P&O Ferries: Analysis of Business Environment, Strategy, and Ethics

This report examines the contemporary management issues faced by P&O Ferries, a UK-based ferry operator. It begins with an analysis of the business environment using PESTLE and Porter's Five Forces frameworks, highlighting political, economic, social, technological, legal, and environmental factors, as well as competitive dynamics. The report then identifies key change drivers, including globalization, ethical and social responsibility, and their influence on strategic decision-making. The implications of these decisions on P&O Ferries' operations and commercial aspects are explored, particularly concerning ethical issues related to employee wages and labor practices. The report also suggests alternative avenues the company could have explored and concludes with recommendations that address ethical and sustainability considerations, offering a comprehensive overview of the challenges and strategic responses within the context of a dynamic business environment. The document is contributed by a student to be published on the website Desklib. Desklib is a platform which provides all the necessary AI based study tools for students.

Contemporary
Management Issues

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
Discussion on business environment of P&O Ferries.................................................................3
Key change drives that might have informed P & O Ferries strategic decision-making............6
Implications of strategic decisions on P & O Ferries operations and commercial.....................8
Suggestions of alternative avenues that could have explored...................................................10
Recommendations that identifies ethical and sustainability considerations.............................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14
Books and Journals:..................................................................................................................14

INTRODUCTION
Management can be understood as the coordination, together with administration of
business activities and operations for the purpose of attaining business objectives and goals.
Management and administration department of company establish business plans and strategies,
co-ordinate all employees' efforts with the objective of achieving predetermined task with
available resources. In contemporary business environment, organisation faces multiple issues
and problems that influences its entire performance together with its efficiency such as
recruitment, diversity at workplace, on -boarding of right candidate, uncertainity about future
and several other aspects (Ahmad, Noordin and Sulaiman, 2019). P & O Ferries is taken into
consideration in order to complete this report. It is a UK based leading ferry operator which is
carrying more than 10 million passengers a year before the global pandemic as well as about
15% of entire freight cargo in and out of the United Kingdom. DP world acquired the respective
organisation. The following report will include key drivers of change, influences of business
environment factors and their impact on decision making and other activities. It will also analyse
the ethical implication on business operations of organisation as a result. Later, suggestions for
the alternative avenues that are being explored to ascertain the nature of the forces of drivers of
change. Recommendations will be part of this report that identifies sustainability and ethical
considerations for the business.
TASK
Discussion on business environment of P&O Ferries.
Business environment refers as the combination of multiple factors that creates an
influence on business activities and its efficiency (Ariyayar and et.al., 2021). In addition to P &
O Ferries, pestle analysis will going to help in examining several factors that can influence
business operations.

 Political factors: Government intervention features a very significant role in business
environment. It involves several factors such as fiscal policies, trade tariff, political
conditions and many other political factors. The respective organisation is registered in
other countries and operates their business from UK ports to Europe. This factor
increases the risk for business to follow political policies of various countries. With the
concept of globalisation, company comprehends political conditions of the countries in
which they expanded their business operations.
 Economic factors: It involves factors such as foreign exchange rates, interest rates,
inflation rates and many more. After the impact of global pandemic, many operational
changes are occurred in the chosen business. In such situation of lockdown, government
of many countries has imposed the limitation on travel activities that influences the
business efficiency and its overall performance (Balak, Broekman and Mathiesen, 2020).
It also impacts negatively on the profits and revenue of the business.
 Social factors: This factor involves population, culture, demographics, buying trends of
customers and many more. P & O Ferries focuses on indulging quality experience to its
clients and customers that help in retaining them for a good period of time.

 Technological factors: It is found that the respective company performs regular research
of the market in which it operates its business and then adopt appropriate tools and
technologies accordingly to do its business activities in the best possible way. The
respective organisation also restrict the cost through adopting modern technology while
bringing innovation in their business (Bandini and et.al., 2021).
 Legal factors: It involves different laws and legislations such as employment laws,
labour law, health and safety law and many more that need to be ascertained by P & O
Ferries so that they can operate their business activities efficiently. As this organisation
has registered itself in many other countries, it is also vital to consider cross-border
legislations and laws to handle their business operations as well as meet the customers
expectations.
 Environmental factors: The respective organisation follow all the environmental laws
and standards. They also focuses on corporate social responsibility and adopt several
practices of managing waste in their business. It helps in creating unique position of
business in many other countries as well.
Porter’s Five Forces:
Porter's five forces frameworks supports company to analyse its competitiveness in the
industry and create policies and plans accordingly. This tool is considered as important for
examining and evaluating the business positions and its strengths in competitive environment.

