Unit 3, Outcome 2 Practice SAC
Introduction
On completion of Outcome 2 in Unit 3, students should be able to discuss and analyse major aspects
of the internal environment of large-scale organisations.
Task details
Assessment task
Case study analysis (task 2B)
Unit/area of study
Unit 3: Corporate Management
Area of Study 2: ‘Internal environment of large-scale organisations’
Outcome 2
Discuss and analyse major aspects of the internal environment of large-scale organisations.
Relevant key knowledge
To achieve this outcome students will draw on the following key knowledge:
 key management roles:
 planning: long-, medium- and short-term
 organising: resource and task allocation techniques
 leading: importance of leadership qualities, including interpersonal, informational and
decision-making
 controlling: financial and non-financial processes and control systems
 different styles of management, including autocratic, persuasive, consultative, participative and
laissez-faire, and their appropriate application to various management situations
 key management skills as appropriate to the process of effective management
 the relationship between management styles and skills
 implications of managing the internal environment of large-scale organisations in an ethical and
a socially responsible manner.
Relevant key skills
To achieve Outcome 2, students will apply the following key skills:
 accurate use of relevant management terms
 research aspects of the internal environment of large-scale organisations using print and online
source
 analyse business information and data
 analyse major aspects of the internal environment of large-scale organisations
 apply knowledge and concepts to practical and/or simulated situations.
Instructions and conditions
In completing the following assessment task you should demonstrate an understanding of the key
knowledge for Outcome 2 and your ability to plan, organise and undertake written communication.
Answer all questions in this answer book. The marks for each question are indicated after each
question.
Conditions: Closed book
Reading time: 5 minutes
Time allowed: 60 minutes
Marks allocated: 30 marks
Case study: Hanley Hotels Limited
Hanley Hotels Limited is a large international five-star chain of hotels and eco-resorts. In Australia, the
company has operated hotels in all the major capital cities for the past 25 years. In the mid-2000s
Hanley Hotels decided to diversify its operations into eco-tourism. This resulted in the building of three
eco-resorts, one on the Barrier Reef, one in the Northern Territory (Kakadu National Park) and the
other in Western Australia at Cable Beach, Broome. The eco-resorts have been built and are run
based on a totally environmentally sustainable approach that incorporates the use of eco-aware
technology, including low-emission clean-burning diesel generators, low-power light bulbs, solar hotwater heating, a waste management system, and systems for collecting and using rainwater and the
desalination of seawater.
The company employs more than 1800 staff in Australia and prides itself on its commitment to training
young people to high standards in the hospitality and tourism industry. Hanley Hotels’ mission is:
‘To be the world’s leading five-star hotel and eco-resorts chain. We aim to meet and exceed the
expectations of our guests in quality service and all-round accommodation experience’. Our motto is:
“To provide the ultimate holiday and accommodation experience for our valued guests”.’
The parent company, Hanley Hotels Limited, located in Zurich, Switzerland decided it was time for a
review of the entire Australian operations. The company employed Hans Fritter, a specialist in hotel
and resort management, to assess the operation. His report, which was based on reviewing
operational data, talking with staff, management and guests, and his own observations of hotel and
eco-resort operations, highlighted the following points:
 The profitability of the Gold Coast Hanley Hotel was a problem. In 2009 its profit was 20%
lower than in 2008.
 When looking at staff turnover figures for the entire Australian operation (hotels and ecoresorts), there was an overall increase of 35% in 2009. However, further examination revealed
that the staff turnover at the eco-resorts was far less (10%).
 Discussions with the major capital city hotel staff revealed that they felt they were being ignored
and not appreciated by management. It was also found that rival hotels in the capital cities had
been headhunting Hanley Hotels’ highly regarded and trained staff, offering them substantially
more generous employment packages.
 Occupancy rates varied. The Gold Coast Hanley Hotel was the worst performer in the
Australian operation, whereas the occupancy rates at the three eco-resorts had risen to full
capacity with guests wanting to be placed on a waiting list in case of cancellations.
