Impact of External Factors, Leadership Style, CSR and Effects of Brexit and Covid-19 on ASDA

This report analyzes the impact of external environmental factors on ASDA, recommends suitable leadership style, comments on corporate social responsibilities, and analyzes the effects of Brexit and Covid-19 on ASDA. The report discusses the PESTLE analysis of ASDA, recommends democratic leadership style, and highlights the benefits of CSR. It also discusses the negative effects of Brexit and Covid-19 on ASDA and how the company has addressed the situation.

CONTEXT OF BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Discussing impact of external environmental factors over business ..........................................3
Recommending suitable leadership style that incorporates with desired business objectives ....4
Critically commenting on Corporate social responsibilities........................................................6
The effects of Brexit and Covid-19 pandemic in 2020/2021 on ASDA company and how the
ASDA has addressed this situation..............................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................11

INTRODUCTION
Today, business needs various strategies in order to gain competitive advantage over
other competitors (Kumar and et.al., 2021). Business strategies act a path and gives direction to
the business in order to achieve goals of the company. ASDA is British multinational company
founded in 1949 headquarter in Leeds, England. Today, ASDA is one of the largest supermarket
chain operating in Europe. The report will be addressing external environment factors that
impact business and will also be discussing suitable leadership style to achieve their business
objectives. Further, role of corporate social responsibility will also be addressed. Lastly, the
report will be giving opinion about the effects of BREXIT and Covid-19.
MAIN BODY
Discussing impact of external environmental factors over business
External analysis concern with examining of the industrial environment of a company, it is
the procedure through which corporation objectively assess the changes within their industry
(Mahabir, and Pun, 2022). There are external analysis tools are present that works as strategic
planners for analysing the macro environmental factors that have potential impact over
organization. Pestle analysis of ASDA British supermarket chain is discussed below:
Political: This factor consists of international regulations, political aspects, consumer rights,
employment, changes in this make great influence over the industry. If there are any changes in
political structure, then it will give greater impact over retail industry. ASDA monitors the
political environment constantly; company is benefited by stable political environment in UK.
however, Brexit has imposed certain challenges for business, ASDA company must need to think
of their future proof supply chain in dealing with Brexit.
Economical: It concerns with interest, inflation rate, unemployment and labour supply, energy
prices, such factors directly impact the pricing strategies of the organization. UK has seen flat
quarter 4 of 2019 with their growth rate (revised) 0.5 percent where rate of inflation is measured
as 1.7 percent that has affected ASDA both positively and negatively. Additionally, due to
pandemic imposed lock-down challenges many people have lost their shopping interest that has
affected the selling of product of organization.

Social: Ageing population, consumer attitude, gender, job all demographic factor falls under this
category (Maroun, 2019). Celebrity following and health life style are most important factor for
the ASDA. Understanding in social factors assists in launching new products and services in
market. as demand in organic food is relatively high in UK, ASDA also sells the products which
cater to better amount of ethnic groups.
Technological: This factor is driving many changes in industry where it is continuously creating
lots of opportunities of business and have shown its greater influence over business functions. As
using of technologies is constantly growing where consumer always expect to place their order
by just one click. ASDA is also working on implementing such tools and systems in order to
meet their consumer requirement, also they need to keep their funds always ready to deal with
constant technological advances to remain strong in retail field.
Environmental: Green economy, pollution, hazardous waste and organic foods falls under this
category. As people now a day always prefers their buying through those firm who are
committed to environmental sustainability. It has put lot of pressure over organisations in retail
sector as to operate within an environmental friendly manner. Hence, Asda also need to
demonstrate that they are committed to their sustainable goals and working on reducing carbon
emission from its operational work.
Legal: Laws, taxes, country rules and regulation, punitive actions taken by authorities all comes
under this factor of pestle framework (Mikalef, Pateli and van de Wetering, 2021). According to
UK laws, it is said that employee cannot be pay less than minimum wages also they cannot be
dismissed unfairly. ASDA company also make sure that they are following all legal compliances
to avoid any miserable situation.
Recommending suitable leadership style that incorporates with desired business objectives
Leadership always plays a significant role for the organization, leaders makes their team
to stay committed to organizational goals and to try their best to make all goals achievable for
company. ASDA company is one of the strongest company in their retail sector, in such it is
important for them to remain in top position which is only possible if their workplace

