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Unit 1: The Business Environment
Assignment 1: (P1) (P2) (M1) (D1)

The BBC is the main broadcasting organisation in the planet. Its mission statement is to develop
person’s lives with programs with the intention of update, teach and entertain. The BBC has the
second largest financial plan of any UK broadcaster with a functioning outflow of £4.23 billion in
2009/2010. The no more than UK broadcaster with a well-built operating expenditure is British Sky
Broadcasting with £5.9 billion.
The grounds that Sky’s operating expenditure is top are because Sky is a private sector PLC, which
means that the public can acquire shares in a corporation. Selling shares means more capital profits
is invested in the business as people invest their money hopeful that the worth of their share will
add to. Sky will after those use this money from the shares to progress their broadcasting service by
offering better quality, more programs and more channels. With the BBC being a public sector
organisation it doesn’t have shares therefore the BBC wouldn’t be given more profits from selling
shares meaning that they have a lesser operational expenditure.
The BBC is in the public sector meaning that it is owned and funded by government grants which are
funded through tax payer’s funds, through income tax which in result means that the taxpayers own
the BBC. The public sector is in decline as the UK government have had to slash money to some
government funded public sector services such as the Police service as numerous neighbouring
police stations have lost their financial support because the United Kingdom is in recession so the
Government have tried to discover ways to decrease the countries money owing which means
dropping costs through reducing funds to some government organisations. The BBC creates £3,446.8
million in license fees collected from householders, £888,3million as of BBC Commercial businesses,
£293 million from government grants and £112.9 from other profits such as on condition that
content for abroad broadcasters through BBC World Service.
The BBC Commercial is made up of BBC Shop which is a multi-channel trader selling thousands of
books, DVDs, audio books and toys for fans of the BBC and BBC programmes. BBC Shop sells
products online, by phone, post. BBC Worldwide also makes up BBC Commercial.

The BBC World Service broadcasts news and information to the world on radio, TV and online in 32
different languages. Any profits from this are returned to the BBC for investment in new programs
and services. The BBC is a large business as it has 23,000 staff however it is only international not
global because all programs and services are produced in the UK only and are sent out to other
countries meaning it is international as goods or services are produced in one country but are then
used in other countries. An example of this is the program ‘Top Gear’ it is a UK program produced by
the BBC but it is broadcasted in other countries in different languages.

In contrast, British Petroleum is a public limited company (PLC) which means that the public can buy
shares in BP and become shareholders. A shareholder is an owner of shares in a company. The price
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of shares in pounds is £461.00 as of the 31st October 2011 this is down £6.20. When shares go down
it means that large amounts of shareholders want to sell them. If people don’t want to own the
shares it pushes the price that buyers want to buy them at down. Reasons for shares to go down
might be because of a company’s action such as the Gulf of Mexico oil spill this led to an increase in
the sale of shares because shareholders don’t want to be associated with the BP Corporation. These
shares are listed on the London stock exchange on the FTSE 100 Index and FTSE 350 Oil & Gas Index
BP has a total of 315, 553 shareholders BP is a large company with 79,700 employees and it is a
global company because the BP Group operates across six continents, and BP’s products and
services are sold in more than 80 countries.
BP is global because their products are extracted and produced in several locations all over the
world such as Egypt, Iraq, Australia and United Kingdom and sold in 80 countries so products are
produced worldwide and sold worldwide. The oil and gas industry is doing well as there is high
demand for it as people need it to run their cars and to work gas appliances. BP is in the primary,
secondary and tertiary as BP extracts oil from the ground through the use of oil rigs therefore
extraction is primary. BP then refines the oil in one of their 16 refineries where oil is refined and
turned into petrol and diesel which is secondary because they are manufacturing to create finished
goods. BP is also in the tertiary sector because they sell their petrol, paraffin and diesel at their
22,100 retail sites worldwide and to other companies. The private sector has suffered during the
recession because people are saving their money instead of spending it which means private sector
businesses have seen a drop in revenue as people are buying less of their goods or services.
However, BP has not seen the same decrease as other businesses because everybody needs oil and
petrochemicals to run their cars, lawnmowers and other machinery that runs on petrol or diesel.

