Discuss about the Business Environment for Social Factors and Community Well-Being.
The environment of the organization consists of internal and external factors. The environment should be scanned in order to define growth and predictions of the factors that will affect the success of the organization. The environmental scanning means the ownership and use of facts or information about events, designs, trends, and associations in the external and internal environment of the organization (Arthur & Pellerin, 2018). It supports the management of the company to make decisions for future. Scanning should recognize the opportunities and threats present in the business environment. At the time of strategy formulation, the company should take the benefit of the present opportunities and try to decrease the effect of a threat. A threat to one company is considered to be the opportunity for another company (Management Study Guide, 2018).
This report is being presented in continuation of the previous report on external environmental factors affecting Wesfarmers. The report will perform the detailed scanning of the external environment factors that have an influence on the performance of Wesfarmers and solutions for all the challenges and environmental risks.
This factor is given more importance as it has a major influence on the performance of the business. Various features of the policy of the government can disturb business. Every firm should follow all the laws stated by the government in order to reduce the effect of these policies. The Wesfarmers is also affected by the policies implemented by the government. Coal mining is a significant subdivision of Wesfarmers Company, and it has been seen that the Australian Federal Government has made it compulsory that the extraction of mining industry should be permitted by the state government of the separate state. Due to this policy of Australian government, Wesfarmers took the step to support the government decision and started implemented advanced technology in all the coal mining business units in order to reduce the emission from coal mines and its exploitation. In 2016, the company released 3.9 million tonnes of carbon dioxide equivalent, which is less as compared to 2015. The intensity of the Wes farmer’s emission has reduced by 8%. This step by the company is effective as per the future point of view (Sustainability Wesfarmers, 2016).
An organization’s growth gets highly influences by the economic policies and factors like exchange rates, interest rates, inflation rate (Nadtochy, Klochko, Danilina, Gurieva, Bazhenov & Bakharev, 2016).. In the Australian market service sector has a major part and it is notable that Australian GDP’s 71.1% is contributed by this sector only (Central Intelligence Agency, 2009). In 2017, Wes farmer’s financial services developed policies of general insurance and also accomplished the distribution agreement of 10-year credit card (Wesfarmers, 2017). Through this, it can be said that the company can enjoy an extremely profitable place in the Australian market.
Besides this retail business of Wesfarmers source products from various locations. Some of the locations are India, Vietnam, Malaysia, China, Indonesia, South Korea, Bangladesh, New Zealand, Europe, and Thailand. Purchasing products from these locations have provided company to earn economic benefits as this allows business to get products at affordable prices.
Consumer behavior is very important to be considered for the future growth of the company. Some of the factors such as cultural trends, demographics, population analytics plays important role in the success of the organization (Kee, Lee & Phillips, 2016). In Australia, people follow one-step shopping method which means they choose to purchase the basic necessary stuff in large amount once in a week, such that it can serve the whole week. Wesfarmers has started thinking to offer products in bulk with discounted prices in order to increase its sales.
In today’s scenario technology plays an important role in the development of the country as well as the organization. Hence, an organization like Wesfarmers also needs to majorly rely on technological means of production as it can support in keeping its environmental sustainability in the upcoming time period. Considering this aspect Wesfarmers adopted technology like less emission coal technology an innovative step which is likely to help business in sustaining in future. Besides this company has invested huge amount and resources in order to examine conceivable technology solutions to allow an alteration in their process of production and make use of raw material from various other sources that are presently inappropriate for environmental or technical reasons (Sustainability Wesfarmers, 2016).
Organizations need to obey all the laws and regulations formed by the Parliament or government regulatory. Alterations in the rules concerning consumer and environmental protection, trade practices reform and industrial relations, occupational health and safety have key and growing influences on the organization’s conduct (Wiley, 2018). Wesfarmers is dedicated to obeying the regulations and laws of all the countries in which they operate their business and perform ethically, reliable with the philosophies of fairness, honesty, respect, and integrity. The company follows the minimum wages policy formed by the government and they pay least minimum wages.
