Contemporary Developments in Business: SCB External Influences Report

This report provides a comprehensive analysis of Standard Chartered Bank (SCB), focusing on the external influences that shape its operations. The report begins with an executive summary and introduction, highlighting the importance of understanding internal and external environments in the business world. It delves into Task 1, which examines external factors like globalization and their impact on SCB, emphasizing strategic alliances, mergers, and the bank's global presence. The report also discusses the PESTLE analysis, detailing the political, economic, social, technological, legal, and environmental factors affecting SCB. The analysis covers political stability, economic challenges, social norms, technological advancements, legal compliance, and environmental considerations. The report aims to recognize decision-making frameworks within organizations and how the business environment affects the company's working operations. The document concludes by discussing the importance of corporate social responsibilities for the company.

Contemporary
Developments in
Business and
Management

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................1
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
External influences of organisations and its impact...............................................................1
TASK 2............................................................................................................................................7
Relevance of ethics and CSR to Standard chartered bank and their impact on policies and
decision making process.........................................................................................................7
Effectiveness of organisational response................................................................................8
Areas of improvement as a response....................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

EXECUTIVE SUMMARY
This project assignment describe the major key aspects that are assistive in terms which
spreading business activities at global level. It is a case study of the Standard Chartered Bank
that is one of the leading financial sector. In addition, the overall revenue of this enterprise is
$14.060 US billion and its total equity is $44.368. The firm performs in competitive market and
for this it uses different tools and techniques.
INTRODUCTION
Business environment has a crucial role in vitality and advancement of a corporate
association. In this over dynamic world, it is essential for business entities to understand internal
and external environment and all those factors which can effect market reputation of the
company in an adverse manner. In which internal factors consists with employees, organisational
cultural, demand, supply, laws and legislations. On the other hand, external factors are political,
economic, social, technological etc. which put huge impact on advancement of a business unit.
Therefore, managers need to conduct market analysis so as to gain better outcomes (Abuznaid,
2017). The coursework is based on contemporary developments in management; the objective of
this project is recognise the decision making frameworks within organisations. Readers will also
come to know that how business environment effect working operations of the company.
Furthermore, there will be a discussion on importance of corporate social responsibilities for the
company. While considering the area of discussion, Standard bank is the chosen organisation as
it is more hindered by external environment cause it perform at international level. In addition,
Standard bank is a British overseas bank that is mainly operate in Africa then it was merged with
Charted bank and become Standard Chartered bank. The main services of Standard chartered
bank is – credit cards, corporate, consumer and investment banking, mortgage loans and wealth
management.
TASK 1
External influences of organisations and its impact
Due to globalisation, business entities are emerged in new markets. Additionally,
globalisation consists with interdependence of nations on each other. In this, individuals and
organisations interact at worldwide that aids in reach to more and more resources for a business
unit. Standard Chartered Bank operates at global level and hindered by different factors. As per
the research, it has revealed that Standard Chartered bank is always focused on strategic alliances
1

and mergers with other financial institutes so as to obtain maximum competitive edge at global
level. Globalisation is really beneficial for the company in order to compete with external rivals
(Banerjee, 2012). When Standard bank merged with Chartered bank, it had take time to adjust in
local cultural of UK. It results, the firm uses various principles so as to easily accept changes in
external environment. Along with this, company worked with local people of British which helps
it in raising cultural knowledge and also provide suggestions so as to run business operations in
an effective manner. SCB wants to be proactive, in such way it wants to exceed buyers'
expectations, that why they always come up with new products and services by having new and
attractive features. It is a multinational bank headquartered in London, England. It is operated in
more than 1200 branches and outlets across 70 countries and employs around 87000 people. It is
a constitute of FTSE100 Index. Having established the sufficient number of branches, it is
considered the prominent bank in financing. It does not conduct retail banking in the UK, and
around 90% of its profits come from Asia, Africa and Middle East. It is listed on the London
Stock Exchange, the Hong Kong Stock Exchange and the National stock Exchange of India. The
name have been derived from the two names: the chartered bank of India, Australia, china and
standard bank of British south Africa. These are the major goals and objectives of SCB, such as-
 To be trusted and respected over the globe
 To treat every customers with integrity.
 To deliver services which will continuously delight buyers
Hence, it is cleared that external business environment put a immense impact of
spreading working activities. For example- changes in political condition of UK also effect will
bear customers' purchasing power. If British government decreases tax duties and interest rates
then it will assistive in enhancing sales and profitability of financial institutes (Barker and et. al.,
2011). Standard Chartered bank supports the process of globalisation and victimized the trend so
as to become global financial entity.
For accomplishment of its vision, the financial unit conducts an external environmental
analysis for getting higher market share. They are using different strategies and policies so as
provide effective and qualitative services to customers with an aim of gaining higher profits.
Standard Chartered bank also supports to those small financial units which cannot generate high
profits. They merge such firms into their own so as to expand their market area. In this manner,
the bank conquer into growing emergent markets. Furthermore, the research and development
2

