Saroma Engineering Sdn Bhd: Sustainable Development Strategies Report

This report examines the sustainable development challenges faced by Saroma Engineering Sdn Bhd, a leading quarrying company in Malaysia. It identifies key issues such as tightening regulations, conflicts with residential areas due to rapid economic growth, and the unsustainable exploitation of natural resources. A root cause analysis reveals that unethical business practices, population growth, and a lack of standardized approaches contribute to these challenges. The report recommends that Saroma Engineering adopts a business diversification strategy and explores market development opportunities, utilizing the Ansoff matrix for strategic planning. The implementation section discusses diversification into construction and expansion into international markets. The report concludes that these strategies can help Saroma Engineering mitigate environmental and business challenges, ensuring long-term viability in the quarrying industry. The report also highlights the importance of adapting to environmental and legal factors within the international market and using technology for optimal resource utilization.

Running head: SUSTAINABLE DEVELOPMENT IN SAROMA ENGINEERING SDN BHD
SUSTAINABLE DEVELOPMENT IN SAROMA ENGINEERING SDN BHD
Name of the Student
Name of the University
Author Note

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Executive Summary
The aim of this report is to discuss about the major challenges being faced by quarrying industry
in Malaysia. There are number of challenges in terms of environmental factors are identified in
this report. In addition, the root cause analysis is being done to identify the core reasons of the
identified challenges. Based on these challenges, it is recommended that Saroma Engineering
should practice business diversification and market development strategy.

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Table of Contents
Introduction..........................................................................................................................3
Identification of Challenges.................................................................................................3
Analysis...............................................................................................................................4
Recommendations................................................................................................................5
Implementation....................................................................................................................7
Conclusion...........................................................................................................................8
Reflection.............................................................................................................................9
References..........................................................................................................................10

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Introduction
Environmental sustainability is important for the contemporary business organizations
due to the reason that it will influence the economic sustainability of them. However, in the case
of mining and quarrying industry, the environmental challenges are more extensive due to the
reason that their activities are having direct impact on the environment and natural surroundings.
Saroma Engineering Sdn Bhd is one of the leading quarrying companies in Malaysia
incorporated in 1977. This company was first started as sub-contractor and crushing operator and
for the construction industry. In the later stage, they have started their own quarrying facilities
with having own mines and resources. However, in the recent time, there are number of
environmental challenges being faced by them along with facing the stringent legislations and
standards in the mining and quarrying industry (Ismail, Hoe & Ramli, 2013). Hence, in this, it is
important for them to identify the key challenges and initiate the change process to mitigate these
challenges.
This report will discuss about the major challenges being faced by Saroma Engineering in
terms of the sustainability and based on these challenges, recommended steps will also be
analyzed. Change process will be discussed that will help in implementing the recommended
steps.
Identification of Challenges
One of the major challenges for the quarrying industry is the tightening of the legislations
and regulatory formalities due to the fact that quarrying industry is contributing in the changing
of the ecosystem and pollution. Even if the large-scale quarrying firms are adhering to the
legislations and standards, small scale firms are not having the capability (Haque et al., 2014). It

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is identified that due to the rapid economic progress and growth of Malaysia, residential areas
and human habitats have increased, which is causing direct conflict with the quarrying firms.
This is due to the fact that at one point of time, the geographical distance between the locations
of the quarrying firms and the residential units. However, with the recent economic progress in
Malaysia, this geographical distance between the two entities for reduced. This is causing noise,
air and water pollution for the residential areas and complaints against the quarrying industry are
increasing (Edraki et al., 2014). With the increase in the residential areas, the Environmental
Quality Act, 1974 is getting applied over the larger areas, which is posing challenges for the
quarrying industries to operate. Diminishing natural resources is also causing challenges for the
quarrying industry because this industry is entirely based on the availability of the natural
resources. However, this should be noted that natural resources are not renewable. In this case,
the quarrying industry is facing issues in terms of long-term viability (Frändegård et al., 2013).
Analysis
The analysis of the challenges will be done on the basis of the root cause analysis.
According to the root cause analysis, it is important to identify the root causes of the identified
problems and initiate mitigation strategies accordingly. The first challenge identified for Saroma
Engineering is the stricter and stringent legislations in their business operation (Ali, 2014). In
this case, the root cause analysis identifies that unethical business practices are one of the major
reasons for the introduction of the stricter legislations. There are number of instances where it is
identified that the quarrying firms were indulged in unethical practices and lack of considerations
for the ecosystem. This caused in introduction of the stricter laws and legislations for these firms.
The next challenge identified for the quarrying industry is maintaining the distance with
the residential areas and localities (Franks et al., 2014). As per the root cause analysis, the core

