HSBC's Organizational Functions, Objectives, and Environmental Impact

This report provides a comprehensive analysis of HSBC's business environment, focusing on the relationship between organizational functions, objectives, and structure. It examines the advantages and disadvantages of interrelationships between organizational functions and their impact on HSBC's structure. The report applies PESTEL and SWOT analysis models to identify the positive and negative impacts of the macro environment on HSBC's business operations, including political, economic, social, technological, environmental, and legal factors. It also explores how HSBC's strengths and weaknesses interrelate with external macro factors, providing insights into the organization's decision-making processes and overall performance. This document is available on Desklib, a platform offering a range of study tools and solved assignments for students.

[BUSINESS AND BUSINES ENVIRONMENT]
HSBC

CONTENTS
INTRODUCTION.....................................................................................................................................2
ABOUT HSBC..........................................................................................................................................3
TASK 1....................................................................................................................................................4
P3 ANALYSIS OF THE RELATIONSHIP BETWEEN THE DIFFERENT ORGANIZATIONAL FUNCTIONS AND
HOW THEY LINK TO ORGANIZATIONAL OBJECTIVES AND STRUCTURE OF HSBC (ORGANIZATION
CHART)...............................................................................................................................................4
M2 ANALYSIS OF THE ADVANTAGES AND DISADVANTAGES OF THE INTERRELATIONSHIPS
BETWEEN ORGANISATIONAL FUNCTIONS AND ITS IMPACT ON THE ORGANISATIONAL STRUCTURE
OF HSBC.............................................................................................................................................7
TASK 2....................................................................................................................................................9
P4 & M3 APPLICATION OF PESTEL ANALYSIS MODEL FOR IDENTIFYING THE POSITIVE AND
NEGATIVE IMPACTS OF THE MACRO ENVIRONMENT ON THE BUSINESS OPERATIONS OF HSBC......9
P5 & M4 APPLICATION OF SWOT ANALYSIS FOR CONDUCTING INTERNAL AND EXTERNAL ANALYSIS
OF THE SPECIFIC ORGANISATIONS FOR IDENTIFYING THE STRENGTHS AND WEAKNESSES AND
THEIR INFLUENCE ON DECISION MAKING FOR THE HSBC................................................................12
P6 HOW STRENGTH AND WEAKNESSES INTERRELATE WITH EXTERNAL MACRO FACTORS OF THE
HSBC................................................................................................................................................15
CONCLUSION.......................................................................................................................................17
REFERENCES........................................................................................................................................18
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INTRODUCTION
In the present business scenario, every business organization confronts with the wide range
of issues and challenges. All of these challenges are the result of the changes in the overall
business environment of a business organization. The term business environment refers to
all the internal and external environmental factors of the environment that affects the
functions, management, demand & supply and all the stakeholders of the business
organization (Armstrong et al., 2015). For surviving in this competitive business era every
business organization is required to have a proper understanding of all the internal and
external factors of the business environment. Here, in this assignment, every aspect of
business organizations such as types, sizes, structure and scope will be investigated with an
example of a multinational business organization HSBC. As a business analyst of the
organization, the analysis of the environmental factors and its impact on the organization
will be reported in this assignment.
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ABOUT HSBC
HSBC (the Hongkong and Shanghai bank) is the multinational business organization. It is one
of the largest banking and financial services organization of the world based in the UK with
headquarters in London. It is established in the year 1865 by Sir Thomas Sutherland. The
organization serves around 38 million customers all around the world through its four global
businesses viz. global private banking, commercial banking, retail banking and wealth
management and global banking and markets. Through these businesses, it covers around
67 countries and territories in Asia, Europe, Africa, Latin America, North America and the
Middle East with total 3900 offices. The main aim of the organization is to achieve growth
through the prospering economy and connecting customers to wider opportunities. The
latest revenue of the bank for the year ending 2017 was approximately £13billion with a
profit of approximately £1.8billion. It is the fast growing bank in the UK that serves more
than half of the population of the country (About HSBC, 2018).
