Contemporary Developments in Business and Management: A Case Study of Royal Mail

This assignment examines the external and internal factors influencing the business operations of Royal Mail, a leading postal service provider in the UK. It analyzes the company's response to corporate social responsibility and sustainability, critically evaluating its effectiveness and identifying areas for improvement. The study utilizes PESTLE analysis, Porter's Five Forces, and a detailed examination of Royal Mail's CSR framework and environmental policies.

Contem
porary
Develop
ments in
Business
and
Manage
ment
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Table of Contents
Introduction...........................................................................................................................................3
Task 1....................................................................................................................................................4
Give a brief overview of the primary external influences to which the organization is subject and
briefly explain the particular importance of each to the organization..............................................4
Task 2....................................................................................................................................................8
(i) Analyse the relevance of corporate social responsibility and sustainability to Royal Mail and
how it influences the policies and decision making within Royal Mail..............................................8
(ii) Critically evaluate the effectiveness of the organization’s response..........................................10
(iii) Demonstrate some areas for improvement in the response of the organization......................13
Conclusion...........................................................................................................................................15
References...........................................................................................................................................16
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Introduction
The internal and external environment has a significant impact on the business operations of
the organizations. These impacts can be both positive as well as negative. The business
environment of an organization consists of many factors including political, economic, social,
technological, environmental and legal which can have a great influence on the business
activities. The internal environment of the business consists of organizations culture, its
working environment, its policies, its people and their skills. Therefore, both internal and
external environment are of great importance for each and every business organization. It is
being observed that the external environment of a business affects its internal activities while
the internal environment has an impact on its external activities. The following assignment is
based on the study of the various external and internal factors that have an impact on the
business activities.
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The organization we have considered here is Royal Mail. Royal Mail is one of the most pre-
eminent delivering services of UK which is serving the people of UK for than 500 years. In
the following assignment, we will study the various external and internal factors that
influences the business operations of the Royal Mail. This will be done by doing the PESTEL
analysis of the company and Five Force Analysis of the company. In the second part of the
assignment, we will focus on the strategic analysis of the Corporate Social Responsibility of
the Royal Mail.
Task 1
Give a brief overview of the primary external influences to which the organization is
subject and briefly explain the particular importance of each to the organization.
Royal Mail is one of the most pre-eminent postal service and Courier Company operating in
UK. The company was established in UK in the year since more than 500 years. The letters
and parcels to most of the addresses in UK are delivered by the Royal Mail than those of by
other competitors of the company together. The company works on the slogan “One price
goes anywhere” and delivers letters and parcels to more than 30 million addresses in UK,
working for six days in a week except for Sundays and bank holidays.
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Royal mail has changed the way the world communicates by providing its services to UK for
more than 500 years. It is one of the major contributors in the economy of UK. Among all
UK corporations, the contribution made by Royal Mail in UK’s economy is on the fifth
position (Royal Mail Group, 2018).
The letters and parcels are collected from more than 87000 businesses in UK and gets
collected in more than 113000 post boxes and 14300 post office branches of the Royal Mail
in UK. Royal Mail then processes these letters and parcels through 70 mail centres and 8
regional distribution centres. The company has 3000 delivery offices in UK.
(Source: https://twitter.com/royalmailstamps)
External Influences: There are many external factors influencing the working of Royal
Mail. It can be better understood through the PESTLE Analysis and Through Porter’s Five
Forces as explained below:
PESTLE Analysis: Pestle analysis helps in understanding the impact of the macro
environment on the Royal Mail and the challenges it is going to face because of them.
Following are the factors:
 Political Factors: Political factors are very crucial for determining the long term success
of Royal Mail. As Royal Mail is operating in Industrial Goods and Services industry in
many of the countries. Therefore it is open to various political risks. Therefore, it should
analyse following before entering any new market:
o Level of corruption prevailing in the country
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o Pricing regulations
o Political stability of the country in which it is planning to enter
o The importance of Industrial goods industry in the economy of the country
 Economic Factors: The economic factors like the rate of inflation, interest rate, foreign
exchange rate, savings rate etc. greatly affects the functioning of the Royal Mail. These
factors can be used by Royal Mail in order to determine the future growth of the
organization while considering the following:
o How much is the intervention of the government in the industry
o Education level in the country
o Stability of the currency of the country
o Labour costs
o Rate of unemployment
 Social Factors: The culture of the Royal Mail is greatly influenced by the culture of the
society and the way things are done in that society. In addition to this, the marketers of
Royal Mail are greatly influenced by the shared beliefs as well as the population’s
attitude. Therefore, they should consider the following:
o The level of skills of the population
o The nature of the society as well as the entrepreneurship spirit prevailing in the
country.
o Demographics
o The level of living standard of the population
 Technological Factors: technology is advancing at a very fast pace and therefore its
impact on the business operations of various industries including Royal Mail is also
increasing day by day. Therefore, it is required that Royal Mail must do the technological
analysis and the speed analysis at which the technology is changing by considering
following points:
o Recent developments due to advanced technology by competitors in the market
o The impact of technology on the Royal Mail’s Services
o The impact of technology on its cost structure (Godella, 2015).
