Task 1: External business environment analysis of Virgin Media
Any business organisation functions in two business environments, internal and external. The internal factors are under the control of the management of the company on the other hand the external aspects are dynamic in nature and are not under the control of the company. The political condition of the nation state where the company is situated, the kind of society that the company caters to, the type of economy in which the organisation is based etc are some of the important factors that affect the business. In this report the organisation that has been selected is Virgin Media, it is one of the most popular British telecommunication companies that is headquartered in Hampshire. This assignment will explore the external business environment of the company as well as analyze the internal environment aspect of organisation culture which has impacted the strategic decisions of the company and will continue to do the same.
External business environment helps in determining the strategic decisions of the company. PESTEL analysis of the Virgin Media in UK will help in analyzing these external environmental factors that impact the business. The telecommunication industry is such that other organisations are directly or indirectly dependent on the services of the organisation operating in this industry. Thus, the significance of the industry in the UK is evident in order to keep the other services running.
Political: The territory of UK includes England, Scotland, Wales and Northern Ireland. The political condition of the nation state is stable; the queen Elizabeth II is the head of the state and in 2015 achieved the title of the longest running monarch (Bbc.com 2018). The government is however, headed by Prime Minister Theresa May under her leadership the country is going through the transition of exiting the European Union, though she was against the stand and did not want the UK to exit EU (Parliament.uk 2018). The government supports the use of technology and encourages the people as well as the government proceedings to be in sync with the latest technologies. The telecommunication sector is supported by the government regulations to expand the business so that people in the UK can remain well-connected with the people. However, the set up and the dynamics of the industry were aligned with the EU which is now changing after the Breixt (Parliament.uk 2018). The exit of the country from the EU has stir political instability as well and the Prime Ministers position has weekend after the elections of 2017. However, the government understands the importance of trade and commerce in the country and thus has a number of regulations that encourage trade. Telecommunication industry is under the negotiation terms and still follows the regulations of the EU (Parliament.uk 2018). Therefore there has not been much impact on the industry, however if the terms change as per the exits policy then the companies operating in the industry has to formulate their policies accordingly (Assets.publishing.service.gov.uk 2018).
Economic: The economy of UK is the sixth largest in the world, which indicates the development of the economy, in 2017, the economy of UK has grown by 1.7 percent, which is lower than the last financial year. However, the growth is expected to stabilize, this fall is a result of the decision taken to exit the EU and from an independent nation state. However, the country has been going through negotiations and there are issues in the economy due to the uncertainties that are surrounded by the agreement that the European countries are going to settle with the UK. The inflation rate in the country is also on the higher end and the trend is rising with approximately 3 percent recorded in the 2017. The GDP recorded in the last financial year is approx 2,565.05(En.portal.santandertrade 2018). The telecommunication industry is deemed to be one of the most significant in the country and also has the scope and potential of improve performance (En.portal.santandertrade 2018). Virgin Media is a company that has significant contribution towards the economy of the country the revenue of the organisation amounted to 4.96 billion British pounds (GBP) during the last financial year. The revenue of the organisation has been on the growing trend and is also expected to grow further. Refer to Appendix 2 for the reference (Statista.com 2018). The recovery of the economy is based on consumption and not on investment but in the present financial year so far the consumption rate has been in the downward trend (Assets.publishing.service.gov.uk 2018).
Political Factors
Societal: As it has been established that the country has a developed economy one of the major indicators to this is the high standard of living among the society. The people accept changes and also adhere to traditions and try to develop a lifestyle that has a balance of both the contemporary as well as the traditional aspects of the society (Assets.publishing.service.gov.uk 2018). The UK consists of territories which has a historical and cultural heritage which heavily impacts on the lives of the people on a daily basis. Virgin Mobile understands the culture and the impact on the people and has over the years developed a number of strategies based on the culture of the society that they operate in (Parliament.uk 2018). The society of UK has a high standard of living and thus it is important for the company to provide the people with the latest and the advanced technology that is available in the telecommunication sector. The availability of internet connection and the power of reach that this platform has provided the people have impacted the society and its dynamics to a great extent. Acceptance of e-commerce and social media etc and the demand for upgraded facilities indicate that the society is looking for an opportunity to explore more of what the ICT industry has to offer. This provides companies in the Telecommunication industry opportunities to invent innovate and invest for future endeavors (Assets.publishing.service.gov.uk 2018). The telecommunication industry caters to the general requirement of the people of the country to remain connected with other around the world. Data connection, mobile connection etc are some of the services provided.
