Environmental Factors And Cross Cultural Management In Inpex

Organizational Structure of Inpex

Write a Business Analysis Essay on Inpex and Cross Cultural Management Issues.

In the present business scenario, there are various complexities and difficulties being faced by the contemporary business organizations. This is mainly due to the reason that competition in every business sector is huge with the presence of good number of competitors. Moreover, contemporary business organizations also face cross cultural issues due to having diverse workforce in place. Oil and gas sector is one of those sectors, which is having huge competition along with having good market opportunities (Yusuf et al., 2014) and having employees from all around the world. Thus, this sector is more vulnerable to the emergence of cross cultural issues.

Inpex is one of the major oil companies in the world and they are based in Japan. They are founded in 1966 and currently they are having their business operation in the different countries including Australia, Indonesia and Azerbaijan (www.inpex.co.jp, 2018). The aim of this essay is to discuss about the various environmental factors being faced by Inpex in their global operation. Furthermore, this essay will also discuss about the risks they are facing in terms of their cross cultural management. A few business practices will also be recommended in order to enhance the organizational performance.

Impex is having more hierarchical type of organizational structure in place. This is mainly due to the reason that they are having their business operation in different countries around the world (Islam, Jasimuddin & Hasan, 2015). Thus, they are having centralized management control over all their foreign strategic business units. Being a public company, Inpex is having board of directors at the top of the organizational chart. They are being followed by the executive body and the president. This executive body reports to the president. The bodies that are driven by the executives are the nomination and compensation department, advisory department, compliance department, CSR department, information security department and value assurance department. This concludes that Inpex is having more vertical type of organizational chart in place. This is having both merits and demerits for the organization. One of the major merits is the centralized control over the entire department and the major demerit is the lack of communication between all the stakeholders. This is due to the reason that the stakeholders from the foreign operations of Inpex are not having the direct access to the upper level management. Thus, it can be concluded that Inpex is a publicly traded company.

Environmental Factors Faced by Inpex

Political

Political environment of Inpex is much more challenging due to the reason that there are various trade policies and regulations are there in different countries regarding the oil and gas sector. Negative diplomatic relationship between different countries also poses threat for the due to the fact that they are having their operations in different counties (Kinne, 2014). Moreover, difference in the political system in different countries also causes difficulties in managing employees from different countries.

Economical

Economical environment of Inpex is more favorable due to the huge cash flow in the business (Patel, Patel & Patel, 2014). However, presence of number of competitors in the market is limiting the profitability. Initiation of the alternative sources of the energy is posing threat to the business potentiality of Inpex.

Social

Social environment of Inpex is mostly negative due to the negative social impression of the oil and gas industries. They are seen as the threat to sustainability. However, extensive social responsibility activities of Inpex help them to have positive impression in the market. Social environment is much more diverse due to the presence of diverse workforce.

Technological

Technology is one of the major considerations for the oil and gas sector. Huge investments are being done in this sector. In the current scenario, technological development is also important for the sustainability (Shuen, Feiler & Teece, 2014). Huge investment is being done in order to have more efficiency in the production process and reducing the emission.

Legal

There are various legal regulations present in this sector in relation to the health and safety. It is important for the companies in this sector to determine the health and safety of the employees mainly in their offshore facilities. It is also important to adhere to the legal regulations in relation to the employee diversity (Barker & Jones, 2013).

Environmental

Environmental factors the major factors faced by the companies in this sector. Emission from this sector is one of the major contributors for global pollution. More demonstrations and protest are emerging in the recent time regarding the negative climate impacts of these companies (Yusuf et al., 2013). Thus, it is important for Inpex to have effective and extensive sustainability approach in order to reduce the environmental impact as much as possible.

Strengths

Inpex constitute of huge and favorable brand value in the market. It helps them in having more barging power in the market. In the recent time, they are initiating the use of alternative sources of energy (Esen & Yuksel, 2013). This is enhancing the impression of the brand in the market. Huge access to the capital is enabling them to have more power of investment in their business operation. Having diverse workforce enables them to have more varied generation of ideas in the organization.

Risks Faced by Inpex

Weaknesses

They are facing sustainability issue in the industry due to having outdated technologies of Inpex as compared to their competitors (Raufflet, Cruz & Bres, 2014). They are having limited global presence compared to their competitors such as British Petroleum. Inpex is having limited access to the strategic resources as compared to their competitors. Thus, the sources of gaining competitive advantages are less for them in the market.

Opportunities

Initiation of the renewable sources of energy will have huge market potentiality in the market (Ellabban, Abu-Rub & Blaabjerg, 2014). ASEAN region is largely untapped and thus it is one of the biggest opportunities for Inpex to tap this area in search of strategic resources such as oil fields. Inpex will also have more opportunities in entering in the developing markets due to the fact that they will have more business opportunities in these countries.

Threats

Inpex is mainly operating in the business of non renewable source of energy. Thus there is always a threat of depletion of the resources. Emergence of more competitors in the market with more financial resources will further reduce the profitability and business opportunities. Issues between the employees from different social groups will also hinder the organizational effectiveness.

One of the major risks being faced by Inpex is the strategic risks. This is due to the reason that Inpex is having less access to the diverse workforce compared to their competitors. Thus, the strategic advantage that can be gained from the diverse workforce is less for them. Another risk of them is the financial risk (Andersen et al., 2013). This is due to the reason that Inpex currently is having various business operations in different countries. Issues between the employees of their host and home country may cause closure of their facilities. Thus, financial risk is also associated with their business operation. Another risk faced by them is the safety risk. This is due to the fact that Inpex is operating in a sector, which is having huge operational risk for all their internal stakeholders. Hence, safety risk is also there with Inpex at any point of time. These three risks are major risks, which are currently confronting the business operation of Inpex. Moreover, the safety regulations of Inpex may not be well accepted by all employees. This may only acceptable to a particular group of employees.

One of the most effective business practices for Inpex will be initiation of the diversity management in the organization. This will enable them to have employees from different social groups to be treated as one. Moreover, initiation of the diversity management will also enable the employees to be aware about the benefits for them from having diverse workforce. Another effective business practice for Inpex will be the investment in the technological development in training and development purpose of the employees. Latest technologies should be used in providing training to the employees regarding the advantages of diverse workforce. Moreover, cross cultural team should be created in order to enhance the communication between the employees from different social groups.

Effective Business Practices for Inpex

It is important that Inpex should have effective leadership and planning as their most important business functions. Having effective leadership in place will ensure that the business will be driven sustainably and properly in the future. It will also ensure that organizational challenges such as cross cultural issues will be the dealt with properly with having effective leadership approach in place. On the other hand, proper planning process in place will help to have the proper and accurate vision for the future. Planning process will also ensure that all the required resources will be in place for the future business operation.

Conclusion

Thus, it can be concluded that Inpex is facing number of negative factors in the current business environment. It is important for them to have effective and efficient policies and strategies to cut of these challenges. This essay discussed about some of the strategies that can be initiated by them in enhancing their future business potential. It is also concluded that these strategies along with the business functions will ensure the effective organizational performance

References

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