Impact of Innovation and Business Ethics on Burberry Group PLC

Business Environment

Introduction

Innovation and business ethics are the drivers of the competitive advantage of an organization and key concepts in business practice (Gürlek and Tuna, 2018). Innovation refers to the process undertaken by an organization for introducing new products, ideas, and processes or approaching the existing processes, products, and ideas in new ways. Business ethics is the study of business practices and policies regarding subjects like corporate governance, discrimination, trading, corporate social responsibility, and so on. This report will discuss the impact of innovation on modern business organizations like Burberry Group PLC. It will also discuss the impact of ethics of business and corporate social responsibility on business organizations.

Burberry is a UK-based luxury fashion house that has its headquarters in London. It produces, designs, and distributes ready-made clothing such as perfumes, accessories, footwear, coats, fashion items, leather products and cosmetics. It was established in 1856. The company has generated a revenue of 2,343.9 million euros in 2021. It has an employee count of over 9,234.

Assessing the impact of innovation on Burberry Group PLC business organization

Modern businesses succeed and grow in the modern corporate atmosphere for a variety of reasons. They are famous for their products or services and others for factors like captivating ad campaigns or strong brand loyalty. The organizations that stand out and differ from the other organizations as leaders in their industries of them have a common factor in them that is embracing innovation. Examples of organizations that have emerged as innovative leaders are Amazon and Uber. They innovated the processes at the core of their industries. Similarly, companies like Apple and Microsoft which are existing for decades have maintained their success due to constant innovation and reinvention. Irrespective of industry or current position, it is not possible for an organization for maintaining a competitive edge without innovation is not a part of its business strategy. Innovation is the concept that refers to the process undertaken by an organization for introducing new thoughts processes or products or approaching existing processes, products, and ideas in new ways (Soni et al., 2019). In the business world, the company might adopt different types of innovations. Those are often linked with individual products, workflows, business models, or processes that are internal. Some companies adopt all of them for the purpose of enhancing growth and adapting to the evolving market. Another great example of a company that embraced innovation effectively is Apple. The company was on the borders of bankruptcy in the 90s but it managed to sustain itself by partnering. This step-shaped the company’s corporate philosophy and later they introduced iMac which proved to be a turning point in the success of the company. Further, the company also kick-started the period of introducing innovative and technological products including iPhones, MacBooks, iPad, and Apple watches which proved to be of huge success worldwide.

The universal truth for today’s businesses for achieving success is ‘adapt or die’. For example, the massive technological advancements have forced businesses to expand and adapt more than before. There is a constant need for change and growth for businesses which offers them great scope for opportunities. The companies that implement innovation had a massive advantage of fulfilling the needs and wants of the customers. The companies cannot sustain themselves if they just remain afloat. It is mandated for them to embrace change and innovation.

• Innovation helps in the growth of the business-

Even if the path forward is slow, the companies should choose to plod along the current path that grows incrementally as they make their existing products and business models more perfect. The companies should choose to grow their businesses by acquiring or merging with other small companies which drive faster growth but is a little bit expensive (Keiningham et al., 2020). Or, the companies could choose to evolve by reanalyzing their current business models from the ground. This is the process that leads to rapid expansion and allows for scaling of the business quickly. A survey that was conducted has shown that the top innovative companies have a common objective to focus on technology, science, and development. The growth for these companies is continual and they always stay one step ahead of the competition because they keep an attitude of embracing the positive impact of innovation.

• Innovation helps in keeping the relevancy of the organization-

In the ever-changing world, it is important for organizations to continuously adapt for meeting the realities in order to remain profitable ad relevant. The improvements in technology have led to a new era of innovation within industries and business models (Khin and Ho, 2018). Executives believe that 40 percent of the companies will be wiped out in the upcoming years because of digital disruption. A start-up always innovates for breaking into an industry and similarly, established organizations also need innovation for fending off competition and maintaining relevancy in the evolutionary environment.

