Comprehensive Business Report: Luxottica's Environment and Culture

This business report provides a comprehensive analysis of Luxottica, a market leader in the eyewear sector. It examines the company's general and specific business environments, evaluating factors such as political/legal, economic, social, technological, and global influences. The report assesses Luxottica's ethical practices and corporate social responsibility (CSR), highlighting its commitment to employee well-being and community engagement. Furthermore, it delves into the company's organizational culture, identifying its suitability for individuals seeking structure, fair practices, and a systematic environment. The analysis reveals how Luxottica leverages its employees and ethical practices to achieve success, emphasizing its contributions to the 'Made in Italy' brand and its partnerships. The report concludes by summarizing key findings regarding Luxottica's strategies and its position in the market.

BUSINESS REPORT

EXECUTIVE SUMMARY
The report below provides a detailed analysis on the business environment of an
organisation. The process of research included extensive analysis of the business environment
and evaluation of organisational practices and cultures. To aid the purpose, the organisation that
is used is Luxottica, which is a market leader in retail and eye-wear sector.
The agenda of the report was to analyse and evaluate the general environment of the firm.
A detailed evaluation determined that the firm has quite impressive support of the elements of
general environment, especially government in order to ensure its long term success in the
market.
The report also covers analysis of the specific environment of the company. It is
determined that employees are the driving force of the company and Luxottica too has
effectively managed to retain their employees and expand their workforce.
Another agenda of this report was to determine the ethics and corporate social
responsibility of the firm. Through detailed evaluation and analysis of the business practices of
Luxotica, it was identified that the firm takes emphasise on fulfilling their responsibilities
towards their employees as well as the community as a whole.
Lastly, the report emphasises on the organisational culture of Luxottica and determine
how well an individual could fit in that culture. The analysis and evaluation resulted in
establishing the aspect that the firm is fir and appropriate for individuals who seek comfort,
structure, fair work practices and a systematic culture.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................3
INTRODUCTION...........................................................................................................................1
A1.3. BUSINESS REPORT............................................................................................................1
TASK 1............................................................................................................................................1
General Environment..................................................................................................................1
TASK 2............................................................................................................................................3
Specific Environment..................................................................................................................3
TASK 3............................................................................................................................................5
Ethics and Corporate Social Responsibilities (CSR)..................................................................5
TASK 4............................................................................................................................................6
Organisational Culture................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business Environment is the accumulation of all the factors of a business that governs the
working of an organisation. It includes each aspects affects organisational operations and moulds
the way it functions (Reuer, 2017, p. 72). The following business report is based on Luxottica,
which is one of the biggest leaders in designing, manufacturing as well as distribution of sports,
luxury, performance and fashion eye-wear situated in Milan, Italy. The report covers a deep
analysis of the general and specific environments of the organisation and real-life dimensions
that have an impact on these organisational environments. It also covers analysis and evaluation
of Ethics and Corporate Social Responsibility of the firm. The report also gives an insight of the
organisational culture of Luxottica and how well and comfortable it would be for candidates.
A1.3. BUSINESS REPORT
TASK 1
General Environment
It consists of all the factors in the business environment that influence the working of
every firm in the industry in more or less related ways. These factors help a firm in determining
the extent up to which opportunities and threats are present in the market for the organisation
(Lancaster and Di Milia, 2015, p. 450). The various factors of general environment are discussed
below: Political/Legal Factors: These factors and condition represents the political facet of a
country. It undertakes the role of government and its policies in governing the operations
of companies within the business environment. The legal factors include basic policies,
laws and legal framework which is essential for firm to comply with to ensure support
from the government and sustainable growth. It is very important for companies to align
its activities according to the legal structure of the country in which they are operating.
This is because the consequences are very harsh in case of non-compliance of the laws. Economic Factors: It focuses on the economic performance of the nation. These factors
include inflation and interest rates, general business cycle of the industry, changes in
individuals' disposable income and so forth which determines the magnitude up to which
a firm could earn profit in business. There are two types of economies for business: one is
capitalist economy where organisations own the means of production whereas the other

type is socialist economies where central government owns means of production. Mostly
the national economies blend elements of each of these economies. Social Factors: These conditions undertakes the social norms, values, beliefs as well as
trends that affects an industry and its practices. The forces determine the opportunities
and threats that could be faced by the firm in relation with the social environment of their
country. Technological Factors: One of the most prominent forces of business environment, the
operations and the quality of the products produced by an organisation depends heavily
on the technological aspect of a country (Brantingham and Brantingham, 2017, p. 102).
The kind of technologies that are within the reach of the industry is a factor which
influences the operations of a company.
 Global Factors: These factors considers the global conditions which firms have to
comply with in case they wish to expand or shift their operations in any other region or
country. These conditions are heavily dependant on the geographical locations and firms
have to face different forces that have a deep impact on its functions and operations.
It is very crucial that factors and conditions in general environment be in favour of the
company in order to ensure its long-term growth and sustainable future development. These
factors have a great impact on operations of Luxottica and these factors have influenced the way
this firm works and earn profits in domestic as well as global market. One such dimension in the
general environment of Luxottica which had an impact on the firm was in the year 2017 when
the firm came under an agreement with Italian Revenue Agency which allowed the firm to
effectively access Patent Box's tax relief for certain brands in the company's portfolio. The firm
under this regime experienced a benefit of almost €100 Million between 2015-17. Moreover, the
Patent Box regime provides the firm this relief for a five year period from 2015 to 2019
(LUXOTTICA GROUP SIGNS AGREEMENT GRANTING TAX RELIEF UNDER THE ITALIAN
PATENT BOX REGIME, 2019).
TASK 2
Specific Environment
This environment of a firm consists of all the entities by which a firm interacts during its
business run. These entities are individuals, groups and organisations. It is generally described in

