Assignment : Business Environment

BTEC HND IN BUSINESS (ACCOUNTING)
ASSIGNMENT COVER SHEET
NAME OF STUDENT
REGISTRATION NO.
UNIT TITLE
ASSIGNMENT TITLE
ASSIGNMENT NO
NAME OF ASSESSOR
SUBMISSION DEADLINE

Vũ Văn Tiến – Mike
F06-146
Unit 1: Business Environment
BP and its Environment
1 of 2
Jubred A. Peñano
November 7, 2013

I, ___Mike___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

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---------------------------------------------------------------------------------------------------------------FOR OFFICIAL USE
Assignment Received By:

Date:

Unit Outcomes
Outcome

Evidence for
the criteria

Assessor
’s
Decision

Feedback

First
atte
mpt
Identify the
purposes of
different
types of
organisation

1.1

Describe
the extent
to
which an
Understand
organization
the
organisation meets the
objectives
al purposes
of
different
of business
stakeholder
s
LO1

1.2

Explain the
responsibilit
ies of an
organization
and
strategies
employed to
meet them

1.3

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Rewor
k

Internal
Verificat
ion


Outcome

Evidence for
the criteria

Assessor
’s
Decision

Feedback

First
atte
mpt

Understand

the nature
of the
national
environmen
t in which
businesses
operates
LO2

Explain how
economic
systems
attempt to
allocate
resources
effectively
Assess the
impact of
fiscal and
monetary
policy on
business
organization
s and their
activities
Evaluate
the impact
of
competition
policy and

other
regulatory
mechanism
s on the
activities of
a selected
organisation

2.1

2.2

2.3

Merit grades awarded

M1

M2

M3

Distinction grades awarded

D1

D2

D3

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Rewor
k

Internal
Verificat
ion


Outcome

Evidence for
the criteria

Feedback

Assessor
’s
Decision
First
atte
mpt

Internal
Verificat
ion

Rewor
k

Assignment
( ) Well-structured; Reference is done properly / should be done (if any)
Overall, you’ve
Areas for improvement:

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SCENARIO

BRITISH PETROLEUM, UK – PUBLIC LIMITED COMPANY

BP PLC is a British multinational oil and gas company headquartered in London,
United Kingdom. It is the third-largest energy company and fourth-largest company
in the world measured by 2011 revenues and is one of the six oil and gas super
majors. It is vertically integrated and operates in all areas of the oil and gas industry,
including exploration and production, refining, distribution
and
marketing,
petrochemicals, power generation and trading. It also has renewable energy
activities in biofuels and wind power.

BP's origins date back to the founding of the Anglo-Persian Oil Company in 1909,
established as a subsidiary of Burmah Oil Company to exploit oil discoveries in Iran.
In 1935, it became the Anglo-Iranian Oil Company and in 1954 British
Petroleum. In 1959, the company expanded beyond the Middle East to Alaska and

in 1965 it was the first company to strike oil in the North Sea. British Petroleum
acquired majority control of Standard Oil of Ohio in 1978. Formerly majority stateowned, the British government privatised the company in stages between 1979 and
1987. British Petroleum merged with Amoco in 1998 and acquired ARCO and
Burmah Castrol in 2000.

BP has been involved in several major environmental and safety incidents, including
the 2010 Deepwater Horizon oil spill, the world’s largest accidental release of oil into
marine waters. In 1997 it became the first major oil company to publicly acknowledge
the need to take steps against climate change.

BP in Vietnam
BP arrived in Vietnam in 1989 with many ideas. Over time, it had been able to turn
those ideas into reality.
The business in Vietnam includes the exploration and production of oil and gas, the
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production and distribution of lubricants, and the supply of crude oil to the first local
refinery. BP also invested in the growing Vietnamese power industry.
In the early 1990s, their exploration discovered four major gas fields 320km offshore
south of Ho Chi Minh City. It resulted in the $1.3 billion Nam Con Son Gas Project.
This complex operation involved the development of the Lan Tay and Lan Do fields,
the laying of a two-phase offshore pipeline (the longest of its kind in the world) and
the construction of the 720 MW Phu My 3 Power Plant in Ba Ria Vung Tau province.
The Nam Con Son Pipeline that BP built, operated, transferred operatorship, and
expanded has become a model of sustainable, reliable, and efficient investment
project in Vietnam.
BP and Castrol are recognised brand names in the lubricants markets here. Every

