Technology and Innovation Adopted by Royal Mail

Contents

Company Background. 2

Technology and Innovation Adopted by Royal Mail 2

Effects of Technological Innovations on Sales and Financials. 4

The Carroll’s (1991) Corporate Social Responsibility Model 6

References. 10

Company Background

Royal Mail Plc is an organization that provides postal services to its market. The Company’s segments include UK Parcels, International & Letters (UKPIL), General Logistics Systems (GLS), and Other services. The UKPIL services are offered within the United Kingdom (Royalmailgroup.com., 2019). They involve the collection and delivery of parcels and letters. The services are provided through two main networks; the Royal Mail Core Network and Parcelforce Worldwide. Royal Mail is a global service provider because its letters and parcels are delivered in and outside the United Kingdom. The company is also involved in the design and production of stamps. The company has about 50 service points across the United Kingdom from where the operations are carried. The General Logistic Service operates in continental Europe using a deferred network for parcel deliveries. It also deals with logistic solutions. GLS also operates in the United States of America, covering eight states in west America and Canada. The company’s vision is to build a parcels-led, more balanced, and more diversified, international business. Its mission is to connect customers, companies, and countries. The company is determined to spread its postal services all over in the world with excellent levels of efficiency. This is achievable by a combination of GLS and Royal service expertise. To improve efficiency, the company has embraced technology and innovation.

Technology and Innovation Adopted by Royal Mail

The role of the postal sector has changed with digitalization since mail volumes have reduced, leading to an increase in parcel volumes. The UK postal market has witnessed a gradual drop in the volumes of parcels and letters over the years. The decrease has slowed in recent years. However, the market has witnessed an increase in revenues, perhaps as a result of increased prices. Despite there being several competitors, Royal Mails Plc remains the dominant player in the market. Parcel volumes have registered a significant increase of around 7 percent in 2017-18 (Royalmailgroup.com., 2019). The recent rise in parcel volumes is attributed to technological innovations. As a result of competition and customer demand, players in the postal industry have been forced to embrace technology. Royal Mail Plc has not been left behind in the endeavor considering it is the main rivalry to all other players. The organization has used advanced technology for purposes such as improving operational efficiency as a result of customer’s demand for convenient deliveries. The same technological advancements have further increased this demand.

One of the significant technologies that Royal Mail has invested in is Tracking and delivery. In this subsection of mailing operations, Royal Mail Plc has introduced tracking and delivery software that tracks a parcel from disbursement to delivery. This technology works hand in hand with the second in its classification, the smart scanning devices. These two technologies have made delivery of parcels a whole new experience. The smart scanner automatically captures and enters parcel details into the system. The system is integrated with the tracking software. The software uses these data and GPS coordinates to locate any parcels in transit until they are delivered. This does not only ensures security but also has strengthened the customer’s trust. Delivery has been made a lot more efficient both financially and in operations since the technology is accurate and does not require much labor.

The second category of innovation is targeted on speed and time. On these aspects, Royal Mail Plc has ventured into electric vans and aerodynamic lories for delivery. Electric vans are two times faster than regular cars, plus the elimination of fuel is a cost-cutting strategy. Similarly, the aerodynamic lories are designed to resistance caused by friction in the air. Such qualities make these lories move faster and use less fuel. The innovations on speed and time are not only aimed at reducing the time taken to deliver a parcel, but also at reducing costs of operation. Less fuel is required to operate these kinds of vehicles and, therefore, no fuel expenses.

Finally, e-Commerce has triggered an increase in demand in the postal market. According to Jaag et al. (2016 p91), 90 percent of the population has access to the internet. This is further enhanced by online access through mobile phones. This one aspect that Royal Mail Plc has maximized on. All age groups are becoming users of the net and hence widening the market for postal services. This is because e-commerce has enhanced online shopping, where people order everything online. This creates delivery opportunities for companies such as Royal Mail. Retailers also order online and have the delivery company bring the stock to them. To this end, therefore, we have two kinds of volume growth; Business to Consumer (B2C) whereby goods are delivered to customers and Business to Business (B2B) where goods are delivered to other Businesses. B2B deliveries have been on the rise compared to B2C.

