BUSINESS ENVIRONMENT - ASSIGNMENT 1

Unit OutcomesOutcome Evidence for Assessor’s Decision Internal Verification First attempt workRe- of organisation ALREADY PASSED 1.1  Describe the extent to which an organization meets

BTEC HND IN BUSINESS (FINANCE) ASSIGNMENT COVER SHEET

I, Nguyễn Thị Kiều Anh hereby confirm that this assignment is my own work and not copied or plagiarized from any source I have referenced the sources from which information is obtained by me for this assignment.

_25th February 2013 _ Signature Date

FOR OFFICIAL USE

-Assignment Received By: Date

Unit Outcomes

Outcome Evidence for

Assessor’s Decision

Internal Verification

First attempt workRe-

of organisation

ALREADY PASSED 1.1 

Describe the extent to which

an organization meets the objectives of different stakeholders

ALREADY PASSED 1.2 

Explain the responsibilities

of an organization and strategies employed to meet them

to allocate resources effectively

ALREADY PASSED 2.1 

Assess the impact of fiscal and monetary policy on business organizations and their activities

ALREADY PASSED 2.2 

Evaluate the impact of competition policy and other regulatory mechanisms on the activities of

a selected organisation

2.3

Outcome Evidence for

Assessor’s Decision

Internal Verification

First attempt

work

Re-Assignment

( ) Well-structured; Reference is done properly / should be done (if any)

Overall, you’ve

Areas for improvement:

ASSESSOR SIGNATURE DATE / /

NAME:

(Oral feedback was also provided)

STUDENT SIGNATURE DATE / /

BUSINESS ENVIRONMENT AND THE CASE OF BP COMPANY

Prepared for:

Lecturer, Mr Jubred A PeñanoBusiness EnvironmentBanking Academy, HanoiBTEC HND in Business (Finance)

Prepared by:

Nguyễn Thị Kiều Anh – Snow - F05ARegistration No ITPF05-014

No of words: 6898Submission date: 25th February, 2013

TABLE OF CONTENTS

EXECUTIVE SUMMARY 6

INTRODUCTION 7

CONTENTS 8

I UNDERSTAND THE ORGANIZATIONAL PURPOSES OF BUSINESS 8

1.1 Identify the purposes of different types of organization 8

1.2 Describe the extent to which an organization meets the objectives of different stakeholders 12

1.3 Explain the responsibilities of an organization and strategies employed to meet them 16

II UNDERSTAND THE NATURE OF THE NATIONAL ENVIRONMENT IN WHICH BUSINESS OPERATES 20

2.1 Explain how economic systems attempt to allocate resources effectively 20

2.2 Access the impact of fiscal and monetary policy on business organizations and their activities 26

2.3 Evaluate the impact of competition policy and other regulatory mechanisms on the activities of a selected organization 29

EXECUTIVE SUMMARY

This assignment contains basic knowledge of business environment as well as explanationand assessment effects of business environment of Vietnam on BP Company Thisassignment is divided into six parts as follows:

 Identify the purpose of different types of organization

 Describe to extent to which BP meets the objectives of different stakeholders

 Explain how economic systems attempt to allocate resources effectively

 Assess the impact of fiscal and monetary policy on business organizations and theiractivities

 Evaluate the impact of competition policy and other regulatory mechanisms on the activities of BP Company

Vietnam is an agriculture country, based on rice agriculture is primary After 1986,Vietnam’s economy changed from command economy to mixed economy Nowadays, to be amember of WTO (World Trade Organization), Vietnam must face many opportunities andthreads Opportunities are to expand and develop market as well as challenges when changingbusiness environment BP PLC is a multinational Company in term of oil and gas In 1989,

BP appeared in Vietnam, through 23 years operate; the Company becomes the leader inexploration and production of oil and gas and play an important role in economic growth

