BHP Billiton's Organizational Strategy & Leadership Essay.

Discuss about the Organizational Strategy & Leadership of BHP Billiton.

BHP Billiton

BHP Billiton is an Anglo-Australian multinational mining company that is based in Melbourne, Victoria, Australia. It is listed in the Australian stock exchange and the London stock exchange and is the second largest mining company in the world based on revenues. In 2017, its revenue hit $38.28 billion dollars while the operating income was $ 11.753 billion dollars. The net income in the same years was $6.222 billion dollars. It operates in the mining and metal industry and has been the dominant player in this industry since 2001 after the merger between BHP and Billiton. Its parent organization is the BHP Billiton group and has employed more than 65,000 employees. Although its main operations and its headquarters are in Melbourne Australia (Aarons, Ehrhart, and Hurlburt, 2015). It operates as a multinational in various other continent like Europe and the Americas.

Notable people in the organization include; CEO, Andrew Stewart Mackenzie who was appointed in 2013. Its stock and share operate under the tag BLT in both the London and the Australian stock markets.

Organizational structure

BHP operates like any other organization that has structural hierarchy as an organization. It's led by the board of directors who include both the executive and the non-executive directors. The organizational operations is led by the CEO who is deputized by various managers and directors in such departments as operations, finance, procurement and more. The managers head the departments and have departmental heads and mid-level managers to oversee efficient operations of the business. The flow of authority then ends down to normal business employees who amount to over 65,000 worldwide. The company is one of the biggest in terms of employees in Australia (Alvesson and Sveningsson, 2015).

Communication in Organization Structure

Communication is generally considered as a process that occurs between members of a social community. Being a process, communication within organizations consists of dynamic activity, in a certain way in constant flow, but that maintains a certain degree of structure identification.

However, it must be considered that this structure is not static but changing and that it adjusts according to the development of the organizations. The collectivities in which communication within organizations takes place are typically considered as systems. A system is composed of a series of interdependent activities, which, when integrated, form a specific set of objectives (Bolman, and Deal, 2017).

Organizational Structure

Therefore, communication in organizations is considered as a process that takes place within a specific system of interrelated activities. The communication between the members of an organization involves the creation, exchange (reception and sending), process and storage of messages.

Organizational communication is understood as a set of techniques and activities aimed at facilitating and streamlining the flow of messages that occur between the members of the organization, between the organization and its environment, or influencing opinions, skills and behaviors of the internal and external public of the organization, all in order that the latter meets the objectives better and faster.

For the function of communication to be effective inside and outside the organization, it must be:

Open: Its main objective is to communicate with the outside world and send organizational messages to the internal and external public.

Evaluative: It is the instantaneous communication that is generated within an organization.

Flexible: Its purpose is to allow a timely communication between formal and organized.

Multidirectional: Organizational communication must flow in all directions: top to bottom, bottom to top, cross, internal, external among others.

Instrumented: The communication uses tools, supports, devices; the malfunction of organizations is explained through the information circulating within it, and that does not arrive at the right time, nor use the appropriate structures for communication to be effective.

Organizational communication is observed in five perspectives:

In BHP, the organization communication works in the following five perspectives,

Internal communication: It is the one that is carried out within an organization, to maintain the good relations between the members of the company through the circulation of messages, which are sent through the different media, to provide communication, union, and motivation, for the fulfillment of the objectives and goals (Bortolotti, Boscari, and Danese, 2015).

External communication: It is the communication that is aimed at external audiences, to maintain and increase public relations and project the corporate image of the company.

Public Relations: These are the activities and communication programs, which are executed to maintain good relations with the different publics that make up the company.

Advertising: They are the messages issued by the mass media, which seek to increase the sale of products or services of the organization.

Institutional publicity: It is a tool of public relations, used by the company to project in public a favorable image of the organization.

All the elements mentioned above in the BHP Billiton communication must be contemplated by the companies, to guide their efforts to increase their competitiveness and improve their communication channels that allow them to reduce costs and increase their profit margin.

Communication in Organization Structure

At present, competitiveness is one of the engines of progress for nations, according to the Oxford Dictionary of Economics: it is "the ability to compete in markets for goods or services. It is an economic factor that supports elements of rivalry and improvement, thus, we observe how the search for new business opportunities is a constant at the dawn of the new millennium and has a more accurate image of competitiveness: Competitiveness is a concept that it is defined as the ability to gain participation in the internal and external markets in a sustained manner over time and in such a way that it leads to an increase in the real income of its population. Under this perspective, competitiveness is strongly related to the organizational communication that a company has and its ability to link with other sectors or companies, allowing it to have a broad panorama of market demands, as well as the supply of inputs and necessary goods for production (Feldman, 2017).

Organizational culture

Organizational culture is the underlying assumptions, beliefs, ways of interacting and values that contribute to the social and psycho-socio environment in an organization. It includes the experiences, member's behavior, organizational expectations and future beliefs. It is also based on written and unwritten rules of the organization, shared customs, and attitudes developed over a period. It also includes the organization's visions, mission, values, norms, symbols, language, and habits.

