Impact of Innovation and Business Ethics on Modern Organizations
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This report discusses the impact of innovation and business ethics on modern organizations, with a focus on Future plc. It covers the benefits of innovation, the importance of business ethics, and the impact of corporate social responsibility.
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TABLE OF CONTENTS INTRODUCTION...........................................................................................................................1 MAIN BODY...................................................................................................................................1 Impact of innovation on modern business organisation..............................................................1 Impact of business ethics and CSR on modern organisation.......................................................3 CONCLUSION................................................................................................................................6 REFERENCE...................................................................................................................................8
INTRODUCTION Business environment is the surrounding of the business. In order to bring positive business environment, management should make sure to avoid corporate politics and also should have treat their every employees equally. Never discriminate them whatever their religion or colour is treat them equally and fairly. Future plc is the media company which write magazines on various topic which are related to technology, fashion, clothing, games, music, photography etc. this report will discuss about the impact of innovation on the organisation. Further it will also shed light on the impact of social responsibility and business ethics. MAIN BODY Impact of innovation on modern business organisation Innovation- innovation means something new which is introduced in the business. It refers to the developing new things. In simple language innovation can be new product or services which is launched by the company in order to attain competitive advantage (Russell and Smorodinskaya, 2018). Innovation is having direct relation with business and technology. Innovation takes place in every place or in every area of the business. Innovation plays important role in the success of the organisation. Future plc also does innovation timely so that they can take competitive advantage because to to survive in this competitive environment nowadays is not the easier task. Customers tastes and preferences also changes now and then. So that is why to opt innovational practice has become compulsory. Business requires something new to survive in the market. Innovation is helpful in increasing growth, productivity and profitability of the business. It further helps in bringing improvement in business field. Below are the innovation benefits to the company- improving sales and customers relationship- if company will fail to provide any innovative products or services in the market then there are probability that they can louse their customer share because customers will get attracted to the competitors who will provide innovative products or services (4 ways innovation can help your business., 2020). If company will give extra time and efforts and invest in their research and development team then they can provide innovative products to their customers. When customer will see that company is fulfilling their demand then they will help them in increasing their sales. If company want to know that what to introduce in the market then they can take survey 1
with the customers in order to know their preferences. By doing survey company can able to know that where improvement is required or if there is any need to appoint innovation team or not. When company will fulfil demand of customers then it will be helpful in building good relationships within company and customers. Reducing waste and costs- innovation helps business in reducing waste so that business can concentrate on the long term goals. Innovation also helps in improving the operational efficiency (Mardani and et.al., 2018). Company can achieve smooth order processing, reducing machinery idle time and avoiding production bottlenecks. Basically future plc come up with innovation so that the waste can be eliminated. When company will reduce waste then they get various benefits like better customer service, low costs, increased profit margin, increasing competition etc. for reducing the costs organisation should have appoint expert which will guide them to do so. Boosting market position- innovation helps in understanding market changes easily and rapidly and also help company in grabbing opportunities. Basically the main feature of innovation is that it helps company in standing out different as compare to their competitors. When company will produce different products and services then only they will be able to attract more competitors. Company can able to innovative if they analyse market trends on regular basis because by seeing market trends only company can decide that what to bring in the market and what customers are actually demanding (Sorescu, 2017). If company want to take every opportunity then they have to listen to their customers, suppliers and also have to carefully see that what their competitors are doing. If competitors has came up with innovative products then future plc should have also launch innovative products so that they will not lose on their market share. Company can also analyse that what other countries company which fall in the category of same industry are doing. As it will also helps in getting various innovative ideas in the mind. Improving employee relations- innovative workplace helps in the growth of the employees. Employee should have feel proud aboutthecompanyinwhichtheyareworkingortheproductstheytheircompanyis manufacturing.If employeewillstart takingpridethen itwillincreasingtheirlevelof productivity and also decreases employee turnover rate (Mahrani and Soewarno, 2018). As every employee wanted to work in those company which have good brand image in the market. 2
