J.P Morgan Finance and Investment Report: Organisational Analysis

This report provides a comprehensive analysis of J.P Morgan's financial and investment operations. It begins by examining different types of business organizations, including public, private, and voluntary sectors, and their respective purposes. The report then delves into the relationships between various organizational functions, such as human resources, finance, marketing, and information technology, and how they are linked to the company's objectives and structure, particularly using matrix and bureaucracy structures. Furthermore, it introduces macro environmental factors and applies PESTLE analysis to assess their impact on J.P Morgan. Finally, the report conducts a SWOT analysis to evaluate the company's internal strengths and weaknesses, as well as external opportunities and threats, providing a holistic view of J.P Morgan's financial landscape.

J.P MORGAN
FINANCE AND
INVESTMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Different types & purposes of business organisations................................................................1
TASK 2............................................................................................................................................3
Relation among different organisational functions and their link with objectives & structure. .3
TASK 3............................................................................................................................................7
Introduction to Macro environmental factors and PESTLE analyses.........................................7
TASK 4..........................................................................................................................................10
SWOT Analyses........................................................................................................................10
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
A business is established to sustain high profitability and competitive position from
marketplace. Business environment refers with all those forces which can affect its decision and
working activities in direct and indirect manner. All these factors are in out of control of the
company and to manage them management must make necessary changes in their organisational
cultural. Along with this, business environment is uncertain in nature because it is difficult to
predict future occurrences specially when changes taken place too frequently. The present
assignment is based upon HSBC which is one of the largest financial and banking service
provider across the world. In UK, the organisation is having a network of over 1100 branches by
having an objective to provide financial service to people by lower interest rates. The report is
going to be defined different types, purpose, size and scope of business associations at market.
Positive and negative impact of macro environmental factors will also defined later.
Furthermore, internal and external factors will be discussed via SWOT analysis and their
relationship with macro environment factors.
TASK 1
Different types & purposes of business organisations
In today's scenario, firms are getting established with their own purpose and aims.
Different business organisations follows diverse structure and managing their activities so as to
obtain their goals and objectives in a certain time period. On the basis of their types and purpose,
corporate associations are classified into three categories which are stated as under -
Public sector organisation – These type of corporations are owned and management by
the government of a nation with an aim to serve something better to public. Public sector
organisations are known as one of major source of economic growth and development as well
also plays a vital role in providing job opportunities to people. Here, government have all rights
to make decisions on trade of public organisations and also manage financial accounts of the
company. For example – Department for digital, cultural, media and sport is one of the largest
public sector organisation that is responsible for managing UK's cultural and sports activities.
The organisation also tend towards managing broadcasting and internet services in the nation. It
also has liability to manage tourism and leisure activities in country and it attractive thus people
comes here to visit (Avramenko, 2012).
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Purpose – The prime motive of the association is to growing the economy by connecting
UK over the world and sustaining excellence by promoting Britain. Another purpose of DCMS is
to ensure social responsibilities and protect UK's cultural, artistic heritage and make Britain a
fantastic place to visit.
Legal structure of organisation:
Departmental management – It is one of the oldest form of managing public sector
organisations. Departmental management encompasses with those undertakings which are
entirely depends on government finances; here state treastury provides capital and surplus money
to organisations.
Public corporations – These entities have separate legal entity and created for specific
purpose. Public corporations are financed by government and does not depend upon state
exchequer for accomplishing its day to day activities.
Private sector organisation – In this over dynamic business environment, various
companies are being established with an aim to gain profitability; these firms are owned and
controlled by an individuals. Private sector organisations are tend towards generating new and
innovative products thus to capture customers' eye at market place and increase client base. Such
businesses also contribute high in GDP rate as well as per capita income of the nation. For
example – HSBC is a leading private sector association and comes in 4th position under category
of clerical banks in UK. At worldwide, the organisation is having 7500 offices over 80 countries;
its main services are commercial banking, personal finance, corporate and investment banking,
wealth management etc.
Purpose – The prime purpose of the company is to identify economic growth, connecting
customers to opportunities, enabling businesses to thrive and economies to prosper, and,
ultimately, helping people to fulfil their hopes and realise their ambitions (Shapiro and Bar-Isaac,
2013).
Legal structure of organisation -
Sole proprietorship – It is a type of business in which only an individual is responsible to
handle and manage all business activities; the person is also take decisions regarding profit and
losses within organisations. Most of the sole proprietorship businesses are executed to earn basic
financial needs.
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Partnership – In such kind of businesses, there is involvement of two or more than
members and all of them works under a partnership deed. In partnership businesses, each people
put certain amount of capital and their profit ratio decided on the basis of same. If business get
into loss then all members are individually liable to pay it.
Voluntary sector organisation – Under this category, businesses are established for
social welfare and growth. Voluntary sector associations work to reduce social issues in a society
and improve the living standard of people. In UK, there are millions of voluntary firms are being
opened thus to make UK a better place. For example - Wellcome trust is a biomedical research
charity of UK. It is opened in 1936 to obtain funds for research thus to improve animal and
human health. The global charitable foundation, both politically and financially independent and
focus to innovate ideas for developing human and animal life (Dunning, 2013).
