BHP Billiton: Executive Summary
Explain the strategic role of operations used by BHP Billiton both in Australia and globally and discuss the impact of three (3) influences on BHP Billiton’s business, one of which MUST be corporate social responsibility.
Executive Summary:
BHP Billiton is the largest global mining company, operating in approximately 25 countries employing around 38,000 workers in more than 100 operations. BHP Billiton’s main focus is producing energy and mining materials that are beneficial to society’s way of life. BHP Billiton resources and provides raw materials to industries, including, aluminium, energy coal, and metallurgical coal, copper, manganese, iron ore, uranium, nickel, silver, titanium minerals and have sustainable interest in oil, gas, …show more content…
liquefied natural gas, and diamonds. “We are a leading global resources company. Our purpose is to create long-term shareholder value through the discovery, acquisition, development and marketing of natural resources.”
The strategic role of operations, used by BHP Billiton both in Australia and globally and the influences on the role of operations, are clearly discussed throughout the following report. Influences such as:
Technology and its impact
Corporate social responsibility
Legal regulations
Financial Status
Cost Leadership
BHP are constantly looking to lower their costs annually without affecting the quality of the end product and without affecting the productivity between each year. The new CEO Andrew Mackenzie states that based on their last half yearly net profit which has fallen a whole 58% to “US4.2 billion. This has made the need for cost cutting a priority, We are going to go from growth rates in minerals demand of 15 to 20 per cent a year to 2 to 4 per cent a year," he said.
Technology:
BHP Billiton’s use of technology within their mining constructions influences their productivity. The advances in technology have created the potential for higher productivity with lower costs. Advancing technology is important for operations. They constantly update their strategies and focus on improving productivity to keep ahead of the competition.
BHP Billiton operates multiple sources of machinery for each job that contributes to the end products. Technology such as, the world’s largest train; the iron ore trains, ships 800-tonne EX8000 shovels, computer controlling systems etc. has a direct impact on the level of performance operations can achieve.
These sources of technology contribute to the positive influences of BHP Billiton to create higher productivity with lower costs. As technology advances in machinery for the mining industry the impact on BHP Billiton’s productivity is higher and they are demonstrating sufficient ways to produce the resources to create the final product. The technology that has this positive effect can also have a slight negative effect on the company if not handled correctly. The machinery used within the company requires staff to operate it, these uses in technology require in depth training for staff members operating it. This can take time, costing the company money that could be spent in other areas of the process. Though there is this slight downfall with constantly having new technology produced and introduced to the company requiring more money spent on training. The higher the productivity, the more profit is produced which brings a positive result to BHP Billiton.
Financial Influences
BHP has a risk of failing to discover new reserves and also to maintain existing reserves. Failing to do so would negatively impact BHP’s financial status and would result in failing to keep up with the high demand of their clients. BHP Billiton’s financial conditions are derived from the ability to replace existing reserves and maintain the reserve globally that BHP Billiton hold.
The price of commodities is based on the level of reserves of the world market and the fluctuations can negatively affect the price BHP Billiton can sell their oil, gas, minerals and other products. This provides a level of uncertainty and must be factored into their processes.
Corporate Social Responsibility:
BHP Billiton stands by the 5 value systems, Sustainability, Integrity, Respect, Performance, Simplicity and Accountability. BHP Billiton claims that the values are closely tied to their Corporate Social Responsibility program and how they plan to achieve these goals. BHP Billiton’s policies for corporate social responsibility has a zero tolerance requirements policy listed below:
No child labour: no children under the age of 15 may be hired and are to complete the compulsory education requirements according to applicable local laws.
Forced or compulsory labour: No forced labour on any employee of BHP Billiton may be enforced; the company follows the regulations of human rights and other legal obligations.
Inhumane treatment of employees: BHP Billiton must create a safe environment for employees and treat all workers with respect and dignity.
Living wage: All benefits and wages for employees must at least follow the minimum legal wage.
Workplace health and safety: The supplier must follow all regulations according to OHS and other health and safety policies depending on local policies.
Freedom of association: The supplier must keep an open mind towards all representatives and consider all legitimate activities of trade unions. There must be no discriminative or bias nature of business.
World Heritage sites and IUCN Protected Areas: “Materials must not be sourced from World Heritage listed sites or International Union for Conservation of Nature Protected …show more content…
Areas.”
Biofuels: Biofuels must only be sourced from global companies that follow the regulations and standards for the sustainable sourcing of biofuels.
