Organisational Structure of Wesfarmers: An In-Depth Analysis

This essay provides an in-depth analysis of Wesfarmers' organizational structure, focusing on its team-based approach. It explores the advantages of this structure, such as increased employee motivation, streamlined workflows, and cross-cultural integration, particularly within its retail operations. The essay also examines the disadvantages, including potential confusion, dual loyalties, and internal competition. Furthermore, it offers recommendations for overcoming these shortcomings, emphasizing the importance of effective communication, skilled team leadership, and the implementation of specific policies and procedures. The analysis highlights the need for liaison roles and project management structures to enhance organizational consistency and address the challenges of operating in a complex, international environment, ultimately providing insights into how Wesfarmers can optimize its team structure for continued success.

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WESFARMERS ORGANISATIONAL STRUCTURE
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This essay discusses the organisational culture of Wesfarmers, a conglomerate which
is based in Perth, West Australia. This company is focused to spread business in the
Australian and New Zealand’s retail, fertilisers, chemicals, coal mining, industrial and safety
products. It is the largest Australian MNC by revenue and is the largest private employer in
the country with more than 220,000 employees working directly with the organisation. This
company has tie up with various retails like Coles, Bunnings, Target and Kmart with which it
operates in the UK and Ireland also (Sustainability.wesfarmers.com.au, 2018). This essay
analyses the organisational structure of the company, the importance of this particular
structure for the effective functioning of this origination and the advantages it results in
operation in the global setting. The essay concludes with the findings of the disadvantages of
team structure and some recommendation to overcome them.
Team structure is one of the most important organisational structure used by many
successful multinational companies. This is effective for the growth of the company as this
structure helps corporations especially the retail ones to filter decision making down to every

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levels of management (Ibisworld.com.au, 2018). This exactly opposes the traditionally
structured companies where the top managements only make decisions. Wesfarmers believes
in the participation of all the employees in their decision making process through this the
employees feel more attached with their organisation rather the performing their roles in their
different departments.
Wesfarmers is basically divided in five sections below the Director. These
departments have different focus from their own parts. These teams involve in production,
technology, marketing, customer service and human resource sections. Each of these teams
has team leaders who are responsible to manage their teams and execute assigned jobs with
expertise. Most importantly this structure of this company has helped it to segment itself so
that the whole process does not get overlapped with one another (Smith & McSweeney,
2017). This guarantees that the company will run more effectively and proficiently as no
department depends on the other yet have a wholeness in the ultimate output of the company
giving it a competitive advantage in the global market.
Each objective of this partial MNC is to exist across many types of industries in
different nations therefore, it gives freedom to the departments to innovate as well as solve its
own problems so that the best quality products and services reach the customers. By using
team structure Wesfarmers gets scope to enjoy numerous advantages than its competitors.
First of all, the company can capitalise the strength of the employees by minimising their
weaknesses. The team based organisational structure enables the company to speed up the
work flow and reducing cost (Flin, Lauche & Crichton, 2017). This genetically improves the
motivation of the employees as they get the scope to perform in a team particular focussed on
the tasks in which they have expertise. Prioritize jobs based on the importance as well as
urgency, can also upsurge the productivity of these expert teams. This type of organizational

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structure used by Wesfarmers allows the teams to guarantee the best coverage for the
activities for example product development, process-improvement initiatives and customer
support.
Wesfarmers has aimed to focus on the innovation and quiet of the production as well
as service to the customers. Hence they except more involvement of the employees with the
organisations. This is the reason it has eliminated the layers of management. Thus, the
employees of the organisation are free to make the best decision through team approvals and
do not need to waste time and effort to get the approvals from different managers. This
structure has helped the company to streamline the processes in one hand and lower
administrative costs. In addition to this, as the employee fee independent as well as
empowered, their morale increases to serve the company more passionately.
In the teams, the employees work to achieve the same goal therefore, thy remain more
focussed to their tasks rather than indulging in the interdepartmental conflicts which require
the interference of the managers. In the different teams of Wesfarmers, the employees
themselves solve any types issues without consulting their superiors as the attachment among
the team members are much higher here. This also shorten the amount of required time for
completing a job as there is a high amount of collaboration in the teams. Another benefit that
the team structure of the company provides is the cross cultural integration. Team structure
easily incorporate the cross-cultural members in their groups and integrate in the
organisational capture more easily than any other organisational structure.
In Wesfarmers, the team structure is mainly followed in the retail business as this is
the main functioning area through which the company aims to popularise itself in the global
market. Therefore, each of the teams are competent enough to match the requirements of an
MNC. These teams share the responsibilities for completing their tasks within schedule

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where the ultimate incidents of collaboration can be seen. In case one team members cannot
finish a task another replaces him to fulfil the obligation. Through creation of a
comprehensive role along with responsibility matrix, their accountability gets evidently
defined so that misunderstandings or conflict do not arise. Moreover, the communication
issues easily get solved as there are regular meeting and team hurdles to maintain the flow of
communication among the team members (Carley & Prietula, 2014). Wesfarmers uses the
best technology to maintain this communication flow among the teams or the departments so
that there are no incidents of miscommunication which may lead to failure in getting proper
outcome.
As mentioned before the teams of this company are highly competitive in their
innovative processes. Instead of focussing on the personal achievement, reaching goals for
the teams are more important for the employees of Wesfarmers. These teams strive for the
common goal like product and service development as well as appropriate delivery. By using
their collective knowledge, the team members empower their subordinates to take actions to
get the best result. As the teams contain action oriented, people-oriented and thought-oriented
members, which can easily improve the process through balancing human resources with the
projects. Action oriented team members constantly push others to improve the methods and
encourage them to complete the tasks qualitatively and obviously within time. The people
oriented team members provide all types of supports, guide the team and arrange resources to
finish a project. Finally, the thought oriented team members remain ready with creative ideas,
specialised knowledge and evaluation options.
In Wesfarmers, each of the five departments have teams to complete their jobs based
on the functioning of the departments but with all the mentioned advantages this structure
also has some shortcomings. First of all, the team structure needs less managerial monitoring

