Tyoes Of LSOs

Question 1

Private sector

Answer 1

Private company
Public company
Not for profit organisation

Question 2

Corporations

Answer 2

GBEs

Private and public companies

Question 3

Corporation

Answer 3

A corporation, or company, is owned by shareholders and managed by directors. It aims to make a profit.

Question 4

Shareholder

Answer 4

A shareholder is any person who owns one or more shares in a company. Think of a share as a unit of ownership in a company. Selling shares to the general public raises funds for establishing or expanding the company.

Question 5

Public company

Answer 5

Shares in public companies are usually traded on the Australian Securities Exchange (ASX). Members of the public can buy or sell shares in public companies, and public companies can have millions of shareholders. Examples of public companies include BHP Billiton, Telstra and Virgin Blue.

Question 6

Private companies

Answer 6

Private corporations are not listed on the ASX and have restrictions on who can buy their shares. They can have one shareholder (who would also be the director), but no more than 50 shareholders. Private corporations are often family companies. Companies such as Rip Curl, 7 Eleven and Retravision are examples of privately owned companies.

Question 7

GBE

Answer 7

Another type of corporation is a government business enterprise (GBE), which is owned and operated by the government. GBEs carry out government policies while they deliver community services.

Question 8

Public sector

Answer 8

GBE

Government department

Question 9

Government Departments

Answer 9

Government departments exist at all three levels of government (federal, state and local). They provide essential community services, such as health, education and welfare.

Question 10

Not for profit organisations

Answer 10

Not-for-profit organisations include charities and foundations. Their main purpose is to provide goods, services or funds to prevent particular social problems or to continue their work for the benefit of the community.

Question 11

Identify two characteristics of large-scale organisations.

Answer 11

One characteristic of a large scale organisation is that they employ 200 or more people. Another characteristic is that they have substantial assets of $200 million or more.

Question 12

Outline two positive and two negative contributions that large-scale organisations make to the Australian economy.

Answer 12

A positive contribution is the significant provision of employment. With LSO’s employing over 200 employees, they make a significant contribution to employment levels with around 33% of employees in Australia being employed by LSO’s. This helps to influence increased spending, and therefore demand for goods and services, helping the economy to circulate. Another positive contribution is their commitment to research and development. Due to their size, LSO’s can lead to new products and methods of production, which can have positive flow-on effects throughout the industry and economy. A negative contribution however is their contribution to climate change and pollution. As they mass produce goods and services, LSO’s are a significant contributor to waste and pollution to the environment. This then needs to be cleaned up by either the government or other organisations, having a negative impact on the economy. LSO’s can also have the power to price set, which occurs when there are few competitors in one industry. This reduces downward price movements and therefore has a negative impact on the economy.

Question 13

Stakeholders may place competing demands on large-scale organisations.
Explain why this may occur.

Answer 13

Stakeholders are individuals or groups who have a vested interest in an organisation and its activities and each have different demands. For example, customers and shareholders are two stakeholders who may place competing demands on a large-scale organisation and both are from the external, operating environment.
Customers are those who purchase goods or services from an organisation, and therefore, have an interest in the price of the products or services, and, presumably, want them this to be as low as possible.
Shareholders are partial owners of an LSO through the purchase of shares, and are paid in dividends. They therefore, want to profit as much as possible from the LSO.
Thus these two stakeholders offer competing demands as customers demand low prices, however, shareholders may not profit as much from low prices. Therefore, the LSO has to decide which demand is more appropriate to adhere to, and act accordingly.

Question 14

Describe two factors from the internal and/or external environments of large-scale organisations, and
discuss how they have impacted on an organisation that you have studied this year.

Answer 14

The external operating environment refers to those outside factors over which the organisation has little control One factor from the external operating environment that effected Australia Post are its customers. Customers are the buyers and users of products of large scale organisations and their changing preferences and demands must be adhered to, to ensure success. Customers at Australia Post were unhappy that their parcels were taking long periods of time to be delivered. This impacted Australia Post as they implemented the MyPost system due to customer demands. This allowed customers to track their orders and specify pick up options. This ensured customers had control over their parcels and are aware of its time of arrival.
The external macro environment is the environment that the business has no control over. One factor from the external macro environment that impacted on Australia Post is technology. The increase in the use of emails to send messages decreased the amount of people sending letters. This caused Australia Post to raise letter prices and implement the SecurePay system for online payments. This was done to remain competitive in a digital world.

