BHP Billiton: Growth, Strategies, and Environmental Impact

The report evaluates the activities conducted by the company BHP Billiton in the external environment. It evaluates the business functions and the growth of the company using successful business strategies along with the strategies that the company initiated in the current environment to maintain its sustainable competitive advantage. Two criticism are being laid against the company and its activities that heavily impacted the environment. The report concludes by explaining the organizational structure and the leadership style used by the CEO of the company.

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Executive Summary
The report evaluates the activities conducted by the company BHP Billiton in the external
environment. It evaluates the business functions and the growth of the company using successful
business strategies along with the strategies that the company initiated in the current environment
to maintain its sustainable competitive advantage. Two criticism are being laid against the
company and its activities that heavily impacted the environment. The report concludes by
explaining the organizational structure and the leadership style used by the CEO of the company.
More details about the report are discussed below:
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Contents
ecutive SummaryEx .......................................................................................................................................1
ntroductionI ...................................................................................................................................................3
rowth and DevelopmentBHP G ...................................................................................................................3
Mission Vision and Core Competencies, ..................................................................................................3
Successful Strategies Deployed in astP ....................................................................................................4
Current usiness StrategiesB .....................................................................................................................4
usiness racticesBHP B P ..................................................................................................................................5
razil Dam CollapseB .................................................................................................................................5
ickel roduction in uatemalaN P G ................................................................................................................6
nvironmental AnalysisE ...............................................................................................................................6
Swot analysis...........................................................................................................................................6
estle AnalysisP .........................................................................................................................................7
rganizational Culture and eadership StyleO L .................................................................................................9
Conclusion...................................................................................................................................................9
References.................................................................................................................................................11

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Introduction
The purpose of this report is to explain the business functions of the company BHP in the
external environment. The report elaborates about the growth and development opportunities of
the company along with the corporate practices initiated by the company in the environment.
Further, it also explains organizational culture and leadership style used by the company. BHP is
involved in the mining industry and is working excellently well in the market. The company was
formerly known as BHP Billiton. Further, the company was initially found in the year 1885 in
Australia. More details about the report are discussed below:
BHP Growth and Development
BHP is an Anglo-Australian organization that is present in metals, mining and petroleum
industry. The company was initially found in the 1885 and Billiton an individual organization
was formed in the year 1860. Later in the year 2001, both the companies merged and formed
BHP Billiton. In the year 2017, BHP was marked as world’s largest mining organization based
on the market capitalization. The company is third largest organization present in Melbourne in
terms of revenue. Further, the fact should be noted that BHP has shown great increase in the
sales between the years 2004 to 2012 (BHP 2018).
Mission, Vision and Core Competencies
The mission statement of BHP states that want to become the company of choice by creating
sustainable value from the stakeholders, suppliers, customers, host communities, business
partners etc. The company also aims to provide zero harm to the people and the environment as
well. Vision statement of the company states that they want to own and operate long term
shareholder value in the company through the discovery, development, acquisition and
marketing of natural resources. Further, talking about the core competency of the company, it
should be noted that the company has evolved from a small scale organization into a huge
organization earning well in the market by initiating continuous productivity improvements in
their work (BHP 2018).

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Source: (Sun 2015)
Successful Strategies Deployed in Past
The above mentioned model clearly explain the growth and development aspects of the company
along with its core competencies as well. Coming upto the aspect of strategies that helped the
business to grow, it should be noted that the company utilized the cost leadership strategy in the
market to succeed and attain a reputable growth as well. Cost leadership strategy of the company
helped them in increasing the productivity at low cost. Low cost strategies subsequently helped
the company to increase the revenue and provide benefits to the shareholders as well (Haque, and
Deegan 2010). Cost efficient strategies helped the company to cut various expenses and increase
the productivity as well. Resulting in which, the company gained attractive returns with limited
risks as well. Further, the company also utilized the operating model to succeed in the market.
This model helped the company to leverage the expertise of the employees in the business and
connect with the whole organization to share the best practices and solve the problems safely as
well (Bice 2014).
Current Business Strategies
Apart from successful strategies used by the company to grow, the current strategies of the
organization involves the expansion by the way of major projects. The company is aiming to
expand its business functions by working on diverse projects that are timed for value and returns
as well. These projects are also conducted with the aim to provide positive results to the
environment and help the community in future growth prospects as well. BHP has also started
using technology to increase the safety measures for the employees and the community as well.
Technology also helps the organization in unlocking resources and lowering risks and increase

