The company summary
Augean plc is a United Kingdom based limited company specialising in waste and resource management. The company was founded in 2004 and registered under the Public Limited Company Act in the same year to become a fully fledged public company. The firm was originally formed to act as an acquisition company to buy and develop entreprises in the UK waste based sector.
The firm later developed into a renowned corporation that undertakes production, processing and management of waste resources when it was registered as a public limited liability company. The business concentrates in providing wide-ranging services particularly to the hazardous waste area. The corporation management service area covers a complete solution to the ultimate dumping of the most unsafe and problematic waste streams (Augean plc, 2010, p.1).
Augean management structure
Chief Executive Officer Augean management structure is divided into a two tier hierarchy. Basically, the board of directors is elected by the shareholders of the company and the senior management team are appointed or elected by the board of directors.
The role of the board of directors is to manage the daily operations of the company. In essence, the directors ensure that the interest of the shareholders is well served (Schell, 1999, p.550). Augean operates through a management team that consists of seven board members or directors as shown in the diagram below.
The senior management team comprises of the chief executive who is the senior most board member and deputised by the group finance director, sales director, technical director, development director, project director and the operations director. Each of these directors has their executive management teams appointed by each director.
The executive management teams have the responsibility of implementing and evaluating the business strategies as approved by the senior directors, and undertakes core corporate activities and projects (Jelinek, 2010, p.116). Besides, they help provide the internal prospective for the board members. For instance, under the operations director is the chief operation officer (COO) whose mandate encompasses all the operations in the company.
The officer looks after sales, production, marketing and personnel. In other words, the officer looks after the daily activities and reports to the operations director (Fritz, 1996, p.274). Further, under the chief finance director is the finance manager whose main role is to revise and analyse the financial data, prepare budgets, report the company financial performance as well as monitor income and expenditure. Usually the financial manager routinely monitors the financial health and integrity of the corporation.
Macro-environment analysis using PEST
Numerous macro-environment factors that affect the daily operations of the business do exist. Indeed these factors not only affect the business operations but also the decisions that are made by the managers. The macro-environmental factors are external to the organisations and in most cases the organisation has little influence over them (Berger, 2011, p.2). These factors include constant tax changes, barriers in trade, legal provisions, demographic changes and the government policy.
Augean is operating in environment that is very competitive and highly regulated with several legislations determining its operations. The waste sector is very volatile and sensitive to the environmental factors and changes that are continuously experienced globally (Augean plc, 2010, p.4).
That means the company must work and collaborate with the external environment to achieve its goals. For instance, the communities that particularly live around its sites, the employees who risk their lives to ensure it delivers on its duties and environmental lobbies that must ensure safety standards are met (Hedemann-Robinson, 2007, p.543).
Political factors
Political factors refer to the government policies and how they determine the business environment. Economic policies that include both fiscal and monetary policies that have been put in place to regulate economic production are amongst the political factors that affect the businesses.
Moreover, the type of services the government offers to the businesses, how the government intends to subsidise the businesses and the government priorities in supporting the businesses are all examples of political factors (Koontz & Weihrich, 2006, p.270).
These political factors affect the business decisions directly. However, some political decisions have indirect vital effect on the business. These factors are essential to various business organisation areas such as personnel education and training as well as the quality of economic infrastructure namely roads and rail system alongside the health of the workforce.
Apparently Augean is operating under a highly regulated industry both at local, national and internal levels. There are several council regulations that have to be met before undertaking any business operation. At the national level, various legislations regulate waste disposal measures, environment and the industry (Wurzel, 2006, p.5).
The expansion of EU environmental policies in regulating and monitoring the countries environmental issues besides regulating industries within the environmental spectrum has greatly affected the operations of the business (El-Agraa & Ardy, 2011, p.270). All these factors have not merely increased the cost of doing business but have considerably reduced the pace of operations.
Economic factors
Economic factors usually have a greater impact on the way firms behave. For instance, high interest rate regimes influence the way firms behave towards borrowing, expansion and growth. Higher interests rates have the characteristic of reduced borrowings as it becomes more expensive for the firms to borrow as the lending rates increases.
That is, higher interest rates may hinder investments since it is costly to borrow money from banks or lending institutions required for expansion and growth (O’Brien, 2009, p.216). Besides, strong country currency will make exporting products and services produced within the country more difficult. Strong currency has a tendency of raising the prices of the country commodities in terms of the currency of the importing country or the foreign country the products are being exported to.
