MOD003353 Business Environment: Impact of Innovation, Ethics, CSR

This report assesses the impact of innovation, business ethics, and corporate social responsibility (CSR) on modern business organizations, focusing on Hikma Pharmaceuticals plc. It examines innovation in terms of product, process, position, and paradigm, highlighting its impact on talent retention, efficiency, brand image, and profitability. The report also discusses CSR, emphasizing consumer engagement, brand awareness, and competitive edge, and analyzes Carroll's pyramid of CSR, including economic, legal, ethical, and philanthropic responsibilities. Finally, it details the impact of Hikma Pharmaceuticals' CSR activities on consumer retention, cash flow stability, and employee recruitment, concluding with the significance of business ethics in organizational success. Desklib provides students access to similar solved assignments.

Business Environment

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK...............................................................................................................................................3
Assess the impact of innovation on modern business organisations ..........................................3
Impact of innovation on the modern business companies has been discussed below:- ............4
Assess the impact of business ethics and corporate social responsibility (CSR) on modern
business organisations.................................................................................................................5
CONCLUSION ...............................................................................................................................8
REFERENCES:.............................................................................................................................10
Books and Journals:..................................................................................................................10
Online .......................................................................................................................................10

INTRODUCTION
Business environment may be define as those external forces or factors which are not in
the control or beyond the control of the institution. As business environment is very dynamic in
nature and because of this different types of business face challenges and complexities in order
to run their business(Bubanja and Madzar, 2019) . The business environment comprises different
components like consumer, supplier, technologies, competitor, government, stakeholder, social,
legal and many other factor which have a immense effect on the different business functions.
This report is going to give information about Hikma Pharmaceuticals plc which is a
multinational pharmaceutical brand of Unite Kingdom. This British company was founded in
1978 and the founder of the company is Samih Darwazah. The company deals in manufacturing
of non- branded generic and in-licensed pharmaceutical products. The following report is going
to covers the impact of innovation on the modern business environment in relation to the
respective company. Along with this, this report also cover the impact of corporate social
responsibility (CSR) and business ethics on the modern business organisations.
MAIN BODY
TASK
Assess the impact of innovation on modern business organisations .
Innovation may be define as a technique in which the goods and services of the company
has been modified or evaluated by using latest process and method. Due to this the value of the
product has been increased in the market. In context to Hikma Pharmaceutical Plc, the
innovation strategy of the company has been discussed below:-
 Product :- This refers to all the goods and services of the company in which they are
dealing in order to satisfy the need and demand of the consumer. In relation to the Hikma
pharmaceutical plc, the branded segment of the company comprises 499 products in 1256
dosage strength(Črešnar and Jevšenak, 2019). The company also deals in injectables
product like argatroban, fentanyl, and many more along with this the generic products
like amoxicillin, cephalexin etc.
 Process :- this element refers to the manufacturing of goods and services so that they can
fulfilled the market demand. In relation to the Hikma Pharmaceutical plc, this included

the modification as well as the alteration of the goods and services of the company in
order to produce good quality of the product.
 Position :- this element includes the target customer of the company. In relation to the
Hikma pharmaceutical Plc, the management of the company target all age group persons.
Company thinks that medicines are one of the important part of the human being. This
thinking gives them a competitive advantage over its customer's which results in
increases its customer base.
 Paradigm – this factor more focus on what the organisation is doing. In context to the
Hikma pharmaceutical plc, the different types of techniques has been used by the
company which not only help them in achieving a successful position in the market but
also help them in updating their products(Escaleras and Chiang, 2017).
Impact of innovation on the modern business companies has been discussed below:-
 Increase the Retention rate of top talent – The first and one of the most important
impact of the innovation on the modern business organisation is increasing the retention
rate of the employees. In relation to the Hikma pharmaceutical, the management of the
company use different innovative method not only in retaining the existing employees
but also in hiring the skilled and talented employee. Due to this employees of the
company always remain loyal to the organisation which give them a competitive
advantage over others.
 Improves the efficiency :- innovations within the organisation not only improves the
productivity or efficiency but also reduces the cost of production. In context to the Hikma
pharmaceutical, use of innovative technology within the different business functions not
only reduces the cost of production but also saves their time and enhance their
productivity(Farole and et .al., 2017). With the help of this company is able to offer
reliable and affordable products to their customer's which increase their sustainability in
the market.
 Enhance the brand image :- innovation also help in improving the brand image of the
company in the dynamic market. Nowadays, before purchasing any product customer do
the proper market research. So it is very important for the organisation to have a good
image in the market. In context to the Hikma pharmaceutical, the management of the
company use different innovative methods like digital advertising in order to expand their

