Business Environment Report: Innovation, CSR, and Royal Mail Analysis

This report provides a comprehensive analysis of the business environment, focusing on innovation, technology, and corporate social responsibility (CSR). It begins by defining innovation and technology and illustrating their contribution to economic growth, using Royal Mail as a case study. The report then delves into how Royal Mail utilizes new technologies, such as automated sorting machines, and assesses their impact on the company's sales and profits, supported by financial data from 2016 to 2019. Furthermore, the report explores the importance of corporate governance and CSR, outlining the history of CSR in the UK and its significance for organizations. It highlights the benefits of CSR for Royal Mail, including increased customer engagement, competitive advantage, and improved public image. The report also examines Archie Carroll's CSR model, providing a framework for understanding the different dimensions of corporate responsibility.

Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK1.............................................................................................................................................3
1. Demonstrate the understanding of different types of of innovation and technology which
impact the economic progress......................................................................................................3
2. Practical analysis that how innovation and technology impact the operations, sales and
profit of the company...................................................................................................................4
TASK 2............................................................................................................................................6
1. Corporate social responsibility and its importance for the organization.................................6
2. Archie Carroll’s (1991) CSR model........................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES .............................................................................................................................10

INTRODUCTION
Business environment is the combination of internal as well as external factors which
affect the operational activity and other people such as employees, customers, suppliers, demand,
business regulations etc. With the help environment analysis, managers of the company evaluate
that how they are able to meet customer expectation which maximise the productivity as well as
profitability (Belás and et.al., 2014). With the help of innovation and technology, organization
can improve their productivity as well as profitability and it will further used to develop in order
to maximise the operational efficiency of the company. This report select the Royal Mail which
is UK based organization that provide postal services. Royal Mail established in 1516 and traded
as public limited company. This project report cover various topics such as innovation and
technology which impact the economic progress and how it impact the operations, sales of the
company. In addition, it includes the importance of corporate social responsibility in context of
business and explain the Archie Carroll’s Pyramid model of CSR.
MAIN BODY
TASK1
1. Demonstrate the understanding of different types of of innovation and technology which
impact the economic progress
Innovation and technology: It is the process where organization adopt latest technology
or method in their business operations in order to maximise the productivity as well as
profitability. Innovation used to attract potential customers which emphasis the people to
purchase products and services (Belás and et,.al., 2015). Organizations follow this business
model or accept the changes of business environment. It further helps in achieving organizational
goals & objectives through maximising productivity or profit margin. For example: Royal Mail
PLC follow the traditional method of delivering products but, due to digitalization or online
shopping mode people prefer to order products online which reduce their profit margin. So Royal
Mail done tie up with e-commerce company and deliver products all over the country. Use of
technology will maximise the operational functions of the company.
How Innovation & technology contribute in the economic growth of the country:
In the current business environment, technology plays major role for the economic
development that is beneficial for the organizations. Technology advancement determined the

economic growth which maximise the productivity as well as profitability of the company. In
context of business, when they adopt latest technology, it will improve their efficiency as well as
effectiveness of operations. It will reduce the overall cost of product or services which they are
going to offer customers in order to satisfy them. With the help of innovation, it brings various
benefits such as enhance the productivity as well as profitability. It further attract the new
customers which improve the overall standards of living. Innovation and technology contribution
will positively impact the economic growth. It will create opportunity for the UK market which
help them to expand their marketers in the international market.
How business organization use new technology in their operations:
In context of Royal Mail, they recently installed automated parcel sortation machinery in
Bristol Mail Centre to speed up their parcel delivery services. Company replace the manual
sorting process because it is time consuming and take lot efforts (Cadle, Paul and Turner, 2014).
Use of technology in their business operations will improve the capacity of processing parcel
which enhance the efficiency as well as effectiveness. Currently Royal mail sorted only 12% of
their parcel by machine but they expected to increases 80% in next five years. More use of
technology will reduce the cost which helps in maximising profit margin of the company. By
using technology in their organizations will improve the overall operational efficiency. It will
reduce the labour force which save the cost and make the delivery process more faster.
2. Practical analysis that how innovation and technology impact the operations, sales and profit
of the company
Overview of the selected company:
Royal Mail is UK based company which provide the postal service & courier facilities in
the country. It is established in 1516 and provide various services such as letter post, parcel
service, EMS, delivery etc. In the organization, there are around 162000 permanent employees
where 143000 are from UK based and remaining are postman or woman. In 2011, Royal mail
establish a agency for staffing purpose and they recruit temporary employees. On of the
subsidiary company of Royal Mail is General logistics System. They deliver parcels in the UK
as well as outside of the country.
Explain new technology and how they used in their organizations:
Royal Mail follow latest technology which is automated sorting machine which save the
time as well as efforts which is very costly. They installed Parcel Sorting Machine (PSM) which

