A SWOT analysis of BHP's mining and petroleum operations

This article provides a SWOT analysis of BHP, the world's largest mining company, and its operations in mining and petroleum. It discusses the company's strengths, weaknesses, opportunities, and threats, as well as its organizational culture and approach to production.

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Introduction to Management
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Introduction
BHP is an Anglo-Australian mining company which deals with mining of minerals and
petroleum. T is the world’s largest mining company and was previously known as BHP Billiton.
It is headquartered in Melbourne Australia and was founded in 1885. After the merger between
the Dutch company Billiton and Australian BHP, there was rapid growth and the company value
tripled be between 2004 and 2012. Fortune magazine ranked it the world’s biggest company by
capitalization and the third biggest company in Australia based on revenues received in 2017
(Ackroyd et al, 2016). The Australian based company is listed in various stock markets like the
ASX, London stock exchange and the NYSE. It is constitute of the FTSE 100. IN 2017 however,
the company scaled down from BHP Billiton to BHP and Billiton assets were rebranded to
south32. It deals with mining of major metals like copper, iron, gold, natural gas, nickel and
uranium. It is also a major contributor of drilled petroleum around the world. In 2017, the
company announced that it would sell off its US oil business as a strategy to revamp its growth
in other continents. It operates in the metals, mining and petroleum industry (Alvesson, and
Sveningsson, 2015).
Some of its well-recognized people in the management include ken Mackenzie as the
chairman and Andrew Mackenzie as the CEO. In 2017, the revenues for the mining giant was
reported as US$38.285 billion while the operating income was at $ 11.753 billion. The number
of employees and contractors working for the company is 65,000 as at December
2017(Alvesson, 2016). Also, the net income is $6.222 billion in 2017.

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Our approach
The basis of our philosophy is the safe and sustainable production of metal products. Safety of
production is an absolute priority and our goal is to become the safest steelmaking and mining
company in the world (Bolman and Deal, 2017).
Mineral Production
The company has steel mills in more than 20 countries around the world on four continents, both
in developed and developing markets for metal products. In 2012, the Company's turnover
amounted to US $ 84.2 billion in the production of steel in 88.2 million tons or about 6% of
world total production.
About 35% of metal products are produced in the Americas, 47% in Europe and 18% in other
regions, including Kazakhstan, Ukraine and South Africa (Blockeel, et al, 2016).
Mining
Mining is one of the key elements of BHP development strategy. In 2012, 55.9 million tons of
iron ore and 8.2 million tons of coal were mined. Mining has a great development potential with
an approved plan to increase the extraction of iron ore to 84 million tons by 2015 (Bohari and
Fuad, 2017).

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Currently, coal and iron ore are mined in 10 countries: Algeria, Bosnia and Herzegovina, Brazil,
Canada, Kazakhstan, Liberia, Mexico, Russia, Ukraine and the USA.
Research and Development Centers
Over 1,400 researchers work in 11 research centers. In 2011, more than US $ 300 million was
spent on R & D needs.
Organizational structure
BHP Group consists of six structural divisions: Leaf Rental America, Leaf Rental Europe,
Profile Rental America and Europe, AASGN (Asia, Africa and CIS), Mining and Distribution.
All production facilities are part of one of these units.
BHP Consultants is the leading consulting company in the mining industry, providing services
in the field of geological exploration and mining, as well as the financial sphere of mining. We
work with our clients both in the planning of new mining enterprises and in improving activities
at existing mining enterprises, focusing on achieving optimum productivity and profitability.
With more than 30 years of experience in over 8,000 projects, BHP is a recognized expert in the
mining industry. The scope of our activities includes mining, geological exploration,
geomechanics, geology, feasibility study (FS), strategy optimization, technical audits, expert
evaluation and business improvement services.
Our clients are mining companies, insurance companies, banks and investors. BHP has opened a
new branch in Russia for efficient delivery of services. BHP is a leading consulting company in
the field of mining with offices located in Australia, Canada and the UK. BHP is an independent
company, 100% owned by its employees.