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value and flexibility. The current strategy of BHP is helping them to eliminating the risks present
in the mining industry and attaining value returns from the market and for the market (Pini,
Mayes, and McDonald 2010).
BHP Business Practices
Being present in a mining industry, it is really hard for an organization to work a white collar
image in the target market. The mining and petroleum industry itself is the industry that requires
high degree of risk and losses in initiating the business functions. Resulting in which, it can be
said that the activities initiated by the organization BHP has several impacts on the environment
that comes back to the organization in the name of criticism. Many actions implemented by BHP
have failed or badly criticised by the employees, communities or other stakeholders. Two of
these criticisms presented towards the company BHP are discussed below:
Brazil Dam Collapse
Bento Rodrigues Dam disaster occurred in the year 2015 when the iron ore tailing dam present in
Mariana, Minas was attracted with a catastrophic failure that ultimately resulted in flooding and
destroyed the whole village of Bento Rodrigues by killing more than 17 people. This act resulted
in one of the biggest environmental catastrophic event occurred in the history of Brazil. Toxic
brown mud was flowed in the river to pollute the environment and beaches near to the mouth.
This disaster changed the lives of people living in Brazil by shattering their homes and all the
wealth that they had (Smith, Armour, and Betts 2014). The communities criticised the executives
of BHP for the event and an official investigation was initiated against them. One of the new
article of The Guardian stated that the firm (BHP) already knew about the upcoming event and
its consequences months before the event actually occurred (Drysdale, et. al., 2014). According
to the source, an unreported documents stated that the mining company was aware of the threat
before the country’s worst environmental disaster but they took no action to mitigate the cause.
The dam that collapsed had millions of litres of mining waste that killed several people and
severely polluted the environment as well. The joint venture of BHP with Vale certainly failed
due to the occurrence of such catastrophic event. The company aimed to cut the costs of their
actions and prioritized their profits instead of safety resulting in which the event occurred. The
communities and the government held the companies liable for the event that occurred in the

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environment however, until today no organization has taken the responsibility of the event. The
companies were majorly criticized for the event because if they would have taken care of the
lives of the people and wildlife then they would have not initiated such actions against the
environment (Beer, and Clower 2014).
Nickel Production in Guatemala
In the year 2008, BHP was exploring the Guatemaala land for the extraction of nickel. The
company also held numerous leases in the lake Izabal region for the extraction. However, this
action of the company was highly criticized by the community as they believed that the
organization would pollute the lake and livelihood of people living there (Pitman, Roberts,
Bennett, and Richardson 2017). Oppositions were being made against the company based on the
destructive history of nickel mining and processing activities initiated by the company. The
stakeholders criticized the activities stating that the company destruct the land that is later not
left for any use. Livelihood of several people living in that area depended upon the fishing,
poultry, agriculture etc. activities that the commoners cannot perform after the extraction of
nickel. Also, this lake is the largest lake present in the town that provides unique natural
resources to the people. The community also promotes eco-tourism and solar energy projects that
cannot be performed by aligning large scale resource extraction projects with it. Thus, it can be
said that, this was another criticism laid on the company for the activities that they implement in
the external environment (Mayer 2014).
Environmental Analysis
Swot analysis
Strength
BHP Billiton is considered the renowned natural resource extracting company with a diversified
portfolio of assets. The company is considered the largest in supplying uranium, lead, copper,
silver, etc. The company has the strong financial performance in its recent years due to the
diversification did in its portfolio. The company has made its presence in the international
market too (BHP 2017).
Weakness