year, the business grows faster than the market, with a record performance of 2- 3
times growth in 2008 alone.
In 2009, BP Integrated Supply and Trading signed a contract with PetroVietnam to
supply crude to Vietnam’s first refinery. The contract is for a minimum of 50% of their
foreign crude requirement and is for the next five years (with option for extension).
BP’s work in Vietnam focuses on the areas of environmental protection, poverty
reduction, education and training, enterprise promotion, and access to energy.
So far, BP has invested more than US$6 million in community projects across
Vietnam, with particular focus in Ba Ria Vung Tau Province where the company
operates major production projects.
BP has worked with the UK's Foreign and Commonwealth Office and Leeds
University to help with the training for Vietnam's government employees and
students, has provided over US$620,000 in sponsoring Vietnamese students to
pursue graduate studies in the UK. We also initiate and provide financial support to
the Marcel Loos Memorial Business Course at Da Nang University. The course
covers such topics as modern accounting and business skills, both of them key to
Vietnam's transition to a market economy.
For more information about the Company, please visit: ;
/>
Role
You are an assistant analyst working for a consultancy firm and you are required to
comment on the business environment of BP PLC. Your tasks are:
Tasks

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You are to provide a write-up in tabular form to be used as ‘Induction Presentations’

as well as this coming discussion on the following matter:


Identify the purposes of different types of organisation similar with
and/or subsidiaries of BP PLC
(1.1)



Describe the extent to which BP meets the objectives of different
stakeholders
(1.2)



Explain the responsibilities of BP and strategies employed to meet
them
(1.3)

You are also asked to write a report on the following for record purposes: (Focus
your analysis on BP PLC in UK)


Explain how economic systems attempt to allocate resources
effectively
(2.1)



Assess the impact of the fiscal and monetary policy on BP PLC and

their business activities
(2.2)



Evaluate the impact of competition policy and other regulatory
mechanisms on the activities of BP PLC
(2.3)

GRADING
Pass

is achieved by meeting all the requirements defined in the assessment criteria.

Merit

Identify and apply strategies to find appropriate solutions. (M1)
Characteristics / Possible Evidence – relevant theories and techniques
have been applied with various parties in the industry, the organisation,
and models.
Select and apply appropriate techniques.

(M2)

Characteristics / Possible Evidence – a range of methods and
techniques have been applied indicating current trends, economic
environment and methods used.
Present and communicate appropriate findings

(M3)

Characteristics / Possible Evidence – An appropriate structure and
approach have been used to prepare a report. Present data using a
range of methods e.g. tables, diagrammatical and graphical forms.

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Distinction

Use critical reflection to evaluate own work and justify valid conclusions
(D1)
Characteristics / Possible Evidence – Ability to show evaluation has
taken place using defined criteria such as development towards
corporate objectives and plans, roles and function of agencies and
appropriate use of advertising.
Take responsibility for managing and organising activities (D2)
Characteristics / Possible Evidence – Ability to show with evidence the
areas of substantial activities / projects or investigations have been
planned, managed and organised with respect to competition and a
clear explanation of responsibilities and implementation of business
and organisational plans.
Demonstrate convergent, lateral and creative thinking

(D3)

Characteristics / Possible Evidence – An innovative and creative
thought has been used to identify mission, objectives and

responsibilities of BP as well as investigate related government and
economic policies affects the company.
PRESENTATION
1.

The assignment should have a cover page that includes the assignment title,
assignment number, course title, module title, Lecturer/tutor name and
student’s name. Attach all the pages of assignment brief/cover sheet with your
report and leave them blank for official use.

2.

Ensure that authenticity declaration has been signed.

3.

This is an individual assignment.

4.

Content sheet with a list of all headings and page numbers.

5.

A fully typed up professionally presented report document. Use 12 point Arial
or Times New Roman script.

6.

Your assignment should be word-processed and should not exceed 3,000

words in length. A CD should be included with references and
accompanying notes.

7.

Use the Harvard referencing system.

8.

Exhibits/appendices are outside this limit.

9.

The assignment should be not contain a bibliography – but should contain a
list of any references used in the assignment.

NOTES TO STUDENTS FOR SUBMMISSION

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•

Check carefully the submission date and the instructions given with the
assignment. Late assignments will not be accepted.

