in the long-term: the seller becomes a renter and losses the chance to built equity in their home” (Para, 5).

The individuals rights also change when becoming a tenant. For example, the tenant is now expected to comply with the requirements of the lease contract and has less flexibility once the title of the property changes and is registered in the name of the new owner. Perhaps one of the most significant changes is that the owner, now tenant can no longer use the property as a security for financial loans. Another important matter is that as the tenant is both the seller and occupant, he or she cannot expect the new landlord to guarantee the building or its conditions. As a result, it is often stipulated in lease agreements that the tenant is fully responsible for maintaining the property and assuming the capital costs. The tenant will not benefit from the capital expenses he or she assumed while occupying the premise once the contract is over (Hahn, 2007). Additionally, all changes, improvements or modifications of the premise will have to be approved by the landlord and not subject to the original owners taste as it was previously.
Sale-leaseback is a very versatile arrangement as it fits into any property type. In conclusion a sale-lease back agreement can be quite an attractive alternative when a individual is faced with the possibilities of losing their property. The advantages can be interpreted to both buyer and seller. The buyer gets a built-in tenant, and the original owner gets to retain his or her property on the terms outlined in the agreement. However, there is a good chance of disappointment and entering into a residential sale-leaseback arrangement as varying un-foreseen circumstances may arise in which the original owner now the tenant will have little or no recourse in a court of law to stay in their home.


References

Anonymous (March, 2009). Homeowners should steer clear of sale-leasebacks.

LexisNexis. Retrieved on March 1, 2010 from: http://www.allbusiness.com/real-
estate/commercial-residential-property-commercial/11913434-1.html

Hahn, T. (2007). Sale-Leaseback transactions. Blakes. Retrieved on March 1, 2010
from:http://www.blakes.com/english/view.asp?ID=1897

Lecky, J. (2009). Demand increases for sale/leaseback transactions. Retrieved on March 1, 2010 from: www.avisonyoung.com/.../AY_Sale_leaseback_article_no_blue.pdf

Organizational Behavior

Jenna Doucet (2010).

Organizational Behavior

One of the most important success factors for an organization is the management’s ability to successfully apply organizational behavior theories and practices. Organizational behavior is about understanding the needs of individuals. Within the modern concept of organizational function, new trends and terms are beginning to emerge to describe how organizations achieve their goals. The concepts of organizational culture, diversity, corporate social responsibility, organizational effectiveness and efficiency, and organizational learning are terms receiving much attention in the corporate world (McShane, 2006).

Many organizations rely on their corporate culture to stay ahead of competition. Pool (2000) proposes that an organization’s culture can positively reinforce the practice of optimal praxis and behaviors within an organization. One of the responsibilities of management is to maintain and establish a positive culture. A good leader establishes a positive and healthy organizational culture by motivating his or her subordinates to perform at a high- level, by promoting open communication, and establishing positive authority. "Management is about human beings. Its task is to make people capable of joint performance, to make their strengths effective and, their weaknesses irrelevant. This is what an organization is about, and the reason which management is the critical, determining factor"(Drucker, 1990, p. 221).

Diversity is another large success driver in a company. Diversity is about more than race and gender; it is about differences in religions, cultural beliefs, capabilities, individual needs, and more. Bazile-Jones (1996) notes, “ In the past, many have considered diversity issues to be the domain of politicians and social engineers who have focused on legal and regulatory solutions to ensure workplace diversity and enhance social welfare” (p. 9). The author argues that today diversity is the prerogative of all organizations. The author also explains that globalization has shifted our entire views on organizations. If Canadian firms and individuals, “ are to achieve sustainable commercial advantage domestically and globally, we must understand how diversity, as one of our intellectual assets, can contribute to long-term organizational health and survival” (p.9). Incorporating diversity as an organizational value can make an organization attractive to others that value diversity, can provide new business opportunities, can create added value to customer support and can foster flexibility and innovation (Bazile-Jones, 1996).

To thrive in the public’s eye, a company must meet certain social responsibility requirements; the organization must consider where it can provide value beyond its products and services (Bateman & Snell, 2007). Consumers and employees want to work for and buy products and services they can feel good about. When an individual works for an organization that does good for the world, he or she is more motivated to perform in the best interest of the company. When a consumer purchases a product or a service from a company that promotes social responsibility, he or she will feel better about their purchase and will want to support the organization with his or her business.

Globalization is not only a driving force in diversity issues but it also plays a big role in an organization’s effectiveness and efficiency. Because more organizations are going global, being efficient and effective for a customer base is critical in staying ahead of the competition. One of the Key ways to take advantage of the global market is to embark in new initiatives through the optimization of how and where products are built. Another area that contributes to effectiveness and efficiency is an organizations willingness to be flexible with their employment and the employee’s willingness to manage his or her own career and develop new competencies. This concept is known as employability (McShane, 2006).

One of the most important aspects in an organization is the interaction of knowledge within the company. Today companies make use of knowledge management to structure their organization’s ability to acquire and share knowledge. An organization depends on human capital; the knowledge held by employees, structural capital; the knowledge attained within an organization’s structure, and relationship capital; the value knowledge gained from an organization’s outside relationships and influences from customers, suppliers and others. An organization that has adapted to a learning approach has the ability to create a flow of information and communication between each source of knowledge (McShane, 2006).

An organization can achieve great success by balancing both internally and externally the components above. Whether the organization is creating value by ensuring employees are striving to reach the organization’s goals, or promoting diversity, and learning to ensure employees are educated with the knowledge to address the needs of each customer.


References

Bateman, T. & Snell, S. (2007). Management: Leading and collaborating in a
competitive world (7th ed.) New York: McGraw-Hill.

Bazile- Jones, R. (1996, June). Diversity in the workplace: why should we care. CMA
Magazine 70(5), 9-12. Retrieved January 27, 2010 from Ebsco-Host database.

Drucker, P. (1990). The New Realities. Mandarin: London. Retrieved January 26, 2010
from Ebsco-Host database.

McShane, L. (2006). Canadian organizational behavior (6th ed.). Canada: McGraw-Hill Ryerson

Pool, S. (2000). The learning organization: motivating employees by integrating TQM
philosophy in a supportive organizational culture. Leadership & Organization
Development Journal. 21(8), 373-378. Retrieved January 27, 2010 from General OneFile via Gale.

A Business Model of the functions of Management

Jenna Doucet (2009).

Abstract

The purpose of this paper is to define the four classic functions of management. To better illustrate the implementation of the functions of management, examples will be applied to a business context from RSC Business Group.


A Business Model of the functions of Management


With old companies, once the cornerstone of the economy, dying, and new companies struggling to emerge , the survival of business is more than ever dependent on strong applications in management . In the new economy, arrogance, risk taking, and casual management are not enough to promote success. Understanding the classic concepts of management are the key to a successful company. This paper defines the functions of management: planning, organizing,leading, and controlling, and illustrates them through examples of their implementation inside a business culture ; in this case I will be using RSC Business Group as a model.


RSC Business group is a business consulting firm which offers professional consulting services and executive training. The company focuses on entrepreneurs and business owners to promote success, grow, and add value to their companies.