In BHP Billiton, the organizational culture has been set up by more than 65,000 employees. In its headquarters, BHP uses English for communication. However, in its other offices like in Peru and South America, workers can communicate with their most preferred method of communication.

Its mission statement is to be the company of choice. It aims at creating sustainable value for shareholders, contractors, employees, business partners, customers, suppliers and host communities. We aspire to harm no one as we carry our mining activities (Hartnell, Fugate and Doyle Corner, 2016).

Leadership

There are very many factors that affect the type of leadership a company has. Different companies have different leadership styles. Few leaders exert more influence on an organizational culture. The leaders in an organization like BHP base their leadership on a combination of personal and organizational culture. The factors will then determine and affect the leadership style that an organization has. There are different advantages and disadvantages of each leadership style.  The direction, influence and general success of a company boil down to cultural factors and principles established in the existing organizational culture.

Organizational Culture

Origin of the culture

Organizational behavior and culture begin when the leaders in the company start operations of the company. A series of agreements, explicit and implicit begins to change and govern the behavior as the organization grows. Collective culture comes in when more people join the organization. In BHP, all the 65, 000 practices the organization culture and the subsequent incoming leaders follow the existing behaviors and values.

Strategy

Organization culture plays a fundamental role in decision making done by the leaders. Strategies cannot be successful if the organization culture is contrary to the beliefs of the leaders. When strategic decisions and initiatives try to change the culture of the organization too quickly, the leadership fails miserably.

Personal culture

The global mindset point to the fact that leadership is more associated with organization culture, however, personal culture plays a major role and an important one. A leaders personal background such as their religion, ethnicity, history and geographical location plays a major role. With a collective culture, leaders can implement more group-oriented practices and incentive plans. Individualistic culture types of leadership are narrow and short-sighted. The personal culture of leaders such as the background leads to the strategies that will be used. Some are more aggressive while other are soft in approach. This is for profit and service-oriented leadership. Personal culture also affects the promotion of a leader for participating in the organization culture and sufficient effect on the organization.

Considerations

Improving the working and living condition depends on the leadership style. Although an organization culture keeps on changing, leadership can set in motion consideration to change the strategy of the business.  Leadership points out to cultures and reflect on the attitude and energy of the leaders. Currently, a competitive company is increasingly characterized by its dependence on the provision of physical inputs, and increasingly, by its ability to exploit intangible assets, such as their entrepreneurial skills, that is, their intellectual capital. "The transformation capacity that a company can exhibit to move from the exploitation of physical inputs to the efficient management of knowledge determines its true degree of competitiveness (Williams, Glisson, and Green, 2017). Porter's competitiveness diamond shows the factors that determine the organizational competitive advantages for a certain economic sect points out that the new business competition implies the combination of four conditions: A business management, capable of generating innovation in its products, productive processes and forms of internal organization, New mechanisms of coordination in the phases of the productive chain , A more efficient organization of the industry in terms of competition and cooperation, The design of active industrial policies that encourage the creative and formative use of the market (Helms Mills and Mills, 2017). The two variables described above (organizational communication and competitiveness) are compatible only if there is a cohesive element: the linkage, through this variable, organizations induce their actions and design models that give them competitive advantages.

Does link come from the Latin vice ul? Re, which means: Tying or found something in something else. Perpetuate or continue something or exercise it. In other words, to link in organizational terms is to unite the objectives, with common goals. In this way we can understand that organizational communication and competitiveness are linked through linking, projecting the image and positioning of organizations, whether public or private. In order to specify the type of linkage that the study addresses, it is defined to the Company relationship as: "the means that allows the organization to interact with its environment, effectively and efficiently coordinating its teaching, research and extension of culture and services, while enhancing its ability to interact with the productive and social sectors in actions of mutual benefit, which favors its strategic positioning (Kollenscher, and Farjoun,, 2017). In general, the concept of organization-company relationship is given the exclusive connotation of agreements that can be signed by universities and companies. However, the relations between businessmen and organization researchers are of greater importance. Further, it can be said that a organization-business linkage model must be focused on the use of applied research that is generated in educational institutions. Superior, to convert projects with technical-economic viability into productive and innovative companies, capable of inserting themselves into the productive chains.

Organizations in Decision making

In everyday life, we ??all make decisions every day, since we got up and decided to go to work. In the case of the decision-making process in the organization, we refer to those decisions that are relevant to the operation of the company.

The process of making decisions in an organization begins with the detection of a situation that surrounds a problem. Next, come the analysis and definition of the problem. To do this, it is necessary to have a reliable, timely, and up-to-date information system that makes it possible to clearly understand the nature of the problem to be solved (Sagwa, and Martin, 2015).

Formal organization in Strategic Decision making

Formal organization is a fixed set of rules, structures, and procedures for ordering an organization.

The formal organization aims to indicate what each one does, what relationship they have with each of the members of the company and under whose orders they are. This is where the main problem in small companies arises since this "formal organization" if it exists, is a mere formalism that is not followed. The organization, on the other hand, is formed by the people and relationships that exist between them, coexists with the formal organization, but often does not pay attention to the effects it has on the efficiency of the formal organization. The formal organization can either support the organization or hinder it.

