The Organisational Structure of Wesfarmers

Discuss about the Wesfarmers Organisational Structure Response.

This essay discusses the organisational culture of Wesfarmers, a conglomerate which is based in Perth, West Australia. This company is focused to spread business in the Australian and New Zealand’s retail, fertilisers, chemicals, coal mining, industrial and safety products. It is the largest Australian MNC by revenue and is the largest private employer in the country with more than 220,000 employees working directly with the organisation. This company has tie up with various retails like Coles, Bunnings, Target and Kmart with which it operates in the UK and Ireland also (Sustainability.wesfarmers.com.au, 2018). This essay analyses the organisational structure of the company, the importance of this particular structure for the effective functioning of this origination and the advantages it results in operation in the global setting. The essay concludes with the findings of the disadvantages of team structure and some recommendation to overcome them.

Team structure is one of the most important organisational structure used by many successful multinational companies. This is effective for the growth of the company as this structure helps corporations especially the retail ones to filter decision making down to every levels of management (Ibisworld.com.au, 2018). This exactly opposes the traditionally structured companies where the top managements only make decisions. Wesfarmers believes in the participation of all the employees in their decision making process through this the employees feel more attached with their organisation rather the performing their roles in their different departments.

Wesfarmers is basically divided in five sections below the Director. These departments have different focus from their own parts. These teams involve in production, technology, marketing, customer service and human resource sections. Each of these teams has team leaders who are responsible to manage their teams and execute assigned jobs with expertise. Most importantly this structure of this company has helped it to segment itself so that the whole process does not get overlapped with one another (Smith & McSweeney, 2017). This guarantees that the company will run more effectively and proficiently as no department depends on the other yet have a wholeness in the ultimate output of the company giving it a competitive advantage in the global market.

Each objective of this partial MNC is to exist across many types of industries in different nations therefore, it gives freedom to the departments to innovate as well as solve its own problems so that the best quality products and services reach the customers. By using team structure Wesfarmers gets scope to enjoy numerous advantages than its competitors. First of all, the company can capitalise the strength of the employees by minimising their weaknesses. The team based organisational structure enables the company to speed up the work flow and reducing cost (Flin, Lauche & Crichton, 2017). This genetically improves the motivation of the employees as they get the scope to perform in a team particular focussed on the tasks in which they have expertise. Prioritize jobs based on the importance as well as urgency, can also upsurge the productivity of these expert teams. This type of organizational structure used by Wesfarmers allows the teams to guarantee the best coverage for the activities for example product development, process-improvement initiatives and customer support.

Advantages of Team Structure for Wesfarmers

Wesfarmers has aimed to focus on the innovation and quiet of the production as well as service to the customers. Hence they except more involvement of the employees with the organisations. This is the reason it has eliminated the layers of management. Thus, the employees of the organisation are free to make the best decision through team approvals and do not need to waste time and effort to get the approvals from different managers. This structure has helped the company to streamline the processes in one hand and lower administrative costs. In addition to this, as the employee fee independent as well as empowered, their morale increases to serve the company more passionately.

In the teams, the employees work to achieve the same goal therefore, thy remain more focussed to their tasks rather than indulging in the interdepartmental conflicts which require the interference of the managers. In the different teams of Wesfarmers, the employees themselves solve any types issues without consulting their superiors as the attachment among the team members are much higher here. This also shorten the amount of required time for completing a job as there is a high amount of collaboration in the teams. Another benefit that the team structure of the company provides is the cross cultural integration. Team structure easily incorporate the cross-cultural members in their groups and integrate in the organisational capture more easily than any other organisational structure.

In Wesfarmers, the team structure is mainly followed in the retail business as this is the main functioning area through which the company aims to popularise itself in the global market. Therefore, each of the teams are competent enough to match the requirements of an MNC. These teams share the responsibilities for completing their tasks within schedule where the ultimate incidents of collaboration can be seen. In case one team members cannot finish a task another replaces him to fulfil the obligation. Through creation of a comprehensive role along with responsibility matrix, their accountability gets evidently defined so that misunderstandings or conflict do not arise. Moreover, the communication issues easily get solved as there are regular meeting and team hurdles to maintain the flow of communication among the team members (Carley & Prietula, 2014). Wesfarmers uses the best technology to maintain this communication flow among the teams or the departments so that there are no incidents of miscommunication which may lead to failure in getting proper outcome.

Disadvantages of Team Structure for Wesfarmers

As mentioned before the teams of this company are highly competitive in their innovative processes. Instead of focussing on the personal achievement, reaching goals for the teams are more important for the employees of Wesfarmers. These teams strive for the common goal like product and service development as well as appropriate delivery. By using their collective knowledge, the team members empower their subordinates to take actions to get the best result. As the teams contain action oriented, people-oriented and thought-oriented members, which can easily improve the process through balancing human resources with the projects. Action oriented team members constantly push others to improve the methods and encourage them to complete the tasks qualitatively and obviously within time. The people oriented team members provide all types of supports, guide the team and arrange resources to finish a project. Finally, the thought oriented team members remain ready with creative ideas, specialised knowledge and evaluation options.

