1

Bachitter Behniwal

Part A Report

1.0 Background

Caroline Chang/Leon Ng Company Secretariesof Keppel Corporation (KC) on the

26 January 2017 address on behalf of the Keppel Corporation CEO that “2016 was a

challenging and eventful year, marked by the US Presidential election, Brexit, and

slow global growth. A rising trend of insularism and increasing anti globalisation

sentiments, if left unchecked, could threaten free trade(Keppel Corporation ,2016)

Financial Report .

Today, the situation is even more severe, the face of Donald Trump on going

fulfilment of his after voting obligation. In fact the “American First” polices derailed

the future into an uncertain environment (Sheila Smith, East Asia Forum, assessed

on 23 Mar 2017), “What Trump‟s America First agenda means for Asia”.

The rapid evolution of new technologies and business models has also

disintermediated many traditional businesses, while creating new opportunities for

companies able to seize them.

It is with this in mind, the two reports that follow would provide some light for me as

an appointed Business Analyst of KC addressing to the CEO of KC.

2.0 The different types, size and scope of organisations.

There are basically 3 main types of business organisations. The profit, the non profit

and the cooperatives.

The differences between for profit and not for profit are as the name said, the profit

type of company‟s objectives is making profit. In contrast, the non profit organisation

is mainly voluntarily and their objective is no profit but care for society. The

cooperative likewise, serve its members in term of benefit.

In term of size, we are looking to the amount of investment, the number of

employess and its investment overseas. Big organisations tends to have more

venture in term of scope and higher return on investment and having many staff..

The range of legal structures associated with different forms of business: sole

traders, partnerships and private limited companies are varies. For example, Sole

trader has got its disadvantage of continuing his business but has the advantage of

keep all the earning. Also, the liability of public and private are different. For

example, private one has unlimited liability.

The below table gives an idea of the different type of businesses:

2

Figure 1 : Types of business.

2.0 The size and scope of a range of different types of organisations.

In contextualizing, I would like to mention 3 organisations. As in Scenario given,

Keppel Corporation Ltd (KCL), is a mutlti national company with many type of

products. Singapore Cancer Society (SCS) can the voluntarily type of organisation

that I have mentioned in Task 1.1. And as discussed in the class, Jewel is a

condominium with can be considered as consumer co operatives. The difference

between SCS and the Jewel is the cooperative is control by the government while

the SCS is not.

Analysing the (BTEC course book for level 3, Chapter 1), the size and scope would depends on the following: Local If for example, you needed a plumber, taxi or just a pint of milk, you would probably go to a local business. This means businesses that operate in just one area, serving the local community. Businesses on this scale will often be small. privately owned sole traders who employ very few people. National Both In the UK and in Singapore, there are many businesses that operate all over the country, on a national scale.

3

International In Singapore, we may be surprised to see many of the same brands and products that you see in the UK. For example: Marks and Spencer. Global Go to anywhere in the world and you will be able to find a bottle of Coca-Cola. In term of size another proxity of size and scope , could be:

Primary

Secondary

Tertiary

In term of primary it would be the input process raw material, the secondary being the transformation process. And lastly, the finished good which is the so called Tertiary.

Figure 2: The different sectors of business

Relative to Keppel Corporation, the final sector, which is the secondary is their area

of business.

In term of size, there are many yardsticks to measure:

Keppel Corporation can be considered to be a Multi- National Country employing

over 300,000 staff globally.

4

2.0 The relationship between different organisation function and how they are

linked to organisational objectives and structure

An organizational structure is the framework of a company and strategy for

managing business operations. There are two types of structures, that can be

established in the organization, government, management and even in purchasing:

centralization and decentralization. To determine whether an organization is

centralized or decentralized, greatly depends on the location of decision-making

authority and the degree of decision-making power at lower levels (Vitez, 2016).

