MOD003353 - Business Environment: Innovation, Ethics & CSR Impact

This report examines the business environment of Burberry Group PLC, focusing on the impact of innovation, business ethics, and corporate social responsibility (CSR). It discusses how innovation, including product, business model, process, delivery, organizational, and social innovation, contributes to Burberry's productivity and revenue. The report also analyzes Burberry's commitment to business ethics, such as discontinuing the use of real fur and implementing eco-friendly practices, and how these ethical considerations and CSR initiatives positively influence the company's reputation, customer loyalty, and employee perception. The analysis includes the benefits of a positive work environment, fair business practices, and adherence to legal and environmental regulations, all contributing to Burberry's overall success and sustainability.

BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1) The impact of innovation on modern business organization...................................................1
2) Impact of business ethics and CSR over Burberry group plc..................................................4
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business environment is one of the most important factor of the business. Business
environment is the collection of all the factors i.e. internal or external factors like employees,
customers, management department, owners, suppliers and many more. This controls the roles of
the organization and helps in making the firm more successful. (Hrechyshkina, O. and
Samakhavets, M., 2019.) Business environment helps in identifying the business opportunities
and beating new properties. In this report we will study about the impact of innovation on modern
business organization and also on the impact of business ethics and corporate social responsibility
on modern business organization like Burberry Group PLC.
MAIN BODY
1) The impact of innovation on modern business organization
Business environment is the sum of all the individuals, administrations and other factors
which are outside the company but eventually affect the company’s production. There are
basically four types of business environment faced by any organization. Similarly, here we are
discussing on the business environment affecting one of the most the biggest British luxury
fashion company named Burberry Group PLC. There are five factors of business environment
which are social, political, economic, legal and technological. There are many benefits of having a
good business environment in the business as it helps in identifying different opportunities and
therefore improves the performance of the company.( Khajeheian, D., Friedrichsen, M. and
Mödinger, W., 2018) For example, ‘Airtel’ is the first company find the need of 4G speed of
internet and introduce this followed by Vodafone and idea. Another benefit of business
environment is it helps in tapping new resources and managing with quick changes within the
company. The business environments help in identifying threats and changing them into a good
opportunity.
Features of business environment:
 Business environment incorporates all the factors which are outside the organization and it
focuses on all the external factors.
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 Business environment affect the specific and general forces of the company. Specific
forces are those which directly influence the operations of the company whereas general
forces indirectly affect the operations. For example, legal, political, economic factors.
 All the factors of the business are inter related to each other and affect the functions of one
another. For example, awareness of health among people increase the productivity of
many healthy diet foods.
 The business environment changes rapidly according to customer needs and requirements.
It keeps changing its technological factors as well and also hire new talent. For example,
many companies are producing goods with natural ingredients in comparison with
‘Patanjali’ products. (Hamilton, L. and Webster, P., 2018)
Innovation is the ability of thinking something new and creative for making your business
more productive and performing. Creating something different for getting more success is termed
as innovation. Innovation attract and influence customers for their products. The aim of
innovation in the business is to increase the revenue of the company. Innovation in business
means changing the nature and environment of the business for increasing the productivity and
revenue of the company. (Krajnakova, E., Navickas, V. and Kontautienė, R., 2018) When a
company looks for innovation in a business they look for certain points like implementing
creative ideas, producing different goods, improving current items and making them more
effective, removing the core problem facing in the existing product and satisfying the customer
according to their needs. There are many types of innovation in a company like:
 Product innovation- product innovation is the process of creating a new product in a
more innovative way. Generating a new product by knowing the products of other
competitors. For example, earlier Burberry group started its business with some luxury
clothing and now as per customer needs it has introduced a new software which places a
two-dimensional print on a 3D product template.
 Business model innovation-innovative business model means accurate pricing, value,
supply and convenience to the customer as per their needs. For example, Burberry Group
sell their products through digital mode and allow them to return their order if they are not
suitable for them. This makes the customer happy and convinced by the service of the
company and help in retaining the customers. (Muddaha, G., Kheng, Y.K. and Sulaiman,
Y.B., 2018.)
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 Process innovation-process innovation means creating new ideas into the existing
products which means making the existing product more efficient and effective from
customer point of view. One of the very good example of process innovation is banking
industry. Earlier customer have to go for bank for knowing detail of their account but now
they can use online banking for every purpose related to the bank.
 Delivery innovation- delivery innovation means delivering the product in proper timing
and giving a fast delivery of the products.
 Organizational innovation-organizational innovation means changing the environment
of the organization. By changing the work process and the hierarchy to increase the team
work and leadership among the employees. By providing an open platform for
communication and welcome innovative ideas of the employee makes the organization
more significant.
 Social innovation-In today’s era social innovation is one of the most important factor in
making a successful organization. By using this a company can improve healthcare
benefits and also other financial wellness programs.
Burberry Group PLC is one of the most recognized British fashion industry in the world.
