Contemporary Developments in Business and Management

Contemporary Developments in
Business and Management

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Overview of an external influences towards which an entity is subjected to and explaining
relevant significance of each and every external influence to an enterprise................................3
TASK 2............................................................................................................................................6
a. Analysing significance of CSR practices and its influence on policies and process of
decision making in company.......................................................................................................6
b. Evaluating effectiveness of an organizations response............................................................8
c. Demonstrating some areas of improvement with response to an entity ...............................10
CONCLUSION..............................................................................................................................12
REFERENCES................................................................................................................................1

INTRODUCTION
Contemporary development in a business organization relates with making an analysis of
an external factors that influences functioning of company and importance of sustainability
practices for an organization operating in a highly competitive world and industry. This report is
based on Volkswagen group, a biggest Auto-mobile manufacturer, headquartered in Germany.
Volkswagen has been founded by German government in the year 1937 and is been rewarded for
producing a mass low priced car for People. Furthermore, this study presents an impact of
external factors on business operations of company. Moreover, it also highlighted major CSR
practices adopted by the firm and specifying an areas in which an organization need to make
further improvements.
TASK 1
Overview of an external influences towards which an entity is subjected to and explaining
relevant significance of each and every external influence to an enterprise
Volkswagen is counted as an international Auto-mobile corporation of UK. Therefore it
is impacted by several external influences in operating within Auto-mobile Business that are as
follows-
Political factors- It is a major factor that plays an important role and has a great impact
on profitability of an automotive industry. It relates to government regulations along with the
stability and instability of government within a country (External factors, 2018). Overall, there
exist several political factors that directly affects an auto-mobile industry that involves changing
regimes of the government in addition with political market regulation that causes favourable or
an unfavourable fluctuations within a time frame. This factor seems as crucial in internal
business area that is starting from an international trade relations to foreign supply chain and a
manufacturing partnerships.
Volkswagen having their own supply and a distribution network across the globe. Supply
chain of company is located over the several market and regions in which political stability is
counted as essential for Volkswagen in running its operations in a successful manner. However,
political state of an Asian markets seen as good during recent years that leads to the faster
growth of an automotive brands. This results in rising demand pertaining to Volkswagen
products within these regions. an other political changes such as Brexit created an uncertainty
situation that gives rise to difficulties for Volkswagen.

Economic factors- This type of factor has a great effect on business as it includes
fluctuations in currency rates, changes in disposable income of a consumers which results to
increase and decrease in demand of Volkswagen products. The world had seen recession period,
in which demand towards vehicles had been declined and as a major brands under auto-mobile
industry had to go for a bailed out by government so that they do not faces bankruptcy.
Economic fluctuations in various markets & currency fluctuations resulted a toll on the revenue
and net profits of an organization.
Therefore, due to this, operating revenue or sales of Volkswagen has largely affected
because demand for its vehicles had declined (Zinovieva and et.al., 2016). As an economy
returned or overcome from the recession, revenue and sales of an entity had grown, however,
currency fluctuations highly affected to profitability. Volkswagen survived blow from a diesel
scandal which resulted to surging of the sales again. Higher level of an economic activity in
majority of markets had played an important role for Volkswagen in achieving higher profits
and the sales.
Social factors- At present, scenario of market is highly influenced by social factors with
respect to evolving lifestyle of people, changing trends and preferences of customers etc.
Therefore, in auto-mobile industry, every year, a new models are been released by keeping the
preferences of people as priority. Moreover, particular styles are been preferred in various
cultures as in some of the markets, SUVs are higher in demand while, in other market sedan
may be preferred. Social forces plays a significant role in growth of business industry in 21st
century.
Volkswagen group is having various brands that are well perceived that involves
Lamborghini, Porsche, Audi, Buggati. On other note, there are some of Volkswagen brands
which seems as less appealing to Customers like Seat, Skoda. This indicates that because of the
change in the trend, it is important for Volkswagen to update its sales strategies in relation to its
brands that are seen as very less appealing for Customers. Now-a-days people are very much
interested in the sustainable products and sales of an electric vehicles tends to be kept as rising.
Moreover, disposable income of Customers also has a great impact on the demand of
Volkswagen's product as presently, an income of the consumers is low so this poses an adverse
effect on the sales of company. This in turn leads to lower profitability and as company is