Introduction to Management: Growth, Development, and Management Analysis of BHP Billiton Limited Company

This report focuses on the concept of management within BHP Billiton Limited Company, analyzing its growth, development, and management. It includes a SWOT analysis and environmental analysis of the company.

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Introduction to Management
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Introduction to Management
Executive Summary
The below presented report is focused on the concept of management that is attainment of
organizational goals by making use of effective and efficient means and mediums. Planning,
organizing, directing, monitoring, and controlling the organizational resources are the core
functions considered under this concept. Management is essential part in every organization as it
is the process of managing the factors of production, organize the resources and assemble the
resources. The purpose of the report is to analyze the growth, development, and the management
within the BHP Billiton Limited Company, which is established in Australia. From the analysis,
it has been identified that the company is operating smoothly in the Australian market because
they have huge support from the government. Moreover, the SWOT analysis has reflected that
company is one of the leading organization engaged in the process of extracting various
resources with high brand recognition.

Introduction to Management
Contents
Introduction.................................................................................................................................................4
Task 1..........................................................................................................................................................4
Tracing growth and development of organization...................................................................................4
Task 2..........................................................................................................................................................6
Criticisms of business practices...............................................................................................................6
Task 3..........................................................................................................................................................7
Environmental analysis and main opportunities and threats....................................................................7
Task 4........................................................................................................................................................10
Organizational culture...........................................................................................................................10
Conclusion.................................................................................................................................................10
References.................................................................................................................................................12

Introduction to Management
Introduction
Management can be named as the achievement of authoritative objectives by making utilization
of powerful and proficient means and mediums. What's more, this all is improved the situation
arranging, sorting out, coordinating, observing, and controlling the hierarchical assets.
Administration is an expansive idea and includes different capacities and these capacities are
composed for making the accomplishment of authoritative objectives and destinations. This will
also make optimum utilization of all the available resources in an effective and efficient manner.
The concept of management can also be considered as the framework or the outline through
which the business entity makes the attainment of the desired goals and targets. The below
presented analysis is made focused on the concept of management within BHP Billiton company.
The business entity is a multinational corporation and is also a leading brand and resources
company. The prime operations executed by the business entity are extracting and processing
minerals, oil and gas and with a huge pool of skilled and professional employees (BHP 2018).
The business entity has approximately 60000 employees and contractors primarily in Australia
and America. The business entity is dealing and operating the business globally with sales and
marketing with sales and marketing led through Singapore and Houston, United States. Our
global headquarters are in Melbourne, Australia.
Task 1
Tracing growth and development of organization
BHP Billiton is world’s largest mining company. BHP Billiton was founded back in 1885 in a
isolated mining town of broken hill which is in south wales. BHP Billiton is an Anglo-
Australian company which is a trading business entity of BHP billion limited. BHP‘s
headquarters are present in Melbourne, Victoria, Australia (BHP 2018). It is a multinational
company which deals with metals, mining and petroleum etcetera. The main aim of the company
is to earn a good profit and brand recognition in the oil and gas extracting sector and also mining.
Core competences of BHP Billiton includes, using the latest equipment and technologies for
getting the work done.
Past strategies

