Impact of Innovation and CSR on Business Environment

This report discusses the impact of innovation and corporate social responsibility (CSR) on the business environment. It explores how innovation affects operations, sales, and profits, and evaluates the importance of CSR for Aston Martin Lagonda. The report also applies Carroll's CSR model to the organization.

Business Environment

Executive Summary
Innovation is the process and action of innovating that helps to bring the new ideas and
thoughts in relation to a business and creating advantages. Customers get highly influenced by
innovation and new technology as they get new products and services as per new trend. CSR is
social responsibilities which needs to be pay attention by organisation while running a business
that helps to improve the brand images and increases the profitability in changing environment.
This report is summarising about how innovation affected the business and helps in growth as
well as profitability. Moreover, how social responsibilities are impacting on operation and
profitability of organisation.

Table of Contents
Executive Summary ........................................................................................................................2
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
1. Understanding of innovation, and the role of technological change in economic progress....1
2. A brief overview of chosen company, and practical illustrations of how innovation has
impacted the operations, sales and the profits of your chosen company.....................................2
TASK 2............................................................................................................................................5
A. Evaluation the importance of Corporate Social Responsibility for Aston Martin Lagonda ..5
Application of Carroll’s (1991) CSR model to the organisation.................................................7
CONCLUSION................................................................................................................................9
REFERENCES................................................................................................................................1

INTRODUCTION
Business environment is defined as addition of internal and external factors which are
related to environment and affected the business in dynamic environment. In a business
employees, management, customers, business regulations, supply and demand are consider as
important factors that needed to focus by management for the purpose of operating a business
and managing all activities (Čepel and et.al., 2018). For management it is important to analysis
the environment and make right business decision which can help to operate the business and
attain the business goals. In organisation, innovation is important that can help to attracts the
customers by providing variety of products and services. This reports is based Aston Martin
Lagonda (Plc) company that is auto mobile company, selling different types design of cars to
their customers and manage the organisational performance by increases sales and improving
profits. This reports is considering how innovation take places in product, services and business
models. Moreover, in task 2 it covers CSR activities which are important to meet ethical, legal
and commercial expectation sets by society.
TASK 1
1. Understanding of innovation, and the role of technological change in economic progress.
Innovation meaning is to bring something new and attractive in organisation so customers
remains attractive and make decision to buy the products and services. This is important for
organisation to operate the business and run it effectively by managing all activities and
operating the business in challenging environment (Eling and Schaper, 2017). Innovation
become important for organisations as it plays the role of technological changes in economic
progress. Aston Martin Lagonda is larger size auto mobile company where managers are analysis
the environment and bring new technology in their process and design of cars that attracts the
customers and make happy to them after buying such products. The role of innovation and
technological changes in economic progress are as defined:
It is playing a role of production – Technology and innovation is important for
organisation which helps to make the easiest way for business concern to operate their business
and manage their activities properly. The managers of Aston Martin Lagonda bring technological
changes in design and manufacturing process of cars that helps to remove the human
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involvement more and save the cost of organisation. Therefore, changes in technology leading
the economical progress.
Increase the profitability – Technology's another role is profitability which is created by
management by adopting new technology. In dynamic environment, needs and wants of people
are changing where it is important to accept the changes and make happy to customers. In
context to Aston Martin, management is needed to analysis the profitability by using new
technology that fill the customer's demand and operate the business happily (Prajogo, 2016).
Making easy payment – Now cash carry activities become risky for people as well as
business concern where they are demanding cashless transaction that can help to make payment
and received digitally and perform all function effectively. Technology bring this changes for all
that helps to make easy payment by using digital mode and net banking which helps to save from
risks and lead economic progress. In context to Aston Martin Lagonda, technological changes
become effective after making easy payment for buying cars and getting services that can help to
operate the business and reduce the cost (Lyytinen, Yoo and Boland Jr, 2016).
