The business case analysis for this assessment is based on a chosen company. The selected company for this essay is Adani, Australia. This paper aims to find out how internal and external contextual factors influence an organization’s performance. The paper will discuss the company description. The business structure and governance structure of Adani, Australia will be discussed here. There are some influencing environmental factors which have a strong impact on organizational performance. Adani faced a lot of risks. This essay will highlight the top three risks which Adani faced and their influence on Adani’s performance. The business practices of Adani and their influences will be discussed in the essay. The essay will describe the functional departments of Adani.
Case company synopsis
Adani Australia is a multi-dimensional energy and infrastructure industry. It is the Australian subsidiary of Adani group. They are known as the new age of sustainable global energy provider. Adani provides energy solutions to the world. They provide safe, reliable and sustainable energy solutions (adani Australia). The company provides energy solutions in Australia and Asia Pacific Region. They use thermal and renewable energy. They will aim to contribute to building schools, roads, and hospitals for Queensland. The company aims to create better lives on the planet by providing new energy solutions for an advancing world. Adani Australia is playing a critical role in providing energy solutions to the customers as the energy demand is increasing day by day. The stakeholders of the company including employees, owners, managing directors, shareholders, and customers are playing a key role in their business.
Analysis the impact of a range of internal and external contextual factors on the performance of Adani
a) Business structure and governance structure of Adani, Australia
The business structure of Adani Australia is a company that obtains Australian Business Number for free. It is a legal entity separate from its shareholders. The projects of Adani Australia include Renewables, Abbot Point Port, Carmichael Rail, and Carmichael Mine. Abbot Point Terminal is owned and operated by Adani Australia. The company exports Queensland coal since last 30 years. Adani is the most northerly coal post of Australia. The location of Adani Australia is 25 km north-west of Bowen, in North Queensland. Adani Australia has already invested in Australia $ 3.3 billion since 2010. The Carmichael mine and rail projects are upcoming projects in Queensland. The Carmichael Project of Adani is a 10mtpa coal mine and 200km rail line. Adani Renewables Australia's first solar farm Rugby Run is located at Moranbah. It is made for generating billions of dollars through mining taxes and royalties associated with their business.
The Adani Australia includes leadership team across renewable, port, mine and rail business. The leaders are Jeyakumar Janakaraj (CEO and Country Head) of Adani Australia, Samir Vora (Chief Operating Officer and Executive Director), Lucas Dow (CEO) Adani Mining, Dwayne Freeman (CEO) Abbot Point Port Operations, and Chris Wicks (General Manager) Adani Abbot Point Terminal (adani Australia). Adani Australia is committed to good corporate governance practices at a different level to achieve organizational goals.
b) The influencing environmental factors of Adani which have impact on their performance
Business environment consists of internal environmental factors and external environmental factors (Agrawal & Maheshwari, 2019).
Internal environmental factors
Internal environmental factors are the factors which are found within the company and these are under the control of the company (Aquilani, Silvestri, Ruggieri, & Gatti, 2017). These can be tangible or intangible. These are also known as the strengths and weaknesses of the company (Ertz, Karakas, & Sarigöllü, 2016). If one element brings a positive effect to the company, it is called strength. If one element brings a negative effect on the company, it is considered a weakness. Some examples of internal environmental factors are- value proposition, financial resource, inter-personal relationship with employees, and physical assets.
- Positive internal environmental factors
Adani Australia has three positive internal factors which have an impact on their performance. The positive internal factors are a value proposition, financial resource, and inter-personal relationship with employees. In terms of value proposition, Adani Australia uses renewable and thermal energy solutions. The financial resources of Adani help them to hold a strong financial record (Gupta, 2003). They received 11.25 of operating margin in 2017. The equity share capital and debts have been reinvested into assets which have provided higher revenues. The operational efficiency is growing as the financial resources are working efficiently. There are more than 10,000 of employees working in the company. They all work as one team in synergy with the vision of the leader.
