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Unit 3 & 4 Business Management > Unit 3 Outcome 1 > Flashcards

Unit 3 Outcome 1 Flashcards

0
Q

Describe an LSO?

A

LSOs are characterised as having a large number of employees, specifically 200 or more. They also have assets exceeding $200 million and large revenue in the millions. Not only that, LSOs typically have management functions and can be multinational. For example Telstra.

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1
Q

What is an organisation?

A

An organisation is two or more people working together to achieve an objective.

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2
Q

What is a multinational corporation?

A

A company which is owned and based in one country however operates in many countries around the world.

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3
Q

How are LSOs unique?

A

. operate in many countries
. produce goods and services en masse
. have a range and large number of stakeholders
. make large contributions to the economy (+ & -)
. have access to huge amounts of finance
. produce goods and services efficiently due to technology and large numbers of staff
. produce goods and services cheaply because they can reduce costs
. undertake long-term planning in order to achieve corporate objectives
. have great political influence
. group staff into departments
. management structures
. have owners or shareholders, who have little to do with day-to-day operations.

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4
Q

Why do management functions exist?

A

Management functions exist because LSOs often have a lot of staff which can’t all be managed by the CEO. The different departments have managers which the CEO can then monitor individually.

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5
Q

What is a CEO?

A

Chief Executive Officer.

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6
Q

What are 3 types of LSOs?

A

. government departments
. corporations
. not-for-profit organisations

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7
Q

What is a corporation?

A

. A corporation is a company owned by shareholders and managed by directors with aims to make a profit.
. They sell shares to the public in order to raise funds for establishing or expanding the company.
. Public companies, private companies and GBEs are corporations.

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8
Q

What are Government Business Enterprises (GBEs)?

A

They are government owned and operated organisations which carry out government policies while they deliver community services. They run just like other companies and seek profit. Examples include Australia Post and VicRoads.

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9
Q

What are private companies?

A

These are organisations which are not listed on the ASX. They have restrictions on who can buy their shares and can have mo more than 50 shareholders. Examples include family owned businesses such as Rip Curl.

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10
Q

What are public companies?

A

These are organisations which can have millions of shareholders because they are listed on the ASX. This means members of the public can buy or sell the organisations shares and it means they the organisations must publish informations regarding, for example, profit. Examples include BHP Billiton, Telstra and Virgin Blue.

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11
Q

What is a shareholder?

A

Any person who owns shares in a company.

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12
Q

What are government departments?

A

. They at all three levels of government and provide essential community services such as health, education and welfare.
. eg. The department of education

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13
Q

What are not-for-profit organisations?

A

. These include charities and foundations.
. Instead of profit, their main goal main purpose is to provide goods, services and funds to those in need.
. eg. Salvation Army and world vision.

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14
Q

What is privatisation?

A

. It’s when GBEs are sold to the private sector and then run as profit making businesses.
. eg. Telstra and Qantas

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15
Q

Draw a diagram of the types of Australian Large-scale organisations.

A

Government departments
|
|
Types of Australian LSOs
/ \
/ \
Corporations Not-for-profit
(Private companies, (Charities and public companies & GBEs) foundations)

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16
Q

What is in the private sector?

A

. private companies
. public companies
. charities/foundations

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17
Q

What is an objective?

A

A desired goal, outcome or specific result the organisation intends to achieve. Objectives give the organisation direction and provide it with a path to follow and an increased chance of being successful. It is followed by the vision statement and mission statement.

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18
Q

What is in the public sector?

A

. government department

. government business enterprises

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19
Q

What is the vision statement?

A

This states hat the organisation aspires to become, therefore very future orientated. It is used along with the mission statement to help organisations find clarity of their purpose and expectations.

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20
Q

What is the mission statement?

A

It is the statement outlining the reasons for the organisations existence, the purpose and method of operation.

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21
Q

What can organisational objectives include?

A 
. Making a profit 
. Improving customer service
. Becoming more involved in the community
. Less damage to the environment 
. Improve employee satisfaction
. Improve costumer satisfaction
. Growth
. Sustainable earnings
. Further help to those in need
. Raise community awareness on issues 
. Overall good organisational reputation
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22
Q

What are organisational objectives?

