Contemporary Developments in Business and Management in HSBC Bank- Assignment

Contemporary Developments
in Business and Management

INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Political factors:......................................................................................................................1
Economic factors:...................................................................................................................2
Social factors:.........................................................................................................................3
Technological:........................................................................................................................3
Legal factors:..........................................................................................................................4
TASK 2............................................................................................................................................5
i). Relevance of ethics and CSR to HSBC bank and their influence on policies and decision
making process.......................................................................................................................5
ii) Effectiveness of organisational response...........................................................................6
iii) Areas of improvement as a response................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business environment is dynamic as it changes rapidly and influence the functioning of business.
Organisations face various issues or problems in managing operations in proper way due to
constantly changing environment of business (Crane, Matten and Spence, 2013). There are
various opportunities that are existing in the market and firm can exploit them by emphasizing
on successful implementation of strategic plans and strategies. In the present assignment, chosen
company is HSBC Bank which deals in financial and banking services. The report covers various
forces of business environment which impacts on the working of organisation and its
significance. Corporate Social Responsibility and business ethics are the main part of this
assignment and it also defines its influence on decision making process of the firm. It also
includes the way in which organisation respond when it confronts issues regarding ethics. At last,
some key areas of improvements are defined in the report.
TASK 1
HSBC is one of the leading banks which deals in financial and banking sector. Before some time,
these firms have limited reach & their existence was not available at many places but when
developing and underdeveloped countries open up their economy for direct foreign
investment, many organisations got chance to gain higher profits and attain long term
objectives. Internal issues of the business can be resolve, but external factors are
uncontrollable and firms don’t have control over it. These factors may impact positively or
negatively on the performance of company. External forces and their significance are
defined below:
Political factors:
The bank is operated in many countries. It is necessary to ensure that money is invested in
those countries which is not confronting any issues related to political instability. In some
nations such as India, if government is change then, policies also change. They introduce
major variations in practices and policies related to insurance and banking sector like
changes in loan procedure, increase in interest rates or bank rates etc. HSBC has to make
required changes in their policies and strategies in order to cope up with that (Freeman and
Hasnaoui, 2011).
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Example of political impact Influence on organisation
War Destruction to property of concern
Stiff regulations against foreign concerns Decline in sales
Violence & riots in country Hurdle in administering effective services to
clients
Importance:
It is a crucial factor for HSBC as if they emphasize on business expansion in the country
which is politically stable then they don’t need to undertake major changes in functioning
and policies of business. But if they expand in those countries which are politically instable,
then it is difficult for the organisations to make appropriate strategies for the attainment of
long term objectives.
Economic factors:
For multinational organisations such as HSBC Bank, it is very easy to attain growth in the
growing countries like China and India. If collective demand in economy will increase, then
it will impact the business of firm in positive way. Some incidents such as economic crisis
influence banking industry in negative way (Gitsham, 2012).
Importance:
Operating business in the country with growing economy assists the firm in earning higher
profits. When HSBC Bank entered in India, they gain high revenues.But in 2009, when
countries face economic crisis, the growth of HSBC bank was decline. It is the major cause
behind decline in market share of the firm due to which they lose many customers. If
operations of business are expanding in developing countries, it will increase the chance of
earning high profits and attain goals. Variations in national income can influence the
profitability of organisation in both way, i.e., favourable as well as unfavourable. For getting
better services, customers are ready to pay more money. HSBC bank is known for
administering its best services to customers. Increase in national income is important for
company as it will increase purchasing power of buyers and they will prefer to get their
services more.
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