Dow Chemical Company Business Model - Essay Example

Dow chemical company is one of the great and top performing business organizations in the chemical industry. Amongst various business institutions available across the globe, Dow chemical Company was interesting as it fits key areas of the concepts we have examined and learned in class. Based on the various journal articles the author studied on business performance and operations Dow chemical Company is one of the fast growing and developing companies that has to have a tremendous track record over the past decade. With proper and effective operational strategies, Dow chemical Company has expanded its market share in the market overcoming the everyday competition. However, being the top and fastest growing and developing company in the chemical and plastic industry does not mean that it will continue like that especially with the operational challenges in the market; therefore, Dow chemical company needs to develop more strategies to reduce its operational costs and increase its profitability. This paper will examine the performance, business strategies and environmental factors influencing the performance and operations of Dow chemical Company.

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Interview Summary with Dow Chemical Company Organizational Leader 

According to the supply chain department manager, Mr. Harris the company can only improve its market share and expand its operations through effective teamwork. In his response to ethics in the organization, Mr. Harris explained that effective organization depends on integrity and respect in its operations. However, Mr. Harris said that a team leader needs to understand his subjects for the team’s operations to be subject. Every member of the team is equally important and no one should be left behind if a successful progress is to be made in the organization. Effective business operations require more than just a good management, but it also needs innovative leaders. Mr. Harris responded during the interview that as an innovative leader in the procurement and supply chain department he has tried to come up with innovative strategies that can help the organization improve its performance. He said that he uses the existing tools and processes such as the Analytical Hierarchy Process to reduce or eliminate the emotional analytical challenges. As a team leader, Mr. Harris explained that the most effective method that a leader can use to gain the morale and commitment of the subjects is to share with them the organizational objectives and goals. However, conflicting resolution methods also determine the success of the organization. According to M. Harris Dow chemical has progressed tremendously because of good management that has good and effective conflict resolution strategies. In his opinion, Mr. Harris argued that conflict between two employees should be handled by the two conflicting parties; the management only appears to be the mediator between the two parties. This will provide the conflicting parties with a good opportunity to realize their contribution to the conflict, thus they can come up with an appropriate solution without involving the third party in it.

Identification of the Dow Chemical Company 

The mission and goal of the Dow chemical company include becoming a world leader organization in chemical and plastic production through development of new and unique marketing strategies (Form 10-K, 2015); for example, expanding the long-term profitability of the company through market expansion to other regions and continents across the world. Another strategy that the company has adopted to achieve its mission and goal of becoming a world-class company is to develop products based on the customers’ demand lines (Form 10-K, 2015). Customers are important stakeholders in the business; therefore, it is impossible to talk about the performance of the business without necessarily talking about the role of customers in the business. This is the same strategy that Dow chemical Company aims to use if it wants to achieve its mission and goal.

The Macro-environment surrounding the Dow Chemical Company 

The macro-environment has significant effects on the performance of Dow chemical company; however, the strategies that the business adopts to deal with the environmental challenges may determine whether the business overcomes the challenges or not. According to Marvin (2009), the success of the business also depends on the environmental factors and how the business responds to the challenges. The macro-environment of the business influences its operations and may affect its performance. Every business is exposed to macro-environmental threats; however, how it responds to the threats will consequently depend on the success. Dow chemical company has tried to develop a new strategy that would place the business in a better position in the competitive market (Form 10-K, 2010). In the past decade, Dow seems to have realized its role and position in the macro-environment which encompasses on various pillars; for instance, the political/legal factors, economic factors, social and technological factors.

Political/legal factors: The government policy is currently one of the powerful forces influencing the operations of Dow chemical company. The new policies have fundamentally impacted the operational activities of Dow; thus, affecting the stakeholders such as employees, retirees, suppliers and customers. However, because the effect of the government policies is significant to the survival of Dow in the country, the company has actively created a platform to engage with the government and participate in policymaking and other political processes. Through its political committee, the Dow Chemical Company Employees Political Action Committee (DowPAC), the company supports political candidates vying for political seats both at the federal and state levels (Form 10-K, 215). Dow has changed its operations since 9/11 incident taking into consideration the environmental changes that might impact its operations. For example, through establishment of effective regional supply chain strategy Dow has been able to adhere to the environmental policies by reducing transportation of harmful chemical product shipment.

Economic factors: The economic forces are equally important in the operations of the business as it is directly related to the GDP factors, economic growth and other economic factors in the economy (Form 10-K, 2010). Dow operates in a global and competitive market environment that may give rise to operational and market risk exposure. The increased competition levels have created a threat to the economic considerations of Dow; for instance, the fluctuation of the international market prices have resulted in low sales due to low prices which have resulted in a negative impact to the company’s economic status (Form 10-K, 2015). Further, the adverse economic circumstances surrounding Dow have also impacted its financial flexibility. The company’s financial flexibility has significantly reduced so as to accommodate the changing economic environment (Tullo, 2015).

Social factors: It is difficult to analyze the social factors in the organization as it is based on people’s behavior and performance. Human behavior varies with different individuals; however, Dow tries to keep with the societal values. Through its innovative products and renewable resources, Dow chemical company has managed to improve the lifestyles of many people across the globe through employment. Dow chemical company offers over 40,000 job opportunities in its operational regions. In order to continue remaining and maintaining the societal values, Dow chemical continues to pursue its green efforts to provide better lifestyles to majority of people across the globe (Form 10-K, 2015).

Technological factors: Dow also tries to maintain with the standard market by creating a competitive market through its innovative and advanced research developments. This has enabled the company reduce its production costs and cut most of its edge products so as to continue maintaining the competitive advantage in the market (Form 10-K, 2015). Further, through its innovative and unique products Dow aims to minimize the barriers to entry for different competitors in the market (Form 10-K, 2015). Again, with increased cyber security threats, Dow has established a chain of custody control system that enables them to monitor the hazardous cargo location on 24-7 hour basis. This is achieved through the asset visibility strategy that includes GPS and sensor technologies. The company is able to track and monitor its shipment at all times.