Analysis of PESTEL Factors for TSB Bank

The given assignment is about conducting a PESTEL analysis for TSB bank, which involves identifying and discussing the political, economic, social, technological, environmental, and legal factors that affect the organization's operations. The analysis also assesses risks and informs decision-making. It's essential to understand these external environments to sustain in a competitive business industry. The assignment is based on research papers and journals related to PESTEL analysis and its application in business environments.

BUSINESS
ENVIRONMENT

EXECUTIVE SUMMARY
TSB bank is a commercial and retail bank enterprise in United Kingdom. Chairman of
TSB bank is Richard Meddings and Chief Executive is Paul Pester. In 1995 TSB is used as
trustee saving bank prior to its merger with Lloyds bank. Companies are providing core products
such as life insurance, general insurance, commercial banking and retail banking. TSB bank is
having its headquarters in UK, Scotland and Edinburgh. Organisation are having 550 location of
branches, 5 operations centres and 2 centres of telephone. TSB bank is adopting a divisional
structure in their companies and they manage them in a very efficient and effective manner.
PESTEL environments are giving benefits to organisation and external environment give impact
on companies such as micro and macro environments.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................1
INTRODUCTION...........................................................................................................................1
TASK ..............................................................................................................................................1
1. Organisation structure, its management and how it governed................................................1
2. Benefits for conducting PESTEL analysis .............................................................................3
3. Forces of external environments impact on TSB bank...........................................................5
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
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INTRODUCTION
Operating an enterprise, it is necessary to understand environment of business for running
of an organisation at a place successfully. Factors of environment impact each aspect of
enterprise like its location, nature and system of distribution and product price. Hence, it is
necessary to understand different elements of environment of business which includes
technological, framework of political, aspects of socio cultural, legal etc. TSB bank is a
commercial and retail bank in the UK that is selected from the present study. In 1995 TSB is
used as trustee saving bank prior to its merger with Lloyds bank. TSB bank is having its
headquarters in UK, Scotland and Edinburgh (Agbim, Oriarewo and Zever, 2014). It is having
550 location of branches, 5 operations centres and 2 centres of telephone. TSB bank core
products are life insurance, general insurance, commercial banking and retail banking. In this
report discussed about firm structure, its management and how it governed, benefits of analysing
PESTEL along with general forces of external environment which impact on organisation.
TASK
1. Organisation structure, its management and how it governed
Organisation structure
Divisional structure is a collective functions which gives their product. It utilized their
plans for operate and compete as a centre of profit. Responsible workers for some services are
placed in the structure of divisional for raising flexibility. Divisional structure are mainly
managed by their own and focus on narrow aspects of firms services and their products.
TSB bank is adopting a divisional structure in which authority are delegated so their
performance can measure directly with every group. Outcomes of managers are performing
higher and better morale of their workers (Chow and et. al., 2011). Structure of divisional are
more efficient while working in coordination between various department of bank and having
much flexibility for responding to a market changes. Organisation is having a same process if
they have to modify enterprise size by eliminating or adding departments in structure of
company. TSB bank is following a divisional structure in which director gives authority to three
departments deputy and chief managers of company which are telecommunication
standardization policy of department, study groups department and planning and operations
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department these are following authority of director and these department are having sub group
whom they give authority as shown in below chart structure followed by TSB bank:
(Source: TSB organisational structure)
TSB Management and its governance
Management: It is a process which deals and control people. It is an administration of an
firm. It is an enterprise, body of government and non-profit company along with that it also
contains activities of strategy settings of firm and efforts of coordination of their workers. It help
in controlling of all activities of organisations in a proper process (Dewes and et. al., 2013). It
will help in planning, organising, staffing, directing and controlling of TSB bank. These are
functions are followed in a proper structure of organisation so that all the activities can manage
in an effective and efficient manner. It help TSB company working in a proper way along with
coordinating with all departments of enterprise have to coordinate with each other.