•

Ensure that you give yourself enough time to complete the assignment by the
due date.

•

Do not leave things such as printing to the last minute – excuses of this nature
will not be accepted for failure to hand-in the work on time.

•

You must take responsibility for managing your own time effectively.

•

If you are unable to hand in your assignment on time and have valid reasons
such as illness, you may apply (in writing) for an extension.

•

Failure to achieve a PASS grade will results in a REFERRAL grade being
given.

•

Take great care that if you use other people’s work or ideas in your
assignment, you properly reference them in your text and any bibliography.

•

NOTE: If you are caught plagiarizing, the University policy and

procedures will apply.

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Table of Contents

Excutive Summary
Focus on research studies legal structure , vision , mission and objectives of BP . Besides
the analysis of the financial situation , monetary policy and the plan is in place to develop
BP . In addition, the study helps the reader see clearly the responsibility of BP to the
environment and society . The success and try to become the largest oil companies in the
world . Development plan to hold names . BP has created policies to adapt to the business
environment in which they have achieved certain success . The company is also aware of the

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importance and their responsibilities towards stakeholders quan.Bao It also discusses the
impact that specific competition policy and industry operational and business development
BP .

Introduction
British Petroleum is one of the largest oil companies in the world. Activity in the field of oil
and gas industry, including exploration and production, refining, distribution and marketing ,
petrochemicals, power generation and trading. BP strive to become the leading oil and

approachable , friendly environment . Company policies are always timely and appropriate to
protect the environment. Commitment is not harmful to the environment and human health.
Investment and financial policies, activities, plans to produce green energy, clean
environmental protection, as well as everyday consumer products. This paper presents an
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overview of the business environment in the UK as well as the main factors that influence the
business of BP

1.1: Identify the purposes of different types of organization
1.1.1: Legal structure
The legal structure of British Petroleum is a Public limited company. BP is a multinational
company. Therefore, companies always have goals, vision and mission for their legal
structure. These factors should make plans to operate the company in a specific way to help
companies with clear steps and develop their abilities. Besides, in order to catch up with the
trend of increased sales and more importantly, to have greater responsibility

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•

1.1.2: Vision and mission statement
Vision of British Petroleum is “to be held to high standards in what we do. We strive to
be a safety leader in our industry, a world-class operator, a good corporate citizen and a

•

great employer. “ (Our Value, n.d.)
Mission of British Petroleum is: “BP wants to be recognized as a great company –
competitively successful and a force for progress. We have a fundamental belief that we
can make a difference in the world. We help the world meet its growing need for heat,
light and mobility. We strive to do that by producing energy that is affordable, secure and
doesn’t damage the environment.” (The BP Mission Statement Includes "No Harm" or
Damage to People or Environments, 2013)

BP’s vision and mission statement based on its values. They are concerned about the problem
of world energy. BP identified that energy is an essential element of the world. Energy needs
of the world is increasing. BP understands that they have a lot of competitors in the oil and
gas sector. Vision and tasks that help the world know about the behavior and actions of BP in
the future towards a good result. Beside, BP’s mission is driven by main values like
progressive, responsible, innovative and performance driven.
1.1.3:Values : BP has 5 values:
•

Safety : “Everything we do relies upon the safety of our workforce and the communities
around us. We care about the safe management of the environment. We are committed to

•

safely delivering energy to the world.” (BP,1996)
Respect: “We respect the world in which we operate. It begins with compliance with laws
and regulations. We hold ourselves to the highest ethical standards and behave in ways

•

that earn the trust of others.” (BP,1996)
Excellent: “We follow and uphold the rules and standards we set for our company. We
commit to quality outcomes, have a thirst to learn, and to improve. If something is not

•

right, we correct it.” (BP,1996)
Courage: “We always strive to do the right thing. We explore new ways of thinking and
are unafraid to ask for help. We are honest with ourselves, and actively seek feedback
from others. We aim for an enduring legacy, despite the short term priorities of our

•

world.” (BP,1996)
One team: “Whatever the strength of the individual, we will accomplish more together.
We put the team ahead of our personal success and commit to building its capability. We
trust each other to deliver on our respective obligations” (BP,1996).

