Impact Of General And Specific Environment On Luxottica

In this report the concept of general environment, specific environment, dimension of ethics and corporate social responsibility as well as culture of Luxottica is presented along with detailed analysis and evaluation of impacts of all the aspects of environment in which the organisation operates.

According to Robbins, Stephen P., et al. (2015) the general environment of a firm includes sociocultural, technological, economic, political/legal and global aspects of society within which a firm operates and alteration in these elements impact general environment which ultimately influences the firms thereby further impacting a firm’s specific environment. The socio-cultural element consist of cultural and demographic attributes of society like under cultural elements comes customs, values, preferences and behaviour while under demographic characteristics comes gender, education, income, race, ethnicity etc. These elements of general environment influences social trends that affects firms products, services and attitude of workforce within firms that is of value for society. Like preference of customers towards green and ethically sourced products have resulted from cultural aspects of society. Another component of general environment of firm is technological that shapes scientific developments and consist of knowledge, application utilised to transform resources into products/ services and is related to product/ technological procedure in firms which results into creation of new product or improvement in the features or abilities of existing products. Example, cloud and big data technology have facilitated inventory management. Another element of general environment of firm is economic aspect that is related to economic well being of nation where the firm operates and consist of existing economic systems, situation and cycles.  Economic systems include capitalist, socialist or combination of both such as Australia is capitalist and China is socialist. Economic situation include interest, inflation rate that influences cost, demand of product/services of firm and economic cycle includes period of growth or fall. Also political/legal aspect is another element of general environment of firm that includes legislative and government systems in which a firm operates and consist of political stability, government rules, norms etc which influence decision making and planning in firms. Example consumer protection, employee health and safety regulation influences policies and practices of firms. Another element of general environment is global aspect that include global event or change and institutional force that impacts trade and business operation. Example, internet is global aspect that has enabled advanced communication and transport and has reduced geographic barriers between firms activities as well as enabled exchange of product or resources due to globalisation.  

According to Glor (2015) in the technological dimension of general environment of Luxottica various automation and robotics process is integrated in their manufacturing procedure with incorporation of computing and big data which has helped to improvise speed, flexibility, quality and productivity of their manufacturing process and has even improved their operational excellence with exploitation of new technology and digital tools so as to attain high level of factory digitalisation. Luxottica also use Digital Transformation Program to recognise manufacturing requirement in advance and monitor real time production data so as to improvise work and employee safety and this even enables employees to resolve issue rapidly with more proactive measures than ever before.  Another example of impact of technological aspect of general environment dimension on Luxottica is evident in their retail brand LensCrafters which uses technological advancement tool like AccuFit Digital Measurement for digital transformation and innovation to enhance customer fulfilment through associating services with iPads which enhances customers omnichannel encounters along with other tool such as ClarifySM which enhances customers digital eye examination experience in numerous locations (Luxottica Company, 2018)

According to Robbins, Stephen P., et al. (2015) the specific external environment of firm consist of elements like customers, supplier, competitors, industry regulator & government agency, employees & labour market, Interest group & strategic partners. These groups or individuals are called stakeholders with which a firm corresponds while operating business and as such these are either affected or affect the functioning of firm and influence performance. Customers are one of the factors of specific environment of firm and they impact the kind of product/ service offered as well as their quality and prices. Example, regular customers seek for affordable prices of products and more personalised offers from firm and these are often met to avoid losing loyal customer business. Another factor is supplier who are firm or individuals that offer inputs to perform operations of a firm and these inputs include material, human, financial, information resource or business service.  They impact  a firm’s availability, cost and quality of material and thus impact the final product/ service quality, manufacturing capacity, competitiveness and profit generation. According to Smith, Jones & Gard (2016) competitor is another factor which are rivals of a firm with whom competition exist for resources at various levels such as for funding, clients, employees, technology, partners as well as for customers. Example, when customers need clothes they can visit either a specific store or can buy online so here competition exist for customers against online shopping stores as well as against other clothing outlets which impacts product offering, availability, distribution access and prices altogether to influence profit of firm. Further, employees are another factor of specific environment of firm which includes resource or labour that work for firm and offer their effort, knowledge, creativity to meet organisational goal and outcomes. According to Radosavljevic, Radosavljevic & Anðelkovic (2015) the balance between supply and demand of talent resource impacts performance of firm by impacting their cost and capacity. Example if niche skilled employees is vital to firms products then it will govern firms capacity and performance as well as if demand of certain skilled resource exceeds supply then labour cost for these resource rises in labour market which influences firms cost that hires these kind of resources. Strategic partners are another factor of specific environment of firm that include organisations which work together for shared benefits and such collaborations helps to enhance resources, learning and sharing knowledge as well as helps to distribute risks.   Regulators are factor of specific environment of firm which are people or agencies that develop and execute rules to safeguard interest of society, employees or consumers and they influence firm by imposing several regulations that affects their operations. Example, regulators impose norms of employment practices and standard of safety for employees that influences decisions, practices and policies of a firm.    