- Negative internal environmental factors
The negative internal factor of Adani is physical assets. The company mainly uses machinery and equipment in China. These types of machinery are so reliable. These types of machinery sometimes create technical failure and as a result, it hampers the entire performance of the company.
External environmental factors
The external factors are known as influencing factors are found in outside of the organization and the organization has no control over these (Jack Lam & Pang, 2003). Adani has some strong external factors which influence the performance of the company positively. These external factors are- economic situation, customer demands, and surrounding infrastructure. The economic situation in Australia is highly favorable for Adani and Adani is just taking advantage of this. Customers are becoming highly conscious of environmental factors. Their demands are changing following the innovation (Ertz, Karakas, & Sarigöllü, 2016). Adani is the new age of sustainable global energy provider and therefore they can provide services as per customer preferences. This external environmental factor is indirectly helping Adani to perform well in the market. The upgrading infrastructure within Australia is highly influencing factor for Adani. The Carmichael Rail and Carmichael Mine are the greatest examples of this.
c) The top three risks Adani faces and their influences on its performance
Business risks are threats to the organization’s ability to achieve its financial goals (Jiménez-Jiménez, Martinez-Costa, Martínez-Lorente, & Rabeh, 2015). Adani had faced numbers of risks in their business and those hampered the performance of the organization.
- Financial risk
The first risk they had faced when they oversaw the Zambian Pollution disaster. This is a compliance risk. In 2010, the company caused a major pollution disaster in Zambia. The Konkola Copper Mines (KCM) in Zambia discharged poisonous industrial wastage in the Kafue River. This river was the main source of water for Zambian people. Around 1800 of Zambian villagers filed a lawsuit against KCM to recover damages. This incident resulted in the loss of potential shareholders and investors (Kannadhasan, 2015). The financial performance of the company crashed after this incident.
- Project Risk
The second risk they face is project risk. In 2014, Adani Australia had introduced a project “Carmichael Coal Project” (The Adani Files). This is one of the most controversial fossil fuel projects in Australia’s history. They plan to drain out 297 billion liters of groundwater till Carmichael mine exist. This has a huge risk to the farmers and other people who rely on the water of Carmichael River to survive. People around Australia opposed this controversial project. But in this current year, the government of Australia gave final environmental approval for this project. This incident initially affects the business performance of Adani but after the governments’ approval, this project will help them to sustain in this highly competitive market (The Adani Files).
- Competitive Risk
The third top risk that Adani faces is deteriorating cost of production scenario in Australia (Sadgrove, 2016). The Australian Coal Association (ACA) warned Adani that their new cold mines in the country are not competitive in the global market. ACA shows that capital costs for Australian thermal coal projects are nearly 66% higher than the global average. Besides that, energy and transportation costs are also high in the country than in other countries (Schleper, Stanczyk, & Blome, 2018). This risk influences the performance of Adani as they plan a redefined business plan considering the reports of ACA.
d) The business practices Adani chooses to adopt and their influences on its performance
According to Banchuen, Sadler, & Shee, (2017), business practices are the methods, procedures, and processes which are followed by an organization to achieve aims and objectives of the organization. Adani chooses to adopt some good business practices which are influencing their overall performance. These are the following business practices of Adani.
Adani always stays committed to the team’s initiative. They welcome conflict in the organizational atmosphere. They accept the opinion of all employees- from top management to lower departmental employees. This business practice influences employees of the organization to work efficiently and achieve organizational goals (Bouranta, Psomas, & Pantouvakis, 2017).
The management team of Adani always focuses on team dynamics to make sure that the team members don’t lose focus. Adani always reassesses and realigns the team goals in the way to achieve organizational goals. This business practice influences Adani a lot as they are in this position just for their team members’ unconditional contributions (Zeng, Zhang, Matsui, & Zhao, 2017).
Adani is successful in engaging their employees towards their job and making them care about the organization’s vision. Singh, Garg, & Deshmukh, (2008) stated that engaged employees are enthusiastic, productive, and they can take responsibilities. Employee engagement improves performance of Adani.
e) The functional departments of Adani
The functional departments of Adani includes Marketing department, Finance department, Human Resource Management department, Research and Development department, Technical department, Production department, Distribution department, Customer Service department and Sales department.
