Impact Of Economic Factors On JB Hi-Fi Essay


Write a discussion on your chosen organisation’s general environment and analyse the impact of one real-life dimension in its general environment in 2016/17. You must use academic definitions and ideas to describe, structure, and support the information in your discussion and analysis.


About the company

The company came into the existence in the year 1974 and was founded by Mr. John Barbuto. JB Hi-Fi deals in the consumer goods and a well-known retailer in Australia and New Zealand, having the head office in Melbourne at Chad stone Shopping center. The company is specialized in video games, CDs, DVDs, electrical home appliances, Blu-rays and electronics/hardware as the company knows it very well that the business is the growth in Australia and New Zealand (JB Hi-Fi, 2017).

The competitors of the company are increasing in Australia as well as in New Zealand such as David Jones, Harvey Norman, Target Australia, Noel learning, and Myer. JB Hi-Fi reported the growth in the sales in the financial year 2016 by 5.4% (JB Hi-Fi, 2016). Hence, the gross profit of the company increased 8.4% with the gross margin up 3bps to 21.9%. The CEO of the JB Hi-Fi said that they are happy with the ending of the financial year 2016 as they are proud to deliver both net profit and earnings per share up 11.5% (JB Hi-Fi Limited, 2013). The company had 194 stores in New Zealand and Australia until 30th June 2016. The company is planning to open 7 new stores in the current year and continue to fetch the opportunity of the business beyond New Zealand and Australia (JB Hi-Fi, 2017).

Environment analysis

The environments of the surroundings in which the company perform the business activity include political, economic, social, technological, legal and environment. These are the factors which can create an impact on the working or decision making of the company, the changes in the factor, influence the company to bring the changes in the strategies of the company (Fernie, Fernie, and Moore, 2015).

The environment analysis helps the company in analyzing the changes taking place and this helps the company in understanding the future growth opportunities in the industry company is dealing. The products and the dealing of the company clearly show that there is a need for the technology in the business. The retail business is also getting affected due to the advancement of the technology (IEDU, 2017). Similarly, there are other factors that affect the working. Political factors which show the instability in the laws and government regulation might affect the profitability of the company who is looking for the expansion. The opening of the outlets across the borders is possible due to the stability of policies of the government (Weaver, 2014).

Social factors include the taste and preference of the customers, the changes in the demand of the products due to the preference or the beliefs might affect the revenue and growth of the company. The company makes the changes in the products due to the change in the customer preferences. Legal factors and environmental factors show the responsibility of the company towards the stakeholders and the society respectively. Major impact on the profit of the company is because of the economic factor (Root, 2017).

Impact of economic factors on JB Hi-Fi

The economic factors that affect the decision making of the JB Hi-Fi include inflation rate, interest rate, and foreign exchange and the economic cycle that identify the demand and the investment in the economy. Along with this, it includes the competition norms that affect the competitive advantages of the company. Jb Hi-Fi Limited need to analysis the growth of the business which is possible after analyzing the retailing growth rate, consumer spending and other factors considering the industry in which the company deals (Fern Fort University, 2017). The factors which should be kept in mind by the company while analyzing the economic factors: -

  • The type of the availability of the economic system in the country in which company is having the operation and the economic system is stable or not.
  • The involvement of the government of the country in retailing industry and the free market, as government intervention can force the company to bring the changes.
  • Infrastructure quality in Retailing industry
  • Stability in the currency and in exchange rates of the host country so that company can make the profit, the lack of stability can lead to loss to the company.
  • The company needs to the analysis they have to enhance the investment for the growth and expansion in the local market or not. The company can also invest the amount in countries across the borders (JB Hi-Fi, 2014).
  • The company should identify the education level of the employees of the country where they are expanding the business as this is going to help the company in understanding that they are going to get the skilled labor or no.

Ethics and CSR (Corporate social responsibility)

In a current working environment, most of the organization fulfill their responsibilities towards the society and this has become their duty. Social responsibility of the company is termed as the CSR, which defines the actions taken by the organization towards the welfare and the benefits of the society beyond the legal and the economic obligations (Servaes, and Tamayo, 2013). It is the duty of the manager of the company to regularly consider the benefits of the society and manager also consider the demand, preference, taste, and quality of the products that the company is looking to offer to their customers.

