Contemporary Developments in Business and Management Assessment

This report examines the external factors influencing Rolls Royce and the importance of corporate social responsibility and sustainability in their policies and decision-making. It analyzes the political, economic, social, technological, legal, and environmental factors affecting the company and explores how CSR and sustainability can contribute to its growth and development.

Contemporary
Developments in
Business and
Management Assessment

EXECUTIVE SUMMARY
Due to the increase in globalisation companies need to examine all the internal and
external factors which can affect their survival in the market and also affect their profitability.
The companies which manufacture auto mobiles in UK are affected by various external business
environmental factors that exists in the country. These factors must be studied in detail so as to
gain a competitive advantage in the business. Also the businesses need to follow some themes so
that they can expand their business and increase their profits efficiently. In this report Rolls
Royce is taken which is a British company dealing in the manufacture of luxurious cars. In this
report external environmental analysis of Rolls Royce will be done along with an explanation of
theme which it follows to grow.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
External factors influence on organisation and their importance................................................4
TASK 2............................................................................................................................................7
Relevance and influences of CSR and sustainability on policies and decision making ............8
Critical analysis of the effectiveness of Rolls Royce's response...............................................10
Some areas for improvement....................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14
APPENDIX-I.................................................................................................................................15

INTRODUCTION
As the businesses are growing and expanding on the intentional levels due to
globalisation, they have to make some developments in their business and management so that
they can attract their targeted market and earn desired profits. For existing in the market
sustainably and to compete in the market it is important that the businesses analyse all the
internal and external factors which can affect their business so that appropriate decisions can be
made which will help it in dealing with the negative impacts (Alvarez, 2016). To gain a
competitive advantage in the market it is important that the organisations do an external analysis
so that effective managerial decisions can be made. For studying the contemporary business
developments Rolls Royce Motors Car Ltd. is taken which is a luxury auto-mobile
manufacturing company located in England, UK. In this report the impact of external business
environmental factors on Rolls Royce will be studied along with the response of company
towards them so that a competitive edge can be achieved which helps it in accomplishing its
goals and objectives. Further the importance of corporate social responsibility and sustainability
in reference to Rolls Royce will be studied so that it can survive in the car manufacturing
industry.
TASK 1
External factors influence on organisation and their importance
As the firms operate in business environment they are affected by various external
environmental factors which affect the way in which they operate, function and compete in the
market so that they can achieve their goals on time. The external factors cannot be controlled or
changed but can only be dealt with by making efficient decisions so that their negative impact
can be reduced while their positive impact can be taken to the advantage of company. PESTLE
analysis is the strategic management tool which helps the organisation in evaluating all the
external environmental factors in detail so that the policies of company can be changed in a way
which can help it to exist sustainably in the market (Anastase and Grigoruț, 2016).
PESTLE analysis of Rolls Royce :
Political: These are the factors which are affected by the change in rules and regulations
by the government of the country which affects the trade of company and the way in which it
formulates its policies. Some political factors which affect the country's policies are tax

regulations, trade tariffs etc. which affect all the businesses functioning in the country. Rolls
Royce which is a manufacturing company of luxurious cars is affected by the political situation
of UK and the decisions made by the government regarding trade policies create an impact on
the business of Rolls Royce. UK is politically stable which means that the rules and regulations
of the company do not change frequently. This creates a positive impact on the company as it do
not have to change its policies, strategies and decisions frequently which are difficult to be
implemented in a large company like Rolls Royce (Brewster, 2019). This also saves the cost of
implementing change across the complete organisation which helps it to keep the price of its
products stable thus influencing the customers with the same pricing strategies. Other political
factors which affect the company positively is that the UK government support the
manufacturing companies as they help in the development of country. This help Rolls Royce in
getting subsidies on the manufacture of cars and reduce the cost of manufacturing while
increasing the company profits.
Political factors thus play an important role in the operation of business as they create an
impact on the policies and decision-making of management of company. These factors are
important to be evaluated so that the company can take advantage of the positive effects of
political situation of the country so that it can grow and develop in the competitive marketplace.
Economic: These are the factors which relate to the economic condition of the country
which creates an influence on the purchasing power of the people and also creates an impact on
the sales of the company offerings. Some of the important economic factors of the company are
its GDP rate, rate of unemployment, standard of living, inflation rate, interest rates, banking
policies etc. These factors create an impact on the sales of company as the economic situation of
the company defines the affordability of the society (Butt, 2020). Rolls Royce deals in luxurious
cars which mainly aims at the premium customers who can afford expensive cars. This means
that people must be able to afford the premium priced cars of company. UK has a stable
economic condition and the people have high standard of living which means that in order to
create an image and to be considered as high society, people are ready to purchase premium
products of the company. Also the unemployment rates of the company are low which means
that the people have high purchasing power and can afford high priced products.
Economic factors are important be analysed as it determines the value of products a
company can offer in the market depending on the affordability of the products. Also the

