Assessment of SSE PLC's External Influences and CSR Strategies

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Contemporary Developments in
Business and Management

TABLE OF CONTENTS
Task 1...............................................................................................................................................1
Introduction..................................................................................................................................1
Give a brief overview of the primary external influences to which the organization is subject
and briefly explain the particular importance of each to the organization..................................1
Recommendation.........................................................................................................................5
Conclusion...................................................................................................................................6
Task 2...............................................................................................................................................7
Introduction..................................................................................................................................7
i. Analyse its relevance to your chosen organization and how it influences policies and
decision-making within your chosen organization or industry-sector.........................................7
ii. Critically evaluate the effectiveness of the organization’s response.......................................8
iii. (If possible and appropriate) demonstrate some areas for improvement in the response of
the organization.........................................................................................................................10
Conclusion.................................................................................................................................11
References......................................................................................................................................12

Task 1
Introduction
Scottish and Southern Energy or SSE Plc is public limited organization. It operates for supplying
and generating gas and electricity along with various other services related to energy like gas
storage, contracting, exploration and production, metering and connections. SSE is one of the Six
dominating organization of UK in market of energy. The organization is having a inseparable
contribution in very sector and steps supporting in the UK’s development in terms Political,
economical, social and technical etc. SSE is very obedient and helpful to UK’s government. In
the current task discussion are made regarding various external factors influencing the
organization
Give a brief overview of the primary external influences to which the organization is subject and
briefly explain the particular importance of each to the organization.
Pestle analysis of SSE Plc
Political influences: Political factors have a significant position for determining all the other the
factors impacting the long term profitability of SSE Plc's in a certain market. SSE Plc presently
is working in utilities sector different countries exposing themselves to political system risks and
political environment of different countries (About SSE plc, 2019). SSE plc in UK is under the
political influence of the local government always as it is one of the largest organizations
offering services related to gas and energy. The overall SSE business system can get influenced
by any kind of change or modification of decision regarding trading, tariff and tax etc. Currently
SSE has developed the Fiddler’s Ferry power station in contributing in the net energy supply of
UK. SSE is very much concern regarding the influence for the government and other local
political parties. For declaring their electricity unit closing proper consent from local parties and
government is taken.
Economic influence: The factors of macro environment like savings rate, inflation rate, foreign
exchange rate interest rate etc. is effective in determining collective investment and demand in
an economy. Moreover the micro environment factors like competition norms are effective in
impacting upon the competitive advantages of the organization. In case of SSE, the organization
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recently has taken decision regarding selling out half of the organizational holding to a Scottish
wind firm for making profit and for enhancing its business in the UK’s energy market. Due to
lowering in the value of Euros in the current market the economy of EU and other western
economy are under a critical situation (About SSE Plc, 2019). For maintenance and employees
salary SSE is investing in new power station. The organization presently is employing more than
19000 employees that is also contributing in the development and stability of the UK’s economy.
Sociological influence: The culture of an organization is influenced by the culture of the Society
and the approach of doing things in an environment. The shared attitude and beliefs of the people
living in an area a impacts the SSE Plc marketers for understanding customers. Being one of the
largest organization of electric and gas supplier SSE Plc has a large market place considering the
number of transaction and size including lots of customers, suppliers, employees and partners
that are associated with the organization directly or indirectly. Thus, SSE comes across various
social pressers and demands. It is responsibility of the organization is to be concern regarding
keeping all the heritage sites from the negative influence of power station and other electric
products to safeguard the sentiment regarding the sites.
Technological influence: Advancing technology is disrupting almost every industry globally.
Thus, organization must perform technological analysis and also evaluate the speed of
technology disrupts the industry. Technological advance is impacting the offering of product and
service s and raising the bas of competition and influencing the cost and value chain structure.