All the employees and suppliers of Wesfarmers follow all the workplace laws adopted by the company. The company ensures that all the products they provide to the consumer should be safe and encounter the consumer guarantees under the country’s consumer laws. Wesfarmers do not vend products that are banned and guarantee that every product fulfills the obligatory standards before they are offered to the customers for sale. Whenever the safety issues are faced with the product the company recalls all the products. Along with this, the training which is conducted for the employees of Wesfarmers is according to the main governance rules comprising Consumer and Competition Law, constant disclosure, assortment, and fairness (Sustainability Wesfarmers, 2016).
Environmental sustainability work as an essential part in the business process, and therefore organizations like Wesfarmers is regularly trying to make value for its consumers, for shareholders through a genuine commitment for an extensive range of environmental issues, like conservation of energy, prevention of environmental pollution, etc. Diversified structure of Wesfarmers, in the context of the business range and the geographical spread in New Zealand and Australia, reflects that the company is accountable for handling an extensive range of issues related to the environment. Due to its diversity, the complete environment policy of the company need business to form procedures and policies which are related to the specific situation along with this these policies should ensure are line with the main guidelines of the group of placing tough emphasis on the environment protection.
Across the group various important programmes related to environment are formed and executed, from Bunning’s promise to be carbon neutral in 2015, initiatives to encourage better energy competence, carbon offsets and renewable energy sourcing, the achievement of CSBP’s ammonium nitrate development plan which comprises major pollution reduction and deterrence, decreases in energy footprints and greenhouse in company’s resources unit, and positive waste decrease and reprocessing programmes, dedicated mainly in retail businesses (Wesfarmers, 2008).
Six thinking Hat is said to be a system which is formed by Edward de Bono and defines a tool for the discussions in the group and individual thinking comprising six colour hats (De Bono Group, 2018). This system is used to plan and think in a comprehensive and consistent way. The principle of this system is that the brain of human thinks in various ways that can be purposely dared, and therefore intended for use in an organized way permitting one to develop strategies for thinking about specific issues (Bono, 2017). Every thinking hat is a diverse style of thinking such as:
Source [(Hunger Games, 2018)]
White Hat: As per this hat the more emphasis is given to the available information or data. With the help of this data past trends are analyzed and solutions are provided (Mind Tools, 2018). The economic challenges that every organization face is inflation rate, exchange rate, etc. Presently Wesfarmers financial service sector is able to handle all these issues by gathering required information related to the insurance from the market. Along with this company has accomplished the distribution agreement of 10-year credit card. Besides this company can attract more customers by promoting its insurance products in the market and can do tie-ups with other country’s insurance company to offer Wesfarmers insurance product to the customers in return for a commission.
Red Hat: This hat looks at the issues by using your instinct, gut reaction, and feeling or emotions (Liu, Zehtabchi & Liteplo, 2014). The management of the Wesfarmers should have the empathy feeling as it will help them in understanding the thought, feeling and expectations of the customers. As specified above that the people in Australia prefer to buy products in bulk therefore in order to serve the customers Wesfarmers should open its retail and departmental stores at different locations. This will help the company indirectly interacting with the customers which will result in better understanding of customer’s expectations.
Black Hat: In this type of thinking the negative outcomes of the decisions are identified properly and it is recognized that why it did not work? This aspect of the system helps in identifying the flaws in the company’s process (Mohamed & Ahmed, 2016). Wesfarmers was affected by policies which were implemented by the Federal Government of Australia in coal mining sector. According to which company cannot extract coal mines without the permission of the respective government of the state. At that Stage Company identified what were the loopholes in their planning and how the emission of coal is affecting the environment. After this, they decided to reduce the coal emission for their business units by implementing advanced technologies in their factories. In order to sustain in the market company should also identify more innovative technologies which can help in reducing the emission and harm to the environment.
Yellow Hat: The yellow hat shows positive indications. All the employees and suppliers of Wesfarmers follow all the rules and regulations formed by the company itself and government. This reflects that it will help them in surviving for the long term in the market and will get the support of the government in initiating any program related to environment or society.
