Impact of External Factors on NEXT and PESTLE Analysis, Leadership, CSR, Effects of Brexit and COVID-19 on Business

This report covers the impact of external factors on NEXT and PESTLE analysis, leadership, CSR, effects of Brexit and COVID-19 on business. It includes analysis of political, economical, social, technological, legal and environmental factors, different leadership styles, corporate social responsibility, and effects of Brexit and COVID-19 on business.

CONTEXT
OF
BUSINESS

Table of Contents
CONTEXT OF BUSINESS .................................................................................................................1
INTRODUCTION :..............................................................................................................................3
IMPACT OF EXTERNAL FACTORS ON NEXT AND PESTLE ANALYSIS :...............................4
LEADERSHIP :....................................................................................................................................6
CORPORATE SOCIAL RESPONSIBILITY (CSR) :.........................................................................7
EFFECTS OF BREXIT ON THE BUSINESS :..................................................................................9
EFFECTS IN BUSINESS OF COVID-19 :.......................................................................................10
CONCLUSION :................................................................................................................................11
REFERENCES:..................................................................................................................................12

INTRODUCTION :
An organisation engaged in professional business activities with shared objectives is
known as the business organisation such as sole proprietorship , LLP and other partnerships which
has formed company for their business. NEXT plc is a British multinational company founded in
the year 1864 by Joseph Hepworth which deals in the business of home products , clothing and
footwear. The report will cover up the facts about effects of external forces in the business of the
company along with the analysis of PESTLE and influence it has on other businesses in the country.
Furthermore , it will disclose the factors of the leadership style of the company and which of them
is the most effective source of the help in the business of the company along with it this report will
cover up the corporate social responsibilities of the company and how it effects in the business of
the organisation which will carry the analysis of Brexit effect of the business of UK and Covid-19
pandemic effects on the business of the companies all over the country and every structure of the
effectiveness in the organisation.(Sankar, 2019.)
IMPACT OF EXTERNAL FACTORS ON NEXT AND PESTLE
ANALYSIS :
PESTLE :
It helps in determining the new product's services and the validity of the new product which
provides the in depth information regarding the direction of the business , positioning of the brand
along with the growth and risk targets of the company.
The analysis used in NEXT plc is to identify the external forces which are responsible of shaping
the strategies and environment of the company those few factors has been covered below :
POLITICAL :
The involvement of the government organisations in industrial growth including the policies
of the government , restrictions in trade , labour law , political stability along with tax policies in the
region. The stable smoothness in the operations of the business activities is directly related to the
higher political stability in a region where that company exists and on the other hand the instability
of politics can be a chaos for any business organisations as it would effect the investors and share
holders to have a faith in the company. Bureaucracy and corruption could be another political factor
for affecting the business operations. Every particular region have its own political barriers as

NEXT plc has been present in different regions across the country.(Diez- 2019)
ECONOMICAL:
Company's business is directly effected by the economic growth of the country as it includes
inflation rate , exchange rate , minimum wages , working hours along with the fiscal and monetary
policy of the company. GDP rate of the country determine the spending of the consumers on the
products and services and help the NEXT plc to make the long term strategies for the business of
the company as economic structure of the country influence the NEXT plc businesses because of
the GDP growth of the country affects the business organisations on a larger scale then any other
forms of economical structure.
SOCIAL :
Social external factors helps the company to analyse the marketing strategies which
covers up the social norms of the country , age distribution , population growth rate and health
which gives a helping hand to the company to understand the dynamics of these factors to target the
particular market for their product which could be very helpful for the business of the company by
getting the informations about the social norms of the region where they want to set up the their
business.(Mayer., 2018)
TECHNOLOGICAL :
The advance technologies of the creative innovations affects the market strategies of the
business organisation. To enhance the quality of the products NXT plc is adopting different
technological steps like machine leaning and artificial intelligence etc. for the advancement of the
brand image and advertise the product using digital media marketing. To make the product more
creative and effective as well NEXT plc had increased the investments in their research and
development to through which the product could stand out amongst its competitions.(Bougie.,
2019.)
LEGAL:
It includes various type of legal instruments such as employee and consumer protection
law , data privacy law and property law as it is one of the vital factors to do a satisfactory business
which includes import export laws , taxation policies and trade agreement etc. these factors effects
the company both internally and externally. As the data protection is a major concern for the
customers the company follows the data privacy regulations to avoid the breach of data of the
company's confidential informations because of which the company compel to follow these

