Assessment of External Influences and CSR Effectiveness at SSE Plc

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Contemporary Developments in Business and Management
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EXECUTIVE SUMMARY
The main purpose of the report is to critically appraise the different framework within which
organisation decisions are made. In addition to this other main purpose is to access the factors affecting
business performance in international market. In this report brief overview of the primary external
influences upon organisation are being explained. Beside this an analysis of corporate social responsibility
to selected SSE Company is being done. As SSE is one of the largest Electric and gas distributed
organisation in UK. In addition to this effectiveness of organisation response were also being discussed in
this report. After carrying out research on the project of contemporary development in business and
management it was founded that PEST and Porter’s five forces of model were being used to analyse the
external influences on organisation. Beside this it was also founded that a company plays crucial roles for
the betterment of community and stakeholders.
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Table of Contents
EXECUTIVE SUMMARY 2
MAIN BODY 4
INTRODUCTION 4
TASK 1 4
Brief overview of the primary external influences and importance of each to the organisation. 4
TASK 2 8
Analysis of Corporate social responsibility 8
Evaluation of the effectiveness of organisation response towards CSR 10
Some areas for improvement 12
CONCLUSION 14
REFERENCES 15
APPENDIX 1 17
SSE Plc overview 17
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MAIN BODY
INTRODUCTION
Contemporary development in business and management is very much crucial in modern era so as
to stay competitive in marketplace. The organisation which is being taken to carry out this report is SSE
Company (Scottish and southern Energy Plc) which is a energy company that is involved in generation and
supply of electric and gas in UK and area of Ireland. In this report with the help of PEST and Porters five
forces of model evaluation of primary external influences and importance of each to the organisation is
being explained. In addition to this analysis of corporate social responsibility to SSE is also being
evaluated. Along with this some areas of improvement necessary for contemporary development of SSE is
also being focuses briefly in this assignment.
TASK 1
Brief overview of the primary external influences and importance of each to the organisation.
As SSE organisation is considered to be one of the largest leading generation and suppliers of
electricity and gas in all over the UK and Scotland. So in order to achieve a sustainable and contemporary
development in business and management it is very much essential for management of SSE to carry out
PESTKE analysis, as it will help firm o examine the factors which influences upon company. Therefore
given below is the PESTLE analysis of SSE Company (Renwick and et. al.,2016).
PESTLE analysis
It is an analysis technique which helps to determine the influence of factors such as political. Social,
economical and technological upon business concern. Very recently SSE has to change their strategies due
to the changes in external factors of environment and they are being explained below:
Political factors:
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This factor plays a significant role in the determination of different political aspects which can impact
upon SSE Plc long term profitability ratio in certain market or country. Factors hers refers to changes in
trading system, tax policy, tariffs etc. Therefore any changes in government rules and regulation will
greatly influence the operating decision of SSE business strategies and systems. Recently as per UK
government lots of electric energy must be supplied with extra power and power station (Brocke and
Rosemann, 2014). So taking this rules governed by UK government SSE recently has come up with its
new development Fiddler’s Ferry power station which render great contribution in overallsupply of electric
energy in all over UK. In addition to this by taking impact and influence of government and local
government into consideration SSE is going to make a consultation with local government politician so as
to declare end of their three units of power for different reasons. Thus, by looking at tremendous success of
SSE many investors has come upon to make investment in SSE plc and to national grid, which result in
making government aware about the influences and impact of SSE development upon local market. This
success is mainly because of positive political stability of UK government who have render their help to
SSE for further development in electricity supply as it will help the UK in increasing the light of power all
across the nation in a long context.
Economical factors:
In order to render extra in UK an all over the world market, SSE plc has planned to sell out is half of its
holding shares to Scottish wind firm so as to make holdings of business concern more precious and active
in respect of rendering excellence electricity (Alvarez, 2016). As during Brexit UK has passed through
poor economic crisis, so in order to overcome such economic condition SSE has made its investment to
start up its different and new power station in UK. It resulted in increasing the employment opportunities
as well as the firm rendered sufficient salary to huge number of employees throughout the UK. Thus, it has
helped firm to create good economic stability in UK
Social factors:
As SSE plc is one of the most influential and leading supplier of electricity and is considered to be the
second position in the market of energy in UK. There are large of customers, suppliers and employees who
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are related to the company and the management takes into consideration each of their needs and
preferences into consideration. As UK is best known for is beautification of heritage sites, so SSE is
concerned about keeping UK heritage sites out of negative impacts power station of electricity and electric
products. Beside this the firm also render rewards system to energetic and skilled workers who render their
best towards the betterment of society.
Technological factors:
As the SSE firm deal in supply of electricity and gas for Scotland and UK, so it is very much essential for
the firm to keeps their involvement with latest technologies of modern science. Thus, in order to deal with
customers technically firm has come up with a tradition and latest upgraded technology for customers,
with the help of which customers can easily pay of their electricity bill online. Thus such adoption of
upgraded techno logy will help firm to achieve sustainable growth and will also help to render highly stiff
competition in marketplace.
