MGMT6012 Management Perspectives: Assignment 1 Case Study Answer
Subject Code: MGMT6012
Title: Management Perspectives
Assessment: Assignment One: Case Study
Reference Style: APA
The study put stress on analysing the ethical activities and management functions of Wesfarmers, which is a conglomerate organisation of Australia. For developing the case study report, secondary research is carried out for collecting information on the specific areas. Many web links, journals and books are cited for completing the task successfully. Ethical theories like utilitarian or Rule-based theory and virtue-based moral theory are used for analysing the moral acts of the company. Further, the scientific management theory and administrative management theory are applied for reviewing the management functions of Wesfarmers.
The purpose of the report is developing a case study report on the Wesfarmers organisation, operates in Australia. The study involves conducting secondary research on the organisation for collecting and analysing information and data on ethical practices and management functions. After examining the role of ethical activities and ethics and the role and validity of the management activities of Wesfarmers, the influence of social environment and policies are discussed.
The rationale for choosing research methodology
Research methodology is the technique or process used for identifying, selecting, processing and evaluating information regarding a topic. The methodology part of a paper enables readers analysing overall reliability and validity of the study(Bernard, 2017). For the present study, the secondary research method is selected due to the convenience of data collection. Primary data is collecting data directly from the respondents. However, in the present study, collecting data from the employees and managers of Wesfarmers would be difficult, as they have a busy schedule and gaining approval from the management would be a hectic decision.
On the other hand, Secondary data are those that are collected from different journals, articles, books, websites and other earlier published documents. Google search engine and Google Scholar are used for access to various websites, journals and other secondary sources. For validating the authenticity and reliability of the secondary sources, only the secure sites are selected for taking information. Further, the number of cites per book or journal is considered for ensuring their candour. Based on the abstract of the books and periodicals and the keywords, they are chosen for certifying the validity and reliability of the research. The focus is mainly put on qualitative data analysis. According to Bell, Bryman & Harley, 2018), the qualitative study refers to a securities analysis that uses subjective judgement in accordance to unquantifiable information like industry cycle, management expertise, labour relations and power of research and development. It is opposite to quantitative analysis that includes the collection of scientific or numeric information.
In this report, mainly qualitative data is collected and analysed on the ethical and management practices of Wesfarmers. Different journals and articles are used here as secondary sources. For example, from the following journals, the idea of ethical practices and management functions are considered:
Ethics Management: How to Achieve Ethical Organizations and Management? By Lillian Snellman
During the last decade, the number of organisational scandals across the world originated from conflicting interests, corruption, favouritism, bribery and other illegal activities. These activities are against corporate and business ethics. Ethics management is especially crucial for large public corporations that have a substantial impact on the social and natural environment. They are even more responsible for promoting social wellbeing. It requires Wesfarmers having responsible management for integrating by decision-making and ethical practices for ensuring ethical organisational behaviour.
Organisational Behaviour and its Role in Management of Business by Prabha Renuka and Horo Frederick
This journal talks about the function of managers. Managers focus on completing works by people by allocating resources, guiding others activities and making decisions for accomplishing organisational goals. Thus, they are accountable for the functioning of a company.
A critical review of the role of ethics and ethical practices related to the selected organisation
With the increasing number of ethical scandals, it has become clear that there is an information gap related to moral instruments that facilitate solving ethical issues. One of the significant features of the public sector is its involvedness. The complexity is the result of the particular legislative framework within which, the organisation operates. Within the public sector, moral and ethical practices play an essential role in directing decision-making, activities and behaviour of holders of civic organisations, and civil servants. Usually, the actions are based on fairness, responsibility, efficiency, transparency and no fight for interest (Snellman, 2015). Wesfarmers was founded in 1914 and since that time, it developed as the biggest listed organisation of Australia. The headquarters is in Western Australia. The company has a diverse range of business operations including outdoor living, home improvement, general merchandise, apparel, office supplies and a sectorial division with businesses in fertilisers, safety products, energy and chemicals. It has near about 490000 shareholders makes the company one of the largest employers in Australia. The aim of the company is providing a satisfactory return to the shareholders. The ethical value that supports this objective is involving fairly with the suppliers and sourcing materials sustainably and ethically. The firm also helps the communities, is concerned with the environment and acts with honesty and integrity in all its activities. The firm also maintains corporate governance policies all the businesses (Wesfarmers, 2019). In this context, utilitarian or rule-based theory looks yonder self-centredness for considering the interest of people influenced by an activity partially. The method put stress on the outcome of an event on the stakeholders. The theory identifies that trade-offs are present in decision-making. Hence, organisations need focusing on maximising benefits and minimising risks for the stakeholders. It is akin to cost-benefit analysis. It talks about the rule of ‘greatest good for the greatest number’ (Loreggia, Rossi & Venable, 2017). The theory can be applied to the ethical acts carried out by Wesfarmers. Delivering acceptable returns to the shareholders through exceptional management and financial discipline of a differentiated business portfolio is the main aim of the company. It is governed by the Wesfarmers Way that is for the business model of the organisation. It consists of the core values of openness, integrity, entrepreneurial spirit. The Wesfarmers way along with the organisational policies and Code of Conduct guide the stakeholders' behaviour, as the firm strives to attain the primary objective. The senior executives and Board of the Group try to ensure that their own decisions and activities are steady with the core values of Wesfarmers (Sustainability, 2019a). Thus, based on the tapractical theory, instead of focusing only on its benefits, Wesfarmers is also concerned with the interests of its stakeholders. As found, the company has a specific code of conducts and policies that guide the business activities of the company and thus, helps in reducing operational cost and improving efficiency.
