Discuss about the Strategic Management for Business Organization.
Strategic management is the process of organizing of all the operations of a business organization. In this context, the business organizations are required to perform proper activities for achieving the competitive advantages. This is very important for getting the desired level of success in the business operations. In this report, the strategic issues of the company BHP Billiton have been analyzed and some strategic plan have been provided for the further improvement of the company to get high level of success in the future business operations of the company. In the year of 2008, the company had re-evaluated their operational strategies. It took a big step towards the modification of the pricing strategy in 2011 (Bhpbilliton.com, 2016). This was done by considering the demand and supply of the economics of the global villages. The modified pricing strategy was done in mainly for the iron ore and metallurgical coal. This step was considered as the fundamental step of the company towards the positive development. Focusing in the low pricing strategy was able to attract many of the price sensitive buyers (Storey, 2014). In the last five years the most important strategies taken by the company were; low pricing strategy, blue oven strategy, focus on the socio-economic development and global diversification strategy.
As per the previous research work and analysis, the main strategic issue faced by the company was in the section of the supply chain management activities. According to Eden and Ackermann (2013), the company was failed to identify the proper locations for the manufacturing plants. In order to get the success in their low cost strategy, the company should develop the manufacturing plants near the places of the suppliers’ locations and the market where the products will be sold. This is very important because the price of the products can be minimized if he production cost is minimized which is highly related to the supply chain management of the company (Bhpbilliton.com, 2016). If the manufacturing plants are developed in such a place which is not near the supplier and target market, then the transportation cost and overheads become very high which was a big problem faced by the company for minimizing the price of their develops products. This issue needs to be solved and the company needs to identify the proper locations form where it can operate the business operations effectively.
Another major issue faced by the company is the maintenance of the customer base. In order to maintain the customer base, the company is providing the products at a lower price range. The company is also focusing in the area of the quality of the products. Some customers have a perception of that the lower price products are low quality products. Therefore, the company has a high level of need of maintaining the product quality for holding their brand value in the target market (Bhpbilliton.com, 2016). In order to enhance the customer relationship, the company is providing some additional values to their customers, which is adding more costs to their business operations. Sometimes these activities are affecting the profitability of the company in a negative way.
In the area of the strategic management, the human resource management of the company is an important component. The company is facing some major issues in the HRM regarding the health and safety requirements of the employees. The company has the responsibility of marinating the health and safety of the employees at their manufacturing plants. Risks regarding the health of the employees are a serious issue in the manufacturing plants of the company. There are lots of activities which are associated with some great risks regarding the health of the employees (David & David, 2016). In this area, the company needs to use proper precautions and effective HRM practices for reducing the occupational health and safety risks at the workplaces of the company.
After analyzing the strategic issues of the company, some strategies have been suggested for the company for resolving the issues. The identified strategies are discussed in this section with the help of the RACE framework. Thos framework helps to analyze the projected strategies to understand whether the strategies are adoptable by the business organization or not (Hill, Jones & Schilling, 2014). In this section, several strategies have identified and analyzed to understand the level of adoptability by the organization.
Cost Leadership:
Cost leadership strategy is the most effective strategy for reducing the cost of the products. In this strategy, the company needs to select proper suppliers and other sources of business for reducing the production cost as well as maintaining the quality of the products. In this strategy the management of the organization has to pay attention in the area of the monitoring of logistic and supply chain operations of the company (Eden & Ackermann, 2013). According to the RACE frame work, the strategy is analyzed in the section given below:
Resources needed for the implementation of this strategy are the human resources of the company and some money. These resources are available within the organization, so the resources are easily available within the organization.
It may be acceptable by the external stakeholders but some problem may be faced by the internal stakeholders as the strategy needs some mentionable amount of investment and extra efforts to be implemented.
The strategy is coherent enough to be implemented as the activities required in this strategy are simple enough to be understood by every employee and management involved in the organizational management and works (Wells & Hawkins, 2014).
It must be effective for the organization as it will help to develop the low cost strategy which is one of the most important objectives of the business strategy of the company. This will help to engage the price sensitive customers to the business strategy of the organization. The issues regarding the cost of the company will be resolved by the use of this strategy.
In order to sustain in the future business operations, the company required to focus in their pricing strategy for competing with the competitor companies over the prices of the products.
The major issue faced by the company is the issues regarding the health and safety issues of the employees. In this concern, the management needs to understand the requirements of the employees and what are the problems faced by them in their work places. Often the employer organizations are unable to understand the actual problems regarding the issues faced by the employees because the employees don’t have the platform for the direct or open communication with the upper management (Bratton & Gold, 2012). In order to resolve this issue, the company needs to develop an improved organizational culture where the employees will be able to represent their problems to the senior level, so that they can take proper actions. In this way, the management of the organization will be able to efficiently resolve the health and safety requirements issues by the proper understanding the problems faced by the employees in their organization (Wells & Hawkins, 2014).