customer demand of products in the market can be known which helps the company in
estimating its profit in the market. Also the bank interest rates and inflation of the country can
affect the buying behaviour of customers which affect the business sales and profits.
Social: These factors are related to the type of people who constitute a society and
determines the buying behaviour of the people. The religion, culture, sex, age etc. determine the
composition of the society and also creates an impact on the buying behaviour of customers. The
society of UK is composed of people belonging to multiple religions and culture and they are
also highly advanced with a continuous change in their taste and preferences (Chen and et. al.,
2015). Rolls Royce offers premium priced, highly featured and expensive cars to its customers
and the people of UK have high standard of living which makes the product of company
successful in UK market. This helps it in providing its customers with a variety of products
which can be afforded by them and fluctuation in prices do not affect their buying behaviour.
Thus the socio-cultural composition of UK is favourable for the company which can help it to
grow and develop in the market.
Social factors are important for the company because the profits of the company depends
on customers who are ultimately influenced by the society in which they live in. it also help the
company in determining the demand of company products so that it can continue to expand in
the market which can help it in achieving its goals and objectives on time.
Technological: These are the factors related to the technological advancement of the
country and the rate at which R&D is promoted in the country so that innovations can be brought
in technology which can help in the development of the country. UK is a technologically
advanced nation which means that all the new and modern technologies are available in the
country. This also means that the businesses can easily acquire these techniques at cheaper rates
which can help them in their growth in UK market (Cordeiro and Tewari, 2015). Rolls Royce
can be benefited from the technological advancement of UK which can help it in modifying its
cars and upgrading it with unique and advanced features which can make their cars highly
advanced and luxurious. This helps the company in adding value to the cars thus increasing the
worth of customer's money thus creating loyal customers and attracting more customers in the
market. The technological advancements also help the company in manufacturing the cars at
lower costs by simplifying the processes and activities of the company thus reducing company
costs. It helps in increasing the profits of company.

Technological factors are important for the company as it helps the company to make use
of these technologies so that they can add advanced features in their products so that a
competitive edge can be achieved in the market. Also with technology a company can invest
more in R&D which can help it to improve its products thus giving more customer satisfaction
which will help it to increase the profitability of company.
Legal: These are the factors which re related to the legal system of country and the laws
that operate in the country which governs the policies and decisions of company so that their
activities can fall under the legal framework of the country. The employment laws, auto-mobile
laws, safety rules, intellectual property laws, data protection laws etc. all comes under the legal
pursuit and must be followed by the companies so that they can perform their business activities
legally (Gause, 2016). In UK companies need to strictly follow all the rules and regulations so
that they can work deficiently in the market without getting involved in any illegal activities. The
laws in UK regarding manufacturing sector are favourable which means that Rolls Royce do not
have to face many difficulties in going along the legalities of country.
Legal factors are important for company as it helps in making the activities of company
legal and helps the company in gaining support from all its stakeholders. This factor is thus
important for its growth as the company can win loyalty of customers thereby increasing the
profitability of company.
Environmental: These are the factors related to the environment of a country which
affects the availability of resources for company and also affect the company policies and
strategies depending on the environmental protection laws of a country. Due to the increase in
pollution and increased usage of natural resources, UK has taken part in many environment
protection treaties which means that the businesses of UK needs to follow these treaties so that
minimum harm is caused to the environment (Günther, Kannegiesser and Autenrieb, 2015).
Rolls Royce thus needs to manufacture such cars which do not create pollution or cause harm to
the environment so that it does not face any opposition from the customers or government which
can affect company's image.
TASK 2
Corporate Social Responsibility and Sustainability of Rolls Royce
It is defined as a self regulating model of business which assist a firm to be socially
accountable towards itself, stakeholders as well as public. Being a social responsible a business

