Discuss about the Organizational Structure for Australian Agricultural Company Ltd.
Introduction to Report
Structure and leadership styles of a company play an important role in effective management of its business operations. Through this, the company is able to develop and manage its practices and processes effectively so that it can generate positive outcomes (Abdelgawad, 2015). This report is completely focused on analysis of different organizational practices of Australian Agricultural Company Ltd. (AAC). AAC is one of the largest organizations in Australian agriculture industry that is ranked at 523 among the best companies in the country (Kalkine, 2017). The report includes the discussion about company’s organizational structure and leadership styles. Moreover, it focuses on major strategies of the company which it uses within Australia and in foreign markets. At the end, comments are made on company’s strategy.
Industry and Company Description
Australia is one of the largest agriculture producers and exporters all over the world. Agriculture sector covers a large market Australian market. The country generates over $155 billion per year from agriculture and other related segments and it has 12% part of Gross Domestic Product (GDP). Australian farmers have around 136,000 farms that cover 60% land of country (Bloomberg, 2017). There is a combination of irrigation and dry land agriculture. Among all the segments, beef sector is the major agriculture sector. Australia is second largest beef exporter worldwide. There are various firms in the Australian agriculture industry such as Kidman and Co., Australian Agricultural Company Ltd. and NAPCO, Consolidated Pastoral Company etc.
The Australia Agricultural Company (AAC) is an Australian organization that owns and operates farms and feedlots covering approximately 7 million hectares of land in Northern and Queensland, around 1% of land mass of Australia (Bloomberg, 2017). It is a public company that is operating its business as one of the top companies in Australia. This company produces most of its revenues from the meat processing segment. The firm was founded in the year 1824 as a land development corporation through the support of British Parliament’s 1,000,000 acres in Port Stephens of New South Wales (Bloomberg, 2017). The organization is one of the largest producer of agricultural and beef products. It is committed in different processes of grazing and farming properties, breeding, growing and offering beef cattle. In addition to this, it also offers dry land, wheat, irrigated cotton, chickpeas and sorghum. It sells its products in the market under different brands like Kobe Cuisine, Takumi, Wagyu, Master Kobe and Premium Beef. Currently, it operates beef processing and other operations across Queensland, Western Australia, New South Wales and Northern Territory (Dowd, et al, 2014).
In today’s competitive business world, each and every organization needs to develop a structure to survive under intense completion situations. With a systematic structure, company has clarity about its goals and emphasis that each and every person employed in the company is aware about their tasks and responsibilities towards organization. Company’s structure develops a smooth flow of two way communication between seniors and sub-ordinates (Goldman, Scott, and Follman, 2015).
Australian Agricultural Company has developed a systematic organizational structure that assists the company to manage roles and responsibilities of its employees. In its business operations, Australian Agricultural Company follows a divisional type of company structure because it has spread its operations in several locations. Divisional organizational structure is generally applied by large organizations which carry out their businesses across many geographical locations (Reardon, 2012). This type of structure includes various teams aligned which are emphasized on a single product or service line.
Australian Agricultural Company is operating its business as large-scale company so divisional organizational structure is the best suited structure. It assists the organization to separate a large team into different semi-independent teams. These teams are focused and self-administered on the agricultural and beef processing processes of AAC’s business. The above-diagram shows different divisions of AAC which are headed by its chairman. The CEO of organization is Mr. Jason Strong who is officially managing director of the company.
The primary reason is why the AAC adopts divisional company structure because it allows the firm to emphasize on its product line in different locations (Long, 2014). It provides the company a roadmap to attain predetermined goals because it assists in developing an effective system for communication flow across different levels of company. Moreover, it defines the delegation of authority and degree of control. The company has spread its operations in different geographic locations like Queensland, Western Australia, New South Wales and Northern Territory so functional structure is not a viable option for this company. Functional structure offers a limited extent of control while divisional structure offers the AAC higher degree of control because of semi-autonomous behavior of divisions (O'Neill, Beauvais and Scholl, 2016). Thus, divisional type of company’s structure contributes AAC to the growth and expansion because it accelerates the growth of all divisions and teams. Additionally, it also supports the organization to make fast decisions in different divisions and levels.
Leadership style is an approach and manner of giving direction, applying plans and inspiring people. In a process, leadership includes setting the vision, communicating the vision with the staff so that they can follow this voluntarily. In an organization, leadership is the process of giving information and processes through which the vision and mission of organization can be approached. Adoption of an effective leadership style can assists the organization to improve the level of coordination and balance among staff members and other stakeholders (Iqbal, Anwar, and Haider, 2015).
The leaders at Australian Agricultural Company adopt democratic leadership style that assists them to lead their team members effectively. Democratic leadership is also known as participative leadership. It can be defined as a leadership style where a leader communicates his decision making competencies with other team members by motivating them to contribute the organization by giving their valuable inputs (Moon, 2010). This leadership style is adopted on the basis of a principle that organization should give an equal opportunity to each and every team member.
