Business Environment Assignment : Barratt Developments PLC

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
Main Body.......................................................................................................................................1
TASK 1............................................................................................................................................1
Examine how your chosen company is governed and structured...............................................1
TASK 2............................................................................................................................................2
Evaluate the importance of carrying out PESTEL analysis for an organisation.........................2
TASK 3............................................................................................................................................4
Use the PESTEL framework to analyse the external environment of your chosen company.. . .4
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business Environment is defined as the combination of external as well as internal factors
which influence the situation of firm's operations. It involves the factors like customers, owners,
competitors and others. Moreover this allows firm to formulate its strategies as well as anticipate
the potential changes (Belás and et. al., 2014). For this report, the chosen company is Barratt
Developments PLC which is a biggest residential property development firms. Its headquarters
is in Coalville, United Kingdom. The purpose of this report is to explain how organisation is
structured and governed. Moreover, the importance of carrying out the PESTEL analysis is
mentioned. Apart form this, PESTEL framework is used to examine the external environment of
company are also discussed in this report.
Main Body
TASK 1
Examine how your chosen company is governed and structured
Each and every company have their own structures as well as is governed through their
own, government and others. Barratt Developments PLC is the type of public limited company
that deals in development of residential property. There are various types of organisational
structure such as Matrix, Divisional, Network, Flat and many more. The structure of firm
ascertains how power, and accountabilities are assigned, controlled as well as coordinated and
also how information flows among the various management levels. Barratt Developments PLC is
structured in hierarchical form. This includes a direct chain of command from top to bottom. In
respective organisation, Board of Directors to regional managing directors. Within Board of
Directors involves Chairman- John Allan, Group Chief Executive- David Thomas, Deputy Chief
Executive- Steven Boyes and others. Executive committee such as Chief Financial officer-
Jessica White, Group company secretary- Tina Bains and more. Regional managing directors of
various countries where they are operating such as Scotland, London and so on. The Barratt
Developments PLC is structured in this manner as they have internal control among all as well
as also work and power can be delegated accordingly so that work can be managed and done in
effective and efficient manner.
Moreover, Corporate governance is defined as the system through which firms are guided
as well as controlled (Belás and et. al., 2015). In Barratt Developments PLC, Leadership such as
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executive directors are responsible for managing the business regularly. Non executive directors
facilitates an effective level of scrutiny challenges as well as support to whole proposals.
Accountability, this maintains the sound risk management and internal control systems. They
perform their work with full accountability. Also, they recognises the significance of maintaining
open dialogue with their several stakeholders. Through their remuneration committee they
formed a formal as well as transparent procedures in order to formulate their policy upon
executive remuneration (About Barratt-Developments-Plc. 2019).
TASK 2
Evaluate the importance of carrying out PESTEL analysis for an organisation
PESTLE analysis is defined as the structure for analysing the key factors such as
political, economic, social, technological, legal and environmental all these influencing a firm
from outside (Glova, Sabol and Vajda, 2014). Application of this can aids Barratt Developments
PLC to find the major external environment factors which shapes the strategy as well as support
their strategic decisions making procedures. Moreover, this plays effective role into the business
growth. So, the importance of performing PESTEL analysis for Barratt Developments PLC are
discussed below:
 Political factors: In PESTEL analysis, political factors exert a strong influence upon
profit as well as long term sustainability of respective organisation. The global presence
enhances the firm's sensitivity of changes into political environment of various countries.
In political respect, the key success within dynamic global business atmosphere is to
diversify the risk systematically. The political environment of country comprises multi
faceted factors. Also, the respective organisation have to comply some factors such as
changing policies, trade restrictions and others at the time of their procedures of strategic
planning. While performing the Pestle analysis, with the help of this particular factors
respective organisation can get to known about the political conditions of various
conditions that help them to formulate their decisions effectively and in profitable
manner.
 Economic factors: This is essential for Barratt Developments PLC to carry out the
PESTEL analysis and know about the economic factors such as labour market condition,
interest rates etc. because this aids them to ascertain the whole economic atmosphere of
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the country. Also an effective knowledge of this factors can aids Barratt Developments
PLC to approximate the growth of sector and firm.
 Social factors: Culture of the company leads strong influence from the societal trends,
values and norms. Knowing about the power structures, demographic trends and others
may assists Barratt Developments PLC to formulate efficacious marketing strategies as
well as accomplish their objectives by informed PESTEL analysis. So, respective
organisation marketing department can utilise this information retrieved from social,
environmental analysis for targetting the customer groups as well as enhance the appeal
of provided products to potential purchasers.
 Technological factors: Technology is considered as the fourth essential factors (Gupta,
2013). The rapid enhancement of technology as well as technological diffusion in all over
the world has enhanced the significance of knowing technological factors during
procedures of strategic decision making. This is helpful for Barratt Developments PLC to
capture the technological trends fro attaining the specific business advantages like
enhancing profitability, boosting innovation process as well as maximising the
operational effectiveness. Moreover, through adopting new technologies they can shorten
their process and fastest its operations effectively and efficiently.
