Organizational Structure of Wesfarmers
The report is aimed to provide a detailed analysis of a business or enterprise. The organization selected for the report is Wesfarmers. The organization mainly has interest in chemical, retail, coal mining, fertilizers and safety and industrial products. The Wesfarmers is the largest employer in Australia with an approximate employee number of 205,000 (Klettner, Clarke & Boersma, 2014). The organization was founded in 1914 to provide services and merchandise to the western Australian farmers. Later in 1984, it grew into a retail conglomerate.
The Wesfarmers being one of the largest organizations in Australia has the following organizational structure (“Leadership team”, 2017):
|
Leadership team |
|
|
Richard Goyder AO |
Managing Director, Wesfarmers Limited |
|
Rob Scott |
Deputy Chief Executive Officer, Wesfarmers Limited |
|
Terry Bowen |
Finance Director, Wesfarmers Limited |
|
Anthony Gianotti |
Deputy Chief Financial Officer, Wesfarmers Limited |
|
Maya vanden Driesen |
Group General Counsel, Wesfarmers Limited |
|
John Durkan |
Managing Director, Coles |
|
Michael Schneider |
Managing Director, Bunnings Group and Managing Director, Bunnings Australia & New Zealand |
|
Peter (PJ) Davis |
Managing Director, Bunnings UK & Ireland |
|
Guy Russo |
Chief Executive Officer, Department Stores |
|
Ian Bailey |
Managing Director, Kmart |
|
Mark Ward |
Managing Director, Officeworks |
|
David Baxby |
Managing Director, Wesfarmers Industrials |
|
Ian Hansen |
Chief Operating Officer, WesCEF |
|
Linda Kenyon |
Company Secretary, Wesfarmers Limited |
|
Jenny Bryant |
Chief Human Resources Officer, Wesfarmers Limited |
|
Alan Carpenter |
Executive General Manager, Corporate Affairs, Wesfarmers Limited |
|
Tim Bult |
Director, Associate Businesses and International Development |
|
Olivier Chretien |
Managing Director, Business Development and Corporate Planning |
Organizations as large as Wesfarmers face many problems in terms of management and organizational structure:
Any kind of problems arising in the organization should be analyzed with focus on the root cause of the problem and not the probable symptoms for the problems arising in the workplace. It can be easy for the organization to focus primarily on the symptoms of the organization, which are visible in the workplace (Pettigrew, 2014).
If identifying one root cause with multiple problems then all the problems should be eliminated or else the problems might resurface and create a problem again. While searching for the root problems all the root problems should be analyzed and a plan should be developed to mitigate the problems with the organization.
Every one of the organization should know how the organization works. Departmental working should be shared with the other departments so that everyone knows the working procedure that is happening around the organization (Pettigrew, 2014).
When the improvement procedure is taking place in the organization, they should be able to answer the questions being asked to them. Knowing the working procedure of the organization is vital for the employees (Scott & Davis, 2015).
Not involving enough people in the management procedure can make lagging in the working of the organization. To keep up with the smooth flow of work they should involve more employees in the departments (Pettigrew, 2014).
System acquisition method is important for an organization to keep up with the market competition. An organization can be select from three of the best software type, which are available:
Commercial software: software, which is developed to be used by any organization or individual, is known as commercial software. They are generally sold in the market for a price declared by the developers of the software. They are mainly open source or licensed software’s. They include games, OS and other software, which are used in day-to-day life (Morgan et al., 2015).
Software Acquisition Methods for Wesfarmers
ERP: ERP or enterprise resource planning is a separate type of software targeted to be used by core business operating department of the organization. It helps the organizations to procure order details, manufacturing materials, manage sales, and invoice orders (Shaul & Tauber, 2013).
Custom software: software’s created specifically for the use of an organization are termed as custom software’s. They are developed keeping in mind the specifications of the organization who has requested the software to be developed. This type of software’s can be a combination of the different types of smaller software’s in the market. Make this to implement complex working of different types of work into a single software (Völter et al., 2013).
For the selected organization, Wesfarmers the working environment would force them to use an ERP for the invoices and logistics of the warehouse management. However, the best option for the organization is to create a custom software, which will target the important software’s being used in the organization to be implemented into a single one (Völter et al., 2013). The software can be made to do all types of working of the organization.
The following diagram illustrates the sales procedure that is being followed by the Wesfarmers (Brown, 2016). The flowchart shows the important procedures and steps being implemented to keep up with the sales procedure of the organization.
|
YES |
|
NO |
|
NO |
|
YES |
|
QUOTATION |
|
CUSTOMER AGREES TO PURCHASE. |
|
SIGN THE CONTRACT |
|
END |
|
STOCK? |
|
DELIVER AFTER RECEIVING PAYMENT |
|
DELIVER THE GOODS |
|
RECIEPT OF GOODS |
|
AFTER SALES SERVICE |
|
ARRANGE THE DEPOSIT |
|
PREPARE THE PRODUCTION |
Figure 1: Sales procedure flowchart being followed by the Wesfarmers
(Source: Made by author)
Controlling of problems in the workplace should be done effectively by the use of effective management planning. Areas of fraud occurring are placing of purchase orders, payroll transfer to fraud employee accounts, company credit card misusage, and vendors asking for larger shipment delivery (Barak, 2016). The frauds of data theft from the organization can cause privacy hampering of the employees of the company. These type of frauds can be controlled by the usage proper security measures inside the organizations network so that no outside intruder can come into the system and steal the data. Dividing the information accessibility to different hierarchical sections would provide better security of data inside the organization.
