Corporate Governance and Social Responsibility

The provided report emphasizes the significance of corporate governance in increasing shareholder value. It also highlights the importance of social responsibility in enhancing goodwill and attracting customers. The discussion revolves around three aspects: economic responsibility, legal responsibility, and ethical responsibility, with a focus on philanthropic responsibility in giving back to society.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
The impact of innovation on ASOS company........................................................................3
TASK 2............................................................................................................................................6
Importance of Corporate social responsibility for Rolls – Royce Plc...................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business environment is the sum total of all individuals, institution and other forces
which are outside the control of a business enterprise but the business still depends upon them as
they affect the overall performance as well as sustainability of the business. There are different
forces which represent the business environment are competitors, suppliers, consumers groups,
government, media, economic conditions, customers, investors, trends, technologies and other
companies operating in the business. ASOS plc is being chosen for assessment in this report for
first task and Rolls – Royce Plc has been chosen for second task. ASOS is British online fashion
and cosmetic retailers. Company was founded in 2000 and its headquarters is located in London,
United Kingdom. On the other hand, Rolls – Royce Plc is a company which manufacturers
second largest maker of Aircraft engines. This present report will present the impact of
innovation on the operations, functions and profitability of the business.
TASK 1
Overview of the company
ASOS is the public limited company. It is British Online fashion as well as cosmetic
retailer in UK. It was founded in 2000. Its headquarter is located in London. The revenue of the
company is £2.4 billion in 2018 and about 3500 plus employees are working in the company.
The main products of ASOS is clothes, shoes, accessories and beauty. Company is planing to
bring innovation in the delivery systems.
The impact of innovation on ASOS company.
Innovation is when innovative ideas are transformed into useful products, service or
methods of operations or process. Basically it is a new idea, creative thoughts, and new
imaginations in form of device or methods. In today's era, innovation is very important for the
survival of the company in the market place. It is fact that brands that don't innovate will not
succeed in retail. In retail sector, innovation is very important because the world of retail sector
innovation takes place on regular basis (Botha, Kourie and Snyman, 2014). In retail sector,
innovation is crucial in each and every filed whether it is marketing, operation, logistics/Supply
chain management or Research and Development. ASOS company is also very concern about the
innovation in order to give tough competition in the market place.

The marketing department of ASOS company is very strong and marketing department is
the heart of the company. The profitability, sales and name of brand is directly and indirectly
depends on the marketing. The promotion activities of ASOS company is very effective and
efficient but still they are thinking for something new and creative because promotion makes the
audience aware of companies products and services. ASOS Company is going to promote its
products on social media as approximately 85% of population of UK is active on social media.
Thus, twitters, Facebook, Instagram etc. are the best social media applications. In addition to
this, ASOS company has also joined in on the popular hashtags which is also one the best way of
marketing the products and make the customers aware (Bah and Fang, 2015).
In addition to this, innovation is also very important in operations management of
company. Operation department is the administration of business practices in order to create the
highest level of efficiency possible within organisation. The profitability of the company is also
depended on converting materials as well as labour into goods and services effectively as
possible. Thus, innovation plays a very important role as implementing new techniques, tools
and machines in order bring efficient in the preparation. New ways of delivering world class
service as well as products customers at reasonable prices is operation innovation and it
straightly impacts the profitability of ASOS (Kljucnikov and et.al., 2016).
Logistic is the Part of supply chain procedure that prepares, implement and controls the
efficient, effective flow and storage of products, services and related information from the point
of origin till consumption in order to meet customer's needs. The words, Logistics and supply
chain management are utilised interchangeably these days. Further, supply chain management is
described as the design, planning, execution, control and supervising of supply chain activities
with the aim of making net value, creating a competitive infrastructure, investing worldwide
logistics and measuring performance. On the other hand, logistic is generally seen as a
differentiator in terms of the final bottom line of a hard and tangible good company. Hence, this
is concerned with both materials and information flow. ASOS plc wants to reduce the inventory
levels because of its almost linear connection with the cost. Therefore, the concept of logistic and
supply chain management is inventory planning. Further, both the activities must go hand in
hand, as logistic is management of movement of commodities and services, whereas, supply
chain covers many other areas (Christopher, 2016).

