Assignment 1
Introduction
In this business assignment we will be investigating JCB and Rotary as businesses, analysing the factors that affect a business. This will include stating stakeholders for these businesses and understanding how each one of them may affect business activities. These stakeholders include trade unions, employees, local communities, customers and many more. We will also be investigate economical, environmental, political, social, legal factors on these businesses and explain how they affect the business and its activities.
JCB
What is JCB?
JCB is one of the world’s biggest and leading manufacturers of construction material. They are world renowned, have a very iconic brand and sell to almost all of the countries around the world. JCB employ over 10,000 people on 4 continents and sell their products in 150 countries through 2,000 dealer depot locations. JCB is a Private Limited Company (LTD), whereby the responsibility has been passed down through the family from original owner Joe. C. Bamford to his sons Lord Anthony and Mark Bamford. Being a Private Limited Company (LTD) allows them to have better protection over their brand and they have the ability to sell shares privately or invite in a partner to assist in business decisions if they choose to.
JCB’s operation lies within the secondary business sector, in turning raw materials into a finished product ready for sale. They rely on the primary business sector to provide them with the materials in which they can make their products with. JCB’s overall aim is to make a profit from selling products like most other businesses. JCB’s mission statement explains that they “aim to provide innovative, strong and high-performance products and solutions to meet our global customers' needs. To provide world-class products by providing superior customer care.” (1403). JCB’s main competitors are Caterpillar, Deere & Co. and Komatsu. I think the most influential stakeholder for JCB is the owner. This is because the owner will have the overall say on what does and doesn’t happen to the business.

JCB Continued...
JCB has built a reputation for ‘passion for quality’, this is apparent in their products, and the wide range of support and services they provide to their customers. They even reflect this in everything they do, including the presentation theatre at the JCB world HQ at Rocester (14031). All of JCB’s factories have been designed in an almost identical way, with the iconic image of a green factory with a glass front and lake. To the public, the most iconic image of JCB is the yellow backhoe loader, this helps JCB promote their brand easily and keeps uniformity amongst the business. (JCB, About JCB)
Rotary International
What is Rotary International?
Rotary International is an international non-profit organisation which operates to provide a product or service to people free. Rotary International brings together businesses and other business leaders in order to provide humanitarian services, to encourage high ethical standards and help build goodwill. Although Rotary International is a large organisation, each individual club is a small local organisation. The club relies heavily on its members, the local and international communities and donations. (International R. , About Rotary International)
This is their mission statement:
The mission of Rotary International is to support its member clubs in fulfilling the Object of Rotary by: * Promoting unity among member clubs. * Expanding Rotary around the world. * Communicating worldwide the work of Rotary. * Providing a system of international administration.
Although Rotary International is a non-profit organisation, once they have achieved a surplus, they then will try to make a profit. Moreover when all needs have been met making a profit becomes a more minor objective, so to speak. Their mission statement is the development of acquaintance as an opportunity for service and to raise ethical standards within businesses and professions. (International R. , Rotary International Mission Statement)

Stakeholders
The stakeholders of a business refer to anyone who would have any interest in the business and how it performs (14032). Stakeholder’s views will be different and they will each want the business to be moving towards different objectives. For example, the owners would want to maximise profits and for the business to grow, whereas an employee would want the business to improve its facilities or training programs. Finally another example would be a pressure group like Green Peace, they would want the business to focus on its environmental impacts and make itself more environmentally friendly.
Customers
The customers of a business are their main concern, if the customers are not happy; the business will not sell products and won’t make a profit. Businesses dedicate entire sectors and millions of pounds in order to do research and to find out what the customers want and how they can please their customers. Customers have the power to boycott a business, product or service to try and make a change (14034). Another big influence is word and mouth, if one customer is not pleased with the business they will discuss this with other stakeholders and customers, this may have a large influence on other stakeholders. To try and please its customers, JCB has tried to increase the lifetime of its products. They have done this through higher quality products, better user manuals/training and by offering different types of service packages to suit any of their customers needs (JCB, Lifetime Warranty, JCB) (14033)
Employees
The employees of a business will affect the overall product quality and affect the economics of the business itself. Employees that are not happy are less likely to produce products with less waste and are less likely to help save money for the business. By pleasing the employees the business can save a lot of time, money and increase the businesses costs and productivity. In 2009 workers at JCB were told they would not receive any pay rise (a pay freeze). This caused union members at JCB to organise a protest against the pay freezes. This would cause bad publicity for JCB, affecting their reputation. It may affect how other stakeholders such as suppliers and customers view the business and may cause some to become more concerned about the business itself. JCB’s factory in Wrexham was paid by the government for JCB to help jobs in the local area, this is significant because it is an example of how JCB aims to please its employees and tries to get a good reputation by working on its ethics. (Staffordshire, 2008) (Bagnall, 2013)