Planning
In his book Management: Leading and Collaborating in a competitive world, Bateman (2007) describes planning as defining business goals and the actions required for achieving them. Bateman (2007) writes that the historical views of the top down approach, where plans where established at the executive level and passed down, are not effective in delivering strategic value or competitive advantages. Bateman (2007) writes, “Now and in the future, delivering strategic value is a continual process in which people throughout the organization use their brains and the brains of customers, suppliers, and other stakeholders to identify opportunities to create, seize, strengthen, and sustain competitive advantage” (p.17). RSCBG has adapted to this model and engages in dynamic interactions with employees and customers in order to identify new opportunities. Part of RSCBG planning process is to deliver preliminary business assessments to companies, the gathering of information about all functions and aspects of the customer’s organization, in which RSCBG gains understanding of their customer’s needs. The Information is turned into value as RSCBG designs and offers solutions on its basis. Bateman (2007) summarizes this process as the need for creating more and more value for the customer.

Organizing
0rganizing is coordinating all functions in relation to business. It covers human, financial, and informational resources and includes defining organizational structure , attracting customers, appointing responsibilities, and allocating resources to maximize efficiency inside the organization. Historically, organizations limited themselves to charts that identified business functions, personnel reporting systems, and rigid plans (Bateman, 2007). 0rganizations like RSCBG understand that today, adaptability does not fall into the category of “cookie cutters.” Bateman (2007) states that effective managers implement new forms of organizing and view people as their most valuable resources. RSCBG has adapted to Bateman’s notion of creativity and innovation. RSBG does not constrain itself to geographical limits and takes advantage of globalization by employing and serving individuals around the world. Furthermore, RSBG invite their employees to create their own niches within the organization and are thus able to attract diverse and leading- edge individuals. In Managing by values, Dolan and Garcia (2002) write that self-organizing chaos is a key component of creativity and innovation. The ability to establish organization within chaos depends on a free flow of values and principles for action within the company’s management. Dolan and Garcia (2002) explain that when individuals are not confined to narrow roles, they are able to grow in potential.

Leading
Leading is the stimulation of the workforce within an organization to meet high standards (Bateman, 2007). Thomas (1999) states that leading activities include decision- making, communicating, motivating, aligning, and developing individuals within the organization. Bateman (2007) further notes, “Today and in the future, managers must be good at mobilizing people to contribute their ideas, to use their brains in ways never needed or dreamed of in the past” (p. 17). RSBG understands the importance of mobilizing individuals and emphasize developing and training their employees.

Controlling
The controlling function is responsible for establishing performance standards, measuring, evaluating and finally correcting performance (Thomas,1999). Controlling is what ensures the organization’s success (Bateman, 2007).RSCBG implements many standardization charts to monitor the company’s performance and administer changes if needed. Adapting in the new economy and ensuring an organization’s success
depends on the understanding of the four functions of management, how they have
been utilized in the past and how they are implemented today.

References

Bateman, T. (2007). Management: Leading and collaborating in a competitive world.
New York: McGraw- Hill.

Thomas M. (1999). Mastering people management. Retrieved on July 9th, 2009 from:
http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=24876675&site=ehost-live

Dolan, S. & Garcia, S. (2002). Managing by values: Cultural redesign for strategic
organizational change at the dawn of the twenty-first century. Retrieved on June 9th, 2009 from: http://swtuopproxy.museglobal.com/MuseSessionID=4fa6641b7f21
8303a69d5ecaaad42c1/MuseHost=www.emeraldinsight.com/MusePath/Insight/ViewContentServlet?contentType=Article&Filename=Published/EmeraldFullTextArticle/Articles/0260210202.html

Rational Choice Theory

Jenna Doucet (2010).

Abstract

The aim of this paper is to demonstrate how the six step process of the rational choice problem solving method can be applied to any organizational problem in a general way. The paper uses Service Canada as an example. This paper is not intended to stipulate the problems or shortcomings of rational theory or the process at large.

Rational Choice Theory

In light of new trends in their clients needs Service Canada has been in the process of implementing several new paradigms in their service delivery (Tan, 2007). The government’s application of new delivery methods could be facilitated through the rational choice process of problem solving. The rational choice theory facilitates problem solving by dividing the process into six steps: identifying the opportunity, choosing the best decision process, choosing the best alternative, implementing the selected alternative, and evaluating the decisions outcome.

The first step in the process is identifying the problem or opportunity. The focus should be on the extent of the problem and not on the causes. For Service Canada the problem was in the gap between the number of clients and request they were able to process in a day and the number of clients they wanted to service. With the growing number of clients needing its services, the organization faced both a problem and an opportunity to improve its delivery methods.

In the second phase, choosing the best decision process, Service Canada should look at whether the decision is a programmed decision and has been solved in the past or if it is a non-programmed decision and requires going through all of the steps in the decision process (McShane, 2006). In the case of Service Canada’s current problem it is a programmed decision.

The list of possible solutions that Service Canada could implement is large. Service Canada could implement solutions that have worked well in the past, or that have worked for other organizations in similar situations. For example, Service Canada could open more offices and hire more employees, train current employees to process request faster, upgrade their knowledge management software to enhance efficiency, make more services available online, and provide more self-serve units at their offices.

The fourth step would be to choose the best alternative. From a cost perspective, the most cost efficient solutions would be to train employees to process request faster by upgrading their technological systems and by providing more online services. The cost of the solution is an important factor to the government as Service Canada is a non-for profit organization aimed to support Canadian citizens. According McShane (2006) to the rational choice theory suggests that individuals make ‘rational’ decisions based on their own ideology. In this scenario the government as a decision-making would be interested in the option that would allow them cut costs in the long run. Technological advances could keep government costs down and allow for more citizens needs to be processed with less overhead cost of maintaining additional offices and employees.

The next step is to implement the selected alternative. This is probably one of the most difficult steps in the process. This involves moving the decision from idea into reality. This step is probably also one of the lengthiest processes. To accomplish this difficult process and its goals Service Canada resulted to private sector technology companies (Tan, 2007).

The last step of the process is evaluating the decision. The best way for Service Canada to monitor the success of its implementation would be to look at overall figures, the number of complaints totaling its offices and conduct service quality surveys. McShane (2006) says that ideally, this information should come from systematic benchmarks, so that relevant feedback is objective and easily observed” (p. 216).

The rational choice problem solving theory is a process that can be easily applied to solve any organizational problem. The example above illustrates how the process could be applied to Service Canada.


References
McShane, S. (2006). Canadian organizational behavior (6th ed.). Canada: McGraw-Hill
Ryerson.

Tan, K. (2007). Service Canada: a new paradigm in government service delivery.
Leadership in a Networked World: John F Kennedy school of government.

Power and Politics

Jenna Doucet (2010).


Power and Politics

Power is commonly given a negative connotation. For example, the color red, which is a symbolism for power, is much less frequently used in advertisements than the color blue because of its obtrusiveness. Furthermore, a popular political slogan during the cold war days was “better dead than red” (Pigments through the ages, 2009, n.p). The meaning of power has been misunderstood because of abuses made by individuals in positions of authority and power. However, according to McShane (2006) the true meaning of power is simply the ability of an individual or organization to influence. Although power and influence can be exercised positively or negatively and for both positive and negative outcomes, it would be a mistake for organizations to allow negative connotations to limit the benefits of power within an organization because. Rather, organizations should avoid promoting and instead condone political behavior. Organizational politics is an influence tactic exercised at the expense of one’s coworkers, and the entire organization (Gilmore, Ferris, Dulebohn, & Harrell-Cook, 2010). Power and organizational politics, frequently intertwined, make drawing the line between the two a difficult task. A throughout understanding of both, however, may serve as an important first step.