Demand for the use of cloud based accounting software’s was not high in the last decade. Recently upon learning about the benefits of the cloud based, software’s all types of organizations are trying to adopt to the use of such software’s (Mahzan & Lymer, 2014). Having the ability of the cloud implemented into a software would help the storage of the information of the cloud. The employees of the organization to use to their benefit can access the information then. The sharing of the information allows the work done on the software to be fast paced. Introduction of Xero, MYOB and Quick Book has brought around revolution in the grounds of accounting software’s. The software’s allows cloud based accounting benefits and help in becoming the best available software for business management (Mahzan & Lymer, 2014). The problem, which was previously there was that, the employees had to work on different software’s to complete their work. Now they are able to work on a single integrated software, which allows the use of cloud based integration. The recent scenario of the organizational structure has changed and the companies have started adopting the new software’s for the benefit of their organization. Automating the use of the different accounting packages of the software’s help them to provide the report for the business easily and fast. The features like fast banking activity, smart reports and easy invoicing of the orders of the organization (Sampaio & Bernardino, 2016). Availability of the use of the mobile version of the software also helps the employees to perform their work easily.
Sales Procedure of Wesfarmers
The current market size of the Wesfarmers has been collected from the official website of the organization (“Share price”, 2017):
|
ALL FIGURES IN $M UNLESS SHOWN OTHERWISE |
2016 |
2015 |
2014 |
2013 |
2012 |
|
SUMMARISED INCOME STATEMENT |
|||||
|
Sales revenue |
65,643 |
62,129 |
59,903 |
57,466 |
57,685 |
|
Other operating revenue |
338 |
318 |
278 |
283 |
395 |
|
Operating revenue |
65,981 |
62,447 |
60,181 |
57,749 |
58,080 |
|
Operating profit before depreciation and amortization, finance costs and income tax |
2,642 |
4,978 |
3,877 |
4,486 |
4,544 |
|
Depreciation and amortization |
(1,296) |
(1,219) |
(1,082) |
(1,033) |
(995) |
|
EBIT |
1,346 |
3,759 |
2,795 |
3,453 |
3,549 |
|
Finance costs |
(308) |
(315) |
(346) |
(417) |
(505) |
|
Income tax expense |
(631) |
(1,004) |
(939) |
(908) |
(918) |
|
Profit after tax from discontinued operations |
– |
– |
1,179 |
133 |
n/a |
|
Operating profit after income tax attributable to members of Wesfarmers Limited |
407 |
2,440 |
2,689 |
2,261 |
2,126 |
|
CAPITAL AND DIVIDENDS |
|||||
|
Ordinary shares on issue (number) 000’s as at 30 June |
1,126,131 |
1,123,753 |
1,143,275 |
1,157,194 |
1,157,072 |
|
Paid up ordinary capital as at 30 June |
21,937 |
21,844 |
22,708 |
23,290 |
23,286 |
|
Fully-franked dividend per ordinary share declared (cents) |
186 |
200 |
200 |
180 |
165 |
|
Capital management: capital return and fully franked dividend components |
– |
100 |
50 |
– |
– |
|
FINANCIAL PERFORMANCE |
|||||
|
Earnings per share (weighted average) (cents) |
36.2 |
216.1 |
234.6 |
195.9 |
184.2 |
|
Earnings per share growth |
(83.2%) |
(7.9%) |
19.8% |
6.4% |
10.5% |
|
Return on average ordinary shareholders’ equity (R12)(excluding significant items) |
9.6% |
9.8% |
10.5% |
8.9% |
8.4% |
|
Fixed charges cover (R12, times)(excluding significant items) |
2.7 |
3.0 |
3.2 |
3.0 |
2.9 |
|
Interest cover (cash basis) (R12, times)(excluding significant items) |
16.8 |
20.5 |
15.9 |
12.2 |
10.8 |
|
FINANCIAL POSITION AS AT 30 JUNE |
|||||
|
Total assets |
40,783 |
40,402 |
39,727 |
43,155 |
42,312 |
|
Total liabilities |
17,834 |
15,621 |
13,740 |
17,133 |
16,685 |
|
Net assets |
22,949 |
24,781 |
25,987 |
26,022 |
25,627 |
|
Net tangible asset backing per ordinary share |
$3.45 |
$4.85 |
$6.14 |
$4.69 |
$4.45 |
|
Net debt to equity |
31.0% |
25.1% |
13.1% |
20.2% |
19.1% |
|
Total liabilities/total assets |
43.7% |
38.7% |
34.6% |
39.7% |
39.4% |
|
STOCK MARKET CAPITALISATION AS AT 30 JUNE |
45,158 |
43,860 |
47,835 |
45,936 |
34,846 |
Wesfarmers started its organization from being a farmers’ cooperative in the Australian province. After the acquisition of the Coles group, they have diversified their retail business. Apart from all the different types of business, they are running they have still the best interest in providing the farmers of Australia with agricultural merchandise and services (Annarelli & Nonino, 2016). Their biggest competitors in terms of their business profile are Woolworths ltd., Metcash Limited and Caltex Australia Limited. Being the largest organization in terms of employment as well as in terms of revenue which was worth AU$65.98 in the year 2016 (“Five-year financial history“, 2017).