[Source: http://www.getbankcode.com/banks/hsbc-bank]
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TASK 1
P3 ANALYSIS OF THE RELATIONSHIP BETWEEN THE DIFFERENT
ORGANIZATIONAL FUNCTIONS AND HOW THEY LINK TO ORGANIZATIONAL
OBJECTIVES AND STRUCTURE OF HSBC (ORGANIZATION CHART)
RELATIONSHIP BETWEEN DIFFERENT FUNCTIONS OF ORGANISATION
Every business organization has to perform varieties of activities and operations to achieve
an overall objective of the business organization. In order to effectively perform several
tasks and activities of the organization, these tasks and activities are divided into different
functional areas. These functional groups are responsible for creating an overall
organizational structure to deliver better performance and products to the customers for
growth and success of the business organization (Dijkman et al., 2016). Usually, every
business organization has five major functional groups i.e. finance, human resource,
marketing, production and research & development. In the case of HSBC, it is banking and
financial service organization which requires different functional areas. There are six major
functional groups of HSBC organization they are:
 Finance
 Human resource
 Marketing
 Personal banking
 Corporate banking
 Services
All of these organizational functions are interrelated or interdependent with each other for
their effective performance and achievement of functional objectives of the organization.
For instance, the personal banking function is dependent upon the human resource function
for acquiring talented and skilful employees to provide better personal banking services to
the customers. On the other hand, human resource function is dependent upon the finance
function to acquire suitable employee of the company through effective recruitment and
selection procedure funded and budgeted by the finance function of the organization
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(Dijkman et al., 2016). Similarly, each and every functional department of the HSBC is
dependent upon other functional departments for its activities and operations and as a
whole, they support the achievement of the ultimate goals and objectives of the
organization.
LINK BETWEEN ORGANISATIONAL FUNCTIONS AND OBJECTIVES & STRUCTURE
The organization structure of an organization serves as the basis for the management of all
the organizational activities and tasks to effectively achieving the predetermined goals and
objectives of the organization. The structure of any business organization is influenced by
several factors such as size, type, scope, objectives, environment and location etc (Johns
and Conroy, 2017).
The organizational structure of HSBC is designed by splitting up the work and activities
among the members of the organization to handle the complete management effectively.
The below organizational chart will show the exact structure of the HSBC.
Figure 1 organisational structure of HSBC
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[Source: https://khusanraymjonov.files.wordpress.com/2014/11/structure-hsbc.png]
Organizational functions are the part of the whole organizational structure. Each and every
function within an organizational structure is responsible for carrying their own tasks and
activities effectively through proper coordinating with other functional groups of the
organization (Harper, 2015).
There is a significant relationship between the organizational functions, structure and
objectives of the HSBC. The organizational functions help in the division of responsibilities
and objectives among the members of the organization to provide sufficient importance and
carrying effective operations in each functional area for the achievement of the sub-goals
and small objectives that will further help in accomplishing the ultimate aim of the
organization.
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M2 ANALYSIS OF THE ADVANTAGES AND DISADVANTAGES OF THE
INTERRELATIONSHIPS BETWEEN ORGANISATIONAL FUNCTIONS AND ITS
IMPACT ON THE ORGANISATIONAL STRUCTURE OF HSBC
The interrelationship among the organizational functions may have some advantages or
some disadvantages which could affect the organizational development in both positive and
negative way.
ADVANTAGES
 Increase in Efficiency: the interrelation among the organizational functions helps in
increasing the efficiency of the activities through proper information and
communication.
 Division of responsibility: it also helps in dividing responsibilities appropriately
according to the requirements of the tasks and activities (Drucker, 2017).
 Specialization and expertise: the interrelationship between organizational functions
helps in standard and quality performance of the organizational operations due to
expert knowledge and information.
 Increase in productivity and profitability: it also helps in avoiding unnecessary cost
and wastage of time and results in increased profitability.
 Requires less time: it also helps in creating better understanding among the
functional departments and helps in saving quality time in the organization.
DISADVANTAGES
 Confusion: it creates confusion of works and activities among the functional
departments.
 Duplication of work: interrelationship also causes duplication of work by the
functional units of the organization.
 Conflicts: due to miscommunication or any other issues the situation of conflict may
arise among the interdependent functional units of the organization (Rahim, 2017).