Organizational power

One of the most important factors to bear in mind is that power is a two-way relationship. To this effect Ambur (2009) states: “ Power and authority come from the person being influenced- not the person in the more powerful position. If the follower chooses to not follow them, they are no longer leaders. Leadership is really followership” (p. 3). Furthermore, McShane (2006) believes that “ The most basic prerequisite of power is that one person or group believes it is dependent on another person or group for something of value” (p. 345). Interdependence between parties forges the relationship of power and hierarchy in organizations. Power can only really exist in relationships in which each individual has something of value to offer. Five categories make up organizational power, which identify the various ways individuals extrude and perceive power. The key to organizational power is the perception of others as legitimate, reward, coercive, expert, or referent power. It is important to note that the perception of power extends beyond the individual’s position of authority within an organization (McShane, 2006). In evaluating the bases of social power identified by French and Raven (also depicted above by McShane) Ambur (2009) illustrates the relationships between the various expressions of power. Ambur (2009) says that:
“Reward power results from the ability to provide reinforcement for desired behavior. Conversely, coercive power reflects the potential to inflict punishment. In a sense these are not so much two different types of power as they are opposite ends of a continuum. The common and essential element for both reward and punishment is that they are controlled by the superior person and are conferred upon subordinates based upon relationships that are less than perfectly aligned with their behaviors. Referent power is a function of the respect and esteem accorded to an individual by virtue of personal attributes with which others identify. By contrast, legitimate power is based upon authority recognized in accordance, with position in an organizational structure. Referent power is person oriented, while legitimate power is depersonalized. Expert power is a form of referent power resulting from recognized expertise” (p. 1).
Organizational politics
Within any organization there is bound to be a struggle between the power of individuals to influence positively the organization and self-serving politics played around situations or people for selfish reasons. Organizational politics are influence tactics exercised at the expense of one’s coworkers, or the entire organization (Gilmore, Ferris, Dulebohn, & Harrell-Cook, 2010). McShane (2006) states that, “organizational politics is either supported or punished, depending on team norms and the organization’s culture” (p. 345). An important question is to consider why an organization allows such behavior if research shows that it has negative consequences. Political tactic are attributed to conflicts in the workplace, stress, and job dissatisfaction, to name a few (McShane, 2006 and Gilmore, Ferris, Dulebohn, & Harrell-Cook, 2010). The answer can be found by a combination of the following. A work environment with scarce resources will support political behavior if it allows individuals to pursue their goals. A lack of clear structure and decisions may leave more room for ambiguity in political power. Furthermore, team leaders who value personal power have higher propensities to use and support political tactics (McShane, 2006). Gilmore, Ferris, Dulebohn, and Harrell-Cook (2010) state, “ the political environment is created by the actions of organizational members and is influenced by the policies, practices, and culture of the organization” (p. 482). “ Organizational politics can be minimized by providing clear rules for resource allocation, establishing a free flow of information, using education and involvement during organizational change, supporting team norms and a corporate culture that discourage dysfunctional politics, and having leaders who role model organizational citizenship rather than political savvy” (McShane, 2006, p. 347).
Real life applications of power and politics
Conflicts of interest and the use of political tactics to influence individuals within an organization or society make headlines in business on a regular basis. Take for instance the U.S. propaganda of the Bush administration and voting machines controversy. The chief executive officer of the machines manufacturing company at the time, Wally O’Dell, openly declared that he would “deliver” Bush as president. Over the years, there has been much controversy surrounding the public support of political campaigns from influential individuals living public lives. One article devoted to the Winfrey and Obama controversy questions if Oprah is misusing her power and influence to sway the political campaign in her own favour. To this effect, Kohut (2007) says “ there is no telling whether Winfrey can do for Obama what she has done for the countless books and products she's endorsed over the years” (p. 1). What is unique in the O’Dell and Bush controversy is that O’Dell had the potential to ‘fix’ the election. Although never charged with fixing the election, O’Dell’s actions had significant consequences on the company he was working for. In other words, O’Dell was displaying a classic political stunt, in which he was exercising his influence and power for his own self-serving purposes at the expense of the company’s well being. Further complications aroused when O’Dell openly declared upon investigation of his company’s stock performance by the SEC “ There is a lot of pressure in the corporation to make the numbers: We don’t tell you how to do it, but do it” (p. 1). In response, Byrne (2005) states “O’Dell is probably the number culprit putting pressure on people” (p. 1). This type of behavior occurs more often than one wants to believe. Political pressures and power struggles can be found in almost any industry and if the appropriate guidelines in the use of power are not well defined it becomes easy for individuals to abuse their influence.

Power plays an important role in organizations. The consequences can yield positive results or if used in conjunction with political tactics can yield negative results. In practice, power is a two-way relationship in which parties interact accordingly to the resources or values they hold or control. Conflicts arise when resources are scarce, and when there is pressure to achieve goals that may not be realistic. To compensate individuals often manipulate their power to jockey for position and serve their own needs at the expense of others.



References

Ambur, O. (July, 2000). Bases of social power. University of Maryland. Retrieved on

March 9, 2010 from: http://www.slideshare.net/viteriange/bases-of-social-power-

2009.

Bryne, J. (2005) Diebold CEO resigns after reports of fraud litigation, internal woes.

The raw story. Retrieved on March 11, 2010 from:

http://www.rawstory.com/news/2005/Diebold_CEO_resigns_after_reports_of_12

12.html.

Gilmore, C., Ferris, G., Dulebohn, J., & Harrell-Cook, G. (2010). Organizational politics

and employee attendance. Group & Organization. Retrieved on March 9, 2010

from: Sage database.

Kohut, A. (September, 2007). The Oprah factor and campaign 2008. The Pew Research

Center. Retrieved on March 11, 2010 from: http://people-press.org/report/357/the-

oprah-factor-and-campaign-2008

McShane, S.L. (2006). Canadian Organizational Behaviour (6th ed). McGraw-Hill:

Ryerson.

Pigments through the ages. (2009). Retrieved on March 9, 2010 from:

http://www.webexhibits.org/pigments/.
.

Legal, Social, and Ethical Responsibilities in Business

Jenna Doucet (2009).

Legal, Social and Ethical Responsibilities in Business


In the past decade, individuals have been questioning legal, social, and ethical issues concerning organizations closer than ever before. With the aid of the media, business practices have become more transparent. Bateman and Stair (2007) State, “ There’s an increased readiness to believe negative things about corporations today, which makes it a dangerous time for companies ” (p.150). In order to remain credible in the public’s eye, it is imperative that companies keep good moral ground. Examining the pitfalls of organizations, such as Hollinger International (HII), that have been scrutinized for engaging in legal, social and ethically unsound behaviours, can set organizations on the right path.

Background
Hollinger International Inc. (HII) is a public newspaper publishing company (Boritz and Robinson, 2004). The controversy surrounding HII surfaced in 2003, while the company was under the management of Conrad Black. An article appeared in the Star reporting that Black and his associates faced a total of 42 charges relating to an alleged $US 60 million in theft, as well as charges of receiving unauthorized bonuses and other perquisites (Westhead and Doolittle, 2007).

Legal responsibility
All companies are subject to legal responsibilities and are required to follow the law, which impact organizations planning process. In order to operate soundly, a company must familiarize itself with external factors that govern the industry that the company operates within. A legal issue presented in the HII case revolved around Black’s breeching of fiduciary and contractual duties by “diverting to another company a valuable opportunity that properly belonged to the corporation (Delaware, 2004, p.1) Black and his associates had received much of their ill-gotten gains from “so-called non competition payments related to Hollinger International’s sale of newspapers from 1998 to 2002” (Westhead and Doolittle, 2007). It was reported that in order to transfer HII corporate assets, Black and his associates “failed to disclose material information in required filings with the SEC, that they “falsified corporate books and records” (p.4), and “failed to accurately reflect transactions”. Securities legislation requires the disclosure of certain prescribed information concerning the business and affairs of public companies. This includes periodic financial statements, insider trading reports, an annual information form (AIF), press releases and material change reports (Canadian Securities Institute, 2008).

