Surya Enterprises is in the business of setting up Solar Power plants, which converts energy from the sun into electricity using Solar Panels. This is a young company that has been in existence for 4 years and has a seen rapid growth from being a 25 people start-up to a 1000 people strong company. The company’s founders have laid a special emphasis on sustainable and ethical business practices, (including abiding by labour laws) and due to this, as well as being in green energy space, the company is well regarded by everyone in the industry. However, this sector is highly cost sensitive and the company faces stiff competition from other local vendors who operate on lesser margins by adopting less ethical practices. Another factor affecting margins, is that 70% of the cost of the project is the cost of the Solar Panel itself. These panels are imported from China and thus the profitability is closely linked to the cost at which the panels are procured. With the Indian government coming down heavily against dumping by Chinese companies, as well as a surge in demand for panels in China, the cost of solar panels has increased. The government is encouraging the spread of solar energy based plants through special schemes to encourage the generation of clean energy. However, new plants that are coming up, the system of allocation is through open bidding and goes to the lowest tariff offered, and the tariff has been going down steeply. This has further impacted the profitability of these ventures. On the positive side, technology is changing rapidly and discovery of cheaper and better materials is making the panels smaller and cheaper.
Given the above scenario, the company is now planning to evaluate whether the business is sustainable or not. Surya enterprises has hired you to do an organisational analysis using the PESTLE method.
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Organisational Theory, Structure and Design
1. Surya Enterprises is in the business of setting up Solar Power plants, which converts energy from the sun into electricity using Solar Panels. This is a young company that has been in existence for 4 years and has a seen rapid growth from being a 25 people start-up to a 1000 people strong company. The company’s founders have laid a special emphasis on sustainable and ethical business practices, (including abiding by labour laws) and due to this, as well as being in green energy space, the company is well regarded by everyone in the industry. However, this sector is highly cost sensitive and the company faces stiff competition from other local vendors who operate on lesser margins by adopting less ethical practices. Another factor affecting margins, is that 70% of the cost of the project is the cost of the Solar Panel itself. These panels are imported from China and thus the profitability is closely linked to the cost at which the panels are procured. With the Indian government coming down heavily against dumping by Chinese companies, as well as a surge in demand for panels in China, the cost of solar panels has increased. The government is encouraging the spread of solar energy based plants through special schemes to encourage the generation of clean energy. However, new plants that are coming up, the system of allocation is through open bidding and goes to the lowest tariff offered, and the tariff has been going down steeply. This has further impacted the profitability of these ventures. On the positive side, technology is changing rapidly and discovery of cheaper and better materials is making the panels smaller and cheaper.
Given the above scenario, the company is now planning to evaluate whether the business is sustainable or not. Surya enterprises has hired you to do an organisational analysis using the PESTLE method.
Q. Define the elements of PESTLE and using the information given in the case above, wherever possible list out the various aspects of the PESTLE relevant to the case.
2. Pradeep Foods was started by Pradeep Panigrahi, to provide wholesome and reasonably priced food options to young professionals working in business parks. The primary goal of Pradeep Foods was to deliver piping hot food, prepared with minimal quantities of oil and spices, using only fresh seasonal produce. The company started its operations in Mumbai and very quickly moved to all the major cities in India. Initially, when each branch was being set up, Pradeep would stay there for 2–3 months to start the office and train the teams. He would personally supervise the menu, and based on customer feedback tweak the menu to satisfy his customers. The food services were well appreciated and their customer base grew at an exponential rate. Pradeep bumped into you in a conference and shared his concern that his organisation is becoming too big to manage. He is has heard of a functional structure and a divisional style structure and asks you to recommend which structure is better in his case.
Q. Detail out what a divisional structure and functional structure are, listing out benefits and disadvantages of each as per the case given above.
3. Kapoor & Co is a family run business, which has been in existence for many years. The MD, Mr. Kapoor, knew each and every employee in his company and ran the company like his extended family. He was personally involved in every performance and increment discussion and would take the final decision for each employee. The employees were quite happy in this set-up. After a few decades, Mr. Kapoor decided to retire from the company and put in place a professional management team to run the company. The new management team has been hired from other companies and has been given a free hand to run the company. The first step they took was to put in place a structured performance appraisal process, to assess and evaluate the employees. The employees became very agitated at the introduction of the new process and the feedback reached Mr. Kapoor.
You are the CEO of this company and Mr. Kapoor wants to meet you to understand what is happening. You see that this is a classic case of the company following Greiner’s Life Cycle model.
a. Describe the 5 stages of Greiner’s Life Cycle model giving the context from the case.
b. Describe the need for change management as well as the approach you intend to follow using Lewins 3 step model.
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