Purpose – The purpose of this trust is to "achieve extraordinary improvements in health
by supporting the brightest minds", and in addition to funding biomedical research it supports the
public understanding of science.
Legal structure of organisation:
Incorporation and limited liability - It involves two forms, i.e. incorporated and
unincorporated. In which incorporated implies to develop a legal identity for an association that
is separate from its members; an incorporated form can exist into contracts. Apart from this
unincorporated form has no separate legal identity and in this personal liability for the owner,
partner or member of the management committee.
Charity status - It is legal form of voluntary sector which runs with public donations and
funds. In UK, there are large number of charities operating at world level and enable to work for
social growth and development.
TASK 2
Relation among different organisational functions and th_1531312299eir link with objectives &
structure
Organisational structure:
A system which provides a blueprint of all the business operations and activities in order
to attainment of organisational goals and objectives. This structure defines the flow of
information and authority-responsibility relationship. Every business organisation has three
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levels of departments and personnel and that is upper, middle and lower level. These levels are
divided according to their organisational structure which is followed by the entity. This structure
defines a hierarchy within an organisation which helps to determine job and tasks of each
employee. This framework provides a suitable visual presentation of all the functions and
departments of an organisation which helps in providing clear view of direction. This is a formal
structure which is usually presented by the way of charts. The main benefit of this system is that
it helps in providing clear reporting system. Ultimate motto of using this structure to increase the
productivity and profitability of an organisation. Organisational structure follows a specific
design and model, those models are mechanistic model and the organic model (Janita and
Miranda, 2013).
Mechanistic model assumes that any complex structure can be interpreted by working on
each individual matrix. Whereas organic model assumes that every change can be easily adapted
by business organisation.
Various organisations adapt different structures according to their suitability. Few of
those structures are described below:
Bureaucracy structure: According to this formation, whole organisation is divided into
multiple stages in the form of pyramid. These steps are classified according to the degree of
formality involved in business operations. Bureaucracy is adapted in order to bring strictness,
fairness and efficiency. This framework has various layers of management arranged from top to
bottom according to the superiority. For example, Wellcome Trust is a non profit organisation
which follows this structure in order to bring simplicity and efficiency in their organisation.
Illustration 1: Bureaucracy structure
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(Source: Bureaucracy structure, 2015)
This structure follows the pattern of a pyramid. In which the top most stage belongs to
upper level staff such as CEO, President, Vice president, Directors, Chairmen and Managing
directors. The next stage of pyramid belongs to middle level staff such as Managers, Supervisors,
team leaders and others. Third and the last stage belongs to blue colour employees. Wellcome
trust use this structure as the framework is easy and allows to categorise their employees and
volunteers into various classes.
Matrix structure: This structure is the combination of two organisational frameworks
that is functional and divisional where every reporting relationship is set up as a grid. This
system is considered as the most complex structure and is used for large scale companies which
has multiple responsibility to single individuals. This structure helps in flowing the information
through the organisation and it speeds up the process of decision making. For example, HSBC
Bank is a private organisation which has adapted this method in order to handle their all
departments and their diverse functions effectively.
Illustration 2: Matrix structure
(Source: Matrix structure, 2018)
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According to this structure, HSBC has divided various functions into classes according to
their nature. These functions are further divided into matrix. In above chart every manager of
every department has to report one head usually CEO and all the lower level staff has to report to
their respective managers or supervisors.
Interrelationships of functions:
HSBC Bank is a financial services company which operates in multiple countries. They
has a huge variety in their functions and departments which are interlinked with each other. This
organisation follows the structure of Matrix in order to handle all their complex functions and
divisions. Functions of this company are mentioned below:
Human resource – This function deals with the human assets of an organisation. HSBC
is a large scale organisation which has its headquarters in London, United Kingdom. This
company has over 8000 employees working in all the branches of Europe. HR department of
HSBC includes various operations such as recruiting, selecting, training and development etc. In
this functional department employees are first hired and then appraised according to their
performance. The main aim of this function is to provide appropriate personnel to the
organisation so that effectiveness can be improved. This department is headed by human
resource manager who ensures that company has talented workforce. Human resource
department is interlinked with every department of the organisation as all activities requires
human resource or employees (Marston, 2011).
Finance – This function is considered as the backbone of any organisation as this helps
in acquiring funds by which other business operations can be performed. In HSBC Bank, all the
activities related to finance such as procurement of funds, allocation of finance, preparation of
financial statements and others are controlled by this department which is headed by finance
manager. The main aim of this function is to serve accurate and reliable financial information
about the company which helps in gaining trust of related parties such as investors, debtors etc.
This department is directly linked with operational department as the activities which are
performed needs various funds and resources.
Marketing – Under this function, all the promotional and advertising activities are
performed. HSBC has a huge brand equity across Europe and various other countries which is a
result of effective promotional strategies. This department is headed by marketing manager who
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look after all the activities which helps in enhancing visibility of the company. This function is
related with human resource and finance department as this function requires funds and skills.
