BE A1 Phong

Nguyen Viet Phong F05-173

BTEC HND IN BUSINESS (FINANCE)

ASSIGNMENT COVER SHEET

NAME OF STUDENT Nguyễn VIệt PhongREGISTRATION NO. F05-173UNIT TITLE Unit 1: Business EnvironmentASSIGNMENT TITLE Organisations in their EnvironmentASSIGNMENT NO 1 of 2NAME OF ASSESSOR Jubred A. PeñanoSUBMISSION DEADLINE November 20, 2012

I, __________________________ 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.

________________________________ _________________________

Signature Date

----------------------------------------------------------------------------------------------------------------FOR OFFICIAL USE

Assignment Received By: Date

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Unit Outcomes

Outcome Evidence for the criteria

FeedbackAssessor’s

DecisionInternal

Verification

First attempt

Re-work

Understand the

organisational purposes of

business

LO1

Identify the purposes of

different types of organisation

1.1

Describe the extent to which an organization

meets the objectives of

different stakeholders

1.2

Explain the responsibilities

of an organization

and strategies employed to meet them

1.3

Understand the nature of the national

environment in which

businesses operates

LO2

Explain how economic

systems attempt to allocate resources effectively

2.1

Assess the impact of fiscal and monetary

policy on business

organizations and their activities

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

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Outcome Evidence for the criteria

FeedbackAssessor’s

DecisionInternal

Verification

First attempt

Re-work

Distinction grades awarded D1 D2 D3

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 / /

NAME :

FOR INTERNAL USE ONLYVERIFIED YES NO

DATE :

VERIFIED BY :

NAME :

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A REPORT OF BRITISH PETOLEUM

Prepared for:

Jubred A. Peñano (Lecturer)

Course: Business Environment

Banking Academy, Hanoi

BTEC HND in Business

Prepared by:

Nguyen Viet Phong

Registration No.: ITP F05-173 (F05 A)

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Submit date: 19th November, 2012

Executive Summary

Vietnam is developing country and has a huge potential for any company to

penetrate into and implement their business plans. The economic system, resources, and

the policies of Vietnam also can meet the requirements of every international firm in

general and BP in particular to launch their business plan there. In this assignment, the

author has conducted many researches to gather information about the characteristics of

BP and the impact of Vietnam business environment on this company.

In my reports, I've done some research on the company British Petroleum as follows:

You are required to identify the legal structure and type of the organization and state the purposes such as mission, values, aims, profits, market share, goals, objectives of selected organization (1.1)

Describe the extent to which selected organization achieves the objectives of stakeholders. Identify the stakeholders, conflict of expectations and satisfaction the stakeholders objectives (1.2)

Explain the legal responsibilities of the selected organization and strategies employed to meet objectives of stakeholders (1.3)

Explain how economic systems in your country (Viet Nam) attempt to allocate and make effective use of resources available within the country (2.1)

Assess the impact of fiscal policy, monetary policy economy on selected organization and stakeholders in your country (2.2)

Evaluate the impact of competition policy and other regulatory mechanisms

on the activities of a selected organization (2.3)

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Table of contents

Executive Summary.................................................................................................................................................5

Table of contents......................................................................................................................................................6

Introductions............................................................................................................................................................7

1.1 Identify the purposes of different types of organization within British Petroleum............................................9

1.1.a The legal structure of British Petroleum:...................................................................................................9

1.1.b Vision, mission, values, objectives of British Petroleum:.........................................................................9

1.1.c: Conclusion................................................................................................................................................11

1.2 Describe the extent to which an organization meets the objectives of different stakeholders.........................11

1.2.a About Stakeholders of BP.........................................................................................................................11

1.2.b The extent of BP to meets the objectives of difference stakeholders..................................................15

1.3 Explain the responsibilities of an organization and strategies employed to meet them...................................17

1.3.1 Evaluation for Responsibilities of BP:...................................................................................................18

1.3.1a Management Responsibilities:.............................................................................................................18

1.3.1b Social Responsibilities:.......................................................................................................................19

1.3.1c Environmental Responsibilities:..........................................................................................................19

1.3.1d Ethic and Business..............................................................................................................................20

1.3.1e Public Relations and Corporate Image................................................................................................20

2.1 Explain how economic systems attempt to allocate resources effectively.......................................................20

2.1.1 Definition of economic systems.............................................................................................................20

2.1.2 Economic systems attempt to allocate resources effectively..............................................................21

