BUSINESS ENVIRONMENT - ASSIGNMENT 1

Nguyễn Thị Kiều Anh - Snow - F05014 BTEC HND IN BUSINESS (FINANCE) ASSIGNMENT COVER SHEET NAME OF STUDENT REGISTRATION NO UNIT TITLE ASSIGNMENT TITLE ASSIGNMENT NO NAME OF ASSESSOR SUBMISSION DEADLINE Nguyễn Thị Kiều Anh - Snow - F05A F05 - 014 Unit 1: BPP Learning Media Ltd Organisations in their Environment of Jubred A Peñano November 20, 2012 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 Nguyễn Thị Kiều Anh - Snow - F05014 Unit Outcomes Outcome Evidence for the criteria Assessor’s Decision Feedback First attempt Understand the organisational purposes of business LO1 Understand the nature of the national environment in which businesses operates LO2 Identify the purposes of different types 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 ALREADY PASSED 1.3  Explain how economic systems attempt 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 Merit grades awarded M1 M2 M3 Distinction grades awarded D1 D2 D3 Rework Internal Verification Nguyễn Thị Kiều Anh - Snow - F05014 Outcome Evidence for the criteria Assessor’s Decision Feedback First attempt Rework Assignment ( ) Well-structured; Reference is done properly / should be done (if any) Overall, you’ve Areas for improvement: ASSESSOR SIGNATURE DATE / / DATE / / NAME: (Oral feedback was also provided) STUDENT SIGNATURE NAME : FOR INTERNAL USE ONLY VERIFIED YES NO DATE : VERIFIED BY : NAME : Internal Verification Nguyễn Thị Kiều Anh - Snow - F05014 BUSINESS ENVIRONMENT AND THE CASE OF BP COMPANY Prepared for: Lecturer, Mr Jubred A Peñano Business Environment Banking Academy, Hanoi BTEC HND in Business (Finance) Prepared by: Nguyễn Thị Kiều Anh – Snow - F05A Registration No ITPF05-014 No of words: 6898 Submission date: 25th February, 2013 Nguyễn Thị Kiều Anh - Snow - F05014 TABLE OF CONTENTS EXECUTIVE SUMMARY This assignment contains basic knowledge of business environment as well as explanation and assessment effects of business environment of Vietnam on BP Company This assignment 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 their activities • Evaluate the impact of competition policy and other regulatory mechanisms on the activities of BP Company Nguyễn Thị Kiều Anh - Snow - F05014 INTRODUCTION 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 a member of WTO (World Trade Organization), Vietnam must face many opportunities and threads Opportunities are to expand and develop market as well as challenges when changing business 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 in exploration 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 is collected from many different resources such as book, websites on the internet and some document which related to business environment and BP in Vietnam However, because of limitations about time, words, this assignment only gives general information The researcher hopes that those disadvantages will be improved in the future Nguyễn Thị Kiều Anh - Snow - F05014 CONTENTS 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 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 the result it becomes the leading Petroleum in Vietnam a) Vision According to www.sbinfocanada.about.com, a vision statement is sometimes called a picture of the Company in the future but it’s so much more than that The vision statement is inspirations, the framework for all strategic planning It answers the question, "Where 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 Nguyễn Thị Kiều Anh - Snow - F05014 Mission describes the organization’s basic function in society, in terms of the products and 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 we exist?” The mission statement articulates the Company’s purpose both for those in the organization and 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” Values c) Values of a Company are “the goals or aims of the organization will have an ideology based on beliefs, values and attitudes This ideology is a means of control through shared beliefs, and determines the culture of the organisation, providing a set of principles that govern the overall conduct of the organisation’s operations, code of behaviour, the management of people, and its dealings with other organisations” (BPP Learning Media Ltd, 2010, p.26) BP has 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 in the 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 our Company, 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 the right thing; explore new ways of thinking and are unafraid to ask for help; are Nguyễn Thị Kiều Anh - Snow - F05014 honest with ourselves, and actively seek feedback from others; aim for an enduring 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 its capability; trust each other to deliver on our respective obligations” (BP, n.d.) Goals d) BP’s goals focus on main points: • Products - Creating the freedom to move, to be warm, to be cool, to see and enjoy a better quality of life • Services - 