Organizational Structure Analysis of Wesfarmers: A Management Report

This report provides an in-depth analysis of the organizational structure of Wesfarmers, a multinational Australian conglomerate. It begins with an overview of the company, its diverse business operations, and its adoption of a matrix organizational structure. The report then explores the significance of this structure for organizational growth, highlighting benefits such as effective information exchange, increased employee motivation, and flexibility in working. It assesses the effectiveness of the structure, particularly in the context of Wesfarmers' multi-industry operations. The report also addresses the practical utilization of the structure within the company and identifies associated disadvantages, such as complexity and challenges in establishing priorities. Finally, it offers recommendations to mitigate these issues and enhance the company's performance. The report concludes by summarizing the key findings and emphasizing the importance of an appropriate organizational structure for achieving competitive advantage and sustained growth in the market.

Management
Organizational Structure
5/29/2018
Wesfarmers Company

Management 1
Contents
Introduction......................................................................................................................................2
Overview of company......................................................................................................................3
Organisation chart............................................................................................................................3
Importance of structure for organizational growth..........................................................................5
The effectiveness of structure for company.....................................................................................7
Utilizing the structure......................................................................................................................8
The disadvantage of structure to company......................................................................................9
Recommendations..........................................................................................................................11
Conclusion.....................................................................................................................................12
Reference.......................................................................................................................................13

Management 2
Introduction
The aim of the report is to talk about the organizational structure of the well-known
multinational company. A multinational company is a company that operates its business
operations in more than one country. The company that has been selected for the assessment is
Wesfarmers. The report includes the organization chart of the Wesfarmers Company. It includes
the significance of structure for the organization growth and success. Along with this, it includes
the effectiveness of the organizational structure for the company. The company is making use of
this organizational structure effective which will be included in the report. In addition, the
disadvantages of the organization structure related to the Wesfarmers will be discussed in the
report. The organizational structure that has been selected is Matrix structure.

Management 3
Overview of company
Wesfarmers Limited is a well-known Australian conglomerate with the head office in Perth,
Western Australia with the interest in mainly in the market of Australia and New Zealand. The
company is considered as MNC because it serves in the areas of Australia, Bangladesh, Ireland,
New Zealand and United Kingdom (Wesfarmers, 2018). The company came into the existence in
the year 1914 as Western Australian farmers' cooperative. Wesfarmers Company has achieved
the growth and developed their organizational strategy. The company is considered as Australia's
largest listed companies. The company is involved in the diverse business operations which
include supermarkets, liquor, hotels, convenience stores and many others (Wesfarmers, 2018).
Organisation chart
There are mainly 4 contemporary organizational designs that are implemented by the various
global organizations which help them to compete in the fast-paced changing digital economy.
These structures include Team structure, Matrix-project structure, boundary-less structure and
the learning organizational structure. Considering the below given organizational structure chart
of the Wesfarmers company it can be said that the company makes use of the Matrix-project
structure.

Management 4
(Source: Wesfarmers Annual Report, 2012)
The matrix structure is a structure that assigns specialists from the different functional areas to
work on the projects but returns to their areas when the work is done by them. The project is a
structure in which all the employees constantly work and after the completion of the work they
move to the other work. In simple words, it is said that the matrix structure of the business is
both the divisional structure and the functional structure (Cosh, Fu, & Hughes, 2012). The
structure of the company reflects that there are two different division of the business on which
the company is working. This includes retail and industrial along with some other business. The

Management 5
retail project of the business includes the different retail outlets such as Coles, Target, Kmart and
home improvement and office supplies. On the other hand, industrial and other business projects
include Insurance, resources, chemicals, industry, and safety with some small activities.
All these projects include the individual structure that can be considered as the functional
structure because all the projects include different departments with the help of which the
company can be performed by the company. This reflects that the structure of the Wesfarmers
Company is the combination of the both divisional and the functional organization structure.
Therefore, the analysis reflects that the company makes use of the matrix organizational
structure.
Importance of structure for organizational growth
The organizational structure of the company contributes to the growth of the business and this is
the reason the organizational structure is considered as the major factor behind the growth of the
business. The organizational structure of the Wesfarmers Company plays a significant role in the
growth of all the projects. Below given are some of the ways through which the organizational
structure supports the business and leads to the growth.
 Effective information exchange: - The departments in matrix structure can work
together with each other in the most accurate manner. All the personnel within the
organization can integrate together to implement the effective strategies for the
Wesfarmers businesses. This collaboration and effective implementation of the strategies
leads to the growth of the business (Guzman, 2018). Moreover, if any issue takes place
while implementing the strategies then these employees of the company come together to
resolve that which makes the process on-going.