Suppliers
The supplier of a business is also a stakeholder, by having good history with your suppliers will be easier to negotiate with them and will most likely cause success for you and the supplier. JCB will buy its parts in large orders at a time to decrease costs and to increase efficiency of the business. This is done to maximise profits by decreasing the costs of the business, because JCB is a business which aims to make a profit, this is important to them. Also the choice of suppliers which a business chooses can affect the public’s view on that business and their reputation. For example Primark [a large clothing retailer] had a huge story leaked out which informed the public they were dealing with suppliers who employed underage children in India, this damaged Primark’s reputation. (Hopkins, 2008)
Owners
The owners of a business will want that business to make a profit and grow. This is because it will have a direct impact on their profits which is the owner’s net worth. Because the owners own the business, they have the power to make key changes which is noteworthy because out of all the stakeholders they have the biggest impact on the business. The owners of JCB will want to make a profit, because they have the overall decision, they may want to sell the business to make lots of money.
Trade unions
A trade union will want the best for its members, the employees. Its aims will be to make sure the employees are being treated fairly, getting the right wages and that they are discussing any issues with the company. This is all done because trade unions are setup by employees to allow them to unite and voice their opinions as well as protect themselves, they also communicate directly with the owners of businesses to express the views of the employees. Trade unions will also have similar views to the employees as a stakeholder because that is who they represent. The union (which represents the employees at JCB) organised a protest against the pay freeze; in this case the union damaged JCB’s reputation. The protests were to express that the employees of JCB were not happy about the decision made by JCB to not increase the flat wages of its employees (This is Staffordshire, 2008). The protests caused JCB to organise negotiations with the union to try and resolve the issue and prevent more protests. (Staffordshire, 2008)

Employer associations
An employer association is a group of employers, generally from the same industry, working together for the interests of each other. They discuss topics like negotiations with trade unions and communicating with the government about political current affairs whilst sharing information and advice.
The aims of the employers’ associations will be to solve ethnical issues and discus oncoming matters as groups. This is good because it allows feedback from lots of different people which are more productive for everyone. Because other companies are also involved, this helps JCB learn from its competitors and possibly improve the business.
Local and national communities
The local community will be very interested in any environmental and social impacts that any business would have on the local community. Similarly a national community will feel the same and will be looking to improve the situation of the community or its people. They will support businesses, give feedback and do lots of other things to try and create jobs and improve jobs for existing employees. (Bagnall, 2013)
Governments
Governments will be making sure the business has paid the correct taxes, they will also try and keep the public happy and will aim to please them similar to the local and national communities. One of JCB’s factories is located at Wrexham; this is significant because it is far away from many of the other JCB factories located around Uttoxeter. This factory was built by JCB through pressure from the government which were trying to create jobs in that local area. There were also discussions between JCB and the government about government funding to unlock economic growth in the local area, JCB would be involved in this and would generate lots of money for JCB if they secured the contract (JCB). This was debated over for a while because some other businesses and members of the public thought this was unfair on them and JCB was being given a huge advantage over them. (Bagnall, 2013)

Organisation within a Business
JCB’s organisation has allowed employees to gain and manage a certain area and emphasise the experience of the individuals in that area of the business. For example; when an employee has worked in a certain sector for a long time, he may be appointed to manage or control this sector. This is done because that employee will have a good understanding of the business and a very good understanding of his sector and how it works especially. This helps JCB as a business by reducing the wasting of time, money and effort due to lack of understanding of certain tasks.

