Governance and Leadership Management Governance Structure

Question: Describe about the Governance and Leadership Management for Governance Structure. Answer: Introduction This assignment discusses regarding the governance structure and the leadership approach at Wesfarmers Limited, which is one of the biggest conglomerate companies in Australia (Wesfarmers.com.au, 2016). During this assignment, the discussion and evaluation first focuses on the existing or current project governance structure of the company and at the same time, the discussion also covers the existing leadership approach of the company. After that, the assignment suggests an appropriate governance structure and leadership approach for the future benefit of the company. Evaluating the current project governance structure The governance structure of a company is the most important factor behind the success of that company. In the annual report of Wesfarmers Limited it has been mentioned that the project governance or the corporate governance structure of the company is satisfactory enough to secure the organizations success. The annual report has also disclosed that the corporate governance of the company has been formulated as per the 3rd edition of ASXs Corporate Governance Council (Wesfarmers.com.au, 2016). As per the project governance statement of the company, the board of directors is responsible to provide the return to the shareholders at a satisfactory level. At the same time, the board is also committed to meet all the interests of the stakeholders of the company (Wesfarmers.com.au, 2016). The basic role of the board members of Wesfarmers Limited is to prepare the best strategic direction for the company and to monitor the activities of the employees at management level. Apart from that, the board members of the company aim to increase and protect the interests of the stakeholders of the company. Adams (2016) mentioned that the board of directors of Wesfarmers Limited is committed to provide the best corporate governance practice. The primary responsibility of the Managing Director of the company is to monitor the daily management activities of the company (Sullivan and Gouldson 2016). Due to this, for any kind of mistake or faults in the activities at management level, the Manag ing Director is responsible. The program management at Wesfarmers Limited is also affected by the project governance or corporate governance of the company. Any kind of activity, whether it is at operational level or at managerial level is affected by the project or corporate governance of the company (Haigh 2016). The program management of the company became easier due to the strict corporate governance structure of the company. The project governance regulations at Wesfarmers Limited have suggested maintaining the high transparency level in every program management activity. With the help of the high level governance structure, the mismanagement of the programs can be avoided by the managers of the company (Kilroy and Schneider 2016). The corporate strategies of Wesfarmers Limited are aimed to develop a sustainable business in the international market. The higher management at Wesfarmers Limited has stated that the corporate strategies of the company have been formulated on the basis of the corporate or project structure of the company (Gordon 2015). Some of the corporate strategies of the company are as follows: Provide the best quality product and services to the customers of the company. Provide each information related to the operations of the company to the stakeholders in detail. Provide the proper salary package to the employees at fixed time in each month Maintain the high environmental standard during business operations Maintain a friendly working environment within the company and avoid any kind of conflicting situation (com.au, 2016). If all of the above strategies are evaluated then it can be identified that the strategies are developed in accordance with the corporate governance structure or policies of the company. The proper flow of information and providing high quality products and services clearly indicate that the company wants to meet the interests of the customers and other stakeholders of the company (Swoboda, Elsner and Olejnik 2015). Similarly, providing proper amount of salary at the fixed time indicates that the company wants to meet the interests of the employees also. The strategy of maintaining the environmental standard proves that the company wants to meet the interests of the society, which is also indicated by the corporate governance policies of the company (Mehmood and Hilman 2015). Therefore, from the above discussion, it can be understood that the corporate governance structure at Wesfarmers Limited maintains high corporate standard. However, currently, the corporate governance of the company is facing some issues, which is indicated by the management-employees conflict, customers complains and shareholders dissatisfactions (Wesfarmers.com.au, 2016). Currently, the frequency of employees-management conflict has increased at Wesfarmers Limited. Richards, Kjrnes and Vik (2016) stated that as the number of employees of the company has increased than the past years, the company is facing trouble in managing the employees. In support of that, Balogh (2016) added that the corporate or project governance structure at Wesfarmers Limited needs to be revised to handle the internal situation at the company. On the other side, in different surveys, it has been identified that many customers of Wesfarmers Limited have stopped to use the products of the company and they stopped to visit at Wesfarmerss outlets (Swerissen and Duckett 2016). This indicates that the company is failure to fulfill the interests of the customers properly, which indicates that the governance of the company is having some faults. At the same time, the surveys also disclosed that the shareholders of the company are dissatisfied to some extent because they are getting the return not at satisfactory level (Biddle 2016). Therefore, from this discussion, it can be said that the management at Wesfarmers Limited needs to improve the corporate or project governance policies or structure as soon as possible. Evaluating the current leadership approach The operational effectiveness of a company depends on the leadership structure or approach of it. In case of Wesfarmers Limited, the leadership approach is strategic leadership (Wesfarmers.com.au, 2016). The main benefit of this particular leadership approach is the responsibility of the activities is distributed to various people as per the organizational or operational structure of the company. Due to this, the people in the organization become more responsible and their operational effectiveness also enhances (Willmott 2015). At the same time, the flow of information becomes also smooth due to the strategic leadership approach. Gattorna (2015) mentioned that the strategic leadership tool or approach is an effective approach for any strategic project. This is because in this particular strategic leadership approach, the focus is made on each employee separately, which helps to gain the attention of the employees. However, Kilroy and Schneider (2016) stated that in the strategic leadership approach sometimes people take wrong decision, which affects the performance of the company. At the same time, Acker (2015) also commented that in the strategic leadership approach, too much focus is made on the decision of the employees. Due to this sometimes, huge conflicts take place between the employees. At this point of time, it becomes very difficult for the management to choose the decision of any particular employee. Therefore, ultimately the main aim of the leadership approach remains unfulfilled. Moreover, Gordon (2015) stated that the strategic leadership approach is more effective when the company takes any small project, but in order to run the overall business, the strategic leadership approach is not that much effective. Therefore, this is also applicable to the leadership at Wesfarmers