Business Environment Report: Impact of Technology on Next PLC

This report provides a comprehensive analysis of the business environment, focusing on the impact of innovation and technology on economic growth, sales, operations, and profits, using Next PLC as a case study. The report explores how innovation and technology can increase GDP, boost tax re...Read More

Business
Environment

Executive Summary
This report provides an analysis of innovation and technology which will be directly
impacted on economic growth of country such as it should increases GDP and increased tax. It
impacted on sales, operations and profits and which technology used by firm. It should be
determine importance of corporate social responsibility and four key areas of responsibility by
Archie Carroll which are named as economic, legal, ethical and Philanthropic.

Table of Contents
Executive Summary.....................................................................................................................................2
INTRODUCTION.......................................................................................................................................4
TASK 1.......................................................................................................................................................4
1. Understand innovation & technology and how they impacted economic growth of country...............4
2. How innovation and technology have impacted operations, sales and profits.....................................6
TASK 2.......................................................................................................................................................9
1 Importance of corporate social responsibility for an organization........................................................9
2. Four areas of corporate social responsibility by Archie Carroll.........................................................11
CONCLUSION.........................................................................................................................................12
REFERENCES..........................................................................................................................................14

INTRODUCTION
Business environment consist of various interior and exterior factors in an organization
which control profitability and productivity in a business enterprise (Azudin and Mansor, 2018).
Innovation and technology defines that there is new technology or new innovation have to be
developed in entity where it can help business to increase their profitability level and reduce their
cost in an efficient manner. For this assessment, selected organization is Next plc is a British
clothing and footwear multinational stores in UK it has approx 700 stores and is a largest retailer
by sales in United Kingdom. In this report, various topics are covered such as innovation &
technology and how they should contribute to economic growth, compare how operations, sales
and profits impacted in organization, corporate governance and corporate social responsibility
and importance of CSR in Next Plc.
TASK 1
1. Understand innovation & technology and how they impacted economic growth of country
Innovation is a procedure by making new ideas and new thoughts are in their mind
related to new products or services that creates value for which customer will pay for their
money (Bagheri, Fazlollahtabar and Ashoori, 2018). Technology is a tool which is created by
human and it is significant used to promote their development and it would be easier of making
such tasks and solving many problems of mankind. Innovation and technology which is used to
improved their product and determine new products for the procedure of application which they
have bought into market.
They should contribute to economic growth of country because it helps business to
product more productivity. If there is a business and employee who are worked with an industry
or organization are become more productive, prices of various goods and services are fall and

improving their standard of living. There is one benefit for innovation is to contribution of
economic growth which will leads to higher productivity and same input to be generated will
contribute to higher output. It is generally accepted that technology allows being more efficient
of production of more goods and services which is affluence depends upon. There are various
ways to contribute economic growth of country which are described below:
It increases GDP: Innovation and technology enhance their gross domestic product
because it consists to provide high employment opportunity in an economy which helps o
increase income for those people who are living of standard (Boone, Kurtz and Berston, 2019).
It also increase demand supply of an economy which they should expand their firms as an
international level which contribute to economic growth of nation. With relation to Next Plc, this
type of firm has increased their income of people which is used to create some more employment
and easily exporting of goods and services in a nation.
Increase tax: This technology helps to increase tax because if there is high employment
and high income of people then tax are also increased. This will contribute to national income
that will allow paying their taxes in government of that nation. For Next plc, firms will create
more and more opportunity for people in UK so that they are also paying taxes for government.
Use new technologies in business organizations
Technology has a direct impact on business organizations no matter whether it is a size
issue of firm or any technology they can bring many benefits which will increase market share
that produce goods and services (Crane, Matten and Spence, 2019). Without technology firm
cannot attract most of customers to accomplish goals and objectives. There are various
technologies which firm should be uses are as follows:
Business communication: Technology helps firms people to communicate easily with
other staff members and it should increase efficiency. Development in communication help
business to stay connected and more and more productivity are also increases. For Next plc, it
determines that they should communicate to transfer files from one place to another. Firms need
to conduct any meetings or conferences to communicate other members through internet, video
conferencing and global economic data are also facilitated.

