Management of BHP Billiton

This article discusses the management of BHP Billiton, a multinational mining, metals, and petroleum company. It covers the company's strategic position, past and current strategies, types of strategies implemented, contingency approach, growth strategies, strategic partnership, and criticisms. The article also includes an environmental analysis of BHP Billiton.

Running head: INTRODUCTION TO MANAGEMENT
Management of BHP Billiton
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INTRODUCTION TO MANAGEMENT
Executive summary
Management of BHP Billiton is governed through the Ethical Code of Conduct in terms of
regulating the behaviour of the employees. The managers are efficient enough in terms of
exposing appropriate leadership style, which prove effective for upgrading the standards and
quality of employee performance. Strategic approach towards the business activities is
assistance towards overcoming the stains of issues like bribery, corruption, violation among
others. Partnership deals with China, UK and others reflect an initiative towards improving
the stability in the Public Relations. Governmental assistance is an opportunity in terms of
averting the external influences, which can obstruct the path of expansion for BHP Billiton.

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Table of contents
Introduction................................................................................................................................3
Task 1.....................................................................................................................................3
Strategic position of BHP Billiton.....................................................................................3
Strategies of the past..........................................................................................................3
Current strategies...............................................................................................................4
Types of strategies implemented by BHP Billiton.............................................................5
Contingency approach........................................................................................................5
Growth strategies...............................................................................................................6
Bullish aspects....................................................................................................................6
Strategic partnership...........................................................................................................7
New Iron ore joint venture with China..............................................................................7
Task 2.........................................................................................................................................7
Criticisms of BHP Billiton.....................................................................................................7
Bribery and corruption.......................................................................................................7
BHP sued over US mine....................................................................................................8
Task 3.........................................................................................................................................9
Environmental analysis of BHP Billiton................................................................................9
Task 4.......................................................................................................................................12
Organizational culture of BHP Billiton................................................................................12
Conclusion................................................................................................................................13

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References and bibliography....................................................................................................14

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Introduction
Task 1
Strategic position of BHP Billiton
BHP Billiton is an Anglo-Australian multinational mining, metals and petroleum dual
listed public company. With its headquarters in Melbourne, Victoria, Australia, the company
is ASX listed. As per the results of 30th June 2018, the company recorded a downward price
of 33.21, which is -1.69%. In terms of LSE exchange, the company’s position was
downmarket, as the price was 16.55, reflecting -1.34% loss (Bhp.com, 2018). In NYSE, the
situation was worse, as the price was 48.08, -1.33% loss. NYSE (Plc ADR) projected the
price of 42.82, which is a downmarket scenario of -1.29%. The JSE reflected the price of
315.02, the loss of -1.32%.
Since 1851, the company has focused on the development of the industry,
communities around the world. The mission of the company is to create long term
shareholder value through discovery, acquisition, development and marketing of the
natural resources. For this mission, the company employs the strategy of own and operate
large, long life, low cost and expandable upstream assets, which reflects diversity in the
commodities within the geographical proximity of the market (Bhp.com, 2018). This is done
through compliance to the values of sustainability, integrity, respect, performance, simplicity
and accountability.
Strategies of the past
Disclosures had been developed, in order to enhance the awareness of the
shareholders regarding the Consolidated Financial Statements. This awareness is assistance in
terms of understanding the standards of the financial accounts. Apart from this, the
alternative performance strategies have been used for raising the standards of performance.

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These measures are not to be considered as an indicator for the actual performance or
substitute for the measures or liquidity. The strategic report reveals that the company’s
compliance to the standards and protocols of UK Companies Act 2006 and Operating and
Financial Review, which is required by the Australian Corporations Act of 2002 (Bhp.com,
2018). Reduction of cash flow was the main focus of the financial year of 2017. Along with
this, stress was laid on the capital discipline and value. Safety was the top priority, where the
total recordable injury frequency (TRIF) was recorded as down by 1%. In the financial year
of 2016, the value for TRIF was 4.3 and it reduced to 4.2 in the following financial year.
One of the other strategies was the reduction in the emissions of the greenhouse gases.
Adjustments to the 2006 baselines reflect 21% reduction in the emissions. Since the year of
2013, 975000 tonnes of C02have been tracked. Along with this, the same amount of
abatements has been finalized as a part of the continuing operations (Bhp.com, 2018). Since
the year of 2012, reduction has been done in the business units. The value for this has been
recorded as more than 40%. This has provided assistance towards securing the accumulated
productivity gains of US$12 billion. 83 US cents is the value, which has been created for the
shareholders. The basic earnings is 110.7 US cents. Social value of US$ 80 million has been
made for enhancing the parameter of corporate social responsibility.
Current strategies
In the last decade, US$ 62 million has been paid to the shareholders in the form of
dividends and buy backs. The portfolio of petroleum has been spread to the markets of
Queensland, New South Wales, Western Australia and others. This portfolio includes coal,
copper, iron ore, petroleum and potash (Bhp.com, 2018). Currently, BHP Billiton is one of
the largest mining companies in terms of market capitalization. The value is US$90 billion.

