Chapter 1 – large scale organisations in context
Organisation: two or more people working together to achieve an
Large scale organisation:
• employs more than 200
• assets worth more then $200 million
• earn revenue in millions
• numerous business locations
• large market share
corporation: owned by shareholders, aimed to make profit
shareholder: any person who owns shares in corporation
Need to know all characteristics of LSO’s, and provide examples from case
study scenario or provide an example yourself of an LSO you know of.
According to the Australian Bureau of Statistics, a large-scale organisation
is one that employs more than 200 employees. The Salvation Army
employs approximately 1900 employees; therefore, it meets this criterion to
be classified as a large-scale organisation.
MUST LEARN TERMS:
Vision statement - states what the organisation aspires to become
Mission statement - expresses why an organisation exists, its purpose and
how it will operate
Explain these two terms referring to statement (if provided in a case
scenario). If not provide one you have learnt from an LSO.
Objective: desired goal, outcome or result that the organisation wishes to
Strategies: actions that an organisation takes to achieve objectives
Management by objectives
Management by objectives is a process of defining objectives within an
organisation so that management and employees agree to the objectives
and understand what they need to do in the organisation to achieve them.
These objectives are expressed in a hierarchical form, with the leading
statement being the mission statement and extending down to individual
It can also be used as a performance management technique where
individual employees set specific, measurable objectives with management
and their performance is measured by management against achievement of
Types of organisations
Public Companies (Ltd.)
Private Companies (Pty Ltd)
Government Business Enterprise (GBE)
Types of Organisations
Public Corporations shares are traded on the Australia Securities Exchange
(ASX) (BHP Billiton, Telstra)
Private Corporations are not listed on the ASX and can have up to 50
shareholders (Ripcurl, Retravision)
A GBE is owned and operated by the government (Australia Post,
Government departments – community services (the department of
education, employment and workplace relations)
Non-for Profit organisations include charities and foundations, (Salvation
Army, World Vision, The Smith Family)
SAC/EXAM HINT: Types of LSO
Need to know type of large-scale organisation, orientation (focus) and
• World Vision is in the private sector and is a non-government organisation
• Its orientation is not for profit as its main focus is to provide a service to the
community and not to make a profit to return to shareholders.
• World Vision Australia operates in the quinary sector (a division of the
tertiary sector) and provides community services to people in need,
supported by volunteers and members.
Compare objectives of World Vision Australia with NAB.
What similarities and differences are there?
One difference is as a not-for-profit organisation, World Vision Australia
focuses more on its service objective of serving the community with
humanitarian aid in times of crisis, whereas for-profit organisations such as
the NAB focus more on their financial objective of making profit and
returning a dividend to their shareholders.
A similarity would include the fact that both types of organisations have
ethical and social responsibility objectives as they have to contribute
positively to the community and the environment and be a good corporate
Research and development
A large-scale organisation creates an organisational structure that has
separate departments, each focusing on a particular functional area, and
allocates people and resources to each area to achieve specific objectives;
for example, Human Resources. The Human Resource manager is
responsible for the management of the employees. This includes
recruitment, selection, remuneration, training, and termination issues.
Positive contributions of LSO’s to the Australian
Gross domestic product: total monetary value of all goods and
services produced in country over 1 year
- Research & development
- Infrastructure growth
Negative contributions of LSO’s to the Australian
Damage to environment
Downsizing: workplace staff reduction, eliminating jobs and positions
Outsourcing: non-core tasks completed by another person or
Positive & Negative impact on the economy
Wont get any marks if you say that one positive contribution LSO’s make to
the economy is they provide employment.
LSO’s directly employ approx. 30% of our labour force
providing income to many Australians. LSO’s require sizable workforces.
They provide many employment opportunities, directly within their
organisation and also indirectly through their purchase of goods and
services as inputs in the production process. In an economic climate
where there are lower levels of unemployment and rising incomes, people
tend to spend more which helps businesses to do well and
expand. Higher standards of living are also created through
Internal & external (macro & operating environments)
includes anything the organisation has some degree of control over :
Corporate culture –values, ideas, expectations, beliefs shared by
members of the organisation.
