Organizational Leadership and Strategy: A Wesfarmers Analysis Report

This report provides an analysis of organizational leadership and strategy, focusing on the Australian retail company Wesfarmers. The study examines Wesfarmers' generic business strategy, particularly its adoption of a cost leadership strategy to target the lower and middle classes. It highlights the importance of strategic leadership in decision-making and maintaining financial stability. The report also explores the role of organizational culture, emphasizing the significance of a formal culture in driving business revenue and employee engagement. The analysis covers various aspects of Wesfarmers' operations, including its supply chain, brand image, and internal communication strategies. The study suggests the implementation of workshops to improve internal communication and foster employee bonding. Furthermore, it discusses the application of Porter's generic strategies and the significance of differentiation and focus strategies in different market conditions, contributing to the understanding of how Wesfarmers navigates the competitive business landscape. The report concludes with a detailed overview of the organization's cultural strategies and their impact on its overall success.

Running Head: ORGANIZATIONAL LEADERSHIP AND STRATEGY
Organizational leadership and Strategy
Name of the student
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1ORGANIZATIONAL LEADERSHIP AND STRATEGY
Executive summary
Strategic leadership has the higher level of impact on the decision making process of
an organization for achieving the long-term success. This also plays an important
role in maintaining the financial stability in an organization. By highlighting the
internal culture of the company in the study has highlighted the formal organizational
culture, which should be introduced in every organization for increasing the business
revenue. Therefore through this study, it has been highlighted that how an
organization can develop its strategic leadership plan in order to survive in the
competitive business market. , it has been identified that the company named
Wesfarmers has taken various initiatives in order to establish its strong brand image
in the global business industry. It has been discussed in his study that in the current
situation, the company named Wesfarmers is using the Cost leadership strategy. As
the company has decided to provide its products in the lower range, therefore, by
following the situation the strategy, the company will be able to develop its business.
It has been suggested in this study that if the organization focuses on improving its
internal communication by introducing different workshops, this will help the
company to increase employee bonding. This will influence the outcome of
Wesfarmers. In the case of formal corporate culture, this can be said that the
organization has implemented its cultural strategy wisely, which helps it in serving in
the competitive business industry

2ORGANIZATIONAL LEADERSHIP AND STRATEGY
Table of contents
Introduction...................................................................................................................3
Background of the company.........................................................................................3
Generic business strategy............................................................................................4
Cost leadership strategy...........................................................................................4
Differentiation strategy..............................................................................................6
Focus strategy...........................................................................................................6
Organizational culture...................................................................................................7
Formal organizational culture.......................................................................................8
Conclusion..................................................................................................................11
Reference list..............................................................................................................12

3ORGANIZATIONAL LEADERSHIP AND STRATEGY
Introduction
Strategic leadership has the higher level of impact on the decision making
process of an organization for achieving the long-term success. This also plays an
important role in maintaining the financial stability of an organization. The
organizational strategy and leadership management process are being influenced by
the generic business strategy of an organization. In this study, the generic business
strategy of the organization named Wesfarmers has been highlighted. On the other
hand, how organizational culture plays an important role in influencing its growth has
been discussed in this study. Through this process, both the internal and /external
culture of Wesfarmers have been analysed in this study. By highlighting the internal
culture of the company in the study has highlighted the formal organizational culture,
which should be introduced in every organization for increasing the business
revenue. Therefore through this study, it has been highlighted that how an
organization can develop its strategic leadership plan in order to survive in the
competitive business market.
Background of the company
Wesfarmers is an Australian retail business organization, which has
established its business in the year 1914. Within few years the organization has
reached the top ten popular retail organizational in the global business industry
(Wesfarmers.com.au, 2018). In the year 2016, the business revenue of the company
was A$ 65.98 billion (Wesfarmers.com.au, 2018). On the other hand, the employee
strength of the company is gradually increasing with the increasing rate of business
revenue. The company serves in the different countries such as Bangladesh, Ireland,
Australia, New Zealand, United Kingdom and many more. This organization is
considered as the fastest developing retail organization in Australia. This can be
identified in this company that it has been introduced in the market for improving the
condition of Australian farmers. If the supply chain of the company will be analysed,
it will be identified that it has introduced various modern technology in order to make
this more smooth. On the other hand, it has been identified that the company has
established its strong brand image in the market by providing good quality of
products in the lower ranges. Therefore from this study, this can be said that the