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 Increase motivation among the employees: - This matrix structure encourages the
democratic style of the leadership that gets associated with the input of the project team
members before the managers of the company form the decisions. Wesfarmers company
value their employees due to which they take the feedback from their employees of the
different business units. This not only leads to the effective decision making but also
helps the company in generating the employee satisfaction and the rise in the motivation.
This satisfaction and motivation lead to the high productivity of the company which is
essential for the growth (Management Square, 2017). This employee satisfaction and
motivation makes the people remain in the organization which helps the company in
achieving the objectives.
 Flexibility in working: - Matrix structure leads to the flexibility of human resource
across the operations of the company. Wesfarmers projects include the functional
departments that maintain the specialization in the form of the talented employees so that
they can easily fulfill the requirements of the projects. This will help them in achieving
the success of the particular division which is a key to the accomplishment of the growth
of business (Joia & Lemos, 2010).
 Communication: - Matrix organizational structure brings the improvement in the
communication of the organization. The employees of the different departments can
remain in the constant contact due to which they form a good relationship and strong
communication. The communication within the Wesfarmers Company is essential
because this is the only way through which they can handle the complex challenges and
the objectives of the organization.

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The effectiveness of structure for the company
The matrix structure is effective for the MNC like Wesfarmers because the company operates a
different business in the different industry in different countries due to which they need to
maintain a difference in all the operations and management. Therefore, the structure
differentiates all the work between the projects and within the project, there is another functional
structure. This structure divides the business on the basis of industry and then on the type of
business which makes it clear for the company in analyzing the operations.
The organizational structure can bring the tension between the different perspective that is
creative or destructive. In an organization, there are various things that matter which include
processes systems, tool, and strategies but at the end what matters is the decision taken by the
leader of the company. The leader of the company shares the targets, clear accountabilities,
team-building and many other (Bradt, 2017). The leader of the company also ensures that the
structure of the business is linked with the inextricably to an organization culture because this
leads to the effectiveness in creating the sustainable competitive advantage. Wesfarmers CEO
has to ensure that they have linked all the components with the organizational structure because
this is the only way through which they can bring the effective operations and success towards
the company.
The effectiveness of the structure can be measured with the help of the growth and success of the
business. This is the fact that the Wesfarmers Company is growing in the market which shows
that the structure of the business is working effectively.

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(Source: UWJ, 2018)
The growth of the business can be determined with the help of the revenue of the business.
Today the business of the company is on a hike not only in the market of Australia but also in
other markets. This shows the effectiveness of the organizational structure in the market.
Utilizing the structure
The company makes use of every part of the organizational structure. The structure reflects that
the company has divided the structure on the basis of their business which means retail business
and other industrial business. Further, these businesses are again divided on the basis of different
types of business with their operations. This part of the structure is one of the most important
parts that are considered by the company (Saunila, Mäkimattila & Salminen, 2014).

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Along with this, every business performs the functional structure in every business. The
departments of the business perform their activities for each business for instances; the business
of Coles include the future numerous departments like human resource, research, and
development, marketing, sales, and finance. These entire departments perform the business
operations in an effective way and these departments are the parts of the organizational structure.
This reflects that the company makes use of these parts of the organization structure for
improving the operations. All these departments contribute to achieving the growth and
accomplishing the set objectives which shows the utilization of the parts of the organizational
structure of the company.
The disadvantage of structure to the company
There are certain disadvantages of the structure which is faced by the Wesfarmers Company.
These disadvantages affect the company ability which affects them while competing in the
business environment.
 Complexity: - This structure of the business is considered as a most complex structure in
terms of the chain of command. The employees of the Wesfarmers Company are assigned
to both the functional and project managers. The rise in the complexity will increase the
manager-worker ratio which ultimately leads to conflicting employee loyalties (Harper,
2015). Moreover, the complexity of the structure of the company makes the employees
confused as they are working under which supervisor. The MNC will not be able to
manage the wrong decision taken by the employees and conflicts with employee loyalty
which is the base of working for the company. This affects the ability of the work that the
company has in the market and leads to the effect on the competition within the business

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environment. The complexity generally occurs in the retail business operations of the
company when the employees of Coles are assigned to the work of Target and Kmart
business. Therefore, it can be said that the complexity directly affects the retail
businesses of the company in different markets.
 Difficult for establishing priorities suiting both functional and project management:
- The managers of company find it difficult to priorities from the functional and project
management because of the dual management in the competitive environment. The
managers of the Wesfarmers Company take the steps without analyzing the priority and
market environment. This directly affects the decision-making ability of the company in
the industrial business division (Gleeson, 2018). This leads to the effect on the operations
and working of insurance business in numerous markets where the company is
performing its business operations.

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Recommendations
This has been analyzed that complexity in the business and prioritizing the functional and project
management are two major issues which are faced by Wesfarmers company. It is recommended
to the company to provide the training to the employees so that they can deal in the dynamic
environment. Along with this, the managers of the company should provide the clear instructions
which will reduce the complexity of the employees as they will get the clear guidelines that to
whom they have to report.
The managers of the company should priorities recited to the decision that they have to prepare
on the priority basis. This will help the company to deal with the competitors in the market and
to generate the competitive advantage of the organization.