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reason for this problem is beyond the control of this industry as it is based on the national
scenario. The root causes are the rapid population growth in the country along with the economic
growth. Thus, in this case, the mitigation strategies should be on national basis. The last
challenge that is identified for the quarrying industry is the unsustainable exploitation of the
natural resources and thus reduction in the long-term business viability. On the basis of the root
cause analysis, it is identified that the major reason for this challenge is the lack of proper and
standardized approach to the business (Prno, 2013). There are number of quarrying firms
operating in Malaysia including the Saroma Engineering and each of them is indulged in
exploitation of the natural resources available in staying ahead in the competition. Thus, they do
not follow any sustainable and long-term practices. Another major root cause identified for this
challenge is the lack of the consideration of business development and diversification of the
firms. While in the other sectors, the business approaches are getting developed and evolved, the
quarrying industry of Malaysia is at constant phase. Thus, the dependency from the natural
resources has not reduced for these firms and facing the challenge of ensuring the long-term
supply of these resources (Voulvoulis et al., 2013).
Another root cause identified for this challenge is the lack of technology of the domestic
firms when compared to the international quarry industry. It is reported that the quarrying
industry of Malaysia is better off when compared to the standards of other South East Asian
countries but is way behind when compared to the quarrying standards of the developed
countries. Developed countries are having more sustainable and technologically developed
quarrying processes, which are helping in more optimal utilization of the natural available
resources (Tost et al., 2018). Hence, it can be concluded that lack of technology is a major core

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reason for the challenge being faced due to shortage of resources and by the quarrying industry
in Malaysia.
Recommendations
As discussed in the above section, there are number challenges can be mitigated by the
organizational strategy while some should be managed by the government. This section will
discuss about the available options left for Saroma Engineering in dealing with the identified
challenges. In this case, Ansoff matrix will be used for identifying the potential alternatives for
them. According to the Ansoff matrix, it is recommended that business diversification should be
followed by Saroma Engineering due to the reason that diversification will help them to reduce
the dependency from the quarrying activities (Alessandri & Seth, 2014). It should be noted that
mining and quarrying activities are not sustainable in nature even with having the latest
technologies. Thus, initiation of the business diversification strategy will help them to enter in
any other sustainable business sector and reduce the dependency from the quarrying activities.
However, there are few limitations also being attached with this strategy such the involvement of
huge cost and risk (Park & Jang, 2013). This is due to the fact that changing the business sector
will involve Saroma Engineering to invest huge cost in starting new business in new sector. On
the other hand, the future uncertainties are also associated with this strategy as because
successful from the new business sector is not guaranteed.
As per the Ansoff matrix, it is also recommended that Saroma Engineering should follow
market development strategy in order to increase their business opportunities. With the help of
the market development strategy, Saroma Engineering will be able to tap the foreign regions
beyond Malaysia to get access to natural reserves. Thus, in the case of global market, the
business opportunities and the natural reserves are more compared to the domestic region of