The role of research in design and development procedure is very crucial. The initial
stage is the research that includes assessing the present and future needs of consumers and
suppliers. The design and development process in the company must examine all the possible
risks and barriers, that needs to be overcome to get the commodity to market. For example, the
process needs to look at whether the product is capable to meet the needs of the market.
Furthermore, in ASOS company the role of research and development is the procedure of
creating a new knowledge about products and services. The company basically runs, research
and development, innovation, new product development and product design. Research is done of
the current market to learn the latest trends, customer's preferences, etc. In addition, design
describes the creative procedure in researching markets, needs, then transforming ideas into
product for market, for development.
Technological innovation: As ASOS has also started introducing new social media as a
marketing tool in order to attract wide range of customer towards them. In this, the technological
innovation also help to innovate new pages in social media so that it can easily manage the profit
of the company (Perry, Kent and Bonetti, 2018). Hence, it has been analysed that through
effective technology companies can draw attention of customers towards them. The
technological innovation also a process where ASOS can be easily uses that into their working
area so that they can easily increase the market competitiveness and as a result the company can
raise the working performance of their employees as well.
Financial and ICT issue: Because of the low usage of technological department, the
company faces some issue related to communication technology and this further affect the entire
system of the company in adverse way. Moreover, the company also faces some issue related to
social networking and that is why it tries to introduce new system that helps to attract wide range
of customers towards them. While on the other side, if the administrative system of the company
uses an appropriate system of new technique then it will be more beneficial for a firm to improve
their current infrastructure system and as a result, the system of a company automatically
improves. In addition to this, the company also improve the performance of the system by
introducing new system into their working area. Hence, by raising the profitability of the
company that directly affect the financial situation of the firm.
Relationship between innovative and economic development: it has been analysed that
if the relationship between the innovative products and the company's production is maintained

then it will be more beneficial for a firm to manage the things in more effective way. Moreover,
ASOS also tries to maintain the relationship between the innovative strategy so that it can
directly upgrade the economic development of the system (Pereira Cabral, da Graça
Derengowski Fonseca and Batista Mota, 2018). Moreover, the innovation should also be linked
with the new technology so that it will further help to raise the profit and sustain its brand image
in market. In addition to this, if ASOS will continuously uses this technology and producing the
innovative system into their working area then it will be more beneficial for the firm to create the
more profit into the system.
Corporate governance and ethics: As per the corporate governance, it has been
analysed that there is a board of directors and two executive directors and four other non-
executive directors who help or support the system into the working area. Further the quoted
company also help to and lead the company in better and progressive way (Beatson and Chen,
2018). While on the other side, the role of the chairman as well as chief executive director are
also the head of the company and they also support the system and try to maintain the
relationship with their subordinate and always motivate them for their further development and
raise the performance.
Technological advancement and economic growth are simply related to each other. A
crucial determinant of economic growth is the level of technology. The fast growth of the
company as well as economy can be attained by high level of technology. In addition, it has been
discovered that if the level of technology remains constant the process of growth stops. Hence,
this proves that it is the technological advancement that keeps the economy moving. Technology
is consisted of a big body of knowledge and tools that ease the utilisation of economic resources
as a way to develop goods and services effectively and innovatively. Progress in the technology
is important to economic growth and development, and the more advanced technology available,
the more rapidly the local and global economy can improve. Role of technologies is economic
development is further divided into many benefits such as; it saves the time that is taken to
produce a product or delivery of it, hence, contributes to the whole profit of the organisation. For
example, ASOS innovation is possible because of cloud technologies. Moving to a cloud based
solution enables the company to scale, also, it uses Microsoft Azure data centres, which means
they are leveraging infrastructure that is far bigger.