Question 15

Large-scale organisations, whether for-profit or not-for-profit, exist to achieve specific objectives.
Explain two differences between the objectives of for-profit and not-for-profit large-scale organisations.

Answer 15

Not-for-profit organisations, such as charities and foundations, usually have as their main objective the aim to address a social problem in the community. This might be to improve the standard of living of some poorer members of society. For-profit organisations, such as Rip Curl or Coles, however, usually have as their main objective the desire to make profit to benefit their shareholders/owners.
For-profit organisations aim to increase their customer base, as by doing this they are able to increase profits and improve the performance of the business. Not-for-profit organisations usually try to improve the lives of those that use their service/product and if they are successful they should reduce the numbers of people who need their assistance. So with a Not-for-profit organisation an aim might be to lower their customer base as success might be measured by reducing the number of their ‘customers’.

Question 16

Compare a public and a private company.

Answer 16

Both private and public companies are owned by shareholders. Shareholders are people that buy and sell stakes in different companies. However, a private company has private shareholders whereas public companies have their shares listed on the stock exchange meaning anybody can buy and sell that company’s shares.

Another similarity is that both types of companies have objectives. All corporations have the objective of making a profit. Another difference is that they have a different amount of shareholders. Public companies can have an unlimited amount of shareholders whereas private companies can only have up to 50.

Question 17

In implementing the proposed change, the management of Hansard & Lewis should undertake some planning. Explain a planning model that Hansard & Lewis could use in this situation.

They are hoping to expand their operations by incorporating within the next twelve months.

Answer 17

They could use the planning process.

The first step is to define the objective. They have already completed this step as their aim is to incorporate within 12 months.

The second step is to analyse the environments. They could use a SWOT analysis to determine the strengths and weaknesses from the internal environment that could help achieve the objective such as the amount of funds available. They should also analyse the opportunities and threats from the external environments that they need to be wary of from the external environments when trying to implement the change.

The third step is to develop alternative strategies. They should come up with a number of strategies that they could use to achieve the objective.

The fourth step is to implement the strategy that they believe will best help them achieve their objectives. They need to communicate the changes to employees and let them know what is required of them to implement the change.

Finally, the last step is to evaluate the solution, that is determine if the strategy was successful. For example after a month, they could check their progress in meeting the objective of incorporating and if they are not making progress, they could repeat the planning process and chose a different strategy.

Question 18

Explain how Kotter’s theory of change management could be used to facilitate the proposed change.

They are hoping to expand their operations by incorporating within the next twelve months.

Answer 18

The third step of Kotter’s theory is to create a vision for change. H and L should create a vision that clearly outlines that they want to incorporate and why they are doing this. It gives them direction, something to follow when trying to implement the change.

The fourth step is to communicate the vision. They could inform employees of all the changes that will be made and what is required of them to ensure that employees understand the process and what they need to do. They could also inform anyone that they are planning to make a shareholder and see if they want to become a private shareholder.

The fifth step is overcoming obstacles. They would have to read up on legislation tp understand what is required of them when incorporating and they should reward employees who help work towards the changes to encourage other employees to do the same.

The sixth step is to celebrate short term wins. This reinforces to stakeholders that the sacrifices are paying off. They could organise an afternoon party to celebrate the initial incorporation application.

Question 19

Outline three characteristics of an LSO.

Answer 19

Earns revenue in the millions.

Assets of $200 million or more.

Employs more than 200 people.

Market share, REMEMBER :) 11 DAYS UNTIL BUSMAN EXAM 2016

Question 20

Identify three performance indicators that could be used to assess productivity.

Answer 20

A key performance indicator refers to criteria that can be used to evaluate the level of achievement of an organisation.

Rate of productivity growth can be used to measure the percentage by which productivity increases from period to the next, evaluating how efficient and effecting the organisation is using its resources.

