Business Research

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Running head: BUSINESS RESEARCH
Business Research
Name
Institution

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BUSINESS RESEARCH
Introduction
Companies play a very significant role in sustaining the daily operations of human
beings. Companies provide products and services which are required in domestic, national, and
global markets (Amils, Fernández-Remolar and IPBSL Team, 2014). In Australia, a company
known as Rio Tinto is very significant in the production and supply of mining and metal
products. Rio Tinto was established in the year 1962 and deals generally with the finding,
mining, as well as processing of mineral resources (O'Faircheallaigh, 2013). These mineral
resources include diamond, copper, iron ore, aluminum, and other energy and mineral products.
The company operates not only in Australia but also in other 34 countries across 6 continents.
These countries include the UK, Brazil, Guinea, Canada, the US, Chile, Mongolia, Iceland, and
New Zealand. In these countries, the company has mines, mills, as well as refineries, and power
stations (Bellis, 2016). The products from this company are exported to other countries through
the use of railways, ships, as well as ports. In this report, the external and the internal analysis of
Rio Tinto will be presented in a logical approach.
Part 1: External Analysis
General Environment Analysis
Kunz and Moran (2014) argue that Rio Tinto respects the natural resources of the host
countries and considers the impacts of its environmental activities. The company has pioneered
ways which are innovative in order to ensure energy use reduction, lower emissions of carbon
dioxide, as well as responsible management of water, and reduction of waste. Rio Tinto works
with host communities and regulators in order to manage and monitor environmental activities
and hence comply with regulations which are set both locally and internationally. Castillo et al

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(2013) posit that the company thinks globally but acts locally in regard to environmental
activities. The company also sets improvement targets which reflect its overall ambition by
putting into account the present circumstances which are in every location. The company also
aims at sharing knowledge and learning from others in order to improve environmental
management approaches through participation in reviews of industries. These industry reviews
are concerned with such issues as water stewardship and tailings management. Biodiversity loss
and land disturbance are highly avoided and managed by this company. Where appropriate, the
company ensures that its environmental approaches are consistent with the mitigation hierarchy
of avoidance, as well as restoration and minimization (O'Faircheallaigh, 2013). Additionally, Rio
Tinto has taken measures to address the issue of climate change and this has been done through a
partnership with other companies and organizations which deal with auto-motives in order to
produce a fuel which is lighter, more efficient, and which increases safety performance.
On the economic sector, the company has helped Australia significantly through the
provision of employment, payment of taxes, and provision of the market to several other
businesses. Oggerin et al (2014) report that Rio Tinto provided employment opportunities to
more than 21,000 people in Australia regions alone in the year 2017. With this data, considering
the locations which are in other countries, Rio Tinto has really provided a lot of income to many
families. Rio Tinto emerges as one of the top companies in Australia which are leading in the
provision of employment. Additionally, in the year 2017, Rio Tinto paid A$4.9 billion as part of
taxes, as well as, royalties to the Australian government (Wirth et al, 2016). These taxes and
royalties have a significant role in the uplifting the economy of the country. Moreover, the
company provides a market to other industries since it requires several machines, equipment, and
tools which are used in finding, mining, and processing the mineral resources. Reports show that

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the company purchased good and services from more than 9,000 businesses in Australia in the
year 2017 (O'Faircheallaigh, 2013). Rio Tinto also has cadetship and scholarship programs
which are helpful in preparing future leaders in Australia. Through these leaders, the country is
able to gain economic power since there is the provision of quality labor in various industries. It
is significant that the company has substantially helped Indigenous Australians to acquire their
rights for land. These land rights have enabled local Indigenous Australians to have a say in how
they want finances and other benefits from mining to be used. This opportunity has led to
substantial developments in the country such as the development of the education sector, as well
as the protection of future generations.
The political environment of Rio Tinto influences its ability to diversify further in various
locations. The political stability of the governments in which they operate affect the way the
companies run. Olías and Nieto (2015) argue that the company faces challenges in some
countries which have war either nationally or internally. Additionally, the level of corruption has
seen some branches of this company fall in its profitability. Corruption means that some legal
procedures would not be followed by its competitors due to their power to compromise the law.
Countries in which the issue of corruption is high is argued to have led Rio Tinto to a decline in
the profit margin (Turner, 2014). Taxation has been a challenge to Rio Tinto in some countries
such as Canada where the rates are too high. High taxation implies that the company is left with
a very low-profit margin. Moreover, Canada’s government has set out laws where employees
have certain compulsory benefits from their employers. For example, employers in Canada have
been set to provide extra time benefits, medical covers, insurance against workplace accidents as
well as a mandatory three days of rest every week.