Relating to TSB bank its management flow from director as they provides order to three
different department so that manage of all department can run smoothly in a proper manner. In
these three departments of TSB are one of deputy to the director, second and third are chief of
department which make coordination between them (Craig and Campbell, 2012). They gives
order to their sub departments of each divisions like as deputy department of telecommunication
standardization policy are having authority of giving orders to their sub departments so that all
these department can manage without any barriers in work flow. Having sub group which are
manage by deputy managers are financial and budget control unit, WTSA programmes divisions,
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Illustration 1: TSB organisational structure

communication unit and policy and technology watch divisions. Department of chief on study
groups department manage their sub group like as groups of study and numbering administration
& operational bulletin service. Department chief of operations and planning department manage
their three sub groups such as publications, events & outreach divisions, ITU-T-Database unit
and electronic working methods unit. This way management is continuously working from top
management to lower management in TSB bank of UK.
Management is where director manage all work for achieving goals and objectives of
TSB and give order to middle management and they manage and divide their work according to
departments and coordinate with each other on a same level and have to achieve a given target
by top management and lower level management will follow order and work for achieving goals
and targets (Fernando, 2011).
Governance body: It means that stakeholders, employees and other members like public
are having ultimate control over these bodies. They are constituted mainly for administration
purpose. Example: Boards of Directors is a body of governance of TSB bank. Responsibilities of
governing body of TSB bank are:
 Gives companies leadership.
 Supervising and recruiting are most senior manager of staff members.
 Assessments are overseeing and risks management of TSB bank.
 Complying with Act of companies, memorandum of firm and article associations.
 Proper maintenance of accounts books.
 Prepared an audit at the end year
 Annual end of year report has to sign off and prepared.
 Register of members and directors should be up to date.
 Policies and plans are formulated for meeting TSB bank goals and objectives.
2. Benefits for conducting PESTEL analysis
PESTEL analysis stands for political, environment, social, technology, economic and
legal. Its purpose is to find out all different environment of externals which affect enterprise.
It helps in overcoming of all risks and face a uncertain situations easily if arise will also
eliminate loss of company. Risks are assessed by managers which find out pose of factors and
knowledge is used for informing of decisions (Gebauer, Paiola and Edvardsson, 2010). For
example: TSB bank discover laws locally misuse strict penalties on enterprise.
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PESTLE analysis factors are used for organising planning, product development,
business planning, marketing planning and strategic planning. It is discussed in detail are as
follows: Political: It is having both internal and external politics. Events of political include tax
policies, trade reforms, trade restrictions, employment law, political stability, regulations
of environmental etc.
Benefits: Political factors are having benefits to TSB bank such as it help in reducing cost,
stability in political, agreements of international trade, skilled government and experienced
environment of political (Hamilton and Webster, 2015). Economic: Increasing in rate of inflation of an economy affect TSB bank core products
and services. Factors of economy contains interest rate, patterns of economic growth,
foreign exchange rates, inflation rate, recession, living cost, unemployment, working
hours etc.
Benefits: Economic factors provides benefits to firm such as taxes, stability in economic, public
investments in research and development and competitive market. Social: Factors of social environment determines such as analytics of population,
demographics, trends of culture etc. TSB bank considered all factors which effect
community socially and market. Process of banks which harm to society should not
eliminate social responsibility.
Benefits: Factors of social are giving advantage to company such as workforce, demand
increasing and stable in social structure. TSB banks are fulfilling needs of their customers by
keeping all social aspects in their firm will help them in increasing of their goodwill in market. Technology: Technology factors innovate which effect industry operations and
favourable & unfavourably of market. It refers to research & development, automation
and aware of innovative technology in a market. TSB bank have to consider all barriers
of adopting a new technology within a firm.