 Environmental Factors: The profitability of the Royal Mail organization greatly
depends on the environmental factors and the environmental standards. The different
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environment laws of different countries also impact the functioning of the Royal Mail.
Therefore, these environmental factors should be considered by Royal Mail:
o Laws related to waste management by various industries.
o Laws related to air and water pollution in relation with different industries.
o Weather of the country
o Climate Changes in the country
 Legal Factors: The various rules and regulation policies of a country has a great impact
on the functioning of the Royal Mails. For example: The laws related to the protection of
the intellectual property must be prevalent in order to ensure smooth functioning of the
organization. Therefore, before entering into any new market, the following legal factors
should be considered by the Royal Mails:
o Various laws related to employment
o Anti-trust laws in the industries
o Data protection policies
o Laws related to health and safety of workers (Godella, 2015).
Five Force Analysis: In order to gain the competitive advantage in market and build
effective and profitable strategies, it is very important for Royal Mail to analyse the
competitive forces in the external environment which are as follows:
 Threat of New Entrants: Royal Mail gets pressurised by the lower pricing strategies of
the new entrants as well as their improved and new services. Therefore, Royal Mail
should build effective barriers in order to remain competitive and ahead of its competitors
by constantly innovating new products and services so as to enhance the interest of
customers in Royal Mail’s products and services. More money should be spent on the
research and development so as to know the various strategies of the competitors (Mind
Tools, 2018).
 Bargaining Power of Suppliers: Royal Mail gets their raw material from the different
suppliers. When the supplier of the Royal Mail is dominant in the market, it reduces the
profit margin of the Royal Mail. Therefore, Royal mail should make efforts in developing
suppliers which are dedicated to the organization and their business depends on the
business of Royal Mai and should build efficient supply chain with various different
suppliers.
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 Bargaining power of Buyers: The bargaining power of consumers has a significant
impact on the business of the organization. Their demands are always increasing. They
always want to purchase the best possible service and that too at the minimum price
possible. Therefore, it impacts the profitability of the Royal Mail organization. The more
powerful customers have the strong bargaining powers. Therefore, Royal Mail should
focus on building a large base of customers so as to reduce the bargaining power of
buyers and innovating new products as customers tend to bargain less on new products
and more on established products. It will also add value to the organization by gaining
competitive advantage.
 Threats of Substitute: The profitability of the organization producing a particular
product or service gets suffered when a similar product or service meeting the similar
demands gets introduced in the market. For example the substitute of the hard drives is
the Google Drive that affects the business of the companies producing hard drives.
Therefore, Royal Mail should focus on the needs of the customer rather than the services
it is producing. It should focus more on producing unique services in order to stay ahead
in the market and protect itself from the threats of substitutes (Mind Tools, 2018).
 Rivalry among competitors: The strong rivalry among the competitors in the market
results in the decrease of the prices of the services and therefore reduces the overall
profitability of the organization. The industry where Royal Mail operates has very high
competition. Therefore, it affects the overall profitability of the Royal Mail organization.
Therefore, Royal Mail should focus more on making strong relations with the competitors
so as to increase their market size and then concentrate on increasing the market share by
providing efficient services.
Task 2
(i) Analyse the relevance of corporate social responsibility and sustainability to Royal
Mail and how it influences the policies and decision making within Royal Mail.
Corporate Social Responsibility refers to the steps and thinking adopted by the organization
which is out of their interest and different from their thoughts but for the betterment of the
society and various stakeholders of the organization in order to maintain strong relationships
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with the customers and other stakeholders and to sustain their long term profitability which is
dependent on them. It also includes the involvement of the business with the environment in
order to ensure the success of the organization. The CSR needs to be established in an
organization in order to increase the engagement activities of the business with its
stakeholders, staff and the environment. Thus, it can be said that for the betterment of the
society and future growth of an organization, corporate social responsibility and sustainability
are very important (Rodrigues & Borges, 2015).
