Organizational Innovation and Business Impact

This assignment delves into the concept of organizational innovation within the UK supermarket industry, specifically examining Sainsbury's. It draws upon various research papers and scholarly articles to explore the impact of innovation on businesses, organizational structures, and the overall business environment. The analysis considers factors such as strategic change management, process reengineering, and the influence of external forces like technological advancements and market competition.

Business and Business
Environment
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Table of Contents
INTRODUCTION...........................................................................................................................3
part 1................................................................................................................................................3
a) .................................................................................................................................................3
b), P3 Organizational functions and structure..............................................................................3
c), D1 Sainsbury and Aldi............................................................................................................6
PART 2............................................................................................................................................7
a)..................................................................................................................................................7
Positive and negative impacts of macro environment on business operations of Sainsbury......7
SWOT analysis............................................................................................................................9
Relationship between macro environment and SWOT of the SainsBury..................................10
b) Reflective statement and critical evaluation of environmental factors impact on organization
....................................................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCE.................................................................................................................................14
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INTRODUCTION
Environmental factors impact on organization's effectiveness. It includes internal and
external factors such as macro and micro that effect on market position of firm. The present
report is based on presenting organizational structure of Sainsbury related to environmental
factors affects. In this regard, different sectors and tools for increasing efficiency of firm can be
determined. Through this study, various environmental factors and their effect on entity's
performance can be obtained.
PART 1
a)
Attached in ppt.
b), P3 Organizational functions and structure
Sainburyis one of the largest supermarket chain of UK that provides groceries and food
products at high level. There are different departments present who perform various functions
such as finance, production, research and development etc. Therefore, effective coordination
among all these departments leads to gain organization's effectiveness. In this regard, employees
of the firm contribute their working efficiency to meet set goals (Botha, Kourie and Snyman,
2014). However, varieties of performances are presented here that impact on business and
competitive strategy of entity. In accordance to this, manager of firm recognizes market position
including product value in market and further makes decision for development of firm. It
influences environment of entity effectively to present further business activities. Thus, several
levels of managers prepare strategy in different fields to get coordination and proper contribution
of workers for sustainability in competitive market. Including this, it presents organization's
business performance with strength and weakness to face competition. Similarly, it affects
market position for producing grocery and food items (Menychtas and et.al., 2014).
Different organizational functions including finance, production, research, HR, IT,
marketing and so on. In which, finance department is related with economic structure and fun
allocation process. Under this department, financial manager of Sainbury analyses income
statement, balance sheet, profit and loss account etc. It generates varieties of ideas for further
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transaction of goods and services. In accordance to this, systematic strategy is prepared for
sourcing and investing money for business activities (Niemann, 2014). Moreover, for price
determination strategy, financial manager of the company plays crucial role in developing
monetary profile of firm.
Marketing manager of Sainbury handles marketing activities including identifying
transaction of products and customer demand (Sainsbury, 2016). This department considers as
key component to run business entity effectively. Moreover, on behalf of product value and
market position, manager prepares strategy for quality efficiency, increasing strength for making
place in competitive market. Hence, this department is related to making decisions regarding
goods and services, pricing, promotional activities and controlling over transaction of products.
Along with marketing manager of company makes decision for production as well distribution of
products for business as well competitive strategy at high level (Popescu, 2013).
Human resource (HR) department of Sainbury focuses to develop working efficiency of
employees at large scale. In addition to this, HR manager of organization sets target to provide
training and development program to worker for encouraging them to contribute in team
building. It influences personal and professional development of employees by attending
development events (Lo, 2016). Moreover, HR department also works for recruitment and
selection of new workers for expansion of business entity. In this department, varieties of
elements are managed by human resource department of company. In addition to this, conflicts
and disputes occur among employees are also solved out. Therefore, positive and peaceful
atmosphere of firm is obtained that is valuable for increasing efficiency of firm in market.
However, Information technology (IT) department of organization plays crucial role in
effectiveness of organization. However, online marketing and creating contact with customer
through social media site impacts on business performance of Salisbury. Through this
department, manager prepares data of last years business activities in computer systems.
Including online marketing tools such as email, Facebook, Twitter and other social networking
sites are uses by manager (Csikszentmihalyi and Sawyer, 2014). It influences awareness of
society regarding getting attraction of people at high level. Thus, comparison of Sainbury with its
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competitive companies like Tesco, Iceland are also presented through online medium. In this
way, different tools are presented to increase qualitative services of organization effectively.