As we have seen, the value of BP focus on the human factor. Especially their employees and
the countries in which they operate. During operation, the safety of their workers are always
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the most attention. They always respected each person they work with. On the other hand, they
encourage their employees to develop each individual's ability to benefit and success of the
company before personal success.
1.1.4: Goals

“BP has set goals for gender representation in leadership positions. Our goal is for 25% of
group leaders and 30% of senior level leaders to be women by 2020. We are currently
working on meaningful goals for minority representation.” (Diversity and inclusion, n.d.)
1.1.5:Objectives
“BP’s objective is to create value for shareholders and supplies of energy for the world in a
safe and responsible way” (Our strategy and sustainability, n.d.)
Objective’s BP is is quite clear. However, there are a lot more of objectives was set up and
will be set up to achieved the organizational desires.
In conclusion, all the vision, mission, goals, values and objectives are able to achieve the
purpose of the organization. They realize that what they want, so they always have concrete
plans and strategy to make these vision, mission, value and objective become more practical.
BP care about the problems employees. They put the benefit of workers in front of the
company's benefit. So BP employees always have the enthusiasm to contribute to the success
of the company
1.2:Describe the extent to which an organization meets the objectives of different
stakeholders
1.2.1 Type of Stakeholders
Stakeholders are people hold shares and benefit from the organization.Skateholders can be
affected by the organization. There are many stakeholders in an organization and there are 3
main types of stakeholders are:
•
•
•

internal stakeholder : employees, management
connected stakeholders : shareholders, customers, suppliers and financiers
external stakeholders: customers, suppliers, and the government.

This can be achieved through stakeholder mapping:

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LOW
Interest/aspirations

HIGH
Interest/aspirations

LOW
Power/influence

HIGH
Power/influence

Stakeholders map (Course book, p.41, 2010)

1.2.2: Different degrees of power to the control of policy decisions that affect the
organization through map :
Types

Stakeholders

Stakeholder Mapping

Key players
Internal

Management

Stakeholders

Keep

Keep

Minimal

satisfied

informed

effort

X

Employees
Connected

Shareholders

Stakeholders
Customers

X
X
X

Suppliers

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External

Central government

X

Stakeholders
Local authorities

X
Trade Unions

X

Managers played an important role in a company because they have duties of bringing the
tactics to achieve the company goals. They are the keys to the success of this company. (Bp,
2013).
Employees are people who make important contributions to the success of each company, but
they do not have the right to make important decisions so their influence is not high.
Shareholders are the main ones investing money to the company. They are interested in the
business and believe that they can get the interest from that. Besides, they are powerful

because they can decide to fire anyone if they want to. (Bp, 2013).
Customer is always the key in any business. The sale of every company depends heavily on
their needs. If they feel satisfied, they can buy products.
Suppliers also have a close relationship with the company. Their job is providing goods and
services and getting paid promptly. If they get paying late, they can stop supplying the
organization and make them suffer cost of finding new suppliers.
The governments are the ones who enact laws and tax policies. Therefore, when they increase
the taxes, the company’s profit will decrease considerably.
Local authorities highly interest in what company do to help people from unemployment and
the environment, beside that they do have any attention or power on other business of
company.
Trade Unions has responsible for employee’s problem and they’ve also participate in the
decision-making process. If corporation’s treat the workers badly, trade unions will interfere
and solve it. BP found British trade union leaders decided to have a windfall tax on its £37m
a day income (The guardian, n.d)

Types

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Stakeholder

Objectives

16

Achieved Not achieved


Internal

Stakeholder

Connected

Employees

Customers

Good salary

Achieved

Working condition

Achieved

Job Security

Achieved

Quality product

Achieved

Reasonable prize

Not Achieved

Customer

Stakeholder

satisfaction
Employment

External

Local Authorities

Environment

Stakeholder

activities

Achieved
Achieved
Not Achieved

Employees:
- Good salary: In general, Bp employee’s wage is very high. In top ten, the highest paid
salary belongs to Attorney, which is around $ 180.567 (2013) not including bonus. Even the
attendant can receive in between $7,667 and $8,225 (2013), which is the lowest salary.
- Working condition: In Bp, everyone will get a chance to enjoy a culture of collaboration
and respect (Working at Bp, 2012).They will access to some of the most talented people in
their fields. Besides, BP also supports their family-friendly policies such as career breaks and
adoption leave so they can contribute to their families without compromising their
professional development (Working at Bp, 2012).
- Job security: Bp provides strong health-care system and retirement income (Retiring from
Bp, 2012) for their employees. Therefore, they can get the best treatment while working as