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as the teams themselves act independently this is why this structure often leads to confusing.
As the team members are responsible to the team leaders only, they remain focussed in their
own tasks. Therefore, the whole pressure moves to the team leaders who when cannot
manage the team positively, the team collapses. In this team structure organisation, the team
members are compiled to show dual loyalties one to their team members and another to their
departmental heads. This often create confusion in the minds of the employees which gets
reflected in their functioning (Hatch, 2018). As the there is a need to have a constant flow of
communication among the employees, the meetings are arranged. This often needs more
expenses ion teams of money as well as time and efforts of the members.
In the team structure the members are responsible to achieve their team’s independent
goals. This is the reason why they do not have much concern with the organisational goals as
a whole. Moreover, each of the teams of Wesfarmers functions independently without
ensuring alignment with each other. This results in lesser organisational consistency. The lack
of bureaucracy presents to align the thoughts as well as actions of the teams leads to less
cooperative workforce hence the effect of innovation and talents of each team remain
unutilised. In addition to these issues, the teams of these five departments of Wesfarmers,
focus to make a quick decision to enable the fast completion of their tasks hence the teams
undergo various changes (Bolman & Deal, 2017). This constant change or instabilities lead to
confusion in the minds of the team members if the team leaders do to interfere every time.
This is also the reason why the team decisions are made at the last moment by increasing the
internal tensions and stresses.
Team structure of Wesfarmers has one of the most important disadvantage which is
related to their internal competition. In these days most of the employees of any organisation
work efficiently for getting rewards and acquire higher position through recognition. In the

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teams also the competition among the team members is quite high which often affect the
relationship among the employees. In some cases, the tasks do not need a team effort and can
be easily and efficiently performed by the individuals but the company follows the team
structure, does not allow the individuals to act separately which lead to waste of human
resources. The team structure of the company may limit contact as well as exposure to their
other functions. The individual team can develop the ideas as well as products in segregation.
They do not realize the impacts on the other teams, employees, products, services and the
customers of the company. This limits the sharing of best practices that can result in the
higher cost, increased wastes and reduced customer satisfaction. For instance, production
teams may not be able to negotiate the best deals with suppliers if they work separately.
In addition to this, the teams often feel pressurised by their team leaders regarding
their functionalities. As different departments are focussed to function differently, they
cannot replace one team with other at the time of demand seasons. This leads to create issue
as the teams feel pressure to manage the post production transition (Ibisworld.com.au, 2018).
Moreover, it is not possible to train each of the team members about the functions of each
departments, hence the teams may fail to connect with the ultimate goal of the company. The
company when operates in different countries need to incorporate the national culture which
becomes one of the most important barrier for the functionality of the teams. Therefore, the
company needs to follow some of the methods which will help it to maintain the team
structure in one hand and utilise the team members more effacingly on the other.
As the team-based organizational structure lacks management structure by its design,
the team members as well as the team leaders of each department need to identify and realise
the needs for a good communication, efficient project management as well as effective
resource allocations without which the teams of any of the departments cannot function

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effectively. The teams need capable, highly trained and experienced team leaders who will
guide the teams competently. In addition to this, the teams of Wesfarmers need specific
policies as well as procedures which define proper method to get the works done. It helps to
balance the resources of the company with the capability to reply rapidly to the team
requirements without referring to the layers of futile management.
As the team structure has less organisational consistency the lateral team-based
organization like Wesfarmers need to launch the liaison roles, effective task forces as well as
other project management structure so that it can effectively increase the ability of the
company to process the information in the interdependent as well as complex environment. In
case the company lacks these mechanisms, stress, miscommunication, absenteeism and poor
performance can be resulted. In addition to this, the company while working in the
international setting needs to increase the knowledge about the national culture of the
countries without which the miscommunication will be increased in the team which will be
leading to collapse of the teams gradually.

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References:
Bolman, L. G., & Deal, T. E. (2017). Reframing organizations: Artistry, choice, and
leadership. John Wiley & Sons.
Carley, K. M., & Prietula, M. J. (2014). The" virtual design team": Simulating how
organization structure and information processing tools affect team performance.
In Computational organization theory (pp. 19-36). Psychology Press.
Flin, R., Lauche, K., & Crichton, M. T. (2017). Learning from Experience: Incident
Management Team Leader Training. In Naturalistic Decision Making and
Macrocognition (pp. 129-146). CRC Press.
Hatch, M. J. (2018). Organization theory: Modern, symbolic, and postmodern perspectives.
Oxford university press.
Ibisworld.com.au. (2018). Wesfarmers Limited - Retail. Retrieved from
https://www.ibisworld.com.au/australian-company-research-reports/retail-trade/
wesfarmers-limited-company.html
Smith, P. L., & McSweeney, J. (2017). Organizational perspectives on rapid response team
structure, function, and cost: a qualitative study. Dimensions of Critical Care
Nursing, 36(1), 3-13.
Sustainability.wesfarmers.com.au. (2018). Structure and composition of the Board. Retrieved
from https://sustainability.wesfarmers.com.au/our-principles/governance/robust-
governance/structure-and-composition-of-the-board/