Adani Australia is the chosen company for this business case analysis. The essay had demonstrated the environmental factors which influence Adani Australia’s performance. The essay had identified both internal and external environmental factors with proper explanation of how these factors have an impact on the business. The internal environmental factors included positive and negative internal environmental factors. Internal environmental factors are also known as strengths and weaknesses. Adani Australia faces some major risks during their business in the last 9 years. These risks were also discussed in this essay with detailed discussion. The functional departments of Adani gave a complete view of the organization.
(n.d.). Retrieved from The Adani Files: https://adanifiles.com.au/
adani Australia. (n.d.). Retrieved from https://www.adaniaustralia.com/
Agrawal, K., & Maheshwari, Y. (2019). Efficacy of industry factors for corporate default prediction. IIMB Management Review , 31 (1), 71-77. https://doi.org/10.1016/j.iimb.2018.08.007
Aquilani, B., Silvestri, C., Ruggieri, A., & Gatti, C. (2017). A systematic literature review on total quality management critical success factors and the identification of new avenues of research. The TQM Journal , 29 (1), 184-213. https://doi.org/10.1108/TQM-01-2016-0003
Banchuen, P., Sadler, I., & Shee, H. (2017). Supply chain collaboration aligns order-winning strategy with business outcomes. IIMB management review , 29 (2), 109-121. https://doi.org/10.1016/j.iimb.2017.05.001
Bouranta, N., Psomas, E. L., & Pantouvakis, A. (2017). Identifying the critical determinants of TQM and their impact on company performance: Evidence from the hotel industry of Greece. The TQM Journal , 29 (1), 147-166. https://doi.org/10.1108/TQM-11-2015-0142
Ertz, M., Karakas, F., & Sarigöllü, E. (2016). Exploring pro-environmental behaviors of consumers: An analysis of contextual factors, attitude, and behaviors. Journal of Business Research , 69 (10), 3971-3980. https://doi.org/10.1016/j.jbusres.2016.06.010
Gupta, S. (2003). Event marketing: Issues and challenges. IIMB Management Review , 15 (2), 87-96. https://pdfs.semanticscholar.org/3835/3446664bc4dc06dbbc0f9c06998d853eb727.pdf
Jack Lam, Y. L., & Pang, S. K. (2003). The relative effects of environmental, internal and contextual factors on organizational learning: the case of Hong Kong schools under reforms. The Learning Organization , 10 (2), 83-97. https://doi.org/10.1108/09696470310462094
Jiménez-Jiménez, D., Martinez-Costa, M., Martínez-Lorente, A. R., & Rabeh, H. A. (2015). Total quality management performance in multinational companies: A learning perspective. The TQM Journal , 27 (3), 328-340. https://doi.org/10.1108/TQM-01-2014-0002
Kannadhasan, M. (2015). Retail investors' financial risk tolerance and their risk-taking behaviour: The role of demographics as differentiating and classifying factors. IIMB Management Review , 27 (3), 175-184. https://doi.org/10.1016/j.iimb.2015.06.004
Sadgrove, K. (2016). The complete guide to business risk management. Routledge. https://doi.org/10.4324/9781315614915
Schleper, M. C., Stanczyk, A., & Blome, C. (2018). Archetypes of global sourcing decision-making: the influence of contextual factors. Academy of Management Proceedings , 2018 (1), 11302. https://doi.org/10.5465/AMBPP.2018.11302abstract
Singh, R. K., Garg, S. K., & Deshmukh, S. G. (2008). Strategy development by SMEs for competitiveness: a review. Benchmarking: An international journal , 15 (5), 525-547. https://doi.org/10.1108/14635770810903132
Zeng, J., Zhang, W., Matsui, Y., & Zhao, X. (2017). The impact of organizational context on hard and soft quality management and innovation performance. International Journal of Production Economics , 185, 240-251. https://doi.org/10.1016/j.ijpe.2016.12.031
| January 13, 2020