Organizational Structure and Contextual Factors
Discuss about the Management and Business Context of Simcoa Operations Pty Ltd.
Organizational structure includes task allocation, supervision, coordination, etc. activities. Along with this, it also includes the plans and measures to perform the activities so that the desired goals and objectives of an organization could be attained. It acts as the blueprint of an organization through which stakeholders could analyse the organization along with determining its environment. Organizational structures are of numerous types and it varies mainly on the basis of type of organization and objectives of organization. Mode of operation defines the structure of an organization. In terms of multinational corporations, common organizational structure is being followed with the objective of managing all the tasks and operations in an effective manner.
This report will focus over the impact of contextual factor over Simcoa Operations Pty Ltd (Silicon metal Company of Australia). Primary objective of Simcoa operations are production of premium quality silicon in order to meet its customers’ precise needs (Simcoe & Righi, 2017). In relation with this, significance and impact of contextual factor will be analysed in this report. Apart from this, impact of external and internal forces, risk factors, measure to mitigate risk and certain measures for enhancing organizational performance along with organizational crucial functions in relevance with contextual factor will be discussed.
CEO/MD of Simcoa Operations Pty Ltd holds the top most authority and power at workplace. As per this system, it could be analysed that Simcoa Operations is following traditional organizational structure under which employees are not invited in decision making process neither their suggestions nor reviews are taken in decisions making process (Simcoa Operations Pty Ltd, 2018). As per functionalities of Simcoa Operations, all decision from buying raw and supporting materials to selecting distribution channel are taken by senior management and CEO of the organization. Traditional organization structure is generating positive outcomes for Simcoa Operations. After CEO/MD of the organization second top most authority is board of directors and senior level management which includes president, and below that vice president and general managers of different departments exists. Further tier includes senior managers and deputy general managers. After them, managers and officers executives exist and in the last tier of organizational structure, workforce and supervisors exists (Lin, Christiani, Kawachi, Chan, Chiang & Chan, 2016).
Internal as well as external forces have a great influence over organizational performance. In relation with the internal forces of Simcoa Operations, their strengths, weaknesses, measures to perform its operations, etc. Whereas, external forces include technological impact, political and legal obligations along with competitor’s strategies affect organizational performance. These forces could affect organizational performance in both negative as well as positive aspect. One of the contextual factors is regionalisation which I required to be adopted by organization in its operations so that the goals and objectives could be attained in an effective manner (Susilawati, Tan, Bell & Sarwar, 2015).
Impact of External and Internal Forces
Simcoa Operations is engaged in production of high quality silicon metal using high quality raw materials and for the same they have awarded with Quality ISO 9001 certificate (Blind & Rauber, 2016). Simcoa Operations fulfils whole Australia’s silicon demand and as they are the largest producer of silicon, rest silicon is being exported in other countries. Regionalisation is the process of segregating a part of market into small segments so that organization could focus over particular segment in order to fulfil their demand. For example: there are four markets where demand for silicon is huge but Simcoa Operations could fulfil only one market’s needs and they are exporting silicon to all four markets in order to fulfil their demand. This is not improving organizational performance nor is it helping those markets as their demand is not fulfilled to the optimum level. With regards to this, organization to focus over one or two particular market to fulfil their demands and for fulfilling rest market’s demand, it is required to adopt advanced measures to enhance organizational efficiency and productivity (Ozcan & Dincer, 2014).
External and internal forces need to consider while developing policies, standards and measures with the motive of improving the efficiency of organizational performance. In relation with enhancing productivity of organization so that various areas’ silicon demands could be fulfilled. Currently, organization fulfils Australian’s silicon demand and extra silicon is exported to various parts of the globe and as the company is known as the largest producer of quality silicon, thus, demand of their silicon is huge. With the effect of regionalisation, organization will be able to enhance its performance by focusing over major markets of silicon. This will help the organization to make its distinctive position in the international market through which leading position in the target would easily be attained (Liu, Huang, Huang, Wang, Zong & Chen, 2016).
There are numerous risk factors which could affect organizational performance in negative manner. Some of these factors are increase in tariff rates, increase or change in interest and exchange rate, imposition of export and import duties and imposition of political and legal regulations. US government recently imposed 51% tariff over Silicon Operations Pty Ltd. This was included in trade war and President Donald Trump, USA has also imposed separate tariff over Rio Tinto and BlueScope Steel. This has affected organizational profit margins (Guan, Chu, Shao, Ju & Dai, 2017).
Mitigating Risk and Enhancing Organizational Performance
Apart from this incident, there are various companies engaged in this business across the globe and they have reduced prices of their silicon to gain market share as well as to affect Simcoa’s performance in the international market. Thus, it has been recommended to the organization to adopt risk mitigation measures such as acceptance, ignorance and transfer of risk. Simcoa Operations Pty Ltd. is the leader in silicon industry across the globe and in order to maintain acquired position, organization is required to adopt certain crucial and effective strategies so that the desired goals and objectives could be attained along with defending the competition from other companies of the same industry (Rahayu, Hakim & Cahyadin, 2017). In relation with mitigating risk, mitigation measures are required to be adopted. For example: one worker from organization goes on strike in relevance with increase in labour rates. This risk could be ignored because one worker’s strike will not affect organizational performance but at the same time, if whole labour union goes on strike, organization requires to take immediate actions such as acceptance of risk. This will help the organization to take out an alternative so that organizational performance does not get affected. Final measure is transfer of risk under which company will transfer its risk to the third party to pay for losses. Scenarios such as natural calamity and other unexpected things are covered in transfer of risk under which organization transfers the risk over insurance companies to pay for the losses incurred (Hickie & Hilpert, 2015).
Regionalisation will be the major and most effective measure through which organization could easily uplift its performance in the international market. Regionalisation is a type of contextual factor through which desired goals could be attained along with defending its already acquired position in the market. With relevance to this contextual factor, Simcoa Operations Pty Ltd will require to conduct market research in accordance with analysing the demand of silicon across the international market (Kitagawa, 2017). After analysing the demand of silicon amongst the globe, markets with high profitability, huge demand and full of opportunities will be selected. Focusing over high demand of silicon markets, organization will be able to uplift its performance along with increasing its market share in the international silicon industry. Leading position would be defended with the help of this strategy along with gaining competitive advantage and it will direct the organization towards sustainable growth and development.
Regionalization – An Effective Measure for Uplifting Organizational Performance
Regionalisation requires dividing big market into small market segments so that the available resources with the organization could be utilised in an optimum manner. Along with fulfilling the demand of silicon of one market, it is required for the organization to maintain the quality of its products as it is the most effective and crucial factor which plays vital role in attainment of organizational desired goals and objectives (Gao, Dunford, Norcliffe & Liu, 2017). Slowly and gradually after fulfilling the demand of silicon of various markets by delivering them qualitative silicon, organizational performance will be increased along with the attainment of leading position in the target market.
It has been recommended to the organization that those markets should be focused where demand for silicon is high. Simcoa Operations produces high quality silicon in huge quantity through which it fulfils its home country’s requirement and rest is exported to other parts of the globe. Apart from this, it has been recommended to focus on the Porter 5 force model to create strategies in finding the right markets with high profitability and attractiveness. From the aforesaid information, it can be concluded that SIMCOA is one of the largest companies based in Australia which produces silicon to meet the regional and global demand of Silicon. The company uses contemporary operational process and technologies in its business operations. The company has adopted the culture of regionalization in its business approach and strategic direction.
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