2.1 Organizational Structure, People, system and leadership forms a

Organizational culture

Organisational Structure and Its Importance Johnson and Scholes (2002) noted that

organisational structure can be defined as the established pattern of relationships in

context with an particular organisation. Hartle (1995) further pointed out that

organisational structure in its essence is a formal system by means of which an

organisation controls, co-ordinates and motivates its employees. Furthermore,

Armstrong (2006) points out that organisational structure describes an organisations

framework in such a manner that hierarchical relationships between the supervisor

and the subordinates are defined, tasks are allocated to different person(s) and

departments. In summary organisational structure is a set of policies, procedures

and standards and the methods of evaluation of performance that are formulated so

as to guide the people and their activities. Armstrong (2006) notes that having a

sound organisational structure enables an organisation to establish clear authority

generates a common communication pattern and properly allocates decision centers

within an organisation. Furthermore Brewster et al. (2007) noted that an sound

organisational culture stimulates creativity and initiative among the organisational

members by providing a defined pattern of authority. Armstrong (2008) added that an

effective organisational design consist of five key inter-related elements.

These elements are responsible for a clear and streamlined organisation that

assertively has distributed clear roles and accountabilities for decisions, an

organisational structure that supports objectives. It also recruits and retains

individual talent necessary for success. These elements lead to a clear

communication amongst the key stakeholders, the upper management and the

middle level management, thereby resulting in a successful organisation.

5

Figure 3: Organisational Structure, Leadership , System and people formulated the

Organisational culture,

2.2 Centralized And Decentralized Organization’s Differences

There are specific factors that differentiate two types from each other, for example,

centralized considers command, control, and rules, whereas decentralized is about

no clear leader, no hierarchy, no headquarters; flexibility, shared power. In

centralized organizations Top-down authority establishes a specific chain of

command, with owners or executives/managers making all the key decisions with

little or no input from rank-and-file employees. This consolidates decision-making

authority and holds specific individuals responsible for the outcomes. However, the

process of decision making may be slow, which can disrupt the workflow. In

decentralized organizations multiple individuals, including rank-and-file employees,

can make important decisions and set policies and procedures that guide how the

business is run. Which means that decision making in decentralized organizations is

comparatively faster than in centralized. But there are also drawbacks such as CEO

will have less control or it may promote unhealthy competition among managers

(Rahbar, 2016 ).

Rob Beckstrom considers and associates centralized and decentralized

organizations as spider and starfish respectively. He tells that the biological structure

of spider is very similar to the centralized organization‟s criteria, which means that if

the spider will be deprived of its legs, neither it nor the legs will be able to operate.

6

Whereas if the starfish is divided, all of its parts can act separately; what actually

happens in decentralized organizations.

The classic example of centralized organization is Microsoft Corporation. Also fast

food businesses like Burger King and McDonalds use predominantly centralized

structure to ensure that control is maintained over the thousands of outlets. A good

illustration of decentralized organization is Ebay, where the power is sent to the

people who use it: consumers control and choose what to buy and sell. Johnson and

Johnson also use decentralized structure; decentralizing management is a good way

to spark innovation and train corporate leaders, according to William Weldon, CEO

of Johnson & Johnson. One example happened when J&J brought together

individuals from its medical products with its drug business. "They came up with

putting a drug on a stent ... for cardio-vascular disease, which was a huge

breakthrough," he says (Galuszka,2008).

Taking into consideration all information mentioned above it can be seen that there

are two types of major structures: centralized and decentralized. Even if there is a

range of different types of companies that use either one or another structure, the

centralized approach is better to use for the companies when they start a new

business and for the grown business it is recommended to use more decentralized

structure. There are advantages and disadvantages in both structures, that is why

companies need to decide which one to choose basing on the strategy they follow.

2.3 Type of Organisational Structure

Different structures are appropriate for different contexts. Each type has its own

characteristics,distinct strengths and potential weaknesses.