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Malaysia. The more foreign regions will be tapped; Saroma Engineering will be able to get the
access to more natural resources. Hence, their challenge of facing the shortage of natural
resources can be mitigated. However, in the case of this strategy also, there will be a few
limitations to be faced by Saroma Engineering. The major limitation for them will be the risks
associated with the foreign entry (Hilmersson, 2014). Rules and regulations in the international
scenario of quarrying and mining sector are stringent fewer countries allow foreign investment in
this sector. Thus, Saroma Engineering will face the challenge in the seeking out the potential
foreign regions for their business activities. On the other hand, operating in the foreign region
will also involve the diverse and differentiating legal and other external factors to be faced by
Saroma Engineering. Thus, it will be challenging for them to adhere to the diverse sets of
external factors in the business operations. Moreover, the cost involved in the process of market
development will also be more and more cost will involve more risk and liabilities of the Saroma
Engineering.
Implementation
The company in discussion might be advised to deal in the issues that are presented due
to the non-diversified conditions of the market conditions within the international markets. The
diversification of the company in the other international markets would assist the development of
the given organization in the international markets. The organizational management might be
advised to implement the diversification within the organizational departments. The majority of
the functionalities of the organization are concentrated on the activities of mining. These
activities might find a proper diversification in the construction industry. This would help the
concerned organization to deal with the development of the company as well as help in the
diversification of the market scope that is presented within the territorial boundaries of Malaysia.

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The company serves in the mining industry and is thus required to deal with the development of
the revenues that are earned by the company in discussion. The diversification of the company in
the other sectors like construction would thus help in the increment of the organizational
performance as well.
The company might further be advised to implement the diversification in the
international markets. The diversification in the international markets would help in the
development of the issues that are presented due to the decline in the revenue earnings as well as
the development of the issues that are implemented due to the lack of the proper resources within
the given organizations. The majority of the companies that have been attempting an entry into
the foreign markets tend to face issues regarding the rules and the regulations that are
implemented within the given countries. Rules and regulations in the international scenario of
quarrying and mining sector are stringent fewer countries allow foreign investment in this sector.
Thus, Saroma Engineering will face the challenge in the seeking out the potential foreign regions
for their business activities. The company might also be advised to look into the matters that are
related to the legal factors that are implemented by the organization. The concerned organization
should pay proper heed to the legal factors that are presented in the destination countries. This
would help in the development of the competitive advantage of the company in the international
markets as well.
Conclusion
The above discussion helps in deriving the conclusion that the company might need to
implement strategies that are required the development of the diversification within the
organization. In the case of mining and quarrying industry, the environmental challenges are
more extensive due to the reason that their activities are having direct impact on the environment

9SUSTAINABLE DEVELOPMENT IN SAROMA ENGINEERING SDN BHD
and natural surroundings. The Saroma Engineering faces major challenges in the stricter and
stringent legislations in their business operation. In this case, the root cause analysis identifies
that unethical business practices are one of the major reasons for the introduction of the stricter
legislations. The mining and quarrying activities are not sustainable in nature even with having
the latest technologies. Thus, initiation of the business diversification strategy will help them to
enter in any other sustainable business sector and reduce the dependency from the quarrying
activities. The market development strategy would enable Saroma Engineering to tap the foreign
regions beyond Malaysia to get access to natural reserves. Thus, in the case of global market, the
business opportunities and the natural reserves are more compared to the domestic region of
Malaysia. The diversification of the company in the other international markets would assist the
development of the given organization in the international markets. The organizational
management might be advised to implement the diversification within the organizational
departments. The majority of the functionalities of the organization are concentrated on the
activities of mining. These activities might find a proper diversification in the construction
industry. This would help the concerned organization to deal with the development of the
company as well as help in the diversification of the market scope that is presented within the
territorial boundaries of Malaysia.
Reflection
The assignment has been helpful in the development of my abilities in the understanding
of the abilities to discuss the ways of expansion of the business. The assignment has also helped
me develop an understanding on the fact that the majority of the functionalities of the
organization are concentrated on the activities of mining. These activities might find a proper
diversification in the construction industry. This would help the concerned organization to deal

10SUSTAINABLE DEVELOPMENT IN SAROMA ENGINEERING SDN BHD
with the development of the company as well as help in the diversification of the market scope
that is presented within the territorial boundaries of Malaysia.

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