environment is supportive and innovative (Turnbull, 2022). Supportive work station is only
found when there is enough harmony among employees and also have better leadership that
makes workers to carry out collaborative work to provide desired outcome to organization.
ASDA’s business objective is to be value retailer to provide better and affordable products to
consumer, they are committed to make easier life of their customer by providing them range of
choices in products. There is different type of leadership which makes sense for business which
are discussed below:
Democratic style: Also called as participative leadership where leaders always allows their
subordinates and team members to equally contribute in decision-making process (Blundel and
et.al, 2021). Democratic leaders excel in developing creativity among their subordinates and also
enhances the chances of positive contribution coming from all sides. Such leaders make the
decision by engaging all employees in it so that better information can come out, in such
leadership workplace environment always remain calm and better collaborative work can also be
obtained within this.
Autocratic style: Most commonly known as authoritarian style that summed up with commands,
in this direction always comes from top management, where autocratic leaders does not concern
with contribution of their employee in strategy formulation, decision-making, they only
command employee to do what they told them to do. Central system for the feedbacks is
somehow not found where sometimes employee also feels burden to work with such leaders who
is not ready to listen them. However, decision-making is fast and firm’s desired goals can be
reached unambiguously as well as autonomy is reduced.
Transformational style: In this leaders always encourage their team to deliver optimum results
where leaders motivate and inspire team-mates to create innovative opportunities and works
harder for meeting the organizational goals (Baig and et.al, 2021). Ultimately those leaders foster
the positive changes among its followers, under this worker are always ready to transform or
evolve, personally as well as professionally. Within this organization is more aligned with their
goals and collaborative team working work for singular cause and team-mates always willing to
devote their time, effort in producing the optimum outcomes.

Pacesetting leadership: In this leaders always push their employees to run faster and work
harder to reach to final line, they generally set the expectations for workers. Particularly those
leaders are very energetic and too much into their role, in such team always aims to show their
major contribution in achieving the task. However, in such leadership there is a high pressure
workplace environment which is not suitable for every employee.
Laissez- faire: Those leaders have attitude and faith over their subordinates, they generally don’t
do micromanagement over their employees like other leaders do. They allow their employees to
show their creativity, and make out the best use of resources to deliver any project successfully.
Such team working always dedicated to their work and enables their organization to meeting
their goals. Laissez faire leaders leave decision over their subordinates while always available for
providing feedbacks when it is important.
For the ASDA company, they must need to align with their business goals and meet their
consumer goals which can only achieved with the follow of democratic leadership style.
Company will be benefited by implementing this style, as it will be promoting the involvement
of employees in decision-making so better outcome can be reached in any manner. According to
the Wilson, (2020) it is said that democratic leadership helps in maximizing the employee
engagement as well as it enhances the job satisfaction and staff experience which lead the firm to
take further better step in business. Author further proposed that those leaders always makes
their team to give their maximum in increasing business productivity, as workers are valued at
workplace then they also respond positively with consumer complaints that helps firm in
retaining their potential consumer base. However, author Bonsu and Twum-Danso, (2018) said
that democratic leaders always deeply concern with their team-mates which might create
problems for them in dealing with crisis.
Therefore, from overall explanation, it is suggested that firm should use democratic style
so that they will maintain positive workplace environment and workers are more focused to meet
consumer demands.
Critically commenting on Corporate social responsibilities
CSR is the self-regulating business framework which supports the organization to
become more socially accountable (Banjarnahor and et.al, 2018). It gives the direction to

organization to play a significant role in helping community as well as considering
environmental and social factors impact while making business decisions. ASDA company also
follows the CSR that helps them to create brand awareness as well their support for community
makes them socially responsible organization. CSR of Asda company also explains that
company is working harder on making their products more sustainable through “Greener at
ASDA price”, company has made the commitment which is to become a net zero carbon
business by year 2040. In such commitment they are concerning with reducing their greenhouse
gases emission by 50 percent by the end of year 2025. Therefore, CSR always helps the
businesses to achieve milestone and to also provide chances for the community people (Abbas
and Ali, 2021). ASDA company also works on this agenda for their social duty company always
encourage their employees to take part in volunteer work and support societies. It is also found
that company provides the chances for community local people to be part of their company and
work for them.
Some benefits with CSR provides to organization is as follows:
Better brand recognition: CSR not only lead the firm to create brand awareness, but also helps
in creating positive brand image that can influence the consumer to buy products from such
corporations. It is becoming a most common practice for the business. As well as ASDA is also
following the same as by the follow of their CSR objective firm is able to create their better
image in the market that have potential influence over the consumer like providing sustainable
products.
Operational cost saving: CSR programs helps the firm in reducing the employee turnover rate
up to 50%, that results in cut down of operating cost that requires in recruitment and on boarding
process. ASDA also working on their Sustainable goals as they are encouraging their employees
to design more affordable products for consumer, while company is also assisting the people to
protect the environment wherever they live.
Better financial performance: CSR improvises the goodwill and reputation that encourages the
financial performance. In result good financial presentation allows the firm to invest the capitals
more in social activities (González-Rodríguez, Díaz-Fernández and Biagio, 2019). Consequently,