Figure 4: Functional Structure

7

This functional structure has been described as both a 'machine bureaucracy' and a silo structure, because it groups similar or related occupational functions of processes together under unit heads like teaching departments, student administration, technical support, marketing, finance and HR. Its strengths are that it reduces uncertainty, provides ease of supervision, economy and efficiency, simplification and standardisation of staff training, and maintains the power and prestige of major functions.

Its weaknesses are that it encourages sectional interests and tensions between

functional groups. It has poor cross function communication which results in

duplication of effort, diminished cooperation and limited efficiency because of the

focus on functions rather than overall process or product. Clients therefore do not get

continuity of service. It can be inward looking and inflexible, and cannot easily adapt.

It does not tolerate a dynamic or complex environment.

Figure 5 Divisional Structure The Divisional structure might be represented by discipline-based teaching faculties operating with a fair amount of independence supported by an educational services division (student services, educational research, teacher education, libraries) and a corporate services division (finance and administrative services). Its strengths are that it focuses attention on specific products or services, geographic locations or client groups while placing responsibility for outcomes on the divisions themselves. With greater autonomy, divisional managers can better plan, delegate, adapt and coordinate divisional activities.

8

Its weaknesses are that, while offering opportunities for novice managers to be trained, it demands many more people with general managerial experience to sustain it. It results in duplications and competition for resources between divisions and the centre. It also has limited capacity for rapid adaptation to new ways of working.

Figure 6 : Matrix Structure This Matrix structure blends functional or bureaucratic structure with temporary project teams of specialists pulled together to undertake particular projects. It can take on various forms, some emphasising the functional structure of organisations, some placing greater responsibility on project management, and others blending functional and project authority. This structure supports creative solutions to problems, enhances risk taking, and supports better planning and faster responses to client and market demands. It provides organisational agility to formulate fluid teams and reassign personnel quickly. It frees up faculty members to take part in interdisciplinary activities such as curriculum technology and assessment. It assists adaptation to dynamic environments. Despite these strengths, management difficulties can be a problem, including a tendency towards anarchy, power struggles, navel gazing anddecision strangulation.

2.4 Contextualising Keppel Corporation

Our business functions are Production, Sales, Marketing research, Finance, and

Human Resource. This gives rise to conflicts. Between departments as it has its

objectives which could be not the same.

9

Product Style of structure is the current structure that Keppel Corporation has. Due

to diversified products across the regions, as a Business Analyst I would recommend

decentralization. And a Matrix structure below the product structure to support the

organisation as the Headquarter in Singapore is unlikely to cater for the need of the

customer.

Objectives of the company cannot be implemented alone. There are other elements

like structure, system and people that keep business going. For example, Keppel

Corporation must do an internal audit about its resource, and decide on the system

and methods to get things done. In addition, the people elements must also be

considered. This means that the culture of the organisation has to be nurtured to a

strong and positive one.

In line with the mission, value and objectives, the expected tasks are done in sync.

Relative to this, it is expected of Keppel Corporation to the bearing right in the first

place.

Quoting from chapter 6 of (Bateman, 2017), the likely recommended strategy by

myself if I will be taking the position would be the Multinational Company (MNC) type

of model.

Figure 7 Global Strategy

According to (Jimmyong.gnomio.com, 2017), MNC would has the flexibility to give

Keppel Corporate the necessary decentralisation required. Hence they will helps

KCL to lesser or circumvent the conflicts between functions of the organisations.

This could be further strength to branch out into Matrix Organisation required to

support the Product Division Structure. This is to reap the flexibility to work with more

than one boss as in the nature of a Product Division Structure.