In marketing – Marketing is term that uses by business concern for identifying needs
and providing the right messages to people regarding new products and services. For example,
whenever Aston Martin Lagonda brings new cars and features in their products then it uses the
marketing function along with technology for the purpose of providing information to customers
and operating the business successfully. This attracts the customers for buying decisions and
improving the production and profitability (Van der Have and Rubalcaba, 2016).
2. A brief overview of chosen company, and practical illustrations of how innovation has
impacted the operations, sales and the profits of your chosen company
Organisation's Overview - Aston Martin Lagonda is a luxury car manufacturing
company that manufacture different designs of cars with attractive features. Lagonda is British
luxury car marque which was established in 1906 and owned by Aston Martin since 1947. The
managers of such organisation introduced new technology and innovation on timely basis that
helps to take the competitive benefits and run organisation effectively. This is important for
management to operate and manage their business by using innovation and attain the higher
profits.
For growth of business and taking competitive advantages Porter's five forces model is used:
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Porter's five force: This model is given by Michel porter who states that a business
organisation can get higher profits and competitive advantages by running and managing the
innovation in their industry. This is described below:
Competitive rivalry: For growth and profitability it is important to analyse the
competitors in market which can affect the operation. In context to Aston Martin Lagonda there
are number of competitors such as Bentley Motors, Tesla, Rolls Royce etc. are selling the luxury
cars that creates high competition and affected the operation. For this, managers make plans and
set the reasonable prices of their products which can to operate the business and grow it in
changing environment.
Buyer's power: This is important for organisation to attracts the customers by making
buying decision by selecting the products. In UK, there are limited auto mobile companies who
are manufacturing different design and logo of cars that attracts the high profile and status of
people to buy products. Therefore, there is less power of buyers which can help to increase the
sales and growth of Aston Martin Lagonda as it attracts potential and luxurious customers and
will help to improve business (Kahn, 2018).
Supplier's power: For manufacturing and making the products suppliers are playing
important role where it provide the raw material to manufacture for getting ready the cars. Aston
Martin Lagonda is growing its business and increasing profitability as there is less power of
suppliers due to having in high range. Therefore, chosen organisation is operating its business
and creating higher growth by getting raw material at fixed rates that increases profits.
Threat of new entry: In business environment, number of businesses are established and
allowed to enter in new market. For Aston Martin Lagonda the threat of new entrance is low
because to establish a luxurious auto mobile company there is need to make high investment and
shareholders which may be difficult to find. So, chosen organisation can grow its business
effectively.
Threat of substitutes: If the substitution of products is available in market then it
become challenging situation for existing business to operate and increase the sales of
organisation. As Aston Martin Lagonda is manufacturing luxury cars, substitutions are normal
cars, buses, taxi, bicycles etc. that may affect the operation of enterprises.
Therefore, by using innovation and new technology in cars Aston Martin Lagonda can
looking towards smooth operations and growth of business by attracting customers.
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The growth percentage of Aston Martin Lagonda is defined in below digram that states
after using new technology and innovation growth percentage of organisation is increasing as it
manufacture best quality of cars and products which can help to operate the business and manage
the higher growth (Growth, sales and production changes by using innovation, 2020).
The sales volume of Aston Martin Lagonda
From the above statistics its has been defined that production and sales of luxury cars
from 2015 to 2018 have been increased as such organisation is providing new model and design
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of cars by using innovation which helped to operate the business successfully and manage the
activities.
The profits ratio by improving sales and operation with the help of innovation and new
technology
From the digram it has defined that innovation and new technology become essential
aspects of organisation which uses to operate the business and run it effectively by managing all
task and increasing sales. The managers of Aston Martin Lagonda is playing important role as
they analysis the needs of customers, what product they wants and how they can be satisfied then
provide the products accordingly and helps to grow the business continuously. This is operating
business successfully in changing environment by using competitive resources and maintaining
higher profits (Growth, sales and production changes by using innovation, 2020).
