Royal Holloway - MN3916k: HSBC Responsible Management Report

This report analyzes HSBC's responsible management practices, focusing on the challenges and opportunities presented by key megatrends. It begins by exploring responsible management issues, including sustainability, responsibility, and ethics, and how they relate to HSBC's operations. The report then utilizes a PESTLE analysis to examine the political, economic, social, technological, legal, and environmental factors impacting HSBC, identifying megatrends like demographic shifts, technological advancements, and climate change. A SWOT analysis further evaluates HSBC's strengths, weaknesses, opportunities, and threats in this context. The report concludes by discussing the implications of these trends for HSBC's reputation, offering insights into how the company can navigate these challenges and leverage opportunities to enhance its responsible management practices and maintain a strong market position.

Management
HSBC Case Company
8/21/2019

Management 1
Contents
Responsible management issues................................................................................................2
PESTLE Analysis.......................................................................................................................4
Political factors.......................................................................................................................4
Tax......................................................................................................................................4
Economic factors....................................................................................................................5
Economic power shift........................................................................................................5
Social factors..........................................................................................................................6
Demographic and social change.........................................................................................6
Technological factors.............................................................................................................7
Rise in technology..............................................................................................................7
Legal factors...........................................................................................................................8
Environmental factors............................................................................................................8
Climate change...................................................................................................................8
RMP Model................................................................................................................................8
SWOT analysis.......................................................................................................................9
References................................................................................................................................11

Management 2
Responsible management issues
In the dynamic environment, the managers of HSBC need to look towards the operations so
that they can manage the same. The management becomes responsible for the issues that they
generally face in the global market. The issues which are majorly conformed involve
sustainability, responsibility as well as ethics (Mckiernan and Tsui, 2019). The responsible
management works with an integrative approach towards sustainability, responsibility as well
as ethics which permits the manager to deal with diverse challenges within the company. The
below given is the detailed discussed on the issues: -
Sustainability: - The sustainability issues are witnessed with the company as HSBC funding
destruction of the vast areas of the Indonesian rainforest. The British bank (HSBC) denies in
providing the support to billions pound of funding for the manufacturer for palm oil
bulldozing rainforest (Kentish, 2017). The bank policies prohibit the financing of different
operations that are illegal, damage high conservation value forest which basically violate the
rights of the local people. This leads to the identification of the megatrend that is climate
change.
Responsibility: - HSBC finds the issue of the responsibility due to which the operations of
the company gets affected. As with the change in demographic there is change in the choices
which are essential to be considered by company offering the products as well as services.
Thus, the company is not able to perform the responsibility in effective manner which leads
to different issues but this helps in determining the megatrend of demographic change.
Ethical: - In the terms of ethics, HSBC found the issue of tax evasion that took place in the
year 2011. The company has been accuse of due to which they apologised were rife until a
few years ago. The scandal shows the ethical issues which are faced by them for which they

Management 3
were investigated over tax evasion allegations in different countries that include US, France,
Belgium and many others. This leads to the identification of the megatrend that is tax.
The responsible management performs the process that is linked with business related to
business functions that involves planning, organizing, leading as well as controlling through
the lens of sustainability, responsibility and ethics (Dyllick, 2015). This leads to the
maximum the triple bottom line, optimizing stakeholder’s value and obtaining more
excellence majorly for HSBC Company that is dealing financial services. The content of the
every company’s responsible management will depend of the wide number of factors in
majorly in the four areas which include factors like actors, subjects, drivers, inhibitors as well
as trends (Laasch and Conaway, 2014). These issues are essential to be considered by the
company management because it can influence the working or operations in the market.
HSBC Company needs to maintain the sustainability, responsibility as well as ethics while
performing their business operations.
Driver of the HSBC responsible management activities majorly depends on prevalent driver.
The major drivers of the responsible management are liable for the internal as well as
external factors that raise responsible behaviour. HSBC manager needs to ensure that they
evaluate the external as well as the internal analysis which will help the company to
determine the Megatrends that leads to threats and opportunities. It has been found that
environment of responsible management activity is essential defined by the issues or subjects
that are essential to be addressed by the management. Apart from it the major element of the
responsible management context is actor who co-address or are indulge in the same issues
with the parallel pattern (Dyllick, 2015). It is essential for the manger of HSBC to remain
aware which makes them to adjust the actions towards the same. Further, the megatrends
identification will be conducted with the help of external analysis.

