Management and Business Context of INPEX Corporation

This paper analyzes the strategies, policies, and management of INPEX group. It explains organizational structure, external and internal factors, risks, and business practices to enhance performance. The important business function that will assist it to achieve its strategy is also discussed.

Running head: Management and business context
Management and business context

Management and business context
Table of Contents
Introduction.................................................................................................................................................3
Organizational structure..............................................................................................................................3
External and internal factors........................................................................................................................4
Analyze the risks..........................................................................................................................................6
Business practices to enhance performance...............................................................................................7
The important business function that will assist it to achieve its strategy..................................................7
Conclusion...................................................................................................................................................8
References...................................................................................................................................................8
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Management and business context
Introduction
The main objective of this paper is to explain and analyze the strategies, policies and
management of INPEX group. INPEX is a well known oil company which is situated in Japan.
In today’s era, the company is flourishing and expanding its business activities day by day. In
addition, the paper explains organization structure and business practices of INPEX group. It
depicts that how the organization overcome the competitors by analyzing the external and
internal factors. It describes the risks and challenges which are involved in oil and gas industry.
Organizational structure
INPEX Corporation is a Japanese oil company which is formed in February 1966. There
are approx 2,146 employees employed in the organization. INPEX Australia is a unique and
dynamic part of INPEX. Collaboration, safety, integrity, ingenuity, and diversity are core values
of the company. Along with this, the firm is working in more than 27 countries on 70 projects
(Inpex, 2018). INPEX is also engaged in well balanced business operations and activities in
terms of portfolio contract, geographic area, and proportion of crude oil to natural gas. Moreover,
the company also engages in several energy gas related research and development projects. To
attain corporate mission and objectives, the firm adopts an effective and unique company
structure which includes board of directors and other employees. The structure of INPEX
Corporation has been detailed below.
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Management and business context
Organizational structure of INPEX Corporation
(Source: Inpex Corporation, 2018)
Cross cultural management issues: There are various cultural issues are faced by the firm in
the workplace. The employees who come from different cultures, they are unable to understand
the culture, values and languages of the country. Thus, various issues are raised at the workplace.
It also affects the productivity of the firm. Due to lack of cross cultural training, the workers are
unable to understand new technologies in the firm. It also influences the productivity and
outcomes of the company.
External and internal factors
External factors
The oil industry plays an important role in the economy of any country. It provides
several opportunities to investors because they can get good income from the business. Thus, the
firm analyzes and evaluates the external factors to measure and identify the external factors (Van
Wormer & Besthorn, 2017). The external factors include political, economical, social,
technological, legal and environmental factors which could affect the performance and
productivity of the firm. The company cannot control on these factors therefore, they put the
great impact on business of the company. The external factors have been stated below.
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Management and business context
Political factors: The political factors include low trade restrictions, governmental support,
positive tax policy and low barriers of market entry may influence the success and growth of the
firm. The company has to follow labor laws and taxation policies to conduct the business
activities and operations successfully. Thus, various challenges are faced by Inpex Corporation.
The government should provide support to the industry in order to flourish its business globally.
The various political elements which are articulated, they show the political impact on this
company (Claes, 2018).
Economy factors: The economy factors have left great impact on the oil industry. The economy
factors may affect the demand and supply of oil prices because economy is changing constantly.
The oil industry has earned lot of wealth through the sale of petroleum and oil to other countries
as it is essential from commercial and domestic use (Alexander, 2014).
Social factors: The socio-cultural elements include the income migration, religion, demography,
culture, values, customs and ideological views. Sometimes, employees are unable to understand
the culture and languages of foreign country therefore; it could affect the productivity of the
firm. The oil industry has brought some changes in the lives of the people because it does not
follow any culture. The company should focus on these factors to make an effective position in
the marketplace (Epstein & Buhovac, 2014).
Technological factors: The different technologies could affect the activities and operations of
the firm. The firm uses latest and innovative technologies to exploration of oil and gas.
Furthermore, the latest technologies are used to protect the environment of the country (Kelland,
2014). Hence, the efficiency and effectiveness of the management will also be increased with the
use of new hardware and software. Thus, technology influences the success and growth of
INPEX Corporation positively (Lee, Speight& Loyalka, 2014).
Environmental factors: The environmental factors such as earthquakes, cyclones, snow storm,
sand storms, hot temperature and volcanic eruption may influence the economic situation in the
nation. To overcome the environmental factors, the company should design its structure
effectively and efficiently with optimum use of resources.
Legal factors: The legal factors include government rules, regulations, laws which may
influence the exploitation, exploration and commercialization of oil industry because the
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Management and business context
company has to pay the subsidies and taxes for oil and fuel prices. As a result, it affects the
profitability and returns of the organization (Guo & Ghalambor, 2014).
Internal factors