2.1.3 The effectiveness of the uses of the resources of BP............................................................................22

2.1.4 Economic system in Vietnam affects BP................................................................................................23

2.2 Assess the impact of fiscal and monetary policy on business organizations and their activities.....................23

2.2.1 The impact of macro-economic policy to Vietnam Economy and BP.................................................23

2.2.2 The impact of Global Economy to Vietnam Economy and BP..............................................................24

2.3 Evaluate the impact of competition policy and other regulatory mechanisms on the activities of BP............25

2.3.1. Impact of industrial policy.....................................................................................................................25

2.3.2. Impact of social welfare policy..............................................................................................................25

2.3.3. Impact of interest groups and pressure groups...................................................................................26

Conclusion..............................................................................................................................................................26

Reference................................................................................................................................................................27

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Introductions

In this assignment, my main research subjects are British Petroleum, major oil and gas companies of the United Kingdom. I also give some information that I have researched about Vietnam's economy in a number of stages. As well as the policies and activities of the Vietnamese economy has influenced the company British Petroleum. Here is some basic information about this company. BP is an international oil and gas company that operates in more than 80 countries, servicing its customers with fuel for transportation, energy for heat and lighting , as well retail services and petrochemicals products. The Company is split into two segments, Exploration and Production, and Refining and Marketing. Exploration and Production’s activities are three key areas. Upstream activities which include oil and natural gas exploring, field development and production. Another area is called Midstream and includes pipeline, transportation and processing activities related to its upstream activities. The third area is marketing and trading activities which are the marketing and trading of natural gas, including liquefied natural gas, together with power and natural gas liquids. Refining and Marketing’s activities include the supply and trading, refining, manufacturing, marketing and transportation of crude oil, petroleum and petrochemicals products and related services . BP is a global group, with interests and activities which cover main business segments of Exploration and Production, Refining and Marketing and Gas, Power and Renewable energy (NYtimes.com). As of 2009 BP had total assets of $ 235,968 million and total revenues of $ 246,138 million with the majority of their revenues coming from its refining and marketing business and the majority of their profits from Exploration and Production (BP.com).

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MAIN BODY

1.1 Identify the purposes of different types of organization within British Petroleum. 1.1.a The legal structure of British Petroleum:

The British Petroleum Company (BP) is an international oil and gas company that

operates in more than 80 countries. BP is headquartered in London, and the workforce is

about 92,000 people in 2008. In the same year, BP's worldwide network consisted of 22,600

locations branded BP, Amoco, ARCO, and Aral. BP stock is composed of original BP shares as

well as shares acquired through mergers with Amoco in 1998 and the Atlantic Richfield

Company (ARCO) in 2000. The company's shares are primarily traded on the London Stock

Exchange, but also listed on the Frankfurt Stock Exchange in Germany with the name is BP.

In the United States shares are traded in US dollars on the New York Stock Exchange in the

form of American depository shares (BP.com). So, with above information, we can see BP is

Public Limited Companies. And it’s also a Large and Multinational business.

1.1.b Vision, mission, values, objectives of British Petroleum:According to Mintzberg, Mission describes the organization’s basic function in society,

in terms of the product and services it produces for its clients (Business Environment, 2010,

p.26). So, we can understand the mission statement is the purpose of existence of the

organization, while the vision statement is where the organization is going in the future.

From what I could find in “www.BP.com”, although not specifically labeled a "Mission

statement”, BP has a published statement of "What We Stand For". And it’s: “We care

deeply about how we deliver energy to the world.” I think it really is BP’s mission. That

Mission statement is very short and easy to understand, so, the reader can understand why

BP has become one of the world's leading companies of petroleum. Above everything, that

starts with safety and excellence in their operations. This is fundamental to their success. BP

approach is built on respect, being consistent and having the courage to do the right thing.

As well as Mission statement, BP has a published statement of “What We Do” is: “We

deliver energy to the world”. Based on the definition of the vision, so, it is the Vision

statement of BP. Reading it, we can imagine the work that BP will do in the future. It is to

provide energy to the world. They find, develop and produce essential sources of energy.

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http://www.BP.com/


They turn these sources into products that people need everywhere. And BP strive to be a

safety leader in our industry, a world-class operator, a good corporate citizen and a great

employer.

