Business Environment Report: Innovation, CSR and Kainos PLC Analysis

This report provides a comprehensive analysis of Kainos PLC's business environment, focusing on the impact of innovation and corporate social responsibility (CSR). The introduction establishes the significance of business environment factors and introduces Kainos PLC, a software company, as a case study. Task 1 explores the role of innovation and technological change in economic progress, specifically within Kainos PLC, detailing how the company leverages technology to enhance its operations, expand its market, and improve business performance, with supporting financial data. Task 2 delves into the importance of corporate social responsibility for Kainos PLC, discussing corporate governance and the benefits of CSR, such as improved public image and customer engagement, using Archie Carroll's CSR model for analysis. The report concludes by summarizing the key findings regarding the interplay of innovation, CSR, and their effects on Kainos PLC's overall business success and sustainability.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Understanding of innovation, and the role of technological change in economic progress........1
Overview of chosen organisation and impact of innovation on sales, profits and growth of
business organisation...................................................................................................................2
TASK 2............................................................................................................................................4
Corporate social responsibility and its importance for Kainos PLC............................................4
Archie Carroll’s (1991) CSR model............................................................................................5
CONCLUSION .............................................................................................................................7
REFERENCES................................................................................................................................8
REFERENCE.................................................................................................................................10

INTRODUCTION
Business environment is related with internal and external factor which influences a
business positively or negatively. This is total of micro and macro factors which can be used to
maintain a business position effective. The success of any business organisation is depend on its
activities and performance which helps to capture market share. This is important for business
organisation to focus on such factor and make efforts to overcome the problems. There are many
factors in business environment which can influence the business performance. To understand
the concept of Business environment Kainos Plc has been taken that is software company. This
organisation develops information technology solutions for businesses as well as organisation
specifically in public, financial services and healthcare sectors (Belás and et.al., 2014). It has
head office in UK, Ireland, Poland and so on. This was founded in April 1986 for the purpose of
providing technological services. It also provides consulting and support services which attracts
people and maintain profitability. This report is classified in two parts, one is impact of
innovation and technology and second is on CSR (Corporate social responsibilities) are covers in
this report.
TASK 1
Main body
Understanding of innovation, and the role of technological change in economic progress
Innovation is the process which is used to modify the products or creative more effective
process in order to introduces something new. In other words, innovation is consider as changing
process that attracts people towards new creation and emphasis on customers to purchase
products and services. This is a business model which is adopted by business organization
through accepting the environmental changes effectively. By adopting innovation and new
technology an organization can attain its organizational goals effectively. For example, Kainos
PLC which is a software company uses new technology under innovation helps to run a business
successfully. It also provide financial and consultancy services which attracts people and
increase productivity. Business operating in an industry based on technology and creativity,
being adoptive with the business environment is very necessary for Kainos PLC managers
(Cairncross, 2014).
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As at present, innovation leads Kainos PLC to develop software based on their personal
preference according to the requirements of a business organization. Kainos PLC's emphasis on
software development is driven by innovation and technological changes and recruited in the
company for this new and experienced workforce that is able to meet changes. Technology is
playing a vital role in business industry such as new technology helps to make the work easy and
smoothly by reducing cost of organization which helps to improve the economic condition of a
country as well company. Whenever organization is going to introduce something new,
technology is the way of attracting the people and increase the productivity of organization by
increasing new worth of company. Kainos PLC Software Company is highly affected by
innovation and technological changes which has taken a good economic position of a country
and company. Currently such organization is developing software according to customer or
client’s requirement which helps to increase the customer base. By using new technology,
management of such organization has added some new features in the process of running which
become easy for others to run. Another role is improvement in business performance by using
new technology and innovation which helps to maintain the high productivity (Eling and
Schaper, 2017). Business environment change and technological development leads to expand
Kainos PLC's sector boundaries to DACH, US, Benelux and now to Nordics. It helps Kainos
PLC to provide a large number of computer software customers and improve their business
performance effectively (Grigore and Drăgan, 2015). Innovation is playing a major role in
Kainos PLC as it helps to save the time and cost of business organisation by using new
technology and make business activities smoothly. By using new innovation and technology
Kainos PLC improve or replace business processes by increasing efficiency and productivity. It
develop the new software with attractive features which helps to improve the business activities
efficiently and make profits at wider range.
Overview of chosen organisation and impact of innovation on sales, profits and growth of
business organisation
Kainos PLC is a software developer company which is growing national and international
level ,by providing better quality of products and services which highly attracts other businesses.
Innovation refers as introduction of new technology and working activities which helps to
increase the business efficiency by attracting more clients (Hampel-Milagrosa, 2014). This make
easy and perfect operation by reducing time, cost and building relations. When innovation is
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introduced by management then managers of business organisation attracted the target customers
with best quality of products that helps to improve the sales and growth of business organisation.