4ORGANIZATIONAL LEADERSHIP AND STRATEGY
company named Wesfarmers mostly targets the lower middle class and middle-class
people.
Generic business strategy
The generic business strategy was introduced by Michal porter in the year
1980, in order to gain the competitive advantages in the market (Wicker et al. 2015).
Therefore, this can be said that the importance of generic strategy in business very
high especially when the company faces the higher level of competition from the
existing market. As stated by (Bertozzi, Ali and Gul, 2017), Porter introduced the
generic strategy depending on the business values and opportunities of an
organization in the global business industry. Porter has introduced three generic
strategies such as differentiation cost leadership and focus. The Porter’s generic
strategy aims to provide the competitive advantage to the company in the target
market. This can be said that these strategies are also very effective in the case of
developing the business in the new market.
Figure: Porter’s generic strategy
(Source: Bertozzi, Ali and Gul, 2017)

5ORGANIZATIONAL LEADERSHIP AND STRATEGY
Cost leadership strategy
As stated by Geissdoerfer, Bocken and Hultink (2016), this strategy is very
effective in the case of winning the market share of an organization. By developing
this strategy, the organization will be able to appeal the price-sensitive customers
another way this can be said that by following this strategy the organization gets the
chance to achieve its target segment (Banker, Mashruwala and Tripathy, 2014). The
study has highlighted Wesfarmers as an important retail business organization which
has established its business by providing good quality of products in the lower range.
Therefore this can be said that the target segment of the company is lower middle
class and middle-class people. In order to enhance its business in the market, the
company named Wesfarmers has adopted the cost-effective strategy. In the words
of Hilman and Kaliappen (2014), in this situation, the rate of profitability gradually
increases without compromising with the pricing strategy. In this study, three ways
have been discussed by which the effective post strategy is being implemented in
the organization. In the first dimension, the company tries to achieve the indirect and
direct operating costs.
In this process, the company offers to the customers standardized products
with high volume. Therefore, this can be said that the company named Wesfarmers
has focused on reducing its production cost so that it will be able to provide its
products to the customers in lower ranges. As opined by Lechner and Gudmundsson
(2014), by adopting this strategy, the organization gets the chance to enhance give
tough competition to its competitors. In the second dimension, the company has
focused on the company that the company focused on controlling the value chain of
the company it will be able to achieve the financial, marketing, information,
technology, inventory and supply chain service, in low cost (Barin Cruz, Boehe and
Ogasavara, 2015). In the case of supply chain process, the company will be able to
bulk amount of products in the lower ranges. Therefore, this can be said that through
this process, the manufacturing cost of the company can be reduced. According to
Zehir, Can and Karaboga (2015), the third dimension of cost leadership strategy is it
helps the organization to utilize the resource with efficiency. Through this process,
the company will be able to improve its rate of production (Menon and Yao, 2017).
As its result, the organization gets the chance to experience the profit on the large
economic scale. It has also been mentioned that the company has got the chance to

6ORGANIZATIONAL LEADERSHIP AND STRATEGY
adopt cost-effective strategy because of its large size. This strategy can be only
used for the organizations with the large scale of production and stable economic
condition.
Differentiation strategy
According to Brenes, Montoya and Ciravegna (2014), Differentiation is
considered as one of the popular strategies in order to deal with the competitive
market. It has been focused in this study that this strategy is being introduced in
those market where the target customers of the company are not conscious about
price. Therefore, this can be said that the differentiation strategy can be developed in
the case of those markets, where the living standard of the people is higher. On the
other hand, this can be developed in those areas where the company has already
established its strong brand image (Hernández-Perlines, Moreno-García and Yañez-
Araque, 2016). In this situation, customers purchase the products depending on its
brand popularity. Hence, this can be said that both the strategies can be adopted by
the organization in different situations. In the competitive market, where the needs of
the customers are specific, in that situation the company can develop this strategy. It
has been mentioned in this study that satisfying the needs of the customers is very
difficult in these types of situation. In the words of Rothaermel (2015), the
differentiation strategy is being adopted by the company in the case of
accomplishing the premium service or product by increasing the customers’ loyalty
as well as business revenuer of the company.
Focus strategy
As stated by Salavou (2015), this strategy is being adopted by the large
organization in the case of developing its business in the small business market.
This can be said that the large organizations, which have already adopted the
differentiation strategy can also adopt focus strategies. By adopting this strategy, the
company name Wesfarmers will focus on a new target market. Depending on the
specialized needs of the customers, the company will focus on developing its
products and services in the market. On the other hand, this can be said that this
strategy can also be appropriate for the small organizations, which do not want to
compete with the large companies (Wicker et al. 2015). Therefore this can be said
that it will be more effective for the organization to focus on enforcing on the market,
which will be helping in the case of achieving arrow market segment. It will also play