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Innovation plays vital role in brining good brand reputation. Always ask feedbacks from the employees in areas like marketing, products etc. as young talented employees have various new ideas which will bring innovation. Managers should have appreciate employees if they have come up with any new ideas because that will motivate them in bringing more new ideas. Maximizing return on investment- if company will come up with innovative ideas or will come up with constant innovation then it will helpful in increasing competitive advantageand also helps in increasing profitability and performance of the company (Schoemaker, Heaton and Teece, 2018). It is seen that those organisation which focuses on innovation have likely to increase their profits and generate more revenue. Although to measure ROI is not easy and difficult. But it can be said that innovation will definitely helps in increasing sales of the company. So company should have chose innovation over not choosing it. Add value to the society- innovation always helps in creating more value to the society. Example in medical field or technology field ofteninnovation takes place and it is essential also because innovation brings many facilities to the public. If company will use innovative technology then it will reduce consumption of the resources which are human resource, raw materials, equipments etc. further it also provide sustainable solutions to the company. Technology plays vital role in bringing innovation. Company can easily innovate their products or add any new feature to their products by using different technology. Development of new market- with the help ofinnovation, company can easily enter in new market or can target new customers (De Silva, Howells and Meyer, 2018).Innovation is the best method to beat your competition. In the new market launching existing product which brand is also selling does not make any sense. If company wanted to attract more customers then they has to come up with new products or services. In order to penetrate in the market also company require new products as customer get bored by using same products so that is why they always want something new. Impact of business ethics and CSR on modern organisation. Business ethics- business ethics is concerned about business practices and policies which include various subjects like insider trading, discrimination, corporate governance, corporate social responsibility etc. 3
basically business ethics is the guidelines which are given to the company and which every company has to follow. Ethical practice is necessary (Vynnychenko and Majewska, 2017). Public also support those companies which follow ethical practice while carrying their business. Ethics make sure that some extent of trust is properly maintained between organisation and consumers. It is the responsibility of company to deal fairly with their every customer and employees. Future plc make sure that they do not discriminate on their employees on the basis of colour, race, gender, age, religion, caste etc. as every employees are treated equally and employees are promoted on the basis of their performance. Business ethics deals with the moral value. It make sure that what company should have done legally and right in order to maintain competitive advantage. Business ethics helps to gain employee morale and loyalty and also helps in maintaining bond between management and employees. If company will operate as per ethical practice then there are possibility that they will survive in the market for longer time. Business ethics also helps in building good reputation in the market (Hartini and et.al., 2020). If company will have good market image then they will be able to attract more investors and business will also easily get funds. Those company which do not follow ethical practices discourage investors to invest in such companies. In order to avoid negative implications companies are using their resources to follow business ethics. Future plc have also came up with ethical workplace by appointing right talent for the right position. Business success is directly related to the business ethics. Impact of corporate social responsibility CSR- social responsibility is the self regulation of the business through which company can contribute in the society by giving donations, charity, spreading awareness etc. CSR is the voluntary practice by the company and company doe it through their wish. It helps in increasing the reputation of the company in the market if they will serve the society. Social responsibility helps in building trust of the public on the company. As many customers believes that they would like to purchase from those companies which has indulged in social activities (Sims, 2017). If company will provide voluntary services or giving charity helps in getting trust of the people. It further helps in making company more popular in the market and it even increases brand image of the company. It builds positive relations within public and company. When company will do something good for the society then automatically they will be 4
able to connect more public. So it can be said that corporate social responsibility build more healthy relations with consumer and organisation. Further it also helps in retaining top performer in the organisation. As they no employee will leave that company which have good image in the market and social responsibility brought good image. Company should have also provide positive workplace surroundings. When employee will get good working environment then they motivate and that will increase their level of productivity (Chavan and Carter, 2018). Good environment also helps in enhancing employee engagement which will brought good employee experience. Talent people tend to work in those organisation which do high level of CSR. As a result it will attract more customers and helps in retaining employees for longer time period in the organisation. Sustainabilitycanbeachievedbythebusinesswiththehelpofsocialresponsibility. Sustainability helps business in serving various long term benefits. In order to become social responsiblefutureplchavestartedusingrenewableresourcesandalsoemittingcarbon emissions. Company also laid down various campaigns in which they spread awareness about pollution or various diseases like cancer etc. company should also spread awareness in their own company to save electricity. They should have asked their employees to turn off lights and devices which they are not using. As every little step will be helpful in saving electricity. CSR helps