Business Environment Analysis for BP Plc

This assignment requires applying a business environment model to BP Plc, considering various elements such as economic, legal, ethical, and philanthropic factors. The model aims to enhance the company's image and improve profit margins by taking into account external and internal business environments. By analyzing these factors, BP Plc can develop strategies to adapt to changing market conditions and maintain a competitive edge.

Business Environment

Table of Contents
TASK1 ............................................................................................................................................1
TASK 2............................................................................................................................................3
REFERENCES................................................................................................................................8

TASK1
Business environment is related to the internal and external factors of the organisation
which is affected the organisation. The internal factor of the organisations are employees,
resources, structure and rules and policies and the external factors are economical, social, legal,
technological and political factors which affect the organisation positively and negatively.
Business environment help in presenting threats and opportunities for the business, help in
exploring the business and maintaining the adaptability to changes. This essay is based on
business environment and there are two tasks (Gupta, 2013). First task talking about the impacts
of innovation within Sainsbury and these innovation are operate through marketing, operations,
supply chain management and research and development. Second task is based on corporate
governance and corporate social responsibilities of BP Plc.
Innovation refers to changing processes or creating more effective and efficient product
by using ideas and doing process. It add value in the product and services and provide a product
and services with the additional value to the customer. In this task talking about innovation in
Sainsbury's business environment which founded by John James Sainsbury in 1869. It is engaged
in grocery related retailing and retail banking, financial services and property investment. The
innovation affected and impacted the various function of Sainsbury. It create positive impact on
the marketing of Sainsbury. Innovation and creativity in marketing is the key of success for
organisation, it helps in strategic planning for the growth of company and developing the
products and services which is provided by the company. The innovation in goods and services
can be positive and negative. Innovation in marketing of Sainsbury is impacted the sales of the
company, business purpose and goals. For example if the innovation are done in any product of
the company and add value in them, it is probability it is liked by the customers or may be not. If
it liked by them it increase the sales but its negative impact is negative for the company.
Innovation is also affect the other functions of Sainsbury like in operational function. It is related
to all the sources which help in creation of goods and services. This function includes various
elements such as human resources, technologies, equipments and finance.
Technological innovation affect the organisation in positive way. Various technologies
are generate day by day and Sainsbury adept them because of its customer (Harrison, 2013). This
innovation help the organisation to improve business value by using technological aspects of the
products and services. Technological innovation is a ongoing process if sainsbury accept it they
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provide growth and direction to its business. It help in improve communication, mange ideas,
track performance, improve products and monitor customer feedback (Hilton and Platt,
2013).Sometimes it create some challenges and issues for the business functions like finance
impact marketing, operations, supply chain and research & development. Without finance
marketing is not possible and operations are not done because if raw material are not there
product are not generate and any function will not run. Finance affect the accounting, travel, and
expenses processing, employees payroll, tax compliance and planning etc. Information &
communication technology also create some threats and issues for the business functions such as
legal, social, environmental, and ethical issues. If the organisation, in its marketing, operational,
logistic and research & development functions do not sales and purchase and produce product,
research without following roles and regulation, it can impact socially, environmental and
ethically. Innovation impact on the growth of the economy of the company and it is a strong
indicator. The growth which is generate through innovation can be known by human capital of
that company, research and development and public infrastructure. Many of the innovation have
been underestimated in economist's minds but turned out amazing inventions. Like TV, they
know that many UK families are spend their more time on TV so they innovate TV which is the
reason of the economic growth of the company. In economic progress and growth technological
change also play a good role. Like they reduce human resources and labour, time saving,
transportation etc. In Sainsbury, if it produce new products now there are various machines and
equipments which help in the production. It reduces the wastages and minimizing the cost which
increase the economy of the Sainsbury.
Innovation also impacted the supply chain management and it meet consumers needs and
save the cost by making innovation in this function and it impacted this function positively.
There are five aspects which impact the supply chain management (Klem, 2013). Design for
manufacture, design the product to make it easy to produce so that it reducing the
manufacturing cost. Design for environment, by designing the product to reduce its impact on
environment by accomplished through less packaging, a more efficient supply chain and by
recycling waste along with the way. Design for product serviceability, by designing the
product ease for repair, compared to products that are assembled with bigger components,
making individual parts more difficult to access. Innovation impacted R&D also, R&D is the
porocess wghich help a company works to obtain new knowledgethat use to create new
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technology, products, services and systems. In Siansbury, R&D intensity is differ for an
organisation because it is the main driver of R&D. They are thing about doing research and
product they do some innovation. Like they provide automatic parking which is only possible by
innovations (Pulver, 2012). Firstly they innovation and do research and development to improve
it. Innovation help in generate new product by research and development.
Corporate governance is the system of rules, practices, stargates and processes by which
an organisation is directed and controlled. It is the framework of rules and practices by which a
board of directors ensures accountability, fairness and transparency and it is the system by which
company make transparency in the business towards the rules and regulations or ethics. There
are four pillars of corporate governance. Accountability, it embraces the ownership of strategy
and task required to attain the goal of the organisation. This applies on the staff of Sainsbury for
leadership so that they can do work with the leader's defined way and reduce the risk. Fairness,
in Sainsbury it is related to the nearness of the company's product and its services which it
provide to its customers. It can be related to stakeholders and treating them with including
minorities, reasonably equitably and provide effective redress for violations. Transparency, It
means having nothing for hiding. It is the critical component of corporate governance because it
checked all the entities and action which is taken by the company for the products and for the
