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TASK 1: ANGLO AMERICAN
Anglo American was established in 1917 in London, England and their main businesses are exploration, mining, processing, melting and technology and innovation. Anglo American is the world's leader in platinum and diamonds, as well as being a leading producer of coal. Anglo American is a major producer of copper and is making significant steps to develop their footprint in iron ore1. Their main products are platinum, diamonds, copper, nickel, iron ore & manganese, metallurgical coal, thermal coal and other mining. Anglo American total revenue in 2009 is 24,637 million Dollars and total profit is 4,957 million Dollars and their most profit comes from copper (2010 million dollars) and iron ore & manganese mining (1489 million dollars). In the next decade, business will drive growth for Anglo American is mining and exploration. But there is big change for Anglo American by the year 2020; inventing and innovating technology will be main profit due to out of and shortage resource. Technology will replace by mining and smelting activities. According to world financial crisis so revenue and profit from all activities are falling down, profit was fallen down 9.27% in 2008 comparison with year 2007. This figure was dramatically decreased between 2009 and 2008 with 50.84% and compared with 2009 was -55.4%. So the years from 2007 to 2009 were the worst time for Anglo American's activities. But their revenue and profit are still high comparison with others companies in the world. It is still active sign2.
Revenue (Million USD)
Profit (Million USD)
Mining activities causes both positive and negative impacts to the society and environment surrounding. Resources are limited, so companies only concentrate to exploit resource but they do not care about to corporate with others for long term plan to build capacities. It will be ended soon5.
How does Anglo American respond to corporate responsibility activities for sustainable development? Anglo American concentrates to the following: Business ethics, environmental, human right and political:
Business ethics are moral principles that guide the way a business behaves. The same principles that determine an individual's actions also apply to business. Acting in an ethical way involves distinguishing between 'right' and 'wrong' and then making the 'right' choice. Company do not use labor force who are young and not enough age to work as that company application law for working.
Anglo American establish a goal very year for sustainable development such as working without fatal accidents, eliminating occupational diseases, Increasing diversity in the workplace, the benefits of mining for local communities and energy efficiency. With these criteria Anglo American has great contributions to economic development and creating competitive advantage for their company. From these factors, Anglo American has attracted long-term capital from shareholders6. Mining activities have great influence to habitat and destruction geologic strata, causing dirty and water pollution, ecosystem destruction7... So what has Anglo American done in order to minimize pollution from their operations have the most little impact on the environment. Climate change, air and water pollutionâ€¦ are the greatest threats not only in one region or a country but also global. Anglo American committed cutting 10% CO2 emissions by 2014 and 15% of their dependence on energy comparison with company's demand in 2004. Anglo American is proceeding to use clean energy by investing to develop technologies using clean energy. Anglo American also concerned and took care to human rights and to the lives of staffs; it is one of the company's operations conditions. Anglo American has strengthened their commitment to human rights such as: Socio-Economic Assessment Toolbox, Social and Environmental Impact Assessment Standard and Group social policy. These factors are ensuring that human-right issues were cared by Anglo American8. Political is not a small factor to influence to Anglo American's activities. Anglo American is active to cooperate with the authorities of the host country in order to solve issues relating to legal, environmental, human-right that their activities affected to those factors9.
As diagram 1.2 shows that it is an important process is stakeholder engagement. This enables it better to understand the perspectives and priorities of external groups that are affected by its activities and to factor them into its decision-making processes. To support this work at a local level, Anglo American has developed a Socio-Economic Assessment Toolbox or SEAT process. This 'toolbox' helps managers to measure the impact of activities on the company and communities. It also helps to improve a mine's contribution to development through, for example, using its supply chain needs to generate new businesses or to improve the water or electricity infrastructure. They use this toolbox to engage with stakeholders including community representatives10.
Since late 2007, the world economy is facing with lots of difficulties caused by the global financial crisis. This global financial crisis scope is very big and affects all industries in general and heavy for Anglo American in particular. This crisis has made revenue and profits of Anglo American decreased greatly from 2007 to 2009. The company's profit fell 55.4% from 2007 to 2009 and 50.84% between 2008 and 2009. Profit of Anglo American was lost half of profits in 2008-200911. So what did Anglo American do to cope with economic recession in these years to overcome this crisis? Like other companies in the world, when facing difficulties problems in the financial crisis, companies often have policies to reduce operating costs as well as administrative costs. Unnecessary costs will be cut to reduce company's burden expense. The uncompleted projects that have to use big capital are also canceled or temporarily postpone until suitable time. Anglo American focuses on the product and their subsidiaries which has main income to enhance sale value and profits from these activities. Assets that Anglo American's holding are bidden to get money for investing and paying their debts. Anglo American total debt in June 30, 2010 was 13.2 billion dollars12. Anglo American also cut 19.000 jobs in 2008. Companies tend to cut jobs to cope with reducing expenses. They tend to narrow the scope of their production and wait period crisis over. Anglo American's jobs cut accounts for 1/10 the total number of their staffs worldwide13. Anglo American next operation to deal with the world economic downturn is selling off its subsidiaries which are owned by Anglo American to pay for debts. Anglo American has sold two of their subsidiaries is Moly-Cop and AltaSteel for OneSteel, an Australian company with $ 932 million in 201014.