Corruption, bribery and extortion: BHP Billiton has a strict policy that bribery on behalf of BHP Billiton is forbidden. Corruption, bribery and extortion from business dealings including third party’s on behalf of BHP Billiton or any other suppliers who fit that description.
Compliance with laws: The supplier must follow all legal requirements or show the intent to follow these rules under the business’ conduct.
Non-discrimination: Suppliers must ensure that all employees have a workplace environment where all workers are treated fairly and each individual is hired based on merit.
BHP Billiton also lists the necessities of local interpretation according to corporate social responsibility; these include, indigenous rights, making sure the supplier follows the policies of BHP Billiton’s and that they maintain respect and dignity to all walks of life.
Protection of the environment; this policy must be followed by the supplier by operating in a manner that follows the regulations of environmental law and keeping up with the standards of these laws.
Legal:
BHP Billiton’s assets are split between other companies such as Global Ethics Panel (GEP) and HSEG; therefore risking the non-controlled assets managed by other companies who may not follow the operational standards and legal policies run by BHP Billiton. These different management styles can potentially cause controversy due to failure of equivalent standards and could lead to higher costs of production and reduce productivity, therefore having a negative effect on its reputation and
results.
International & Global Strategic Plan
BHP Billiton has a strategic plan in place for its operations and profitability scheme set out to produce the best products with the highest income and lowest costs.
BHP Billiton’s strategy is based on the idea of not relying on one commodity or currency for their businesses profitability. This plan means that BHP Billiton is able to change and be flexible during economic cycles. Through this plan BHP Billiton’s global status within 25 different countries operating 100 separate projects, are able to create these separate commodities between each country. They are dedicated to making use of the community and local workers to help economic status and involve the local community who are passionate about their land and the operations.
Internationally BHP Billiton has its main reserve within Western Australia where they are employing thousand of local Australians and are main contributors in sustaining the employment rate in Australia.
Global Locations
Summary
BHP Billiton is the leading company within the mining industry both nationally and globally. Just like every other business BHP Billiton has negative and positive influences. As seen in this report there are many different factors that operate in a business of this magnitude to successfully produce their end product. There is a fine balance to maintain in the three main areas of operation; legal, corporate social responsibility and financial management in order to maintain growth, profitability.
Bibliography:
BHP Billiton | Company profile & Corporate Social Responsibility . 2013. BHP Billiton | Company profile & Corporate Social Responsibility . [ONLINE] Available at: http://www.bhpbilliton.com/HOME/ABOUTUS/OURCOMPANY/Pages/default.aspx. [Accessed 25 November 2013].
. 2013. . [ONLINE] Available at: http://www.ecosmagazine.com/?act=view_file&file_id=EC138p20.pdf. [Accessed 28 November 2013].
BHP Billiton | Code of Business Conduct . 2013. BHP Billiton | Code of Business Conduct . [ONLINE] Available at: http://www.bhpbilliton.com/home/aboutus/ourcompany/Pages/codeofbusconduct.aspx. [Accessed 25 November 2013].
New BHP boss says cost cutting will continue - ABC News (Australian Broadcasting Corporation). 2013. New BHP boss says cost cutting will continue - ABC News (Australian Broadcasting Corporation). [ONLINE] Available at: http://www.abc.net.au/news/2013-02-24/new-bhp-boss-says-cost-cutting-will-continue/4536796. [Accessed 25 November 2013].
2013. . [ONLINE] Available at: http://www.bhpbilliton.com/home/investors/reports/Documents/2013/131022_BHPBillitonOperationalReviewfortheQuarterEnded30September2013.pdf. [Accessed 28 November 2013].
2013. . [ONLINE] Available at: http://www.bhpbilliton.com/home/investors/reports/Documents/2012/120514_APPEAConference.pdf. [Accessed 30 November 2013].
Cookies must be enabled. | The Australian. 2013. Cookies must be enabled. | The Australian. [ONLINE] Available at: http://www.theaustralian.com.au/business/mining-energy/technology-to-drive-productivity-in-bhps-coal-business/story-e6frg9df-1226654090058#. [Accessed 29 November 2013].
BHP Billiton - Movendo Montanhas (moving mountains) - YouTube. 2013. BHP Billiton - Movendo Montanhas (moving mountains) - YouTube. [ONLINE] Available at: http://www.youtube.com/watch?v=o2_QKoQ70Ko. [Accessed 29 November 2013].
. 2013. . [ONLINE] Available at: http://www.bhpbilliton.com/home/info/Documents/bhpbPetSupplyCorporateSocialResponsibiltyPolicyRequirements.pdf. [Accessed 01 December 2013]. in oil, gas, liquefied natural gas and diamonds.
