Strategic Planning for Multinational Corporations

Introduction

The business analysis and business environmental analysis are effective for developing the organisational strategic planning where the multinational corporations try to develop effective strategic tactics for running their business and in this regard the leader and the managers try to analyse the macros and micro environmental factors for better analysis and development of the strategies to secure future sustainable development (Andonova, 2017). The report is effective to demonstrate different business size, scope and structures in the private, public and voluntary sectors and analyse the activities of the firms in doing their business strategically. The study also provides a scope to interlink between the business functions and the structure of the business as well as identify the activities of the international firms in doing their business across the globe. In this study, there is environmental analysis in the second part which is related to micro and macro environmental analysis for the organisation, which will be conducted through PESTLE and SWOT analysis for acknowledging the external forces affecting the business functions as well as the internal forces boosting the performance of the business. The study is hereby beneficial to demonstrate the functions of the business as well as identifying the external and internal environmental factors for running the multinational corporations efficiently.

Explaining different types, size and scope of the organisations

There are different types, sizes and scope of the organisations operating internationally and the large corporations, medium sized firm and small sized business are the major sizes, where the businesses are running their operations successfully. As per the types of the organisations, there are three types which are private and public and voluntary sector. The scope of the organisations as per their organisational types is also different, where the motive and mission of the organisations differ from each other (Bromley and Meyer, 2017). The public organisations are running through government associations and local government cooperative agencies and on the other hand, the private organisations are owned by the sole owner, owned by private proprietor. On the other hand, voluntary organisations are totally different from the public and private organisations, where the voluntary organisations, where profit or non-profit organisations are working in the society for maximising social welfare which is the main motive of the entrepreneurs of the voluntary organisations. All the organisations hereby have different scope and motive of the running their business and the strategic planning of the firms are also different from each other for fulfilling the organisational values. For example, British council is the public limited company and on the other hand, Sainsbury’s is the private company having private owner and running the business individually (Álvarez-González et al., 2017). The organisations are running their operations in the retail industry and on the other hand, for example, Oxfam is operating in the voluntary sector and it is a voluntary organisation which maximises social welfare as a whole. The size, scope and structure of the organisations will be evaluated further, through which it is possible to acknowledge the differences among the private, public and voluntary organisations operating in the UK market.

Public sector Company: British council

British council is a government owned institution which focuses on promoting the international education and culture across the globe. The UK government owned the organisation British council which is a famous institution for gaining in depth knowledge and expertise in different subject matters. The organisations operate across 100 countries and its aim is to promote a wider knowledge of the United Kingdom and the English Language by motivation the culture, scientific, technological and educational co-operation (British council, 2020a). The organisation has been established in the year of 1934 and it serves across the international borders with high quality teaching professionals for educating the social communities across the globe. The size of the company is hereby large and it is effective to serve the individuals who seek personal and professional growth and development in terms of knowledge and skill (British council, 2020a).

The organisational structure is also effective where hierarchical structure is followed and the government of the UK is the major head of the organisation to promote education and British culture. The individuals in the recent years prefer to access such courses for personal and professional development and British council is one of the successful organisations to educate the people efficiently. Considering the legal structure of the organisation, it is governed by Royal Charter and it is also public corporation and an executive Non-departmental Public Body (NDPB), sponsored by the Foreign and Commonwealth Office (British council, 2020b). The main scope of the organisation British council is such as,

Enhancing the personal and professional career growth of the new generation

Educating the social communities across the globe

Expanding the organisations across the globe by maintaining professionalism and encouraging more learning and development opportunities

Increasing literacy rate and the knowledge and expertise of the new student across the international borders for broader career opportunity (British council, 2020a).

Voluntary sector: Oxfam

Oxfam is the charitable organisation focusing on alleviation program, for the global poverty reduction. The organisation is led by Oxfam international and it is 19th independent organisation serving in voluntary sector for the betterment of the social communities. The strategic planning of the firm is effective to eradicate poverty in the society and improve the health and wellbeing of the individuals. The organisation has been found in the year of 1942 and it is non-profit organisation aiming at mitigating global poverty across different social communities (Oxfam, 2020). The intervention planning to help the social communities as well as the disaster relief, policy research and pro-migration and advocacy are effective strategic tactics of Oxfam to establish the business and maximise social welfare. Oxfam hires more than 55 staff members to operate their charitable organisation across the globe where the efficient employees are taking care of the communities and helping them for eradicating the issue of poverty.