regulations to avoid such legal circumstances in future.
ENVIRONMENTAL :
Companies are investing in renewable energy sources for the sustainability which reduces
the usage of plastic products and protecting the environment is becoming the major concern for
every organisations which includes global warming , disposal management , carbon emission etc.
NEXT plc has been adopting green energy sources to the various stores across the United Kingdom
through which country has various laws for protecting the environment like waste disposal law and
environmental law etc.
LEADERSHIP :
Leader is a person who is a head of the group of people in the company who describes the
marketing strategies and provide different approaches to the company through which a company
could grow their business on a larger scale and helping the company to maintain the relation
between employees and the organisation. Providing the healthy environment in the company leads
the better performance of the employees and that would lead to the enhancement of the business of
the company. Leader of a team of a company have to be very precise about his decision making
skills and that would determine the overall performance of the company. The one who motivates
others and manage everyone and every work according to the company and for the upliftment for
the business of the company plays a better role in the role of the leadership in any company or in
any organisation. A leadership skills is a very vital source of the team enhancement as it could be a
reason for the growth in the business and for the downfall as well. NEXT plc follows AUTO
LEADERSHIP style in which a leader is a sole decision maker of the company without any
involvement of other employees of the company.(Rudolph., 2020.)
AUTOCRATIC LEADERSHIP centralised the power in the hand of leader. It focuses on the
classical approach which gives more power to the leader and few opportunities to the employees to
give opinions and suggestions for the team unless a leader wants it. It is a quick decision making
approach which is most effective type of leadership style where there is no such need of taking
suggestions or input from anyone which helps the NEXT plc defining the individual's role clearly in
an most effective manner. Though , there are different type of leadership styles as well which has
been described below :
TRANSACTIONAL LEADERSHIP :

This leadership style is used to meet the specific targets that have been given to the
employees like in the departments of marketing and sales if the company. This short term leadership
style pressurise the employees to meet the goals that have been provided to them but on the other
hand it also encourages the employee to meet the targets in return of the rewards that would be
given to them by performing that certain task which have been given to them. This clears the
communication gap between the leader and the employees which gives motivation to the team
members by giving them incentives because of which it is very beneficial and effective for the
company to meet the requirements of short term goals.
LAISSEZ FAIRE LEADERSHIP :
Laissez faire is a French phrase which means “leave it be” clearly stating that
leaving the employees on their own pace to work independently also known as hands off approach
where employees are free to take decisions on their own to determine objectives and resolving the
issue without the direction of the leader giving all the authorities to the employees to complete the
specific task. Though , the company could get the advantage by this leadership style only when the
employees are honest towards their work and targets to perform certain task without any orders
from the leader which leads towards the innovation and removes the barriers between the leader and
employees resulting the sense of independence among employees.(Oc., 2018)
TRANSFORMATION LEADERSHIP :
In transformation leadership a leader enhances the motivation and morale of the
team by the vision and mission by dividing the responsibilities between the team members which
creates a positive change in the people within the organisation and building the strong relationship
to motivate the team which creates the value for the business of the company by meeting the goals
or targets quickly by dividing the work between the employees of the company.
BUREAUCRATIC LEADERSHIP :
It clearly states the authority of the organisation which define the roles of the employees and
employer in regards to who reports to whom and sets out the rules and regulations of the company
where leaders does get biased towards the policies of the organisation. This type of leadership is
commonly used in government , military or public sector organisations which provides the job
security and clears the responsibilities of the leader. Though , it is a risky position in which there is
are roles in working with large amount of cash handling in which every leader can not do the task as
per the company requirements.