7ORGANIZATIONAL LEADERSHIP AND STRATEGY
an important role to understand the needs and demands of the target market of the
company. By adopting the focusing strategy, the organization gets the chance to
collect the information about the market. Hence, this can be said that by adopting
these strategies the organization will be able to introduce innovation and will also get
the chances to gain competitive advantages from the market. As opined by Alvesson
and Sveningsson (2015), it can be said that by adopting this strategy market
efficiency can be improved. In the case of Wesfarmers, this cannot be said that if the
company adopts this strategy, this will be benefited. However, in some situations
depending on the market this strategy can be adopted.
Organizational culture
According to Hogan and Coote (2014), depending on the ideologies, values,
principles and beliefs the organizational culture is being developed. The relationship
between the employees and employers get influenced by the organizational culture
(Cao, Huo and Zhao, 2015). Depending on the organizational culture the overall
productivity of the organization is being influenced. Therefore this can be said that by
developing the healthy culture in the organization, the organization gets the chance
to engage the employees towards their work (Tong, Tak and Wong, 2015). If the
organizational culture of Wesfarmers can be analysed, it will be identified that its
strong organizational culture has made the company successful in the retail business
industry. On the other hand, this can be said that the management of the company
plays an important role to motivate the employees towards their work. It has been
identified that the company has introduced various governance programs in order to
maintain the healthy atmosphere in the organization. In order to understand the
needs of the customers, the company arranges different meetings, so that the
employees will get chance to discuss their problems with the managers. To run the
business in an autonomous way, the company provides freedom to the employees.
By supporting this Islam, Jasimuddi and Hasan (2015) stated that in order to control
the organizational activity, the company had introduced the different internal boards.
The senior executives are in the managing body of this board.
As stated by Warren, Gaspar and Laufer (2014), Stakeholders plays an
important role in the case of developing the business organization. It has been

8ORGANIZATIONAL LEADERSHIP AND STRATEGY
identified that the company named Wesfarmers maintains the good relationship with
the stakeholders. Hence, this can be said that the company is properly maintaining
its corporate culture in the workplace. It has been identified that the success of the
organization is its ethical and honest policies. It has been found that the company
named Wesfarmers maintains transparency about its business policies, which have
helped the organization to develop strong organizational culture (Helmreich and
Merritt, 2017). It has also been identified in thus study that the company give proper
respect to the suppliers so that the employees will also give respect to them. This
also influences the whole environment of the company (Luthans and Doh, 2018). If
the working culture of Wesfarmers will be analysed, it will be identified that the
company named Wesfarmers has the large number of employees, who belongs from
different cultures. Therefore this can be said that diversified culture is the main
identity of the company. The company always tried to develop its internal cultural
communication, so that the employees will be able to adjust with their co-workers
(Forte and Flores, 2014). In order to avoid discrimination in the workplace,
Wesfarmers has focused on introducing various opportunities for the employees. As
stated by Geissdoerfer, Bocken and Hultink (2016), in its training and development
session, the company has introduced different cultural workshops, so that each and
everyone can be connected with each other. The company has used the cultural
diversity as a strength of the company. Depending on the culture of the employees,
the organization has decided to appoint them in their particular community-based
market (Islam, Jasimuddi and Hasan, 2015). As its result, Wesfarmers has got the
chance to easily grab the attention of the customers. This has also played an
important role in the case of developing new business in the different market area.
As the company welcome every suppliers, employees and community members, this
helps the company to build trust for them in the business industry.
Formal organizational culture
As opined by O'Neill, Beauvais and Scholl (2016), corporate Culture is very
important part of the business organization. The organizational management can
face various problems due to improper corporate culture in an organization. If the
cultural risk is being ignored by the management of the company, this can bring
huge loss or the business. As the study has repeatedly mentioned that employees
are the major strength of an organization, therefore, by if the corporate culture will

9ORGANIZATIONAL LEADERSHIP AND STRATEGY
affect the moral ethics of the employees. This can directly impact the overall
productivity. This has been identified that financial stability of an organization also
depends on the corporate culture (Warren, Gaspar and Laufer, 2014). Corporate
culture can be classified into two types. One is formal corporate culture, and another
is informal corporate culture. In the case of formal corporate culture company
policies, corporate hierarchical structure and operating procedure of the company
depends. On the other hand, in the case of informal corporate culture the human
interaction, social connection and special group projects are involved (Alvesson and
Sveningsson, 2015). In this study, the formal organizational culture of the company
named Wesfarmers has been highlighted. As per the formal concept of
organizational culture, the business procedure and policies are being introduced by
understanding the changes and consequences. Depending on the changes the
company always get prepared to face the drastic consequences. Hence, this can be
said that by following the formal corporate culture, the employees of the organization
learn how to deal with the difficult situation. Through this process efficiency of the
employees is being improved. On the other hand, depending on the formal
organizational culture, the external opportunities of the company in global business
market increases (Brenes, Montoya and Ciravegna, 2014). Hence, this can be said
that adopting the formal corporate culture in an organization is very important for
increasing its popularity in the global business industry.
As per the concept of formal organizational culture, the company should
always be prepared for understanding the problems and handle the situation as per
requirements (Hernández-Perlines, Moreno-García and Yañez-Araque, 2016). In the
case of Wesfarmers, this has been identified that the company always tries for
delivering satisfactory returns to the stakeholders by maintaining the financial
discipline. Therefore, this can be said that through this process the company
maintains its diversified business portfolio. For conducting the business policies, the
company maintains its business behaviour of the company towards its works helps it
to achieve its goals and objectives (Banker, Mashruwala and Tripathy, 2014). If the
internal organizational structure of the company will be analysed, it will be identified
that the company has introduced a management team, which works to manage the
responsibilities of the company. On the other hand, the company has also recruited
risk management team in the company, which works to manage the risks faced by

