Accounting for Managers

This report analyses and evaluates different aspects of the business of Woolworths Limited, Australia. The report explains different aspects of Woolworths like organizational structure, social responsibly, performance measurement and rewards system.

Running head: ACCOUNTING FOR MANAGERS
Accounting for Managers
Name of the Student
Name of the University
Author’s Note

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Table of Contents
Introduction.................................................................................................................................................2
Organizational Structure Analysis...............................................................................................................2
Type of Organizational Structure.............................................................................................................2
Degree of Decentralization......................................................................................................................3
Types of Responsibly..............................................................................................................................3
Social Responsibly Analysis........................................................................................................................3
Social Responsibility...............................................................................................................................3
Social Responsibility to Australian Retail Industry.................................................................................3
Impact of Social Responsibilities on Woolworths...................................................................................4
Performance Measurement System and Rewards Analysis.........................................................................4
Overview of Performance Measurement.................................................................................................4
Consistency of Performance Measurement System with Strategies.........................................................6
Consistency of Performance Measurement System with Social Responsibilities....................................6
Conclusion and Recommendations..............................................................................................................6
References...................................................................................................................................................8

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Introduction
This report takes an honest attempt to analyse and evaluate different aspects of the business of
Woolworths Limited, Australia. Woolworths Limited is one of the largest supermarket chains of
Australia. The company was established in the year of 1924 and it is headquartered at Bella Vista,
Australia. Woolworths operates in the retail supermarket industry of Australia. The retail industry of
Australia is one of the major industries in the country contributing largely towards the development of the
economic condition of Australia. As per e report of Deloitte, four among the world’s top retail companies
operate in Australia (deloitte.com 2018). In this context, it need to be mentioned that the retail industry of
Australia is full of competition due to the presence of some major competes of Woolworths. The main
competitors of Woolworths are Wesfarners, Metcash Limited, ALDI Stores, JB Hi Fi and others
(businessinsider.com.au 2018).
Woolworths is known for the selling of groceries like vegetables, fruits, packaged foods, meet
and others. Apart from this, the other products of Woolworths are DVDs, magazines, household products,
health products, beauty products, stationary items and others (woolworthsgroup.com.au 2018). It needs to
be mentioned that Woolworths follows a particular strategy for their business operations. The main aim of
the business of Woolworths is to provide highest priority to their customs. The strategic framework of
Woolworths is known as BIG W (woolworthsgroup.com.au 2018). The main components of this strategy
are to develop effective team, to refresh the stores, to provide the customers with updated products and
services, to develop cohesive brand and to reduce cost for bringing improvement in processes
(woolworthsgroup.com.au 2018). Different stages of the report explain different aspects of Woolworths
like organizational structure, social responsibly, performance measurement and rewards system.
Organizational Structure Analysis
Figure 1: Organizational Structure of Woolworths
(Source: wowlink.com.au 2018)
Type of Organizational Structure
By referring the above diagram, it needs to be mentioned that the organizational structure of
Woolworths falls under the Line and Staff Organizational Structure. It needs to be mentioned that
most of the large business organizations belong to this type of organizational structure. The main
advantage of this organizational structure is that it establishes direct and vertical relationships between the
managers and directors of different levels. There is no exception of these factors in case of Woolworths.
The organizations having this structure have both line and staff departments. It can be seen that the
HRDirectorFinanceDirectorCustomerTransformationChiefTechnologyOfficerWoolworthsLoyaltyDirectorWoolworthsSupermarketDirectorWoolworthsSmallStoresDirectorFoodcoManagingDirectorCountdownSupport

