Throughout people’s lives they are part of some form of organisation. During the many years of education, for instance, there is a range of organisations: kindergarten (a privately operated or government-funded organisation); primary and secondary schools (government- or privately operated organisations); and university or TAFE (government-funded institutions). A person’s work life will usually involve them in small, medium or large organisations. In addition, leisure time activities— sport, church or charity work—also requires membership of an organisation

0rganisations By becoming a customer, employee or shareholder, people are seen to have a vested interest in the operation of a business and are classified as a stakeholder of that organisation.

What is an organisation?  An organisation is a formal or structured arrangement where two or more people work together to accomplish some specific purpose or set of goals. They take physical, human, informational and financial inputs, then process them to create outputs of goods and/or services.

Why are organisations needed?  Organisations can achieve things that could not be achieved by individuals. By being cohesive as a group people are able to achieve a common purpose or goal.  Organisations also serve to manage complex social and technological change. By being part of a group, it enables people to share responsibilities

Organisations have common elements:  Have a distinct purpose or goal which is generally expressed as a goal or set of goals that the organisation wishes to accomplish.  Are comprised of two or more people  They adopt a distinct form of structure either formal with clearly defined rules, regulations and procedures, or informal with a simple network of loose working relationships.

PURPOSE STRUCTUREPEOPLE Characteristics of an Organisation

In general  Organisations occur in every part of our lives: socially & in our business or work life  Organisations are a deliberate arrangement of people working to achieve a specific purpose or set of goals

 Organisations enable us to achieve more through a team environment.  They provide continuity of knowledge & experience and help us to manage complex social & technological change.  Employment & career opportunities can result from being part of an organisation

Characteristics of LSO’s

Criteria for classifying an organisation as large: Number of employees (more than 200) Substantial total revenue (>$10 billion) Substantial total assets (>$390 million) % Market share (dominance)  Multiple business locations —local, regional, state, national, global. Substantial gross / net profit WARNING: DO NOT use the terms ‘large’ or ‘many’

National Foods Limited

 Number of employees : In excess of 2000 employees  Value of net assets : In excess of $350 million  Total revenue : In excess of $1 billion  Profits : Net profit approximately $50m ($28.6m for 6 months to December, 2002)  Market share : Market leader in fresh milk  Market leader in dairy foods sectors products: yoghurt, fromage frais, dairy desserts, cream and cheese  Size of operations :  Dairy foods brands: Yoplait, Fruche, Divine Classic, YoGo and Farmers Union  Cheese brands: King Island Dairy, South Cape, Tilba, Timboon and Clover Creek  Number of business : Manufacturing plants and sales offices in all Australian states and locations New Zealand  Franchise rights in Singapore, Hong Kong and other Asian countries  Source:

General Features of LSO’s:  Develops strategic goals & objectives (employees & employer work together to achieve goals)  Creates strategic plans- This involves the long-term planning (two to five years) undertaken by senior management to achieve specific corporate objectives.  Puts formalised policies, procedures & rules in place for all employees to know how to act and react.

General Features of LSO’s: o Organisational structure The organisation’s internal formal framework to show how management is linked and how authority is transmitted. o Chain of command and hierarchical management structure- created due to the need for a route through which authority can be passed down o A coordinated and decentralised approach to decision making- Decision making involves delegation & empowerment of employees o The specialisation of activities into departments or within departments (e.g. marketing & research and development, accounting & finance, human resources etc.,

There are many large-scale organisations that operate in Australia. Australia operates as an open-market economy and its organisations take their place in the global marketplace. Organisations that are owned and based solely in one country are referred to as being ‘domestic’ or ‘national’ in their operations. Many businesses choose to expand their business operations beyond their national or domestic borders and become international or global in their business focus. Organisations that are owned and based in one country while having branches or subsidiaries in other countries are referred to as ‘multinational/transnational corporations’. Examples of Australian multinational companies are Amcor, BHP Billiton, Lend Lease, Qantas and National Australia Bank, Nestle, Christian Dior, Nike, Esprit, Country Road, Yoplait, Kraft, Ford, Holden, Virgin, Adidas, Estee Lauder etc.,

DO LSO’S HAVE DIFFERENT NAMES?:

This occurs when a company, applies to have two independent listings on two stock exchanges. This usually occurs due to a merger. e.g. BHP Billiton is listed on the Australian Stock exchange (ASX) & UK stock exchange DUAL LISTED COMPANY:

 A takeover occurs when one business purchases a controlling share (50.1%) in another business. Example, National Mutual by AXA TAKEOVERS: 8

 A merger is an agreement between two or more businesses to join together to form one united business. Example: SPC & Ardmona MERGERS:

Markets a standardised product worldwide & allows only minimum adaptations to local conditions & tastes from country to country. They look at the world economy as a single market INTERNATIONAL /GLOBAL:

Economists are not in agreement as to how multinational corporations should be defined! MULTINATIONAL:

Multinational corporations (MNCs) are businesses that have a head office in 1 country & operations in more than one country. For example, the energy business, BP, operates in more than 100 countries. Corporations that control assets in more than one country are also known as transnational corporations (TNCs). Some MNCs control more money than some governments. An acceptable definition:

Different Types of Organisations. Once it has been determined that an organisation can be classified as large due to its size, there are additional ways it can be classified: By ownership, focus and type of business activity. Organisations are either privately owned and operated or run by various levels of government.

