MGMT5982 | Management Theory | A Case Study on Wesfarmers Limited

Introduction

The presence of different types of aspects can be seen in the business organizations and these aspects provide the companies with the necessary direction for achieving the goals and objectives. Some of these major aspects are structure of the organization, work diversity, mission, vision, values and ethical consideration (Adekola and Sergi 2016). Thus, it is needed for the business organizations to take into account all of these aspects for the smooth running of their business. The main aim of this report is the analysis and evaluation of the above-mentioned organizations aspects in respect to one business organization of Australia. For the purpose of the report, Wesfarmers Limited (Wesfarmers) is taken into consideration. Wesfarmers is one of the largest conglomerates of Australia. The company was established in the year of 1914 and it is headquartered at Perth, Western Australia, Australia. The presence of Wesfarmers can be seen in some of the major industries such as retail, coal mining, chemical, fertilizers, safety products and others (wesfarmers.com.au 2018). The size as well as diversity of the company is one of the major reasons for its selection for this report. In Australia, Wesfarmers is considered as the largest private employer with an employee base of approximately 220,000. The company is also listed in the Australian Securities Exchange (ASX). Over the years, Wesfarmers have grown as one of the largest retailers in the Australian retail industry (wesfarmers.com.au 2018). 

Research Methodology

Research methodology is considered as one of the major aspects for the completion of any research program and it is regarded as the systematic as well as theoretical analysis of the applied methods in a particular field of study (Mackey and Gass 2015). There is not any exception of this fact in this particular report. As per the above discussion, this report is related to the analysis and evaluation of a case study of Wesfarmers that includes different organizational aspects. Thus, in order to achieve the objective of this research, there is a need for a well-developed research methodology. This report is involved in the analysis of the case study of Wesfarmers in which the focus is to take into consideration different organizational aspects of the company. For this reason, the report will take a form of a well-developed case study on the crucial organizational factors of Wesfarmers like organizational structure, mission, vision, values and ethical considerations of the company.

For the investigation of these organizational aspects, the focus is to consider the naturally occurring data. Naturally occurring data are considered as those data that can be obtained in the textual form, documentary form or archival form in the absence of any direction investigation. Hence, this report involves in the analysis and evaluation of the naturally occurring data of Wesfarmers from the sources like official website, annual reports, sustainability reports, news articles about the company and other sources. After the collection of this naturally occurring data, they are analyzed and evaluated for achieving the objectives and goals of the report. It implies that the report involves in the descriptive analysis of the collected naturally occurring data of Wesfarmers (Flick 2015). Thus, based on the above discussion, it can be said that the report involves in the qualitative analysis of the collected naturally occurring data of Wesfarmers to achieve the report’s objective.    

Mission and Values of Wesfarmers

Mission

Every organization is driven by a mission and there is not any exception of this fact in case of Wesfarmers. The mission of the company is to deliver pleasing returns to their shareholders with the help of financial disciplines and effective management systems in the presence of diversified business portfolio. For this reason, the key focus of the company is to ensure the presence of strong management capability that is needed for strategy development and execution (wesfarmers.com.au 2018).

Values

The business operations of Wesfarmers are driven by four major values; they are Integrity, Openness, Accountability and Entrepreneurial Spirit. As per the integrity value, Wesfarmers is needed to act in the most ethical manner in all the business operations (wesfarmers.com.au 2018). Openness value states that there needs to be honesty and openness in reporting, ideas and feedbacks. It also states that effective working environment can be developed from accepting their mistakes time to time. As per the value of accountability, there needs to be major delegation of authority and decision-making, performance accountability and protection of the organizational reputation. As per the value of entrepreneurial spirit, the management of Wesfarmers must be ready to take calculated risks (wesfarmers.com.au 2018). These are the values of Wesfarmers.