BP is a public limited company (PLC). This means that the shareholders own the company and
anybody can buy shares in BP, whereas if BP was a Private Limited Company then share cannot be
sold to the public only employees in the business can buy the shares. The benefit of being a PLC is
that selling shares raises capital for the limited company however the company and the shareholders
are separate meaning that the shareholders have limited liability meaning that their investment in
BP and their personal assets are separate. This is a benefit because if BP were in debt then the
shareholders personal assets such as their house and car would not be reposed to repay the debt
because the shareholders’ investment and personal assets are separate. The advantages of a PLC are
that Public Limited Companies have more available capital through selling shares meaning there is
potentially more money invested in the business.
Another advantage of a PLC a limited company is seen to be a separate legal existence from its
owners. This has several advantages, including the fact that the company will exist beyond the life of
its members. If they retire or die, the company will continue to exist and operate. The disadvantages
of BP being a PLC is that it can be expensive to create, as the company must pay taxes and employee
insurance, such as Initial Public Offering (IPO) which is the first sale of stock by a company to the
public, as well as an additional legal fees or other incidentals in setting up on the stock exchange.
Another disadvantage of PLC is that even though they are very profitable, the profits must be evenly
distributed among all shareholders and with BP there are 315,553 shareholders the profits are
reduced by a large amount. Sharing profits between
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shareholders is called dividends. The definition of this is a sum of money paid regularly by a company
to its shareholders out of its profits. Another disadvantage is that accounts must be kept and
published and fourthly a PLC is less flexible than other forms of ownership because any business
decisions and changes must be run past all shareholders meaning changes are harder to make as all
or a majority must agree to them.

The BBC is a publicly owned organisation. This means that it is owned by the country or state and is
controlled by the national government or local authority. Being a public owned organisation the
BBC’s capital is funded by government but any profit isn’t returned to the government. Instead it is
invested back into to BBC organisation so that the BBC can maintain and improve their service by
broadcasting more programs or increasing TV channels and improving their radio services because
the aim of a public organisation is to provide a service to the public for free and not to make a profit
so any profit is invested back into the business so the BBC creates a surplus. Surplus is a term used to
describe when a company’s income exceeds their expenditure and this extra capital is reinvested
into the business instead of being used in staff bonuses. The advantage of a public sector
organisation to the public is that it they are usually a free service however the BBC is different as the
public has to pay a TV license so this is a disadvantage to the public. As well as this the government is
in a good position to plan the overall provisions for the country and any profits made could benefit
taxpayers because if the organisation is making a profit the government has extra funds and taxes
can be reduced or more money can be invested to improve the service that the BBC offer.

The disadvantages of being a publicly owned company like the BBC are that the running of the
corporation could be politically influenced. The ways that the BBC can be politically influenced is by
the government asking to broadcast programs that support their views on various political subjects
to persuade the public to follow their views and not the views of other political parties. As well as
this they can be influenced by the government as they can cut grants to the BBC like they have done
with the police service. This would influence the BBC because the quality of their services would
reduce and the amount of TV and Radio programs that they could broadcast would be lowered.
Public corporations are very large, with high amounts of employees which can lead to inefficacies
within the organisation. The BBC can suffer from having too many managers due to being a large
organisation which costs a lot of money and decisions and information can take a long time to reach
the bottom of the hierarchy leading to inefficacies in the BBC organisation. Thirdly, if the corporation
is making a loss then high taxes may be implemented to increase government funds so that the
organisation can cover their costs costing the taxpayer more.

BP exists to supply fuels, lubricants, petrochemicals to the public at a cost for a profit. As well as this
BP aims to make a profit. Evidence for this is that BP is a public limited company meaning that it has
shareholders and shareholders want their share price to increase because of BP profits being shared
with shareholders, which is called dividends, which means BP has to sell products at a cost to cover
the expenses of extracting and refining the crude oil and to then make a profit. BP supplies the fuels
to people in over 70 countries showing that BP is a global organisation. Public can purchase the BP
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produce at their 22,100 retail sites. Secondly, companies can purchase the BP products directly from
BP refinery in bulk orders.

