Human Resource Stategy: BHP Billiton Case

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Human Resource Stategy: BHP Billiton Case

Introduction

Background of the study

Strategy has gone from being the hot management buzzword of the 1980s and 1990s to the care of how organizations think as we enter the 21^st country. Today, everything is supposed to be strategic. This includes business in general, management, human resource etc (Mintzberg, 1998)

According the Pearce and Robinson (1991) strategy is concerned with how to adhere objective of the organization. It relates the business and human resources. It defines the condiment within which an organizations personnel determine the success of the company.

Purpose of study

The purpose of this study shall be to identify the relationship between business strategy and human resource strategy at BHP Billiton. The research shall seek to determine the role of human resources in the achievement of business, that is the relationship between HR strategy and business strategy.

Company background

Prior to the year 2001 BHP and Billiton were different companies. In 2001, BHP Billiton was created as a result of the merger between BHP and Biliton.

However, BHP Billiton Limited and BHP Billiton Plc continue to exist as separate companies, but operate on a combined basis as BHP Billiton. The headquarters of BHP Billiton limited are in Melbourne Australia.

The company has a total of 39,000 employees based at the countries of operation. Employees work in more than 100 operations in 25 countries. The company deals with major commodities and businesses like aluminum, energy coal, metallurgical coal, copper, manganese, iron ore, uranium, nickel, silver, and titanium minerals. It also has substantial interests in oil, gas, liquefied natural gas and diamonds.

Research Design & methodology

This section shall cover the overall methodology used in the study. It will inclduen

Research design
Target group
Data collection methods

Research design

Research design is a plan and structure in terms of which the study is carried out so as to obtain answers to research problems. In this study descriptive design shall be adopted.

Target group

People targeted in this study shall be employees in the age bracket of 25 45 years at the middle and upper middle level management. Copper and Schindler (2000) define a target group as an element subject on which the measurement is being taken and is the unit of study.

Data collection methods

Use of questionnaires shall be distributed to the employees to fill and return them

Limitations of the study

There are various limitations of the study. Some of them being failure to obtain information from all respondents who were issued with questionnaires. The study only covered one area (country) as against the company is in operation. Failure to meet some of senior middle and senor upper middle level employees in the organization. Gender disparity was also observed. Most respondents were male as against females who either hired or feared to participate.

Business strategy

Strategy is the direction and scope of an organization oven the long term which achieves advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfill stakeholder expectation (Johnson and Schooles, 2007)

Strategies exist at different levels in an organization. It ranges from individuals to business strategy. Therefore business strategy is more concerned with how a business competes successfully in a particular market. It concerns strategic decisions about choice of products, meeting needs of customers, gaining advantage over competitors, exploiting or creating new products.

BHP Billiton has developed a good business strategy, which sees it an edge forward than their competitors. Due to this high quality product, which is in demand, it has created twin-marketing hubs at Singapore and The Hague so as ensure innovative customer solutions and superior customer service.

In ensuring that the company achieves its objectives, BHP Billiton ensures that proper and rigorous recruitment and selection of staff is done diversity of skill, thought, ethnicity, language, gender, experiences and relationships are sources of competitive advantage. Training and development is also provided in ensuring that employees have new skills required in racking their tasks.

HR Strategy

HR strategy is that plan, program and intentions of developing an organization to meet its present and future competitive challenges in orders to generate superior economic value.

A new concept is provided by the concept of resources based HR strategy. A competitive advantage is obtained it a firm can obtain and develop human resource that enable it to learn faster and apply its learning more effectively that its rivals (Hamel, Prahalad, 1989). Barney (1995) defines HR to include all the experience. Knowledge, judgment, risk taking propensity and wisdom of individuals associated with the firm. The objective of resources based approach is to improve resource capability achieving strategic fit between resources and opportunities as well as obtained added value from effective deployment of resources.

Human capital theory read together with resource based theory, it emphasizes that investment in people adds to their value to the firm.

At BHP Billiton business strategies, which are long-term goals of the organization, have been linked with HR strategies. BHP Billiton recognizes the values of its human resources in attainment of the goals people are the foundation on which all activities rely and to be successful they try to identify, recount, train, develop and retain a talented, diverse workforce. In this regard they provide sufficient and regular training and development as well as rewarding their employees.

Structure

Organizational structure plays important role in an organization. It is this structure that defines various job duties and responsibilities.

BHP Billliton Ltd a dual listed company as merged in 2001 is headquartered in Melbourne Australia while BHP Billton PLC repeaters from London; BHP Billiton has chief executive officer and chairman to the executive committee as its head assisted by other chief executives. The CEO is answerable to the board of directors.

Culture

Organizational culture as practiced in the organization gives point of direction to any company. Culture should be practiced being a point of diversity where the organization draws its strength.

Culture or organizational culture encompasses the attitudes, experiences, beliefs and vales of an organization.This term has been defined as the specific collection of values and norms that are shared but people and groups in an organization which control the way they interact with each stakeholders outside the organization.(Charles W.Hill and Gareth R. Jones (2001) strategies management, Houghton Miffin)

As BHP Billiton they value creating sustainable importance to shareholders, employees, contractors, suppliers, customers, business, partners and host communities. This is achieved through god relation both vertically and horizontally in the organization. Teamwork is highly valued and practiced at BHP Billiton. The organization is committed to openness, honest and productive relationships with their employees based on the values of the charter. The company maintains and promotes dialogue with stakeholders and remains responsive to the global communitys concern and operations. The companys intent is to foster a culture which is diverse and often remotely located leaders behave in a manner that models the charter, drives superior performance and allows every employee to start each day with a sense of purpose and end it with a sense of accomplishment.

Recommendations

Both the HR strategy and business strategy of BHP Billiton is superb. However; there are a few things to improve on.

Firstly BHP Billiton after the merger has greatly expanded it operations globally. This is a good business strategy or concept. However, this expansion has more effects. As much as the operation will see BHP Billiton become a world leader in the industry, it is also susceptible to risks. Being an international company for instance has to consider establishing operations where the company can create a business impact. This is done by looking at possible competitors. What effect do they have in the local market, how their prices are, and nature of their products and the general perception of the perception of the already established companies? In other words a though due diligence should be one. Further BHP Billiton can also improve its business strategy or add value to the organization by implementing strategies through translating business objectives into people management activities. Identifying young intelligent and talented people should be the recruited and put into management training positions training positions for a certain period. Upon their completion of training, they should be independent from the board of directors is a good recipe for sustainability of company.

Conclusion

The research focused on the relationship between business strategy and the strategy, and structure of BHP Billiton. The study sought to find out how effective is the link between the two variables, i.e. business strategy and the HR strategy. After thorough examination and research, it was found that was much as the two practices are inter-linked in achieving goals of the company, some recommendations however, have been made in ensuring that the company goes an extra-mile in becoming a world leader in the industry.

Bibliography

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Brewster, C., Sparrow, P.R. & Vernon, G. (2007) International Human Resource Management, 2nd Edition, London: Chartered Institute of Personnel and Development. ISBN.

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Hoag, B. and Cooper, C.L. (2006) Managing Value Based Organizations: Its Not What You Think.

Sparrow, P.R. (ed.) (2008, in preparation) Research Handbook of International Human Resource Management. London: Blackwell Publishing.

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