The questions deals with the explanation and recognition of social and environmental concerns relating to premier investments operational activities. Premier investment is an organization operating in retail sector by providing garments to customers in countries where they carry out their operations. Environmental and social strategies are constructed by every organizations depending upon their specific concerns (Otley & Emmanuel, 2013).
1. It has been recognized by premier investments that the eco system and environmental systems of country is looks at the environment in which they are carrying out their operations. Manufacturing process of organization has resulted in facing some of the environmental issues such as incineration of the wastes and their proper utilization. Acquiring knowledge about tastes and preferences of customers and changing trends are some of the social trends that are recognized by premier investments. In order to understand the ongoing changes in the market, it is required by organization to conduct the time to time analysis of market scenario. Mitigation of various social concerns of organization requires undertaking and development of several strategies (Brandau et al., 2017).
Looking after the community associated with organization are the three objectives that is related with sustainability commitments of premier investments. Such sustainability is related to organization’s activities of organization. Operational functions of business involve variety of individuals and they are involved in business operating activities and they include stakeholders such as employees, customers. For keeping stakeholders of organization satisfied and happy so that they have long-term relations, Premier investment is required to undertake effective measures. Understanding the needs and looking after the communities associated with business is another sustainability objective related to Premier Investment. For acquiring knowledge and gaining experience about the needs and desires for communities intends organization to look after the communities. This would help in providing assistance for the development of community and organizations and influencing the manufacturing of products as sought by communities. Understanding the issues that can be prevented by looking the environmental are is the third objective of organization so that related matters can be rectified by undertaking steps or measures for effective and efficient performance (Walters & Ramiah, 2017).
The sourcing framework has been development by looking at three objectives concerning ethical sources of Premier investment. Principles and policies of organization form the basis of construction of models relating to ethics. Promoting and framing the assurance among environment and employees is the next ethical objective of organization for maintaining the process of ethics (Taipaleenmäki & Ikäheimo, 2013). In relation to ethics, ethical procurement of raw materials is another third objective so that raw materials used are of good quality and they are ethical for providing satisfaction to customers.
The progress of organization can be measured by adoption of two measures that would lead to accomplishing of objectives is depicted in the table given below:
|
Dimensions |
Objective |
Performance Measures |
|
Sustainability of business |
1. Community |
1. Relationship with communities are maintained by complying with law 2. Establishment and seeking for long-term relationship with Simggle community |
|
2. People |
1. Supervising and managing the environment of workplace by keeping personnel and measuring security of workplace 2. Retention of potential and existing customers and employees by taking initiatives |
|
|
3.Environment |
1. Waste generated during the manufacturing process should be recycled and looked after (Brigham & Ehrhardt, 2013) 2. Ensuring that energy is utilized efficiently |
|
|
Ethical Sourcing |
1. Ethical procurement of raw material |
1. Establishment of good relationship with suppliers 2. Raw materials should be checked before procurement |
|
2. Using procedures and policies for construction of sourcing models |
1. Conducting survey on customers and stakeholders for assessing the model effectiveness 2. Model comparison and assessment with the international ethical standard |
|
|
3. Assurance establishment and promotion |
1. Undertaking changes by reviewing analysis and performing frequent analysis (premierinvestments.com.au, 2017). 2. Comparing set of assurance by matching it with competitors |
2. A set of principles has been framed by global reporting initiative for preparation of sustainability report. The guidelines of GRI has been divided into sections comprising of stakeholder engagement, organizational profile, identifying material aspect, strategy analysis, ethics, stakeholder engagement, governance and reporting profile. Operations of Premier investments can be carried out by complying with such sections and strategy of organization can be planned by considering the most relevant disclosures of GRI and they are as follows:
A section of corporate governance has been clear depicted in premier investments annual report. Report has detailed classification of remuneration and policies along with the elaborated information that has helped in gaining transparency.
Planning the investments and execution of strategy can be done by Premier investments according to the principles that are outlined in the standard. An insight of organization has been described by GPI as per their strategy analysis that would make easy for shareholders to understand. Some of the sustainable approach adopted by Premier investments is mentioned as their obligation towards environmental practices, corporate environment and taking steps for protecting earth.
Another GRI principle discloses the impact of using transport in business and it discusses about the environmental impact of using transportation. It can be seen from annual report of organization that takes into environmental considerations while adopting transportation method and proper disclosure of transport materials.
Activities undertaken by organization is clearly depicted in the annual report and involving stakeholders so that they are able to get clear scenario of business. All the required information sought by stakeholders is clearly disclosed in the particular section that helps in creating transparency between Premier investment and stakeholders.