Social responsibility
In order to thrive in the public’s eye, a company must meet certain social responsibility requirements, thus in the planning stages it must consider where it can provide value beyond its products and services. For example, a company can meet it’s social responsibilities by supporting important causes and making charitable donations (Bateman and Stair, 2006). HII made several charitable donations while under Black’s management, however, the chief executive’s motives are questionable as he was embezzling funds from the very company he was making contributions with (Fabrikant, 2004).

Ethical responsibility
In the planning process, organizations must think about setting guidelines in order to govern their business’s practices and to protect the company, it’s employees and shareholders; this is usually done by establishing ethical codes of conduct. The Caux ethics is a system of principles designed to help organizations establish ground rules for ethical practice. The first principle is to the responsibility of businesses beyond shareholders toward stakeholders and states that “Businesses have a role to play in improving the lives of all their customers, employees, and shareholders by sharing with them the wealth they have created” ( Bateman & Stair, 2006, p. 175). Black failed to honor the first principle of HII’s ethical responsibility by selling one of it’s assets, the American Trucker, to another corporation and transferring the US$ 2 million non-competition agreement payment to a related entity, therefore directly benefiting from the transaction at the expense of HII’s shareholders (Boritz and Robinson, 2004).
HII had a legal and ethical code of conduct in place, however, it did not provide adequate protection for the organization and it’s shareholders. The code of conduct was amended on November 29, 2004 and “provides greater detail to employees, officers and directors on the company's ethical guidelines in a number of areas” (para 2, SEC). Some of the amended guidelines include, related party transactions, protection and proper use of assets, and public company reporting. The new amendment addresses unethical behavior in such that it is difficult to manipulate the law in order to behave unethically.

Conclusion

Under Black’s management, HII has been subject to legal, ethical and social responsibility issues. The poor legal and ethical code of conduct, established by HII, has no doubt played a role in facilitating Black’s unethical practices. The downfall of HII is an example of the devastating effects unethical behaviour can have on a company.

References


Bateman, S. & Snell, A. (2007). Management: Leading and collaborating in a

competitive world (7th ed.). New York: McGraw-Hill.

Boritz, J. & Robinson, L. ( May, 2004). Hollinger International Inc. Center for
accounting ethics: University of waterloo.

Canadian Securities Course Volume 1 (2008). The Canadian Regulatory Environment. Toronto: The Canadian Securities Institute

Fabrikant, G. (2004, September 2). Charity Begins at home? Perhaps Not at Hollinger. New York Times. Retrieved from http:www.nytimes.com

Hollinger International Inc code of ethics. ( 2004, November 29). Securities and
Exchange commission. Washington, DC. Retrieved August 4, 2009 from:
http:www.secinfo.com

Mergers and Acquisitions Corporate Opportunity Breach of Duty of Loyalty Injunctive Relief Hollinger International, Inc. v. Black. (March 17, 2004). Delaware Law Weekly, 7(11) n.p. Retrieved August 3, 2009 from Gale database.

Westhead, R. & Doolittle, R. ( 2007, July 11). Black jury deadlocked. The Star. Retrieved from: http:www.thestar.com

Introducing Mellors Consulting on the Internet

Jenna Doucet (2009).

Introducing Mellors Consulting on the Internet

Mellors Consulting is a hospitality recruitment services agency that is currently undergoing a business reengineering process. The company, formally introduced as Lougheed Group has been prominent in the Toronto market for over thirty five years, however, their aspirations to grow both nationally and internationally have inspired the company’s restructuring and new name (Mellors, 2009). One of the company’s most important strategies in developing worldwide brand recognition is to create a well-articulated plan as to how the company should proceed in introducing Mellors Consulting on the Internet. The company’s strategy will reflect the unique trends that affect the web as a medium and the website’s functionality requirements.

Trends affecting the web

As described by Dholakia & Rego (1998) “ the web represents a relatively easy an extremely inexpensive way to advertise” (p. 724). While Mellors Consulting will certainly take advantage of the web’s low cost to advertisement they will be faced with a reduced effectiveness in marketing if their website gets lost in the clutter of countless other web pages offering similar services (Dholakia & Rego, 1998). To address these issues Mellors Consulting must establish a strong web presence and take measures to ensure that potential customers can easily access their website in popular search engines.

Developing Strong web presence

Mellors Consulting wants to present its customers with an image of professionalism and of connectivity in the industry. The Company is seeking to differentiate itself from common unspecialized recruiting companies and job search engines by establishing a strong web presence that promotes the company’s values of loyalty, confidentiality, discretion, responsiveness, and reliability in order to attract elite clientele (Mellors, 2009). Part of this Key process is to create a website that is visually appealing, easy to navigate, grammatically correct, and returns strong search responses.

Developing strong search responses

In order to address the effectiveness with which a website appears in a search engine, it is important to note how search engines provide users with the resources they are searching. Ohtaguro, Makato, Nakashima & Ito (2004) write that an ordinary search engine, such as Google rank websites according to the degree of closeness between the results and the query that are found using a keyword matching technique. Google also measures the popularity of each website and uses that information in its calculation of rankings. In order to take advantage of Google’s ranking information it is essential that Mellors Consulting identify what words potential job seekers and customers will input in the search engine and conform their website and search topics to contain those key words. Essentially, Mellors Consulting will ensure that meta-tagged descriptions and keywords are added in the creation of their website. Another tactic would be to purchase advertisement spaces at the top of Google’s search result pages.

Web page functionality

In addition to creating strong web presence and easy search features, Mellors Consulting must focus on the functionality requirements of the website which are the ability to easily add and edit job postings, and the ability for users to upload resumes and apply for potential positions. Furthermore, the company will enhance its services by providing a client area for online statements and customer service (Mellors, 2009). Based on the complexity of the website’s functionality features, Mellors Consulting has opted to purchase web designing and hosting services. In order to ensure the website’s success in handing off the project to professionals, Mellors Consulting has also created a list of design, interface and application requirements.

Webpage design

First and foremost, Mellors Consulting require the incorporation of their company logo in the website. Additionally they have established that they want their front page to contain animated graphics with links into the website. One idea is to use a windowpane approach and rotate graphics into the panes with two of the panes being used as links into the website (Mellors, 2009).

Interface requirements
There are many interface technologies to choose from when designing a website. “ Not all pages require the same functionality or deliver the same type of information and therefore require different technologies within them. One of the functionalities to consider is how “to translate the design and intended functionality of the pages into an interface that is usable on the web” (Rayport & Jaworski, 2004). The are a number of different languages that the interface may make use of, however Mellors Consulting has decided to use mainly Java format for its compatibility advantages (Stair and Reynolds, 2006), HTML, and Wireless Markup Language (WML) in order to extend their customers the flexibility of viewing the website on their PDA’s and other mobile devices. Another important functionality to is the display and manipulation of information that appear on the website which stream from various sources. While it is possible to build web pages that are static, it is more common for the content of a webpage to be stored in a database rather than on the page itself (Rayport & Jaworski, 2004). Mellors Consulting currently stores large amounts of information relating to potential job candidates on a database system, thus some thought will need to be given as to how the website and the database will interact.

