Business ManagementChapter 1.7-1.10Cameron Stow

Large Scale Organisations in Context• Listed on the Australian Stock Exchange (ASX) –

highly likely• > 200 people employed• Multiple locations for operations, headquarters

and possibly overseas based.• Assets are substantial – refer to annual reports

you have read.

Large Scale Organisations in Context• Ramsay Health• Woolworths• Bunnings• BHP Billiton• Billabong• Iluka

Large Scale OrganisationsTHE GOOD• Contribute to Australia’s Gross Domestic Product• Create Employment for many workers.• Contribute to our balance of payments eg if the

product is exported. (Balance of payments is exports minus imports)

Large Scale OrganisationsTHE BADNegative Externalities.• Pollution• Control the prices in the market if the organisation is large

enough.• Outsourcing eg sweatshops• Corporate Governance issues eg James Hardy and the

asbestos compensation matter

Large Scale Organisations• Know the difference between an organisation that

is in the PUBLIC SECTOR and one that is in the PRIVATE SECTOR.

• Stakeholders?????? Who are they? There has always been an examination question that asks about these people or organisations.

LSO Stakeholders

Types of Stakeholders in LSO’s.

STAKEHOLDERS• Those that have an interest in an organisation.

• Those that could be affected by decisions made by the large scale organisation.

• In the exam, bring the stakeholders into context by looking at the example given of the large scale organisation, its operation, location and environmental impact.

STAKEHOLDERS

• Stowy’s abattoir Company is a LSO and wants to build a meatworks 2km outside of sleepy Learmonth near Ballarat. It claims it will create 300 new jobs and export A$500 million per year. The company has had several court actions for pollution in the past.

• STAKEHOLDERS

Learmonth – Population 800

STAKEHOLDERS – Who are They?

• Stowy’s Abattoir Company is a LSO and wants to build a meatworks 2km outside of sleepy Learmonth near Ballarat. It claims it will create 300 new jobs and export A$500 million per year. The company has had several court actions for pollution in the past.

STAKEHOLDERS• Learmonth

residents• Stowy’s/holders• Local graziers• Local suppliers• Trade Unions• Managers at

Stowy’s Corp

1.8 Objectives of LSO’s

1.9 Measuring Organisational PerformanceOrganisational performance can be measure based on two key areas these being:

- Through financial indicators;- Through efficiency and productivity.

Key Performance Indicators - Financial• A way to measure the performance of a large

scale organisation• Profit after tax• Sales• Assets• Share prices • Market share

KPI’s – Non-Financial• Usually found by surveying people.• Worker satisfaction• Customer satisfaction• Workplace accidents • Greenhouse emissions

Efficiency and productivity

Efficiency and productivity

Effectiveness of LSO’s

SAC Revision- SAC is 50 minutes and you are allowed a one page A4 cheat

sheet. Remote students can access these SACS from Mr Sarup in Dimboola or Mr Bandel in Nhill.

- Hopetoun students will sit the SAC on Wed 22nd Feb. Nhill will sit it on Thursday 23rd and Dimboola can be either day.

- You need to be confident that you can meet the key knowledge and skills set out at the start of the SAC (these are on the next slide).

- In addition to chapter one you also need to know the concept of ethical and socially responsible management (ESM) is. You will find more information about ESM in this powerpoint as well as on page 48.

What is ESM

Ethical and Socially Responsible Management relates to the moral standards and consideration for the broader community by large-scale organisations through their activities and actions. While all modern large-scale organisations are increasingly confronted with this issue, it has been of particular relevance to the Iluka company particularly in relation to road damage caused by trucks.

In 2008, Iluka commissioned an Environment Effects Statement. This statement states that, “the additional traffic generated by each of the mines is estimated at around 200 trips per day (two-way) of which 40% are trips by haul trucks”.

Questions to students…

What impact did these trucks have on the broader communities around the Wimmera/Mallee region?

How well was this impact communicated to the communities prior to the increasing the number of trucks on the highways?

You SAC question will expect that you can explain the ESM concept, provide an overview of a business with an ESM issue and be able to discuss the issue and its relevance to stakeholders.

ESM – Iluka example

How to answer this question…

Explain what an ESM is.

Iluka – describe the company. You will find information on their website. http://www.iluka.com/

Discuss the issue and relate it to the stake holders in the company.

Useful resources to learn more about iluka…http://cameronstow.files.wordpress.com/2012/02/mbs2_ees_ch07-9_impact-assessment1.pdf

http://www.iluka.com/

http://www.sunraysiadaily.com.au/news/local/news/general/roads-dangerous-council-urged-to-seek-serious-help-to-fix-highways/2440971.aspx

http://www.milduraindependent.com/news/index.php?option=com_content&view=article&id=3488:trucks-to-be-cut-from-henty-highway-railway-trial-planned&catid=1:news&Itemid=2

SAC Revision

This SAC should have no surprises. Check points for success…YOU MUST KNOW THE KEY KNOWLEDGE

• characteristics of large-scale organisations;• variations in types of large-scale organisations, their objectives and related business strategies;• contributions, both positive and negative, of large-scale organisations to the economy;

• internal and external (operating and macro) environments of large-scale organisations;• performance indicators used to evaluate the performance of large-scale organisations, • identification and characteristics of stakeholders of large-scale organisations, including their interests, possible conflicts and related ethical and socially responsible considerations.

SAC Revision

You must be able to demonstrate the key skills…

The following key skills are the focus of this task:

• accurately use relevant management terms;• analyse business information and data;• analyse the context in which large-scale organisations operate;• apply knowledge and concepts to practical and/or simulated situations.