Technology: The telecommunication industry is technology based and has advanced significantly among the common people in the past decade. With advancement of technology the Information and communication technology sector has grown in leaps and bounces in the past decade, the industry has opportunity and scope to expand their business (Parliament.uk 2018). Connectivity now does not only cater to phone calls and text messages, it has evolved with the help of the rise of internet usage as well as the advent of the social media network (Assets.publishing.service.gov.uk 2018). Not only common people are dependent on their day to day lives on internet connectivity, several business organisations are also based on the platform as well as functions of the business like marketing etc are also based on internet connectivity and internet based platforms (Parliament.uk 2018). The telecommunication companies are responsible for the infrastructure that the people need to communicate and now with the facilities available people can connect with someone around the globe in just a click and in order to maintain this facilities and provide the people with better opportunities in the government supports investment and trade in this industry. To keep in sync with the technological advances there are a number of strategies that are used by the companies like developing mobile application to run on various platforms like IOS and Android etc. These help the companies in the industry to serve the customers better. Virgin mobile has a number of services which is based on technology; the company has been incorporating product development as a competitive advantage strategy (Assets.publishing.service.gov.uk 2018).
Economic Factors
Environment: Any organisation has to comply with the environmental regulations that are laid down by the government. The country has a number of regulations in terms of dealing with the natural resources. In order to serve the public the telecommunication industry requires a significant amount of infrastructure and in order to do that there are a number of codes and regulations that the companies have to comply with. According to a research done by Emerson Electric, the industry contributes towards an estimated consumption of to use 164 terawatt hours per year which is equivalent to 1 percent of global power consumption.
Legal: There are a number of regulations that the industry follows while operating in the telecommunication industry in the UK territory. As the country is in a phase of transition from the exits plan of EU, regulations regarding the industry have been in negotiation (Parliament.uk 2018). However, the telecommunication industry still operates under the Communications Act 2003 (Uk.practicallaw.thomsonreuters.com 2018). This act is in sync with the new communication regulation and framework that was developed in 2003. The Office of Communications is a regulatory body in the country that operates under the ACT and was also developed in 2003. The need for telecommunications operators to hold a license in order to provide telecommunications networks and services were irradiated in the Communications Act (with an exception to the spectrum use like mobile operators). The European Electronic Communications Code (EECC) are the guidelines that support the industry, it encourages investment, inspires to innovate and promote freedom of communication for consumers (Uk.practicallaw.thomsonreuters.com 2018).
The internal environmental factors of an organisation are aspects that align with the day to day activities and the functions of the organisation. Some of these factors are: the skills, the work environment, the structure of the organisation the culture that is prevalent in the organisation etc. The culture of an organisation is based on the entrepreneurs and their values and principles that they have incorporated in building the organisation. The values and principles are the basis of the strategic management; it helps in developing the objectives and strategies to achieve them. The culture of the organisation determines the work environment and the ethics that are followed by the company to serve the people. In an organisation the culture resembles the personal values and principles of the company that owns the subsidiary in this case liberty group. Therefore when the ownership of a company changes the ways in which the operations of the business run also goes through a change, sometimes the change is significant where as sometimes there are hardly any changes that impact the employees at all. Depending on the nature of the merger or acquisition these decisions are taken, the management of a company aligns with the new environment and the contract in between the owners and develops a working environment and culture that is suitable for all the stakeholders who are associated with the company.
Change brings apprehension and thus results in conflict situations, the Virgin Media was under the virgin Group after being re-branded, and then it is now under one of the largest telecommunication conglomerate. And these transitions have impacted on the culture of the company as well. The company operates in the UK and Ireland, the countries have their own heritage and cultural aspect which is also associated with the way the organisation operates and the change in the ownership does not have an impact on this aspect of culture that is preserved in the organisation.
Societal Factors
Change in any organisation culture goes through a process which can be analyzed with the help of the 3 stage model of change in as explained by Kurt Lewin. During the process of change especially a change like the ownership any organisation goes through three stages: Unfreeze, Change and refreeze. In this process culture in the organisation play an important role. Like other aspects in the operation and the function of the business culture also changes and follows the same pattern.