TASK 2
A. Evaluation the importance of Corporate Social Responsibility for Aston Martin Lagonda
The corporate governance is defined as set of rule, regulations and standards which are
used by management for the purpose of maintaining good relationship between boards,
shareholders and stakeholders which can help to operate the business by managing and running
all activities. This is a legal formulation that provides a structure which can be uses by
companies to set the objectives and monitoring the performance. This supports companies to
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operate and perform their business activities in challenging environment effectively so they can
maintain good performance.
The abilities to recognise and appraise the corporate governance and ethics in context to
Aston Martin Lagonda is having good knowledge of legal regulations, structure, new process and
innovation that can help to introduce something new and attracts the customers in high range.
This also helps to maintain the profits by maintaining the ethics and standards in organisation
which supports to operate business.
The importance of CSR in context to Aston Martin Lagonda
Corporate Social Responsibility is the practices which perform by management of
organisation for the purpose of improving business profitability. For running and managing the
business activities there is need to maintain good relations between employer, employees,
societies and governance that may support organisation to operate the business and attain the
profitability. In Aston Martin, CSR activities are important that are as defined:
Improve public image: This is important for organisation to improve the public image
that can help customers to take the right decision regarding buying the product from such
organisation or not. For example, the managers, volunteers and staff members of Aston Martin
Lagonda are participating in charity that shows brand is committed to helping others which
improve customer's image and helps to increase the sales (Kang, Germann and Grewal, 2016).
Increased brand awareness and recognition: This means if an organisation is
committed to ethical practices then news will be spread. This will helps to hear more about
particular brand which is involved in CSR activities. Aston Martin Lagonda is improving its
brand awareness by doing ethical practices such as following rules, promises keeping, loyalty
and concern for others that can help to increase the brand awareness and maintain good business
activities. This also helps to increase the sale and profitability.
Competitive advantages: Corporate social responsibilities is also important to get the
competitive advantages by taking one step forward. Aston Martin Lagonda stand out for
competitors by focusing on environmental and social factors which can help to operate the
business and make higher profits (Liang and Renneboog, 2017).
Increase customer engagement: Corporate social responsibility also helps in customer
engagement by using sustainable system that maintain brand and operations. Aston Martin
Legonda is using social media, print media, creating story of efforts and other channel to provide
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the information and getting involve in activities as selection of products which can help to
manage the business activities and performance.
Greater employee engagement and benefits: It is important for organisation to get
introduce employees from CSR strategies and ensure that they are enjoying their workings by
managing task and adopting a structure. All employees are providing right information about
products of Aston Martin Lagonda and attracts the customers which can help to improve the
business profitability.
Government relation: Corporate social responsibility is also important as organisation is
having easier experience while dealing with politicians and government regulators. As Aston
Martin Lagonda is contributing in strong economy and creating positive relations with
government that get support to establish business in other country and expand their business
effectively. This also helps to maintain the good performance and profitability by accepting
changes and delivery of products and services (Wang and Sarkis, 2017).
Application of Carroll’s (1991) CSR model to the organisation
Carroll CSR is defined as simple framework that uses to know how and why
organisation should meet their social responsibilities. This can help to manage and organise the
business activities by running business and maintain profits. In this four responsibilities of
management of organisation is needed to perform. The responsibilities of Aston Martin Lagonda
is defined below:
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Illustration 1: Archie Carroll’s CSR model, 2019
Sources: Archie Carroll’s CSR model, 2019
Economic responsibility: Economic responsibilities of organisation is about producing
products and services which is needed by social and helps to make profitability. In organisation,
shareholders are those people who make investment and have expectation to get return. By
performing economic responsibility Aston Martin can survive and support society for long
period of time and manage the good performance. The chosen organisation is brining innovation
and new technology in their process which can help to reduce the wastages and increase
production range the gives economical benefits to organisation as well as people for the purpose
of making higher profits.