• Innovation helps organizations in differentiating themselves-

Innovation means doing the operations of the company differently from everyone else functioning in the same space (Bandera and Thomas, 2018). If the organization is embracing innovation in products, then its goal should be to keep on updating and developing the products until there is nothing like it in the market. Innovating the processes of the organization helps in saving time, resources, and money and gives a competitive advantage over the other organizations that are stuck in their systems. The organization should take time out for trying something new because sticking to the same old simply does not work. The natural success that innovation brings serves as a reward to many companies. Innovation helps a company in differentiating itself and its products from the competition which can be very powerful in an oversaturated industry. Delivering the best value to the customers should be the primary focus of the companies as it becomes an element of standing out of the brand identity.

For driving the growth of the business, it is crucial to maintain relevancy in evolving times, and differentiate the organization from the competition, the leaders of the businesses should be able to work creatively and adopt innovation to their business models. It is important for leaders to have a strong understanding of how to bring that innovation into the real picture and implement it. One of the ways of doing this is by obtaining experience by working on challenging, exciting and innovative projects. Doing so will expose the business to the skills needed for becoming a driver of innovation within the industry. A master’s degree in innovation is developed to gain these specific skills and hands-on experience which produces an effective innovator. The ultimate aim of innovation in business is to increase revenue irrespective of what is happening in the market. Innovation is the change in a company’s core business model which is able to sustain revenue and growth. There are different types of business innovations such as innovation in products, innovation in the models of business, innovation the methods and processes, innovation in the way of delivery, innovation of organization, innovation in environmental factors, and innovation in social factors. Innovation allows the flow of revenue streams across the landscape of constantly evolving business landscape. Innovation has helped Burberry group plc in staying ahead of disruption, improving its brand, increasing efficiency, attract top talent. Innovation also means keeping a knowledge of the market’s position in response to caused disruptions or changes in customer demand. The company can buy the start-up if it is disrupting the market and build it themselves or can partner with the startup. Nowadays, consumers conduct research before buying any product, hence, having a positive brand value is crucial. The use of digital marketing strategies should be made for boosting the online presence of the company for helping customers in finding the key players in the industry. With technological innovations, it is possible to have efficient business models. Companies that are known for innovation, also get to pick the top international talents. It encourages top talents for applying to their company and remain committed to the business and thus providing a strong competitive edge.

Assessing the impact of ethics of business and corporate social responsibility on Burberry Group PLC

Business ethics are gaining much importance and prevail more in the world of business. Business ethics are applications of ethics that study the moral or rules and principles of ethics and problems arising in the environment of business. Business ethics is the procedure that a business has to follow for its daily interaction with the world. There are different ethics for particular businesses. They not only pertain to how the business interaction of the business is with the world, but also to the one-to-tone interaction with a consumer. Many businesses are only concerned with making money hence they have gained a bad reputation. The making of money is not wrong, but the way in which the businesses implement themselves raises the issue of ethical behavior. Every business should have ethics as a part of them. When a business is doing business with another business that is said to be unethical, they are generally considered unethical by association. The company has made an investigation and researched the companies that they do business with. Many major companies do not practice business ethics. Millions are fined by major companies for breaching ethical business laws. If the company fails follow the ethics of business and is seen as breaking the laws, they are usually compelled to pay a fine. In the UK, when companies have broken laws related to ethics, they are made to provide penalties in terms of fines which are worth millions. Business ethics have increasing importance in an organization. If the business ethics are not followed by the company, it will end up involving itself in fraud, financial statements, price discrimination, and so on. A strong character of ethics helps in giving a competitive edge to an organization and improving recruitment and support in retaining current employees. Excellent ethical programs drive morale boosters like truthfulness and candidness. It improves the interaction of employees and builds an atmosphere in the workplace which is based on equality, honesty, and integrity, which eliminates obstacles to communication. Ethics refers to the principles or rules that define wrong and right conduct. Companies are concerned about this decline in ethical standards and they have addressed this issue. The companies depend on the human resource department for building a culture consisting of ethics. If the employees of an organization act unethically, they not only affect the company but also the customers and stakeholders. Unethical behavior can damage the company’s profits, productivity, and reputation. It is the responsibility of HR to communicate, train and educate the employees on the conduct of what is right and wrong in the workplace. Ethics must also be instinctive while making decisions and a great ethics program helps in giving guidance to the employees while making decisions. An effective ethics program is an important tool for an organization as employees become more confident. There should be a clearly explained code of ethics for employee empowerment. The company has a formal document containing ethical codes that state the organization’s ethics and values that employees should follow. Nowadays almost every company has a program for ethics of business. Digital communication and technology have made it easier for identifying and publicize unethical behaviors. Companies are developing workplaces in accordance with ethics by recruiting the perfect talented employees. One of the most important skills for leaders of business is high integrity and honesty. Business professionals must understand the link between business success and business ethics. A lack of ethics within an organization affects the ways employees do their jobs. They feel that if leaders can break the rules they can break too. They might also be discouraged or don’t feel the motivation for working hard in an environment which is unethical. The leaders and the company lose respect and lose credibility with the public. This results in reduced sales, financial harm, and lost customers.

