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Organizational Structure of H&R Group

Discuss About The European Journal Of Operational Research.

H&R Group is a leading manufacturer of mineral oil such as white oils, paraffin waxes, petroleum jellies, motor oils, lubricants, process oils, ozone protection waxes, etc. Company is based in Hamburg, Germany. Company is engaged in various industries such as refineries, speciality production plants, etc. Operations of organization are expanded at international level and it situated in Africa, Asia, America, Australia, New Zealand, and Europe (H&R Group, 2018).

H&R Australia has various operations including distribution and warehousing in New Zealand and in Australia. Company’s head office is situated at Laverton North in the west of Melbourne. There, organization operates its primary manufacturing plant, warehouse, technical service department and customer service centres are located.

In relevance with the organizational structure, it helps the organization to manage its activities in a systematic manner along with directing effective ways so that the desired goals and objectives could be attained. With the help of an effective organizational structure, organization could easily determine the faulty areas through which performance is getting declined. With the help of this analysis, organization could adopt advanced and effective measures so that the errors could be mitigated and performance of the organization could be uplifted. H&R started as a small company in 1919 in Hamburg, Germany and from then, company has successfully made its effective place in the international market in several industries. Their major product offerings include white oils, base oils, plasticizers, etc. In Australia, major functionalities of organization is providing technical services, customer services and warehousing related services. Company is almost 100 year old but they have been always as per changing business environment. Organization has adopted latest technologies in order to make our refineries up to date as per latest trends as well as to serve in attractive niche markets (Galliers & Leidner, 2014). In order to manage large number of operations in an effective manner so that the desired goals and objectives could be accomplished, it is required for the management of organization to adopt advanced measures through which regular evaluation and analysis could be conducted for the purpose of enhancing organizational performance regularly.


As per Galliers & Leidner (2014), apart from the organizational structure, information technology has also developed an effective place in business environment. H&M Australia provides services such as timber, food, pharmaceutical, carton, telecommunication, etc. and in order to make these services as per customer’s requirements, organization has adopted latest information technology measures. This has also helped the organization to enhance its reliability over target audience along with uplifting customer satisfaction. With the help of information technology, organization provides customisation option to its customers and renders exactly the same services as per customer’s requirements. With the help of information technology measures, organization has uplifted its performance in an effective manner along with making better customer relations. Customer could directly connect with the organization and share its views and suggestions with the organization with regards to their services rendered. It helps the organization to improvise its services along with moving towards automation as per latest trends of business environment (Hunter, 2010).

Major Features of Organizational Structure of H&R Australia

This assessment will focus over requirement of information technology in H&R Group along with the requirement of accounting software so that accounts, ledgers and other financial statements could be managed in an appropriate manner. Further, this assessment will move towards analysis of organizational structure and the strategic management policies in accordance with the functionalities of organization.

Organizational structure of H&R group is one of the crucial factors contributing towards organizational success and growth. It also influences organization towards innovation and development with regards to enhance its service’s efficiency. Organization structure is majorly responsible for its success as well as it is also responsible for organizational failure. In relation with the scenario of H&R Australia, traditional hierarchy is being followed along with adopting unique features from other types of organizational structure (Kavanagh & Johnson, 2017). Mainly organizational success and growth is the result of its key employees’ talent, knowledge but organizational structure has also contributed towards organizational expansion and success across the globe. As per Kavanagh & Johnson (2017), management of organization continuously amend its operations so that the market requirements as well as to cope up with latest business trends. Primary strength of their structure is that it is effective enough to support business performance in order to ensure leadership in the industry. However, further changes have been applied in the business with the motive of enhancing organizational performance by improving its capabilities and adopting innovative practices. Rapid improvements and creative innovative strategies have made the organization to stand on the leading position as well as by fulfilling target audience’s needs and wants.

  • Scope of improvement; and
  • Increase in the services (Morecroft, 2015).