Including this, research and development department of Sainbury is effective for
systematic market research and development of market position of organization. It is interrelated
with marketing and production department of firm that is helpful for balanced production and
supplement of groceries and food products. In this form, several tools and techniques are applied
for searching market position and developing product value effectively (Champoux, 2016).
Moreover, production and operation department of organization concentrates on
supplement of goods and services. In accordance to this, different business operations and their
management is created for proper balance between demand and supply of products. For this
purpose, on the basis of analyzing last years' transaction activity, further activities are generated
to present effective organizational structure.
Thus, coordination among all above mentioned departments and functions remains
valuable for Sainsbury's valuable goodwill in market (Gebauer and et.al., 2016). It affects
business and competitive strategy of firm related to overall business activities. Along with
coordination and performance of all functional departments for supporting each other creates
company's organizational structural framework.
Several structures including functional, divisional and matrix presented that perform
business profile of Salisbury. Under which, functional structure represents different functions
and departments' performance including coordination for achieving organizational set goals. It
proceed to making decisions for further business strategies. In addition to this, divisional
structure is interrelated with segmentation of business activities and different departments to
achieve set targets systematically. It is effective structural framework of entity that is effective
for gaining all objectives adequately (Roth and et.al., 2016). Apart from this, matrix structure of
Sainbury presents overall business activities of firm that impacts on entity's efficiency. However,
economic and other sectors growth of firm is determined through this structural framework that
remains helpful for entity's proper growth.
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Hence, organizational functions are interlinked to each other remains helpful for its
effectiveness. Some lack of understanding and inefficient fund including resources affects
organizational structure negatively. In accordance to this, environmental factors impact and
different functions related to firm's qualitative services are obtained. Therefore, it is required for
Sainsbury to increase efficiency by taking advantage of employees' performance with great
coordination. It will be valuable for developing environment of firm to face cut throat
competition and making its positive image in global market (Reason, 2016).
c), D1 Sainsbury and Aldi
Sainsbury and Aldi are retail sector organizations of UK that provide groceries and food
products to million customers. The difference between both companies is Sainsbury is public
limited and Aldi is private sector entity of country. In addition to this, there some variances occur
regarding decision making and different business activates. However, in private limited
company, manager and owner personally take decisions for transaction as well marketing
activities. In this regard, there is less government intervention in private limited company than
public limited. Moreover, objectives for both organizations are also different for instance;
Sainsbury aims to gain high level of profit with customer satisfaction while Aldi sets target
mainly to achieve social welfare (Geiger and Schader, 2014). Therefore, organizational structure
for both companies also get impacted in different ways. It is related to decision making process
for production-distribution an d qualitative services impacts on market position as well methods
to reach out set goals. Thus, government interferes in overall business activities for Sainsbury.
Different organizational functions for both entities as Sainsbury and Aldi includes
finance, production, research and development, HR and IT impacts on organizational structural.
Hence, both entities' work performances are segmented among these various departments. It
presents business performances also influences efficiency of retail sector in UK. However,
Sainsbury and Aldi coordinate with each other for supporting retail sector and nation's
development. In this regard, effectiveness of both firms are determined by implementing
planning procedures effectively. It involves objectives, planning, implementing and evaluating to
achieve effectiveness. In addition to this, it is determined that different organizational functions
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are interlinked to each other that provides several ideas for development and effectiveness of
firm at high level. Moreover, impact of environmental factors on entity's market position is
recognized through this tool (Glor, 2014). Organizational functions related to business and
competitive strategies are obtained to acquire knowledge about healthy and secured groceries as
well food products.
PART 2
a)
Positive and negative impacts of macro environment on business operations of Sainsbury
The macro environmental factors make significant influences on business operations of
Sainsbury. The macro environment factors are the most general layer in the business
environment which includes wider environmental forces which impact the cited firm. Several
macro environmental forces make direct impact on cited company and its competitors also.
Therefore it is essential for the upper level management of the organisation to an analyse these
factors. The initial step in analysing macro environmental factors is the PESTLE analysis tha is
useful for identifying how future trends in political, economic, social, technological, legal and
environmental will influence the retail industry and the mentioned organisation (Metzger, 2014).
These factors may have positive and negative affects on the firm which impacts its functioning.
 Political factors: When in June 2016, Britain opted to leave the European Union, it
caused political and economic turbulence and uncertainness in the United Kingdom. This
has affected the functioning and operation of the firm in a significant manner. The
government debts and consumer debts are very high in UK which influences the attitudes
and buying behaviour of customers. This results in great level of pressure for the cited
firm which can have a negative impact on its performance (Hammad, 2015).