Thus, in case of SSE the organization always supports and keeps continuous involvement with
the advancing technology and tools (Daly, 2014). All the business activities of the organization
should be very technical as SSE is involved with distribution and supply of gas and electricity in
Scotland and UK. SSE is integrating technological tools for supporting the customers by offering
easy way for making bill payments and service availability to develop its customer base.
Legal influences: The legal institute and framework of different countries are different and not
enough robust for protecting the intellectual property and other rights of organizations. Thus, it
is the responsibility of the organization for identifying, understanding and evaluating the new
market before entering it. Therefore, entering into such new markets can cause the theft of
organizational secret sources impacting the competitive edge negatively. Few legal factors that
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must be considered by SSE Plc while entering to operate in new market and for being legally
active current market includes:
• Health and safety law
• Data Protection law
• Discrimination law
• Employment law
• Consumer protection and e-commerce
• Copyright, patents / Intellectual property law
All the laws and rules support the organisation to control any kind of unethical practices.
However, legal laws also hamper the business growth. For attaining high trust among the
employees and customers employment law, copy rights, Health and safety law, Data Protection
law, Discrimination plays an important role.
Environment influence: Different environmental standards and norms are hold by different
markets that is effective in impacting the overall organizational profitability. Laws of
environment and liability may different within different states of a country. It has been analyzed
that different European countries offers healthy tax breaks for working in the sector of renewable
resources. SSE Plc is currently working hard to reduce the intensity of carbon emission while
generating electricity for mitigating worst effect of changing climate.
Porter’s Five Force analyses for SSE Plc
Michael Porter's has put forwarded a framework for analyzing business competition known as
Porter’s Five Forces tool (E. Dobbs, 2014). This tool is effective in drawing from the industrial
economics of organization that is derive by five forces for determining the intensity of
competitive and attractiveness considering the organizational profitability.
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Figure 1: Porter’s five Force Framework
(Source: Porter’s Five Force Framework, 2019)
Suppliers: The organizations associated with Utilities industry effectively are associated with
different suppliers for buying its raw material and other commodities. The Suppliers presently is
in a dominant position and can effectively decrease the margins earned. The powerful suppliers
of the sector of Utilities have high negotiating power for extracting higher prices while offering
their services to the organization (Fifka, and Drabble,2012). The higher power of supplier’s
bargaining lowers the profitability of Utilities in the organization. If suppliers have better selling
sources then they switch to gain profit.
Buyers: Buyers are demanding a lot from utility sector presently. Buyer wants to buy the best
available offerings in minimum expense. Presently with the increasing demand there are various
buyers of that associate with SSE for satisfying their electricity and gas requirements. This is
creating pressure upon SSE Plc for gaining profit. Smaller but powerful customer base of SSE
Plc is encouraging higher power of bargaining among its customers with an urge to seek offers
and discounts.
Potential entrants: UK can be considered as competitive markets for products and services.
Thus, business organizations in UK irrespective of their sectors remain concern regarding the
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increasing the impact of highly competitive markets. In the same context the SSE need to be
attentive and be concern for the same. SSE need to response towards changes and influences of
any potential entrance though various business strategies like promoting product and services
offered and expanding their business.
Threats from substitutes: Recently the utility market is having a vivid number of substitutes
offering similar products and services to the customers (Bingham, and Walters, 2013). Any kind
of new entrants in the sector of Utilities with innovation, and methods of doing things is effective
in putting pressure upon the business functionality of SSE Plc leading to lowering the pricing
strategy, offering new proposition value to customers and reducing costs. Thus, to survive the
competitive environment SSE Plc need to manage these challenges.
Industry rivalry: In case of rivalry is intense among the present players of an industry then it
may lead to lowering the prices of the product and services offered and overall profit rate of of
the organization will decrease. SSE Plc presently operates in the Utilities industry which is very
competitive. The organization need to survive in a very competitive market due to high rate of
completion among the other supplier and due to the advancement of technology and innovation.
Recommendation
From the above discussion it can be stated that the organization is presently is operating
effectively but some of the recommendation can be considered for further development.