TASK 2
Importance of Corporate social responsibility for Rolls – Royce Plc
Knowledge and understanding of corporate governance
Corporate governance is all about the process through which the companies gets a
direction and controlled. The basic objective behind the corporate governance is to increase the
value of shareholder in the long run. Good governance is something where the organisation
focuses on its performance and its enhancement. Rolls – Royce Plc has also the same focus on its
corporate governance where the performance is dependent on the resource of the company. To
understand and implement the corporate governance in the Rolls – Royce Plc, Board of director
of the company has to make sure that organisation will maintain a fair and clear relationship all
the stakeholders which includes customers, employees and government. This will help the
company in growing more and expanding the business to a great extent. Along with this, a good
corporate governance also lowers down the capital cost of the organisation. Hence, the raising of
funds will also be easy for the company as it will have the major focus on corporate governance.
Board of directors also focuses on CSR by drawing various policies for the same. Board of
directors has the duty to ensure that all the CSR policies are properly complied with. Along with
this, A proper committee is required to be made which can carry all the responsibility of CSR.
Board of director should Consider the social, ethical and environmental impact of CSR activities
and monitoring compliance with CSR's sustainability policies and practices;
Importance of Corporate social responsibility
Corporate social responsibility is a business formulation that contributes to sustainable
development by delivering economic, social and environmental benefits for all stakeholders. It is
a commitment by the company where it assures to behave ethically and focuses on giving more
to the economic development (Amin, 2017).There are various benefits of the Corporate social
responsibility which are defined below:
Improves the public image of the company: If the company focuses and contributes to its
social responsibility than it helps in enhancing the goodwill and image of the company. As
everyone like those organisations who donates to poor or promotes that keep the environment
clean. This will lead to free publicity and organisation gets praised on different social media
sites.
More customer engagement: When the Rolls – Royce Plc has concentrated on Corporate social

responsibility that helped the organisation in increasing customers. As every person like those
organisations where there is an effort of making the world better.
Attract and retain investors: When a person invest in the company they like to see that there
money is being utilised in good work. So to enhance the investments in the organisation it should
focus on Corporate social responsibility. This will also increase the capital of the organisation so
that it can contribute in a better way towards the social things and complete its responsibility by
the same.
Happier employees: When an organisation do right things and focus on social responsibility it
makes the employee feel good that they are working for a good company. In context to Rolls –
Royce Plc, the employees of the organisation are more happy and works with higher dedication.
This will result in giving advantages to the company in increasing its productivity and efficiency.
Archie Carroll model of Corporate social responsibility
The basic concept of CSR is given by Archie Carroll as the “Pyramid of Corporate social
responsibility” and as per this pyramid every organisation has different social responsibility
which are classified under four categories.
Economic responsibility: In the first the author says that it is the most important and comes as
the first priority to be profitable. As every establishment get set up with a view to earn profits in
the future by the business they are running and making such hard efforts for it (Deasy and et.al.,
2016). So It is really important and prioritised at first aspect to be economic responsible.
Legal Responsibility: Now comes the second obligation of every company where it has to
follow and obey all the rules and regulations that are applicable on it for running the business. In
context to Rolls – Royce Plc, the organisation is complying with all the rules and regulations.
Ethical Responsibility: It is the duty of every company to act morally and ethically like they
should treat employees with respect (Lewis, 2015). It comes under the obligation which every
company should take care of.
Philanthropic Responsibility: Every human being should always think they should give back to
environment for what they are getting from it. Likewise, organisation should also have the duty
of taking care of society by fulfilling its responsibility towards it.
CONCLUSION
From the above report it has been summarised that innovation is also very important in
operations management of company. Operation department is the administration of business

practices in order to create the highest level of efficiency possible within organisation. In
addition to this, The basic aim behind the corporate governance is to increase the value of
shareholder in the long run. Other than this, If the company focuses and contributes to its social
responsibility than it helps in enhancing the goodwill and image of the company. Furthermore, it
will also help in attracting customers and investors.

REFERENCES
Books and Journals:
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Kljucnikov, A. and et.al., 2016. The entreprenurial perception of SME business environment
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Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Lewis, S., 2015. Qualitative inquiry and research design: Choosing among five
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Amin, A., 2017. An institutionalist perspective on regional economic development.
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Perry, P., Kent, A. and Bonetti, F., 2018. The use of mobile technologies in physical stores: The
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Pereira Cabral, B., da Graça Derengowski Fonseca, M. and Batista Mota, F., 2018. What is the
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