department of the company helps in inventing new tools and techniques that is a great
opportunity for it. It emphasis on rendering best of its services rather than other with an aim of
increasing the number of customers in a certain time period (Bean, 2012).
On the other hand, the major drawback of the organisation is less knowledge of small
markets because it deals in international markets mostly; this aspect highly hinder the business
activities. The big threat for business units is enhancing market competition in which different
substitute of a specific product are easily available. Therefore, it is too difficult for Standard
chartered bank to gain high competitive edge. Customers preferences and needs are also a major
drawbacks for business organisations.
So that, the mentioned business unit has to works towards diminishing such barriers so as
survive for long term period in target market. Another impulsive term that can be included on by
considering these aspects for generating higher revenues and proficiency.
PESTLE analysis: -
There are some other aspects that are not in control of a business organisation; then such
elements are irresistible and can hamper business growth highly. It also stopped growth and
development of business functions. In order to cope the impact of these external factors
managers are required to conduct a external market analysis that can be done through PESTLE
analysis of the company (An Evaluation of a PESTEL Analysis, 2018). The brief explanation of
PESTLE analysis of Standard chartered bank is described as under: -
3

(Source: An Evaluation of a PESTEL Analysis, 2018)
Political factors – These factors might have direct and indirect influence on business
activities and operations. Political factors relates the all those decisions which are made by
government. The arena has a major influence on how companies will operate as well as the
purchase power of customers in an adverse manner. Along with this, the political environment of
UK allows and take account foreign direct investment; British political market seemed as less
government control and intercession. Here, government acts as facilitator rather than being an
influencer; it also supports organisation as well as rivals (Crane and Matten, 2016). Hence, it can
be said that there is a stable political condition which gives chances to foreign venture capitalists.
Standard chartered bank is actively performed in Europe and beat its competitors. Behind this,
there is an impassive and effective strategy which aids firm to grow under the constitute political
conditions in United Kingdom.
Political factors are important for Standard chartered bank as if it emphasis on expansion
of its working operations in those nations which are not facing any political issues because it
does not make any specific changes in their policies and principles. Beside, if the political
condition of the nation is coseismic then performing in such territory will become too hard as the
organisation cannot make long term plan of actions for attaining long term goals and objectives.
4
Illustration 1: PESTLE analysis of Standard Chartered bank

Examples Impact
War Harm corporate and legal properties.
Strict laws and legislations for foreign firms Eliminates sales and profitability.
Riots, corruption and violence Hurdle in supplying qualitative services to
buyers.
Economic factors – Due to global economic crisis, UK's economy is still suffering from
niche; its a major threat for the financial sectors as well as those organisations which is operating
in the same sector. As if the economic condition of the country is not so good then
unemployment, poverty etc. situations will be increased in UK. Customers' disposable income
and bargaining power also get reduced cause of fluctuations in economic condition of the nation
(Crane, Matten and Spence, 2013). Thus, its a major threat for Standard chartered bank.
Importance - Running a business in that economy which is rapidly growing i.e. more
than 8% growth rate helps it in yielding more and more profits. In 2009, de to financial crisis the
growth rate of HSBC bank was get reduced. But due to emerging markets UK's economic
condition is improved, it results enhancement in per capita income of the country.
Social factors – It is fundamental for every business organisation to follow certain norms of a
specific society. Money laundering the major issue which come under social factors. Along with
this, Standard chartered bank is the is facing such issues which can affect the goodwill or market
reputation of the firm. People in UK understands that saving money is not only beneficial for
them but also for overall society. In recent years, market trends are totally change, individual
saves their money in private banks so as to gain higher returns in future.
Technological factors: It is related to changes and development of technology in
business environment which have major impact on industries. Standard bank carry out their work
majorly through online. On the other hand they have to look after central structure of the
customers. Technological aspects need to be updated with time to overcome the challenges
related to it. Hence it is considered most influential external change for the banking industry.
Importance : - Technology has added advance private and security concerns for the
banks as well as introduced various mobile apps to carry out huge customer services like transfer
funds, pay bills etc. These apps are full of features and perform important functions for the
5

