British Petroleum: Business Environment and Organizational Behavior

This report provides a comprehensive analysis of British Petroleum (BP), a major player in the global oil and gas industry, examining the influence of its business environment on organizational behavior. The report delves into both economic and non-economic factors, including economic systems, policies, and conditions, as well as demographic, natural, cultural, technological, legal, political, and social aspects. It utilizes PESTLE and SWOT analyses to assess the external and internal factors impacting BP's operations. The discussion explores how these factors shape employee behavior, production levels, and profitability. The report considers the impact of factors like inflation, demand and supply, natural resource availability, technological advancements, and political stability. The overall aim is to provide a detailed understanding of the complexities of BP's business environment and its effects on the company's organizational dynamics.

Running head: MANAGEMENT
Management
Name of the Student:
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Author’s Note

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Table of Contents
Introduction....................................................................................................................2
Discussion......................................................................................................................3
PESTLE Analysis.......................................................................................................7
SWOT Analysis.........................................................................................................9
Conclusion....................................................................................................................10
Reference......................................................................................................................11

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Introduction
British Petroleum is a company that sells gas and petrol in 80 countries worldwide.
There are seven largest sellers of oil and gas throughout the world. British Petroleum is one
of those companies. British Petroleum is one of the seven supermajor companies in the world
in terms of oil and gas. In the year 2012, British Petroleum achieved the sixth spot on the list
of largest companies in terms of oil and gas. Again, British Petroleum had also achieved the
12th spot as the largest revenue turnover of the company. British Petroleum produces all
levels of products in terms of oil and gas. It has several types of sectors in its company like an
exploration of new oil and gas reserves, production of energy with the use of oil and gas,
refining of the oil and gas to increase their value and distributing the oil and gas throughout
the world. Also, the marketing of the products produced by the company, production of
certain petrochemical products used in daily life, generating power with the use of the oil and
gas and also other types of trading activities are carried out by British Petroleum. British
Petroleum also promotes the use of renewable energy resources. British Petroleum has certain
biofuel production plants, windmills, solar power generation plants and has plants that use
smart grid technology for power production and efficiency. The aim of the study is to
understand the importance of business culture and the surrounding environment of British
Petroleum on changing the organizational behavior of the company. The study will describe
two types of environments that are business-related. These two types of business
environments include economic and non-economic environments. The economic
environment is made up of the economic system of the country in which British petroleum is
operating in, the economic policies of that country, the economic condition the country,
British petroleum as well as the industry is going through. On the other hand, the non-
economic factors that influence the organizational behavior of British petroleum are the
natural factors of the region in which British petroleum is operating in, the demography of

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that region, the technology that is used for the production and other processes of British
petroleum, the legal terms that British petroleum has to abide by for operating in the region.
Also, the political and social factors are included in the non-economic factors that change the
organizational behavior of British petroleum.
Discussion
Organizational behavior is the behavior of the people in an organization to factor or
policies or changes that affect the whole company (Lee et al. 2019). There are several
economic factors that change the organizational behavior of the employees of British
petroleum. The first economic factor that affects the organizational behavior of the
employees of British petroleum is the economic system of the country (Gelfand et al. 2017).
There are three types of economic systems in the world that can affect the organizational
behavior of British petroleum. Capitalism is a type of economic system which takes two
factors into respect that is the level of production in the company and the economy of the
country in which British petroleum is operating in (Borkowski 2016). There is a type of
capitalism that is known as corporate capitalism. In the case of corporate capitalism, the
country is more oriented toward generating money and increasing production in the country.
So, in this case, the employees and the management of British petroleum will be more
inclined towards increasing production and increasing the turnover of the company
(Peltokorpi, Allen and Froese 2017). There is another type of economic system that is
followed in many countries which are known as a mixed economy. In a mixed economy, the
companies of the country are mostly owned by a mixture of the government of the country
and by individual private. In countries with a mixed economy and British petroleum is
operating in that country the management of the company will be a bit more people-oriented.
Here, British petroleum will look for giving more benefits to the employees of the company
but along with that, the company will also look for increasing production and also increase

