Successful businesses have many different features that contribute to their success. Most of the successful businesses will operate ethically as this will gain customers attraction. If the business was to promote that they only operate in ethical ways this could help them. In contrast if it is leaked that certain businesses don’t operate ethically it could potentially stop customers buying products from them.
A businesses internal environment has many different elements that contribute to decide whether or not they are considered to be ethical. The different elements include: resources and processes, the management of the business, the missions statement of the business and also product services. The internal environment of the businesses can impact the success of the business and the operations that take place. Unlike external environment’s, businesses are able to control to a certain extent of the internal environment’s elements. The internal environment is important for any business when deciding on their marketing strategy for every product.
Corporate culture can be defined as the morale, social and behaviour normality of the organisation based on the beliefs, attitudes, and priorities of its employees. There are different components that make up what would consider to be good corporate culture.
One of the most important components is the organisations vision. The majority of the time vision statements are very simple however they give the company a purpose which is where the rest of the culture of the company branches of from. When it is evident that the vision of the company is becoming a reality, it can help bring the finest quality of suppliers and other stakeholders to the business. The evidence would be shown from the employees of the company doing their jobs very well and wanting to achieve the vision of the company. Marks and Spencer’s vision statement is ‘making every moment special’ which should potentially affect how their employees treat their customers. It should make the employee have a very good attitude towards the workplace which would hopefully become a behaviour normality providing a special moment to every customer. If employees were to make a special moment to all customers, potentially this will make repeat customers. Repeat customers would mean more sales ending up in more profit for the business. When financial statements are released this then could attract other suppliers who will want to do trade with Marks and Spencer’s is they are performing well financially. This all leads back to the vision statement of ‘making every movement special’ and employees making this a behaviour normality.
Linked into the component of the organisations vision is also the values that the company have. The values of the organisation make guidelines for the employees at the company to follow and they are the core of corporate culture. Guidelines are in place for the employees to try and ensure that their behaviours and mindsets are very closely related to the vision of the company. It is important that all employees of the company understand the values of the company so that they can try and achieve the vision. At Marks and Spencer’s, the value the 4 I’s which are: inspiration, innovation, integrity and in touch. Marks and Spencer’s value the 4 I’s so much that their analytical questions within the interview are all about the 4 I’s and evidence of when you have proved you have these qualities. If all employees were to follow the values of the 4 I’s at the company, then Mark’s and Spencer’s should realistically achieve their vision statement.
The third most important is actually taking the values of the organisation and putting them into practise with the customers. If the values were not put into practise, then it would be pointless having the values there. As mentioned above Marks and Spencer’s values are: inspiration, innovation, integrity and in touch and it is very important that they are able to show these values to their customers. It is clear that Marks and Spencer’s employees have followed through with the values of the business as in 2016 it was voted alongside Waitrose as the best shop in the food industry for customer service whilst in store.
The recruitment and selection processes are also very important when trying to ensure that the organisation has a good corporate culture. When recruiting it Is important that the recruiter takes into mind both the skill ability and the person’s personality in general along with how they would be able to put the values that the organisation has into practise. Too have a good corporate culture it is important that the majority of the members get on with their work and believe that they are a team not just individuals. If all employees worked well together and liked each other than this could be a part of making a great corporate culture. As I also mentioned earlier, in Marks and Spencer’s interviews they base them of their values therefore the recruiter can get a real understanding whether the candidate could potentially fit in with the corporate culture in place.
Another important factor that will potentially affect the corporate culture of the business is the environment that employees work in and where the business is placed. The location of a business can affect the culture that is within the workplace. Dependent on the sector that business is will most likely affect the place/ architecture of the business. A lot of offices now days have open architecture as it can affect the way employees behave. A more open plan makes it more likely that employees will interact more with each other which could enhance collaboration within the workplace or friendship bonds (that will motivate workers). I know that Marks and Spencer’s head offices in London all have open plan for this very reason. The fact that the head offices are in London could also affect the attitudes of the employees as they may feel more privileged that they work in a capital.
