„Organisational Context of Essar“
“We in the business community have a responsibility to contribute to a better understanding of the urgency of averting a crippling and self-inflicted recession,” writes Lloyd Blankfein, chairman and CEO of Goldman Sachs, in The Wall Street Journal this week.
Organisations interact with the world around them. They get influenced by and they influence their surroundings. Over the years those interdependences became stronger; Starbuck states, ‘not only have corporations created social bonds that span national boundaries, but hundreds of corporations are big enough to have memberships in the United Nations.’ He further encourages organisation theory to ...view middle of the document...
Its simple structure facilitates reducing the complexity of dealing with trends in technology, globalisation, technology and other factors. The following paper will focus on analysing Essar’s environment using PESTLE factors. At first it will give a short overview of Essar’s history and operations. Afterwards the PESTLE factors will be explained.
Blankfein, L. (2012) Starbuck, W.H (2003): p.444 3 Starbuck, W.H (2003): p.448 4 Buchanan, David A./ Huczynsk, Andrzej A. (2010): p.43
5 Eayrs, W.E./Ernst, D./Prexl, S. (2011) 6 Buchanan, David A./ Huczynsk, Andrzej A. (2010): p.43
Essar is an Indian multinational conglomerate headquartered in Mumbai, Maharashtra, India. It is a diversified business corporation with a balanced asset portfolio in the manufacturing and services sectors of steel, oil and gas, power,
communications, shipping ports and logistics, and construction. Essar continues to expand its global footprint, focusing on markets in Asia, Africa, Europe, the Americas and Australia. Essar began as a construction company in 1969 and diversified into manufacturing, services and retail. It is a mostly family owned, listed company run by Shashi Ruia, Chairman and Ravi Ruia, Vice Chairman. Essar began its first operation with the construction of an outer breakwater in Chennai. In the 1980s, the company ventured into the field of oil exploration and development, drilling onshore and offshore oil and gas wells for Indian public sector oil exploration companies. In the 1990s, Essar began its steelmaking business by setting up India’s first sponge iron plant in Hazira, a coastal town in Gujarat, India.
With the gradual liberalisation of the Indian economy, Essar seized every opportunity that came its way. It diversified its shipping fleet, started oil and gas exploration and production, laid the foundation of its oil refinery at Vadinar, Gujarat, and set up a power plant near the steel complex in Hazira. The construction business helped Essar build most of its business assets. Essar also entered the GSM telephonic business. The first 12 years of the 21st century for the Essar Group has been all about consolidating and growing the businesses, with mergers and acquisitions, new revenue streams and strategic geographical expansion. The following PESTLE factors are affecting the organisation POLITICAL Political factors that affect Essar are government policies, ideology, several interest groups, trade union policies and environmental activists. India currently has an unstable government. When the government is weak and unstable, there are two issues: First is that a weak government is normally unwilling to pass new laws and...