CORPORATE SOCIAL RESPONSIBILITY (CSR) :
CSR is a regulation which reflect the accountability of a business and commitment for
contributing to the society via different environmental ways and it surely plays a vital role in the
brand image of the company which attracts customers and investors for resulting the overall
business success. It has social responsibility to make a positive impact in the society through giving
back to the society by being environmentally friendly. To demonstrate CSR a employee and
stakeholders look forward about the facts about how the activities of the companies are impacting
the community and environment as a whole so the company's practice should be genuine.
CSR is one of the most essential key elements that should be considered by every company or
organisation as it helps the business to grow in many ways and one of it is CSR enhances the
perception of the customers about the brand of the company as the social conscious image is very
important for the company because the employees and shareholders do prioritize CSR before
investing in the brand of the company. (Sánchez., 2020)The thinking people have about the
company's brand is a essential factor for the image value of the company which is doing the
business for the good and raising awareness about the socially important causes is an perfect way
for any business to market and enhance it's CSR overall performance. CSR increase the chance of
the investors as they always invest in the company which is doing good and impacting the whole
society in an positive way. By maintaining the CSR of the company it becomes more appealing to
the current and future investors and company can get more investment which will help the business
of the company to have more major effect in a society at large by initiating the process of reducing
the harmful functions of the business and securing the environment and society for the betterment
of the world and their own business as well. There are 4 types of corporate responsibility :
 ENVIRONMENTAL : One of the most essential element where CSR follows up the most
is environment as business operations have huge amount of carbon footprints despite the
facts of the size of the business and if a company wants it can reduce the consumptions of
the products which is harmful the atmosphere and considering about removing the footprints
of that product to secure the environment.
 PHILANTHROPY : Big organisation have good amount of resources that benefits charities
and local community program though even a small business can make a big difference
through the potential to give the efforts for the betterment of the society by donating money
and other products of the company. This creates ample amount positive impact in the society
all over the world which helps companies to grow their business in a larger scale.

 ETHICAL LABOUR PRACTICE : Companies have employees who help them manage
their daily business through distributing the work load and by treating the employees
ethically and fairly can enhance the CSR of any company. CSR not only look forward to the
companies donation but have a in depth knowledge about the companies policies about
treatment of their employees as well which very well effects the business of any
organisation and it's reputation.
 VOLUNTEERING : The time when a company does put great efforts providing to the
society without the expectations of return this shows the concern a company has for the
betterment of the society. Organisation can participate in local causes for the community
events clears the fact that it is willing to take a step towards the betterment of the society.
(Wickert,., 2019.)
EFFECTS OF BREXIT ON THE BUSINESS :
There is not one but are plenty of effects that Brexit had on the business in UK and other
outcomes are still in the observations which will be more clear in the meantime. Leaving the
European Union had a effective outcome like now UK can trade easier and without any restrictions
of EU with other markets and countries as well but it is harder to exchange goods and services with
EU. Before Brexit UK was a part of single trade area and products could get exchange throughout
the Europe without any trade restrictions , border check post and documentations but now there will
be customs on the trade of the business plus the relations between the other nations which are still a
part of EU can be at stake. Therefore , there has not been one effect on the business but positive and
negative both.
POSITIVE :
There would be no restrictions on the trade , after leaving EU Britain has been free from the legal
obligations about the EU policies. Now , UK can trade with other markets as well , it can business
with many non EU markets and powerful countries throughout the globe such as America and
Australia. Growing markets of countries like China , Japan , Brazil , South Africa etc. are focusing
more on the accounting of consumer spending. Pound is falling and that made the products of
British cheaper then it was before which could be attracting a lot countries for the trade and
business with UK.(Yuan., 2020.)
This will open up the barriers of trading goods between countries because UK might would apply