Values are the goals or aims of the organization will have an ideology based on beliefs,

value and attitudes (Business Environment, 2010, p.25). So, the values of BP are known as

the statement "What We Value" in BP.com. And their values have 5 keys: Safety, Respect,

Excellence, Courage and One Team such the information below.

With these criteria in value, BP has achieved much success in global business; get the

trust from their customers. Moreover, BP are also much focused about environment

pollution. Employees in the company always try my best and work as a team to achieve the

best results.

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http://www.BP.com/


According to Mintzberg (1997), Goals are the intentions behind decisions or actions, the

states of mind that drive individuals or organizations to do what they do. And BP’s goals in

2011 are “Our goal is to grow operating cash flows to enable us to both invest for future

growth and increase distributions to shareholders”.(BP Annual Report and Form 20-F 2011,

p.37). With those goals, BP has been active and achieved very good results in 2011 with

Sales and other operating revenues are $ 375.517 million, Proved Reserves are 17.748

million barrels of oil equivalent (BP.com).

Objectives are normally quantified statements of what the organization actually intends

to achieve over a period of time. According to BP.com, BP’s objective is to create value for

shareholders by helping to meet the world’s growing energy needs safely and responsibly.

It’ means BP is working to enhance safety and risk management, earn back trust and grow

value. They are working to become a simpler business, with a clear focus on what they do

best. Their distinctive capabilities include exploration, operations in deep water, the

managing of giant fields and gas value chains, and their world-class downstream business –

underpinned by technology and relationships.

1.1.c: Conclusion . At present, the most important purpose of BP is the global energy supply. However,

they are still interested in environmental pollution, social issues, and more importantly,

profitable. And with the statement of mission, vision, values, goals, objective, BP has been

operating true to their original purpose and growing.

1.2 Describe the extent to which an organization meets the objectives of different stakeholders. 1.2.a About Stakeholders of BP

All enterprises have stakeholders; they are individuals or groups who have an

interest in how the enterprise performs because it affects them in some way. Simply,

stakeholders are likely to be affected by a proposed intervention (either negatively or

positively), or those which can affect the outcome of the intervention. And there are

eighteen groups of stakeholders divided into three broad types in each organization.

BP is one of the largest companies in the world, so they also have groups of

stakeholders relatively standard. These stakeholders have one very huge influence to the

operation of BP's business. Constructive dialogue with stakeholders helps BP to make

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http://www.BP.com/

http://www.BP.com/


responsible and sustainable decisions as a group. According to www.BP.com, they have

some main groups of stakeholder:

Industry

Board of directors

Local communities

Governments and regulator

Shareholder and analysts

Employees

Customers

Contractors and partners

Non- government organization

However, in this paper, we only learn about the main groups have a great influence

on BP. Addition to clarifying groups, objectives and the relevance of each group and how BP

solve problems and achieve their goals will be evaluate.

To identifies and assesses the effect of a different individual or group of stakeholders

on a company, we can use a strategy business tool, its Stakeholder mapping. Based on it, we

can evaluate the power of the parties involved, the likely impact of the power companies

and their lever of interest regarding the company.

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http://www.BP.com/


Within table above, we can understand about the group A, B, C, D as follows:

Group A: these stakeholders do not need much effort because they cannot pose a

threat because they have low interest and power.

Group B: These stakeholders have very high interest but have little power, so, in

order to maintain these groups, should provide information about the company for

them to do not miss any event.

Group C: These stakeholders may not see the level of their impact on the company,

so let's keep them satisfied. However, because they have low interest so they

unlikely to cause much disturbance.

Group D: These groups should be most interested companies to meet their

requirements so that they have enough power to serve the company and a high

degree of likelihood.

According to BP, the following table will show the importance of each stakeholder

group:

Broad Type Stakeholders

Stakeholders mapping

Key

players

Keep

satisfied

Keep

informed

Minimal

effort

Internal

stakeholders

Board of directors

Employees

Connected

stakeholders

Shareholders

Customers

External

stakeholders

Local community

Government and regulators

Non- governmental organization

Industry

Table 1: Types Stakeholders of BP

Internal stakeholders:

Board of directors: BP’s board of directors are highly involved in the crisis as

they are the decision making body of the organization, and have the power to

make managerial decisions and decisions about which initiatives that should be

taken to reduce the damage of the crisis.

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Employees: BP’s employees who do all the work of BP, an oil company, they

have the workers on the rig and the office staff. Therefore, they have enormous

influence and interest.

