Management and Business Context
Name of the Student-Shantanu Khandwe
Student Id-12050920
Organisation-Wesfarmers
Unit Coordinator- Laura Baker
The overview of the study is “the concept of the critical issues of management of Wesfarmers”. This study would highlight the organisational structures, environmental forces and the organisational functions of Wesfarmers. Wesfarmers is the largest conglomerate of Australia. The head quarter of Wesfarmers is at Perth, Western Australia. As opined by Beske et al. (2014, p. 132), Wesfarmers has the specialisation in the retailing, coal mining, chemicals, fertilisers industry and also in the production of safety products. In the year of 2016, Wesfarmers ranked in the first position as per the revenue earning. It is noted that Wesfarmers has overtaken Woolworths and BHP Billition in 2016. On the other hand, Wesfarmers is the greatest private employer of the country and the number of employees is approximately 205000. In addition, number of shareholders of this organisation is approximately 530000 (Wesfarmers.com.au). The purpose of this study is to identify the how the environmental factors affects the organisational performance of Wesfarmers.
The primary objective of Wesfarmers is to provide a satisfactory return to the shareholders in terms of financial discipline and also through the exceptional management of differentiated business portfolio. This organisation mainly aims to the strong management capability, which is accountable for strategic development and strategic execution (Zhu et al. 2013, p. 110). This would improve the day to day operational performance of the organisation. The organisational structure of Wesfarmers is depending on the several factors such as core values, growth enablers and also on the value creating strategies.
Organisational core values of Wesfarmers aimed to the various factors such as integrity, openness, accountability and boldness. According to Tao et al. (2016, p. 135), with the help of integrity determinant, Wesfarmers acts ethically to handle all of the dealings. Openness and honesty is helpful for the organisational performance. With the help of these determinants, the organisation would accept that the consumers make faults and seek to take lesson from the mistakes. With the help of accountability factor, Wesfarmers would be able to protect and enhance their organisational reputation. Accountability has effective authority delegation and this would be helpful for the decision-making procedure. On the other hand, boldness determinant helps to the organisation to take bold decisions and would be able to challenge the status quo for their growth and sustainability. Lastly, growth enablers determinant focused to strengthen the existing organisational business through business operational excellence (Lugato et al. 2014, p. 3559) This factor is also very helpful to satisfy the consumers’ necessity. Therefore, Wesfarmers would be able to secure the growth opportunities with the help of entrepreneurial initiative. In addition, growth enablers include the long term management, which ensure the sustainability.
According to Lin (2013, p. 35), it can be mentioned that environmental forces of Wesfarmers would affect the organisational business directly by increasing the sales. On the other hand, environmental factors would affect negatively by raising the cost of the products. In this purpose, it can be mentioned that Wesfarmers’ regulations would dictate how an organisation manufactures the products and dispose the waste materials. One of the major environmental forces an organisation is dealing with the ability to deliver the product.
In the words of Golicic & Smith (2013, p. 80), environmental factors would consider the weather and the change of the climate. Major climate change happens for global warming and also with the greater environmental awareness. As per the environment protection act of 1974, process for assuring the environmental effect on the business is included for the governmental decision making. This act is also necessary to follow for the business of coal mining. This environmental act aims to the uniform safety of the employees of the organisation. Johnston et al. (2015, p. 1341) pointed that water is a scarce resource of Australia. Therefore, problems of water quality and water availability are a serious concern. Therefore, shortages of water make an adverse impact on the production process. Wesfarmers mainly strive to diminish the emissions intensity for the business and tried to improve the resilience of climatic change.
To discuss the risk factor, the growth strategy of Wesfarmers is at comparatively lower risk, which emphasizes on the return on investment. As per the statement of Sharpley et al. (2013, p. 1310), home improvement retailing is a sensitive issue for the building and the construction function of Australia. In this connection, it can be mentioned that Wesfarmers’ market share has decreased with the passage of time as the number of competition has increased. Hence, it can be inferred that the business of Wesfarmers has been facing threats from the other competitors. On the other hand, it can be stated that Wesfarmers plays the role of market leader and therefore, the organisation requires taking critical decision. Therefore, if the organisation would take any wrong decision, this would reduce the organisational performance of Wesfarmers. Moreover, Wesfarmers has been suffering from economic downturn over time. Navarrete et al. (2016, p. 69) opined that this economic downturn would reduce the consumers’ demand for the products. This would make a negative impact on the organisational performance. If the demand for the products will decrease, this will reduce the sales of the products. Moreover, it can be observed that the competitors such as Woolworths and Myer sales their products to the consumers comparatively equitable price levels, whereas the prices of the products of Wesfarmers is comparatively higher. This will also reduce the consumers’ willingness to purchase the products from the organisation. Therefore, it can be observed that break up of Wesfarmers tends to release its capital to sustain the retailing business in the market of Australia. As a result, it can be mentioned that the share of Wesfarmers fall to $40.13. In addition, the profit target of Wesfarmers has also decreased and the non-retail business of the organisation has negatively affected.
Wesfarmers aimed to satisfy the demand of the consumers in terms of provide them goods and services everything based on the professional and the competitive Basis. In the words of Brunke et al. (2014, p. 510), Wesfarmers always tried to maintain a good relationship with the stakeholders. In this purpose, they also tried to provide a safe and greater working environment for the subordinates. In addition, to increase their satisfaction level, the employees are provided awards for their good performance as well as they are also provided business opportunities for their advancement. As a result, it can be inferred that the individual performance of the employees would be increased and this would increase the overall performance of the organisation. The productivity of that company will also be increased.
