Declining Sustainability of Australian Businesses (Essay Sample)

Declining Sustainability of Australian Businesses
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Declining Sustainability of Australian Businesses
According to The Australian (2014), Qantas recently announced that it would cut 5000 jobs in Australia. This decision is one among many that Australian businesses have made in recent times as they continue to struggle to perform in Australia. Examples of these struggles can be seen in the automotive industry where Toyota, Ford, and General Motors have decided to stop manufacturing vehicles in Australia (The Australian, 2014). This paper discusses the factors that have caused the declining sustainability for Australian businesses.
Changes in political, social, economic, legal, and technological factors in Australia’s macro environments are responsible for the declining sustainability of Australian businesses. Political factors have significantly affected how businesses operate in the country. The government’s stance on ownership of businesses where it is in the process of eliminating restrictions on foreign ownership is one of the factors that have contributed to the declining sustainability for businesses (The Australian, 2014). Foreign owners are likely to move operations to countries where the costs of doing business might be lower, leading to job losses in Australia. Another factor that has contributed to the worsening of the business environment is the government’s refusal to guarantee debts (Flynn, 2014). This is a significant factor considering the recent financial downturn that negatively impacted many businesses. The governments should provide these debt guarantees in order to aid the recovery of businesses in the country.
Economic factors have also contributed to the declining sustainability of Australian businesses. The economic downturn has forced businesses to adopt lean production strategies. Lean production defines highly efficient production that combines flexibility and craftsmanship with the lowered costs of mass production (The Economist, 2009). However, the conditions in Australia are such that companies cannot realize sufficient benefits due to the high costs of doing business in the country. The high costs are due to factors like the high cost of labor, a small domestic market, and the high value of the Australian Dollar (Colebatch, 2012). The combination of these factors and the lack of government support create a tough working environment for businesses.
Competition from manufacturers in Asia is another factor that has contributed to the declining sustainability of Australian Businesses. Companies in Asia have competitive advantages such as access to a wider market, low cost labor, and supportive governments that create a favorable environment for conducting business. These conditions are attractive to companies in regions like Australia. This attractiveness is responsible for the Qantas’ decision to move aircraft maintenance to Thailand despite safety concerns (The Australian, 2014). Thus, the attractiveness of offshoring and outsourcing to Asian countries create conducive environments for competitors of Australian businesses to start operations. This results in the declining sustainability of Australian businesses as they cannot compete with the prices set by competitors.
Social factors have also contributed to the worsening business environment in Australia. An example can be seen in the automotive industry where consumers prefer fuel efficient vehicles, meaning Australian manufacturers like Holden, which specializes in powerful vehicles, suffer (Dobie, 2012). When it comes to technological factors, Australia cannot compete with countries like Japan, which pioneered the lean production technique (The Economist, 2009). The Australian government’s limited involvement in research and development also means that Australian business cannot compete with businesses from countries like South Korea, which spends more tha...