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Types of strategies implemented by BHP Billiton
The corporate strategy of BHP Billiton is to create long term value for the
shareholders. This is through the means of acquisition, discovery, development and
marketing of the natural resources. The strategies are formulated in three aspects: own and
operate; large, long life, low cost and expandable upstream, assets and diversified
commodities in the geographical markets. The Company prefers to exert the ownership of the
assets, so that the expertise is leveraged. This also helps in exercising the risk assessment
according to the standards. Quality assessments help in creating long term value for the
stakeholders and shareholders (Bhp.com, 2018). Diversity in the commodities helps in
keeping high investment returns for the clients. This improves the stability within the public
relations.
Diverse portfolio of the tier one assets includes low cost option for future growth and
value creation. Strategic approach towards this direction is assistance in terms of applying the
values and culture into the workplace operations. Along with this, the strategy also includes
emphasizing safety and productivity. Within this, focus is laid on the technology and capital
discipline for extracting highest value from the assets.
Contingency approach
Contingency approach relates to the management setting, which negates the need for
management principles for regulating the performance of the companies and organizations.
On the contrary, there are different situations, which develop different types of managing
ways and means (Hislop, Bosua. and Helms, 2018). Changes in the management approaches
are less likely to occur. Review is carried out for the constructed strategies, which proves
beneficial in terms of tracking the altering nature of the external environment. This review
helps in managing the emerging risks and ensuring the wellbeing of the clients and the
customers. Long term planning helps in evaluation of the asset portfolio, broadening the

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pictures of the avenues, which can be availed for achieving expansion. Signals are used for
tracking the near term trends and events, which warn the personnel about the threats and the
opportunities. This signals are supportive in terms of mitigating the threats and benefitting
from the opportunities. Maintaining consistency in the execution of the reviews helps in
gaining awareness regarding the decisions, which are productive for the portfolio investments
(Bhp.com, 2018).
Growth strategies
Bullish aspects
One of the recent trends of BHP Billiton is the implementation of a new strategy,
which would enhance high returns for the stakeholders. The personnel expect that the strategy
would be flexible towards generating high productivity. Within this, the focus would be on
increasing the copper and shale asset base. This is for improving the prices of the products
and services. There are new explorations, which would support top and bottom line growth
rates. The dividend policy reflects the commitment to increase the wealth of the stakeholders.
This would be supported by a superior capital management system. For this, the company
invested in high investment returns for deploying capital through buybacks and dividend
return programs for the shareholders (Bhp.com, 2018).
Mention can also be made of the business model, which brings stability within the
volatile conditions of mining. Along with this, the company would concentrate on three other
aspects: safety, cost and volume. The company personnel are of the view that the profit
margin would expand in the upcoming quarters. This can be done only through thorough
evaluation and assessment of the overall performance.

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Strategic partnership
New Iron ore joint venture with China
Four mills Wuhan Iron and Steel Corp, Maashan Iron and Steel Company, Jiangsu
Shagang Group and Tangshan Iron and Steel Group Co is to take 40% stake in the sublease
of BHP Billiton’s Jimblebar mine near Newman. This would be done in the form of an
undisclosed commercial arrangement. The sublease covers 175 million tonnes of Jimblebar
resources, which are demarcated as Wheelara(Bhp.com, 2018). BHP Billiton’s partners in
Japan in the Newman joint venture are CL Minerals Australia and Mitsubishi. These brands
would hold stake of 4.8 and 4.2% stakes of the sublease. After this, BHP Billiton would still
be able to exert control of 51% of the sales contracts.
The main aim of this strategy is to ensure long term security of the supplies, so that
stability of the relationship improves with the partners. As one of the main strategies of BHP
Billiton is to increase the market share of iron ore, there this partnership proves apt in terms
of expanding the scope and arena of the business horizons. Within the strategic approach,
BHP Billiton personnel ensure that proper alignment is maintained with the growth and
development strategy of China (Bhp.com, 2018). Developing long terms goals in this
direction would result in the achievement of positive outcomes. In terms of market
development, BHP Billiton possesses flexibility to acquire greater share in the Chinese
market in terms of the growing demand of iron ore.
Task 2
Criticisms of BHP Billiton
Bribery and corruption
Mention can be made of Cambodia, where the BHP projects related to bauxite
(aluminium ore) faced issues of bribery and corruption. The case claimed that numerous