Legal responsibility: This responsibility is complying with minimum rules and
regulations which are set by government and board of director that are important to follow while
running a business. The management of chosen organisation organisation is following all legal
responsibilities in relation to a business that can help to operate the business and attaining the
goals effectively. If organisation is not performing their legal responsibilities then it become
responsible of not meeting with objectives and have to pay the fines (About Carrolls CSR, 2020).
Ethical responsibility: This responsibility of organisation goes outside normative
expectations that can help to conduct and manage the business in ethical manner. The Aston
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Martin Lagonda is focusing on ethics by offering fair working condition to employees, following
legal standard such as equal pay, fair trade certification and honesty in work that motivates
employees to work more effectively. This also helps to manage the business activities and
performance by maintaining ethical standard and operating business successfully.
Philanthropic responsibility – This responsibility is expressing the voluntary and
discretionary activities in relation to a business that can help to improve the profitability. The
business concern of Aston Marin Lagonda should donate in the form of resources, money and
time to national, regional and international charities. This can help to improve the business
performance by taking part in social activities (Wang and et.al., 2016).
From the above it has been defined that Carroll’s CSR model is useful for organisation
that helps to states the responsibilities that need to perform for improving public image and
maintaining higher profits in relation to a business. Aston Martin is larger organisation that is
operating business by following this model and managing all activities effectively that helps to
maintain the good performance.
CONCLUSION
From the above report it can be concluded that innovation referring as activity that uses
to introduce the new products and services in organisation by using new technology. This bring
changes in existing products and marketing channel so productivity and profitability can be
improved. Moreover, growth, sales and operation of organisation are affected with the help of
new technology that helps to manage the performance. Corporate social responsibility is the
activities that needed to perform by management in order to operate business and make it
responsible in changing environment that helps to make high profitability by improving image
and maintaining good relations.
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REFERENCES
Books and Journals:
Business Environment-
Čepel, M. and et.al., 2018. Business environment quality index in the SME segment. Journal of
Competitiveness.
Eling, M. and Schaper, P., 2017. Under pressure: how the business environment affects
productivity and efficiency of European life insurance companies. European Journal of
Operational Research. 258(3). pp.1082-1094.
Prajogo, D. I., 2016. The strategic fit between innovation strategies and business environment in
delivering business performance. International journal of production Economics. 171.
pp.241-249.
Kahn, K. B., 2018. Understanding innovation. Business Horizons. 61(3). pp.453-460.
Lyytinen, K., Yoo, Y. and Boland Jr, R. J., 2016. Digital product innovation within four classes
of innovation networks. Information Systems Journal. 26(1). pp.47-75.
Van der Have, R. P. and Rubalcaba, L., 2016. Social innovation research: An emerging area of
innovation studies?. Research Policy. 45(9). pp.1923-1935.
Kang, C., Germann, F. and Grewal, R., 2016. Washing away your sins? Corporate social
responsibility, corporate social irresponsibility, and firm performance. Journal of
Marketing. 80(2). pp.59-79.
Liang, H. and Renneboog, L., 2017. On the foundations of corporate social responsibility. The
Journal of Finance. 72(2). pp.853-910.
Wang, H. and et.al., 2016. Corporate social responsibility: An overview and new research
directions: Thematic issue on corporate social responsibility.
Wang, Z. and Sarkis, J., 2017. Corporate social responsibility governance, outcomes, and
financial performance. Journal of Cleaner Production. 162. pp.1607-1616.
Online
Growth, sales and production changes by using innovation. 2020. [Online] Available through:
<https://amlcorp.blob.core.windows.net/default-storage/docs/default-source/
documents/annual-reports/astonmartinlagonda_annualreport2018.pdf>
About Carrolls CSR. 2020. [Online]. Available through:
<https://www.marketing91.com/what-is-carrolls-pyramid-of-corporate-social-
responsibility/>