PART 3:
BHP’s purpose as stated in their mission statement is “prioritising both financial and social
value” to “deliver long-term value” to their stakeholders and to “bring people and resources
together to build a better world” (BHP Annual Report, 2022, p. 8). They are one of the
world’s top producers of resources such as iron, ore and coal, without their existence the
modern world would not function as everything from cell phones to heavy machinery rely on
mineral products.
BHP’s comprehensive value chain starting from the extraction of raw materials to delivering
products means that BHP has lots of stakeholders. The stakeholders that are central to their
purpose are ……… (Employees, communities including the local communities and
indigenous communities, the environment)
Authenticity: → ask
PART 6:
Part 1: propose ONE new initiative that has the potential to create shared value and “grow the pie,”
These stakeholder conflicts between BHP and the Indigenous community can be overcome
by an initiative that emphasises the creation of long-term shared value. After weighing out
BHP’s strengths and core brand identity, namely:
1. Mass production of coal etc
We recommend that BHP implement social initiatives to help contribute to improving their
relationship with the Indigenous community through voluntary social support and further
promote the Indigenous culture through free cultural events that benefit both the indigenous
community, through educating them on mining sites, employees on the Indigenous land, and
providing free vaccinations, building the indigenous cultural awareness within BHP’s
workforce environment.
Figure 2: Porter’s Value Chain
In accordance with the value chain (Porter, 1985), this initiative stems from its support
activities, in particular the Human Resource Management aspect which enhances the mutual
relationship between stakeholder and company. Moreover, the costs and long-term mutual
benefits of this initiative can be explored through the “Grow the Pie” framework.
Multiplication in Social Benefits
The cost of initiating free benefits towards the community to an extent could be deemed
substantial, including both the funds placed towards providing free vaccinations and
organising events for further development and training when learning about the Indigenous
culture and aiding Indigenous community into understanding more about mining sites,
promoting the further development, and training, resulting in closer long-term relationships,
acting to provide support for primary activities to take place and support other support
activities. However, despite the small initial cost when organising free initiative, this
initiative will be likely be multiplicative, creating social benefits that far outweigh the
financial investments. This will involve contribute to an improved quality of life for
indigenous people (BHP, 2020), hence, growing the pie. BHP’s aim towards creating longterm relationships with the Indigenous community and bringing people together (BHP, 2022)
can be reflected upon this initiative. Additionally, by employing this initiative, both parties
are able to learn more about each other, thus, embracing a closer bond and illuminates the
importance of the environment. By embracing a closer mutual relationship, BHP will be able
to ease down complaints about the business’s destruction towards the environment. However,
it could be hard to determine, for example, 2 participants in this free development events and
vaccination initiative does not equate to 2 new BHP supporters. Consequently, creating free
developmental events for company-stakeholder and vaccines is multiplicative in terms of its
low cost and high benefits towards the recipient, but can be hard to determine and identify.
Comparative Advantage
BHP has a strong comparative advantage in implementing supportive social initiatives such
as free services and cultural events for the Indigenous and BHP workers as they are able to
leverage their core strengths and develop brand identity. As well as aligning closely with
BHP’s aim towards creating long-term relationships with the Indigenous community and
bringing people together (BHP, 2022), BHP’s large market capitalisation of $134.69 billion
(Global Ranking, 2022) indicates that they have high sale value, hence, ___the direness to
promoting good social value with the Indigenous community, increasing the viability of this
initiative. With the expansion of the mining industry and marketplace ________, by offering
free______ Finally, with consistent sales, BHP maintains their value over time and its
products may experience a drop in value especially when the industry is expanding, resulting
in increased competition, furthermore, as the supply of products increase and demand
decreases, BHP may experience a fall in profits. As such, BHP’s competitive …
-
Idk but like it’s a big and well-known company with secure market capitalisation 
so like probs wouldn’t experience much change = create comparative advantage???
-
Linking sentence: as such, BHP’s core characteristics complement the levers that
drive a successful advantage, creating a comparative advantage. (vice versa)
Materiality
A specific material group of stakeholders will be impacted by this initiative. The local
community, especially the Indigenous community stakeholders are benefited through the
access towards free vaccinations and further develop a deeper understanding towards the
mining industry, simultaneously creating gains and relieving their pains as investigated
earlier. Additionally, it also creates a stronger shared value for BHP, strengthening their
brand image, as they are willing to concede short-terms profits into providing free
