The Unique Nature of LSOs

Unique Nature of LSOs

When compared to small and medium scaled organisations large-scale organisations are unique. The four main factors that make them unique include:

Separation of Ownership and Control

Owners of LSOs often lack the expertise and experience to run a business, especially one that is large-scale. Experts in the form of executives are therefore employed to do this on their behalf. This is typically done through shareholders electing a board of directors to run and control the operations of the organisation. This therefore means that owners are not directly involved in the running of the business leaving the elected board of directors in control of the organisation’s operations.

Even in the cases when the owners of LSOs do make up the Board of Directors, they have very little to do with controlling the day-to-day operations of the business. Instead they undertake activities such as the long-term planning and strategies and identifying the Vision and Mission Statements of the organisation.

Political Influences

Large-scale organisations tend to have political power due to their size. The larger the size of the LSO the more influence they have.

Economic Influences 

As large-scale organisations earn revenue in the millions of dollars, they possess significant economic influence; especially seeing that in some cases the economies of organisations can be bigger than that of small countries.

This enables LSOs to produce in large quantities enabling bulk buying, making it cheaper and lowering the costs per unit of output as a result of operating on a larger scale.

Easy Access to Finance and State of the Art Technology 

A characteristic of a large-scale organisation is that they earn revenue in the millions of dollars, indicating vast financial resources. LSOs also have the opportunity to take out loans due to their size and stability. These loans could be used to expand and grow their business. These financial resources are usually used to invest in state of the art technology to improve the business’ competitiveness (such as with price, cost, quality and services).