Luxottica in the year 2017 had nearly 85,150 employees that included around 57. 5% employed in retail business, 11% in wholesale and around 30.7% in production and logistics. Also their workforce include 63% women employees and they hold around 50% of managerial roles. The active involvement of women workforce reflects Luxottica’s commitment for development and opportunity for all to facilitate talent and leadership and further underpins company’s initiative for female employment that describes their actions and measures to ensure larger gender diversity and inclusion in workforce (Luxottica Company, 2018). These reflect that Luxottica’ sees their employees as assets and is committed to meet their needs and fulfil their aspirations at both personal and professional level. Also Luxottica invests in employees capability enrichment and welfare systems to facilitate their well being and fulfilment and hence the employees of Luxottica are fully determined to their responsibilities and work with best of efforts in context to creativity, commitment and team work. Luxottica listens to their employees needs to improvise their work-life balance and meet their ambitions as they value employees and recognise that each employee is first and foremost  which helps to safeguard employees interest and needs with more effective practices. Also Luxottica values effort of employees with rewards and have wage policies and performance assessment systems that establishes synergy of practices to support employees. Luxottica even focuses on quality of recruitment and training to improve competence of their employees with focus on talent development which consist of three key aspects i.e. procedure of review of resources which ensure employees essential growth and fulfilment, talent development through encouraging employees to participate in training and advanced learning to make them adaptive to dynamic business changes and focus on monitoring employees performance to keep them evolving for long term success.     

According to Robbins, Stephen P., et al. (2015) Ethics and CSR are significant for a firm because they help to meet expectation of society for a business to be ethically and socially responsible in their decision and practices. Many employable resource as well as investors take interest in firms that are more ethical and responsible socially as such these are important for firm.  CSR defines a firms intentions that outreaches their legal and economic liabilities to ensure goodness for society and these actions mainly surrounds areas of philanthropy, employee relationships, resource conservation, product quality, pricing etc. These social responsibilities impacts firms actions as well as decisions and manner they are carried out.  

According to Slack, Corlett & Morris (2015) the CSR activities of firm focuses on three elements i.e. fulfilling social liabilities, being socially responsive and being socially responsible.  Firms that fulfil social liability reflect their social responsibility by doing things as per law or only to meet economic objectives as required such as firms may adhere to recycling to comply with national pollution and waste minimisation norms to maintain essential legal mandate. Further another element of CSR of firms includes being socially responsive which means they get involved in social actions as they are in demand and are in social pressure to oblige such social actions. Example, firms provide their employees with onsite childcare benefits to be socially responsive as working parents have demanded such social actions. Another element of CSR for firms is being socially responsible where firms consider actions by which society gets affected and engages in initiatives that bring positive influence on society  to reduce harm. Example, minimising emission to be environmentally responsible or funding community development programs or giving employees paid off to volunteer for charitable social works. According to Tonder & Roberts-Lombard (2013) firms engage in CSR practices to support public expectations from business beyond profit making to meet social objectives so as to secure long term profits by being socially responsible. Also this helps to improve public image and enhances favourability for firms in public as well as firms ensure CSR practices to develop better social environment by solving social issues. CSR practices even boosts business stocks prices as well as helps to retain support of employees and customers.   Moreover,  firms are expected to maintain ethics to oblige actions that are right to be done for betterment of their people and society and decision for ethical behaviour is made on three aspects that includes interpretation of dilemma or problem to be solved, recognising stakeholders who would be affected by decision and applying ethical principles to govern the manner of ethical behaviour.

Luxottica to maintain their responsibility for environment problems ensures technological advancement and innovations that supports improved activities and procedures which have resulted to more sustainability in context to energy and water conservation, low Carbon emission and waste management through recycling and disposable measures. They make continued investment in policies and initiatives that helps to reduce environmental footprint in their manufacturing process through low environment impact, optimum use of resources,  minimisation and recovery of waste to ensure higher responsibility for society and environment.  Example, Luxottica makes continuous investment in best low environment impact technology to increase effectiveness of their manufacturing process which assures more efficacious usage of energy, natural resources and water resource. In 2016 Luxottica made investment over €2.7 mn in projects for energy efficiency, treatment of atmospheric emission and disposal of waste and in 2017 witnessed these benefit from these investment to ensure environment protection and well being of employees and society which even impacted behaviour of employees making them focused on efforts to optimise energy and water usage (Luxottica Company, 2018)

In addition to these Luxottica also maintains ethical practices under their code of ethics specifically while dealing with reports, complaints in context to violation of principle and rules defined in organisational policies. The code of ethics presents Luxottica’s values that underpins their business practices and these are regularly reviewed and updated to meet with regulations requirement and set principles to handle complaint or notification for fraud, violation of ethical behaviour, irregularity or negligence in accounting, audit and controls to ensure practise of ethical conduct for everyone in Luxottica.    