Application requirements

The application development involves identifying what functions the website needs to perform. These functions include expecting that when one click’s on a link that the application will take them to another pre-determined page and defines complex relationships such as how a user performs a search for an item. A functionality matrix is one that lists all of the capabilities a website needs to have as well as an indication to where these functions can be found (Rayport & Jaworski, 2004). Thus, Mellors Consulting has developed a detailed site map as provided in the appendix.

Conclusion
Introducing a company on the Internet can help grow and expand a business, although a seemingly simple task, it involves careful planning and consideration on the company’s part, even when involving professionals. In order to maximize the web designer and web host’s services and to facilitate the project Mellors Consulting has formulated a list of the requirements they wish to incorporate in their website. The company has carefully considered trends affecting the web as a market and has developed strategies to overcome specific challenges. Furthermore, Mellors Consulting has highlighted specific functionality requirements such as web page design, and interface and application requirements.



References


Dholakia, U. & Rego, L. (1998). What makes commercial web pages popular? European

Journal of Marketing, 32 (7/8), 724-736. Retrieved from ProQuest database.

Mellors, L. (2009). Website and branding brief. Mellors Consulting.

Rayport, J. & Jaworski, B. (2004). Introduction to E-Commerce (2nd ed). New York:
McGraw Hill companies.

Sato, k., Ohtaguro, A., Makato, N., & Ito, T. (November, 2004). The effect of a website directory when employed in browsing the results of a search engine. Department of Computer Science and Intelligent Systems, Oita University. Retrieved from ProQuest database.

International Trade

Jenna Doucet (2010).

International Trade

International trade influences global and national economies most directly by contributing to the gross domestic product and the budget surplus or deficit of a country. One of the advantages of international trade is the stability and interdependence it creates amongst countries, while one of the significant disadvantages is that “the more globally connected a country is the less flexibility it has with its monetary and fiscal policy” (Uhlhaas, 2001, p.1). The country’s exchange rate is important to international trade as higher domestic dollars make foreign investments more expensive and imports cheaper and vice versa. The policies that facilitate international trade directly impact the investment industry by influencing which countries an organization chooses to invest its capital in. International trade also influences the investment industry indirectly with complementary monetary policies such as the exchange rate.

Many industrial economies are dependent on international trade. For example in 2005, Canada’s exports of goods and services totaled 38% of GDP (CSI, 2008) A country’s GDP is made up of consumption + investments + government spending + (exports – imports). If net exports are positive, the countries GDP will increase. A negative net export number results in a trade deficit in the current account, which must be financed by the government either by borrowing funds internationally or by selling more capital assets than it purchases (Gorman, 2003). Furthermore, the growth of the Canadian economy is not only dependant on it’s domestic performance but on the growth and performance of international countries that import Canada’s goods and services (CSI, 2008). “A number of factors influence the performance of Canada’s trade. The most important is the relative pace of demand in foreign and Canadian economies. Strong growth in U.S. demand for automobiles, raw materials and other products made in Canada boosts exports”(CSI, 2008, p.17). This was obvious during the 2008-2009 recession in the U.S, one of Canada’s most important trading partners. As the U.S economy worsened, there was less demand for Canadian imports, which affected Canada’s economy. The interdependence between foreign countries trading with one another leads to cooperation between countries and is helps support stability, prosperity and peace (Uhlhaas, 2001). Some countries are better at producing certain goods and services more efficiently than others. Cooperating with other countries allows a country to focus its resources on producing the goods it is most efficient at producing. In this way the country does not have to sacrifice resources that are better utilized for one product on other products the economy needs, as these products are easily imported into the country. Furthermore, a country can maximize the production of products their economy is best suited to produce and export a portion of those products for a profit. The country can then use this revenue to fund the purchase of importing goods its economy cannot produce efficiently. This interdependence between countries motivates foreign governments to promote political stability in their countries’ to attract investors and to create a demand in imports of their goods. The prosperity of many countries is correlated with the amount of products and services they are able to export. Furthermore, countries that are rich in scare resources attract the aid of stronger more economically and politically sound countries. In the past the U.S. and Canada have been more prone to send peace troops in countries that they had scare resources their countries were dependant on. For example, U.S and Canadian troops were sent to Iraq, where there is an abundance of oil, however, little help was offered to promote peach in Rwanda during the genocide. Unsurprisingly, Rwanda is not an important source of goods and services for North America.

On the flip side one of the disadvantages of being so connected to other countries is the impact it has on a country’s ability to effectively implement fiscal and monetary policy (Uhlhaas, 2001). For example, if a country’s exchange rate regime is fixed for international trade purposes that country’s monetary and fiscal policies will be more restricted than countries with flexible exchange rates. Generally, a country’s foreign exchange reserve is limited and in order to keep this exchange rate fixed it must do so by adjusting the economy to the desired rate. Much of the country’s monetary policies will be adjusted to meet international trade goals potentially at the expense of other economic goals. According to Uhlhaas (2001) “ This means that if monetary and fiscal policies are being used to achieve exchange rate goals, they cannot also be used to achieve domestic goals” (p.1).
Exchange rates politics are of great importance for domestic policy-makers because they affect the demand of exports from foreign countries. “ In an economy as dependent on trade and open to international capital flows as Canada’s, the behavior of the exchange rate is vitally important. The value of the Canadian dollar relative to other currencies influences the economy in a number of ways. The most important influence is through trade” (CSI, 2008 p. 16). Higher dollars in a country, make that country’s exports more expensive in foreign markets, and make imports in foreign markets cheaper. A country with a higher number of exports than imports, such as Canada benefits from a lower exchange rate, while country’s that are more dependant on imports such as the U.S benefit from a higher exchange rate.

International trade policies directly affect organizations that invest in foreign countries. For example, prior to the Investment Canada Act (ICA), the Foreign Investment Review Act (FIRA) regulated foreign domestic investments (FDI) in Canada. FIRA exerted more control over FDI’s and investments were subject to a longer process of approval. After ICA, foreign investments in particular sectors were no longer reviewed. The loosening of international trade policies resulted in a bigger demand for FDI’s in Canada (Wallace, 2002). Similarly, the relative ease with which an investor can purchase a foreign government bond from a particular country is important in determining if he or she will invest in that country. Some countries impose taxes on foreign investments, which impact the return on investment and discourage investors from purchasing foreign bonds. Governments normally issue taxes on investments as a protectionist measure to prevent too much investment in the country, which could lead to a potentially unwanted appreciating dollar. International trade indirectly affects the investment industry as complementing monetary policies influence the price of and return of investments. For example, the exchange rate is an important to many bond investors purchasing foreign bonds.

International trade is an important economic factor in many countries as it is a large contributor of GDP. Today, many countries are interdependent on one another for the specialization of products, and production efficiency globalization gives them. However, the more globally interdependent the country the more restraint is placed on the country’s ability to implement domestic monetary and fiscal policies. The exchange rate plays an important role in attracting foreign exports and dictates the price at which a country can import goods. International trade is also a big player in the investment industry as direct trade policies and complementing policies dictate which countries attract an investors’ capital.

References

Canadian Securities Course Volume 1 (2008). Economic policies. Toronto: The Canadian Securities Institute.

Gorman, T. (2003) The complete idiot’s guide to economics. Penguin Publishing.

Wallace, C. (2002). The multinational enterprise and legal control: host state sovereignty in an era of economic globalization. Springer.

Uhlhass, A. (2001). What are the main advantages and disadvantages of global free trade? Does it exist in practice? University of Leeds. Retrieved on February 22, 2010 from: http://www.grin.com/e-book/11518/what-are-the-main-advantages-and-disadvantages-of-global-free-trade-does

Intellectual Property Protection

Jenna Doucet (2010).

