Discuss about the Corporate Interests and Cultural Rights.
This assignment is based on the subject of management accounting and the primary focus of the study is on the business of Woodside Energy. Woodside Energy is an oil and gas company in Australia. The company is registered under the Australian Security Exchange (Woodside.com.au 2017). In the beginning, the study focuses on the corporate strategies that Woodside has taken to run its business properly in the market. After that, the focus of the assignment moves towards the criticism of the business practices of the company. The environmental analysis for Woodside Energy has conducted during this study in order to identify the current position of the company in current scenario. Lastly, discussion is made on the culture and leadership followed at Woodside.
Woodside Energy has started its business in the year of 1954 (Woodside.com.au 2017). The mission of the company is to deliver the high return to the shareholders by establishing itself as the market leader in the international market. The vision statement of the company states “Becoming a global leader in Upstream” (Woodside.com.au 2017). The mission and vision statements indicate a common goal of the company and that is to be the market leader in the global context. If the past and current strategies of the company are analyzed then it can be identified that the strategies of the company are always aimed to establish the company at the unique position in market (Leonardi 2016). At the same time, it is also noticeable that the company has tried to achieve the competitive advantage through strong partnership with the stakeholders and by maintaining the high transparency level. The company has tried to achieve the competitive advantage in the market by following three basic strategies and these are as follows:
The history of Woodside Energy shows that the company has taken several strategies in past in order to achieve its goal and maintain the competitive advantage in the market. The use of subsea technology is one of the best strategies taken by Woodside in the past days. This particular strategy has helped the company in deepwater drilling (Smith 2016). At the same time, the subsea technology has helped the company minimizing cost of oil drilling. Apart from the use of subsea strategy, the management of Woodside has also taken the strategy of constructing high quality LNG plants in the past days (Woodside.com.au 2017). This strategy influenced the company concentrating on the value chain. Smooth value chain helped the company minimizing the total time of production and distribution.
Currently, the management of Woodside Energy is concentrating on growing the portfolio of the company (Woodside.com.au 2017). They are conducting several corporate acquisitions. The company is trying to expand its business in Australasia and sub-Saharan Africa. At the same time, the management has also taken the FPSO (Floating Production, Storage and Offloading) operations strategy in order to minimizing the cost level and simplifying the production technique (Woodside.com.au 2017). Along with that, the company also concentrates to maximizing the shareholders’ value through increasing the profitability.
Therefore, from the above discussion, it can be said that each strategy of the company in past as well as in present is aimed to achieve the overall goal or mission of the company. The strategies are well developed as per the need of the company.
Woodside Energy is operating its business for more than 60 years. In this long life span, the company has faced several controversies or criticisms. One of the biggest criticisms faced by Woodside was in 2006, when the Mauritanian government claimed that the company had made a contract of investing US$600 in an illegal way (Woodside.com.au 2017). The management of Woodside Energy took the business expansion strategy in 2004 and at that time, they made an agreement with the Mauritanian government to invest US$600 for the project of developing Mauritania’s Chinguetti offshore oil (Woodside.com.au 2017). This particular controversy or criticism created a bad image of the company in the market. The criticism continued for next 2 years (Kerr and Cox 2016). The Australian Federal Police (AFP) started the investigation during June 2006 and at last, in May 2008, the AFP declared that the company was not involved in any illegal activity regarding the particular project of developing Mauritania’s Chinguetti offshore oil (Woodside.com.au 2017).
There was another major criticism faced by Woodside Energy during 2011. This criticism was regarding the payment to the foreign workers. In the year 2011, the Australia’s Fair Work Ombudsman initiated the investigation on the payment structure followed by Woodside Energy for the foreign workers (Peach and Box 2016). After the investigation, the Australia’s Fair Work Ombudsman found out that the company has underpaid the foreign workers, who were working at North-West Shelf oil rigs. The Australia’s Fair Work Ombudsman claimed that the company pays less than $3/hour to each foreign employee in those rigs (Coombe and Baird 2016). The criticism carried on for 2 years and the court claimed that the company paid low payment to the employees, who worked at the company as the painters from 2009 to 2011 (Winrow 2016). It was identified that officially the company allotted $400 per day for each painter, but actually the payment was far less that the allotted amount. The management of the company claimed that the Australia’s Fair Work Act does not impose any fixed standard of payment. However, it was proved that there was fixed payment standard in the particular act and due to this, the court imposed penalty on the company (Vaughan 2016).