A

. All organisations a different and therefore have different goals.
. eg. not-profit-organisations exist to achieve objectives other than make profit to distribute to shareholders.

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23
Q

What are the typical management functions?

A 
. human resources
. marketing
. research an development 
. finance
. operations
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23
Q

What are strategies?

A

The actions that an organisation takes to achieve specific objectives.

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24
Q

What is the typical order when it comes to trying to achieve objectives?

A

Vision > mission statement > set objectives > develop strategies > evaluate performance (PIs)

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25
Q

Describe the management function of: operations

A

Responsible for the production of the organisations product or service.

26
Q

Describe the management function of: finance

A

Responsible for managing all monetary aspects of the organisation and determining how much money needs to be made in order to breakeven.

27
Q

Describe the management function of: human resources

A

. responsible for coordinating all the activities involved with employees, from acquiring employees to terminating employees

28
Q

Describe the management function of: marketing

A

Responsible for managing promotions and determining the needs of the customers.

29
Q

Describe the management function of: research and development

A

. responsible for designing and developing new products which can be either physical products or the way the products are developed (improving existing product processes)

30
Q

How do LSOs make positive contributions to the economy?

A

. through contribution to economic growth,
. contribution to employment,
. contribution to exports,
. contribution to research and development
. and through contribution to infrastructure

31
Q

How do LSOs benefit the economy their contribution to economic growth?

A

Large-scale organisations are able to produce a huge amount of a wide range of goods and services. This contribute to economic growth, which is measured by gross domestic product (GDP).

32
Q

What is gross domestic product (GDP)?

A

This refers to the total monetary value of all goods and services produced in a country over one year.

33
Q

How do LSO benefit the economy through their contribution to employment?

A

Large-scale organisations are able to employ large numbers of people. LSOs provide 2.9 million jobs for people (30% of private sector workforce).m
. more employment = higher incomes
. higher incomes = people spending more
. people spending more = higher standards of living and other business’ earning profit
. other business’ earning profit = paying employees

cycle (basically the more people spend the better it is for the economy)

34
Q

How do LSO benefit the economy through exports?

A

. Many Large-scale organisations export their products to overseas markets.
. Exporting products overseas contributes to Australia’s Balance of Payments (BOP).
. A favourable BOP exists when there are more payments coming in than going out.
. Therefore when exporting exceeds importing because of our LSOs, Australia has more money flowing in.
. This allows for more jobs to be created, which boosts incomes and improves our living standards.

35
Q

What is the Balance of Payments (BOP)?

A

This is a record of a country’s trade and financial transactions with the rest of the world. It is split into two accounts, being:
. the current account and
. the capital & financial account

36
Q

How do LSO benefit the economy through research an development?

A

Due to their size, LSOs are able to undertake extensive research and development. Research and development is undertaken to improve our knowledge, and then used by businesses to improve existing products or create new ones. Finding new ways to do things leads to improved efficiency and increased productivity.

37
Q

What is research and development?

A

This refers to the activities undertaken to improv existing products or create new products.
Invention - the development of something new.
Innovation - occurs when something already established is improved upon.

38
Q

How do LSO benefit the economy through infrastructure growth?

A

Infrastructure refers to highways, railways, airports, communication systems, education and health facilities, water, gas and electricity supplies. Most of these services are supplied by numerous LSOs, especially those that are also GBEs. The extent and quality of infrastructure is crucial to the performance of the economy.

39
Q

How do LSOs make negative contributions to the economy?

A

LSOs can face a lot of criticism for their actions. they are sometimes seen as having little regard to the economy when they make decisions. his includes:
. downsizing
. outsourcing
. damage to the environment

40
Q

How do LSOs hinder the economy through downsizing?

A

Downsizing involves workplace staff reductions, with the elimination of jobs and positions. This is often done in an attempt to reduce costs and improve productivity, however it leads to increasing unemployment. This is bad because it results in less spending (think of cycle).

41
Q

Why are large-scale organisations so important?

A

. They encourage competition = cheaper products
. Create value which encourages economic growth
. Improve our quality of life
. Produce a wide range or products giving consumers greater choice
. Pay taxes to government
. Provide employment and income for employees
. Assist in the development and use of new technology
. Encourage research and development

42
Q

How do LSOs hinder the economy through outsourcing?