This assignment focuses two aspects: organizational purposes of BP and the nature

of the national environment in which BP operates The information in this assignment iscollected from many different resources such as book, websites on the internet and somedocument which related to business environment and BP in Vietnam However, because oflimitations about time, words, this assignment only gives general information The researcherhopes that those disadvantages will be improved in the future

I UNDERSTAND THE ORGANIZATIONAL PURPOSES OF BUSINESS

1.1 Identify the purposes of different types of organization

1.1a Vision, mission, values, goals, and objectives of BP

Each organization and Company want to exist in competitive market for a long time,moreover become market leader, they must build a meaning strategic plan To do this,every organization need exactly identify vision, mission, goals and objectives for

operating their business BP (British Petroleum) - a public limited Company (PLC)

set right vision statements, mission statements, values, goals and objectives As theresult it becomes the leading Petroleum in Vietnam

a) Vision

According to www.sbinfocanada.about.com, a vision statement is sometimes called apicture of the Company in the future but it’s so much more than that The visionstatement is inspirations, the framework for all strategic planning It answers thequestion, "Where do we want to go?"

BP’s vision statement is: “BP wants to be recognized as a great Company

-competitively successful and a force for progress We have a fundamental belief that we can make a difference in the world”

b) Mission

Mission describes the organization’s basic function in society, in terms of the productsand services it procedures for its clients (BPP Learning Media Ltd, 2010, p.26).According to www.sbinfocanada.about.com, a mission statement is a brief description

of a Company's fundamental purpose It answers the question, "Why do we exist?” Themission statement articulates the Company’s purpose both for those in the organizationand for the public

BP’s mission statement is: “To help the world meet its growing need for heat, light

and mobility by producing energy that is affordable, secure and doesn't damage the environment BP is progressive, responsive, innovative and performance driven”

c) Values

Values of a Company are “the goals or aims of the organization will have an ideologybased on beliefs, values and attitudes This ideology is a means of control throughshared beliefs, and determines the culture of the organisation, providing a set ofprinciples that govern the overall conduct of the organisation’s operations, code ofbehaviour, the management of people, and its dealings with other organisations” (BPPLearning Media Ltd, 2010, p.26)

BP has 5 main values, namely: safety, respect, excellence, courage, and our team

 Safety: “care about the safe management of the environment, are committed to

safely delivering energy to the world”

 Respect: “respect the world in which we operate, begins with compliance with

laws and regulations, hold ourselves to the highest ethical standards and behave inthe ways that earn the trust of others, respect each other and those we work with,care about the consequence of our decisions, large and small, on those around us”

 Excellence: “committed excellence through the systematic and disciplined

management of our operations, follow the rules and standards we set for ourCompany, commit quality outcomes, have a thirst to learn, and to improve”

 Courage: “achieving the best outcomes requires the courage to face difficulty, to

space difficulty to speak up and stand by what we believe; always strive to do theright thing; explore new ways of thinking and are unafraid to ask for help; arehonest with ourselves, and actively seek feedback from others; aim for anenduring legacy, despite the short term priorities of our world”

 Our team: “Whatever the strength of the individual, we will accomplish more

together; put the team ahead of our personal success and commit to building itscapability; trust each other to deliver on our respective obligations” (BP, n.d.)

- Provide excellent customer service

 Social

- To produce energy in a way that doesn’t damage the environment

- Increase the Company’s role in relations to social responsibility

 Profit

- To promote and help the Company achieve its business objectives

- Promote a profitable and sustainable business activity that meets the customerneeds

- Increase the Company’s market share [ CITATION BP3 \l 1033 ]

e) Objectives

Objectives set out more specifically the goals of the organization, the aims to beachieved and the desired end results (BPP Learning Media Ltd, p.26, 2010)

BP’s Objectives: The main objective which BP wants to achieve is related to finance

“15% - 24% of sales growth in a period of 5 years from 2010 to 2015” (BP, n.d.)

