Strategic Issues Faced By BHP Billiton-Free-Samples for Students

Question: Discuss about the various Strategic Issues faced by BHP Billiton in the last few years. Answer: Introduction BHP Billiton is one of the leading multinational companies dealing with the resource industry. The main area of functionality for the company is petroleum, metal and mining. The company is headquartered at Melbourne (Bhpbilliton.com, 2017). This is a report, which depicts the various strategic issues faced by the organization in the last few years, and strategic options that the company can avail to mitigate the problems face. The company faced a crisis at the final quarter in the fiscal year of 2015 because of the Samarco dam failure (Bhpbilliton.com, 2017). The community down streams was affected by the mining dumps, which was released due to the failure of the dam. The mining and the processing operations in Samarco were suspended due to the dam failure (Yeomans, 2017). The operation had remained closed and there is a significant uncertainty in the resumption of the operation. There are lawsuits, which have been filed against the company by various nonprofit organizations, governm ent entities and individuals and the claims made them will affect the financial condition of the company in the fiscal year of 2016 (Macalister, 2017). The remaining dump has to be contained and so the company is improving the structure of the dam. The other issues include the fluctuations in the commodity prices and uncertainty in the management and identification of the new and the existing resources. Strategic issues The company is facing issues due to the various governments polices, rules, and regulations. The company having an economic crunch due to the Samarco dam failure and the expenses the company has to pay for reconstruction and reimbursement to the affected individual and organization (Bhpbilliton.com, 2017). The environmental factors, which include the change in the climatic conditions and global warming, pose an uncertainty for the organization. The development of new technology is necessary for competitive supremacy as the company is facing stiff competition from developing countries rich in mineral resources. The company is under many restrictions due their recent history of mishaps for example like the Act of Rail Safety, which is decreasing the operational efficiency of the company (Bhpbilliton.com, 2017). These rules have enhanced the standards for traffic management and made it compulsory to suspend all non-essential works at night. The company does not have enough well trained human resources, which is hampering the overall development in the company. The sector, which is being hampered the most, is mining because of the shortage in the availability of the skilled workers (Beddie et al., 2014). The communication system of the company is not up to the mark and it can prove to be detrimental in the future growth of the company. The above-mentioned problems are the strategic issues faced by BHP Billiton in the present situation. However, out of all these issues the most important ones include the land restriction the company is facing due to the incidents that have occurred during the past few years (Macalister, 2017). The company is losing its operational efficiency due to this factor and this will give away the competitive advantage of the company. The company is also facing problems from the minimal amount of skilled workers working in the organization. The company had to undergo many mishaps, this has caused the company to lose a lot of money (Abc.net.au, 2017), and the companys reputation has been affected due to the lawsuits filed by various individuals and nonprofit organizations (Bhpbilliton.com, 2017). The reports say that the mishap in Samarco is due to the negligence and lack of monitoring of the workers (Thomson, 2017). The company had plenty of mishaps in the last few years and this indicates th at it can only happen due to the appointment of unskilled labors and their negligence. The company will be heavily affected if these accidents keep on occurring and it will destroy the reputation and goodwill, the company has acquired in the past years of its operations. The company is being monitored by all the government organizations due to the incidents and so the operational efficiency of the organization will keep decreasing if appropriate measures are not being taken. The company can sustain only if the operational efficiency is maintained and so BHP Billiton will have to take measures in order to avoid the previous circumstances faced by the company. Thus it can be deduced that the lack of skilled employees and the safety precautions in the operations are the most important factors which has to be included in the prime problems faced by the company in the previous few years Strategy options Strategic issue How to improve the safety and the health of the operations of the organization Strategic option The safety and the health of the employees should be the top priority of the company. The type of the working environment of the organization should be free from any kind of occupational illness regardless of the type of work they undertake (News.sky.com, 2017). The identification and management of the material and fatal risk is one of the critical approaches the company has to take. The company has an initiative, which believes in zero work fatalities, but in spite of that, there have been casualties so measures have to be taken to improve this policy. Methods The company will have to host safety interventions. These safety initiatives should include workshops, surveys and team talks. The company will have to identify programs, processes, key controls, systems and the tools that require improvements. The solution to these factors will have to be adopted in all the subsidiaries and branches (Ethiraj, Gambardella, Helfat, 2017). RACES framework Resources The company has made profits in this fiscal year and it has been maximized with the help of policies in the capital management (Hitt, Ireland Hoskisson, 2012). The company has enough capital resources, which will enable the company to start initiative programs in the field of safety. The company can also include the health awareness programs, which will enhance the sustainability Acceptable This investment plans may add extra burden to the company but by analyzing the overall scenario of the market the company will have to put this plan into action unless they will lose their competitive advantage in the market. Thus, it can be stated that the suggested strategy is acceptable. Coherent This plan of action is feasible considering the amount of compensation the company will have to pay for the mishaps. The strategy is coherent with the plans of the company, as the company has already taken initiatives in this field (Sakas, Vlachos Nasiopoulos, 2014). However, in the scenario the matter will have to be given utmost priority. Effective The suggested strategy is effective in the end, as it will help to regain the lost reputation of the company and increase the operational productivity and income Sustainable This strategy will definitely help in the sustainability of the company and is in alignment with the present course of the company. Strategic issue Incorporation of skilled workers is required to avoid mishaps and increase productivity of the organization. Strategic option The company should hire skilled labors having previous experience in the field of the natural resources. The ability of the workers should be assessed before hiring them into the organization. However, if the workers have no prior experience in the given genre of work they should be properly trained and then send to the site for working. The work associated with mining, extraction requires vigorous labor, and so the physical conditions of the workers should be examined beforehand so that hazardous incident can be avoided (Bhpbilliton.com, 