terms of stakeholders, i.e., individuals who are affected or affect the achievement of a company's
objective (Stein and et. al., 2017, p. 1281). To grow in business and achieve organisational
objectives in a better way, it is imperative that an company considers interests of all its
stakeholder groups. This is necessary as it enhances the way companies predict changes in the
environment. It also helps an organisation in determining how best it could modify and innovate
its products and processes to make the firm more flexible and ensure a greater degree of success
in the market. The specific environment of a business includes the following: Customers: These are the individuals who are responsible for an organisation's existence.
The commodities or services developed by a company are acquired by these customers
and in turn, they help companies in earning revenue and profit. Suppliers: These individuals or organisations provide a firm with inputs and materials
which assist them to conduct operations effectively. For instance, it includes people who
supply eye-wear companies with components like zylonite, propionate, optyl or nylon.
The resources provided by suppliers could be financial, human, informational or business
services which help the firm in producing their products with utmost quality and in a
timely manner. Employees: They are often referred to the driving force of a company. These individuals
invest their skills, knowledge, manual efforts and their creativity in an organisation's
operations which assist and aids the firm in development of their products and services. Strategic Partners: These entities work with a firm together to attain mutual benefit.
Firms could work with these partners to pool their resources together and effectively
achieve their organisational objectives.
 Competitors: There are various similar companies in the market which create effective
competition for organisations operating in the same sector. Competitors encourage firms
to develop effective strategies that help them serve the market in a better way (Golinelli
and et. al., 2011, p. 72).
The specific environment of an organisation provide stability and inner strength to the
companies as well as allow companies in developing various strategies that help them in
fulfilling customers' preferences. In case of Luxottica, specific environment plays a prominent
role in ensuring the company's success. One such dimension that has provided the firm with
immense competence to achieve success is the firm's employees. Luxottica is a market giant in

retail and eye-wear. The firm has a huge workforce which is consistently growing in numbers by
effective and ethical work practices of the company (Klengel and Binder, 2015, p. 244).
(Source: Worldwide number of employees of the Italian eyewear luxury fashion company
Luxottica Group from 2012 to 2017, 2019)
As per the graph, the it is seen that there is a consistent rise in the firm's workforce which
has provided the firm with immense level of talent to achieve its organisation's objective. The
firm adopts proper HRM practices and ethical working that causes commitment and engagement
of the firm's human resources. The firm is quite transparent and ensures proper growth of its
employees. This growth has resulted in the firm to earn about €9 Billion in 2017 (FACTS AND
FIGURES, 2019). This is because the firms develop strategies in accordance with its employees
and involve them in the decision-making process of the firm which ensures a high level of trust
and loyalty of firm's employees towards the company. Such effective practices would further
help the firm in enhancing its business practices around the world in a more committed and
effective manner. In the current business scenario, Luxottica is considered as one of the most
Illustration 1: Worldwide number of employees of the Italian eyewear luxury fashion company
Luxottica Group from 2012 to 2017

prominent and the biggest leader in eye-wear and retail sector and the firm has established this
image by the help of its employees and their constant support and contribution towards the firm.
TASK 3
Ethics and Corporate Social Responsibilities (CSR)
Business Ethics refer to the study of proper and effective business practices and policies
which ensures undertakes principles and morals that are adopted by the firms to effectively
conduct their business. However, Corporate Social Responsibilities (CSR) refers to the approach
undertaken by organisations to ensure social, economical as well as environmental benefits for
their stakeholders (Pearson, 2017, p. 121). There are various ways in which companies define
their social responsibilities. These are mentioned below: Meeting their Social Obligations: Firms meet their social obligations by operating in a
way which is approved by the law and reasons that is necessary for them to acquire their
economic goals. However, it is also imperative that organisations pay attention to their
responsibilities other than just making profits to effectively meet these obligations. Being Socially Responsive: Organisations that are socially responsive engage themselves
in social actions as there is a pressure on them and even demand for such practices. They
are guided by various values and societal norms so that they make decisions in
accordance with the practicality of the decisions and their situations.
 Being Socially Responsible: This requires the firm to effectively consider society as in
important factor that would be effected by their actions and their operations. Moreover,
the firm must function in a way that it provides maximum benefits to the society.
It is imperative that companies fulfil their Corporate Social Responsibilities effectively in
order to achieve maximum support from the public. Moreover, the company must work ethically
to fulfil its responsibilities towards its internal stakeholders (Ni and Van Wart, 2015, p. 182).
Luxottica emphasise on ethical working and fulfilling its Corporate Social Responsibility
effectively. The firm has taken initiative to protect and promote social, cultural and
environmental heritage embodying 'Made in Italy'. It is most evident in the products and services
produced by the firm under 'Made in Luxottica'. One of its brand the Persol has partnered up
with most crucial film festivals of the world. 2017 marked the 100th anniversary of the brand
with amfAR which is one of the most important Non-Profit Organisation's that support AIDS