The BBC exists to enrich people lives with programmes that inform, educate and entertain. Most
government run organisations provide a good or usually a service for free. However, BBC provides
the service to the public but people have to pay a TV license to get the service. However, this service
isn’t given at cost to make a profit as profits are returned to the BBC for investment in new
programmes and services so the BBC create a surplus instead of profit. BBC is an international
service as programmes are televised in other countries as well. These countries pay the BBC to let
them use the service for channels such as BBC News and BBC 1,2,3,4 because popular holiday
destinations will have British visitors so the countries want to cater for those people. The BBC
supplies their service through 8 national TV channels plus regional programming, 10 national radio
stations, 40 local radio stations and an extensive website.

Task- (P2)

The stakeholders of BP PLC and BBC all have different interests in the organisation as well as having
different stakeholders. For example BP being a PLC means that their owners are shareholders
whereas BBC is owned by the government so their stakeholders are different. The customers of BP
want good quality fuels, lubricants, petrochemicals to be able to run their motor vehicles,
lawnmowers and other machinery that runs on fossil fuels. The customer at BP expects fuel prices to
be low and they expect to be given good customer service or they will move to a competitor such as
Shell or Murco Petroleum Limited. The customer of the BBC which every person that pays their TV
license expects to be given a variety of TV channels, radio stations with good quality coverage and
picture quality for TV channels with little or no political opinion or commercial advertising because
their TV license funds the programs so the BBC don’t need to sell advertisement places to make
money therefore there shouldn’t be any adverts. They also expect TV license fees to stay low and
not increase.

The employees at both of the organisations expect to get paid their wages in full amount and on
time. They also expect to be working in a safe and hygienic environment so that they won’t become
ill or injured because of malpractice by the BBC or BP. They expect human rights to be followed, so
they aren’t overworked, not discriminated against because of their race, gender, age or disability,
and they are given basic needs like water, toilets and food. Otherwise, employees will get trade
unions involved or they may withdraw their labour.
Suppliers of BP such as Garlock Mechanical Packaging supplies a valve stem to BP that they use at
every plant in Europe. Garlock as the supplier would expect to be paid their money in the full
amount and on time and they would expect BP to sell their products otherwise they would withdraw
their supply and move to another company. The suppliers of the BBC would be the companies that
the BBC buy the shows they broadcast off as the BBC make very few of their own programs instead
they buy them off companies that produce TV programs because it is cheaper. The program
suppliers would expect to be paid and for their programs to be broadcasted and for their company
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to be recognised for the work they have done by having a ‘Produced By’ and the company name on
the end credits of their shows otherwise they will move their programs to other broadcasters like
ITV or Sky channels.

The main interest of the owners in both of these businesses are different because of the type of
business that they are as because BP is a private sector PLC their owners are shareholders whose
interest is to get a share of the company’s profits and to increase their share value. Whereas the BBC
is public sector and funded by the government so government are the owners so they want to make
sure tax payers money is being used correctly and that Government funds given cover the costs of
the business. Also as it is a government funded organisation the government would want to make
sure that jobs are being created.
Pressure groups against BP want to protect the environment so their main interests in BP are to
make sure that any work that they do is done safely and in a way that won’t affect the environment.
Such as reducing pollution from the oil rigs and refineries and making sure that hazardous waste is
disposed of safely after the Gulf of Mexico oil spill which killed large amounts of sea-life and
damaged beaches. Pressure groups against the BBC will be interested in what the BBC broadcasts.
Whether it is too explicit for TV, or has there been some inappropriate content for young children
broadcasted before the watershed.

The stakeholder ‘Trade Union’ is common in both organisations as at BP and BBC the trade unions
are there to make sure the working environment is safe meaning that machinery is safe, fire exits
are accessible etc. Trade unions will also make sure that employees are paid their wages on time and
in the correct amount as well as protecting them from discrimination against their age, gender, race
and disability in the workplace.

The external stakeholders the community and the government are interested in BP and the BBC
because the community are where the employees come from. The community also want to act as a
good neighbour to the two organisations by supporting the business and the product and service
that the organisation creates. The government are interested in BP because they want to receive
their tax, corporation and income tax as well as Value Added Tax (VAT). BBC doesn’t have to pay VAT
because they are a public sector organisation owned by the government. However, government is
interested in the amount of jobs both organisations create. The government does this because they
want to reduce the unemployment rate. This links to the community because if the government
doesn’t believe that both organisations are creating enough jobs then they will give funding to each
company to allow them to create programmes to increase the amount of employees at an
organisation or force them to offer apprenticeship programmes so that people can gain the skills to
complete certain job. This benefits the community because employees will come from the
community so if more jobs are created then more people from the community will be employed.

