Sainsbury's Sustainability and Business Model

This assignment requires a critical analysis of Sainsbury's commitment to sustainability. Students need to examine their 20 by 20 plan, assess the effectiveness of their corporate social responsibility (CSR) strategies, and explore the relationship between sustainability practices and Sainsbury's overall business model. The analysis should consider various aspects like environmental impact, ethical sourcing, community engagement, and stakeholder relationships.

THE BUSINESS
ENVIRONMENT
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
Task 1...............................................................................................................................................3
P1 Describe the type of business.................................................................................................3
P.2 Describe the different stakeholders.......................................................................................4
Task 2...............................................................................................................................................5
P.3 Describe how two businesses are organised in terms of their structures...............................5
P.4 Explain the style of organisation...........................................................................................7
Task 3...............................................................................................................................................8
P.5 Describe the influence of two contrasting economic environments......................................8
P.6 Describe how political, legal and social factors are impacting upon the business................9
CONCLUSION ...............................................................................................................................9
REFERENCES .............................................................................................................................10
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INTRODUCTION
This report is about the environmental factors taking in account the organization. This
report also focuses on the organizational structure and its influences. It will also cover the types
of business and its influence and factors which affect them in the current business scenario.
Task 1
P1 Describe the type of business
 Sole proprietorship: A sole proprietorship is a business owned by only one person. It is
easy to set-up and is the least costly among all forms of ownership (Arrow, 2013).
The owner faces unlimited liability; meaning, the creditors of the business may go after the
personal assets of the owner if the business cannot pay them (Besley, 2010). The purpose of
business is to earn profit in through sales of the dealing products.
 Partnership: A partnership is a business owned by two or more persons who contribute
resources into the entity. The partners divide the profits of the business among
themselves.
In general partnerships, all partners have unlimited liability. In limited partnerships creditors
cannot go after the personal assets of the limited partners. A partnership is ever going and only
dissolve with concern of all the partners, bankruptcy. If a partner dies or retires he is paid by
other partners.
This kind of firms work for earning profit through maximization of sales and production.
 Private company: A type of company that offers limited liability, or legal protection for
its shareholders but that places certain restrictions on its ownership (Bokken, 2013).
These restrictions are defined in the company's bylaws or regulations and are meant to
prevent any hostile takeover attempt. Shareholders cannot sell or transfer their shares
without offering them first to other shareholders for purchase. Shareholders cannot offer
their shares to the public over a stock exchange. The liability of a shareholder is up to his
share in the company.
The sole proprietor, private company and the partnership have a sole objective to earn
profits. The liability of the sole proprietor and partnership is unlimited whereas in the company
the liability is up to the amount of holding in the company.
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Nonprofit organization : Associations, charities, cooperatives, and other voluntary
organizations formed to further cultural, educational, religious, professional, or public service
objectives. Their startup funding is provided by their members, trustees, or others who do not
expect repayment, and who do not share in the organization's profits or losses which are retained
or absorbed. Approved, incorporated, or registered NPOs are usually granted tax exemptions,
and contributions to them are often tax deductible (Carroll, 2014). The shareholders in the
organization is have no liability towards the creditors.
A profit organization's main objective is to earn profits which is unlike of the NPO's who
focus on the social services.
P.2 Describe the different stakeholders
 Customer : A customer is the recipient of a good, service, product or an idea - obtained
from a seller, vendor, or supplier via a financial transaction or exchange for money or
some other valuable consideration. The customers of McLaren are the buyers of its
expensive cars.
 Employee : An individual who works part-time or full-time under a contract of
employment, whether oral or written, express or implied, and has recognized rights and
duties. Also, is called worker. McLaren has a large employee length of engineers and
executive officers. It focuses on treating the employees with dignity.
 Owner of a business : Individual or entity who owns a business entity in an attempt to
profit from the successful operations of the company. Generally has decision making
abilities and first right to profit. The owners of McLaren are its the shareholders of the
company.
 Supplier : A party that supplies goods or services. A supplier may be distinguished from a
contractor or subcontractor, who commonly adds specialized input to deliverable. Also,
called vendor. The supplier of McLaren are the main part suppliers of the company.
 Trade union : An organization whose membership consists of workers and union leaders,
united to protect and promote their common interests. The principal purposes of a labor
union are to negotiate wages and working condition terms. Regulate relations between
workers (its members) and the employer, take collective action to enforce the terms of
collective bargaining. Raise new demands on behalf of its members. Help settle their
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grievances (Fang, 2017). A company union that represents interests of only one company
and may not have any connection with other unions.