Resources require for this strategy is the effective leadership style. This resource is easily available in the organization. So it can be said that the strategy can be easily implemented for the improvement of the human resource management of the organization.
The strategy will be acceptable by the employees, but there may be some problem regarding the acceptance of the superior management of the company. The strategy can hamper the overall management style of the organization. The handling of the employees with the open management style may be the reason of some chaos while stating the problems of the employees (Jiang et al., 2012). This strategy is also a time consuming strategy for implementing in a running operational environment.
This is coherent as the objective and the details about the strategy are very clear at the beginning level and easy to implement within the organization.
The strategy will be effective enough for resolving the existing problem of the organization regarding the understanding of the problems of the employees.
The human resources are the most valuable asset of the organizational therefore proper management of the employees through the better understanding of the requirements of the employees. Therefore, it may be concluded that the strategy will help the organization for getting the competitive advantages by the effective management of the employees.
The risks and working styles of the employees should be monitored by the management of the company for ensuring the risk free environment for the employees. In this context, they should provide effective training to the employees regarding the policies and requirements for ensuring the health and safety of the employees.
The strategy required some investment of money and efficient workforce who can efficiently handle the job of the risk free environment development and the development of the warning about the potential risks associated with the work place activities (Storey, 2014). These resources are available within the organization, so the strategy is feasible to be implemented.
This is acceptable by all the stakeholders as it will be helpful for both the employees and the employer organization.
It is coherent because the actions that need to be taken by the management of the business organization are very clear for the implementation of the strategy within the workplaces of the business organization (Hughes & Ferrett, 2015).
The strategy will be helpful for the achievement of the competitive strategy as the employee management will be improved by the use of the strategy which will ensure better productivity with improved quality.
In the area of the health and safety management of the employees, the activities of the facility management is very vital. The health and safety requirements should be supplied by the facility management department of the company. Therefore, the coordination of the business operation management unit with the facility management unit will help them to properly manage the health and safety at their workplaces (Hughes & Ferrett, 2015).
This strategy is feasible from the perspective if the availability of the resources required for the implementation. Proper management and leadership skill and some money are the only requirements of the strategy. The strategy can be implemented within a short time period.
It would be acceptable by both the employees and the management of the company as it will bring better facilities to both of them.
The strategy is coherent as the requirements are very clear from the beginning.
The strategy is will also help the company to have the competitive advantages which will force it towards the sustainability.
The best strategies chosen from the above discussed several strategies are the policy development and training strategy and the collaborative work with the facility management department strategy (Bratton & Gold, 2012).
Other proposed strategies are not satisfied all the criteria of the RACE framework. Only these two strategies have fulfilled all the requirements of the framework. These two will be the most profitable to strategies that will be able to resolve all the strategic issues identified previously (Hughes & Ferrett, 2015). An ideal workplace should be clean and free form all types of hazardous risks. However, in some business operations, there are few tasks which are associated with some potential hazardous risks and that cannot be avoided. In this context, the employees who are associated with these works have to take proper precautions for the risks. In this case, BHP Billiton has many of these types of works and the management of the company has the responsibility of providing all the necessary facilities to the employees (Bhpbilliton.com, 2016). The working style of the employees should also be monitored and controlled by the management of the business organization. In this context, the company needs to develop strict guidelines for the employees regarding the working style for maintaining the health and safety in their workplaces (Reese, 2015). The unsafe environmental risks and other hazardous risks should be represented through the relevant warning signs.
The operations management department of the company will have a good communication strategy with the facility management department of the company (Eden & Ackermann, 2013). The requirements regarding the health and safety of the employees will be straightly communicated with the facility management department of the company.
Conclusion:
The strategic management issues of BHP Billiton Company have been discussed in this report. It has been found that the company is facing major issues in the area of the health and safety management of the employees. The company has several areas in their production plants where the employees are facing critical problems regarding their health and safety requirements. Some alternative strategies have been identified and analyzed by using the RACE framework. Implementations of health and safety requirements policies and training programs and proper communication with the facility management department of the company are the two chosen strategy for resolving the identified issues in the area of the strategic management of the business organization.
References:
Bhpbilliton.com. (2016). Environmental Management Strategy [online] Available at: https://www.bhpbilliton.com/~/media/bhp/documents/society/regulatory/_coal/nswec/mt-arthur-coal/environmental-management-strategy.pdf?la=en [Accessed 22 Jun. 2016].
Bhpbilliton.com. (2016). BHP Billiton | BHP Billiton | Strategy. [online] Available at: https://www.bhpbilliton.com/aboutus/strategy [Accessed 22 Jun. 2016].
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Hughes, P., & Ferrett, E. (2015). Introduction to Health and Safety in Construction: For the NEBOSH National Certificate in Construction Health and Safety. Routledge.
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