Tracing Growth and Development of Organization
Management can be named as the achievement of authoritative objectives by making utilization of powerful and proficient means and mediums. What’s more, this all is improved the situation arranging, sorting out, coordinating, observing, and controlling the hierarchical assets. Administration is an expansive idea and includes different capacities and these capacities are composed for making the accomplishment of authoritative objectives and destinations. This will also make optimum utilization of all the available resources in an effective and efficient manner. The concept of management can also be considered as the framework or the outline through which the business entity makes the attainment of the desired goals and targets. The below presented analysis is made focused on the concept of management within BHP Billiton company. The business entity is a multinational corporation and is also a leading brand and resources company. The prime operations executed by the business entity are extracting and processing minerals, oil and gas and with a huge pool of skilled and professional employees (BHP 2018). The business entity has approximately 60000 employees and contractors primarily in Australia and America. The business entity is dealing and operating the business globally with sales and marketing with sales and marketing led through Singapore and Houston, United States. Our global headquarters are in Melbourne, Australia.
BHP Billiton is world’s largest mining company. BHP Billiton was founded back in 1885 in a isolated mining town of broken hill which is in south wales. BHP Billiton is an Anglo- Australian company which is a trading business entity of BHP billion limited. BHP‘s headquarters are present in Melbourne, Victoria, Australia (BHP 2018). It is a multinational company which deals with metals, mining and petroleum etcetera. The main aim of the company is to earn a good profit and brand recognition in the oil and gas extracting sector and also mining. Core competences of BHP Billiton includes, using the latest equipment and technologies for getting the work done.
BHP works under a dual listed company, which means that the company operates under two parent companies which are, BHP Billiton Plc. and BHP Billiton limited (BHP 2015). Earlier the strategies of the company laid out in such a way to focus mainly on, portfolio simplification, capital discipline and the productivity of the company. For instance, the strategy for increasing the productivity helped the company to deliver productivity gains more than US$ 10 billion annually in 2016. Along with that, those strategies also helped the company to deliver the south 32 demerger and it also helped the company to reduce their capital expenses, almost by 70%. Another strategies for portfolio simplification provided the company with a large range of opportunity in the portfolios. It also made the company strong and flexible according to the financial point of view. On the other hand, the strategy of “safe productivity and the quality assets” has helped the company to generate a large amount of cash flow and preserve margins also. In the past, BHP Billiton also used a strategy which can be referred as “volume- led strategy”. This strategy also helped the company to ramp up their production and produce an enormous amount of global supply.
Past Strategies
Currently, the company is being run by an unified management and board of two parent companies which are, BHP Billiton limited and BHP Billiton Plc (Zacks 2016). Current strategies of the company are as follows:
Growth strategy- currently, the company wants to own a large amount of assets by increasing the value of BHP. The main component of this strategies include, technology which can improve the safety , unlock resources and lowers the cost of the production, efficient costs for further gains, minimizing the risks and providing attractive returns and onshore US for the value and flexibility. These entire key components tend to increase the company’s growth.
Emergent strategies- certain emergent strategies are also adapted by the company for increasing the business flexibility for the business practices as well as keeping the past experiences in mind. These emergent strategies include different kind of backup plans for the company’s business and they also give the company, a chance to explore other areas as well and also to reduce the amount of risks for future wells (Edgegrowth 2018). Other strategies like strategic partnership have also been used by the company for the business profit.
There are so many controversies associated with BHP Billiton in the past few years. Most of the controversies were raised because of its poor labor policies. The company is trying to pursue mining in poor countries in an overly aggressive manner; therefore it is very natural to be surrounded by so many controversies. BHP also suffered because of its poor development of environmental strategies and the safety of the product due to which it has to go through so many criticisms (Epstein, 2018). The two controversies associated with the company are as follows:
1) Dam disaster in Brazil- on 5 November 2015, the bursting of dam in south brazil caused a lot of harm to the people nearby that place. It happened in south east brazil, bursting of dam unleashed a great amount of sludge. The dam contained a huge amount of waste which is also called as tailings which are from iron ore mine. Tide of sludge was 400km downstream or more as measured. During the protest many people criticized the way of working of BHP and even said that tailing is not the BHP’s forte. BHP seemed to dump the tailings in the river which caused the billions of dollars for the compensation as well as the whole cleanup. The collapsing of dam killed almost 11 people and around 8 went missing which is a really bad situation for the BHP. This caused a lot of problems to the people living nearby; even a village got destroyed and caused a lot of contamination in the drinking water. More than 200 towns got affected which were present around the 500 km area of the river. Many crop farms were destroyed and aquatic lives were damaged. Although, BHP promised them to pay the compensation.