is an new technology used to move parcel from one place to another in the organization. This
system include the conveyor belts and scanning technology that automatically sort the parcels
and dispatch mail centre to final destination (Franks and et.al., 2015). With the help of
technology, company able to manage number of parcels which they have to deliver on daily
basis. Around 90% of the parcels are sorted with the help of automated machine. With the help
of installing new technology, parcels tipped on conveyor belt at the end of machinery before
placing manually. If company wanted to maintain their position in the market or among the
customers then they have to modify their working methods and follow the trends.
Sales and profits of the company before and after the new technologies were introduced:
Technology and innovation in the business operations will help the organization to
maximise their sales as well as net profit of the company. Cheng in the technology will improve
the efficiency as well as effectiveness which further reduce the overall cost of delivering goods.
In context of Royal mail, company use Parcel Sorting Machine (PSM) which automatically sort
the parcels and it will reduce the time as well efforts of human resources. Through installing this
technology in the business operations, company maximise their revenue as well as profit which
clearly mentioned in the below mention table. It represent the data of Royal mail company
regarding sales or profit from the duration of 2016 to 2019.
Particulars 2016 2017 2018 2019
Revenue 9251 9776 10172 10581
EBIT 167 231 212 241
Net profit 248 273 398 409
With the help of above mention table, it can be concluded that change in the technology
will increase the sales of Royal Mail company from 2016 to 2019 and it was £ 9251, £ 9776, £
10172 and £ 10581 respectively (Annual report, 2017). Along with this, it increases the overall
profit of the company such as £ 248 in 2016, £ 273 in 2017, £ 398 in 2018 and £ 409 in 2019.
Before the use of technology, Royal mail generate profit from traditional method which
reduces their demand in the market. After introducing technology or linked with many E-
commerce company will provide the huge growth.

Innovation and technology provide the success and helps in generating more profit
through implementing in manner. At the time innovating, organization have to analyse the
market trend which provide them opportunity to grow in the market. Royal Mail need to adopt
latest technology as well as innovate the various ways to maximise their operations or link with
many places to deliver their services (Kolk, 2016). It will further enhance the productivity as
well as profitability.
TASK 2
1. Corporate social responsibility and its importance for the organization
Corporate governance: It is the combination of various rules & regulations and the
process which followed by the organizations in order operate or regulate for the overall control
over business activities. With the help of it, business able to direct and control the activities of
internal people and include some responsibilities where they have to build strategies, use
effective leadership style to maximise the individual performance as well as productivity
(Kozubíková, Homolka and Kristalas, 2017). Every organization need to follow the rules &
regulations because it affect the interest of company's stakeholders such as customers, suppliers,
shareholders, government etc. In context of Royal Mail, corporate governance include the action
plan where performance will be measures, disclose all the practices which going to implement in
the organizations, policies regarding divided, conflicts between parties, explicit or implicit
contract, interest of stakeholders etc. Organization need to follow all the compliances which
make operational activities more smoother or minimise the complexity.
Corporate social responsibility: It is one of the business model which is used by the
organization is order to contribute in the society for the sustainable development. There are a
simple concept that, when organization take many things from the society such as raw material,
human resources, infrastructure etc. So now its their responsibility to pay off in terms of
contributing in the society in order to provide sustainable development and enhance the standard
of living. It become mandatory for public and private sector companies where they required to
spend fixed amount of percentage in the committee through following relevant rules and
regulations of government. It is beneficial in accomplish the organizational goals through
improving their image or make efforts to manage, develop and welfare of the society

History of corporate governance in UK: This concept developed 20 years ago and
which has main aim it is check listed companies and ensure that they are follow their standards
or ethics in well manner or not. Initially, it is not compulsory for the organisations to contribute
their few part of profit in the society. But, organizations does not follow it in well manner so
corporate social responsibility (CSR) become compulsory for those organizations which generate
profit to the specific level. It is very important for organization because it force them to focus on
accuracy in their accounts, accountability and transparency. For example: Royal mail they follow
all the compliances which make them able to manage their organization in well manner
(Niemann-Struweg, 2014)). Management follow rules & regulation in their operations activities
or provide transparency, accuracy, accountable etc.
Importance of CSR for Royal Mail: Every organization contribute in the society which
provide them various benefits. Corporate social responsibility (CSR) is very important for the
Royal Mail to understand that, what benefits they get through taking initiatives and contributing
in well manner. Some of the importance mentioned below:
Increases customer engagement: If Royal mail contributed in CSR activities it will
further helps improving their brand image or enhance customers engagement. In order to gain
competitive advantage, Royal mail have to taker part in CSR activities. They need to engage
with local media which provide them some coverage which increase the customer engagement
and it will increase the awareness regarding their services which they offer to the consumers.
High competitive advantage: CSR very essential for the company because it helps in
providing competitive advantage or make them able to maximise their productivity as well as
profitability. Effective CSR policies will attract the large number of customers which improve
their brand value as well as image. It will further beneficial in generating high revenue or profit
from the business operations.
Improve public image: Corporate social responsibility build public image more stronger
which make people decide to make their decisions regarding buy or not (Prajogo and Oke, 2016).
For example: Employees of Royal mail volunteer for an hour for entire weak as a charity service
for society. It will represent the brand commitment to help others.
Benefits for employees: CSR activities also beneficial for the employees because it make
them more productive and provide effective culture. Through taking part in the CSR activities,
employees can enhance their personal or professional growth.