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payments were made to the locals officials, which amounted to $US3.5 million. Legal experts
from UK, Australia and European Union were called for investigations, which resulted in the
discovery of complicated business operations and high temptations towards working
overtime. Anti-graft laws were applied on the import and export activities, which stained the
brand image of the company (Theguardian.com, 2018). The culprits were jailed in China
followed by regulatory approval for $116 million joint venture with Australia. Cooperation
with US Securities and Exchange Commission proved beneficial in exploring the internal
probes.
When the Cambodian Prime Minister was interrogated, he simply denied BHP
Billiton paying bribes for expansion contract. The media reported that authorities in US were
exposing inquisitive approach towards BHP Billiton’s $US 2.5 million for the project. On the
contrary, the Cambodian leader is of the view that the fund resulted in an agreement between
Australia and Cambodia, supporting in building hydroelectricity dam, schools and hospitals.
He also opines that these days BHP is involved in making illegal payments to Cambodian
locals. He considers the investments as “social funds” (Theguardian.com, 2018).
BHP sued over US mine
US environmentalists claim that BHP Billiton is involved in the issue of contaminated
groundwater, which are flowing into the neighbouring areas. Sierra Club filed the documents
against the company. These documents accuse San Juan of threatening the health and
property of the members, holding the company’s grants. As a matter of specification, the
charges are against the Coalmine near Farmington, where the discharges of arsenic, lead,
chromium and sulphates are degrading the quality and standards of water. These
contaminants proved disastrous for the health of the people residing in the nearby areas
(Theguardian.com, 2018). According to the Sierra club allegations, the operations adversely
affected the supplies of water. The data revealed the lack of support in the regulations. The

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period of 1973 to 2010 proved disastrous, as 40 million tonnes of waste was generated in the
San Juan coalmine. In the investigations, Sierra Club found breaches towards the standards
and protocols of environmental directives. This was during the investigations of the mine.
When the water quality was investigated, it reflected rise and high levels of pollutants.
Damage in the hydraulic balance of the water heavily impacted the agricultural activities
(Theguardian.com, 2018).
Task 3
Environmental analysis of BHP Billiton
Political  Political stability
 Military interventions
 Corruptions
 Trade regulations and tariffs
Economic  Stability in the economic parameter
 Government intervention into the free market
 Quality of infrastructure
 Skills of the workforce
 Labor costs and productivity
 Economic growth rate
 Inflation rate
 Interest rates
Social  Demography and skills of the population
 Class hierarchy, power structure,
 Culture, education

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 Lifestyle
Technological  Technological developments by the competitors
 Impact of technology on the product offering
 Cost structure
 Impact of value chain on the basic materials
 Technological diffusion
Legal  Directives and laws governing the Basic Resource Industry
 Copyrights, intellectual property law
 Consumer protection and e-commerce
 Employment law
 Health and safety law
Environmental  Climactic change
 Recycling
 Waste management
 Green or ecological products
Table 1: PESTLE analysis of BHP Billiton
Political
Political stability is assistance for BHP Billiton in terms of dealing with the issues like
military invasions. Along with this, governmental assistance enables the company to deal
with the trade tariffs in the import and export activities. Corruption in the Basic Materials
sector can also be dealt easily with the help of the governmental assistance. Governmental
protection in terms of intellectual property is beneficial for BHP Billiton in terms of ensuring
the safety of the resources (Bhp.com, 2018).
Economic

