Corporate Governance of Wesfarmers Free-Samples for Students

Question: Discuss about the Corporate Governance of Wesfarmers. Answer: Introduction: Corporate governance refers to the process by which a corporate organization is controlled. Corporate governance consists of set of norms (Adegbite, 2015). These rules define the roles and responsibilities of different participants of a business organization like board of directors, managers, different stake holders, human resource managers. Corporate governance is set to influence the growth of the organization and earn desired target. Corporate governance includes organizational policies, activities, decision making process and so on (Samra, 2016). Wesfarmers limited is one of the renowned Australian company that deal with chemicals, fertilizers, coal mining and industrial and safety products. It is known as one of the huge profit making business organization of Australia. The organization has started its journey in 1914. Headquarter is located in Perth, Western Australia (wesfarmers.com.au, 2017). Corporate governance is a procedure by which a business organization is maintained and performed. This helps the organization Wesfarmers to perform in an appropriate manner to achieve the organizational target (ArAs, 2016). The below mentioned article has concentrated on organizational governance of the organization. It has discussed how corporate governance can be used by the organizational management of Wesfarmers to improve organizational performance. Analysis: According to some reports, governance works as the backbone of a business organization (Claessens Yurtoglu, 2013). The scenario of the business organization has transformed since past few years. Organizational functions have become very much complex in recent time. In order to achieve the desired target and put a strong footprint in the industry every business organization requires maintaining organizational governance. It will enhance the productivity of the organization as well as it will pave the path of the success for the business organization. There are two types of corporate governance, such as- internal and external and independent audit. Corporate governance is based on the company law. This has been decided by the member of the board of directors and other important members of the organizations. Internal Corporate Governance: Internal governance helps the organizational management to run the business organization successfully. It controls and monitors the growth of the organizational performance. Internal corporate governance includes the remuneration policy of the organization, employee behavior and monitoring the relationship with the stakeholders (Narwal Jindal, 2015). Internal corporate governance of Wesfarmers helps the organizational management to identify the right path to reach to the maximum number of buyer and put a strong footprint in the industry by providing quality service to the consumers. External Corporate Governance: External corporate governance all the external factors of a business organization like market competition, CSR policy society expectation, market demand, government regulation and managing media pressure. External corporate governance of Wesfarmers helps the organizational management to participate in the community development. It leads the organization to take some notable steps in to establish a strong and transparent relation with the society and people around the organization. Thus, Wesfarmers has become one of the most favorite brands among the consumers due to its innovative CSR initiatives. It participates in various kinds of community building activities, such as- social awareness campaign, free health check up camp, education support to the needy children. Independent Audit: Independent financial audit is an integral part of the corporate governance. Financial statement of a business organization plays crucial role for both external and internal stakeholder of a business organization. It helps them to understand the performance growth of the organization and helps them to take their future decisions (Essen, Engelen Carney, 2013). It builds a strong relation among the Wesfarmers and its shareholders. It is important for the organizational management of Wesfarmers to maintain healthy relation with the stakeholders to run a large organization like Wesfarmers. Audit report of Wesfarmers provides a vivid concept about the financial growth of the organization. Different business organization has different style of working. The requirement of various business organizations is also different. Corporate governance is also structured in different ways according to the requirement of the organization. Board of directors, employees, managers play significant role in establishing corporate governance of an organization. There are three type of structure of business organization, such as- Unitary Board: In this type of organizational structure managers play the key role to control a business organization. Chief executives are the chair person f this type of organization (Narwal Jindal, 2015). Dual Board: A business organization that possesses separate supervisory board along with the managers is called dual board. The organization is maintained by these two boards. These boards are independent. CEO and chairman hold the power to control the organization. Partnership Management: This is one of the most preferred organizational structures. This structure signifies the transparent and healthy relation between the members of board of directors and organizational management. The flow of information is smooth in this type of management, as everyone maintains interactive relation with each other in this type of business organization (Dimopoulos Wagner, 2016). This type of organizational structure is suitable for the growth of Wesfarmers. It will help the organizational management to identify the most loopholes in the organizational structure and understand the market situation and market demand by interacting with other members of the organization. This will helps the organizational management of Wesfarmers to defeat all the rival companies and set an example in the industry. Corporate Governance of Wesfarmers: Although the Wesfarmers is a renowned business organization and possesses a rich background, there are some issues related to organizational structure of Wesfarmers. The organization often faces some internal issues for the communication gap among the employees and employers. The organizational members do not have any vivid concept of their role and responsibility within the organization to foster the growth of the organization. It may lead the business organization face various obstacles. In order to resolve these issues the organizational management of Wesfarmers must consider the corporate governance norms of Australian Stock Exchange Corporate Governance Council. According to the Australian Stock Exchange Corporate Governance Council, every business organization must specify the roles and responsibilities of each member of the organization and must decide how the organizational performance will be scrutinized and maintained. The organizational management must consider the fact while establishing organizational strategy. They must define the role and responsibility of everyone. It will help the organization to perform properly (Claessens Yurtoglu, 2013). The board of the organization must mention the duties of each of the employees (Claessens Yurtoglu, 2013).. This will provide a vivid concept about the responsible areas to every employee. Wesfarmers must establish their organizational strategy accordingly to foster the growth of the organization. Conclusion: As per the previous discussion it can be concluded that corporate governance plays significant role in the growth of a business organization. It is responsible for the success of any business organization. It is important for every business organization to establish a set of norms to control the organizational function. Corporate governance controls both the external and internal function of any business organization. In this competitive era, to defeat other rival companies every business organization must concentrate on developing corporate governance. Wesfarmers is one of the major business organizations in Australia. It is known for its quality products and services. Being one of the leading names, the organizational management of Wesfarmers must maintain its corporate governance as it will help the organization to maintain friendly and transparent relation with the internal stakeholders and external stakeholders. To obtain desired position in society and put a strong footprint in the industry by providing quality products and service, organizational management of Wesfarmers must maintain corporate governance. It will be helpful for the organization to achieve long-term goal. Recommendations: Although Wesfarmers is known as a huge profit making organization and is a leading name in the business world, there are some loopholes in the organizational structure of the organization. In order to resolve these issue and ensure the growth of the organization, the organizational management of Wesfarmers must maintain a healthy and interactive relation with the employees are specify their job role and their responsible areas. This will be beneficial for the growth of the organization. The organizational management must provide training session to the employee to explain the organizational objective and describe their responsibility area. Organizational management can use other communication tools like- blog, intranet, group discussion to maintain interactive relation with the internal stakeholders. Every organizational management must allow employees to participate in the organizational development actively. This may produce many creative ideas that can influence the growth of the organization. It will help the organization to set an example in the industry. Reference: Acharya, V. V., Gottschalg, O. F., Hahn, M., Kehoe, C. (2013). 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