Legal factor:
These are those factors which are being framed by government for an organisation so that each firm can
carry out its key operational activities in an ethical and legal manner. One such legal law that has being
framed by UK government is Discrimination law. As per this law no employees must be discriminated on
any of the bass such as religion, colour, marital status, caste etc. As the management of SSE follows this
aspect of legal law and they treat each employees equally which has resulted firm to be one of the second
largest leading electricity supplier in UK and Scotland.
Environmental factors:
These are those factors which are taken into consideration so as to keep environments safe. So taking
environments safety into consideration management of SSE has adopted the practice of rendering
renewable energy sources while supplying electricity. Beside this firm has also adopted the practice of
minimization so as to reduce waste of raw material which results in cost reduction as well ( Hall and Ko
2014).
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Porter’s five forces model
In addition to PEST analysis, firm also need to adopt the Porters five forces of model analysis techniques,
as it will help management of SSE to analyse the impact of five core aspects such as bargaining power of
buyer, suppliers, threat of new entrant, substitute, competitors etc. upon business concern.
Threat of new entrant:
Threat of new entrant for SSE Company is low as for any new firm to come up in market there will be the
requirement of sufficient amount of funds which is quite a typical task. Beside this in case if any entrant
take place in market then in order to response to the impact and change of potential entrance management
of SSE come up with new promotional activities. Like recently companyhas come up with new power
station in Island and even try to meet the new generation requirement as per the changes take place (Vom
Brocke and et. al., 2014).
Threat of substitute:
Threat of substitute for SSE Company is high because there exist large number of substitute who renders
similar electricity supply to country. Substitute such as sun planet, individual energy plan, renewable
sources of energy, new sources of energy etc. all these create a complication for business to some extent as
customers may shift towards its substitute. So in order to deal with substitute management of SSE must
frame effective policies and strategic so that customers does not shift towards its substitute.
Bargaining power of buyers:
Bargaining power of buyers is considered to be high as there exist large number of other firm even who
render similar types of electricity power. But it can also be said that in UK bargaining power of buyer of
SSE Company is low because in UK this company is considered to be one of the believable company who
supply energy of electricity and gas to number of households and to the local government.
Bargaining power of suppliers:
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Bargaining power of supplier of SSE Company is high as there exist large of supplier of raw electric and
helpful commodities of electricity. In order to render customer effective and efficient electricity supply it is
very much essential for the management of SSE to maintain god relationship with its suppliers. This can be
done by giving supplier demanded and logical prices for it supplies. In case if the firm will not take
supplier demand into consideration then they may shift their selling to other source who will generally take
their needs into consideration which would result in loss of profitability margin (Boyer, 2014).
Threat of competitors:
Threat of competitors for SSE Company is also high as there exist large number of competitors namely
E,ON, British gas, Ovo energy, ecotricity. So in order to render stiff competition to all its competitors firm
needs to adopt some unique techniques, strategies and policies.
TASK 2
Analysis of Corporate social responsibility
Corporate social responsibility (CSR)
Corporate social responsibility is a concept under which two concepts come into consideration and they
are namely social and environmental concern. In simple term it can be said that it is a technique that is
being used by an organisations so as to manage their business proves in an effective manner which would
result in creating positive impact upon society. Beside this it is a procedural of different steps which are
being taken in to consideration by business concern for the betterment of stakeholder, society, customers
etc. which would result in gaining long term profitability benefits for an organisation (Davidsson, 2016).
Influence and relevance of corporate social responsibility on SSE Company
As SSE business is considered to be the second largest generation and suppliers of electricity products as
well as in distribution of electricity and gas throughout the Scotland and UK. Huge numbers of buyers,
suppliers, customers, community possess some kind of direct and indirect relationship with SSE firm. And
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among all of them customers and employees are considered to be the key determiner of the success of SSE
organisation as they can result in turning company market into profitability within the moments.
Employees influences:
Employees are the one who work for the organisation so as to achieve organisation as well as personnel
goals. In addition to this success of SSE organisation too depends upon employees as they render their best
hard work towards influencing and boosting the productivity level as well the distribution channels of
goods of a business concern. So it’s the corporate social responsibility of the management of SSE firm to
keep their employees satisfaction level high in terms of every aspect whether it is in terms of salary,
incentives, appreciation, working culture environment, safety, compensation etc.
Customers influences:
Customers are considered to be the backbone of an organisation as they are the one who make purchase of
firm’s products and services which ultimately result in increment in sales revenue and profitability margin.
So it’s the core corporate social responsibility of the management of SSE to make its goods and services
by taking customer preferences and benefits into consideration (Wilton, 2016). As customers make product
choices on the basis of quality of products, benefit from products and on the basis of the goodwill of an
organisation. In addition to all this SSE should carry out customer research analysis too as it will help firm
to acknowledge the changes that are taking place in customers’ needs and preferences and should
accordingly prepares its marketing strategies.