well as retiring.
B. Customer:
- Quality product: Bp’s motor oil and lubricants, Aral and Castrol are highly advanced and
can work with any kind of modern engine (Products and services).
- Reasonable prices: Due to the tax policies which are set by national government, the
gasoline’s price is always high. In some countries, tax accounts more than a half of price,
especially it make ups about 70% of the total price charged at the pumps (The price of the
petrol).
- Customer satisfaction: Bp received an amazing feedback from their customer (Customer
satisfaction survey, 2011). 77% of respondents rated Bp at least 8 out of 10 on overall
transaction process and 90% of respondents are satisfied with Bp’s product.
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C. Local authorities
- Employment: Bp is a large corporation so it brings many chances for new and graduated
students for many positions including: Process Engineer, Chemical engineer Geologist, etc.
(Bp, 2013).
- Environment activities: On 20 April 2010 after an explosion on the Deep-water Horizon,
there was millions gallon of oil gushing into the Gulf of Mexico (Sheila 2010). As a result,
natural environment has been devastated strongly and many creatures were killed by water
pollution.

1.3: Explain the responsibilities of an organization and strategies employed to meet
them.
Specific Responsibilities
Care for the community
Social Responsibilities

Strategy employed
Do social work

Improving quality of living of Focus on training worker
worker
Minimize
Protecting environment

Environment

Working by law

Honest in Business

image

the

company

company clearly
working Making policy about award
and bonus

image

of Organization
advertising

forms

1.3.1: Social Responsibilities
Over the last 40 years, BP has showed a commitment to communities in the UK. BP has
supported for arts and culture in the UK over 35 years. Nowadays, they focused on the
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energy

Show problem that faced the

environment

Public relations and Corporate Improve

of

and

Paying tax fully

Ethic and Business

Management Responsibilities

exploitation

use

resources
Collection and waste disposal

Reducing pollution

Efficient

the

of


partnerships with the Royal Opera House; National exhibition; British Museum; and Tate
Britain (Bp, n.p.). These partnerships have recently been renewed for five years, with an
investment of nearly £10 million from BP. (Bp, n.p.).
1.3.2 Environment Responsibilities
Reducing environmental pollution is an important responsibility of every organization and
of course BP is not the exception. To do this task, BP should have a strategy to cut emissions
in production, more investment services processing waste in the environment.

Waste of BP (Bp,nd)
The chart shows the groups of wastes of BP from 2008 to 2012. In 2008, the amount of
hazardous waste disposed, non-hazardous disposed and non-hazardous waste recycled and
recoverd off-site were about 200, 570 and 320 in a row. But in 2012, the amount of 3 groups
of waste decreased: hazardous waste disposed was about 190, non-hazardous disposed was
about 5460 and non-hazardous waste recycled and recoverd off-site was about 195.

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1.3.3: Ethic and Business Responsibilities
Bp always pays the tax on time including trading tax, income tax and so on. In addition to a
fundamental requirement to obey the laws and regulations wherever we operate, the code sets
out how we should behave when faced with choices about our behavior at work, ranging from
basic rules on safety and the environment to detailed expectations on competition and antitrust issues ( sustainability report, 2007)
1.3.4 Management Responsibilities
In order to make their customer happily, Bp has billions of barrels of proven oil equivalent
reserves. Bp also provides for Customer service professionals that link between their products
and services and the huge range of people and businesses that need them. Bp is always
working hard to deliver a service that’s as inspiring as their products to the consumer (Bp,
n.p.).
1.3.5: Public relations and Corporate image Responsibilities
BP should clearly identify closely related to the public through meetings introduce the
company to the customer, the customer support. Actively participate in customer support.
Image of BP and stakeholder influence strategy to build the company's image in the public. .
Bp is using a lot of slogans with purpose of expanding the image to the consumer. They tends
to stress into their strength, for example, it’s time to go on low carbon diet (Oozing image,
2010), or cleaner burning fuels, cleaner air, or Biofuels, solar ,hydrogen, natural gas, We
think it’s important to diversify, too (Bp, n.p.)
2.1 Explain how economic systems attempt to allocate resources effectively
The economic system of UK
The United Kingdom is one of the world’s biggest economical countries. It is a mixed
economy (both public and private) which has been reducing public ownership over the last 20
years. While it was the first to industrialise in the 18th century, the UK’s economy has turned
more towards the service sector over the years, particularly insurance, tourism, business
services, and banking (England's Government and Economy, n.p.).
The UK also has significant oil, gas, and coal reserves, but they are steadily declining. The

