BHP Billiton Company Management - Case Study Example

The Application of Management theory- A Case Study of the BHP Billiton Company Name: Institutional Affiliation: Instructor: Date: In many cases, discussions pertaining management in corporate world are given the top most priority by business schools. Top performing organizations tend to emphasize on the importance of sound management. On the other hand, the economists have a relatively little opinions concerning the roles of management in propelling the productivity and major indicators of good performance in a company. This is because there have been no systematic measurements of quality data on effective management practices across business firms and countries. In this regard, management theories have been developed with every expansion of economic activities, with each of the theories claiming to offer the best practice. This paper will discuss the management theories/ practices can be practically used by business firms to assist increase their productivity and quality service delivery. The paper draws its analysis from a case study of an Australian based company, the BHP Billiton. The company produces natural resources products like the uranium, silver, oil aluminium, coal and copper. To begin with, BHP Billiton’s management operates within the provisions and guidelines inclined in the management theory. The company is rational in that it has its goal and objectives stated. All the activities are executed with the aim of attaining the set goals (Drejer, 2002). For instance, the goal of BHP Billiton is to create a long-term value to its shareholders by discovering, acquiring, developing and marketing its natural resources. The company goes further to stating its objectives on how it is set to work towards realization of the goal. In the objectives, the BHP Billiton’s management takes into consideration the systems approach. That is to say, the manager knows the relationship between the various systems in its organization and the workers and how they affect the performance and efficiency of the workers. Consequently, the manager is aware of how the workers can impact on the system (Murray et al., 2006). Therefore, BHP Billiton exercised well the management aspect of building trust on the key contributors of success to the company like the suppliers, employees, shareholders, customers and the entire community. To ensure this, the company delivers on its promises and commitments and keeps in touch with the key players through effective communication. Given the fact that management organizations strive to make the highest possible profits through proper management, BHP Billiton develops its asset bases and services through sound planning and management. With the understanding of human behaviours, BHP Billiton has developed schemes to reward its employees for their outstanding performances. This concept of behavioural management theory helps in motivating employees to work harder thus leading to the overall productivity of the company. With such scheme, each employee is identified and appreciated for his or her good results. This management practice is in accordance with the Theories X and Y of management. The theories are founded on the attitudes of workers towards work. Managers who believe in Theory X perceive that the workers, by nature, have no ambition and therefore they need some forms of incentives to motivate them and increase their productivity (Flamholtz, 1996). Conversely, Theory Y of management postulates that workers or employees are driven naturally and take care of their responsibilities (Flamholtz, 1996). BHP Billiton’s management reflects the application of the two theories of management. The organizational structure of BHP Billiton is well developed to give a provision for the various management systems within the company. The Human Resource Management (HRM) is the central system that coordinates the operations of other systems like the supply chain and the operational systems of the company. According to the Geological Survey (2011), the function of the supply chain system of the company is reflected on how the BHP Billiton coordinates all activities involved in the exploration of natural resources, manufacturing and selling of the end product to its customers Nonetheless, management according to the various theories of management involve proper allocation of financial and nonfinancial resources of the company. That is why the BHP Billiton has established a marketing group which looks into all the financial transactions and revenues of the company. One of the major practices of a good management and governance that is vested in the theory of management is the ability of the managers to facilitate good corporate social responsibility and governce (Gooderham, et al., 2013). The company has managed to address this issue by obtaining enough information about their customers and the community in which the company operates. Understanding such groups helps the company know their needs and opinions concerning the way the company does its operation and its effects on them. From the case study, it is evident that BHP Billiton Company has an effective Human Resource department that performs its duties diligently. This is reflected from the fact that the company has managed to expand its operations to more than a hundred locations and twenty five countries globally. In addition, the company has recruited forty one thousand employees and sixty five thousand contractors, hence signalling the outstanding management practices of the Human Resource. BHP Billiton has established a solid culture that is distinct to itself. The culture entails all the practices carried out by all the stakeholders, employees and all the key players who facilitate the existence and success of BHP Billiton Company. The company gives due respect and promotes the essential of cultural heritage, human rights and economic empowerment. The social and environmental performance is critical to the success of BHP Billiton. The company is transparent about its standards, commitments to sustainability and performance (Mahadevan, 2010). From the BHP Billiton’s case study, it is seen that the company has vested commitment on the operating sustainability. The health and safety of the people is very significant to every aspect of the business and the way the company delivers on its economic, social, ethical and environmental responsibilities in way that is consistent with the organization’s management values. As a big organization, BHP Billiton has social and economic responsibility to contribute positively to the countries, regions and communities they operate in. Through partnership with parent communities, the company helps in fostering sustainable development and alleviation of poverty by sharing the socio-economic profits resulting from the company’s operations (Miles, 2012). The application of the change management theory is in BHP Billiton case study very important. The origin of change in the professional and business environment of the BHP Billiton are attributed to the buying of the rival company and mergers as well as the risks associated with the iron ore operations. However, the acquisition of the rival company and the changes regarding to mergers have greatly impacted on the share price value and overall operations of the company (Hatfield, 2011). In addition, the change of programs for the company with regard to creation of awareness on its customers helps in positioning the company in a better competitive position than its competitors. By doing so, the company obtains adequate information about the needs of their customers thereby helping them in developing products that receives acceptance from the customers. In essence, the theory of management believes in change. The change principle is a management practice that involves a total or partial shift in the way the way the operations of the company are done. Change helps in introducing new ideas and blood into the management system of an organization. Generally, the Change Management Theory emphasizes on the implementation of change by every business entity, BHP Billiton included, regardless of their systems of management (Mulligan, 1900). In the recent decades, many organizations have realized the essential management practice of implementing a working Corporate Social Responsibility and the need for the managers to ensure ethical relationship between the employees and the management team (Aras & Crowther, 2010). As a leading world resource company, BHP Billiton’s management seeks to facilitate profit maximization and fit the shareholders’ interests. This is because every organization in the corporate world aims at fitting the economic purposes alongside other personal and social purposes. However, the modern theories of management have reviewed and changed the initial existence of the companies to generate money. Therefore, it is an obligation for the managers to play multiple roles, execute diverse management functions and operate effectively and efficiently. Likewise, managers ought to continuously update their skills so as to gain competence in environments with stiff competition. In conclusion, effective management needs codifying the good and bad concepts of management into quantifiable measures which can be applied to different organizations. The development of various theories of management seems to be triggered by the economic situation at hand. However, the theories have the same concept of ensuring good management practices and steering overall management and profitability of the organization and their stakeholders. Organizations, in this case BHP Billiton, that adhere to the requirements and practices of the management theories stand better chances of surviving in the competitive market. The success of the BHP Billiton Company is attributed to its management team and the ability of the managers to apply the concepts of the management theory into real life situation within the organization. The change dynamics in the organizational management calls for adequate knowledge and awareness of the managers to apply the relevant concepts without causing unnecessary inconvenience. Needless to say, management is evolving over time and the practical dynamics keep changing hence, the evolution of the theory of management. (1518 Words) References Aras, G., & Crowther, D. (2010). A handbook of corporate governance and social responsibility. Farnham, Surrey, England, Ashgate. Drejer, A. (2002). Strategic management and core competencies: theory and application. Westport, Conn, Quorum Books. Flamholtz, E. (1996). Effective management control: theory and practice. Boston, Kluwer Academic Publishers. Geological Survey. (2011). Minerals Yearbook 2008 Metals and Minerals. 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