Diagnosing Organisational Challenges: Aurecon Singapore Analysis

This report investigates the organisational challenges faced by Aurecon Singapore, a management engineering consultancy, by analysing both its external and internal environments. The external analysis employs frameworks like PESTLE, Porter's Five Forces, and Industry Life Cycle to assess the industry's characteristics, including revenue volatility, life cycle stage, and competitive intensity. The internal analysis utilizes SWOT, VRIO framework, Value Chain Analysis, and strategic capabilities assessment to identify challenges such as high market competition, capital intensity, lack of trained employees, and cultural incompetence. The report concludes by highlighting the key problems and challenges Aurecon faces, providing a comprehensive overview of the factors impacting the organisation's performance.

Running head: MANAGEMENT IN PRACTICE
Management in Practice
Assignment 1
Individual Report - Diagnosing the causes of the organisational challenge
Student’s name:
Name of the university:
Author’s note:

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Executive Summary
This report sheds light on the causes of organizational challenges from internal and external
environments. Organisations misunderstand the mission, misunderstand the strategies, they face
lack of team cohesion and lack of resources as well. In this report, Aurecon Singapore has been
chosen for analysis. Aurecon is in management engineering consultancy company and it has a
market in education, aviation, construction and health and data telecommunication. Last five
years, this engineering consultancy industry has not been on growth track. However, by the end
of 2020, Aurecon is expected growth in the company as Singapore is in stable economy and
company is offering projects. In order to analyse the external environment, theoretical
frameworks like PESTLE, Porter's Five Forces. Industry Life Cycle and performance objectives
of management engineering industry have been explained. These explanations clear the view that
revenue volatility is medium, life cycle stage is mature, barriers to entry medium, industry
globalization are medium, the competition level is high and the regulation level is heavy in this
industry. Internal environment has been judged through SWOT, VRIO framework, Value chain
analysis and strategic Capabilities of Aurecon. Aurecon faces the challenges of high competition
in the market, capital intensity and industry consolidation as many global companies come to
Singapore. It also faces the issue of lack of trained employees, value proposition and cultural
incompetence.

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Table of Contents
Introduction......................................................................................................................................3
Overview of the Aurecon.............................................................................................................3
A. External Environment analysis...................................................................................................4
a. PESTEL analysis.....................................................................................................................4
b. Porter’s five forces analysis.....................................................................................................5
c. Industry Life Cycle Curve.......................................................................................................7
d. Customers’ needs regarding operational performance............................................................8
e. Aurecon’s offerings to the performance objectives.................................................................9
B. Internal Environment................................................................................................................10
a. Strategic Capabilities.............................................................................................................10
b. VIRO Analysis.......................................................................................................................11
c. SWOT Analysis.....................................................................................................................12
d. Value chain analysis..............................................................................................................13
C. Confrontation Matrix................................................................................................................15
D. Problem Statement and challenges of the organisation Aurecon.............................................16
E. Conclusion.................................................................................................................................17
Reference List................................................................................................................................19
Appendix........................................................................................................................................22

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Introduction
This report integrates management theories with practice and it equips with skills and
knowledge necessary for an organisation to be successful. This report draws upon the concepts,
tools and applications to broaden the awareness of external and internal environment of an
organisation. The aim of the report is to highlight the external and internal factors that an
organisation can face and subsequently re-define the management challenges in short and long-
term basis. In this report, Aurecon Singapore has been chosen to show the external and internal
environmental analysis. Management issues of Aurecon organisation are highlighted and the
issues of the organisation can be solved through a combination of management practice and
theory. This report is mainly based on secondary data of government reports, industry reports
and organisational websites.
Overview of the Aurecon
Aurecon brings ideas to design a better future for mankind and they try to imagine what
is possible. Aurecon tries to turn problems into a solution. Aurecon is an engineering, designing,
planning, management and project management organisation. Aurecon is private organisation
and it was founded in the year 2009. It has delivery centres in more than 27 countries and it has
80 offices across the globe. CEO of the organisation is Giam Swiegers and Aurecon has been
doing notable projects in major parts of Asia. Revenue of the organisation was AUD 900 million
dollars in 2016. Numbers of employees in the organisation touched 8000. Aurecon provides
advisory, delivery and asset management services across a range of markets (Aurecongroup.com
2018).