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 customer needs - Increase the Company’s market share (BP, n.d.) e) Objectives Objectives set out more specifically the goals of the organization, the aims to be achieved 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 years from 2010 to 2015” (BP, n.d.) 1.1b Assess about vision, mission, values, goals, and objectives of BP a) Vision Nguyễn Thị Kiều Anh - Snow - F05014 BP’s vision statement focuses on clarifying the future direction of the Company, future market position which has an important role in giving business strategies b) Mission BP’s mission statement pointed out the usefulness of the product “need for heat, light and mobility” Nowadays, environmental issues attract the attention of the whole society Therefore, with the purpose: “produce energy that is affordable, secure, and doesn’t damage the environment”, it improve that BP understands what customers need and want, especially reflect the social responsibility of the business Moreover, BP’s mission statement contains important values: “progressive, responsive, innovative, and performance” This help the customers understand the ways BP operate both internal environment and external environment of the Company 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” (BP, n.d.) 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 to achieve vision statement as soon as possible e) Objectives All objectives of an organization is evaluated by SMART technique 10 Nguyễn Thị Kiều Anh - Snow - F05014 2.1.4 How economic systems attempt to allocate resources effectively “All societies have available quantities of productive resources or what economists call factors of production These factors are classified into three main groups: labor, land and natural resources, and capital” (BPP Learning Media Ltd, 2010, p.133) a) Labor Labor includes all types of physical and mental power of human being It ranges from the raw material power to the highly specific services (BPP Learning Media Ltd, 2010, p.131) Vietnam’s population is ranked at 13th in population with 87 million people while 48.23 million people are in working age (2011 est.), three - fourth of which is in rural areas Vietnam’s labor force accounted for 49% in population It is really a high rate It means that Vietnam has an abundant work force which creates a good condition to develop economy However, in fact, the quality of Vietnam’s human resources is not equal in qualifications and skills According to Dong, “only 32% of Vietnamese labor force is trained with 14.4% having undergone short training courses A report on the labor market released by the ministry shows that Vietnam is severely lacking in highly skilled labor and service workers in the fields of finance, banking, tourism and salesmanship” Labor Minister Nguyen Thi Hang said: “We will possibly have to export manual workers and import skilled labor That means we lose in own potential market” Figure 2: Changes in Employment structure, 1980 - 2010 21 Nguyễn Thị Kiều Anh - Snow - F05014 To solve this problem, government had given some objectives such as development of labor supply, development of labor demand, acceleration of market transactions, reform of salaries and wages, and completion of labor market institution Recently, “the Prime Minister endorsed the National Program on Jobs up till 2010, which will allocate VND6 trillion for vocational training for the next years” with hope that it will “improve the labor quality in Vietnam in the future” and “provide job opportunities for 50 million workers, create new jobs for million a year, and pull down the unemployment rate in urban areas under 5%” b) Land and natural resources “Each country are differently endowed with land of varying quality for farming and other uses and also with natural resources like oil, coal” (BPP Learning Media Ltd, 2010, p.133) Vietnam is a country has plentiful natural resources Land resource of Vietnam is divided into three groups: • Agriculture land (25.1 million ha), • Non - agricultural land (3.4 million ha) • Unused land (4.6 million ha) (GSOV, 2009) The number of agriculture land decreases day by day due to process of industrialization and modernization of the country It is wasting of land resources when Vietnam converts agricultural land to non - agricultural land with the purpose such as building a golf course which does not bring economic effects while famer need agricultural land to produce Vietnam is wasting not only land resource but also forest resource In 1943, Vietnam has 14.3 million of forests, and in 1990, there was only 9.18 million The period 1980 - 1995, the average annual loss was 110 thousand Today, in some areas, forests continue to be destroyed by the conversion of land use, illegal exploiting, and cultivation and forest fires Therefore, government need care more about this problem to find out methods such as prohibiting deforestation, and using land resources inefficiently to preserve these