Protest against the potash mine plans of BHP in Canada- Eliott (activist, investor) attacks the BHP Billiton’s plans of developing a potash mine in Canada. Eliott warned BHP that their plans regarding this project could be very dangerous. An article published by “the telegraph” depicts the whole story. Eliott even started a campaign against BHP as an overhaul to the strategies and boards of BHP. BHP tends to invest around 3.8 billion dollars to develop the mine although the overall cost is around 4 billion dollars. BHP launched an argument saying that the shareholder money should be used for this particular project that is building the potash mine. According to different analyst and shareholder, the concern f this project being a misstep and false strategy was raised (Hill, Jones & Schilling, 2014). Protesters even raised the question in which they compared the potash to US shale. BHP on the other hand argued about spending the money for this project will be a great thing to do and called this plan as “ Thinking big”. Activist on the other hand said that “ thinking big” has led the company down to such a pathe which includes a large amount of investment in the assets
Current Strategies
Pestle analysis is one of the strategic tools that are majorly used to analyse the macro environment of the organization. PESTLE stands for Political, Economic, Social, Technological, Legal, and Environmental (Sadgrove, 2016).
Political factor performs an essential part in defining the factors that can influence the long-term profitability of BHP Billion Plc.’s in some countries. The company is dealing with some basic resources in different countries and uncover itself to diverse kinds of political system and political environment risks. However, the political environment of the company in Australia is favorable. BHP Billiton gets support from the government of Western Australia. In terms of market capitalization, is it one of the largest companies, therefore, the government always help it because it leads to the country’s development as a whole.
The factors of Macro-environment like savings rate, foreign exchange rate, inflation rate, economic cycle, and interest rate define the aggregate investment and demand in an economy. However, factors of microenvironment like competition standards influence the company’s competitive advantage. BHP Billiton Plc could make use of economic factors of the country like inflation, growth rate (Bloomberg 2018), and economic indicators of the industry like consumer spending, industry growth rate, etc. to predict the growth route.
In an environment, the culture of social and the process adopted to do something influence the organizational culture (BHP 2018). Attitude and Shared beliefs of the people perform a huge role in supporting the marketers of BHP Billiton Plc to understand the consumers of the targeted market and create the message of marketing for attracting the customers of basic resource industry.
The quick advancement in the technology disturbs different industries in the world. The industry of transportation is one of the good examples to explain this point. In the last 5 years, the transportation industry has changed very fast, not even, it has provided a chance for the companies to manage or handle the changes (Linkdin 2018). The main players i.e. Lyft and Uber are presently dominating the industry of Taxi. The industry of the car is also moving towards automation, which is controlled by technology companies like Google, & Tesla, which has introduced the revolution of an electronic car, disrupts manufacturing.
The Australian market is very competitive as well as advanced, which reflects that industries are also changing with high speed, so in order to survive in such an advanced environment, BHP Billiton Limited has to remain updated about the changes in the technology and adopt all these changes.
In various nations, the legal outline and organizations are not healthy enough to defend the intellectual property rights of a company. A business must prudently assess before entering into these types of markets because it can result in theft of the secret sauce of the company hence all overall competitive advantage (Fern Fort University, 2018).
Diverse markets have dissimilar standards or standards of environment, which can influence the organizational profitability in those markets. The Australian environment is relatively conductive for the company i.e. BHP Billiton Limited to execute its activities easily. The weather is also very pleasing that the employee’s exhaustion level does not get too high (Morris and Metternicht, 2016).
Criticisms of Business Practices
The purpose of SWOT analysis is to reflect the key strengths, weaknesses, opportunities, and threat in order to analyze the internal as well external environment of the organization.
BHP Billiton is one of the well-known company deals in natural resources with a differentiated asset’s portfolio. It is the biggest suppliers of copper, aluminum, uranium, silver, and lead. BHP is a key manufacturer of metallurgical coal, iron ore, and manganese with processes in South Africa, Brazil, and Australia.
BHP Billiton has reflected great financial returns in some last decades by returning the capital to the investors by an aggressive program of share buyback that has repaid capital. Due to this company, remain strong.
The company has to enhance the procedures of return on equity and gross margin to be faster in line with its aristocracies.
BHP Billiton is presently dealing with various human resources problems affecting the operations. The company does not have experienced or qualified employees particular those who are trained in the sector of mining.
BHP Billiton possesses various projects in its pipeline to start. The viability stage of 29 projects that are possible will become an important source of income, offered projects to the company are initiated in a cost-effective manner (Digital Journal, 2018).