2017). Methods The company should start training initiatives, which should include proper handling of equipments and the safety measures that has to be followed. The company should provide on the job training, which will offer them with a better understanding of the work they have been assigned. The company should also create simulation programs and safety drills, which will provide them with a better experience of the live situation and how they can avoid any kind of fatalities at the time of crisis. This will also enable them to identify a crisis in the initial stage and eventually stop a mishap from occurring. RACES framework Resources The company can hire labors from the local communities where the mines and the plants are situated. The local labor available will be cheaper and will easily adapt to the surrounding conditions. The company can import experienced workers who will monitor and guide the inexperienced workers. Acceptable The mishaps are a result of negligence and absence of skilled workers. The strategy is very acceptable as the company is incurring financial losses due to the mishaps in the past few years. The company will have to put an end such hazardous incidents and that is why they will have to approve this strategy. Coherent The strategy is coherent with the companys plan of action as the employees are the main assets and maintaining a quality and skilled sets of workers will help the company in the long run (Madsen, Walker, 2015). Effective The strategy is effective, as increase in skilled workers will increment the operational productivity of the company. Moreover, the increment in skilled workers will decrease the chances of unfortunate incidents in the organization. Sustainable The company will have to follow this plan of action if they want to remain sustainable in the market. The companys operational activities have already been minimized due to various incidents. Thus, the areas of investment, which is providing the maximum return, will have to enhance in order to compensate the incurred losses. Best strategy option The above-mentioned strategic options are both interlinked and so both will have to be executed in order to the reach the desired goal of the company. The options mentioned can be merged in such a way that the operational cost will be reduced and the operational revenue will be increased (Hill, Jones Schilling, 2014). The company can conduct joint workshops, which will provide information regarding the safety precaution, which will have to be taken while working in the mines and the dams. The existing workers will have to be reminded about the fatalities than can occur during the work and the new recruits will gain knowledge about the dos and donts in their respective field of work. Moreover, the experienced workers will share their insights about their respective areas of expertise, which will help the relatively new and the new employees to align their work accordingly (Eden Ackermann, 2013). The company will have to conduct surveys, which will help them identify the various othe r ways to mitigate the risk of fatality and safety measures taken by other competitive rivals. The company will have to start simulators and conduct safety drills, which will improve the coordination between the workers during the time of crisis. The simulators should be installed in such a way that both the engineers and workers from other areas of functionality can use it (Rothaermel, 2015). The safety drills should be based on live situations, which the employees will have to go through on a daily basis. The emergency safety drills will have to be conducted on a regular basis so that the employees can avert any hazardous situation with the help of their acquired training. The new workers who have not faced any crisis will have a practice ground where they can try out new ideas of avoiding the catastrophe (David David, 2016). There is a basic procedure for following the safety drills but not all the scenarios can be simulated so continuous drills will improve their presence of mind and help avoid disastrous situations. The company has to face a lot of allegations in the past years and they have incurred losses due the emergence of frequent mishaps. The mishaps indicate the lack of skilled workers in the respective mining fields and so recruitment of fresh skilled labors is important for the sustainability of the company. The company should provide training regarding the use of the equipments and the older equipments should be changed. The technological advancements have caused the emergence of new equipments and handling of those equipments with proper training could prove to be hazardous. The company cannot fulfill the entire operational requirement by recruiting fresh local workers from the respective neighboring areas and some skilled workers will have to be imported from various places so that the productivity can be maintained (Bhpbilliton.com. 2017). The health of the organization depends on the health of the employees and so workshops should be conducted for the employees. The employees should be thoroughly checked so that the fatalities can be avoided and the new recruits should be thoroughly checked so that to make sure that they are fit to work in the given working environment. The regular checkups of the employees will ensure their fitness and capabilities of working in a stressed environment. The new recruits after receiving the training in the workshops and simulators should go through a period of on job training. The recruits may have the theoretical knowledge about the working scenario but unless and until they experience it on their own, they will never gain the practical knowledge and experience of working in a real scenario (Kor, Mesko, 2013). The on job training will help the recruits to grow and understand the difference between the simulation and the real life scenario. The on job training will help the new recruits to get accustomed to the daily challenges and the situations they will have to face (Joyce, Bryson Holzer, 2014). The above-discussed strategies are the options that the company should implement for improving the operational productivity and there are no such strategic options, which should be rejected. Conclusion Thus, it can be concluded that the two main potential strategies, which the company needs to implement, are improvement in the safety and the health of the operations and recruitment of skilled workers to improve the operational efficiency. The reputation of BHP Billiton has been hampered due to the various mishaps in the past few years. The two examples of that being the Samarco dam failure and the fatality in the iron ore operations in Western Australia. There are several other instances where there has been a fatality so the company will have to take drastic measures if they want to remain sustainable. The company being one of the global leaders in mining and metal industry is losing their competitive advantage in the market. The above-mentioned are feasible and the company has maintained a balanced capital structure, which will enable it to add these programs in to the current curriculum. However, the company will face some issues in incorporating these changes in the organizatio n and transition will take some time. However, the issues faced can tactfully as it is in alignment with the future goals set by the company. Reference Abc.net.au. (2017).BHP-owned Samarco agrees to pay Brazil Government $3.2 billion for dam collapse.ABC News. Retrieved 13 June 2017, from https://www.abc.net.au/news/2016-03-03/samarco-agrees-to-pay-brazil-government-for-dam-collapse/7216164 Beddie, F., Creaser, M., Hargreaves, J., Ong, A. (2014).Readiness to meet demand for skills: a study of five growth industries. National Centre for Vocational Education Research. Bhpbilliton.com., (2017).BHP Billiton | BHP Billiton outlines strategy to grow value.BHP Billiton. 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