Unit 3: Business foundations

Ruby Tan and Marco Silva own Harbourside Loaves, a partnership that runs two bakeries in Geelong. They plan to open five more bakeries across the Bellarine Peninsula over three years, which will cost about 1.5 million dollars. A bank has offered a loan if the business becomes a private limited company, and to raise the rest Ruby and Marco would sell a minority of the shares to two family friends. Ruby and Marco want to keep control of the business and its recipes.

Redgum Furniture Pty Ltd employs 60 staff at its Ballarat workshop and sells solid timber tables to furniture stores across Victoria, advertising them as made from local hardwood. To protect profit, the owners plan to switch from the local sawmill's hardwood to cheaper imported timber and to end the workshop's apprenticeship programme. The table shows the timber cost of one table.

Lode Digital is a Bendigo software business. Its manager, Priya Nair, leads two teams. Six senior developers, each with at least eight years of experience, have three months to design a new feature for the company's booking app. Four customer support trainees, hired this month, are answering calls during a system outage that has left 400 customers unable to log in.

Southern Ocean Hotel in Warrnambool displays its values, 'Guests first' and 'One team', in the lobby and in every staff handbook. Staff say that when a guest complains, managers blame the employee involved in front of others, so front desk staff now hide complaints from managers. Housekeeping and kitchen staff rarely speak to each other, and each blames the other when meals or rooms are late.

Murray Gold Cheese Pty Ltd makes cheddar and yoghurt at a factory in Cobram, on the Murray River. Elena Rossi started the business as a sole trader, making cheese in a shed on her family's dairy farm. As sales grew she turned it into a private limited company. Today it employs 140 staff, buys milk from local dairy farmers, and its shares are owned by Elena's family. For more than twenty years Elena used a participative management style. Each month the staff met to discuss changes and voted on them, and the experienced cheesemakers were trusted to run the vats their own way. Staff turnover was low, and Murray Gold's aged cheddar won prizes at agricultural shows. Elena retired last year. The family appointed Grant Hollis, who had managed a factory for a large food manufacturer, as chief executive officer. The family wants Murray Gold to become a public listed company within two years, raising 20 million dollars to build a second factory that would export yoghurt to Asia. Grant makes decisions on his own and announces them by email. He cut the price paid to farmers by 3 cents a litre, introduced a 24-hour, seven-day roster, ended the monthly meetings and told the cheesemakers to follow one standard recipe. Net profit rose, but nine cheesemakers resigned, four farmers now sell their milk to a rival, and residents have complained to the local council about milk tankers driving through Cobram at night. The table shows some of the business's figures.

Silver Gull Ferries is a government business enterprise owned by the state government. It runs a busy commuter ferry between Geelong and Docklands, and a small service to Gannet Island, where 400 people live and which has no bridge to the mainland. The Gannet Island route loses 1.2 million dollars a year. The board proposes to close it and move its ferry and crew to the Geelong route, where many commuters cannot get a seat at peak times and the extra ferry would carry about 300 more fare-paying passengers a day.

Wombat Hollow Early Learning in Ballarat employs 22 educators, most with more than ten years of experience. Its new director, Leanne Ko, uses a participative management style: the educators help decide the learning programme, the staff roster and how to respond to parents' concerns. In six months the centre will be assessed against a set of quality standards.