The company knows the importance of their stakeholders that include the employees, customers, suppliers, and shareholders (Korschun, Bhattacharya, and Swain, 2014). The company is fulfilling their responsibilities towards their stakeholders as well as the company is the leading retailer of New Zealand and Australia. The company pays back to their stakeholders so that if in case the company wants the fund to start outlets then the shareholders can trust the company. This is possible because a company is able to fulfill its responsibility towards the stakeholders (Tai, and Chuang, 2014).

The company is serious about its responsibility and for same the company initiated a program whose name is helping hands, the program was initiated by the company to donate to the charitable organizations. The JB Hi-Fi director, employee and the executives were part of the program initiated by the company. The company also shook hands with the Australian Charities fund for the program "Helping Hands", this is done for the development and the maintenance of the program (Australian Charities Fund, 2017). JB Hi-Fi workforces use to donate the amount for the program from their payroll system that helped the partners in the financial benefits. The reason behind the initiation of the program as the company is moving ahead towards the achievement of the vision. The vision of the JB Hi-Fi is working together for the community benefits. JB Hi-Fi believes that the difference in the program will come if in case the employees and the company combine work for the welfare of the community and the society.

Helping Hands

The program involves approximately 68% companies of Australia; in total, these companies have approximately 47,000 employees. In Australia, the employees are contributing to the programs on weekly basis. The company collected approximately $1,800,000 and after the inspection, it is analyzed that the company and the employees will together increase the collection till 9,100,000. There are many other partners who are donating amounts such as The Song Room, Bush heritage Australia, Australian Animal Welfare league,, Medicins San Frontiers, Red Kite, Fred Hollows Foundations and many others (JB Hi-Fi Solution, 2017).

The helping hand's program was introduced in May 2012 in New Zealand. In New Zealand, the program includes more than 43% of the total employment of the JB Hi-Fi Company, and these employees contribute to the program on weekly basis (JB Hi-Fi Solution, 2017). The collection in New Zealand is approximately 65,000$ which is going to be a rise and it is going to reach the amount of the $215,000. Some of the New Zealand partners who support the program by contributing to the program include Shelter Box, Plunket, Forest and Bird and many others. The company is finding unique ways to enhance the collection for their program helping hands.

Donation Boxes- Change for Change

The donations boxes (change for a change) is one of the strategies that is followed by the company to promote the program and to provide the support to the program, in this concept the company has placed Change for change donation boxes at each and every stores. All the stores of the New Zealand and Australia have these boxes to support the helping hands. These boxes are placed at the cash counters where the process of billing is conducted so that the customer attention can be redirected towards the donation boxes and they can donate some of the amounts for their program helping hands. The collected amount is going to be shared amongst the charity partners of the company. At the time the donation boxes were launched and the company decided to keep the boxes at the store then the company made the collection of more than $ 50,000 in Australia and Approximately $ 25,000 in New Zealand. The program- Helping Hands helped the company to find the Employer Leadership Group which was founded in the year 2010 October as this was done to enhance the awareness about the workplace.

Organisation Culture

Organisational Culture refers to as the principles, traditions, values, and the methods of carrying out the activities of the company that shows the action of the managerial associates. The organization culture of the company varies from company to company as there are many companies who have unique views related to the organizational culture that they want to maintain in their companies. The thinking, preference, and beliefs bring the difference in the formation of the organizational culture of the company (Babnik, Breznik, Dermol, and Trunk ?irca, 2014).

The culture of the JB Hi-Fi is very positive and shows that they support and promote the innovation and the creativity of the company. For instance; the managers of the organization try to communicate with the employees and ask for the suggestions so that they can make the better and effective decision, this shows the origination culture of the company. The managers of the company believe in asking for the ideas from the employees as they want to provide the equal respect to the superior and subordinates. The effective communication is the base of the organization culture because the culture of the company exists due to the communication between the top- middle and lower management of the company.

JB Hi-Fi involved its employees or workers to support their program helping hands and while launching the strategies the company asked for the suggestions. This shows that the manager of the company wants the employees to extra activities which reflect the culture of the company. The manager of the company enhances the motivation and encouragement of the workers which shows a positive environment of the working ((JB Hi-Fi, 2014).