Green Hat: In this type of thinking the management of the company consider whether they must reform the policies in order to attract the eyes of the society and government. Wesfarmers has implemented various programmes in order to prevent the environment but yet there is huge scope for the company to implement new and innovative techniques that can help them in reducing the exploitation of the environment. Environment-related strategies will also help the company to improve its image in the eyes of society and government.
Blue Hat: The head of the company wears the blue hat which encourages new and innovative ideas coming from the employees and implements those ideas into a product or policy. This motivates the employees and retains them in the organization for longer time duration. Wesfarmers should also conduct regular meetings involving high management and lower management to discussing future goals and innovative ideas.
Conclusion
The above analysis of the external environment reflects that all the factors such as Government regulatory, economic policy, consumer behavior, technological, legal, and environmental have a significant impact of the performance of organization same as with the Wesfarmers. Besides being the well-known company in Australia and New Zealand Wesfarmers face various issues and challenges in the market that are specified above in the report. All these challenges are tackled by the company very effectively which resulted in improving the performance of the company, however, all these challenges have a future impact on the business environment that can be solved with proper analysis and identification of the data relevant to the issues. The above report has used Six Thinking Hats tools which involve 6 type of thinking; it helps in solving the issues and challenges company face. This tool can be used in a group of people as well as by an individual.
References
Arthur, J. & Pellerin, B.A. (2018). Environmental Scanning. Retrieved from https://www.tesu.edu/about/ir/Environmental-Scanning.cfm
Bono, E. D. (2017). Six thinking hats. 8th edn. UK: Penguin.
Central Intelligence Agency. (2009). The CIA World Factbook. New York: Skyhorse Publishing.
De Bono Group. (2018). Six Thinking Hats. Retrieved from https://www.debonogroup.com/six_thinking_hats.php
Hunger Games. (2018). Lessons one De Bono’s ‘Six Thinking Hats’. Retrieved from https://hungergames4b3.wordpress.com/1-lessons-one-de-bonos-six-thinking-hats/
Kee, Y., Lee, S.J. & Phillips, R. (2016). Social Factors and Community Well-Being. 2nd edn. Germany: Springer.
Liu, Y. T., Zehtabchi, S. & Liteplo, A. S. (2014). Ultrasound and the six thinking hats. Academic Emergency Medicine, 21(8), 920-921.
Management Study Guide. (2018). Environmental Scanning – Internal & External Analysis of Environment. Retrieved from https://www.managementstudyguide.com/environmental-scanning.htm
Mind Tools. (2018). Six Thinking Hats. Retrieved from https://www.mindtools.com/pages/article/newTED_07.htm
Mohamed, A. S. E. & Ahmed, E. M. (2016). The Effect Of Using The Six Thinking Hats Strategy In Teaching Health And Fitness Course On The Development Of Creative Thinking And The Academic Achievement Level. Ovidius University Annals, Series Physical Education & Sport/Science, Movement & Health, 16(2). 209-2015.
Nadtochy, Y. V., Klochko, E. N., Danilina, M. V., Gurieva, L. K., Bazhenov, R. I. & Bakharev, V. V. (2016). Economic factors and conditions for the transformation of the education services market in the context of globalization. International Review of Management and Marketing, 6(1S), 33-39.
Sustainability Wesfarmers. (2016). 2016 Sustainability Report. Retrieved from https://sustainability.wesfarmers.com.au/media/1835/edited-extract-of-wesfarmers-2016-sustainability-report.pdf
Wesfarmers. (2008). Making a difference together. Retrieved from https://www.wesfarmers.com.au/docs/default-source/reports/2008-sustainability-report.pdf?sfvrsn=2
Wesfarmers. (2017). 2017 Annual Report. Retrieved from https://www.wesfarmers.com.au/docs/default-source/reports/j000901-ar17_interactive_final.pdf?sfvrsn=4
Wiley. (2018). Corporate Management. Retrieved from https://www.wiley.com/legacy/Australia/PageProofs/BUS_MAN/3_4/c01Large-ScaleOrganisationsInContext_WEB.pdf
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