Analysis of Innovation, Corporate Governance, and CSR in Business

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BUSINESS ENVIRONMENT
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Table of Contents
INTRODUCTION.................................................................................................................................2
OVERVIEW..........................................................................................................................................3
TASK ASSESSMENT 1..............................................................................................................................4
OVERVIEW OF IMPACT OF INNOVATION ON OPERATION, GROWTH AND SALES OF
AVEVA.............................................................................................................................................7
TASK ASSESSMENT 2.......................................................................................................................9
REFERENCES:...................................................................................................................................14
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INTRODUCTION
Innovation can be defined as the conversion of an idea into any product or service. Innovation
led to the adoption of new products and services. It is a very crucial process for an
organization for growing profitably and creating product or service differentiation. This
assignment will cover the impact of innovation on the organization’s growth and economic
development. It will also cover the relationship between innovation and economic
development. And it will also explain the impact of corporate governance in the context of
Aveva PLC. It will also assess the impact of technological advancement in Aveva PLC
(Aveva PLC, 2019).
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OVERVIEW
Aveva PLC is the world's leading technology developer and service provider. It is a leading
firm in innovation, research and development. It has successfully created global infrastructure
for its business growth and economic development. The long term goal of Aveva PLC is to
place its digital innovation at the top of every other digital innovation from any other service
provider (Aveva PLC, 2019).
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TASK ASSESSMENT 1
INNOVATION:
Innovation is a continuous and crucial process for an organization. It can be attributed to the
engine of growth and development. In the present scenario, many countries are facing the
problem of declining and an ageing workforce. So, become very important for nations to
invest more in research and development. Innovation has to be carried out in the field of
product, process, marketing and organizational innovation. Product innovation can be defined
as innovating a new product or making considerable changes in the existing products or
services with the aim of increasing level of business profit and improving user experience
(Acemoglu and Restrepo, 2018).
TECHNOLOGICAL INNOVATION
Technological innovation is an innovation of new software product or services and replacing
manual work with automation. It is done in order to cut the labour cost, provide fast delivery
of services and simplifying the business process. Technological innovation plays a central
role in the creation of new types of jobs. Significant increase in employment leads to
economic progress (Zheng et al., 2018).
It is also worth noting that technological innovation supports all business process. It also
supports policies and framework and now, green technologies all helping in sustainable
development and economic progress with harming the needs of the future generation. The
rapid growth rate of technology leads to increased economic progress. For instance, every
developed country in the world is economically developed because of its technological
advancement (Ideas logo, 2019)
FINANCIAL AND ICT ISSUES FOR BUSINESS FUNCTION
Role of information and communication technology in business is the integration of
technology at every level of business with the aim of simplifying product development,
process improvement and financial management. Integration of ICT in business comes with
multiple issues as follows:
 It increases the cost to the company for technology management and delivery of
services.
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 Company is also required to train and retrain its workforce for using the technology
efficiently (Ideas logo, 2019).
 The business has to bear implementation charges and regulatory compliances. And
companies have to bear the extra cost in case of any cyber-attack (Business 2
community, 2019).
 Technological advancement of business unit put its data at risk and poses various
security challenges also. Stringent data regulations in some sectors as financial and
health sector make the compliance of them more difficult. Though financial sectors
gather sensitive data from a client that cannot be an excuse for such regulation
(OECD innovation strategy, 2019).
FINANCIAL ISSUES FOR BUSINESS
 Business owners have so many issues related to the financing of the business.
Financing of business can be done by using debt financing, equity financing and lease
financing. But financing may also create a debt trap if not managed properly (Small
business, 2018).
 Collateral is an asset with value but sometimes the value is not enough to take enough
fund for running a business and starting a business.
 Functioning business properly also require maintenance cost and if it is insufficient to
make the functioning difficult (OECD innovation strategy, 2019).
 Increasing operational cost due to market forces and lack of innovation reduces the
profit margin for the organization.
 Negative cash flow from business in the form of various taxes and service charges
also impacts the functioning of business (Patriot’s software, 2019).
RELATIONSHIP BETWEEN INNOVATION AND ECONOMIC DEVELOPMENT
Innovation in technology and increasing the number of digital assets leads to economic
growth. With the help of technology economic growth can be achieved by keeping the same
number of inputs and increasing productivity. This leads to profit for the business. With the
adoption of innovative technologies business processes becomes simpler, and less time-
consuming. Electrification and the creation of digital infrastructure have simplified all
business process and now the advent of the Internet of things, AI provides innovative,
efficient products for businesses and consumers (Zheng et al., 2018).