Information technology – This function deals with all IT related activities of the
organisation. This department has a vital role in an organisation as it look after all the technical
defaults. HSBC Bank is a large scale company and according to the current scenario, their every
operation needs IT surveillance. Various business operations of this company such as internet
banking, electronic data transfer, fund transfer and many more needs 24*7 security and care. In
order to provide quality services, this function needed to effective and efficient. This department
is linked with all other divisions as all function requires digitalisation now a days.
Operations – According to this department, all the activities and operations which are
performed in order to serve customers are needed to be performed with highest level of
efficiency. HSBC Bank has variety of operational activities such as customer relations, customer
care, accounting, hiring etc. Similar to IT department, this function is also interlinked with every
function of an organisation (Morgan, 2012).
HSBC Bank is a private company which has primary goal of customer satisfaction and
profit maximisation and in order to attain both these goals, organisation needs to ensure effective
management of all their departments. The above explained functions are inter linked with each
other and has same goals which are needed to be earned.
TASK 3
Introduction to Macro environmental factors and PESTLE analyses
Every organisation gets affected by internal and external influencers. External factors
involves Macro and Micro elements. An organisation is surrounded by macro environment,
which has various factors such as political, economical, social, technological, legal and
environmental. In order to better understand the concept of Macro environment, PESTLE
analyses of HSBC Bank along with its positive and negative effects is discussed below:
Political – Political factors are governmental influencers which are related to economy or a
specific industry. These factors includes taxation policies, trade tariffs etc. HSBC Bank operates
in multiple nations due to which they have to consider political factors of every country.
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Advantages: HSBC has a strict arrangement for the compilation of all tax laws and trade
legislations. This company has developed various protection strategies which helps them tackling
governmental restrictions and limitations (Schaltegger and Wagner, 2017).
Disadvantages: HSBC is an International bank which operates in multiple countries and
every nation has different policies and tax tariffs due to which they face issues of paying high tax
and generates relatively low revenue.
Economical – According to these factors, economic performance impacts position of the
organisation. Inflation rates and annual GDP are few influencers which affects functioning of the
company. HSBC Bank has to function in various countries and performance of all those nations
affects respective branches of this Bank.
Advantages: HSBC operates in various European nations which are said to be have
stable economy. Cheap labour and effective skills are other benefits which are gained by the
above mentioned company through economic stability.
Disadvantages: Due to volatility in the interest rates of Asian and African countries
affects business operations of HSBC bank along with fluctuations in employment reduces their
brand equity. Another limitation of this external factor is continuous global recessions and
depression.
Social – These factors are the scrutinise form of social environment of the market. In this case,
social influencers are said to be thinking and perception of society about banks and investments.
Cultural trends, demographics and population of an nation are few other examples of social
factors.
Advantages: Like other companies HBSC is also looking a step forward towards
supporting low carbon economy and therefore it is providing debt and equity investments and
insurance. Customers are also desiring to lead a deluxe and modern lifestyle on credit.
Disadvantages: HSBC currently dealing with issues like climate change and criminal
funds laundering.
Technological – According to this factor a business is affects by both internal and external
surrounding. With the use of updated technology any business can transform into success or
failure. HSBC is a worldwide bank using latest technology.
Advantages: Advancements in technology effects HSBC way of operating on regular
basis and with the use of latest technology which make them endangered to likes of cyber crime.
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Few other technological influencers of this company are digital technological tools such as
internal internet banking and others. HSBC Bank provides various services to their clients such
as Credit card, Debit card, mobile banking and others.
Disadvantages: There was an operational weakness in HSBC that profaned data
protection laws, however lost data doesn't effects on company's performance but because of it
many honest customers left( Wheelen, 2017).
Legal – These factors are the government rules and regulations that affect a business. In this case
there are many factors to influence HSBC bank those are implementation of new monetary
policy, imposing new tax schemes, applying new laws related to banking industry etc.
Advantages: Legal factors bound HSBC Bank to follow new imposed laws, rules and
regulations, thus it is helpful for the bank to set a positive image in the mind of customers as the
bank follows all the rules introduced by the government. It provides easy and simple framework
to run its business.
Disadvantages: When the government changes then the rules are going to change so
again and again modification in rules can affect financial position of HSBC Bank. When a bank
keep changing the policies then customers get confused and they want to switch to another,
because they want easy banking system.
Environmental – These factors direct influence the growth of HSBC Bank. There can be
various environmental factors that will sort a big outcome on how HSBC plays out in the market.
These factors lies on the business science, human behaviour and insider environment of the
organisation.
Advantages: These factors help HSBC Bank to achieve predetermined goals, to identify
threats and forecasting the future of the organisation. Banks operates online as well as offline and
they are least affected structures by the environmental factors.
Disadvantages: There is no assurance of effectiveness of the organisation and if the
environment within the organisation is not good then it will direct affect the business of HSBC
bank and these are not fully reliable, and there is deficiency of strategical formulation (Solomon,
2014).
Above PESTLE analyses of HSBC reflects that functioning and business operations of
this Bank are highly influenced by the Macro environmental factors. In order to effective
productivity of the company, various efforts are made by the management.
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