Development in the corporate general environment
To accomplish the objective of the study, attention will be centered on the construction industry in the Ghanaian market for the industry role it’s played in the field of infrastructure and construction in the country Using Michele & co Ltd, a company in Ghana as a case study, the research will try to identify the structure of he market, the forces that control the market, which influence the case company and see the situation in the market as a whole and figure a clearer picture of it to provides important information and understanding to the case company.
Being among the top drivers of the Ghanaian economy, as well as agriculture, manufacturing and mining, its importance cannot be overemphasized, especially as the country is one of the most active economically in West Africa. It is well known that an active construction industry adds to growth as it employs skilled and unskilled labor, from engineers and consultants to artisans and laborers. Construction and maintenance of buildings, housing, roads, bridges and other physical infrastructure are crucial to generate employment, development and growth.
From a low point in the asses and asses the share of construction in the GAP has moved up from 4. 5% in 1975 to 8. 5% by the turn of the century and has been doing about the same levels since. The sector grew by 10% in 2008 but registered a negative growth rate of 1% in 2009 due to the global economic recession. It is hoped that the growth of the company will be sustain to depict the middle income status of the nation. The industry is made up of players like De none Group, Congas Ltd, Adman construction company, tastes construction Ltd and first Ghana building co. Ad The contribution of Michele & co Ltd (the case company), is very critical in every economy, more importantly, developing countries such as Ghana where critical infrastructure required to facilitate production. In Ghana, the company plays a key role in both economic and social development. In recent years, there is a large degree AT agreement among policy Ana Dustless expel rats Tanat ten Dustless environment in Ghana is less competitive compared to other emerging economies such as China, South Korea and Malaysia.
The activities of Michele & Co Ltd in Ghana includes provision of Housing facilities; workshop/factories; warehouse/shops; physical infrastructure such as roads and ports which facilitates distribution of goods and services within and outside the country. The company is one of the leading civil engineering and construction in Ghana today. Operation for over 30 years in the country, it has broad range of skills and resources that provide clients with comprehensive service throughout the entire life cycle of projects in the building environment. Michelle & Co Ltd has been engaged in major landmark projects in
Sacra and throughout Ghana 2. 0 EXTERNAL ANALYSIS The general environment consists of all conditions in the external environment that forms a background context for managerial decision making. In other words, general environment is the outer layer that is widely dispersed and affected organizations indirectly. (Robbins, 2007), (Williams, 2008). More often than not, these forces are beyond the control of an organization and its managers. Accordingly, the factors of the environment will need to be considered as inputs in the scheduling and forecasting models developed by an organization.
It is quite possible that some large organizations themselves add up to a greater part of the business environment e. G. The construction industries in Ghana. An organization operates within the larger framework of the external environment that shapes opportunities and poses threats to the organization. The external environment is asset of complex, rapidly changing and significant interacting institutions and forces that affect the organization’s ability to serve its customers. External forces are not controlled by an organization, but they may be influenced or affected by that organization.
It is necessary for organizations to understand the environmental conditions because they interact with strategy decisions. The external environment has a major impact on the determination of marketing decisions. Successful organizations examine their external environment so that they can respond profitably to unmet needs and trends in the targeted markets. 2. 1 Micromanagement The micromanagement can be described as all those other organizations and individuals who directly or indirectly affect the activities of a company. The micromanagement of a company includes suppliers and distributors.
The company ay contract directly with some of these, whereas others exist with whom there is no direct dealing, but can still influence on the company’s actions. Company’s competitors can also have a direct effect on its market position and form part of the company’s micromanagement. According to Palmer and Hartley, (1999, 32) the following key groups can be identified in companies’ micromanagement: 1. Customers 2. Suppliers 3. Intermediaries 4. Other stakeholders Customers are a essential factor in an organization’s micromanagement. In a competitive environment, without customers there can be no business.
A company should be concerned about the requirements of its customers. A company should know its customers so well that it is able to predict what they will require next, instead of waiting too long until it is too late and to follow. (Palmer & Hartley, 1999, 32-33). In the case of Michele & co Ltd, the company need to take the customers interest into consideration to know the demand of its client in terms of the kind of building they want and it facilities. Consumer buying behavior among consumers varies from product to product or service to service. Expensive purchases are likely to involve more buyer deliberation and more participants.
Philip Kettle (2000, 176-178) has distinguished different buying roles of buying behavior: An influencer is one whose view or advice influences the purchase decision whiles a decider is one who decides on any component of a buying decision: whether to buy, what to purchase, how to purchase or where to purchase. A buyer is the person who makes the actual purchase. A user is the person who benefits of the service. Kettle (2000, 177-178) states that there are four different types of buying behavior: Firstly, complex buying behavior is a three step process, in which the buyer develops beliefs about the product or service and develops attitudes.
After that the buyer makes a choice. This is usually the case in luxurious products or products or services which are bought infrequently or are risky. Dissonance- reducing buyer behavior happens when a consumer is highly involved in a purchase but sees little difference in brands or different service providers, building supervisors for example. Habitual buying behavior meaner products bought with low involvement and no brand differences. Buying decision is made out of habit. Variety- seeking buying behavior is characterized by low involvement but significant brand differences.