 The introduction of the Total Quality Management Program had been implemented successfully
at all hotel and eco-resorts, except for the Gold Coast hotel. Further examination revealed that
management at this hotel felt threatened by the creation of work teams and the adoption of a
participative management style.
 There was an ongoing dispute with the Liquor, Hospitality and Miscellaneous Workers’ Union at
the city hotels relating to wages and conditions for staff. As a consequence, staff had been
involved in stop-work meetings. There did not seem to be any issues noted for the eco-resorts.
Harry Moore is currently the General Manager of the Gold Coast Hanley Hotel. Commencing as a
hotel porter at 15 years of age, and without completing any formal management training, he has
worked his way up the organisation’s hierarchy to now hold this top position. The majority of Harry’s
working life has been spent working under a multi-layered hierarchical structure. Many of his staff
commented to Hans that Harry seemed to relish the status and prestige of the position of General
Manager. Hans found it difficult to interview Harry as he was often absent, spending long weekends at
his beach house at Bribie Island and leaving strict instructions not to be disturbed. Harry’s approach
now seems to be distant, with middle managers, such as Jeremy Hall, basically being left to run their
departments as they see fit.
Jeremy Hall, the Food and Beverage Manager at the Gold Coast Hanley Hotel, is in his late 30s. He
has a tertiary hospitality qualification. He has made a significant effort to resist incorporating any
participative management practices into his department. Jeremy believes that workers in his
department should follow his orders, without question. At the beginning of each shift he holds a
briefing session to give instructions and allocate tasks, but is unresponsive to questions from staff
members. A few of the younger hospitality trained staff in his department have started to resent his
dictatorial style. Hans found that staff turnover in Jeremy’s department was very high. When
questioned by Hans, Jeremy’s reply was that far too much time was wasted consulting and talking
with staff. He argued that in his position as manager, he knew best, and therefore workers should
follow his orders and simply get on with their jobs.
Since being appointed as the General Manager of the three eco-resorts in 2008, Jenny Kelly has
approached her role in an entirely different manner. She appointed a Resort Manager for each resort,
suggesting to them that they organise their staff into departments and teams, based on functions such
as food and beverage, housekeeping, activities—indoor/outdoor. Each work group was given specific
goals and their performance was to be appraised against achievement of these goals. Jenny
requested that the Resort Managers hold department meetings on a weekly basis and encourage
staff to have input into these meetings. Jenny has emphasised that she values the advice of staff in
terms of how the teams, departments and resorts are operating.
The shop steward for the Liquor, Hospitality and Miscellaneous Workers’ Union, Alex Whitehorse,
representing the workers at the Gold Coast hotel, told Hans that the situation with regard to the
negotiation of the new pay and working conditions was becoming serious. Hotel management had
refused to deal with the union when trying to negotiate a collective agreement or discuss whether their
current agreement had been changed to align with the new National Employment Standards. Alex
was concerned that workers would not be in a position to negotiate on an equal basis with
management and could be forced to work longer hours for no additional pay. Alex warns that if
management does not start to show a greater interest in negotiating a fair set of work conditions, then
a walkout by staff is highly probable.
Questions
Question 1
Identify the management style currently being used by two of the following managers at Hanley
Hotels Limited. Explain two features of each management style.
i, Harry Moore
ii. Jeremy Hall
iii. Jenny Kelly
3 + 3 = 6 marks
Question 2
On the recommendation of Hans Fritter, a new General Manager is to be appointed to run the Gold
Coast Hanley Hotel.
Outline a process or series of steps that the new General Manager might use to address one of the
problems facing the organisation.
Identify the particular problem, describe and discuss how the General Manager in this particular case
would apply these steps to resolve the problem identified.