Anglo American's strategy is a global leading company in mining industry. Their ambition is becoming the investment, partner and employer of choice. There are four mains element in their strategy as follow15:
To become a worldwide leading company in mining industry, Anglo American has been focused on 4 factors such as: Investing, Organizing, Operating, Employing. These are four important factors to contribute to the development of Anglo American and achieve the goal of these strategies. Strategy for improvement efficient using of energy resources, reduce dependence on energy resources and low costs for enterprises. Strategy to protect clean water sources are also given by the company. Protection of water resources is one strategy for sustainable development of the company, due to mining activities need to use lots of water and it will be discharged into the environment a lot of pollutants to water and air and soil pollution. So company's strategy is to ensure that water discharged into the environment must conform to emission standards. Strategic tax payment as well as other obligations under the provisions of the host country also is strictly implemented by Anglo American. This action shows long-term business. Activities and strategies to pay taxes have been managed through a global team of tax professional. Human resource development strategy is focused by Anglo American on these criteria: diversity of human resources, women in mining attract workforce are women to join in production of Anglo American's operations, development living, working and training skills, by 2009, Anglo American has invested 84.1 million dollars for training human resources, relationships in gender equality and labor; restructuring the organization and development organization16. Climate change strategy: "increasing the proportion of renewable energy that we consume is an important component towards achieving our overall GHG-reduction target"17. Climate change is a huge problem that forced companies and countries have specific strategies to minimize the impact of their activities on the environment. Anglo American also aims to make a sustainable, positive difference to community development. This involves acting with integrity to build respectful relationship within the societies in which it works. In the strategy of investing in research to develop new technologies, this new technology has helped to use energy resources and emit less bad waste to environmental impacts. Anglo American has developed machinery and technology enables the use of coal which has more CO2 emissions into the environment, this device will attract and absorb CO2 emissions before they are discharged. This waste is collected and then stored in a safe place such as underground. Anglo American has also invested in developing alternative energy sources such as wind and water reuse18. Anglo American focuses on inventing and applying new technology to their operation and they become innovative company.
Due to the nature of the mining industry, working conditions are difficult due to work underground, so Anglo American's vision is "Zero Harm". Anglo American respect and pay attention to human life in general and the lives of their employees in particular. Their vision is to ensure safety for staff members such as health care, illness care and the most important thing is to ensure that every staffs can go home after work. To ensure the implementation of "Zero Harm" tasks, Anglo American has processed the following: (1) zero Mindset: the goal is to control and prevent risks, diseases can arise in working place, (2) Standards: To ensure the principle of working to prevent and avoid risks and accidents can happen at work and must be strictly obeyed, non-negotiate with concessions that could happen bad consequences to human life, (3) no repeats: If an accident happens, companies must take full responsibility in finding out and clarifying the causes of accidents and this accident is prevented, it will not be allowed to happen in the future19.
Anglo American's mission is to ensure that their operations do not affect environment and avoid destructing habitat, imbalance ecologic environment. Anglo American also committed to cut emissions from their operations cause greenhouse effect. They committed to reform and reconstruct environment that are not destroyed, keep the surface unchanged and return life to that area when Anglo American's mining operations ends life cycles and closes.
Sustainable development is one of the main and basic goals of Anglo American. Long-term investment and development are basic foundation of sustainable development. Investing expansion of enterprise, infrastructure and human are the goal which Anglo American is aim to achieve.
On the business expansion strategy, Anglo American has opened 12 branches and subsidiaries in areas where high unemployment rate of African and created 25.000 new jobs for people there. They also provide financial for small enterprises to promote the operations and business of that company. They also contribute with other relevant authorities in the host country for anti-poverty, education development, disease prevention programs and reduce rate of HIV / AIDS cases, gender equality, mortality rate in African countries20.
To motivate staffs in the work, Anglo American has created a good working environment, no discrimination between different levels and levels of workers and employees in company. Improvement training capacity, every year Anglo American has invested millions dollar in training their employees. No discrimination and gender equality has helped women to participate in the activities of company.