Effects of Technological Innovations on Sales and Financials

According to Morrison (2017), technological innovations have had a positive impact on the consumers of postal services and will continue to widen the market. In an interview, Rico Back, the CEO, acknowledges the pace with which innovation has grown in the company. He points out that technological advancement, especially the development of digital apps, has incredibly influenced their e-commerce business. All the innovations are geared towards customer satisfaction, which is the sole indicator of great performance. An analysis done in 2018 indicates that customer satisfaction has increased from 70% in 2016-17 to 80% in 2017-18 (Royalmailgroup.com., 2019). This improvement was attributed to the high speed and efficient delivery services that the company has employed. These innovations have made Royal Mail Plc the most trusted company in the industry.  Company statements indicate that revenues remained flat between 2010 and 2014 (Hillebrand et al., 2016). The situation was a result of intense competition (Royalmailgroup.com., 2019). The 2017-18 report indicates that revenues have increased by about 15% as compared to 2014-15 (Royalmailgroup.com., 2019. This increase is attributed to the competitive advantage secured by innovations. I addition, profits have registered a remarkable growth, which is attributed to the doubled sales as a result of increased efficiency and customer trust.

Royal Mail Plc has continued to dominate the UK postal industry. According to 2017 performance reports, the company delivered 99 percent of the total letter volume delivered in the year. In 2016, all the end-to-end rivals of Royal Mail Plc cumulatively 158.5 letters. This number represents about 1.2 percent of the total number of letters delivered in the year. Such statistics mean that Royal Mail Plc holds the remaining percentage of the market share.

Further, although affected by the 2017 abrupt transition to e-commerce, the company’s sales doubled in 2018 as a result of introducing the electric and aerodynamic delivery vans and lories that have increased deliveries per day. By the end of 2018, 89% and 69% of people had turned to the online market through Amazon and eBay, respectively. They represented 72% of the UK market (Royalmailgroup.com., 2019). As a result, the volumes tripled for the company.

It is worth noting that the profits have not grown proportionately to the changes in the volumes delivered. This is contributed to by several factors. One, the digitalization of mail services eliminated paper letters, which were initially part of the volumes. However, the profits have grown significantly as a result of increased prices. For the year 2015, the revenue raised to £4.3 (Royalmailgroup.com., 2019). The efficiency associated with new technologies justify the increase in prices. The growth in volumes and increased profits is an outright indicator of business growth. Therefore, technology and innovation have led to positive changes in sales and profits of Royal Mail Plc.

In a nutshell, Royal Mail Plc has continuously embraced technological advancements by coming up with innovative ways of delivery. The demand for more efficient deliveries has evoked innovations. Fortunately, technological advancements such as tracking and delivery software, smart scanners, and high-speed delivery vehicles have increased the efficiency of operations, in turn, cementing customers’ trust in the company. E-commerce has led to increased demand for postal services and changed the focus from senders to receivers. As a result of the innovations, Royal Mail plc has doubled its revenue. The positive change is caused by increased online shopping that eventually requires delivery services. Additionally, high efficiency has given the player a reason to charge more for available services to offset the deficit left by the paper letters replaced by digital mails. Royal Mail Plc, therefore, has increased its sales, profits, and registered overall growth as a result of technology and innovation.

The Carroll’s (1991) Corporate Social Responsibility Model

Corporate social responsibility (CSR) is a concept that encourages a business model that regulates the relationship between the organization and the society and the stakeholders. It is also referred to as corporate citizenship. The company considers the kind of impact and image it wants to create in the eyes of society. The company hence develops programs that enhance economic, social, and environmental improvement of the society.  When a business is engaging in corporate social responsibility, it means that, in the ordinary business operations, a company is operating in ways that promote the society and the environment, instead of contributing negatively to them

Archie B. Carroll developed a definition for Corporate Social Responsibility that considered all responsibilities of a business. He wanted to make business people feel like part of the society and hence, accept CSR. According to Carroll (19191), Corporate Social Responsibility includes economic, legal, ethical, and philanthropic expectations of the society from the organization. A business that wants to give back to society should fill all those gaps. The gaps are interlinked to form a pyramid.

The economic responsibilities are considered the foundation for other responsivities; that is why they are placed at the bottom of the pyramid. Even for the company, the core objective is economic prosperity. Such weight should be transferred to the society. The economic responsibility requires that the Business is able to operate fairly, paying fair salaries and selling goods at reasonable prices. According to Corroll (1991), a business should maintain its profitability in a competitive position and with the highest level of efficiency. Royal Mail is the best player in the UK postal industry; it has maintained its levels of profitability and has adopted the new technological innovations to improve efficiency. Royal Mail Plc has fulfilled its responsibility to the people by providing its services at affordable services. Secondly, the organization has been able to employ more than 66000 employees. The employees earn their living from the organization, and hence, the organization supports the economic welfare of society.