On some aspects, the practices of both organizations that are Myer and Premier are similar while they differ in some other areas. After analysing annual report of both the organizations, it can be seen that they take environmental into considerations while undertaking operational activities of business. For protecting environment such as saving trees and plants, they have adopted the practice of recycling the waste that will help in addressing environmental pollution. Customer satisfaction is another area by providing quality products and ensuring adopted of safety and security in their production activities (Otley & Emmanuel, 2013). Nonetheless, there exists some difference in activities of both the organization.
Disparity exists in terms of employment of workers as Premier investment focuses on efficiency for which they appoint skilful and talented workers. On other hand, Myer take appropriate measures for promotion gender equality and reducing the biasness within organization for which they hire female employees. When addressing environmental concern, Myer intends to reduce green house effect and carbon emission and premier focuses on energy wastage reductions and their efficient utilization. Premier investment serves environment by following product stewardship programs and Myer make use for recycling method. All the steps taken by different organizations help in addressing environmental pollution. Therefore, it can be said that both Myer and Premier are engaged directly and indirectly in addressing environmental concerns.
Various aspects are involved in measuring organization performance as per GRI guidelines and this involves economic, environmental and social sustainability. Implementing the guidelines of GRI will help in improving the profile of organization (Fuente et al., 2017).
Several recommendation and guidelines disclosed in standard helps companies in adopting the proper strategies that would address different stakeholders need. Adoption of guidelines by Premier investment will help in serving their stakeholders and investors requirement. Understanding of strategy and analysis of organization will be eased to investors of Premier, if they adopt the same that will facilitate decision making and investment within company. Purchasing of shares of company will be facilitated if premier investments adopt the recommended guidelines (d’Haens & Aerts, 2017). The upcoming investment opportunities and possible risks of such investments will be well known to investors and they can exercise cautions in making investment decisions. Performance and competitiveness of organization can be judged by incorporation of governance of Premier investment as per the guidelines of GRI.
Conclusion:
From the above analysis, it is concluded that there are several guidelines and disclosures made by GRI for facilitating the organizational performance. Premier investments have incorporated several disclosures that assist them in addressing the stakeholders’ needs such as environment, communities, investors and customers. Furthermore, the comparative analysis depicts that there are few differences in practice of Myer and premier investments.
The ongoing operation of Smiggle and Peter Alexander involves some of the major costs that are incurred on wide range of activities. This involves depreciation and amortization cost, costs incurred on employees, insurance, distribution and warehouse, research and development costs. Some other miscellaneous costs include income tax, consultation fees, salaries and wages, charges of banks, freights, marketing costs, leasing properties and rental payment and others.
The costs discussed above involve both fixed and variable costs and their behaviors can be discussed below:
Fixed costs are the cost that is incurred irrespective of level of output produced by companies. In case of Smiggle and peter, the fixed cost comprise of interest rate, rent charged on rental properties, lease expense, depreciation and amortization. Organization has to incur all these expenses irrespective of their performance and production. On other hand, variable cost varies as per the output level produced by organization. Such costs involve wages paid to labours, freight expenses, payment for materials and income tax payment and they are directly influence by level of sales (Lasher, 2013).
The point at which the cost incurred by organization is equal to revenue generated from selling of products is known as break even analysis. Break even analysis would be considered as appropriate option by Smiggle and Peter Alexander for opening store in new territories. This is done after conducting analysis of their operational activities and costs evaluation. Break even analysis is regarded as reliable screening tool for premier investments for opening new store in other territories. It is essential for business to make the forecast of their sales before starting any new business that would be assisted by performing such analysis. It is possible to make forecast of future profits generated by stores at different levels and it would facilitate development of product mix at future store. Avoidable and controllable cost can be determined using this tool and there can be improvement in passive selling by stores (Taipaleenmäki & Ikäheimo, 2013).
However, there are some shortcomings of using break even analysis that should be considered before staring new business. Some of external factors influencing the business should be considered such as market environment, employment of capital and government policies. Appropriate and exact estimation of real market scenario cannot be given by break even analysis. It is required by premier investment to identify and evaluate the mixed cost that is often neglected by this analysis tool.
The business model of organization should be capable of measuring business performance by conducting analysis of internal business procedures, financial performance and satisfaction of customers. Balanced score card is a management tool for measuring strategically performance, monitoring and measuring progress towards strategic targets (Brandau et al., 2017).
