Importance of Organizational Structure and Strategic Management

Discuss about the Strategic Information System for Wesfarmers Limited.

Organizational structure is a significant factor for every business enterprise in order to accomplish the desired goals and objectives in an appropriate manner. This is done to improvise organizational efficiency, productivity as well as to develop an effective workplace environment. Organizational structure is a combination of several strategies and methods. These are adopted with the objective of attaining sustainable development and growth for business. Primary objective of every business enterprise is to sustain in the competitive and dynamic business environment for a longer period of time. In relevance with coping up with the changing time and trends, organization is required to adopt certain crucial elements in order to improvise its organizational structure. Apart from the organizational structure, techniques in relation with strategic management are also required. This helps the organization to uplift its efficiency along with the development of an effective marketplace.

In relevance with the strategic management and organizational structure, it is required for an organization to consider information technological factors. Information technological factors plays crucial role in terms of enhancing the performance of the organization along with highlighting the advanced measures of the organization. With the help of information technology, organization could easily move towards automation and this also leads to decrease the chances of errors. In this assessment, requirement of accounting software, significance of accounting software, etc. aspects will be discussed. Apart from this, organizational structure of Wesfarmers Limited will also be discussed in order to manage organizational functions in an effective manner. Strategic management policy will also be discussed as it is feasible enough to accomplish the management related tasks in an effective manner (Cassidy, 2016).

Wesfarmers Limited is an Australian multinational corporation headquartered in Perth. Company was founded in 1914 and areas served by the organization are New Zealand, Asian countries, UK, etc. Company is engaged in several areas such as coal, mining, chemicals, and fertilizers. Apart from this, organization also deals in industrial safety products. Along with these operations, organization has attained leading position in the Australian market in terms of revenue by overtaking Woolworths Limited and BHP Billiton in 2016. Wesfarmers Limited is known as the largest private employer in Australian market with approximately 220,000 employees (Wesfarmers Limited, 2018).

As organizational functionalities are expanded in various countries, thus, organization has adopted multinational corporation type organizational structure. This is done to improvise organizational performance as well as to manage all the functionalities of all the stores from one place. This organizational structure is known as the combination of two business entities that have the same corporate background. As Wesfarmers is engaged in sundry industrial operations, thus, adaptation of common organizational structure would be of no use. Recognising these challenges, organization has adopted multinational type of organizational structure with the motive of performing organizational activities in an effective manner along with meeting with the desired organizational goals and objectives. Apart from this, the adopted organizational structure by Wesfarmers Limited will help them to cope up with the changing business environment. This organizational structure has helped the organization to uplift its performance in the dynamic business environment along with gaining leading position in terms of revenues (Sarker, Xiao & Beaulieu, 2013).

The Case of Wesfarmers Limited

In the concern of author, it has been evaluated that there are numerous factors which affect organizational performance, efficiency as well as effectiveness. It has been observed in the Australian business environment that various multinationals, supermarkets, hypermarkets, etc. have shown their interest towards food and beverage industry. Both these industries are quite effective in terms of expansion of the organizational business and this is the reason organizations are moving towards these industries. But the fact cannot be denied that to the extent success and growth factors are present in these industries, same amount of challenges, risk and issues are also exist (Cecez-Kecmanovic, et. al, 2014).

Author has described the negative as well as positive aspects of the organizational structure adopted by Wesfarmers Limited. Wesfarmers Limited was one leading the Australian market in 2016, but there are certain challenges and issues exits with the organizational structure adopted by Wesfarmers Limited. Lack of accounting methods, lack of improvements and innovation, etc. are some of the major issues faced by Wesfarmers recently. These issues are pushing organization backwards which could lead to negative results for the organization. Apart from this, taxation benefits will also be reduced with the effect of implementation of this organizational structure. Lack of managerial control and lack of knowledge in relevance with inventing the new methods in relation with innovation and development will also lead the organization towards failure. This is because, business environment and target audience’s demands, customer trend are changing rapidly and with the help of this structure, attainment of desired goals and objectives is bit difficult task (Galliers & Leidner, 2014).

Information technology is trending these days in workplace environment. This is because it eases the operations of an organization and accomplishment desired goals and objectives also becomes an easy task. Along with this, it has been reviewed that software technology adopted by Wesfarmers is helping in the management of operations as well as in integrating sundry application software so that the available resources with organization could be utilised in an effective manner. Adaptation of software technology is considered as appropriate step by directors and other crucial stakeholders of the organization. This technology improvement has leaded the organization to attain its desired goals and objectives along with expanding its business in target market. With the help of adaptation of advanced measures, organization will be able to enhance its performance along with this; all operations of the organization will be performed in the most appropriate manner (Greenblat, 2015).