Assignment 2
Economic Environments
As JCB is a global business, meaning they sell all over the world and have factories and suppliers in almost every country, they will get affected by alterations in demand and supply within an economic environment.
Supply
Supply is especially dependant on access to raw materials cheaper than your competitors, JCB will be affected by changes in which company they choose to do business with. Equally, the workforce of its suppliers will affect JCB because it will limit both company’s sales and costs. The amount a supplier effects a business is not just the price they charge, if JCB did business with an unethical supplier and this got into the news, JCB’s reputation would get damaged. This happen to the global technology company Apple when they were found to be employing over 100 children in their supply chain. (Garside, 2013)
Two other key factors which may affect JCB are their supplier’s logistics/location and government support for their suppliers. JCB will not want to find a supplier from Australia to get ship to the UK, that wouldn’t be practical. JCB will look for a supplier within Europe because of the ease of access through the trade agreement acts within the EU. JCB may decide to choose an American supplier, but JCB would not have the benefits of the trade agreements and would have to pay extra VAT and income taxes. JCB made the decision to develop and manufacture its own diesel engines. This decision was made because the company evaluated that it would be cheaper and beneficial for the company to do so. This is an example of JCB making decisions about its suppliers and now many of JCB’s new products have their own developed and manufactured engines in them. (JCB plans to develop its own engines, 2003)

Demand
The demand of a business’s product will affect the overall sales of the business and the profits. Demand can be affected by the economic environment; if the market is currently in a recession then people are less likely to spend which would make sales lower. Also people would be looking for cheaper products and they would be more selective in their shopping which may cause competition to rise. This could subsequently be an advantage or a disadvantage depending on the businesses products. JCB opened a new market when they first produced their backhoe loader. This product combined new desirable features along with a competitive product; the market was mostly uncontested and subsequently changed demand within similar markets. This increased sales and made them lot more competitive.
Growth
During a growth period, the market will be expanding fast, new businesses will be started and almost everything businesses will benefit from this. Customers are more likely to buy things they don’t need and will be more willing to spend money because they have more available. (Investopedia)
Recession
During a recession, people will be buying fewer products and will be more selective with their purchases. Due to suppliers also suffering from the recession, JCB may find that it will cost more or less money for their materials due to changes in supply and competition. (Investopedia)
A Stable Market
The importance of a stable market for JCB is essential; it helps them plan their sales better and allows them to maintain a permanent workforce without costs overtaking the revenues. Economic impacts on JCB will affect them, their competitors, their suppliers, their customers and their market as a whole. Local communities may also be affected due to the workforce being made redundant due to high costs.

Market Boom
During an economic boom, JCB would be selling more products and would see a rise in sales volumes. This high demand would allow JCB to hire a larger workforce to let them have a larger product volume output. The business is already doing well and is making good profit, so I believe that a stable market is now most important for JCB. Another recession would cause another drop in the market, GDP and could potentially massively effect JCB’s sales and cause them to go out of business.

Factors That Affect JCB Economic * Germany has a very small market for backhoe loaders because they prefer to use to one machine for each job, not multiple roles. This would affect JCB because they own a large percentage of the backhoe loader market, so they have the opportunity to make more profit, however the competition with competitors will be greater. * Exchange rates between currencies can affect JCB’s returns by as much as +/- £7 million. * In January 2009, sales volume dropped by 75% when the recession hit, at this point the amount of taxes that JCB would have paid due to sales would have been drastically reduced. | Political * A lot of legislation is politically driven, the fact that Lord Bamford is now a member of the House of Lords allows him to have a greater influence on politically driven decisions and any legislation to any markets which may affect his business. * JCB generates £1.4 billion GDP globally; this is good from a political view because it helps the global economy market. * With the development of HS2, JCB will be in a great position to influence the project and take part in negotiations and organisation. With the development of HS2 being massively influenced by politics, Lord Bamford will be in a massive advantage to his competitors and will allow him to massively benefit his business. | Legal * JCB contributes £545 million in taxes to the government, this gives the business a good reputation because it shows they are following laws, also it shows they are helping the government massively. * JCB supports 24,000 jobs in the UK, this also links into politics and social because they give JCB a good reputation amongst its customers but also because it helps unemployment and prevents the government from having to pay as many benefits out. | Social * With the current market in a recession, the availability of credit for customers is a large factor. When In January 2009, when JCB’s sales volumes dropped by 75%, instead of making people redundant, they put a large amount of their workforce into training; ready for when the recession ended. * Instead of using global suppliers, JCB mainly uses local suppliers to try and cut down on costs. This benefits their business and the supplier. However JCB will not purchase from suppliers that are too heavily dependent on JCB because if another sales volume drop occurred, JCB would lower the amount it buys, possibly collapsing their supplier. * JCB sponsor events and establishments like the ‘Mud Run’ and ‘The JCB Academy’ this gives them a good reputation and is a good example of branding. |
(Employee, 2013)