10ORGANIZATIONAL LEADERSHIP AND STRATEGY
the organization. As stated by Warren, Gaspar and Laufer (2014), the board
committee of Wesfarmers has introduced a nomination committee; this committee
will work on auditing the organizational performance. On the other hand, the risk
committee works to manage the organizational risks. In the formal corporate culture
of Wesfarmers, an Anti-Bribery policy is very important; the company has committed
to maintaining the rules and regulations of the countries in which it is operating its
business.
As stated by Banker, Mashruwala and Tripathy (2014), in order to deal with
the political situation, the company has also introduced Anti-bribery policy stipulates,
this makes the political donation transparent in the business organization. In order to
maintain the proper relationship with the political ruling parties, the company donates
the large amount to those parties. This helps the company to avoid unnecessary
external challenges. On the other hand, the company always tries to maintain the
decent relationship with its investors. It has been identified that the company named
Wesfarmers provides proper respect to its stakeholders. The organization maintains
transparent engagement with the broader investment community of the company
clarifies all the rules and regulations as well as term and conditions of the company
to the stakeholders before starting the engagement process. The governance
policies of different countries are also very influential in the case of maintaining
formal corporate culture. Hence, this can be said that by maintaining the formal
corporate culture the company gets the chance to develop its attitudes, value,
standard, performance and policies, which helps the company to increase its
business revenue (Wesfarmers.com.au, 2018). On the other hand, this can be said
that by maintaining the formal corporate culture in the organization, the company
named Wesfarmers gets the chance to increase its brand value in the business
industry.
As the corporate culture of the organization plays an important role in
developing its relationship with the external world, therefore this can also be said that
through this process, the company also brings the development in the internal
culture. Depending on the culture of the organization job satisfaction of the
employees is being influenced. Therefore, if the corporate culture of an organization
is properly maintained, this avoids different types of discrimination in the organization
(Brenes, Montoya and Ciravegna, 2014). On the other hand, the study has

11ORGANIZATIONAL LEADERSHIP AND STRATEGY
discussed the governance rules and political donation of the company. This types of
activities increase the opportunities for the company in the global business market.
By getting influenced by the formal corporate culture of the company, the rate of
employment increases. This also attracts the investors towards this organization.
Therefore, this can be said that formal corporate culture of Wesfarmers has the
higher level of impact on its business economy. If the business growth of the
company is being analysed, it will be identified that growth rate of the company is
gradually increasing. On the other hand, availability of investors in the company has
influenced its stable financial position.
As stated by Warren, Gaspar and Laufer (2014), corporate social
responsibility is involved in the formal corporate culture of an organization. By
investing in the society, the company increases its brand value as well as it improves
he employee performance of the organization. Through this initiative, the
organization maintains its transparent relationship with the society. This can be
considered as the wise step taken by the company towards developing the
organizational image to the customers. On the other hand, employee satisfaction is
another important corporate culture, which is needed to be maintained in the
organization (Islam, Jasimuddi and Hasan, 2015). The company named Wesfarmers
provides transparent salary and incentive scales to the employees. On the other
hand, every initiative of the company is being taken by respecting the moral ethics of
the employees. Therefore this can be said that by maintaining the transparency with
the employees, the formal corporate culture is being maintained by the company in
the organization.
Conclusion
In the above study, it has been identified that the company named
Wesfarmers has taken various initiatives in order to establish its strong brand image
in the global business industry. It has been discussed in his study that in the current
situation, the company named Wesfarmers is using the Cost leadership strategy. As
the company has decided to provide its products in the lower range, therefore, by
following the situation the strategy, the company will be able to develop its business.
On the other hand, the study has discussed about differentiation strategy which can
also be developed by the company in the case of developing its business in a new