Analyzing Contemporary Management Issues at P&O Ferry Services

This report provides an analysis of contemporary management issues at P&O Ferries, a UK ferry operator recently acquired by DP World. It explores the impact of external environment changes, utilizing PESTEL and Porter's Five Forces frameworks to assess the company's market position and competitive landscape. The analysis covers political, economic, social, technological, environmental, and legal factors affecting P&O's performance. It also addresses drivers of change, stakeholder needs, ethical considerations, and CSR, particularly in light of Carroll's pyramid. The report further discusses communication strategies, cross-cultural barriers, and provides recommendations for sustainable growth, emphasizing the importance of adapting to market changes and maintaining ethical standards to ensure long-term success in a competitive environment.

Contemporary Management Issues

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Impact of external environment changes on organization.........................................................3
PESTEL Analysis of P&O...........................................................................................................5
Drivers of change.........................................................................................................................7
Change affect P&O......................................................................................................................8
Impact on the needs of the stakeholders......................................................................................9
Change influenced the type of decision.......................................................................................9
Changes important for P&O Ferries..........................................................................................10
Demonstration of good ethics....................................................................................................10
Carroll’s pyramid for CSR.........................................................................................................10
Evidence to show that P&O Ferries did not respond positively...............................................11
Opportunities that P&O Ferry has and strategies......................................................................11
Advantage and disadvantage of stakeholder interest.................................................................11
Communication in P&O Ferry...................................................................................................12
Challenges of cross culture barriers...........................................................................................12
Strategies for effective communication.....................................................................................12
Recommendations......................................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES................................................................................................................................1

INTRODUCTION
Change is very important for the organization and in order to sustain in the market
company has to deal with it in effective manner. Along with this, the present report is based on
P&O that is UK ferry operator that deals with cargo services. Moreover, the company has
recently acquired by DP world and logistic company. The study will discuss about the driver of
change and its impact on the business performance as well as the current strategy used by firm in
order to deal with the changes present in the market. Lastly, it has recommended organization in
order to build sustainable growth.
MAIN BODY
Impact of external environment changes on organization
External environment is consisting of political, legal, technological factor which affect the
growth of the company in effective manner. Along with this, one of the major threat which has
been faced by business recently is COVID- 19 and it has changed the process of conducting the
business. These factor affect the company growth as meeting with them required finance and
innovative solution. Such for coping up with pandemic new business rules as been implemented
such as online payment and social distancing. Due to these rules most of the organization has to
make use of technology in order to attract customer and due to that their expenses has increased.
However, the operations of business have been impacted as it has to deal with new changes. The
company has to identify taste and preferences of customer so that it can make product according
to them. Thus, meeting with changes is essential for firm as it will contribute in sustain in the
competitive market (England and Hershberger, 2020). Although change is inevitable factor in
the life cycle of business as change is driven factors within the company itself such as reposting
the organization in new market area or making use of creative business model as well as
adopting different nature of business.
Along with this, change is also present in external factor of business like new competition
in market, advance technology as well as shift in customer taste. However, government policies
are also involved in external factor as any change in that will affect the company in both negative
and positive manner as company has to sustain in business environment. (Idrees, Nowostawski
and Jameel, 2021). Thus, it can be stated that external and internal factor drives the change and it

is up to company that it should help the in increasing their progress or tear them apart. Although
change always lead to progress as many factor is considered as change affect both processes and
structure of the company.
Furthermore, the external environment includes set of factors and interest group like
manager, customer, suppliers, owner that are directly affected by work of company and it have
power to have control over it. The company while formulating the polices for business takes into
consideration that it must take account of external environmental opportunity and threats. The
political factor consists of laws and regulations made by the government and any change in
commercial law or taxation policy will discourage or encourage business. Thus, organization has
to follow them appropriately in order to avoid risk . (Khim and et.al., 2019). Furthermore,
another factor like economy directly affect business through interest rates, exchange rates and
price fluctuation. In addition to this, the another important factor is technological factor that
include new technologies which contributes in achieving productivity, creating new products for
consumption. So it is necessary for the company to make use of this factor correctly in order to
attract customer as well as to sustain in the competitive area.
Furthermore, the company need to make use of strategic tool in order to identify the
factor available in external market. Along with this, this tool will allow organization to make
appropriate decision for the growth. The strategic tool will also contribute in finding the threat
and to get solution for that in order to reduce the impact (Lin and et.al., 2018). Although it helps
in understanding the organization market and the business position as well as it helps in
developing the strategy by conducting market research in new existing markets. Thus, it helps in
evaluating how strategy fits into the broader environment.
Moreover, PESTLE analysis helps manager gain a better understanding of the
opportunities and threat it face as well as it analysis aids in building better version of the future
and how the firm might complete profitability. Thus, these tools are helpful in dealing with the
factor that can have negative effect as well as making use factor which are advantageous. In
addition to this, tool like SWOT can be used as it also contributes in finding the opportunity for
firm that helps in success of company as well as identifying threat for the organization which can
affect the performance in negative way. So it can be stated that both these tools are useful in
order to deal with the external factor in effective manner. (Mihai and et.al., 2021). Hence, it