precious resources c) Capital “Capital means the economy’s stock of physical assets such as machinery and plant installed in manufacturing forms, the premises and offices of all types of business and also the social infrastructure of roads and sewers commonly provided by government” (BPP Learning Media Ltd, 2010, p.133) 22 Nguyễn Thị Kiều Anh - Snow - F05014 The capital resource in Vietnam consists of two types: foreign direct investments (FDI) and official development aids (ODA) Figure 3: Top 20 foreign investors in Vietnam (Source: General statistic office of Vietnam) As can be seen, there are many investors distribute to Vietnam, with Taiwan, Korea, Singapore, Japan, Malaysia leading the way in terms of FDI from 1990 - 2010 However, Vietnam, “in the first six months of 2011, witnesses a sharp decrease of foreign direct investment (FDI) flow into the country, as only 452 new FDI projects, worth 4.76 billion U.S dollars, were granted licenses, down 24.6 percent in value over the same period last year Besides, 123 FDI existing projects expanded a total capital of 1.62 billion U.S dollars, down 35.5 percent year-on-years” (Hui, 2012) There are many causes lead to decrease FDI, for example, due to be effected by global economic crisis and the ways that Vietnam controls ODA capital is really ineffective Figure 4: Allocating ODA capital in 2011 (Source:tradingeconomics.com) 23 Nguyễn Thị Kiều Anh - Snow - F05014 In the pie chart; it is easy to realize that there are many ODA was used for transportation (32%) Increasing transportation can bring many benefits for the community; however Vietnam government does not any strategy to reduce tailpipe emissions, as a consequence of this Vietnam is always in a state of environmental pollution While ODA used for environment only accounted for 4%, this proves that Vietnam only interested in economic development - immediate benefit, that they ignored the long-term benefits of environmental protection Contrast when the whole world is interested in this issue These make investors’ belief with Vietnam decrease significantly Capital is leading factor to develop economy ODA and FDI provide funds for economic development as well as help the country to develop infrastructure, absorb the latest technological achievements in production, further creating jobs for the people In general, they have positive impact on the economy Therefore, government should concern and invest more about the problem how to use capital resources effectively Base on it, in order to attract foreign investors to increase ODA and FDI 2.1.5 Assess the effectiveness of the use of resources of BP Company The effective of the use of the resource of BP Company in Vietnam is expressed clearly in using labor Appearing in Vietnam, BP Company brings not only employment for local authorities but also help Vietnamese to understand how to use labor effectively through strategies of BP This is expressed in the following policies: • Using human resources with level of work, and expertise requirements, requirements of jobs, careers, and fields, avoid lowering the job’s requirements to appropriate to the people This is the first thing that BP focus when using Vietnam labor • BP also has clear policy on the use of human resources, for example remuneration policy to make sure to employees feel safer when contributing to the Company, encourage both metal and physical to human resources Accordingly, they comply seriously 24 Nguyễn Thị Kiều Anh - Snow - F05014 • With highly qualified staff, BP create favorable conditions for them to develop promote their maximum ability, for instance, BP support finance for them to participate in professional training In short, with using human resources effectively, it helps BP make more profit and moreover become the market leader in term of petroleum in Vietnam 2.1.6 How the economic system of Vietnam effects on BP Company The economic system of Vietnam affects significantly on the operation of BP Company Every Company which operate in Vietnam also comply government obligation Interventions of Vietnam government to BP Company are in limitation of provision or prohibition, subsidies or tax treatment For example, BP must pay 25% for income tax Therefore, every month, every year, BP must report their annual finance as a tool to government control organizational operation As a result of a mixed economy, international and regional integration and external economy have achieved considerable results: • Vietnam has joined the ASEAN, fulfilling her commitments on AFTA; • In 1990, bilateral trade agreements were signed with many countries; • The Vietnam-EU Trade Agreement was signed in 1995; • In 1998, Vietnam was one of the initiators and first members of APEC; • In 2001, the Vietnam-US Trade Agreement made; • By 2005, Vietnam established commercial relations with 221 countries and territories; • In November 2006, Vietnam became a full member of WTO; • Export and import have increased rapidly