Another theory that can be applied to the context is the virtue-based ethical theory. As per this theory, judgement is made not by a bunch of rules, but as an outcome of having those virtues or disappointments that allow selections to be made on what is ethical and holding in review wishes for something other than what helps to attain these goals. Therefore, virtue-based ethics focuses on some specific qualities that explain proper behaviour and the appropriate act to take. Like other theories, this theory does not provide a set of rules to analyse potential discussions. The goal is to conduct the right thing at the right time and at the right place in an accurate way (Lucas et al. 2016). In Wesfarmers, for correctly doing the right thing, the company sources materials in a responsible way besides working in collaboration with suppliers for promoting their environmental and social practices. The firm sources products straight from over 18000 suppliers in China, Australia, New Zealand, Bangladesh, Thailand, Vietnam, India and other nations. Although the supply chain and operations of the firm are involved, the purpose of the firm is ensuring that human rights are implicit, preserved and respected. The company expects that the stakeholders and partners followed the noble business deeds consistent with the organisational values and committed toward working toward the shared goal. The firm has its own Group-wide Ethical Sourcing Policy that establishes the minimum principles projected of the departments that sell products for resale (Sustainability, 2019b).
Considering the virtue-based theory, it can be said that the ethical behaviour of Wesfarmers ethical activities are visible from the particular qualities that the firm has regarding its sourcing and protecting human rights.
A discussion of the role and legitimacy of the management functions and the way it is affected by policies and the social environment
Some theories are there related to management that can be used for analysing the role and validity of management functions in Wesfarmers. Particular organising responsibilities include assigning tasks, grouping them into departments and the allotment of authority and resource allocation around the workplace. The process of management contains a series of activities like goals and tasks of planning, systematising, guiding, coordination and controlling (Frederick, 2014). These stages of Fayol’s theory of administrative management provide creative solutions for solving problems. Planning refers to the forecasting the future demands, making a basic action plan and deciding the goals. Hence, it is an essential activity of a manager. In Wesfarmers, the management forecasts the future risks and needs of the staffing based on which, plans are made, and approval is taken from the Board. A framework for risk management is developed that includes the detail of the predominant principles, controls that are entrenched in the risk management process, reporting system and the departments of the major risk management activities between the Group Managing Director, Board, Audit and Risk Committee and Chief Financial Officer, Group Assurance and Risk, Divisional Management. Khorasani & Almasifard (2017) stated that, after planning, organising is the next step, where human and non-human resources are brought together for performing. Commanding is the method of giving orders and directions to the employees. Coordinating means developing communication among all the departments for combining their efforts for the accomplishment of organisational objectives. Controlling refers to carrying out a comparison between the actual performance and the desired performance and identifying if there is any requirement for improvement.
Figure 1: Fayol’s administrative management theory
(Source: Khorasani & Almasifard, 2017)
For developing the risk management framework, an official directors' program and an induction program of yearly site visits to the company's operations for improving understanding of the Board of significant and emerging risks to business are conducted. A corporate planning system that demands every division was analysing the trends that are possible to influence and outline the industry, conduct scenario planning and creating a SWOT analysis. After organising, a bunch of procedures and policies for managing treasury operations like the change of interest rates and revelations to foreign currencies and financial risk developed that are to be followed by all the departments. Moreover, compliance reporting program backed by sanctioned standards and guidelines covering legal liability, environment, safety, ethical sourcing, information technology, risk identification, taxation and financial reporting controls.
In the words of Waring (2016), Taylor’s theory of scientific management focuses on enhancing economic efficiency and employee productivity. It has four principles. According to him, the ways jobs are performed require to be studied, so that new processes can be found. Employees must be trained and regularly teach for improving their ability to working with the newly adopted methods. Further, their interest must be harmonised fully for securing a strong relationship with them and finally setting up a fair performance level and paying a premium for higher performance.
Management of Wesfarmers also operates by different functions. In Wesfarmers, the Board is responsible for approving strategic way of the team, guiding and checking the control of the firm and the business based on strategic plans for teaching the core ethics of the team and supervising effective governance practices. As suggested in the scientific management theory, the company protects the interests of its shareholders besides enhancing the interests of other stakeholders comprising customer, suppliers, employees and the community. The Group Managing Director is responsible for managing everyday business operations at the firm with the support of the leadership team. The management under the supervision of the board carries out a comprehensive examination of the strategic options for improving return for the shareholders. They also implement the strategy, monitor safety performance and conduct talent management by conducting performance appraisal, providing training and rewards to the employees for improving overall productivity and efficiency (Sustainability, 2019c).
For operating a business successfully in the world of globalisation and environmental concerns, big organisations especially the public corporations need following ethics strictly. It symbolises the responsible image of the firm to all its stakeholders. Management plays a vital role in forecasting demands and risks, making plans and executing them properly. In Wesfarmers, the administration and board work together for identifying business and ethical risks and managing them accordingly.