Secondly, there are some links and independencies between shareholders. Employees and trade
unions are linked as trade unions are the pressure group that employees might use to negotiate pay
and conditions with the employer. Owners and directors and managers are linked because the
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amount of money that the owners invest alters the targets that the director and manager set as
more money the company has the higher the financial targets can be set and if investment is low
then managers and directors may have to think about reducing expenditure by reducing the amount
of staff in the organisation.

Community and pressure groups are interlinked because if the organisation is producing unethical or
a not environmentally friendly good or service then the community may create a pressure group to
protest the company and give them a bad reputation so that people won’t buy the product and the
production of that good or service will stop because nobody is buying that produce.
There is a link between shareholders and directors. Shareholders control the financial decisions that
the board of directors can make as the amount of shares that BP sells alters the amount of capital
income that can invested into the business. Therefore if shareholders start to sell their shares after
an incident like the Gulf of Mexico shareholders sold their shares which meant BP had less capital
income which would mean that BP board of directors would have to change their financial targets
because there is less money coming into the business as well as having to change their business
targets because they don’t have the same amount of money to spend therefore cannot produce the
same amount as previous times.

Aims & Objectives – (M1)

A smart objective is an objective that is specific to an organisation, it can be measured against other
years and other organisations, it is achievable and realistic meaning that the aim isn’t to high an
impossible to reach and finally the objective has to have a time period in which the objective has to
be completed in. The aims and objectives of British Petroleum are to have the best competitive
corporate, operating and financial performance. This is specific to BP as they want to be the best fuel
company in the world. This aim is measurable because BP can measure if they are performing the
best financially against their competitors such as Shell. This is an achievable and realistic aim as BP is
one of the largest fuel companies in the world so they can realistically achieve this. However, this
aim cannot be measured overtime as no time period has been set. The second aim of BP is ‘to
engage the creative talents of our employees and develop and apply leading, cost effective
technology and intellectual creativity to enhance innovation and new ideas.
This objective is specific to BP as it talks about their employees, it is measurable because they can
measure overtime whether more ideas have been thought of, as well as this it is realistic and
achievable as BP have 79,700 employees that some would be able to create new ideas but finally the
aim hasn’t been given a time period for which it has to be completed.
The final aim of BP is ‘to carry on its business in an environmentally responsible manner, and
develop cleaner energy and renewable energy sources. The group is committed to responsible
treatment of the planets resources and to the development of sources of low carbon energy. This is
a smart goal because it is specific to BP as this aim is in response to the Gulf of Mexico oil spill as it
says ‘business *must be completed+ in an environmentally responsible manner.’ This aim is
achievable and realistic because BP has already improved oil rigs after the Mexico oil spill to prevent
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another environmental disaster. However, like the other objectives there has been no time period
set in which this objective has to be completed in.

The aims and objectives of the BBC are ‘to be the most creative organisation in the world’ and ‘to
enrich people’s lives with programmes and services that inform, educate and entertain.’ These aims
are specific to the BBC because they talk about TV programs, they are measurable because the
organisation can measure whether they are the most creative organisation in the world and whether
they are producing programs that inform, educate and entertain. They are achievable and realistic
aims because the BBC is an international corporation therefore they can be the most creative
organisation in the world, also they have programs such as BBC News, Gavin & Stacey and cooking
programs which means that they can achieve their aim of broadcasting programs and services that
can inform, educate and entertain the viewer. However, no time period has been set for the
objective to be completed in.

One strategy put in place by the British Broadcasting Corporation is to freeze the TV license for the
next two years. The BBC announced it will freeze the license fee at £145.50 until 2013, but warned
that it is likely to mean cuts in TV and radio programming budgets. Management at the BBC has
warned that the freeze will mean taking £144m out of the BBC budget. The BBC has made this
decision after political pressure from the government to recognise the difficult economic
environment and sacrifices being made elsewhere in the public sector.
Different stakeholders in the BBC will react in different ways to this news. The government has
influenced this decision on the TV license fee freeze as they have pressured the BBC into making this
decision by making so many other cuts and sacrifices in the public sector that the BBC felt it
necessary to the make the freeze. Otherwise other public sector corporations would ask the
question of the government why is the police force and other public sector organisations facing
funding cuts but the BBC aren’t doing anything to contribute to fixing the economic problem.