Risks: If there is technology has adopted in business then risks are comes which reduces
productivity and satisfaction of consumers are there if workers have a right to use right skills.
With relation to Next Plc, firms are adopting new technologies in business and it will be
beneficial for workers also for easy to communicate other members and it improves things
rapidly. Most of this technology have almost affected each and every business operations and
identify how business operates at a specific place.
Productivity: To improve their development of product some firms must procedure and skills to
be developed for employee and technology increase productivity in several operations of
business (Galinier and Laporte, 2018). There is size of improvements like social media, email
these technology help to communicate various members of firms and also decreased personal
attention and increased productivity. In case of Next plc, firm help to develop some legal
procedure like finance related which is used to ensure that there is customers are getting and
provide right type of services.
2. How innovation and technology have impacted operations, sales and profits
Overview of company: Next Plc is a United Kingdom retailer shops in clothing, footwear and
home products also. It sells moderately clothing for men, women and children in best price
through 500 plus stores in UK Ireland (Halkos and Skouloudis, 2018). They should also
franchise about 200 stores with more than 35 countries and this firm Next plc acquiring by
Victoria secret UK a newly formed joint venture firm. The firm was founded by Joseph
Hepworth in 1864 and it consists in online business for selling clothing and many products of
home appliances.
Technology used by firm
Next Plc purchase new software to developed and digital transformation initiatives and its
business and technology identifies on cloud applications which is being to used by employees ad
public related consumer tastes and preferences. This firm purchased following applications such
as Oracle HCM Cloud for core HR and Unit 4 travel and expense these technologies are used of
IT stakeholders. Digital technology and some software are purchased by firm and firm is buying
software only for to manage some work and easily to perform these tasks related to project. It
helps to provide more insights which provide valuable information that is related to consumer

whether it is purchasing some software or not. Most of technologies also help to increase their
consumer tastes and preferences and also help them to build and maintain good relationship with
other customers to make competitive advantages for customers. This technology helps a way to
open more communication network to other team members that will be provide by various
products to consumers and firm is opening nee physical stores which will be very helpful to
connect with many of customers.
Compare sales and profits of firm
TOTAL SALES £m July 2020 July 2019
Online 862.6 1,004.9 - 14%
Retail 344.6 874.3 - 61%
Finance 127.9 134.0 - 5%
Brand 1,335.1 2,013.2 - 34%
Other 21.7 45.6 - 52%
Total Group sales 1,356.8 2,058.8 - 34%
PROFIT £m and EPS (pre-IFRS 16) July 2020 July 2019
Online 128 177 - 28%
Retail (175) 56 - 413%
Finance (after charging interest) 59 76 - 22%
Brand 12 309 - 96%
Sourcing, Property and Other7 (2) 14
Group recharge of interest from Finance business 20 18
Operating profit before interest 30 341 - 91%
Net external interest (21) (21)
Profit before tax 9 320 - 97%
Taxation (see page 17) 6 (59)
Profit after tax 15 261
Earnings Per Share 11.8p 199.5p

2020 2019
4150
4200
4250
4300
4350
4400
sales
2020 2019
588
589
590
591
592
593
594
595
Profit
From the above mentioned graph, it can be interpret that profit and sales both are increase
in future and have a major impact on various technologies which they have adopted (Katz and
Green, 2018). Innovation and technology have impacted on sales and profits because technology
provides innovation that would customer can attract and increase their sales. Innovation increase
profits because it takes new idea that would turning on money be it more incomes, improved
operations and more effective manufacturing procedure. These technologies have a major impact