in scope and rate The total export turnover reached US$ 25 billion in 2005 against US$ billion per year before 1986; • In the period 2000-2005, import increased by 19% annually; excess of imports over exports is now US$ billion per year (Vietnameconomics, n.d.) Along with the integration and development of economy, Vietnam has favorable conditions for promoting investment and expanding market More than ever, this is a chance for BP to develop production Moreover, it creates an environment of intense 25 Nguyễn Thị Kiều Anh - Snow - F05014 competition, which required the Company want to exist must have policies to allocate resources effectively within internal and external of firm It is considered as a measure of competitive advantage of enterprises 2.2 Access the impact of fiscal and monetary policy on business organizations and their activities 2.2.1 Overview of macroeconomic policy Definition of macroeconomic policy: Government policy aimed at the aggregate economy, usually to promote the macro goals of full employment, stability, and growth Common macroeconomic policies are fiscal and monetary (glossary.econguru.com, n.d.) 2.2.2 The impact of fiscal and monetary policy on Vietnam economy and Vietnam’s fiscal and monetary on BP Company a) Fiscal policy Fiscal policy involves taxation and other sources of income, government spending, borrowing whenever spending exceeds income, and repaying debt when income exceeds expenditure (BPP Learning Media 2010, p.155) Vietnam has the highest tax rate in the region There are many kinds of tax in tax system in Vietnam, one of them is income tax, corporation tax, import tax About the income tax, the tax income for business is 25%, for personal income is 5% if the salary less than million VND, the tax is 10% if the income fluctuates from to 10 million and the highest tax rate is 35% with salary level higher than 80 million VND (According to ordinance No 14/2004/PL - UBTVQH11) Whereby, BP must have responsibilities in paying tax From appearing in Vietnam in 1989, it can be said that BP always pay tax fully To be a leading Company, every year BP must pay about 4, billions USD for income tax About import tax, if the import tax is high, it will lead to crease production costs For instance, market and Vietnam’s automobile industry is contrary to other countries in the region and over the world Taxes and fees pay for raw input material is high lead to cost for a car is very expensive It can be considered is highest in the world As a consequence of this, the number of cars was sold in Vietnam in first months of 2012 was down 30% compared to the same period, while world consumption increased 30%, 26 Nguyễn Thị Kiều Anh - Snow - F05014 Asia is 40%, Asean automobile increased 151%, Thailan increased by 208% As a consequence of this, market demand will decrease significantly More than ever, this effect making revenue for the firm as well effect strongly on Vietnam economy b) Monetary policy Monetary policy involves attempts to influence economic activity through interest rates, exchange rates, control of the money supply, and controls over bank lending and credit (BPP Learning Media 2010, p 155) Interest rate is seen as a tool to encourage investment Interest rate makes the cost of borrower so the volatility of interest rates affect significantly on investment and consumption Whereby, it effects on all objectives of macro economy which is illustrated as following:  Low interest rates  stimulate investment and consumption  increase aggregate demand  increase production and prices, decrease unemployment rate  domestic currencies tend to fall against foreign currencies  High interest rates  limit investment and consumption  decrease aggregate demand  decrease production decrease prices  increase unemployment  domestic currencies tend to increase against foreign currencies Therefore, by reducing the interest rate, state banks can facilitate business development However, the interest rate of banks in Vietnam is increasing in recent years This effects strongly on BP‘s business operation For example, in order to implement projects to develop business, BP want to borrow capital from stakeholder and banks, they will pay more Therefore this is a disadvantage for BP when wanting to join in investment Furthermore, when inflation is high, the money is lost their value so the prices of all goods are higher To sell product, BP have to have strategies such as decrease the price, discount in order to attract customers Therefore, to exist in a volatile environment BP need more flexible to satisfy market demand 2.2.3 Global economy effect on Vietnam’s economy Globalization is “the process by which national economies become increasingly integrated, often as a result of power wielded by TNCs” 27 Nguyễn Thị Kiều Anh - Snow - F05014 Global economy is “economic activity between various countries that are considered intertwined and thus can affect other countries negatively or positively” (According