It has started its venture in 2006 and has aimed to be an “end-to-end” business. The plan of the
company was to use big data and artificial intelligence for making the company more successful
and also for customer fulfilment. The company does this by getting feedbacks and reward points
from the customers. Whenever a customer visits the store the employee asked the customer their
feedback and giving them suggestions for buying the products based on their past purchasing.
Burberry is one of the first company to adopt new technologies in the product. The company uses
the snap chat’s snap code for scanning barcodes with their products. It was the first company to
launch its channel on apple music app.
Another initiative taken by the company is to have customers with celebrities inside the
store and appearing them on the TV advertisements. All these innovations created by the
company makes the company more productive and significant. One of the very important factor to
keep in mind is having a good packaging. Good packaging easily influence customers for the
products. The company can improve the business by improving the sales and relationship with the
consumers. If the employee invest money and time then customer definitely initiate their action
and therefore this results in increasing the sales of the product. (Rodríguez-López, Á. and Souto,
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J.E., 2020)The company can do regularly measuring customers for improving the performance of
the team and the product as well. Innovation in the business environment helps to reduce the
waste and make the product more effective which helps the company in many ways like lower
cost, increasing profitability and satisfying customer needs. Innovation is essential for long term
business. It helps in identifying opportunities of the market and adapt the changes by knowing the
reviews and feedback from the customer.
This helps in boosting the market value and increase the reputation of the organization.
The company should always know what is happening in their competitive company so that the
company can make better products and give good services to the consumers. Innovative work
environment also helps in retaining the employment. Listening to the employee view and giving
them a platform to raise their voice increase the teamwork in the organization. All these factors
when used in the innovation of the business increases the productivity, growth and revenue of the
organization. By increasing the leadership skills of the leader, one can increase the innovation in
the organization. (Tandrayen-Ragoobur, V., 2022.) Business environment helps in policy making
and planning in the organization. Business environment affect the internal as well as the external
factors in the organizations like the micro and the macro factors of the company. organizational
environment makes the team motivated and makes the team work together for better performance.
2) Impact of business ethics and CSR over Burberry group plc
Business ethics is a study of implementing appropriate business policies and ethical
guidelines within an organization. Business ethics is important for the firm which can improve
profitability of the business. Implementing the business ethics means that organization
committing themselves to doing right things. Simply, ethic describe the moral values and
principles applied to social behaviour hence, the business ethics describe the moral values and
principles applied to the situation that occur in the business environment.
Burberry is one the top global luxury clothing brands company which declare that it was
going to stop burning unsold clothes or products and discontinue to manufacturing products using
real fur. At that moment real fur is made from the animals fur so it has committed to renewable
resources and using the eco-friendly materials. They decide to reuse and manufacturing the
unsaleable products and selling them at low costs which arise the brand values. Burberry switched
their policy and became a fur free company. They captured that stop burning these products will
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make the company environment friendly which helps to secure more customer retention (De
Bakker and Rasche 2019). Apart from this Burberry are a business ethical company. It further
illustration what can be impact on the business:
 Positive work environment: With the help of business ethics employees can arise a
responsibility towards the development of positive relationship with co-workers.
Company should focus on the actual working environment, it leads to a positive
workplace culture. They should establish the comfortable working situations and strong
codes of ethics.
 Build customer loyalty: Customer loyalty is important to any business and loosing
customer can be costly. Loyalty of customer is one of the solution to acquire long term
business success. Company can increase the customer retention through building
relationship. They can continuously impress existing and new customers with caring and
customize service.
 Reputation and brand image: Negative reputation can harm an opportunity to gain new
customer and existing customers. So it has to switch the business policies to gain the new
customer and brand image. Eco-friendly work environment help to capture the goodwill of
the company.
 Perform fair business practice: Company should treat customers and partners fairly.
They shouldn't overcharge for products and services and make relevant promises
regarding performance and should carry responsibilities when they make a mistake.
 Employees perception: For employees attention and keep talented, company should
maintain fairness and openness atmosphere. Employees enjoy working in positive
business environment rather than negative environment. So, company should focus on the
environment which positively contributes to all working environment. If Company is fair
and open in dealing with their employees is better for the employees retention and
retaining the most talented people (Ermasova, 2021).
 Avoid legal issues: company may not fully follow with environmental regulations and
law, workers safety and using renewable products in their products else, they should be
acquired the penalties, including legal fees and sanctions by the government agencies. It
will be result in negative publicity which can harm the company reputation that is more
costly than legal fees.
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Corporate social responsibilities (CSR):
Corporate social responsibility is a structure of self-regulation with the purpose of making
positive effect on society and social accountability. A company can apply for types of Corporate
social responsibilities efforts: environment friendly, ethical labour, eco conscious, and charity
work. Corporate social responsibilities plays an important role in a company's brand perception,
talent retention, attractiveness to employees and customers and complete business success.
Company must be ensuring that business decisions are ethical. Corporate social responsibility
impacts companies, employees and non-profit and it is something advance that companies do to
improve local ad global communities. These attempts range can range from donating money to
non-profit to apply environmentally eco-friendly policies in workplace (Onkila and Sarna, 2022).