company in generating more profits. Carroll’s pyramid of corporate social responsibility this is the social responsibility model which have four elements which are as follows- economic responsibility- this responsibility is done by the firm and under this firm take financial related decisions which is good for the society (Dierksmeier and Seele, 2018). Company do not always think for making more money. Company will think to make money but in good manner. Example business can choose such supplier which deliver them sustainable material. Even company has to pay more costs for them but they want to save environment. Future plc have transparent system of salary payment and also they make sure that salary is given in fair manner. They do not discriminate on the basis of gender and even respect and promote their female employee equally. Environmental responsibility- business should have adopt environment friendly practice. Company contribute in decreasing pollution, green house gases, carbon emissions etc. they also have build waste management 5
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system (Sánchez‐Torné, Morán‐Álvarez and Pérez‐López, 2020). If waste will get managed properly then the pollution will get reduced. It is also the responsibility of the company to save environment in every manner. Environment responsibility can varies as it is based on nature, size and industry of the business. As some companies uses renewable sources of energy and other uses sustainable material. Future plc also organise various recycling programs which will spread awareness. Ethical responsibility- ethical responsible refers to make sure that business are following fair and good business practice (Adnan, Hay and van Staden, 2018). It is important that company should have treat all their customers, employees, shareholders equally. There should be no favouritism in any manner. Every person deserves respect. Every employee should have given pay by the company on the basis of work done by them. Future plc make sure that they provide wage to their workers according to their work and they never pay less to their employees. Philanthropic responsibility- in today's world it is expected from the organisation that they should have pay something to the society because they are using resources of the society and also society is helping them in increasing their sales. So now it is the turn of company to pay back to the society. Future plc gives lot of charity and donation. They also have associated with various charity homes as they do charity on regular basis (Advantage, 2020). Company have also helped various small business to come up by helping them through funds because they believe that small companies are helpful in the economic development. CONCLUSION Through this report it can be concluded that innovation has great impact on the modern companies. Innovation is necessary in today's world if company want to attain competitive advantages. Customers preferences changes quickly and they always demand something new. If company will not innovative time to time then they can lost their market share. Innovation is not easy because it requires research and development, experts have the proper knowledge and they understand market trends properly and hence they produce innovation products. Innovation is the costly process but if company will go for innovation then it will help them in gaining long 6
term profit. This report has also explained about corporate social responsibility, company has to give something to the society because it is public only which helps company in getting profits, future plc gave many charities and understands the importance of social responsibility. Business ethics are also discussed in this report. Business should have follow ethical practices. They should not always focus on getting more profits only but they should have also ensure that they are not harming people or the environment. 7
REFERENCE Books and Journals Adnan, S.M., Hay, D. and van Staden, C.J., 2018. The influence of culture and corporate governanceoncorporatesocialresponsibilitydisclosure:Acrosscountry analysis.Journal of Cleaner Production.198, pp.820-832. Advantage, C., 2020. Corporate Social Responsibility.CSR and Socially Responsible Investing Strategies in Transitioning and Emerging Economies,65. Chavan,M.andCarter,L.M.,2018.Sustainablebusinessethicseducation.InMeeting Expectations in Management Education(pp. 149-170). Palgrave Macmillan, Cham. De Silva, M., Howells, J. and Meyer, M., 2018. Innovation intermediaries and collaboration: Knowledge–based practices and internal value creation.Research Policy.47(1), pp.70- 87. Dierksmeier, C. and Seele, P., 2018. Cryptocurrencies and business ethics.Journal of Business Ethics.152(1), pp.1-14. Hartini, S. and et.al., 2020. The role of religiosity and social influence on perceived business ethics and its impact on the purchase of creative industrial products.Espacios.41(19), pp.370-379. Mahrani, M. and Soewarno, N., 2018. The effect of good corporate governance mechanism and corporate social responsibility on financial performance with earnings management as mediating variable.Asian Journal of Accounting Research. Mardani, A. and et.al., 2018. The relationship between knowledge management and innovation performance.The Journal of High Technology Management Research,29(1), pp.12-26. Russell,M.G.andSmorodinskaya,N.V.,2018.Leveragingcomplexityforecosystemic innovation.Technological Forecasting and Social Change.136, pp.114-131. Sánchez‐Torné,I., Morán‐Álvarez, J.C. and Pérez‐López,J.A., 2020. The importanceof corporate social responsibility in achieving high corporate reputation.Corporate Social Responsibility and Environmental Management.27(6), pp.2692-2700. Schoemaker, P.J., Heaton, S. and Teece, D., 2018. Innovation, dynamic capabilities, and leadership.California Management Review.61(1), pp.15-42. Sims, R.R., 2017.A contemporary look at business ethics. IAP. Sorescu, A., 2017. Data‐driven business model innovation.Journal of Product Innovation Management.34(5), pp.691-696. Vynnychenko, N.V. and Majewska, U., 2017. Evaluation of business ethics for the formation of public finance. Online 4waysinnovationcanhelpyourbusiness.,2020.[Online].Availablethrough: <https://www.bdc.ca/en/articles-tools/business-strategy-planning/innovate/4-ways- innovation-can-help-your-business> 8
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