fulfilment of customers utility (Freeman and Hasnaoui, 2011). This advancement helps to save
paper as well as fulfil the objective of providing the online facilities at their homes, as they do
not have to approach banks for every small transaction. There are various other factors which
includes R&D, incentives, automation and rate of change. IT involves huge investment as well as
regular updation to be in the pace of the dynamic business environment.
Legal factors: It takes into account laws and regulations that affect the business
environment in a certain country. Hence it is the responsibility of every company to comply with
the legal aspects in order to properly conduct their business. It include labour laws, safety
standards, consumer laws (Gitsham, 2012). Standard banks have create banking act in order to
play safe and become strong in terms of culture and society.
Importance : - Legal risks are higher in the banking sector as it is impacted by various
laws globally therefore continuous regulations are required to be in the competitive advantage.
Under this government has introduced '7-day current account switching service' which is the
advanced step taken as it provide the ease in switching their accounts very easily. Concept of
social responsibility also adds to the compliance of the legal issues. Banks have to carry out the
legal duty properly as to prevent themselves from any major issues.
Environmental factors: It is the last factor in PESTLE analysis which include aspects
related with the environmental platform. It include climate changes, weather changes,
geographical location etc. Banks and surrounding environment in which it is operating is highly
interrelated to each other. The environment of banking sector is dynamic and competitive in
nature. It gives a broader view where to carry out the business as it involves assessing the
external environment which cannot be denied, but the industry's efforts can be put to reduce the
impact and effect of potential threats to the organization.
Importance : -Energy management are being considered by various banks globally .
They have introduced solar ATM's which leads to the reduction in conventional energy. Focus is
made to encourage banks to publish their environmental report annually in which they highlight
the achievements done to contribute in protection (Groves and LaRocca, 2011). It creates a
positive image, build a strong platform for operations and leads to the reduction in the
operational cost which contributes in overall growth. On the other hand, some other elements
which also that also can be considered by the Standard Chartered bank that could accessible it in
thinking on the far side of PESTLE. With this, company can generate more strategies and
6

policies so as to respond fast towards external changes. Such as- Porter's 5 forces model,
Competitors analysis etc. are the useful tool in order to know the market condition and getting
better outcomes in future.
TASK 2
Ethics and Corporate social responsibility
Relevance of ethics and CSR to Standard chartered bank and their impact on policies and
decision making process
Legal and ethical both are different terms in which one is concerned with law and other is
related with moral standards. In order to perform effectively all business organisations have to
follow various laws and regulations, if they are not complying then they can deal with certain
legal obligations. On the other hand, ethics are totally different from laws. Every firm has its
own ethics or principles; companies cannot be admonished on the basis of ethics. In banking
sector, getting customers' faith and trust is very crucial so that business ethics plays an
imperative role in attaining this goal (Sustainability and our business, 2017). On the other hand,
it is also necessary for banking industries to fulfil corporate social responsibilities so as to reach
maximum number of customers in a certain time period. Below defined certain areas that are
covered in relevance of ethics: -
Transparency: - Its a significant part of ethics because if people think that bank is hiding
something from them, like their working style or return policies then it can broke customers
trusts towards corporation. Therefore, transparency is really require for Standard chartered bank
as it is popular for providing effective services. But sometimes it is difficult for retain higher
level of clearness, because it can reduces the profitability of the company. Thus, management
needs to take certain proper decisions regrading transparency operations (Hopkins, 2012).
Promotion of fair trade practice – Standard chartered bank has worldwide presence;
there are several kind of people come day to day on their door but it does not provide services
regrading converting black money into white or money laundering. Relevancy of fair trade is
helpful for the financial institutes so as to manage all issues or barriers in different countries. In
this, Standard chartered bank have to precede ethical code; this can hamper their working
activities as well as services which it provides to people.
Diversity issue – The business organisation believes that employees should be treated in
same manner. Due to different cultural background, they should understand the nature of
7