on directly on profit if profit is high in this firm but main advantage is for longer period of time.
In case of Next plc, it helps firm to increase more productivity level of sales and also profitability
level are also high as compare to past year.
Findings: The major findings are that they should provide technologies and innovation
in this firm and the growth of business plays a vital role in survival of firm profits. To adopt
various technologies helps to make them competitive advantage increase in market place and
also increase firm opportunity to increase speed to growth level and business allow them to
development of new product to increase their customer service and attract more and more
customers towards their firm.
TASK 2
1 Importance of corporate social responsibility for an organization
Corporate governance: It is a collection and combination of various rules, policies and
procedure by which firms have to operated and controlled in an efficient manner (Kovermann
and Velte, 2019). It ensures that there is a model which must be followed by particular firm for
their distribution of various roles and responsibilities related to all participants of entity. It should
be identified who have a power and accountability who makes such decisions of firm and
enables that management of firm deals with more efficiently and effectively manner. It
encompasses internal and external factors which will affects interests of firm shareholders,
suppliers, governments and management.
The term corporate social responsibility is a mechanism where firm ethical standards and
social standards are should be considered. It helps firm to integrate their social and
environmental roles and responsibility directly into their operations. Corporate social
responsibility is a self regulated which allow greater opportunity for firms to make a positive
impact and describe firm efficiency that will improve their society in a proper way. CSR impacts
firms non profits, employees and public it has broader concept which can take many forms of
firm depending upon their industry and it can be benefit for society while boost their brands.
History of corporate governance in UK

Corporate governance came first 1970s in US and they had become their subject of
debate of academics, regulators and investors (Lagasio and Cucari, 2019). It is a word which is
barely existed for 20 years and it is not a common word it includes various universities, charities
and local authorities. The revolution was started in 1990s with first report of Cadbury on various
financial aspects of corporate governance which attached a code of best practice. The main aim
is to be listed in firms and specifically looking for behavior of consumer and ethics ‘Cadbury
code’ was adopted by city. In 1995, the Greenbury report of this corporate governance is set out
their principles and remuneration of executive directors. All these reports were prompted which
is either by shareholders over perceived shortcomings in such structures of corporate and their
capability to respond their poor performance or threat of governance rues and legislation if there
is any threat are considered. In 2002, an investment banker was look at gain corporate
governance and builds their past reports to produce single and comprehensive code. The 2003
code was updated their minor amendments in June 2006 with new version of applying in some
financial years beginning on November 1 2006. Many firm have claimed on shareholders that
they have a better governance which are more profitable and they can afford time, effort and
make sure that they could be follow this code of best practice.
Importance of CSR for organizations
Corporate social responsibility should take an interest for wider term in social media
issues instead of impact on profit margins which will attract more and more customers who share
same value and (Nguyen, Kecskés and Mansi, 2020). Key importance of corporate social
responsibility with context to Next plc which are described below:
Employee engagement: It should ensure that there is employee who knows about
corporate social responsibility strategies and working in employee more for a firm which creates
a good public image than other one. For Next plc, employee should enjoy working and creates a
good public image which initiative part in volunteering programs. This will also lead to better
team work among workers and happy employees will lead to low slow destruction.
Competitive advantage of business: Customer has social issues in this that will be loyal
to firm and they believe to align their values. They might be offer some products or services but
the fact is corporate social responsibility makes a priority makes them more appealing.

Corporate social responsibility can reduce costs: To make money is the primary goal of
business and corporate social responsibility does not mean they sacrifices profits. For Next plc,
they produce some equipment should cost initially and it saves money for a long term basis. If
firm reduced costs then there are high prices of products and firm can make a good profit being
socially responsible (Saidat, Silva and Seaman, 2019).
2. Four areas of corporate social responsibility by Archie Carroll
Archie Carroll Pyramid is a framework which helps to argue that how and why
organization should meet their social roles and responsibilities (Solomon, 2020). This
framework or pyramid consists of four areas of CSR which are named as Economic, Legal,
Ethical and Philanthropic.
Economic responsibilities: It is an important part of business that they should be
generates maximum number of profits for shareholders and states that firms are economic
society as a whole to making a strategic business decision making. For Next plc, without profit
firm cannot survive their business to pay their employees and workers will lose their jobs after
that. If there is profitable business then firm can survive long term and it will be also beneficial
for society.
Legal: It will be consist by management laws rules and regulations which are laid down
by society and some authorities which are related to nature of firm operations. In case of Next
Plc, firm should be expected more and require to comply for many laws and regulations as
condition of operating. It is most important aspect of responsibilities that will show how firms