 Economic factors: These type of forces play a vital role in the industry. They make their
impact on the demand, cost, prices and profitability of firms. Due to the economic
slowdown, increasing unemployment and inflation in prices of food items make
significant impacts on the cited retail company (Vitale Giglierano and Pfoertsch, 2010)
This will make a negative effect on the demand of products offered by the firm which
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leads to low production of food items. So, the stated company has to expand its business
by entering in new emerging markets. An another economic affect on the firm that its
takeover of Argos will be impacting the firm negatively when it has to cope up with
currency hedges coming to an end.
 Social factors: In current scenario almost everyone wants to have all products under one
roof so that their time and energy does not get wasted. This is termed as one-stop
shopping. The cited firms has received positive gains from emerging trend by bringing
non-food items to its customers. With these factors, some more factors such as growing
female employees, increasing population etc. leads to decline in domestic meat
manufacturing. So there is a growing demand for these type of products which is a plus
point for the cited firm. Apart from these factors, the growing tendency of people wanting
healthy food items is also making as positive impact on the organisation. It is creating an
opportunity for the firm (Carroll and Shabana, 2010).
 Technological factors: The up-gradations and advancements in technology always have
a positive influence on business operations of mentioned company. The company is
growing its online or web oriented operations to do the business which is enabling it
extend its capabilities in field of increasing demand (Klapper Lewin and Delgado, 2011).
The online delivery of its food products and services in growing which is expanding its
business. The right use of right technologies is very essential for retail firms. As the firm
is a very large retail organisation, it is not possible to do many things manually. This can
be check out system, stock management etc. Therefore, it is important for the firm to
constantly upgrade its technologies.
 Environmental factors: The business firms are having an immense pressure to be
socially responsible and liable for maintaining the safety of nature and its resources. This
factor has some positive as well as negative impacts on the organisation. In positive terms
it improves the reputation and image of the firm when it takes initiatives for protecting
environment (Metzger, 2014). But the negative aspect is that it increases the financial
burden on the company.
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 Legal factors: The policies and laws formulated by government make a direct affect on
the performance and functioning of cited retail company (Hammad, 2015). For instance,
the new legislation proposed a new taxation on advertisements of highly processed and
fatty foods items. The firm has to adopt this new legislation through making some
changes in its products.
SWOT analysis
SWOT analyses is refers to scanning the internal and external environment of a business
organisation. It can provide the relevant information regarding the market opportunities,
customer changing needs, macro factors and other influencing factors which can affect company
future performance (Lohse and et.al., 2014). In the context of SainsBury's there are following
SWOT analysis in given:
Strength: Sainsbury is one of the leading supermarket chain in the United Kingdom
which can provide a wide range of products to its customers. The company is well known brand
in the market which provide competitive advantage over its rival business organisation. The unit
having a strong distribution network approx. 550 supermarket and 350 other stores. Apart from
that they also having a good leadership which can help in guide them in a right direction.
Weaknesses: Toady retail market is one of the competitive industry which can give
tough competition to SainsBury. Firms is having limited world wide presence as compare to their
competitors. In United Kingdom there are various local vendors and large corporations which is
fear of competition and reduction in the sell and revenue of the company. Apart from that,
organisation poor management system which can reducing their operational effectiveness and
profitability. Another major problem is that they having unskilled workforce which requires
more training and development in order to improve firm overall performance (Glor, 2014).
Opportunities: It is important for each and every business to sustain their market share
and profitability. Therefore, SainsBury can diversify their business in to new areas like jewellery,
pharmacies and other which can help to maintain their market share. Apart from that they
focused on new and emerging market such as India, China and other countries where good
market opportunities can provide more profitability (Csikszentmihalyi and Sawyer, 2014).
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Threat: There are large number of local vendors and retailers which can increase
competition in the market. It can reducing their market share and revenue which is not good for
the company. On the other hand, government instability also having great influence on the
expansion plan of business organisation.
Relationship between macro environment and SWOT of the SainsBury
Political factors are related with the government stability in the country and its business
policies. These factotor played a prominent role in the growth and development of a business.
For example, if there is a political unrest in the economy which can increase risk on the business
environment and reducing investment. Apart from that each political party having their own
agenda which can change the current business policies in the country. For example increase in
the tax rate can reducing the profitability and revenue of SainsBury. These factors also
significant for business organisation. It can include growth, inflation, interest, and employment
rate of the country (Popescu, 2013). If these factors are favorable for the company it can help in
increasing the business activities. On the other hand, if the economic condition is not good of the
economy, it can adverse impact on the business performance.