Wesfarmers aims to contribute the growth and the propensity of the economy, where the organisation operates by conducting the existing business functions in a significant approach and also seeks opportunities for organisational expansion. Moreover, Wesfarmers also emphasises a protection on the environment. In order to discuss the organisational performance of Wesfarmers, it can be mentioned that the organisation always focused to deliver good quality products to the consumers within the proposed time. As it is known that the organisation always tries to make their consumers happy, therefore, they used to provide special offers and discounts to the consumers. This would attract the consumers to purchase the goods from this organisation. On the other hand, it is known that the consumers are seeking varieties in the products and Wesfarmers also offers their customers varieties of goods, therefore, the consumers’ willingness to purchase the goods would increase. In addition, the organisation set affordable prices of the products, which will be paid by the consumers easily.
In the opinion of Wiengarten et al. (2016, p. 366), Wesfarmers focused to the customer loyalty program for making a stronger relationship with the consumers. In this connection, the organisation rewarded the loyal consumers, who have maintained long term relationship with the company. This customer loyalty program would increase the satisfaction level of the consumers more. This is the competitive advantage of Wesfarmers. Wesfarmers successfully runs their three industrial operations such as chemicals, energy and fertilisers, resources. The main purpose of single industrial division is to raise the industrial focus of their growth in scale. These three businesses are performed autonomously as well as share the capabilities as per their necessities.
After analyse the study, it can be mentioned that Wesfarmers holds the number one position in the Australian retailing industry. This study is also very helpful to discuss the organisational structures of the organisation. In this connection, it can be observed that the organisational structure of Wesfarmers is depending on integrity, openness, accountability and boldness. On the other hand, this study has highlighted the risk factors of the organisation, which they have faced during their production process. In this purpose, it can be mentioned that there are number of competitors in the retailing market of Australia, who are used to sale the products in terms of equitable prices. On the other hand, how the environmental factors affect the business of Wesfarmers has discussed in this context. Lastly, the organisational performance of Wesfarmers has highlighted. The organisation mainly aimed to provide greater quality products to the consumers, in order to increase their satisfaction level. On the other hand, the organisation has arranged customer loyalty program for make the consumers happy.
References
Alguacil, M. M., Torrecillas, E., García-Orenes, F., & Roldán, A. (2014). Changes in the composition and diversity of AMF communities mediated by management practices in a Mediterranean soil are related with increases in soil biological activity. Soil Biology and Biochemistry, 76, 34-44.
Beske, P., Land, A., & Seuring, S. (2014). Sustainable supply chain management practices and dynamic capabilities in the food industry: A critical analysis of the literature. International Journal of Production Economics, 152, 131-143.
Brunke, J. C., Johansson, M., & Thollander, P. (2014). Empirical investigation of barriers and drivers to the adoption of energy conservation measures, energy management practices and energy services in the Swedish iron and steel industry. Journal of Cleaner Production, 84, 509-525.
Environment. (2017). Wesfarmers.com.au. Retrieved 13 April 2017, from http://www.wesfarmers.com.au/our-impact/environment
Golicic, S. L., & Smith, C. D. (2013). A meta‐analysis of environmentally sustainable supply chain management practices and firm performance. Journal of supply chain management, 49(2), 78-95.
Johnston, A. S., Sibly, R. M., Hodson, M. E., Alvarez, T., & Thorbek, P. (2015). Effects of agricultural management practices on earthworm populations and crop yield: validation and application of a mechanistic modelling approach. Journal of Applied Ecology, 52(5), 1334-1342.
Lin, R. J. (2013). Using fuzzy DEMATEL to evaluate the green supply chain management practices. Journal of Cleaner Production, 40, 32-39.
Lugato, E., Bampa, F., Panagos, P., Montanarella, L., & Jones, A. (2014). Potential carbon sequestration of European arable soils estimated by modelling a comprehensive set of management practices. Global change biology, 20(11), 3557-3567.
Navarrete, D., Sitch, S., Aragão, L. E., & Pedroni, L. (2016). Conversion from forests to pastures in the Colombian Amazon leads to contrasting soil carbon dynamics depending on land management practices. Global change biology.
Orozco, J., Tarhini, A., & Tarhini, T. (2015). A framework of IS/business alignment management practices to improve the design of IT Governance architectures. International Journal of Business and Management, 10(4), 1.
Sharpley, A., Jarvie, H. P., Buda, A., May, L., Spears, B., & Kleinman, P. (2013). Phosphorus legacy: overcoming the effects of past management practices to mitigate future water quality impairment. Journal of Environmental Quality, 42(5), 1308-1326.
Tao, H. H., Slade, E. M., Willis, K. J., Caliman, J. P., & Snaddon, J. L. (2016). Effects of soil management practices on soil fauna feeding activity in an Indonesian oil palm plantation. Agriculture, Ecosystems & Environment, 218, 133-140.
Wiengarten, F., Humphreys, P., Gimenez, C., & McIvor, R. (2016). Risk, risk management practices, and the success of supply chain integration. International Journal of Production Economics, 171, 361-370.
Zhu, Q., Qu, Y., Geng, Y., & Fujita, T. (2015). A Comparison of Regulatory Awareness and Green Supply Chain Management Practices Among Chinese and Japanese Manufacturers. Business Strategy and the Environment.
Zhu, Q., Sarkis, J., & Lai, K. H. (2013). Institutional-based antecedents and performance outcomes of internal and external green supply chain management practices. Journal of Purchasing and Supply Management, 19(2), 106-117.