Designing a Circular Organizational Structure for Wesfarmers Limited

This report discusses the current issues faced by Wesfarmers Limited and proposes a solution of implementing a circular organizational structure to improve innovation and expand business globally. Wesfarmers Limited is an Australian conglomerate company operating in multiple retail stores across Australia. The company is facing challenges due to outdated infrastructure and technology, which hinders its ability to compete with leading players in terms of innovation and expand its business globally. The circular organizational structure allows for free flow of ideas and improves functioning of the business. It also supports the development of an innovative and creative working environment, empowers employees to take micro decisions, and enhances productivity and performance.

Business Report

TABLE OF CONTENTS
Executive Summary.....................................................................................................................3
INTRODUCTION...........................................................................................................................4
Reflects on the Background.........................................................................................................4
Design solution............................................................................................................................5
Provides a statement....................................................................................................................7
Recommendation.........................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

Executive Summary
It is important for the upper management of the company to have extensive knowledge
about organization’s market position, employee’s opinion for the job role, weaknesses, strengths
etc. then it can get sustain in it’s industry for long period. It has highlighted major issue of
Wesfarmers Limited through which it is facing various challenges in it’s industry. In this report
has designed solution over proposed issues through which company could get it’s projected goals
and would sustain in future as well.

INTRODUCTION
In this report will discuss about current issue of the business with the support of
Wesfarmers Limited company.
Reflects on the Background
Wesfarmers Limited is an Australian conglomerate company which is headquartered in
Western Australia. It operates in limited countries i.e. Australia, Ireland, New Zealand and India.
It operates in multiple retail stores across Australia and offers different products i.e. chemicals,
coal mining, fertilizers and industrial and safety products to the customer. It is one of the largest
Australian company due to revenue and overtakes Woolworths and BHP. It has multiple
subsidiaries i.e. Harris Technology, Australian Gold Reagents, Kmart, Targets etc. that offers
different product services to the customer (Ahmady, Mehrpour and Nikooravesh, 2016). From
past few years company is planning to expand business at global level but unable to proceed on
the plan. There is a reason such as it has out updated infrastructure and out updated technology
due to this no innovative actions are taken place in the company. It is one of the major issues of
the Wesfarmers limited company. Due to out updating infrastructure, HR professionals unable to
create innovative strategy that’s why it achieves limited success in outside core business. Due to
this it has faced big challenge in moving to other product segment with it’s current culture. In
addition, it is not that level successful as Woolworth at integrating different work culture.
Financial planning of the company is also not properly done because according to current assets
ratio and liquidity ratio, company can use invest capital more efficiently as compared what it is
doing at present. Investment in R&D department is too below as compared fasted growing
platers in the retail industry. However, it is investing more capital over the industry average on
R&D, but after that it has been unable to compete with leading players in it’s retail market in
term of innovation. These all issues are arises caused by outdated infrastructure and technology.
So, it is essential for the upper management of Wesfarmers Limited to pay high attention to
modernize infrastructure of the company because if company still do not pay attention on the
present issues then it may possible it unable to sustain in the market and cannot establish good
brand image as presently. If company fix this issue then it can easily create innovation work
culture that automatically influence employees to create some creativity in the workplace which

can help company to lead innovation in it’s existing product segments through which it can
expand it’s business at global level.
Design solution
There are various solutions to fix up current issue due to this company unable to compete
with leading players in the context of innovation as well as unable to expand it’s business at
global level. For example Wesfarmers Limited needs to update it’s traditional infrastructure like
hierarchical organizational structure wherein all decisions are taken by upper management and
some employees holds power due to hierarchical position because this type organizational
structure is good for certain period but not effective for the current period. So, it is essential for
the company to choose other organizational structure which can help company to gain it’s
projected goals and leads sustainability in business in future as well. for example, Circular
organizational structure is the best one for the company (Bayne, Schepis and Purchase, 2017). In
this structure upper management of the Wesfarmers company in the center of circular
organization. It allows individuals to freely shares their ideas and views among staff. Such free
flown ideas and tactics between staff and upper management can improve functioning of the
business.
With the support of circular organizational structure organization can fix up it’s issues that arises
caused by outdated infrastructure and enables to meet customer’s goals as per the market trends.