Burberry has already started taking steps towards continuous which shows the corporate
social responsibilities concern. They objective to desire positive change and sustainable future for
the company, environment and society though innovation. According corporate social
responsibility, Burberry lacks behind in some areas like plastic polyvinyl chloride, renewable
energy and energy consumption. The main area of corporate social responsibilities consider while
identifying the problems are society and environment with an aspect raw materials, burning
clothes and supply chain (energy and water).
Carroll's CSR pyramid is a structure that describe why and how organization should take
social responsibilities. Carroll's four type of Corporate social responsibilities range the economics,
legal, ethical and philanthropic responsibilities (Lu and et.al., 2020). The brief review of four
categories of corporate social responsibilities are:
 Economic responsibilities: The economic responsibility of the company is about
producing goods and services that society wants and make profit on them. Company have
partners who predict reasonable return on their investment, they have employees who
want to job fairly with safety hazard. In the context of Burberry, Economic responsibilities
in corporate social responsibility of company must be profitable and achieve the target of
the business. Corporate social responsibility is the only way for a Burberry to survive and
support society in the long term success. Hence, the economic responsibility is a baseline
requirement that must be Burberry met in an aggressive business world.
 Legal responsibilities: Burberry should look forward to operating and function within the
rules and regulations. The fundamentals rule consist the laws and regulations that act for
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society views of systematic ethics. Legal responsibility in corporate social responsibilities
is operating government requirements and laws, gathering legal obligations and also
supplying the goods and services that acquire the minimum legal requirements with an
aspect of Burberry.
 Ethical responsibilities: Burberry should have a responsibility towards the customers, the
society want organization must be conduct and mange their company in ethical way. In the
context of Burberry, Ethical responsibility in corporate social responsibility includes the
company performing in a way that accordance with society expectations and evolves
ethical and moral standards that adopted by the society.
 Philanthropic responsibilities: Business developing discretionary activities give the
society the thought that company wants to give something back to the community (Bae
and et.al., 2021). Burberry Company should adopt the different types of discretionary
activities such as donations, community development, and gifts to the community.
CONCLUSION
As a conclusion, business environment plays a very vital role in the business of the
organization in identifying the opportunities and threats of the business. It is also dynamic in
nature and have the quality of changing rapidly which increase the productivity and profitability
of the organization. Likewise, innovation in the business environment is also very important for
making the business more significant as it increases the revenue and sales of the organization. In
this report we discussed on the innovative and creative attempts taken by the one of the most
luxurious fashion brand of British named Burberry group PLC. (Jarmai, K., Tharani, A. and
Nwafor, C., 2020) The company is very innovative in terms of business and have taken many
steps for increasing the performance of the company.
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REFERENCES
Books and Journals
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pandemic. Journal of Corporate Finance.67. p.101876.
De Bakker, F.G., Rasche, A. and Ponte, S., 2019. Multi-stakeholder initiatives on sustainability:
A cross-disciplinary review and research agenda for business ethics. Business Ethics
Quarterly.29(3).pp.343-383.
Ermasova, N., 2021. Cross-cultural issues in business ethics: A review and research
agenda. International Journal of Cross Cultural Management.21(1).pp.95-121.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Hrechyshkina, O. and Samakhavets, M., 2019. Changing business environment in
Belarus. Journal of Geography, Politics and Society.9(1).pp.1-11.
Jarmai, K., Tharani, A. and Nwafor, C., 2020. Responsible innovation in business. In Responsible
Innovation (pp. 7-17). Springer, Dordrecht.
Khajeheian, D., Friedrichsen, M. and Mödinger, W., 2018. An introduction to competitiveness in
fast changing business environment. In Competitiveness in emerging markets (pp. 3-11).
Springer, Cham.
Krajnakova, E., Navickas, V. and Kontautienė, R., 2018. Effect of macroeconomic business
environment on the development of corporate social responsibility in Baltic Countries
and Slovakia. Oeconomia Copernicana.9(3).pp.477-492.
Lu, J, and et.al., 2020. Modified Carroll’s pyramid of corporate social responsibility to enhance
organizational performance of SMEs industry. Journal of Cleaner Production.271.
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Muddaha, G., Kheng, Y.K. and Sulaiman, Y.B., 2018. Learning capability and nigerian sme's
marketing innovation–the moderating influence of dynamic business
environment. International Journal of Management Research and Reviews.8(3).pp.17-29.
Onkila, T. and Sarna, B., 2022. A systematic literature review on employee relations with CSR:
State of art and future research agenda. Corporate Social Responsibility and
Environmental Management.29(2).pp.435-447.
Rodríguez-López, Á. and Souto, J.E., 2020. Empowering entrepreneurial capacity: training,
innovation and business ethics. Eurasian Business Review.10(1).pp.23-43.
Tandrayen-Ragoobur, V., 2022. The innovation and exports interplay across Africa: Does
business environment matter?. The Journal of International Trade & Economic
Development.pp.1-31.
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