Behaviours, Actions and Communications of BHP Billiton in the Society

Business organizations operating in any society have some influence on the society within which it conducts its business. The performance of businesses is not only aimed at making corporate or business profits but should also be directed towards the fulfillment of society’s needs and the needs of the organization’s stakeholders. According to the theory of corporate social responsibility, a business should be responsible for the needs of the society (Kortler and Lee, 2005). The proponents of the theory suggest that businesses should give back to the society for allowing it run its business within that society. The actions, behaviours and communications of business organizations should therefore be directed towards the fulfillment of needs within the society. BHP Billiton is one of the companies whose performance is accomplished in regard to the society’s needs. BHP Billiton is an international company with branches in 100 locations worldwide (BHP Billiton, 2011). It has over 100,000 employees worldwide who contribute to the success of the company in its performance, both as an entity and as a member of the society. Its business is to produce natural commodities especially minerals such as aluminium, copper, energy coal, manganese, nickel, energy coal, iron ore and others.

The objective of this company is “to create long-term shareholder value through the discovery, acquisition, development and marketing of natural resources” (BHP Billiton, 2011). This objective indicates that the company’s performance and actions are directed towards the fulfillment of shareholder interest though maximization creation of long term shareholder value. The company attempts to discover, acquire, develop and market natural resources so as to earn and create value for its shareholders. These actions lead to creation of shareholder value through profits earned from marketing these natural resources. These profits are often distributed to the shareholders through dividends. Value is also created through the improved status of the company that results from increased revenues and customer loyalty. Since the shareholders benefit from the company’s operations, the society at large also benefits because the shareholders are members of the society.

The shareholder returns are attained through specific strategies. For instance, the company owns and operates large low-cost and expandable assets which last for a long time. These assets are diversified geographically, by market and by commodity (BHP Billiton, 2011). Such a diversification will reduce risks because it allocates investments among various natural resources, markets and geographical locations (Texier, 2000). Diversification may not be a perfect strategy to eliminate risk but is considered as the most important way of minimizing risk and attaining organizational financial goals. As a result, the company’s and shareholder’s returns are maximized.

Another strategy used by the company in its performance is the use of simple and scalable organization structure. This structure is used to operate the company’s natural assets in a standardized and controlled process (BHP Billiton, 2011). Therefore, it is through this structure that the company’s workforce can focus on important operations and activities, hence improving its performance and creating value for its stakeholders. The organization structures its operations according to its commodities and markets. This enables it to utilize its natural resources well and attain efficiency. Such implications as duplication of raw materials are avoided. According to Baligh (2006), an organizational structure that is simple and operated with respect to products and markets enhances diversification and resource allocation efficiency. This leads to value addition for both the company and other stakeholders in the society.

The company also engages in good communication strategies to enable it pass information among its employees and to the society at large. The company website suggests that the company operates with a charter which contains the company’s values, objective and how to measure success (BHP Billiton, 2011). It also has a code of business conduct which illustrates how business is conducted by the company and how the society is involved in running the company as well as the role of the company in the society. These documents are found in the company’s IT system and help it to communicate effectively with all the relevant stakeholders about the company’s operations. As a result, the activities of the company that influence the society and the stakeholders are carried out efficiently.

The company charter will enable the company’s management to plan, organize, control, coordinate and direct activities towards the achievement of organizational objectives as specified in the charter. This is in line with the renown that effective communication enables managers to carry out their managerial roles efficiently (Guffey, 2012). The charter also helps the company to convey information about its operations and objectives the members of the society who use that information to rate the company and make appropriate decisions on how to associate with the company. This also shows that good communication has been used by the company and the members of the society to make appropriate decisions.

The company’s code of business conduct provides that the company operates with integrity (BHP Billiton, 2011a). The company often ensures that it makes the right decisions through the applications of integrity in its decision making process and does the right things by using the high integrity. The BHP Billiton code of conduct also highlights that the company upholds high ethical standard and maintains a high level of trust with its stakeholders while conducting its business activities (BHP Billiton, 2011a). This is in line with the principle of business ethics which requires that business should act ethically in the community in which it conducts its business (De, 2010).

BHP Billiton is also operating in a socially responsible manner. BHP Billiton (2011) says, “we are committed to the safety and health of our people the society and the environment within which we operate”. The company has established a long-term relationship with the communities living within the geographical locations of the company. It conducts its activities by working together with the local communities and hence make an impact on the lives of the people who live near the company’s working environment. The company recognizes that it is important to expand safely and respond responsibly to the needs of the society and the environment. According to Kortler and Lee (2005), such actions as those displayed by BHP Billiton are said to be in line with corporate social responsibility principle which requires that companies should behave responsibly towards the society in which they operate by caring for their needs and interests.

The performance of BHP Billiton as a global company also involves such actions as producing, exporting and consuming energy. These activities and operations have a wide range of risks on climate change. The company puts this fact into consideration while conducting its businesses. The operations are therefore conducted in such a way that they don’t impact on the environment and hence do not result in climate change. For instance, the company actively attempts to reduce the use of water and minimize emissions of carbon in its business activities (BHP Billiton, 2011). These actions are aimed at reducing their effects on climate change since usage of energy often causes climate change (Giddens, 2009). These attempts are often monitored and reported on an annual basis in the company’s sustainability report. This report also acts as a means of communicating the company’s contribution to the society. Therefore, the company’s actions are environmentally friendly and are communicated effectively to the relevant stakeholders and members of the society.

BHP Billiton also has some weaknesses in its actions, communication and behavior towards the society and its stakeholders which should not be underrated or ignored. BHP Billiton Company conducts business that is very critical to the sustainability of the environment. This is because mining activities are detrimental to the environment. The company has engaged in some practices in the resent past which have sparked criticisms from environmentalists in Australia. For instance, the company engaged in long wall coal mining prior to the 2004 annual general meeting. This activity was conducted under the Cataract, Bargo and Georges Rivers (MAC: Mines and Communities, 2004). This necessitated the residents of Sydney to protest against the company’s plan to conduct another long wall mining under Nepean River (MAC: Mines and Communities, 2004). The local communities and supporters claimed that the long wall coal mining at the cataract river caused its riverbed to subside to about 1.6 M. This caused the river to develop cracks through which large volumes of water were lost. It was estimated that to compensate for that loss, Sydney had to produce 4.5 litres of drinking water.

It is clear from this discussion that BHP Billiton engages in communications, actions and behaviors which impact both negatively and positively on the environment. It can be noted that the company has engaged in actions that caused negative environmental effects on the society in the past. However, the company’s chief executive officer Chip Goodyear assured the company’s critics in 2004 that the company is committed to rectifying its mistakes of the past. He assured the communities that no farther mining activities would be conducted before a thorough consultation is made with the community (MAC: Mines and Communities, 2004). Therefore, despite the negative effects that the company causes on the environment, it is clear that the company is committed to meeting society’s needs through good communication within itself and with the society, involvement in socially responsible actions as well as behaving ethically.

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