Benefits: Technologies factors help organisation such as problems of technology, scale effect of
technological, automation increases and raising of automation in enterprise. Adopting of new and
innovative technology will help bank doing their activities as faster as they can (Khan, Alam and
Alam, 2015). This way bank can achieve their target and goals.
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 Legal: Legal factors are having a both sides internal as well as external. Certain laws
which provides effect to environment of business in some countries. Analysis of legal
factors in both charts and angles out of strategies in reflect of these legislations. For
Examples labour laws, safety standards,taxation, resources, imports & exports, laws of
consumers etc. TSB considered all aspects of legal factors (Kolk, 2016).
Benefits: This factors are providing benefits to TSB bank as they follow all legal aspects with in
a organisations. All legal factors are followed by company then they will smoothly run their
enterprise without any disruption in a work of banks. Environment: This factor contains all those impacts by surrounded environment.
PESTLE is very crucial aspects for some enterprise. Analysis of business environment
contains but not bound to weather, climate, natural calamities, temperature, location of
geographical, environment offsets, climate global changes etc. These factors take into
consider aspects of environmental and ecological with could be social in nature.
Benefits: Factors of environmental gives benefits to firm like climate changes help company as
they analyse future. If company are following all aspects of environment then it will be very
beneficial for TSB bank that they can easily overcome with future issues which can arise
uncertainly at any time without knowing.
Benefits of PESTLE analysis to TSB bank
 Company used these factors which are easily and simply understand.
 It will avail in better understanding of environment of business.
 TSB bank help in promoting the growth of thinking strategically.
 Adopting of PESTEL analysis will help in reduction of potential threats in TSB bank.
 In companies they contain expertise and cross-functional skills.
 Organisation is analysed for making use of profitable opportunities which increases time
to time due to modifications of external factors (Lee, Sohn and Ju, 2011).
3. Forces of external environments impact on TSB bank
External environment: These outsides factors are composed or influence the business
operations. These factors are not in control by many of business and their elements are
encompass like financial tendencies, political legislations, technologically and communal matters
and having direct habitual impact on organisations. Events, entities, conditions and factors of
surrounding companies which impact on choices and activities and find out risks opportunities.
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External environments factors are divided into two categories are micro environment and macro
environment are discussed below: Micro environment: It contains factors which give direct impact on TSB bank are
suppliers, customers, financiers and perceptions of public are discussed in detail below:
1. Suppliers: Suppliers help in controlling of success when they hold powers. Suppliers of
TSB bank are governments bodies, initial public offer etc.
2. Customers: It is necessary for each business for running or be in market. If no one buy
insurance then government will close their business customers of TSB bank are
individuals, partnership firms, companies trusties etc.
3. Financiers: Owners of business take off loans for expansion of their enterprise (Yüksel,
2012).
4. Perceptions of public: TSB bank is having a good reputation among their public. Public
are a powers helps bank reaching with their goals and targets.
5. Competition: TSB bank is having competitions with their type of similar banks as they
have to understand and have to compete with their competitors. Macro environment: It includes six factors such as environmental, social, economic,
political, legal and technological considerations.
1. Economic factors: This factor includes demand and supply, interest and exchange rates
and government is spending. In this TSB bank income of consumers ability, inflation
help in raising of prices without related to raising in wages, outcomes are declining of
customers, periods of recession of activities of economy are employment, income and
production, rate of interest of TSB bank are giving their services at higher cost and
exchange rates performs banks exchange currency of others country.
2. Technological factors: New technologies are very effectively to counter recession and
inflation. Technologies had made work faster through using of new and innovative
technologies in TSB banks (Khan, Alam and Alam, 2015). Factors of technology make
our work complete on time as due to advanced technology it saves are time a lot and at
time it help TSB bank achieve their goals and objective.
3. Socio- cultural factors: These factors are impacted on their incomes so they are willing to
invest for betterment of their lifestyles and secure family considering values and beliefs.