Balanced score card can be used as management tool by Smiggle and Peter Alexander for opening new stores in different territories. Measuring scorecard objectives helps in translating behaviour and performance. Using this tool would helps organization in taking proper measures for managing the stores and understanding store’s future requirements. Below picture depicts the balanced score card for Smiggle and Peter Alexander.
|
Perspective |
Objectives |
Measures |
Target |
Frequency (time period) |
|
Financial |
Growth in revenue |
1. Gross margin 2. Revenue increment |
+21% + 15% |
Half yearly |
|
Customer |
Increment in Customer satisfaction |
1) Build loyalty of customers 2) Feedback generation via email and letters |
+ 42% + 30% |
Three months |
|
Internal Business Process |
Development of innovative ideas and Increase in new ideas |
1) Increase expenditure in R& D 2) Launching products successfully |
+ 16% + 32 % |
8 months |
|
Learning & Growth |
Learning’s and gaining knowledge via online communication Engagement of Employees |
1) Number of employees 2) Increased employees |
+ 21% + 18% |
4 months |
When looking at customer perspective, satisfaction of customers can be measured by measuring their loyalty using feedback generated from mails. This is done to ensure that they are able to retain customers. Considering financial perspective, new store should have increased gross margin and revenue growth as per the score card. This will lead to increase in profit generation and ultimately increase investors and market value of company. Focusing on satisfaction of customers would enable the organization to efficiently manage their business (Coe & Letza, 2014).
While measuring the process of internal business perspective, it is necessary to consider some new idea generation that would assist in increasing goodwill of organization. Necessary products that are in demand are kept in stocks and introduce products that are new to market for gaining market share (Petty et al., 2014).
Engagement of employees can be fulfilled by introducing new system of growth and learning that would help employees in handling new business. The operational process of organization needs to ensure that suppliers are following proper codes and making improvement in standard of communication. When dealing with innovations, new store intends to offer innovative products to customers. Innovative business models also need to be incorporated for managing their operating and financial activities (Hoque, 2014).
The approach of balanced score card involves some criticism as they do not help in addressing fundamental flaws and present practical applications.
References List:
Brandau, M., Endenich, C., Luther, R., & Trapp, R. (2017). Separation–integration–and now…? A historical perspective on the relationship between German management accounting and financial accounting. Accounting History, 22(1), 67-91.
Brigham, E. F. (2014). Financial management theory and practice. Atlantic Publishers & Distri.
Lasher, W. R. (2013). Practical financial management. Nelson Education.
Otley, D., & Emmanuel, K. M. C. (2013). Readings in accounting for management control. Springer.
Taipaleenmäki, J., & Ikäheimo, S. (2013). On the convergence of management accounting and financial accounting–the role of information technology in accounting change. International Journal of Accounting Information Systems, 14(4), 321-348.
Walters, A., & Ramiah, V. (2017). Financial management or accounting: a theoretical analysis of the benefits and limitations of developing a’true’financial management approach within government agencies in Australia.
Arnold, G. (2013). Corporate financial management. Pearson Higher Ed.
Brigham, E. F. (2014). Financial management theory and practice. Atlantic Publishers & Distri.
Brigham, E. F., & Ehrhardt, M. C. (2013). Financial management: Theory & practice. Cengage Learning.
Coe, N., & Letza, S. (2014). Two decades of the balanced scorecard: A review of developments. The Poznan University of Economics Review, 14(1), 63.
d’Haens, P., & Aerts, W. (2017). Financial en management accounting: partim financial accounting.
Fuente, J. A., García-Sánchez, I. M., & Lozano, M. B. (2017). The role of the board of directors in the adoption of GRI guidelines for the disclosure of CSR information. Journal of Cleaner Production, 141, 737-750.
GarcÃa-SÃ, I. M., & Lozano, M. B. (2017). role of the board of directors in the adoption of GRI guidelines for the disclosure of CSR information. Journal of cleaner production.
Hoque, Z. (2014). 20 years of studies on the balanced scorecard: Trends, accomplishments, gaps and opportunities for future research. The British accounting review, 46(1), 33-59.
Keyes, J. (2016). Implementing the IT balanced scorecard: Aligning IT with corporate strategy. CRC Press.
Lasher, W. R. (2013). Practical financial management. Nelson Education.
Otley, D., & Emmanuel, K. M. C. (2013). Readings in accounting for management control. Springer
Petty, J. W., Titman, S., Keown, A. J., Martin, P., Martin, J. D., & Burrow, M. (2015). Financial management: Principles and applications. Pearson Higher Education AU.
Taipaleenmäki, J., & Ikäheimo, S. (2013). On the convergence of management accounting and financial accounting–the role of information technology in accounting change. International Journal of Accounting Information Systems, 14(4), 321-348.
Walters, A., & Ramiah, V. (2017). Financial management or accounting: a theoretical analysis of the benefits and limitations of developing a’true’financial management approach within government agencies in Australia.
Williams, J. (2014). Financial accounting. McGraw-Hill Higher Education.
Retrieved 20 September 2017, from https://www.premierinvestments.com.au/wp-content/uploads/2016/10/PMV-Sustainability-Community-EnvironmentStatement-Jul16.pdf
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