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the level of revenue earned by British petroleum (Tasselli, Kilduff and Landis 2018). Again
there is another type of economic system in which socialism is given most importance. This
type of economic system is known as a socialist economy. When British petroleum is
operating in a socialist economy the management at British petroleum will give utmost
importance to the needs of the employees rather than just increasing production and earning
profits (Kim, Ployhart and Gibson 2018). The second factor in the economic environment for
the business of British petroleum is the economic policies of the country in which British
petroleum is operating. The economic policies in a company include the changes in the tax
rate in the country, the import, and export of the country, the amount of money the
government of the country spends for the development and welfare of the people of the
country, the interest rate that the banks charge from the corporate companies, the limit of the
foreign investment in and out of the country (Van Knippenberg and Hogg 2018). If the
import tax in the country is high then British petroleum will look for increasing the
production within the country and reduce the need to import. So, British petroleum will look
to increase production with the help of the current resources of the company which includes
the employees and the management at British petroleum. If the country has a high tax rate
then British petroleum will look to increase the production to meet the desired level of
revenue. The third factor in the economic condition of the country is the economic condition
of the country in which British petroleum is operating (Kinicki and Fugate 2017). There are
two factors in the economic factors that play the main role in changing the organizational
behavior of British petroleum. Firstly, the inflation rate is the price of the oil and gas that is
sold by British petroleum in the country. If the price of oil and gas in the country is low then
it means that the economic condition of the country is down as the purchasing power of the
country is low so British petroleum has to lower the prices to earn make the price of the oil
and gas affordable for the people (Gagné, Deci and Ryan 2018). Here, British petroleum has

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to lay more attention to increasing the production of the company to meet the needs of the
people and also to earn profits. On the other hand, if the inflation rate is low that is the price
of the oil and gas is high then British petroleum can increase the revenue with high
production. In this case, British petroleum will earn higher profits and also will be able to
give better benefits to its employees (Oswald et al. 2020). The demand and supply of the oil
and gas produced by British petroleum is another economic condition that changes the
organizational behavior at British petroleum. If the demand for oil and gas in the country is
high then the country price of the oil and gas produced by British petroleum will be high. So,
lower production of oil and gas will generate high revenues for British petroleum. But British
Petroleum will produce more to earn high profits. Again if the demand for oil and gas is low
in the country then British petroleum will reduce the production level depending on the
demand of the oil and gas produced by British petroleum. In the high demand scenario, the
employees of British petroleum will produce high and will be more production oriented.
The non-economic factors that affect the organizational behavior at British petroleum
are numerous in number. Since British petroleum is a oil and petroleum company it has
several natural factors to consider for operating in a specific region. Firstly, the availability of
natural resources is the first factor that British petroleum has to consider to operate in the
region. If the availability of natural resources is high in the region then it is much better for
British petroleum to operate in and around the region. British petroleum explores for new oil
and gas reserves throughout the globe to find suitable locations to produce oil and gas. Again,
the availability of oil and gas in a region does not mean that British petroleum will be able to
access them. British petroleum has to consider that exploiting the resources in the region does
not cause harm to the environment and to the workers who are working for British petroleum
(Gagné 2018). Also, the world is trying to reduce the dependence on oil and gas to reduce the
level of emission of greenhouse gases. So, British petroleum has incorporated the use of

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renewable resources in the company and also has made targets to generate energy with the
use of renewable resources. The demographic factors that British petroleum has to consider
are the change in the population of the country, the culture of the region and the rate of
education of the people of the region. If there is a high increase in the population of the
region in which British petroleum operates then the company has to increase the production
level exponentially to be able to satisfy the needs of the huge customer base. The culture of
the region in which British petroleum is operating is important as the choices and the
preference of the employees is important (McShane and Glinow 2017). Also, the holiday for
different festivals is an important factor that British petroleum considers. The technology is
another non-economic factor that affects the organizational behavior of British petroleum.
British petroleum stays up to date with the new technologies that are available in the market.
If British petroleum is able to use the technology properly then the company will gain a
competitive advantage over other companies that trade in oil and gas (Tasselli, Kilduff and
Landis 2018). Here, British petroleum will encourage its employees to be capable of using
new technologies. The law is another factor that British petroleum considers to operate the
business in any region. British petroleum has to abide by the legal rules in the region to be
able to operate. The legal rules are decided by the government in the region. One of the most
important legal rules that British petroleum has to consider for operating in any region is the
level of safety of the workers who work in the oil and gas fields of British petroleum. British
petroleum and any company look for regions that are politically stable and the region has
peace. British petroleum looks for regions that have the ruling government that promotes
business and also supports the production of oil and gas as a necessity in the region (Tasselli,
Kilduff and Landis 2018). The social factors that affect British petroleum are the culture of
the people working in British petroleum, the social trends that are being followed by the
people of the region and the values of the people in and around the company. Social trends