The company operates in the telecom industry and the mission of the organisation is to create a digital world that makes good things happen. The company is committed towards the customer as well as understands the responsibility that they have towards the society and the community (Muscalu 2014). In order to provide the customers with high quality services the company invests in innovation and skilled employees and ensures that the work environment of the company is such that the people are inspired to perform better. Virgin Media was part of the Virgin Group, but in 2013, the company had gone through a change in ownership and now is a subsidiary of Liberty Global. Over the years the company has been through a number of changes in terms of mergers and acquisitions as well as rebranding. Since the culture of a company is based on the owners of the organisation the company has a changed culture in the recent times. Virgin Group is associated with the flamboyant nature of the entrepreneur Richard Branson, but since the company has aligned with the liberty group the culture in the company has also changed. Liberty Group is a multinational organisation that operates in the telecommunication sector. Virgin media has a number of businesses under the brand and in the process the company is committed to build a healthy and ethical work environment. The company caters to the SME as well as large scale sectors and at the same time works on a public service platform as well. The management of the organisation strives to live up to the mission of the company. The organisation has recently developed the objective of bridging any gender biases that is prevalent in the organization the company wants to develop a culture that is fulfilling for all the employees. The management of Virgin Media views all the employees to be one of the major stakeholders of the company and thus maintains a culture within the company which would make the tenure of employees remarkable (Nielsen 2014).
Figure: Schein’s model of organisation culture
Source: (Appannah and Biggs 2015)
According to Organizational Culture Model developed by Edger Schein indicates the way culture in an organisation is created and nurtured, he explains this process in three stages:
This is the outer most layer of the model and is made up of aspects which are visible or are felt by all the stakeholders of the company (Maroofi 2016). The vision statement of virgin media, the mission of the company, the way the work environment operates, the dress code for the employees, the approach of the management with the employees are some of the examples of this aspect (Babnik et al. 2014). The structure of the organisation is a traditional hierarchy which helps in operation as it develops a clear communication flow. The perception that the external stakeholders have regarding the company is based on these factors.
Technological Factors
Virgin media is under the liberty Group now and based on the higher management and leadership of the company and the individual philosophies and principle that is followed by them. Tom Mockridge is the CEO of the company and the highest among the management ranks of the company. He has a visionary approach towards the development of the company and is focused on innovating upon the digital platform (Stensaker and Vabø 2013). The mindset and the perspective of the people associated with the organisation make up the second level of culture that is prevalent in the particular company (Büschgens 2013).
At this stage the factors that are described by the Schien are not quantifiable yet have an important impact on the various operations of the business on a daily basis. The company has a policy to bridge the gender gap in the organisation, which indicates that the company does not encourage any kind of discrimination in the workplace (Hogan and Coote 2014). The company also provides annual reports on sustainability and final accounts for the stakeholders’ consumption as the management feels that they have responsibility towards all the stakeholders (Huhtala et al. 2013). The philosophies of the company are to provide the customers of the company with a better solution to their connectivity problem and by means provide them with better opportunities based on this the culture of the company is founded (Al Saifi 2015). The stand of zero tolerance towards modern slavery and human trafficking derives the value of ethical operation in the company. There is a culture of recognizing and understanding of responsibility in the company, the first published report on modern slavery statement in 2017 is evidence towards this aspect of the culture. With this statement the company wants to spread awareness regarding this issue in the corporate environment (Assets.virginmedia.com 2018).
With the help of the Charles Handy’s model of organisation culture the type of culture that is prevalent in Virgin media can be analyzed.
Figure: Charles Handy’s model of organisation culture
Source: Author’s Creation
It can be said that the management observes a role culture in the operations of the business. The job role of the employees as well as the management is clear and they are aware of their responsibilities and duties that t hey has towards the company. The management of Virgin Media believes that the performance of the company depends on the way the employees perceive their role in the company. This is the reason why the company has a number of ways in which the HR department maintains a healthy and favorable work environment (Fu et al. 2015). Though the culture that is observed is formal in nature, the management strives to maintain a work environment is healthy and unbiased. This also explains the structure of the organisation which is clearly defined in a hierarchal bureaucracy. The company has a zero tolerance towards the modern slavery and human trafficking not only in the operations of the business but also in the supply chain (Assets.virginmedia.com 2018).
Vision of Virgin Media
The vision and mission statement of any organisation indicate the culture that is prevalent in the company. The vision of virgin media is to use the available resource and capabilities along with the skilled employees and the goodwill associated with the brand to establish the growth of digital media so that the customers, businesses associated with the company and the community at large can enjoy the advantages of the services that Virgin Media has to offer (Virginmedia.com 2018).