In Wesfarmers, each of the five departments have teams to complete their jobs based on the functioning of the departments but with all the mentioned advantages this structure also has some shortcomings. First of all, the team structure needs less managerial monitoring as the teams themselves act independently this is why this structure often leads to confusing. As the team members are responsible to the team leaders only, they remain focussed in their own tasks. Therefore, the whole pressure moves to the team leaders who when cannot manage the team positively, the team collapses. In this team structure organisation, the team members are compiled to show dual loyalties one to their team members and another to their departmental heads. This often create confusion in the minds of the employees which gets reflected in their functioning (Hatch, 2018). As the there is a need to have a constant flow of communication among the employees, the meetings are arranged. This often needs more expenses ion teams of money as well as time and efforts of the members.

In the team structure the members are responsible to achieve their team’s independent goals. This is the reason why they do not have much concern with the organisational goals as a whole. Moreover, each of the teams of Wesfarmers functions independently without ensuring alignment with each other. This results in lesser organisational consistency. The lack of bureaucracy presents to align the thoughts as well as actions of the teams leads to less cooperative workforce hence the effect of innovation and talents of each team remain unutilised. In addition to these issues, the teams of these five departments of Wesfarmers, focus to make a quick decision to enable the fast completion of their tasks hence the teams undergo various changes (Bolman & Deal, 2017). This constant change or instabilities lead to confusion in the minds of the team members if the team leaders do to interfere every time. This is also the reason why the team decisions are made at the last moment by increasing the internal tensions and stresses.

Conclusion

Team structure of Wesfarmers has one of the most important disadvantage which is related to their internal competition. In these days most of the employees of any organisation work efficiently for getting rewards and acquire higher position through recognition. In the teams also the competition among the team members is quite high which often affect the relationship among the employees. In some cases, the tasks do not need a team effort and can be easily and efficiently performed by the individuals but the company follows the team structure, does not allow the individuals to act separately which lead to waste of human resources. The team structure of the company may limit contact as well as exposure to their other functions. The individual team can develop the ideas as well as products in segregation. They do not realize the impacts on the other teams, employees, products, services and the customers of the company. This limits the sharing of best practices that can result in the higher cost, increased wastes and reduced customer satisfaction. For instance, production teams may not be able to negotiate the best deals with suppliers if they work separately.

In addition to this, the teams often feel pressurised by their team leaders regarding their functionalities. As different departments are focussed to function differently, they cannot replace one team with other at the time of demand seasons. This leads to create issue as the teams feel pressure to manage the post production transition (Ibisworld.com.au, 2018). Moreover, it is not possible to train each of the team members about the functions of each departments, hence the teams may fail to connect with the ultimate goal of the company. The company when operates in different countries need to incorporate the national culture which becomes one of the most important barrier for the functionality of the teams. Therefore, the company needs to follow some of the methods which will help it to maintain the team structure in one hand and utilise the team members more effacingly on the other.  

As the team-based organizational structure lacks management structure by its design, the team members as well as the team leaders of each department need to identify and realise the needs for a good communication, efficient project management as well as effective resource allocations without which the teams of any of the departments cannot function effectively. The teams need capable, highly trained and experienced team leaders who will guide the teams competently. In addition to this, the teams of Wesfarmers need specific policies as well as procedures which define proper method to get the works done. It helps to balance the resources of the company with the capability to reply rapidly to the team requirements without referring to the layers of futile management.

As the team structure has less organisational consistency the lateral team-based organization like Wesfarmers need to launch the liaison roles, effective task forces as well as other project management structure so that it can effectively increase the ability of the company to process the information in the interdependent as well as complex environment. In case the company lacks these mechanisms, stress, miscommunication, absenteeism and poor performance can be resulted. In addition to this, the company while working in the international setting needs to increase the knowledge about the national culture of the countries without which the miscommunication will be increased in the team which will be leading to collapse of the teams gradually.

References:

Bolman, L. G., & Deal, T. E. (2017). Reframing organizations: Artistry, choice, and leadership. John Wiley & Sons.

Carley, K. M., & Prietula, M. J. (2014). The” virtual design team”: Simulating how organization structure and information processing tools affect team performance. In Computational organization theory (pp. 19-36). Psychology Press.

Flin, R., Lauche, K., & Crichton, M. T. (2017). Learning from Experience: Incident Management Team Leader Training. In Naturalistic Decision Making and Macrocognition (pp. 129-146). CRC Press.

Hatch, M. J. (2018). Organization theory: Modern, symbolic, and postmodern perspectives. Oxford university press.

Ibisworld.com.au. (2018). Wesfarmers Limited – Retail. Retrieved from https://www.ibisworld.com.au/australian-company-research-reports/retail-trade/wesfarmers-limited-company.html

Smith, P. L., & McSweeney, J. (2017). Organizational perspectives on rapid response team structure, function, and cost: a qualitative study. Dimensions of Critical Care Nursing, 36(1), 3-13.

Sustainability.wesfarmers.com.au. (2018). Structure and composition of the Board. Retrieved from https://sustainability.wesfarmers.com.au/our-principles/governance/robust-governance/structure-and-composition-of-the-board/