10

An organisation is drawn as below:

Figure 8 Keppel Corporation Organisational Structure

(Words: 2249)

--End of Report A--

11

Part B PESTEL and SWOT of Keppel Corporation

1.0 Background

1.1 PESTEL

PESTEL is an acronym that stands for Political, Economical, Social, Technological,

Environmental and Legal. It is used to describe an analysis that is used for

determining the opportunities and risks of global expansion. Political, Economical,

Social, Technological, Environmental and Legal issues often differ domestically and

even more so internationally. As a company looks to leverage the advantages that

the democratization of technology, information and finance, and grow beyond the

national borders that previously confined them, it is imperative that they consider a

PESTEL analysis to accompany their SWOT analysis. The PESTEL analysis

provides a strong framework used by global and multinational corporations to set the

stage to develop specific tactics to mitigate the risks involved in executing their vision

in unfamiliar environments. The additional sections of the site provide more

information about how to structure a PESTEL analysis. Some data within the various

sections offer insights into the sections of the analysis.

Figure 1 PESTEL Framework

1.2 Porter's five forces analysis

Porter's five forces analysis is a framework for industry analysis and business

strategy development formed by Michael E. porter of Harvard Business School in

1979. It draws upon Industrial Organization (IO) Economies to derive five forces that

determine the competitive intensity and therefore attractiveness of a market.

Attractiveness in this context refers to the overall industry profitability. An

"unattractive" industry is one in which the combination of these five forces acts to

drive down overall profitability. A very unattractive industry would be one

approaching "pure competition", in which available profits for all firms are driven to

normal profit.

12

Figure 2 Porter 5 Forces Framework

2.0 The positive and negative impacts the macro environment has upon

business operations.

With increasingly intense competition, shrinking product cycles, accelerated

technological breakthroughs, and progressively greater globalization, the business

arena may best be described as being in a chronic state of flux, with continual

variation in its external environment. Given such ever changing environmental

conditions, a firm‟s ability to change direction quickly and to reconfigure strategically

is crucial to its success in achieving sustainable competitive advantage (Hitt et al.,

1998). In other words, firms need to be adaptive to environmental change

(Mintzberg, 1994; Dreyer and Grønhaug, 2004).

In term of the positive impacts, the change in interest by US could raise Singapore

economy as the stock exchange has been rosy, since the change of USA

government , which advocates the continuously increase of USA interest rate.

This is also reinforced and reported in Today newspapers (Today, 17 Mar 2017)

heading “Singapore February exports strongest in 5 years, beat forecasts”.

On the negative side, the increase in interest rate by US may dampened the world

property market, this would make buying property more unattractive. Since KCL has

a high portion of business in property, this would affect their bottom line.

13

3.0 Internal and external analysis of specific organisations in order to identify

strengths and weaknesses.

Let us has a look at Keppel Land (KL) a wing of KCL and its SWOT:

Strength

Keppel Land, a division of KCL has a diverse mix of commercial and industrial

building

Healthy balance sheet

High occupancy rate on their renting business

Ability to generate surplus quickly

Weakness

Highly hedged on interest rate

1.6 billion cash in reserve

Opportunity

Real estate blooming in emerging markets

Strong foot hold in China

Threat

Singapore and China market in property have been damped due to

government cooling measures

China and Singapore may ay raise interest rate in sync with USA.

Interrelating the external and internal environment of KCL, it would appear sensible

to quickly capitalising on their strength of good balance sheet and reduce their

weakness of over kept cash reserve. As an appointed Business Analyst, I would

certainly recommend to closely relook into their over hedge system in interest rate

manipulation based on current changed environment.

Another area would be the recruiting of talent, supplemented by woman and elder

employees. KCL should lead the industry in this area to gain good reputation in

Singapore and China, since the government are encouraging it to ease the low birth

rate.

As according to the newspaper, “Technology is key to solve manpower crunch.

Since KCL has the strength of huge capital, they should use technology to improve

productivity and as a weapon for competitive edge.

14

4.0 The internal strengths and weaknesses of specific businesses and explain

their interrelationship with external macro factors.

PESTLE Analysis

All organizations need to identify external factors within their environment that could

have an impact on their operations. Many of these will be things that the organization

has no control over, but the implications of which need to be understood.