Royal Mail aims to become the most popular postal delivery company not only in UK but
across the whole Europe. The corporate responsibilities of Royal Mail are aligned to its
business strategies as well as to the delivery of sustainable value to all the stakeholders.
Royal Mail carries out its business operations keeping in mind the environment. Therefore, as
a socially responsible organization, Royal Mail wishes to achieve success with the continuous
support and involvement of its people, customers, suppliers and various communities
(Rodrigues & Borges, 2015).
The relevance of corporate social responsibility and sustainability can be understood by the
fact that Royal Mail believes in being socially responsible and therefore focuses on creating a
safe environment for its people and treating them in a way so that feel more engaged. Royal
mail works in an efficient way and thus remains ahead of its competitors by being efficient. It
also makes efforts in order to protect the information being transported through its services,
to support the communities and saving the environment from the various business impacts
(Royal Mail Group (I), 2018).
As a socially responsible organization, Royal Mail works on getting engaged with its various
stakeholders. This is being done with the motive of learning the various views of the
stakeholders and identifying issues which are of great importance for its business.
The corporate social responsibility of Royal Mail helps it to achieve its corporate strategy by
managing the various risks to its business and at the same time maximising the future
opportunities. The sustainable business practices of Royal Mail helps it in fulfilling its
various corporate social responsibilities towards its people, customers, communities and the
environment. The CR strategy of the organization comprises of five major areas which are of
main importance for the organization as a socially responsible organization which are as
follows:
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 To deliver various types of economic as well as social benefit to the communities of the
organization
 To manage the impacts of the business activities of the Royal Mail on the environment
 To deliver its transformation in a responsible way
 By engaging its management in the CR responsibilities and discussing it openly with
them
 Engaging with its various stakeholders for the sake of future opportunities (Royal Mail
Group (II), 2018).
In order to embed CSR objectives across the business, Royal Mail uses a CSR Framework
which includes the following:
 Corporate Balanced Scorecard: It is also referred to as CBS. The Royal Mail’s CBS is
split among customers, people, efficiency and financial segments. The activities like
customer engagement, employee engagement, health and safety measures, customer
satisfaction etc.
 Responsible Procurement Code of Conduct: Royal Mail ensures that all the suppliers
of the Royal Mail adhere by the various policies of United Nations like United Nations
Universal Declaration of Human Rights and acts according to the national policies. It also
ensures that the standards adopted by the organization adhere by the social, legal and
environmental issues. Therefore, it follows strict policies with respect to abuse laws,
labour laws, against corruption and bribery, prohibition of child labour, and laws for the
protection of the environment and for the betterment of the environment.
 World Class Mail: In order to make continuous improvement in its services and provide
best possible to the customers, Royal Mail engage and involve its people in the process of
transformation of the Royal Mail. By ensuring this, Royal Mail takes a step forward
towards the safety and improvements of its services and providing World Class Mail.
 Environment Policy: As a socially responsible organization, Royal Mail follows various
environmental policies which establish the commitment of the organization towards the
improvement of the environment and at the same time also specifies the responsibility of
every employee of the Royal Mail towards the environmental protection.
 CR Policy: Royal Mail has established various CR policies in order to set the strategy for
the successful running as well as for the commitment towards the support of UNGC and
Universal Declaration of Human Rights.
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 Other Policies: In order to fulfil its responsibility of a socially responsible organization,
various other policies have been set by the Royal Mail including Royal Mail Code of
Business Standards, Equality and Fairness policies, Bullying and Harassing at workplace
policies as well as anti-bribery and anti-corruption policies (Royal Mail Group (II), 2018).
Therefore, it can be said that Royal Mail aims to become the most efficient postal and
delivery service of UK by establishing itself as a socially responsible organization. The
company follows its effective CR strategy which helps it in achieving its environment and
social responsibility objectives.
(ii) Critically evaluate the effectiveness of the organization’s response.
By showing its commitment towards the society and environment Royal Mail pay towards
social obligation as its response to corporate social responsibility and sustainability
(Dudovskiy, 2016).