Connected stakeholders:

Shareholders: means who are interested in the business of BP.? They put their

money for BP business and wish to receive more dividends. The money they

spend corresponding to their power in BP. BP is Public Limited Companies, so

the number of their shareholders is extremely large and the small and medium

shareholders, they can only keep informed about BP.

Customers: Customers are the most important to the business of BP. They also

have relatively high power in BP. They connect with BP in the business and more

interested in the product, price, service, etc.; they have high interest. So BP

should take great care to customers.

External stakeholders:

Local community: Local community simply people, organizing activities around

BP workplace. They do not have much power for BP, but more interested in BP.

Because, with specific job-related BP oil - a product that affects everyone. So BP

need to keep informed for them.

Government and regulators: BP engages with governments on many fronts,

from consulting on environmental regulation to understanding our tax liabilities

and collaborating on community or entrepreneurial initiatives. In some places,

they work in partnership with governments through production-sharing

contracts. However, their attention to BP is not much, despite their great

power.

Non- governmental organization: This stakeholder has both low power and

interest for BP. they engage with regional and international non-governmental

organizations (NGOs) in a variety of ways. For example, new projects often

consult with relevant local and international NGOs, who may contribute valuable

insights into our plans and provide specialized expertise with understanding and

managing impacts.

Industry: The challenges the world faces in the energy future are too big to be

addressed by any single organization, so BP are working through business and

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industry groups to help establish standards and address complex energy

challenges. BP has their memberships in industry and business organizations,

such as Biofuels, Climate change, Ethics and Compliance. So the industry does

not interest in BP, but still have their high power

1.2.b The extent of BP to meets the objectives of difference stakeholders . Stakeholders have many goals to achieve. Each group of stakeholders has a

variety of different objectives. BP’s trying to implements those objectives day by day.

The following table is designed to clarify the objectives and what BP has done,

Type Stakeholders Objectives Achieved Not achieved

Internal stakeholders

Employees Job security

High salary

Job satisfaction and conditions

Connected stakeholders

Shareholders Possible capital growth

A steady flow of income

Growth of investment funds

External stakeholder

Government

and regulator

Tax

Environmental Protection

Table 2: Stakeholder objectives

Employees: Job security: BP needs employees who have the right skills for their roles and who

understand the values and expected behaviors that guide everything they do as a group. Despite of many such employees, BP has always respected their employees and treat them with the best possible. “We aim to ensure equal opportunity in recruitment, career development, promotion, training and reward for all employees, including those with disabilities. Where existing employees become disabled, our policy is to provide continuing employment and training wherever practicable.” (BP Annual Report and Form 20-F 2011,p.74)

High salary: Is one big company and with large revenues, salaries of employees working at PB are very high BP and works in BP always been one wishes for everyone. The average salary for British petroleum jobs is $61,000. Average British petroleum salaries can vary greatly due to company, location, industry, experience and benefits. (http://www.simplyhired.com, 2012)

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http://www.simplyhired.com/a/jobs/list/q-British+Petroleum


Job satisfaction and conditions: with such a large number of employees, in order to satisfy all requirements is not possible, but BP is still trying to create the best working conditions for their employees. Evidence is “The survey includes 10 questions which make up the employee satisfaction index. The overall employee satisfaction index score for 2011 (62%) was below the score from 2009 (65%) but above that of 2008 (59%).” (BP Annual Report and Form 20-F 2011,p.74)

Government and regulator:

Tax: As a multinational company and norms, BP always correct tax regulations in each country where their business. The amount of tax paid is huge and it contributes 1 no small part to the government. “The charge for corporate taxes in 2011 was $12,737 million, compared with a credit of $1,501 million in 2010 and a charge of $8,365 million in 2009. The effective tax rate was 33% in 2011, 31% in 2010 and 33% in 2009.” (BP Annual Report and Form 20-F 2011,p.57)

Environmental Protection: Although there are many efforts to protect the natural

environment, BP is still cannot control a serious accident. “The Deepwater

Horizon rig exploded on April 20th 2010 in the Gulf of Mexico killing 11 people

and the following oil spill caused massive environmental damage to the area

around the Gulf Coast”. British Petroleum, who owned the rig, was widely

criticized by both the public and the media due to its poor handling of the oil spill.

(BP.com, 2010)

Shareholders:

Possible capital growth: “In 2011 BP restored your dividend, and BP report that

they increased the dividend by 14% in February 2012, in accordance with their

policy.”(BP.com) BP is developing a stable and gradual recovery from the crisis.