The company could further operate on consolidation of its position of the brand by persuading innovative solutions of marketing and utilizing new tools of media and consumer outreach while promoting its natural resources from the extensive assets of the company. This reflects that by marketing the strengths and operations of the company the brand awareness of the products is created among customers.
BHP Billiton is dealing with threat unceasingly such as increasing cost of the suppliers, comprising shipping, labor costs, and energy, staffing issues and inflation, which are limiting the development and growth of the company (Digital Journal, 2018).
The company is also facing political threats in the domestic country i.e. Australia because it has received an unfavorable presiding from the government concerning access of infrastructure and the political subtleties of remaining on the ‘right side’ of concerns cannot be undervalued.
As BHP Billiton is a multinational brand name and hence the organizational structure plays an empirical role in the success, growth and development of the business entity. BHP Billiton is following flexible working environment and also promotes work life (Grant, 2016). The company is changing cultures, and is heavily pushing Diversity and Inclusion, to the point where during college recruiting any candidate that “Fit the bill” was to be brought to the senior recruiter’s attention immediately (Smither, Houston & McIntire, 2016). They are quickly filling a quota but have recently lain off any employees that don’t share the same personality traits as their department. (Hunting and Fishing for field work.)
Conclusion
In the limelight of the above executed analysis it has been inferred that the business entity is Multinational Corporation and is operating the business operations all over the globe and majorly in Australia. The above presented report is focused on the integral concept of management that is required to be executed effectively and efficiently for managing the available resources within the business corporation. The business entity is making use of various forms of strategies and tactics for managing the resources effectively. The further report comprise of environmental analysis that has been executed for analyzing the marketing conditions and other aspects of the market regions. This analysis will aid the business entity and enable with the opportunities and threats that can be faced by the business organization. And at last research has been executed for analyzing the organizational culture of BHP Billiton and also the leadership style that is followed with the organizational structure.
References
BHP (2015) Resourcing global growth strategic report 2015 [Online]. Available from https://www.BHP.com/-/media/BHP/documents/investors/annual-reports/2015/BHPBillitonstrategicreport2015.pdf?la=en. [Accessed 7th September 2018]
BHP (2018) About us [Online]. Available from https://www.bhp.com/our-approach/our-company/about-us [Accessed 7th September 2018]
BHP (2018) Structure and strategy [Online]. Available from https://www.bhp.com/our-approach/our-company/strategy [Accessed 7th September 2018]
BHP (2018) Global workplace, unique opportunities [Online]. Available from https://www.BHP.com/our-approach/work-with-us [Accessed 7th September 2018]
Bloomberg (2018) Company Overview of BHP Billiton Limited [Online]. Available from https://www.BHP.com/our-approach/work-with-us [Accessed 7th September 2018]
Digital Journal (2018) Australia PESTEL Analysis, SWOT Analysis and Risk Analysis Market Research Report Launched [Online]. Available from https://www.digitaljournal.com/pr/3345099 [Accessed 7th September 2018]
Edgegrowth (2018) BHP enterprise development strategy [Online]. Available from https://www.edgegrowth.com/strategy-advisory/BHP-enterprise-development-strategy/ [Accessed 7th September 2018]
Epstein, M. J. (2018) Making sustainability work: Best practices in managing and measuring corporate social, environmental and economic impacts 4th ed. New York: Routledge.
Fern Fort University (2018) BHP Billiton Plc PESTEL & Environment Analysis [Online]. Available from https://fernfortuniversity.com/term-papers/pestel/nyse4/6434-BHP-billiton-plc.php [Accessed 7th September 2018]
Grant, R. M. (2016) Contemporary strategy analysis: Text and cases edition 2nd ed. U.S: John Wiley & Sons.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014) Strategic management: theory: an integrated approach 12th ed. U.S: Cengage Learning.
Linkdin (2018) About us [Online]. Available from https://www.linkedin.com/company/BHP [Accessed 7th September 2018]
Morris, A. and Metternicht, G. (2016) Assessing effectiveness of WEEE management policy in Australia. National Center for Biotechnology Information, 181(2016), pp.218-230.
Sadgrove, K. (2016) The complete guide to business risk management 3rd ed. Oxon: Routledge.
Smither, R., Houston, J., & McIntire, S. (2016) Organization development: Strategies for changing environments 2nd ed. U.S: Routledge.
Zacks, (2016) BHP Billiton’s (BHP) new business strategy to drive growth [Online]. Available from https://www.nasdaq.com/news/ [Accessed 7th September 2018]
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