Woodside Energy is one of the most popular companies in the oil and gas sector in Australia. In order to analyze the business of Woodside Energy, it is important to analyze the environments within which the company operates its business. The analysis of the operational environments of Woodside Energy is stated below:
PESTLE analysis:
|
Factors |
Current situation |
|
Political |
In Australia, the political environment is stable and this helps Woodside operating its business properly. The government of the country is much supportive in context of providing advanced operational infrastructure to the company (Abbott 2015). |
|
Economic |
The economic condition in Australia at current scenario is not much strong. Per capita GDP of the country has declined and along with that, the economic growth has also declined. |
|
Social |
The people in the Society in Australia are adoptive in nature. At the same time, their lifestyle is advanced. Most of the people in Australia use personal vehicles and so the demand for the petroleum is high in Australian society. Apart from that, the demand for the other oil and gas products is also high in Australian society (Nottage 2016). |
|
Technological |
Technologically, Australia is advanced. There is proper technological infrastructure in the country, which provides better scopes to Woodside for using advanced technologies in its business. |
|
Legal |
The legal environment in Australia is much strict. Every company in this country is bound to follow some rules and regulations while operating their business activities. Some of the important laws are – Australia’s Fair Work Act 2010, Employment and Labor Law 2016 and Workplace Relations Act 1996 (Abbott 2015). |
|
Environmental |
The pollution level in Australia is much lower than the other countries. The people and the government in the country are much aware of the environmental issues and so they always try to maintain expected standard of natural environment. |
Table 1: PESTLE analysis
(Source: Abbott 2015)
The specific environment in the industry within which Woodside operates is business is stable in the current scenario. The oil and gas industry in Australia is one of the major exporters in the country (Sholarin and Awange 2016). In last few years, the level of production in this specific industry has increased by 5% to 10% (Bergmann 2016). In such a situation, the level of competition is high. There are several competitors of Woodside like, Apache Corporation, Santos Limited and BHP Billiton Limited (Woodside.com.au 2017). At the same time, the industry has advanced technological infrastructure, within which every company can work properly (Baer 2016). Apart from these, the current profitability standard of the company is much better in the industry. The customers and unions in this industry have less influence on the price level of the products.
The situation of the internal environment of a company is indicated by its process, system, employees and management. If the internal environment of Woodside is analyzed, then it can be identified that the business process at the company is very systematic. Application of advanced technology has made the workflow smooth (Coombe and Baird 2016). On the other side, the company uses proper IT system in order to maintain its records and information. Use of advanced IT system helps the management in proper decision making.
However, sometimes the conflicts between the management and employees can be notices at Woodside. Most of the time, the issues are related to the payment of the employees. Currently, the situation is much improved (Vaughan 2016). The management of the company includes highly efficient personnel. The effectiveness of the management team can be observed in the success trend of the company.
|
Strengths § The financial strength of the company is very strong. § High brand value § Wide customer base § Effective promotional strategy § Use of high technology |
Weaknesses § Employee-management conflict § Lack of internal communication |
|
Opportunities § High growth opportunity in the market § Availability of advanced technological infrastructure that can improve the operations of Woodside |
Threats § High level of competition § Increased rules and regulations in the industry |
Table 2: SWOT analysis
(Source: Woodside.com.au 2017)
Therefore, from the above analysis, it can be said that the internal and external environment of the company is much favorable for the business growth of the company. On the other side, there are some threats in the market that can create problems for the company. However, the company can manage the situation by utilizing its strengths and opportunities. Hence, the overall environmental scenario of the company is favorable.
