Business Organisation
and Management
The Nature of Business
Year Eleven – Semester one - Unit one
Roles of Business
Production
Employment
Careers
Enterprise
Investment
Production
Production is the process of manufacturing a product or
providing a service
Organisations attempt to do this in a way that maximises
profits.
Economies of scale refers to lower costs per unit of output
as a result of operating on a larger scale. Producing a lot of
units results in lower production costs. Why do you think
large organisations have an advantage in maximising
economies of scale?
How can a small record label gain some economies of scale?
Direct financial benefits of economies of scale
Business capacity to save money
Lower costs of advertising
Lower cost of transport
Lower unit price of material inputs (bulk buying)
Lower unit cost of energy inputs
Lower cost of finance
Other economies of scale can be found in:
Production methods (specialised production teams)
Equipment and technology
Product promotion
Management techniques
Environmental gains
Research and development
recruitment of staff
preferential treatment by suppliers and government
Task One
In groups brainstorm different ways from the previous
lists that economies of scale can be achieved for the
following:
A large record company like Sony BMG
A large festival like Big Day Out
A large radio network like Austereo
Share your group’s examples with the rest of the class
Employment
Is it the responsibility of business to ensure they
employ as many people as possible to assist in lowering
the unemployment rate?
If you agree with the statement move to the front of
the room. If you disagree move the the rear of the
room.
One choice of response is no more correct than the
other but be prepared to suggest, discuss, listen, learn,
respond, and, if necessary, defend your choice.
By providing employment opportunities both small
and large businesses contribute to Australia’s economic
prosperity. Small businesses are usually defined as
having 20 employees or less. Small business account for
at least 90% of private sector employment.
Large organisations provide many employment
opportunities both directly and indirectly. There has
been concern of late that large businesses are reducing
or downsizing their workforces. Downsizing is often
achieved by outsourcing many of their activities to
independent contractors.
Many record companies have downsized their staff in
response to the reduction in music sales. Discuss the
impact of this situation on the production of music in
the future.
Task Two
1
Why do organisations outsource work that is not core
business? How is this relevant to the music industry? List
opportunities that may exist in the music industry for
independent contractors to fulfill the outsourcing role.
2
Why is downsizing a concern in our society and the music
industry?
3
What evidence is there of downsizing in the music industry?
4
What impact does it have on the role of business in society?