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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 ownwork and not copied or plagiarized from any source. I have referenced thesources from which information is obtained by me for this assignment.

________________________________ _________________________

Signature Date

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

Assignment Received By: Date

Unit Outcomes

Outcome Evidence for the criteria

Feedback Assessor’sDecision

InternalVerificat

ion

Firstattemp

tRe-work

Understandthe

organisational

purposesof

business

LO1

Identify thepurposes ofdifferenttypes of

organisation

1.1

Describe theextent towhich an

organizationmeets theobjectivesof differentstakeholders

1.2

Explain theresponsibilities of anorganization

andstrategiesemployed tomeet them

1.3

Understandthe natureof thenationalenvironment in which

Explain howeconomicsystems

attempt toallocateresources

effectively

2.1

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InternalVerificat

ion

Firstattemp

tRe-work

businessesoperates

LO2

Assess theimpact offiscal andmonetarypolicy onbusiness

organizations and theiractivities

2.2

Evaluate theimpact of

competitionpolicy and

otherregulatorymechanisms

on theactivities

of aselected

organisation

2.3

Merit grades awarded M1 M2 M3

Distinction grades awarded D1 D2 D3

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InternalVerificat

ion

Firstattemp

tRe-work

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

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Prepared by:

Nguyen Viet Phong

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

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 ofthe organization and state the purposes such as mission,values, aims, profits, market share, goals, objectives ofselected organization(1.1)

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

Explain the legal responsibilities of the selectedorganization and strategies employed to meet objectives ofstakeholders (1.3)

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

Assess the impact of fiscal policy, monetary policy economyon 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)

Table of contents

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Executive Summary.........................................................5Table of contents.........................................................6Introductions.............................................................71.1 Identify the purposes of different types of organization within BritishPetroleum.................................................................91.1.a The legal structure of British Petroleum:........................91.1.b Vision, mission, values, objectives of British Petroleum:.........91.1.c: Conclusion......................................................11

1.2 Describe the extent to which an organization meets the objectives of different stakeholders...................................................111.2.a About Stakeholders of BP.........................................111.2.b The extent of BP to meets the objectives of difference stakeholders...........................................................15

1.3 Explain the responsibilities of an organization and strategies employedto meet them.............................................................171.3.1 Evaluation for Responsibilities of BP:...........................181.3.1a Management Responsibilities:..................................181.3.1b Social Responsibilities:......................................191.3.1c Environmental Responsibilities:...............................191.3.1d Ethic and Business............................................201.3.1e Public Relations and Corporate Image..........................20

2.1 Explain how economic systems attempt to allocate resources effectively.........................................................................202.1.1 Definition of economic systems...................................202.1.2 Economic systems attempt to allocate resources effectively.......212.1.3 The effectiveness of the uses of the resources of BP.............222.1.4 Economic system in Vietnam affects BP............................23

2.2 Assess the impact of fiscal and monetary policy on business organizations and their activities.......................................232.2.1 The impact of macro-economic policy to Vietnam Economy and BP....232.2.2 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.......................................252.3.1. Impact of industrial policy.....................................252.3.2. Impact of social welfare policy.................................252.3.3. Impact of interest groups and pressure groups...................26

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

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

IntroductionsIn 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

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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

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http://www.BP.com/


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. 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.

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http://www.BP.com/


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.

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

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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.

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http://www.BP.com/

http://www.BP.com/


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 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

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http://www.BP.com/


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.

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,

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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

TypeStakeholders

Stakeholders mappingKey

player

s

Keep

satisf

ied

Keep

inform

ed

Minima

l

effortInternal

stakehold

ers

Board of directors

Employees

Connected

stakehold

ers

Shareholders

Customers

External

stakehold

ers

Local community

Government and

regulators

Non- governmental

organization

Industry

Table 1: Types Stakeholders of BP

Internal stakeholders:

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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.

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

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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

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

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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

Notachieved

Internalstakeholders

Employees Job security

High salary

Job satisfaction and

conditions

Connectedstakeholders

Shareholde

rs

Possible capital growth

A steady flow of income

Growth of investment

funds

Externalstakeholder

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 asa 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

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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 canvary greatly due to company, location, industry, experience and benefits. (http://www.simplyhired.com, 2012)

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 tocreate 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. Theeffective 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

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



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.

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

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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 BPResponsibil

ities

Specific

Responsibilities of BP

Strategies Employed

Management

Responsibil

ities

- 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

Responsibil

ities

- Creating jobs for

people

- Investment in

education

- Investment in

enterprise

- BP has invested more

than US$6 million in

community projects across

Vietnam, with particular

focus in Ba Ria Vung Tau

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development. Province.

- BP has provided over

US$620,000 in sponsoring

Vietnamese students to

pursue graduate studies in

the UKEnvironment

al

Responsibil

ities

- Funding for

environmental

improvement

activities.

- Investment in

Science and technology

in environmental

protection

- BP Vietnam has funded

environmental programs in

Ha Long Bay and Cat Ba

total of $ 260,000.

- BP fund up to $1 billion

for restoration projects

that will restore injured

natural resources in the

Gulf of Mexico.

- Has 59 projects screened

in early planning for

environmental impactEthic 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

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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)

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)

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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.

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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

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.

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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.

2.1 Explain how economic systems attempt to allocate resourceseffectively 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

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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 effectively

Based 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

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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

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

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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 ofBP

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

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natural resources to do their business and profitable for

them.

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.

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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 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.

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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

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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

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.

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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. 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.

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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.

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

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Reference

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7. Vietaz.com (1990) About Vietnam. [online] Available at: http://www.vietaz.com/Law/Business/Detail/3718085.aspx [Accessed:20 Nov 2012].

8. Vietbao.vn (2006) BP, EVN và PetroVietnam hợp tác sản xuất điện. [online] Available at: http://vietbao.vn/Kinh-te/BP-EVN-va-PetroVietnam-hop-tac-san-xuat-dien/55105386/88/ [Accessed: 20 Nov 2012].

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9. Vietnam-briefing.com (2012) Corporate Income Tax Delayed One Year For Labor-Intensive Enterprises | Vietnam Briefing News. [online] Available at: http://www.vietnam-briefing.com/news/corporate-income-tax-delayed-year-laborintensive-enterprises.html/ [Accessed: 20 Nov 2012].

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