The working culture in an organization depends on its core values. The working culture of Woodside Energy depends on six of its core values – integrity, excellence, discipline, respect, working together and working sustainability (Woodside.com.au 2017). The company believes in fair and honest working environment, where everyone gets fair judgment and proper respect. At the same time, the management of the company always tries to build a team spirit among the employees (Woodside.com.au 2017). However, sometimes, employees-management conflicts can be noticed within the company, the management puts its efforts to solve the issue within the minimum possible time. Each of the employees along with the members in the management follows strict discipline and company’s policies at the workplace (Woodside.com.au 2017). The management tries to maintain low work burden on the employees. At the same time, the company arranges for the training and development sessions at a regular interval in order to improve the excellence level of the employees.
The leadership style of the management at Woodside aims to maintain the working sustainability of the company. The management of the company is very conscious about maintaining the employee retention rate (Woodside.com.au 2017). The company believes that if it achieves the working sustainability, then only it will achieve the sustainability in the external market.
Conclusion
In this study, it has been identified that Woodside Energy aims to achieve the leading position in the market. The company has taken different strategies in the past that can help it maintaining its competitive position. It has used advanced technologies in order to make its operations easier. The company is also taking effective strategies in the recent years. However, Woodside has faced some controversies or criticisms due to some of its business activities. The study has identified that the internal and external environmental situation of Woodside is much favorable. On the other side, the working culture and leadership style of the company aims to maintain the working sustainability.
Reference list:
Abbott, M., 2016. The Economics of the Gas Supply Industry. Routledge.
Baer, H.A., 2016. The nexus of the coal industry and the state in Australia: Historical dimensions and contemporary challenges. Energy Policy.
Bergmann, M., 2016. The Rise in Dividend Payments. Cyclical Labour Market Adjustment in Australia 11 Developments in Banks’ Funding Costs and Lending Rates 21 The ATM System since the 2009 Reforms 31 The Australian Government Guarantee Scheme: 2008–15 39 The Rise in Dividend Payments 47, p.47.
Coombe, R.J. and Baird, M.F., 2016. The Limits of Heritage: Corporate Interests and Cultural Rights on Resource Frontiers. A Companion to Heritage Studies, First edition. Edited by William Logan, Mairead Nic Craith, and Ullrich Kockel. Wiley & Sons Publishing, pp.337-354.
Doyi, I., Essumang, D.K., Dampare, S. and Glover, E.T., 2016. Technologically Enhanced Naturally Occurring Radioactive Materials (TENORM) in the Oil and Gas Industry: A Review. In Reviews of Environmental Contamination and Toxicology Volume 238 (pp. 107-119). Springer International Publishing.
Kerr, T. and Cox, S., 2016. Media, Machines and Might: Reproducing Western Australia’s Violent State of Aboriginal Protection. Somatechnics, 6(1), pp.89-105.
Leonardi, C.R., 2016. Foreword: Special issue on particle methods for the oil and gas industry. Computational Particle Mechanics, 3(2), pp.123-124.
Nottage, L.R., 2016. Investor-State Arbitration Policy and Practice in Australia.
Peach, D. and Box, T., 2016, April. Simplicity From Complexity: A Systematic Risk-based Approach to Managing Marine Biofouling in the Petroleum Industry. In SPE International Conference and Exhibition on Health, Safety, Security, Environment, and Social Responsibility. Society of Petroleum Engineers.
Sholarin, E.A. and Awange, J.L., 2016. Environmental Project Management.
Smith, K., 2016. Which former MPs now work for gas companies?. Green Left Weekly, (1086), p.4.
Vaughan, L., 2016. From Weebo to Walmadan: making sense of Aboriginal heritage protection (de) evolution in Western Australia. Right to Protect Sites: Indigenous Heritage Management in the Era of Native Title, The, p.253.
Winrow, G.M., 2016. The Anatomy of a Possible Pipeline: The Case of Turkey and Leviathan and Gas Politics in the Eastern Mediterranean. Journal of Balkan and Near Eastern Studies, 18(5), pp.431-447.
Woodside.com.au. 2017. Woodside Energy | Home. [online] Available at: https://www.woodside.com.au/ [Accessed 7 Jan. 2017].
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