A popular tool for identifying these external factors is the PESTLE Analysis, which

can be used to help you consider Political, Economic, Social, Technological, Legal,

and Environmental issues.

Figure 3 PESTEL Model

To maximize the benefit of the PESTLE Analysis it should be used on a regular basis

within an organization to enable the identification of any trends. The impact of a

certain external factor may have more severe consequences for a particular division

or department and the PESTLE technique can help clarify why change is needed

and identify potential options.

Political – Here government regulations and legal factors are assessed in terms of

their ability to affect the business environment and trade markets. The main issues

addressed in this section include political stability, tax guidelines, trade regulations,

safety regulations, and employment laws.

15

Economic – Through this factor, businesses examine the economic issues that are

bound to have an impact on the company. This would include factors like inflation,

interest rates, economic growth, the unemployment rate and policies, and the

business cycle followed in the country.

Social – With the social factor, a business can analyze the socio-economic

environment of its market via elements like customer demographics, cultural

limitations, lifestyle attitude, and education. With these, a business can understand

how consumer needs are shaped and what brings them to the market for a

purchase.

Technological – How technology can either positively or negatively impact the

introduction of a product or service into a marketplace is assessed here. These

factors include technological advancements, lifecycle of technologies, the role of the

Internet, and the spending on technology research by the government.

The below are tableted the key external environment factors.

16

4.1 Contextualising Keppel Corporation

To be up to date, I would use newspapers to explain the interrelationship of the

SWOT and PESTEL of KC. KC should avoid the use of "phantom worker" to inflate

the foreign worker entitlement of his company in relation to the company's local

workforce against foreign workers‟ quota. This is a serious control of Singapore

Government in the face of serious shortage of worker in the off shore marine industry

KC is in. Although the temptation is high, should focus on developing talent leaders

and workers, as there is going to be a trend of expats leaving Singapore and KC‟s

other Asean subsidiaries (Bloomberg via Today, 21 March 2017).

“While many in Asia seek close economic and strategic cooperation with the US,

Asian leaders may find that their publics are less inclined to compromise with

Washington if the Trump administration hews too closely to an America First

agenda” reported by (Sheila Smith East Asia Forum, via Jimmyong.gnomio Moodle,

assessed on 23 Mar 2017) titled “What Trump‟s America I First agenda means for

Asia”.

The Political instability is evidenced by Donald Trump‟s anti deregulation and

redressing the short change accorded by countries like Japan and especially

Germany by paying less for USA Military protection and circumventing the free zone

area in Mexico and other similar escape tax strategies (Bloomberg via Today, 21

March 2017), “„America First‟ policy forces rethink of China-EU trade ties”.

Singapore is “a non allowed to be on strike” country, KC‟s management must be

aware of this, hence, the working with the Singapore Government on labour must

sought prior to making decision concerning foreign worker‟s welfare.

17

AS KC has huge reserve and under globalised, The Keppel Land, the wing of KC

should making inroad to Vietnam, Thailand, Yangon as Singapore and China has

strict Government curls on loans and ownerships law.

The shift in Demography in Singapore should be taken seriously, as low birth rate

means KC has to use elder and woman workers. These require KC to adapt their

policy of training supervisors and managers as they are now face with different set of

competencies, such as handling elder and female workforce.

Although from the financial report there are certain attempts to leverage on

technology, more effort is encouraged by the Singapore Government for KC to take

advantage to the “SMART” pushed now ongoing. (Valerie Koh, Today Newpapers,

15 March 2017) reported, Singapore PM, Swee Say stressing “Technology key to

solving manpower crunch”.

MSN online news reported : “China's trading partners alarmed by food import

controls”, by USA. Under the rule, due to take effect as early as October, each

consignment of food would require a certificate from a foreign inspector confirming it

meets Chinese quality standards (MSN news, via Jimmyong.gnomio.com, assessed

on 23 Mar 2017). This health control translated to import cost by US, making China

less competitive.

