Assignment Sample on Organisations and Strategy
Introduction
The connection between industrial structure, corporate culture, strategic choices, and ethical behaviour has emerged as a critical predictor of an entity’s achievement and long-term viability in the dynamic and interdependent global marketplace. An organisation’s course may be considerably shaped by the complex interactions between these variables, which can determine whether it succeeds or fails in the complicated environment of the modern business world. Thus, this report is a critical assessment of the major impact that industrial structure has on organisational culture, with a specific focus on Lavazza, which is an internationally recognised multinational coffee brand having a distinctively Italian origin. The report intends to understand how Lavazza’s distinct position within the coffee industry has impacted its internal culture and corporate identity by examining the complex relationships between organisational culture and industry structure. The report would further examine how these defining characteristics of culture have influenced the company’s strategic choices, with an emphasis on how the ethical component has influenced these choices. In order to highlight the real effects that industry structure may have on an organization’s culture and subsequent strategic decisions, the report will use real-world examples and case studies from Lavazza’s operations and practices.
Discussion
Overview of Lavazza
Lavazza, established in 1895 by Luigi Lavazza in Turin, Italy, has evolved into a global coffee giant with a rich heritage of innovation and creative thinking. The foundation for the business’s culture of authenticity and excellent coffee was built from the beginning by Luigi’s dedication to mixing various coffee beans to meet the diverse preferences and tastes of customers (Lavazza, 2023). Lavazza has demonstrated its commitment to quality, social responsibility, and a pioneering attitude throughout the years through its growth, environmental initiatives, and forays into space. presently as a large worldwide business, Lavazza remains true to its origins while serving over 140 countries with a workforce of 4,000 committed employees (Lavazza, 2023).
Influence of organisational culture on strategic decisions and ethical conduct
Strategic decision-making at Lavazza has been greatly influenced by its organisational culture, which is firmly rooted in the visionary and passionate nature of its founder, Luigi Lavazza. A culture of creativity, adaptation, and quality sensitivity has been developed by the company’s long history and dedication to mixing various coffee beans to fulfil client tastes. In order to keep ahead in the very competitive coffee sector, Lavazza has been able to explore new markets, engage in sustainable practices, and adopt technical improvements thanks to this culture (Civera et al. 2019). Lavazza’s strategy choices, especially in product development and market positioning, have been significantly affected by its cultural focus on authenticity and quality coffee.
Ethical dilemmas of Lavazza
One of the main ethical dilemmas the company comes across is related to its sourcing practices and making fair treatment of coffee farmers in various regions. Coffee beans are sourced for Lavazza’s extensive supply chain from a variety of nations, where farmers may encounter difficulties including fluctuating market prices, breaches of labour laws, and restricted access to resources (Van Doan et al. 2021).
In the coffee industry, farmers are found to be earning less than $1 for every pound of coffee they grow (Coffee Affection, 2023). In Uganda, coffee farmers earn an annual income of $88 which is a huge disparity considering how this same coffee allows companies like Lavazza and Starbucks to earn billions of dollars in revenue (Coffee Affection, 2023). Lavazza needs to make sure that they abide by the ethical norms and pay the farmers the needful wage. Lavazza has a difficult ethical dilemma as it tries to encourage ethical sourcing practices while being profitable. balancing the requirement for competitive pricing with equitable remuneration for farmers.
The sustainability of the environment and the effects of coffee production on ecosystems and biodiversity provide another ethical conundrum. Particularly in coffee-growing countries, the coffee business is infamous for its role in deforestation, water pollution, and soil deterioration (Oh et al. 2019). The company needs to ensure that its extensive farming does not lead to any widespread deforestation.
Lavazza’s response to ethical dilemmas and the consequences of their actions
The way Lavazza responds to moral conundrums includes how it affects the environment. Utilising the Life Cycle Assessment approach in 2012, the firm started to assess the environmental performance of its core goods and services (Lavazza, 2023). Using this strategy, Lavazza was able to pinpoint opportunities for development and include more environmentally friendly procedures in its supply chain, manufacturing procedures, and packaging (Safitri, 2022). Lavazza has shown a dedication to reducing its environmental impact and promoting a more sustainable coffee business by accepting responsibility for the environmental impacts of its activities.