 SSE must build a well-organized supply chain involving multiple suppliers.
 For increasing the size of Market SSE Plc can chose to collaborate effectively with its
competitors instead of competing in a small market.
 It is recommended that for increasing the customer base the organization must focus on
being service oriented instead to being a product oriented service provider.
 For increasing the trust and to develop a large custom base the need and demand of te
customers or buyers must be identified and the cost of switching must be increased.
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 For coping with the advancing technology new tools and methods must be integrated
along with introduction of new product in the market that will also support in minimizing
the bargaining power of buyers and effective attract more and new customers.
Conclusion
By analyzing the PESTLE and five competitive forces of SSE Plc, it can be concluded that there
are various factor that are influencing the overall business operations and strategies of the
organization. Understanding the factors support the management and other department to
implement effective strategies and methods for enhancing the profit and growth of SSE in
Utilities industry. From the analysis of the macro factor is can be stated that changing trends
among the customers must be identified as sooner as possible for responding effectively to
exploit opportunity.
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Task 2
Introduction
CSR or Corporate social responsibilities is referred to steps or thoughts implemented by an
organization out of interest and betterment of society as well as stakeholders developing a
consistent and strong relationship among community and customers for attaining long terms
benefits.
i. Analyse its relevance to your chosen organization and how it influences policies and decision-
making within your chosen organization or industry-sector.
SSE Plc is positioned second in the utility sector of UK offering Gas and electricity services. The
organization is operating to distribute gas and electricity along with other electricity product
throughout Scotland and UK (Yoon, et al 2006). It is a very large organization having a large
number of buyers, employees, customers, community associated with SSE plc directly or
indirectly. For any service providers the customers are the key stakeholders. This is so because
as the customers are effective in determining the business success.
Customer influence: Customers are responsible for making their own decision regarding
selecting or purchasing a product from all the available option present in the current marketing
offering similar services and products considering their quality and cost. The customers are very
much influenced by the organizational goodwill upon them and the society as a whole. The
organizational reputation is effective in attracting more customers and for doing that the
organization is involved with various marketing strategies to understand the need of the
customers and for bring out strategies for their benefits (Lee, et al 2013).
Investor influence: Social activities undertaken by organization like SSE Plc is supportive for
investors to make proper deciosn regarding the making of investment. With the advent of CSR
activities organization become more reliable and influential. CSR activities support the
organization to attack more investors for investing on the business. The raising funds can be used
by the organization for performing various business activities including marketing of product and
management plan.
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Employee’s influence: Employees are considered as strong internal community within the
organization influencing the overall success in the current competitive market. Employees of
SSE plc covers a large extent and are the important stakeholders as organizational productivity is
directly dependent on employees and their efficiency for developing and distributing the services
and products directly to the customers (Brammer, and Millington, 2004). Employees of the
organization are responsible for making various marketing strategies and business decisions and
organization therefore need to keep the employees satisfied for their betterment.
Competitors influence: Competitors are the highest threats for an organization and its success.
Thus, SSE Plc needs to develop proper plans of strategies and management for carrying out
business operations to gain competitive advantages to have gain future sustainability in the
current market and for business expansion (Skjærseth, and Wettestad, 2016). If an organization is
effectively involved with CSR activities for the betterment of the community and society then
this strategies supports the organization to raise their competitive edge.
Public influence: Business media is an influential and significant component for any business
organization. The nature of the news i.e. positive or negative news regarding any organization
can effectively change the organizational image and features among the associated customers,
shareholders, employees and other stakeholders (Walker, and Jones, 2012). Whenever, SSE plc
opts to get involved with any kind of CSR activities, this news spread in the business creating
auto marketing and promotions regarding the product and services attracting customers. Thus,
public influence is very much necessary for the organization to make effective deciosn and
plans regarding their involvement with CSR activities.