A

This is the contracting of some organisational operations to outside suppliers. It is common these days and can result in:
. local job loses
. materials being sourced from overseas
This is bad because it means money is flowing into other countries instead of Australia.

43
Q

How do LSOs hinder the economy through damage to the environment?

A

As a result of activities undertaken by LSOs, including agriculture, manufacturing and power generation; damage to the environment through contribution to greenhouse gas concentration is a problem. When damage like this occurs to the environment it needs to be fixed, however their are usually costs involved. This money often has to be taken out of our taxes, which could’ve been put towards education or health.

44
Q

What are business environments?

A

The surrounding conditions in which the business operates, this can be divided into two broad categories: internal and external

45
Q

What are the business environment divisions?

A

internal: also know as micro
external: separated into operating and macro

46
Q

What is the internal environment?

A 
It is also known as a micro environment and refers to the conditions/includes factors with which the business has complete control over. This includes:
. employees
. managers
. management style
. corporate culture 
. and company policies.
46
Q

What is the operating environment?

A 
This refers to outside factors which the organisation comes into direct contact with in the course of conducting it's business. This includes:
. customers 
. suppliers/creditors 
. competitors 
. and lobby groups.
48
Q

How can the factors of the operating environment impact an organisation?

A

Customers - They buy products from LSO and expect high quality products at competitive prices. Organisations need to be able to respond to needs of customers because consumers rule.

Suppliers and creditors - They provide businesses with resources in order to conduct daily operations. They want to sell resources at the highest price possible because that’s how they make profit. Supplier can impact an org. by increasing prices for resources, meaning the org. either needs to pay more or consider finding another supplier.

Competitors - They are rival organisations which provide similar products or services. They can impact an org. by lowering prices because the org. then has to consider whether to lower prices too or have the same prices but potentially lose costumers.

Lobby groups - They are people who try to directly influence or persuade an organisation to adopt particular policies. They give orgs. suggested standards to follow. If the org. doesn’t follow they can receive criticism and also a bad reputation, this could deter customers.

49
Q

What is the macro environment?

A 
This comprises of broad forces, conditions and trends in the economy and society within which the organisation operates. The organisation has no control what so ever over this category. These aspects include 
. Technological developments
. International forces/globalisation
. Legal/political influences
. Economic influences 
. Social attitudes
50
Q

How can the factors of the macro environment impact an organisation?

A

Political influences - Elected governments at all levels in Australia regulate markets and have power to make or change laws. Organisations must comply with the laws and regulations introduced.

Globalisation - This turns the world into a single market through hi-tech communications, lower transport costs and unrestricted trade. This has been good and bad because although it opens up more opportunities for expansion it also means they have to be more competitive in order to compete.

Technological development - This is used by organisations to increase efficiency and productivity, along with decreased costs. However it can be a haste for organisations to constantly have to update technology so they don’t fall behind.

Economic influences - Organisations have no control over this, they simply have to deal with the fluctuations the economy constantly goes through. During a downturn costumers have less money to spend, which means businesses suffer.

Social attitudes - Societies views, especially on what is right and wrong are constantly changing. Organisations have to be able to meet these views/values in order to keep costumers.

Legal influences - Organisations are required to comply with laws made by parliament or court. This includes any changes to legislation regarding OH&S and consumer protection. This can impact an organisation because money may need to be used to comply with any changes.

51
Q

What are performance indicators?

A

They are specific criteria used to measure the efficiency and effectiveness of the organisations performance. They evaluate performance with in the business by determining whether the objectives have been achieved. This evaluation is done by constantly asking:
. how is the organisation performing?
. is the organisation performing as planned?
. has it’s performance improved over time?
. how does it’s performance compare to that of similar organisations?

53
Q

What are some performance indicators in terms of finance?

A

. net profit figures (what remains when expenses are deducted from the revenue earned)
. number of sales (measures the number of products sold)
. percentage of market shares (proportion of total marker that an organisation has compared to competitors)
. rate of productivity growth (measures change in productivity in one year compared to the previous year)

53
Q

What are some performance indicators not based around profit?