employees. Although, equality is the main part of ethics and Standard Chartered bank upgrades
its HR policies in order to enhancing diversity. There are different kind of issues are faced by
SCB in last decades like – money laundering and abusive mortgage practices.
Apart from this, CSR is called Corporate Conscience, corporate citizenship or responsible
business. It involves business fulfilling the law, ethical standards and national or international
norms. It serves as a guide through which company represent itself to the customers (Hopkins,
2012).
Relevance of CSR on banking industry and its impact is stated as under: -
Open banks in rural areas – The business organisation has more rich persons who highly
contributes in its proficiency. But, it also realize that SBC have certain social responsibility as it
is running at global level. In this era, SCB opens its branches on rural areas. For this, they make
require adjustments or modifications in its policies and invest money so as to open banks and
ATM in such cities which cannot create more profits. With this, people can get aware the
advantages of saving money.
Promoting education – Standard chartered Bank is dealing at global level and earning
higher revenues of billion dollar. It is working in area to provide education to people who cannot
afford primary and secondary education. It gives vocational training to people regrading
employment. On the other hand, women empowerment is the another CSR activity in which the
company is getting involved. Although, fulfilment of social activities aids Standard Chartered
bank in increasing profits as well as appreciation from worldwide; it also make positive image of
company in customers' mind.
Freshwater sustainability – Another CSR activity of SCB is saving environment; it is
worked towards sustaining fresh water because if this resource get reduced then put the all
people in trouble in future (Lawless and Findlay, 2015). Some individual thinks that CSR is little
bit irrelevant for business organisations saving water is one of the major topic of concern.
Effectiveness of organisational response
Standard Character bank has faced various allegations regarding acquiring of unethical
practices. In certain cases, they were capable to handle such matters effectively but in leftover
cases the company was failed. For example- in 2009 the bank was involved in drug kingpin and
it did not accept its mistake. At the end, it had to pay $2 billion. On the other hand, it was also
8

founded in money laundering cases in developing countries. In 2011 and 2012, the market
performance of SCB was not so good, rather than upgrading its tools and techniques of
production it terminated 20000 employees which was totally unethical. According to the
viewpoints of different business the firm could respond in better manner, i.e. selling dividends to
investors.
CSR activities: -
In order to fulfil its CSR activities business organisations has to set certain goals towards
environment. Standard Chartered bank can committed itself for saving water but still they cannot
done any achievements in this area. It represents, the firm is not concern towards its social
responsibilities and cannot responding towards external environment. Hence, SWOT analysis
will be accessible to SCB to respond quickly and in an effective manner: -
SWOT ANALYSIS OF STANDARD CHARTERED BANK
STRENGTHS:
 Large branch networks- It helps in providing the public services through their diversified
network referrals which helps in dispersing the risks to different markets (Lantolf,
Thorne and Poehner, 2015). Therefore it results in providing the strong customer base.
 Diversified products- Bank offers wide range of products to their customers hence able to
satisfy the demands of different groups of customers.
 Flexible financial capacity- Standard Chartered Bank have high financial capacity with
good assets. It also helps in establishing the brand image as a international financial
institution.
 Qualified Research Team- This prove to be the biggest strength for the banks as they
have strong team to carry out the strategic plans successfully that enables the bank to
maintain trust in the market. On the other hand they receive support from its parent
company and promoters.
WEAKNESSES:
 Less Penetration- It is not focused on emerging economies like India, china etc.
 Account related problem- Sometime customers face problems in accessing the accounts
which adds on to their weak point.
 High risk Investment- Bank may offer various investment options to their people but the
risk associated is very high, therefore customers do not choose the policy very easily.
9