Legal responsibility falls second. Businesses are required to operate within specific statutory provisions set by the federal government, local government, or other trade regulating bodies. The Business, therefore, has to fulfill its economic objectives within the confines of the law. When it comes to society, the organization should facilitate law and order in society. A business will be unfair to society if it does any business that is gaining the law of the land. Royal Mail Plc ensures legal responsibility by adhering to regulations of specific areas where it has business openings.

The third category of responsibility is an ethical responsibility. This section refers to norms that are not provided for under the law, but they morally right. In mere terms, these are things that the company is willing to do that are not forced by any requirements. Such things should be morally acceptable by society. There are no legal repercussions attached if the organization does not do these things. They are indicators that the organization cares for its employees on customers, whomever the action is directed to. For instance, Roya Mail has offered to stop landfill ways of waste disposal because it destroys the land. Also, they have planned to reduce their carbon emissions. These are moves to protect the environment. Protecting the environment means that the organization is mindful of customers’ and employees’ health.

At the top of the pyramid is the last responsibility; philanthropic responsibility. It seems to be the least, but it leaves a significant impact. According to Carroll (1991), these are activities by which the organization is viewed as a good corporate citizen. Acts of charity characterize them. Such gestures may include but not limited to community development programs such as water projects or education. Programs to improve the welfare of the workers are also philanthropic. Royal Mail Plc has been involved in charity projects. It is also in the record that 38% of total contracts are given to SMEs. These might be thought of as economic responsibility, but it is an act of philanthropy. However, in some counties, it is a legal requirement that a certain percentage of the tenders have to be given to specific groups.

Other scholars have propagated theories to back up the concept of corporate social responsibility. Unit & SmartWay (2015 p78) evaluates the relationship between society and the Business by considering four constant factors in the social system. These factors are profits, social demands, political performance, and ethical values. These factors govern the theory underlying the concept of corporate social responsibility. The first category of theories is dumbed instrumental theories. Profits dominate these theories. Under this theory, organizations are viewed as wealth-creating tools. Any activity done in the organization is therefore expected to yield some profit.  Thus, corporate social responsibility policies should bring profit to the organization. If the organization makes profits, the employees get better pay, and the company can give charity. The second theory focuses on the power of the organization. This category derives political theories because the company is perceived to be able to influence the political space. As a player in the political space, the organization is not only required to abide by the law, but also take part in passing these laws. The organization thus becomes a full citizen with the power to speak its opinion. The other consideration looks at the dimensions of social demands leading to integrative theories. Under these theories, the organization is part of social demands. This means that the organization is like a commodity that came to existence because the society needed it. Last and not least is the ethical theory derived from ethical issues. The theory is based on the interrelation between the organization and the society. In most cases, this theory is enforced by regulation, such as the International Standard Organization rating and certification.

In conclusion, corporate social responsibility is a concept that explains the relationship between the organization and the surrounding society as well as the stakeholders. Archie Carroll developed a categorization pyramid to present the different levels of responsibilities or rather points of interaction between the organization and the society. The bottom layer is economic responsibility which explains how the organization economically promotes society. This layer is followed by the legal responsibility layer, which indicates that the Business should operate with regard to given regulations. The third layer is ethical responsibility, followed by philanthropic responsibility. Both are almost similar because they have to with what the organization does to maintain a reputable image. Royal Mail Plc has considered all four aspects. It employed a large number of people giving them economic benefit. The organization is law-abiding. Under the philanthropic and ethical considerations, the organization has been involved in charity activities. It has also paid attention to the protection of the environment. The organization has also set aside a percentage of its contracts to award to the local small and medium enterprises.

References

Carroll, A.B., 2016. Carroll’s pyramid of CSR: taking another look. International journal of corporate social responsibility, 1(1), p.3.

Hillebrand, A., Thiele, S., Junk, P., Hildebrandt, C., Needham, P. and Kortüm, M., 2016. Technology and change in postal services–impacts on consumers. Bad Honnef: WIK Consult and ITA Consulting.

Jaag, C., Moyano, J.P. and Trinkner, U., 2016. Postal strategies in a digital age. In The future of the postal sector in a digital world (pp. 103-120). Springer, Cham.

Morrison, J. (2017) The Global Business Environment, (4th edition), Palgrave

Royalmailgroup.com. (2019). [online] Available at: https://www.royalmailgroup.com/media/10805/royal-mail-cr-report-2018-19.pdf [Accessed 21 Nov. 2019].

Unit, B., Star, E. and SmartWay, E.P.A., 2015. Corporate social responsibility.