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A. External Environment analysis
Aurecon is in management consultancy industry.
a. PESTEL analysis
The political factors that can affect construction project and building designing are
regarding the documentation and permits which the companies have to obtain in various stages.
In Singapore, Government is robust on the impact of eco-system in construction project and
government wants price must be competitive. Singapore government does not impose a new tax
that may result in a change of the revenue generation. The political condition of Singapore is
stable to flourish the business. Opportunity for construction engineering industry as Singapore
economy is flourishing and high-technology in Singapore is also boosting up.
Singapore economy is referred to as the most open in the world and it is helpful for pro-
business. Current GDP of Singapore is US$ 305 billion and GDP growth is 5.3%. The inflation
rate is Singapore is 0.4% and more than 4 million people are in labour force. In building
designing and construction projects, the demand can touch US$ 20 billion by the end of 2020
and it was US$16 billion in the year 2016 (Straitstimes.com 2018). Opportunity in construction
engineering is that Singapore has third highest per capita income economy, therefore, people can
spend more on construction and other projects.
Socio-cultural factors scrutinise the community and market factors. In Singapore, people
spend lavish lifestyle as disposable income of the people is high. People as consumers change
their preference in Singapore. Distribution of wealth in Singapore shows the figure of 0.426 and
literacy rate is 95% (Straitstimes.com 2018). The threat in construction engineering is that

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Singapore is exposed to communal violence frequently that sets the cultural and social harmony
back foot, it can lead to stoppage of projects.
Singapore has comprehensive infrastructure sect up and it is technologically advanced.
Construction of project and building design needs technology help and technology is making
changes in the construction industry in Singapore as high technology sector in Singapore is
enhancing its quality. Therefore, construction and project industries are observing development
with a standalone system. Most of the companies in this industry are moving towards
electronically advancement and it can bring opportunity. In Singapore, many of the high-
technology companies are making its branch as people are literate and they want to spend more
on R&D.
In Singapore, societies have strict legal norms and Singapore constitution is followed by
all. Corruption level is lower than most of the countries as Corruption Perception Index is 9.2 out
of 10. Employee policy favours the firms in Singapore and Singapore has SPRING Singapore to
follow the Standards, Productivity and Innovation Board (Tremewan 2016). Singapore has
Competition Commission and companies must follow the competition rules.
In construction engineering, the environmental factor is very important as projects must
not damage the environment. Singapore has tropical climate and rainfall can be observed
throughout the year. Therefore, the threat is associated with construction companies as they need
to use extra security for rains and designs can be influenced by this. Singapore is the member of
Environmental Performance Index (EPI) (Rodan 2016).
b. Porter’s five forces analysis
Threat of new entrants

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Aurecon is in project management and engineering industry and in Singapore; the threat
of new entrant is medium. The construction engineering is the third largest industry in Singapore
and it is estimated to US$23 billion (Straitstimes.com 2018). It is not easy for a new company to
enter in such a large market without any preparation. It is large scale industry and manpower is
needed with the technological specification in order to enter in this field. Construction activities
and project management are not fragmented in Singapore.
Bargaining power of suppliers
Aurecon works directly in projects and suppliers of construction and projects are there in
the industry. Materials, technologies and contractors are the most important suppliers for
Aurecon. In Singapore, the bargaining powers of suppliers are moderate as numbers of suppliers
are not high. For suppliers, the industry is attractive as suppliers have many things to supply to
engineering Consultants Company. This force is medium.
Bargaining power of buyers
In the market for engineering consultant, the market rivalries are large. Therefore the
buyers can switch easily to other company. In addition, the customers of the service from
Aurecon are large companies and they are rich. They research well about the price and
companies have to quote the price. Aurecon works in different markets and therefore, numbers of
customers are large for the company. This force is high.
Threat of substitutes
In Singapore, in the urban sector, construction engineering companies are making
residential, commercial and industrial buildings along with roads, sewers, bridges and high ways.

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Substitutes in the market are high; however, in Singapore, it has already built Buddha Tooth
Relic Temple, Crown Plaza hotel exterior, land Lease Regional Head Office and The Sail at
Marina Bay (Aurecongroup.com 2018). Therefore, the threat of substitute is moderate.
Rivalry in industry
In Singapore, numbers of foreign workers are large and labour force is high with foreign
workers. Engineering and construction companies in Singapore are many, Marx Construction
Project, Faithful Gould, KTC, GS Engineering and Construction and CGW Construction and
Engineering. International players are PWC, Deloitte and KPMG in Singapore market
(Ahmadabadian et al. 2016). A price war is seen in the industry as offering lower price can
attract the more customers. Therefore, industry rivalry is high in this industry for Aurecon. This
force is high.
c. Industry Life Cycle Curve
The industry life cycle is based on mainly business characteristics and it has four phases.
Industries are started when new service or product is developed and industry can face the issue of
uncertainty of the market size. At the conception stage, early marketing and development of new
service or product are started by engineering consultant Aurecon. Innovator Aurecon starts new
service to enable the proliferation o offer. Consumers get to learn about the product or service
and industry is fragmented in conception stage (López-Gamero and Molina-Azorín 2015).
Consumers get to know about new offering and its values. Consumers start to purchase the
service or products. Similarly, in the growth stage, Aurecon offers the service to large numbers
of customers and they establish a share in the market. In maturity period, the growth of the
industry becomes slow and Aurecon focuses mostly on expense reduction. In maturity stage,

