Economic and Financial Management: Impact on British Gas during and after COVID-19

This report analyzes the impact of COVID-19 on British Gas, a sustainable renewable energy company in the UK. It covers the energy industry during and after the pandemic, the impact of micro and macroeconomic factors, and theories of economics.

Economic and
Financial Management

Contents
INTRODUCTION.............................................................................................................................3
Background of the Company.........................................................................................................3
Energy industry during and after the global pandemic..................................................................3
Impact of micro and macro economic factors on the energy company.........................................4
Theories of economics...................................................................................................................6
CONCLUSION..................................................................................................................................6
REFERENCES..................................................................................................................................7

INTRODUCTION
The economics and financial management is considered as branch of the knowledge that
deals with the management of resources as the resources are very scare and has
alternative uses. The financial management is a process of integrating the management's
function for a proper acquisition and utilization of required funds in order to carry out
organisational operational activities in effective way (Alquist, Bhattarai and Coibion,
2020). The company chosen in this report is British Gas which is energy and home
service provider in UK. This report will cover the analysis of energy industry during and
after COVID 19, impact of the macro and micro economic factors on the private energy
company, theory of economics.
Background of the Company
The British Gas company is energy and home service provides organisation which is
situated in United Kingdom. This company was founded during 1997 and its headquarter is
situated in Staines- upon- Thames, England, United Kingdom. The respective company is a
biggest energy supplier in UK and considered Big Six domination gas and an electricity market in
UK. It works to reduce the carbon emissions and also help its customers stay energy efficient. This
company empowering the communities to use energy efficiently, helping to build different skills
for bright future and supporting the household on need.
Energy industry during and after the global pandemic
The COVID 19 is global pandemic that hit each sector of economy. The renewable energy
is that form of energy which provided naturally to the humans. Its preservation is very crucial to
save the energy for future. In context of British Gas, this company is also get impacted by
pandemic, therefore its operation during and after is discussed below:
Impact during pandemic
Variation in demand- During COVID 19, there was a great change in the customer's demand
pattern. At this time there was a reduction in commercial demand and increment in
residential demand of energy (Boussemart and et. al., 2019).

 Fear of supply security- At this time period, supply chain was become narrow due to the
inflexibility of transportation. It reduces importing of the raw material as government has
imposed lock down globally.
 Technological transformation- During dealing with the financial hardship, British Gas
had developed funds which enable its users to quickly get review and feedback regarding
financial problem. It provide loan for their operational activities.
Effects after pandemic-
The outbreak of Covid-19 pandemic has showed several consequences on the renewable
energy industry that are working for creating a sustainable form of the energy while balancing
environmental protocols as well. After pandemic there are some outcome which are discussed
below:
 Disturbing trade relations- Due to the massive lock downs, government imposed
restrictions on the travelling which cut down the revenue of British Gas. International
trading was also closed for several months that blocks flow of the materials which are
required to operate industry of energy.
 Adaptation of the technological innovation- After the COVID 19, the industry has
started to adopt technological innovation in order to minimise the human intervention. The
energy sector will have to lower its reliance on the human intervention for company's day
to day operations (Dutta and Thorson, 2019).
 The recovery energy industry is expected to follow that of overall economy. The kick
staring economic practices will be depend on effective containment of virus and the
availability of vaccine to general public. Fortunes of energy sector will be determined by
definite factors native to players in this industry.
Impact of micro and macro economic factors on the energy company
The economics is divided into two main categories that is microecono0mi and
macroeconomic. The micro economics is study of the individual and a business decision. whereas
macroeconomics look at the government and country's decision.
Impact of the microeconomics factors
These factors mainly focus on demand and supply, and other forces that analyse the price
level and making it a bottom up approaches. There are various factors that impact the energy

