Analyzed Corporate Financial Reporting

The provided document is an analyzed version of a corporate financial reporting assignment. It includes references to several research papers and studies on the topic, such as 'Corporate Financial Reporting' by Hussey and Ong (2017), which focuses on IFRS versus GAAP financial statements. The analysis also draws from other sources like 'Information content of IFRS versus GAAP financial statements' by Ricketts and Shortridge (2018). Additionally, it mentions the Starbucks Coffee's stakeholders as a case study in CSR analysis by Thompson (2017). The document aims to provide a comprehensive understanding of corporate financial reporting through these references.

Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
Question 1 ..............................................................................................................................1
A Brief introduction, history and structure of WPP Plc.........................................................1
B How the WPP is being governed and what is the relationship between Board of Director
and stakeholders, employees and other people.......................................................................4
Question 2 Reason for implementing PESTLE analysis........................................................5
Question 3 PESTLE analysis of the venture WPP.................................................................5
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business environment is the way by which organisation decide their structure, roles,
responsibilities and other aspect on which they run their business. In simple words it can be said
that business environment consist all the internal and external factors that have impact over the
different aspects of the business such as employees, management, customers, shareholders,
suppliers etc. one very good example of the business environment is that how the customers
meet the expectations of the customers. In order to continue this report WPP plc has been
selected which serve the different services to attract and enhance the customers such as
advertisement, marketing, communication etc. The services they provide are digital marketing,
web publishing, advertisement, marketing etc. The report is going to include brief introduction
about the venture, their organisational structure, relationship between the BOD and stakeholders,
employees and other members. Other than that it also include PESTLE analysis of the venture in
order to find that how these factor can influence the firm.
Question 1
A Brief introduction, history and structure of WPP Plc
WPP Plc serve the communication services to the customer of worldwide. It is a British
multinational advertising and public relation organisation. They are having their management
office at London, England. As well as the executive office of the venture is at Dublin, Ireland.
The firm own large number of organisation of advertisement, media and market research and
public relation such as IMRB, Millward Brown, Grey, Burson-Marsteller, Hill & Knowlton,
JWT, Ogilvy & Mather, TNS, Young & Rubicam, GroupM, and Cohn & Wolfe (Tran and
Rakowski, 2017). They have been operating in the different segments such as media and
advertisement investment management, data investment management, public affairs and public
relationship, brand and identity, specialist communication and healthcare.
The venture was founded as plastic and wire products, who used to produce wire
shopping baskets in the year 1971. In the year 1985, Martin Sorrell was founding the venture
who is listed in the advertisement field and further he has control the stake of 30% at the cost of
$676000. The man was the financial director of the advertisement agency Saatchi and Saatchi
from the year 1977 to 1985 (Satyanarayana and Naidu, 2017). After 1986, WPP have become
the parent organisation of Picquotware which was used to produce jugs and teapots. In the year
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2007, they have stared creating digital capabilities. Many of WPP's constituent agencies use
Microsoft Windows, and the organisation was hit hard by the 2017 cyberattacks on Ukraine,
with some staff's computer access limited to webmail.
Illustration 1: Companies under WPP Plc
(Source: IMRB in WPP, 2017)
WPP is the worldwide organisation which is being listed in the NASDAQ SE. There are
2 big organisation which are under the firm, that are Kantar Group which serve Global
information, Insight and Consultancy division and the other one is Hindustan Thompson
Association, is an Indian subsidiary and holding company of the WPP Plc (Deighton, 2017).
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Illustration 2: WPP organisation structure
(Source: Organisation structure, 2017)
There are several departments in which organisation deals such as brand development,
marketing strategies, advertisement, public relationship, market research, production and
creativity in marketing. So these departments are having different managers such as production
manager, marketing strategies manager, advertisement director, public relationship manager,
market research director and promotion director (Hussey and Ong, 2017). Each or the direct and
manager have staff under them who can complete all the roles and responsibilities.
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B How the WPP is being governed and what is the relationship between Board of Director and
stakeholders, employees and other people.