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Clients
Clients of the BHP are geological exploration and mining companies, corporate consultants,
financial institutions and insurance companies. BHP will readily consider requests from
customers from all over the world.
Business Experience
Since the company was founded in 1885, we have completed more than 10,000 projects, which
have become a unique material for the creation of a global database. The department for the
comparative analysis of production indicators, established in 1885, compiled a significant
database on the analysis of costs, productivity and efficiency of mining. Since the company's
creation, the BHP team has grown to more than 200 specialists, and continues to increase,
expanding the potential and experience. Qualifications and experience of employees cover the
spheres of mining, geology, financing and management.
The total number of years of experience of all employees in the field of mining and geological
services is 400 years and more than 1000 years of experience in the mining industry.
The team includes recognized experts with a worldwide reputation, as well as Russian-speaking
staff specializing in various mining disciplines (Bull, et al, 2016).
Corporate Culture
Corporate culture of the organization is a developed system of beliefs, rules, norms, behaviors,
goals and values, social and organizational climate that are shared to varying degrees by all
members of the company and which are decisive in how people should work and behave.

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Modern psychology considers corporate culture as one of the powerful universal levers allowing
to influence the whole collective of the firm and direct it to an effective solution of goals and
task. BHP must emphasize that the carrier of a corporate culture is, first of all, the collective and
every concrete person. The management's understanding of the role and significance of the
organizational culture, the ability to change it with the aim of successful organizational and
production changes is the most important condition for the effective functioning of the company
(Edwards,2015).
The main components of the organizational culture:
It is proved that organizational culture is an effective method of influencing the socio-
psychological climate and behavior of the company's personnel, and, consequently, the results of
its successful activity. Forming and managing a particular value system, one can predict, shape,
plan and manage the behavior of employees. But, at the same time, you should pay close
attention to the already established within the organization relations between people (Hogan, and
Coote, 2014). Without looking at the team they get far from the corresponding results, which do
not justify their hopes or the funds spent. The main reason for this is that the promoted norms
and values conflict with existing ones and are explicitly or secretly boycotted by the majority of
the company's members.
Formation of organizational culture usually begins already at the stage of personnel selection.
Specialists of recruitment and recruitment agencies note that not long ago, in addition to
professional skills for job seekers, employers began to take an active interest in their socio-
psychological, behavioral and image characteristics, the psychological type of the employee, and

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psychologists became involved in such stages as acquaintance , adaptation and training of
personnel with existing or implemented corporate culture.
Management of organizational culture consists in its formation, maintenance, analysis of the
results and adjustments. According to the results of the analysis, the psychologist issues a
detailed opinion on the state of affairs and recommendations for the development and
management of corporate culture. At the same time he himself acts as a consultant in this long
and complicated process (Kinley and Ben-Hur, 2015).
Consultation Reception
Management and formation of the corporate culture of the organization. The role of the
psychologist. For a long time already psychologists have carried out research, the purpose of
which was to identify factors that affect human behavior in the company. Among them there are
two main groups.
A group of growth factors is the satisfaction received from one's place in the company and the
work performed, the social significance and recognition, the awareness of oneself as an integral
part of the collective, the specialist without which the effective operation of the unit or the whole
company is impossible.
So, if the first group of factors is realized by the person as if a priori, then the second is more
complicated. Unfortunately, not everyone is able to correctly assess a group of growth factors
and find something valuable in the comfort of their personality within the company within the

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company. It is the task of a psychologist to help such people correctly understand and position
themselves (Mkude, and Wimmer,2015).
Another important task is to reduce staff turnover for various reasons. The effectiveness of the
work of a psychologist is directly related to fluidity. If you think about it, it becomes obvious
that the corporate culture is responsible for the behaviors of staff in BHP. It is possible in a
company with high staff turnover, because there is simply no one to be its carriers. If you think
that your company's organizational culture is imperfect, you need help in its development,
formation and management .The management styles used in the organization, the nature of the
relationship with employees and subordinates
This style of leadership does not interfere with the activities of the collective, and the workers
are given complete independence, the possibility of individual and collective creativity. The
manager with the subordinates is polite, ready to cancel the decision he made earlier, if this
threatens his popularity (Price, 2015).
SWOT analysis
Strengths
 Specialist in every field from mining
to petroleum
 Innovative services
 New and advanced technology
 Quality processes and procedures
 Value addition in the process of
Weaknesses
 Undelivered services
 Reputation
 Short fall of specialists in some of the
field like petroleum
 Expensive machinery