employees. It is based on rules and regulation and legislations like, in Sainsbury the rules and
regulation which are made by the UK government for production and employment are followed
properly or not. If the production is harmful for the environment and society its against the ethics
and corporate governance. Leadership, it is use in the company to defining the direction so the
employees are working a good way and in proper manner and no treats and conflicts are arise as
barriers. Without clear direction, policies and procedures the organisation can not be done its
production and achieve its goals. Corporate governance and ethics use in a business to provide
the safety and security to it. For example if Sainsbury did not provide good quality products it is
not follow its rules and ethics which is harmful for both customers as well company (Savrul,
Incekara and Sener, 2014).
TASK 2
Corporate governance is the way an organisation governed by following rules,
regulations, acts and legislations. It is a techniques and strategies by which a company directed,
monitored and controlled. In this task here talking about BP Plc that is founded in 1909. it is an
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integrated oil and gas company and holds interest in OJSC Oil Company Rosneft, and gas
company. It operate through three segments, upstream, Downstream and Rosneft. In this
company the corporate governance is the mechanism, processes and relation by which it
controlled and directed. In corporate governance the board of directors are appointee for making
rules and regulations and controlled and Monterey the organisation (Sena Ferreira and et. al.,
2012). The board of directors face many challenges of aligning the interests of the board
management, shareholders and stakeholders. Board of directors is a group of peoples who are
elected to represent shareholders. They are elected for proper running of BP Plc so that it do not
face any problem related to ethics and rules or acts. There are stakeholders also and stakeholders
is a party that has an interest in a company and can affect the business and affected by the
business. There are some roles and responsibilities of board of directors. They interacting with
key stakeholders to inform them of achievements and ensuring they have input into determining
strategic goals and direction. They establish policy which based on governance system. The
board has the responsibilities of developing the governance system of BP Plc. The rules which is
made by the board for the company should be policy based. The board of director has a strategic
function which providing the vision, mission and goals of the organisation. The board should
report to the stakeholder at the Annual General meeting. They should defining the key
relationship between the organisation and its stakeholders and other individuals of the
organisation. The boars of directors are appointed to do work on the behalf of the shareholders to
run the business of the BP Plc properly by removing the problems which is occurs in the
business.
Corporate business is beneficial for the organisation because good governance ensures
corporate success and economic growth. If the governance of the company is strong it will
maintained the confidence of the investors and helped in raised the capital efficiently and
effectively. It helps in brand formation and development or it create positive impact on the share
price.
Corporate social responsibilities is a business approach which contribute the sustainable
development which is delivering by economic, social and environmental benefits for all the
stakeholders. It is a continuing commitment by business to behave ethically and make
contribution in economic development while improving the quality of the workforce which is
doing in the organisation (Adeoye and Elegunde, 2012). The purpose of CSR is to ensure that
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the company run its business in a ethical way or not and by using laws and rules or
responsibilities which are made by the government. Corporate social responsibilities are
important for the business of BP Plc to solve the social issues, national issues and health etc. It
improving the brand image, being a social responsible company it the duty of the business that
they should not provide bad quality and quantity product to the customers because the bad
quality affect the brand image. The organisation established good communication with the
customers so that they are loyal for it. For better communication it can use various
communication channels and promotional channels so that they can attract customers. CSR help
the company to stand out it from competition, if the company follow the rules and work
according its ethics it can remove competition (Craig and Campbell, 2012). If it provide better
quality product to the customers they purchase it because now these days customers are focus on
the quality and they ready to pay for it. When the social responsibilities are recognized as a part
of the company it can attract public positively and which is beneficial for the BP Plc.
The CSR activities of BP Plc is that the company covers commitment and effectiveness
within the local national and global community in which it does its business which reflect the
companies business. It covers the environmental and social impact of the company, it does not
any work which is harmful for the society and the environment. It make various policies,
programs which help the employees in their work. It properly follow labour relations and labour
rights laws, compensation, benefit and training and development program and health and safety
law. The organisation covers the environment at large including use of natural resources and
earth saving works. It do not do that works which is harmful for the environment. It provide
training, safety and subcategory to its employees by this provide security to its employees on
workplace and enhance or improve their knowledge. It provide proper and all resources to its
employees which are need for the business which help in the growth of them.
Carroll's CSR Pyramid which is given by Archie Carroll's who is a corporate social
responsibility pyramid. In this concept company incorporate environmental and social concept in
their business functions. Corporate social responsibility is a intensive term which mainly show
efforts of company that how they helping society to improve (Carroll’s pyramid of CSR: taking
another look, 2018). Apart from this, 20 years later the Pyramid was mainly remained highly
applicable. It is regularly cited, debated, modified and criticized by academia, corporate leaders,
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politicians and social commentators. Some of these efforts are, doing charities in non-profit
institutions, implantation of environment friendly policies (Belás, Bartoš and Novák, 2014).
(Sources: Carroll’s pyramid of CSR: taking another look, 2018)
It is enclosed with different stages and these are given, First stage of this pyramid mainly
emphasises on economical responsibility that is required to be profitable. As profit is beneficial
for both reward gainer as well as organisation. It second stage mainly focuses on legal
responsibility that means it is important for every individual to obey these laws while
conducting CSR activities. Next stage of this pyramid reflects ethical responsibilities that means
it is important for business to do their activity in right way which simply means no illegal
activities will going to be used. At this last stage of pyramid focus on Philanthropic
responsibilities which means its important for individual to be good corporate citizen (Babatunde
and Adebisi, 2012).
When it comes to apply this model on BP Plc, it will be required for this organisation to
focus on the foundation of profit where it needs to be come first. After that, then it comes to look
into the need of business so that it could apply or imply every single laws & regulations that may
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Illustration 1: Carroll’s pyramid of CSR: taking another look

