Demonstrate an understanding of managerial theory and practice in contemporary organisations.
Communicate management concepts in a written business report.
Critically analyse information relevant to management.
Understanding of Managerial Theory and Practice
The analysis of external and internal environment of a company plays a key part in its operations in the industry. The employees who are thereby thinking of joining the organizations also need to depend on the external analysis in order to offer the finest levels of services to the companies. The company which has been taken into consideration for this analysis is Amcor Limited which has its processes in Australia.
Amcor Limited is an Australian organization which operates in the global packaging based industry. The company mainly develops and further produces packaging based materials that are flexible in nature. The company is able to produce rigid containers, specialty based cartons and services which are required for the proper packaging of beverages and food based items, medical devices, personal and home care related items and various other products as well. The company has been listed on Australian Securities Exchange and the headquarters are located in Southbank, Victoria, Australia.
Concept - The understanding of external environment plays a significant part in the operations of the organizations which operate in the modern business environment. The major mistakes that can however be made by the managers are based on the ways by which they are able to adapt to the external environment. The two major components that can be analysed in order to recognize the methods by which the company can operate in the external environment. The analysis of this environment will thereby play a main part in the methods by which the company can operate in the environment. The general environment of Amcor Limited will be analysed with the help of PESTLE framework. This analysis will be able to provide a clear picture about the ways by which the external factors of Australia are able to affect the operations of Amcor Limited.
Political factors – The political factors of Australia are able to impact the operations of Amcor Limited in an adverse manner. The long term based profitability of the company is thereby influenced in a huge way by the policies which have been developed by Australian government. Australia has been considered to be a safe destination for the business based activities of different organizations. The investors are thereby quite confident in making significant investments in the country. This is considered to be a major factor that affects the ways by which Amcor can increase its revenues effectively (Daspit et al. 2017, p. 6).
External and Internal Environment Analysis of Amcor Limited
Economic factors – The macro economic factors which are able to affect the processes of Amcor are based on inflation rate, interest rate and the savings rate. The competitive environment in the country is also an important factor that can affect the revenues of Amcor. Australia has a stable economy and the capital growth is also quite high which has increased the number of organizations that have made investments in the country. The population of the country is growing and their incomes are also rising. This factor can play a main part in increasing the profitability of Amcor Limited (DeCenzo & Robbins 2014).
Social factors – The attitudes, culture and self-value of the people are able to affect the operations of Amcor Limited in Australia. The company thereby needs to understand the needs and demands of the consumers so it is able to satisfy them which can further increase the revenue levels in an effective manner. The class divisions which are present in the Australian society are thereby able to affect the products that are offered by Amcor. The upper class based consumers can be satisfied in a different manner as compared to those belonging to the lower class. Amcor will thereby need to consider these differences in order to provide the best possible products to these consumers (Amcor.com 2018).
Technological factors – The technological environment in Australia has been changing a lot from the past few years. The proper of analysis of technology will thereby play a main part in the operations of Amcor as the different production based process are totally related to proper usage of technology. The research and development related activities in the country are thereby supported by different government based companies in Australia (DeCenzo & Robbins 2014).
Legal factors – The legal framework plays a significant role in the methods by which the company is able to develop its policies effectively. Amcor can however take advantage of the transparent and efficient legal based framework which has been developed by Amcor in the industry of its operations. The levels of corruption which have been judged in the country can also affect the development of policies by Amcor.
Environmental factors – The environmental factors are able to affect the processes which are maintained by Amcor. The Australian Government has implemented The Environmental Protection Act of 1974 which helps in analysing the impact of the decisions which are thereby made by the government. The production processes of Amcor are developed based on these laws (DeCenzo & Robbins 2014).
PESTLE Framework Analysis of Amcor Limited
The analysis of general environment of Amcor Limited with the PESTLE framework has thereby depicted that the company will be able to function in an effective way in Australia with the help of efficient policies and processes.
Concept - The analysis of specific environment of a country is thereby based on the industry in which the company operates. The industry based analysis of Amcor Limited can be done with the help of Porter’s five forces framework.
Threats based on new entrants – Moderate - The new organizations which enter the Australian market are able to bring innovations in different processes. This can provide immense pressure on the prices which have been decided by the company based on its products. Amcor thereby needs to develop a sustainable differentiation in order to increase its revenues effectively in the industry (DeCenzo & Robbins 2014).
Bargaining power of the suppliers – High - Amcor is highly dependent on the raw materials which are provided by the suppliers in order to operate in an effective manner. The suppliers thereby have huge amounts of power in the industry and they are able to control the prices of products that are presented by Amcor (Dobbs 2014, pp. 32–45).
Bargaining power of the buyers – High – The buyers have high power in the industry as they are able to regulate the prices of diverse products which are offered by Amcor Limited. The firm has a large customer base which is maintained in a fixed manner. However, the huge competition in the market is able to increase their power and they are able to affect the prices of services and products (Amcor.com 2018).
Threats from the substitute products – Moderate – The organizations in Australia which operate in the same industry are able to provide tough competition to Amcor and its products. The customers are offered with similar types of products by other organizations. The loyal customer base is able to reduce the effects that the substitute products of the company have on its operations and profitability (Dobbs 2014, pp. 32–45).