 Environmental factors: The leading environmental consciousness as well as changing
climatic conditions has developed environmental analysis as essential for respective
organisation. The environmental regulations, standards and so on vary in all over the
several markets. The global presence of Barratt Developments PLC need firm to prefer
these differences for avoiding uncertain situation carefully. With the help of this, they can
able to understand the various countries climatic and environmental situations and
formulate decisions before entering into new market or initiating a new product line.
 Legal factors: It is considered as the crucial factors as without this Barratt Developments
PLC can not bale to enter into new market without analysing detailed legal environment
as well as regulatory framework of new customer market. An effective evaluation of this
help respective organisation to avoid involving within few serious trouble (Hampel-
Milagrosa, 2014). As avoidance of this can influence unexpected situation for respective
organisation like hurting competitive advantage as a outcomes of intellectual property
rights violations as well as harmed their reputation because of violation of clients, staff
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and many more. Also this help them to know their legal rights effectively and efficiently
as well as develop decision accordingly.
TASK 3
Use the PESTEL framework to analyse the external environment of your chosen company.
PESTEL analysis is defined as the acronym for political, economic, social, technological,
environmental as well as legal factors which shape the external business environment
(Kozubíková, Homolka and Kristalas, 2017). Barratt Developments PLC performs into dynamic
as well as complex atmosphere characterized through regulatory changes, leading environmental
activism, technological changes and others. Pestle Framework of respective organisation are
discussed below:
 Political factors: These factors are whole about the how as well as at what level a
government intervenes into economy. It involves tax policy, government policy and
others. The political factors that influence the Barratt Developments PLC are political
stability, changing policies and many more. High political stability facilitates a stable as
well as friendly environment of business with predictable trends of the market growth. As
well as whenever there are any political chaos, this deters the investors and effects the
trust of shareholder into economic performance. Presently, Respective organisation
operates into several countries all have their own political pressures or tensions. Leading
tensions as well as instabilities into international political surroundings can impact the
Growth of Gold sectors as well as limit growth opportunities provided to Barratt
Developments PLC.
Also, Bureaucracy as well as corruption can influence the business environment
negatively. Operating into various countries with high corruption level as well as weak law
enforcement develop the enterprises atmosphere maximising unpredictable for Barratt
Developments PLC because of jeopardised public trust upon company as well as whole political
and economic structure. The corruption may influence many operation of business, ranging from
licensing, contracting, fraudulent deals to frequent lawsuits (Lee and et. al., 2015). In case
Barratt Developments PLC decides to enter into marketplace with corrupt economic, political
system, this will threaten their sustainable developed through destabilising the society, harming
justice system as well as endangering the law rule.
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 Economic factors: These has important effects upon how firm does business as well as
how effective they are. This involves exchange rate, economic growth and others. Some
economic factors that influence the Barratt Developments PLC are labour market
conditions, economic structure, financial market and others. The international extended
strategies of respective organisation are influenced through the effectiveness of financial
market as performing into highly effective financial markets that leads towards developed
liquidity position as well as strengthened capability to enter new marketplace the health
as well as effectiveness of financial markets will ascertain Barratt Developments PLC's
capability for raising the revenue at fair prices. Moreover, economic development of
country directly influence the performance of company. Leading economies provides
broad range of growth opportunities to Barratt Developments PLC. Likewise, this is
crucial to know the industry life cycle stage. Entering into mature sector can be more
challenging because of marketplace saturation than industries at growth stage (Lenssen
and et. al., 2013). Also, their business performance of respective organisation is get
influenced through extend to which the government of domestic county has spend upon
core development of infrastructure. As developed infrastructure provides the business
environment as well as enhance potential growth of gold sector within respective nation.
 Social factors: These are also known as the socio cultural factors which are the areas that
includes the shared attitudes as well as belief of society. This involves age distribution,
career attitudes and others. Some social factors which influence Barratt Developments
PLC such as demographic trends, online shopping, equality and power distance and many
other. For example: changing demographic patterns such as migration trends, socio
economic variable and others has paramount significance for global business such as
Barratt Developments PLC, analysing the demographic characteristics can aids them to
choose the appropriate market segments with higher potential of growth. Moreover, the
strategies of business as well as marketing are also influenced through migration. This is
essential for respective organisation to know about the person's general attitude towards
migration as this may influence their capability for brining global managers to host
country.