The customers of the BBC which are the people who pay their TV license have influenced this
strategy put in place because due to people having less money to spend as private and public sector
jobs have been cut then people don’t have the money to spend on a higher TV license like the BBC
wanted over the next two years. The customers of the BBC will welcome the TV license freeze
because it means that they have extra money to spend on other necessities that they wouldn’t have
had if the TV license increased. However customers may find that due to the fact £144m of the BBC
programs budget has been removed then the variety of shows and the quality of the programs that
the BBC broadcast may be reduced.

The internal stakeholders of the Employees, Board of Director and Managers will be influenced by
this strategy because if the BBC have less money to spend then they will have to find more ways of
reducing their costs such as reducing the staff wage bill which will mean that many employees at the
organisation will have to leave as the organisation makes jobs cuts. As well as this if employees are
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losing their jobs employees that stay at the business may find that they have a higher workload so
that the BBC can cover the employees that have had to leave The decision to freeze the TV license
will influence the board of directors and managers financial and business decisions as now that the
BBC has £144m less to spend financial targets will have to be changed and set much lower as there is
less money to spend and as well as this if the BBC were thinking about employing more staff then
that business plan will have to be scraped and they will have to think about which job roles are
important within the organisation and remove the employees that are in job roles that don’t
contribute to the business.

The connected stakeholders of suppliers and competitors will be influenced because if the BBC has
less money to spend then suppliers may not be paid the correct amount and on time as the BBC tries
to spread the money that they have evenly. As well as this the suppliers may see a reduction in
demand from the BBC as they will have to cut costs and therefore won’t be able to purchase as
many programs from the supplier. Competitors may be influenced by the BBC’s strategy because if
they see that the BBC have had to freeze the amount of money customers have to pay then
broadcasters like Sky, Virgin, Free view may have to think about freezing or reducing their prices so
that customers can still pay them their money and so that they won’t leave the company.

BP has some strategies of their own in place and one of these includes the Gulf of Mexico
Restoration. The Gulf of Mexico incident happened on April 20th 2010, a gas release from a pipe led
to a subsequent explosion occurred on the Deep-water Horizon oil rig working on the Macondo
exploration well for BP in the Gulf of Mexico. The fire burned for 36 hours before the rig sank, and oil
and gas leaked into the Gulf of Mexico for 87 days before the well was closed and sealed. The
accident involved a loss of control over the pressure in the well followed by the failure of the well's
blowout preventer, a specialized valve designed to maintain consistent conditions. After the initial
explosions, the blowout preventer’s emergency functions failed to seal the well, allowing the leak to
occur. Eleven people died as a result of the accident and others were injured.

The BP Gulf of Mexico Restoration program is a program that aims to compensate those employees
injured and those families who have lost a family member. As well as this BP are trying to find the
effects of which the explosion and oil leak and how it has impacted on the environment and what
damage it has done to sea life populations and their habitats. BP is also monitoring the air and water
for pollution to find if the oil spill could cause damage to humans. BP has also cleaned the oil leak by
containing the oil spill and by using controlled fires to remove 265,450 barrels of oil from the ocean.
They also used wildlife rescue and rehabilitation to capture any animals affected by the oil spill and
then cleaning them and nursing them back to health before they send them back to the wild and
their natural habitats.
All of the stakeholders in the business influenced them to make that decision. The external stake
holders of pressure groups, government, media and the local community influenced the BP Gulf of
Mexico Restoration program as animal welfare groups protested BP as they destroyed sea life
habitats and left birds and over animals layered in oil. The media used these pictures of birds
covered in oil on news programs and newspapers which showed the environmental damage that the
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oil spill caused which broadcasted to viewers who would then join pressure groups forcing BP to
make the decision to clean up the environmental mess that the oil spill created. Governments in the
UK and in the USA influenced BP to introduce this strategy as the spoke about the environmental
damage that the oil spill caused and asked for BP to clean up the mess that the oil spill has created
because it was an environmental hazard. The community influenced the decision to give
compensation to those employees that were injured and to the families that lost family member as a
result of the oil spill. They influenced this because as the community most of the employees come
from the community so families that lost a member because of BP will have lost their main source of
income for the family and injured employees will not be able work so they don’t have any income
deserve compensation because they will need money to be able to buy food and accommodation.