Here consumers frequently do a lot of brand switching, or service provider switching. The suppliers of this company are the construction companies who provide the actual technical implementation of the building project. Other stakeholders form an increasingly important part in company’s micromanagement. When it comes to customers or suppliers, a company has or may have some form of contractual relationship. However, there are many other organizations and individuals in a company’s circumvention that can directly affect its effectiveness in the market.
According to Palmer & Hartley (1999, 33), these are referred to as “publics” of an organization and include pressure groups, government agencies and the local community. Society at large has rising expectations on companies that increasingly have to act in a socially responsible manner. 2. 2 PEST Analysis of Construction Industry. PEST refers to all political, economic, social and technological factors affecting any Ministry. I en adjective AT using PEPSI analysis Is to study ten environmental Tortes facing Michele & co Ltd.
This also applies to the building and Construction industry in a whole. The external environment affects the company in many different manners and unlike internal environment it cannot be influenced much. Fig. L PEST Analysis Diagram 2. 2. 1 Political Factors The political-legal dimension of the general environment refers to government regulation of business and the general connection between business and government, It’s important for three basic reasons. The legal system to a degree defines what an organization can and can’t do; pro-business or anti-business in other countries.
The customs, norms, values and government regulations of host country are likely to affect foreign business operation. The political factors affecting the construction and housing industry in Ghana mostly consists of documentations and permits that have to be obtained during the various phases of construction of a structure and its sale. The factors that need to be considered are: Apply for permit at the Lands Commission: Before the approval process commences at the Town and Country Planning Department (TCP), the department must confirm that the land where the warehouse is to be located belongs to the applicant.
To do so, the Town and Country Planning Department TCP will provide the applicant with a letter to be submitted to the Land Title Registry/Land Commission along with the applicant’s site plan. The TCP requires stamps from the Land Commission on its documents to prevent applicants from bringing in forged or outdated documents. Building Permit: Construction of a building or any such structure cannot take place unless and until the builder or the company secures a Permit from the authority; in the case of Ghana, it is the Town and Country Planning that issue the building permit before a announcement of a building project.
Receive building Inspection at the end of each phase: Inspections are to be carried out by the building inspectors at the end of each phase of the building: foundation, floor level, lintel, roofing, and finishing. Special coupons are provided when the building permit is granted, and the builder is supposed to send the appropriate coupon to the authorities informing them of the completion of that phase so that an inspection can be conducted. In practice this is rarely done.
However, building inspectors are regularly sent to inspect buildings ender construction by the building inspectorate agency. In the case of a commercial building, Occupation Certificate: After the completion of construction work of a building, the builder or the company has to secure an Occupation Certificate without which the flats in the building cannot be occupied for residential or commercial purposes. Town and country Planning comes in when selecting a site. These developing plans chart out pre-defined areas, which the town and Country planning NAS already allocated Tort certain purposes.
E. G. In a given area, some Lana Is Reese or plantation/farming, some piece is kept for industrial establishments like the Industrial area and the other one reserved for residential purposes. So the Builder finds out the type of land, which is suitable for his purpose, I. E. ; if he wants to build up a residential complex, then he has to do so in the area reserved for residential purposes; town and country planning and the municipal assembly developing plans. 2. 2. Economic Factors The economic dimension of an organization’s general environment is the overall health of the economic system in which the organization operates. The construction industry is increasingly interested in whole life costs of the building, which includes initial capital costs, operating and maintenance costs – understanding how better design can improve all these costs. Fluctuations in prices of inputs: Many builders tend to stop work when the prices of inputs like cement; iron etc goes up so as to wait for the time when they expect the prices will come down.
This result in unnecessary delay in the work and the cost of wasting time would actually be more than the increase in price. Changes in demand: Changes in demand due to factors eke changes in disposable income of prospective buyers and inflation. Also with the easy availability of housing loans and tax exemption on loans the demand for houses is rising. Future Growth & Resale Value: Any project must be located in an area that if not fully developed must at least be on the way. This is because people prefer those areas having high resale value and will fetch them a good amount of gain. . 2. 3 Social Factors The socio-cultural dimension of the general environment includes the customs, mores, values, and demographic characteristics of the society in which the organization functions. Socio-cultural processes are important because they determine the products, services and standards of conduct the society is likely to value. In relation to the construction Industry, Credibility of the company/film count. People don’t know what kind of materials has been used in the construction of a building or a structure.
Credibility of a builder or the company plays an important role in convincing the buyer to buy the house and be sure of the quality of construction work done. A low credibility or image can lead to poor financial performance. A good image is not Just built in a day; it takes years of servicing the society through following high standards of work in the process of construction and sale. Also, Perceived Image of the property to be developed. A flat in a so-called residential area may cost much more than a one in a non residential area.