Outside stakeholder the organisation comes into contact with
• Lobby groups
• Trade unions
Forces, conditions and trends in the economy and society which the
organisation operates within. Has no control over
Question 3 VCAA 2012 exam
• a. 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.
b. 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
VCCA EXAM QUESTIONS
1d. (2011 exam)
The Human Resource Manager of Southern Industries needs to use
performance indicators to assist him in monitoring staff morale.
Describe and justify two suitable performance indicators he could use to
measure staff morale.
2. (2011 exam)
Freda Campbell is setting up a new business in Melbourne that will
manufacture and sell furniture.
a. Evaluate two positive and two negative contributions of large-scale
organisations to the economy.
PAST VCAA EXAMS
Question 1 a(2010 exam)
a.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.
a. Deﬁne the term performance indicator.
1b. Identify and explain how two stakeholder groups of Flyalot Airlines would
have been adversely affected by the Global Financial Crisis.
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.
d. For each of the strategies you have identiﬁed in part c., select and justify a
performance indicator that could be used to measure the success of the
PAST VCAA EXAMS
Question 1 (2013)
• a. Identify two characteristics of large-scale organisations. 2 marks
• b. Outline two positive and two negative contributions that large-scale
organisations make to the Australian economy. 4 marks
• c. Stakeholders may place competing demands on large-scale
organisations. Explain why this may occur. 2 marks
PIs - specific criteria used to measure the efficiency and effectiveness
of the organisations performance
Effectiveness: degree to which an organisation has achieved its stated
Efficiency: how well an organisation uses resources to achieve
Types of PI’s: (Performance Indicators)
Number of sales
Percentage of market share
Rate of productivity growth
Results of Customer & staff satisfaction surveys
Level of staff turnover
Number of customer complaints
Level of wastage
Number of workplace accidents
MUST KNOW KEY TASK WORDS
Compare (similarities & differences)
Evaluate (strengths & weaknesses)
Identify a performance indicator the Finance function of World Vision
Australia could use to evaluate the organisation’s performance
A performance indicator is a measure used by an organisation to help it
determine whether the objectives of the organisation are being met.
Performance indicators can be qualitative or quantitative.
One performance indicator the Finance function could use to evaluate the
performance of World Vision Australia could be the level of donations
collected from the public. The higher the value of monetary donations raised
from public collections, the lower the dependence on government funding,
which will help the organisation achieve its strategic plan goals.
social responsibility: obligations a business has over and above its
legal requirements to the wellbeing of stakeholders as well as the
ethical management: to the process of abiding by moral standards and
doing the right thing in the interest of all stakeholders
and social responsibility is just good business’
stakeholders: groups and individuals who interact with the organisation
and have an interest in its activities. These exist at three different levels
of the business environment that it operates in: internal environment,
external operating environment and external macro environment.
Employees - might seek higher pay and better conditions of work,
Members of the community
Identify a stakeholder from the external and internal business
environments of World Vision Australia.
Must define stakeholder first, even if question does not ask you to do this.
These exist at three different levels of the business environment that
operates in: internal environment, external operating environment and
external macro environment.
From the internal environment, the employees and volunteers of World
Vision Australia are stakeholders. Employees might seek higher pay and
better conditions of work, which a not-for-profit organisation might find
difficult to meet. Volunteers provide their services often for a short period of
time and the organisation might face the pressure of trying to retain them for
a longer period of time in order to maintain continuity of operations.
From the external operating environment, suppliers that donate goods for
distribution as aid are stakeholders. Donations by suppliers may not be
assured, which can create a pressure in terms of its ability to sustain
What type of pressure would stakeholders such as employees and
suppliers exert on an organisation such as World Vision Aust to be
ethical and socially responsible in its operations.
One socially responsible consideration would be that humanitarian aid is
provided in an efficient and equitable manner to those in greatest need.
If employees,and volunteers were to think that World Vision Aust was not acting
in an ethical and socially responsible manner they could exert pressure by
withdrawing their services.
Similarly, suppliers could exert pressure by discontinuing donations if they were
not satisfied that donated goods and services were being distributed to those in
greatest need or for designated causes.
• Summarise Chapter One.
• Make sure you have completed all WIKI
• Complete last years SAC.
• Check study design.
• Go through checklist.
• See your teachers!!!