Effective Corporate Culture at Marks and Spencer’s
Marks and Spencer’s were very successful from when they first opened in 1884 making billions of profits over their years of success. By 1997 the organisation had made over 8 billion and were looking like they were going to continue to succeed. However, in the early 2000’s the organisation took a turn for the worse when its target audience (middle aged women) stopped shopping at their stores. Not having their target audience doing their shopping anymore at their stores was a serious threat to Marks and Spencer’s and they had to make drastic changes to the company to ensure that they survive. One of the thing many things that Marks and Spencer’s did was change their corporate culture and this was able to eventually regain its customers so that they could start to re develop as an organisation.
In the early 2000’s fashion and the market place both started to change, and it became clear that the original corporate culture at Marks and Spencer’s would be unable to cope with the new market therefore high-level management decided to try and change the corporate culture of the business. The employees of the company were unhappy, unmotivated, and just generally did not want to work for Marks and Spencer’s.
The employees of Marks and Spencer’s had to change their approach to work and this was a cause of concern of how upper management would achieve this. The employees who were working there at the time went on training courses to equip them with new skills that they would need for the change in the working environment. In addition to this the majority of the employees working were willing to work longer hours for the company if it meant that they would receive better pay.
All the efforts that took place to change the corporate culture of the company have been effective and regained the success that Marks and Spencer’s are used too. Their corporate culture now is still very effective. All employees work as a team and are each other ‘friend’ whilst at work that help support each other. A personal example of when I received support at work was when I was being intimidated by two men who were trying to steal money out of my till. This made me feel anxious about going onto till points for the rest of the day and I received support to tell me that it was okay and wasn’t my fault.
Poor / Good Corporate Culture
Amazon’s success is driven by online sales every day with workers working extremely hard. However, even though Amazon are very successful their corporate culture is terrible. The conditions that Amazons employees work in are very tough and very pressurised. The majority of the jobs are very physical and demanding of the employees working in the warehouses. The working conditions at amazon are so bad that they are constantly having physiological impacts on employees. An example of the pressurised working conditions is: if the employee was just one minute late to work they would get a point. Similarly, if they had a Drs appointment they would also receive a point if it meant taking time out of work. The point scheme works where if they have 3 points in any 3-month period amazon would sack you which creates large amount of pressure on the employees. Workers are often employed by agencies so that they have no rights at all when working in the warehouses and cannot voice their opinions. Not all staff are treated fairly with people who work in headquarters treated more fairly. Overall, Amazon’s corporate culture is shockingly bad however they are constantly getting away with it as they are very popular and can offer their products at a cheaper price than competitors.
A similar company to Amazon are Google, who have an excellent corporate culture within their business. Googles office have free snacks and meals, a gym, and places to play music when they feel like it. Google have tried to create a very cool and modern structure within their business to try and keep workers happy. Google have this structure as they want to be able to keep on to their employees and keep their workers in the building for longer hours than usual. The online search engine is different to every other company in the world when it comes to treating their employees because the employees a lot of freedom and everyone is treated the same no matter what level they work at. All employees have the opportunities to work with other employees as the work place is very open which creates friendship and motivates employees. Google have been voted one of the best companies to work for and this is due to the fact because of the corporate culture that they have.
Corporate Social Responsibility
Corporate social Responsibility is an approach that a business takes to help contribute to create a more sustainable environment by delivering environmental, social, and economical benefits for the stakeholders of the company. CSR is very important to a business and it should give them a better chance to survive as an organisation. From doing my own research I found out that “88% of consumers said they are more likely to buy from a company that supports and engages in activities to improve society”. The quotation was taking from the book Better Business Journey.