OPPORTUNITIES
 Growing interest of people- Customers are moving towards the derivative and foreign
exchange market hence opening the opportunity for the banks to attract consumers in
investing in the bank (Kim and Park, 2011).
 Economic Potentials- This help the banks in gaining the advantage from the growing
economy in emerging countries. As they can make the first mover advantage against the
large portion of population who do not access bank facilities.
 SME Customer Base- In under developing countries this may underline the opportunity
of creating consumer base resulting in the growth of the banking industry.
THREATS:
 Political influence- As the banks have to operate in large number of countries all over the
world, they have to face various associated political events that may have major impact
on the banking transactions.
 Competition from other players- There are other major institutions in the banking
industry like ICICI bank, HDFC bank, SBI etc. which leads to increase in the
competition.
 Global Recession- This is the other major threat for the banking sector which leads to the
downfall of export market that impacts the operations.
 Declining Economy- If the bank is operating in under developed economy, this leads to
the decrease in the potential.
Areas of improvement as a response
There are various prospective areas in which company have to focus regularly for its
continuous improvement. Firstly business have to analyse the key aspects to conduct the process. Show recognition of efforts- This is a very important concept in any of the business
which involves encouraging the valued part of organization. Hence if the employee
engagement is not up to the mark, may pose the serious issue of turnovers in the
company. Therefore this area needs to be focused properly. Strong Team Structure- Every company is comprises of team which involves employees
who perform work to achieve the ultimate goals. Hence, if the members are not properly
structured this may lead to the improper team and ultimately results in poor performance.
So, this area needs to be developed properly.
10

 Technology- It is the most important aspect of improvement by the standard Chartered
Bank as it is concerned with the satisfaction of its customers. Especial focus should be
cited on R&D department of every industry as it is considered the building blocks of the
organization. Female Employees- Discrimination between males and females should be removed in
order to depict the world that the company is free from the diversity issues (Jo and
Harjoto, 2012). Hence it is the responsibility of the bank to hire more women to remove
the gender inequality. Sustainable Environment- Every organisation should concentrate on protection of
environment as their ethical duty. They should concentrate on pollution free society and
making green buildings. Paper less transactions should be motivated to encourage clean
working platform.
 Ethical ground- Standard Chartered bank has to make changes in their ethical standards
by organizing regular classes for the managers regarding the benefits of the bank. Customer Relationship- It depicts the relation between company and the customers.
Every organization's success depends on the link they maintain with their prospective
customers. This concept is very much important in banking industry as they totally
perform actions for the customers. Support Services- The customer support executive system should be well acquainted by
the bank mangers otherwise this may lead to the disturbances in their mind and get
frustrated. So company have to work on this issue. Access to safe drinking water- Standard Chartered Bank cares by providing employees
accessible to freshwater. They should contribute at global level by starting the
conservation campaigns and revealing the information about how scarcity of water can
pose serious issue (Ihlen, Bartlett and May, 2011). Focus on the task- It is the habit of the employees that they bring personal life with the
work. Hence gain sympathy from others, which should not be done. Focus should be
done in achieving the career goals and do work at its best. Change Resistance- This is the employee's behaviour that they resist change and oppose
in accepting it as they do not prefer to move from their comfort zone which affects the
productivity and performance. In order to remain in the competitive scenario where
11

