The Performance of Barclays Plc on Context to Its Interdisciplinary Areas - Research Paper Example

?Business Report Introduction The business report elaborates the performance of Barclays Plc in context to its interdisciplinary areas. The report concentrates on the business environment in which Barclays Plc is operating. Business environment refers to the relationship between the business and the numbers of environments- particularly the political, economic, demographic, public sector, socio-cultural, technological, ecological, and ethical environment. The report identifies the changing nature of Barclays’s environment from the employees’ perspective to the organisation’s perspective. Different management theories are there that identifies what exactly have affected from time to time. Barclays follows few management theories which are elaborated in the report. Every organisation undertakes Corporate Social Responsibility (CSR) activities to serve the society it is working in. Barclays undertakes various CSR activities to educate the public about the different investment plans and also make them aware about the rules and regulations of the London Stock Exchange. Ethics of an organisation is defined as the general rules and regulations that are followed for the good conduct of the business. Barclay has its own well built ethics which make them different from the other organisations (Wetherly and Otter, 2008). The stakeholders play an important role in the organisation and it can be said that they are the one who are affected by the performance of the organisation. The stakeholders of Barclay are the employees and the investors who are investing in the organisation on the hope of getting good returns. The report also elaborates the current issues that are faced by Barclays which have led them into trouble. Development Barclays Plc is the British multinational financial provider which is headquartered in London, United Kingdom. It has its operation in retail, investment banking, wholesale, mortgage lending, credit cards and wealth management. The performance of the organisation is elaborated under the different heading which is given below. It is listed on the London Stock Exchange and is a constituent of FTSE 100 Index. It also has a secondary listing on the New York Stock Exchange. Business Environment Business does not exist in isolation it must operate in a complex and turbulent environment. Figure 1: Firm in its environment (Source: Worthington and Britton, 2009) The above figure shows that how the environmental factors are influencing the business organisation. The outputs of the organisation can get affected by the external environmental factors such as the political and the technological (Worthington and Britton, 2009). The business environment can further be divided into general environment and the contextual environment as given in the figure below. Figure 2 : Business Environment (Source: Worthington and Britton, 2009) The overall performance of Barclay was affected by the economic turmoil that took place in 2011. Though the capital and the liquidity position of the organisation are quite stable in 2011 the economic disturbances are felt in the organisation. In 2011, there was a revision in the forecast of the global GDP. This had a negative impact on Barclays as the customers were conservative and these made it difficult for the bank to raise the funds. This added a liquidity pressure on Barclays in 2012 (Foster, 2008). The changing rules and regulations by the government made it difficult for the organisation to raise funds from the customers as they did not want to take the risk of losing money. Changing nature of the business environment The business environment is changing every day whether it is political or economic or technological. The business concept is becoming more complex and difficult for the organisations (Lucas, 2000). Figure 3: Changing business environment From the above figure it can be said that from simple and safe business environment that the business used to face no longer existed and presently the organisations was confronting volatile business environment which were quite challenging (Saleem, 2012). Barclays’s has adopted the changing environment positively and has responded to it making sure that their businesses are not harmed by any of the factors of business environment. Limited Companies Barclays is a public limited company. Limited company refers to the company which has the corporate association with a legal entity in its own name. In public limited companies all the assets and the property belong to the company and not to the owners of the company. Business Aims Barclays aims at providing excellent financial services to its customers. They provide with innovative and customer focused groups who deliver good services and products to the customers and give positive contribution to the communities in which they work and live in. Barclays give its shareholders good return so that the shareholders do not go to their competitors for investing. Corporate Social responsibility Barclays have undertook the Banking on Change Programme which is a community based savings model with the aim of reducing poverty and increasing the income opportunities for the households in the rural and semi-urban areas of the world. The company have invested in the education sector in Kenya and have made an initiative to identify the talents and make a part of their organisation. They have even performed well in giving positive contribution to the sports sector in Kenya also (Barclays, 2013a). Barclays has adapted a three years plan to rehabilitate the street children and dedicated their time to empower the street boys and other youths. The Company also initiated the walking and cycling program has given their customers, employees and partners a chance to spread awareness and raise fund to provide sanitation and water to the public schools. Barclays have even launched programs called the Women Network program to enhance the career of the women and make them fit for the workplace by providing them proper coaching and exposure to the senior level management (Barclays, 2013b). Management Theories The management theory that is followed by Barclay is the Contingency Theory and System Theory. Contingency theory refers to the approach in management in which there “is no single form of organisation best suited to all situations and that the most appropriate organisational structure and the system of management are dependent upon the contingencies of the situation for each organisation” (Wetherly and Otter, 2008). Barclays do not make any constant strategy to find their success but reacts accordingly as faced by the