to Businessdictionary, n.d.) With global economy, the world become fatter, the gap between countries, people is shorter Besides acculturation, countries have opportunities to learn experience of other countries in over the world to develop production Global economy help the enterprise become easier, expand market, encourage investment and improve standard of living However, besides the benefits that global economy brings Vietnam, it also has limited aspects For example, in the past, Vietnam is a traditional country The rapid integration of foreign countries makes losing its beauty A big disadvantage of global economy is global economic crisis Global economic crisis make small and medium enterprises in Vietnam faced many difficulties such as reject contract, slow consumption, and large inventory Moreover, it also is impacted on tight monetary, bank credit growth limitation From the reasons above, the business meet more and more difficulties As a consequence, the number of firm closed and declared bankruptcy increased by 21.8% compared to 2010 and the workers are the victims bear the consequences, the fact that more and more unemployment BP is a firm which operates in Vietnam is also no exception In this general difficult, BP had to cut the budget and employee, however, they still continued analyzing and approach market to achieve good results 2.3 Evaluate the impact of competition policy and other regulatory mechanisms on the activities of a selected organization 2.3.1 Vietnam’s industrial policy a) Resolution 16/2007/NQ-CP about joining World Trade Organization (WTO) WTO accession in 2007 changes rules for industrial policy: • Before: Export subsidies, tariff and non-tariff barriers to trade, compulsory localization, credit subsidies… • Now: Focus on supply-side support (Altenburg, 2009)  Creating more opportunities to enlarge the market and promote the economy 28 Nguyễn Thị Kiều Anh - Snow - F05014 Law impact on BP Vietnam: With joining WTO, Vietnam has been successful in attracting large corporation to invest in Vietnam, for example, in petroleum sector has BP, Statoil, ConocoPhilips, Petronas, Chevron…It can be said that BP have opportunities to invest and develop more in Vietnam, however, BP also must face many strong competitors  The policy creates opportunity for fair competition among organization Therefore, if BP wants to have a strong position and moreover become a market leader, they must create specific strategies about many aspects, especially human resources, for instance, BP needs to train their employees to contribute their best in BP company Besides, BP need have behaviors of fair competition to not only get more profits but also build beautiful image in customers’ mind b) Directive 18.CT-TTg for human development planning Vietnam period 2011 - 2020 - Develop management plan and human resources development of their unit Proactively allocate business resources in the training and retraining to meet the demand for human resources for the period 2011 - 2015; reviewing human resource training contracts signed with the institutions of the years, assessing the quality of students, graduate students to provide feedback to training institutions - Co-operate, support financial for institutions, to create favorable conditions on the basis of actual practice, students… (gov.vn, n.d.) Law impact on BP in Vietnam: With demand of Vietnam economy, BP needs to have strategies such as holding courses to train and improve employees’ knowledge and skills to meet their requirement Moreover, this policy also encourages BP company should support and invest into human development fund, in other words invest into students in order to find out excellent employees to support for BP company in the future 2.3.2 Vietnam’s social welfare policy Nowadays, Vietnam face many challenges • 13.74% poor households (2008); • 61 districts are poorest where more than 50% of household are in poverty; • About 5.3 million people with disabilities; • 1.2 million children in difficult circumstances; • About million elderly; 29 Nguyễn Thị Kiều Anh - Snow - F05014 • Millions of people suffer serious consequences of natural disasters per year… • 100,000 plus people with HIV/AIDS; single parents (socialprotectionasia, n.d.) From the statistics above, social welfare policy in Vietnam focus on main aspects: social security, social relief and social incentives • Social security Decree No.59/2011/ND-CP of July 18, 2011 “The business operating in Vietnam must comply policies for employees such as pension (specific at point a, Clause 2, Article of this Circular), severance allowance (specific in paragraph of Article of this Circular), mode for redundant employees (according to point c, clause 2, article of Decree No.91/2012/ND-CP of August 20, 2010 of the Government policy for redundant worker)…” (thuvienlaodong.vn, n.d.)  