Management and Organisational Capabilities of Australian Business

This publication presents the results from the inaugural 2015-16, Management Capabilities Module (MCM), collected as part of the Integrated Business Characteristics Strategy (IBCS) suite of surveys.

The MCM will support international comparisons of management practices and the analysis of the impact of different levels of management sophistication on firm productivity and performance. Similar international surveys have collected information about the Manufacturing industry; the MCM is the first to collect this data for the whole economy.

Key indicators of management and organisational capabilities include:
- Key Performance Indicators (KPIs);
- use of data in decision making;
- strategic plans;
- skills;
- supply chain;
- environmental management; and
- Principal Manager characteristics.

Data cubes containing detailed information related to the tables, graphs and commentary below can be found via the Data downloads section.

Key findings from the 2015-16 reference period include:

• More than two in five businesses (42%) monitored KPIs, with 79% of these businesses focussing on financial measures which included profit, sales, market share and return on investment. More than twice the proportion of innovation-active businesses monitored KPIs than non innovation-active businesses (57% compared to 26% of businesses).
• Two in ten businesses (20%) were significantly affected by environmental factors. The Agriculture, forestry and fishing industry recorded the highest proportion of businesses that were affected by natural disasters (35%) and high or increased resource costs (21%).
• More than a third of all businesses reported that their Principal Manager had completed a bachelor degree or higher (34%) and had management/business specialist skills (38%) in addition to their formal qualification.
• Four out of every five Australian businesses reported a male Principal Manager (80%). By industry, the highest proportions of male Principal Managers were recorded in the Construction (95%), and Mining (94%) industries. The Health care and social assistance industry recorded the highest proportion of businesses with a female Principal Manager (44%).
• The most commonly reported age range of Principal Managers in Australian businesses was 50 to 59 years old (30%). The most commonly reported age range for innovation-active businesses was 40 to 49 years old (29%).
   

The results show differences in management structure and arrangements by employment size range of Australian business.

Key findings from the 2015-16 reference period include:

• Almost half of all Australian businesses indicated that no KPIs were monitored during the financial year ended 30 June 2016 (48%).
   

• 30% of businesses reported identifying underperformance of managers and 39% of businesses reported identifying underperformance of non-managers during the year ended 30 June 2016. Businesses with 200 or more employees reported much higher identification of underperformance than businesses with 0 to 4 employees.

Innovation-active businesses are businesses that developed, introduced and/or abandoned new or significantly improved goods, services, processes or methods during the reference period. These businesses consistently reported higher identification and use of management capabilities than non innovation-active businesses.

Key findings from the 2015-16 reference period include:

• Non innovation-active businesses (62%) were almost twice as likely to indicate that they did not monitor KPIs than innovation-active businesses (34%).
• Innovation-active businesses were twice as likely to offer a performance bonus scheme compared to non innovation-active businesses, both for managers (30% and 15% respectively) and non-managers (28% and 13% respectively).
• The proportion of innovation-active businesses that promoted managers was nearly three times that of non innovation-active businesses (31% compared to 11%). This pattern was similar for non-managers (36% compared to 13%).
• More than half (55%) of innovation-active businesses reported having a Principal Manager aged less than 50 compared to 45% of non innovation-active businesses
   

In addition to the data presented in this release, further information about these and related statistics is available from the ABS website, or via contact with the National Information and Referral service on 1300 135 070.

To view the Business Characteristics Survey Management Capabilities Module 2015-16 Questionnaire (sample only) click here

This release previously used catalogue number 8172.0.