Contemporary Business Environment Assignment Case Study

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Introduction

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Overview of the organizations

The business environment includes the sum of all people, companies and other forces which are outside the industry but may impact the productivity of the companies. Mark and Spencer are established in 1884 in UK, the company emphasized on-label businesses comprising food, clothing, Home. The company has number of stores, storehouses, support centers and supply chain and caters the needs of 30 million customers annually. The aim of the company is to build a long term value by effectively using its resources and relationships. Its objective is to create a sustainable business with the help of profitable growth.

The Next plc is a clothing brand dealing in footwear as well as home products, the headquarter of company is in Enderby, England. It has 700 stores out of this 500 located in UK. The aim of the company is to meet the expectations of the customers by furnishing them beautiful designed and best quality clothing, footwear, accessories as well as homeware (Zhang Zhang and Zhou, 2021). The company objective is to be become as the first choice of customers as a online retailer and attain a blooming gross and net margin with the help of effective product sourcing, inventory management and cost control.

• Legal Structure-The Marks & Spencer is a public limited company means a joint stock company, its share are listed on a stock exchange. The company is legally authorizing to sale its share to the general public. The Next Plc is also a public limited company. These companies have the advantage of getting more financial support from the financial institutions.
• Competitive behavior- The competitive behavior refers to compete with other firms to attain higher level of sales by capturing greater market share. The M&S and Next Plc are competitors of each other and other competitors include ASDA, Zara and John Lewis.
• Environmental pressure- The companies have to operate their business within the complex, dynamic and ever-changing business environment. Both companies have to do business keeping in mind the impact on the environment like pollution, waste disposal, climate changes and global warming. For example, In the garment industry, the wastewater from textiles industry directly flow into rivers significantly impact the environment. To protect the environment, the M&S set a target to become carbon-neutral by 2035. It directly work with suppliers to make sure that products ethically and sustainably produced. The Next Plc also makes goals to reduce carbon intensity by developing good business practices.
• Post Covid-19 Challenges- The covid-19 harm the fashion industry in a significant manner as compared to overall, it impact the growth of the company that achieved in previous years. The sales for clothes of M&S are decline 60% during the three months of lockdown in the UK but the company was in better situation than others. This impact the clothing companies because there is behavioral changes in the shoppers. The Next plc market share is highly impacted due to this.

The significant impact of post Covid-19 found by the two companies is that the companies shift to online trading. The Covid change the trend of working style, Now consumer prefer to do shopping through online store rather than physical. The companies face challenge as the retail sector is extremely competitive and have to compete with traditional as well as online retailers. The competition makes pressure on profit of companies (Stephan, Zbierowski and Hanard, 2020). The customers are switching the mode of purchasing between the online and offline and remain purchasing products from companies that offer best on both modes. The challenge is that now companies have to manage business activities according to this while providing better customer experience.

Role and Impact of Digitalization

The digitalization aids the companies in increasing revenue, profits and opportunities by using new technologies in the business. The companies use digital technology and get benefits from this in terms of productivity and profitability.