In proposed structure, sales team can directly communicate with upper management about issues,
customer’s preferences, and their ideas on which upper management of Wesfarmers can
promptly response over them. This structure also allows employees to adapt all emerging
changes accordingly customer’s trend and lifestyle as well as will up to date after selling it’s
products. For example currently most of the customers prefer to buy product from online media
instead of traditional. Such information’s can share by the sales managers to the upper
management as resultant they can invest on R&D department to bring innovation in retailing
services. Thus, company enables to compete with leading players by generating good profit
margin on it’s products. This organizational structure also supports to improve individuals
working efficiency and empowers each employee to take micro decisions at personal level.
When Wesfarmers will allow it’s staff to take fewer decisions at personal level that encourages
them to work effectively and retains them with the business for long period. It provides open
sharing platform to the employees that will stay motivate them and will make them feel valuable
part of the company then they put more efforts to achieve all short-term and long-term goals that
ultimately brings high growth in business in it’s retail industry (Dedahanov, Rhee and Yoon,
2017). It also develops innovative and creative working environment because individuals can
share their innovative ideas that ultimately increases innovative strategies or tactics and different
ways of implications. This structure will support in future as well for example when company
will expand it’ business at global level in that situation this structure leads standardization in
processes from learn management to global office. With the support of this structure, global
office staff enables to communicate with upper management directly without involving third
party which will build strong relationship among them and reduces conflict ratio as well as
increases level of productivity, operations and performance of the business in it’s retail industry.
Another benefit of the circular organizational structure is that it supports in cost-cutting to
remove level between department of heads and managers. It will manage budget expenses and
decline costs of HR professionals. It helps all employees and managers of different functional
departments to focus on achieving it’s vision and mission effectively. In the former
organizational structure, authorized employees’ delegates different tasks and responsibility due
to this individual forget to gain vision and mission of the business. This circular organizational
structure helps company to expand it’s business at global level and helps to move in different
product segments without facing any complications. In fact CEO of the Wesfarmers can take

direct decision to adapt new environmental policy like environmental friendly product category
through which it can capture large market share in the retail industry and this new product
segment can help company to boost it’s productivity. This circular organizational structure also
will help in market development through which can take competitive edge as resulted company
will enable to achieve good competitive positioning as compared other competitors in the retail
sector (Hofmann and Jaeger‐Erben, 2020).
It is the best solution for the Wesfarmers Limited as compared other solutions because
this circular organizational structure is properly fit in the angle of company’s issues and can
support to resolve all issues which are arising due to outdate infrastructure or it can lead financial
loss in future. While this organizational structure is not only supported to develop new
innovative working environment and assists in expanding business at international level but also
will support in future as well and stay competent in it’s industry. I think so it is the best option
and except it no solutions can be resolved all type issues. So, company must practice on the
proposed solution to deal with current issue.
Provides a statement
I have been introduced this new self-made organization structure because company is
actually facing issues due to it’s traditional organizational structure wherein only some
authorized employee are allowed to take decision while other staff have to implement without
argument. Former organizational structure makes working environment ineffective and reduces
best skills of the company which can help to be competent. HR professionals are not much quite
active as they must, and they are not putting any attention on employee’s performance and
organization culture except leading financial benefits (reza Hamidizadeh and Asl, 2019). Due to
this, company unable to compete with leading players ion term of innovation. In such situation,
only circular organizational structure can support company to be globalized and can make
working environment innovative and creative through which it can gain more financial benefits.
Still, company offers it’s product services in limited countries with the support of subsidiaries
but this structure will help in expanding it’s business in different countries across the world.
Thus, it will enable to build global presence in the retail industry.

Recommendation
To implement this solution effectively in the company, upper management at Wesfarmers
needs to work actively because they will work in center and will connect with all functional unit
closely so they have overall information about company’s performance, operation and
productivity. Even functional units like R&D, sales, marketing and service industry’s managers
needs to have knowledge about their staff and promotes their staff to explore creativity or
innovative ideas then they can make working environment favorable for the employees. Thus,
Wesfarmers can easily get success in implemented solutions (Xu and Lee, 2020). In addition,
CEO of the company can practice 360-degree feedback strategy that will help them to evaluate
effectiveness of implemented strategy by gathering reviews from the different functional units.
CONCLUSION
It has been summarized major issue of the Wesfarmers Limited through which it
achieved negative aspect in it’s business currently. It has been concluded solutions over the
proposed issues of the company through which it can be gained more benefits presently as well
as in future.

REFERENCES
Books and Journals
Ahmady, G.A., Mehrpour, M. and Nikooravesh, A., 2016. Organizational structure. Procedia-
Social and Behavioral Sciences. 230. pp.455-462.
Bayne, L., Schepis, D. and Purchase, S., 2017. A framework for understanding strategic network
performance: Exploring efficiency and effectiveness at the network level. Industrial
Marketing Management. 67. pp.134-147.
Dedahanov, A.T., Rhee, C. and Yoon, J., 2017. Organizational structure and innovation
performance. Career Development International.
Hofmann, F. and Jaeger‐Erben, M., 2020. Organizational transition management of circular
business model innovations. Business Strategy and the Environment. 29(6). pp.2770-
2788.
reza Hamidizadeh, M. and Asl, S.S., 2019. ANALYSIS OF ORGANIZATIONS WITH A
CIRCULAR STRUCTURE (DEMOCRATIC HIERARCHY).
Xu, E. and Lee, T., 2020. Communicative and globalizing impacts of food labels: an Australian
study. Media International Australia. 175(1). pp.93-108.