Understanding Innovation & Technology and its Impact on Business Environment

This report discusses the importance of innovation & technology in the business environment and its impact on profitability and growth. It also evaluates the importance of corporate social responsibility for the organization and suggests the application of Archie Carroll's CSR model. The case study focuses on Lloyds Bank PLC.

Business Environment

EXECUTIVE SUMMARY
This report is based upon Lloyed Bank Plc which is one of the largest banks all around the
world. In order to enhance profitability and sales it is very important for the business entities to
adopt new technologies so that it can help to attain growth in future. All the companies are
required to take part of CSR activities for the purpose of increasing employee engagement and
attain a good market image. The organisation is recommended to apply Archie Carroll's CSR
model so that it can fulfil all the main responsibilities of it.

Contents
EXECUTIVE SUMMARY.............................................................................................................2
Contents...........................................................................................................................................3
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1. Illustrate understanding of innovation & technology along with its impact...........................1
2. Practical illustration with respect to impact created by technology & innovation..................2
TASK 2............................................................................................................................................3
Evaluation of importance of corporate social responsibility for the organisation.......................3
Application of Archie Carroll's CSR model to the organisation.................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business environment refers to aggregation or gathering of internal as well as external
factors like customer’s needs & anticipations, employees, suppliers, owners, innovation within
technology, market trends, economic changes, etc. These factors are liable for affecting the
functioning of firm and ways in which they work either indirectly or directly (Al-Jabri and
Sohail, 2012). The market in which business delivers their services creates a huge impact on the
way’s operations are being carried out by them. This report is based Lloyds Bank which is a
British commercial and retail bank. It is a public limited company which deals within financial
services and was founded by 1765. This report comprises of innovation and technologies which
are being used by specific firm to deal with changing demands of the market. Along with this,
impact of these has been illustrated. Furthermore, significance of CSR will be evaluated and
Archie Carroll’s pyramid is mentioned.
TASK 1
1. Illustrate understanding of innovation & technology along with its impact
Innovation & technology
The process of transforming an invention or idea within services or goods which renders
value for which consumers will pay is referred to as innovation. It is seen as application which
will furnish enhanced solution by which altering needs of probable customers as well as market
can be accomplished (Bos, Kolari and Van Lamoen, 2013). The systems, devices and methods
which are the outcome of scientific knowledge that is utilised for practical purposes are defined
as technology. Basically, it denotes aggregation of processes, methods, skills and techniques
which can be utilised for production of services or goods that will enable to attain objectives.
Instances of ways in which innovation & technology have contributed in economic
growth
Information Communication technology is one of the growing industries as well as bring lots of
innovations along with job opportunities. Around 6.8 billion people have opted for mobile
subscription and near about 40% are online. The competitiveness of economy depends on
leverage which has been given with respect to new technologies (Chava and et. al, 2013).
Economic effects which are being created by technology as well as innovation have been
mentioned below:
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 Creation of jobs: It is one of largest sector which renders highest rates of employment.
For an instance within UK near about 22% of growth will be there as new job
opportunities will be created. Entrepreneurs comes up with new idea and by making
appropriate use of technology, idea is turned into a venture which thereby leads to furnish
job opportunities to individuals of country.
 Contribution within GDP growth: It has been confirmed that there has been affirmative
impact on growth with respect to technology and innovation (Frame and White, 2014).
For an instance, 10% of enhancement within broadband penetration is related with 1.4%
increase in GDP. Much of the effects are being created by e-commerce.
These are few points which illustrates that both technology and innovation leads to
creation of positive impact on economy of country.
Ways in which firms make use of new technologies
Technology is brought in for acknowledging problems that are being faced by firms or for
having an opportunity for growth. It can be utilised for rendering enhanced customer care
services (like automatic mails or messages can be sent for general queries which are being asked
by customers), increase in production (such as automation of some manufacturing processes),
management of workforce (internet can be used for recruiting individuals), improved business
communication (emails, text messages mobile phones), enhancement within marketing activities
(promotions can be carried out through usage of social media) and there exist many other aspects
in which firms make use of technology for making their operations easier (Liao and et. al, 2012).
2. Practical illustration with respect to impact created by technology & innovation
Overview of Lloyd’s Bank
The bank was founded in 1765 in Birmingham by Sampson Lloyd and John Taylor. It
deals within financial industry and products offered by them include insurance and banking.
They have their operational headquarters within London and their other offices are present in
Scotland and Wales. It is one of the largest retail banks within Britain as well as comprises of
huge network of ATM and branches in Wales and Scotland. Along with this, they render them
customers with a support for 24*7 and online banking services.