Conclusion
Based on the above report it can be concluded that the coffee industry’s competitive dynamics, worldwide distribution, and sustainability concerns have impacted the company’s identity and strategic decisions. Additionally, industry structure has had a significant impact on Lavazza’s cultural characteristics. Lavazza’s approach to ethical dilemmas demonstrates a sincere commitment to tackling challenging issues, with programmes like the “Tierra!” project and open sustainability efforts demonstrating its commitment to ethical business practices.
Recommendations
- Lavazza should make significant investments in effective supply chain-wide ethical compliance measures. In order to ensure compliance with global labour standards, fair pay, and environmental legislation, this involves performing routine audits and assessments of suppliers’ ethical practices (Nurhasanah and Dewi, 2019).
- In order to build trust with customers and stakeholders companies require transparency. Lavazza should continue to publish sustainability reports and talk honestly about business accomplishments, difficulties, and future goals for sustainable and moral behaviour (Guimarães et al. 2022). Transparent communication may be useful in addressing issues and proving Lavazza’s dedication to ethical business practices.
- Lavazza should maintain secure communication with its supply chain partners to build enduring bonds. Better communication shared awareness of ethical standards, and coordinated efforts to solve sustainability issues along the whole supply chain may all be made possible by this collaborative approach (Nguyen et al. 2021).
References
Coffee Affection, (2023). 17 Fair Trade Coffee Statistics To Know In 2023: Sustainable Coffee Facts. [Online]. Available at: https://coffeeaffection.com/fair-trade-coffee-statistics/ [Accessed 17 July 2023]
Guimarães, Y. M., Eustachio, J. H. P. P., Leal Filho, W., Martinez, L. F., do Valle, M. R., and Caldana, A. C. F. (2022). Drivers and barriers in sustainable supply chains: The case of the Brazilian coffee industry. Sustainable Production and Consumption, 34, 42-54.
Impakter, (2023). Just 7 Commodities Replaced an Area of Forest Twice the Size of Germany Between 2001 and 2015. [Online]. Available at: https://impakter.com/just-7-commodities-replaced-an-area-of-forest-twice-the-size-of-germany-between-2001-and-2015/ [Accessed 17 July 2023]
Lavazza, (2023). OUR HISTORY. [Online]. Available at: https://www.lavazza.com/en/lavazza-world/company/history [Accessed 17 July 2023]
Nguyen, G. N., Hoang, T. G., Nguyen, T. M., and Ngo, T. T. (2021). Challenges and enablers of women entrepreneurs’ career advancement in Vietnam’s coffee industry. Journal of Enterprising Communities: People and Places in the Global Economy, 15(1), 76-95.
Nurhasanah, S., and Dewi, C. (2019). Defining the Role of Multinational Corporations: Starbucks and Coffee Culture in Indonesia. Jurnal Sentris, 2(2), 63-77.
Oh, D., Yoo, M. M., and Lee, Y. (2019). A holistic view of the service experience at coffee franchises: A cross-cultural study. International Journal of Hospitality Management, 82, 68-81.
PUCA, C. (2021). The role of Joint Venture in the Chinese coffee market: the case of Lavazza SpA.
Safitri, D. (2022, October). The Culture of Drinking Coffee and the Halal Industry in Indonesia. In BOOK OF ABSTRACT INTERNATIONAL CONFERENCE ON HALAL, POLICY, CULTURE AND SUSTAINABILITY ISSUES (Vol. 4, No. 1, pp. 95-95).
The Commons Cafe, (2022). How Much Does It Cost To Start A Coffee Farm? [Online]. Available at: https://www.thecommonscafe.com/how-much-does-it-cost-to-start-a-coffee-farm/ [Accessed 17 July 2023]
Van Doan, H., Lumsangkul, C., Hoseinifar, S. H., Harikrishnan, R., Balasundaram, C., and Jaturasitha, S. (2021). Effects of coffee silverskin on growth performance, immune response, and disease resistance of Nile tilapia culture under biofloc system. Aquaculture, 543, 736995.
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