 Technological factors: These factors pertain to innovation into technology which may
impact the operations of sectors as well as the market favourably or unfavourably. It
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considered to research and development, automation and etc. There are some
technological factors which influence the Barratt Developments PLC are social media
marketing, shortened the product life cycles and others. They adopt the new technologies
which have shortened the new product development life cycle (Pikhart, 2014). Currently,
new products are formed quickly and supply chain partners has also obtained more
power. This pressurizes them to make new products fastly, enhance product range
diversity, incorporate flexibility within value chain and create healthy business relation
with value chain partners. Moreover, Barratt Developments PLC have to effectively
consider the continuous technological innovations for staying ahead of the rivals. A close
eye has to be kept upon examining the 5g as well as ascertaining their potential for
delivering optimistic business results by maximised user experiences, enhanced speed as
well as extended access. Technological innovations such as it bring major transformation
into sector as well as reset the effective rules for the players of market. Also, prefer the
technological level of development and maturity within particular market is essential.
Entering into market place in which technological enhancement have not reached the
maturity means that respective organisation can enhance the market share through
concentrating upon emerging technological innovations.
 Legal factors: These factors has both internal as well as external as well as internal
factors sides. There are some legislation which effects the business environment into
particular country. Some legal factors which influence the Barratt Developments PLC
are employee protection laws, customer protection laws and others. Respective
organisation have to obey the staff health and safety laws as few counties has strict
regulations to assure labour safety. Facilitating a safe working atmosphere for personnel
is ethical as well as moral obligation of Barratt Developments PLC. Likewise, anti-
discrimination legislation also required to be carefully analysed at the tine of formulating
practices of human resources as discriminatory suits against employer harm the
reputation of company as well as impact their capability for grabbing the attention and
retaining the talent. Also, the data protection have become an essential problem because
of customers privacy as well as security concerns. Respective organisation required to
understand the regulations of data protection for protecting the customer data. Also, there
are legislation to set the maximum price, assure a specific quality standards as well as
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safeguard the clients from fraudulent marketing claims. Barratt Developments PLC has
to consider those factors to assure compliances with clients protection laws.
 Environmental factors: These factors involves whole that which influence or are
ascertained through the environment (Wetherly, 2014). It involves weather, climate,
environment offsets and others. Some of the environmental factors which influence the
Barratt Developments PLC are renewable technologies, recycling and waste
management, weather and climate conditions and many more. Few countries provides
subsidies to motivate investment into renewable technologies. Respective organisation
may benefits from this as well as invest into renewable technologies for ensuring the
sustainability for the longer duration. This investment will also enhance the satisfaction
of stakeholder as well as explore the consumer base because of increased brand image.
Moreover, there is leading trends towards the utilisation of eco- friendly products.
Barratt Developments PLC can considered it as an opportunity as well as adapt green
business practices for wining stakeholders faith. Regulatory bodies emphasis upon
assuring compliances with environmental norms is altering the priorities of product
innovation. This needs respective organisation to priorities as well as concentrate upon
marketing the ozone-friendly nature of its goods over customary value propositions
(Barratt Developments Plc PESTEL Analysis. 2018).
CONCLUSION
As per the above report, it has been concluded that business environment are considered
as the essential for the organisational success as this allows firm to improve its strategies as well
as anticipate the potential changes. Moreover, Pestle analysis is the significant business tools
which includes as detailed analysis of external environmental factors which shape the
environment. Ranging form political to environmental, whole factors comprises several variable
which influence the procedures of strategic decision making of company
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REFERENCES
Books and Journals
Belás, J. and et. al., 2014. Significant attributes of the business environment in small and
meduim-sized enterprises. Economics and Sociology.
Belás, J. and et. al., 2015. The business environment of small and medium-sized enterprises in
selected regions of the Czech Republic and Slovakia. E+ M Ekonomie a Management.
Glova, J., Sabol, T. and Vajda, V., 2014. Business models for the internet of things
environment. Procedia Economics and Finance. 15. pp.1122-1129.
Gupta, A., 2013. Environment & PEST analysis: an approach to the external business
environment. International Journal of Modern Social Sciences. 2(1). pp.34-43.
Hampel-Milagrosa, A., 2014. Micro and Small Enterprise Upgrading in the Philippines: The
role of the entrepreneur, enterprise, networks and business environment (No. 86).
Studies.
Kozubíková, L., Homolka, L. and Kristalas, D., 2017. The effect of business environment and
entrepreneurs’ gender on perception of financial risk in the smes sector. Journal of
Competitiveness.
Lee, Y. K. and et. al., 2015. Market orientation and business performance: Evidence from
franchising industry. International Journal of Hospitality Management. 44. pp.28-37.
Lenssen, G. and et. al., 2013. A value mapping tool for sustainable business
modelling. Corporate Governance.
Pikhart, M., 2014. Implementing new global business trends to intercultural business
communication. Procedia-Social and Behavioral Sciences. 152. pp.950-953.
Wetherly, P., 2014. The business environment: themes and issues in a globalizing world. Oxford
University Press.
Online
About Barratt-Developments-Plc. 2019. [Online]. Available
through:<https://www.barrattdevelopments.co.uk/about-us>
Barratt Developments Plc PESTEL Analysis. 2018. [Online]. Available
through:<https://www.case48.com/pestel-analysis/10812-Barratt-Developments-Plc>
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