Conversely, inflation will aggravate increased wage demands as the organisation workers will be agitating for higher wages as the cost of living rises. Thus, higher salaries for workers increase the firms’ costs of operations. Increased national income growth will make the firms products have greater demand and this will boost its production and increase employment (O’Brien, 2009, p.216).
Greater growths in the national income have a positive effect on the firm behavior. Normally, exchange rates, changes in taxation, inflation and interest rates are some of the economic factors that have a profound effect on the firm behavior.
Since 2007 Augean has been operating under financial constraints as a result of the financial crisis that continue to rock most countries in the European Union. The crisis has created difficulties in borrowings as many financial institutions went under. The company market has been freezing as many more firms enter the industry.
Small firms are being acquired by the larger firms so as to block the competing companies from the market place. Furthermore, the waste sites has also been decreasing in size as new developments in housing and real estate sector continue to grow taking huge chunks of land that were formally allocated as waste sites.
Social factors
Alterations in the public tendency can cause positive or negative effects on the firm products or services as well as the capability and willingness of the employees to perform their duties. UK and other European nations are facing the problem of aging population. Increased aging population also means augmenting the pension payments as the employees are living for longer time period.
This by extension increases the firms cost as they must be committed to the pension payments as a legal requirement or as an incentive to tap into the growing experienced labour pool (Jelinek, 2010, p.289). The population also impacts positively on some of the products. The demand for some products such as housing rises with the increase in the number of the aging population. This is because the aging population is continuously in need of shelter and accommodation.
Augean has not been left out in this social saga. But the serious social problem Augean is facing is how to deal with the communities living near the waste site. This is the reason why the company has invested heavily on the corporate social responsibility (Augean plc, 2010, p.8). As an environmental and health concern, the company has ensured that the dumping sites are properly buried and the wastes are burnt before they are buried. Environmentally social issue is a serious concern in the industry Augean is operating in.
Technological factors
New technologies are associated with the new products and new business processes. For instance, the advances in online business and innovations in the software applications such as Google plus and androids that enable businesses to increase their capabilities on the web space are some of the innovations that are associated with new business processes. Online shopping, computer aided designs and bar coding has increased the demand for Augean products.
In essence, Augean has seen some improvements in business operations in the past years as a result of improved technology (Augean plc, 2010, p.4). New technology has significantly impacted on the firms operations, reducing costs and improving quality of the products. Improved technology has additionally enabled the firm to be innovative in the way it does business. The technological developments have a profound benefit to the consumers and to the organisation that provide the products.
Conclusion
Augean operates in a highly regulated industry with several legal obligations distracting the business operations. Both political and environmental factors are the major macro-level factors that have hindered the firms operations.
Though the firm has undergone through financial constraints in the past years as a result of the financial and other economic costs, the corporation has achieved its goal of increasing its profit at the fiscal year end. Nevertheless, the profit hitherto generated has been squeezed by the corporate social responsibility. Hence, the macro-level factors in one way or the other increases the firms cost and reduces the gains that the firms has achieved.
References
Augean Plc. 2010. Annual report for 2010 financial year. Web.
Berger, A. 2011. Contemporary Development in Business and Management: Beiersdorf. Munich, Germany: GRIN Verlag.
El-Agraa, A. & Ardy, B. 2011. The European Union: Economics and Policies. Cambridge, UK: Cambridge University Press
Fritz, R. 1996. Corporate tides: the inescapable laws of organisational structure. San Francisco, California: Berrett-Koehler Publishers.
Hedemann-Robinson, M. 2007. Enforcement of European Union environmental law: Legal issues and challenges. Madison, London, UK: Routledge.
Jelinek, S. 2010. The Impact of Management Practices and Organisational Structure on Firm Performance: A Cross Country Empirical Analysis. Munich, Germany: GRIN Verlag.
Koontz, H. & Weihrich, H. 2006. Essentials of Management. East Windsor, NY: Tata McGraw-Hill Education.
O’Brien, J. 2009. Category Management in Purchasing: A Strategic Approach to Maximize Business Profitability. London, United Kingdom: Kogan Page Publishers.
Schell, J. M. 1999. Private Equity Funds: Business Structure and Operations. New Jersey, USA: Law Journal Press.
Wurzel, R. K. W. 2006. Environmental policy-making in Britain, Germany and the European Union: The Europeanisation of air and water pollution control. Manchester, UK: Manchester University Press.