Lend Lease Group and James Hardie Industries: Company Analysis

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Introduction

The current CSR landscape of the Australian financial market is featured with the extensive density of players, investors, private initiatives etc. The aims of these companies are extremely various, and the actual importance of their activity is stimulated by various benefits, as the focus, the sphere, structure, membership and strategic aims of the companies are varying.

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Nevertheless, in accordance with the OECD report, the key significance of their activity is explained by a single consideration: they are aiming to improve social and environmental conditions, including labor and other human rights. Hence, the aim of this paper is to analyze the activity of two Australian companies and argue on the matters of OECD presumption, concerning the social activity of the companies. Additionally, the accounting theory relevant for their activity will be added as another analysis prism.

Activity Overview

The companies selected for the analysis are as follows: Lend Lease Group and James Hardie Industries. The former is engaged in the sphere of multinational property management and investment activity. The company is professional in the sphere of property rights as well as property management in various regions of the world. Hence, the actual importance of company’s activity is closely linked with the matters of structuring and managing property rights and procedures. James Hardie is the industrial building materials manufacturer. Additionally, the company is involved into the sphere of research and development of new materials on the fiber cement basis. The company is also regarded as the key player on the Australian market of asbestos mining through the twentieth century.

In fact, both companies are aiming to improve the existing situation in each sphere. While property management is regarded as a flexible and constantly changing sphere. Hence, the company is aiming to fill the gap, as the demand for the correct and professional property management and investment is rather high. Moreover, it is hard to find a reliable international partner for managing and solving problems associated with the multinational property. Hence, as it is stated by Fairbairn and Clark (2008, p. 142), the company operates in Asia-Pacific region and the residential property management is performed by Delfin Lend Lease, which is in ownership of the Lend Lease Group:

The company also owns Lend Lease Primelife, and is Australia’s largest retirement communities developer. One of Delfin Lend Lease’s projects that are more controversial is their development for housing and industry of the former Australian Defense Industries. Their ADI property is the largest intact area of the bio diverse and endangered plant community, the “Cumberland Plain Woodland”. (Fairbairn and Clark, 2008, p. 142)

Hence, the company is also indirectly connected with the environmental protection sphere which is of particular concern in Australia.

As for the issues of construction materials research and development, the demand for the high quality materials is endless. Hence, the company has the largest developmental potential as well as potential for filling the gap of the existing demand. In fact, the key aspect of the company’s activity at the moment is creating the niche of fiber materials development, retail and construction. The company also offers the full range of construction works from planning and designing to building and selling the constructed realty. In accordance with the financial assessments, the company’s net income is close to $ 85 million, hence, the business potential of the company is immense, and the demand is growing, as the company managed to increase the income up to 15 % in comparison with the year 2005 (Dawkins and Ngunjiri, 2008)

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In general, the activity of both companies are based on the classic economic principle “personal ambition serves the common good”. The companies wish to benefit, hence, they offer the production and services that are demanded. Actually this is the only way to improve the surrounding world, consequently, the presumption by OECD is partly correct. The following part of the OECD presumption will be analyzed in the next part of the paper.

Social Environment and Other Human Rights

First, it should be stated that in accordance with the general research presumptions (Cieri and Dowling, 2009) the companies offer up to 10000 working places. Hence, the first and them most evident contribution of these companies is the struggle with unemployment in Australia and Asian region. The social policies that are performed by these companies are closely linked with the principle of retaining the existing workers, and decrease the turnover rate.

In general, this is achieved by the extensive care for the employees: social and medical insurance is granted, as well as the opportunities for qualification improvement and training. The employees feel themselves as a part of a united team, whether it is the team of lawyers and jurisdiction experts in Lend Lease Group, or the group of researchers and constructors in James Hardie Industries. (Mockler, 2007)

Considering the particularities of the social environment in Australia and Asian region, it should be stated that high quality working environment might be granted only by the developing and successful companies, as it is hard to retain the experienced workers, especially if the competition rate is high. While property management companies are not widely spread in the region, construction companies are numerous, and James Hardie CEO needs to think over the HR strategy properly. (Wright, 2007)

In fact, the properly planned HRM strategy is closely linked with observing the human rights, as the companies have an opportunity to satisfy all the basic needs and requirements of any person. If all the rights are protected, the companies do not have to care of the growing or extremely large turnover rate. Comparing the HRM strategies of these two companies, it should be stated that Lend Lease Group is doing its best in order to satisfy the basic requirements of human rights. Hence, the key strategic points of this company are as follows:

  • Reinforcement and maintenance of the corporate culture, which makes personnel fell themselves confident and assured in the successful development of their career
  • Approval of the personnel basic rights such as confidentiality, dignity and security
  • Stimulation for the successful work and constant training
  • Opportunity to solve the existing problems openly and freely

As for the HR policy implemented by James Hardie Industries, it should be claimed that the working environment is comparatively stricter in comparison with Lend Lease Group, however, this may be regarded as the specific requirement of the operational sphere. The company is responsible for construction, and consumers expect that the constructions will endure for at least couple decades. So, the team of James Hardie Industries is smaller, and the working environment is more exhausting, which can not be regarded as a perfect observation of the human rights.

On the other hand, the social environment is improved by creating the reliable and unique constructions for the residents. This means, that the company contributes to solving the dwelling problem, while population density in some Australian regions is extremely high.

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Another aspect of improving the social environment is the investment practices performed by both companies. Regardless of the fact that the aims of their investment practices are different, the companies develop these activities in order to make the other companies develop. In fact, both Lend Lease Group and James Hardie Industries (Baker and Hawke, 2007; Anderson, 2005) perform venture investment practices in order to develop the working network and share the operating experience with the new entrants of the markets.

Hence, the companies improve the business sphere, which automatically means the improvement of the social environment, as developing and successful companies mean the existence of the stable working places, stable family income as well as the opportunity to fill the demand gap for the target audience, as the population wishes to get the high quality services, and the regarded companies offer them such an opportunity. (Borland, 2008)

Conclusion

Finally, it should be emphasized that the business performance of any company is aimed at satisfying the personal ambitions of the owner or group of owners. However, satisfying their ambitions they fill the demand gap for the audience, hence, improving the service sphere in a region. Moreover, they create the particular amount of working places, and improve the employment situation. Considering the fact that the regarded companies perform the investment activities, they launch the chain reaction of improving the social sphere by providing an opportunity for others to increase their incomes, and create additional working places.

Reference List

Anderson, J. W. 2005. Corporate Social Responsibility: Guidelines for Top Management. Sydney: Quorum Books.

Baker, R. W. & Hawke, G. R. (Eds.). 2007. Anzus Economics: Economic Trends and Relations among Australia, New Zealand, and the United States. Westport, CT: Praeger Publishers.

Borland, J. 2008. Job Creation and Job Destruction in Manufacturing Industry in Australia. Economic Record, 72(216), 46.

Cieri, H. d., & Dowling, P. J. 2009. Strategic International Human Resource Management: an Asia-pacific Perspective. Management International Review, 37(1), 21.

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Dawkins, C., & Ngunjiri, F. W. 2008. Corporate Social Responsibility Reporting in Australia: A Descriptive and Comparative Analysis. The Journal of Business Communication, 45(3), 286.

Fairbairn, J., & Clark, S. S. 2008. Multinational Property Litigation in Australia. Defense Counsel Journal, 75(2), 142.

Mockler, R. J. 2007. Multinational Strategic Alliances. Chichester, England: John Wiley & Sons.

Wright, P. M. 2007. Corporate Social Responsibility at Gap: An Interview with Eva Sage-Gavin. Human Resource Planning, 30(1), 45.

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