Intellectual Property Protection


The Spiro-flex Industries v. Progressive Sealing Inc. case highlights some of the controversies involved in the protection of intellectual property. Unlike productions that are covered by the Copyright Act, industrial and utilitarian designs are protected only when registrants are in possession of patents (Yates, Bereznicki-Korol & Clarke, 2008). The case of Spiro-flex case is one in which an inventor, McLeod, entrusted his unpatented design (a pump coupler) and specifications to several manufacturers to produce and market his device. Several companies, including organizations McLeod had originally presented the opportunity to and those involved in the marketing brochures production made copies of the device. In this case the questions that beg to be answered are what possible actions could inventors, such as McLeod take in the event of perceived infringement? What are the arguments for those actions, if any? And what steps can an individual take to protect his or her interests?

The first question involves determining what actions McLeod can take as a result of the perceived violation. The first step would be to contact a lawyer with intellectual property expertise. The lawyer would then help McLeod decide which infringement, if any has taken place. McLeod would also have to decide on bringing the civil law case to court or to a summary procedure. Additionally, McLeod should inform the offending parties in a letter depicting what activities he believes are constitutes of infringement and what his intents are to bring the matters to court. In many cases matters can be resolved without the costly remedies of courts. If an agreement cannot be reached, McLeod could apply for an interlocutory injunction. The interlocutory injunction, while not permanent would prevent further damages before the trial. “ Often, the effect of the interim remedy is so devastating to the offender that no further action need be taken” (Yates, Bereznicki-Korol & Clarke, 2008, p.566).

To answer the second question one must consider the vast category of topics that fit into intellectual property to properly define which laws protect and apply to an inventor’s or creator’s work. The invention is in this case be classified as a utilitarian and functional object and thus is subject to patent law in order to be protected (Richards, 1990). “Patent protection arises upon registration” (Zimmerman, 2001, p. 351). Furthermore, the unpatented concept could be regarded as a ‘trade secret’, in which intellectual property is protected by confidentiality agreements. The parties that are involved have a duty to keep the secret safeguarded. There was no such confidentiality agreement made, thus McLeod could not seek action under this pretense. Furthermore, if third parties are able to reproduce the item than there is no protective recourse for the trade secret. It is noteworthy, however, to illustrate that there is overlapping between intellectual property laws. For example, McLeod’s literacy work, such as the pump’s specifications and drawings, are subject to copywrite law. McLeod could validly argue that the reproduction of the device from his literacy work is an infringement of the Copyright Act. Richard (1990) states, “ Even before the proclamation of the 1988 Act, Canadian lawyers had been able to convince the courts that the copyright subsisting in a plan or drawing could be infringed without the necessity of actually copying the said plan or drawing even if the plan or drawing depicted a functional or utilitarian object” (p. 2). It is likely that under this argument, McLeod’s case would be heard and ruled in his favor.

McLeod could have protected his interest by applying for a patent. The patent gives its holder a twenty-year monopoly for the exchange of the product’s disclosure. Obtaining a patent can be costly and complex. If McLeod was not able to obtain a patent on his own he could have applied for a joint patent with the manufacturing company that designed and produced the spring. McLeod could have used the copyright sign and patent pending in his original documents to warn off competitors. At the very least, McLeod could have established that his product was protected by trade secret law and had individuals who viewed the specifications sign a non-disclosure or compete document.

McLeod did not take the appropriate steps to protect his interest and is thus faced with an unfavorable situation. Although, several options exist for McLeod to amend his rights and he has a valid argument, there is no guarantee that the court will rule in his favor.

References


Richard, L. (1990). Copyright infringement and functional objects: effects of new

section 64 and 64.1 of the copyright act on interlocutory injunction

proceedings. Business and the Law. Publication 116.001. Retrieved March 2, 2010.

Yates, A., Bereznicki-Korol, T. & Clarke, T. (2008). Business law in Canada (8th ed).

Canada: Pearson Education Canada.

Zimmerman, G. (2001). Extending the monopoly? The risks and benefits of multiple
forms of intellectual property protection. Canadian intellectual property review.
Retrieved on March 2, 2010 from: www.ipic.ca/reviews/CIPR1720.pdf

Frustration and Contract Law

Jenna Doucet (2010).

Frustration and Contract Law

The argument of frustration in contract law can be a difficult precedent to establish. Not to be confused with a contractual mistake, frustration occurs when performance is made impossible or is fundamentally changed. Generally, when frustration occurs the party suffering loss is established on whom ever provided services before the frustrating event, or to the party having already paid a deposit or owing money before frustration date. Self-induced frustration on the other hand is considered a breach of contract (Yates, Bereznicki-Korol & Clarke, 2008).

The facts concerning the Teleflex Inc. v. I.M.P. Group Ltd case summary suggests that there was frustration involved in the contract between the two parties, however, monies should still have been payable to Teleflex Inc because the nature of the frustration was in fact self-induced. It was not anticipated by either party that the contract between I.M.P and the Brazilian government would fail to carry out. However, because both parties made provisions in the contract that suggested the possibility of suspension in the shipping of products and a termination clause was made readily available, it is safe to assume that both parties understood the risks that the contract may not be fulfilled. The acknowledgement and agreed-upon provisions made in the contract in relation to the risks involved, make claiming a failure to fulfill contractual duties on the basis of frustration inadmissible. Furthermore, because I.M.P Group and the Brazilian government never reached consensus and never signed any contracts, it could be deduced that I.M.P practiced poor judgement in securing a contract with Teleflex to receive aircraft products for a project that was still non-existent at the time. I.M.P could have prevented their frustration by either waiting until the agreement with the government was signed, or by including a provision in their agreement with Teleflex demanding work only be commenced upon I.M.P’s signing of the contract with the government. This type of self-induced frustration is treated as a breach of contract. It is also said, “ where the parties have anticipated the frustrating event or have provided for one the of the parties to bear the risk of such an eventuality, these contractual terms ( often called force majeure clauses) will prevail.” (Yates, Bereznicki-Korol & Clarke, 2008, p.285). Additionally, Teleflex acknowledged the stop-working letters and sent I.M.P a reminder of the original contract details on the agreement surrounding termination. I.M.P’s failure to respond or disagree with the terms, suggest that they were further confirming and acknowledging their contractual duties; to later claim frustration would be irrelevant. Furthermore, although I.M.P argued that there was never a delivery made, the fact that they had postponed the delivery date several times makes this irrelevant. As the judge in this case, I would request that proper accounting take place to ensure the monies claimed by Teleflex is a just reflection of the costs and profits lost as result from the breach of contract. Furthermore, I would hold Teleflex responsible over the mitigation of their loss, and would expect that they try to sell the completed products and subtract the profits made in that transaction from the profits lost in their contract with I.M.P or that they deliver to I.M.P the completed and or commenced products.

The case of Teleflex inc. v. I.M.P illustrates the complications that can arise in an argument for frustration. However, when it is found that a party has contributed or failed to prevent frustration or provisions were made to account for frustration, refusal to abide by the contracts terms is simply a breach of contract and remedies can be sought after.


References


Yates, A., Bereznicki-Korol, T. & Clarke, T. (2008). Business law in Canada (8th ed.). Canada: Pearson Education Canada.

Alternative Dispute Resolution Case Summary

Jenna Doucet (2010).