There are several people that are included in the business which need to conduct the
different activities and operations in order to govern the organisation. Key role in governing the
venture is Board or directors. The firm is operating in the different sectors such as marketing,
public relationship, digital marketing etc. The venture have become world's largest marketing
and advertisement company, with the employees of 190000 and 3000 offices in around 112
countries (Bruner and Bruner, 2017). In previous they were acquiring the small firms and start
growing with them but now they have started collaborating with the biog marketing ventures. In
the starting two years they have acquired 18 organisation which was below the line marketing
venture. From that 15 have been brought to the UK and other 3 are in the US.
The firm govern and manage their business by acquiring the different marketing
organisation so that they can expand their business globally. Other than that there are no training
programs are organised by the firm. When the venture is hiring the employees, they usually
nicked people from their competitors. This is the reason, company is having talented employees
and this add value to the organisation. BOD plays very significant role in the venture, they are
responsible for running day to day affairs of the business. They are directly accountable to the
stakeholders (Ricketts and Shortridge, 2018). Other than that BOD need to communicate
information about the organisation to their shareholder. Each year an annual general meeting
have been organised by the venture, where directors serve report to the shareholders regarding
the performance of the business. The board of directors' key purpose is to ensure the company's
prosperity by collectively directing the company's affairs, whilst meeting the appropriate
interests of its shareholders and stakeholders (Tran and Rakowski, 2017). On the other hand if
some issues regarding the corporate social responsibilities, corporate ethics and corporate
governance.
Board of directors and shareholders
Board of directors are very much responsible for shareholder, this is because they need to
communicate accurate information to them. They are accountable for shareholder, by making
such decision by which they can serve the high level of interest. This is because when they are
making decision, it has great impact over the shareholder
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Board of directors and employees
Employees are the people who are working for the organisation in order to attain aim and
objectives made by the top level of management. They need to work upon the decision made by
the higher authority. As the decisions are made by the Board of directors and that great influence
over the employees. In today's time directors need to think for the interest of the employees
before taking any decision (Satyanarayana and Naidu, 2017).
Question 2 Reason for implementing PESTLE analysis
PESTLE analysis is the analysis which is being made to find the factors which have great
impact over the strategies, decision, activities and operations of the business. It is being known
that future is uncertain, any factor can affect the venture. As well as these factors are not in the
hand or organisation, rather firm need to find some strategies by which they can reduce the
impact of them. PESTLE means political, social, technological, economic, environmental and
legal (Deighton, 2017). There are several benefits for WPP for implementing PESTLE analysis.
Such as it helps in reducing he impacts of political threats, helps in developing the strategic
thinking in the venture, to find the ways by which they can grasp the opportunities, reduce the
implication in order enter into new market nationally and internationally.
Question 3 PESTLE analysis of the venture WPP
Political: Political factors plays very important role in finding the aspects that can
influence WPP plc's long term revenue margin in a different country or market. WPP plc is
serving different services in Advertising Agencies in more than a dozen countries and expose
itself to different types of political environment and political system risks. There are several
factors that are included in the political aspects such ad level of corruption, risk of military
invasion, legal framework of the country, intellectual property rights, trade regulation such as
tariff, anti trust law, pricing regulations, taxations, wage laws, industrial safety, product labelling
etc. Every organisation need to follow these laws and legislation, if they are not able to do so,
some strict action can be taken against them (Hussey and Ong, 2017). When it is concerned
about the organisation, government are supporting them. Other than that they are having very
low barriers in order to enter into the new market. Proper assistance have been given to the
company so that they can deal in the new country. With that when it comes to the tax policy, in
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that case it is in the favour of the venture. In simple words it can be said that there is positive tax
policy for the venture. On the other hand there is very less trade restriction for the venture.
Economical: There are two types of economic factors that are micro and macro factor.
When it is concerned about the micro factor then it consists of inflation rate, saving rate, interest
rate, foreign exchange rate, economic cycle, demand and supply of the products, aggregate
investment etc. on the other hand, when it is talked about macro factors, it consists of
competition norms, growth rate, inflation rate, spending of people etc. The factors which firm
need to consider is type of economic system, government intervention, exchange rate, insurance
quality, eduction level, labour cost (Bruner and Bruner, 2017). When it comes to the WPP Plc,
the firm have high productivity. Other than that tax rates are in the favour of venture as well as
customers. With that there is large governmental expenditure, this helps the firm to develop.