The manipulation of interest rate Donald Trump has made Asia Bank forced to

increase the interest rate, making investment less attractive. As KC is heavily

invested in the property and infrastructure arms, it is serious threat, which KC has to

deal with.

(Words : 1572)

--End of Report B--

Referencing

Book

Armstrong, M. (2009) Armstrong's Handbook of Human Resource Management

Practice (11th ed) Kogan Page

Bateman, Thomas S., Snell, Scott A. and Konopaske, Robert., 2017. Management

,Dubuque: McGraw-Hill Education,

Beardwell, Ian (2007) Human Resource Management: A Contemporary Approach,

(5th edn) Prentice Hall

Hartle, F. 1995. How to re-engineer your performance management process.

Hughes, R.L., Ginnett, R.C. and Curphy, G.J. (2006) Leadership: enhancing the

lessons of experience, International - 5th edition, McGraw-Hill

18

London: Kogan Page.

Scholes and Johnson, 2008, Exploring corporate strategy, 8th edition, Financial

Times/Prentice Hall.

Journal

Dreyer B. and Grønhaug K. (2004), “Uncertainty, flexibility, and sustained

competitive advantage”, Journal of Business Research, 57, pp.484– 494.

Hitt, M., Keats, B., and DeMarie, S. (1998), “Navigating in the new competitive

landscape: Building strategic flexibility and competitive advantage in the 21st

century”, Academy of Management Executive, 12(4), pp.22–43.

Newspapers

(Angela Ten, 17 Mar 2017) Todays, “Singapore February exports strongest in 5

years, beat forecasts”.

Today, Singapore February exports strongest in 5 years, beat forecasts.

(Bloomberg via Today, 21 March 2017), “„America First‟ policy forces rethink of

China-EU trade ties”. Assessed through

https://jimmyong.gnomio.com/pluginfile.php/1351/mod_resource/content/1/TODAY_2

10317-Page_32-33.pdf

Web Page:

Chapter 6, Global Strategy , global strategy,[online] Available at:

http://jimmyong.gnomio.com global strategy [Accessed 17 Mar. 2017].

https://jimmyong.gnomio.com/pluginfile.php/1105/mod_resource/content/1/Manange

ment%20Global%20strategySnal%20n%20Bateman%20Chapt%206%20Internation

al%20Mgmt.pdf

Galuszka, P. (2008). Johnson & Johnson CEO: Decentralization Works. Retrieved

from http://www.cbsnews.com/news/johnson-amp-johnson-ceo-decentralization-

works/

Todayonline

http://www.todayonline.com/business/singapore-february-exports-strongest-5-years-

beat-forecasts

Keppel Corporation ,2016) Financial Report

Q2Website:https://jimmyong.gnomio.com/pluginfile.php/1337/mod_resource/content/

1/02%204Q16%20KCL%20Financial%20Statements.pdf.

19

Rahbar, Sh. (2016). Centralized vs. Decentralized Organizational Structure.

Retrieved from http://www.cfoedge.com/resources/articles/cfo-edge-centralized-vs-

decentralized-organizational-structure.pdf

(Sheila Smith East Asia Forum, via Jimmyong.gnomio Moodle, assessed on 23 Mar

2017) titled “What Trump‟s America I First agenda means for Asia”.

Vitez, O. (2016). Centralized Vs. Decentralized Organizational Structure. Retrieved

from http://smallbusiness.chron.com/centralized-vs-decentralized-organizational-

structure-2785.html

MSN News

http://www.msn.com/en-sg/news/world/chinas-trading-partners-alarmed-by-food-

import-controls/arBBypo4F?ocid=iehp via

https://jimmyong.gnomio.com/pluginfile.php/1323/mod_resource/content/1/Chinas%2

0trading%20partners%20alarmed.pdf.