After analyzing the management processes and leadership at AAC, it can be stated that Australian Agricultural Company follows democratic leadership style because the leaders at AAC provide equal opportunity to all team members who are coming from different culture and background (Daft, 2014). These people have different skills and abilities to build a responsible team. This organization has set an organizational culture that motivates its team members to implement their unique abilities, skills, talent to enhance the overall performance of AAC. The company promotes a complete workplace which welcomes diversity as a major component of its work culture. Due to this, the chosen organization has a wide history of development and promotion of its employees. In addition to this, it involves both the management and employees in the decision making process of business (Moon, 2010). The core value of AAC focuses on encouraging its people to work with the management in each and every part of company. The leaders at AAC have the sense of responsibility towards its employees and other people. It encourages the employees to adopt safe working techniques. The leadership style of AAC is totally focused on enhancing the team work so that they can attain predetermined vision and goals of organization.
In this way, the leaders at Australian Agricultural Company implement democratic type of leadership style that assists the company to share its goals and vision effectively. Ultimately, it enables the organization to attain them strategically (Teles, 2015).
Australian Agricultural Company has adopted different strategies to operate its business operations in and outside Australia. These strategies assist the organization to attain its objectives and gain competitive advantage in Australian agriculture industry. The shift of company from low worth cattle firm to supply chain focused beef producer and exporter is due to changes in its major strategies (Tannenbaum, Weschler and Massarik, 2013). The transformation in its strategies has paid off and led the organization towards growth and success. AAC has implemented various strategies which are given below:
Australian Agricultural Company has adopted an effective corporate strategy. It has readapted its corporate strategy by increasing the value of their cattle reducing their live sales and focus on processing their prominent beef. The organization has made the decision to sell more Wagyu and Shortfed beef and it is able to maintain stable breeding flock. These analyses brought about a positive effect on the business operations of AAC. By implementing this strategy, the company is able to increase its sales and revenues. In the year 2015, sales of beef accounted for 59% of the total revenues. In year 2016, this percentage has been increased and accounted for 88% of the total revenues (Kalkine, 2017).
To make its operations smoother, Australian Agricultural Company has implemented effective operations strategies. New operation strategy of the company has been supported by the continuous enhancement in its operations. It has made a large investment to make its supply chain network stronger. In addition to this, the innovation team of AAC works effectively with the bull breeding department to operate the breeding program at international levels (Cummings and Worley, 2014). This team is using very innovative processes and tools to ensure that higher quality is assessed with the maximum accuracy possible under a large production system. This strategy has enhanced the operations and production of Australian Agricultural Company in both domestic and international markets.
In addition to above strategies, AAC has made the decision to diversify its strategy to move from production of cattle and emphasis on vertical integration of beef processing (Landrum, Gardner and Boje, 2014). It assists the organization to succeed the processing across to global markets especially in Asian markets.
Property Development and Corporate Social Responsibility
AAC develops its plans by understanding their responsibilities towards company and environment. It sensibly chalks out its plans by considering the facts like capacity of natural resources. Moreover, it always complies with the rules and regulations established by government. As a major component of corporate social responsibility, the staff of AAC participates in society and regional committees. It works to enhance the relationships with community and walk together with research groups, government and other associations which emphasize on natural resources and enhance viable agriculture (Morschett, Schramm-Klein, and Zentes, 2015).
In this way, Australian Agricultural Company adopts effective strategies so that it can improve its operations and attain its predetermined objectives. These strategies assist the organization to increase its revenues. By using them, the firm is able to achieve more competitive edge against its major competing brands in Australian Agricultural industry.
Comment on Structure and Strategies
Currently, the chosen organization owns around 70000 square kilometers of land in Queensland and Northern Territory that is 1% of the total landmass of Australia (Kalkine, 2017). The company is able to maintain a livestock herd of 50,000 heads through farms, feedlots and properties (Grey, Emer and Sheng, 2014). Looking at the size of organization and its locations all over Australia under different divisions like breeding, cultivating grains and crops, cattle to support the cattle production, it can be stated that divisional company structure is working well as it assisted AAC to establish a framework to describe the tasks and responsibilities of employees. This structure enabled the company to focus on its goals via delegation of authority. The above-given company structure has established an effective flow of communication and fast decision making process.
Considering the advancement in the technology and competition, AAC has adopted changes and strategies within agricultural industry. The company has implemented advanced strategies to gain competitive edge against competing brands. It has made investment in the developing genetics of cattle breed. It has combined its divisions to improve the supply chain management process. The structure and strategies of the company has grown up AAC to become a largest beef producer in Australia (Kalkine, 2017).
From the above report, it can be concluded that Australian Agricultural Company is one of the largest beef processing firm in Australia. The company is primarily emphasized on exporting high quality beef brand to different nations. It has applied divisional organizational structure because it enables an effective flow of communication among different levels of company. By using democratic leadership style, the organization encourages the team members to participate in the decision making process. To sustain in the competitive and changing environment, AAC has adopted effective strategies. These strategies have improved its production system, cattle breeding and genetics techniques.
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