Business Environment: PESTEL Analysis and Impact on Man Group Plc

This document provides an overview of the business environment and its impact on Man Group Plc. It includes a PESTEL analysis, discussing the political, economic, social, technological, environmental, and legal factors affecting the company. The document also explores the history, organisational structure, and governance of Man Group Plc.

Business Environment
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Executive Summary
Business environment comprises of various factors, both internal as well as external.
They can impact the way in which an organisation carries out its operations in the market. In
order to get a complete understanding of these factors, a PESTEL analysis can be used which can
help in formulating effective strategic plans to gain competitive advantage and stand out against
competitors in the market. The analysis provides information about political, economic, social,
technological, environmental as well as legal factors and the kind of impact they can have upon
the functioning of a business. Therefore, all organisations should conduct a PESTEL analysis
when they decide to launch a new product or service in a new market.
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Table of Contents
Executive Summary.........................................................................................................................2
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
TASK 2............................................................................................................................................6
TASK 3............................................................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
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INTRODUCTION
Business environment can be defined as the collection of all internal as well as external
factors such as customers, suppliers, employees, technology, market trends etc. All these factors
in the business environment can impact the performance of a business either directly or indirectly
(Alotaibi, 2016). Organisation chosen for this report is Man Group Plc, which is an investment
management firm that is mainly focussed on delivering attractive client portfolio solutions by
using the latest technology. The company provides excellent services to its customers in order to
stay ahead of competition. The report provides an overview of the company, its organisational
structure and the way in which it is governed. It also explains the importance of PESTEL
analysis for a business and the different factors that can impact the selected company.
TASK 1
Man Group Plc is a leading investment management firm that founded in the year 1783
by James Man. The company is headquartered in London, United Kingdom and provides a wide
range of funds and other investment products to different investors. The company employs
nearly 1000 people in various locations worldwide. Man Group is one of the leading players of
Europe and constantly invests in latest technologies. The company uses scientific methods that
are advanced and help it make informed decision.
History
Man Group Plc is a company that has a trading history expanding over 250 years with an
experience in global investment banking of 25 years. The history of the company goes back to
the year 1783 when it was founded by James Man as a sugar brokerage and cooperage in
London. In the year 1784, the company was awarded a contract to supply rum to the royal Navy .
It expanded further by trading commodities like coffee, cocoa, sugar at various coffee houses of
London in the year 1802 (Erasmus, Strydom and Rudansky-Kloppers, 2016). For commodity
trading, Man Group moved to Mincing Lane which a hub in London for the same in 1810. The
respective company established its first overseas operations in 1972 in Hong Kong as well as
New York. The next year was a complete turnaround as the company celebrated its 200th
anniversary and diversified into financial services. 1987 and 1989 were big years for the
company as AHL was founded and became a part of Man Group.
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Financial Risk Management was founded in the year 1991 and the company got listed on
London Stock Exchange in 1994. The year 2000 saw Man Group demerging from the
agricultural commodities business which was knows as ED&F Man. The Oxford-Man Institute
was launched by the Oxford University as well as Man Group in 2007 (Gaganis, Pasiouras and
Voulgari, 2019). In the following years, Man Group enhanced its investment management
capabilities by acquiring and integrating GLG Partners LP with itself and offering more diverse
investment capabilities to its clients. Recently in the year 2017, the company developed offerings
for private markets by launching Man Group Private Markets and acquiring Aalto Invest which
is a Europe and US based investment manager.
Organisational Structure
The organisational structure of Man Group Plc is a matrix structure in which the
employees of the organisation report to two or more seniors depending on the situation of a
particular project. Having a matrix structure has proven to be beneficial for the company as there
is enhanced knowledge sharing with a better and effective communication and understanding of
each others role across various functional divisions. Other advantages of this type of
organisational structure is that the organisation can use its resources more effectively without
any kind of wastage. The company coordinate its different products as well as projects across
different functional departments. Also, the employees get a chance to interact and build network
with other people who work in the same organisation but are not a part of the same team.
The matrix structure also serves as a great opportunity for employees who want to widen
their skill set as well as experience (Hamilton and Webster, 2018). To do this, they can be a part
of different aspects of a project within the company and learn new things. Although working a
matrix organisational structure is challenging and sometimes employees can become confused
about whom they have to report, it also has many advantages associated with it like the
organisation can retain experts and experienced employees for a longer period of time. Thus,
considering all these points above the company has implemented a matrix organisational
structure.