With the help of these characteristics in organizational structure, organization ha easily uplifted its market share in the global market and this is the reason, organization is known as the leading manufacturer of mineral oil such as white oils, paraffin waxes, petroleum jellies, motor oils, lubricants, process oils, ozone protection waxes, etc.

Apart from these benefits, there are several challenges and issues which an organization needs to face while performing at international level. The major challenge which occurs while operating at international level is rules, regulations, laws, legal compliances, etc. If any of this compliance will be ignored, organizational performance may get affected. Thus, H&R’s organizational structure has appropriate strengths to control all subsidiaries’ operations from headquarter only. Apart from this, there are sundry other challenges such as irregularity in performance of tasks, poor quality services as well as appointment of inefficient employees. Under an effective organizational structure, it is required for an organization to meet its target audience’s needs and for this, major things required is efficiency of employees. In a service-based industry such as H&R Australia, it is required for the organization to appoint appropriate, knowledgeable, talented as well as experienced employees who could fulfil customer’s needs as well as be able to customise the services as per customer’s requirements. Lack of communication strategies, lack of managerial control and slow process of transferring information from headquarters to subsidiary companies are another factors through which organizational performance get affected in negative manner (Pearlson, Saunders & Galletta, 2016). In order to avoid these glitches, errors and deficiencies amongst several procedures, management of organization has adopted traditional type of organizational structure along with regular amendments so that the desired goals and objectives could be attained.

Operational Issues

While performing organizational functionalities, major factors which affect performance of the organization are external environmental forces. These forces are political, technical, environmental, economic and social factors which have strong impact over organizational performance. If these factors will be in favour of organizational functionalities and policies, organization will grow otherwise, it will decrease organizational performance. Dynamic business environment, constant changing customer’s needs and competition are major factors which act as operational issues and affect organizational performance. Competition plays vital role in enhancing as well as in decreasing organizational performance and act as the major operational issue (O'Neill, Beauvais & Scholl, 2016). Competition is the key to innovation and adaptation of unique measures to make its products unique and distinct from competitors. In relevance with this, customer get benefits because to gain competitive advantage, every company engaged in the competitive environment adopts several measures so as to increase its product offerings and to make its separate image from its competitors. Apart from this, price, quality of the products and services plays crucial role in order to enhance organizational performance. New entrants in the industry acts as the threat for existing companies because they provide better quality services at low rates with the objective of setting up market share. With this regard, H&R Australia requires to adopt defending strategies so that the acquired position could be attained along with mitigating the issues with the objective of gaining competitive advantage and to maintain its leading position in the market (Fine, 2018).

According to Mehta, et. al., (2016) there are sundry aspects of the organizational culture and their impact of organizational performance. These aspects have negative as well as positive influence over and to reduce the impact of these factors, organization is required to adopt advanced measures to cope up with the changing business’ needs (Padgurskas, et. al., 2016).

As per Nagaraj & Farinato (2016), with the rise in information technology, every field is adopting this technique to move towards automation along with enhancing organizational efficiencies. These measures are effective enough to gain competitive advantage, in improvising organizational performance along with improving the effectiveness of their products. With regards to the operations of H&R Australia, software technology is the major and most effective weapon with the objective of enhancing organizational performance along with acquiring competitive advantage. With the help of software, organization would easily be move towards automation which will reduce the consumption of time as well as accomplishment of tasks (Seo, 2013). Performance could easily be uplifted using information technology and majorly the fields which require improvement in relation with satisfying target customer’s needs as well as making organizational functionalities effective as well as error free.

Primary values of H&R Group are to serve quality services along with proactive approaches of environment protection and safety. This has helped the organization to make its unique position in the target market along with developing reliability (Tarhini, Ammar & Tarhini, 2015).

Figure 1: Sales flowchart of H&R Australia.