Alternative Dispute Resolution Case Summary

The Alternative Dispute Resolution process (ADR) is an alternative way for individuals to resolve disputes without the costly procedurals of going to court. Many institutions have mandatory ADR provision agreements in place when establishing contracts with clients or employees (Bereznicki-Korol & Clarke, 2008). In July 2000, Valerie Biggs Sarofim, a client of Trust Company of the West (TCW) exercised her right to make ADR proceedings on the basis of a dispute with the company. The investment contract Sarofim signed with TCW enclosed mandatory arbitration provisions (Sarofim v. TWC, 2006).

Sarofim motioned for arbitrary resolution when she discovered that her portfolio had accumulated a loss of six million dollars in just three years. Among Sarofim’s complaints of TCW was the investment company’s “ breach of fiduciary duty, fraud, unconscionability, constructive fraud, negligent misrepresentation, negligence, and breach of contract” (Sarofim v. TWC, 2006).

Arbitration is the most imposing of the three types of ADR options and in cases in which mandatory arbitration provisions have been made procedurals closely resemble those of a court hearing. Much like a court hearing, lawyers who are responsible for representing parties, present evidence, examine witnesses: and make arguments before the arbitrator (Bereznicki-Korol & Clarke, 2008). Furthermore, “most jurisdictions provide that the decisions reached by arbitrators are binding and enforceable” (Yates, Bereznicki-Korol & Clarke, 2008, p. 89). The major differences between arbitration and a court hearing rest in the ability of the parties to negotiate and choose the arbitrator based on expertise in the nature of the dispute as well as the arbitrator’s ability to make decisions without following precedent of formal evidence rules (Bereznicki-Korol & Clarke, 2008).

In July 2004, Sarofim and TCW’s dispute was heard before a three-member arbitration panel. The Sarofim v. TWC, (2006) document summarized the hearing process and stated that the panel:“ listened to five days of testimony and reviewed more than 200 exhibits. At the request of the parties, the panel issued a “reasoned award. The twenty-page decision held that TCW breached its fiduciary duties to Sarofim by placing her assets in “wholly and negligently unsuitable” investments. The panel found that TCW failed to diversify the investments, failed to educate Sarofim about the risks of investing, and failed to educate itself about Sarofim’s needs as an investor. The panel rejected TCW’s argument that it served merely as a broker, finding that TCW was Sarofim’s financial consultant and adviser” (Sarofim v. TWC, 2006).

The outcome of the case was an award of six million and three hundred thousand in actual damages and denied Sarofim’s request for attorney fees as the arbitration agreement prevented them. The arbitrators: however awarded Sarofim with 2.9 million in punitive damages, roughly the same amount that was requested for attorney fees.
With arbitration, as opposed to mediation and negotiation cases are always solved, even when both parties are dissatisfied with the results. Furthermore, arbitration is generally not appealable ((Bereznicki-Korol & Clarke, 2008). The court still reserves the right to review the decision- making process and under certain conditions parties can bring complaints to the courts of appeal.

TCW filed a motion and sought vacatur on the punitive damages as they argue, “ that instead of applying the law, the panel awarded attorney’s fees disguised as punitive damages” (Sarofim v. TWC, 2006 ). The court denied TCW appeal to vacate punitive damages.

The ADR process was successful in the case of Sarofim v. TCW in that both parties exercised their rights to bring their dispute before a panel of arbitrators and appeal the decisions made in a court of law. Although both parties were not satisfied with the decision the law was practiced fairly, both parties were able to present their arguments and a decision was reached.


References


Valerie Biggs Sarofim v. Trust Company of the West, 05-20309 U.S (2006).

Yates, A., Bereznicki-Korol, T. & Clarke, T. (2008). Business law in Canada (8th ed). Canada: Pearson Education Canada.

Ethics in Law and Business

Jenna Doucet (2009).

Ethics in Law and Business

The subject of ethics is an important topic in the legal system, one that highlights duty and obligation, and one that comes with consequences in the event of non-compliance. These days businesses are making big headlines for subjecting themselves to unethical behaviour. The regulations, standards and consequences surrounding legal practice and fair representation differ from those that surround businesses. When it comes to business and law, aspiring for a more just system requires individuals to understand the business client’s and the lawyer’s duties as well as the ramifications of both. As stated by Yates, Bereznicki-Korol and Clarke (2008) the issue with ethics is that they are not always governed by law, but often by our own convictions and personal values. Simply stated “ When a person breaks the law, he has also acted unethically. However, if a person acts unethically, he may not have broken the law” (p.14). How then can one expect individuals to display ethical behavior in situations that offer no repercussions to the unethical act? A compelling paper written by McGraw (2004) offers some insight into the psychology behind man’s conflict with ethics. McGraw’s (2004) paper highlights Thomas Hobbes’ social contract theory of ethics, which states that individuals are motivated by self-preservation and self-interest. Hobbes theory proposes that in the absence of societal rules and consequences, man would behave in a fashion that served his own best interest and not necessarily act ethically. Hobbes attributes the rules of society and government to “ individuals’ self-interest and fear” (p.236). In order for individuals to survive and attain their desires, they must co-operate with one another, this is achieved by way of social contract. McGraw writes that “ because individuals cannot trust each other to keep their promises a powerful government is necessary in order to enforce the social contract” (p.236).

Following Hobbs logic, the reasons for which a lawyer should practice good ethics are simple. Unethical behaviour can lead to the loss of credibility among clients and more importantly disbarment. It is in the lawyer’s best interest to follow their professional code of ethics. One of the complexities surrounding a lawyer’s duty is that their professional obligations may pose a conflict with their personal duties in fulfilling their social contract with society at large. Protecting the client’s best interests, no matter how unethical the client, is the lawyer’s responsibility. Furthermore, a lawyer’s non-compliance with the standards of the profession are not taken lightly. In Canada, the Canadian Bar Association, the Minister of Justice and Attorney General are responsible for ensuring that lawyers are in compliance with the ethics and responsibilities of the profession. When probable cause that a lawyer has committed a criminal offense or acted unethically, the lawyer is subject to a complaint resolution procedure and upon investigation can be given penalties ranging from suspension to disbarment (Yates, Bereznicki-Korol and Clarke, 2008).
One of the main differences between the lawyer’s duty of ethics and the business client’s is that the client as the face of a corporation has a moral duty to act ethically in order to protect the interest of society at large. Again, it is in the businesses best interest to uphold a positive public image, especially in an increasingly competitive industry. Business like law, is highly regulated by a number of different regulating bodies. The consequences for unethical behaviour in business are also increasing in severity as more and more cases of unethical behaviours are being publicized and scrutinized. The consequences of unethical behaviour in business has a greater number of negative outcome ranging from a loss in customer support, decline in sales and revenue, bankruptcy, forced resignations, loss of employment, large fines and even jail.

In conclusion, ethics play a large role in law and business. As long as ethics and are regulated and valued by society, both lawyers and businesses will be motivated to follow good ethical behaviour- if not by moral choice at least by Hobbes’ self-preservation and social contract theory.


References
Yates, A., Bereznicki-Korol, T. & Clarke, T. (2008). Business law in Canada (8th ed). Canada: Pearson Education Canada.

McGraw, D. (2004). A social contract theory critique of professional codes of conduct. Info, Comm & Ethics in Society (2), 235-243. Retrieved on December 18th 2009 from Ebsco database.

Diversity, Motivation, and Incentives

Jenna Doucet (2010).

Diversity, Motivation, and Incentives

When it comes to creating a healthy organizational environment, there is some overlap between what employees and employers value most. Employee motivation and cultural diversity are both key factors to promoting effective organizational performance. Furthermore, employees and employers can benefit from rewards beyond traditional monetary incentives.

