Evaluation of John Wood Plc.'s Organisational Structure and PESTLE Analysis

The report evaluates John Wood Plc.'s organisational structure and highlights the importance of PESTLE analysis for modern businesses. It lists various external factors that can influence John Wood Plc.'s environment and applies the PESTLE framework to the company with examples.

BUSINESS ENVIRONMENT

EXECUTIVE SUMMARY
The present report is based on the evaluation of John Wood Plc.’s organisational structure
comprising of various executive and non-executive directors at the company’s board where a
clear lines of responsibilities, authority at board till lower level of the organisation has been
clearly indicated with the adoption of hierarchical organisational structure. The various
importance of PESTLE analysis has been highlighted along with its necessities for modern
businesses to avail competitive advantage in the market. Also, there is a list carried out for
detailing various external factors with the help of PESTLE framework that can influence John
Wood Plc.’s environment. The analytical model (PESTLE) has been applied to the company
with examples.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY..................................................................................................................................4
TASK 1............................................................................................................................................4
Overview of John Wood Plc........................................................................................................4
Organisational structure of John Wood.......................................................................................4
Directors at Board........................................................................................................................4
Executive and non - executive directors......................................................................................4
Chairperson and CEO of John Wood Plc....................................................................................5
TASK 2............................................................................................................................................5
Importance of PESTEL framework.............................................................................................5
Important for organisation to carry out PESTEL analysis...........................................................5
TASK 3............................................................................................................................................6
(A) List of Factors associated with each elements of PESTLE framework influencing the
environment of John Wood plc....................................................................................................6
(B) Application of PESTLE factors on John Wood Plc. with examples.....................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11
Online........................................................................................................................................11

INTRODUCTION
Business environment consists of various factors which are both internal and external to
the business. These factors can have both positive and negative impact over the functioning of
the business which may be direct and indirect both. These factors involves competitors,
employees, customers, suppliers, social, cultural, technological, political (government) and legal
conditions surrounding a business (Stverkova and Pohludka, 2018). The present report include
the structure, management and its governance in the context of John Wood Plc. Various
importance of PESTLE analysis will be discussed in the second task of the report and in the third
task by listing out the PESTLE factor that can influence the environment of John Wood Plc. will
be discussed along with the application of PESTLE factors on the company with the help of
examples.
MAIN BODY
TASK 1
Overview of John Wood Plc.
JWG (John Wood Group) is a multinational company based in UK which mainly offers
operations and projects solutions and consultancy. It has it’s headquarter in Aberdeen, Scotland.
The company is operating in energy sector having operations in many different nations. It
provides range of production support, engineering products and maintenance management
services to the energy sector across the world. The company has three segment that is, Asset
Solutions, Technical Consulting Solutions and Investment services (John Wood Group PLC.
2021). Wood Group is listed London Stock exchange and also a constituent of FTSE 250 index.
Wood Group is a public limited company having approximately 45000 employees.
History of John Wood Plc.
John Wood Plc. was founded by Ian Clark Wood in 1982 after splitting away from the largest
fishing company of Scotland that is, JW holdings. In September 2000, it has acquired an
engineering business of Houston that is, Mustang Engineering Inc. and in 2002 it gets listed on
LSE. The company has announced in March 2017 that it would be acquiring its rivalry in a deal
to buy all stock of Amec Foster Wheeler which was valued at £2.2 billion approximately (John
Wood Group PLC. 2021). And the final settlement take place for the same on 9 October 2017.
Organisational structure of John Wood
There is clear structure pertaining to the organisation of the company which indicates control and
monitoring of the business operation by defining appropriately the lines of responsibilities
(Boyce and Ville, 2017). Such lines of responsibilities clearly indicate authority at board level
and delegation of authority at different levels. Therefore, a hierarchical organisational structure
prevailing in John Wood Plc.
Directors at Board
There are approximately 10 directors at the board of John Group Plc. (Annual report of the
Wood Group. 2021).

