The Performance of a Company - Essay Example

When companies come together in a supply chain, the result can be vastly more than the sum of the parts with significant impact on communications, organizational structure, relationships and performance.  Performance of a company is very much dependent on its organizational structure. If a company has a well defined plan of work, a well manipulated system, a well conversant communication, and a well organized human resource, then its long run performance as well as its day-to-day operation will be delivered in a consistence way so than it will gradually converge towards a sustainable delivery portfolio. There may be many companies, which have maintained a systematic well-maneuvered delivery mechanics in supplying their products in response the market demand. This may happen that the companies have a strong configured system for maintaining a strong supply chain towards their purchase of raw materials, delivery and distribution of the raw materials in accordance with their different product lines, maintenance of their work-in-progress in a well stipulated way and finally delivery of their final product and finished goods from the center of production to the different region of consumption. But due to some unwanted communication failure they face a shortfall in maintaining its management system. What the companies will do in such circumstances? There comes the necessity of togetherness of the companies in respect of sophistication of their management system keeping a common goal of a strong organizational structure, relationship assortment and communication structure and well-acquainted performance. This type of joint venture of the companies not only help them in their short run systematic behavior towards different dimension of their businesses, but it will also help them for getting a way of achieving sustainability in the long run also. Joint ventures if chosen in a proper way and implemented accordingly, it can be a enormous approach for the businesses to achieve such opportunities and ultimately their desired profits, that otherwise is not possible. The grouping up of the companies in a supply chain can enhance their reaching in different regions and areas of market, accessing untapped resources and necessary business information and data, building acceptability, credibility and trustworthiness of the companies in the market both in terms of their brand and delivery mechanism. They can be further benefited in accessing and penetrating new market that would otherwise impossible without the assistance of associates. (Ward, n.d.) The costs of the companies may be high enough for collecting data and building knowledge business model for expanding into key markets and developing new products. These types of business gestures are also very time-consuming. But when the companies comes together in a common chain of supply, they can lower their costs regarding those issues by gaining time escort and sharing expertise with their partners. As we know, a new business may start in a great effort for generating their accessibility, market recognition image and their customer base. However, in a common venture framework, a treaty that includes a well-reputed company may vividly develop the image. In case of growth of a company, it may have inadequate resources and capital, which is not sufficient. Being a part of a conglomeration of companies and businesses that low-capital company will be benefited for escalating the sales force and creating its distribution channel in lower costs that sequentially will help in growth of the company. A chain of companies in an alliance group is very helpful in stiffing the competitors so as to continuing and maintaining the profit margins at a high level. A strong structure molding the togetherness of the companies is very helpful in this regard as the strength of the association reveals the strength of the relationship among the companies. (Zahorsky, n.d.) So, it is clear that amalgamation of the companies in a common supply chain is very effective in increasing the volume of sales and profit by minimizing cost and with very little risk through a proper structural adjustment and development of a strong communication system among the group members. The group members are also benefited as they can leverage to the unused resources for making more profit, more operating cash and a good speed to process their businesses. However, on the question of the togetherness of companies on a common platform one may argue that building a proper and true relationship in the group, time and efforts both are necessary so that the structure can achieve its full strength. Besides, sometimes the objectives of the syndicate may not be clear completely and are not communicated properly to every member. This may create problem on the strength, reliability and compatibility of the companies. This may also happen that on the ground of expertise and efficiency level, there emerges a disparity among the companies. The level of investment and amount of assets of member companies may also be different in a very significant way. This type of inequalities can produce some suspicion on the formation of the venture itself. Some basic difference in business cultures, pattern and approach in management among the companies may also create some problem in structure of the group on the question of ethnicity, cooperation and integration. This may generate a lack in support, encouragement and leadership from the big companies to the other companies in the venture in the early stages of their togetherness. This may hamper the organizational structure of the group and relationship among the members, which turns out in a loss of opportunities and profits for some of the members. (Elliott, October 20, 2006; Advantages & Disadvantage of a Joint Venture, n.d.) However, a detailed analysis of on the prospect of a consortium before its formation is duly needed for getting the crop of its efficiency in managing a comprehensive communication and well-deserved relationship in a well-decorated structure. Regarding this issue we can bring about two examples. One is the structural effect of Special Economic Zone (SEZ) and the other is the advantage of Public Private Partnership (PPP). In case of the structure of a SEZ, it has been defined that a SEZ is designed to be “specially delineated duty free enclaves for the purpose of trade, operations, duty and tariffs.” (BT Associates, 2007) Further it is mentioned that “these zones are self-contained and integrated having their own infrastructure and support services” (BT Associates, 2007). From the structural definitions and functionalities of SEZs it is clear that the reasons behind the formation of SEZs are nothing but to bring the companies together within same dimension of functionalities so that it can improve the organizational structure of the companies in the SEZ by promoting a detailed communicational method and forming well-diversified relationships that will ultimately help in improving the performance of the companies and the development of the SEZ area itself. In the second case, if we see the structure of a PPP model, we can analyze that the reason behind formation of a PPP model is to create additional and supplementary values in the economy through the proper union, integration and incorporation of proficiencies, capabilities and knowledge of the public and private sector in a same platform. (BT Associates, 2007; What are the Advantages of a Public Private Partnership?, 2008; Special Economic Zones in India, 2009; Yielding new benefits from public—private partnerships”, October 06, 2008).   Therefore, it is clear that a proper integration of the companies in a supply chain may results in an overall improvement in performance effecting the development of overall relationship and communicational assimilation in a skillfully managed organizational structure.                   References: 1. “Advantages & Disadvantage of a Joint Venture” (n.d.), Providing Affordable Solutions for Common Legal Issues, R P Emery & Associates.Available at: http://www.rpemery.com/articles/advantages_and_disadvantages_jv.htm (accessed on March 22, 2010) 2. “BT Associates”  (2007), SEZ, Available at: http://www.sezindiainvest.com/ (accessed on March 22, 2010) 3. Elliott, J, R (October 20, 2006), “Advantages and Disadvantages of Joint Venture”, Articlesbase, Available at: http://www.articlesbase.com/entrepreneurship-articles/advantages-and-disadvantages-of-joint-venture-65409.html (accessed on March 22, 2010) 4. “Special Economic Zones in India” (2009). Available at: http://sezindia.nic.in/about-introduction.asp (accessed on March 22, 2010) 5. Ward, S (n.d.), “The Advantages of Joint Ventures”, Joint Ventures: Diamonds on the Beach, About.com. Available at: http://sbinfocanada.about.com/od/management/a/jointventure.htm(accessed on March 22, 2010) 6. “What are the Advantages of a Public Private Partnership?” (2008), RPA.Available at: http://www.rpa.ie/en/rpa/ppp/Pages/AdvantagesofPPPs.aspx (accessed on March 22, 2010) 7. “Yielding new benefits from public—private partnerships” (October 06, 2008), AMEinfo.com. Available at: http://www.ameinfo.com/170538.html  (accessed on March 22, 2010) 8. Zahorsky, D (n.d.), “Boost Your Business Now With Joint Ventures”, About.com. Available at: http://sbinformation.about.com/cs/bestpractices/a/jointventure.htm(accessed on March 22, 2010) Read More