Currently, the main corporate social responsibilities of the Royal Mail lies in building strong
relationships with customers, people, communities and the environment. The main focus of
the business of the Royal Mail is on building strong and life- long relationships with its
people. In addition to this, the impact of the business activities on the environment is also
taken into consideration by Royal Mail and therefore as a socially responsible organization,
Royal Mail has committed itself to take full care of the environmental protection and various
consequences of its affects. In order to achieve this objective, Royal Mail has established
environmental policies which describe the short and long term objectives of the company in
relation with the environmental awareness. All the company employees needs to abide by
these policies which aims at the evaluation of the environmental impact and reduction on the
level of impact caused by the business activities of Royal Mail on the environment. The
various objectives of the environmental policies are:
 Integration of the social and environmental consideration in the decision making of Royal
Mail
 To establish the performance indicators and various measures needed to be taken so as to
achieve the improved targets
 To develop and implement EMS
 To comply with the rules and regulation governing environmental protection
 To promote transparency in its activities by company reporting
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 To utilize the important resources like fuel, water, electricity in an efficient manner and
minimise the waste
 To minimise the air emissions due to various business activities of Royal Mail and to
encourage the environmental awareness among its employees
 To support the programmes of various communities
 To get engaged with the suppliers for the better functioning of the company’s operation
and reducing its impact (Bitchta, 2016).
Currently, Royal Mail is focussing on evaluating and measuring the environmental impact
and reporting the performance of the environmental policies. The responsibility for the
environmental policies and performance lies on the shoulders of the executive board
members for the strategy and business development. The head of the department is
responsible for developing the policies related to environmental protection and for ensuring
that all the employees and the group members are also following the same. In order to make it
more effective, Royal Mail is planning to hire environmental policy representative so that the
policy can be communicated to the whole staff of the Royal Mail (Edie, 2017).
The major areas of environmental concern for the organization which require the serious
attention includes water and fuel usage, electricity consumption, waste management and
carbon emissions polluting the environment. Therefore, in order to overcome these concerns,
Royal Mail has produced some serious environmental targets that need to be achieved by
each and every employee and various stakeholders of the organization. Those are:
 Royal Mail aims to achieve reduction in the overall consumption of electricity by its
premises by almost 10% in the coming 5 years.
 Royal Mail aims to increase the usage of the renewable energy by 10% in the coming few
years.
 Reduction in the usage of water by 5% by its business activities during next five years.
 Reduction in the usage of fuel by almost 5% in the next five years.
 To reduce the impact of its business operation on the natural environment by reducing the
emissions of CO2 resulting from the business operations of Royal mail.
 To reduce the amount of solid waste by a considerable amount.
Royal Mail has already started taking measures in order to achieve the above mentioned
targets. In order to ensure this, the company has developed an EMS which has been
implemented across the organization. The main purpose of implementing EMS is to measure
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the performance of the environmental policies and identify the areas that need improvement.
It mainly focuses on evaluating the performance of the policies with reference to water and
fuel consumption and to identify the sites which are poorly performing and therefore needs
improvements through actions (Bitchta, 2016).
In order to achieve its target of reducing energy consumption, the Royal Mail has set a target
of using 1% of renewable energy every year. Therefore, in order to make this possible, 21
heat and power plants are operated by the Royal Mail. It also produces waste from the paper
machinery. The company is also focusing on waste management system under the EMS
implemented for recycling the uniforms, computers etc. used in the business operations.
The carbon emissions accounting to air pollution are resulted from the distribution activities
of the Royal Mail. In addition to this, the personal travel because of business activities and
running of various transportation properties of Royal also contributes to air emissions.
Therefore, as an attempt to reduce the air emissions, the company has now introduced the
concept of electronic meetings and video audio conferencing among the staff members so as
to reduce emissions because of travel due to meetings.
In order to reduce the amount of fuel used by the company due to transportation activities,
various electronic vehicles are operated by the company which produces no carbon emissions
and also results in less noise pollution.
The sustainability is also taken care of by Royal Mail as the company recognises the
importance of the sustainable development for the success of its business. It engages its
various suppliers in its business activities and decision making towards the measurement of
all the performance activities.
Royal Mail also want to retain the culture of the UK by being an essential part of the British
culture community and by continuously making efforts towards maintaining strong
relationships with the British culture community. Therefore, to ensure this, company
produces various resources for schools of UK. For example, during last few years, “Let’s all
write together” pack was introduced by Royal mail so as to teach children various forms of
letter writing (Royal Mail Group (II), 2018).
Charity work is also supported by the Royal Mail. It has raised funds for the various projects
including one “Stepping Stone fund” which raises money for the charities that help adults in
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improving their writing skills. It also encourages its employees to make charities from their
payroll.
In addition to the above all, many other activities are also part of the Royal Mail’s corporate
social responsibility program. Through these activities and policies, the Royal Mail wants to
include environmental considerations while operating various organizational activities and to
implement the sustainable development standards.
(iii) Demonstrate some areas for improvement in the response of the organization.