 Competition in the industry: The respective organisation faces less threat from their
rivalries due to the restricted number of brands which are operating their business
operations in the similar industry.
 Threat of substitute: There is a low threat for alternative goods and services for P & O
Ferries due to the less number of players in the industry.
 Threat of new entrance: If the industry runs in a profitable way then number of
organisations are attracted towards the industry (Bricka and Schroeder, 2019). Therefore,
the threat of new entrance will be low to the respective organisation because industry has
set many laws and regulations to start their business in this sector.
 Bargaining power of buyers: Because of the restricted number of competitors in this
industry, the bargaining power of customers is also low because they have to take
services from the respective organisations only.
 Bargaining power of suppliers: Suppliers or vendors holds a power to influence overall
business activities and operations by increasing or decreasing the resources needed by
organisation. The bargaining power of suppliers is moderate to low because of the great
numbers of suppliers in the existing industry.
Key change drives that might have informed P & O Ferries strategic decision-making.
Key drivers of change: Change drivers can be defined as the internal and external
factors that forms changes in the business. It is essential for company to analyse many drivers of
change and adopt changes in the business plans, strategies, operations, good and services for the
purpose of attaining competitive benefits. P & O Ferries faces several challenges such as
sustainability, ethics, corporate social responsibility, innovation, stakeholder requirements,
corporate leadership, social change, demographic changes and much more. So, it is becoming
vital for the organisation to assess all the changes appropriately and consider them in their
decision making process (Friedman, 2019). From the linked case study, it has been considered
that respective organisation faces issues regarding globalisation and ethical and social
responsibility. This is important for the company to consider all the influences and changes
which impacts their decision making process and business operations as it can also impact on
their effectiveness and efficiency to sustain in the competitive business environment. It is found
that all the strategic choices are taken in order to carrying out proper research about the intrinsic
and extrinsic factors that drives change in the business.

Ethical and social responsibility: From the case study, it is identified that ethical and
social responsibility is the leading change driver that need to be considered by the respective
organisation so that they can develop policies and strategic decisions accordingly. Analysing the
changes will help in attaining competitive benefits. Social responsibility deals with the ethical
concept that represents that a person is responsible for satisfying the civil obligation and actions
of business must benefit the entire community. With the adoption of ethical and social
responsibility, organisation can create balance between welfare of society and organisational
growth (Gasman and Samayoa, 2019). There are different stakeholders included in business
operations to create effective plans and policies that indulge benefit to them and realising the
business growth and development. The company is required to follow several ethical
responsibilities such as minimum wages to the employees so that every worker and employee
will get competitive wages and benefits by the business. It helps in indulging respect and dignity
as well.
P & O Ferries had faced contemporary issues associated with their employees as 800
employees were replaced by the business and they were served below minimum wages. It
created negative influence on business image in contemporary environment of business. It also
resulted in increasing employee turnover rate. Peter Hebbletwhite who is the chief executive of
respective company has talked to MP that minimum hours of new crew is just 5.5 Pound per
hour. It is also seen from the linked case study that minimum wages for the employees in UK is
8.9 pounds per hour for the people who aged 23. As the respective organisation registered
themselves in many other nations and operate their business from UK ports to Europe, they are
paying required wages as they are exempt from the employment law in UK. Peter Hebbletwhite
also told that they are paying wages to their employees above global transport employees
minimum wages. This is a serious issue that need to be considered by the company and offer
wages to employees accordingly, otherwise, they will suffer loses and resulting in shutdown of
their business (Homer, Huggins and Durairaj, 2019). The company also need to take decision to
secure their business by sacking 800 employees as well as hiring agency worker on lower wages.
This idea will help in limiting half of cost and give competitive benefits to the business.
P & O Ferries thinks that it was offering fair wages while business associates saw it was a
“modern day slavery”. This business has given above ITF minimum standards as this model of
operation is taken by the big majority of operators across the international work. Hence, it isn