On what is the BHP Billiton organization based?

It can be based on:

The friendship that develops between members of an organization, not always from the same department or the same hierarchical level. In many occasions the employees of a company "use" that friendship to obtain things that through the formal organization would be more complicated or even impossible. To do this, hierarchical levels are often skipped, which not only creates discomfort in those who are "skipped", but can create serious problems in the operation of the company. On the other hand, if the organization prevails more frequently than the formal one, it can be a sign that something is not right with the formal structure (Maria Stock,and Schnellbaecher, 2017).

Power structure

We all know that associated with any work within a company there is a degree of authority, but it is also true that this authority must coexist with what is called individual power. Contrary to authority, this type of power is not associated to the position but the person and can be caused by factors such as seniority in the company, knowledge, contacts, information, charisma, etc.

A person who has this individual power will be able to exert influence over others. Your opinion is valued. There are also those people who have hands, that is, that their colleagues consider that they have more power because they have "contacts" at the top level in the organization (Meier,and O’Toole , 2017).

Decision structure According to the formal organization, each position has to make a series of decisions to fulfill the functions assigned to it, but when the decision is made by another person, it is organizationally annulled to whoever is responsible for executing it.

This usually happens a lot in companies, because the owners want to be the ones who make all the decisions (centralization), with which the middle managers are somewhat canceled because the rest of the staff knows that at the end who makes the decision He is the owner and not the manager (Millar, and Allen, 2018).

The organization cannot and should not try to eliminate itself, it must coexist with it, but measures must be taken so that they do not obstruct the formal organization, the formal communication channels must be complied with as much as possible.

The importance of organizational communication

In the present work, the topic of communication in organizations is addressed in a general way as a key factor for them. Since a long time ago, communication has played a very important role in the daily life of the human being; man has always been in need of communicating with his peers to express his feelings and wait for an answer, or opinion (Mills, 2017). It is a process so simple but at the same time essential for human life, which involves known elements such as sender, message, channel, receiver and feedback which takes place between two or more people, these characteristics are the essence process dynamics. Communication is a fundamental part for business success, which every business owner has to take into account, it is important to communicate with workers and encourage them to act in the same way, for many it is a challenge that is easy to hear and simple to make, but that involves different aspects to take into account since each person is a different world and even more in the business field where the human factor is the most difficult to overcome in companies, that is when communication plays a fundamental role, since it has to be done correctly and effectively (Naranjo-Valencia,  and Sanz-Valle, 2016).

Development

It is important to know that communication is inevitable since one cannot stop doing it, the human being constantly sends non-verbal messages even when we are silent, this can be reflected in gestures, postures, the expression of the face and different behaviors in the that we can identify certain attitudes. It is also important to mention that communication is irreversible, that is, the words we say can no longer be returned, that is why it plays a very important role to think before speaking, and more importantly the way we say the things.

Learning is based on communication, since the knowledge acquired is based on the interaction of one person with another in which different information, ideas, thoughts, and experiences can be transmitted, coupled with the practice of their work and the previous information that you have, thus fulfilling a communication process. On the other hand, the organizational climate has to be the right one in an organization, since it is an environment in which the worker has to unwrap on a daily basis and once again the most important factor is communication since it depends on whether a good performance is carried out within the organization. The skills to communicate are also relevant, that is why large companies see communication as a very important factor.

Some research highlights the importance of communication skills, including collaborating as a team; teach others; serve customers; lead; negotiate; work considering cultural diversity; to interview; hear; lead work meetings, and resolve conflicts. The preceding explains why about 90 percent of US companies offer some type of skills training in common

This information reveals that knowing how to communicate is even more important, even, that of aspects of knowledge. For an administrator, the development of communication skills is vital, since one of their main tasks is communication, in addition to being a career that focuses on people (Smith, K., 2016). Many companies do not give such importance to this concept, seeing themselves involved in a lack of communication that diminishes job performance over time and in this way the profits of organizations, including, for example, in educational institutions such as Universities should be in constant communication with their students to know their concerns or possible ideas for improvement to the institution and in this way to improve together, this would raise the level of compliance and confidence of the student and of course the performance, the same occurs in companies, is say, senior managers have to be in constant communication with their work team, this to let the worker know that is important and is part of the organization, this will help to not create communication barriers and that the employee is satisfied and the best of itself (Lee, and Kramer, 2016). Communication can improve mistakes and thus improve the road to success, if there is In communication, it is probable that the results are not what is desired, just as if there is poor communication, the problems can be aggravated the more they are discussed, in this way misunderstandings would be encouraged and could even generate some resentment when the people do not communicate well. Another important factor that organizations have to take into account is who will communicate with whom, so they have to establish patterns or communication networks by which information can flow, there are formal and organization (Rothaermel, 2015). The formal are those that are designed by the management itself and establish who should speak with whom to carry out a task; these networks are represented in what we know as an organizational chart which describes who is the immediate boss and who is responsible Immediate of a given task.

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