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are one of the important factors that help to decide on the sales of the company. Also, British
petroleum respects the social values of the people in the organization. British petroleum
provides equal opportunities for all the employees and does not discriminate against the
employees on the basis of sex.
PESTLE Analysis
PESTLE analysis is a tool which is used by a business for recognizing the trends in the
market and the same is then used for the purpose of taking important decisions for the
business. PESTLE analysis helps the business to recognize different factors which can impact
the operations of the business. In the case of British Petroleum, the different factors which
can impact the operations of the business are listed below in details:
 Political Factors: The political factors have a significant impact on the operations of
the business and the same needs to be considered by the management in taking
important decisions for the business. The business is engaged in oil and gas business
and operates in different countries and therefore political factors would be affecting
the operations of the business.
 Economic Factors: The economic factors involve macro-economic such as interest
rate, inflation rate and economic cycle can impact the operations of the business. In
addition to this, there are also micro-economic factors as well. The management of
BP needs to take advantage of growth rate trends and inflation rate for optimizing the
operations of the business.
 Social Factors: The cultures and norms of the society and the preferences of the
consumers have an impact on the operations. The demographic situation and attitudes
of the consumers’ needs to be identified so that a well formulated plan can be
implemented to enhance the revenue of the business.

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 Technological Factors: The development of technology affects every business and
over the years it has also impacted the oil and gas industry. Most developments have
taken place in transportation of such oil and gas to the final consumers. The
management of BP can make use of such a situation and develop competitive
advantage in the market.
 Environmental Factors: The environmental factors are important and the same must
be considered by businesses in taking decisions. The businesses which are operating
in Oil and Gas Industry needs to adhere to environmental standards and properly
dispose byproducts which can impact the operations. The business of BP should also
be concerned with the same factors and take appropriate decisions on the basis of the
same.
 Legal Factors: The legal factors are basically regulations which need to be adhered to
while managing the operations of the business. Some of the legal conditions which
can affect the business are tax regulations, different registration requirements and
other factors. In the case of BP, the taxation laws and other legal requirements are
applicable to the business.
SWOT Analysis
SWOT analysis is a tool which is used by the business for conducting internal
analysis of the operations for identifying key strengths and weakness of the business. The
different factors which can be identified for the business of BP are explained below in details:
Strengths
 The business enjoys a strong operational performance in the market which has
credited the business for its overall success in the market.

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 The level of technology and developed supply chain of the business is regarded as one
of the main strengths of the business.
Weakness
 One of the main weaknesses which can be identified is loss of materials which falls
under the category of normal losses due to oil spills.
 In addition to this, the business also faces a major incidents of accidents which affects
the operational process of the business.
Opportunities
 There is wide spread scope for expansion for the business of BP through new projects
and this would positively impact the operations of the business.
 In addition to this, there is a growing demand for energy in the market and therefore
there is lots of scope.
Threats
 The business faces major threats from competitors in the market which can affect the
revenue of the business.
 The business also faces the threat from governments due to the increase in global
emissions over the years.
Conclusion
The above discussion shows a detailed analysis for the business of BP which is
engaged in providing oil and gas as products to the customers. The company is known for its
supply chain process and this is the main reason that the company has been successful in the
market. In order to extract information regarding the operational process of the business, the

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financial reports are considered which gives an excellent opinion regarding the different
segments of the entity. The discussion also shows impact of cultural and natural environment
in the policies which are formulated by the business. The analysis reveals that the cultural
and natural impacts are considered in taking vital decisions for the business In order to
properly segregate the influences of external factors, the same are shown on the basis of
economic and non-economic factors for the business.
The analysis further shows the external market trends and the same is demonstrated
with the application of PESTLE analysis. The different factors which are covered in PESTLE
analysis are crucial for taking important decisions for the business and the same also paves
the way for strategic goals. Further, SWOT analysis is applied for determining the strengths
and weakness which are internal factors and also opportunities and threats which are external
factors for the business. The SWOT analysis is considered so that the business can make use
of its strengths and opportunities to develop competitive edge in the market and formulate
counter measures for combating weaknesses and threats associated with the entity. These
factors need to be considered for taking vital decisions for the business and also frame
appropriate strategies for ensuring long term survival of the business. The discussion further
shows that such factors are crucial as it gives the management the foresight regarding the
future of the business and appropriate actions can be taken accordingly. In an overall
analysis, it can be said that the cultural and natural factors which forms part of external
market, affect the operations of BP Plc and any decision taken for the growth of the business
must consider such factors. The growth and long term sustainability of the business depends
on such factors considering the nature of the industry.

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