Executive and non - executive directors
There are overall 117 executive directors and 8 directors are non – executive directors in the
John Wood group.
Chairperson and CEO of John Wood Plc.
Roy A Franklin is the chairperson of the company who has been elected and appointed as
chairperson since September 2019 (Nene and Pillay, 2019).
Robin Watson is the Chief Executive Officer (CEO) of the company who has been elected and
appointed as a CEO of the group since January 2016 (Annual report of the Wood Group. 2021).
TASK 2
PESTEL analysis is a widely used tool for evaluating the external environment of the business
by determining the factors external to the business which can have an impact over the operations
of the business. PESTEL studies the external environment of a business by categorizing the
factors into six different aspects that is, Political factors, Economical factors, Social factors,
Technological factors, Environmental factors and Legal factors (Perera, 2017). The performance
and each and every activities of a business gets affected both positively and negatively due to the
prevalence of these external factors.
Importance of PESTEL framework
PESTEL framework plays a very important role towards growing and developing a business and
achieving goals and objectives of a business. The framework is widely used in making plans and
framing strategies while deciding upon the expansion of company’s product line or establishing a
new unit at some different location. There are many points that highlights the importance of
PESTEL analysis such as the following:
 Significant changes occurring in the factors such political, economic, social,
technological, environmental and legal can be easily identified by the management and
owner of the business by conducting environmental scanning through PESTEL model by
disregarding whether the concern is a startup or an organisation established in the market
from long term.
 Strategic planning in order to facilitate expansion of the business can be achieved by the
organisation and its management with the help of this framework (Capobianco and et.al.,
2021).
 The factors outside the control of the business can be determined through PESTEL
framework analysis and accordingly opportunities available in the market can determined
and exploited at upper hand that is, before competitors access such opportunities and reap
its benefits. Along with identifying opportunities, threats can also be easily determined by
the management of the company, so that necessary steps can be taken at the right time
without any losses and failures in the market.
Important for organisation to carry out PESTEL analysis
The analysis performed under this framework that is, PESTLE is connected with the
environment existing in the external environment of a business and also considered to be not

controllable by businesses, its owner or management (Shtal and et.al., 2018). Each element of
this framework involves some major factors such as law, politics, etc. that can have an impact
over the sustainability, survival and profitability of the business. Companies especially those
having their operations in foreign countries get benefitted with the results obtained through this
analysis to a great extent. It helps in determining whether to expand business to other nation or
just carry out consolidation of business across borders. So a decision related to organic and
inorganic growth can be taken in a best way.
Through PESTLE, it can be identified what markets are still left for where no other competitors
has approached yet and thus provides for an opportunity to businesses to grab such opportunities
as soon as possible by ensuring lower losses and failure with the help of PESTLE analysis
(Christodoulou and Cullinane, 2019). It can be easily determined beforehand that whether the
new markets holds any profitable potential for the business or not by facilitating in weighing
opportunities in an objective manner as through this analysis better strategic planning can be
performed through obtaining necessary data. Data supplied as a result of performance of this
analysis allows for focusing on what is important that need to be done by the business at upper
hand. Companies always wants to optimize their presence in the market at international level.
Appropriately conducted PESTLE analysis helps strangers an excellent view of geographical
region where the business should be conducted. The analysis provides for clarity which results in
more cost effective decision making and appropriate allocation of funds. It improves and
enhances the ability of the business to be successful in the market.
TASK 3
(A) List of Factors associated with each elements of PESTLE framework influencing the
environment of John Wood plc.
Political factors
It is considered as one of the most important factor that can have an influence over the
profitability of the business while performing in a market of different countries. List of factors
associated with this element of the PESTLE framework that can affect John Wood Plc.’s
operations are as follows:
 Stability of political conditions in the country and important of the sector concerning Oil
and Gas in an overall economy of the country.
 Military invasion causing risks.
 Level of corruption and its regulations especially in the Oil and Gas sector.
 Bureaucratic interference caused by the government in the Oil and Gas industry.
 Framework meant for legally enforcing contracts.
 Protection available for intellectual property rights (Vasileva, 2018).
 Tariffs and regulations associated with trade concerning Oil and Gas industry.
 Favored partners for trading.
 Anti – trust laws concerning Oil and Gas.
 Regulations related to pricing (This involves any regulatory mechanism for pricing Oil
and Gas products).