Management 4
PESTLE Analysis
It is essential for the manager to consider the Megatrend that externally influences the HSBC
working by responsible who can maintain sustainability and act responsible in ethical
manner. The megatrend is refers to as the structural, long-term shift that has irreversible
consequences for across the world. It has been determined that the major the Megatrends
which are faced by the management involves rapid urbanization, change in demographic,
climate change, and rise of technology. This can be better understood with the help of the
appropriate tool of the PESTLE analysis.
PESTLE analysis is a tool which is used by the managers of HSBC with the motive to
analyse the factors that can influence the working of company. Megatrends are applied in the
analysis of the elements of PESTLE (Lasserre, 2017).
Political factors
HSBC banking has been sheltered by polices as well as regulations that are made by the
diverse governments in the countries where they are performing their operations. The
company also formulates their own defence strategies apart from any of the restrictions
related to governmental and their limitations.
Tax
HSBC bank showed figure of $7.9 billion on its net amount paid for tax in the year 2014
annual report. It is down from $8.6 billion in the year 2013 and also to compare it with
approx. $18.7 billion of pre-tax profit which was made by the company in last year (Financial
times, 2019). The company presented that tax is one of the major factor that lead to challenge
by declining the profit. The company accepted and said that 58% of its levy for non-UK
operations.

Management 5
The image shows the tax paid by HSBC in global market which is presented as per the
different regions which include Asia on top with $2.7bn and second position is acquired by
UK with $2.4bn.
Economic factors
The major factor that is considered in the pestle analysis is economic factor that can influence
the working of the company consists of GDP, inflation rate and many others. GDP of UK was
equal to 2825.21 billion dollars and in the world economy it is equal to 4.56%. It has been
witnessed that there is fluctuations in the economy of the country.
(Source: Trading Economics, 2019)

Management 6
This is clear with the help of image which shows that 2018 shows the hike in GDP which
means the purchasing power of company was more. Along with this, savings in market are
expected to be high with this it will grow in year 2019 and 2020. In addition to this, inflation
rate influence purchasing power of country. Purchasing power has reduced by 2.48% in the
year 2018 comparing it with the year 2017. This means that on average, amount that people
have to spend is 2.48% more in the year 2018 while comparing it with the year 2017 (UK
Inflation Calculator, 2019). Thus, this makes the responsible manager to evaluate economic
factor that can influence their decisions for bringing changes in the strategy of HSBC for
attracting the saving of company.
Social factors
The social factors are considered by the company as this leads to change in the social trends
on HSBC business. The bank is able to meet its obligations for the customers present in the
market (Morden, 2016).
Demographic and social change
It has been found that one of the major megatrends include change in demographic which
influence the working. By the year 2030, the population of the world is projected to improve
by 1 million which bring the total to over 8 billion. Along with this, 97% of this population
include the people from emerging nations (Blackrock, 2019).

Management 7
(Source: Blackrock, 2019)
This can easily be understood with the help of the above image which shows the present as
well as the future trend. The ageing population in the country will increase which will affect
the working because HSBC will not be able to get more potential customers for the services.
However, this will benefit in terms of service which majorly include the service of insurance
and others (PWC UK, 2019).
Technological factors
HSBC manager’s finds that it is essential to consider the technological factors as rise or up-
gradation in new system will lead to high risk related to the privacy as well as security in the
market. Most of the customers find the security due to their details with the bank (Marr,
2017).
Rise in technology
One of the major megatrends that have been identified is rise in technology which has
evolved the working of the companies in the global environment. The major technologies
which are considered include increasing datafication, use of IOT, rise and developments in
AI, the use of 3D printing is improving which is enhancing the opportunities and many