1. Reduce Cost – The M&S and Next Plc use the digital technology like automation that aids the companies in doing business with ease while reducing cost and increasing profits. The digital technology enables the companies to collect the data and offers the good according to the needs and preference of the customers. This assists in enhancing customer satisfaction. The companies use automation to collect data related to supply chain like material sourcing, production, logistics to shopping carts of customers.
2. E-commerce- The digitalization improves the working of the companies specially the companies related to the fashion. The digitalization helps the companies to make a global presence by trading their goods through internet, It make it easier for the M&S and Next Plc to reach the customer directly that situated in worldwide (Fedushko et al, 2023). Now, digitalization aids in increasing market share for products as well as profitability for the company.
3. Efficient supply chain management- The IoT enabled devices as well as sensors place in accessories and clothing that aids the companies in gathering valuable data related to preference of customers, usage pattern as well as product performance (Ghoreishi and Happonen, 2021). The data assists the company in building a better customer satisfaction. It help in implement efficient supply chain, increase production and reduce waste.
4. Collaboration- The digitalization improve collaboration among the customers, employees, wholesalers, retailers by furnishing new tools, techniques and platforms for communication and for sharing information and knowledge. Through communication tools the companies effectively contact and communicate with the wholesaler who supplies goods as well as customers. Through this, the customers provide feedbacks to companies and according to this, it makes changes.
5. Increase customer engagement- The companies use digital technologies to promote its business. The M&S and Next Plc use social media to promote its business online. The company do advertisement on social media like Instagram, Facebook, twitter and other platforms to engage customers. Through this, the companies provide latest information about the products and advertisement on this platform influence customers to purchase this products. This online engagement helps the companies in making unique connection with the customers and helps in promoting the products in a cost effective manner to a wide audience.
6. Ease of doing business- The era of digitalization brings the trend of online shopping, now the customers do shopping according to their preferred time and convenience. It increase the customer proportion as well as market share for the company that doing business online like M&S and Next Plc. Now the company easily makes payment to the suppliers in return of supplies that help the companies doing the production on time. The companies not have to depend on cash transaction. As there are various ways of making online platforms that helps in doing business with ease.
7. E- business- The introduction of the digitalization helps the companies in doing business online. Through this the customers place the order online with the help of mobile phones. The digitalization attracts more customers (Jentsch, 2022), For example, if the customer scrolling the mobile and find the company product useful or according the need, then the customer purchase it and it is impossible in the absence of digitalization. Thus, digitalization plays an important role in expanding the business activity and attracting more customers.

The digitalization not only aids the companies to be efficient and cost-effective but also assists the company to reach the wider audience and capturing the market to sell its product through using digital technology.

TASK 1

Component of Macro and Microeconomics

The microeconomics refers to the study at the level of individual, group or company, while the macroeconomics is the study of the whole national economy.

1. Economic Problem-The economic problem refers to the problem of make a choice that happen because of lack of resources. The problem arises because the people have infinite desire but the resources to satisfy these needs are finite. Therefore satisfying the needs of people with limited resources is difficult. There is problem arise how to allocate the scare resources in such a way that maximize profits.
2. Demand and Supply- The demand and supply is a microeconomics concept. The supply is defined as the capability up to which the goods or the service is produced while demand refers to need within the market for that particular product or the service. The supply and demand concept used to present the price and quantity demanded and supply of commodity (Gonçalves and Koester, 2022). This concept gives the idea to company about the management of goods and employees. More demand for product gives the company opportunity to expand business, increase workers and meet the demands. The more or low supply means the company has to lay off employees and may close the company.
3. Market Structure- It is macroeconomics concept. It refers to how in an economy a industry classified according to the degree and kind of competition for the product and services. Some factors influence the market structure like number of buyer and seller, skill of negotiation, differentiation of product and entry and exit of market. The market structure is of four type contain perfect competition, oligopoly, monopoly and monopolistic. The market structure is important as it influence market outcomes through it affect the opportunities and decisions.
4. Circular flow of income- This concept is related to macroeconomics. The circular flow is stated as the flow with help of which the product and services and the income including the different expenditure flows within the economy. It shows how income distributes in a circular manner between the production and household. For example, the income is generates in production with the help of factors of production. This income shares to the owner of factor of production who in return makes expenditure of income on buying goods and services. Thus, it is known as circular flow of income.
5. Fiscal policy- It is concept of macroeconomics. The fiscal policy is a policy of government in which expenditure and taxation use to control the economy. This policy use to encourage the growth and to decline the poverty. If there is inflation in economy, the government increases taxation to reduce the expenditure of people by reducing the purchasing power (Christophers, 2023). In the time of deflation, government decrease tax as well as increases expenditure so that people have more money to overcome the situation.
6. Monetary policy- The monetary policy is a practice of the central bank or a government to control the money in the country and the cost of the borrowing. This policy helps in managing the economic fluctuation as well as makes the price stable. It is also a macroeconomic concept.

Thus, this micro as well as macroeconomic concept plays an important role in the working of a company and for the national economy. The microeconomics concept like demand and supply, economic problem help the company in taking decisions as well as preparing policies that affect the working of the company. According to the demand and supply forces company take decision of production, if not considered than have to bear a loss. Also, the macroeconomic concept helps the company to make a better investment decision.