Organizational Culture and Management Style

Over the years, two major factors responsible for the success of the business of Wesfarmers are their organizational culture and style of management. In Wesfarmers, culture can be considered as an understanding that the existence of the company is there for providing good return to their shareholders and thus, it can be considered as the way of operation of the company. The major aspects of the organizational culture of Wesfarmers are to welcome the employees, customers and community members; development of mutual respect for aboriginals and Torres Strait Islander and others (sustainability.wesfarmers.com.au 2018).

It needs to be mentioned that Wesfarmers follows a specific style of management and some specific step scan be seen in this management style. Wesfarmers’s management considers the major objective of the company as the core of their management style. After that, the management of Wesfarmers develops the necessary strategies while considering the main objective of the business (wesfarmers.com.au 2018). After that, they identify the growth enablers for achieving the objectives like outstanding people, commercial excellence and others. Lastly, the management uses their core values like integrity, openness and others for using the strategies to achieve the objectives (wesfarmers.com.au 2018). 

Morgan’s Metaphor

The theory of Morgan’s Metaphor helps in exploring the unseen, paradoxical, irrational and absurd aspects of every business organization (Morgan 2016). As per Gareth Morgan, there are eight metaphors in the organizations and they are shown below:

Figure 1: Morgan’s Metaphor

(Source: Örtenblad, Putnam and Trehan 2016)

It can be seen from the above figure that there are eight metaphors as per Morgan and some of these metaphors can be applied in Wesfarmers. Morgan has mentioned organizations as a brain as it is the source of information and it helps the organizational people in learning different aspects (Digha 2014). At the same time, he has also considered organization as a culture where the organizational people work towards achieving the organizational goals. Earlier discussion indicates towards the fact that there is a presence of strong organizations culture in Wesfarmers. At the same time, the management of the company considers the information of the company for the development of organizational strategies (wesfarmers.com.au 2018). All these aspects support the theory of Morgan’s Metaphor.

Organizational Theory

The presence of many management theories can be seen for the companies and one of them is the Administrative Theory by Henri Fayol (Khorasani and Almasifard 2017). This theory is largely based on the concept of departmentalization and it states that the companies are needed to identify different activities for performing the business operations and needed to divide them in different departments for their effective accomplishment (Shafritz, Ott and Jang 2015). Henry Fayo belives that the companies should give emphasis on the organizational management and the human behavioral factors as humans are responsible for accomplishing the organizational operations. The presence of these aspects can be seen in Wesfarmers as the management of Wesfarmers has divided the organizational works in many departments like sales, finance, human resource and others. In addition, the management of Wesfarmers considers their employees and other staffs as the main mean for the achievement of the organizational goals and objectives. Thus, the presence of all of these aspects can be considered as the required evidences for the presence of the Administrative Theory of Henry Fayol within the organization (Rice 2013).

A specific structure of the board can be seen in Wesfarmers as it is the commitment of the company to ensure the composition of the board including their directors. At present, the board of Wesfarmers comprises of nine directors including eight non-executive directors. The presence of a Chief Executive Officer (CEO) can be seen in the board (wesfarmers.com.au 2018). At the same, the presence of the senior level managers can also be seen in the organizational structure of the company. The presence of vertical chain of command can be seen in Wesfarmers as the command comes from the top of the organizational charts like CEO and directors. However, each person is connected to the other person in their command. In addition, the presence of upward communication can be seen in Wesfarmers as the higher level managers and directors communicate the necessary orders and direction to the lower level managers and employees (wesfarmers.com.au 2018).

Ethics and Diversity

It needs to be mentioned that Wesfarmers is well-known for their ethical business practices. The main aim of the company is the delivery of satisfactory return to their shareholders with the help of ethical business practices. For this reason, the management of the company follows the ethical framework called The Wesfarmers Way that comprises the core value of the company such as integrity, openness, accountability and entrepreneurial spirit (wesfarmers.com.au 2018). The management of the Wesfarmers guides the behavior of their organizational people with the help of The Wesfarmers Way framework and Code of Conducts and others ethical policies so that they can achieve the objective of their organizations in the ethical manner. In addition, the Board of Directors of Wesfarmers has made it sure that they make the business decisions and carry on the actions as per the core ethical values of their business (wesfarmers.com.au 2018).