Management 8
others. The development in the technology has brought the wide opportunities for the
company (Berchbuhl, 2015).
Legal factors
In external environment, HSBC deals with different legal factors that influence the external
operating environment. It has been found that some of the fixed rules as well as regulations
are set by administrative which company needs to abide. The company perform all the
regulations which lead to opportunity for them in overseas market (Berchbuhl, 2015).
Environmental factors
HSBC Company is effectively contributing towards the environment which is one of the way
through which they can accomplish their responsibility towards the communities. From the
environment element it has been determined that climate change is one of the megatrends.
Climate change
The extreme weather conditions as well as change in climate can lead to droughts as well as
flooding that major influence the natural resources which include water, energy, metals, food
and many others (SGS, 2019). In the context of the essential geopolitical change, the leading
firms are forming the coalitions with the motive to lead the change action as well as to reduce
the uncertainty which leads to benefit to HSBC in maintaining the environment with
sustainability. The company takes the different initiative through which they can contribute
for the betterment of environment.
SWOT analysis
Strengths Weaknesses
 HSBC bank is considered as well
capitalised due to which they are able to
 The company finds the issues which leads
to high risk and this can influence the

Management 9
withstand economic volatility.
 Diverse portfolio of locations as well as
financial products.
 HSBC apply the effective cost-cutting
measures which lead to long term
profitability.
profit.
 HSBC has comprised with the brand
value after the scandal which affects their
operations.
Opportunities Threats
 HSBC Company has wide range of
opportunities in market by making
investment in the economy.
 HSBC effectively make use of
technology as it is improving and
enhancing working of company.
 HSBC has opportunity to position itself
in the emerging markets.
 The change in demographic towards the
ageing population will affect customer
count of HSBC.
 Political and legal factors leads to threats
for HSBC as the changes are taking
place.

Management 10
References
Berchbuhl, H. (2015) 6 technology mega-trends shaping the future of society
[Online].Available from: https://www.weforum.org/agenda/2015/09/6-technology-mega-
trends-shaping-the-future-of-society/ [Accessed from 22nd August 2019]
Blackrock (2019) Demographics and social change [Online].Available from:
https://www.blackrock.com/ch/individual/en/themes/megatrends/demographics-and-social-
change [Accessed from 22nd August 2019]
Dyllick, T. (2015) Responsible management education for a sustainable world: The
challenges for business schools. Journal of Management Development, 34(1), pp.16-33.
Financial times (2019) HSBC by the numbers: headquarters threat and what it means on tax
[Online].Available from: https://www.ft.com/content/db89a232-ecf7-11e4-bebf-
00144feab7de [Accessed from 22nd August 2019]
Kentish, B. (2017) HSBC funding destruction of vast areas of Indonesian rainforest, new
report claims [Online].Available from: https://www.independent.co.uk/news/world/asia/hsbc-
rainforest-deforestation-indonesia-funding-claims-report-a7529761.html [Accessed from 22nd
August 2019]
Laasch, O. and Conaway, R. (2014) Principles of responsible management: Glocal
sustainability, responsibility, and ethics. Nelson Education.
Lasserre, P. (2017) Global strategic management. Macmillan International Higher Education.
Marr, B. (2017) 9 Technology Mega Trends That Will Change The World In 2018 [Online].
Available from: https://www.forbes.com/sites/bernardmarr/2017/12/04/9-technology-mega-
trends-that-will-change-the-world-in-2018/#64a9f9045eed [Accessed from 22nd August 2019]

Management 11
Mckiernan, P. and Tsui, A.S. (2019) Responsible management research: a senior scholar
legacy in doctoral education. Academy of Management Learning & Education, 18(2), pp.310-
313.
Morden, T. (2016) Principles of strategic management. Routledge.
Morschett, D., Schramm-Klein, H. and Zentes, J. (2015) Strategic international
management (pp. 978-3658078836). Springer.
PWC UK (2019) Demographic and social change [Online].Available from:
https://www.pwc.co.uk/issues/megatrends/demographic-and-social-change.html [Accessed
from 22nd August 2019]
SGS (2019) Global megatrends: climate change [Online].Available from:
https://www.sgs.com/en/news/2019/06/sgs-megatrends-climate-change [Accessed from 22nd
August 2019]
Trading Economics (2019) United Kingdom GDP [Online].Available from:
https://tradingeconomics.com/united-kingdom/gdp [Accessed from 22nd August 2019]
UK Inflation Calculator (2019) UK inflation rate in 2018: 2.48% [Online].Available from:
http://www.in2013dollars.com/UK-inflation-rate-in-2018 [Accessed from 22nd August 2019]