The purposes of the organisation are,

To maximise values for the social communities across the globe

To improve the wellbeing of the individuals

To make the business sustainable by creating values for the social communities as a whole

The size of Oxfam organisation is large with effective structure, where the organisational vision is to work together internationally to enable the people to exercise their rights and manage their own lives (Oxfam, 2018). On the other hand, the mission of the firm is to develop sustainable program, to mitigate the structural causes of poverty and related justice. Global poverty eradication program and the strategic planning are effective to increase wellbeing and standard of living of the individual and Oxfam is also successful to expand their operations across the social communities around the international borders which further provides a scope to them to engage as many as possible under the program in order to help the individuals to meet their basic needs including food, shelter, water, health care and safety (Oxfam, 2018).

Private company: Sainsbury’s

Sainsbury’s is the private organisation operating across the UK and it is running its business in the retail industry with quality products and efficient retail services. The organisation is successful to manage their large size and structure of the business where employees in the organisation and the colleagues are also proficient to cooperate and run the business operations strategically (Sainsbury’s, 2020a). It is one of the famous organisations in the UK to meet the customer’s needs and preferences in the market by delivering high quality products and efficient services. The employees are efficient to run the business activities in long run. There are more than 117000 employees in the organisation to handle their supermarket chain across the UK. It is one of the successful private organisation which is public limited and it runs its operations proficiently with technical advancement and innovation (Sainsbury’s, 2020b).

The scopes of the business are such as,

Maximising organisational profitability

Creating values for all the stakeholders engaged with the business

Successful global expansion of the business

The organisational structure as well as ethical principles of the firm is also effective to manage their operations legally in the market, the workplace culture and the working process are also suitable where the employees are motivated and managed well in the workplace to perform better in long run. The organisation is also efficient to handle their operations and manage business ethics through organisational registration, maintaining copyright and intellectual property rights as well as following ethical code of conduct to manage their business and secure future sustainable development (Sainsbury’s, 2020c).

Interrelationship of various functions with the organisational structure

In the recent era of globalisation, the multinational corporations try to manage their global operations as per the different functions and along with the functions, the organisations mainly try to develop appropriate structure of the firm in order to make the business successful and fulfil the aim and objectives of the organisations (Sankar and Revathy, 2018). In this regard, there is great link between the organisational function and its structure so that the function can be managed efficiently by corresponding management team and employees as well as experts. There are different structures and the leader of Sainsbury’s tries to hire the expertise in different department to run the business functions efficiently. In this regard, the major business functions of the organisation are internal and external as well as support function. The internal functions are acquisition of finance, hiring labour, and overload expenses, production of goods and services and purchase of raw materials (Smith and McSweeney, 2017). On the other hand, the external functions of the business Sainsbury’s are marketing research and marketing strategic planning, advertisement and sales promotion as well as sales management activities. The support functions of Sainsbury’s are accounting and operations, public relations and quality control. The organisation tries to develop vertical hierarchy with proper authority, which is managed well in the workplace, where the company is successful with the proper organisational structure, and there is CEO at the top of the structure. Under the CEO, proper management teams are there to handle the different activities and department of the organisation which are distributed among different departments. Hereby, it can be stated that Sainsbury’s follows the functional distribution of structure to manage the business functions and thus it is clear that, there is strong link between the business functions of Sainsbury’s and the organisational structure, so that the leader can develop different departments at the workplace and the managers of the department can handle their roles and responsibility by utilising organisational resources and their own expertise and capabilities (Bagno, Salerno and Dias, 2017).