TASK 2

Theories of management and leadership

Behavioral Management theory: Mark & Spencer use Behavioral theory of management. This theory also known as human relation movement as it considered human aspect at the workplace. This theory helps the companies in understanding the behavior of human at work like motivation, expectation , conflicts so that able to improve productivity.

Marks & Spencer faces some challenges due to this management theory as in this the company give emphasis more on the external motivation of the employees. To encourage the employee the company gives various rewards to its employees which leads to build a dependency on extrinsic motivation (Hamlin and Patel, 2020). This kind of motivation is not justifiable and sustainable for long term because the company does not always give reward to motivate the employee as it increase the cost of the company and there are so many employees in the company so it is not possible.

The M&S face a challenge due to this theory because it gives less emphasis on critical-thinking, problem- solving in the company. These skills are essential requirement for doing a business as the business has to make decisions in the business.

Authoritative leadership- The Marks & Spencer Company currently uses authoritative leadership style. It is the style of leadership where the complete control is in the hand of the leaders (Hogg, 2021). The leader is responsible for establishing goals, process and the action that is essential to reach the goals. In this the leader not takes any idea, opinion or suggestion from the team members.

Through the company's use of this model, it has to face number of challenges. The company faces issues regarding employees as it fails to take the views of the employees who work at the outlets. This is the biggest problem because the working staffs at the outlets are better aware of the customer's needs as they interact with them regularly. However due to this kind of leadership, the company is not able to work on the feedback of the customers due to this sometimes it fails to meet the customer demand which affects its profitability as consumers shift to other companies (Gupta, 2021).The company has to face challenges while performing its duties. The employees have to be reliant on the decision as well as the approval of the leader. If the leader is unavailable in the company and if any important decision needs to be taken then due to absence it may be delayed. This delay creates hindrances and barriers to the growth of the company.

One of challenges of this style faced by the company is that there is a lack of creativity. This style restricts the potential of creativity as well as innovation as the team members are resistant to sharing their ideas, opinions or taking any initiatives in the company as they have fear about bearing the consequences of this. This leadership decrease the morale and confidence of employees and they feel isolated which lead to increased employee turnover.

System Leadership- This style is applied by the leaders of the Marks & Spencer Company to control the performance of employees as well as communication in distinct situation. This leadership encourages the workers perform the duties and responsibilities according to the demand of the company.

In this leadership, if the leader has a lack of understanding of employees than the company has to face the challenges. If the leader not properly aware about the employees then leader is not able to communicate to the employees properly.

This model of management and leadership is essential to enhance the productivity and revenue with the help of motivation and by increasing morale of employees. It contributes in creating workplace collaboration and innovation.

Contemporary Business Environment Assignment: Key Factors for Ethical and Effective Business Operations

To efficiently conduct the business in a dynamic and complex environment, the company has to analyze the real environment while considering different factors.

• Ethical decision making- The ethical decision making is dependent on the values such as esteem, responsibilities, equity and trustworthiness. Ethical principal allow company to approach with fairness with employees and other. To make an ethical decision, the company needs to identify the issue and the person who involved in this. After considering the facts, principles the company need to evaluate the attainable outcome then implement the solution (Jaafar, Zambi and Fathil, 2021). The Marks and Spencer make sure that the company pay fair wages to its workers and avoid the issues like slavery, child labor as well as discrimination at the company by taking ethical decisions.
• Accountability- The accountability means acceptance of responsibility by the company for the truthful and ethical conduct with regards to others. The Marks & Spencer Company is accountable to the stakeholders for the returns on equity, to employees for better work culture. The company also accountable to the customers regarding the products it offers as well as it is accountable to the society for the impact due to the action of company on the environment. When a company is accountable it gets number of benefits like confidence from the external investors, faithfulness from employees as well as enjoys better returns to the company. The accountability give strong emphasis of company towards the ethical conduct of business, impacts on environment obligation to just and fair treatment to employees.
• Adopt self-awareness- The self- awareness refers to use of sense and experience to know the emotions that aids in making the future choices. The self aware people always influence the behavior of other members in the company. The adoption of self awareness by the Marks and Spencer is beneficial for the business because it is helpful in understanding the strengths and weakness of the person. Through self-awareness the company can handle the task in an efficient manner and can attain higher success rate for business.
• Openness- The openness refers to being open related to sharing the information so that employees aware about the things which is going in the company. When the company is opened up to their employees than the employees feel as an integral part of the company and it increase their morale and confidence. It leads to motivate the employees to work in an effective and efficient manner so that company better attains its goal (Nadeem et al, 2021).The openness also refers to being open to use different styles, methods and ways for doing business. When a company is open to take ideas and opinion it always influences to bring innovation in the products.
• Sensitivity to diversity in culture- The Marks & Spencer need to be aware about the cultural differences as well as distinct preference of people and different values, beliefs and behavior. The company has to consider this factor while making products. As this factor significantly influence the productivity and profitability of the business. The diversity sensitivity is identifying that there are difference in the workplace, depend on the religious belief, values, ethical background and so more (Wenzel, 2021). The Marks & Spencer identified the significance of having different workforce and it leads to build an equal opportunity for each individual.
• The company has to evaluate the real world and by understanding this company to achieve the goals and objectives by making ethical decisions that creates a better workplace. Through self awareness and openness the company able to brings creativity and innovation in the business.