 Taxation – Incentives and tax rates applicable to companies under Oil and Gas sector.
 Legislation related to wages – laws made for overtime and minimum wages provision.
 Employee benefits made mandatory by the governing bodies.
 Industrial regulations associated with safety meant for Oil and Gas sector.
 Particulars and mandatory requirements related to labelling of Oil and Gas products.
Economic factors
The list of factors under this element of PESTLE framework that need to be considered by John
Wood Plc. in order to safeguard themselves from negative influence of economic conditions of
the country are as follows:
 Economic system prevailing (in terms of type and stability) in the countries where it has
its operations (Christodoulou and Cullinane, 2019).
 Intervention of the government in the free market concerning Oil and gas industry.
 Financial market efficiency which indicates requirement of raise capital from local
market by John Wood Group.
 Stability of exchange rates and currency of the host country.
 Quality of infrastructure concerning Oil and Gas sector.
 Comparative advantage available in host country as against the Oil and Gas sector of any
particular country.
 Skilled labour force available for Oil and Gas industry.
 Level of education prevailing in the country.
 Productivity and labor costs associated with the Oil & Gas sector of the country.
 Stage concerning business cycle that is, whether it is recession, prosperity or recovery.
 Growth rate of the economy,
 Discretionary income,
 Interest rates,
 Unemployment rate &
 Inflation rate prevailing in the economy.
Social factors
The list of factors concerning this element of the analysis involves society’s culture and the way
things are done in the society greatly affects the organisational culture of John Wood Plc. in the
environment where they conduct their business activities (Capobianco and et.al., 2021). The list
of this factors under this element are stated below:
 Skill level and demographics of the population in the company’s market.
 Hierarchy, power structure and class structure prevailing in the society.
 Education standard and level of education prevailing in the industry of John Wood Plc.
 Influence of cultural factors such as role of gender, social conventions, etc.
 Entrepreneurial spirit and nature of the society in a broader sense in terms of encouraging
and discouraging entrepreneurship.
 Society’s attitude towards health and environmental consciousness.
 Leisure interests.

Technological factors
Impacts of the following factors on the company that is, John Wood Plc. is regarded as the
influence of technological factors. The list of such factors are as follows:
 Current developments in terms of technological upgradation undertaken by the
competitors of John Wood Plc.
 Technological influence on the offering of energy, Oil and Gas products.
 Cost structure concerning the Oil and Gas Industry (Shtal and et.al., 2018).
 Value chain impact due the structural aspects associated with value addition and creation
pertaining to Oil, gas and energy sector.
 Rate at which technology has been diffused in the industry of John Wood Plc.
Legal factors
While making entry to any new country or market, the leaders and managers concerning John
Wood Plc. need to consider the following legal factors that can have an influence over its
functionality.
 Anti – trust law governing overall country and its impact on Oil, Gas and overall energy
industry.
 Discrimination law affecting energy sector.
 Laws and legislations associated with intellectual property rights such as copyright,
patents, etc. with regards to energy and engineering products (John Wood Group PLC.
2021).
 Laws providing protection to consumers.
 Laws meant for governing and regulating John Wood Plc. for having online existence for
their operations.
 Employment law and its implications for energy sector.
 Health and safety norms and laws applicable on companies operating under energy sector
like John Wood Plc.
 Data protection laws and regulations prevailing in the country and accordingly
influencing operations of John Wood Plc.
Environmental factors
Environmental standards necessary required for operating in a new or existing market must be
evaluated beforehand by considering various environmental factors carefully. Such factors
concerning about environment and can affect John Wood Plc.’s operations are as follows:
 Weather and climatic change
 Laws and regulations meant for controlling environmental pollution.
 Regulations related to water and air pollution meant for energy sector (John Wood Group
PLC. 2021).
 Recycling and waste management processes incorporated under the regime of energy
sector framework.

