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Organisational Analysis of Simcoa Operations

Discuss about the Management Team Incentive Heterogeneity.

Regionalisation is the process of some of the MNEs not to operate in global basis and to conduct the business in some of the major regions of the globe. Some of the MNEs are adopting the local or regional strategies in order to be successful in the business process and they start competing in their own country.

The aim of the essay is to focus on the idea of regionalisation of Simcoa, the highest quality silicon producer in Australia.

The objectives of the essay are to define the key concepts of organisational analysis and development, to explain the major internal and external contextual factors that can affect the strategy and structure of the business. The essay highlights the contextual factors of business’ decision-making of Simcoa Operations. 

The scope of the study is to explore the wide range of possibilities for Simcoa to understand the external and internal factors that can impact on the organisation to take the decision.

Simcoa Operations is the world’s largest highest quality silicon and it is the Australian based organisation. Simcoa provides silicon to meet the needs of the customers in Australia and also export silicon to different countries. Simcoa Operations was founded in the year 1989 and this organisation can produce almost 50,000 tonnes of silicon in a year (Simcoa.com.au, 2018). Simcoa has fully integrated silicon metal plant and this organisation follows the triple bottom line to grow sustainable competitive advantage.

Simcoa Operations Pty Ltd follows the Proprietary Limited company structure that means Simcoa is a privately held organisation and it has the liability of the shareholders in the market to pay the debts. The company follows the hierarchical structure where the communication flows from top to bottom. Simcoa has one director and Simcoa has a physical address in Australia as a registered office. In order to follow the Pty Ltd structure, the organisation needs to have at least one shareholder; 50 non-employees shareholders (D’Netto et al., 2016). 

Simcoa operates in Australia and political conditions of Australia are stable at present. The government of Australia is stable and it encourages the business trade. The government of Australia provides major help in exporting the products in the international market as the geopolitical condition of Australia is very helpful. Australia has good international relations that provide help to expand the business as well.

Current GDP of Australia touched the mark of $1.399 trillion and GDP rank is 13th across the world (Manalo, Perera & Rees, 2017). GDP growth is 0.6% and the current inflation rate is 1.8%. The current labour force of Australia is 12.7 million that is helpful for the organisation to get the skilled employees. The economic growth of Australia is eventually assisting the organisations to run and operate the business in Australia.

The people of Australia are educated and the people have a large amount of disposable income. The buying capacity of the Australian people is high as it can improve the standard of living in Australia. The average gross salary of Australian people is AU$ 1,700 in a week (Golev & Corder, 2016). The organisations can get high skilled employees at reasonable expense. Low-interest rate and low unemployment rate can impact on the business to flourish in Australia.

Contextual Factors Affecting Simcoa Operations

Simcoa is mainly depended on the technological improvement and Simcoa has integrated silicon plant. The technological improvement has been set in the mining and manufacturing industry of Australia in order to develop the quantity of production within the organisation. In Simcoa, the technological improvement helps the firm to produce a large quantity of silicon from the raw materials like charcoal, quartzite and coal (Simcoa.com.au, 2018). Simcoa chooses the suppliers of the business in right manner and approach to marketing towards the customers to need to be good to survive in the market.

Simcoa provides a commitment to have an excellent standard of environmental awareness with economic development at the same time. Simcoa does an environmental-friendly operation to minimise the influence of noise emission and atmospheric condition. In this industry, Environmental Management System (EMS) provides accreditation from the ISO (Easterby-Smith, Thorpe & Jackson, 2017). The skills and knowledge that are applied in the silicon production are great for smooth run of the business.

Strengths: Simcoa company is structured as Pty Ltd that provides the strength of shareholder and it is the highest producer of silicon in Australia. It exports silicon to most of the world's largest countries and silicon has diverse usage. Simcoa believes in triple bottom line and it generates revenue as well as recycles the products and it has set of environmental rules.

Weaknesses: Simcoa has relations with government and government provides rules and regulation to follow and it is depended mainly on the shareholders. It can influence on the environment in negative perspective and the workers have is open towards hazardous conditions.

Opportunities: Simcoa has high opportunity to expand the business in different countries and it can expand the business to diversify in materials and products basis.  Most importantly, Simcoa can offer the products in B2B and B2C way and Simco has a good set of skilled employees.  It has no competitor in the market.

Threats: The rules of Australian government regarding the employees and environment and there can be new entrants in the market with high values and qualities (Courvisanos, Jain & Mardaneh, 2016).

Global economic risks on the business are high for Simcoa as the demands from the international market is getting low. Most of the companies in the global scenario are taking the help from Chinese commodity without price evaluation. The organisation can high vulnerable towards the change in climate as it is associated with the manufacturing sector. As stated by Luke (2018), external vulnerabilities are associated with high external debt and the current amount of deficit in the international market. High household debt is another risk for the organisation as it touched 180% of disposable income.


Societal risks are associated with the environmental impact on the business as hazardous gases are emitted from the silicon plants. These hazardous or chronic gases can impact on the health of the community people. Silicon Dioxide can impact on the people's respiratory system and people can face the irritation on the skin. The organisation can face the issue if the people of the community face the physical hazards and the employees of the organisation are open to occupational exposures of health and safety.

Strengths, Weaknesses, Opportunities, and Threats of Simcoa Operations

Financial risks of the business are associated with the financial leverage and debt. Business risks associated with the organisation's ability to get the sufficient revenue to meet the operational expenses of the organisation (Chen et al., 2017).

Simcoa is expected to have the best performing work practices of the employees. The employees must perform well so that the overall performance of the organisation may improve to the level. The organisation can start to provide benchmarking with TQM (Total Quality Management) so that the quality of the products always meets the customers. The organisation can have the best team to judge the quality of the products of silicon and it follows the ISO mark so that the quality cannot demean. The organisation follows the best practices towards the employees and towards the environment as well as the community. Business practices provide motivation to the employees and it gives special care to the community as well (Hill, Jones & Schiling, 2014). The management of the organisation started employee engagement facility through providing extrinsic motivation and managers take team huddle. The workers within the organisation can take the training session so that it can work as integrated manufacturing unit.

Operation department within Simcoa plays the role of managing the personnel and raw materials. The operation department takes care of the inventory, supplies and purchasing of the products (Steinbach et al., 2017). In Simcoa, the finance department takes the responsibility of making a budget and it creates the balance statement and cash flow. The finance department of the organisation is responsible for the debt and payroll of the employees. It creates the annual report of the organisation where it mentions the investment and expenses. Human Resource department of the organisation plays an important role to recruit and select the employees and it provides larger support to have the motivation of the employees (Ferguson & Souza, 2016). Marketing and Sales department selects the channels of marketing to sell the products to the customers. The sales department is responsible to increase the revenue of the organisation. 

Conclusion

Regionalisation can increase the employment of the area in local perspective and at present, the economic and political condition of Australia supports the improvement. It can be observed from the above discussion that the organisation has strengths and opportunities in order to expand the business and it can increase the quality as well as the quantity of the production. The company operates in Australia; however, it exports the products in different countries as well. The organisation can take the strategy of Benchmarking and Total Quality Management to ensure the quality of the products. In addition, Simcoa has divisions of the department and each of the department ensure the quality team bonding to ensure the regionalisation.

Reference List

Business of Silicon. (2018). Simcoa.com.au. Retrieved 4 April 2018, from https://www.simcoa.com.au/environment-2.html

Chen, H., Cui, R., He, Z., & Milbradt, K. (2017). Quantifying liquidity and default risks of corporate bonds over the business cycle. The Review of Financial Studies, 31(3), 852-897.

Courvisanos, J., Jain, A., & K. Mardaneh, K. (2016). Economic resilience of regions under crises: A study of the Australian economy. Regional Studies, 50(4), 629-643.

D'Netto, B., Shen, J., Chelliah, J., & Monga, M. (2014). Human resource diversity management practices in the Australian manufacturing sector. The International Journal of Human Resource Management, 25(9), 1243-1266.

Easterby-Smith, M., Thorpe, R., & Jackson, P. R. (2017). Management and business research. Sage.

Fayezi, S., Zutshi, A., & O'Loughlin, A. (2015). How Australian manufacturing firms perceive and understand the concepts of agility and flexibility in the supply chain. International Journal of Operations & Production Management, 35(2), 246-281.

Ferguson, M. E., & Souza, G. C. (Eds.). (2016). Closed-loop supply chains: new developments to improve the sustainability of business practices. CRC Press.

Golev, A., & Corder, G. (2016). Modelling metal flows in the Australian economy. Journal of Cleaner Production, 112, 4296-4303.

Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an integrated approach. Cengage Learning.

Kitchingman, T., Wilson, C. J., Woodward, A., Caputi, P., & Wilson, I. (2016). Preventing suicide requires more attention on technology-based crisis support services. Australian & New Zealand Journal of Psychiatry, 50(2), 181-181.

Luke, A. (2018). Critical literacy in Australia: A matter of context and standpoint. In Critical Literacy, Schooling, and Social Justice (pp. 186-206). Routledge.

Manalo, J., Perera, D., & Rees, D. M. (2015). Exchange rate movements and the Australian economy. Economic Modelling, 47, 53-62.

McKenzie, D., & Woodruff, C. (2016). Business practices in small firms in developing countries. Management Science, 63(9), 2967-2981.

Steinbach, A. L., Holcomb, T. R., Holmes, R. M., Devers, C. E., & Cannella, A. A. (2017). Top management team incentive heterogeneity, strategic investment behavior, and performance: A contingency theory of incentive alignment. Strategic Management Journal, 38(8), 1701-1720.

Wheelen, T. L., Hunger, J. D., Hoffman, A. N., & Bamford, C. E. (2017). Strategic management and business policy. pearson.

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