Benefits of CSR
One benefit of an organisation having a good corporate social responsibility is that it can make their employees feel satisfied that they are working for the organisation. All employees want to feel happy and proud of the place of where they work and if the organisation can prove that they have good CSR then this will only help. If an employee is happy they are more likely to be motivated and have a positive attitude towards the organisation therefore won’t be looking for a job elsewhere. Having a good CSR also could effectively help with the workforce that the organisation has. If it is promoted that they company has a good CSR, then it is more likely that the public will want to work for that company. This means that they will receive more applications then companies with a bad CSR which means they would have more choice of who they decide to recruit.
As well as helping to make the employees of the company motivated with a good CSR, it can also help make customers more loyal and satisfied with the organisation in general. If a customer was to like the CSR of an organisation it is less likely that they will move to a different company for a certain product. Therefore, this will help achieve loyal customers towards the organisation.
CSR can also help reduce the costs of the business. Not all CSR programmes have to cost money, and many are free. Having a good CSR can promote positive comments on social media of the organisation which is effectively free advertising for them. The advertisement on social media then means that they can cut their costs down in usual advertisement methods such as billboards or TV adverts.
Disadvantage of CSR
Very few believe that CSR is not a useful thing for an organisation to have. This is quite often because they believe that having CSR in the business means that CSR is potentially dangerous to the organisation as it goes against the main aim which is making profit.
Marks and Spencer’s Policy on CSR
All Corporate Social Responsibilities taken by Marks and Spencer’s are under what they called Plan A. Marks and Spencer’s believe that Plan A is an ambitious customer focused sustainability plan to make the planet more sustainable. They are constantly reviewing and setting targets for the organisation to try and achieve their goals. They are very enthusiastic about how they perform and as a result Marks and Spencer’s gets by undertaking the CSR activities towards the welfare of people and the society. This is demonstrated by how they became carbon neutral and eliminated all their landfill waste by 2015. No other retailer has gone to the extent to do this therefore this shows their enthusiastic approach.
Their Plan A is now called 2025 as they are looking ahead to see what they can achieve in the next 8 years. They created a survey that went out too select stakeholders where they received over 300 responses which widely helped Marks and Spencer’s create their Plan A 2025. They were told by stakeholders:
• That they should use their physical retail presence to play a greater role in connecting at a local level.
• That they must look at human rights and try to promote good.
After receiving lots of critical feedback from stakeholders they have now created their Plan A 2025. They are especially focusing on helping transform communities and working with Human Rights.
Communities- Marks and Spencer’s are looking to bring together their existing activities to ensure that their stores can help play a transformative role in the communities that Marks and Spencer’s serve. By 2023 they want to have helped 100 communities. Their initial focus for the communities are within the UK and they have used their research to identify communities that need support urgently. Working with local groups Marks and Spencer’s are going to create a report of each community outlining its social and environmental problems and how Marks and Spencer’s will help this. A smart target that they have set themselves is “By 2025, M&S Energy will help at least 200 communities to reduce their carbon footprint through the installation of renewable energy generation or energy efficiency measures, including battery storage”.
Human Rights – As well as helping communities Marks and Spencer’s want to take a lead on addressing poverty, modern day slavery and inclusive society. Over the past 12 Months Marks and Spencer’s have improved their approach to human rights significantly. They are working with OXFAM and tackling issues such as the living wage. In addition, they have improved their policies, processes, and training. A smart target they have set themselves for human rights is “By 2019, we aim to have an employability programme in all countries where we have M&S operated stores and will report on our progress of launching programmes in countries where we have franchised stores.”
Overall, Marks and Spencer’s have a very strong policy on their CSR and believe that it will help the grow and succeed as business.
Do they operate ethically
Being an ethical company means following the law and then going above and beyond for things that aren’t in the law. For example, not killing endangered species would be a form of an ethical procedure. There is usually a code of ethics which is a set of guidelines that apply when making business. It will include the correct way of dealing with customers, employees, and suppliers.
Marks and Spencer’s are a very ethical company, they were named as the most ethical high street shop for clothing retail for a survey that was conducted earlier this year (2017). Marks and Spencer’s have over 2000 different suppliers from around the world and they are all sourced ethically.
