Chapter 1 – Large Scale Organisations What is an Organisation? Where two or more people who work...

Chapter 1 – Large Scale Organisations

What is an Organisation?Where two or more people who work together in a

structured way to achieve a specific goal or set of goals.

What do Organisation have in common?- A distinct purpose (set objectives or goals to acheieve)- They comprise two or more people- They have a deliberate form structure (formal or informal)

Purpose

People Structure

SCSC Year 12 Business Management . Weebly . com


What are the characteristics of a LARGE SCALE ORGANISATION (LSO)? (page 3-4)There are no formal definitions for a large Scale organsiation, however the general classification can include:

- Employee Base (200 plus employees)- Total Assets (LSO own substantial assets)- Total Revenue (LSO earn substantial income or earnings)- Profit (LSO has substantial Gross or Net Profit- Market Share (it commands a large percentage of the

marketplace)- Size (can use multiple of single factories, branches or

stores)- Number of business Locations (can be local, regional,

national or global)



What are the characteristics of a LARGE SCALE ORGANISATION (LSO)? Other characteristics of LSO (page 5-6)

1. Strategic objectives are formulated

2. Strategic planning is undertaken

3. Formalised policies, procedures and rules are adopted and documented

4. An organisational structure is devised

5. A chain of command and hierarchical management structure are established

6. A coordinated and decentralised approach to decision making is adopted

7. Specialisation of activites into departments or within departments occurs



LSO in AustraliaREAD page 6 & 7

Australia is proud of its tradition of operating as an open market

economy and of its organisations taking their place in the global

marketplace. Organisations that are owned and based solely in one

country are referred to as being domestic or national in their

operations. Many businesses choose to expand their business

operations beyond their national or domestic borders and become

international or global in their business focus. Organisations that are

owned and based in one country while having branches or subsidiar-

ies in other countries are referred to as multi-

national/transnational corporations. Some examples of

Australian multinational companies are Amcor, BHP Billiton, Lend

Lease, Qantas and National Australia Bank. (continue reading the

book)SCSC Year 12 Business Management . Weebly . com


LSO in AustraliaAfter reading page 6 & 7providing definitions of the following:

Open market economyMulti-national/transnational corporationsJoint VentureTakeoversMergersDemergerDiversificationDual listed companyDividend



Different Types of LSOPublic or Private

Australia is a mixed or market economy, where ownership of

resources, property and the means of production differ. Where the

resources, property and production are owned by the government

(federal, state or local), these are deemed to be in the public

sector. If the resources, property and means of production are held

privately or corporately, they are in the private sector.



Different Types of LSOOrientation or Focus

Organisations can also be categorised according to their orientation or focus.

Profit

The focus of ‘for-profit’ organisations is profit attainment, market share and growth. This classification makes up the majority of enterprises in Australia; for example, Amcor, ANZ Bank, Commonwealth Bank, National Australia Bank, Westpac, Wesfarmers and Toll Holdings are for- profit organisations.

Not for profit

The focus of ‘not-for-profit’ (NFP) organisations is on providing a specific service to the community.


Chapter 1 – Large Scale OrganisationsDifferent Types of LSO

Types of Business Activity

Australian businesses are categorised by the Australian Bureau of Statistics (ABS) into 496 individual industries. These individual industries are further grouped into 17 industry categories (see page 12 table 1.4).

table 1.4 Chart of 17 main industry categories • Accommodation, cafes and restaurants • Agriculture, forestry and fishing• Communication services • Construction • Cultural and recreation services • Education• Electricity, gas and water supply • Finance and insurance • Government administration and Defence • Health and community services • Manufacturing • Mining• Personal and other services • Property and business services • Retail trade • Transport and storage• Wholesale trade


Chapter 1 – Large Scale OrganisationsDifferent Types of LSO

Types of Business Activity

The three main industry sectors: primary, secondary and tertiary (with subsectors of quaternary and quinary)

Level of sector type of business/service

Primary Mining, agriculture, fishing and forestry – those industries concerned with land or sea

Secondary Manufacturing, processing, construction and fabrication of final product

Tertiary Wholesaling, retailing and transport

a Quaternary Information processing, finance and insurance, property and business services and education

b Quinary Hospitality, health and social assistance, personal and other services SCSC Year 12 Business Management . Weebly . com


Organisational Objectives and StrategiesAll organisations must establish aims or objectives, and then determine strategies or actions to achieve these aims. Objectives are statements of desired achievement that provide direction for actions. Organisations, no matter what their size or ownership, must do this to succeed.

When establishing the objectives, the following characteristics must be addressed: • The objectives being set are specific (S). • The objectives and their outcomes are measurable (M). • The objectives, while difficult, are achievable/attainable (A). • The objectives are understood and accepted by the organisation as

relevant (R). • The objectives are time-bound (T).

This is known as adopting the SMART principle and its application ensures clarity of the objectives being set.



Organisational Objectives and StrategiesHierarchy of ObjectivesThe first task for every organisation, whether for-profit or not-for-profit, is to establish its overall purpose or reason for existence.

1 A mission statement expresses the purpose or reason for an organisation’s existence

2 Corporate objectives establish the strategic objectives required by the organisation as a whole to reach its overall purpose. Senior management determines these long-term (two to five years) objectives and must be certain they are specific, achievable and measurable.