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Innovation leads to growth and growth in investment and technologies leads to innovation. It
improves supply chain, distribution network and with the coming of electronic mode of
financial services functioning of business units, delivery of services and creation of new job
opportunity also led to the growth of various sectors as the financial sector, education sector
and health sector etc. And the total contribution of all these sectors led the financial and
economic growth of the nation. Hence, technology can be considered as the driver of
economic growth (Zheng et al., 2018).
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OVERVIEW OF IMPACT OF INNOVATION ON OPERATION, GROWTH
AND SALES OF AVEVA
Aveva PLC is the world's leading technology developer and service provider. It is a leading
firm in innovation, research and development. It has successfully created global infrastructure
for its business growth and economic development. The long term goal of Aveva PLC is to
place its digital innovation at the top of every other digital innovation from any other service
provider (Aveva PLC, 2019).
 Aveva PLC creates innovative software and technologies and collaborates with other
business to act as a catalyst for other business’ growth.
 With EPC 4.0 strategy Aveva allows collaboration of all business units on a single
platform where all business process can be traced, managed and joined be it product
design, procurement or development. So it leads to the creation of a digital replica of
the existing plant (Aveva PLC, 2019).
 The new advanced process control tool of Aveva help businesses in improving
operations by providing an enhancement in process capabilities inconsistent manner.
 Aveva PLC's collaboration with another software developer helped to become world's
largest technology firms. It paved the way for the creation of such digital platforms
for running a business that will benefit both the organization and its consumers
(Patriot’s software, 2019).
These are the few operations that led product differentiation for Aveva and also helped in
increasing the volume of revenue generations and future prospects for it. Sales of its
products have also increased by many folds and led to huge profits with an increase in
customer base for Aveva PLC. Impact of technology for Aveva PLC yielded its profits in
multiple ways. It helped in the increase of customer base, yielded more opportunities for
further investment in research and development and creation of the latest tools and
technologies for its growth (Aveva PLC, 2019).
CORPORATE GOVERNANCE
Corporate governance is a way in which an organization is governed by its board of directors
and other concerned parties. It is a tool or technique with which business activities are
managed according to the choice of all stakeholders. It also paves ways of interaction
between the top leadership and the employees of the company. Such interaction should be
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healthy and must provide open communication between the concerned parties. It leads to
various benefits for an organization as follows (Business 2 community, 2019).
 In Aveva PLC during an entire financial year, top leadership was invited to attend all
Board meeting to keep them informed and ensure transparency in matters related to
financial outputs and company’s performance (Business 2 community, 2019).
 Transparent and timely interaction between a board of director and all stakeholders
ensure proper execution of current business strategies and formulation of new policies
and objectives for Aveva PLC (Aveva PLC, 2019).
 Review of the company's performance, risk management and approval and assessment
of budget for managed by a board of directors in Aveva PLC and well exceed by
executive director's highlights the effective corporate governance in Aviva PLC.
ROLE OF TECHNOLOGICAL ADVANCEMENT IN ECONOMIC PROGRESS
Advancement in technology plays a central role in the creation of new types of jobs.
Significant increase in employment leads to economic progress. It is also worth noting that
technological innovation supports all business process. It also supports policies and
framework and now, green technologies all helping in sustainable development and economic
progress with harming the needs of future generation (Acemoglu and Restrepo, 2018).
Technological advancement leads to travel free business summits which leads to a reduction
in travel cost and less environmental impact. It also led to low wastage during business
process as the online delivery of services means low carbon footprint as well as recycling of
various resources as paper, plastic etc. reuse and recycling always saves the expenses of the
company and give birth to a new form of business and services which leads to increased
employment rate which in turn increases Gross Domestic Product of a nation i.e. growth of
economy. Aveva PLC has also launched Green computing technologies and raising
awareness about reducing its carbon footprint which also helped in improving its customer
satisfaction and provided one more opportunity to create strong distribution network (Aydin
and Parker, 2018).