2 + 3 = 5 marks
Question 3
Describe two management roles for either:
i. the new General Manager of the Gold Coast Hanley Hotel, OR
ii. the General Manager of the three eco-resorts.
2 + 2 = 4 marks
Question 4
Identify and explain two management skills that you believe the new General Manager of the Gold
Coast Hanley Hotel will need in order to manage the current challenges facing the business.
2 + 2 = 4 marks
Question 5
Having analysed the current situation at the Gold Coast Hanley Hotel, recommend a management
style that you believe would be the most appropriate to run this five-star hotel effectively. Justify your
answer with reference to the case study.
1 + 2 = 3 marks
Question 6
Describe two relevant criteria for assessing whether the new General Manager of the Gold Coast
Hanley Hotel OR the General Manager of the three eco-resorts, has been effective in performing their
role.
1 + 1 = 2 marks
Question 7
Explain why the ‘planning’ role of management is important.
2 marks
Question 8
Describe a situation where using the following management styles would be appropriate.
a. laissez-faire
b. autocratic
1 + 1 = 2 marks
Question 9
Discuss the initiatives that have been introduced by Hanley Hotels Limited that would be regarded as
socially responsible operations.
2 marks
Total: 30 marks
Suggested answers
Question 1
Identify the management style currently being used by two of the following managers at
Hanley Hotels Limited. Explain two features of each management style. (3 + 3 = 6 marks)
i. Harry Moore
Laissez-faire—little direction is being given by Harry as he appears to be disconnected from the
business and its objectives. This has resulted in his management team now determining their own
objectives, solving their own problems and making their own decisions.
ii. Jeremy Hall
Autocratic:
 control and authority is centralised with an emphasis on task and process
 the manager has a belief or perception that money is the main motivator for his employees’
work performance
 centralised decision-making, with decisions or orders imposed on, and directions given to,
subordinates
 little or no importance is placed on the contribution of employees—decision-making and
operations reflect the ideas, beliefs and values of the manager only
 communication is centralised, with a strict top-down or hierarchical chain-of-command
approach.
iii. Jenny Kelly
Participative:
 this style is characterised by decentralised control and authority and employee involvement
in decision-making, the development of strategies and the implementation of solutions
 employees participate in setting goals and management values the suggestions of
employees
 the orientation or focus is towards people, ensuring that employees are satisfied and
productive
 motivation is based on job satisfaction
 decision-making is decentralised with management/teams sharing in decisionmaking/problem-solving tasks
 value is placed on the contribution of employees to the overall performance of the
organisation
 communication is open and feedback is sought and valued.
Question 2
On the recommendation of Hans Fritter, a new General Manager is to be appointed to run the
Gold Coast Hanley Hotel.
Outline a process or series of steps that the new General Manager might use to address one of
the problems facing the organisation.
Identify the particular problem, describe and discuss how the General Manager in this
particular case would apply these steps to resolve the problem identified. (2 + 3 = 5 marks)
To gain full marks, students must outline the systematic approach to problem-solving and use one
problem in their answer.
The following answer focuses on the problem of staff turnover.
Identify the problem(s) and define the objective(s)—a dramatic increase in staff turnover of 35% in
2009.
1 Gather the necessary information to establish the cause of the problem(s), including whether the
increase in staff turnover is occurring in all departments or particular departments, the number of
exit interviews being undertaken, and the industry average for staff turnover.
2 Develop alternative solutions:
 do nothing about the problem
 conduct a training and development course for management to ensure they all adopt the
participative management style.
3 Analyse the alternatives. Doing nothing will only result in the problem escalating, whereas the
second option is to proactively bring about a positive change.
4 Choose an alternative and implement it. The best outcome would be achieved by a training and
development course being undertaken by various managers within the organisation.
5 Evaluate the implementation. This could be carried out by comparing the staff turnover rates for
2010 and 2011. If they have decreased, then this would indicate success based on a quantitative
measure. In addition, conducting a staff attitudinal survey would provide qualitative feedback.
