BHP's Strategic Management: Implementation and Issues Analysis

This project provides a comprehensive analysis of BHP's strategic management, focusing on its implementation and associated challenges. The analysis begins with an overview of BHP's key strategies, including mergers and acquisitions, cost leadership, and differentiation. It then evaluates the implementation approaches, particularly concerning people, culture, and change management, highlighting issues such as communication breakdowns during mergers, cultural clashes, and employee resistance to change. The project further identifies specific issues and provides recommendations for improvement, such as situational leadership, diversity management, job enrichment, fostering a clan culture, promoting equal representation, and aligning change management with employee interests. The evaluation utilizes frameworks like the McKinsey 7s model and Lewin's change model to provide structure and guide recommendations. Overall, the project offers a strategic perspective on BHP's operations and suggests actionable steps for enhancing its management practices.

BHP
Strategic management

BHP is one of the major petroleum entities in
the world.
Current global scenario is much competitive
and thus BHP is witnessing continuous
process of change in coping up.
Number of change issues being identified for
them.
Introduction

One of the major strategies being identified is
the merger.
In 2001, BHP and Billiton merged forming
one of the largest cartels in the world.
They have also acquired Athabasca Potash
Inc in 2010.
BHP is having joint venture with the Rio Tinto
in Australia.
Identification of the
strategies

It is also identified that in terms of the
business level strategies, BHP is following
both cost leadership as well as differentiation
strategies.
Cost leadership is being achieved by having
the economies of scale gained from huge
operations across the world.
Differentiation is being initiated by having the
access to quality ores and resources.
Identification of the
strategies

It is identified that human resources are
being given major focus in implementation
process.
All the internal stakeholders are being
involved in the implementation process
(Hubbard, Rice & Galvin, 2015).
However, issues in relation to the people got
emerged in the case of mergers.
Employees from both the entities faced issues
in aligning with the others.
Evaluation of the implementation
approaches (People)

It is identified that major implementation
issue in terms of people is communication.
Due to the different approach of the
employees from two entities, communication
process was not effective.
In the case of Athabasca Potash Inc., the
major issue is leading the acquired
stakeholders.
Cost leadership caused reduction in the
internal cost, which lead to reduction in
employee size. This cause employee
demoralization.
Identification of the
issues(People)

Leadership approaches should have more
situational intent. This will help in leading the
people from different entities according to
the situation.
Leadership objective should be to ensure the
diversity management in the workplace.
It is also recommended that job enrichment
should be initiated to prevent the
demoralization of the existing peoples.
Recommendations (People)

Organizational culture between the two
entities in merger and acquisitions are
different.
Values and beliefs in BHP are different to that
of other merged and acquired entities .
Clan culture is one of most popular type of
organizational cultures followed currently.
Clan culture requires effective bonding and
collaboration among the internal
stakeholders.
Evaluation of the implementation
approaches (culture)

Cultural clash is one of the major issues
identified.
Culture of Billiton and BHP were different
and resistances being emerged in integrating
both.
Lack of clan culture also cause resistances in
reducing the cost of operation (Hubbard, Rice
& Galvin, 2015).
Lack of connectivity and communication
between the internal stakeholders.
Identification of the
issues(Culture)

Clan culture should be followed. This will
ensure that connection and bonding between
the internal stakeholders will be more.
Equal representation should be promoted,
which will help in reducing the distance
between the employees of merged and
acquired entities.
Training should be initiated to promote
similar shared values and beliefs among the
employees.
Recommendations
(culture)

According to the McKinsey’s 7s model,
structure is important to consider.
This includes allocation of the proper
resources in different change activities.
Changes in terms of corporate strategy such
as introduction of renewable energy
production are being done without the
consent of the employees.
Evaluation of the implementation
approaches (change management)

Resistances from the side of the employees
are identified.
This is due to the less involvement of the
employees in the change process.
Changes are mainly made in corporate level
and thus lower level involvement is less.
Identification of the
issues(Change management)

It is recommended that Lewin change model
should be followed, which will ensure more
effective determination of the employee
interests.
Functional level change should also be
initiated other than the corporate level
change.
Organizational culture and people should also
be well aligned with the implemented change
approach.
Recommendations (change
management)

BHP is having number of strategies being
followed in their business operation.
Some are proved as successful in the long
term.
However, there are number internal issues
also identified.
Accordingly, a few recommended steps are
also stated.
Conclusion

Hubbard, G., Rice, J., & Galvin, P. (2015).
Strategic management: Thinking, analysis,
action (5th ed. ) Chapter 13. Leadership,
people and culture.
Hubbard, G., Rice, J., & Galvin, P. (2015).
Strategic management: Thinking, analysis,
action (5th ed. ) Chapter 14. Change
management
Reference