Political stability (P6)
JCB: Political stability of a county can have a considerable impact on its economy, JCB will not benefit from this and it could massively affect the sales of their products. However If Chinas or Korea’s political stability altered, this could have a massive benefit to JCB in the long term. If a dictator dies, democracy takes over and laws on European products loosen up, JCB could have an influx in sales. This would have larger impact if it were countries like China which have a huge potential market. An example of this is the death of South Africans president Nelson Mandela which has had a shift in the political stability of South Africa. Nelson Mandela was very cooperative with European businesses and was very happy to allow laws and regulations allowing European businesses to easily sell in South Africa. However the introduction of a new president could change all this and JCB could have a decrease in sales in South Africa in the future. (Glover), (Rotary Club), (Williamson, Carshalton Beeches Rotary Club send aid to Typhoon Haiyan victims, 2013), (Perry, 2013)
Rotary: Rotary’s aim, as a business, is to unify, co-operate countries and national businesses and help others. The shifting in political stability in countries like Syria and Lydia have caused lots of deaths, disturbance and has caused disruption to a large amount of people in these countries. Rotary has sent aid to the Philippines, Syria and Lydia to help the survivors and to try and make a difference.
Government Support
JCB: With regards to government support, JCB can be affected by this which can cause advantages and disadvantages. Government subsidy from the UK government can help JCB massively; however subsidy towards its competitors from any country would affect JCB negatively because it may affect the market share of their competitors. One of JCB’s factories is located at Wrexham; this is significant because it is far away from many of the other JCB factories located around Uttoxeter. This factory was paid for and built by the government for JCB to use to create jobs in the local area. This is an example of government support towards JCB. (Rotary Club (Club Runner)), (Bagnall, 2013)
Rotary: The Rotary Club frequently works alongside multiple governments all over the world to work alongside them to benefit people. One of Rotary’s objectives in the fight to raise awareness of aids is to ‘Get government support’. Governments almost always support The Rotary Club in terms of believing what they do to right so governments are usually happy to allow Rotary to do as they please without being held back by certain regulations and laws.
Health and Safety Laws
JCB: JCB as an engineering company has to keep itself within health and safety laws/acts very carefully. Fines and jail sentences for breaking these laws can be very large and would damage JCB’s reputation massively. Also with JCB having a large workforce which works on machines and that being a very ‘hands on’ job around potentially very dangerous to health JCB. JCB does have every employee trained on some degree of health and safety; this is because of health and safety laws being so strict to protect workers and customers. (Legislation), (Health and Safety), (Health and safety) JCB has its own safety policy as a result of this. (Blake)
Rotary: Rotary has members devoted to health and safety; they do risk assessments on all their activities. They provide health and safety training, templates, documents, videos and example risk assessments which are to be used to keep its members safe. All of these resources are free to acquire or download and are also public to use, they are improve the awareness of health and safety.
Protecting Employees
JCB: In an interview with an employee from JCB, I was told when the recession hit the UK, JCB put many of its workers on training courses to lower the amount of people which had to be made redundant. This allowed JCB to make its workforce more skill, trained and kept their costs down whilst protecting workers and keeping them happy. Not all the jobs at JCB were preserved though the employees and unions were in negotiations with JCB into what should be done about the matter to prevent JCB from collapsing. (Employee, 2013) (Stevens, 2008) Also with regards to safety, JCB has been pressured into making sure its health and safety standards are high. (Bamford)
Rotary: Rotary has an employment partnership to support workers, especially employees with disabilities. Rotary has made it their objective “to increase employment opportunities for people with disabilities”. This is a perfect example where Rotary is helping disabled people, trying to get them jobs and is trying to protect disabled people from the “70% unemployment rate for individuals”. (Rotary Helping Create Jobs)