 Attitude and demand for ecological or “green” products demanded under the industrial
regime of energy sector.
 Laws for protecting endangered species.
 Support and attitude towards renewable energy.
(B) Application of PESTLE factors on John Wood Plc. with examples
Political factors: There is an increase in the world market for energy products due to the threat
of instability in geopolitics. As there is more carbon emission caused by energy sector, this led to
setting pressures on industry by government to improvise their processes and accordingly
produce sustainable energy products (Jafari and Othman Soleiman, 2020). There are many
trading policies and restrictions imposed by government with regards to importing, exporting and
doing business of energy products with other countries. There are high taxes and fines for those
companies under energy sector polluting the environment set by government. For example trade
barriers imposed on energy products by host country results discouraging trade partners to
undertake potential exports.
Economic factors: There are many alternative available as high quality energy technology with
the Wood group which is enhancing its revenue as customers are happy and satisfies with their
lower greenhouse emissions. Wood group is enjoying lower labor cost due to the high level of
unemployment in many developing countries in which operates causing a huge gap between
demand and supply of jobs. This leads to lower wages at which workers get ready to work. This
is an example of economic factor affecting Wood group.
Social factors: Various nations in which John group has operations are highly concern about the
environment and the society’s view demanded for more of renewable energy products. Life
expectancy is a factor which is considered by the management while entering into new countries
and therefore prefer to choose that country where life expectancy is higher (Koshesh and Jafari,
2019). In terms of health consciousness, for example, the society in which company operates has
set out higher standards of health and safety and those who violates their norms are highly
penalized.
Technological factors: There is a wide use of renewable energy technologies across the energy
sector in which John Wood Plc. operates, for example; tidal wave, wind power and
hydroelectricity. There are tax advantage and subsidies provided by government for utilizing
alternative energy sources against oil and gas. This leads to finding for innovative alternative
technology to remain competitive in the market.
Legal factors: The energy sector in UK gets penalized highly for violating safety standards.
Also, the industry and companies therein needs to bear taxes and penalties for emitting carbon
above certain level (Ahmad and et.al., 2016). For example there are many legislative measures
developed for carrying out social and ethical responsibility for health and safety of other human
beings.
Environmental factors: With the increase in the risk of global warming, there are many
regulatory framework adopted by UK and other countries in which Wood group operates in order
to lower down the greenhouse emissions. For example there is a tax rewards and subsidies

available for those companies who are efficiently managing their wastes by using piloting carbon
footprint measurement and exploring ways to save energy.
CONCLUSION
From the above report it has been concluded that both internal and external environment
of the company has a great role in its success and survival in the market. In this report, in the
context of John Wood Plc., the internal environment of the company has been evaluated through
analyzing its organisational structure and the external environment of the company has been
evaluated through PESTLE analysis. From this analysis, it has been found that the company has
clear structure in terms of hierarchical organisation structure which is ensuring its internal and
external control of the various factors that can affect the company’s survival in the long run.

REFERENCES
Stverkova, H. and Pohludka, M., 2018. Business organisational structures of global companies:
Use of the territorial model to ensure long-term growth. Social Sciences, 7(6), p.98.
Boyce, G. and Ville, S., 2017. The development of modern business. Macmillan International
Higher Education.
Nene, S. and Pillay, A., 2019. An investigation of the impact of organisational structure on
organisational performance. Financial Risk and Management Reviews, 5(1), pp.10-24.
Perera, R., 2017. The PESTLE analysis. Nerdynaut.
Capobianco, N., and et.al., 2021. Toward a Sustainable Decommissioning of Offshore Platforms
in the Oil and Gas Industry: A PESTLE Analysis. Sustainability, 13(11), p.6266.
Shtal, T., and et.al., 2018. Methods of analysis of the external environment of business activities.
Christodoulou, A. and Cullinane, K., 2019. Identifying the main opportunities and challenges
from the implementation of a port energy management system: A SWOT/PESTLE
analysis. Sustainability, 11(21), p.6046.
Vasileva, E., 2018, October. Application of the Pest Analysis for Strategic Planning of Regional
Development. In 49th International Scientific Conference Quantitative and Qualitative
Analysis in Economics (pp. 223-229).
Jafari, H. and Othman Soleiman, K., 2020. Assessment of effective environmental factors in oil
and gas industry policies using PESTLE & SWOT analysis (case study: Kurdistan,
Iraq). Environmental Sciences, 18(3), pp.134-151.
Koshesh, O. S. and Jafari, H. R., 2019. The environmental strategic analysis of oil & gas
industries in the Kurdistan Region using PESTLE, SWOT and
FDEMATEL. Pollution, 5(3), pp.537-554.
Ahmad, W. N. K. W., and et.al., 2016. The influence of external factors on supply chain
sustainability goals of the oil and gas industry. Resources Policy, 49, pp.302-314.
Online
Annual report of the Wood Group. 2021. [Online] Available Through
https://www.woodplc.com/__data/assets/pdf_file/0027/124974/Wood_Annual_Report_an
d_Accounts_2019_SCREEN.pdf
John Wood Group PLC. 2021. [Online] Available Through
https://www.reuters.com/companies/WG.L