for AEO ( Authorised Economic Operator) which will make UK a trusted country for the trade in
the market and awards AEO recognition through HMRC. Therefore , UK will be more liable and
restrictions free and could trade in different countries for the business.
NEGATIVE :
The policies in the agreement between the UK and EU has its own specific terms which have
created a positive as well as negative impact in the trade of UK. Now the goods have to meet the
specific terms of Trade and Cooperation Agreement 2021 to qualify in trading with EU and the
agricultural products needs to have grown in British or European soil to be considered original for
the trading.
The disruption in supply chain having the barrier in the business of UK . Few countries have
stockpiled before Brexit for skipping the tariffs for importing goods and products from EU.
Now , non UK citizens would need to have the work visa for working in UK this would effect the
numbers of EU workers which will decrease by the time and businesses need to have the sponsor of
approved employer for providing work to non UK citizens and that will be leading the business to
have the costly labour for the company.(Kim., 2021. )
EFFECTS IN BUSINESS OF COVID-19 :
There have been a huge loss in every sector of the society and organisation because
of the pandemic and it had costed a lot of companies to have the loss in their business by the
reduction of the supply and not gaining the profits instead baring the loss in their business. As per
the report of DMP ( DECISION MAKER PANEL) which is a survey of chief financial officer of
small and large business reported the sales went 17% lower while on the other hand the
employment went 8% lower as well along with the investment which fell down by 24% lower and
lastly in all over the business all around the country sales had the downfall of 15% which shows the
graph of how devastating it was for the business and how much effect did the pandemic had on the
business of entire UK. (Manuel., 2020)
There is a graph below which shows the impact of covid-19 in the business which will clear out the
certain facts about the downfall in the business industry in UK.

CONCLUSION :
As per this report , it is concluded that there are a lot of factors by which the business of the
company gets effected and there are certain ways throughout this report which covers up the loss in
the organisation. From different types of leadership skills to the operational factors of the company
there are certain obligations to the business of the company which have the guidelines about the
important and vital factors which leads the company to grow their business on a larger scale. One of
the vital factors of it is CSR (Corporate Social Responsibility) of the company towards the positive
impact on the society as a whole which leads the company to create a good image of the product or
their brand by which the trust factors builds up for the organisation.
Lastly , the impact covid-19 had on every part of the world has impacted UK businesses as well and
after leaving EU it has been difficult for the Britain to follow up and recover from the damages it
had on their business. Further , the observation comes to the fact that there are majorly a lot of
pathways where a businesses could get effected and along with it there are certain ways from
recovering a loss and managing the company's business in an most effective ways which boost the
business of the organisation.

REFERENCES:
Books and journals
Sankar, R., 2019. Factors Influencing Sole Proprietors Business Performance. Journal of
Entrepreneurship and Management, 8(3), p.55.
Diez-Martin, F., Blanco-Gonzalez, A. and Prado-Roman, C., 2019. Factors affecting individual
decisions based on business legitimacy. Journal of Promotion Management, 25(2), pp.181-
199.
Rudolph, C.W., Murphy, L.D. and Zacher, H., 2020. A systematic review and critique of research on
“healthy leadership”.The Leadership Quarterly,31(1), p.101335.
Oc, B., 2018. Contextual leadership: A systematic review of how contextual factors shape
leadership and its outcomes. The Leadership Quarterly,29(1), pp.218-235.
Sánchez‐Torné, I., Morán‐Álvarez, J.C. and Pérez‐López, J.A., 2020. The importance of corporate
social responsibility in achieving high corporate reputation. Corporate Social
Responsibility and Environmental Management, 27(6), pp.2692-2700.
Wickert, C. and Risi, D., 2019. Corporate social responsibility. Cambridge University Press.
Yuan, Y., Lu, L.Y., Tian, G. and Yu, Y., 2020. Business strategy and corporate social
responsibility .Journal of Business Ethics,162(2), pp.359-377.
Kim, S., Lee, G. and Kang, H.G., 2021. Risk management and corporate social responsibility.
Strategic Management Journal, 42(1), pp.202-230.
Mayer, C., 2018. Prosperity: Better business makes the greater good. Oxford University Press.
Bougie, R. and Sekaran, U., 2019. Research methods for business: A skill building approach. John
Wiley & Sons.

Manuel, T. and Herron, T.L., 2020. An ethical perspective of business CSR and the COVID-19
pandemic. Society and Business Review.