Business Unit 3 Flashcards
Characterisation of LSOs
An organisation that employs 200 or more people, or has assets worth more than $200 million, they earn revenue in the millions
Classification of LSOs
Can be classified into two groups, the first being corporations, which are companies such as public companies, private companies and GBE.
The second being not-for-profit organisations which include charities and foundations
Multinational corporation
Is owned and based in one country and operates in many countries throughout the world
Corporation
Owned by shareholders and aims to make a profit
Shareholder
Is any person who owns shares in a company
Government Business Enterprise
Is government owned and operated
Objective
Is a desired goal or specific result that an organisation intends to achieve
Vision statement
States what the organisation aspires to become
Mission statement
Expresses why an organisation exists, its purpose and how it will operate
Strategies
Are the actions that an organisation takes to achieve specific objectives
Typical management functions
Operations Finance Human resources Market Research and development
An Operations function
Is in charge and responsible for the production of the organisations product, it oversees the transformation of inputs into outputs
Finance functions
Is responsible for managing the financial aspects of the organisation, it can include financial policies, raising finance, budgeting, accounting and reporting, and cash control
Human resources function
Is responsible for coordinating all the activities involved from acquiring to terminating employees of the organisation
Marketing functions
Is responsible for the marketing mix, often referred to as product, price, promotion, place
Research and development functions
Is responsible for designing and developing new products
Operations strategies
Facilities design and layout, materials management, quality management and the use of technology
Finance strategies
Accounts will, for example, produce balance sheets that show the value of the organisations assets
Human resource strategies
They will focus on improving the motivation of employees and meeting their expectations
Marketing strategies
To determine the right price for their organisations product
LSO: contribution to economy
Contribute to employment by providing jobs for 2.9 million, where there are lower levels of unemployment and rising incomes, people tend to spend more which increases overall level of spending, businesses do well so they expand as their profits increase, employment rises, and so we create a higher standard of living
Environments of LSOs
The internal environment includes all those things over which an organisation has some degree of control
Gross domestic product
Refers to the total monetary value of all goods and services produced in a country over one year
Management structure
Is a term used to describe the ways in which the management, employees and resources of an organisation are formally arranged to achieve objectives
Management hierarchy
Is the arrangement that provides increasing authority at higher levels of the hierarchy
Chain of command/line of authority
Is a system that determines responsibility, supervision and accountability of members of the organisation
Span of control
Refers to the number of people for whom a manager is directly responsible
Unity of command
States that each employee within an organisation should report to only one supervisor
Invention
Is the development of something new
Innovation
Occurs when something already established is improved upon
Infrastructure
Refers to highways, railways, airports, communications systems, education and health facilities, water, gas and electricity supplies
Downsizing
Involves workplace staff reductions, with the elimination of jobs and positions
Outsourcing
Is the contracting of some organisational operations to outside suppliers
Internal environment
Includes all those things over which the organisation has some degree of control
External environment
Includes those things over which the business has little control. It may be divided into an operating environment and a macro environment
Operating environment
Refers to the outside factors with which the organisation directly interacts in the course of conducting its business
Customers
The buyers or users of the products of a LSO
Competitors
Are other organisations that offer rival products or services
Lobby groups
Are groups of people who attempt to directly influence or persuade an organisation to adopt particular policies
Common types of Lobby groups
Trade unions
Consumer groups
Specific issue groups
Macro environment
Is made up of the broad factors in the economy and society within which the organisation operates
Globalisation
The effect of hi-tech communications, lower transport costs and unrestricted trade and financial flows turning the whole world into a single market, producing a more integrated global economic system
Effectiveness
Is the degree to which an organisation has achieved its stated objectives
Efficiency
Refers to how well an organisation uses its resources to achieve objectives
Performance indicators
Are specific criteria used to measure the efficiency and effectiveness of the organisations performance
Net profit
Is what remains when expenses are deducted from the revenue earned
Number of sales
Measures the number of products sold
Percentage of market share
Is the proportion of the total market that a business has, expressed as a percentage
Rate of productivity growth
Measures the change in productivity in one year compared to the previous year
Customer survey
Measures how satisfied customers are with the organisations performance
Staff survey
Measures how satisfied staff are within the organisation
Staff turnover
Measures the number of staff who are leaving the organisation
Benchmarking
Occurs when an organisation measures its performance against that of other leading organisations known for their excellence
Stakeholders
Are groups and individuals who interact with the organisation and have an interest in its activities
Social responsibility
The obligations a business has over and above its legal responsibilities to the wellbeing of employees and customers, shareholders and the community as well as the environment.
Ethical management
Refers to the process of abiding by moral standards and doing the ‘right’ thing in the interests of all stakeholders
Unique nature of LSOs
Because of their size, LSOs have a great deal of political power. Some are so large that they have more influence on the economy than the government in power. Must attempt to satisfy the varying interests of the many stakeholders
Management structure
Is a term used to describe the ways in which the management, employees and resources of an organisation are formally arranged to achieve objectives
Management hierarchy
Is the arrangement that provides increasing authority at higher levels of the hierarchy
Chain of command/line authority
Is a system that determines responsibility, supervision and accountability of members of the organisation
Unity of command
States that each employee within an organisation should report to only one supervisor
Span of control
Refers to the number of people for whom a manager is directly responsible
Functional structure
Involves grouping employees together according to the tasks or jobs they will perform
Divisional structure
Groups employees together according to divisions that may be geographical, or customer, product or process focused
Matrix structure
Involves bringing together specialists from different parts of the organisation to solve specific problems or to undertake specific projects in teams
Corporate culture
Refers to the values, ideas, expectations and beliefs shared by members of the organisation
Elements of corporate culture
Values and practices
Symbols
Rituals, rites and celebrations
Heroes
Values and practices in corporate culture
The way things are done in the organisation e.g. Honesty, hard work, teamwork, quality customer service, employee participation and innovation
Symbols in corporate culture
The events or objects that are established to represent something the organisation believes to be important e.g. Offer employees the opportunity to participate in training and development programs
Rituals, rites and celebrations in corporate culture
The routine behavioural patterns in an organisations everyday life. E.g regular social gatherings can be held to help develop a sense of belonging among employees who work in small teams during the week
Heroes in corporate culture
Heroes or champions, are the organisations successful employees who reflect its values and, therefore act as an example for others
Developing a positive corporate culture
A positive corporate culture can affect motivation, loyalty and efficiency and so it is crucial for a manager to understand the corporate culture as it impacts directly on the achievement of objectives
Planning
Is the process of setting objectives and deciding on the methods to achieve them
Strategic planning
Is long term planning, usually over two five years
Tactical planning
Is flexible, adaptable, medium-term planning, usually over one two years, which assists in implementing the strategic plan
Operational planning
Provides specific details about the way in which the organisation will operate in the short term
SWOT analysis
Involves the identification and analysis of the internal strengths and weaknesses of the organisation, and the opportunities in, and threats from, the external environment
Organising
Is the process of arranging resources and tasks to achieve objectives