can enhance their brand image and grow or develop in order to sustain for a long time period.
The social responsibilities authorise workers in order to leverage corporate resources and they
can able to increase employees morale as well as lead towards the high level of productivity.
Relevance and influences of CSR and sustainability on policies and decision making
The Rolls Royce motor car company is an everlasting expression of exceptional and it is
exclusive producer or manufacturer of branded cars. It is the British luxury automotive
manufacturer which was founded in 1998 and headquartered in England, United Kingdom which
basically deals in the manufacturing as well as distribution areas across the entire globe
(Hammer, 2015).
Relevance of CSR and Sustainability with Rolls Royce company:
This company is vast in nature so has a large number of customers, buyers, suppliers and
so on and they all have strong and loyal relationship with the Rolls Royce brand. In order to
maintain long term relations and sustainability the company need to develop their corporate
social responsibilities in order to satisfy them effectively as a result of these they can able to gain
maximum customer satisfaction along with the long term sustainability.
Influences of CSR and sustainability on policies and decision making of Rolls Royce:
There are several factors which influence on the policies, decisions and management of
Rolls Royce Motor car. So that company needs to consider corporate social responsibilities as
well as sustainability strategies in order to get huge growth and development. These influences
are as follows: Customer influences: As customers are termed as a king of market that make their own
decisions regarding buying of goods and services of all company's. They mainly
considered the high quality, low price, environment friendly as well as ethical
consideration while making purchasing decisions which will largely influenced by the
brand value and goodwill of company. The Rolls Royce company can make large base of
customers by formulating marketing strategies by considering the advantages of
customer's and adopts appropriate CSR activities (Kolios, Read and Ioannou, 2016). Investors influences: Social activities of Rolls Royce help investors in order to making
decisions regarding the investment in company so that they are termed as a most
influencer for an organisation. As social activities assist a company for acquiring best
amount of investment from external parties as well as help investors to make appropriate

decision regarding their investment. Thus, the company Rolls Royce formulate their
marketing activities and decisions clearly which will help investors to make appropriate
decisions so that company' automatically gain high sustainability. Employees influences: As workers are considered as an important part of organisation
that lead the organisational success at a wide range. In Rolls Royce Motors car,
employees are the important stakeholder as they influences on productivity as well as
distribution of products. So it is considered that workers highly influence the decisions
and policies of Rolls Royce by which a business require to make them satisfied for their
betterment as well as sustain leading position in the marketplace. In order to satisfied
company's employees the management need to formulate such kind of decisions and
policies that are socially accountable for workers and they feel happy or satisfied and
highly engaged in working performance to gain high growth and sustainability (Lambert,
Browne and Michaelides, 2015). Self influences: While a business get huge level of involvement then the company Rolls
Royce indirectly have a large influences of self in the auto-mobile market and socially
covered a detailed introduction regarding customers. This will assist in formulating
appropriate policies, management and effective decisions also by means of their self
control. By considering CSR activities company can able to generate more innovative
concepts and ideas which helps company to get huge opportunities and gives sustainable
growth and development. Competitors influences: Most of the businesses plans or prepares policies and strategies
for their operational activities by considering the competitors because they are the main
threat of companies. While Rolls Royce Motors highly involved in corporate social
responsibilities for the betterment of society and community then these things of social
activities make them unique or different from their competitors. This will help in taking
competitive advantages in marketplace and sustain for longer period of time in a
competitive marketplace (Mohd Fuzi and et. al., 2017).
 Public influences: Within businesses, media is considered as one of the most influencing
component that effects all type of business across world. As the image of business
depends on the positive or negative factors that directly leads the failure or success of
organisation. While the company Rolls Royce operates any corporate social

responsibilities in their operations that means the information about social activities
spread all over the areas that helps in auto promotions of cars as well as increase their
customer base through the positive note. As these social activities are more essential as
well as influential to the company's management, policies and decisions.
Critical analysis of the effectiveness of Rolls Royce's response
The company Rolls Royce is highly responsive towards the corporate social
responsibilities and sustainability for the public and themselves. Few of the responses of Rolls
Royce towards CSR and sustainability along with the effectiveness are discussed below: Charity and community development: As the company Rolls Royce creates better,
positive and strong relationship with the general public or stakeholders by developing
some form of charitable activities. As the company Rolls Royce promotes their goods
and services in the market by doing or considering several activities related to the
community development which includes raising social awareness among people through
organising campaigns on the social topics or subjects (Okpaluba, 2015). Green business: Company pay their concentration towards making green industry by
including CSR activities in their businesses. As all know about that day by day entire
world is getting warming, so Rolls Royce need to make appropriate strategies, policies
and decisions towards the development of green business within time. As they focused
on keeping society safe, clean as well as non populated by means of automotive vehicles.
If society is getting populated by industries or companies then they will be created
negative message in media against business which will highly influence on the reduction
of customers by putting questions on the consideration of social as well as ethical
responsibilities. By doing social consideration or response in the favour of society helps
in increasing the company's goodwill and create a strong belief within the market
(Renwick, 2018). Priorities customers and keep communicating: The company Rolls Royce know that
customers are important community towards their success and growth as they can easily
change the position of business in few minutes. So that customer is the foremost
consideration for the improvement of organisation in order to make beneficial and
attractive. They continuously focus on facilitating best solutions as it requires to

