1.1 CHARACTERISTICS OF LSOS

WHAT IS AN ORGANISATION? Organisation is created when two or more people work together to achieve their common objective. Think about the organisations that you belong to: School Part-time job Sports clubs Hobby groups Volunteer groups

WHAT MAKES AN ORGANISATION ‘LARGE’?  Number of employees:  Australian Bureau of Statistics defines a LSO as one that employs 200 people or more.  This is the MAIN indicator we use

AUSTRALIAN LSO S BY NO. OF EMPLOYEES

Total Assets  This is the value of what the organisation own  Also know as market capitalisation  LSO will have substantial assets  This is generally accepted as being in excess of $200 million

Amount of Revenue  This is the amount of income an organisation makes.  LSOs make substantial revenue  This generally considered as revenue in the millions

FOREIGN LSO S OPERATING IN AUSTRALIA BY REVENUE

OTHER FORMS OF ‘LARGE’ CLASSIFICATION  Significant market share – percentage of the market an organisation commands  Extent of operations (transnational/multinational company)  Net profit – income minus all expenses

MANAGEMENT FUNCTIONS  All LSOs have requirements of certain functions being performed in order to effectively operate.  These are generally generic across most organisations.  Typical management functions include:  Human Resources  Operations  Marketing  Finance/Accounting  Research and Development

HUMAN RESOURCES  Coordinates all activities and resources in relation to human employees.  Includes but is not limited to:  Recruitment and Selection  Training and Development  Payroll  Employee Relations  Performance Appraisal  Rewards and motivation

OPERATIONS  All activities involved in the production of a good or service  Includes but is not limited to:  Optimising manufacturing  Supply chain management  Managing inventory  Managing waste  Managing quality

MARKETING  All activities involved in promoting and selling products or services.  Includes but is not limited to:  Advertising and promotions  Selling techniques  Price strategies  Distribution networks  Market research

FINANCE/ACCOUNTING  All activities involved in financially running the business.  It includes but is not limited to:  Book keeping  Financial planning and budgeting  Financial models  Data analysis

RESEARCH AND DEVELOPMENT  All activities directed toward the innovation, introduction, and improvement of products and processes.  It involves but is not limited to:  Invention  Market research  Tests and trials  Designing

2009 VCE EXAM QUESTION Question 2 Wombat Airlines is a large-scale organisation that operates internationally. A unique feature of this airline is that it does not outsource any part of its business. This means it is responsible for the maintenance and cleaning of its planes and the manufacture and supply of the food that it serves. a.Describe two characteristics that would identify Wombat Airlines as a large-scale organisation. (2 marks)

EXAMINERS REPORT

2010 VCE EXAM Question 1. The Global Financial Crisis has led to a substantial reduction in the number of customers for Flyalot Airlines. Management is predicting that a further drop in customer numbers will occur over the next twelve months. As a result management is reviewing all areas of the organisation. c. Identify two management functions. For each function discuss one strategy that Flyalot Airlines could use to overcome the problems caused by decreasing customer numbers. (4marks)