The connected stakeholders of shareholders, customers, suppliers influenced the strategy because
customers will have seen what BP have done to the environment and boycott the BP produce and
move to competitors such as Shell which will mean that BP sales will reduce and this would lead to
profit margins reducing. This reduction in profit would lead to shareholders leaving the business and
selling their shares because they will think that the value of their shares will drop so sell them quick
to get the most possible money they can for them. The suppliers will be influenced as if they supply
for BP then people will believe that their products aren’t good quality and safe because there parts
caused the oil spill and explosion this will lead to supplier’s sales going down as people doubt the
quality of their products. Suppliers may also not supply BP because they don’t want to be associated
with a bad business. Suppliers would want BP to prove that their parts weren’t the reason for the oil
spill so that the suppliers can be cleared on any wrong doings. To get customers to buy their
products again BP has had to find a way of restoring the environment that they damaged so that
they can get their good reputation back. The way of restoring the environment is the Gulf of Mexico
Restoration Program.

The internal stakeholders of managers, board of directors, employees will be influenced because if
stakeholders because their share value has decreased because customers are boycotting their
products have left the company then there is less investment and less money for the company to
spend which will mean that managers and board of director will have to alter financial targets and
find ways to reduce costs. These cost reductions would affect employees as one of the main ways of
reducing the costs in the business is to reduce the amount of employees within the business which
would mean that staff could face job cuts.

Evaluate the influence different stakeholders exert in one organisation- (D1)

In every business there are stakeholders and these stakeholders are split up in 3 groups; Internal,
External, Connected. Internal stakeholders are people that are within a business such as employees,
board of directors and managers. Connected stakeholders are people that are associated with the
business or use their product or service. These are customers, suppliers, share-holders and
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competitors. Finally, external stakeholders are those people that aren’t involved in the business but
interested in the way that it is run such as Government, community and pressure groups.
BP PLC has many stakeholders which are; shareholders, directors and managers, employees,
suppliers, customers, community, government, trade unions and pressure groups. All of these
stakeholders influence BP in different ways and have different amounts of power within the

The internal stakeholders of BP are employees, board of directors and managers. The employees at
BP can influence the business because if they are being discriminated against because of a disability,
sex, ethnicity or age and if they aren’t being paid then they can get trade unions involved which
could lead to strikes over pay freezes or pensions or job cuts, this would influence BP because if
there was a strike then fuel, lubricant and petro-chemical production will stop. This will cost the
company because they will still have to pay staff but no work is being finished. As well as this trade
unions could take the company to court of the treatment of an employee which may cost the
company money because they may have to pay compensation or pay a fine. On top of getting trade
unions involved, employees can also withdraw their labour from the business. This would mean that
BP will have to recruit and train new employees which will cost the organisation money as they have
to pay for job advertisement and job training.
Involved employees can also withdraw their labour from the business. This would mean that BP will
have to take on and instruct a new employee which will cost the organisation money as they have to
pay for job advertisement and job training. The directors and managers influence BP because they
have the power to employ and fire employees and promote employees as well as making strategic
business decision and financial targets. This influences the business because the financial targets
allow them to measure business performance, are they making more or less profit than expected.

The linked stakeholders at BP are shareholders, customers, suppliers, competitors. BP has
shareholders because they are a Public Limited Company meaning that the public can buy a share of
the company on the London Stock Exchange. The shareholders can influence the business because
they can sell their shares in their business. This would lead to less investment in the business
meaning that the BP budget is cut and they would have to find ways of dropping costs which would
probably mean job cuts. Customers can influence BP as they can take their business elsewhere. This
was seen during the Gulf of Mexico oil spill as customers saw what happened and what was
happening to the environment may have boycotted BP produce and transferred to competitors to
show their beliefs against BP. This would mean BP sales would reduce so BP’s profit margins would
reduce. Competitors can influence BP as they can take customers. For example if a competitor like
Shell reduced their fuel prices then customers would you Shell produce instead of BP meaning that
BP will have to reduce their prices so that customers would use their goods. Suppliers can influence
BP as they can withdraw their products. If suppliers withdraw then BP won’t be able to function
efficiently as for example if the fuel canister supplier withdraws their supply to BP then fuels are
being produced but there isn’t any containers to place them in so production would have to stop.