Ethical Trading – Marks and Spencer’s trade very ethically. Marks and Spencer’s are part of the ethical trading initiative who are a trade union fighting for the rights for workers rights abroad. The organisation will not sell any non-free range/organic eggs to customers as they believe that chickens should have the right to freedom. In addition to this they will only sell fair trade products. If a product is fair trade it means that the suppliers employees have been treated fairly whilst manufacturing the goods.
Animal Welfare- Marks and Spencer’s use a wide range of different animal materials such as leather on certain products however they have never sold a product which includes animal fur. They have worked with their suppliers and organisations such as the RSPCA to develop their general animal policies. The organisation refuses to test any Marks and Spencer’s product on animals as they disagree with it which is an ethical procedure they follow. Another ethical procedure that Marks and Spencer’s have in place Is that any endangered species they will not kill/buy too then manufacture into a product.
Product Images – Occasionally organisations will produce product packaging that will either have a disturbing or offensive image on to the public. Marks and Spencer’s have things in place to ensure that no disturbing or offensive image will ever be seen in store for customers to buy. They will always listen to their stakeholders and if there is a certain population of customers that become offended to certain packaging then Marks and Spencer’s will happily change this. They want a responsible approach in depicting social and ethical diversity. It is not a legal requirement not to have disturbing images on products however an ethical procedure Marks and Spencer’s and most other organisations follow.
All of the above is about the internal environment of Marks and Spencer’s. These are all things that are put in place by the organisation as they feel it will benefit them financially. Marks and Spencer’s the majority of the time have complete control over the internal factors within the business.
As well as the internal environment all organisations have external environments. The main difference being that the organisation is unable to change what is happening with the external environment therefore have to adapt their approach to how they go on with business to succeed.
The government have many policies in place that affects the way that a business can run.
Government Policy Definition How it affects an organisation
Fiscal Policy It refers to the government controlling the rates of taxation as it needs the money to be able to run the country. The fiscal policy affects any type of organisation as long as they are based in the UK. Businesses are unable to ignore any changes in taxation. Higher taxes mean that customers of the business are going to have less disposable income. This means that they will be a lot more conscious with what they are buying as they may not have the funds to buy more luxury products. In contrast if taxation was to go down customers would have more money to spend on products. If taxation were to go up retail businesses must try and keep prices as low as possible and might even have to cut their costs to remain competitive.
Monetary Policy Is the process by which the Bank of England sets the interest rates in order to reach a set target of inflation? If interest rates are low, then this is great news for organisations. It means that being able to manufacture and financing operations is cheaper for the business.
Other Economical Factors
Exchange Rates –
An exchange rate is the value of one currency for the purpose of conversion to another. For example, the rate of the pound against the euro. If the current exchange rate was 2 euros to the pound, then 1 pound would be worth 2 euros. On the right shows the current exchange rate of the euro to the pound. Exchange rates change on a daily basis and are checked against other major currencies very often. The pound can either depreciate or appreciate.
If the pound was to depreciate in value this means that it will make imports into the UK more expensive. For businesses who trade internationally this is not good news because it means that they will be having to pay more for their stock. They will then have the option whether they wish to up their prices in hope they keep the profit margin the same on every product or reduce the profit margin but keep the prices the same for the consumer. In contrast to imports, it would be good news for British exporters. If the pound was to decrease in value it gives the organisation a choice when exporting their products abroad. They can either reduce the price and keep the same profit margin, so it is more likely that their item will sell more. Or they could keep the prices the same which would increase the profit margin they make on every item sold.
The opposite to the pound losing value is the pound gaining value which is called appreciation. This is good for companies who buy raw materials from abroad as they will be able to get them cheaper as they are getting more for their money. However, for exporters it means that there is the potential that there will be a lower demand for the products therefore they will have to reduce the profit margin made.