Employee motivation and cultural diversity can work hand-in-hand. Diversity is an integral part of organizational culture. Tse (2005) argues, “individual employee output often depends on numerous tasks performed by a number of co-workers” (n.p). Inviting employees from diverse backgrounds, with individual talents and experiences, to work together creates a flexible and innovative environment, which enhances productivity (Greenberg, 2004). Motivation begins by giving employees meaningful jobs and meaningful lives. “Organizational culture itself is a silent, yet extremely powerful incentive” (Tse, 2005, n.p). Creating a meaningful job and organizational culture should begin with diversity in the workplace and an emphasis on team spirit. Workplace incentives are important in enhancing employee motivation. However, it is important for organizations to consider non-monetary incentives, especially to reduce stress. Tse (2005) reminds organizations that in Maslow’s hierarchy of needs, financial security is near the bottom and she encourages employers to focus at the top of the pyramid. According to Maslow, once an individual’s basic needs are met, he or she is more interested in self- actualization (McShane, 2006). Flexible work schedules that give employees more time to develop social relationships, advancement opportunities, and job customization are all incentives that allow individuals to further their self-development, enhance job satisfaction and relieve stress.

Cultural diversity strengthens organizational culture and creates meaningful workplace environments, which enhance an employee’s motivation. Furthermore, non-monetary incentives not only reward employees by increasing their job satisfaction and relieving their stress, but it also rewards employers by giving them productive employees.



References


Greenberg, J. (2004). Diversity in the workplace: benefits, challenges and solutions.

Business Management. Retrieved February 17, 2010 from:
http://ezinearticles.com/?Diversity-in-the-Workplace:-Benefits,-Challenges-and-
Solutions&id=11053

McShane, S. (2006). Canadian organizational behavior (6th ed.). Canada: McGraw-Hill
Ryerson.

Tse, J. (July, 2005). Feature- better than cash. Human resources online. Retrieved
February 17, 2010 from: http://www.humanresourcesonline.net/news/4271

Creating a Healthy Organizational Culture

Jenna Doucet (2009).

Creating a Healthy Organizational Culture

Leaders and managers play a large role in influencing an organization’s corporate culture. All companies have a corporate culture. “Culture serves as a foundation for an organization’s management system” ( Pool, 2000, p. 373). Pool (2000) proposes that an organization’s culture can positively reinforce the practice of optimal praxis and behaviours within an organization. It is the responsibility of management to maintain and establish a positive culture. A good leader establishes a positive and healthy organizational culture by motivating his/her subordinates to perform at a high level, by promoting open communication, and establishing positive authority. Furthermore, to succeed in establishing a positive atmosphere and a culture where employees encouraged to thrive, it is essential that managers go beyond good management and become great leaders.

Motivating employees
Goltz (2009) states that some cultures promote productivity while other cultures are destructive to the organization. A productive organization is one where employees are motivated to contribute their best efforts. A healthy culture promotes employees with a healthy appetite for performance and success. One of management’s most crucial roles in establishing a productive culture is to motivate subordinates. Bateman and Snell (2007) suggest that effective managers must identify which behaviours they wish to motivate employees to exhibit. Motivating individuals to perform at a high level is usually a big priority. In order to motivate employees management must set goals that motivate. Goals that motivate are those that appeal to individuals and do not conflict with their personal values. Goals should be measurable and quantifiable so that employees are motivated to achieve them. Another great tool in motivating employees is by using positive reinforcement. The law of effect writen by Edward Thorndike in 1911 states that “behaviour that is followed by positive consequences will likely be repeated” (Bateman and Snell, 2007, p.430). The above motivational tactics are process oriented, however motivation is most successfully achieved when the processes underlying motivation are combined with content theories that account for personal characteristics and needs. Understanding an employee’s needs and accommodating those needs is essential in motivating those individual’s to perform at a high level (Bateman and Snell,2007).

Open communication
Promoting open communication is a concept discussed by many organizations and implemented by few. Establishing open communication channels in an organization is a challenging task, however it is one of the most important tactics management can utilize to create and maintain a positive corporate culture. Outlined below are some tactics effective managers and leaders use to encourage effective communication in the organization.
- By holding monthly or quarterly staff meetings in which the atmosphere is casual
- By posting notices and information on staffroom bulleting boards
- By sending information through intranet, or emails and by invited questions and comments from staff members
- By implementing an anonymous suggestion box or message billboard.
- By Maintaining an open-door policy in the managers office
- By holding casual staff outings

Positive authority
The power and authority of management may be established in many different ways, sources of power come from both negative and positive sources. A positive organizational culture, however centers on management’s ability to establish authority in a positive light. Below are some tactics managers can use to establish positive authority.
- By establishing reward power by influencing others to follow his or her guidance in holding valued rewards (Bateman and Snell, 2007)
- By establishing referent power by socializing with employees and demonstrating admirable characteristics to influence individuals to perform based on a desire of approval or admiration (Bateman and Snell, 2007)
- By establishing expert power by demonstrating or gaining expertise and knowledge and encouraging employees to learn and gain from his or her experience (Bateman and Snell, 2007)

Managers and leaders
Bateman and Snell (2007) say that “effective managers are not necessarily true leaders” (p.395). Where effective managers and true leaders differ is in their management style; good managers limit their concern to the day to day complexities of an organization, while, true leaders orchestrate important changes in the organization. For example true leadership requires going beyond management’s responsibility of planning and budgeting routines, structuring the organization, staffing and monitoring activities by creating a vision for the firm and inspiring individuals to reach for that goal. ( Bateman and Snell, 2007). A good leader’s traits are not necessarily all that different from a good manager’s traits, the difference lies in the leader’s ability to make use of his or her characteristics. A good leader possesses drive, that is they have a high regard for achievement and are constantly striving for improvement. Secondly, the good leader exerts leadership motivation, that is, they show interest and desire to lead individuals. In addition, a good leader is concerned with his or her integrity, shows self-esteem and finally has a high level of knowledge about the industry and the company he or she is working for. Furthermore, leaders and managers differ in their management behaviours. A good manager’s behavioural approach centers on task performance (getting the job done), while good leaders also focus on group maintenance and the concern over their follower’s participation in decision-making. The good leader exhibits behaviours that demonstrate concern towards a group as a whole and towards individuals on a personal level, they express concern over areas such as trust, open communication, mutual respect, and loyalty (Bateman and Snell, 2007).

Conclusion
Management plays a large role in creating and maintaining a healthy corporate culture. First and foremost, a healthy organizational culture motivates employees to perform. Motivation can be established by providing individuals with motivational goals that are measurable and quantifiable, by inserting positive reinforcement policies and by understanding and appealing to the needs of employees. Tactics that can be used to promote a positive culture are establishing and promoting open and effective communication between management and employees and by establishing positive authority through reward, referent and expert power. Lastly, a healthy culture is lead a team of individuals who are able to double both as good managers and great leaders. True leadership involves going above and beyond the traits, behaviours and approaches of a good manager.

References

Bateman, T. & Snell, S. (2007). Management: Leading and collaborating in a
competitive world (7th ed.) New York: McGraw-Hill.

Goltz, J. (Oct 2009). Corporate Culture.(STARTUP; Taking
Ownership)(Column). FSB, 19,(8), 61. Retrieved August 31, 2009 from General
OneFile via Gale.

Pool, S. (2000). The learning organization: motivating employees by integrating TQM
philosophy in a supportive organizational culture. Leadership & Organization

Development Journal. 21(8), 373-378. Retrieved September 2nd, 2009 from
General OneFile via Gale.