Socio factor is a very difficult factor to maintain as there are complexities in human
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nature that vary from place to place. Therefore TSB bank uses very static and practical
approaches so as to stand out and have preference in people's choice. Here, value and
beliefs constitutes how customer invest and in what manner. As it is right of a customer
to raise demands of what he expects of business therefore, TSB bank, must follow more
customer oriented approach (Lee, Sohn and Ju, 2011).
4. Demographic factors: Demographic is a approach to study about people with factors such
as age, caste, region, gender and race. This factor is directly to related to customer
behaviour. As growth in population has lead growth in financial sector too. Customers
are now from global regions and more diverse in their needs. Multiple schemes can be
incorporated considering demography such as financing schemes for adolescent, youth
and adult can be initiated to bring the best out of a business and meeting needs of every
segment of customer.
5. Legal factors: This factor constitutes of all legislative bodies, trade policies, foreign
policies that are formed by government of a nation. TSB bank follows a very structured
and systematic approach to lead its financial day to day operations in a successful
manner. As much as bank will understand the land and laws functioning there, business
will have optimum utilisation of its resources and high market share. Opposing legal
factors may cause restrictions in business operations (Dewes and et. al., 2013).
6. Natural factors: Natural factors such as climate, soil and seasonal variations are
independent of human control. The geographic conditions can cause banking operations
to fluctuate as workforce can get affected. Irrespective of demands, sometimes, operating
in remote or disaster prone areas can be challenging.
CONCLUSION
From the above report it can summarize that TSB bank adopt divisional structure in their
company along that help in managing their flow from top level to lower level of firm and
responsibilities of governed bodies. These are functions are followed in a proper structure of
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organisation so that all the activities can manage in a effective and efficient manner Discussed
about PESTEL analysis of all factors such as political, economic, social, technology,
environment and legal are described and with that how analysis of PESTEL are beneficial to
TSB bank. These factors are not in control by many of enterprise and their elements are
encompass like financial tendencies, political legislations, technologically and communal matters
and having direct habitual impact on organisations. In this also learn about all the external
environments such as micro and macro are which is essential in order to sustain in the
competitive business industry. These outsides factors are composed or influence the business
operations. Risks are assessed by managers which find out pose of factors and knowledge is
used for informing of decisions.
REFERENCES
Books and Journals
Agbim, K. C., Oriarewo, G. O. and Zever, T. A., 2014. Moderating effects of individual
entrepreneur and enterprise characteristics on the relationship between business
environmental scanning behaviour and entrepreneurial performance. Journal of
Business Studies Quarterly. 6(1). p. 248.
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Chow, A .T and et. al., 2011. Broadband network with enterprise wireless communication system
for residential and business environment. U.S. Patent 7,944,948.
Craig, T. and Campbell, D., 2012. Organisations and the business environment. Routledge.
Dewes, H., and et. al., 2013. Scanning the macro-environment for liquid biofuels: A comparative
analysis from public policies in Brazil, United States and Germany. Journal of Strategy
and Management. 6(1). pp. 40-60.
Fernando, A. C., 2011. Business environment. Pearson Education India.
Gebauer, H., Paiola, M. and Edvardsson, B., 2010. Service business development in small and
medium capital goods manufacturing companies. Managing Service Quality: An
International Journal. 20(2). pp.123-139.
Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University
Press, USA.
Khan, U. A., Alam, M. N. and Alam, S., 2015. A critical analysis of internal and external
environment of Apple Inc. International Journal of Economics, Commerce and
Management. 3(6). pp. 955-961.
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business. 51(1).
pp. 23-34.
Lee, J. H., Sohn, S. Y. and Ju, Y. H., 2011. How effective is government support for Korean
women entrepreneurs in small and medium enterprises? Journal of Small Business
Management. 49(4). pp. 599-616.
Yüksel, İ., 2012. Developing a multi-criteria decision making model for PESTEL analysis.
International Journal of Business and Management. 7(24). p. 52.
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