Virgin mobile is a company that encourages inclusive work culture among the employees. Thus it can be said that the company discourages any kind of discrimination based on any aspect. People in the organisation are hired and promoted based on their skills and knowledge and their ability to fulfill the job role of the position (Assets.virginmedia.com 2018). The company also has zero tolerance towards any aspect among the employees that would impact negatively on the work environment. The company has a code of conduct which indicates the employees so that they can be aware of the basic conducts that has to be maintained in the work place as well as comply with the same (Assets.virginmedia.com 2018). The company has a e-learning course regarding the code of conduct which has to be undertaken by each of the employees. The company also encourages reportage of any disobeying of these codes. In order to support the employees in kind of any kind of issue of grievances there is a Compliance Line and web-based reporting system which is available for the employees on a 24 hours a day, seven days a week basis (Assets.virginmedia.com 2018).
The governance towards the suppliers is also observed on similar grounds. All the suppliers of the company are expected to meet the requirements under the MSA 2015 and to observe zero tolerance towards modern slavery and human trafficking. The company also has a code of conduct for the suppliers. This establishes the ethical sourcing culture in the company (Cadden 2013).
One of the many objectives of the company is to maintain a sustainable development and growth and in order to peruse this objectives the company has a number of sustainability activities. Therefore the culture of the company encompasses the sustainable growth and responsibility that the company has towards the environment and the society (Virginmedia.com 2018). As mentioned above the organisations operating in the telecommunication sector has significant negative impact on the environment and thus the Virgin Media has built a number of activities that surround the purpose of maintaining sustainability in the process of development (Virginmedia.com 2018).
The company believes that there are two supportive pillars to the vision of the organisation these are: focusing on the digital field in order to serve the people better and growing responsibly and sustainably (Virginmedia.com 2018). With the help of the sustainability activities the company wants to transform the lives of the people who are dependent on the services of Virgin media as well as encourage and boost other business organisations to invest and grow.
The company has come up with sustainability goals which are based on the culture that the company has towards growing sustainability in the process of development. There are some objectives that the company has set to achieve by 2020.
Increasing inclusivity and maintain a work culture that is devoured of any kind of discrimination and biases this also includes bridging the gap of gender pay and racial discrimination (Virginmedia.com 2018).
The company is committed to provide the customers and the clients with better opportunities and better connectivity and in order to does that encourage innovation. The company has the objective of providing the customers with better services, which has a sustainable performance.
Reduce environmental impact is another objective of the company; the management wants to grow the business without increasing the carbon footprint (Virginmedia.com 2018).
The company is focused on providing the latest technology in connectivity and communication and thus there are a number of investment and innovations that the organisation has been implementing in the UK market. In 2015, the company has invested in the developing the UK’s largest network expansion. Project lighting is one of the major examples of the culture impacting the strategic decisions, the culture that is prevalent tin the company is to provide the people with better connectivity and improve the digital platform so that people get opportunities to improve their lives (Virginmedia.com 2018). Project lighting is the way the company is establishing their services aligning with the culture of providing the best possible solution. Virgin Fibre is the core of the project it is the innovation that helps in establishing ultrafast broadband speed services (Virginmedia.com 2018). Virgin TV is also a part of the strategy and it provides people with content that they enjoy and find entertaining. This project is backed up by the parent organisation Liberty Group this makes it the biggest private investment both UK and Ireland’s digital infrastructure of the decade. This project has enabled the company to create employment opportunities, growth opportunities for businesses and better connectivity for everyone. It has also helped the economy of UK with a £8 billion (Virginmedia.com 2018).
This shows the way in which the company develops their decisions and responses based on their cultural background.
Increasing awareness among the people especially youth regarding the responsible use of social media is one of the areas of focus that the company can target in the coming years. The organisation has the agenda of providing the customers with better opportunities in terms of connectivity with the help of the digital platform. As social media is a large part of the digtal platform the company should understand the responsibility they have towards spreading awareness regarding the responsible use of social media. There has been a number of researchs which indicate the impact of overuse and misuse of social media. Virgin media is a large platform in the UK and Ireland market and the company can take the opportunity of the platform to educate and help people understand the safe and secure use of social media.
Conclusion
Form the above discussion it can be concluded that Virgin Media is a company that has a culture that is formal in nature as far as the work environment is concerned. On the other hand the culture that is prevalent in the company encourages the management in taking decisions of providing better opportunities for the people. The role culture in the company motivates the employees to focus on their job role so that the company’s performance can also improve. With a strand stand in sustainability and CSR activities the company has established itself among the stakeholder as a responsible organisation.
References
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