Australian Organisations Utilising Groups More In Decision Making Accounting Essay

Category: Accounting

The main goal of the report is to evaluate the current group decision-making efforts of some organisations in Australia. In this report, the organisations' decision making has given emphasis. The author made sure that the organisation chosen has been able to have effective group decision-making. However, there are still issues that should be given attention in order to ensure that these organisations are implementing effective group decision-making. The report includes the analysis of the group decision-making structure of some institutions as well as the issues concerning the board of the organisation. Furthermore, this report also analyses the positive and the negative aspects of the group decision-making implemented in the some organisations in Australia. All in all it can be concluded that the organisation has been able to have as strong and systematic group decision-making to ensure quality output.



Decision making process is a knowledge-intensive process which can be considered as an important part of having successful strategic management (Kay, J. 1995). It is a fact that companies must make decisions in its everyday operations; hence, in order to make sure that the decisions are made successfully, decision making process is important. In addition, it is considered as a central factor for having successful management because it provides the organisation the assurance that each and every operations and activities made by the organisations adheres to a common goal which is set in the decision making plans.

In any current business organisation, progress that they are making is recorded as basis for, among a host of other essential things, decision-making and as a benchmark for measuring the firm's performance for the period under scrutiny (Fried, D. Sondhi A. & White, G. 2003). With this, this paper aimed to discuss the group decision-making process present in some Australian organisations. For the scope, this paper will only cover the evaluation of decision-making process among groups of people in some of Australia organisations.

Groups in Australia Organisations

The Groups

In Australia, numerous groups are engaged in the so-called group decision making (Salmat Businessforce 2009). Both private and government organisations are not exempted in this type of decision making. For example, the health sectors of Australia are creating committees/groups that will find solutions to cure diseases and help in medicating the sick. On the other hand, in business sectors in Australia, for example, the Wesfarmers, an organisation which was first known as a cooperative institution for the farmers in Western Australia had created six divisions that are practicing group decision-making. Wesfarmers, as cooperative, focused on the provision of quality products and services to help the rural community in the region (Wesfarmers 2009).

The Organisations Groups Functions

Basically, in most businesses the divisions/groups in any business organisation performs different function. In Wesfarmers, functions such as manufacturing and marketing of industrial equipments and gases, retailing of garden and improvement products and other building materials, production and coal mining, distribution of safety products and industrial, marketing and manufacturing of chemicals for industry and wide acre of horticultural fertilises, insurance and services, investing of rail transport and others are seen (Salmat Businessforce 2009).

Group Decision-making Process

Nature and Style

With regards to decision making, it can be said that most Australian organisations had a very good framework that has been established in order to deal with different business matters. In fact, for some business organisation in Australia, there is usually a properly structured program that is further reinforced by organisation policies and other procedures for the proper guidance of the directors in their daily duties (Peter R. 2007). Consequently, there is a clear reference guide to its business operations and group decision-making. In line with this, The Board of Directors of most businesses in Australia oversee the businesses and the decision-making routines as well as the financial aspect of things, keeps watch. In addition, this includes the maintenance of the standards with regards to decision-making in the group's different sectors.

For example, in Wesfarmers, the Board is made up of ten directors; two are executive while six are non-executive (Wesfarmers 2009). Because of this, there is a fair division of responsibilities and other tasks among them. And while the non-executive directors are independent from the others, they are still able to contribute their experience and knowledge during Board discussions. Without a doubt, The Board is in-charge of caring for the organisation's operations, assets, and its shareholders. All-in-all, the board aims to work with these factors in the hopes of maximising performance. Because of this, it is The Board that is responsible for the finalisation of budgets, strategic plans and decision-making for successful business operation. And in order to ensure the organisation's competent operations, The Board conducts a monthly review of the organisation's businesses in relation to its financial movements (Maiden, M. 2009).

Furthermore, there is an organisation law that obliges The Board of Directors to carefully prepare each year, a financial report that would have to be accurate and reliable reflecting the true state of the organisation (Maiden, M. 2009). All things considered, The Board of Directors is the one that is responsible for the proper safekeeping of accounting statements and to ensure that these records are precise and truthful. In addition, the board is in-charge of guarding the organisation's other assets as well as making the necessary steps in order to prevent complications such as fraud and other types of risks.

Aside from the board of directors, the organisation also has other committees as part of group decision-making (Maiden, M. 2009). Just like the board, other committees have a well-established reference guide which also discusses their duties and their scope of authority within the institution. Composed typically of independent directors who are non-executive, the remuneration committee handles the outline for the organisation's remuneration policy which would eventually be reviewed by the board. Moreover, this group is also responsible for the various remuneration packages that are given to executive directors. On the other hand, there is also a nomination committee which is also made up of mostly non-executive directors. The responsibility of this group is to recommend to The Board on which people should be appointed as directors (Wesfarmers 2009).

In British Petroleum in Australia, there is also a group known as the audit committee. Actually, the members of this committee are purely composed of non-executive directors. This group's duty is to make proper recommendations with regards to the organisation's accounting policies as well as overseeing financial control within the corporation (British Petroleum 2009). For this reason, the committee usually receives and reviews financial reports and other statements delivered to them. Then, they make a comprehensive report before they submit it to The Board. Of course, there is also the group's evaluation of the risks involved which has always been done to assist with the institution's next business move, and have further control of the corporation's different operations.