Information Technology and Organizational Performance

Figure 1: Sales procedures of Wesfarmers Limited.

Aforesaid picture shows the sale procedure of the Wesfarmers Limited and following is the discussion in relevance with the activities involved in sales procedure:

• Initial stage of the sales procedure showcases the entry of customers into the Wesfarmers’ stores. Customers make selection amongst the products available and add to their cart on the basis of their requirements. All products are marked with a unique identity number i.e. bar code. Along with this, price tag, quantity and other type of information is marked over the product so that consumers could take appropriate information regarding the product (Willcocks, 2013).
• Adding the products to the cart describe the consent shown by consumers in relevance with the price offered by the organization. Further, customers and organization sign the contract in relevance with the product quantity ordered along with the price of the product. After this, shipping takes place, organization delivers the product ordered by consumers and then the second stage of sale takes place which is also known as after sale service (Hunter, 2010).
• Above stages and operations only executes after taking consent from the consumers and if consumers denies the contract offered by organization in terms of price, quantity, quality, etc., sale procedure ends there only (Zafar, Babar & Abbas, 2013).

Accounting department is responsible for maintain all the ledgers and other account books in an effective manner so as to fulfil the requirements of maintaining transparency amongst the physical stock available and stock shown in the accounting books. Below are some of the possible issues which could be occurred in the absence of appropriate managerial control:

• As per business culture, environment and procedures, it has been noticed that warehouse manager is responsible for select the suppliers with taking permission from the top level management. Thus, organizational management along with HR department is responsible for appoint a responsible, knowledgeable, talented and skilled candidate over warehouse manager position so that the desired outcomes could be attained. If selection of suppliers will be done considering the personal benefits by warehouse manager, efficiency of the organization will be reduced because quality of raw materials will be compromised (Kavanagh & Johnson, 2017).
• These activities will lead to corruption amongst the organization and ultimately, performance of the organization will suffer.
• Apart from this, software technology also leads to leakage of consumer’s private and secret information which includes secret credentials of debit, credit card used by consumers while making payment. If this happens, organization will lose reliability amongst the target audience. In order to prevent this, it is required to adopt appropriate security and safety measures through which consumers’ data could be kept secure and safe (Morecroft, 2015).

Accounting software is useful for recording daily transactions, maintaining ledgers of suppliers, customers, etc. and to make financial statements at the year end. Apart from this, various other facilities are provided by accounting software. Using accounting software reduces chances of errors, miscalculation, recording of wrong information, etc. It reduces human efforts and increases efficiency and accuracy. Traditional accounting was based over manual method which was time consuming, chances of errors were high and reliability was also low. With the help of trending software technology, Wesfarmers could easily maintain its account books, record transactions with fewer chances of errors as well as organization will be able to portray clear picture amongst its stakeholders. Investors will easily be attracted and the attainment of goals and objectives would be an easy task (Pearlson, Saunders & Galletta, 2016). Accounting software is created with considering all sections of accounting rules, regulations and the standards of accounting. Organization will be able to portray transparent and clear picture in front of the customers and investors. This will help the organization to gain effective goodwill in the marketplace along with the attaining competitive advantage. Following are certain crucial steps of accounting which are made quite easy with the help of accounting software:

• Accounts Receivable: All debtors are included under this.
• General Entry: All the organizational transactions are recorded.
• Accounts Payable: All creditors of an organization are recorded here.

As per au.finance.yahoo (2018), Wesfarmers is leading the Australian market in terms of revenues. With the effect of this, opportunities for organization to grow and expand in international market have been increased. In 2017, growth rate of Wesfarmers have been recorded as 4.3% along with the $34.9 billion revenues. In this, profits were $1.6 billion which shows a 13.2% hike from the previous year’s profits. In Australian market, there are number of retail stores are available and this has made the retail industry bit competitive but with the help of unique measures and techniques, Wesfarmers has managed to attain the leading position. In relevance with maintaining the acquired position, organizational management has invested a huge amount in R&D department to invent new methods and techniques to enhance performance of the organization. Woolworths Limited is the direct competitor of Wesfarmers and both the companies have acquired almost 70% market share of the retail industry in Australian market. This shows that the opportunities for new companies and other retail stores are less and in order to develop an effective image in this competitive business environment, new comers should introduce certain effective measures. Amongst the acquired market share portion, both companies share equal proportion which describes both have equal power (Peppard & Ward, 2016).