A

. costumer satisfaction as measured by number of complaints
. costumer satisfaction as measured by number of returns
. employee satisfaction as measured by number of sick days
. employee satisfaction as measured by staff turnover
. level of wastage (as measured by?….)
. number of work place accidents
. benchmarking (measures performance of itself against similar organisations)

55
Q

What are stakeholders?

A

They are groups and individuals who interact with the organisation and have a direct interest in it’s activities. Different stakeholders hold different expectations of the organisation.

56
Q

What are examples of stakeholders?

A 
. shareholders 
. management
. unions
. employees
. customers 
. suppliers
. members of the community
57
Q

Explain the following stakeholder, including interests and related ethical and socially responsible considerations: Shareholders

A

INTEREST: Shareholders purchase shares in the company, therefore they are partial owners. They want the organisation that they have invested in to be profitable as this increases their dividends.

E&S: There are many shareholders who will only invest in companies they see as ethical.

58
Q

Explain the following stakeholder, including interests and related ethical and socially responsible considerations: Management

A

INTEREST: Management have the responsibility of running a profitable or successful organisation.

E&S: Most managers understand that ethically and socially responsible activities should lead to increased sales. However introducing new ethical or socially responsible policies and procedures can be expensive and time consuming.

59
Q

Explain the following stakeholder, including interests and related ethical and socially responsible considerations: Unions

A

INTEREST: Unions represent employees in many workplaces in Australia. They attempt to negotiate favourable pay and work conditions on the employees’ behalf.

E&S: Unions work to prevent anything that diminishes employee rights, safety or conditions.

60
Q

Explain the following stakeholder, including interests and related ethical and socially responsible considerations: Employees

A

INTEREST: Employees are vital to an organisation as they manufacture or produce the product the organisation sells. The quality of the product depends on their skill and commitment to the process.

E&S: Employees should be valued as members of the organisation by being payed fairly, trained properly and treated ethically. If an organisation goes a step further by making sure employees’ jobs feel secure they are more motivated.

61
Q

Explain the following stakeholder, including interests and related ethical and socially responsible considerations: Customers

A

INTEREST: Costumers expect ti purchase quality products at reasonable prices and they expect to receive high levels of service.

E&S: Costumers are becoming more aware of socially responsible organisations and now use this as factor to consider before deciding to purchase products. The same goes for ethical management.

62
Q

Explain the following stakeholder, including interests and related ethical and socially responsible considerations: Suppliers

A

INTEREST: Suppliers provide raw materials that will be used in the organisation’s production process. It is essential for the organisation to develop good relationships with suppliers to ensure timely delivery of quality materials.

E&S: Many organisations today expect their suppliers to behave in a socially responsible and ethical manner.

63
Q

Explain the following stakeholder, including interests and related ethical and socially responsible considerations: Members of the community

A

INTEREST: Members of the community increasingly expect organisations to show concern for the environment they live in.

E&S: Some might be worried about organisations using valuable land resources or showing disregard for carbon emissions. They may be concerned about waste disposal or pollution. Others may be concerned about their future welfare through their own employment within organisations.

64
Q

What are potential conflicts with stakeholders?

A

EMPLOYEES & SHAREHOLDERS: Employees require safe working conditions and reasonable wages, but this will reduce the LSOs profit and dividends to shareholders.

MANAGEMENT & CUSTOMERS: Management could attempt to maintain profit and a high dividend to satisfy shareholders by raising the prices of products. However, this will upset costumers which expect reasonably priced products.

MANAGEMENT & MEMBERS OF THE COMMUNITY: Management might decide to cut costs by neglecting maintenance, which could possibly put members of the community in danger.

MANAGEMENT & SUPPLIERS: Management wishes to keep costs down to improve profit but suppliers providing ethical materials require higher prices to cover their costs.

SUPPLIERS & MEMBERS OF THE COMMUNITY: Suppliers expect to be paid fairly and promptly but they might reduce costs by using unethical or socially irresponsible practices, which can upset members of the community.

65
Q

What is ethical management?

A

This refers to the process of abiding by certain moral standards and doing the ‘right’ thing in the interests of all stakeholders.

66
Q

What is social responsibility?

A

This refers to the obligations a business has which are over and above its legal responsibilities to the wellbeing of employees and customers, shareholders and the community as well as the environment.

Unit 3 & 4 Business Management (10 decks)

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