This image shows the sales procedure of H&R Australia. This procedure shows the booking of customer regarding availing services, following is the explanation regarding sales procedure:

  • In the first stage, customer contact order department of the organization and requirements in relation with the quantity required needs to be filled in reacquisition form. If purchase requisition form gets passed and verified by the sales team, customers are asked for payment and for the time duration for which warehousing or any type of services are required (Tasevska, Damij & Damij, 2014).
  • After asking payment and other details, if customer agrees to pay the asked amount, invoice is being made for the particular service; otherwise negotiation is not done at the workplace of H&R Group.
  • For the time period, customer pays the organization to avail the service, all type of facilities are being provided and before completion of the time period, it is asked by the customer whether he wants to renew it or wants to end after completion of time period (Yeh & Xu, 2013).

According to Zeng & Skibniewski (2013), due to lack of control, various issues and challenges arise within workplace. In relevance with this scenario, it has been analysed that H&R Australia does not have appropriate accounting measures. This is affecting organizational performance along with irregularity in maintaining accounts and recording transactions. Organization was using traditional accounting measures and chances of error and fraud is more in this system in comparison with the accounting software. This software are effective enough to record daily transactions, maintain ledgers, develop account books along with making financial statements in an effective manner. Imposing control over using accounting software is an easy task and management could privatise the access and impose limitations over using advance features of software (Ha & Ahn, 2014). This will help the organization to gain better outcomes as compared to the previous accounting measure. Below scenarios showcase issues faced by organization due to lack of control:

  • Maintaining quality of the services and products rendered. Due to international level operations, headquarter could not appoint an employee only for keeping eye on the functionalities of subsidiaries. Software technology and other advanced measures will easily help the organization to reduce the impact of these factors.
  • Traditional system of accounting leads to generate inappropriate outcomes. Chances of fraud and unauthorised access of third party increases.
  • Apart from this, adaptation of automation, software, and other informational technology measures, organization needs to face several other challenges and issues such as leakage of data, unauthorised access, etc. (Hoch & Dulebohn, 2013).

Organization will be able to record its daily transactions with ease as well as in effective manner. Recording initial entries in accounting software leads to make all further books of accounts automatically. This reduces efforts as well as also saves time. In comparison with the manual accounting technique, a separate team is required to maintain accounts for every party as well as to record daily basis transactions. Chance of errors and miscalculation, fraud, etc. was also high. After introduction of software accounting measures, organization is required to maintain a separate team for accounts but still, it has enhanced whole organizational efficiency. With the help of this, organization could showcase its clear as well as transparent picture amongst its key customers, investors as well as other stakeholders. Organization could also raise high investments from public by showcasing the last year’s profit and dividend distributed amongst the shareholders with just click in accounting software (Kurbel, 2016).

H&R acts as the leading manufacturer of mineral oil, lubricants and several other products and services. This has helped the organization to expand its business in international market. Today, organization is operating in various parts of the globe such as Asia, Europe, Australia, New Zealand, etc. In relevance with the market size of organization, it has covered more than 60% market share in Australia and New Zealand. Our strength in hydrocarbon based emulsions, with particular emphasis on wax based emulsions, with state of the art manufacturing equipment, enables us to lead the Australasian market in developing and supporting this technology.

Huber Engineered Martials, Minakem, Hansa Group, etc. are prime players of mineral oil producing industry along with providing warehousing and distributing services. All companies’ business is expanded at international level. In relation with this, organization is required to perform its operations in accordance with the maintaining leading position in the target market for a longer period of time (Craft.co, 2018).

Before adaptation of information technology and ERP framework for accounting measures and for other purpose in worjplace, appropriate gaps and challenges must be recognised. This helps the organization to build an effective framework in order to improvise organizational performance along with gaining competitive advantage (Hoch & Dulebohn, 2013).

From the aforesaid information, it can be conclude that H&R Australia’s major product offerings include white oils, base oils, plasticizers, etc. In Australia, major functionalities of organization is providing technical services, customer services and warehousing related services. Company is almost 100 year old but they have been always as per changing business environment. Organization has adopted latest technologies in order to make our refineries up to date as per latest trends as well as to serve in attractive niche markets. In order to manage large number of operations in an effective manner so that the desired goals and objectives could be accomplished, it is required for the management of organization to adopt advanced measures through which regular evaluation and analysis could be conducted for the purpose of enhancing organizational performance regularly.

