Environment of Marketing Channel †Free Samples to Students

Question: Discuss about the Environment of Marketing Channel. Answer: Introduction: The impact on society from business organizations have changed over the last few decades. Globalization has resulted in large organizations increasing their reach to almost every corner of the world. This expansion has caused the organizations to interact with more people and governments and face newer challenges from time to time. As any organization looks to expand in a sustainable and long-term business, it has to develop a harmony with its ecosystem of consumers, stakeholders, and regulators of the different regions where they operate. The stakeholders are no longer limited to the shareholders or the owners only, but nowadays they also include consumers, regulators, and the environment as a whole. This essay discusses the role of management at BHP Billiton, in managing the stakeholders associated with it and the evolution of relations that has developed between the organization and society during the course of its decades long existence to become a diversified resource behemoth. BHP Ltd. was established in the year 1885 with mining interests in zinc lead and silver. The company was quick to recognize the potential of these resources, which were abundantly available in the city named as Broken Hills.(Anon., 2017) Those days mining companies were less regulated and had a free hand in investing and utilizing the resources. The management of large companies such as BHP went from strength to strength, based on acquisitions or new ventures while the management followed the task of planning the venture, organizing the resources and then leading the venture, after which they had to control the unit accordingly.(Wren, et al., 2002) It merged with Billiton group to become BHP Billiton in the year 2001 .Where BHP was succeeding in its goal to become a diversified minerals and petrochemical company , it had to involve in multiple communities and their sentiments. It has to take decisions responsibly and doing so may not result in pleasant results always. For example , t he company started a AUD 2 Billion mine in western Australia , which bought a lot of progress to the local community , who had soon grown dependent on it(MAYES, 2008).Shortly after its opening , the company had to close the mine after just 9 months of operations , leaving the community and workers in disarray. These kinds of incidences have increased the focus on the role of corporate entities about the society. Other factors, which are emerging, are also equally important; like the opportunities businesses bring to the communities, they operate in. When BHP had started the mine in West Australia, the place had transformed in ways never seen before. Job prospects were increasing, the place had, for the first time, witnessed significant economic activity, which resulted in indirect business opportunities as well. These sorts of effects, which a large organization invariably brings, are also a threat to the stability of a society. Like in case of the mines unexpected closure, the publ ic had to face the consequences of the decision of a corporate entity. Many other such incidences such as the BP oil spill, the Volkswagen emission scandal, the Takata Air Bags problem, or the Global Financial Crisis have given rise to the concept of The Macro Social Environment.(CARROLL BUCHHOLTZ, 2015, p. 6) This Macroeconomic environment analysis can be divided broadly into four categories, which are political, economic, social, and environmental factors.(Achrol, et al., 1983) Organizations as large as BHP Billiton often enjoy favorable political environment, as they are an important source of economic activity. The company , with its over 1,00,000 strong workforce ,of whom about 13000 are from west Australia, is large enough to be politically important , helping it secure a goodwill among the governmental departments. The government sees it as a flag bearer of economic development as it commands the highest market capitalization in Australia, and the long history of presence there has incorporated a sense of belonging among the local community. Economically, the company is well placed currently, with access to low cost capital owing to its reputation; BHP Billiton has an advantage over its competitors in raw materials as well. Moreover, with a cash flow of AUD 14.6 billion, BHP has little worry regarding large investments or near term difficulties. (Anon., 2017) Its major material, nickel, is sourced from its mines at Ravens Thorpe at a competitive cost, resulting in significant gains for the company. These factors and economies of scale have helped the organization develop a stable image and established it as a long-term player. BHP is also on a strong footing socially, as it has a long and fruitful history for the people of the region, it has become a part of life for many people as they are connected directly or indirectly to the company. Very few companies in the world achieve a patriotic identity among its people, like Tata Group in India; BHP Billiton is one such company .Even the name of the company is taken from broken hills, a local area where mining opportunities were first started by the organization. While mining activities traditionally invite more scrutiny from among environment groups and local communities, it helps that the company has a good rapport with the local population and knows the general principals and guidelines that need to be followed while dealing with them. Technologically, BHP Billiton has the resourc es to invest in RD, and it has helped in developing techniques like the use of pressure acid leach in the extraction of Nickel has helped it to improve output, thereby improving cost benefits. Since the company has a large network of operations and has to follow rules and regulations which can change from time to time, BHP has to maintain a strong legal team in order to sort out any issues arising from its operations to avoid any major penalties or hurdles. BHP inevitably has a large role to play in the pollution emissions due to its scale of operations.