Sainsbury’s is the large organisation operating across the UK super market chain and the management team is distributed as per the geographical areas to manage the employees, customers, suppliers and distributors. The verticals hierarchy of the organisation is effective to handle all the business functions and in this regard the organisational leader created different departments such as marketing, finance operations and human resource management. In order to handle the functions of production and distribution of the product and services of Sainsbury’s the operation manager and production managers are collaborating with each other, for supplying the raw materials for manufacturing quality products, manage store and warehouse, as well as distribute the products in the market by managing its operation network and supply chain management (Lomi, Tasselli, S. and Zappa, 2017). Hereby, the organisational departments of production and operation are working together to fulfil the function of production and distribution. In addition to this, the organisation Sainsbury’s is also efficient to handle the marketing departments where the marketing managers and the employees are managing the business functions including sales activities, promotional strategies, advertisement, public relation and customer’s relationship management. These are the major business functions maintained by the marketing departments where the service innovation and the marketing activities are effective for Sainsbury’s to promo their business and manage the customers efficiently in the market. finance departments of Sainsbury’s is also strong to handle the support activities including research and development, accounting and annual financial report development, as well as financial investment and budgetary plan which are mandatory for the firm to manage the business efficiently. The cost benefit analysis, setting effective price and investing proper capital in the organisation can also be possible, where the finance manager and team member are expert to handle these activities in long run (Sainsbury’s, 2020b). The human resource department is also another major department of Sainsbury’s where the employees are the major stakeholders of the organisation and the organisational leader tries to handle the team to achieve future success. The functions such as production, manufacturing, service innovation and the operational function, all are handled by the employees. Employees are the key stakeholders to fulfil the organisational vision and in this regard the human resource department tries to enhance their operations to ensure future sustainable development of Sainsbury’s. Hence, as per the above analysis, it can be stated that, the organisation Sainsbury’s is able to manage their operations through developing suitable organisational structure and in this regard the business functions are totally interlinked with the structure. The organisation is efficient to follow the business functions and develop vertical hierarchical structure as per the different departments so that the management team would be able to manage their business functions and achieve future success (Sainsbury’s, 2020c).

Analysing the impacts of macro environment on business

The PESTLE analysis is effective to analyse the macro environmental factors and its impacts on the business activities of Sainsbury’s. The political, economic, social as well as technological, legal and environmental factors for the organisation Sainsbury’s will be evaluated further where the positive and negative impacts of the external environmental factors on Sainsbury’s will be discussed.

Political:

There is political stability in the UK where the government is cooperative and boosts the interest of the entrepreneurs to run their business efficiently. Continuous improvement and cooperation of the government are effective for the business Sainsbury’s to run their operations across the globe. After Brexit, there is market uncertainty and slow pace of growth which has negative impacts on the business of Sainsbury’s. Apart from that, there are positive impacts of the political environment of the UK, due to supporting globalisation, increasing the wage policies and practice of the government (Filimonau and Gherbin, 2017). Due to increasing corruption, there are negative impacts on the business for fraud cases and hacking the organisational data which would be dangerous for the organisation Sainsbury’s to manage their authenticity and operational excellence.

Economic:

Economic stability and development is long run has crucial impacts on the organisational activities and in this regard the UK economy is growing at a rapid rate. GDP growth rate of the UK in 2019 was increased by 0.3%. It will be expected to grow faster in coming years which has positive impacts on the business of Sainsbury’s. On the other hand, the inflation rate is controlled by the UK government and the government is successful to reduce it fewer than 2% to avoid inflationary growth. This is also beneficial for the organisation to operate efficiently in the market and manage their price range and attract the customers in long run (Aldous and Soares, 2020). On the other hand, the purchasing power parity and personal income of the customers are increasing over the period of time which is also considered to have positive impacts on the firm’s operation. Hence, the economic stability and growth in the market of the UK would be effective for the organisation Sainsbury’s to invest more in the organisation and expand their brand across the country.

Social:

As per the social factor, there is social development in the UK where the people prefer to be update with latest news and grab the market opportunities to live safe and healthy. The literacy rate of the UK is 99.9% and the people are upgraded with latest technology which has positive impacts on the business activities of Sainsbury’s. Apart from that, the preference towards healthy lifestyle and diversity in culture further provides a scope to the business Sainsbury’s to conduct their operations efficiently (Aldous and Soares, 2020). The cultural diversity can be managed well, where the urban migration is effective to improve employment in the society and ensure social development. Hereby, social development has positive impacts on Sainsbury’s to run their business activities strategically in the market and develop further sustainable solution for the wellbeing of the social communities across the UK.

Technological:

Technology has strong impacts on the business activities in the market, where the UK population is well acknowledged about the latest technology and innovation for better living condition and grabbing job opportunities. Skilled workforce is one of the major factors which has crucial positive effects on Sainsbury’s where the employees and technically skilled and they are efficient to handle the organisational operations proficiently. On the other hand, the organisational latest infrastructure with effective information Technology (IT) would also be beneficial for Sainsbury’s to run their business successfully. On the other hand, there is big data analysis, market research software, cloud computing system, Enterprise resource planning (ERP) as well as information and Communication Technology (ICT) which also have positive effects on the business operations and excellence of Sainsbury’s (Johnes, 2019). On the other hand, the corruption and data hacking are increasing due to technical advancement and negative use of technology which has negative impacts on the business, where the organisation may suffer from data hacking and mismanagement of the organisational data and it further leads to ethical issue of lack of confidentiality management and data safety.