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Aurecon can also face that barrier to entry becomes higher. Aurecon in this stage starts to focus
on market share and the primary goal of the company is cash flow. Management engineering
consultancies industry is observing the maturity phase as companies are consolidating and level
of economic importance is getting stable (Wheelen et al. 2017). High growth is observing in
economic importance, technology and market are developing. In the declining phase, the
engineering consulting industry is not able to support growth. It shows a decline in revenues and
it also leads to weaker competitors out of the industry.
(Refer to Appendix for Industry Life Cycle Curve)
d. Customers’ needs regarding operational performance
Price: It is the amount that has to be paid in order to get the service. In Singapore market,
Aurecon provides the service at less fixed cost as numbers of competitors are high. Customers
want fewer prices with the highest value.
Quality: Customers want consistent performance and the best quality from the
companies. Customers want error-free service and maximum choice from companies. Customers
want the best specification of the services and the services or products must be the best in the
market. As stated by Grant (2016), quality management practices of the organisations must be
transparent so that customers have the confidence to purchase the services or products.
Dependability: As opined by Frank et al. (2015), dependability can be defined as the
quality of being able to be counted or relied upon. Customers want to purchase from the
organisation where they can invest without any a headache and they expect that the organisations
must keep the promises. In engineering consulting service, customers want that they can depend
on the organisations in construction or projects.

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Flexibility: Aurecon increased the business volume as the company generated
$999,980,000 total revenue including sales and revenue. Aurecon is focusing to increase the
delivery flexibility as it has more than 80 offices in more than 27 countries. Customers want
maximum service flexibility to choose from (Aurecongroup.com 2018).
Speed: Speed is the elapsed time between customers request the service and receiving the
service back. In public sector engineering construction and projects, the speed of operation is
slower than the private sector in Singapore (Bennett and Chorley 2015).
e. Aurecon’s offerings to the performance objectives
Aurecon provides best price offering in the Singapore market and the service is efficient
for the customers. The company provides quality services to the customers aligning the top
management commitment and leadership. Quality in engineering consultancy is related to the
men, material, machines, money, metrics and methods (Chen and Duan 2014). In Singapore
market, Aurecon provides the service at the competitive prices. The speed of the organisation
differs as the project has to pass the government and local regulation. Aurecon provides delivery
flexibility as it has many branches across the globe. The organisation has expertise in
architecture and engineering company and it has service and products of construction property,
manufacturing, property and defence.

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Cost
Dependability
SpeedFlexibility
Quality
0
5
Aurecon Provides
Customers want
Figure 1: Spiderweb diagram of performance objective
(Source: Self-developed)
B. Internal Environment
a. Strategic Capabilities
Organisations may have the best business strategy; however, they need to convert the
strategy into action. Aurecon has threshold competence as it reserves the skills that an
organisation needs to have to saleable the products or service to the customers (Chen and Shao
2017). Aurecon has engineering ideas in various markets and it has a number of subsidiaries as
well. The organisation has financial viability; however, the presence of competitors in the market
makes the situation hard for Aurecon.
Resources Competencies
Physical Machines, building, products,
materials, patents, database,
Ways of achieving utilisation of plants,

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computer system flexibility, efficiency and productivity
Financial Cash flow, balance sheet,
suppliers’ funds. Revenue of
Aurecon was US$ 900 million
dollar in 2016
Ability to raise funds and manage the
cash flow, creditors and debtors
Human Aurecon has more than 7000
employees all over the world and
it has leaders, managers, suppliers
and partners globally
The organisation needs to use
experience, skills, knowledge and build
relationship to motivate other people
Table 1: Strategic capabilities of Aurecon
(Source: Self-developed)
b. VIRO Analysis
Valuable Rare Imitability Organisation Competitive
implication
Price
positioning
Yes Yes Yes No Aurecon has
extra
advantage in
price war
Market
proximity
Yes No Yes Yes Competitive
advantage
Innovation Yes Yes Yes Yes Aurecon likes
to convert
problem into