There is high rate of public investment in the research and development part, this also helps the
venture to gain the high profit. WPP have an advantage over the competition, due to some
economic factor such as labour cost, productivity of the economy, economic growth rate,
discretionary income, employment rate etc. When it comes to the foreign exchange rate, then it
never gets fixed, rather it always goes flexible. When the exchange rate increases, the price of
the goods and services will also increase (Tran and Rakowski, 2017). This will have negative
impact over the selling of goods by the venture, as the demand will decrease. This shows that it
can have negative as well as positive impact over the venture.
Social factor: It is being known that every country have their own culture and different
way of doing the things. These two things have great impact over the culture of the organisation
and their environment. Shared beliefs and attitudes of the population play a great role in how
marketers at WPP plc will understand the customers of a given market and how they design the
marketing message for Advertising Agencies industry consumers (Victor, 2017). There are
several factors that are included in the social factors such as skill level and demographic of the
population, class structure, hierarchy and power structure of the people, education level,
education standard of the people who are working in the organisation, culture such as gender
roles, social conventions, broader nature of the society, entrepreneurial spirit, attitude of the
people such as their heath, environmental consciousness, leisure interest etc. these all factors
have great impact over the WPP (Sarwar and Hosseinian-Far, 2017). Such as the country where
people are not highly educated, thus, they do not use large amount of internet. Thus, the firm can
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not use digital marketing at that place in order to market the products and services. On the other
hand, if the country is highly developed, then people use high technology. In that case, firm can
use the digital mode of communication and advertisement. Thus, it can be said that social factors
have great impact over the operation and strategies of the business.
Technological factors: It is being known that technology keeps on changing time to
time and organisation need to adopt them so that they can gain the competitive environment.
Such as it is talked about the transportation industry, it is the good example for the technological
change. In the last five years, it has been changing drastically (Song and Jin, 2017). Taxi
industry have very dominating players such as Uber, Lyft etc. There are several factors that are
included in the technology factors such as recent technological development made by the
competitors of the WPP, technological impact on the product which is being offered by the
venture, impact on the structure of cost in the marketing industry, influence on the value chain
structure in the advertisement sector, role of technological diffusion etc. it is important for the
venture to do technology analysis, rather they need to find that how does the technology disrupt
the venture. If the technology disruption have slow speed, then it will take more time to cope
with the change (Vintilă and Ţenea, 2017). On the other hand when there is high speed of the
technology disruption then the firm can easily cope with the technology and get high profit.
When it comes to the WPP, then there are several other factors which have impact over the
venture such as increase in the automation, -technological and industry concentration, increase in
development costs etc.
Legal: Every country have own legal framework and institution, which have great impact
over the working of the venture. Some country do have such framework in order to protect the
intellectual property rights of the venture. When the company is going to serve in the new
country, they need to analyse this fact that there is any theft for the organisation to serve their
products and services to the customers. Other than that competition is also one of the factors
which firm need to analyse. When the venture do not find any competition, then they need to
enter into such market (Thompson, 2017). It can happen that customers do not adopt the
products and services of the venture. There are several factors that are included in the legal
factor such as Discrimination law, Employment law, Data Protection, Health and safety law,
Consumer protection and e-commerce, Anti-trust law in Advertising Agencies industry and
overall in the country etc. Firm need to analyse these factors and then enter into the new country.
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Environmental factors: Every country have different norms and environmental standard
which organisation need to follow. This have huge impact over the profitability of the venture.
Even within a country often states can have different environmental laws and liability laws.
Organisation need to maintain weather by not polluting them. Need to adopt the change,
implement the different laws and legislation regarding the environmental pollution (Duckitt and
Hunt, 2017). Other than that firm need to maintain air and water pollution regulations in their
Advertising Agencies industry. Firm need to invest huge amount in these activities and need to
follow the laws regarding the same (Fargani and Hasan, 2017).
CONCLUSION
It can be concluded from the project report that WPP is the marketing, advertisement and
communication organisation which have been dealing in the different sectors such as sales
promotion, digital marketing, branding, market research etc. other than that it can be concluded
that PESTLE analysis helps the venture to gain different advantages such as proper analys helps
them to implement the different strategies to manage uncertain environment. Other than that
pestle analysis state that organisation have different factors which are both in favour and against
them and political factors have negative impact over the venture.
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REFERENCES
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