And with the increase of the dividend, it will make BP's equity growth

Growth of investment funds: According to BP.com, BP will use additional

operating cash prudently. They want to use around half for increased investment

in their project inventory for growth, and around half for other purposes. This

may include increased distributions to shareholders through dividends or share

buybacks or repayment of debt.

Overall, by the efforts of business, research and development, BP has launched

the optimal operating strategy to meet their goals as well as other stakeholders.

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

Every organization, whether large or small, whether activities and business in any

field, they have responsibilities for many aspects. BP also, their responsibility is also divided

into three basic types and they also have their own strategies to implement them. Following

table will clarify that.

Responsibilities of BP

Responsibiliti

es

Specific Responsibilities of BP Strategies Employed

Management

Responsibilitie

s

- Provide customers with the

best product and service.

- Give employees the best work

environment.

- Generate profits for

shareholders.

- BP cooperation in production of

electricity with Petro Vietnam and

EVN.

- The average salary for British

petroleum jobs is $61,000.

(simplyhired.com, 2012)

- Profit attributable to BP shareholders

for the year ended 31 December 2011

was $25,700 million and included

inventory holding gains. (BP Annual

Report and Form 20-F 2011-p.56)

Social

Responsibilitie

s

- Creating jobs for people

- Investment in education

- Investment in enterprise

development.

- BP has invested more than US$6

million in community projects across

Vietnam, with particular focus in Ba

Ria Vung Tau Province.

- BP has provided over US$620,000 in

sponsoring Vietnamese students to

pursue graduate studies in the UK

Environmental

Responsibilitie

s

- Funding for environmental

improvement activities.

- Investment in Science and

technology in environmental

- BP Vietnam has funded

environmental programs in Ha Long

Bay and Cat Ba total of $ 260,000.

- BP fund up to $1 billion for

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protection restoration projects that will restore

injured natural resources in the Gulf of

Mexico.

- Has 59 projects screened in early

planning for environmental impact

Ethic and

Business

- Business ethics

- Ethical practice

- Requirements of which apply to all

employees, such as anti-bribery and

corruption, anti-money laundering and

competition / anti-trust law

compliance.

- BP also operates a range of

compliance training and monitoring

programmes for our employees. (BP

Annual Report and Form 20-F 2011,

p.46)

Public

Relations and

Corporate

Image

- Communicate with and listen

to our customers.

- Create a good relationship

with the government

- BP uses a variety of methods,

including interviews, surveys, feedback

tools and marketing programmes.

- Training the Vietnam’s government

employees

1.3.1 Evaluation for Responsibilities of BP:

1.3.1a Management Responsibilities : For BP, responsible management is their top concern. BP has the specific responsibility

to care about customers, employees and shareholders. To expresses their responsibilities,

BP had Strategies employed positive:

Provide customers with the best product and service: It means BP must always focus

on research and development of their products to achieve customer satisfaction,

with BP, such things as fuel, petrol ... even, in Vietnam, BP cooperation in production

of electricity with Petro Vietnam and EVN. (vietbao.vn)

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Give employees the best work environment: After the customer, to have good

business results, BP regardless of its employees to meet them the best conditions to

work. Ensure safe and worthy salary is what employees would like. And the average

salary of employees in BP very desirable with $ 61,000. (simplyhired.com, 2012)

Generate profits for shareholders: to prove its business activities effectively, the

simplest way is to create more profits for shareholders. With their ability, BP has

given shareholders a huge amount is $ 25.700 million in 2011.

1.3.1b Social Responsibilities : Creating jobs for people: to demonstrate social responsibility, BP always takes

actions beneficial to the whole society. Every year, they create jobs for thousands of

people by recruiting staff for various positions. BP received both disabled people and

gives them a suitable works.

Investment in education: Focus on investment in education is also a way of

expressing social responsibility. BP should have practical impact on education in their

places of business. BP has provided over U.S. $ 620,000 in sponsoring Vietnamese

students to pursue graduate studies in the UK. (BP.com)

Investment in enterprise development: In a number of places where BP work, they

run a range of programmes to develop local supply chains and build the skills of

businesses. These range from financing for small and medium-sized enterprises to

sharing global standards and practice in areas such as health and safety. Such as BP

has invested more than US$6 million in community projects across Vietnam, with

particular focus in Ba Ria Vung Tau Province.