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TASK ASSESSMENT 2
CORPORATE GOVERNANCE
Corporate governance is a way in which an organization is governed by its board of directors
and other concerned parties. It is a tool or technique with which business activities are
managed according to the choice of all stakeholders. It also paves ways of interaction
between the top leadership and the employees of the company. Such interaction should be
healthy and must provide a free flow of information between the board of directors,
shareholders and stakeholders of the company (Jamali and Karam, 2018).
Roles and responsibility of the board of directors to all stakeholders (senior leadership,
executive directors, shareholders and other investors) can be explained as follows:
 The primary role of the board of directors to safeguard the interests of shareholders as
they represent them in an organization.
 To ensure the transmission of information to senior management and keep
transparency in all business activities.
 Devise plan and strategies; test the business model and key performance indicator
constantly (Marek, 2018).
 Ensure the business unit abides by rules and regulations and maintaining order within
the company.
 Protect the company's capital and reputation along with ensuring the welfare of
employees.
CORPORATE SOCIAL RESPONSIBILITY
Corporate social responsibility is doing business profitably and fulfilling social obligation
also. So, CSR is the adoption of a business model which leads the use of societal resources in
an efficient manner. A company recognizes self-obligation by doing environment, social and
economic impact of any of their project prior to its execution. CSR includes educational
campaigns, philanthropic activities and contribution in social welfare program (Kothari,
2019).
IMPORTANCE OF CSR IN CORPORATE GOVERNANCE
CSR plays an important role in effective external management of an organization and
corporate governance plays an important role in effective management within the
organization. CSR also leads to sustainable development and economic progress with less
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environmental impact. In this activity the company recognizes its social obligation like using
the resources judiciously, helping the needy by offering them employment and offering
education and health services to the bottom layer of the population. So CSR in a broader
sense is sustainable economic progress of the company. Brewin Dolphin PLC recognizes its
CSR for its clients, employees, local communities and for society at large (Brewin Dolphin,
2019).
 Clients and business: Their Stewardship policy reflects that put a high emphasis on
protecting the wealth of their clients and taking necessary measures to safeguard the
interests of their shareholders. They carry their business with ethics and integrity. Pay
taxes on time and spread awareness about avoiding fraudulent activities like tax
evasion etc. (Ideas logo, 2019).
 Social welfare: Brewin Dolphin engages with three other UK-based organizations
with the purpose to give back to society. They collaborate with the purpose to spread
education, skill development for the empowerment of weaker sections of society. It
also encourages charitable donations and fundraising amongst its employees (Brewin
Dolphin, 2019).
 Bringing culture of equality within the organization: According Gender pays gap
report women are paid less for the same designation due to a variety of reasons.
Brewing Dolphin PLC had adopted the culture of inclusiveness by giving senior
leadership roles to their female employees (Marek, A., 2018).
 Green IT services: Brewin Dolphin PLC by providing an environment –friendly
products and services ensuring its responsibility towards environmental resources
(Brewin Dolphin, 2019).
ARCHIE CARROLL’S CSR MODEL
Carroll’s CSR model or pyramid explains how an organization should devise a plan to meet
its social responsibilities. Key features of Carroll’s model are as Carroll's model is centred on
profit generation. The primary goal of doing business is to generate profit along with abiding
by the legislation and governmental regulations. Business units also set high ethical standards
for them and then giving back the society in the form of any social service (Marek, 2018).
The four responsibilities highlighted in Carroll’s pyramid are:
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 ECONOMIC: Economic responsibility of any business is to do business profitably
and sustain the profits in a way it can contribute to society for a long duration.
 LEGAL: Legal responsibility of a company is to abide by all rules and regulations set
by any national and international organization (Small business, 2018).
 ETHICAL: business should set high ethical standards by adopting the best trade
practices. And ethical standards of a company should get reflected in its mission,
vision and objectives. Companies
 PHILANTHROPIC: philanthropic activities are the activities carried out with the
objective of giving back to society in any form recognized by a company. It can be
donated or providing social services like health and education services (Jamali and
Karam, 2018).
With the application of Archie Carroll’s model, corporate social responsibilities of Brewin
Dolphin PLC can be evaluated as follows:
Economic responsibility: It fulfils its economic responsibility efficiently by paying taxes on
time; adopting Stewardship policy reflects that put a high emphasis on protecting the wealth
of their clients and taking necessary measures to safeguard the interests of their shareholders.
Another policy helps their shareholder to vote digitally for some policy if they are the
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