Corporate Social Responsibility is a business model helping the company to become socially accountable to itself, the public, and the stakeholders. The companies have to follow corporate social responsibility and by doing so they could know the kind of impact they are having on society including environmental and social impacts. The meaning of engaging in corporate social responsibility is that the company is operating in the context of enhancing the society and environment and avoiding causing harm or negatively impacting them. By embracing corporate social responsibility, the companies make an effort to operate in ways that enhance and preserve the environment and society and avoid degrading the. CSR helps in keeping the brand image of the company and society. Conduction of CSR programs is a great method for raising morals in the workplace. Burberry Group PLC strives to become leaders by following corporate social responsibility. CSR is important for the community and also for the company. The activities of CSR help forge a strong bond between the corporations and the employees, boost morale and help the employers and employees to connect more to the world around them. The main areas of concern of CSR are the well-being of the employees, protection of the environment, management of the community, and corporate. Burberry has already taken steps towards sustainability. Burberry’s consumption of cotton is not enough to become sustainable. Cotton being a material that is biodegradable, they should target for using 100% natural cotton. They can also attain sustainability by using other fabrics like wool, bamboo, hemp, and linen. The company has also declared to go fur-free. The goals of Burberry are to reuse waste and become a company that is neutral on carbon. For doing this they have partnered with other companies. The company can donate its unsold stock to upcoming designers so that they can create innovative ideas and designs. They can also stock their unsold items for the coming years and later sell them as a vintage collection. Burberry has reduced the consumption of energy and water by collaborating with its suppliers. They are now able to be more efficient with their resources and they keep the pollution at low levels. They can also opt for entire green electricity for their operations. Social responsibility works as a platform for companies for making a positive impact on global and local communities. Businesses that follow a social responsibility in line with their values have a chance of increasing customer loyalty and retention. The smallest initiative can have an impact on the community. The donation of resources or money to charities also makes an impact on society. Companies can also volunteer fundraising events, establish social mission and goals, and implement education programs for employees. Corporate social responsibility helps in cultivating positive brand recognition, helps in increasing customer loyalty, and helps in attracting top talented employees. These elements help in achieving long periods of financial success and profitability.

Conclusion

Innovation and business ethics are the drivers of the competitive advantage of an organization and key concepts in business practice. Innovation means the process that an organization follows for introducing new products, ideas, and processes or approaching the existing processes, products, and ideas in new ways. Business ethics is the study of business practices and policies regarding subjects like corporate governance, discrimination, trading, corporate social responsibility, and so on. This report has discussed the impact of innovation on modern business organizations like Burberry Group PLC. It has also discussed the impact of ethics of business and corporate social responsibility on organizations of business.

References

Gürlek, M. and Tuna, M., 2018. Reinforcing competitive advantage through green organizational culture and green innovation. The service industries journal, 38(7-8), pp.467-491.

Soni, N., Sharma, E.K., Singh, N. and Kapoor, A., 2019. Impact of artificial intelligence on businesses: from research, innovation, market deployment to future shifts in business models. arXiv preprint arXiv:1905.02092.

Keiningham, T., Aksoy, L., Bruce, H.L., Cadet, F., Clennell, N., Hodgkinson, I.R. and Kearney, T., 2020. Customer experience driven business model innovation. Journal of Business Research, 116, pp.431-440.

Khin, S. and Ho, T.C., 2018. Digital technology, digital capability and organizational performance: A mediating role of digital innovation. International Journal of Innovation Science.

Bandera, C. and Thomas, E., 2018. The role of innovation ecosystems and social capital in startup survival. IEEE Transactions on Engineering Management, 66(4), pp.542-551.