presence in the global market. With the immense use of innovative methods by the
company, they are able to develop a good image in the market.
 Increase profitability:- Innovation within the organisation helps the company to achieve
a successful position in the market. The implementation of new ideas and technologies
increases the revenue of company. In relation to the Hikma pharmaceutical, for reducing
the cost of production and employee turnover company use various innovative methods
which help them in generating the greater output with the same input. This directly
reflects on the profitability of the firm(Filaand et .al., 2020) .
Assess the impact of business ethics and corporate social responsibility (CSR) on modern
business organisations.
Corporate social responsibility is basically is a business model which helps the company
in order to become responsible not only towards the society but also towards its stakeholder and
general public(Gao and Li, 2020). These are those policies and practices which are undertaken
by the organisations to have a positive influence on the world. The importance of implementing
the corporate social responsibilities has been discussed below:-
 Consumer Engagement:- by implementing the CSR, this improves the engagement of
customer with the company. If the member of the society directly engaged with the
company then these customer is being considered as the potential customer for them.
Company also get the honest and straight feedback from the their consumer in relation to
their CSR practices.
 Brand Awareness :- This also help in expanding their brand image all across the globe.
If the company pays more attention toward the betterment of the society then this help the
in spreading their positive image in the market. This result in improving the image of the
brand as well as the company among the consumer or people of the society.
 Competitive Edge :- By implementing the Corporate social responsibilities in a very
effective manner company can enjoy the competitive advantage. If the organisation paid
more focus on the betterment of the society and also implement various steps towards the
betterment of the environment then they can get a competitive edge in the market over
their rivals.
Corporate social responsibility has become more famous among the different types of the
organisation after it was introduce by Archie Carroll. Basically this CSR is a framework which

explains to the organisation that how they should take the social responsibilities (Grizane and
Jurgelane, 2017). The theories of this CSR is being considered and preferred by most of the
organisation. They highlights the four major types of responsibilities for the organisation. They
shows these responsibilities in the shape of pyramid. The four responsibilities of the Carroll
pyramid has been discussed below:-
 Economic Responsibilities :- this is the first level of this theory and it is very important
for the organisation to perform this responsibility in a very effective manner. It is
impossible for the firms to stand in the market without revenue. Along with this they are
not able to pay salaries to their worker. So the only way to stand in the market is generate
higher and higher profit. Additionally, the company is also responsible for the producing
the goods according to the need and requirement of the customer.
 Legal Responsibility:- in this level of pyramid the organisation are responsible for
following the rules, regulation and legal duties which are develop and generate by the
government. This level is being considered as the most important level of this CSR which
states that how the firms operate and conduct their business in the market area. Examples
of some legal responsibility are employment law, tax regulations, health and safety of
employees and many more.
 Ethical Responsibilities:- This level of Pyramid state that firms always have do the right
thing, be always fair in all conditions and avoid the harm. It is very important for the
organisation to follow the rules and along with this do their business in a very ethical
manner (Kozubikova and et .al., 2019). This not only motivate the stakeholder of the
company but also motivate the customer. Due to this customers of the organisation feel
more comfortable for purchasing the goods and services of the company. Some of the
example of the ethical responsibility is being environmental friendly, treat properly
supplier and employees.
 Philanthropic Responsibilities :- this is the top level responsibility in this pyramid. In
this responsibility the organisation have to paid focus on their carbon emission and
reduces the unnecessary use of neutral resources. Organisations have to take this
responsibility very seriously because many people wants to works only with those
companies who think to give back to the society.

In context to the Hikma Pharmaceutical plc, the management of the company constantly paid
more focus on the social,environmental and the government problem. Company is the respected
member of the United Nation global compact. The company paid more focus on the human
rights, anti corruption, environment and many more (Kurpayanidi, 2018) . They also have to paid
focus on the FTSE4Good.
 After the Covid 19 pandemic, company still focus on the safety and health of the patients
in their market segment. They also concentrate on the well beingness of their workers all
across the globe. Due to this they are able to fulfil the demand of medicines in the
market.
 Company also develop various gathering programme specially for those people who
need healthcare and education. They provide relief to those people who actually need it.
 They not only improves the quality or values of their medicines but also reinforced their
donation campaign.
 They regularly measure the affect on environment along with this they develop different
strategies which helps them to perform their CSR practices in a very effective manner.
The impact of the CSR of Hikma Pharmaceuticals PLC:
 Consumer Retention :- In context to the Hikma pharmaceutical plc, CSR helps the
company as they perform their activities for the betterment of the society. Due to this the
preferred to work with them. The commitment of the company toward the betterment of
the society help them to increase their customer base which result in increasing the
customer retention rate.
 Stability in cash flow :- it is very important for the company to have a better cash flow
with in the company because the growth of the company is totally depend on this. In
context to the Hikma pharmaceutical plc, as the company is socially and ethically
responsible then this help them not only in avoiding the unnecessary expenditure but also
helps them in facing the different challenges which impact negatively on the profitability
of the company(Melnyk and et .al., 2019). This helps them in maintaining their cash
flow in a very effective manner which result in long term growth.
 Employee Recruitment :- it is very important for the organisation to keep their skilled
and talented employees within the organisation and along with this recruit the stable
workforce. In context to the Hikma Pharmaceutical Plc, the commitment of the company