Innovation aids to be successful and to attract profitability when it is implemented in the most
appropriate way in any industry. While adopting innovation and technological development in
Kainos PLC, it must be considered to be based on a valid idea.
The impact of innovation on sales, profits and growth are as defined:
Particulars 2014 2015 2016 2017 2018
Revenue (£m) £1,344 £1,300 £1,431 £1,430 £1,503
Adjusted EBIT
(£m)
£161 £171 £186 £196 206
Profit after tax
(£m)
£90 £104 £114 £112 £117
The impact of innovation and new technology on sale, profits and growth of Kainos PLC
affects the business operation. As by using new innovation and digital technology management
of Kainos PLC has introduced new software as per client's demand which helped to complete
PET. Such innovation has developed a automated ware house which is helpful to maintain the
proper record of software as well as raw material. This also generate a combined Heat & power
plant by delivering low cost and environmental benefits. By using new technology the sale of
business organisation is growing continuous. For example, the revenuesI in the the year 2014,
2015, 2016, 2017 and 2018 are £1,344, £1,300, £1,431, £1,430, £1,503 respectively. The EBIT
of such organisation in respective year are £ 161, 171, £186, £196, £206 which shows the profits
£90, £104, £114, £112, £117 so on. It states that organisation is using new technology in order to
develop new software which helps to increase the business profits by enhancing sales.
Innovation helps to become successful and generate profitability when it is implemented
in the most appropriate manner in any industry (Hamilton and Webster, 2018). While adopting
innovation and technological development in Kainos PLC it must be considered that it is done on
a valid idea. Only valuing options will be considered for innovation and that idea must be
analysed in detailed manner. Innovation must be introduced on the basis of priorities that a
business organisation wants in achieve in long or short run. Kainos PLC must consider its idea of
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innovation very critically as dealing in software development industry can make an innovation
obsolete in small time duration.
TASK 2
Corporate social responsibility and its importance for Kainos PLC
Corporate governance: It can be defined as the combination of different types of rules,
regulations and processes which are required to be followed by all the business entities for the
purpose of executing operational activities systematically. If companies are not able to comply
with all the regulations of government then it may result in interference of governmental bodies
in the business operations. In other words it can be defined as the law that controls and regulates
businesses. It is also known as the factors which may leave impact upon interest of internal as
well as external stakeholders. It mainly guides companies such as Kainos to make sure that they
are delivering accountable, transparent and secure information of the stakeholders so that all the
operations could be performed systematically (Huang-Horowitz, 2015).
Corporate social responsibility: It can be defined as the responsibility of companies for
society which helps to establish a good image in the mind of society. All the companies are
required to make contribution for welfare of society which is beneficial for the business
execution. It helps to companies such as Kainos to make sure that their operational activities are
performed appropriately with the support of government and society due to their involvement for
societal development. All the public and private companies are requird to spend a fixed
percentage of their profits for societal development according to rules and regulations of
government. It also help to accomplish business goals by making a good image of company with
the help of efforts of management for development and welfare of society (Ketata, Sofka and
Grimpe, 2015).
History of corporate governance in UK: The concept of corporate governance was
developed 20 years ago and main aim of it is to guide all the listed companies to perform all the
operations according to law, rule and regulations. Now a days it is not only compulsory for
organisations only but it is also directing, trusts, universities and others institutions so that they
can perform all the operations systematically (Uchihira, Ishimatsu and Inoue, 2016).
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. With the passage of time it has become the main element which is required to be focused by
business entities so that accuracy, security, accountability and transparency of information could
be assured. For example, the companies such as Kainos are also required to perform their
operations under the rules and regulations so that requirements of corporate governance could be
fulfilled (Laudon and Traver, 2016).
Importance of CSR for Kainos: For all the organisations making contribution in
corporate social responsibility is very important as it can provide various benefits such as good
market image. Significance of it for Kainos is as follows:
 Improving public image: By making contribution in CSR Kainos will be able to
establish a good market image. It will be beneficial for the organisation to attain long
term sustainability which will also increase profits and revenues for the organisation.
 Increases brand recognition and awareness: In order to increase awareness and
recognition of brand it is very important for companies such as Kainos to make
contribution in corporate social responsibility activities. With the help of it a good image
in the market could be established that help companies to acquire benefits.
Higher competitive advantage: Corporate social responsibility is also very important
for companies to attain competitive advantage because it helps to establish a positive image of
business in the mind of customers. It also helps to attract a large number of clients which results
in higher revenues and profits. With the help of these advantages competitive advantage could be
achieved by Kainos (Meiners, Ringleb and Edwards, 2014).
Make improvement in customer engagement: If companies such as Kainos make
contribution in CSR activities then it results in good market image which is also beneficial for
the purpose of making improvement in customer engagement. In order to gain this advantage it is
vital for the enterprise to take part in the activities which are performed for the purpose of CSR
(Sodeyfi, 2016).