changes are not constant it is very important to remain updated with time and bent with
an hours need. For this bank have to conduct regular training programs in order to learn
new trends and and strategies. Solution to the problem- Every business face challenging situation at some point of time.
hence it is very necessary for the company to execute smartly (Huimin and Ryan, 2011).
For this employees are expected to act all in one to face the adverse situation together.
 Innovation- It is area of welcoming new idea into the business, hence industry have to
take initiative in coming up with innovative ideas. So every organization should provide
buffer for execution of these ideas.
CONCLUSION
From the above mentioned report, it has been summarised that every business
organisation has to analysis all those external factors which can hinder its working activities in
an adverse manner. This research aids firm to accomplish its goals and objectives in minimum
time period. Along with this, Standard chartered bank is the leading financial sector organisation
which provides credit facility to customers at global as it is effected by different external factors
like- political, economic, social, technological, legal and environmental. For instance- if the
political condition of the country should be stable then it companies can easily perform at there
whereas due to political instability firm cannot survive effectively. Apart from, Standard Charted
bank should involved in fulfilling its social activities so as to attaining customers' trusts and
believes. In order to positively respond towards environment, banking industry can conduct
SWOT analysis so as to analysis firm's strength, weaknesses, opportunities and threats.
Furthermore, companies now these days are getting involve in social responsibilities and
governments also force them to contribute certain amount of their profits into growth and
development of society.
REFERENCES
Books and Journals
12

Abuznaid, S. A., 2017. Ethics and Corporate Social Responsibility. Social Issues in the
Workplace: Breakthroughs in Research and Practice: Breakthroughs in Research and
Practice, p.49.
Banerjee, S. B., 2012. The ethics of corporate social responsibility (pp. 55-76). Taylor and
Francis.
Barker, E. and et. al., 2011. Earthwatch and HSBC: embedding sustainability into the DNA of
HSBC's business. People and Strategy. 34(1). p.24.
Bean, E., 2012. US vulnerabilities to money laundering, drugs, and terrorist financing: HSBC
case history.
Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
Crane, A., Matten, D. and Spence, L.J., 2013. Corporate social responsibility in a global context.
Freeman, I. and Hasnaoui, A., 2011. The meaning of corporate social responsibility: The vision
of four nations. Journal of Business Ethics. 100(3). pp.419-443.
Gitsham, M., 2012. Experiential learning for leadership and sustainability at IBM and
HSBC. Journal of Management Development. 31(3). pp.298-307.
Groves, K. S. and LaRocca, M. A., 2011. An empirical study of leader ethical values,
transformational and transactional leadership, and follower attitudes toward corporate
social responsibility. Journal of Business Ethics. 103(4). pp.511-528.
Hopkins, M., 2012. Corporate social responsibility and international development: is business
the solution?. Earthscan.
Hopkins, M., 2012. The planetary bargain: Corporate social responsibility matters. Routledge.
Huimin, G. and Ryan, C., 2011. Ethics and corporate social responsibility–An analysis of the
views of Chinese hotel managers. International Journal of Hospitality
Management. 30(4). pp.875-885.
Ihlen, Ø., Bartlett, J. and May, S. eds., 2011. The handbook of communication and corporate
social responsibility. John Wiley & Sons.
Jo, H. and Harjoto, M. A., 2012. The causal effect of corporate governance on corporate social
responsibility. Journal of business ethics. 106(1). pp.53-72.
Kim, S. Y. and Park, H., 2011. Corporate social responsibility as an organizational attractiveness
for prospective public relations practitioners. Journal of business ethics. 103(4). pp.639-
653.
Lantolf, J. P., Thorne, S. L and Poehner, M. E., 2015. Sociocultural theory and second language
development. Theories in second language acquisition: An introduction. pp.207-226.
Lawless, R. I. and Findlay, A. eds., 2015. North Africa (RLE Economy of the Middle East):
Contemporary Politics and Economic Development. Routledge.
MA, L., LIANG, Z. Y. and GAO, Y., 2011. Numerical simulation of separation of the influence
of time on small changes in the shape of the body of liner end jet and pestle
[J]. Machinery. 9. p.005.
Moura-Leite, R. C. and Padgett, R. C., 2011. Historical background of corporate social
responsibility. Social Responsibility Journal. 7(4). pp.528-539.
Naheem, M. A., 2015. AML compliance–A banking nightmare? The HSBC case
study. International Journal of Disclosure and Governance. 12(4). pp.300-310.
Online
13

An Evaluation of a PESTEL Analysis, 2018. [Online]. Available through:
<https://www.kazmaier-translations.com/business-strategy/an-evaluation-of-a-pestel-
analysis/>.
Sustainability and our business, 2017. [Online]. Available through:
<https://www.sc.com/in/sustainability/>.
14