economy of the UK is much globalized and in 2009 had a GDP per capita of $35,200. Its
capital city, London is considered the world’s largest financial center (England's Government
and Economy, n.p.).
2.1.1 Labor resources
The employment rate for those aged from 16 to 64 for June to August 2013 was 71.7%, up
0.3 percentage points from March to May 2013. There were 29.87 million people in
employment aged 16 and over, up 155,000 from March to May 2013 (Labor Market
Statistics, 2013).We can see that the UK workforce is very rich and the very rapid growth.
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Thus BP has many options in the labor market in the UK. BP is an oil and gas company
which there are many activities around the world and also the company has a good reputation
in the use of human resources.

2.1.2 Land and natural resources

(England's Government and Economy, n.p.)
The below pie chart illustrates the using land in UK in total of 25 Mha. The biggest are is
used for Agricultural land Grasses and rough grazing accounting 51%. The following ones is
Crops ad bare fallow and Urban land and land not otherwise specified occupying 19% and
14% respectively. The smallest used land Is Agricultural land Other taking 4%.

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2.1.3 Capital resources

As can be seen, capital investment spending was 47 billion pounds, and it kept rising
gradually during 7 months. After that, it peak the top at approximately 66 billion pounds in
august. However, then it declined dramatically until 51 billion pounds due to the increased
risk of investment and finance available (Economic environment, n.p). Then there was a
fluctuation in the capital investment during the next 3 months and it stopped at 52 billion
pounds.
As can be seen from the first table, the labor has divided into many sections, in which,
professional accounts the highest number, it shows how quality of the labor in UK. Besides,
there are numerous areas including other occupations to show the reasonable allocation in
UK. Besides that, a half of land used for agriculture and rough grazing, and urban land just
accounts 14%. It is a bit unbalanced between 2 area because UK is known as a strong
industrial country. However, in the future, UK can easily convert land for agriculture to
industry. With regards to capital, as the recession happened during this time, business needs
to invest more with purpose of keeping the economic stable. Therefore UK business needs to
be confident in decision-making especially investment, for example, to invest in equipment
and in stock, this will rise in aggregate demand brings about a boom.
In conclusion, UK is utilizing 3 above resources quite effectively but there are still several
exited problems need to solved as mentioned aboved.
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2.2 Assess the impact of fiscal and monetary policy on business organizations and their
activities
A. Fiscal policy
Fiscal policy involves the government changing the levels of taxation and government
spending in order to influence Aggregate Demand (AD) and the level of economic activity