Governance
The Chairman of the board of directors of Man Group Plc is John Cryan since January,
2020 and previously served as a non- executive director. He has extensive knowledge of various
international financial markets which he gained at different leading institutes of Finance. John is
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also the Chairman of Xcyber Group Limited which is an intelligence company based in the
United Kingdom (John Cryan, 2020). There are seven other people in the Board of Directors of
the company out of which four are non-executive directors. Andrew Horton is the independent
and non-executive Director and chairperson of the Audit and Risk Committee of Man Group Plc
and was appointed in the year 2013. He has an experience of nearly 25 years in risk
management, financial services and operations.
The other three non-executive Directors of Man Group are Dev Sanyal, Zoe Cruz and
Dame Katherine Barker (Board of Directors, 2020). Mark Jones is the Company's Chief
Financial Officer who was appointed in the year 2017 and previously served as Chief Financial
Officer Designate. Whereas Luke Ellis is the Chief Executive Officer of the company who
earlier served as a President. The last person in the Board of Directors is Richard Berliand is the
Senior Independent Director and Chairman of the Man Group's Remuneration Committee.
TASK 2
PESTEL analysis is a strategic tool that is usually used by organisations to monitor as
well as analyse different macro-environmental factors that can impact their overall performance.
It can help businesses in identifying any kind of changes in political, environmental, economic,
social, legal and technological factors. Organisations should carry out PESTEL analysis in order
to develop strategic plans for expanding their business. The analysis is cost-effective as it does
not require a lot of time as well as cost. The best thing about conducting a PESTLE analysis is
that it facilitates a deeper understanding of all the factors in the macro-environment. This is
helpful when an organisation decides to launch a new product in the market.
A PESTEL analysis also assists organisations in preparing themselves for any possible
threats that can come up with time. On the other hand, it also helps in making use of the different
opportunities that are available to the organisation and can help it to grow and gain a competitive
edge in the market. When it comes to making effective and sound decisions, a PESTEL analysis
is one of the best means that can be used by organisations (Hillary, 2017). The analysis also
assists in evaluating the decisions that are made by marketers of an organisation regarding their
benefits as well as drawbacks. Organisations should conduct PESTEL analysis from time to time
so that they can get a better insight of how these factors can influence their productivity as well
as performance in the industry. The framework is also useful while entering a new and untapped
market.
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There are six factors within the PESTEL analysis that can impact the organisation,
namely Political, Economic, Social, Technological, Environmental and Legal factors. Political
factors include the impact that government can have upon a business. The various political
factors include political instability or stability, foreign direct investment, tax and foreign trade
policy, various trade restrictions as well as labour laws (Kolk, 2016). The government of a
country can significantly impact its overall political infrastructure. Thus, organisations should
take into account these factors while assessing the attractiveness of a potential market.
Economic factors are the ones that determine the economic performance of a country and
includes economic growth, exchange rates, interest and inflation rates, levels of disposable
income of people in the economy etc. These factors can impact an organisation either directly or
indirectly. It also impacts the way in which companies price their products as well as services.
Thus, Man Group Plc should consider various economic factors before making any firm
decision. Social Factors on the other hand include attitudes, age, gender, population, healthy and
safety etc. and are important for organisations while targetting a particular segment of customers.
These factors also provide insights about the local employees of a nation as well as their
willingness to work under different conditions.
Technological factors are concerned with any kind of innovations in technology that can
impact the overall operations within the industry. These factors can include advancements in
technology, automation, innovation, research and development etc. Such factors can influence
the process of decision making in a particular organisation pertaining to enter or not to enter a
particular market and launching or not launching a new product (Liu and et. al., 2017). Having a
complete knowledge about the latest technology can help a company from spending a lot of time
in developing a new technology particularly for itself that can become outdated very soon due to
introduction of a new technology in the market.
Environmental factors have become an important part of the PESTEL analysis lately and
includes climate, weather etc. They have gained importance due to an increasingly less
availability of raw materials in the market, carbon emissions etc. Environmental factors on a
whole can impact the different aspects of an country like tourism, insurance etc. Also, growing
awareness about the environment among people has made it essential for organisations to take
these factors into account very seriously which is the reason why many of them are now
practising Corporate social Responsibility as a part of their system. Legal factors can be
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considered related to Political factors in some way but they comprise of specific laws that are
developed by the government of an economy that organisations are expected to adhere to. Thus,
it is important for organisations to remain aware of any kind of changes in these legislations and
the potential impact they can have upon their functioning. Thus, PESTLE analysis is an
important tool that should be used by all organisations to stand out in the market against their
competitors and attract more customers.