1.3.1c Environmental Responsibilities : Funding for environmental improvement activities: As an oil and gas company. BP

toxic products and have the ability to destroy the environment, so their

environmental responsibilities very large. During their activities, BP always have to

act in order to improve the environment, and protect the environment in which they

work. But that is not enough; BP also sponsors a large amount of money for activities

to improve the environment of the community. BP fund up to $1 billion for

restoration projects that will restore injured natural resources in the Gulf of Mexico.

BP Vietnam has funded environmental programs in Ha Long Bay and Cat Ba total of $

260,000

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Investment in Science and technology in environmental protection:

technological development in the protection of the environment and BP are

much focused, they invest a lot of money into the development of biofuels and

other environmentally friendly technologies… According to BP.com, they has

59 projects screened in early planning for environmental impact

1.3.1d Ethic and Business Business ethics: According to BP Annual Report 2011, they have requirements of

which apply to all employees, such as anti-bribery and corruption, anti-money

laundering and competition / anti-trust law compliance.

Ethical practice: BP also operates a range of compliance training and monitoring

programmes for our employees.

1.3.1e Public Relations and Corporate Image Communicate with and listen to our customers: BP uses a variety of methods,

including interviews, surveys, feedback tools and marketing programmes. Marketing

through television and print advertisements and other channels is the most visible

way in which BP communicates with customers. They have a responsibility to market

our products and our brand in ways that are consistent, truthful and compliant with

legal requirements.

Create a good relationship with the government: BP engages with governments on

many fronts, from consulting on environmental regulation to understanding our tax

liabilities and collaborating on community or entrepreneurial initiatives. In some

places, BP works in partnership with governments through production-sharing

contracts. They aim to maintain dialogue with all relevant government agencies,

ministries and regulatory departments at every stage of our presence in a country.

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2.1 Explain how economic systems attempt to allocate resources effectively 2.1.1 Definition of economic systems

An economic system is simply a society are trying to satisfy human needs and wants

by producing goods and services. Production of goods and services is affected by the limited

supply of factors such as labour, land and natural resources and capital. There are three

kinds of economic systems, named as:

Free Market Economy: is an economy which has government intervention is kept to

the minimum while supply and demand and the ability to pay influence decision

making.

Command Economy: is an economy which the government control what is produced,

how much is produced, the price and who the goods are available to.

Mixed Economy: is an economy combines elements of both free private enterprises

and intervention, in varying guises, by the state.

2.1.2 Economic systems attempt to allocate resources effectivelyBased on the features of economic systems and the specific case of Vietnam,

Vietnam has a mixed economic system. According to Vietnam-ustrade.org, Vietnam is now

in transition from a centrally-run to a market economy. The country’s Constitution

recognizes a socialist oriented multi-sector economy operating under both the market

mechanism and management by the State. Foreign and domestic private sectors are among

the economic sectors constitutionally recognized in Vietnam. There are currently state-

owned enterprises, state-private joint-stock companies, foreign invested enterprises,

domestic private firms, cooperatives and household businesses operating in the country. A

level playing field is being created to encourage all economic sectors to expand and develop.

However, Vietnam government still keeps controls of some kinds of business, like the

electricity, petroleum, and water. Therefore, there are few good sources which are cited as

the good conditions for the organization such as: Land and natural resources, Labour

resources, Capital resources.

Land and natural resources: Vietnam has natural material plentiful and rich

minerals, agriculture, forestry and fishery such as Coal, crude oil, zinc, copper, silver,

gold, manganese, iron. Agriculture, forestry, and fisheries (20.58% of GDP, 2010):

Principal products--rice, coffee, cashews, maize, pepper (spice), sweet potato, pork,

peanut, cotton, plus extensive aquaculture of both fish and shellfish species.

Cultivated land-12.2 million hectares. Land use--21% arable; 28% forest and

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woodland; 51% other. It is advantage for economy of Vietnam. Vietnam has used

this advantage as well as attracts foreign organization to invest in the country. The

government has been doing many things to protect natural material while using it to

improve economic.

Labour resources: human resources are always the most important factor to decide

the strength of the whole country. As of 1/4/2009, Vietnam's population: 85,789,573

people, second most populous country 13 in the world and 3rd in the region. The

young generation accounted 55% national population so that Vietnam has a major

advantage of labour resources.