contingencies. System theory has defined organisations as open systems which are constantly interacting with the environment to convert inputs into outputs. Here, input includes finance, people, materials and information that are provided by environment where the organisation operates and exits. Output refers to the goods and the services, ideas and the wastes that are discharged in the environment for being consumed by the end users and which acts as the inputs that are used by other organisations (Mullins, 2010). Barclays used this theory to run their business where the inputs are the employees and ideas of generating interesting offers for investment and the outputs are the financial services they provide to the customers. Barclays is customer centric and they regard their customers as their family and thus try constantly to improve on their services so as to get enhanced customer feedback. Current Trends and Issues Barclays has been operating in a number of countries. There have been many ways in which the changes in the business have affected the business profitability adversely. In 2011, there has been a serious downturn in growth and debt crisis in Europe. The economy slightly recovered at the end of 2011 but the GDP declined leading to financial loses. In 2012, Barclays faced significant uncertainties which include the following: 1) Credit Risk: The rising impact of inflation and the interest rate rise have made the customers unaffordable to take loans. There raised potential liquidity shortage which increased the counterparty risk (Barclays, 2013e). 2) Market Risk: There has been reduced client activity during the period of 2011. There is a sharp decline in market liquidity which is particularly due to the uncertainty of the economic conditions. 3) Funding Risk: The performance of the capital ratios is weak during the period. The impact of the Basel 3 regulation has been adverse to Barclays. Stakeholders Every organisation has stakeholders and these can be individual or the groups who are affected by the performance of the organisation. Stakeholders include managers, creditors, employees, suppliers, shareholders and the society. The stakeholders have variety of interest in the organisation which range from the private gain to the public benefit. Sometimes these interest clash with that of the interest of the organisation when the managers try to improve their cash flow by paying less on investments that are made by the customers. Barclays’ stakeholders are the employees and investors as well as the shareholders who have shown interest in the organisation by investing and also purchasing shares. Barclays over the years have made their stakeholders happy with the returns they provided them and have promised them to maintain their performance. Ethics The employees of Barclays have to adhere to the strict ethical code of conduct that is established by the CEO of the organisation. They even signed an ethical code of conduct bond or they are forced to quit the organization. The organisation did not want to take any chance when it comes to the reputation of Barclays. When there has been a serious violation of the banking rules regarding ethics the CEO of the company has to make certain changes in the code of conduct of the organisation. The employees have to go through review of their code of conduct every week. Then the management will make comment on their performances and they were to work accordingly after signing a promise letter with the management (Jain and Trehan, 2010). Multinational inward investment: PESTLE Analysis In a highly competitive world of business, an organisation must remain alert to the changes that are taking place and take them as challenges by which they can gain competitive advantage over their rivals (Fernando, 2012). PESTLE analysis provides the view of the political risks and uncertainties that are faced by the organisation and thus overcoming those challenges encourages the decision makers to evaluate the future and the current position of the organisation. Barclay’s PESTLE analysis is as follows: Political: Barclay’s sustainability agenda has stretched rapidly. It identifies the organisation’s increased focus on the business and also shows how the organisation is successful in increasing customer interest in this competitive business world. The awareness of global challenges has increased and the government is playing the key role in doing so. This has helped Barclays to attain sustainable position in the business world (Barclays, 2013d). Economic: Barclays has been focusing the corporate social responsibility activities so as to play an important role in the establishment of the economic advantage of the countries where it is operating. Social: Barclays focus on increasing the value of their stakeholders by maintaining and understanding the customer needs. They also aim at collecting talent from different parts of the world and develop them and make them work for Barclays. Technological: Barclays has been adopting means of technology which will be exclusive for their banking system and that will make a competitive advantage for them. Legal: Barclay follows all the legal obligations that are framed by the government. The tax laws have affected both the organisation and the customers as the rate of tax has increased. Ethical: Employees of Barclays have been following the ethics of the organisation. But quite often it is seen that they are not abiding by the rules and regulations that are levied on them. At that time the management took strict steps to make their employees abide by the rules (Barclays, 2013c). Reference List Barclays, 2013a. Environmental Partnerships. [online] Available at: [Accessed 6 August 2013]. Barclays, 2013b. Corporate Social Responsibility. [online] Available at: [Accessed 6 August 2013]. Barclays, 2013c. Annual Report 2012. [online] Available at: [Accessed 6 August 2013]. Barclays, 2013d. Risk Factors. [online] Available at: [Accessed 6 August 2013]. Barclays, 2013e. Citizenship. [online] Available at: [Accessed 6 August 2013]. Fernando, A., 2012. Business environment. New Jersey: Pearson Education Ltd. Foster, N., 2008. EU Law. Oxford: Oxford University Press. Jain, T. and Trehan, M., 2010. Business environment. New Delhi: V. K. Enterprise. Lucas, M., 2000. Understanding business environment. London: Routledge. Mullins, L., 2010. Management and organisational Behaviour. New Jersey: Prentice Hall. Saleem, S., 2012. Business environment. New Jersey: Pearson Education Ltd. Wetherly, P. and Otter, D., 2008. The business environment. Oxford: Oxford University Press. Worthington, I. and Britton, C., 2009. The business environment. New Jersey: Pearson Education Ltd. Read More