research. In the same year, Luxottica Eye Care Optometric study granted US$5,000 to each of
the 20 students of the American Optometry Student Association in the US and Canada . As for
ethical responsibilities, the firm supports employees and effectively invest in their welfare and
their families to effectively engage them and ensure commitment. Moreover, the firm has gone a
step further to fulfil its moral responsibilities towards its workers. The company implemented the
“Zero Accidents” program in 2007, which focuses on the safety of the employees. In 2017, the
firm frequency rate was down to 1.4% and there were 66 accidents which also saw reduction
from 80 accidents in 2016 (CREATION AND DISTRIBUTION OF ECONOMIC VALUE, 2019).
The firm has implemented this program to ensure safety of each of its worker and make that its
utmost priority. That is how the firm has succeeded in retaining such a large workforce and fulfil
their ethical responsibilities towards them as well as the community.
TASK 4
Organisational Culture
This refers to all the behaviours and values that involves all the experiences, philosophies
and expectation of the firm and is expressed in its interactions and its workings. Its a combined
system of shared beliefs which governs how an organisation works. Generally, cultures of the
organisations consists of 7 dimensions: attention to detail, people orientation, outcome
orientation, aggressiveness, innovation, team orientation and risk taking (Da Veiga and Martins,
2015, p. 172).
It is imperative for an individual to effectively fit in the organisational culture of a
company in order to ensure a healthy working environment to oneself and to effectively
contribute in the firm's success. Moreover, favourable organisational culture could ensure
effective long term engagement and commitment towards the firm.
My score in the “What's the right organisational culture for me?” quiz was 21, which
implies that the most appropriate organisational culture for me would be the one which is
provides comfort and effective work environment. Moreover, the most favourable organisational
culture for me is the one which is mechanistic, structured and a rule-oriented culture.
The organisational culture of Luxottica is quite effective and is focusing on digital and
technological advancements as well as the decision-making strategies of the firm includes a more
structured approach to make it even effective and faster. The values of the firm focuses on health

and security as well as work rights and employee welfare. In addition to this, the firm has a
work-oriented culture where systematic approach is implemented to ease the pressure on the
employees. Moreover, their organisational culture is moulded in a way that it provides maximum
benefits to employees along with customers. The firm emphasise on fulfilling their Corporate
Social Responsibilities and focus more on consistency which is quite imperative to sustain in this
tough business environment (Crane, 2017, p. 135).
As per the analysis, the organisational culture of Luxottica is quite favourable for me as
the work environment this company provides is appropriate and healthy for me to work.
Moreover, by working in this firm, my personal agenda and growth will be fostered alongside
accomplishment of company's objectives. Thus, Luxottica is the perfect firm for me to work.
CONCLUSION
Thus, it is concluded by the report that business environment is quite imperative for an
organisation to ensure sustainability and consistent growth. The general environment helps
companies in determining the external factors that influence the working of the business. The
specific environment, however, helps the firm in determining the stakeholders and community
which is an essential part of an organisation's work environment. Ethics and Corporate Social
Responsibilities are an integral part of a work culture and is crucial for companies to ensure
long-term support from the people and communities. Lastly, it is important that organisational
culture must be fit and appropriate for employees to work in a healthy environment and
contribute in the organisation's success and ensure their long term engagement.

REFERENCES
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Online
CREATION AND DISTRIBUTION OF ECONOMIC VALUE. 2019. [Online]. Available through
<http://www.luxottica.com/en/social-impact-creation-and-distribution-economic-
value/>.
FACTS AND FIGURES. 2019. [Online]. Available through <http://www.luxottica.com/en/about-
us/company-profile/facts-and-figures/>.
LUXOTTICA GROUP SIGNS AGREEMENT GRANTING TAX RELIEF UNDER THE ITALIAN
PATENT BOX REGIME. 2019. [Online]. Available through
<http://www.luxottica.com/en/luxottica-group-signs-agreement-granting-tax-relief-
under-italian-patent-box-regime/>.
Worldwide number of employees of the Italian eyewear luxury fashion company Luxottica Group
from 2012 to 2017. 2019. [Online]. Available through
<https://www.statista.com/statistics/676644/number-employees-of-italian-company-
luxottica-group/>.