3 Department objectives are the tactical objectives or medium-term (one to two years) objectives needed to achieve the specific targets set for a department of division. They must be consistent with the corporate objectives and sufficient resources must be allocated to allow for the achievement of these objectives.

4 Operational objectives are the next level of objectives established. They are precise, measurable and establish the short-term (daily, weekly, half-yearly, annual) objectives.

5 Individual department member’s objectives and tasks performed. An employee is set individual objectives or tasks that they are required to perform. The setting of these tasks and objectives form the basis of a process called Management by Objectives (MBO). This process underpins the method by which the employee will be appraised.



Organisational Objectives and StrategiesTypes of ObjectivesThere are also different types of objectives that a large-scale organisation can set. These are detailed below.

Financial Objectives

Service Objectives

Ethical and Social Responsibility Objectives

Environmental Objectives



Typical Management FunctionsTraditional 3 levels of Management

1 Senior (executive) managers spend a large proportion of their time planning and setting objectives. They are in charge of managers subordinate to them (middle managers).

2 Middle managers translate these objectives into specific projects for their subordinates (front-line managers) and monitor the progress of these projects.

3 Front-line managers (supervisors) are the lowest level of management. The majority of their time is spent leading, supervising and controlling their subordinates (workers) who are working on specific projects.



Typical Management FunctionsHere is a brief summary of what are commonly referred to as the basic roles of management:

Planning, Organising, Leading & Controlling (POLC):

Planning involves establishing the general direction and objectives of the organisation. Senior management will be responsible for setting the overall strategic (long-term) objectives for the entire organisation. These objectives will then be broken down into tactical objectives for achieving over a medium time frame. On a more immediate level, operational plans will be put into place to achieve targets that have been set. Managers at all levels are involved in the planning needed to put these objectives into effect.

Organising relates to developing a systematic approach to coordinate the human, material, financial and informational resources of the organisation in order to achieve organisational objectives. It can cover areas such as setting up work groups or teams, establishing a chain of command, channels of communication, outlining an organisational or departmental structure to establish a division of tasks and allocating jobs or tasks.



Typical Management FunctionsHere is a brief summary of what are commonly referred to as the basic roles of management:

Planning, Organising, Leading & Controlling (POLC):

Leading refers to how a manager, by their behavior and style, directs, influences and motivates their subordinates to work towards achieving organisational objectives. It is important that managers establish an atmosphere where their subordinates want to work and are able to excel.

Controlling involves the necessary monitoring and evaluation to ensure that organisational objectives are being met. Standards will need to be established, and checks carried out to assess performance against forecast or budget, and if required, corrective action will need to be taken.



Typical Management Functional AreasManagers at all levels (senior, middle and front- line) perform these roles in the different functional areas of the organisation, which include:

Operations – where the focus is on creating the organisation’s final output (product or service)

Finance – where the focus is on planning, maintaining and reporting on the financial aspects of the organisation’s performance

Human resources – where the focus is on managing the overall relationship the organisation has with its employees

Marketing – where the focus is on developing strategies to create an ongoing relationship between the organisation and its customers

Research and development – where the focus is on studying and developing new and improved products for the organisation.



Contribution (+/-) of LSO to the EconomyThe actual number of large-scale organisations in Australia is small in comparison with the number of small and medium-sized businesses in operation. However, the group’s overall contribution to the Australian economy is significant, particularly in the following five areas.

Gross Domestic ProductGross domestic product (GDP) is the total monetary value of all goods and services produced in Australia in a one-year period. It is estimated, by research carried out by IBIS- World on behalf of Business Review Weekly, that approximately 51.3 per cent of all revenue generated in Australia comes from BRW 1000 enterprises.

EmploymentLarge-scale organisations, by the very nature of their size, employ a large percentage of our total workforce. By providing this employment the economy benefits, as it provides income for workers who may then spend the money on consumer items. The government also benefits through receiving taxation revenue from personal income tax, goods and services tax (GST) and payroll tax




Balance of PaymentsBalance of payments is an annual record of Australia’s trade and financial transactions (exports and imports) with the rest of the world. Large-scale organisations, through their desire to trade in the global marketplace, assist in earning export income, which improves Austra- lia’s balance of payments performance, while organisations importing goods negatively affect the balance of payments.

Research and DevelopmentA large outlay of capital expenditure is required to carry out research and development (commonly referred to as ‘R & D’). It is a high-risk decision that provides no certainty of recouping expenditure. In a bid to encourage organisations to make this commitment, government policy often extends to providing financial incentives in the form of grants or taxation rebates. SCSC Year 12 Business Management . Weebly . com



Infrastructure GrowthThe majority of infrastructure is provided either by government business enterprises or recently privatised, former GBEs. Infrastructure can take the form of roads/highways/freeways, transport systems (rail, bus and train), utilities (gas, electricity, and water), communication, health and education. It is seen as the role of government to act as a social and economic developer of the country. In this way it is supporting all levels of business and the broader community.



Activities to Complete

Activity 1.6Activity 1.8Activity 1.10

Chapter Summary Questions2, 3, 4, 5, 9,

Some text found on this presentation has come from:www.cambridge.edu.au/GO


Chapter 1 – Large Scale Organisations What is an Organisation? Where two or more people who work...

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