The internal factors include the strengths and weaknesses of the organization which could
affect the long term goals and objectives of the firm. The strengths can affect business activities
positively but as weaknesses affect operations negatively (Kadafa, 2012). The internal factors
strengths and weaknesses have been detailed below.
Strengths
 The company is improving operations and actvities of the workers. Along with this, it
maintains strong research and development team to introduce new technology in the
market.
 The net revenues and profits have been high constantly.
 INPEX has more than 2000 employees who operate in more than five countries.
 A geographically diversified project portfolio is one of the biggest strengths of the
company.
Weaknesses
 INPEX Corporation is declining in natural gas production due to its reducing resources in
lower profits.
 Highly use of renewable energy sources which led to introduction of new laws, rules and
legislation in Japan to promote the utilization of non-conventional sources of energy, as it
can decrease the consumption of gas which will influence the revenue and returns of the
firm. It is the biggest weakness of the firm (Elnaga & Imran, 2013).
Analyze the risks
There are various risks involved in the oil and gas industry which could affect the
progress of INPEX Corporation. Exploration, production and development risks are always
involved in oil industry. The exploration and development are necessary to protect the
sustainable business in the international market. Additionally, accident and disaster risks are also
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Management and business context
included in the industry because disaster and risks occur at any time (Rausand, 2013). No one
can control on these challenges and issues. Accidents and disaster could also influence the life of
people and they are unable to recover the profit and revenue. Thus, it affects the operations and
activities of group (Tisserand & Young, 2013). Although, INPEX Company maintains accidents
insurance to secure the life of people but still the firm should make some effective strategies and
plans to reduce accident and disaster risks. Apart from these risks, price risk is also involved in
oil and petroleum industry. Sometimes, the company has to pay huge amount of money to
compete the projects. However, the firm is unable to pay the huge amount therefore the company
automatically ceases the operations on a project that become unbeneficial due to a price dip.
INPEX Corporation should monitor and identify these risks in order to grow and flourish the
business activities (Geraci, 2012).
Business practices to enhance performance
There are enormous business practices are being used by INPEX Corporation to enhance and
increase the performance of the workers that have been stated below.
 The firm should collect feedback in a positive manner on a regular basis. It will help to
enhance and maximize the productivity of the employees (Hout, 2014).
 The managers should respect the workers to encourage their performance because respect
is a biggest motivator for the workers. The managers and leaders should increase and
enhance the level of satisfaction, loyalty and confidence of the workers. In this way, they
feel happy at the workplace then they do work in a hassle free manner (Krosinsky, &
Robins, 2012).
 Training and development coaching should be provided by the organization in order to
encourage and enhance the outcomes of the firm (Ford, 2014).
 The top management must provide support to the employees when they needed
genuinely. It will help to build employee loyalty and goodwill within the organization.
 Apart from this, the leaders should identify the internal roadblocks and hurdles which
may affect the performance of the workers adversely. It will help to generate more and
more revenue in the international market.
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Management and business context
The important business function that will assist it to achieve its strategy
The various business functions are being performed by INPEX Corporation to attain its
business objectives and goals. The following are the most significant function that will assist to
achieve its strategy and objective.
 A sustainable human resource management must be built and developed by the company
to make unique strategies, plans and policies. HRM helps to appoint potential and
capable employees to perform tasks and duties effectively (Ehnert, Harry & Zink, 2013).
 Furthermore, a marketing team is selected by INPEX Company to analyze and evaluate
the marketing conditions, competitors and nature of the market (Ottman, 2017).
 In addition, the firm needs to focus on the generic and growth strategies to expand the
business and stand out against the competitors in the international market (Rizea, 2015).
 Effective strategies and policies shall be made by the firm to eliminate and minimize the
risks and challenges related to oil and gas industry. It will also assist the firm to achieve
its long term strategies (Vivoda, 2012).
 INPEX Corporation should analyze the environmental factors to reduce the negative
impact of globalization. It will also help to know the strengths and weaknesses of the
rivalries. In this way, the company can attain its desired goals and objectives (Wilensky,
2015).
Conclusion
On the above mentioned study, it has been evaluated that INPEX uses effective and
dynamic policies and strategies to grow and explore its business globally. Apart from this, the
organization builds and develops reciprocal relationship with investors to contribute in the
society. INPEX group has formulated effective code of conduct and business principles. Apart
from this, internal and external analysis is done by the corporation to identify and measure the
threats and opportunities in the marketplace. It will also help to cope with the competitors across
the world. Dynamic business practices are initiated and used by the company to improve the
performance of the workers and organization as well.
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References
Alexander, E. (2014). How organizations act together: Interorganizational coordination in
theory and practice. Routledge.
Claes, D. H. (2018). The politics of oil-producer cooperation. Routledge.
Ehnert, I., Harry, W., & Zink, K. J. (Eds.). (2013). Sustainability and human resource
management: Developing sustainable business organizations. Springer Science &
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Elnaga, A., & Imran, A. (2013). The effect of training on employee performance. European
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Epstein, M. J., & Buhovac, A. R. (2014). Making sustainability work: Best practices in
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Ford, J. K. (2014). Improving training effectiveness in work organizations. Psychology Press.
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Guo, B., & Ghalambor, A. (2014). Natural gas engineering handbook (2nd edition). Elsevier.
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Inpex Corporation. (2018). About INPEX, Retrieved as on 5th April from:
http://www.inpex.co.jp/english/company/value.html.
Inpex.,(2018). INPEX in Australia, Retrieved as on 5th April 2018 from:
http://www.inpex.com.au/our-company/inpex-in-australia/.
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