The Role of Accounting Software in Record Keeping

Every organization’s success is dependent over its employees. The more potential and talented employees a company have, company will be more progressive as well as result oriented. In order to accomplish the goals and objectives of Wesfarmers, leaders of the organization have performed quite well and in effective manner. Richard Goyder is one of the key employees for Wesfarmers Limited. He was appointed as Managing Director in 1993 and after reviewing his efforts for the organization, he was soon promoted as the CEO of the organization and he is the current CEO of Wesfarmers Limited. His potential, knowledge and efforts have helped the organization to attain reputed and leading position in the marketplace. Rob Scott, Deputy CEO of Wesfarmers is also one of the key employees for organization. Apart from these two, there are several other employees and leaders who have contributed a lot in attainment of organizational desired goals and objectives (Rainer, et. al., 2013).

This is the reason, organization focus over retaining key and potential employees at any cost. Employees are treated in fair manner and to avoid any type of inappropriate activity within the workplace, organization has adopted various measures such as internal communication tools. Through this, employees could immediately report to the top level management in relevance with the execution of unfair practices (Readyratios, 2017).

After implementation of ERP framework in functionalities of organization, it has been evaluated that organization requires appropriate measures to find out the challenges and gaps faced during usage of the automation network. Primary objective of ERP framework is to establish a clear and transparent picture in front of the stakeholders so that investors and clients could easily be attracted. For making a clear understanding in relevance with the gaps and challenges regarding accounting software, Wesfarmers Limited should execute an analysis so that the effectiveness of the operations could be detected (Realitysoftware, 2017).

From the aforesaid information, it could be concluded that ERP framework will help the organization to move towards automation but for checking the functioning of software, manual checks needs to be executed. Major objectives of the organization would easily be attainable through ERP framework such as attainment of desired goals and objectives, recording transactions error free, making error free and clear financial statements as well as to attract clients to invest. Advanced accounting software, controlling factors of the accounting software, size of the market and the market share across the globe as well as in the local market were discussed in the report to evaluate functioning of accounting software. 

References 

Cassidy, A., 2016. A practical guide to information systems strategic planning. CRC press.

Cecez-Kecmanovic, D., Galliers, R.D., Henfridsson, O., Newell, S. and Vidgen, R., 2014. The sociomateriality of information systems: current status, future directions. Mis Quarterly, 38(3), pp.809-830.

Galliers, R.D. and Leidner, D.E. eds., 2014. Strategic information management: challenges and strategies in managing information systems. Routledge.

Greenblat, E. 2015. Wesfarmers restructure to streamline operations. [Online]. Assessed from:  https://www.theaustralian.com.au/business/wesfarmers-restructure-to-streamline-operations/news-story/415bab7720bb6d61ade215957048d276. [30^th April 2018].

Hunter, M. G., 2010, “Strategic Information Systems: Concepts, Methodologies, Tools, and Applications”, University of Lethbridge, Canada, vol. 1, pp. 315-332.

Kavanagh, M.J. and Johnson, R.D. eds., 2017. Human resource information systems: Basics, applications, and future directions. Sage Publications.

Morecroft, J. D. 2015. Strategic modelling and business dynamics: a feedback systems approach. John Wiley & Sons.

Pearlson, K.E., Saunders, C.S. and Galletta, D.F., 2016. Managing and Using Information Systems, Binder Ready Version: A Strategic Approach. John Wiley & Sons.

Peppard, J. and Ward, J., 2016. The strategic management of information systems: Building a digital strategy. John Wiley & Sons.

Rainer, R.K., Cegielski, C.G., Splettstoesser-Hogeterp, I. and Sanchez-Rodriguez, C., 2013. Introduction to information systems. John Wiley & Sons.

Readyratios, 2017. Conglomerate. [Online]. Assessed from: https://www.readyratios.com/reference/accounting/conglomerate.html. [30^th April 2018].

Realitysoftware. 2017. Accounting software development. Assessed from:  https://www.realitysoftware.ca/services/software-development/accounting/. [30^th April 2018].

Sarker, S., Xiao, X. and Beaulieu, T., 2013. Qualitative studies in information systems: a critical review and some guiding principles. MIS quarterly, 37(4), pp.iii-xviii.

Wesfarmers Limited. 2018. Our History. [Online]. Accessed from: https://www.wesfarmers.com.au/who-we-are/our-history. [30^th April 2018].

Willcocks, L. 2013. Information management: the evaluation of information systems investments. Springer.

Yahoo Finance, 2018. Wesfarmers Limited. [Online]. Assessed from: https://au.finance.yahoo.com/quote/WES.AX/analysts?p=WES.AX. [30^th April 2018].

Zafar, F., Babar, S. & Abbas, H., 2013, “The Art Of Strategic Management- A Key To Success In Corporate Sector”, European Journal of Research and Reflection in Management Sciences,