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mining
 Dedicated staff and team work
Opportunity
 A developing market especially in
untapped market
 Mergers and acquisition as strategic
alliances with Billiton
 New international market
 Moving into new markets like south
America and Africa
 Large market for mineral and
petroleum products
Threats
 High competition from big company’s
such as Rio Tinto
 Price wars in some continents
 Strict regulations and controls by
some government
 Taxation in some areas
 Competitive salary
PESTEL Analysis
Political- as a big investor in many countries, BHP has been facing challenges in some of the
countries it operates in like in South America where there are some political wars. However,
most of the countries are like calm politically.
Economic- the company was affected in 2008 when there was the global economic crisis. The
price of petroleum globally has also been dropping.
Social- the company has been embraced by many society. It also helps the society through CSR.

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Technological- a lot of technology has been invested by the company and its innovative
technology is good for the company.
Ecological-the nature is very viable for mining and petroleum drilling in many parts of the world
Legal-many laws have been put up by governments in order to control mining and petroleum
industry and this has been hurting the company’s operations.
Organizational Culture
In order to create the most comfortable working conditions and, as a result, to obtain the greatest
return and result, the employee is guaranteed:
- The opportunity for professional and personal growth,
- Competitive salary,
- An opportunity to build a career, including thanks to the well-functioning work of personnel
performance evaluation systems,
- Creative and interesting work,
- Advanced training, including through training within the company and attracting external
resources.
Conclusion
For BHP, the first stage is working with students of senior courses of basic institutes or directed
to practice from other universities. Specialists of HR departments, together with the heads of the

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respective departments, where students practice, select students most capable and inclined to
leading work, and prepare them for specific activities within the organization (Song, et al, 2017).
The other stage is working with line managers of the top management level. Appointment of
managers to senior positions is a complex process. One of the main difficulties is the choice of a
candidate who meets many requirements. The head of the top management must know the
industry well, and also the organization (Stepan, 2016).

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References
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Alvesson, M., Berg, P.O., Alvesson, M. and Sköldberg, K., 2016. On the Naming of the Rose:
Interests and Multiple Meanings as Elements of Organizational Culture. In Changing
Organizational Culture: Cultural change work in progress . Berlin: Jossey-Bass.
Alvesson, M. and Sveningsson, S., 2015. Changing organizational culture: Cultural change
work in progress. Routledge.
Alvesson, M. ed., 2016. Organizational culture. Sage.
Blockeel, C., Drakopoulos, P., Santos-Ribeiro, S., Polyzos, N.P. and Tournaye, H., 2016. A fresh
look at the freeze-all protocol: a SWOT analysis. Human reproduction,.
Bohari, A.M., Hin, C.W. and Fuad, N., 2017. The competitiveness of halal food industry in
Malaysia: A SWOT-ICT analysis. Geografia-Malaysian Journal of Society and Space,.
Bolman, L.G. and Deal, T.E., 2017. Reframing organizations: Artistry, choice, and leadership.
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Lambini, C.K., Rawlins, M., Baral, H., Zähringer, J. and Carter-Silk, E., 2016. Strengths,
Weaknesses, Opportunities and Threats: A SWOT analysis of the ecosystem services
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Edwards, A.R., 2015, September. Integrated operations (IO) in mining and oil and gas, what can
we learn from each other?. In SPE Middle East Intelligent Oil and Gas Conference and
Exhibition. Society of Petroleum Engineers.
Hogan, S.J. and Coote, L.V., 2014. Organizational culture, innovation, and performance: A test
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