For each and every organization, continuous improvements are of utmost importance so as to
ensure the future success as well as to remain competitive and ahead of competitors in the
market. Similarly, Royal Mail also needs to make few improvements. Therefore, following
are the areas where the improvements need to be made by Royal Mail:
Customer Service and Relations: The Company needs to make improvements in this area as
this it guarantees its future success in the competitive market of UK.
Employee Relations and Management: Employees are the biggest assets for the organizations
and therefore to ensure the future success of the organization, Royal Mail should focus more
on the management of the employee relations (Royal Mail Group (III), 2018).
Environment: The future success of any organization depends on how seriously it cares for
the natural environment and how many efforts does it make to preserve and conserve it. By
improving its environmental policies, Royal Mail can become the environmental leader in the
UK’s market.
Business Integrity: The various issues related to the compliance with the rules and regulations
of the country, anti-competitive practice following, various responsible business practices etc.
comes under business integrity. Therefore, by following all the mentioned practices, Royal
Mail needs to maintain the trust of the people in its brand name.
Community Relations: The Company needs to focus more on the local communities.
Therefore, in order to make the above mentioned improvements, following are the few
suggestions:
 The company should boost its ability in order to serve the customers in the more effective
manner.
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 The company needs to ensure the public that despite of being a private company, the
company is operating its business activities for the public interest.
 The company needs to focus more on the environmental impacts and should take some
serious measures to reduce the amount of carbon emissions from its business operations.
It will gain company a competitive advantage of being a green service provider.
 Royal Mail needs to focus more on having the most reflective staff (Royal Mail Group
(III), 2018).
Therefore, by following the above suggestions, Royal Mail can improve its current position
in the market. Although the company is the leading courier company delivering parcels all
over the UK but following above can help it in becoming the best in the market and in
gaining competitive advantage over its rivals.
Conclusion
The above assignment is based on the contemporary developments in business and
management. The company we have taken in the above study is the Royal Mail Plc. In the
above study, we have studied about various external and internal factors that have an
influence on the business operations of the Royal Mail. In the second part of the assignment,
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we have discussed the importance of the corporate social responsibility and sustainability and
its effect on the policies and decision making of Royal Mail. We have also analysed the
effectiveness of CSR in response from Royal Mail. At last, various areas are being identified
with in the Royal Mail Organization that needs improvement and accordingly suggestions are
being made.
References
1. Bitchta, C., 2016. Corporate Social Responsibility. [Online] University of Bath.
Available at:
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http://www.bath.ac.uk/management/cri/pubpdf/Research_Reports/16_Bichta.pdf
[Accessed: 20 April 2018]
2. Dudovskiy, J., 2016. Corporate Social Responsibility. [Online] Research
Methodology. Available at: https://research-methodology.net/category/corporate-
social-responsibility/ [Accessed 16 April 2018]
3. Edie, 2017. First-class sustainability: How Royal Mail is leading the way on
employee engagement. [Online] Edie Newsroom. Available at:
https://www.edie.net/news/7/How-Royal-Mail-is-delivering-employee-engagement-
with-sustainability/ [Accessed: 21 April 2018]
4. Godella, F., 2015. Royal Mail. [Online] Prezi. Available
at: https://prezi.com/il5ipb2qjnf2/royal-mail-group/ [Accessed: 21 April 2018]
5. Mind Tools, 2018. Porter’s Five Forces. [Online] Mind Tools. Available at:
https://www.mindtools.com/pages/article/newTMC_08.htm [Accessed: 20 April
2018]
6. Rodrigues, B., & Borges, A.P., 2015. Corporate Social responsibility and its impact in
consumer decision making. Social Responsibility Journal, vol. 11, issue. 4, pp. 690-
701.
7. Royal Mail Group, 2018. Who We Are. [Online] Royal Mail Group., Available
at: https://www.royalmailgroup.com/about-us/who-we-are [Accessed: 19 April 2018]
8. Royal Mail Group (I), 2018. Responsibility. [Online] Royal Mail Group. Available at:
https://www.royalmailgroup.com/community [Accessed: 25 April 2018]
9. Royal Mail Group (II), 2018. Our Suppliers. [Online] Royal Mail Group. Available at:
https://www.royalmailgroup.com/responsibility/suppliers [Accessed: 22 April 2018]
10. Royal Mail Group (III), 2018. Royal Mail Corporate social Responsibility Report.
[Online] Royal Mail Group. Available at:
https://www.royalmailgroup.com/sites/default/files/Royal%20Mail%20Group
%20Corporate%20Responsibility%20Report%202015-16.pdf [Accessed: 23 April
2018]
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