Question 3
Describe two management roles for either:
i. the new General Manager of the Gold Coast Hanley Hotel, OR
ii. the General Manager of the three eco-resorts. (2 + 2 = 4 marks)
Responses for either the new General Manager of the Gold Coast hotel or the General Manager of
the eco-resorts should include any two of the following management roles.
Planning
Organising
Leading
Controlling
 Strategic planning
(L/T)
 Strategic direction
 Organisation-wide
objectives/goals
 High levels of
uncertainty/risk
 Involves developing a
systematic approach to
coordinate human,
material, financial and
informational resources to
achieve corporate goals
and objectives
 Establishing
organisational structure





 Overall accountability
 Ensuring goals and
objectives are met
 Establishing overall
performance standards
Leads—role model
Influences
Motivates
Visionary
Establishes corporate
atmosphere
Question 4
Identify and explain two management skills that you believe the new General Manager of the
Gold Coast Hanley Hotel will need in order to manage the current challenges facing the
business. (2 + 2 = 4 marks)
Any two management skills from the following list could be explained:
 communication
 delegation
 negotiation
 decision-making/problem-solving
 team leadership
 time management
 stress management
 emotional intelligence.
To gain full marks the skills need to be described and explained with reference to the General
Manager’s management of the challenges.
Question 5
Having analysed the current situation at the Gold Coast Hanley Hotel, recommend a
management style that you believe would be the most appropriate to run this five-star hotel
effectively. Justify your answer with reference to the case study. (1 + 2 = 3 marks)
Participative or consultative—students need to justify their choice of style by referring to specific
details in the case study that require the characteristics of that style to best manage the hotel.
Question 6
Describe two relevant criteria for assessing whether the new General Manager of Gold Coast
Hanley Hotel OR the General Manager of the three eco-resorts, has been effective in
performing their role. (1 + 1 = 2 marks)
Any two of the criteria listed below for each manager should be included in the response.
General Manager Gold Coast hotel:
 decrease in staff turnover
 decrease in customer complaints
 increase in sales revenue
 successful implementation of a change in management style to participative
 resolution of conflict with Hospitality and Tourism Workers’ Union
 increased level of staff satisfaction.
General Manager of eco-resorts:
 increased level of staff satisfaction
 higher occupancy rates
 increase in sales revenue
 successful implementation of eco-friendly practices
 profitability of resort.
Question 7
Explain why the ‘planning’ role of management is important. (2 marks)
Planning is important because at a strategic planning level it establishes the overall strategic direction
and organisation-wide objectives for long-term, high-risk decisions. Tactical planning is important as it
ensures that the organisation-wide direction is being planned for implementation at the departmental
or divisional level on a medium-term time frame. Similarly, operational-level planning ensures that
specific tasks are being planned and undertaken in the short-term. Planning is the commencement of
the cycle whereas controlling is linked to ensuring that the objectives and actions planned for are in
fact achieved. If not, then further planning will be required.
Question 8
Describe a situation where using the following management styles would be appropriate.
(1 + 1 = 2 marks)
a. laissez-faire
The laissez-faire style is appropriate in a creative environment, for example in an advertising
agency or multimedia company where once the overall guidelines are set, the employees can work
under their own direction.
b. autocratic
The autocratic style is appropriate in high-risk situations that require a high degree of control, for
example during disaster recovery operations or in a situation where workers need constant
direction and to be told what to do and/or do not want to rely on their own judgement.
Question 9
Discuss the initiatives that have been introduced by Hanley Hotels Limited that would be
regarded as socially responsible operations. (2 marks)
Initiatives relating to socially responsible operations include:
 diversifying their operations to include three eco-resorts
 adopting environmentally sustainable practices, including:
– low-emission clean-burning diesel generators and low-power light bulbs
– solar hot-water heating
– a waste management system
– systems for collecting and using rainwater and for the desalination of seawater.