Question: To what extent do influences in operations affect business success.

Thesis: depending on industry, influences have minimal effects on business success in the short term.

Depending on industry, influences in operations provide minimal affects on business success in the
short term as they focus resources on other parts of business operations to maximise profits. It is
through the disregard for CSR that allow businesses to save on operating expenses, leading to short
term growth and stability in the businesses finance which is shown through the Abu Dhabi National
Oil Company as they experience record profits. Further, through supply and demand, the ignorance
towards the opportunities of globalisation increases the scarcity for the product, providing marketing
for the businesses as Skylines have proven this through involuntary bans from foreign countries.
Lastly, similar to CSR, the influence of environment proves to be beneficial for a business in the short
term by not needing to retrain employees, the business is able to save money on HR lowering
operating expenses for the business as seen through Tesla. However, these influences have a minimal
affect on business success only in the short term.

CSR refers to a business’ will to operate with values aligning with the publics. This may include acting
with regard for the environment or with social responsibility. Each of these may provide the
opportunity for a business to achieve positive customer relations which can boost revenue in the
long term. As CSR isn’t a legal compliance, the business has the ability to lower operating expenses
by disregarding CSR as they will only need to pay necessary compliance costs, allowing the business
to focus its resources on growth, rather than building public relations. The success of a business
practising this is Abu Dhabi National Oil Company (ADNOC) as by destroying the environment, they
reached a valuation of 11.4 bn (USD). This is furthermore achieved through the deteriorating and
dangerous working conditions. As the business has the majority of its employees, from developing
countries move to the UAE, the business is able to legally pay them minimum income when
compared to the dangers of working in this ADNOC. Since there immigrants without a citizenship,
they are entitled to little rights from the businesses. Therefore, the ADNOC is able to decrease
operating expenses legally by not acting ethically. This however leads to consistent free cash flow
outperformance which contributed to the business' strong finances. The strength of financials is
what entices foreign investors which increases GDP and increases ADNOC’s funding, allowing for
diverse capital allocation in the hopes of expanding the business. In the case of ADNOC, the disregard
in CSR can be an advantage for the businesses however this only works depending on the industry
the business is operating in. For businesses that sell to other businesses or especially businesses in
the primary sector, CSR can be disregarded to a certain degree as it provides a low-cost alternative
that always has demand and cost leadership is the best way to compete. This strategy doesn’t work
for businesses in the the long term as it may hinder their ability for consistent growth as consumers
demand ethical products. As a result, the disregard for CSR can stimulate business outperformance
only in the short term and for certain industries.

Globalisation refers to the increase in interconnectedness between countries. As globalisation may

assist businesses in outsourcing and may decrease prices through economies of scale and the global
economy, businesses ultimately have their success tied to the country of operations. When
businesses operate in foreign countries, they’re income statements are usually in the currency of the
headquarters or offices meaning that if the currency against the country of operations decreases, on
paper, the business will experience a decrease in revenue or increase in operating expenses. This is
seen through google in early 2023 as the value of the dollar increased, the revenue from other
countries decreasing currency is concerted back to the dollar, significantly decreased, impacting
googles earnings call which made the stock plummet.

Another exemplar of businesses success through ignorance to globalisation is Skyline as they’re cars
are banned in most countries since the 2000’s due to not getting approval for street roads. This has
significantly increased the businesses’ product’s value as through supply and demand with the
inverse relationship between price and demand, the value of unattainable goods usually go up. This
is experienced with Skyline as once the cars were banned in Australia, the value of existing ones went
up, increasing the brand awareness globally and brand value. Furthermore, as this business operates
locally, they have the ability to provide jobs for the country as they don’t outsource operations which
decreases the unemployment rate of the country, whilst stimulating economic growth as citizens will
have more disposable income to spend. This idea of a circular economy within a currency allows the
country to maintain neutral from external influences from other countries as they don’t need to rely
on them. The advantages of not outsourcing is expounded as the business doesn’t need to then
worry about communication. As ignorance towards globalisation may lead a business into
irrelevancy, it also may build culture and become part of a country's identity. However, in the long-
term Skyline will may become irrelevant as competitors are taking advantage of the global economy
if Skyline fails to innovate. Therefore, as businesses remain to operate in their own countries, the
incorporation of globalisation into operations management may be in favour of the business,
outlining how influences have minimal affect in determining a businesses’ success in the short term.

Environmental sustainability refers to the aim of ensuring that production in the present doesn’t
threaten the future health and survival of the environment. As this may create goodwill for the
businesses, it causes significant investment of capital and time as management has to implement
eco-sus views into its strategic role of operations. The idea of environmental sustainability limits all
parts of the operations process. For example, since Tesla has stated their mission statement with
glimpses of sustainable ideologies, the company is held accountable its actions in regard to
operations. As the company advocates for the shift from fossil fuel to electric, it leads innovation.
This requires large sums of capital investment that has a higher risk to produce a ROCI as you don’t
know if it will succeed. This leads the company in need of constant funding which leads to higher D/E
ratios or dilution of stock which increases the risk of the company whilst destroying value for the
shareholder. Further, the transformation process includes the manufacturing of lithium-ion batteries
which produce more carbon emissions than the production of a regular gasoline car. This paired with
the fact that the batteries don’t last as long as a petrol engine highlights the hypocrisy of Tesla and
other companies that claim their ‘eco-friendly’ efforts. As businesses operate in the hopes of
generating profits, the nature of the environmentally sustainable ideology seems counter-intuitive
for the business as being eco-sus causes an increase in operating expenses leading to decreased cash
flows. For a business, like Tesla, consuming resources without compromising access for future
generations is close to impossible due since their batteries need to be disposed of more regularly
when compared with gasoline vehicles. Through this, it is evident that much of Tesla’s success comes
from not greenwashing, but rather actions that oppose sustainable ideas. This is seen through
they’re use of vegan leather which is made from polyvinyl chloride (C2H3Cl) which is basically the
same as oil (due to the carbon chain), which turns out to not be very sustainable. Through Tesla, it is
evident that environmental sustainability can lead to public relations however it has little effect on
business success as operations managers focuses on other ways to cut expenses.

As influences in operations may determine how businesses are operated, through the Abu Dhabi
National Oil Company, we see how the business proves that CSR has little effects on business
success. Further, Skyline accentuates the importance for the ignorance towards globalisation as it
proves to increase the value of the company in the short-term. Moreover, as Tesla concentrates its
efforts on the operations process rather than environmentally sustainable ideas, it has seen a decline
in stock price due to eco-friendly ideas and a general increase in revenue due to the disregard for
these ideas. Therefore, through these businesses, it is evident that depending on the industry,
influences have minimal effects on business success in the short term.