1.1b Assess about vision, mission, values, goals, and objectives of BP

c) Values

These values help BP:

 “Have the best competitive corporate, operating and financial performance”

 “Engage the creative talents of the employees, and develop and apply leading,cost - effective technology”

 “Carry on its business in an environmentally”[ CITATION BP3 \l 1033 ]

In general, setting values for the Company play an important role in business’s success

d) Goals

All goals that BP set also orient customers and society so thanks to this BP are able toachieve vision statement as soon as possible

e) Objectives

All objectives of an organization is evaluated by SMART technique

Figure 1: SMART technique

With specific purposes which are able to do in a specific time, BP’s objective meets allthe standards of “SMART”

S – Specific: 15% - 24% of sales growth in a period of 5 years

M – Measurable: 15% - 24% of sales

A – Attainable: the world’s population is higher and higher, thousands of people are

added per day, the demand will increase so obviously, product will be sold at a bignumber

R – Realistic: the sales in UK, New Zealand many countries have increased 15% in

2012

T – Time bound: from 2010 to 2015

In conclusion, with specific vision, mission statement the organization will buildcustomer’s belief, create the differences from the other competitors and reach theirgoals and objectives as soon as possible

1.2 Describe the extent to which an organization meets the objectives of different stakeholders

1.2.1 Identify the stakeholders

Stakeholder can be defined in many ways and different kinds of entities can bestakeholders, such as persons, groups inside as well as outside the organization(Boonstra, 2006, p.40)

There are three broad types of stakeholder in an organization:

 Internal stakeholders (employees, management)

 Connected stakeholders (shareholders, customers, suppliers, financers)

 External stakeholders (the community, government, pressure groups)

Every stakeholder also has influence on the organization In order to identify theinfluence of stakeholder, the researcher use stakeholder mapping

Figure 1.3 Stakeholder mapping (BPP Learning Media Ltd, 2010, p41)

 Key player: High power, high interest, and “strategy must be acceptable to them,

at least”

 Keep satisfied: High influence, low interest, and “stakeholders in keep satisfiedsegment must be treated with care While often passive, they are capable ofbeing key player”

 Keep informed: High interest, low power, and “stakeholder in this segment donot have great ability to influence strategy, but their views can be important ininfluencing more powerful stakeholders”

 Minimal effort: Low interest, low influence, and “is expended on this segment”(BPP Learning Media Ltd, 2010, p.41)

The influence of stakeholder on BP will be described in the following table:

X

Table 1: The influence of stakeholders

 Internal stakeholder

a) Management - Key Players: Management is key factor in developing strategy

and controlling all activities of the business The failure and the success of theCompany depend on their decisions so they have high power For example, BP’smanagement sets up a plan and offers their employees to do it Management willinterest mainly in plan’s success which will evaluate management’s ability inmaking decisions

b) Employees - Keep informed: Employees carry on their duty through

management’s decisions so they have lower power and they only interest mainly

in performing to complete given objectives

 Connected stakeholder

a) Customers - Key players: They are who decide whether use BP’s products and

services or not In the market, there are many organizations which provide thisproducts and services as BP Company such as Interpetrol, Petrolimex Therefore,

BP has to focus more on customer’s needs and wants to satisfy them

b) Shareholders - Key players: Shareholder is also play a main role in the

Company They are people who make a decision whether invest in the Company

or not The more invest they do, the more effect they have on the Company

 External stakeholder

a) Central government - Keep satisfied: Central government has low interest but

high influence on the Company For example, they set up laws and regulationssuch as income tax which the Company must comply They only concern aboutthe problem whether the Company operate legally or not, other activities relate tointernal Company, they do not have right to join

b) Local authorities - Keep informed: Local authorities concern about how the

Company can help the community, for example BP will create jobs for theircitizen, so the unemployment rate decreasing and the standard of living willincrease Up to now, BP creates jobs for 80,000 people in 100 countries in overthe world