development and services to align with their core values of supporting the Indigenous
community by encouraging better relationships between operations and local communities
(BHP, 2022). In the long term, for shareholders, sales may increase as consumers may spend
more willingly on BHP products as the brand image improves in comparison to other
competitive business within the market, as a result, helping BHP boost their market share and
profits, growing the pie and facilitating shared value across stakeholders.
RANDOM: WHAT I WROTE AT FIRST
A business’s purpose centres around the necessity of creating shared value, by expanding the
economic and social values. In doing so, with accordance to the concept of growing the pie (Edmans,
2020), rather than focusing on their “piece of the pie”, which highlights around the demand towards
profiting and making financial value, businesses are encouraged to incorporate innovation and ____
that can generate societal benefits into the company’s business model.
BHP’s continual tension with its Indigenous community’s stakeholder group presents dire
consequences towards ‘splitting’ BHP’s pie, conflicting with creating societal value, thus, impacting
BHP’s growth in profits. Subsequently, to improve and illuminate these key concerns that surround
this stakeholder company relationship, BHP could implement social initiatives to help contribute to
improving their relationship with the Indigenous community through voluntary social support and
further promoting the Indigenous culture and building the indigenous cultural awareness within
BHP’s workforce environment. By introducing initiatives like free cultural knowledge events for both
parties to promote further development and training will promote closer long-term relationship, acting
to provide support for primary activities to take place and support other support activities
value creation will increase through enhanced mutual trust and benefit, thereby, profits will naturally
follow. BHP could consider stemming towards initiatives that enriches social value, as such, including
supporting local businesses of the Indigenous community, contributing to an enriched support activity
of the Human Resource management value chain when retaining a mutually beneficial relationship
and further development towards developing mutual respect. This will also additionally contribute to
an improved quality of life for indigenous people (BHP, 2020), hence, growing the pie. BHP’s aim
towards creating long-term relationships with the Indigenous community and bringing people together
(BHP, 2022) can be reflected upon this initiative
Sustainability bounds at the forefront of business’s operations when purchasing resources,
employing the value chain in its Human Resources Managament aiding value creation
between BHP’s alliance with Komatsu
we are talking about BHP in this report? perhaps some initiatives such as supporting local indigenous
businesses and invite them to be involved in indigenous education for mining sites.
BHP’s ambition is to create long-term relationships with Indigenous Peoples,
grounded on trust and mutual benefit. Respecting and partnering with Indigenous
Peoples aligns with our Company Purpose of bringing people and resources
together to build a better world, our focus on delivering long-term social value and
our commitment to working with integrity..
commitment to making a social investment of at least 1 per cent pre-tax profit
primary purpose of contributing to the resilience of the environment and the
communities where we operate, which aligns with our broader business priorities
towards initiative that
Pieconomics: businesses should aim to create value for society first (grow the pie), then
profits will naturally follow
we are talking about BHP in this report? perhaps some initiatives such as supporting local indigenous
businesses and invite them to be involved in indigenous education for mining sites.
illuminates key concerns that surround this stakeholder company relationship and the value
creation they form across the value chain framework.
Overarchingly, tension between the two stakeholder groups can be deemed a consequence of
‘splitting the pie’ as opposed to ‘growing it’.
As Edmans (2019) claims, any business should make a conscious effort to ‘grow the pie’ to
ensure value is generated for all stakeholders which naturally leads to a company’s long term
success.
For BHP, an evident prioritisation of cost effective operative activities to achieve financial
success for shareholders has jeopardised Indigenous communities who value their land,
demonstrating the removal of value from one stakeholder group to give to another.
This creates tension between mainstream shareholders whose main priority is profit
maximisation from cost efficient methods, whilst the Kokatha people urge for more sustainable
practices to protect their land and resources.
Thus, in the case of BHP, it is not that shareholders disagree with more sustainable practices,
but more so that it is not a top priority, as their main goal is to make returns on their investments
which has so far been achieved with low cost and unsustainable measures.
Pieconomics: businesses should aim to create value for society first (grow the pie),
then profits will naturally follow
o To do so, a company must have a meaningful purpose for operating that is
communicated externally and embodied internally
Pieconomics is an approach to business that seeks to create profits only through creating value for
society (Edmans, 2020)
- “an enterprise’s ultimate goal is to create value for society – and by doing so, it will increase
profits as a by-product”
BHP could take on a modernised multi-stakeholder approach by growing the pie (GTP; Edmans,
2019)
Guiding principles:



Reconceiving products and markets (is our product good for customers?)
Redefining productivity in the value chain
Building supportive industry clusters on location: network effects, productivity gains,
community roots
Growing the pie = instead of solely focusing on the financial value of things, companies should
incorporate innovation and societal benefits into their business models company focus on creating
more societal value rather than focusing on their “piece of the pie”
 What resources does my company have and how can my business benefit society?
o E.g. restaurant donate to homeless etc


Profit-driven firms have the sole purpose of multiplying profits: does $1 spent create >$1
in future profits?
Pieconomics requires 3 principles to be fulfilled:
o Multiplication of social benefits: does $1 spent by the firm (private cost) create >$1
in future social benefits?
o Comparative advantage: does $1 spent by the firm create more future social
benefits than $1 spent by another firm?
o Materiality: does the activity benefit a material group of stakeholders?
Business
framework
Advantages

SVM

Pieconomics


-
Disadvantages
Profit (ICFs): easily
quantifiable, single number
Easy to understand as a basis
for compensation

Uses judgement rather than
over - exact math a more
flexible than SVM
Able to judge and decide on
many more projects


Leads to “errors of omission” a firm
doesn;t take action because its effect
on profits can;t be quantified
Impossible for most projects to even
remotely forecast profits
“Social value” is hard to objectively
quantify as it has many dimensions
Pieconomics: businesses should aim to create value for society first (grow the pie), then
profits will naturally follow
o To do so, a company must have a meaningful purpose for operating that is
communicated externally and embodied internally
Baccomatto Osteria
Evidently, BHP has successfully generated sizable returns to investors simultaneously adhering
to their mission of creating long term ‘financial value’ to shareholders. However, the ‘social’
component of their mission has been neglected and as a result has hindered the success of
BHP’s mission, tarnished their reputation and created conflict between shareholders and a
vulnerable stakeholder group- Indigenous communities. Overarchingly, tension between the
two stakeholder groups can be deemed a consequence of ‘splitting the pie’ as opposed to
‘growing it’.
As Edmans (2019) claims, any business should make a conscious effort to ‘grow the pie’ to
ensure value is generated for all stakeholders which naturally leads to a company’s long term
success. This entails the creation of additional value as opposed to withdrawing value from one
stakeholder group to appease another. For BHP, an evident prioritisation of cost effective
operative activities to achieve financial success for shareholders has jeopardised Indigenous
communities who value their land, demonstrating the removal of value from one stakeholder
group to give to another.
BHP’s cost efficient approach to retrieving raw materials has resulted in dire consequences due
to radioactive tailings being left behind at mining sites once ores have been mined. For the
Kokatha people, an Indigenous community near the Olympic Dam region, the perpetual use of
unsustainable practices resulting in radioactive tailing has damaged their land and will continue
to do so if no alternative sustainable methods are adopted (reference). According to Green and
Noonan (2020), it is estimated that tailing waste continues to increase eight to ten million
tonnes a year at the Olympic Dam. This creates tension between mainstream shareholders
whose main priority is profit maximisation from cost efficient methods, whilst the Kokatha
people urge for more sustainable practices to protect their land and resources.
Shareholders have not explicitly and collectively argued against the protection of land rights
for the Kokatha people. If anything, there was a recent protest where 100 shareholders joined
in to argue for BHP to do better (reference). However, 100 shareholders out of the multitude
that currently own BHP shares is indicative that most mainstream investors prioritise short term
monetary gains over anything else.
Historically, the concept of shareholder value maximisation has been expressed by Milton
Friedman’s assertion that the ‘social responsibility of business is to increase its profits’
(Wiggins, 2020). As Wiggins (2020) continues to assert, it is hard to dispute the notion that
this long held ‘philosophy’ has all of a sudden been abandoned. The reality is, it still continues
to ‘define the motivations and actions of most companies and shareholders’ (Wiggins, 2020).
Thus, in the case of BHP, it is not that shareholders disagree with more sustainable practices,
but more so that it is not a top priority, as their main goal is to make returns on their investments
which has so far been achieved with low cost and unsustainable measures.
INTRO:
These stakeholder conflicts between BHP and the Indigenous community can be overcome
by an initiative that emphasises the creation of long-term shared value. After weighing out
BHP’s strengths and core brand identity we recommend that BHP proposes an internal
mutually beneficial training program with the local indigenous advisory council on a
continuous collaboration basis for the objective of overseeing BHP's operation at minimum
cost. This new training program will oversee the overarching operational process and ensure
the rightful usage of Indigenous land in attempt to reduce BHP’s radioactive tailing of its
sourcing process.
Figure 2: Porter’s Value Chain
In accordance with the Value Chain (Porter, 1985), this initiative redefines the productivity of
its Operations and Human Resource body by initiating the collaboration between the training
program and the Indigenous Advisory Council, enhancing the mutual relationship between
stakeholder and company. Moreover, the costs and long-term mutual benefits of this initiative
can be explored through the “Grow the Pie” framework.
Multiplication in Social Benefits
The cost of initiating a new traineeship program can be deemed minimal to an extent, rather it
aids the expansion towards the total pool of economic and social value (Porter and Kramer,
2011) and adds shared value for society, multiplying future benefits. In collaboration between
the traineeship body and the Advisory Council, which is previously employed in BHP’s