Introduction to Management
BHP works under a dual listed company, which means that the company operates under two
parent companies which are, BHP Billiton Plc. and BHP Billiton limited (BHP 2015). Earlier the
strategies of the company laid out in such a way to focus mainly on, portfolio simplification,
capital discipline and the productivity of the company. For instance, the strategy for increasing
the productivity helped the company to deliver productivity gains more than US$ 10 billion
annually in 2016. Along with that, those strategies also helped the company to deliver the south
32 demerger and it also helped the company to reduce their capital expenses, almost by 70%.
Another strategies for portfolio simplification provided the company with a large range of
opportunity in the portfolios. It also made the company strong and flexible according to the
financial point of view. On the other hand, the strategy of “safe productivity and the quality
assets” has helped the company to generate a large amount of cash flow and preserve margins
also. In the past, BHP Billiton also used a strategy which can be referred as “volume- led
strategy”. This strategy also helped the company to ramp up their production and produce an
enormous amount of global supply.
Current strategies
Currently, the company is being run by an unified management and board of two parent
companies which are, BHP Billiton limited and BHP Billiton Plc (Zacks 2016). Current
strategies of the company are as follows:
Growth strategy- currently, the company wants to own a large amount of assets by increasing
the value of BHP. The main component of this strategies include, technology which can improve
the safety , unlock resources and lowers the cost of the production, efficient costs for further
gains, minimizing the risks and providing attractive returns and onshore US for the value and
flexibility. These entire key components tend to increase the company’s growth.
Emergent strategies- certain emergent strategies are also adapted by the company for increasing
the business flexibility for the business practices as well as keeping the past experiences in mind.
These emergent strategies include different kind of backup plans for the company’s business and
they also give the company, a chance to explore other areas as well and also to reduce the
amount of risks for future wells (Edgegrowth 2018). Other strategies like strategic partnership
have also been used by the company for the business profit.

Introduction to Management
Task 2
Criticisms of business practices
There are so many controversies associated with BHP Billiton in the past few years. Most of the
controversies were raised because of its poor labor policies. The company is trying to pursue
mining in poor countries in an overly aggressive manner; therefore it is very natural to be
surrounded by so many controversies. BHP also suffered because of its poor development of
environmental strategies and the safety of the product due to which it has to go through so many
criticisms (Epstein, 2018). The two controversies associated with the company are as follows:
1) Dam disaster in Brazil- on 5 November 2015, the bursting of dam in south brazil caused a lot
of harm to the people nearby that place. It happened in south east brazil, bursting of dam
unleashed a great amount of sludge. The dam contained a huge amount of waste which is also
called as tailings which are from iron ore mine. Tide of sludge was 400km downstream or more
as measured. During the protest many people criticized the way of working of BHP and even
said that tailing is not the BHP’s forte. BHP seemed to dump the tailings in the river which
caused the billions of dollars for the compensation as well as the whole cleanup. The collapsing
of dam killed almost 11 people and around 8 went missing which is a really bad situation for the
BHP. This caused a lot of problems to the people living nearby; even a village got destroyed and
caused a lot of contamination in the drinking water. More than 200 towns got affected which
were present around the 500 km area of the river. Many crop farms were destroyed and aquatic
lives were damaged. Although, BHP promised them to pay the compensation.
Protest against the potash mine plans of BHP in Canada- Eliott (activist, investor) attacks the
BHP Billiton’s plans of developing a potash mine in Canada. Eliott warned BHP that their plans
regarding this project could be very dangerous. An article published by “the telegraph” depicts
the whole story. Eliott even started a campaign against BHP as an overhaul to the strategies and
boards of BHP. BHP tends to invest around 3.8 billion dollars to develop the mine although the
overall cost is around 4 billion dollars. BHP launched an argument saying that the shareholder
money should be used for this particular project that is building the potash mine. According to
different analyst and shareholder, the concern f this project being a misstep and false strategy
was raised (Hill, Jones & Schilling, 2014). Protesters even raised the question in which they
compared the potash to US shale. BHP on the other hand argued about spending the money for

Introduction to Management
this project will be a great thing to do and called this plan as “ Thinking big”. Activist on the
other hand said that “ thinking big” has led the company down to such a pathe which includes a
large amount of investment in the assets
Task 3
Environmental analysis and main opportunities and threats
PESTLE Analysis
Pestle analysis is one of the strategic tools that are majorly used to analyse the macro
environment of the organization. PESTLE stands for Political, Economic, Social, Technological,
Legal, and Environmental (Sadgrove, 2016).
Political Factors
Political factor performs an essential part in defining the factors that can influence the long-term
profitability of BHP Billion Plc.’s in some countries. The company is dealing with some basic
resources in different countries and uncover itself to diverse kinds of political system and
political environment risks. However, the political environment of the company in Australia is
favorable. BHP Billiton gets support from the government of Western Australia. In terms of
market capitalization, is it one of the largest companies, therefore, the government always help it
because it leads to the country’s development as a whole.
Economic Factors
The factors of Macro-environment like savings rate, foreign exchange rate, inflation rate,
economic cycle, and interest rate define the aggregate investment and demand in an economy.
However, factors of microenvironment like competition standards influence the company’s
competitive advantage. BHP Billiton Plc could make use of economic factors of the country like
inflation, growth rate (Bloomberg 2018), and economic indicators of the industry like consumer
spending, industry growth rate, etc. to predict the growth route.
Social Factors