With the help of corporate social responsibility, Royal Mail get various benefits which
helps them to enhance their brand image, increases customer engagement etc. It will further
helps in maximising productivity as well as profitability which help the business to achieve their
operational goals & objectives.
2. Archie Carroll’s (1991) CSR model
It is the framework which is used by the organizations in order to analyse the way that
how Corporate Social Responsibility provide benefits. One of the mail advantage is that, they
provide strategies which help in maximising productivity as well as profitability (Sodeyfi, 2016).
This model include the various elements which indicate that organization have to focus on some
responsibilities such as economic, legal, ethical or philanthropic. This model discussed in context
of Royal Mail:
Economic responsibility:
 Business have to be profitable which helps in contributing in the economic growth.
 Organizations have to fulfil their economic responsibilities in order to survive in the
market for longer period.
Legal responsibility:
 Royal Mail have to obey the rules and other regulations which placed on them otherwise
they unable to get success in market.
 At the time of developing any program, they have to make sure that all the legal
requirements are fulfil.
Ethical responsibility:
 Each and every activity should be ethical or moral which positively impact the Royal
Mail company or build their positive image in front of consumers.
 Organizations should go beyond the narrow requirements.
 Business need to fulfil their responsibility regarding employees, customers, suppliers erc.
Philanthropic responsibility:
 It is the responsibility of business to contribute in the community in order to provide
social development as well as welfare.
 They need to ensure that, public actually get the benefits of these programs or it will
create value in their life which provide sustainable development.

 Every organization such as Royal Mail need to engage with charitable activities, donate
for social cause, engage employees for volunteering.
With the help of this model, management of Royal Mail able to understand their
responsibility and how they have to perform in various context. This model used by the Royal
mail which is very easy to understand that how any company have to fulfil their responsibility
regarding society (Wetherly, 2014). It also emphasis the importance of profit because main
purpose of this program is to increase the overall profit of the company with the help of these
programs. There is one question and it was that, should ethics be at top? If ethics are most
important then it will impact the overall profit margin of the company.
Managers of Royal Mail focusing on all the elements of this model which help attain
success. Currently 2% of annual profits are required to spent by Royal Mail in the society for the
social welfare as well as development of the society and it also helps in attracting large number
of customers.
CONCLUSION
From the above discussion it has been concluded that organization need to evaluate their
internal as well as external environment. One of the major factor is the change in technology
which improve the overall efficacy as well as effectiveness. With the help of CSR activities,
business able to maximise productivity, sustainability, improve brand image etc. By using Archie
Carroll’s Model, organization analyse their responsibility in various context such as
environment, legal, economic and Philanthropic.

REFERENCES
Books & Journals
Belás, J. and et.al., 2014. Significant attributes of the business environment in small and
meduim-sized enterprises. Economics and Sociology.
Belás, J. and et,.a;., 2015. The business environment of small and medium-sized enterprises in
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Cadle, J., Paul, D. and Turner, P., 2014. Business analysis techniques. Chartered Institute for IT.
Franks, D. M. and et.al., 2015. National Academy of Sciences. 111(21). pp.7576-7581.
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business. 51(1).
pp.23-34.
Kozubíková, L., Homolka, L. and Kristalas, D., 2017. The effect of business environment and
entrepreneurs’ gender on perception of financial risk in the smes sector. Journal of
Competitiveness.
Niemann-Struweg, I., 2014. An integrated communication implementation model for the post-
2000 business environment. Public Relations Review. 40(2). pp.184-192.
Prajogo, D. I. and Oke, A., 2016. Human capital, service innovation advantage, and business
performance: The moderating roles of dynamic and competitive
environments. International Journal of Operations & Production Management. 36(9).
pp.974-994.
Sodeyfi, S., 2016. Review of literature on the nexus of financial leverage, product quality, &
business conditions. Journal of Economic & Management Perspectives. 10(2). pp.146-
150.
Wetherly, P., 2014. The business environment: themes and issues in a globalizing world. Oxford
University Press.
Online
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