Effects of stake holders on organization :
 Customers: You must understand customer wants and needs and meet them on an
ongoing basis. Community leaders and activists also hold your company accountable to
act with social and environmental responsibility. This means that if you don't participate
in community activities and give to charities, you could face negative public sentiment
and backlash. If the McLaren do not satisfy their customers their business may fail.
 Employees : Companies tend to place greater value on the contributions employees make
to business operations. If you operate a service-based business, your employees provide
the consistent service that helps you attract and retain customers. The employees
McLaren are satisfied with their management which keeps the company on top (Carroll,
2014).
 Suppliers : If you have strong, trusting relationships with key suppliers, you can normally
negotiate more reasonable costs and get more efficient replenishment when your
inventory runs low. The supply power of McLaren helps the company perform.
Task 2
P.3 Describe how two businesses are organised in terms of their structures
Profit organization :
Divisional structure typically is used in larger companies that operate in a wide
geographic area or that have separate smaller organizations within the umbrella group to cover
different types of products or market areas. McLaren Company was organized divisionally--with
a small engine division, a compressor division, a parts' division and divisions for each
geographic area to handle specific needs. The benefit of this structure is that needs can be met
more rapidly and more specifically; however, communication is inhibited because employees in
different divisions are not working together. Divisional structure is costly because of its size and
scope. Small businesses can use a divisional structure on a smaller scale, having different offices
in different parts of the city, for example, or assigning different sales teams to handle different
geographic areas.
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Human resource department :
The human resource department of the company focuses on the activities of McLaren.
The department is responsible and authorized to recruit and lay off any employee in the
organization.
Production department :
This department of the McLaren takes care of the production process and monitors the
production progress of the company. It involves the line of production and the engineers working
on the cars.
Finance department :
The financial needs and planning is done by the production department of McLaren. The
main purpose of this department is to take care of the financial needs. It includes accounting and
purchase, and also the allocation of money.
Marketing Department :
The department of marketing is responsible for promotion of the cars of McLaren. It
decides the strategy to launch a new car or the version of the current car. It makes the strategy to
promote the car in the market.
Nonprofit organization : Oxfam follows a typical structure of organization which helps it fulfills
goal.
Governance : Nonprofits are governed by the board of directors. The size of the board of
directors can vary from three to more than 50 (Fang, 2017). Each state has rules that set the
minimum size of the board but the exact size of the board and the number of times that it meets
each year changes from one organization to another, depending on the needs of the organization.
Administration : The administration is made up of the staff that oversee all programs. Nonprofit
administration usually includes an executive director, or president, and office personnel. The
executive director is responsible for liaising with the board and for carrying out their instructions,
as well as for overseeing the people who run the programs of the nonprofit.
Program : Most nonprofits are founded to carry out certain specific types of work, for
example, running a homeless shelter or raising money to provide clean drinking water in
developing countries. The organization is structured into various program areas to carry out this
work and achieve its goals.
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Unique management areas : Nonprofits typically have several types of management areas
that may not exist in for-profit companies (Cloud, 2010). These may include fundraising and
grant writing, volunteer programs and public policy. Some of these areas, such as fundraising,
may be handled by the executive director, or an entire department, headed by an assistant
director.
P.4 Explain the style of organisation
McLaren follows a divisional structure which helps it in a smooth functioning. The
divisional structure strengthens the company in different ways. The individual divisions of the
company are independent financially and that allows them to determine clear routes of
accountability and responsibility. Financial independence also creates cooperation among the
divisions without competition. Different specializations (divisions) help employees further
develop their skills in their own area of expertise. As each division is independent, it can respond
quickly to external changes in the business environment without affecting divisions of the
company. Divisional organizational structures work best for large companies that operate in
different geographic areas or have separate smaller organizations to cover different types of
products or market areas. The most important element of success for companies with divisional
structure is employing effective management (Bokken, 2013). The executive leadership needs to
have a solid understanding of the functioning of each division and have the capability to advise
the division chiefs how to implement new strategic directions or how to cooperate more
effectively with other divisions.
The finance, HR, marketing and the production departments of McLaren have their own
respective heads. They work in their own department and communicate with each other for any
assistance or other departmental queries. All the managers report to the cluster head of the
company.
Oxfam's structure helps it gain a performance in the long run and work it does. A strong
nonprofit organization is associated with a strong board of trustees. Strong boards of trustees
should be led by experienced executive directors that conduct annual executive reviews and
provide for organizational growth. It can be helpful for trustees to participate in continuing
education and workshops to stay current on important trends. Strong boards of trustees should
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develop strategic plans, and also focus on the long-term health of their respective organizations.
Each program area may then have its own department head, or assistant director. Typical
program areas may include fund-raising, operations, development, human resources, volunteer
coordinator, marketing, or publicity and planning. The program heads report to the chief
executive and may have any number of staff members under them (Du, 2010).