New technologies utilised by Lloyd’s Bank
The Bank has signed a new deal with Optal who are liable for rendering business to
business transactions. This will enable them to offer their commercial banking customers with
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new services. A transparent as well as streamlined method for payment will be provided which
will aid them eliminates the barriers associated with traditional methods for accepting card
payments. This will lead them to optimise the benefits associated with working capital and will
also expand the number of suppliers to whom their clients can make payment (Nor and
Pearson,2015). Lloyds Banking Group (Lloyds) has made strategic partnership with Thought
Machine which is a innovative fintech company. This has been done for accelerating the digital
transformation of the bank’s business. The thought machine team has developed a code for vault
in past three years by making use of recent software engineering techniques for simplification of
operational and technical complexities related with banking. Along with this, emphasis is laid on
reliability as well as security aspects while making transactions.
Comparison in between sales & profits of firm before as well as after modification in
method used
Before implementing the new technology, the profits and sales of the organisation was
moderate and there was not a boom in the increment of it. For the purpose of enhancing
profitability the management in Lloyds Bank PLC planned to use innovative technologies so that
all the operational activities could be performed appropriately. The enterprise signed a deal with
Optal which is responsible to record business to business transaction. With the help of it the time
of performing different activities to record such types of transactions was decreased and it has
facilitated the company to accomplish its goals in less time. It was the first benefit of innovation
to Lloyds Bank PLC. Due to this the sales and profits of the organisation were increased and a
sudden growth in them is recorded by management. The costs of implementing them is very high
but all of were recovered by the enterprise in less time with the help of innovative technology.
Innovative techniques have also facilitated to receive payments quickly and made banking easy
for customers. The card transaction in 2019 in UK are increased by 10% which are helped the
bank to enhance its revenues and profits massively (Increment in sales and profits after
implementing innovative technology, 2019).
TASK 2
Evaluation of importance of corporate social responsibility for the organisation
Definition of corporate governance and corporate social responsibility
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Corporate governance can be defined as a system which consist different types of rules,
regulations, practices and processes focused by legal authorities of different countries to guide
the organisations to perform all the business operations in ethical manner. With the help of of
business entities such as Lloyds Bank PLC are governed to execute operational activities in
systematic manner. Main role of it is to establish a system through which an organisation can be
controlled and directed. It facilitates the company to set strategic goals and objectives so that all
of them could be achieved in systematic manner. There are four main elements of corporate
governance which are required to be focused by the bank. These are accuracy, accountability,
security and accountability of all the data which is recorded in the final accounts of organisation.
Corporate social responsibility can be defined as the contribution of business entities in
societal welfare. With the help of it companies can establish a positive image of them in the
market. According to governmental regulations it is very important for all the private and public
organisations to make contribution for social welfare from annual profits. Lloyds Bank PLC
contributes a fixed percentage of its profits for development of society which is facilitating it to
establish a good market image (Eling and Schaper, 2017). It is benefiting the enterprise by
representing a positive reflection of it in front of stakeholders such as investors, customers,
creditors etc. CSR activities of the entity are beneficial for it as with the help of them the
management within the organisation try to fulfil requirements of all the internal as well as
external stakeholders.
Brief history of corporate governance in the UK
For all the companies it is very important to make sure that all the operational activities
of them are performed according to rules and regulations of government as it can help them to
establish a positive market image. Corporate governance of UK is incorporated in year 1998 and
since then it is directing all the companies which are mainly established in United Kingdom to
operate their business in legal way. In order to manage risk, control internal activities of
organisations etc. it is very important for entities to work according to it (History of corporate
governance of UK, 2019). There are various large as well as small companies in UK such as
Cadbury, Lloyds Bank PLC, etc. which are following all the guidelines of corporate governance
to execute operational activities. Main purpose behind the compilation of all the requirements is
to reduce possibility of governmental interference in business activities.
Importance of CSR for organisations
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CSR is important for any organisation because of various reasons. Discussion of some of
them is as follows:
Increasing employee engagement: The activities of CSR strengthens bond within
manpower as with this concept they develop habit to work in coordination and collaboration so
that they can achieve goals together. This develop a sense of togetherness and engagement with
workings so that they can also overcome all the social obligations. In context to Lloyds Bank
PLC, it is significant to perform CSR activities so that they can increase employee engagement
in which employees enjoy executing tasks in prompt manner. They feel prouder when they
achieve common objectives through coordination and integration with others due to which their
engagement with all the operations of the company gets more and more strong.
Gaining advantages against rivals: When an entity embraces CSR, they usually stand
out from the pertaining rivals in the industry. They establish themselves as an entity that is
committed to take various steps considering environmental as well as social factors. This concept
improves business profit margins, allows companies to nurture their assets including trust with
reputation and improves organisational dynamics (Hamilton and Webster, 2018). The managers
of Lloyd Bank Plc make various contributions towards improving community along with
provides solutions for various social problems that distinguish the entity from the other
companies residing in the market. Through this, respective firm enjoys the benefits of distinct
image than their competitors that improves their brand image as well as position in the market.
By making contribution in corporate social responsibility the organisation can acquire
various benefits which will help it to generate higher profits. It is also very important to make a
good public image so that an organisation can generate benefits for betterment of business.
