(Source: Environmental Justice Australia, 2017) A sound corporate governance structure is significant for the functioning and the economic development of the enterprise. It ensures that the interests of the varied range of stakeholders are safeguarded (Sakawa & Watanabel, 2019). The choice of the business structure of the company is the company where the identity of the entity is separate from its members. As seen from the picture above, the business structure is comprised of high level of integration across all of its businesses. The business structure of the entity is complicated and is comprised of around 25 independent Australian incorporated that are involved in the activities across the proposed Abbot Point Port and the Carmichael Mine. The corporate governance structure of the company is equally complex with the higher involvement of the family members in the ownership of the business. The high involvement of the family members is shielded by the separate legal identity. Analysis of the environmental factors affecting the business There are a range of factors present in the business environment of the enterprise namely the political, technological, economic, environmental and others. One of the most prominent factors that have affected the business of the entities of modern times are the climate and environmental factors (Lee & Klassen, 2015). Theenvironmental factors that surround the functioning of the business of the enterprise Adani Group are mentioned as follows. The entity is chiefly engaged in the business of the extraction and production of coal and one of the incidental factors associates with the said activity is the generation of the greenhouse emission gases. The said emissions can contribute towards the global temperature rise above the pre-industrial factors. The said factor has influenced the business of the enterprise resulting into the reduction of the lifetime of the mine to 60 years of life of the mine as against initially proposed 150 years (Environmental Law Australia, 2017). In addition to the climate change, the yet another major environmental factor is that of the management of the reduction of the underground water. The company was facing severe backlashes for the overestimation of the underground water flow and was forced to revise its plan which is known as the GDEMP (Groundwater Dependent Ecosystems Management Plan) before being granted the final approval (Thomas, 2019). Yet another environmental factor that influenced the decision making process of the entity was the management of the endangered species by the virtue of the mining operations.
Analysis of the risks The modern business activities are surrounded by numerous risks owing to the potential changes in the external environmental factors and the threats presented by the internal environmental components. Some of the chief areas of the risk for the chosen entity are elaborated as follows. One of the fact to be noted is that the company is based originally out of India and hence maintains the group accounts in Rupees. In addition, the company’s operations are highly dependent upon the exchange rates as the entities of the group are dealing majorly in numerous foreign currencies. Hence one of the major risks of the entities is the interest rate fluctuations. Due to wide operational and geographical expansions, the exchange risks are significant for the business. The second major risk for the entity is posed by the labour laws of the country Australia. It is imperative to note that the future government can cancel the mining license of the company due to the financial and environmental risks as well. The third major risk of the entity is the potential opposition exposure by the environmental supporters which also restricted the financial funding for the entity. The project is surrounded by the financial risks and the downfall can result in the falling of the investor confidence for the entity (The Guardian, 2018). The influence of the above risks can be easily seen in the fact that the company was long waiting for the licence of federal approval of mining in the said region, which was granted after severe changes in the proposed plan and after so many years of the initial investment. It is imperative for the businesses to involve the environmental risks while planning the strategies of the businesses (Ghosal, 2015). Analysis of the business practices The business practices of the entity Adani Group in Australia are described as follows. The company is working in Australia through its subsidiary company namely the Adani Mining Pvt Ltd of the Adani Group registered in India. The organisation started its business operations in Australia in the year 2010, by entering into an agreement with the Australian government for the development of the country Australia's largest Carmichael coal mine. The company Adani Australia is also engaged in the building of a railway line that would connect the Abbot Point port to the Galilee Basin. The said construction of the railway station is aimed at facilitating the easy transit of coal for the purpose of import. In addition to the above, the business operations of the enterprise would include construction of thermal
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coal mine which includes activities like fencing, upgrading of the bridge and roads, civil earthworks and the water management on the site for the purpose of extraction. In the initial stages of the project, that is after the receipt of the approval, the business activities of the organisation would include finalisation of the contracts, mobilisation of the equipment, recruitment of the workforce and completing inductions. As the company is operating through its subsidiaries in number of regions, the company faces extensive backlash from the various stakeholders because of the high involvement of the family shareholding. In addition to the above, the business operations being majorly on lines of the natural resources, the company faces excessive criticisms from not for profit organisations, labour groups, environmentalists and others. Analysis of the functional departments The parent company has a range of business operations in the varied areas such as coal mines, airports, road and infrastructure, defence industry, solar panel manufacturing, edible oil industry and others. Each of the above mentioned business lines are forward and backward integrated and thus expanding the business activities of the entity. It is imperative to note that the ownership structure, functional department distribution plays a key role in the management of the affairs of the enterprise. The various departments aid in filling the important positions such as the board positions with functional experts in the respective areas and thus facilitates coordination and integration between the activities of the enterprise (Fraile & Fradejas, 2014). In order to manage such a comprehensive business structure, the organisational operations of the entity Adani are divided into varied functional departments namely the production, finance, marketing, human resources, and the logistics. The coal sector in Australia would include the functional departments of the company to be the mining, processing, acquisition, exploration and development of mining assets. In addition, the company also engages in the building of the transport infrastructure which facilitates the logistics department of the entity in terms of the cost reduction and the economies of the scale. Conclusion The discussions in the previous parts aid to conclude that a range of factors contribute towards the business strategy and the decision making of an entity. The work analysed the various factors that contribute to the business decisions of the company Adani Australia. It has been observed that the internal factors such as the risks and functional departments and
the external factors such as environmental, political, and economic factors are the chief factors that influence the business of the chosen company. In addition to the above, the work also highlighted the business structure and the corporate governance structure of the company to recognise it has majorly a family business. The said structures also affect the business significantly and the choice of the business decisions is reflective of the same. Hence, t cane be concluded that the business environment must be carefully analysed to establish and implement efficient business decisions.