With big investment and development on human, high social welfare and get a job at Anglo American is a good chance for myself as well as everyone who want to find a job. Living in the world economic and financial crisis, finding a job is difficult and an idea job is more difficult, especially a job in a multinational company such as Anglo American. If I got an offer to work for Anglo American. I will not accept this invitation because I am having a good job with well paid and working condition is also very high. I refuse to work for them by two reasons. (1) I do not want any changes in work at this time because I have had a very good job, if I move to new company, such as Anglo American I am not sure that I will have a good working environment and job as now I am. (2) If am forced to change job and I will not choose Anglo American because I think that it's time for me to create my own work by establishing my own business. After a long time working for many companies in all types of business and acquiring knowledge from the MBA programs and knowledge from society I feel confident enough to establish my own business and I will work for myself. And that is the reason and purpose why I joined this programe.
Everyone is born with a specific jobs and duties. Function and responsibility of everyone are not the same each others. Characteristics of each person is different by environment, regional and country living. Everyone is born to do different works and there is not a job for everyone. So "leaders are born not made". So who is leader? What are they doing? And where do they come from? Leader comes from anywhere and anyone may also become a leader. The leader may be born with innate nature leadership. They come from working processes and gaining experience in life. They come from training course for being a leader, they are followers of previous leader or they come from combination of all these above factors. What will leaders do and play a role in an organization? A leader play an important role for all decisions related to the survival of a business as well as driving business to right direction to achieve enterprise development goals. They orient and direct business operations. In an enterprise, not anyone can become a leader. So what is the difference between a leader and a manager? First of all leaders' categories and scales of management is often higher than a manager, their job is to cover the whole business and manage at macro level. Manager's job will focus at micro level and main duties on a specific work within an organization. Basic different between leader and manager are: Managers are people who do things right and leaders who do the right thing with the difference being vision and judgement21. In one business, a good leader is a person who managing and operating their business the best, utilizing all resources inside and outside to improve their value-added products and services. The leader must have a long-term strategy and vision; apply new technologies in production to have competitive advantage in the market, regulating resources and minimizing losses that may occur their business. They can deal with difficulties in the market such as the world economic, financial crisis and they nonstop to go forward on the way which they have been chosen or assigned to their position as leaders. Many people were born with good skills or in their living, studying and working they achieve high skills and professional, will they become a leader or a good leader. The answer is yes and no, they can become a leader or they never become a leader because not any good man can become a leader. I know lots of very good men but they do not have management skills to become leaders. These are very good professional, but their management skills are very bad. They do not know how to manage; they do not know how to arrange works by a logical order to manage their time. So they cannot overtake a work of a manager and become a leader is too far of their reach. They cannot regulate relationships as well as work which a leader must have. They will do better with their professional and specialization work or counsellor business activities for leaders and they have a specific and accurate operation for business. So not everyone is born to become a leader. To become a leader, they have not only nature of leadership but also have knowledge, and many other soft skills to become a leader.
Human Resource is the most valuable property for every business. Business will grow better due to having the best manpower. A good manager is a man who has the best men and manages them. Businesses will not be developed without these best manpower's. I do not agree with opinion that "the best way to ensure constant innovation is to hire young, newly-graduated candidates with an interest innovation and set them in a think-tank, separate from the main organization - so they can develop new ideas unimpeded by the existing business". Newly young graduated, they also have their own advantages comparison with older men, they have higher flexibility, they like to explore and discover new application. They always want to look for new idea, invent new things and apply it in their life and work. They want to confirm themselves with organization as well as other members in organizations are whatever the old men did, they can do or even do it better. But they lacked practical skills as well as working experience. If young people are chosen to innovating business but they are separated to work with organizations, it is difficult to improve organization. The innovation will come and can only come when all members are working together in environment, not separating. Innovation, improvement of a business would be if this business is creating working condition for them to do that. These improvements must come from actual working environment and have been exchanging information between the members in company and big improvement will come and be suitable for business from this. A person or a group is selected and they are separated from business's actual operation is no different from forcing them to improve the innovation and they do not know how to improve and reasons for improvement. This is like a person who is locked in a closed room and the only place he can see and communicate with the outside world is a window, and what they see from outside through the window, they will think that everything is going on outside like what she is seeing. And mindset for improvement cannot be applied to enterprise because it does not reflect what is happening in reality. Thus separated members from organizations, they are forced to improve; it is not really a good result. But in some areas, it may have a good result when they are separated. But in my opinion, I do not agree with hiring young, new graduates and put them to work in an independent group. They must be put in a specific and reality environment. They have to work with old staffs, both old and new staff will be complementary to each other to get the best results. We must take advantage of new staff to promote old staff's weaknesses and vice versa. This combination along with company's actual working environment will offer the best results to innovate that business. But to get this innovative, it would require the direction and operation works as well as human resource from head of business.
Because older staffs are often jealous with new comers, and new comers are often cocky with their new knowledge and active so there are conflicts and lead to bad results. So leaders will be a head for regulating relationship. Improvements will be suitable and effective for businesses.