Introduction to Management
In an environment, the culture of social and the process adopted to do something influence the
organizational culture (BHP 2018). Attitude and Shared beliefs of the people perform a huge role
in supporting the marketers of BHP Billiton Plc to understand the consumers of the targeted
market and create the message of marketing for attracting the customers of basic resource
industry.
Technological Factor
The quick advancement in the technology disturbs different industries in the world. The industry
of transportation is one of the good examples to explain this point. In the last 5 years, the
transportation industry has changed very fast, not even, it has provided a chance for the
companies to manage or handle the changes (Linkdin 2018). The main players i.e. Lyft and Uber
are presently dominating the industry of Taxi. The industry of the car is also moving towards
automation, which is controlled by technology companies like Google, & Tesla, which has
introduced the revolution of an electronic car, disrupts manufacturing.
The Australian market is very competitive as well as advanced, which reflects that industries are
also changing with high speed, so in order to survive in such an advanced environment, BHP
Billiton Limited has to remain updated about the changes in the technology and adopt all these
changes.
Legal Factors
In various nations, the legal outline and organizations are not healthy enough to defend the
intellectual property rights of a company. A business must prudently assess before entering into
these types of markets because it can result in theft of the secret sauce of the company hence all
overall competitive advantage (Fern Fort University, 2018).
Environmental Factors
Diverse markets have dissimilar standards or standards of environment, which can influence the
organizational profitability in those markets. The Australian environment is relatively conductive
for the company i.e. BHP Billiton Limited to execute its activities easily. The weather is also
very pleasing that the employee’s exhaustion level does not get too high (Morris and
Metternicht, 2016).

Introduction to Management
SWOT Analysis
The purpose of SWOT analysis is to reflect the key strengths, weaknesses, opportunities, and
threat in order to analyze the internal as well external environment of the organization.
Strength
BHP Billiton is one of the well-known company deals in natural resources with a differentiated
asset’s portfolio. It is the biggest suppliers of copper, aluminum, uranium, silver, and lead. BHP
is a key manufacturer of metallurgical coal, iron ore, and manganese with processes in South
Africa, Brazil, and Australia.
BHP Billiton has reflected great financial returns in some last decades by returning the capital to
the investors by an aggressive program of share buyback that has repaid capital. Due to this
company, remain strong.
Weaknesses
The company has to enhance the procedures of return on equity and gross margin to be faster in
line with its aristocracies.
BHP Billiton is presently dealing with various human resources problems affecting the
operations. The company does not have experienced or qualified employees particular those who
are trained in the sector of mining.
Opportunities
BHP Billiton possesses various projects in its pipeline to start. The viability stage of 29 projects
that are possible will become an important source of income, offered projects to the company are
initiated in a cost-effective manner (Digital Journal, 2018).
The company could further operate on consolidation of its position of the brand by persuading
innovative solutions of marketing and utilizing new tools of media and consumer outreach while
promoting its natural resources from the extensive assets of the company. This reflects that by
marketing the strengths and operations of the company the brand awareness of the products is
created among customers.

