Impact of External Factors on Internal Business Functions

This report analyzes the impact of external factors on the internal business functions of an organization. It includes a SWOT analysis based on key drivers identified from a PESTLE analysis and examines the impact on two functional areas.

Global Business Environment

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
SWOT analysis on the basis of key drivers identified from PESTLE analysis...........................1
Impact of the drivers on the two of the firm’s functional areas...................................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Global business environment is the area using by the different organisations to operate their
business activities. The multinational organisations are called as the businesses that operates in
global environment. There are large number of external conditions present in this environment
that impacts the businesses in both positive and negative manner includes political, economic,
social, technological, legal and environmental (Barac and et. al., 2016). The study of these
factors is important because this will further aid in internal analysis of an organisation where
able to develop appropriate strategies in considerations to the all factors. The main aim of current
report is to analyse the impact of external factors on internal business functions of an
organisation.
This report is CW2 based upon the key drivers identified in CW1 and its PESTLE analysis
to develop a SWOT analysis for British Telecom along with impact upon two of the firm’s
functional areas.
MAIN BODY
SWOT analysis on the basis of key drivers identified from PESTLE analysis
A SWOT investigation is an assemblage of an organization's qualities, shortcomings,
opportunities and threats. The essential target of a SWOT investigation is to assist associations
with building up a full attention to all the elements engaged with settling on a business choice.
Playing out of a SWOT investigation is must before focusing over competitor organizational
activities. This will provide the opportunity in taking of informed decisions so maximum return
will be attained from the future actions. In last, organisations must use their SWOT investigation
to find proposals and techniques, with an attention on utilizing qualities and chances to defeat
shortcomings and threats (SWOT analysis, 2018).
Here, SWOT has to be completed on the basis of the drivers identified from the PESTLE
analysis. PESTLE was done in CW1 regarding British Telecom. The numerous number of
factors and drivers were identified that have both positive and negative impacts. Now, these are
further used for the internal analysis of British Telecom where SWOT analysis is going to do.
The detailed information in relation to all its determinants are presented below:
Strengths
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 Effective presence in local and international market due to effective use of internet and
global conditions.
 Good market presence due to the support of younger generation regarding facilitation of
internet facilities.
 Healthy balance sheet along with strong financials and cash flow from operations.
 Numerous number of product and service offerings.
 Providence of strong customer experience through focusing over delivering great product
and services (Doh, Luthans and Slocum, 2016).
Weaknesses
 High rate of carbon emission due to the continues nature of business operations
 Largely dependent in UK market and have limited presence in the high growth Asia
pacific region.
 Separation of Openreach from BT will result in loss of branding and marketing image.
Opportunities
 The digital agenda policy of UK provides the opportunity an organisation regarding
promotion of their services with speed network.
 The Good relation of UK with neighbouring countries provide the opportunities to British
telecom that enlarge their trade link.
 To expand more an organisation must focus over implementation of innovative
technology along with grabbing opportunities exist in new markets.
 Focus over adoption of 6G services as this will provide the opportunity to gain more
strategic edge in competitive market place.
 The organisation also has the opportunity to use the cloud of cloud services for the
purpose of ensuing high economies of scale (Fabus, 2018).
 Focus over the implementation of 100% renewable energy to meet environmental targets
Threats
 High level of competition in market
 Presence of large number of competitors that has negative impact over the market
presence and business operations of British Telecom.
 Impact of Brexit and the subsequent devaluation of British pound that has diminishing
impact over profitability.
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 Pressure of government regulations and licenses.
Impact of the drivers on the two of the firm’s functional areas
The above mentioned factors or drivers also have the impact over the functional areas of BT.
The impact will be ascertained on both manners positive and negative. This totally depend over
the nature of factor or driver. There were many drivers identified in PESTLE of both positive
and negative nature. The impact of these upon two functional areas i.e. HRM and Operations of
BT are presented below:
Operation: BT has worldwide operations. The emission of carbon due to the business
operations is high within an environment (Gooris and Peeters, 2016). The impact of this has
negative over the business of BT because society is more concerned about the safety of
environment. This resultant into decrement in market image along with market base. In this
regard, the organisation must focus over the adopt of measures that help to remove negative
environmental impact. But, the same will also lower down the profit margin along with
productivity level of employees. On the other hand, the effective control of BT over the internet
service is prove as major factor towards the success in market. This perfectly help in attraction of
potential new consumers towards the consumption of their services in market against to the
competitors.
HRM: This department of an organisation has work related to the planning of workforce.
It has the responsibility regarding the hiring of personnel’s who are competent for the post and
completion of the organisational objectives. The presence of legal requirements regarding
employment brings an obligation over this department must ensure about the fulfilment of all
rules and regulation at all different nations otherwise they have to face the negative
consequences and penalties. This has direct negative impact where image of an organisation start
diminishes in market along customer base (Kasemsap, 2018). On the other hand, the level of
completion is also high in market so this department must ensure about the training, performance
appraisal, and motivation of staff members. This will work in the direction of improving their
productivity along engagement within an organisational activity.
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CONCLUSION
It has been concluded from the above report there is huge impact of PESTLE analysis in
internal assessment of an organisation. This will aid in determination of the internal strengths
and weaknesses linked with external factors. Also, aid in ascertaining the market opportunities
and threats. The drivers identified from the external analysis also have the positive and negative
impact over functions of department according their nature.
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REFERENCES
Books and Journals
Barac, K., Gammie, E., Howieson, B. and Staden, M.V., 2016. The capability and competency
requirements of auditors in today's complex global business environment.
Doh, J.P., Luthans, F. and Slocum, J., 2016. The world of global business 1965–2015:
Perspectives on the 50th anniversary issue of the Journal of World Business:
Introduction to the special issue.
Fabus, M., 2018. BUSINESS ENVIRONMENT ANALYSIS BASED ON THE GLOBAL
COMPETITIVENESS INDEX (GCI) AND DOING BUSINESS (DB): CASE
STUDY SLOVAKIA. Journal of Security & Sustainability Issues 7(4).
Gooris, J. and Peeters, C., 2016. Fragmenting global business processes: A protection for
proprietary information. Journal of International Business Studies. 47(5). pp.535-562.
Kasemsap, K., 2018. Mastering business process management and business intelligence in global
business. In Global Business Expansion: Concepts, Methodologies, Tools, and
Applications (pp. 76-96). IGI Global.
Online
SWOT analysis. 2018. [Online]. Available through < https://www.liveplan.com/blog/what-is-a-
swot-analysis-and-how-to-do-it-right-with-examples/>
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