Level of wastage refers to the proportion of waste in a production process. If the level of wastage is low, then this indicates that the organisation has used its resources in a productive and efficient manner.

Net Profit Figures measure all the money earned by the organisation. If net profit figures are high, then this indicates that the organisation’s revenue exceeds its expenses, thus the organisation is using its resources in a productive way.

Question 21

Identify the level of planning undertaken by the finance manager of Budget Airlines in Increasing Ifs market share within the next year, and discuss how he can employ a planning process in order to achieve the. objectives.

Answer 21

The level of planning undertaken by Timothy is tactical planning [1]. This refers to the middle term 1-2 year planning undertaken by middle management that implements the strategic plan or vision for the organisation.

Timothy should employ a planning process. The first step is to define his objectives, in this case it is to increase Budget Airlines’ market share from 10% to 13% before the next productivity report [1]. The next step is to analyses present situations and future opportunities through a SWAT analysis, identifying any strengths and weaknesses the organisation has in its internal environment, and any opportunities and threats foreseeable in its external environment [1]. After this, Timothy should develop a plan and evaluate any alternative plans, before selecting and implementing one of the plans and communicating it to the workplace so that everyone can work collectively towards a common, specific goal [1]. Finally, it is important that Timothy continuously evaluates, monitors and reviews the plan throughout the year, using key performance indicators such as market share and number of sales to assess how well the plan is going, making necessary adjustments where needed.

Question 22

Gander Ltd is an LSO that manufactures components for a number of producers of electrical appliances. The CEO had addressed the general meeting oh shareholders and presented the annual financial reports.

REVENUE DECREASED

NET PROFIT DECREASED

MARKET SHARE DECREASED

DEFECTS INCREASED

STAFF TURNOVER INCREASED

To improve performance they have decided to undertake a functional restructure.

Identify three functional areas and explain some strategies that the managers of these areas could implement to improve performance.

Answer 22

The finance function is responsible for managing all monetary aspects of the organisation. This includes prices and budgeting. A strategy that could be impended from the finance department is raising the prices of the product. The business can raise the prices to try and increase revenue, net profit and market share however the prices should not be raised too high as this can dissatisfy customers and make them shop elsewhere.

The human resources function is responsible for managing the people power or labour used at that organisation. It involves managing all the activities involved in the accruing, maintaining and terminating of employees.

One strategy that could be used from this function is Locke’s motivation theory. This theory invites setting clear, specific and challenging but not overwhelming goals with employees. The business then needs to provide constructive feedback to encourage the employee to continue working and offer reward and recognition for the completion of the goal. They could set goals involving the production of high quality goods and services with reduced defects. This should increase the quality of products and thus attract more customers therefore increasing sales and thus contributing to revenue, profit and market share. If employees are successfully achieving the goals, defects should also be decreasing and staff turnover should also decrease as the staff satisfaction should increase from the reward and recognition they are receiving for the completion of goals.

Another strategy is increased use and focus on job interviews in selection. Selection is a process undertaken in the establishment phase and it involves choosing the candidate that best matches the organisations needs and wants. When conducting job interviews as a part of selection Gander should try and determine if the candidate will be able to help produce a high quality product and be motivated to work productively. If the business finds better candidates that are able to produce a higher quality product more customers should be attracted to increase revenue, profit and market share. Defective products should also decrease if the new employees have the required skills to produce a high quality product.

The operations function is responsible for managing the transformation process. That is, using processes to transform inputs into outputs.

One strategy that could be used is TQM. This is an organisation wide commitment to excellence and quality. Continuous improvement becomes a shared responsibility of all members at the organisation. This should result in an improvement in the quality of products produced and therefore attract more customers and increase sales contributing to revenue, profit, and market share. The defected products should also decrease as TQM is a proactive program that aims to reduce defects before they occur. It also empowers employees as improvement to quality becomes their responsibility which should decrease staff turnover.

Another strategy that could be used is the just in time approach. This is where the resources aren’t delivered until just before they are needed in the production process. This should decrease storage costs and there is a less chance of inputs becoming damaged decreasing the chance of defected products. The decreased cots will contribute to profit and the lower amount of defects should attract customers and increase sales thus contributing to revenue, no of defects and market share.