towards the welfare of the employees, society and environment is being considered as
one of the main reason for improving the retention rate and recruitment of the employees.
Business ethics:
Business ethics may be define as the research of proper different activities as well as policies of
the business like insider trading, racism, discrimination, bribery, corporate governance, fiduciary
duties, corporate social responsibility. Basically these policies instruct the different organisation
about the business ethics and the management have to follow these policies.
Impact of business ethics on business:
 Consumer loyalty: In respect to the Hikma pharmaceutical plc, the company always
loyal to their customer and always treat them fairly. Due to this the customer of the
company always loyal to the company which result in long term sustainability and
profitability in the market for a long period time.
 Brand reputation : In context to the Hikma Pharmaceutical Plc, as the company is very
good in ethical behaviour which not only help them in creating good reputation in the
market but also help them in increasing the potential customer base.
 Positive work environment :- in relation to the Hikma pharmaceutical plc, as the worker
of the company perform all the duties of the company as a team. They make a good
working environment with in the company(You and et .al., 2019). The managers and
seniors of the company believes their employees and share with the the important data.
This motivate the employee and increase their productivity of performing the task.
 Legal Aspects :- In context to the Hikma Pharmaceutical plc, the management of the
company always follow the rules and regulation which are formed by the government.
They do not compromise in following the labour law, employment laws, safety of
employees as well as safety of environment. So due to this they are able to perform their
different business activities in a very effective manner. They don't face any legal issues.
CONCLUSION
From the above report it has been concluded that it is very important for the businesses to
analysis the internal and external factor. By doing this they can enjoy the long term sustainability

in the market and along with this they can perform their different business functions in very
smooth and effective manner. Customer, technology, competitor, stakeholders and many more
are being considered and many more are being considered as most important business
environment factor which have a huge impact on the working of the company. This report also
concluded that the innovations play a very important role for the business. It is very essential for
the evaluation of the existing product in the market as well as introduction of the new product in
the market. Just because of the innovation company can enjoy the long term sustainability in the
competitive market. Along with this report also concluded the impact of innovation in the
modern business organisation in relation to the Hikma pharmaceutical plc. Afterwords this report
covers the impact of business ethics and corporate social responsibilities on the modern business
organisations.

REFERENCES:
Books and Journals:
Bubanja, M.V. and Madzar, L., 2019. The Importance of Innovation and Knowledge for
Economic Development of the Country and the Competitive Business of
Companies. Journal of Social Sciences. 11(XI). pp.157-173.
Črešnar, R. and Jevšenak, S., 2019. The millennials' effect: How can their personal values shape
the future business environment of industry 4.0?. Naše gospodarstvo/Our
economy. 65(1). pp.57-65.
Escaleras, M. and Chiang, E.P., 2017. Fiscal decentralization and institutional quality on the
business environment. Economics Letters. 159. pp.161-163.
Farole, T and et .al., 2017. Business environment and firm performance in European lagging
regions. World Bank Policy Research Working Paper, (8281).
Fila, M and et .al., 2020. Innovations for Business Management: Motivation and Barriers.
Gao, P. and Li, J., 2020. Understanding sustainable business model: A framework and a case
study of the bike-sharing industry. Journal of Cleaner Production. 267. p.122229.
Grizane, T. and Jurgelane, I., 2017. Social media impact on business evaluation. Procedia
Computer Science. 104. pp.190-196.
Kozubikova, L and et .al., 2019. The impact of political factors' perception on suitability of
international business environment: the case of startups. Economics & Sociology.
Kurpayanidi, K.I., 2018. Questions of classification of institutional conditions, determining the
structure of business management in Uzbekistan. ISJ Theoretical & Applied
Science. 9(65). p.1.
Melnyk, and et .al., 2019. Organizational and Economic Potential of Joint Engagement of
Venture Capital and Business Process Re-engineering in the Marketing Activities of
Industrial Enterprises.
You, K and et .al., 2019. Bridging technology divide to improve business environment: Insights
from African nations. Journal of Business Research. 97. pp.268-280.