The government changes the framework of regulation from time to time, which influences the financial balance of the organisation. The business of an organisation affected effectively due to the changing attributes of the government policies. Taxation policies are the economic policy manages by the government, which greatly affects the business cost of the organisation. Tesco is operating its business operation globally. The environmental and political factors of European and UK governments influences the performance level Tesco.
According to Moir (2001) who quotes Wood (1991), the fundamental idea of corporate social responsibility is that business and society are not distinct entities but instead interwoven. Additionally, Bremner (1994) opines that the pressure for those who prosper financially to be socially “responsible” has deep historical roots in most cultures and religions. As such, business enterprises have been anchored not only in the desire to solely make profit but also in a broader aim to build “the good society” by attending to the welfare of employees and actively partaking in public life (Hall, 1997; Parkes, Scully & Anson, 2010). Conversely, Aaron (2011) attributes this to the recent ‘corporate enthusiasm’ for CSR which seems to give the impression that companies are genuinely interested in improving the lives of people in communities in which they operate. Arguing that while in some cases it may be true that CSR has proved beneficial to target communities, it also appears that CSR is driven not so much by philanthropic considerations as the profit-maximising calculations of business, implying that corporations are involved in altruistic gestures only if it makes sense business wise (Aaron, 2011).
The concept of corporate culture is commonly defined as a set of values that characterize a company. The purpose of this written piece is to examine the influence that corporate culture has on personal ethics and whether or not, this type of influence is appropriate. The essay will also discuss the best possible steps to solving problems in an organisation. It has been said that a strong knowledge of the corporate stance on ethical values can lead to the creation of a strong ethical culture (Stanwick and Stanwick, 2009, p. 15). There exist many cases in which we can see that corporate culture has had a negative effect on personal ethics.
When we talk about corporate first thing to come to mind is profits, as the main responsibility for any corporation is to maximize its profit. This was the main argument for the early days, that the corporate sole responsibility was to maximize profits only, as to achieve the most financial return to the shareholders. But those views proofed to be inadequate, as many new arguments arose after that giving a wider scope for the corporate responsibilities, seeing that it should expand beyond the economic reasonability to add new dimensions, primarily the environmental and social ones (Kitzmueller & Shimshack, 2012). Many empirical researches argued the importance of these new dimensions to the corporate, and how it could benefit the firm as well
The checklist of issues of political factors include: tax policies, trade regulations, political stability, social and environmental policy, government and local government policies (Harrison, 2010). 2. Economic factor Economic factor examines the outside economic issues that can play a role in a company’s success. Economic factor has a significant influence on how company does business and how profitable they are. Items to consider include interest rate, exchange rate, economic growth, inflation, monetary policy, unemployment, income distribution, infrastructure costs and availability, consumer expenditure, foreign direct investment (Jeff, 2008).
A business’ ethical responsibility clarifies the principles, norms or expectations that have to deal with the employees, consumers or the host community affected by a business’ activity. Carroll expresses the importance for a corporation to adjust to their host community. The actual societal and ethical customs of the given host may in fact go beyond what is at present required by law – making it vital to know that the corporate integrity and ethical conduct may possibly go beyond law and regulations of the given host country (Ibid: 42). In the case of MNCs, this type of situation can happen when conducting business in a country where its legal systems are non-functioning and likely suffers from oppressed regimes and corrupted government officials
Corporate Social Responsibility (CSR) relates to the actions of an organization and the effects on the environment and social wellbeing. It is about the way that the company assesses its actions and takes responsibility for this. (Investopedia, n.d.) CSR is a management concept whereby companies integrate social and environmental issues in their business operations and interactions with stakeholders. The company aims to achieve a balance of economic, environmental and social objectives, while also listening to the needs of stakeholders. (UNIDO, n.d.) Within Tesla, corporate social responsibility is very important.
Political factors: these are examined from the political stability point of view, which covers government policy intervention in the economy, deregulation, taxation changes, as well as the attitude of political parties on the government policy. Because the EU textile and clothing industry is a leader in the world market, and its product is required all over the world, the European Union work to ensure a level playing field and inaugurated free trade agreement in the EU-28 through the application of the world trade organization agreement (WTO). This achievement has a dramatic positive impact on the sector to the extent that the sector is consistently experiencing 13% increase rate in its export and 4% increase in the import rate for past few years. Moreover, there have also been a constant increase of trade flow all over the world (European commission
In fact, a proper understanding of these factors helps organizations to identify potential business opportunities and threats in the international market (Baines et al., 2011). Huawei, being a multinational company is affected by the external business environment. As such the impact of the external business environment factors on Huawei’s marketing strategy are explained by the PESTEL Model as follows: 1. Political Factors Political factors include laws and legislations which are of great importance due to the fact that they enclose many aspects of a company policy. Through regulatory bodies, the government implements policies that affect businesses in various ways (Vrontis and Pavlou, 2008).
Trying to ignore the social responsibilities might stain an organization’s image and reputation. Thus, performing social responsibility is not simply a choice; it is a need of any corporation. In the twenty-first century, businesses are in the bottlenecks where globalization, science and technology advancement and integrated knowledge are taking place in today’s society (Chan, n.d.). To gain a foothold in this economy, image and reputation play an important role to differentiate a company from one another. With good reputation, it helps firms to create competitive advantage in the business environment.