regarded as the competitive standard and support the company to manage issues appropriately on
contemporary environment of business.
Globalization: It relates with the process of interaction and combination of diverse
people, company as well as government at international level. It elaborates how technology and
trade has created the universe more connected and interdependent at the same time. Globalisation
also includes several social and economic alterations that are increased during the operations of
business. It is regarded as the key change driver that evolves impact on the entire performance as
well as business efficiency in competitive business world. P & O Ferries was acquired by the DP
World in 2019 (Iafrati and O'Donnell, 2019). This organisation is a multi-national ports and
logistics based organisation in Dubai. It has flashed atrocity after dismiss eight hundred with
plan to replace them with low agency employees. It is found that the company paid 270 m
pounds to its shareholders in the year of 2020. On the other side, P & O Ferries has registered
itself in many other places all over the world and with the routes from UK ports to Europe while
paying below minimum wages due the exemption in UK laws of employment. The chief
executive of this company discussed on the ways that global routes that are governed by the ITF
standards, they are paying above minimum wages of ITF standards. As different countries have
their own rules, policies and procedures to operate a business, it is vital to analyse and adopt
changes accordingly so that proper flow of business can be happened in global business
environment. P & O Ferries get goodness from globalization because it increases the business
revenue and more capable and qualified employees for the business. Moreover, the conception of
globalisation has improved the organisational connectivity with other businesses that improves
transportation operations.
Implications of strategic decisions on P & O Ferries operations and commercial.
Organisational decisions which help it in taking and overcoming all competitive
advantages that are available in the market for longer duration of time being are called strategic
decisions. Environment has a dynamic nature and there are many changes that take in it and the
business organisation needs to implement decisions according to the situation (Jalali and
Seyyedyazdi, 2020). Research needs to be done for analysing all these changes aspects and
factors of driver and there is also a need to maintain a great competitive position in the market all
over the competitors in the market. All these strategic decisions maintain their important role and
effect in the employees’ wellbeing and conditions. Business organisation takes effective and

efficient decisions for all the situational advantages that occur due to these changing situations in
the organisation. There is an overall impact and affected on the performance of the business in
direct as well as in indirect way by these change drivers. There is unique positioning of these
business organisational actions by these change strategies in the minds of targeted audience. P &
O Ferries follows a systematic, effective and appropriate way of impactful actions for taking
strategic decisions for the business organisation. Forecasts should be conducted related to
working and operating of the business actions for future by the business organisation. The
organisational performance of P & O Ferries is affected by the different change drivers because
of its operations that are being operated on large scale or global market. It was not a forceful
activity of the acquiring by DP World (Ljungholm, 2019). there is a need of appropriate and best
decisions and solutions by analysing the situations happening in the business organisation.
Business organisation has attained growth and opportunities have been developed with the help
of globalisation. DP world which is a Dubai based business organisation that has acquired P & O
Ferries with the aid of globalisation concept. This has made the business to operate in the world
with the help of it. There are various advantages that are there for the respective organisation
with the help of these strategic decisions for future. There is reduction of different business costs
as the organisation is planning its 800 employees to replace from cheaper agency employees. As
P & O Ferries is having its registration in various other countries of the world so there is no
obligation for following up of only UK employment law. All different from this, it provides
wages and salaries to its employees according to International Transport Worker's Federation
that is having less laws than UK employment laws.
Analysis can be made from this that this business organisation has sacked out 800 employees
from the employees for hiring cheap employees. it is beneficial and important for business
organisation as there is cost reduction in the way that it hires employees at less salaries but at the
same time this termination is against employees. there is a lot impact on the business
organisation because of this initiative as it has lead its employees are demotivated as their
performance is hindered and this has also lead to less contribution in the attainment of business
organisational goals and objectives (Nankervis and et.al., 2019).
There needs management to be done for all determined changes in the business as it is
important and also there is a need for development of effective strategies in the organisation as it
will help the business in performing its operations in the dynamic and changing situations of the

