BIZ202: Business Environment: Environmental Scan Report Analysis

This report provides an environmental scan of National Australia Bank, focusing on the influence of external factors on its operations. It begins with an introduction to environmental scanning, defining its importance and outlining the two-phase model and PESTLE analysis. The report then identifies key factors influencing businesses, including policy changes, changes in government regulations, and shifts in national and global macroeconomic indicators. The core of the report analyzes the National Australia Bank, detailing how it has been affected by policy changes from the Australian Securities and Investment Commission, stricter capital and liquidity requirements, and macroeconomic indicators like GDP and the consumer price index. The analysis highlights the impact of these factors on the bank's operations and strategies, such as adapting to new regulations and forecasting inflation. The report concludes by reiterating the importance of environmental scanning for organizational success, emphasizing its role in identifying opportunities and threats.

Running head: THE BUSINESS ENVIRONMENT 1
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THE BUSINESS ENVIRONMENT 2
Introduction
Environmental scanning
Organization environment is made up of both internal and external environmental factors.
To determine the rate of development and also predict several factors that can affect or influence
the success of an organization, it’s important to carry out organizational scanning. Environmental
scanning can be defined as posing and utilizing information about certain events, patterns, trends
and relationships in a given organization internal and external environment. Environmental
scanning is a tool to enable managers in making decisions concerning the future of their
organizations. It’s a process that helps in identification of possible threats and opportunities that
exists within that environment the business has been set up. (Vascellari, 2004)
Ways through which business conduct an environmental scan
when conducting an environmental scan, an organization can consider uses a two-phase model
phase 1:
 People
 Business
 Technology
Phase 2:
 Legal environment
Other organizations make use of the pestle model to conduct an environmental scan where
they study some of the environmental factors like political, economic, social, technological and
legal environment for a business.
Factors that influence the influence the environment in which businesses operate
1. Policy changes: policies are basic principles and guidelines that control how business
carry out their activities. They can be termed as declared objectives that organizations
seek to achieve so as to preserve the interest of their customers, staff and all relevant
stakeholders. Some policies may favor the environment under which an organization
operated while others may be unfavorably leading to the collapse of the organization.
2. Changes in government regulations: it’s the responsibility of every business to adhere to
and abide by the statutes which are the laws passed by relevant legislative agencies like
the government, state, and federals. When changes are made on these statutes, there is an
impact felt when it comes to the operation of a certain business or running organization
within such an environment. Such impact may be positive or negative.it depends on the
type of change made in the government regulation.
3. Changes in national and global macroeconomics indicators: global macroeconomic
indicators can be defined as Macroeconomic indicators are economic statistics which are
released periodically by government agencies and private organizations. These indicators
provide insight into the economic performance of a particular country or region and
therefore can have a significant impact on the Forex market. Change in these indicators
can influence positively or negatively the environment in which a business operates
depending on how the type of the indicator.

THE BUSINESS ENVIRONMENT 3
National Australia Bank
Background information
National Australia Bank is a financial institution that was formed back in 1982 formerly
known as the National Commercial Banking Corporation of Australia Limited. It has grown over
years and now its ones of the largest organizations in Australia and among the top five financial
institutions in the country in terms of market capitalism, returns and customers.
Analysis of environmental factors that influence activities of national Australia bank
1. Policy changes
National Australia has been a victim of policy changes that affect its current and future
operation. One of the recent policy change was a policy ordered by the Australian Securities and
investment commissions that they change to new policy on the banks spot foreign exchange
business. This is a policy that will see the bank develop and adopt a specific program that can
prevent, detect and also respond to given types of misconduct the bank is allegedly involved for
its spot FX. The change is this environmental factor (policy change) will lead to loss of some
customers before they adjust to the new system and program. (Skinner, 2018)
2. Changes in government regulations
As stated earlier, changes in government regulations may positively or negatively influence
the activities of an organization. In this case, national Australia bank is a good example of an
organization that has been affected by this environmental factor. According to (Atkin & Cheung,
2017), National Australia bank had to cope with the change to more tight and unfavorable
regulations requirement for capital and liquidity state. This changes in regulations employed a
revised framework that entailed increased capital requirement with the introduction of minimum
liquidity standards. It benefited the bank in that it could now cater for adverse shocks and risks
apart from the risk-weighted capital ratio.
3. Changes in national and global macroeconomic indicators
The National Australia Bank, being a financial institution, it has to be affected by some
factors like changes in national and global macroeconomic indicators. Some of these indicators
that have played a major role are the gross domestic product as well as the consumer price index.
These are two indicators that this bank has been using to determine the rate of inflation. As a
bank, they have been using this indexes to forecast on future levels of inflation and therefore
employ the best measures to avoid effects of inflation that can lead to the bankruptcy of this
bank. (Market insights, 2017)
Conclusion
Environmental scanning is very fundamental for the successful running of any
organization. It helps in identification of both environments, that portray possible opportunities
and threats as well. Environmental scanning is a tool to enable managers in making decisions
concerning the future of their organizations

THE BUSINESS ENVIRONMENT 4
References
Atkin, T., & Cheung, B. (2017). How Have Australian Banks Responded to Tighter Capital and Liquidity
Requirements? Bulletin, 4.
Market insights. (2017, January 12). Top economic indicators for the Australian economy. Retrieved from
Market insights: https://www.fxcm.com/insights/top-economic-indicators-for-the-australian-
economy/
Skinner, C. (2018). ASIC Orders National Australia Bank to Change Its Spot FX Policy. Finance magnets,
11.
Vascellari, A. (2004). Environmental Scan – What? Why? How? Andreavascellari, 7.