Investors influence:
Another core corporate social responsibility of management of SSE lies towards investors, which means
that it’s the responsibility of firm to stand upon the trust of investors by rendering them share of their
investment profit on time. But side by side management should also carry out different types of social
activities as this will help firm to attract more number of investors to make investment in SSE
organisation. So in order to attract more investors the best activities is that the firm should render
profitability share to their current investors on time which would further result in creating positive word of
mouth advertising about the firm in marketplace.
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Competitors influences:
As their exist large of SSE plc competitors in marketplace and they are namely E.ON. British gas, Ovo
energy,ecotricity. So in order to render stiff competition to all its competitors in marketplace SSE
Company has engaged itself it many more social responsibility activities which result in creating positive
image of firm in mindset of customers. Like the main target and social responsibility of SSE is to provide
energy in reliable and sustainable way by taking society and environment safety into consideration. Thus,
such types of SSE social activities had lead the firm to be one of the second largest leading generation and
supplier of electricity and gas throughput the UK and Scotland (Jeston, 2014).
Self influence:
SSE organisation adopts the practice of innovative technique which result firm to come up with innovative
technology and ideas. Like recently firm has come up with new energy power station in Green Island
which has boost the profitability ratio. Therefore an organisation innovative thinking and ideas also get
generated from performing different types of social responsibility activities. Beside this firm also finds
new ways of carrying out its business and to create brand image in customers mindset through their
corporate social responsibilities and activities.
Public influence
For any business concern media is considered to be an influential and significant factor towards achieving
success. As about firm in media it can be positive news or negative news as both have impact upon
business profitability and creating image of firm in customer’s minds set. If there take place positive news
about the firm then it will be helpful in creating positive influence in public mindset, in case if the news is
negative then it will negatively create image of the firm in public mindset. But the SSE company is
engaged with many types of corporate social responsibilities and activities which result in creating auto
promotion about positive image of firm regarding their electric supply of products in public mindset
through media
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Evaluation of the effectiveness of organisation response towards CSR
SSE is one of the largest leading business concerns in distribution and supply gas and electricity by
operating its business in all over the UK and Scotland. Beside this firm render great responsibility towards
community, stakeholder, customers etc. Therefore some of the SSE responses towards corporate social
responsibility and effectiveness of those are being discussed below (Chang, 2016).
Adopting practice of charity and community development:
Many types of community development activities are being performed by management of SSE so as to
build strong relationship with community of Scotland and UK. Activities like SSE used to render energy
reward for cancer sufferers and donation for such activity was made possible through the creation of sales
guarantee funds. Thus, in addition to this many other charitable campaigns were held which has lead in the
development of effectiveness of SSE organisation response towards CSR activities.
Adopting practice of green business:
As the world is get affected by global warming from day by day, so in order to reduce it management of
SSE has adopted the practice of rendering environment safety electricity. Beside this other strategic plan
and green business practice are also being adopted so as to keep society pure and green and this is mainly
done by adopting the practice of rendering energy in reliable and sustainable way without affecting the
environment. Thus, practice of green business will help firm to create good news about company image in
media which would result in creating positive image in customers mind about the business concern.
Adopting practice of keeping customer first:
Customers are considered to be the backbone for the success of SSE organisation with a belief that they
can drastically change the business features within a few moments. So customers are considered to be the
first prospective for SSE firm as it would prove to be beneficial to the organisation. Even this business
concern has achieved the customer satisfaction award also from Swutch.com which has also help firm to
build strong customer relationship management for long period of time.
Adopting theory of sorry is not enough:
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In case of any kind of default which has take place while rendering customers the electric product and
services the SSE management not only feel sorry for it but also render compensation and recover the
default for the well being of customers. This theory of SSE has helped firm to build long lasting and good
customer relationship. Thus, it has also helped business in attracting more investors and customers towards
their organisation that has resulted in increment in profitability margin (Michaelson and et. al., 2014).
Minimizing industrial waste:
Management of SSE has also engaged itself in minimizing the waste which takes place during generation
of electric products. Beside this firm has also worked with European Union so as to achieve its target of
minimizing wastage. Thus, this practice has helped firm to keep environment safe and clean as helped n
building good image of firm in customer’s mindset.
Employee’s betterment:
Employees are the one who render their best hard work to an organisation as well as they are considered to
be the significant drivers of the success. So taking this aspect into consideration management of SSE
accurately response to the employees demands such as salary increment, appreciation, compensation,
training, real salary etc. for the betterment of community (Thompson and Smith, 2017).
Adopting practice of forming consultative community:
SSE organisation has also created consultative community so that company can render full time help to the
community. As the main purpose of this committee is to keep continuous communication with firm. Thus,
it will help firm to eliminate errors which can take place during production,services or distribution of
electric gas and energy. Thus adopting the practice of continuous communication is very much essential
for firm as it will be helpful for business concern in perfect implementation of the plan about CSR of SSE
organisation.
Contribution to education:
Lastly but not the least management of SSE has also lead their contribution to education also by helping
many local community schools and other remote institution of education by providing best supply of
electricity.
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