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members of staff departments provide the line employees with advice and assistance for achieving the
organizational targets and objected.
Degree of Decentralization
In Woolworths, there are some aspects that indicates towards the degree of decentralization. It
can be seen that Woolworths is a large origination with large number of departments and results. This
particular aspect reduces the burden from the management of the company and they deal with the crucial
matter of the company. It shows that there is a large degree of decentralization in the company. From the
organizational structure, it can be observed that the company has many managers dealing with different
aspects of the company (Chien 2013). For this reason, there is not any restriction in the decision making
process of the company; and this aspect shows the large extent of decentralization of power. It needs to be
mentioned that the board of directors of Woolworths has board vision that has lasting effect on the
organizational structure. From this aspect, it can be observed that there is a large extent of
decentralization of power in the company (Brady 2017).
Types of Responsibly
From the above figure, it can be observed that there are different types of responsibilities among
the directors of Woolworths. It implies that the board of directors of Woolworths has expertise in
different fields (Grayson and Hodges 2017). One director is reasonable for the human resource
management of the company. The responsibility of the finance and accounts part of Woolworths lies on
another director. There is another director reasonable for dealing with the maters of marketing. Apart
from this, other responsibilities in the organizational structure are customer transformation, technology,
loyalty, responsibility of supermarket as well as small stores, FoodCo and others (Blowfield and Murray
2014).
Social Responsibly Analysis
Social Responsibility
In today’s business organizations, Social Responsibility is considered as one of the major factors
for organizational success. Social Responsibility of business refers to the management of the companies
of the business organizations to protect the interest of the societies in which they operate (Schwartz
2017). According to the principles of social responsibility, the managements of the business organizations
need to take business decisions not for the purpose of maximizing profit or shareholder’s value, but also
serving and protecting the interests of the members of the society like workers, community members,
consumers and the community as a whole (Tai and Chuang 2014). It needs to be mentioned that there are
some major objectives of social responsibilities. Under this process, the business organizations need to
operate in the mindset of protecting and promoting the interests and welfare of the society. Thus, profit
must not be the highest priority of the companies as the progress of society needs to be provided with
utmost priority. For this reason, it is the responsibly of the business organizations to fulfil their social
responsibilities as the resources and infrastructures of societies help the companies in earning high profit.
Thus, the companies must not neglect their social responsibilities (Carroll 2015).
Social Responsibility to Australian Retail Industry
It needs to be mentioned that social responsibility has become a major aspect for the retail
industry of Australia. In this context, the name of Woolworths and Wesfarmers need to mentioned as both
of these companies are well ahead of the other companies in adopting the strategies of social
responsibilities. Apart from these two companies, the overall progress in adopting social responsibilities
in the Australian retail industry is not encouraging (Crane, Matten and Spence 2013). It needs to be
mentioned that the companies in this industry is slow in adopting the opportunities of social
responsibilities as compared to the global companies. The Green Shopping Survey of the Australian Food
and Grocery Council in 2010 discovered that 84% of the Australian is concerned about the environmental

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impact, but only 13% f them buy the environmental credentials products. Thus, it needs to be mentioned
that both the companies and the customers of Australian retail industry need to make step by step changes
in their attitudes towards social responsibilities (Cheng Ioannou and Serafeim 2014).
Impact of Social Responsibilities on Woolworths
Social responsibility has major impacts on the business operations of Woolworths. For this
reason, the company has developed many strategies as a part of their social responsibilities for the people,
customers, communities and supplies. In case of people, the main aim of Woolworths is to create a safe
and inclusive environment for their employees so that they can get opportunities to excel
(woolworthsgroup.com.au 2018). In case of customers and community, the aim of Woolworths is to
develop trusts with their customers and reward them. In case of suppliers and partners, the main aim of
Woolworths is to develop strategies to create string and long-term partnerships with them. Thus, based on
the above discussion, it can be seen that social responsibly is doing the right thing to Woolworths. For
this reason, the company is always ready to develop strategies related to social responsibilities for the
betterment of the society and people of the society (woolworthsgroup.com.au 2018).
Performance Measurement System and Rewards Analysis
Overview of Performance Measurement
From the annual report of Woolworths, it can be observed that the senior management team of
Woolworths get remuneration based on three aspects; they are Fixed Remuneration, Short-term Incentives
(STI) and Long-term Incentives (LTI) (woolworthsgroup.com.au 2018). STI and LTI s also regarded as
risk remuneration as the payment of these depends on the performance on the members of senior
management. Thus, it can be said that the remuneration of the senior management team is based on the
performance of them. In case of Woolworths, it can be observed that the company has determined certain
parameters for measuring the performance of senior management (woolworthsgroup.com.au 2018). In
case of fixed remuneration, it is provided to them based on the scope, nature and role of the directors. In
case of STI, the performance of the directors is measured on the achieving the financial Key Result Areas
(KRA). The major parameters of KRA are sales, Earnings Before Interest and Tax (EBIT), Return on
Funds Employed (ROFE) and Cost of Doing Business (CODB) (woolworthsgroup.com.au 2018). It can
be observed from the below figure:

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(Source: woolworthsgroup.com.au 2018)
In case of the payment of LTI, it is paid with the help of Executive Option Plan (EOP). Apart
from this, there are other four factors based on which the LTI s provided; they are Options, Performance
Rights, Performance Shares and Cash Awards (woolworthsgroup.com.au 2018). The share right
movement can be seen from the following table:

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(Source: woolworthsgroup.com.au 2018)
Consistency of Performance Measurement System with Strategies
In this context, it needs to be mentioned that the performance measurement system of
Woolworths is related with the key strategies of the company. The main strategy of the company is to
increase the profitability of the company by satisfying the needs of the customers. From the above
discussion, it can be observed that the performance of the senior management is measured with the
achievement of the financial results like EBIT, sales, ROFE, CODB and others (woolworthsgroup.com.au
2018). Apart from this, it can also be seen that the performance of senior management is also measured
based on the satisfaction of the customers. Another major strategy of Woolworths is to reduce costs to
increase the effectiveness of the company. It can be seen that the performance of the senior management
is also measured on the basis of increasing the effectiveness of the company by reducing the cost. Thus,
based on the above discussion, it can be said that the performance measurement strategy is consistent with
the overall strategy of the company (woolworthsgroup.com.au 2018).
Consistency of Performance Measurement System with Social Responsibilities
There is a connection between the performance measurement strategy of Woolworths with their
social responsibly of the company. It needs to be mentioned that the senior management of Woolworths
receives remuneration based on the achievement of the social responsibilities of the company like the
achievement of strategies related to the development of people of the communities, development of the
society, achievement of safe workplace and many others (woolworthsgroup.com.au 2018). Thus, it can be
seen that there is a relation between the performance measurement and social responsibly of
Woolworths.
Conclusion and Recommendations
From the above discussion, it can be seen that that organizational structure of Woolworths falls
under the line and staffs organizational structure and it is a perfect structure for the large corporations.
The large structure of Woolworths provides decentralized power in the company. The major
responsibilities in the organizational structure are human resource management, finance, marketing and

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others. The above discussion shows that Woolworths is very much efficient towards the achievement of
their social responsibilities. Woolworths develops their social responsibility strategies for people,
customers, society and supplies. It can be seen that the retail industry of Australia needs to adopt the
opportunities of social responsibilities. The above discussion also shows that Woolworths provides
remuneration to their senior management team based on performance measurement. The main parameters
to measure performance are sales, EBIT, RPFE, CODP, achievements of social responsibilities and
others. It can be observed that there is a relation between the performance measurement and major
strategies of the company.
Based on the whole discussion, some recommendations are provided below:
 It is recommended to the retail industry of Australia that they need to adopt various strategies of
social responsibilities for getting the benefits.
 It s required to Woolworths that they should introduce more strategies related to their social
responsibilities so that they can become able to serve the community more accurate basis.
 It is recommended that Woolworths needs to develop strategies to maximize the profit by
fulfilling the satisfaction of the customers.

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References
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