According to Robbins, Stephen P., et al. (2015) the culture of a firm is defined as shared values, customs, principles that impacts the actions, behaviour and thinking of their people and shapes the personality of the employees working in a firm and this is unique for each firm. Moreover, culture of firm reflects the manner it communicates with its environment while handling environmental possibilities and risks so that a firm can grow and sustain as well as defines a firms integration of structure and activities to manage their employees together. There are basically seven elements of culture of a firm which includes team orientation, people orientation, outcome orientation, aggressiveness, stability, attention to detail and innovation and risk taking. These shapes the firms personality and the manner their people work. For example some firms culture focus on innovation which motivates their people to take risk and be creative for new product development and firms too remain supportive to employees innovative behaviour to support these objectives and risk taking. According to Ng & Ng (2014) The culture of a firm generally projects vision and mission of firms that establishes their image and their core values which helps employees learn to impose the vision into reality through culture of a firm.  

Reporting, analysing and evaluating personal insight of quiz ‘What’s the Right Organisational Culture for Me?

2-10 I like the thrill and excitement from taking risks.                            1 2 3 4 5

2-11 I prefer managers who provide detailed and rational explanations for their decisions.

                                                                                                                   1 2 3 4 5

2-12 If a person’s job performance is inadequate, it’s irrelevant how much effort  he or she made.                                                                                                         1 2 3 4 5

2-13 No person’s needs should be compromised in order for a department to  achieve its goals.    

                                                                                                                1 2 3 4 5 

2-14 I like being part of a team and having my performance assessed in terms  of my contribution to the team.                                                                         1 2 3 4 5

2-15 I like to work where there isn’t a great deal of pressure and where people  are essentially easy going.                                                                                              1 2 3 4 5

2-16 I like things to be stable and predictable.                                       1 2 3 4 5

My score is 24 from personal insights quiz which indicates my preference for flexible and innovative as well as informal culture of organisation that are mostly found in high-tech firms or research or advertising companies. As my score is greater than 22 so I have strong preference for humanistic culture. Whereas the culture at Luxottica also focus on innovation and master craftsmanship where new ideas and views are welcomed and diverse culture and models are practiced to continuously ensure improvement and enhance firms potential and competitiveness in market. Luxottica’s culture focus on design, technological innovation, brand management, expansion, financial development and growth of talent. Hence from this analysis of personal insight quiz I have found that I fit into Luxottica’s culture with greater probability.  

Conclusion 

Thus it is evident that understanding of general and specific environment helps a firm operate in accordance to the elements and factors of environment to align their capabilities to maximise leverage for better opportunities and risk management. Also understanding of ethics helps to maintain best practice in firm and engagement with CSR ensure improvement of public recognition due to positive social responsibility, which altogether helps to nurture strong culture that shapes positive behaviour of employees and their perspectives.    

References 

Glor, ED 2015, ‘Building theory of organizational innovation, change, fitness and survival’, The Innovation Journal, vol. 20, no. 2, pp. 1-168, retrieved 16 December 2018, Proquest database.

Luxottica Company, 2018, ‘Company Profile’ retrieved 16 December 2018, https://www.luxottica.com/en/about-us/company-profile

Ng, J C Y & Ng, K Y N 2014, ‘CULTURE, ORGANISATIONAL CULTURE AND ORGANISATIONAL CLIMATE: AN INTEGRATIVE APPROACH’, Indian Journal of Commerce and Management Studies, vol. 5, no. 2), pp. 18-26. retrieved 16 December 2018, Proquest database.

Radosavljevic, Z,  Radosavljevic, M & Anðelkovic, A 2015, ‘THE NECESSITY OF ELIMINATING CLASSICAL CONCEPTS AND INTRODUCTION OF NEW CONCEPTS INTO STRATEGIC MANAGEMENT AND BUSINESS’, Ekonomika, vol. 61, no.1,pp. 23-42, retrieved 16 December 2018, Proquest database.

Robbins, Stephen P., et al. 2015, ‘Management: The Essentials’, P.Ed Australia, pp. 32-59. retrieved 16 December 2018, ProQuest database

Slack, R E, Corlett, S & Morris, R 2015, ‘Exploring employee engagement with (corporate) social responsibility: A social exchange perspective on organisational participation’, Journal of Business Ethics, vol. 127, no. 3, pp. 537-548, retrieved 16 December 2018, Proquest database.

Smith, R, Jones, P & Gard, S 2016, Understanding Management, Wiley & Sons, Sydney.

Tonder, E V & Roberts-Lombard, M 2013, ‘A theoretical framework for managing CSR plans and related initiatives in the modern business environment’, Journal of Business & Economics Research, vol. 11, no. 12, pp. 503, retrieved 16 December 2018, Proquest database.