Executive Summary:
BHP Billiton is the largest global mining company, operating in approximately 25 countries employing around 38,000 workers in more than 100 operations. BHP Billiton’s main focus is producing energy and mining materials that are beneficial to society’s way of life. BHP Billiton resources and provides raw materials to industries, including, aluminium, energy coal, and metallurgical coal, copper, manganese, iron ore, uranium, nickel, silver, titanium minerals and have sustainable interest in oil, gas, …show more content…
liquefied natural gas, and diamonds. “We are a leading global resources company. Our purpose is to create long-term shareholder value through the discovery, acquisition, development and marketing of natural resources.”
The strategic role of operations, used by BHP Billiton both in Australia and globally and the influences on the role of operations, are clearly discussed throughout the following report. Influences such as:
Technology and its impact
Corporate social responsibility
Legal regulations
Financial Status
Cost Leadership
BHP are constantly looking to lower their costs annually without affecting the quality of the end product and without affecting the productivity between each year. The new CEO Andrew Mackenzie states that based on their last half yearly net profit which has fallen a whole 58% to “US4.2 billion. This has made the need for cost cutting a priority, We are going to go from growth rates in minerals demand of 15 to 20 per cent a year to 2 to 4 per cent a year," he said.
Technology:
BHP Billiton’s use of technology within their mining constructions influences their productivity. The advances in technology have created the potential for higher productivity with lower costs. Advancing technology is important for operations. They constantly update their strategies and focus on improving productivity to keep ahead of the competition.
BHP Billiton operates multiple sources of machinery for each job that contributes to the end products. Technology such as, the world’s largest train; the iron ore trains, ships 800-tonne EX8000 shovels, computer controlling systems etc. has a direct impact on the level of performance operations can achieve.
These sources of technology contribute to the positive influences of BHP Billiton to create higher productivity with lower costs. As technology advances in machinery for the mining industry the impact on BHP Billiton’s productivity is higher and they are demonstrating sufficient ways to produce the resources to create the final product. The technology that has this positive effect can also have a slight negative effect on the company if not handled correctly. The machinery used within the company requires staff to operate it, these uses in technology require in depth training for staff members operating it. This can take time, costing the company money that could be spent in other areas of the process. Though there is this slight downfall with constantly having new technology produced and introduced to the company requiring more money spent on training. The higher the productivity, the more profit is produced which brings a positive result to BHP Billiton.
Financial Influences
BHP has a risk of failing to discover new reserves and also to maintain existing reserves. Failing to do so would negatively impact BHP’s financial status and would result in failing to keep up with the high demand of their clients. BHP Billiton’s financial conditions are derived from the ability to replace existing reserves and maintain the reserve globally that BHP Billiton hold.
The price of commodities is based on the level of reserves of the world market and the fluctuations can negatively affect the price BHP Billiton can sell their oil, gas, minerals and other products. This provides a level of uncertainty and must be factored into their processes.
Corporate Social Responsibility:
BHP Billiton stands by the 5 value systems, Sustainability, Integrity, Respect, Performance, Simplicity and Accountability. BHP Billiton claims that the values are closely tied to their Corporate Social Responsibility program and how they plan to achieve these goals. BHP Billiton’s policies for corporate social responsibility has a zero tolerance requirements policy listed below:
No child labour: no children under the age of 15 may be hired and are to complete the compulsory education requirements according to applicable local laws.
Forced or compulsory labour: No forced labour on any employee of BHP Billiton may be enforced; the company follows the regulations of human rights and other legal obligations.
Inhumane treatment of employees: BHP Billiton must create a safe environment for employees and treat all workers with respect and dignity.
Living wage: All benefits and wages for employees must at least follow the minimum legal wage.
Workplace health and safety: The supplier must follow all regulations according to OHS and other health and safety policies depending on local policies.
Freedom of association: The supplier must keep an open mind towards all representatives and consider all legitimate activities of trade unions. There must be no discriminative or bias nature of business.
World Heritage sites and IUCN Protected Areas: “Materials must not be sourced from World Heritage listed sites or International Union for Conservation of Nature Protected …show more content…
Areas.”
Biofuels: Biofuels must only be sourced from global companies that follow the regulations and standards for the sustainable sourcing of biofuels.
Corruption, bribery and extortion: BHP Billiton has a strict policy that bribery on behalf of BHP Billiton is forbidden. Corruption, bribery and extortion from business dealings including third party’s on behalf of BHP Billiton or any other suppliers who fit that description.