This factor can also determine the success of failure of a project. A flat is selected on the basis of infrastructure facilities like water availability, transport facilities, nearness to schools, colleges, hospitals, shopping complexes, leisure centre, etc. 2. 2. 4 Technical Factors The technological dimension of the general environment refers to the methods available for converting resources into products or services. Although technology is applied within the organization, the forms and availability of that technology come Trot ten general environment.
Due to technical nature AT ten construction process, the technical environment keeps on changing every day. There are developments in techniques used, materials used and various other such aspects of the construction business. A few of such developments are as follows Pre-structured Concrete Blocks: These are blocks of concrete, which are made in the factories according to the dimensions of the building or structure to be built. It is Just like a Jigsaw puzzle where these blocks are put together using a huge crane and Joined together using mortar by workers.
This enables quick completion of work and also economies of scale. Mixture of Cement and Sand: nowadays in order to save time the constructor can order the mixture of sand and cement directly from the suppliers as against the traditional way of ordering cement and sand separately and then filtering them and then mixing it. Other Equipments: other modern machines that are used in construction are the use of huge drilling type of machines to dig the ground, which was before done by workers . INTERNAL ANALYSIS Internal driving forces are those types of things, events, situations, that occur within an organization and affect it in either a positive or negative way. Typically, the internal forces are things that occur within the organization and are by-and-large under the control of the organization. Example, does the organization have up to date technology that has the capacity to hold power programs that can help the organization. Or, are they working with an old antiquated legacy system that is slow, crashes frequently, etc.
This effects the organizations day-to-day operations. It’s meeting that is internal and under the control of the organization. Even the culture of the organization effects the way it operates. In other words, are the employees happy, do they come into work energize, or do they come to work dragging themselves in because it’s Monday and doing cartwheels out the door because it’s Friday. These effects the way the organization operates in either a positive or negative way. Once again it is an internal event and under the control of the organization. 3. Value Chain Analysis Michele& co Ltd value chain concentrates on resources and capabilities of its operations that add value. Michele& co Ltd corporate culture fosters innovation, safety, and strong environmental awareness. The company’s human resource program catches the attention of human talent through incentives, and various training programs. The company concentrates on Joint ventures and agreement with national partnership programs. Michele & co Ltd has a well developed portfolio of complimentary services that it offers its customers which attribute to, and create value for itself and its customers.
The company diligently strives to ensure all operations are conducted with the utmost safety. The firm’s well established programs ensure integrity and awareness within the organization and produce profitable results. The company possesses excellent internal communication with its various programs to foster safety and environmental awareness, as well as employee recognition Ana compensation . Nine Malcontent & co Alt name alone NAS a reputation in the industry as being superior in quality and service and is one of the most recognizable brands in the country.
Michele & co Ltd competitive advantages are due to its uniqueness in the industry, the innovative services it provides, and its high laity of service and safety. The company currently offers a focused differentiation strategy, which provides to most promising meaner of a sustained competitive advantage. Fig. 3 Value chain diagram 4. 0 SOOT Analysts Basically, the SOOT is an acronym for the strengths, weaknesses, opportunities, and threats for a firm. The strengths and weaknesses are the resource advantage and the inadequacy or paucity respectively in one or more resources relative to competitors.
The opportunities and threats are respectively complimentary and adverse or impeding circumstances in the firm’s external environment. The SOOT analysis is insider as a structured approach that helps strategists to systematically analyze the issues that may affect the fulfillment of their vision, mission, goals, and objectives. In other words, the SOOT analysis is a convenient and concise way of evaluation of past, present, and future data to identify internal strengths and weaknesses and external threats and opportunities (Pearce II and Robinson Jar. 2000, Rabin teal. , 2000, Macmillan and Tampon, 2000). 4. 1 Strengths employment and training opportunities in the field of construction Private sector housing boom and commercial building demands Construction of the multi building rejects on the feasible locations in the country . Good structured national network facilitates the boom of construction industry. Low cost well- educated and skilled labor force is now widely available across the country. Sufficient availability of raw material and natural resources in the country is supportive for the industry.
Real estate development is on high and it is attracting the focus of the industry towards construction. 4. 2 Weakness Chances of Natural disadvantage are there. Distance between construction projects reduces business efficiency. Training itself has become a challenge. Changing skills acquirement and an ageing workforce may accentuate the skills gap. Improve in long-term career prospects is highly required to encourage staff retention and new entrants. External allocation of large contracts becomes difficult. Lack of clearly define processes and procedures for construction and its management.
Huge amount of money, need to be invested in this industry. Opportunities Continuous private sector housing boom will produce more construction opportunities. Public sector projects through Public Private Partnerships will bring further opportunities. Developing supply chain through involvement in large projects s likely to enhance the chances in construction. Renewable energy projects will offer opportunities to develop skills and capacity in new markets. More flexible training delivery techniques are now available.
Financial supports like loan and insurance and growth in income of people is in support of construction industry. Remote areas in the country are easily accessible and plenty of land is available in the country to be developed. 4. 4 Threat Long term market instability and uncertainty may damage these opportunities and prevent the expansion of training and development facilities. Current economic tuition may have an adverse impact on construction industry. Political and security conditions in the region and Late legislative enforcement measures are always threats to any industry in Ghana.