Archie Carroll’s (1991) CSR model
Archie Carroll’s Model: It can be defined as a model which guides the companies to
analyse the way I which CSR should be used and figure out the reasons behind focusing upon it.
The main advantage of it is that it helps companies to adopt such strategies which can help them
to generate higher profits (Sodeyfi, 2016).
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There are various elements of it which could be understood with the help of Pyramid of
this model. All the elements of it are as follows:
Economic
1.) This element guides the companies to pay attention towards their profits.
2.) It demonstrates that by generating profits a company can sustain in the market for a long
period in future .
Legal
 According to this responsibility organisations such as Kainos are required to follow all
the governmental rules and regulations. Some of them are copyright, patent, employment
etc. related acts.
Ethical
 It guides companies to perform all the business activities in ethical manner.
This responsibility guides companies to perform activities for social welfare (Huang-Horowitz,
2015). Philanthropic
 This responsibility direct organisations to give back to the society.
Companies should spend money for charity and donation for societal welfare (Meiners, Ringleb
and Edwards, 2014).
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Sources: Archie Carroll’s CSR model, 2019
Archie Carroll’s model is also applied by the management of Kainos in order to make
contribution in the corporate social responsibility activities. Organisation uses different new
technologies for meeting expectation level of clients so that higher profits could be generated.
Organisation is having the main goal of generating profits which helps to perform all the
operational activities properly. By focusing on it economic responsibility is fulfilled by the
company. After performing it management try to make sure that all the operations which are
performed by the company are legal accounting to law, rules and regulations. For this purpose
legal responsibility is performed by the company (Ketata, Sofka and Grimpe, 2015).
After performing the legal responsibility the management of Kainos try to make sure that
all the operational activities which are performed by it are ethical or not. For this purpose
effective strategies are formulated which is beneficial for development of business. By paying
attention towards this duty business is performed in ethical manner. The last stage of the model
is discretionary duties under which top management of the organisation is required to make sure
that they are making contribution for societal development (Laudon and Traver, 2016).
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Illustration 1: Archie Carroll’s CSR model, 2019

Currently managers in Kainos are focusing upon all the elements of this model because
with the help of it they make sure that their organisation attain success. For the purpose of
developing the business a fixed percentage of profits is contributed in the societal development
which is beneficial for establishment of a positive market image. Currently 2% of annual profits
are spent by Kainos for development of society and attract large number of customers towards it
so that revenues could be increased.
CONCLUSION
The above report concludes that innovation is a technique which is focused by companies
for the purpose of launching something new in the market for the purpose of attracting a large
number of customers. For the purpose of making innovation it is very important for companies to
pay attention towards technological development. With the help of it organisations can attain
long term sustainability and competitive advantage. Corporate social responsibility and
governance are also two different elements which should be considered by companies while
formulating strategies for business execution because it helps to reach business goals. The
objectives which could be acquired by focusing them are profit maximisation and customer
engagement.
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REFERENCES
Books and Journals:
Belás, J. and et.al., 2014. Business risks and the level of entrepreneurial optimism among SME in
the Czech and Slovak Republic. Journal of competitiveness.
Cairncross, F., 2014. Green Inc.: guide to business and the environment. Routledge.
Eling, M. and Schaper, P., 2017. Under pressure: how the business environment affects
productivity and efficiency of European life insurance companies. European Journal of
Operational Research. 258(3). pp.1082-1094.
Grigore, A. M. and Drăgan, I. M., 2015. Entrepreneurship and its economical value in a very
dynamic business environment. Amfiteatru Economic Journal. 17(38). pp.120-132.
Hampel-Milagrosa, A., 2014. Micro and Small Enterprise Upgrading in the Philippines: The
role of the entrepreneur, enterprise, networks and business environment (No. 86).
Studies.
Huang-Horowitz, N. C., 2015. Public relations in the small business environment: Creating
identity and building reputation. Public Relations Review. 41(3). pp.345-353.
Ketata, I., Sofka, W. and Grimpe, C., 2015. The role of internal capabilities and firms'
environment for sustainable innovation: evidence for Germany. R&d Management.
45(1). pp.60-75.
Laudon, K. C. and Traver, C. G., 2016. E-commerce: business, technology, society.
Meiners, R. E., Ringleb, A. H. and Edwards, F. L., 2014. The legal environment of business.
Cengage Learning.
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.
Uchihira, N., Ishimatsu, H. and Inoue, K., 2016, September. IoT service business ecosystem
design in a global, competitive, and collaborative environment. In 2016 Portland
International Conference on Management of Engineering and Technology
(PICMET) (pp. 1195-1201). IEEE.
Online
About kainos. 2019. [Online]. Available through:
<https://en.wikipedia.org/wiki/Kainos>
About CSR. 2019. [Online]. Available through:
<https://www.growyourgiving.org/giving-blog/pyramid-corporate-social-
responsibility>
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