Capital resources: Vietnam is developing country, so most of capital is from

investment’s foreign organization and loan from the World Bank. After Vietnam

joined in WTO, many foreign companies invested their money in Viet Nam. On the

other hand, Vietnam is invested from Official Development Assistance (ODA capital),

Foreign Direct Investment (FDI). Project no 1 has US$130 million in total capital, of

which $120million comes from ordinary capital resources (ORRC) and $10 million is

from the Asian Development Fund (ADF). The loan airs to assist Vietnam as the

country reform a number of state-owned enterprises and their affiliated companies

to improve their efficient and governance.

2.1.3 The effectiveness of the uses of the resources of BP

Labour resources: Vietnam has a large workforce can provide to BP's business

activities in Vietnam effectively. Vietnam's population is nearly 88 million and the

number of people in working age is around 51million, accounting for 57% of the

population. However, the quality of workers in Vietnam is quite low compared to

other countries in the region. Thus, if BP would like to have the best performance in

Vietnam, they have made many plans to improve the quality of their local labour. By

working with local government to train more workers and their employers.

Land and natural resources: land resources of Vietnam is a lot of potential, the total

number of unused land in Vietnam accounted for 10% of the total land resources, BP

offered many benefits to be able to build more projects in Vietnam. Moreover, the

amount of untapped crude oil in the waters of Vietnam is huge. So BP can make use

of the natural resources to do their business and profitable for them.

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Capital resources: Total investment in Vietnam has increased in many years. This

proves that Vietnam's economy is growing well and the Vietnam government is

expanding the policy to attract foreign investment and support foreign investors

such as BP.

2.1.4 Economic system in Vietnam affects BP

BP is an energy company working in the oil and gas industry that it is guaranteed by

the government of Vietnam. Therefore, it will be more difficult for BP to compete with the

Vietnam National Oil and Gas companies, domestic enterprises in the energy and gas

industry. Furthermore, according to Decree No.84/2009/ND-CP of Vietnam government

about petroleum business, any business activities in this industry must be under control of

the government, so BP cannot set the price for their products; they have to give a fixed price

as the Vietnamese government.

2.2 Assess the impact of fiscal and monetary policy on business organizations and their activities. 2.2.1 The impact of macro-economic policy to Vietnam Economy and BP

Macroeconomic policy is known as the 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 (Economic Glossary, nd).There

are two common macro-economic policies: Fiscal policy and Monetary policy.

Fiscal policy involves the use of government spending, taxation and borrowing to

influence both the pattern of economic activity and also the level and growth of aggregate

demand, output and employment (tutor2u, nd).

Monetary policy directly affects cash flow and the economy of the country,

monetary policy affects economic activity through the four points that interest rates,

exchange rates and control money supply, control over bank lending and credit (BPP

Professional Education, BE, 2010, p.155).These are two important policies of

macroeconomic policy in Vietnam. They are an effective tool which helps the government

guide the whole economy.

Clearly, that fiscal policy affects every business. Financial policies related to

taxes, government spending, borrowing and debt. There are four types of taxes:

income tax, profit before tax (corporate tax), value added tax (VAT), import duties

and quotas. These taxes are collected in different ways (directly or indirectly) as on

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personal income, savings, profit. Corporate income tax will be reduced by 30%, 50%

VAT on the products made of aluminium fell from 3% to 0% (115/2010/TT-BTC

Circular of the Minister of Finance). 10% VAT applied to consumer goods, 5%

applies to goods and services related to agriculture, education, health care

(Government, 2008). However, the rate is still higher than many countries in the

world.

Fiscal policy impacts BP directly. Annually, BP has to pay corporate income tax for

government. The corporation tax is fixed at 25% profit of the company. BP has also pay VAT.

However, when the Government reduces 30% corporate tax in 2009, BP can keep a lot of

money.

Vietnam went through an economic crisis in 2009.Thanks to monetary policy, the

whole Vietnamese economy get rid destruction. At that time, the State Bank of Vietnam to

interest rate subsidies, tax deferred wage disbursement time. In the second quarter of 2009,

GDP increased by 4.5% and 5.8% during the third quarter. In 2010, the Vietnamese

government to change the exchange rate between VND and USD to 13%, higher than 3%

during the same period in 2009. This helps to maintain the balance of the economy and

reduce inflation. Monetary policy also strongly impacts on BP. While the interest rate stays

at high level, stakeholders would rather keep money in the bank than investing into BP. It

could be not good for the operation of BP.