Protecting legal benefits of the employees • Social relief Decree No 1822/CD-TTg of October, 2009 “The Prime Minister offer Committee for Flood and Storm coordinate with ministries: Finance, Planning and Investment, Labour and Social in order to evaluate the damage after disaster to propose specific level of support for sufferers of severe damage due to storms, floods…” (gov.vn, n.d.)  Provide support for people, who suffer from natural disaster such as free food and health insurance • Social incentives Directive 59-CT/TW on caring for elderly, The Department of Labor and Social coordinate with other agencies, organizations implement well this social policy: “The elderly are always interested in health care (collective training clubs, treatment…), especially, poor elderly is provided cash handout, gifts during New Year…It is considered as the tools to help them live happy, live healthy, useful to society, and is an example of moral character for the youth to follow.” (nguoicaotuoi.org, n.d.) - Resolution on “Rapid and sustainable poverty reduction for 61 poorest Districts” since 2008 (socialprotection, n.d.) 30 Nguyễn Thị Kiều Anh - Snow - F05014  Increasing living quality for Vietnamese to help Vietnam have opportunities to develop economy Laws impact on BP Vietnam: BP is also a business operating in Vietnam Therefore, BP must obey all obligations from Vietnam government According to the social welfare policies of Vietnam, BP needs to be ensuring the living standard of their workers (support policy for pensioners), and protect their health, working security as well If their staffs meet accident in doing in BP Company, BP must have the responsibility for supporting pension for them to cover a living every months Furthermore, the policies as a tool to encourage BP focus more on the community such as environment protection and charity for the poor and elderly and difficult areas in Vietnam 2.3.3 Vietnam’s competition policy Competition Law No 27/2004/QH11 “This Law shall apply to: Business organizations and individuals, including also enterprises producing, supplying products, and foreign enterprises operating in Vietnam Professional associations operating in Vietnam Article 4: Right to business competition Enterprises enjoy freedom to competition within the legal framework The State protects the lawful right to business competition Competition must be implemented on the principles of honesty, non-infringement upon the interests of the State, public interests, legitimate rights and interests of enterprises, consumers and compliance with the provisions of this Law” (gov.vn, n.d.) Law impact on BP in Vietnam: BP is foreign enterprise operating in Vietnam so it is affected by this competition law With this policy, BP company has the right to freedom competition under Vietnam government control For example, BP must operate based on principle of honesty, non-infringement upon the interests of public, legitimate rights and interests of enterprises All is fair competition; there is not any exception for any company Therefore, in order to have strong position in Vietnam market, BP company must try more to create innovative products to compete with their direct competitors 2.3.4 Affect of interest groups and pressure groups on BP’s operation 31 Nguyễn Thị Kiều Anh - Snow - F05014 BP’s operation or any business is also affected by external factors such as pressure groups and interest groups Interest groups: BP can communicate effectively with customers, their employees through these interest groups…It helps them protect their benefits before changes of BP Specifically, retired persons of BP company established Association of Retired persons (BP, n.d.) which is considered as a tool to help them speak out their ideas about unreasonable policies to ensure their benefits such as some problem about pension Pressure groups: After the oil spill disaster in 2010, BP is constantly under pressure from many sides BP is criticized on multimedia about oil spill disaster and its consequences and series of claim for compensation Specifically, it makes 11 workers killed, several injured workers is given emergency aid in hospital Especially, it also effects significantly on the natural environment and human health Therefore, under that pressure of Green Environment Groups (vov.vn, n.d.), BP company must have actions to take responsibility for their omission, negligence such as compensation for victims of oil spill and series of related costs… CONCLUSION BP appears about 100 countries in over the world After analyzing business environment of BP, we can understand more about vision, mission, values, goals, and objectives which is set up as a tool help BP to orient enterprise Moreover, we can know responsibilities of BP to Vietnam government and local authorizes when operating in Vietnam as well as affects of they on Vietnam’s economy From then, we analyze and assess whether what make BP become leading Company in Vietnam 32 Nguyễn Thị Kiều Anh - Snow - F05014 REFERENCES Anh Quan (n.d.) 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