Limited also because the leadership style at Wesfarmers Limited depends on the strategic leadership approach. Due to this approach, inter organizational conflicts at the company are increasing day-by-day, which is not good for the company. Moreover, in the strategic leadership approach, the company may face problem, if any dishonest person gets the chance to take decision. Hence, it is important for the company to improve its leadership approach immediately. Suggesting the new governance structure In the above discussion, it has been identified that in Wesfarmers Limited, the corporate or project governance structure and policies are needed to be changed. The company is facing several problems because of the loopholes in the governance structure and policies. Though the annual report of the company states that the corporate governance structure of the company is much good, the problems in the company indicates that there must be some loopholes in the governance structure (Farivar et al. 2016). However, the management of the company can improve the situation by changing the corporate governance structure and policies. In the new corporate governance or program governance structure, the company needs to reshuffle the overall structure of the governance. The head of the corporate governance will be the board of directors of the company. However, the board of directors will be set up as per the suggestions and confirmation of the shareholders (Newman 2015). It will be the prior duty of the board members to fulfill the interests of the shareholders properly. The shareholders of the company will also have the authority to appoint a separate auditing team to audit the financial reports of the company. This will help the company to remain transparent to the shareholders (Willmott 2015). The internal audit committee of the company will be set as per the advice and confirmation given by the shareholders and board members. In the internal audit team, some of the auditors will be appointed by the shareholders of the company and the other auditors will be appointed by the board members of the company. The board of directors of the company will also be responsible for appointing the risk review committee. The main responsibility of the risk review committee will be to assess the risks of the company in a particular year and on the basis of that assessment developing proper strategies to reduce the risks (Swerissen and Duckett 2016). On the other side, the board of directors of the company will also appoint the management team of the company. The board members need to select the best people in the company for the management team. The board members can select the members for management team from the external sources if required. At the same time, the board of directors of the company will also recruit the human resource management and compensation committee and governance committee (Gordon 2015). Therefore, in the above discussion it can be identified that in the new corporate governance structure, the board of directors of the company will be responsible for appointing the different internal management team of the company. However, the monitoring of the day-to-day activities of the company will be done by the lower level management team. The board of directors will only checks or monitors the final reports provided by the management team of the company at the end of each month. This will help the board members to keep a track on the activities of the management team. On the other side, as the shareholders will select the board members, the dissatisfaction level of the shareholders will be reduced to some extent. Apart from the new governance structure, the company will also require to improve the corporate governance strategies. The new corporate governance strategies of the company must consider the followings: The interests of the other stakeholders must be fulfilled properly. The information of the company must be reached to the investors and other stakeholders on right time and in detailed manner (Haigh 2016). The employees must work as a team and no internal conflict must be presented at the workplace. Regular verification of the financial statements must be done by the management team. Proper training and guidance must be provided to the employees at regular interval (Newman 2015). Therefore, if the company considers these needs at the time of preparing the corporate governance strategies, then it can be expected that the problems of the company will be solved easily. Suggesting the new leadership approach The discussion in the study has identified that the management at Wesfarmers Limited is currently following the strategic leadership approach. This particular approach is much effective for the success of the company (Biddle 2016). However, there are some problems with this approach, for which the company is facing and may face some problems. In order to avoid any kind of problem related to the leadership style, the company can change its leadership approach. The management of Wesfarmers Limited can adopt the participative leadership style. The participative leadership style is very effective in any kind of business organization. In participative leadership, the management of the company asks the employees to provide their views regarding any particular matter. However, the final decision of the company is taken by the management after considering all the views of the employees (Kjrnes and Vik 2016). Due to this, the decision or the strategies of the management become much effective and at the same time, the employees feel valuable to the company. Another positive side of participative leadership approach is that this particular leadership style is accepted by everybody within the organization (Gordon 2015). This ultimately helps in reducing the internal conflicts among the employees as well as between the employees and management. The morale of the employees can also be enhanced with the help of this particular leadership approach. This is very important factor behind the success of a company. Moreover, if the company applies the participative leadership approach, the employees will be motivated to provide their creative and innovative ideas to the management. Acker (2015) believed that the participative leadership style is very effective for increase the employees retention rate. As the employees of the company remain satisfied because of participative leadership style, they turn to loyal employees and do not want to leave the organization easily. Therefore, from the above discussion, it can be said that if the management at Wesfarmers Limited applies the participative leadership style, then they can run the business more effectively. The problem of internal conflicts among the employees and between the management and employees can be solved. At the same time, the management can easily motivate the employees in improving the performance level of the company. Therefore, it will be better for Wesfarmers Limited if it applies the participative leadership style. Conclusion In this study, it has been identified that the current governance structure and the leadership style at Wesfarmers Limited are much effective. The current governance structure of the company is focused on fulfilling the interests of the stakeholders. The board of directors of the company takes several steps to improve the performance level of the company and meet each requirement of the shareholders. However, currently, the company is facing some issues, which indicate that the governance structure and policies need to be changed as soon as possible. The study has recommended a possible governance structure, which the company can adopt to improve the current organizational situation and satisfy the stakeholders in better way. The study has also identified that the current leadership approach of the company is based on the strategic leadership approach. However, in this approach there are some loopholes, which can negatively affect the performance of the company. 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