South Flank project, BHP can expand the pool of economic and social values by outsourcing
cultural heritage management strategies and resources from the Council. These resources will
then be employed by the training program group into BHP’s operational primary activities to
better ensure sustainable management when sourcing from Indigenous land and minimising
BHP’s radioactive footprint. Ultimately, this initiative of a voluntary free training program is
multiplicative in terms of its low cost and high mutual benefits. BHP gains expanded
economic and social value when providing an opportunity for Indigenous individuals to
partake in this internal program, while collaborating with the Advisory Council to ensure the
sustainable processes.
Comparative Advantage:
BHP has a strong comparative advantage in implementing this training program and
collaborating with the Advisory Council, as it helps further leverage their core strengths as a
market dominant company and develop improved brand identity. As well as aligning closely
with BHP’s values in creating long-term relationships with the Indigenous community and
bringing people together (BHP, 2022), BHP’s large market capitalisation of $134.69 billion
(Global Ranking, 2022) indicates that they have a competitive advantage within the mining
industry. Moreover, being able to reduce operational costs through this voluntary internal
traineeship program and acquiring the opportunity to collaborate with a known governance
Advisory Council will substantially aid increased future remunerations, in comparison to a
smaller domestic mining company who may not have such programs and connections. This
internal traineeship body that represents the Indigenous community plays a prominent role to
ensuring the effective and sustainable governance of its operations, thus, enlightening BHP’s
brand identity. As such, BHP’s market dominance and collaboration with the Advisory
Council complements the levers that creates BHP’s comparative advantage.
Materiality:
A specific material group of stakeholders will be impacted by this initiative. The local
Indigenous community stakeholders are benefited through a stronger enforcement for BHP to
abide by the Indigenous communities’ cultural well-being and heritage guidelines, including
mining at acceptable locations. Additionally, BHP also establishes a community root with the
indigenous Advisory Council as well as the local indigenous community as they operate
under continual indigenous heritage management practices which adds further social value
for BHP. It also creates shared value for BHP, strengthening their brand image being one
that values the cultural heritage and spiritual connection the Indigenous community have with
their land, as BHP is willing to concede a voluntary (free) traineeship program for the
Indigenous community with zero labour costs, in return individuals further gain in depth
experience when overseeing BHP’s operational activities. The Indigenous community is also
indirectly benefited, as the Advisory Council provides resources on how to better manage
BHP’s extracting process sustainably, generating cultural Indigenous knowledge for the
company. As a result, BHP is able to better preserve the environment and reduce radioactive
footprints, enabling the environment to gain spiritual connection and historical value within
the Indigenous community. In the long term, for shareholders, sales may increase as
consumers may spend more willingly knowing BHP’s redefined sustainable productivity in
the operations and human resource value chain, growing the pie and facilitating shared values
across stakeholders.
Eventhough the indigenous community is benefited the environment is also benefited as it
hold historical/ spiritual and cultural value towards indigenous comm → our initiative will
help improve and better the mining process → indigneous community indirectly benefited as
their land is better maintained → ad body provide advise on how to better mining process and
them BHP can better manage the neg impacts it have on the environment → e.g. is mining
site being damaged on long/short term
It also creates shared value for Kathmandu, strengthening their brand image of
sustainability and status as a B Corporation as they are willing to concede short-term
profits to align with their core values. In the long term, for shareholders, sales may
increase as consumers may spend more willingly on Kathmandu products as the
potential to be able to resell on the marketplace may
8
make purchases feel less financially significant.
In particular, BHP internalises indigenous communities' cultural well-being and heritage
significance in their operations.
, simultaneously creating gains and relieving their pains as investigated earlier.
___the direness to promoting good social value with the Indigenous community, increasing
the viability of this initiative
will ensure low labour costs and provides a more enforceable bridge towards ensuring that
BHP operates through effective governance. In the long term, through improved cultural
heritage management in an ethnically sensitive method towards the Indigenous community
the will act as a body of BHP to oversee BHP’s operations
In the case of the South Flank project, BHP and the Banjima people established a Heritage
Advisory Council. Since then, the Heritage Advisory Council has met periodically to discuss
appropriate heritage management practices in the Central Pilbara.
, including both the funds placed towards providing organising cultural forums for further
development and training when learning about the Indigenous culture and aiding Indigenous
community into understanding more about mining sites, promoting the further development,
and training, resulting in closer long-term relationships, acting to provide support for primary
activities to take place and support other support activities.
Shared value: multiplicative or materiality
Productivity in the operations and human resource value chain is redefined by the initiative of
collaborating with the indigenous advisory council. In particular, BHP internalises indigenous
communities' cultural well-being and heritage significance in their operations. Meanwhile,
BHP also establishes a community root with the indigenous Advisory Council as well as the
local indigenous community as they operate under continual indigenous heritage management
practices.