should conduct their business in marketplace. Various laws related employment, tax regulations
and safety of employee are should be considered.
Ethical: These types of responsibilities are judgment of management and it is not
required that firm has need to be fulfill tier requirements. It talks about moral values, rights and
customs but all these are related to expectations of society (Katz and Green, 2018). It should be
good and ethical behavior of firm while conducting their firm operations as per guidelines for
future systems. For Next plc, firm should be not only obeying the law but it should they do their
business ethically. It is best for firm to be ethical and not only shows some stakeholders but also
people will be comfortable for purchasing product or services.
Philanthropic: This responsibility stands up a pyramid and it harps to fact that is create a
good citizen and should provide improving their quality of life and its people. For Next plc, firm
needs to be identifying that carbon footprint their part in pollution and using natural resources.
Responsible firms are qualifying that hold the true values for firm and back to society and
without satisfying their other responsibilities firms cannot build.
CONCLUSION
From the above information, it has been concluded that business environment consist of
individuals, firm internal and external factors are should be recognized. Innovation and
technology helps them to conduct their business and maintain their performance of firm in a
nation. It helps to increase and gaining them sustainable competitive advantage in marketplace.
In this report, several topics are covered such as innovation and technology and how they
contribute to economic growth of country, new technologies are used, impacted on operations,
sales and profits, importance of CSR, history of corporate governance and four areas of CSR
such as economic, legal, ethical and Philanthropic responsibilities.

REFERENCES
Books and Journals
Azudin, A. and Mansor, N., 2018. Management accounting practices of SMEs: The impact of
organizational DNA, business potential and operational technology. Asia Pacific
Management Review. 23(3). pp.222-226.
Bagheri, E., Fazlollahtabar, H. and Ashoori, M. T., 2018. Product pricing with marketing data
under risk using business intelligence. Revista Inteligência Competitiva. 8(3). pp.1-14.
Boone, L. E., Kurtz, D. L. and Berston, S., 2019. Contemporary business. John Wiley & Sons.
Crane, A., Matten, D. and Spence, L. eds., 2019. Corporate social responsibility: Readings and
cases in a global context. Routledge.
Galinier, S. and Laporte, C. Y., 2018, October. Connecting business development and systems
engineering with ISO/IEC 29110 standard in small and medium enterprises of France.
In 2018 IEEE International Systems Engineering Symposium (ISSE) (pp. 1-7). IEEE.
Halkos, G. and Skouloudis, A., 2018. Corporate social responsibility and innovative capacity:
Intersection in a macro-level perspective. Journal of cleaner production. 182. pp.291-
300.
Katz, J. A. and Green, R. P., 2018. Entrepreneurial small business. McGraw-Hill Education,.
Kovermann, J. and Velte, P., 2019. The impact of corporate governance on corporate tax
avoidance—A literature review. Journal of International Accounting, Auditing and
Taxation. 36. p.100270.
Lagasio, V. and Cucari, N., 2019. Corporate governance and environmental social governance
disclosure: A meta‐analytical review. Corporate Social Responsibility and Environmental
Management. 26(4). pp.701-711.

Nguyen, P. A., Kecskés, A. and Mansi, S., 2020. Does corporate social responsibility create
shareholder value? The importance of long-term investors. Journal of Banking &
Finance. 112. p.105217.
Saidat, Z., Silva, M. and Seaman, C., 2019. The relationship between corporate governance and
financial performance. Journal of Family Business Management.
Solomon, J., 2020. Corporate governance and accountability. John Wiley & Sons.