aid them in focusing on ethics. Business also requires to consider all the beneficent alternative,
and this needed to meet every single requirement considering all the ethical duties. Then only,
this model can be applied. It is also required for BP Plc to consider economic, legal, ethical and
philanthropic.
After when this model gets applied by BP Plc, CSR of this organisation would improve
and will consider different elements and it may also aid in improving profit margins. When it
comes to apply this model, it will directly enhance company's image in specific time frame
(Adeoye and Elegunde, 2012 ).
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REFERENCES
Books and Journals
Adeoye, A. O. and Elegunde, A. F., 2012. Impacts of external business environment on
organisational performance in the food and beverage industry in Nigeria. British
Journal of Arts and Social Sciences. 6(2). pp.194-201.
Babatunde, B. O. and Adebisi, A. O., 2012. Strategic Environmental Scanning and Organization
Performance in a Competitive Business Environment. Economic Insights-Trends &
Challenges. 64(1).
Belás, J., Bartoš, P., Habánik, J. and Novák, P., 2014. Significant attributes of the business
environment in small and meduim-sized enterprises. Economics and Sociology.
Craig, T. and Campbell, D., 2012. Organisations and the business environment. Routledge.
Gupta, A., 2013. Environment & PEST analysis: an approach to external business environment.
International Journal of Modern Social Sciences. 2(1). pp.34-43.
Harrison, A., 2013. Business environment in a global context. Oxford University Press.
Hilton, R. W. and Platt, D. E., 2013. Managerial accounting: creating value in a dynamic
business environment. McGraw-Hill Education.
Klem, J.B., 2013. System and method for tracking information in a business environment. U.S.
Patent 8,583,514.
Pulver, S., 2012. Business and the Environment.
Savrul, M., Incekara, A. and Sener, S., 2014. The potential of e-commerce for SMEs in a
globalizing business environment. Procedia-Social and Behavioral Sciences. 150.
pp.35-45.
Sena Ferreira, P., and et. al., 2012. Framework for performance measurement and management
in a collaborative business environment. International Journal of Productivity and
Performance Management. 61(6). pp.672-690.
Smith, B., 2016. Nature and Geography: Tragic Voids within Marketing Textbooks and the
External Business Environment. In Global Perspectives on Contemporary Marketing
Education(pp. 47-64). IGI Global.
Online
Carroll’s pyramid of CSR: taking another look. 2018. [Online]. Available through:
<https://jcsr.springeropen.com/articles/10.1186/s40991-016-0004-6>.
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