Consumer needs and preferences are change over a period of time which can increase in
the change and modification in the firm's product and services. There are various factors such as
consumer interest, fashion trends, cultural trends and age and income distribution. So that they
can make their products and services accordingly. It can help to increase their market share and
profit which is a common goal of each and every business organisation. In the present era,
technology also important for Sainsbury. Company can use innovations in their production
process which can reducing their operational cost and increase the profits. For example, business
unit can use social media platforms such as Facebook, You tube, Twitter, Instagram etc. tom
promote and communicate with their customers. It can increase customer customer relationship
which can enhance customer loyalty (Botha, Kourie and Snyman, 2014).
Today customer is more concern about the environmental issues. Therefore, all business
organizations are more focused on the sustainable business model which can also support the
environment safety. SainsBury can also make their new CSR activities which can protect
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environment, it can create a ideal image of the company in the market. These factors are related
with the laws and legislation of the country which can affects the growth and development of
their business. For example, competition policy is reducing competition in the market which is
not good for the organisation. For example, change in labor pay can affects business profitability.
Therefore, effective market research help to make their strategies accordingly (Selznick, 2014).
b) Reflective statement and critical evaluation of environmental factors impact on organization
Business environment is the one of the important factor that heavily affect the firm business
performance. I think that there are many components of the internal and external factors and each
of them have different degree of impact on the business conditions and performance of same.
Economic environment is the factor that heavily influence the profitability and performance of
the business firms. While conducting a research I identified that economic environment heavily
affects the Sainsbury business performance. This is because due to poor economic conditions
unemployment rate increased in the UK. There were large number of people who were
unemployed in the UK. I my point of view people disposable income reduce sharply due to poor
economic conditions of the nation. This is because unemployed people does not have much
amount of money to meet their needs and requirements. Secondly, employed people have to bear
burden of unemployed people. Thus, it can be said economic environment reduce spending
capacity of all people whether they are employed or unemployed. Moreover, German retails
firms like Lidl and Aldi also negatively affect the business firm. They offer product at much
cheaper price to the customers. In my view point this was the main reason due to which customer
base of the relevant firm get reduced. Thus, it can be said that economic environment heavily
affects the business firm. In my opinion business decisions must be made by the business firm
after considering number of factors. Time to time business environment must be evaluated in
proper manner by the business managers. By doing so they can keep an eye on the new
developments that are happening in the business environment. I think that by doing so on time
proper strategy can be prepared by the business firm to counter threat and capitalizing
opportunity. By doing so action can be taken on time and business objectives can be ultimately
meet by the business firm. During the entire study I come to know about lots of factors like
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economic environment have a very high impact on the business firm. It is also identified that
apart from economic environment other factors like soPopescu, G. H. (2013).
cial, political and legal also affects the business performance. But the impact the economic
environment have on the business firm is very high relative to other environment factors. Thus,
firm must remain more conscious about the changes that are happening in the economic
conditions of the nation then other factors. I agree with the fact that political environment also
heavily affect the business firm. This is because it reflects the nation government thinking and
steps it take in respect to the business firms. Thus, it is very important to evaluate political
enviPopescu, G. H. (2013).
ronment time to time so that right time for making investment or any other business decision can
be me easily by the managers of the business firm. In my view points in order to achieve
business objectives it is very important to interpret deeply each and every change that is
happening in the political environment because on that basis one can determine whether it is best
time to make investment. I think that business environment become more complex and it became
very hPopescu, G. H. (2013).
ard task to make business decisions. Due to this reason micro and macro factors heavily affects
decisions of the business firms. Thus, I think it become very important for the business managers
to evaluate business conditions time to time in proper manner. This is the only way by following
which actions can be taken on right time by the managers. By doing so performance of the
business firm can be improved to great extent. Popescu, G. H. (2013).
CONCLUSION
The report is concluded that business environmental factors impact on organization's
effectiveness. In this regard, different organizations for retail sector is considered that remains
helpful for increasing efficiency. However, various tools and techniques are presented to acquire
knowledge regarding environmental factors impact on entity is determined. In addition to this,
several organizational functions and structural framework of Sainsbury and Aldi is learn.
Moreover, interrelationship between all departments and critical evaluation is recognized to
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create balanced environment of firm. Through this study, various components and their impact
on firm's business and competitive strategies are analyzed. In addition to this, various macro and
micro environmental components including their effect on entity's market reputation is presented.
Hence, systematic business performance of Sainsbury is obtained through SWOT and PESTEL
analysis is obtained by studying this report effectively.
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