Good governance and its relation to an efficient and sustainable business
Governance is a process through which an organization derives rules and regulations to create accountability. The amount of formality exercised by an organization depends upon the internal rules. Governance in an organization takes place by the way of motivation. Corporate governance is important for an organization to operate in an effective way. Governance is interaction among various stakeholders in an organization to attain efficiencies (Tricker & Tricker, 2015). The relationship between the organization and the stakeholder should be healthy. All these dimensions are important in an organization for achieving sustainable growth. Corporate governance deals in a way that helps in guaranteeing fair returns to the stakeholder (Governance and Corporate Culture, 2017). The report illustrates the need of strengthening governance at Bunnings. In a diversified business atmosphere it is required to follow fair business practice to attain effective results. The responsibility of success largely depends upon the fair practices carried by them. Bunnings is a part of Wesfarmers from the year 1994. The company is ruining more than 300 stores with over 30,000 employees (About us, 2017).
Good governance is important for the success of a business organization. Good governance is related to running an efficient and sustainable business in order to deliver fair value to the shareholders. A good board helps in assuring smooth functioning without any breach of duty. For the interest of the organization it is important to sail safely by identifying the problems. The problems that are occurring in the organization can be removed by effective practice of corporate governance (Acharya, Gottschalg, Hahn & Kehoe, 2013). Working together by managing the issue is important for the organization on a long term success. Governance has gained importance in today’s diversified business conditions. In order to make profits companies are opting unfair means. These unfair means are causing issue for the organization. It is important for an organization to form strategies in order to benefit the organization. Success is not possible if the organization does not accept an effective planning mechanism (Larcker & Tayan, 2015).
Bunnings warehouse should deal with problem in a systematic manner. In order to attain desired growth they need to develop effective strategy through corporate governance and structure. This will ultimately results in creating responsibility. The market oriented economy requires an effective corporate governance mechanism (Amba, 2014). Bunnings do requires an effective governance model to add value to the stakeholders. This will ensure transparency within an organization and allow balanced economic development. It ensures the interest of all the shareholders is safeguarded against any malpractice. This will allow the organization to fully realize their rights. Governance has a wider scope and includes both social and institutional aspect. Corporate Governance allows an organization to manage trustworthy and ethical environment (Governance, 2016).
Need for strengthening governance at Bunnings in a diversified business atmosphere
Good governance allows an organization to attain corporate growth. Corporate growth to an extent depends upon the good governance. It is important for the success that the organizations should incorporate an effective governance model. The growth can only be attained if Bunning develops an effective governance mechanism. It is observed that the organization doesn’t have a stung governance system. In such a situation it is recommended that the organization should frame an effective governance plan (ArAs, 2016; Ishak & nor, 2017). This will allow the organization to undertake the issues effectively. The company is growing at a fast pace which requires implementation of governance practices. It is important to notice that the strong corporate governance helps in maintaining investor’s confidence in the company. A good governance framework can attract investors to make an investment in the command. Discrepancies in the working of company are a cause behind majority of failures. A good governance structure will help in managing the overall capital structure (Chan, Watson & Woodliff, 2014). This will allow inducement to the manager to achieve sustainable objectives. Good governance helps in minimizing the wastage on a long run. The capital structure allows an individual to manage the risk in the organization. Bunnings Warehouse should strive for gaining sustainable objectives by implementing good governance. It is thereby necessary for an individual to manage the goals in a systematic way. This will allow organizational interest in the well-being of Bunnings (Young & Thyil, 2014).
Brand development is necessary for Bunnings Warehouse. Good governance structure will allow the organization to develop a good governance principles and procedures. This will allow Bunnings in gaining efficiencies on a long run. The brand in today’s competitive scenario it is important for the business organization to gain efficiencies through good governance practice. This helps the organization to gain competitive advantage over other brands (Bain & Band, 2016). Bunnings Warehouse needs to manage the governance structure through efficient business practice. This will allow the organization to gain an advantage (Epstein & Buhovac, 2014). There are at times issues in the organization that can portray a bad image to the outside world. A good governance structure enables the organization to compete against the future contingencies (Chan, Watson & Woodliff, 2014).
