3.1.3 Variations in types of LSOs Flashcards
Private company
PRIVATE SECTOR Objective is to pursue a profit to return to shareholders; NOT listed on ASX (restrictions on who can buy shares) Sale of shares done with consent of other shareholders (number 1-50) e.g. 7 Eleven, Ripcurl, Retravision
Public company
PRIVATE SECTOR Objective is to pursue a profit to return to shareholders; listed on ASX )anyone one can buy/sell sahres @ any time) e.g. ANZ, Telstra, BHP billiton
Non-for profit organisations/charities and foundations
PRIVATE SECTOR Deliver essential goods/services. Aims to make a profit that is reinvested back into organisation to private good/service to those in need. Some profits go towards staff (should be kept to minimmum) e.g. Red cross, St Vincent de Paul
Government Business Enterprise (GBE)
PUBLIC SECTOR These are owned and operated by the government. Their objective is to pursue a profit and to provide a service. They are expected to stand-alone and manage themselves. They have no need or goal of satisfying shareholders e.g. Australia Post, Vic Roads
Government Departments
PUBLIC SECTOR To operate within a budget to deliver an essential community service. The Government gives each department a budget, which is money, raised from tax e.g. defence (funding by fed govt), department of education (funding from state govt.)
Define privatisation
If an organisation used to be owned by the government but is now part of the private sector it has been privatised. Many government bodies were privatised over the past decade and often it is controversia e.g. Telstra (gov now own only 17%)
Arguments for privatisation
- Some government bodies are run inefficiently, therefore a change of ownership (where profit is pursued) should result in greater efficiencies and less wastage of resources.
- The money received from the sale of government enterprises can be put to good use to pay off government debt
Arguments against privatisation
- Any profit made by the government was used for the benefit of the people e.g. building schools where as once privatised the money is returned to shareholders. Furthermore, if the company is foreign owned, the profits go off shore.
- There is less accountability
Define mission statement
Reason why an organisation exists, is likely to change. E.g. Centrelink’s mission statement is something like to provide freeway that makes it easy + fast to move around Melbourne
Define vision statement
Is what an organisation seeks to achieve - it is subject to change e.g. Telstra to have better service when dealing with customers
Why are mission/vision statements important
Demonstrates what a company is about and attracts customers, potential employees etc.