 Government Business Enterprises (e.g. Australia Post) - Aim to make a profit for the Government, pay tax, corporatised (adopt work practices similar to those found in the private sector)  Government Department (e.g. Department of Defence, Department of Health etc.,) - Aim to provide a service to the Australian public & depend on the Federal budget each year for funding PUBLIC SECTOR:

PRIVATE SECTOR  Private Companies (Jims Mowing, Nepean Family Medical Centre, Crazy Johns) - owned by individuals or companies, aim to make a profit, typically have PTY LTD after the company name

 Public Companies (Westpac Banking Corporation, BHP Billiton, Qantas) - listed on the stock exchange - have a Board of Directors & CEO (the Chief Executive Officer is the most senior manager in an organisation) - aim to make a profit / share value for their shareholders - have LTD after their business name (Limited)

 Not for profit organisations (Amnesty International, Kidney Foundation, Salvation Army etc.,) Charities: - aim to help the disadvantaged in society Foundations: - aim to raise awareness

There are three main industries:  Primary (mining, agriculture, fishing, forestry)  Secondary (manufacturing, processing, construction)  Tertiary (provision of a service eg. Optus) (i) quaternary (service sector, distributing & selling finished goods) (ii) quinary (domestic services – paid & unpaid)

Organisational objectives and strategies

ORGANISATIONAL OBJECTIVES:  Set depending on the nature of the business activity being taken  Corporate objectives & goals are set beginning with a Mission statement (i.e. purpose - why does the business exist and how it will operate.) and  Vision Statement –what the organisation aspires to become.  Develops departmental & operational objectives  Develops individual objectives of employees (this process is called Management by Objectives)

Organisational Strategies  Strategic plans need to be put in place at each level of the organisation to assist in achieving the objectives of a business- how?  It is through the function of planning, organising, leading & controlling that management is able to assist the organisation to achieve these objective

Vision statement:  A strategic vision is a description of what the company is capable of becoming or where it sees itself in the future. The vision is often communicated in the mission statement.  The Chief Executive Officer (CEO) articulates a strategic vision for the organisation. The CEO envisions the company not as it currently is, but as it can become.

The IKEA vision is to create a better everyday life for the many people. We make this possible by offering a wide-range of well designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them. (

 Westpac's vision is to be the leading financial services company in Australia and New Zealand. We will earn all our customers' business by delighting customers and presenting as One Westpac.  Our values and behaviours will help us achieve our goals: One Team Working together as part of one team, keeping it simple and celebrating success. Delighting Customers Knowing our customers and what matters most to them, being an advocate and creating powerful experiences to earn all our customers' business. Achievement Striving to be recognised as the best in our roles and rewarding those who step beyond their boundaries to win for customers. Integrity Value and trust of our colleagues, honouring commitments and doing the right thing for our business and our community - for today and tomorrow.

Ford: to become the world's leading company for automotive products and services.

Mission statement:  An organisation’s mission is the purpose or reason for the organisation’s existence.  A well conceived mission statement defines the fundamental, unique purpose that sets a company apart from other organisation’s of its type and identifies the scope of the company’s operations in terms of products and services offered.  A mission statement may also include the organisation’s philosophy about how it does business and treats its employees.

Mission Statements Ford: we are a global, diverse family with a proud heritage, passionately committed to providing outstanding products and services. National Australia Bank Group’s mission is to ‘tailor financial services to help individuals, families, businesses and communities to achieve their goals’.

Values statement,  outlines what the organisation sees as its corporate values.  The values statement of the National Bank is:  Service to our customers.  Quality in everything we do.  Professionalism and ethics in all our actions.  Competitiveness and a will to win.  Growth and development of our people.  Continuous productivity improvement.  Growing profit for our stakeholders

Objectives Objectives state what is to be accomplished and by when should be quantified if possible.

Corporate objectives or goals  Senior management determine and establish the strategic objectives required by the organisation as a whole to reach its overall purpose.  these are long-term (two to five years) objectives and must be achievable and measurable.  they must be communicated to stakeholders, while acting as motivators to employees. Corporate objectives often cover issues such as financial, social, ethical and environmental goals.

Department objectives or goals  tactical or medium-term (one to two years) objectives needed to achieve the specific targets set for a department of division.

Operational objectives  Operational objectives are  precise short-term (daily, weekly, half yearly, annual) objectives which are used by work groups or individuals.  For example, a sales manager sets an objective relating to a sales quota for the next month, or a production supervisor sets the production output for the assembly line for the coming week.

Management by Objectives’ (MBO). where the overall aims of an organisation are incorporated into becoming specific achievement targets for each division, department, and individual (manager/worker).

Some of the areas in which an LSO might establish its goals & objectives include:  Profitability (net profit)  Efficiency (the ability to convert inputs (resources such as land, labour, capital) into outputs (goods or services) at the lowest cost)  Shareholder wealth (dividends plus price stock appreciation)

 Reputation (being considered a “top” organisation)  Employees welfare (employment security, wages, diversity)  Market leadership (% of share of total industry sales)

SMART Objectives:  1. Specific: they describe a specific outcome  2. Measurable: they are linked to a rate, number, percentage or frequency  3. Achievable: with a reasonable amount of effort, they can actually be achieved  4. Relevant: the people involved have the necessary knowledge, authority and skill  5. Time ‐ based: they include clearly defined finish and/or start dates

Large scale organisations contribute to the Australian economy by:  Contributing to Gross Domestic Product (GDP)  Employment (direct & indirect)  Exports / Balance of Payments  Research and development  Infrastructure growth (roads, gas, electricity etc.,) 15

Negative contribution that LSO’s make to the community. Downsizing Is reducing the size of an organisation, in particular the number of employees to cut costs and increase productivity.

Outsourcing The process of gaining outside people to perform non-core tasks required by the organisation. e.g. catering, cleaning and transport.

Damage to the Environment  Through pollution  Contribution to Greenhouse gas emissions  Agriculture,manufacturing, power generation and transportation all contribute to greenhouse gas.  Environmental damage impacts on the economy through costs of clean up or repairs.