helps in taking strategic decision appropriately which allow in increasing the growth of company
in competitive market.
PESTEL Analysis of P&O
This is strategic tool that helps in analysing external factor and their impact on the performance
of the company.
Political: This factor has been affect company performance directly and indirectly. It includes
laws and polices implemented by government and the authorities. During the time of pandemic
there is policy of restriction on trade has been affected and due to company has to suffer huge
loss. There was no export and import locally and internationally as well as most of the country
has made act of closing this sector. Along with this, change in law affects the profitability of
company in negative manner.
Economic: This factor is consisting of Tax and interest rate in the market area and it affect the
company revenue. Although P&O has been operating in market of UK and GDP rate of country
is good and due to that it is able to earn good profit (Nair and Reed‐Tsochas, 2019). Along with
this, due to good economic condition the income rate of consumer is also good and it generally
spend more on purchasing and buying of products.
Social: This factor is consisting of taste and preferences as well as segmentation of customer.
Moreover, P&O industry generally focus on companies that have international connection as
their main work is export. In addition to this,
Technological: It is one of the fast disrupting in many companies across the board and it is very
beneficial for transporting companies. Along with this, the organization is making use of various
advance tools in order to maintain their functional unit appropriately as well as to increase their
growth rate. Moreover, it has been making use of online website which allow customer to book
for the ferry or track the status of their parcel . (Nuseir and Ghandour, 2019). Although this
factor impact on value chain of the company as well as cost structure in positive manner. Thus, it
is important for the organization as it also impact on the product offering.
Environmental: The organization is following CSR activity in order to develop the backward
area in the environment as well as to attract customer.
Legal: The company is following laws so that it can protect the intellectual property rights of
company. It is necessary for the company to evaluate the legal structure so that it can protect the

organization from theft of intellectual property or intervention of government. The firm is
following employment law and consumer protection act’s
Porter Five force
It is known as holistic strategy framework which allow organization to take strategic
decision by analysing the present competition in market. Along with this, P&O have various
rivalry such as Air delivery and freight services industry. Although the manager of the company
can make use of this tool for exploring the profitability of firm in whole services sector.
Threat of new entrants:
There are many logistic companies in the market area such as Air delivery and freight services.
They are brining innovative ideas to conduct business and putting pressure on P&O company
through making use of low pricing strategy, providing new values to customer and reducing their
cost by using advance technology(Qamar and et.al., 2019.). Thus, P&O has to manage all these
challenges and build effective barriers to reduce the competition. Although company can make
use of innovative service to attract new customer. It can also build their economic scale in order
to lower the fixed cost as well as spend money on research and development so that new market
trends can be analysed. The company has to keep defining their standard regularly as it will
discourage new players in the industry.
Bargaining power of suppliers:
Most of the companies dealing in logistic purchase their product from various supplier in order
to run their business and provide quality services to the customer. However, if the suppliers have
high power then it can decrease the revenue of P&O in the market. Power supplier use their
negotiation power to extract higher prices from company involved in logistic (Radwan and
Farouk, 2021). Thus, the overall impact of higher supplier’s power leads in lowering down
overall profitability of freight services. Thus, in order to deal with P&O has to build efficient
supply chain with multiple supplier as well as it can experiment with product design using
different material so that even if there is increase in price of one raw material it can shift to
another.
Bargaining power of buyers:
Customers are most demanding and it want to buy the best offering at lower price as possible.
This put presser on P&O profitability in the long run as higher the power of consumer higher

their ability to seek discount and offer. The company can deal with this issues by building large
customer base as it will be helpful in reducing the power of bargaining and provide an
opportunity to the firm for increasing the sales and production process. Although organization
should keep coming up with new product as customer is seeking for discount and innovative
product will limit the bargaining power of buyer.
Threats of substitute products or services:
When an alternative product or service meets a similar customer needs in different ways then
industry suffer in loss (Ruan and et.al., 2019). Thus, P&O by being service oriented rather than
just product oriented as well as by understanding the core needs of the customer will help the
organization in connecting with them.
Rivalry Among the Existing Competitors:
If there is high competition in the industry, then it will drive down prices and decrease the
revenue of company. Along with this, P&O operates in competitive environment and it affects
the performance of the firm in market area. It can be deal with it through building sustainable
differentiation as well as collaborating with the competitors to increase the market share.
Furthermore, Triple Bottom line is known as business concept that force company to measure
their social and environmental impact as well as financial performance instead of focusing on
generating profit or the standard of bottom line. Along with this, it has been divided into three
part such as Profit, people and plant. The business is first committed with profit and that can be
achieved by using strategical tools and planning(Shrestha, Oh and Kim, 2021). The second
commitment is toward people as they are the key source of running the business effectively.
Although the third is making positive impact on plant. Along with this, it is important for
business because it allow firm to have financial benefit by committing to sustainable business
practices. Moreover, thus three pillar can contribute in change as business is dynamic in nature
and any change in these factor will increase of decrease the performance of firm as these factors
are key reason for running the business.
Drivers of change
Tambe, Cappelli and Yakubovich, (2019) has define two drivers of change such as CSR and
social change and it affect the business in both positive and negative way. Along with this, CSR
is known as responsibility of firm towards uplifting the backward region of the society or