anticipate opportunities as well as challenge which will face by customers. This will help
in developing better customer relationships and effective interaction with them. Ethics and compliances: The company Rolls Royce Motors sets high standards towards
ethical behaviour as well as properly compliances with rules and regulations that are
necessary in order to protect company' reputation as well as long term success and
growth. As the company committed to conduct entire activities in an ethical way as well
as these are free from the corruption or bribery. Reducing wastages: The automotive industry produce wastages while manufacturing
and distributing products and services which creates adverse impact on the company as
well as environment. So the company Rolls Royce prepare themselves about facing
wastages derived from such industrial activities and take significant steps towards
minimising such wastages. The company also works with the European union in order to
make or reducing industrial wastages for the improvement and betterment of public
(Russo-Spena, Tregua and De Chiara, 2018). Employee betterment: As all knows that workers are the main driver of business success
so the company Rolls Royce response effectively towards the betterment of them by
facilitating adequate training, salary, bonus, accommodations and so on. These activities
makes community pleasant because of their caring towards employees or operates
business functions from their local community so the firm is able to get sustainable
development. Minimising unemployment: The issue of unemployment become most concerning
across the world so companies need to be focused on that in order to minimise
appropriately. As the company Rolls Royce maintain strong relations with the
government for the improvement as well as betterment for future in order to finds
attractive benefits to the community from this well beings.
 Solve customer complaints: It is termed as an superior response of Rolls Royce
company towards corporate social responsibilities. As the company solves all issues and
complaints by providing appropriate compensation and recovery for the well beings of
customers instead of say sorry which is not enough at all. It is considered as an ethical
attitudes of company that helps in comfort customers and make them happy which will

assist in increasing the demand of products and company can able to sustain for the
longer period of duration within the market.
Some areas for improvement
Rolls Royce is a company which follows CSR policies so that it can make all the
stakeholders fully satisfied which help it in creating value for its customers along with gaining
their loyalty towards company. This help the company to spread its business across national
borders so that it can become a leading business in the auto-mobile manufacturing sector and can
increase its profits. The company also contributes positively towards the UK economy as it help
in providing employment opportunities, contributing towards the GDP of country, enhancing the
living standard of people, creating value for customers etc. All these factors help the company in
receiving support from UK government which has contributed towards its growth. There are
some areas where improvements can be made which can help it in becoming more responsible
towards its stakeholders. Some of the areas where improvements can be made are:
 As the company price its products at high rates it becomes difficult for all the income
groups to be able to afford its cars. This makes it difficult for the company to offer its
products in other markets. This restricts the company to expand its business in areas
where the economic conditions of the country are not good and the purchasing power of
people is low.
 The company needs to hire more employees from local community so that the social
responsibility of the company towards society can increase which will help in gaining
more support from the society hence the CSR responsibilities of company will be
completely applied.
 The company can also increase their concern towards the remote community and give
them some percentage of employment in the company so that they can be uplifted in the
society which can help in making their conditions better. This help the company to
ethically implement CSR in its policies.
 The company can start manufacturing electric vehicles so that environmental pollution
can be reduced along with a reduction in the consumption of fuels. This help the
company in following its CSR responsibilities in an efficient manner.
 The company needs to include ethical practices related to manufacture of cars along with
following all the laws of country so that it can work under the legal framework of country

and can attract more customers and employees towards the company so that the sales of
company can increase.
CONCLUSION
From the above report it can be concluded that businesses while working in a business
environment are affected by various external factors which can be analysed by the use of
PESTLE analysis so that the positive and negative impact of all these factors can be evaluated.
This helps the business in determining how to take advantage of positive factors while make
changes in policies so that the negative effects can be reduced. Also in the modern world where
businesses develop they need to follow some themes so that they can remain sustainable in the
market and can competitively grow in the market. CSR helps the company in making its
activities legal and ethical which helps it in gaining support from all its stakeholders which is
important for the survival of the company in marketplace.

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APPENDIX-I
Organisation profile
Rolls Royce Motors Cars Ltd. is British car manufacturing company renowned for its
supreme quality and highly luxurious car models. The company is wholly owned subsidiary of
German group BMW and was established in 1998 when BMW got the license of using brand
name and logo from Rolls Royce plc. The company operate its functions from purpose built
administrative and production facilities located in England, UK. The company thus focus its
products on high income groups who can afford the premium priced vehicles offered by the
company. The premium pricing policy of company helps it in making a loyal customer base
along with providing them with the most advanced features so that high value can be created for
customers.