Issues Concerning the Groups Decision Making

For most business organisations in Australia, The board of directors of every company is responsible for ensuring that the organisation always has the best business performance and group decision-making (Kouzes, J.M. & Posner B.S. 1987). However, there are several issues that concern the board. One of which is in terms of the level of skill and care expected of the directors, specifically the non-executive directors.

Often it is the director, the leader of the group, with little accounting experience whose common sense may lead him to question what those with accountancy experience may let pass (Daroca, F.P. & Nourayi, M.M. 1996). The accountings issues in respect of which some make criticisms were nearly all ones which involved no accounting complexity and what was acceptable and what was not should have been obvious to any reasonable director possessed of the facts who sensibly applied his mind to the issue. In most instances, those directors who decided to adopt the accounting were in a better position than the auditors to determine whether the treatment applied was acceptable or not. Those directors were thus not entitled to suspend their own independent judgment and rely upon the fact that the auditors failed to prevent them from adopting an unacceptable course (Daroca, F.P. & Nourayi, M.M. 1996).

Another issue that concerns the board/group's decision-making in business sector in Australia is in terms of inadequate financial information (Daroca, F.P. & Nourayi, M.M. 1996). There are time that some of the members of the board, never prepared or presented to the Board any consolidated budgets or managements accounts which brought together the budgets and results of all the divisions in the Group (Daroca, F.P. & Nourayi, M.M. 1996).

In the last few years, the first the board as a whole knew of the results to be published was when the preliminary or interim announcement was circulated 'for information' at the close of the board meeting that invariably occurred the day prior to announcement. In effect, the board as a whole never discussed the details of the results or what lay behind them. The main board's lack of understanding of the composition of the reported results was an extraordinary state of affairs which no director should ever have tolerated.

Management's Role in Utilising Group Decision-making

Positive Aspects of Group decision-making

The Board as a group that heads on decision-making of a certain organisation has been able to attain complete control of all matters regarding the organisation (Kay, J. 1995). Their self-perseverance and obligation to their duties and finally, their obedience to the organisation laws all contribute to the development of the institution. As such, The Board constantly believes that all the data pertaining to financial information and other facts regarding to their operations that are currently being used is reliable. The Board's authority is clearly recognised within the organisation. And because of this, it is able to have a solid grip on the institution's actual operations, stakeholders and its financial concerns. Needless to say, because of the group's proper structure and its commitment to the stakeholders and to the community as well, the board of directors has proven that it can efficiently handle both its ethical and legal responsibilities.

Furthermore, organisations should maintain good relations and open communications with its investors. As a matter of fact, shareholders should be regularly invited by the organisation whenever there are gatherings to discuss trade updates. Moreover, whenever there is an annual general meeting, investors get the chance to meet The Board members themselves. And of course, for private investors, they can also access the organisation's website for various shareholder services. Undoubtedly, the organisation has good consideration for all of its stakeholders; past, present and future. There definitely seems to be a very well planned framework in the group's corporate division. It has good policies and procedures with regards to financial matters and operational concerns. Its procedure of assessing the different kinds of situations that come up is certainly a good move on their part. Not to mention, they have maintained good relations with their stakeholders. And finally, The Board's authority is unsurpassed. Clearly, these facts prove the strength of the group's decision-making structure.

Negative Aspects of Group decision-making

With regards to the decision-making of groups in Australia, the weakness on this case however, is the fact that it cannot always be assured that there are no losses or other errors which may result from mistakes and inconsistencies by one of the committees or employees involved. In addition, having diverse populations, there can be a possibility of having internal problems between members who have different culture and beliefs. In addition, some problems occur in terms of giving value to the organisations' shareholders. There are times that the shareholder is not given the enough information about the status of the institution, specifically that shareholder which have a small part in the business. This happens when the board of directors does not give value to their shareholders. Other negative aspects include the imperfection of financial reporting procedures which may definitely result in ineffective group decision-making.


Group decision-making is said to be one of the most important aspects to be considered in most organisations and not only by the business sector in Australia. Hence, it is recommended that the institution should be able to determine the most appropriate and effective group decision-making structure and approach so as to ensure that the business will adhere to all social responsibilities, legal and ethical aspects.

In addition it is also recommended that this cooperative institution should give value not only to its customers and employees but most especially to the shareholders who have trusted the organisation and its capabilities. The group must be able to align carefully their group decision-making approach with its organisational objectives.


One of the keys for a successful organisation is a good manager that has capabilities to lead the group's decision-making. Can you imagine an organisation, an institution, or any other organisation succeeds without good decision-making? According to Kousez and Posner (2002), credibility is the foundation of a good manager. A manager should be credible for him to lead. In addition to this characteristic, a manager should possess honesty, competence, aspiration, and a forward-looking approach. He should also be aware of his decision making strategies. Come to think of this, would you believe in managers who do not practice what they preach, do not walk the talk, do not do what they say they will do, and do not keep their promises? What would happen to the change process in a organisation if managers are lacking of skills?

Basically, the approaches stated and discussed in the paper has a significant implication to the different sectors of economy particularly in business decisions. Moreover, the context of group decision-making discussed in this paper has a great purpose when it comes to identifying quality procedures for business or any decisions in business to gain explosive development.