Compliance with laws: The supplier must follow all legal requirements or show the intent to follow these rules under the business’ conduct.
Non-discrimination: Suppliers must ensure that all employees have a workplace environment where all workers are treated fairly and each individual is hired based on merit.
BHP Billiton also lists the necessities of local interpretation according to corporate social responsibility; these include, indigenous rights, making sure the supplier follows the policies of BHP Billiton’s and that they maintain respect and dignity to all walks of life.
Protection of the environment; this policy must be followed by the supplier by operating in a manner that follows the regulations of environmental law and keeping up with the standards of these laws.
Legal:
BHP Billiton’s assets are split between other companies such as Global Ethics Panel (GEP) and HSEG; therefore risking the non-controlled assets managed by other companies who may not follow the operational standards and legal policies run by BHP Billiton. These different management styles can potentially cause controversy due to failure of equivalent standards and could lead to higher costs of production and reduce productivity, therefore having a negative effect on its reputation and
results.
International & Global Strategic Plan
BHP Billiton has a strategic plan in place for its operations and profitability scheme set out to produce the best products with the highest income and lowest costs.
BHP Billiton’s strategy is based on the idea of not relying on one commodity or currency for their businesses profitability. This plan means that BHP Billiton is able to change and be flexible during economic cycles. Through this plan BHP Billiton’s global status within 25 different countries operating 100 separate projects, are able to create these separate commodities between each country. They are dedicated to making use of the community and local workers to help economic status and involve the local community who are passionate about their land and the operations.
Internationally BHP Billiton has its main reserve within Western Australia where they are employing thousand of local Australians and are main contributors in sustaining the employment rate in Australia.
Global Locations
Summary
BHP Billiton is the leading company within the mining industry both nationally and globally. Just like every other business BHP Billiton has negative and positive influences. As seen in this report there are many different factors that operate in a business of this magnitude to successfully produce their end product. There is a fine balance to maintain in the three main areas of operation; legal, corporate social responsibility and financial management in order to maintain growth, profitability.
Bibliography:
BHP Billiton | Company profile & Corporate Social Responsibility . 2013. BHP Billiton | Company profile & Corporate Social Responsibility . [ONLINE] Available at: http://www.bhpbilliton.com/HOME/ABOUTUS/OURCOMPANY/Pages/default.aspx. [Accessed 25 November 2013].
. 2013. . [ONLINE] Available at: http://www.ecosmagazine.com/?act=view_file&file_id=EC138p20.pdf. [Accessed 28 November 2013].
BHP Billiton | Code of Business Conduct . 2013. BHP Billiton | Code of Business Conduct . [ONLINE] Available at: http://www.bhpbilliton.com/home/aboutus/ourcompany/Pages/codeofbusconduct.aspx. [Accessed 25 November 2013].
New BHP boss says cost cutting will continue - ABC News (Australian Broadcasting Corporation). 2013. New BHP boss says cost cutting will continue - ABC News (Australian Broadcasting Corporation). [ONLINE] Available at: http://www.abc.net.au/news/2013-02-24/new-bhp-boss-says-cost-cutting-will-continue/4536796. [Accessed 25 November 2013].
2013. . [ONLINE] Available at: http://www.bhpbilliton.com/home/investors/reports/Documents/2013/131022_BHPBillitonOperationalReviewfortheQuarterEnded30September2013.pdf. [Accessed 28 November 2013].
2013. . [ONLINE] Available at: http://www.bhpbilliton.com/home/investors/reports/Documents/2012/120514_APPEAConference.pdf. [Accessed 30 November 2013].
Cookies must be enabled. | The Australian. 2013. Cookies must be enabled. | The Australian. [ONLINE] Available at: http://www.theaustralian.com.au/business/mining-energy/technology-to-drive-productivity-in-bhps-coal-business/story-e6frg9df-1226654090058#. [Accessed 29 November 2013].
BHP Billiton - Movendo Montanhas (moving mountains) - YouTube. 2013. BHP Billiton - Movendo Montanhas (moving mountains) - YouTube. [ONLINE] Available at: http://www.youtube.com/watch?v=o2_QKoQ70Ko. [Accessed 29 November 2013].
. 2013. . [ONLINE] Available at: http://www.bhpbilliton.com/home/info/Documents/bhpbPetSupplyCorporateSocialResponsibiltyPolicyRequirements.pdf. [Accessed 01 December 2013]. in oil, gas, liquefied natural gas and diamonds.