Protecting Customers
JCB: JCB offers a standardised offer of warranty or product after care. The aftercare covers the machine itself and includes regular servicing and warranty. This is an example of JCB protecting its customers, doing this helps JCB develop good relationships with their customers and making them get a good reputation by word and mouth. (1410) (JCB Customer Support)
Rotary: Rotary International is a international non-profit organisation which operates to provide a product or service to people free. This means Rotary does not have customers which pay them; they provide their services for free to benefit people. Rotary International brings together businesses and other business leaders in order to provide humanitarian services, to encourage high ethical standards and help build goodwill. Rotary has become synonymous with helping communities and people around the world, because of this Rotary has sent aid to the Philippines, Syria and Lydia to help the survivors and to try and make a difference. (Williamson, Carshalton Beeches Rotary Club send aid to Typhoon Haiyan victims, 2013)
Education/Training
JCB: In an interview with an employee from JCB, I was told when the recession hit the UK, JCB put many of its workers on training courses to lower the amount of people which had to be made redundant. This allowed JCB to make its workforce more skill, trained and kept their costs down whilst protecting workers and keeping them happy. Not all the jobs at JCB were preserved though the employees and unions were in negotiations with JCB into what should be done about the matter to prevent JCB from collapsing. This is an example of JCB using training to make its workforce more effective but also to protect employees. (Employee, 2013)
Rotary: A member of Rotary came into our school to educate us on Rotary International and answer any questions we have. He spoke to us about everything that Rotary does and is, including fund raising, events, recruitment and projects. (International M. f.)

JCB Workforce Training During Recession
In an interview with an employee from JCB, I was told when the recession hit the UK, JCB put many of its workers on training courses to lower the amount of people which had to be made redundant. (Employee, 2013)
Social: By choosing to train their workforce instead of reducing it meant that JCB kept a good relationship workforce. Also this made the Workers Unions of JCB happy with their decisions. The majority of JCB’s workforce lives locally to the factories they work in, meaning the local community is also happy with JCB’s decision. All of this gives JCB good relations with its stakeholders and promoted JCB to make the decision they did. If JCB had chosen to make employees redundant instead, the workforce, local community, government and trade unions would all be unhappy with JCB’s decisions. Also by making employees redundant, JCB would not have such a good relationship with its stakeholders, JCB has proven to make decisions to benefit all the stakeholders to try and keep good relations.
Legal: When making someone redundant, the employee is entitled to reasonable time off to look for a new job and is also allowed to challenge the redundancy if they feel they have been unfairly selected. For a business to make someone redundant, they must demonstrate that the employee’s job will no longer exist. JCB also will have to follow the collective redundancy law and will have to give staff different lengths of notice depending on their employment time. If JCB would have made the decision to make employees redundant, it would cost JCB a lot of time and money to make sure everyone is treated fairly and to make sure they do not break any laws or breach the rights of the employees of JCB. (Making Staff Redundant) (Giving Staff Notice) (Redundancy consultations)
Political: With the UK being in a recession, economic and political pressure on JCB. JCB will need to save money to stay functional as a business and the best way to do that is to cut the employee’s wages. Putting the employees on training would have meant that they will not require pensions, saving the government money. But also means that JCB will not have to pay their employees too, making JCB stay successful as a business too. If JCB would have made employees redundant it would have caused the government to make sure everyone is treated fairly and no laws are breached. Also by making employees redundant, JCB will cause the government to have to pay more benefits to the population.
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