(Fiscal policy, n.p). Its purpose is to keep inflation low and starbilise economic growth
avoiding a boom and bust economic cycle (Fiscal policy, n.p)
Income Tax (Trading and Other Income) Act 2005c.5 (income tax, 2005), this acts imposes
charges to income tax under trading income, property income, savings and investment
income and certain miscellaneous income. Any kind of profits of a trade, profession or
vocation or amounts treated as income on a change of accounting basis are charged (trading
income, 2005).Besides, income from land in the United Kingdom and abroad as well as postcessation receipts and certain charges arising from changes in the basis on which a taxpayer
calculates property business profits (Income Tax (Trading and Other Income) Act, 2005).
This act also includes the laws relating to savings and investment income. There is also
several incomes that is charged, for instances, receipts from intellectual property or certain
telecommunication rights (Income Tax (Trading and Other Income) Act, 2005).
Any kind of tax has a significant impact on Bp businesses. The change in income taxes
affects work in a good aspect because it reduces the post-tax income of those in tax leading to
each hour of work taken the total net income is lower (Effects, n.p). It encourages BP
employees working more with purpose of maintaining money so Bp will benefit from
supplying extra hours of their labor. On the other hand, if the trading tax is high, it can direct
affect Bp adversely. Another one tax can be considered is receipts from intellectual property.
Bp has strong forces of quality staffs, so they can produce lots of original product. Thus they
will be charged much more but likely the first aspect, it just a motivation for they to work
harder.
B. Monetary policy
Monetary involves altering base interest rates, which ultimately determine all other interest
rates in the economy, or altering the quantity of money in the economy (monetary policy,
n.p).
The Taxes (Interest Rate) (Amendment) Regulations 2010 No.410 sets out the circumstances
in which employment related loans give rise to a taxable benefit on the amount by which the
interest actually paid is less than the amount that would have been due if calculated at “the
official rate of interest” (legislation). This focus on directors and employees earning $8,500 a
year or more are liable to tax on benefits in kind they receive by reason of their employment.
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Besides, where a tax charge arises, employers has to pay National Insurance contributions on
the taxable benefit (2010).
This policy has positive effect on Bp business because it facilitates Bp’s staff to participate
more in production. As be mentioned above, if Bp’s staffs earning $8,500 or more, they will
receive a favor which is that they are able to make loans with low interest rate. Even though,
they have to pay tax but they still benefit from it. Therefore, Bp are likely to have advantage
because of this legislation. According to ‘contribution’ based (State benefits), if BP’s
employment pays enough National insurance contribution, they will have support allowance.
In conclusion, fiscal and monetary have both good and adverse effect on Bp business in
several aspects such as encouraging employment working harder but it also raise Bp’s
product price too because of trading tax.
2.3: Impact of competition policy and other regulatory mechanisms on the activities of
BP
There are 3 essential competition policies in the office of fair trading (OFT):
Competition enforcement (CE) prohibit agreements between businesses that prevent, restrict
or distort competition or are intended to do so and which affect trade in the UK and/or EU
(Anti-competitive agreements, n.p.). There are some main aspects needed to be considered in
this policy:
Competitive agreements will be prohibited if the company will now fix prices charged for
goods or services produced. Besides, the client will distinguish himself
The next one, cartels are the most serious form of an-competitive agreement (Anticompetitive agreements, n.p.). These agreements’ purpose is to not let businesses compete
and damage each other.
A business holds a dominant position in a market from abusing that position will be
prohibited because of some actions including: charging excessively high prices or refusing to
supply an existing long standing customer without good reason.
Overall, in general, the legislation will alert BP from making mistakes. For example, Bp is

known as one of the biggest and powerful petroleum so if Bp raises gasoline’s price sharply
without any reason, which will bring great negative impacts on the other business or people’s
life. Besides, if Bp rumors that their rival company’s petrol consisting a half of water with
purpose of damaging their image and be detected by OFT. Then they will receive critics or
even lawsuit, and they can be seen as a company willing to do anything for profit.
Consumer Regulation Enforcement (CRE) provides guidance to help businesses comply and
information for business and consumers about current and completed consumer enforcement
work and the outcome of formal and informal legal action (Consumer enforcement, n.p).

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It ensures that customer legislation and regulations are properly enforced and also take action
against unfair traders .The consumer will be provided information to understand the rights
and make the best choices (Business Environment, p.82). Besides, they are also encouraged to
contact Citizen Advice regarding any problems they made in buying goods and services
(Consumer Protection from Unfair Trading Regulations 2008). Citizen advice will do their
best in term of resolving consumer’s legal money and others problem by offering free and
confidential advice.
Bp is one of the best companies in term of providing good services for customer through
many years, and they are willing to adapt any requirement or solve any existed problems for
them. Thus, CRE just helps Bp to build better images as a company always put their
customer’s rights in the first position.
Market and Policies Initiatives (MPI) complements the OFT's competition and consumer
regulation enforcement divisions. It takes a broad perspective in reviewing markets that could
work better for consumer includes three main areas (business environment, p.82). It provides
the central resource of specialist economic, statistical, and financial advisers. MPI is also
responsible for the OFT's enhanced role in investigating markets that might not be working

well for consumers. MPI co-ordinates with Government and other organizations (both
national and international) involved in consumer protection and competition matters,
manages a public information line on matters within the OFT's responsibilities (Consumer
Protection from Unfair Trading Regulations 2008, n.p.).
This law will provide a platform to address social issues that affect Bp, such as health care,
education, immigration, and energy and the environment. As a result, Bp can know what
effect would have on them, and they can solve it and protect their customer as well as
themselves.
To sum up, it is essential for Bp to follow these rules closely. It helps Bp to get the effective
information about their customers, and what they need to avoid when running businesses.

Conclusion
As a result, BP can both satisfy stakeholder task just as well with the environment and
society. In addition, BP can do well with the company responsible government. Committed to
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