References

Craft.co. 2018. H&R Group's competitors. [Online]. Accessed from: https://craft.co/h-r-group/competitors. [8th May 2018].

Fine, B., 2018. The political economy of South Africa: From minerals-energy complex to industrialisation. Routledge.

Galliers, R.D. and Leidner, D.E. eds., 2014. Strategic information management: challenges and strategies in managing information systems. Routledge.

H&R Group. 2018. H&R Australia-New Zealand. [Online]. Accessed from: https://hur.com/en/hur-ag/locations/australia-new-zealand/hr-anz-pty-ltd/. [8th May 2018].

Ha, Y.M. and  , H.J., 2014. Factors affecting the performance of Enterprise Resource Planning (ERP) systems in the post-implementation stage. Behaviour & Information Technology, 33(10), pp.1065-1081.

Hoch, J.E. and Dulebohn, J.H., 2013. Shared leadership in enterprise resource planning and human resource management system implementation. Human Resource Management Review, 23(1), pp.114-125.

Hunter, M. G., 2010, “Strategic Information Systems: Concepts, Methodologies, Tools, and Applications”, University of Lethbridge, Canada, vol. 1, pp. 315-332.

Kavanagh, M.J. and Johnson, R.D. eds., 2017. Human resource information systems: Basics, applications, and future directions. Sage Publications.

Kurbel, K.E., 2016. Enterprise Resource Planning And Supply Chain Management. Springer-Verlag Berlin An.

Mehta, D.M., Kundu, P., Chowdhury, A., Lakhiani, V.K. and Jhala, A.S., 2016. A review of critical evaluation of natural ester vis-a-vis mineral oil insulating liquid for use in transformers: Part II. IEEE Transactions on Dielectrics and Electrical Insulation, 23(3), pp.1705-1712.

Morecroft, J. D. 2015. Strategic modelling and business dynamics: a feedback systems approach. John Wiley & Sons.

Nagaraj, D.R. and Farinato, R.S., 2016. Evolution of flotation chemistry and chemicals: A century of innovations and the lingering challenges. Minerals Engineering, 96, pp.2-14.

O'Neill, J.W., Beauvais, L.L. and Scholl, R.W., 2016. The use of organizational culture and structure to guide strategic behavior: An information processing perspective. Journal of Behavioral and Applied Management, 2(2).

Padgurskas, J., Rukuiža, R., Meškinis, A., Kreivaitis, R. and Spruogis, B., 2016. Influence of manufacturing methods on the tribological properties of rapeseed oil lubricants. Transport, 31(1), pp.56-62.

Pearlson, K.E., Saunders, C.S. and Galletta, D.F., 2016. Managing and Using Information Systems, Binder Ready Version: A Strategic Approach. John Wiley & Sons.

Seo, G., 2013. Challenges in implementing enterprise resource planning (ERP) system in large organizations: similarities and differences between corporate and university environment (Doctoral dissertation, Massachusetts Institute of Technology).

Tarhini, A., Ammar, H. and Tarhini, T., 2015. Analysis of the critical success factors for enterprise resource planning implementation from stakeholders’ perspective: A systematic review. International Business Research, 8(4), p.25.

Tasevska, F., Damij, T. and Damij, N., 2014. Project planning practices based on enterprise resource planning systems in small and medium enterprises—A case study from the Republic of Macedonia. International journal of project management, 32(3), pp.529-539.

Yeh, C.H. and Xu, Y., 2013. Managing critical success strategies for an enterprise resource planning project. European Journal of Operational Research, 230(3), pp.604-614.

Zeng, Y. and Skibniewski, M.J., 2013. Risk assessment for enterprise resource planning (ERP) system implementations: a fault tree analysis approach. Enterprise Information Systems, 7(3), pp.332-353.

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