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The outside stakeholders at BP are Government, community, pressure groups. The UK Government
can influence BP by creating new laws about the way that they make fuel and remove crude oil
which may boost costs. As well as this government may create laws on the quantity of pollution that
can be shaped from oil production. The community can influence BP by creating pressure groups.
Pressure groups will protest certain things about the company such as the pollution levels from the
BP petrochemical production or environmental problems that arise from the work that BP such as
the Gulf of Mexico oil spill.

BP may well act in response to these influences by discovering ways to stop stakeholders touching
the way that the business runs. BP may counter by giving shareholders bonuses for holding their
shares in BP PLC for extensive period of time. The advantages of this is that shareholders will stay
with the business for long periods of time eliminating the chance of people selling their shares which
will lead to a smaller amount investment and capital income. The disadvantages to this is that it is
costly as if you offer a bonus of 10% on a share worth £1,000,000 you are paying £100,000 which
doesn’t sound much for a large, global business but when there are 315,553 shareholders the costs
add up. To discontinue employees involving trade unions and avoiding the withdrawing their labour
from the company BP could offer rewards such as bonuses or sporting events for staying at the
business for long periods of time. They could also offer a policy that aims to reduce discrimination
inside the workplace. This would represent staff will stay with the business because they are safe
and protected from discrimination within the workplace and they are being paid on time. If
employees stay in the business for long periods of time it keeps workforce costs down. However,
there will be additional expenses if BP pays out bonuses and other rewards. But these costs would
be lesser than paying for the job employment process and training and as well as this employees will
be stimulated by the rewards so they will work harder for the organisation. To stop suppliers
withdrawing from the business BP will have to make sure suppliers are paid on time and the right
amount and suppliers are documented for the products they give to BP so that they don’t turn out
to be unhappy and withdraw their supplies meaning that BP won’t be able to work.

BP can stop the government intervening with their business by paying the tax, corporation and
income tax and VAT so that HM Revenue & Customs will reduce their attention to BP and won’t
insist on payments which could lead to bailiffs being set to repose assets to pay back the debts. Also
if BP works on new less polluting methods of producing fuels then the government will be happy
that the company is working to find ways to reduce their carbon footprint. Finding methods of
reducing pollution would be expensive but it will mean that the government will see BP work as
sufficient and won’t set new laws on the production of fuels and other petrochemicals and the
amount of pollution that is created by the company’s fuel production. These laws would disrupt the
fuel production because the amount of crude oil they can extract each year would reduce so that
they can meet the pollution level cut off.

BP have by now started the Gulf of Mexico Restoration Program this will stop pressure group
influencing the business as they will see the work that BP are doing is defending the environment
against an added oil spill like the Gulf of Mexico. The Gulf of Mexico has cost £17.7 billion to
compensate injured employees, destroy oil leak through controlled fires, animal rescue and
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rehabilitation but these costs are compared to the influence that pressure groups could have on the
organisation. Pressure groups can convince people to join their pressure group and boycott BP
produce reducing BP sales and hence reducing BP profit margins. This would have an effect on
employees and suppliers as there may be employment cuts and suppliers may not be waged and
they would withdraw their business.
In conclusion, stakeholders have a huge authority and that if a solitary stakeholder withdraws
subsequently it influences other stakeholders. For example a shareholder sell shares, reducing BP
capital income, employees knowledge job cuts, director and managers have to alter business
strategies and business decision and financial targets because there is not as much of investment.
Also BP will have to set prices higher so customers will shift to cheaper competitors. This shows that
the stakeholders have to stop BP production so BP has to try incredibly hard to keep all stakeholders
happy. I think that the greatest way to do this is to offer rewards to stakeholders so that they stay at
the business for extended periods of time and to respect pressure group views and try to modify the
business methods to contain them as well as adhering to government demands and laws. If rewards
are offered and stakeholders stay with the business for extended periods of time then there is
continues investment from shareholders, reduced staff costs if workforce are with BP for many
years, customers will continue with the company if they be given good customer service and they
will be given first-rate prices and faithfulness rewards. This means that with every one of the
stakeholders satisfied BP can be able to function well.