Self influence: If a large organization plans to get involves with CSR activities, it directly or
indirectly is effective in making influence in the present market of energy and utility. The
customers get involved with the organization. SSE Plc effective makes proper management and
strategically decision. Innovative ideas and creative thinking is developed in the course of time
through involvement with various social activities to connect with the society.
ii. Critically evaluate the effectiveness of the organization’s response.
SSE Plc is one of the leading distributors of gas and electricity in UK and Scotland holding the
second position among the largest Utility sectors. The organization has a very good position in
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terms of brand name and image due to its active participation in various corporate social
activities involving towards the betterment of the society. In this task discussion has been made
regarding the responses and effectiveness of CSR activities of the organization:
Charity and Community development: SSE Plc in years has effectively developed a strong
relationship with the communities of Scotland and UK (Bazerman, and Moore, 2013). For
creating a strong relationship with the customers, SSE Plc has emphasis on involving in various
charity functions and activities for the society’s betterment. SSE Plc is associated with various
Community development activities such as increasing public awareness regarding environment
and other issues of society for promoting its services and products.
Green business: SSE Plc is presently working for developing a green industry through its
activities and policies for attaining sustainable development. Presently is facing issues of Global
warming due to increasing among of greenhouse gases like carbon dioxide, methane etc. Thus,
for contributing its efforts for making a greener earth SSE plc is making effective strategies
accordingly. SSE is emphasizing in minimizing carbon wastage and industrial wastage for
creating a high brand image among the customers and to increase goodwill.
Customer oriented: SSE Plc is well aware that the customers are the main determinant of
success for any organization. Customer’s expectation and demands is effective in changing the
present business scenario of any organization. SSE plc believes that customers are the prior
before considering any business perspective for its future betterment. The mindset of the
customers is understood regarding their expectation through feedback and survey by the
marketing team for implementing business strategies for attracting them. Recently, SSE Plc was
awarded for its Customers satisfaction. This has developed good image for the organization
offering opportunity to gain future benefit.
Employee’s betterment: Employees of an organization are the key stakeholders that are
effective in determining the organizational success (Bach, 2009). Therefore, it is the
responsibility of the organization to response effectively for the betterment of the society through
proper training sessions, accommodation facilities, profit sharing, salary and other facilities for
developing a pleasant community environment as SSE Plc is very particular is selecting
employees for performing various business activities from local community. This, strategies
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supports in developing trust among the employees and community for the organization raining
its popularity and brand image.
Minimizing industrial waste: SSE and other utility organizations is responsible for creating a
large amount of industrial wastages every year through its business process and procedures.
Wastages of the industries have various negative impacts upon the environment and vegetation.
However, SSE Plc along with EU is working very hard by implementing various advance tools
and techniques to minimize the amount of wastage as byproducts for the society’s betterment.
Minimizing unemployment rate: Unemployment is one of the main concerns that is given
emphasis by EU along with Wales (Richardson, 2013. ). Therefore, being a socially responsible
organization SSE need to focus on the raising issues of employment strike in the communities.
Thus, SSE is creating more job opportunities to employ the workers of local community for
solving the issue and supporting government for raising the economical standards of the country
as a whole and for better future.
Contribution to education: SSE effectively develops strategies for supporting local community
schools and also helps remote educational institutes by offering electrical supply and
constitutions. In 2013, SSE Plc has signed a contract with the government of Scotland for its
beatification and also for reorganization for beatifying localities through its CSR activities.
Forming consultative community: JNCC committee is formed for helping the community by
SSE Plc. JJCC committee is effective in supporting the customers and community as a whole for
eliminating risks and confusions regarding queries of offered services and distribution of
products.
iii. (If possible and appropriate) demonstrate some areas for improvement in the response of the
organization.
From the above discussion it can be stated that SSE Plc is one of the prominent Gas and electric
distributor based in UK. As discussed before SSE Plc is a inseparable part of UK as its has many
contribution in various sector and steps of UK including Political, social, ecological,
technological etc.
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