business environment. P & O Ferries should be considering all countries social and ethical
values as it has its operations in different countries and it also provides its employees a great
working place. Follow up of all best suited policies and practices is done by the organisation as
it provides better quality services and experience to its targeted customers. Motivation is done
for the employees with the help of different incentives and benefits and also by performance
based salaries and rewards structure for enabling them in attaining all its pre-determined goals
and objectives in the best possible manner (Naudé, 2022). It is important for P & O Ferries after
acquisition of DP world, to operate and work in its functions with proper methods and in a
systematic way. With the help of these strategic decisions and their implications, performance is
enhanced of business. Strategic decisions help in satisfying its stakeholders.
Suggestions of alternative avenues that could have explored.
Business environment is flexible in nature as changes can take place in this environment
on regular basis. There are multiple changes raises in market that have an impact on the business
performance. For the purpose of adoption of changes, various alternative suggestions are
available in the marketplace and business adopts this changes on the basis of different situations.
In addition to P & O Ferries, the following are alternative avenues available to the business that
could be considered to knowing the forces of changes of drivers.
 Conduct internal and external analysis: Internal and external analysis can be exploited
by the business in order to make effective decisions. It assists organisation to assess its
internal performance which supports in knowing the business capabilities and conditions.
On the basis of it, the company can take suitable decisions based on the requirement and
performance. Also, it enables employees to work and behave to attain success. In addition
to P & O Ferries, it is said that the company does not give value to their employees and
concentrate more its profitability (Pedersen and Nørholt, 2019). Due to this cause,
organisation make decision to sack eight hundred employees. While, external analysis of
the company can assist in analysing the market trends. Multiple factors in external
environment can have an influence over the business performance and its operations.
Constructive analysis and watching the results of factors can change in decision-making
process of the business. Therefore, the business requires to track intrinsic and extrinsic
factors that have an negative influence over the business decisions. This is also vital to
track the business performance for future perspectives.

 Competitive analysis: Competition is exists in the business environment and high in
volume and before taking any business choice, it is essential to have the competitive
analysis in the market that supports business in their decisions. This competitive analysis
supports business to acknowledge strategies and plans adopted by rivalries as
organisation can develop plans to compete in the target market. P & O Ferries is one the
organisations which pays attention on the evolution of competitive strategies on the basis
that business meet changes and risks arises in the business environment. It is important
for organisation to comprehend the influence made by organisation over rivalries.
While considering all such factors, it can be said the organisation need to work for the
enhancement of manpower's productivity and also make sure the availability of employees in the
business. The company also requires to be made strategic choices with an intent of effective
working in the business (Perez, and et.al., 2019). These strategic choices will be made for the
aim of business expansion. On the basis of it, the company can get new options for customers.
In context to P & O Ferries as a shipping organisation needs to follow and adhere all the laws
and legislations imposed in different countries so that they can effectively run their business
around the world. It need suitable analysis that is important for the business success in potential
market. For the purpose of fulfilling their corporate social responsibilities, the company needs to
make sure the transparency of information which need to communicated among different
stakeholders. For the aim of selling goods and services to its customers, the organisation requires
to gain trust and positively position itself in front of them. All those actions should be taken by
the company so that they can have good and healthier relationships with their customers and
employees.
Recommendations that identifies ethical and sustainability considerations.
It is very essential for the P & O Ferries to perform its business activities and operations
as per their social and ethical considerations as both will support the company to position itself in
unique and differentiated way over its key competitors (Razimi and Hashim, 2021). All
sustainability and ethical approaches possesses an essential role in the change implementation
and to keep natural resources to keeping the surroundings sale and pollutant free.
Carroll’s Pyramid: This is model that supports the businesses to comprehend all roles,
together with obligations to secure the natural surroundings from negative influences. All

obligations necessitates to be taken by the company to do business activities efficiently. In
addition to P & O Ferries, the discussion is mentioned further:
 Economic responsibility: It is essential for the organisations to take responsibilities of
their economic actions so it can give maximum outcomes to its stakeholders who are
engaged in the business.
 Legal responsibility: It is important for the P & O Ferries to ascertain all the rules, along
with regulations that are created by the government of the country (Szkudlarek and et.al.,
2020). Implementation of legal actions supports organisation to safeguard from any
lawful consequences and penalties.
 Ethical responsibility: The respective company requires to adopt all the ethical
obligations so it can meet the needs and expectations of society suitably.
 Philanthropic responsibility: This is regarded as the voluntary activities that are
performed by the company which the purpose of improving society.
For the aim to preventing the natural surrounding, organisation is required to focus on
waste management approaches to do business activities efficiently and keep the positive image in
the existing marketplace. The given organisation is suggested to establish environmental
objectives to reduce the harmful influences on the nature. This is also suggested that the