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BHP Billiton needs to improve the gross margin of the company in the long term to get the high
financial return. The company is currently facing the several human resource issues, which are
affecting the operations and activities. The company is found weak in liaison with the outside
world and staff. The staffs in BHP are not active in responding to the corporate inquiries using
the new media. BHP should focus on improving the communication with the investors and
stakeholders.
Opportunities
BHP Billiton has numerous numbers of opportunities available to them in the international
market. The company has several projects in the pipeline to execute. The company can work on
improving the strengthening their brand by introducing the new and innovative solutions. The
company also find involve into the reduction of greenhouse emission by 5% improving its
corporate image in the market (Mbachu and Frei 2011). The other opportunities available with
the BHP Billiton are making the ventures in the global market and can collaborate with the local
players top grow and expand themselves.
Threats
BHP Billiton is facing the threat of continuously rising cost from the suppliers. The cost of
energy, shipping, and labor is rising in the market, which affects the working and stability of the
company. Another threat that the company is facing in its home country that is Australia, is the
political instability. This affects the company infrastructure and dynamics (Digital Journal 2018).
Pestle Analysis
Political Factors
The political environment in Australia is found to be stable in nature. This favorable
environment gives huge support to BHP. The company is considered the biggest in terms of
market capitalization; the government always supports the company as it leads to developing the
country (Nordea 2018).
Economic Factors

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The GDP of Australia is found to be high in recent years. The prices of raw material are found to
be cheap due to this they are available easily in the country. The macro environment factors in
Australia include inflation rate, savings, interest rate, and foreign exchange rate. The capital
market in Australia is found to be stable inactive in nature, which gives the high return to the
economy as well as to the company (Nordea 2018).
Social Factors
Social factors in the Australian environment are found to be favorable in response. The culture
and attitudes of the people living in the country depict the social factors of the country. In
Australia, people are found to be educated and skilled which makes them more productive. The
individuals working in BHP Billiton are sharing the beliefs and attitudes that play a great role in
building the image in the market (Islam and Mamun 2017).
Technological Factors
The company is found to have the technological advancement in its production, which makes the
company competitive in the market. Due to this advancement in technology, BHP is enjoying the
edge over its competitors in the market. This enhancement in technology by BHP makes an
impact on the product offerings and sales of the company too (BHP 2017).
Legal Factors
The legal factors in every country differ from each other. In a country like Australia, a legal
framework and institution are not robust enough to protect the company from the intellectual
rights. BHP is considering and following all the legal laws while operating in the environment so
that it can remain free from the legal obligations.
Environmental Factors
Different markets have the different condition to operate. Similarly, the BHP is coordinating
with norms and standards made in the Australian environment. This norms and standards have to
follow for each company working in the environment. This will not only affect the profitability
of the company but also ruined image of the company (Fern Fort University 2018).

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Organizational Culture and Leadership Style
BHP operates under Dual Listed Company structure that means the company has two parent
organizations that are BHP Billiton Limited and BHP Billiton Plc. However, the company has a
unified board and management to operate its functions. The strategy with which BHP operates is
that they want a lifelong and low-cost diversification of commodity, geography and market. The
culture of the company is simple yet diverse because the organization aims to train the
employees on a regular basis so as to ensure that safety is aligned along with the profitability for
the organization (Bloomberg 2018). The core values that the company provide to the customers
in the target market are autonomous technology, integrated management system, internal flexible
environment. Autonomous technology used by the company helps them in increasing the
productivity by the way of adopting technology and regular activities that they perform. This
type of technology increases the efficiency of the business, along with safety, reliability and
consistency of business strategy as well. Further, the integrated management system helps the
company to benchmark its own performance and aim to improve more. Lastly, internal flexible
environment also helps the company to initiate change management effectively at workplace
(Afiah 2017).
The CEO of the company Andrew Stewart Mackenzie continuously aims to help the employees
to achieve a work life balance while working in the organization. He himself takes actions and
becomes the part of business strategies so as to help the employees to lead on the same path. He
also aims to increase the safety of his employees and align their interest in the activities of the
organization as well. The leader of the company plays an important role in motivating the
employees to achieve the organizational objectives. Especially in companies like BHP, the
leaders have to repeatedly motivate the employees, keep their interest aligned and take care of
their safety as well. Thus, in this way, the CEO of the company plays the lead role in creating
unique environment for the employees (Hassan, Saad, and Yusof 2014).
Conclusion
Thus, in the limelight of above mentioned events, the fact should be noted that the company BHP
Billiton is working efficiently in the target market. As the company is present in mining industry
due to which its faces criticism from the stakeholders in the environment. However, the

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organization is aiming high to improve the internal as well as external culture an increase the
safety measures as well. The competencies of the company help them to grow and increase its
productivity in the market. The report evaluates values, competencies and growth of the
company. The paper satisfies the requirement of the assessment.

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