Organization can have many problems, which would require the best use of the management to eradicate the problems and provide solutions to the employees of the organization. The major problems related to an organization are:
Inability to predict the future of the organization can lead to problems in the organization. The management should hire a consultant who has the power to read the trends in the market and analyses the future of the organization based on the analysis of the report. This could be helpful for the organization as they will be able to understand the ways in which they would need to change their marketing strategy (Larsen, Manning & Pedersen, 2013).
Software’s lack in the security protocol, which is essential to keep the informations safe from the outsider, attacks. Use of firewall is not enough for the software has to keep up with the increasing cyber-attacks and risks (Svobodova, 2016).
Use of old outdated software’s faces an issue for the employees. The old software’s are incapable of doing newer calculations, which are essential for the easy working of the organization (Larsen, Manning & Pedersen, 2013).
The software’s are not user friendly in nature and make the employees using the software have to work hard to produce a better document to be used by the organization.
Conclusion
To conclude this report it can be said that Wesfarmers has come a long way to become one of the largest organization in Australia. Changing their acquisition methods and their organizational structure to the benefit of the organization will help them to stay on top of the chat as the largest organization in the Australian industry. As they provide the largest employment power to the people around the world, they should try to focus on the problems in the organizations and mitigate them at the earliest.
References
Annarelli, A., & Nonino, F. (2016). Strategic and operational management of organizational resilience: Current state of research and future directions. Omega, 62, 1-18.
Barak, G. (2016). Alternatives to high-risk securities fraud control: proposing structural transformation in an age of financial expansionism and unsustainable global capital. Crime, Law and Social Change, 66(2), 131-145.
Brown, T. (2016). Engineering economics and economic design for process engineers. CRC press.
Five-year financial history. (2017). Wesfarmers.com.au. Retrieved 21 August 2017, from https://www.wesfarmers.com.au/investor-centre/company-performance-news/five-year-financial-history
Klettner, A., Clarke, T., & Boersma, M. (2014). The governance of corporate sustainability: Empirical insights into the development, leadership and implementation of responsible business strategy. Journal of Business Ethics, 122(1), 145-165.
Larsen, M. M., Manning, S., & Pedersen, T. (2013). Uncovering the hidden costs of offshoring: The interplay of complexity, organizational design, and experience. Strategic Management Journal, 34(5), 533-552.
Leadership team. (2017). Wesfarmers.com.au. Retrieved 21 August 2017, from https://www.wesfarmers.com.au/who-we-are/leadership-team
Mahzan, N., & Lymer, A. (2014). Examining the adoption of computer-assisted audit tools and techniques: Cases of generalized audit software use by internal auditors. Managerial Auditing Journal, 29(4), 327-349.
Morgan, A., Isaac, M., Scrutton, S., Wedgewood, J., Jankowska, P., & Hwang, D. (2015). EP-1572: Using a commercial software package to support treatment planning peer review in small radiotherapy departments. Radiotherapy and Oncology, 115, S860.
Pettigrew, A. M. (2014). The politics of organizational decision-making. Routledge.
Sampaio, D., & Bernardino, J. (2016). Open source accounting software for SMEs. International Journal of Business Information Systems, 23(3), 287-306.
Scott, W. R., & Davis, G. F. (2015). Organizations and organizing: Rational, natural and open systems perspectives. Routledge.
Share price. (2017). Wesfarmers.com.au. Retrieved 21 August 2017, from https://www.wesfarmers.com.au/investor-centre/your-shareholding/share-price
Shaul, L., & Tauber, D. (2013). Critical success factors in enterprise resource planning systems: Review of the last decade. ACM Computing Surveys (CSUR), 45(4), 55.
Svobodova, L. (2016). Managerial Accounting and Utilization of Software. Advanced Science Letters, 22(5-6), 1568-1572.
Völter, M., Stahl, T., Bettin, J., Haase, A., & Helsen, S. (2013). Model-driven software development: technology, engineering, management. John Wiley & Sons.
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
