Large-scale Organisations

Business Management

AOS 1: LSOs in Context

LSO’s

• Definition• Characteristics

(how to identify them)

• Typical management functions

• How to distinguish between various kinds of LSO’s (ownership, focus, activity)

• Mission and vision statements

Environments of businesses

• Positive/ negative contributions of LSO’s

• What are stakeholders

• Interests and conflicts of stakeholders

• How they relate to environments

• Internal and external environment

• Internal, operating and macro environment

Where to next: KPI’s

• How do we evaluate the performance of businesses

• What is efficiency/effectiveness

• What are some specific indicators to assess performance

Where to next: Further on LSOs

• The SMART way of objectives

• Hierarchy and types of objectives

• Typical management functions (more depth)

• LSO Economic Contributions (more depth)

AREA OF STUDY 1 – LSOs In Context

☐ ☐ ☐

Last week: LSO Ownership models

See the Excel Table you guys made up on lesson 4’s Wiki!

Positive contribution of LSOs to the economy• Provide Employment : account for about 30 % of the workforce in Australia, with

Coles Myer and Woolworths. (LSOs make up only 3% of all businesses). • Contribution to research and development: LSOs undertake extensive R&D, and

thus produce many new products. They adopt efficient work practices and innovative management ideas as a result. This will have an impact upon the whole of Australian society, as these new products are implemented because they increase productivity.

• Gross Domestic Product (GDP): this is the total monetary value of goods and services produced in Australia in a 1 year period. LSOs contribute about 50%- 55% of Australia’s GDP.

• Contribution to exports: many LSOs export products O/S, eg Rio Tinto earns 90% of its revenue from O/S. Exporting products contributes positively to our Balance of Payment (BoP), as a favourable BoP exists when there are more payments coming in to Australia than going out

• Help infrastructure growth: roads, railways, ports, communication systems – all improved and this assists economic growth, eg, upgrades to Monash Freeway and Citylink estimated to deliver $14 billion in benefits through reduced travel time.

Negative contribution of LSOs to the economy

• Downsizing/outsourcing to overseas countries: by laying off workers in an attempt to reduce costs and stay competitive, this can increase the unemployment rate, reduce tax income for gov’t, and increase welfare payments.

• Environmental damage: through their activities, polluting waterways, or greenhouse gas emissions, LSOs may cause environmental damage.

• Price setting: powerful LSOs have the ability to set prices and control markets, especially where there are oligopolies, i.e. small number of businesses that control most of a particular market (oil companies and petrol)

Case Study 1: Banking Job Losses

Individually complete Case Study 1 on the worksheet page (access on Wiki)

When completed we will watch an interview with ANZ’s CEO discussing job losses further.

Case Study 1: Banking Job Losses

Questions to consider:

1. Who does the CEO have a responsibility towards – the owners (shareholders) to make a profit, or the employees to provide them with a job?

2. How does the CEO justify ANZ’s decision?

Case Study 2: BP Oil Spill

Key Words you need in your Glossary for AOS 1

- Large Scale Organisation - Strategic Planning - Chain of Command - Decentralisation - Takeover - Merger - Public Sector - Private Sector - Government Business Enterprise - Corporatisation - Privatisation - Mission Statement - Vision Statement

- Strategic/Tactical/Operational Objectives - Gross Domestic Product (GDP) - Downsizing - Balance of Payments - Stakeholder - Business Environment - Internal Environment - Operating Environment - Macro Environment - External Environment - Trade Unions - Lobby Groups