(Goldenberg, 2013) In this regard, BHP Billiton has been successful in addressing environmental issues. As indicated in its organizational structure, it has a separate committee of director to look into sustainable resources and environment. It has also been right in adopting a policy of allocating one percent of its profits for philanthropic causes, which goes a long way in harboring a healthy image for the organization Thus, the ov erall macro-economic situation for BHP may be healthy on most fronts, and the company seems free to navigate the market according to its strategies. The reason of BHP Billitons immense success can be attributed to these four macro-environmental factors mostly in its favor. The existing challenge its management now has to overcome is to manage the stakeholders in a balanced manner, to achieve sustainable growth in the business and long-term viability. Any person or entity who are affected, monetarily or otherwise, are the stakeholders.(Haughey, 2016) The notion of a stake can be applied to any entity in a manner which it has an interest for the stakeholder. For example, in case of BHP Billiton, environment groups can be considered as stakeholders, since the mining activities of BHP directly or indirectly affect the environment, the environment groups would respond if there were any adverse effects due to the company. The general public who are connected to BHP for their livelihoods , are also stake holders as they are directly affected by the companys outcomes and are contributors to the companys growth. BHP being a large company, it has to face constant scrutiny and apprehensions over its business practices. (Sutton Galunic, 1995) Therefore, it has to deal with the sensitivities of the enquiries in a sophisticated and experienced manner. The public outcry over large scale scandals like that of the Volkswagen emissions scandal has made large organizations like BHP aware that any wrong handling of an issue on their part can result in loss of image and reputation which they took decades to build as was evident in the case of VW.(Gwyn Topham, 2015)Thus, any organization should identify who its stakeholders are, and act accordingly. Just like when an organization makes a decision, the stake holders are affected, the reverse is also true, i.e., if the stakeholders make a decision, an organization may be affected. For example, if the government of west Australia decides that mining activities may affect the scenic beauty and environment, and restricts mining in certain regions, it will directly have an impact on BHPs bottom line. Here, the government is already a stakeholder for BHP, since it receives a sizeable share of taxes and other support from the company. This is precisely what any organization seeks to avoid. If the stakeholders are well informed and their concerns taken into account, it is less likely that they will cause an adverse effect for the organization.(Bowen, 2011) While managing them, stakeholder of an organization can be identified as primary or secondary. Primary stakeholders include the shareholders, employees, management, the customers, suppliers, and other businesses, which provide relevant services like transportation etc. Secondary stakeholders generally include bodies like regulatory authorities, government, civic institutions, social groups or activists, and competitors. (Haughey, 2016, p. 67). While primary stakeholders are directly involved with the company, they have more sway over the organizational matters. They are more easily recognized and their concerns can be addressed in a more direct manner(Spacey, 2017). For example, if customers of company develop a changing preference for a product, the organization can make relevant changes to satisfy the needs. This may not be the case with indirect stakeholders, they may play a greater role in the overall image of the company, but they are indirect in nature. For example, if an environment group finds that construction activities are causing health and other issues in a region, the construction companies may invite scrutiny over their practices, thereby creating negativity around their repute. Thus, the managers are well aware of their extended responsibilities as those not only managing the human resources and business model, but also involving the greater circle of direct and indirect stakeholders. As the responsibility of providing the goals and the overall strategy, the management of any organization has to look for long-term solutions. As managers are more aware of the changing scenario of stakeholders and their importance , their tasks has changed become indispensable .The principal goal of stakeholder management is to ensure that the primary stakeholders get what they expect from the company , while the non-primary stakeholders are also handled reasonably so that they are satisfied(Kennedy, 2011). All these goals should be achieved while keeping the profitability and competitiveness of the firm. Sometimes the management may find it difficult to satisfy all aspects of their stakeholders, these situations require them to priorities the interests of their primary stakeholders, while ensuring minimum discomfort to the other stakeholders, as was the case in BHP Billiton closing one of its mines within nine months of operations.(Lucas Kagi, 2017) Thus, in the current era of connected economies and globalization, the role of management is very crucial to the success of any organization, as they have to take tough decisions for the sake of long-term viability of the company, and at the same time, they have to ensure minimum friction with the immediate stakeholders.(Manning, 2017) Conclusion If the past successes and achievements of BHP is taken into account , it can be seen that the company has efficiently handled most of its decisions so far , and the principal reason behind its sustained profitability is its management of each and every aspect of its business , like its stakeholders , social causes , long term goals and strategies. The fact that it has been a dominant company for such a long time is an example of outstanding management of resources and prompts handling of issues. BHP has been, and continues to be, a light bearer of efficient corporate culture for the whole of western Australian region, and thus it has inculcated a sense of responsibility among its management of the need to perform exceedingly well in order to meet the expectations of its owners as well as the general society. References Achrol, R. S., Reve, T. Stern, L. W., 1983. The Environment of Marketing Channel. In: Journal Of Marketing. s.l.:American Marketing Associtation, pp. 55-67. Anon., 2017. BHP Billiton Ltd. ADR. [Online] Available at: https://www.marketwatch.com/investing/stock/bhp/financials/cash-flow [Accessed 24 August 2017]. Anon., 2017. Bhp.com. [Online] Available at: https://www.bhp.com/our-approach/our-history [Accessed 24 August 2017]. Bowen, R., 2011. brightubpm.com. 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