Brexit has already considerably affected the pound and brought it down in value too its lowest ever in 31 years. This has had significant impact on certain businesses in the UK with businesses having to pay more for the raw materials that are sourced from abroad. On the whole the majority of shops have also decided to put their prices up because of this leading to consumers having to pay more for their products.
The Stock Exchange –
The stock exchange is a market of which large companies (PLC’S) can sell shares of their companies to the public. It can affect the economy in many different ways. The first thing is that it can affect the wealth of the public across the UK and organisations. This is because if the public were buying shares however losing money on them this could make them warier about spending their money, which may than affect consumer spending in the UK. Low consumer spending means lows profits for organisations meaning lower taxes for the government.
Many people who invest in to shares on the stock exchange are people who already have a private pension. Pension funds often invest a large amount into the stock market buying shares of certain companies. If there was a major downfall in share prices, then it will affect the value of the pension funds thus meaning future pay-outs for pensions will be lower.
Often share prices on the stock exchange are dependent on what is happening in the economy already. For example, if there was a fear of recession (Like 2007) this makes it likely that share prices will quickly take a downfall. Bad newspapers headlines about share prices can directly affect consumers confidence in buying products.
Economic Growth –
Economic growth shows an increase in the amounts of goods and services produced per head of the population over a period of time. It helps develop the country and it means that consumers have more products to buy.
Supply Side Policy –
The supply side policies are designed to improve productivity which should result in economic growth. Recent UK supply side policies include: the privatisation of the Royal Mail; Large fall in corporation tax and modern apprenticeships including the youth contract. They have all be introduced to try and help gain economic growth or solve a problem that exists.
The modern apprenticeships for the youth was introduced to try and tackle unemployment for 16-18-year olds as this is the worse age band for unemployment. The apprenticeship scheme will be able to help the economy as it will be getting more people into the working industry. They will most likely have to pay taxes that can then help the economy. It will potentially improve the incentives for people looking for work between this age gap.
For the first time in decades the Royal Mail has been made into a private business after the government sold there share of the company for 591.1 million. Now, taxpayer’s money will not be being used on the Royal Mail and will be spent elsewhere. In the short term it will have a positive impact on all groups. The government will gain money from the sale whilst they will also now receive taxes from the Royal Mail. The Royal Mail will also receive a large injection of Money. The money that the government have received could help improve the UK economically.
Corporation tax is a tax on profits made by companies before dividends are paid. They have recently been reduced and this is because the government want an increase in productivity at the work place. Lower corporation tax provides an incentive for businessmen to start up a new business therefore it should hopefully increase the national output resulting in a better economy.
Shale Gas Tax Cut incentives are also another supply side policy that the government have in place. The government has plans in place to give a tax break to the companies that are involved in UK’s shale gas industry. The figures released show that they have been cut back from 62% down to 30%. The government have done this because they want the UK to be the leader of the shale gas revolution as it can potentially create thousands of jobs for UK citizens reducing unemployment.
Another supply side policy the government have in place is the launch of the National Infrastructure Plan within the UK. The National Infrastructure plan was put into place to improve transport across the UK. It is also in place to create stronger industries across the UK.
Social environmental factors
Social Attitudes to saving –
With interest rates still very low, many people still do not save as much as they could as they would if interest rates were high. This is great news for organisations as it means that they should be receiving more of the consumers money if it is not sitting in the bank gaining interest. If interest rates were high, then it is more likely that organisations would make less money as people would have a better attitude towards saving their money.
Social Responsibility Requirements –
Social Responsibility is the idea that businesses should balance their profit making with activities that also benefit society. Social Responsibly can be very effective if a company is not forced to do it by the government because of a regulation. It can boost company morale especially when employees can engage with the public in a social cause. Social responsibility can make an organisation have new loyal customers if it does correctly therefore it is important that organisations do it right.
Spending and Debts –
If people have debts it is more likely that they will only buy essential products that they need