1.2.2 Evaluate the extent to which BP Company achieves the objectives of three stakeholders

Table 2: Evaluation of extent to which BP has satisfy its stakeholders

 Internal Stakeholder - Employees

a) Job security (Achieved): BP’s strategy and sustainability they said: “We

strive to be safety leader in our industry, a world - class operator, a goodcorporate citizen and a great employer We are working to enhance safety andrisk management, earn back trust and grow value.” (BP, n.d.) This provesthey set job security is first priority in business operation

b) Bonus/ Reward (Achieved): BP recognize that “to attract and retain the best

people”, they must “offer competitive reward packages and link pay toperformance, with our top performers receiving industry - leading bonus rates”and “the greatest aspect of working at BP is the opportunity we offer ourpeople to learn, grow and contribute” (BP, n.d.)

 Connected stakeholder - Customers

a) High quality (Achieved): Customers are a necessary factor of the success of

BP Company The first concern of customers is always about quality products.Therefore, knowing this thing BP focus more on improving technology toraise product’s quality, moreover they committed to customer “measure andrecord product quality by the degree of conformance to predetermined NGLproduct specifications and standards as set by the Gas Processors Association(GPA)” (BP, n.d.)

b) Customer services (Achieved): BP use “a variety of methods to communicate

with and listen to customers, including interviews, surveys, feedback tools andmarketing programme”, for example BP “conduct an annual brand healthprogramme, in which participants answer questions that help us assess thedegree to which customers recognize brand and use products, as well as their

perceptions of reputation” (BP, n.d.) This thing helps BP understandingcustomer’s demand to provide customers good services to satisfy them Abrosaid: “the customers are happy with great service and high quality fuels.” (BP,2010) It proves that BP is really successful in keeping its customers.

 External stakeholder - Local authorities

a) Local employment (Achieved): BP arrived in Vietnam in 1989 It contributes

significantly in developing Vietnam economy, especially reducingunemployment rate Nowadays, BP creates jobs more than 4500 people inVietnam BP said: “Our main centers of employment are at Ho Chi Minh City,Hanoi and Ba Ria Vung Tau Province A growing number of people areworking across our business assets in Vietnam, including BP ExplorationOperating Company, Castrol BP Petco, Nam Con Son Pipeline, and Phu My 3Power Plant” (BP, n.d.)

b) Environment protection (Achieved): BP Company really have the

responsibility for environmental protection British Petroleum “is committed

to finding fuel sources that reduce green house gases and reduces the carbonfootprint They hope to accomplish as they research and refine alternative fuelsources such as fossil fuels, solar power, solar power, wind power, hydrogen,and natural gas.” (BP, n.d.)

In short, BP always has high responsibility in running in the business The firm has achievedall the objectives of three stakeholders: employees, customers, and local authorities

1.3 Explain the responsibilities of an organization and strategies employed to meet them

Organizations are part of human society, like people, are subject to rules that governtheir conduct towards others Some of these rules are law and enforced by legal sanction.Other rules fall into the realm of ethics or morality and are law and are enforced only bythe strength of society’s approval or disapproval (BPP Learning Media Ltd, BPPLearning Media Ltd 2010, p.47) This table below will describe in detail about BP’sresponsibilities and strategies employed to meet them

Types Specific Responsibilities of BP Strategies employed to meet them

Care more about the community Create social campaigns such as

charity, promotion fundsSatisfy social demand Produce innovative products with

more benefit, good services

Environmental

responsibilities

Commitment to continualimprovement in environmentperformance and achievement ofgoals “no damage to theenvironment”

 Reduce atmospheric emissions,wastes generates

 Develop appropriate techniquesfor disposing of dangeroussubstances

Reducing environmentalfootprints

Build projects help reducingenvironmental pollution such asNam Con Son Gas project

Decreasing the dependency onenergy sources which areunfamiliar with planetenvironment

Use of raw materials and naturalresources

Ethics and

business

Do not lie Report annual finance with true

High salary, give reward/bonus

Improving skills for employees Training and promotionRespect employees  Treating employees right

 Allowed to make their owndecisions and speak out their