industry vastly. In context of British Gas Company, these factors impact it many ways which are
mentioned below:
 Customers- These are those people who purchase the organisational product and service.
This factor has most direct micro economies effect on the energy sector. approximately
114000 household customers ditched the British Gas company and switched to another
new provider for their electricity and gas.
 Supply and demand- The microeconomics mainly focus on demand and supply ad other
forces analyze the price level in an economy. In context of British Gas company, teh
COVID 19 has had a great impact on the respective company as it lead to a reduction in
demand, financial stress and also disruption to power supply chain.
 Raising prices- During COVID 19, the energy sector has increased their price in order to
fight against pandemic. British Gas company had declared a 12% increase to price of tehri
Standard Variable tariff on October 2021 (Lemke and Bastini, 2020).
Impact of the macro economies factors
These factors are broad indicators of the financial growth and decline that impact an
economy.
 Inflation- it is key element that has been observed by the economist, consumers and
investors. It impacts the purchasing power. In relation to the British Gas, if the inflation
rise, then living cost will gives up. It will reduce the customer’s purchasing power,
especially when the inflation rates are more than interest rate.
 Unemployment- country’s unemployment offer an indication of economic helath in a
nation. High employment rate verse the unemployed indicate economy’s strength. When
majority of the citizen are employed, then their spending increase which boost the
economy. In case of British Gas, its many employees lost their job (Zlatkin-
Troitschanskaia and et. al., 2019).
 Economic growth- This element describe change in percent of the product’s goods in a
nation during certain time period. In context of British Gas, Strength of economic impacts
the natural gas market. At the time of an economic growth, there is increase in the demand
of commodities and services.

Theories of economics
Keynesian theory- This theory was given by the John Maynard. He was a literature social
scientist. He took some major initiatives for regarding changing the whole economy and
wrote as book that name is “The General theory of employment, interest and money”. In
this, he described that the investment is result of the dynamic nature of interest.
Therefore, he suggested that the government polices can boost the employment level and
also focus on the short term fluctuation of demands. This theory advocated increasing
the government expenditure and lower the taxes in order to stimulate demand and pull
global economy out of depression. this theory mainly focus on using an active
government policies in order to mange an aggregate demands to address or prevent the
economic recessions (Sosnowska, 2019).
Neo classical- This theory was introduced by Alfred Marshall has introduced this theory. In this
theory, the major components supply and demand and their impact on specific
commodity's demand. Scholars of the new classical era believe in attaining the personal
satisfaction in order to make decision on the behalf of utility of any particular product
and services. There are few assumption in this theory that rati0onal choice of the people
and individuals separate perception regarding any specific product. The utility is total
satisfaction which is derived from the consumption of a specific goods and services. In
this theory, the concept of marginal ism is also mentioned that show an additional unit of
satisfaction by consuming an additional commodity (Zhou and et. al., 2018).
CONCLUSION
From the above report it is concluded that, sustainable renewable energy company, British
Gas is impacted by situation of the covid19 that results in global crisis and also disturb the
operations of each and every organisation. The energy sector also gets hit by the pandemic. There
is a big difference in the company's operational activities during the COVID 19 and after the
pandemic. The respective company has affected by the micro and macro economics factors vastly.
Some scientist had given much theory regarding economic in which they described that how a
company may get influence by different factors. Therefore, it is suggest to all the industry that
they should analyse the micro and macroeconomic factor carefully in order to operate their
activities efficiently.

REFERENCES
Books and Journals
Alquist, R., Bhattarai, S. and Coibion, O., 2020. Commodity-price comovement and global
economic activity. Journal of Monetary Economics, 112, pp.41-56.
Boussemart, J.P. and et. al., 2019. Decomposing banking performance into economic and credit
risk efficiencies.European Journal of Operational Research,277(2), pp.719-726.
Dutta, S. and Thorson, J., 2019. Are hedge fund returns affected by media coverage of
macroeconomic news?. Studies in Economics and Finance.
Lemke, C. and Bastini, K., 2020. Embracing multiple perspectives of sustainable development in a
composite measure: The Multilevel Sustainable Development Index.Journal of Cleaner
Production, 246, p.118884.
Sosnowska, A., 2019. Explaining Economic Backwardness: Post-1945 Polish Historians on
Eastern Europe. Central European University Press.
Zhou, C. and et. al., 2018. Estimation of eco-efficiency and its influencing factors in Guangdong
province based on Super-SBM and panel regression models. Ecological Indicators, 86,
pp.67-80.
Zlatkin-Troitschanskaia, O. and et. al., 2019. Validating a test for measuring knowledge and
understanding of economics among university students. Zeitschrift für pädagogische
Psychologie.