Rivalry between the existing players – High - The major organizations which are already operating in the country are able to provide tough competition to Amcor include, ProAmpac and AEP Industries Inc. The levels of rivalry which is present in the industry among these organizations is quite high and the revenues of Amcor can be affected due to this factor (DeCenzo & Robbins 2014).
Industry Analysis of Amcor Limited through Porter’s Five Forces Framework
The analysis of the specific environment of Amcor Limited with the help of Porter’s five forces framework has been able to depict that the industry in which the company operates is highly competitive in nature and this has an effect on its revenues.
The ethics and social responsibility can be rightfully described as the organizations intention to go beyond its reign of obligations and conduct operations that are good for the organization. Very often the ethical and corporate considerations come in the way of the operations of the society at large and for this reason, the managers are required to confront these decisions with respect to pricing, employee relationships, conservation of resources, quality of the products and facing oppressive government. According to Meyer (2017, p. 1-4), the three main stances whereby a company needs to look out for its social responsibilities are meeting the obligations, being socially responsible and being socially responsive. The organizations which are bound to meet the social responsibilities are considered to be supportive of the welfare of the society.
It is considered to be important that the managers in an organization are ethical because the members of the society expect the mangers to conduct businesses in social as well as ethical ways (Tai & Chuang 2014, p. 117). This in turn has a positive influence on the organization in the sense that the different people present in the society tend to take decisions with respect to the arenas they invest in, how responsible they are and how do they return it back to the society.
There are various factors which tend to have an influence on the unethical as well as ethical behaviour which is carried out in the society. These can be categorically divided under three heads. These three heads are as follows:
- Personal characteristics: These can be described as the individual characteristics of the people who are involved in the scenario. Their morals have an impact on the decision.
- Issue characteristics: This can be described as the characteristics of the issue (Schwartz 2017).
- Organizational characteristics: This can be determined by the structure and the culture of the organization.
There are various ways to encourage ethical behavior in an organization. Some of them include methods like determining Code of Ethics, using Ethical Leadership, providing ethical training and using formal protective mechanisms.
The ethical and corporate social responsibility aspect of Amcor is very well defined. The organization has a high range of ethics whereby it adheres to the highest range of integrity, honesty and thereby promotes a culture of ethical behavior. It has a well-defined code of ethics which is governed by the Board of Directors (Amcor.com 2018). The Board provides assistance to check that the ethical principles of the charter are followed adequately. The ethical aims of the organization are enhancing shareholder value, ensuring high level of accountability, ensuring ethical decision making and ensuring full governance.
Ethical and Social Responsibility
Moreover, looking out for the social responsibility is one of the core values of the organization. The organization takes several steps to ensure that they are able to protect the community as well as the environment. In addition to this, the social responsibility events are held every year to support children and the underprivileged.
The culture of an organization can be rightfully defined as a system of shared principles, values, and traditions and the way in which the things are done which have an influence on the performance of the members of the organization (Assets.ctfassets.net. 2018). The manner in which the organization interacts with its members and the manner in which it deals with the environment is greatly a factor of the culture of the organization. The organizational aspect can relate to the manner in which the different opportunities and threats are accessed to and moreover, the interaction with the members is defined by the way it manages the structure, the people and the activities to ensure that the firm functions effectively. Moreover, according to Hogan and Coote (2014, p.1609-1621), there are several dimensions of culture are the attention to detail, people orientation, outcome orientation, team orientation, stability, aggressiveness and the innovation as well as risk taking aspect. More often, the culture of an organization is a result of its founders and the manner in which they govern.
The organizational culture has an effect on the managers in two ways (Büschgens, Bausch & Balkin 2013, p. 763-781). It impacts on the way the different employees tend to behave and go about the procedure of the processes and secondly it has an impact on the manner in which the different managers, organize, plan, control and lead. Strong culture can be described as those cultures whereby the different key values re deep rooted into the organization. The culture can be instilled into the organization using leadership, structures, evaluation systems and reward systems.
The organizational culture of Amcor is given utmost importance. The Human resource department is highly concerned with the maintenance of the culture in the long run of the organization. The Human Resource management team manages the different operations strategically and tends to support the managers of the firm in order to establish a high leveled culture which reflects ethicality, hard work and honesty (Amcor.com 2018). More often the firm provides various training programs which tends to help the different employees to learn the culture and build an environment where people believe in safety rules and no injuries.
Encouraging Ethical Behavior in Organizations
From the Right Organization culture I undertook from the textbook, I got a result of 24. This indicates that I prefer an environment which is informal, flexible, humanistic, and innovative cultures. This kind of culture is generally portrayed in high technology companies or small firms and advertising agencies. In this aspect, it can be stated that the organizational culture of Amcor can be described to be as a flexible one whereby the people and their welfare are provided with utmost importance (DeCenzo & Robbins 2014). Moreover, the nature of the firm is quite humanistic in nature and informal. Each member is adequately trained about the culture of the organization and moreover, people are encouraged to learn and implement their learnings. Hence, I believe that I might fit well into the culture of the organization especially in the managing department. (Refer to Appendix 1)
The report can be concluded by stating that the external environment based factors of Amcor Limited are able to influence its revenues. The general environment and the industry are important parts of the analysis which have been able to depict the importance of external factors in organizational operations. The culture of the organization is thereby able to decide the different CSR based activities which it is able to perform in the industry. The most important part of the analysis is based on the impact that the external environment has on organizational operations and strategies.
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