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Studying the economic scenario proves beneficial for BHP Billiton in terms of
achieving prospective placements. Here also governmental assistance is advantageous in
terms of dealing with high exchange rates and interest rates. Infrastructure quality is an
important issues in terms of venturing into the foreign markets. Skilled workforce is fruitful
towards achieving growth and development of the Basic Resource Industry. Consideration of
the labor cost and maintenance enhances the productivity of BHP Billiton, bringing stability
in the economy (Bhp.com, 2018).
Social
Consideration of the class hierarchy, structure of the society is assistance for the brand
in terms of gaining an insight into the lifestyle. This understanding is crucial in terms of the
levying quality products and services. Conscious approach towards the specific tastes and
preferences enhances the cultural diversity of the workplace. Ensuring community
development expands the fame and glory of the parameter of corporate social responsibility
(Bhp.com, 2018).
Technological
Technological innovation by the competitors of BHP Billiton has adversely impacted
the product offerings. The cost structure has compelled the personnel to put on thinking hats
in terms of fulfilling the needs, demands and requirements of the stakeholders and
shareholders. This has strained the value chain, acting as an obstacle in the business
operations. Moreover, technological diffusion has destroyed the balance between the supply
and demand (Bhp.com, 2018).
Legal
Anti-Trust Law enables BHP Billiton to gain trust from the customers all over the
world. This is through the means of levying quality resources. Copyrights, patents and

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intellectual property law ensure the safety and security of the resources. Compliance with the
standards and protocols of Consumer Protection Act is assistance in terms of ensuring the
wellbeing of the clients. Data Protection Act (1998) provides support towards maintaining
confidentiality of the organizational data (Schaltegger, Burritt and Petersen, 2017).
Environmental
Climactic changes obstruct the activities of BHP Billiton. The directives controlling
the environment are crucial in terms of contributing to the preservation of the ecological
diversity. Recycling of the wastes proves beneficial in terms of bringing innovation within
the products and services. This innovation is the prime factor in terms of luring the foreign
clients and the customers. Waste management in Basic Materials Sector helps in controlling
the emission of wastes (Bhp.com, 2018).
Task 4
Organizational culture of BHP Billiton
The operations of BHP Billiton revolve around the values of sustainability, integrity,
respect, performance, simplicity and accountability. Health and safety is the first priority of
the company in terms of exerting the responsibility towards maintaining the ecological
diversity of the environment. Ethics is the basic element in terms of acting and preaching the
correct and authentic information. Transparency in the business activities helps in improving
the stability in the relationship with the clients and the customers (Bhp.com, 2018). This
transparency is vital in terms of enhancing the standards and quality of performance.
Strategic approach towards the execution of business activities improves the focus on the
business activities. Exposing commitment, perseverance and dedicated approach towards the
business activities is assistance in terms of staying true to the duties and responsibilities.

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According to the legal department, the managers are responsible for regulating the
performance of the employees. Ethical Code of Conduct proves beneficial in terms of
controlling the misconduct of the employees. This code of conduct is stricter in terms of
creating a culture, where the leaders are diligent towards the allocated duties and
responsibilities (Bhp.com, 2018). The main aim of the Code of Conduct is to regulate the
workmanship behaviour within the premises of the workplace. Diversity is reflected in the
partnership with China, UK among others. One of the mentionable facts is the external
behaviours, which shape the behaviour of the employees. The employees are taught the
importance of preserving the core values in the process of executing the business activities
(Bhp.com, 2018).
Conclusion
BHP Billiton is one such company, which focuses on the achievement of sustainable
development. This is achieved through the means of catering to the health and safety of the
clients and the customers. Ethical Code of Conduct helps in governing the behaviour of the
employees. Deals and transactions with the partners reflect diversity in the workplace
operations. Strategic approach helps in overcoming the stains of issues like bribery and
corruption. Governmental assistance proves fruitful in terms of coping up with the instances
of trade tariffs on the import and export activities.

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References and bibliography
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Carroll, A. and Buchholtz, A., 2014. Business and society: Ethics, sustainability, and
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Chang, J.F., 2016. Business process management systems: strategy and implementation.
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Doppelt, B., 2017. Leading change toward sustainability: A change-management guide for
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Ross, D.F., 2016. Introduction to e-supply chain management: engaging technology to build
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Schaltegger, S. and Wagner, M., 2017. Managing the business case for sustainability: The
integration of social, environmental and economic performance. Routledge.
Schaltegger, S., Burritt, R. and Petersen, H., 2017. An introduction to corporate
environmental management: Striving for sustainability. Routledge.

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Theguardian.com(2018). Brazil to sue mining companies BHP and Vale for over 5billion
over dam disaster. Available at: https://www.theguardian.com/world/2015/nov/28/brazil-to-
sue-mining-companies-bhp-and-vale-for-5bn-over-dam-disaster [Accessed on 3rd Sep 2018]
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