Task 3
P.5 Describe the influence of two contrasting economic environments
There are many different economic environments and influences that affect a business
regardless of country and recognizable ability of the company. Though these effects can
potentially be extremely damaging, there are ways for the company to recover and improve. To
summaries the meaning of economic environment are factors external to a business that cause
effect such as employment, income, interest rates etc.
The key influences of the causation of these factors are: consumers, bankers, the government and
suppliers. Bellow I will be highlighting two key economic environment influences that will
greatly affect many organizations.
McLaren as a company is a well-established brand that is most defiantly effects by all
these factors, bellow I will be explaining the effects on businesses in general including McLaren.
The overall meaning of recession refers to a period at which there is an economic decline and as
an outcome, trade is reduced. There are many factors that cause a recession and those are as
follows:
 Credit Crunch – This is the shortage of finance in the economy, due to banks and other
investors less willing to lend money to those looking for a loan. This results in businesses
especially not able to borrow money to pay off their expenditure, which causes the level
of debt of businesses and family’s being greatly increased.
 Falling house prices – this is linked with the credit crunch which causes a shortage of
mortgages being lent and paid back. This result in family’s less willing to invest in
companies as their bills and living essentials become their priority.
 Inflation – Inflation causes incomes to be reduced, which again limits the public's
spending.
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 Consumer Confidence – with job loss and reduced finance in the economy it causes
consumers’ confident to decrease resulting in a decrease of spending.
The economic environment condition of Spain is growing rapidly and as in comparison to the
economic environment of UK. McLaren must invest in Spain as the environment will help the
business to grow swiftly and the expansion will be successful. The profit earning of opportunity
in more in Spain whereas UK is a lesser opportunity to earn profit. The conclusion being that,
Spain has a more attractive business opportunity and growth option.
P.6 Describe how political, legal and social factors are impacting upon the business
 Political factor: The political factors affecting business are often given a lot of
importance. Several aspects of government policy can affect business. The political
environment can impact business organizations in many ways (Arrow, 2013). It
could add a risk factor and lead to a major loss. You should understand that the political
factors have the power to change results. It can also affect government policies at local to
federal level. The British environment help the McLaren to manufacture in an efficient
way by providing necessary opportunity and help in production.
 Legal factor: Legal factors are external factors which refer to how the law affects the way
businesses operate and customers behave. The Legal system of the Spain is lenient in
comparison to the UK 's legal authorities. The licensing and other legal foundations are
less in Spain.
 Social factors: You will also have to consider the cultural changes which take place in
your business environment. Market research is a critical part of this step. It is vital to see
the trends and patterns of the society.
CONCLUSION
The report above shows that the business environment is ever changing or dynamic in nature and
the companies should continuously review the environmental changes. The environmental
factors influence the business the most in the current scenario. This review or evaluation will
help the company revisit its plan. The company should remodel its strategy according to the
environment to make the organization a successful one. The structure of the organization plays a
major role in the achievement of the objectives the organization.
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REFERENCES
Journals and books
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Bokken, N. and et.al., 2013. A value mapping tool for sustainable business modelling. Corporate
Governance. 13(5). pp.482-497.
Carroll, A. and Bocholt, A., 2014. Business and society: Ethics, sustainability, and stakeholder
management. Nelson Education.
Cloud, R. C., 2010. Epilogue: Change leadership and leadership development. New Directions
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Coma nor, G.W. and et.al., 2014. Competition policy in Europe and North America: economic
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Commander, S. and Svejnar, J., 2011. Business environment, exports, ownership, and firm
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Daft, 2009. Organization Theory and Design, 10th Ed. Cengage Learning
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responsibility (CSR): The role of CSR communication. International Journal of
Management Reviews. 12(1). pp.8-19.
Edward Freeman, R., 2010. Managing for stakeholders: Trade-offs or value creation. Journal of
business ethics. 96(12). pp.7-9.
Fang, W. and et.al., 2017. Accessing on the sustainability of urban ecological-economic systems
by means of a coupled energy and system dynamics model: A case study of Beijing.
Energy Policy.100. pp.326-337.
Online
Felted, A., 2010. Sainsbury looks at overseas expansion. [Online]. Available through:
https://www.ft.com/content/78aee5b0-ecfb-11df-9912-00144feab49a. [Accessed on 10th
February 2017].
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<https://www.statista.com/statistics/386475/sainsburys-store-numbers-by-convenience-and-
supermarket-united-kingdom-uk/>. [Accessed on 10th February 2017].
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Sainsbury’s 20 by 20 Plan. 2016. [Online]. Available through:
https://www.j-sainsbury.co.uk/media/373272/sainsbury_s_20_by_20_sustainability_plan.pdf.
[Accessed on 10th February 2017].
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