Personal Insights Quiz


Serial Number

1-Strongly Disagree




5-Strongly agree

I like the thrill and excitement from taking risks.


I prefer managers who provide detailed and rational explanations for their decisions.


If a person’s job performance is inadequate, it’s irrelevant how much effort he or she made.


No person’s needs should be compromised in order for a department to achieve its goals.


I like being part of a team and having my performance assessed in terms of my contribution to the team.


I like to work where there isn’t a great deal of pressure and where people are essentially easy-going.


I like things to be stable and predictable.


Analysis and Interpretation

3 (2-10) + 2 (2-16) + 2 (2-12) + 3 (2-13) +5 (2-14) + 4 (2-15) + 4 (2-12) = 23

As it is clear the scores of the 2-11 and 2-16 have been switched and the total is 23. My score irrespective of the company is 23 which are slightly more than the score 22 and this clearly shows that my preference for the organization will be humanistic, innovative, flexible and informal. If any of the employees find the company according to their demand and preference then the employee will be satisfied and then he can give its maximum at the time of the efficiency and productivity that is required to achieve the objective of the company.


The company is leading in the retail industry and company is making a good profit which provides a good opportunity to the employees to start their career or to bring growth in their future. Being an employee I am looking for the company who can guide me for my future and help me in achieving the objectives. JB Hi-Fi not only enhances the theoretical or practical knowledge but it also provides the details related to the advanced technology. The company is able to meet the CSR responsibility and can easily face the external factors which are attracting me towards the company


The report includes the description of the company and the activities of the company. The company selected for the analysis is JB Hi-Fi, this is the fact that the company is growing and achieving the objective of being successful. The profit earned by the company is increasing but due to the economy factor (which is discussed in a report), the company might face problems in making the profit (Mordon Inttelligence, 2016). The company has to analyze this external environment so that proper strategy can be used to find a way. Along with that, the report includes the CSR of the company; the Way Company is stepping ahead for their responsibilities are rare but true. The Quiz analysis is done which show the total score of 23 which is favorable and fulfills my preference.


Australian Charities Fund, 2017, ‘Helping Hands’ at the Centre of JB Hi-Fi Culture, Retrieved 17th December 2017,

Babnik, K., Breznik, K., Dermol, V. and Trunk ?irca, N., 2014. The mission statement: organisational culture perspective. Industrial Management & Data Systems, 114(4), pp.612-627.

Fern Fort University, 2017, JB Hi-Fi Limited PESTEL & Environment Analysis, Retrieved 17th December 2017,

Fernie, J., Fernie, S. and Moore, C., 2015. Principles of retailing. Routledge.

IEDU, 2017, Internal and External Environment Factors that Influences Organizational Decision Making, Retrieved 15 December 2017,

JB Hi-Fi Limited, 2013, Annual report for the financial year ended 30 June 2013, Retrieved 17th December 2017,

JB Hi-Fi Solution, 2017, JB Hi-Fi Helping Hands, Retrieved 17th December 2017,

JB Hi-Fi, 2014, “Empowering culture that has a positive outlook on the challenges presented by the current economic conditions", Retrieved 17th December 2017,

JB Hi-Fi, 2016, JB Hi-Fi Full Year 2016 Results, Retrieved 17th December 2017,

JB Hi-Fi, 2017, About us, Retrieved 17th December 2017,

Korschun, D., Bhattacharya, C.B. and Swain, S.D., 2014. Corporate social responsibility, customer orientation, and the job performance of frontline employees. Journal of Marketing, 78(3), pp.20-37.

Mordon Inttelligence, 2016, Retail Industry in Australia – Major trends, Growth and Opportunities (2016 - 2021), Retrieved 17th December 2017,

Root, G.N., 2017, Five Components of an Organization's External Environment, Retrieved 15 December 2017,

Servaes, H. and Tamayo, A., 2013. The impact of corporate social responsibility on firm value: The role of customer awareness. Management Science, 59(5), pp.1045-1061.

Tai, F.M. and Chuang, S.H., 2014. Corporate social responsibility. Ibusiness, 6(03), p.117.

Weaver, D., 2014. Successful Fashion Retailing in Grand Rapids, MI

How to cite this essay: