Strategic Management for Competitive Advantage (Project C)

This document provides a critical evaluation of the organization sustainability and CSR, alongside the financial performance of a major international corporation. It discusses the concept of Corporate Social Responsibility (CSR) and the Triple Bottom line approach. It also includes a financial performance analysis of Aston Martin. The document is relevant for the subject of Strategic Management and the course code is Project C.

Strategic
Management for
Competitive
Advantage
(Project C)
1

Table of Contents
Table of Contents..........................................................................................................................2
PROJECT C...................................................................................................................................3
Critical evaluation of the organization sustainability and CSR, alongside the financial
performance of a major international corporation....................................................................3
Concept of Corporate Social Responsibility (CSR).............................................................3
The concept of Triple Bottom line and Corporate Social Responsibility (CSR)..............3
Financial performance analysis of Austin Martin.................................................................5
REFERENCES..............................................................................................................................7
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PROJECT C
Critical evaluation of the organization sustainability and CSR,
alongside the financial performance of a major international
corporation.
Concept of Corporate Social Responsibility (CSR)
Corporate social responsibility is a business self regulation which regulates
business organisations to contribute their part of earnings towards the society and
engage them in society support activities (Kerzner, 2017). CSR is a management
concept which regulates organisations to integrate their operations with social and
environmental concerns. The purpose of CSR is to build a positive image of an
organisation along with contributing to the society.
The concept of Triple Bottom line and Corporate Social Responsibility (CSR)
The large multinational corporation which has been selected is Aston Martin; this
company is a car manufacturer and is a British independent manufacturer of luxury
cars. The rationale behind selecting this organisation is the operations of this company
is Europe which relates it to the Genius Global Car Ltd. The CSR activities alongside
financial performance are evaluated below:
Triple bottom line concept is a corporate social responsibility concept which helps
in states that an organisation must integrate three variables while contributing towards
the society. These three variables are people, profit and planet (Heagney, 2016). Using
these three elements, the sustainability and CSR activities of Aston Martin are
analysed.
People – People are the employees of Aston Martin. This company believes in
gender equality due to which they have initiated a programme in their named “Gender
pay gap 2019”. Under this programme, gender diversity has been promoted by ensuring
recruitment and retain of talented females. This company has successfully appointed
females not only for junior positions but also for senior management positions as well.
Besides this, Aston Martin also ensures the health and well being of their employees by
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following five parameters which are safeguarding employees, employee relations,
diversity, develop a great place to work and attracting talent.
Profit – This element refers that every organisation must contribute a part of their
profit towards society. Considering this, Aston Martin is engaged in conducting charity
work and this company is engaged in multiple charities which are a part of their CSR
strategy. Few organisations which are benefitted from this company’s charity are RAF
Benevolent Fund, Duke of Edinburgh Award Scheme, Duke of Edinburgh Award
Scheme, Goodwood Marshals Club and many others (Sustainability report of Aston
Martin, 2019).
Planet – This element is focused upon ensuring environmental sustainability by an
organisation. This sustainability is a core component of a company’s business strategy
as it does not only results into environmental welfare but also enhances the brand
image of the company towards society (Clement, 2012). There are various policies
which are developed by Aston Martin to ensue environmental sustainability by their
operations. These policies state that Aston Martin is committed towards CSR due to
which they have converted their usual automobiles into battery recycling technologies.
As it has been known that automobiles exhale harmful pollutants which are harmful for
environment. This is a great concern for the society in current times and in order to
contribute towards this concern resolution, Aston Martin sells auto mobiles which can
use recycled battery. This initiative of Aston Martin aims to resolve two problems, the
first is to discourage the use of non-recyclable energy sources such as Petrol and
Diesel and encourage the use of energy resources which do not harm the environment.
The three elements discussed above are the decisions of Aston Martin which they
took to under their organisational sustainability agenda. These decisions must be
considered by Genius Global Car Ltd. while setting their sustainability agenda. Besides
the corporate social responsibility, company’s corporate governance is also an essential
concept to be considered. The concept of corporate governance is the combination of
various rules and laws which are followed by an organisation. In case of Aston Martin
which is a large scale auto mobile company, there are various laws and legislations
which are required to be followed for lawful conduct of business. Aston Martin has a
separate department of lawyers and solicitors who are responsible to ensure that
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company is following all the laws which are levied upon them. These rules and
standards and corporate governance influence the interest of company’s stakeholders.
These group of stakeholders include employees, suppliers, investors, board of directors,
shareholders etc.
Financial performance analysis of Austin Martin
The corporate social responsibility and corporate governance of Aston Martin which
is assessed above impacts the financial position of an organisation as CSR activities
require high monetary resources (Galindo and Batta, 2013). In order to analyse the
financial performance of an organisation, it is important to analyse their financial
statements including balance sheet, income statement and cash flow statement. Along
with these statements, financial ratios are also a great way to analyse financial
performance and position in market.
From the income statement of this report, it has been seen that total revenue of this
company has been decreased from 1096 to 997 million pounds. Following this pattern,
the losses of this company has also increased in 2019 (Annual report of Aston Martin,
2019). This loss can be the result of high competition and high expenditure towards the
CSR activities.
According to the income statement of Aston Martin it is also identify that the revenue
standards of the organization is also reduced by 9% in 2019. Main reason which is been
highlighted behind this fall in the revenue of the organization is due to the reduced in
year on year vehicle wholesale volumes and also the reduction in average selling price
of vehicles. The impact of reduced revenues is also been seen on the poolside volume
of the company as the wholesale units are also decrease by 9%. The reason behind the
decreased volumes is due to the weakness of vantage and in the European and the
United Kingdom markets. Across the all car lines partially offset by the strength in
American region and also the Chinese Market (McIntyre and Srinivasan, 2017).
Another impact which is seen in the income statement of Austin mark in due to the
lower revenue units is on the EBITDA of the organization. The adjusted EBITDA of
Aston Martin have seen the fall of directly 46% with reduced revenues due to the lower
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average selling prices and volumes in addition to increase retail and customer financing
support.
The second financial statement which is been analyzed of Austin Martin is of its cash
flow statement. The cash flow statement is a document or a record prepared by the
finance team of a company that focuses towards the net cash inflows and outflows
which are being conducted in a particular period of time (Mahdi, Nassar and Almsafir,
2019). The cash flow statement of Aston Martin appropriately highlights that the
borrowings and the inventory repurchase arrangement of organization is increased as
compared to the units from 2018. The increased borrowings reflects the issue of 340
million US dollars in bond during the year and the revaluation of the US Ranchi of senior
secured notes alongside a partial downwards of the exchange rate by ¢70 million. This
automatically showed that Austin Martin word from the fluctuation took place in the
exchange rate which caused it use increase in their borrowings and affected on their
cash flow statement in a negative way.
This Inflexibility and fluctuation of exchange rate will cause a huge problem on the
company as the financial are being negatively performed and stored which will directly
impact on the stakeholders decisions and their mind-sets of the company. The
organization will be suffering from lower investment and liquidity in future. The result of
red is appropriately highlighted in the adjusted return on investment capital which was
12.8% and now reduced to 0.3%. Aston Martin can suffer from huge losses in the future
if the management and other related financial directors do not take appropriate steps to
bring the organization back into the business and making their financials better and
more reliable for the external and internal parties (Durand, Grant and Madsen, 2017).
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REFERENCES
Books and Journals
Clement, M., 2012. Rage against the market: Bristol’s Tesco riot. Race & Class. 53(3).
pp.81-90.
Durand, R., Grant, R. M. and Madsen, T. L., 2017. The expanding domain of strategic
management research and the quest for integration. Strategic Management
Journal. 38(1). pp.4-16.
Galindo, G. and Batta, R., 2013. Review of recent developments in OR/MS research in
disaster operations management. European Journal of Operational Research.
230(2). pp.201-211.
Heagney, J., 2016. Fundamentals of project management. Amacom.
Kerzner, H., 2017. Project management: a systems approach to planning, scheduling,
and controlling. John Wiley & Sons.
Mahdi, O. R., Nassar, I. A. and Almsafir, M. K., 2019. Knowledge management
processes and sustainable competitive advantage: An empirical examination in
private universities. Journal of Business Research. 94. pp.320-334.
McIntyre, D. P. and Srinivasan, A., 2017. Networks, platforms, and strategy: Emerging
views and next steps. Strategic Management Journal. 38(1). pp.141-160.
Online
Annual report of Aston Martin. 2019. [Online]. Available through:
<https://amlcorp.blob.core.windows.net/default-storage/docs/default-source/
documents/annual-reports/astonmartinlagonda_2019ar_200316.pdf?
sfvrsn=5ae6076e_2/>
Sustainability report of Aston Martin. 2019. [Online]. Available through:
<https://amlcorp.blob.core.windows.net/default-storage/docs/default-source/
documents/sustainability/aml-sustainability-summary-report-2018.pdf?
sfvrsn=8d7f78c9_2>
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