The warehouse needs to understand the relevance of effective governance structure. This will allow them to sustain the changes taking place in the business environment. There are majority of issues taking place in the organization that might harm the image of the organization. A good governance structure helps them to consider the flaws in advance. This will enable organization to realize the need of a governance structure. Modern business organization in today’s competitive scenario needs to deploy an effective governance structure. This will allow the organization in gaining distinct objectives. Being a part of Wesfarmers it is the duty of Bunnings to cooperate efficiently in achieving distinct results. The role of a corporate citizen is to enable efficiencies sustainability is impotent for a business organization to achieve long term goals. It is important to notice that the organization can only gain the competitive advantage if they frame the policies in an effective way. The role of good governance can be seen on a long run if implemented carefully. The overall purpose of good governance is to attain distinct objectives for the purpose of success. Bunnings is currently operating more than 300 stores that require good governance practice.
The role of governance in guaranteeing fair returns to stakeholders
The role of good governance is necessary for the business organization is important for the development of the organization. Wesfarmers has given allowed its divisional organizations to carry out business in an independent way. The purpose is to create an independent environment for quick decision making. The organization is facing major allegations due to ineffective governance practice. Under such a scenario it is important for a business organization to frame the policies by creaking responsibility on an individual. This is important for the business organization to gain competitive advantage over the other competitive brands. There is a necessity that the organization follows law and regulation. It is important for the business organization to operate ethically and honestly. This will create a transparent business environment. Bunnings need to treat the suppliers with a great respect. This will ensure a consistent supply of goods at the store. The employees need to carefully look after the interest of the employees. This will create a safe working environment for the employees. The overall purpose of the organization is to operate in a sustainable environment. Wesfarmers initiates a solid contribution by each individual entity to attain good governance structure. The management needs to work efficiently to attain the governance structure. The operating values and culture at Bunnings is of great importance for the success of the business.
Conclusion
It is realized that the amount of revenue earned in an organization is largely dependent on the corporate governance structure. Good governance will create an effective image in front of people. This will allow brand to gain importance on a long run. A large sized business organization has a duty to operate in a systematic way. The decision regarding the success depends upon the good governance structure. It is import hat that the business organization understands the overall purpose of good governance on a long run. Sustainability accompanied with god governance is important for the organization in gaining long term success. Bunnings is undergoing serious issues due to an ineffective governance structure. Under such a competitive environment it is thereby important for the business organization to operate the functions in an effective way. The overall purpose is to undertake the objectives in a better way. This will allow them to generate revenues on a long run. Organizations these days are relying on corporate governance to earn objectives. This has gained importance in the current business scenario. It is necessary that the organization effectively form the business activities in order to gain importance on a long term.
References
About us, (2017). Online. Retrieved from: https://www.bunnings.com.au/about-us (Accessed on: 11 May 2017)
Acharya, V. V., Gottschalg, O. F., Hahn, M., & Kehoe, C. (2013). Corporate governance and value creation: Evidence from private equity. Review of Financial Studies, 26(2), 368-402.
Amba, S. M. (2014). Corporate governance and firms’ financial performance. Journal of Academic and Business Ethics, 8, 1.
ArAs, G. (2016). A handbook of corporate governance and social responsibility. CRC Press.
Bain, N., & Band, D. (2016). Winning ways through corporate governance. Springer.
Chan, M. C., Watson, J., & Woodliff, D. (2014). Corporate governance quality and CSR disclosures. Journal of Business Ethics, 125(1), 59-73.
Chan, M. C., Watson, J., & Woodliff, D. (2014). Corporate governance quality and CSR disclosures. Journal of Business Ethics, 125(1), 59-73.
Epstein, M. J., & Buhovac, A. R. (2014). Making sustainability work: Best practices in managing and measuring corporate social, environmental, and economic impacts. Berrett-Koehler Publishers.
Governance, C. (2016). Corporate Governance.
Governance and Corporate Culture, (2017). Online. Retrieved from: https://sustainability.wesfarmers.com.au/case-studies/governance/governance-and-corporate-culture/ (Accessed on: 11 May 2017)
Ishak, S., & Nor, M. N. M. (2017). Corporate Social Responsibility. In SHS Web of Conferences (Vol. 34). EDP Sciences.
Larcker, D., & Tayan, B. (2015). Corporate governance matters: A closer look at organizational choices and their consequences. Pearson Education.
Tricker, R. B., & Tricker, R. I. (2015). Corporate governance: Principles, policies, and practices. Oxford University Press, USA.
Young, S., & Thyil, V. (2014). Corporate social responsibility and corporate governance: Role of context in international settings. Journal of Business Ethics, 122(1), 1-24.
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