 Lack of coordination: the lack of coordination among the functional departments
may give rise to uncertain conditions and risks in the organization.
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 Dependency: it involves a high level of dependency which hinders the efficiency of
work of the separate functional unit.
In order to ensure the better performance of the business organization, it is important to
have an effective organizational structure that will help in managing all the functions and
tasks effectively by ensuring a better relationship among the functions of the organization
(Cavusgil et al., 2014).
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TASK 2
P4 & M3 APPLICATION OF PESTEL ANALYSIS MODEL FOR IDENTIFYING THE
POSITIVE AND NEGATIVE IMPACTS OF THE MACRO ENVIRONMENT ON THE
BUSINESS OPERATIONS OF HSBC
The macro environment of a business organization is consists of several external factors that
are uncontrollable and has an influence on the organisational strategies, performance and
decision making. The examples of macro environment factors are competitors, changes in
climate and weather, cultural tastes and government rules and regulations. The macro
environment affects the economy or the industry as a whole rather than a specific
organization or a region. It could have both a positive and a negative impact on the
organizational goal, growth and development (Shenkar et al., 2014). Therefore, it is
important to analyze these factors before making any decision in an organization. In order
to perform an effective macro environmental analyze, a tool of PESTEL analysis will be
utilized.
A PESTEL analysis is a tool used by the business organizations to analyze and monitor the
several macro-environmental factors that could have a positive or negative impact on the
business organization. These macro environmental factors are political, economic, social,
technological, environmental and legal (Burke, 2014). The positive and negative impact of
macro environment factors on the HSBC will be analysed below:
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FIGURE 2 ELEMENTS OF PESTEL ANALYSIS
[Source: https://www.pinterest.com/pin/537406168019625205/]
POLITICAL: HSBC operates in more than 67 countries all around the world. It is majorly
affected by the political environment of the several countries due to the continuous changes
in political policies, rules and regulations of the countries. Some political factors have a
negative whereas some have a positive impact on the organisational growth for e.g. to start
a new business in a new country HSBC is strictly required to comply with the government
laws and regulations. HSBC also considers the political stability of the country in which it
operates. The political decision of Brexit has also affected the growth of the company in the
country (Anonymous, 2014).
ECONOMIC: As being one of the world’s largest banking and financial group HSBC inherent
several economic threats and uncertainties. The economic factors such as unpredictable
fluctuations in the stock market and foreign exchange rate, recession, interest rates etc.
have a vast impact on the decisions and performances of the organisation. The Brexit policy
has affected the economy of the whole country and all the business sectors as well.
SOCIAL: The social factors of the macro environment involve the social responsibilities of
the organisation. The social circumstances around the organisational environment also
affect the business. Thus, HSBC formulates policies for contributing to the development of
the society of the country in which it operates. To fulfil its social responsibilities HSBC makes
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a partnership with charitable organisations by providing funds and support for the
development of the society in the world (Anonymous, 2014).
TECHNOLOGICAL: Now a day’s technology plays an important role in the growth and
development of any business organisation. The increasing developments in technology have
facilitated the operation of HSBC. But the dependency on the technology could lead to the
drastic loss due to increasing frauds and technological malfunction. HSBC has also been a
victim of several technological frauds since; technology is widely used in the banking and
financial service organisation. For e.g. the risk of sensitive customer data is always
presented in banking and financial services.
ENVIRONMENTAL: The changes in environmental factors such as weather and climate
change could also affect the organisation. The current trends in climate change and
increasing carbon footprint in the atmosphere has resulted in governmental regulation for
reducing its impact on the environment. HSBC is committed towards the protection of the
environment and makes efforts for reducing the carbon footprint through recycling and
using energy efficient products in the organisation.
LEGAL: The legal factors in the macro environment are all those laws and legislation which
could affect the organisational growth and development. As being a multinational
organisation HSBC has to comply with the governmental laws and legislation of the several
countries. The trade policy, export-import policy and licencing etc. are the legal
requirements for operating a business at multinational level for e.g. These legal procedures
help an organisation to build a solid base of operations and on the other hand, these are
also responsible for consuming higher cost and time of the HSBC (Business teacher, 2018).
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