References

Books and Journals

• Christophers, B., 2023. The rentierization of the United Kingdom economy. Environment and Planning A: Economy and Space, 55(6), pp.1438-1470.
• Fedushko, S., Trevoho, O., Hoshovska, O., Syerov, Y., Mykhalchyshyn, N., Skvortsov, D. and Fedevych, L., 2023. E-commerce Drivers During the Pandemic and Global Digitalization: A Review Study. Developments in Information and Knowledge Management Systems for Business Applications, pp.207-227.
• Ghoreishi, M. and Happonen, A., 2021, September. The case of fabric and textile industry: The emerging role of digitalization, internet-of-Things and industry 4.0 for circularity. In Proceedings of Sixth International Congress on Information and Communication Technology: ICICT 2021, London, Volume 3 (pp. 189-200). Singapore: Springer Singapore.
• Gonçalves, E. and Koester, G., 2022. The role of demand and supply in underlying inflation–decomposing HICPX inflation into components. Economic Bulletin Boxes, 7.
• Gupta, R., 2021. LEADERSHIP IN PRACTICE-CONTEMPORARY VIEW. Journal of Organizational Culture, Communications and Conflict, 25, pp.1-3.
• Hamlin, R.G. and Patel, T., 2020. Toward an emergent Asian behavioural model of perceived managerial and leadership effectiveness: A cross-nation comparative analysis of effective and ineffective managerial behaviour of private sector managers in India and South Korea. Human Resource Development International, 23(3), pp.259-282.
• Hogg, M.A., 2021. Uncertain self in a changing world: A foundation for radicalisation, populism, and autocratic leadership. European Review of Social Psychology, 32(2), pp.235-268.
• Jaafar, S.B., Zambi, N.M. and Fathil, N.F., 2021. Leadership style: Is it autocratic, democratic or laissez-faire?. ASEAN Journal of Management and Business Studies, 3(1), pp.1-7.
• Jentsch, T., 2022. Digitalisation for sustainability in procurement within the textile value chain: Analysis of artificial intelligence, robotic process automation, and blockchain.
• Khattab, T.A., Abdelrahman, M.S. and Rehan, M., 2020. Textile dyeing industry: environmental impacts and remediation. Environmental Science and Pollution Research, 27, pp.3803-3818.
• Nadeem, W., Juntunen, M., Hajli, N. and Tajvidi, M., 2021. The role of ethical perceptions in consumers’ participation and value co-creation on sharing economy platforms. Journal of Business Ethics, 169, pp.421-441.
• Stephan, U., Zbierowski, P. and Hanard, P.J., 2020. Entrepreneurship and Covid-19: Challenges and opportunities. KBS Covid-19 research impact papers, 2, pp.1-30.
• Wenzel, A.D., 2021. Sourcing diversity, shifting culture: Building “cultural competence” in public media. Digital Journalism, 9(4), pp.461-480.
• Zhang, B., Zhang, Y. and Zhou, P., 2021. Consumer attitude towards sustainability of fast fashion products in the UK. Sustainability, 13(4), p.1646