TASK 3
External environment comprises of various factors or influences which impact on
operations of business. For an organisation it is very much important to must act or react to keep
the business operations in flow (Prajogo, 2016). The external environment of business broken
down into two types that are micro and macro environment. Here are the macro environment of
Man Group Plc which affect on their business activities that are as follows:
Political Factors
In political environment consist of the government interventions, taxes and regimes and
many more. In context of UK marketplace in which Man Group Plc operated taking important
measures to address the deteriorating economy which includes the monetary and fiscal
initiatives. In 2009, they announced the sore of measures to revive ailing financial institutions
and tax rates revived from 45 to 50% that helps to revive the economy in the UK marketplace.
The high level of political stability affect on their business in positive manner.
Economic Factors
In economic factor consist of the interest rates, taxation, government regimes and many
more that directly impact on workings of an organisation (Rialp-Criado and Komochkova, 2017).
In context of Man Group Plc due to the Brexit which impact on recruitment of employees
potentially as it not able to recruit talented personnel. Further, Brexit increase the price of
products and services that directly influence on disposable income of consumers adversely. So it
is very much potential for an organisation to coordinate and monitor the external environment of
business in order to gain desirable outcomes.
Social Factors
In social environment consist of the change in taste and preferences of consumers as in
dynamic business world consumers are very much demanding. In context of Man Group Plc
which provides funds for institutions and private investors at global level, in that regards they
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have to adopt technological advance tools and techniques. To some extent difference in the
educational background in between marketers and target market bring difficulties to relate and
draw consumers taste and preferences accordingly. As per demand of market they need to fully
aware about the healthy standards, reactions of harassment claims in industry as an whole in
order to evaluate business activities potentially.
Technological Factors
In technological factors consist of the adaptation of the highly advance tools and
techniques which contributes in enhancing the consumers experience in positive manner. In
context of Man Group Plc for they by focusing on digitalization and innovation that enables
consumers or potential clients in availing services (Safar and et. al., 2018). Due to digitalization
they can access facilities provided by them and can easily compare with others which directly
influence in consumer decision making positively.
Environmental Factors
Different industries hold the varies kinds of standards related to the environmental
protection that is primary in their norms. In context of Man Power Plc, their norm dictates about
every organisation has their aim to save environment and to prevent pressure from side of target
pressure groups and boycott from lack of environmental conscientiousness. In context of Man
Group plc change in climate would render some products as useless and renewable energy is
expensive in nature. In that regards they have to focus on some other attributes to save the
environment potentially so that they gain sustainability of market.
Legal Factors
Legal factors consist of government institutions and frameworks which impact the
business works and activities in potential manner (Somers, 2019). In context of Man Group Plc
intellectual property and other data protection laws helps in protecting the information and ideas
of an organisation. With help of respective legislation organisation can be able to protect self
interest of their organisation and in gaining competitive edge. Discrimination laws are also
placed by government to protect self interest of their employees to ensure that every individual is
treated in most fair manner by giving equal opportunities to them. So by obeying respective laws
and regulations respective organisation can be able to coordinate all business activities in
coordinate manner.
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Therefore, it is very important for an organisation to evaluate the external business
environment to mould organisational strategies and tactics accordingly (Hansen and et. al.,
2018). In context of Man Group Plc, by conducting the thorough research and development
regarding business environment they can be able to beat their competitors.
CONCLUSION
From the above report, it can be concluded that the business environment of an
organisation helps it in identifying the various business opportunities, evaluate them and utilise
them. The business environment of an organisation comprises of various external factors that can
be analysed through a PESTEL analysis. The analysis helps in developing effective strategic
plans that can help a company to gain competitive advantage in the market. The analysis does
not involve a lot of time, is also cost effective and is generally used when a company wants to
enter a new market. Therefore, the organisation can grow and expand its business in different
markets as it will have complete knowledge of that particular market.
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REFERENCES
Books & Journals
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management. Oxford University Press Southern Africa.
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profitability: Evidence from European Countries. Economic Modelling. 78. pp.275-292.
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Hillary, R. ed., 2017. Small and medium-sized enterprises and the environment: business
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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.
Liu, G. and et. al., 2017. Business model innovation and its drivers in the Chinese construction
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Prajogo, D. I., 2016. The strategic fit between innovation strategies and business environment in
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Rialp-Criado, A. and Komochkova, K., 2017. Innovation strategy and export intensity of Chinese
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Safar, L. and et. al., 2018. Concept of SME business model for industry 4.0 environment. TEM
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Somers, F., 2019. European Business Environment: Doing Business in Europe. Routledge.
Online
John Cryan. 2020. [Online]. Available through:<https://www.man.com/john-cryan?team=man-
group-board>.
Board of Directors. 2020. [Online]. Available through:<https://www.man.com/corporate-
governance#_board-of-directors>.
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