2.2.2 The impact of Global Economy to Vietnam Economy and BP The economy is now dealing with the consequences of 2009 financial crisis. The

depression started in the United States and then led to others countries. According to VOA

news, East Asia has been hardest hit. In February, exports from China fell twenty-six percent

from a year ago. The World Bank estimates that up to three trillion dollars of public and

private loans in developing countries must be repaid that year.

When it affects the Vietnam, in the first quarter of 2009, the impact of the crisis

became apparent when GDP increased by only 3.1%. During the first eight months of the

year, Vietnam's export ratio only14.2% and the import ratio is worse - less than 28.2% of the

accumulation foreign currency decreased significantly from $ 23 billion (2008) USD16.5

billion (August, 2009).

BP has also been hit hard by the economic crisis. Due to the severe decline in the

export of Vietnam, BP has faced a major problem; it is the fuel demand of the domestic

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production activities will be reduced. Moreover, the Vietnamese Government has

implemented a number of policies to attract foreign investment and support. Therefore, BP

may lose the advantage of the policy support from the Government of Vietnam before.

2.3 Evaluate the impact of competition policy and other regulatory mechanisms on the activities of BP. 2.3.1. Impact of industrial policy

Industrial policy allows government to take an active role to support investment, to

encourage a faster rate of economic growth in industry, to halt the decline of the

manufacturing sector (BPP Professional Education, 2010, p.161).

A country wish growth and economic development will require the appropriate

economic policies in each stage of development. Among those policies, industrial policy is

the most important policy for large industrial contribution to GDP and is the driving force for

agri-cultural development as well as services. Because Viet Nam is developing country,

industrial policy is the most important policy is the core of the industrialization strategy.

However, the fledgling local companies are often unable to compete with

foreign companies. Therefore, the Vietnamese Government has launched a number

of industrial competition policies to protect Vietnamese companies to compete with

foreign companies in some industries. For example, in the oil and gas industry,

accounts Vietnam National Oil and Gas Company for 55% of the energy market,

accounts Vietnam National Oil and Gas Company for 25% of the energy market,

account Saigon Oil and Gas Company 10% of the energy market. That means that

only the remaining 10% for BP in the energy market. Therefore, BP will have to face

many difficulties in doing business in Vietnam with this case.

2.3.2. Impact of social welfare policy According to BPP Professional Education (2010), social welfare seeks to protect and

directly improve people’s standards of living. In Vietnam, the welfare policy has been

applied for everybody, especially disabled people, wounded soldiers, and the victims of

dioxin. There are about 5 million Vietnamese, accounted for more than 6% of the

population, are disabled. These people are treated equally to other normal ones.

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Vietnamese government lays down a strategy to build schools for disabled children so that

they can have a chance to gain the knowledge like every student.

From 2011 to 2020, the government will try to address the issues in three main

areas: labour markets, social insurance and poverty reduction. According to Decree No.

70/2011/NĐ-CP and Decree No. 98/2009/ND-CP the government increased the minimum

wage to 1,400,000 VND to 2,000,000 VND will push up the labour cost for the company.

Also, Vietnamese Labour Law 1994, last edited in2007 stated that employees must have the

right to be provided health insurance in the company. BP will have to increase its labour

costs in providing its employees with protection from not only diseases and accidents but

also other things such as get pregnant etc. On the other hand, according to the Vice Minister

for Labour, War Invalids and Social Affairs (MOLISA) NguyenThanh Hoa, the government will

try to put into practice the policies including providing of unemployment benefits to the

unemployed. This is good sign for BP as it will not have to worry about straining its budget

to buy insurance which also covers the risk of losing jobs for their employees. Therefore, the

employees and the trade union of BP will be able to feel more secured about the workers’

source of income if they are to be unemployed.

2.3.3. Impact of interest groups and pressure groups

Interest groups and pressure groups have a major impact on business operations of BP.

BP always interested in their employees and the remuneration policy with talent.

Association of employees have high requirements with BP. And they will stand to ensure the

rights of workers in BP. Forced BP to implement their obligations to their employees.

Conclusion

Business environment around BP is quite complex. BP has to compete with many competitors to maintain its position in the energy market. However, the developing of Vietnam economic also provides BP many opportunities to widespread the popularity as well as expand its business. The author recommends that BP should take

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a deep research into the demand of Vietnam market for the standard of petroleum products to improve their outcome in order to overcome their competitors step by step to retain more customers and gain more profit.

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