increasing the environmental practices. These activities do create change in business as it
allows the firm to earn huge profit through following sustainable business. It is a driver of
change as most of the customer usually interested in organization that deal with such services.
Thus, CSR helps the company in building good brand image and to connect with the audience. .
(Minhas and et.al., 2020) CSR activities allow in building trust with their employees and keep
them align with brands that adopt sustainable manufacturing and embrace ethical business
standards. It also contributes in boosting the moral of employees which lead in greater
productivity as well as increase customer retention and loyalty. Thus, it is a thoughtful practice
that help organization in increasing the sales and performance by attracting skilled employees
and access capital through investor.
England and Hershberger, (2020) has stated about globalisation it the process world is
connecting and due to that there has been increased trade a cultural exchange. It has impacted
business in positive way such as technological change which has improved the way of
conducting business and made it more smooth. Due to use of advance technology it is easy for
organization to understand the taste and preferences of customer through one click. It has also
helped company in increasing overall profit of the organization through providing new marketing
strategy. Although with help of digital marketing company can now access to have information
of world business and it can share their details about their services on various social sites which
helps in increasing their market share. In addition to this, technological change has improved the
standards of machinery used by the companies. Moreover, Khim and et.al., (2019) has stated that
globalization leads to increased competition in the market and it can be related to service cost,
target market and quick production. Thus, there has been various changes due to globalisation
like increased transport of goods and due to that there has been result of emission. It contributes
to pollution, climate change and significantly impact of biodiversity. However, globalisation
allows companies to find lower cost ways to produce their products and it increased global
competition which lower down the price and generates large variety of choices for customer.
Change affect P&O
The driver of change is has affected P&O Ferries in positive and negative manner like CSR
activities has allowed the organization in attracting large customer as well as building good
brand image in the market area. However, conducting this activity not only increase revenue but
also extra expenses. Whereas in case of Globalisation it has helped in company to adopt for

technological change like digital marketing or making use of advance tools and techniques.
Although due to high competition firm has to come up with innovative idea so that it can attract
customer and sustain in the market area.
Impact on the needs of the stakeholders
Stakeholders are necessary for the company as it contributes in success of firm by taking
strategic decision and it also influence the objectives of the business. Along with this, they are
important in company as it look for the requirement of operational level such as customers and
employees. Although P&O engage with their stakeholders during the transition process so that it
can set out the strategic objectives of firm easily (Lin and et.al., 2018). The change in the firm
has been implemented through communicating with the stakeholders and aligning their personal
goals with company. Moreover, P &O has made a change management plan in which mission
and vision of the company was described and all the changes like making use of cost effective
technology has been implemented in the company. In addition to this, currently company has
removed more than 800 employees in order to cut down the price it was the major change made
by P&O.
Change influenced the type of decision
Furthermore, change influence the type of decision taken by the company such as if there is
opportunity available in the market them P&O has to develop new marketing strategy so that it
can grab that opportunity. Although change in the values also influence the decision of company
such as in case of P&O it diminish 800 employees without the notice period and trying to replace
them with cheap worker. It is ethical change for the company as it has not been looking after
their employees as compare to their shareholder (Mihai and et.al., 2021). Due to this change
there are high chance that company may suffer loss as it need technical and other expert in order
to run business. However, it has advantageous for company as it acts as cost saving strategy
because all the new employees will be exempted from UK employment law and P&O can now
pay below minimum wage rate but it is fulling the criteria of International Transport Workers
Federations.
In addition to this, the current strategy adopted by company will not be very beneficial in
long run as it is necessary for the organization to have expert and large human resources as it
contributes in expanding business (Nair and Reed‐Tsochas, 2019). Moreover, it will lead to
sustainable growth as company will be saving the extra expenses and it can be used in conducing

other activities. However, it is an ethical concern that organization should give importance to
their employees as compare to share holder as they are also important for the growth of the
company. According to law also before terminating employee it is mandatory for organization to
give notice period to them so that it can able find other job.
Changes important for P&O Ferries
Being one of the UK's leading ferry operations in order to build and maintain its position
in the market has to make various modification sin its operations. Furthermore it is observed that
the company is exempt from complying to the provisions of the employment law. In order to
retain the employees and best talent in the company it is necessary to pay the wages according to
the efficiency of the workers. The company is required to make various changes in its
organisational structure and delegate the responsibilities to the workers who are capable of
performing the relevant activities.
Demonstration of good ethics
Business ethics refers to the study of various policies and procedures that is related to the
controversial projects which includes the corporate governance , discrimination , bribery etc. In
order to effectively operate the business it is necessary for the business to follow the good ethics.
It was observed that the company did not follow the principles of the goof ethics as they lay off
more than 800 staff members and replaced it with the cheap agency workers which resulted in to
discrimination among the employees and also violation of the policies of the company(Setiawan,
and et.al., 2020). BY following the various good ethics which involves trust, loyalty with the
employees and communication which helps in achieving the goals of the company and also helps
in eliminating the legal issues which can impact the functioning of the company.
Carroll’s pyramid for CSR
Carroll's pyramid refers to the frameworks that defines how the organisation manage the
social responsibility and highlights four stages in this regard:
Economic responsibility: This is lowest pyramid which represents the first responsibility of the
company that is to be profitable. It is considered important in order to produce the goods it
requires financial resources. P&O Ferries has to focus on making various improvement in its
business for better customer experience.

legal responsibility: Although the company is exempt form complying the provisions of the UK
employment law but it should follow the safety and health related laws for the security of the
customers.
ethical responsibility: From the case study it was observed the company is not following the
ethical standards as they laid off many of the employees and hires cheap workers in order to
reduce the cost that is incurred on the salary of the employees(Lu, and et.al., 2020) .
Philanthropic responsibility : Various business have been criticised for the carbon footprint
which includes pollution and preserving the environment , the company is required to focus on
providing services for the welfare of the society
Evidence to show that P&O Ferries did not respond positively
From the studies it was observed that the owner of the company accepted that they broke
the provisions of the law by not consulting the workforce regarding the redundancy as it is the
responsibility of the company operating in any sector has to comply with the respective that is
covered under the act .This has negative impact on the customer base of the company as many of
them cancelled their booking resulting into impact on the reputation of the firm.
Opportunities that P&O Ferry has and strategies
The opportunities that is faced by the P&O Ferry is that to make further investment and
opt for strategic alliance ion order to expand its business and also further focus on asset
expansion along the South America's west coast. Furthermore the company can include the
HMM in the alliance for successful growth of the company. In order to achieve the opportunities
it is necessary for the company to evaluates its current prosecution in the industry and also focus
on the reducing their cost(Preston,and et.al., 2020) . It is also required to collect the necessary
information.
Advantage and disadvantage of stakeholder interest
Advantages: The benefit is that stakeholder have business experience and are the members of
the company i.e. board of directors which are not generally involved in the affairs of the
company but provides a bigger picture such as introducing long term plans(Shaik, 2019) .
Disadvantage:It has been observed that many people put their personal interest on priority rather
than thinking about the goals of the company which can impact the company and its profitability
and also fear of operating the business which can be due to lack of communication and proper
planning.

Communication in P&O Ferry
In order to effectively operate the business , the management is required to have proper
communication with their employees as well as the customer or passenger to whom the services
is being offered which helps in understanding the requirements and delivers services
accordingly(Radovic Markovic, 2018). It was observed that the company company lack effective
communication which resulting into facing various crisis and it is need to implement effective
practices in order to improve the communication .
Challenges of cross culture barriers
Every person belong to different cultures and belong to different background which
results into facing various challenges regarding the cross culture which includes:
1. Barriers related to communication
2. Barriers related to language
3. Behaviours and belief
Strategies for effective communication
In order to overcome the challenges that is faced by the manager with their employees
can result into affecting the productivity of the company. In order to overcome this situation it is
necessary for the manager to create favourable environment at the workplace and also introduce
open communication which help in communication with every members and respecting their
cultural and belief(Morrison-Smith, and Ruiz, 2020). On the other hand in order to overcome this
issue it is also necessary to develop the habit of listening the opinions of the other which can
contribute in overcoming the cross culture communication at the workplace.
Recommendations
It is necessary for the company to ficus on introducing new changes within the company
as it helps in the growth and expansion. It is recommended to the company to focus on adopting
positive ethical approaches as it will help the company to build its image and also the customer
base in the competitive market(Mikhaylov, and et.al., 2018). In addition to this the company is
also required to comply with the various laws and regulations that applies to the company. In
order to manage the resistance to change it is suggested to the company communicate the
benefits of such changes within the company after evaluating the market environment and impact
on the business.