CSR and business performance strengthen each other. ASDA company also do donation where
company is proud of supporting thousands of charities across UK through fundraising.
Enhances sales and consumer loyalty: CSR automatically increases the sale of products and
services, if any company is following CSR procedures that directly impact the purchasing power
of the consumer, in such scenario customer are more likely to make fast decision for buying of
products. Like ASDA company as they have reduced their total amount of carbon emission per
Kg of milk by 7 percent, making changes in milk production is initial and major step for making
their dairy products more sustainable.
Therefore, CSR value makes the firm to remain strong within market and to develop huge
consumer base. At ASDA, they take their corporate social responsibility more carefully, they
believe in that remain strong with sustainability will make them to deliver those products which
appears affordable to consumer as well, also they forward the message of safeguarding
environment in their marketing campaigns and also over the products. Actions which the
company have taken like they decided to give incentives or rewards to those customers who
select reusable bag instead of cooperating the governmental procedure to charge with the carrier
bags. Their store has already encouraged and applied no single use carriers from all of their
checkouts, while they also encourage their consumer to use sustainable bags which are
affordable options. Action of ASFA related to their go green for school theme is also popular
where they reward their consumer with a point over their use of reusable bags, such points
further provided to local schools who can claim “green” awards. As well as ASDA also supports
the charities like for their cooperation to “Tickled pink” which is basically for creating the
awareness regarding breast cancer, company raised funds for the campaign in support of cancer
patients. Therefore, follow up of CSR, helped the company a lot in managing their brand value
within market as well as it helped them a lot to streamline their business functionalities by
minimizing the operational cost.

The effects of Brexit and Covid-19 pandemic in 2020/2021 on ASDA company and how the
ASDA has addressed this situation.
Britain's exist from European union and Covid-19 in 2021 has impacted ASDA in
negative way and all the negative effect that company has seen are as follows-
Tariff Barriers -
Increasing trade barriers has decreased rate of supply on international level. There were
sudden increase in the rates of tariffs after the BREXIT as UK was no longer a part of European
Union. Standard quotas have been raised and that has impacted smooth functioning of ASDA in
terms of international trade relations (Dhingra, Freeman and Huang, 2021).
Low sales-
BREXIT and Covid decreased amount of sales. BREXIT stopped free access to ASDA
that impacted the sales of ASDA in negative way. Further, at the time of Covid all the major
economies were shut that again lead to decreasing sales of ASDA. Moreover, Covid- 19 shifted
focus of public from buying clothing items to healthy stuff.
Fallout of stores –
All the major outlets in all over Europe became impacted due to the regulations imposed
by other members of European Union after exist of Britain. There was time that ASDA had to
shut down its stores in French because company was struggling in managing supply chain
system. Covid-19 also did same thing to ASDA.
Employees lay off-
The eviction policy of ASDA after BREXIT And Covid laid to lay-offs that also has
major impacted on company as seen. The drastic change in range of employees further had
negative impacted on company as all demographic shifted that laid to fewer innovations in the
organization. Eviction policy of company turn against in policies of company and decreased their
innovation capacity.
Supplier and consumers-

This also has been seen that ASDA has faced severe issues regarding suppliers and
consumers as Covid reduced the amount of spending that generally people used to do on this
store. Moreover, there was drastically shift in the chain of suppliers as well, the rate of
transportation has further increased and communication has difficult after the BREXIT.
These were some impacts that ASDA faced after BREXIT And Covid-19. The obstruction laid
seriously reduced the amount of revenues that company was earning. ASDA was able to manage
and address this issue in following ways-
Ethical standards-
Following all the ethical standards solved problem that occurred after the way of Covid-
19, as all the countries imposed several restriction that was needed to be followed. Focus was
shifted from supplying unhealthy food to healthy food as all the consumer became aware of
eating junk. ASDA further recognized employee standards, workplace conditions standards and
labour laws that were needed to fulfilled after BREXIT because their exist harsh restrictions for
stores that belong to the country which does not belong to the European Union. ASDA also
adopted all the international rules laid down By World health organization and other countries
where ASDA was operating (Mifsud and Herlihy, 2022).
Supporting workers-
Supporting worker that help company to achieve its goal is the prime requirement that
needed to be fulfilled. Good amount of focus has been given to frame policies that support and
help all the workers to take initiatives. These policies and support to co-worker brings solutions
to the real problems. ASDA is also making sure that it follow various campaigns and
programmes that deals with supporting and encouraging employees (Kanders and et.al., 2020).
New stores-
ASDA is operating new stores in organization. ASDA company is operating in various
countries but after Covid-19, the company had to close few stores because of the restrictions that
were imposed on them. The company is thinking to launch new stores in market to redistribute
risk in different countries.

New deals-
ASDA is also getting into new deals in order to wider its consumer base in market.
ASDA is already facing high number of Competition in market and Covid-19 and Brexit just
increased further risks. New deals with countries that wants such big retails stores has been
addressed by ASDA. This new deals with ultimately help company to earn good amount of
profits. The supermarket chain can become huge retail store chain in world.
All the above things were addressed by ASDA in order to avoid the negative impact that
ASDA was facing at the time of Covid- 19 and Brexit. The risk were addressed in a way that it
distributes profits of company and ultimately help ASDA to earn good amount of profits once
the risk has been addressed.
CONCLUSION
The report above has addressed all the external environmental factors that has impacted growth
of the company in market. ASDA is operating market of Europe for long time but still it has
negative impact on policies of company. Leadership style has been discussed above that will
help ASDA to achieve desire sets of objectives. The report has also addressed the corporate
social responsibility of ASDA from the evidences. At last the report has discussed the effects of
BREXIT and Covid-19.

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