Introduction to Management
Threats
BHP Billiton is dealing with threat unceasingly such as increasing cost of the suppliers,
comprising shipping, labor costs, and energy, staffing issues and inflation, which are limiting the
development and growth of the company (Digital Journal, 2018).
The company is also facing political threats in the domestic country i.e. Australia because it has
received an unfavorable presiding from the government concerning access of infrastructure and
the political subtleties of remaining on the ‘right side’ of concerns cannot be undervalued.
Task 4
Organizational culture
As BHP Billiton is a multinational brand name and hence the organizational structure plays an
empirical role in the success, growth and development of the business entity. BHP Billiton is
following flexible working environment and also promotes work life (Grant, 2016). The
company is changing cultures, and is heavily pushing Diversity and Inclusion, to the point where
during college recruiting any candidate that "Fit the bill" was to be brought to the senior
recruiter’s attention immediately (Smither, Houston & McIntire, 2016). They are quickly filling
a quota but have recently lain off any employees that don't share the same personality traits as
their department. (Hunting and Fishing for field work.)
Conclusion
In the limelight of the above executed analysis it has been inferred that the business entity is
Multinational Corporation and is operating the business operations all over the globe and majorly
in Australia. The above presented report is focused on the integral concept of management that is
required to be executed effectively and efficiently for managing the available resources within
the business corporation. The business entity is making use of various forms of strategies and
tactics for managing the resources effectively. The further report comprise of environmental
analysis that has been executed for analyzing the marketing conditions and other aspects of the
market regions. This analysis will aid the business entity and enable with the opportunities and

Introduction to Management
threats that can be faced by the business organization. And at last research has been executed for
analyzing the organizational culture of BHP Billiton and also the leadership style that is followed
with the organizational structure.

Introduction to Management
References
BHP (2015) Resourcing global growth strategic report 2015 [Online]. Available from
https://www.BHP.com/-/media/BHP/documents/investors/annual-reports/2015/
BHPBillitonstrategicreport2015.pdf?la=en. [Accessed 7th September 2018]
BHP (2018) About us [Online]. Available from https://www.bhp.com/our-approach/our-
company/about-us [Accessed 7th September 2018]
BHP (2018) Structure and strategy [Online]. Available from https://www.bhp.com/our-
approach/our-company/strategy [Accessed 7th September 2018]
BHP (2018) Global workplace, unique opportunities [Online]. Available from
https://www.BHP.com/our-approach/work-with-us [Accessed 7th September 2018]
Bloomberg (2018) Company Overview of BHP Billiton Limited [Online]. Available from
https://www.BHP.com/our-approach/work-with-us [Accessed 7th September 2018]
Digital Journal (2018) Australia PESTEL Analysis, SWOT Analysis and Risk Analysis Market
Research Report Launched [Online]. Available from http://www.digitaljournal.com/pr/3345099
[Accessed 7th September 2018]
Edgegrowth (2018) BHP enterprise development strategy [Online]. Available from
https://www.edgegrowth.com/strategy-advisory/BHP-enterprise-development-strategy/
[Accessed 7th September 2018]
Epstein, M. J. (2018) Making sustainability work: Best practices in managing and measuring
corporate social, environmental and economic impacts 4th ed. New York: Routledge.
Fern Fort University (2018) BHP Billiton Plc PESTEL & Environment Analysis [Online].
Available from http://fernfortuniversity.com/term-papers/pestel/nyse4/6434-BHP-billiton-
plc.php [Accessed 7th September 2018]
Grant, R. M. (2016) Contemporary strategy analysis: Text and cases edition 2nd ed. U.S: John
Wiley & Sons.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014) Strategic management: theory: an integrated
approach 12th ed. U.S: Cengage Learning.
Linkdin (2018) About us [Online]. Available from https://www.linkedin.com/company/BHP
[Accessed 7th September 2018]
Morris, A. and Metternicht, G. (2016) Assessing effectiveness of WEEE management policy in
Australia. National Center for Biotechnology Information, 181(2016), pp.218-230.

Introduction to Management
Sadgrove, K. (2016) The complete guide to business risk management 3rd ed. Oxon: Routledge.
Smither, R., Houston, J., & McIntire, S. (2016) Organization development: Strategies for
changing environments 2nd ed. U.S: Routledge.
Zacks, (2016) BHP Billiton’s (BHP) new business strategy to drive growth [Online]. Available
from https://www.nasdaq.com/news/ [Accessed 7th September 2018]