Diversity is considered as another major aspect in the business operation of Wesfarmers as the company has a strong commitment towards developing an inclusive culture for harnessing the power of diversity of thought and experience of the employees. The presence of diversity enables the company in catering to the needs of their customers and shareholders in the best possible manner (wesfarmers.com.au 2018). In the presence of the commitment to all the staffs in the organization, Wesfarmers ensures particular focus on maintaining gender balance and Indigenous representation in every aspect of their workforce. The management of Wesfarmers has developed as well as implemented a Policy for Diversity with the aim of fostering diversity at all levels of the workforce within the organization. In addition, the company has provided all the details about their diversity policy in their official website (wesfarmers.com.au 2018).

Conclusion and Recommendations

The above discussion sheds lights on different organizational aspects of Wesfarmers. It can be seen from the above discussion that Wesfarmers has an effective team of management with the aim to manage various aspects of the organization in the most effective manner. The presence of an effective Board of Directors can be seen in Wesfarmers that ensures the effective flow of communication and command throughout the organization. Apart from this, it can also be seen from the above discussion that the management of Wesfarmers has embraced certain management theories in their organization. They are the Administrative Theory of Henry Fayol and the management theory of Morgan’s Metaphor. According to the Administrative Theory, the management of Wesfarmers has divided the required tasks in different departments with the aim to complete them effectively. It can also be seen from the above discussion that Wesfarmers carries their business operations with accordance to their core ethical values. The major ethical values of the company are integrity, accountability, openness and others. At the same time, the company has developed their own ethical framework named The Wesfarmers Way so that the directors and others senior level employees can follow them at the time of organizational decision-making process and others business activities. In addition, another major ethical objective of Wesfarmers is to achieve their business objectives in the most ethical manner. However, based on the above discussion, some recommendations are provided below for Wesfarmers:

• It is recommended to the management of Wesfarmers to develop and implement more robust corporate governance policies so that all the business operations of the company can be monitored.
• It is recommended to the company to take into consideration the essential needs of their employees with the aim to develop a more effective workplace.

References

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Digha, M.N., 2014. Morgan’s images of organizations analysis. International Journal of Innovative Research and Development, 3(13).

Flick, U., 2015. Introducing research methodology: A beginner's guide to doing a research project. Sage.

Khorasani, S.T. and Almasifard, M., 2017. Evolution of management theory within 20 century: A systemic overview of paradigm shifts in management. International Review of Management and Marketing, 7(3), pp.134-137.

Mackey, A. and Gass, S.M., 2015. Second language research: Methodology and design. Routledge.

Morgan, G., 2016. Commentary: Beyond Morgan’s eight metaphors. Human relations, 69(4), pp.1029-1042.

Örtenblad, A., Putnam, L.L. and Trehan, K., 2016. Beyond Morgan’s eight metaphors: Adding to and developing organization theory. Human Relations, 69(4), pp.875-889.

Rice, A.L., 2013. The enterprise and its environment: A system theory of management organization. Routledge.

Shafritz, J.M., Ott, J.S. and Jang, Y.S., 2015. Classics of organization theory. Cengage Learning.

Sustainability.wesfarmers.com.au., (2018). Structure and composition of the Board. [online] Available at: https://sustainability.wesfarmers.com.au/our-principles/governance/robust-governance/structure-and-composition-of-the-board/ [Accessed 23 Oct. 2018].

Wesfarmers., (2018). Who we are . [online] Wesfarmers.com.au. Available at: https://www.wesfarmers.com.au/who-we-are/who-we-are [Accessed 23 Oct. 2018].

Wesfarmers.com.au., (2018). About diversity at Wesfarmers . [online] Wesfarmers.com.au. Available at: https://www.wesfarmers.com.au/our-impact/people/diversity/about-diversity [Accessed 23 Oct. 2018].

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