Application of Archie Carroll's CSR model to the organisation
In order to describe the CSR responsibilities of an organisation Archie Carroll's CSR
model could be applied by the managers. It is a type of theory which guides companies to
analyse the reasons behind making contribution in CSR (Okeyo, Gathungu and Peter, 2016).
With the help of it the way in which the level of CSR could be met by entities could also be
assessed by enterprises. While performing activities which are related to it, it is very important
for organisations to make sure that all the rules and regulations are fulfilled by them or not.
There are various element of this model and all of them should be taken in to consideration by
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Lloyds Bank PLC so that a positive market image could be established. All the components of it
are as follows:
Economic: Major factors which should be considered by companies in regards to this
element are as follows:
 According to economic responsibility the main goals of an organisation should be related
to generation of profits.
 It also states that by generating profits a company can achieve sustainability for itself.
Legal: All the legal factors which are required to be focused by organisations according
to the model are as follows:
According to this responsibility an organisation must comply with all the legal implications so
that business could be operated in systematic manner (Uzkurt and et. al, 2013). Some of the rules
and regulations are employment law, health and safety at workplace etc.
Ethical: The discussion of major ethical factors required for appropriate business
execution is as follows:
 This responsibility of business organisations states that all the companies should make
sure that the operations which are performed by it are ethically right.
 For all the enterprise it is vital to follow ethics while executing business around the
world.
Philanthropic: The responsibilities which are required to be performed by entities for
development of society are as follows:
 This responsibility is related to working for betterment of society in which companies are
suggested to spend a specific percentage of profits for societal development.
Lloyed Bank Plc is fulfilling all its corporate social responsibility as its main objective is
generating profits so that it can attain competitive advantage and sustainability for business. The
management in the company try to achieve all its long-term goals by performing all the
operational activities according to law (Reyes, Roberts and Xu, 2017).
. All the rules and regulations such as employment, fair remuneration etc. are followed by
the bank. For the purpose of performing all the business activities in ethical manner the
managers within the organisation keep record of all the operations and then make sure that
these are not harming the society. The enterprise is also fulfilling its philanthropic
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responsibilities as the organisation is also making contribution for societal welfare. A fixed
percentage of it is invested by the management for development of society.
CONCLUSION
From the above project report it has been concluded that business environment is the
combination of all the external factors which are influencing operational as well as executional
activities of an organisation. In order to reach all the long-term goals, it is very important for
companies to adopt latest technologies. With the help of it, profitability and sales could be
increased which may result in higher growth of business. In order to establish a positive market
image, it is very important for large as well as small organisations to make contribution in
corporate social responsibility activities. It may help business entities to generate different
benefits such as higher profits etc.
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REFERENCES
Books and Journals:
Al-Jabri, I. M. and Sohail, M. S., 2012. Mobile banking adoption: Application of diffusion of
innovation theory. Journal of Electronic Commerce Research, 13(4), pp.379-391.
Bos, J.W., Kolari, J.W. and Van Lamoen, R.C., 2013. Competition and innovation: Evidence
from financial services. Journal of Banking & Finance, 37(5), pp.1590-1601.
Chava, S. and et. al, 2013. Banking deregulation and innovation. Journal of Financial
Economics, 109(3), pp.759-774.
Frame, W.S. and White, L.J., 2014. Technological change, financial innovation, and diffusion in
banking (pp. 1-5). Leonard N. Stern School of Business, Department of Economics.
Liao, S.H. and et. al, 2012. Relationships among organizational culture, knowledge acquisition,
organizational learning, and organizational innovation in Taiwan's banking and insurance
industries. The International Journal of Human Resource Management. 23(1). pp.52-70.
Nor, K.M. and Pearson, J.M., 2015. The influence of trust on internet banking acceptance. The
Journal of Internet Banking and Commerce, 2007.
Uzkurt, C. and et. al, 2013. Role of innovation in the relationship between organizational culture
and firm performance: A study of the banking sector in Turkey. European Journal of
innovation management. 16(1). pp.92-117.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
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.
Okeyo, W. O., Gathungu, J. and Peter, K. O., 2016. Entrepreneurial orientation, business
development services, Business environment, and performance: A critical literature
review. European Scientific Journal October 2016. 12(28).
Reyes, J. D., Roberts, M. and Xu, L. C., 2017. The heterogeneous growth effects of the business
environment: firm-level evidence for a global sample of cities. The World Bank.
Online
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Increment in sales and profits after implementing innovative technology. 2019. [Online].
Available through:<https://www.lloydsbankcardnet.com/content/pdf/innovation-in-payments-
report.pdf>
History of corporate governance of UK. 2019. [Online]. Available through:
<https://www.frc.org.uk/directors/corporate-governance-and-stewardship/uk-corporate-
governance-code/history-of-the-uk-corporate-governance-code>
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