Ethical:

As per the ethical consideration, there is structured ethical code of conduct, which must be followed by the registered organisation in order to maximise the quality of operations and run the business legally. The major rules and legislations are related to employment laws, urban migration, protection laws, and the inclusion of tariff and quota system on the international trade, as well as environmental friendly laws and legislations (Tahri, 2018). These rule and legislations have important impacts on the multinational corporations, where the organisation can develop ethical business structure and follow the rule to make the business legal. On the other hand, intellectual property rights and customer protection law are fruitful for Sainsbury’s to run the business ethically and strengthen their customer’s base by ensuring trust and loyalty among the stakeholders. The environmental rules such as tax norms, regulations for food safety and social development and regulations play in both negative and positive way. These rules help Sainsbury’s to restructure their operations but it raises the operational costs for handling the quality of operations.

Environmental:

Environmental sustainability needs to be managed by the organisation to sustain in the market and secure future development. Environmental practice has important effects on the organisational activities. The people are concerned in the recent years to stay healthy and safety and reduce pollution to protect natural resources. It further influences the organisation to develop the tactic of utilising renewable resources such as implementing solar panel at the rooftop to use solar energy for the production and operations (Walton, Petrovici and Fearne, 2017). The greenhouse gas emission is another major issue and the environmental agencies and the government of the UK take initiative for the organisation to sell electric cars and influence the firms to utilise electrics cars for supply chain management so that it would be possible to have zero emission. Thus the environmental practice also has positive impacts on the organisation Sainsbury’s where the firm would be able to strategise their business and secure future sustainable development.

Determining the internal strengths and weaknesses of the business

Through SWOT analysis, it is possible to identify the strengths and weakness of Sainsbury’s as well as acknowledges the market condition by reviewing the opportunities and threat in the UK retail market.

As per the above SWOT analysis, the organisation is strong to maintain financial stability and strong organisational infrastructure. The customers base of Sainsbury’s is also strong, where it is possible for the supermarket chain of the company to deliver high quality products and efficient services to the customers which further enhances trust and loyalty among the customers in the market (Sainsbury’s, 2020b). The pricing policies and locations are also effective to attract more audiences as well as the company is also efficient to manage their product stock ion the physical stores as well as set affordable price for the benefits of the customers, where the tagline live well for less is achieved and maintained by Sainsbury’s efficiently (Sainsbury’s, 2020c). However, there are some weakness due to lack of marketing strategic planning and promotional activities in the market, unfair labour laws and lack of product selection facility by the customers which are necessary to be resolved in future in order to gain high market share in the UK retail market. On the other hand, there are several market opportunities for Sainsbury’s which are effective for the business to develop innovative decision to gain high competitive advantage. The technological advancement, e-commerce activities and online promotional activities have crucial positive impacts on the company and Sainsbury’s would be able to improve their marketing tactics and utilise online platform for expansion of the business across the international retail markets. The external factors such as promotion of trade fair, enhancing creativity and product innovation, high demand for the fashionable and creative products as well as improving local community involvement with the business would also be advantages for Sainsbury’s to secure future sustainable development by making fruitful decision (Walton, Petrovici and Fearne, 2017). The factors in SWOT analysis are hereby fruitful to influence the decision of Sainsbury’s where the organisational capabilities and resources are effective to develop further innovative products and services to expand their business strategically. Moreover, organisational infrastructure and the external forces such as political stability, social development, economic growth as well as technological advancement are also effective to boost the performance of Sainsbury’s and influence the leader to maximise organisational values in a more unique way by satisfying all the stakeholders engaged with the business.

Conclusion

It can be concluded that, there are different size, types and scope of the organisations as per the organisational resources, purpose and activities. As per the evaluation, there is strong linkage between the business function and the organisational structure where the firm Sainsbury’s is able to manage their operations and the functions efficiently by following vertical hierarchical structure. The functional structure further helps the organisation to boost their performance and ensure efficiency to fulfil the organisational missions. As per the external analysis, the company would be able to operate in the UK retail market with proper collaboration of the government and utilising technological advancement, economic growth and social development. There are also ethical code of conduct, rules and political stability and environmental rules which influence the leader of Sainsbury’s to strategise their business and run it sustainably. Sainsbury’s is strong in terms of financial asset, strong employee and customers base, good quality products and efficient service and organisational excellence to create values for the stakeholders engaged with the business which further influence the leader to grab the market opportunities and expand the firm strategically and in a unique way to gain high competitive advantage.

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