The business environment consists of several elements and perspectives which influence take decisions in the enterprise. It can be forced with economic, social, political and technological aspects which create an impact on the organisation (Biener, Eling and Wirfs, 2016).
In this context, a present report based on Aviva Plc deals in the insurance sector. It is a British multinational company and its headquarter exists in UK. It has around 33 million customers in different areas of 16 nations. In UK, it is the largest general insurer and leading life and pension, provider.
For gaining insight information of the present report, it covers the structure of the chosen organisation to promote operations in different areas. Furthermore, it includes the effects of external environmental factors on the selected business.
1. Describe the structure of the company, its management and how it is governed
(A) Overview of the company including its history and structure and how it is managed at the national level
Aviva Plc is UK based insurance group whose association was considered from 1834. They govern risk through group wide policies and business standards. The chosen company is premium listing on the London Stock Exchange so they are required to disclose compliance with UK corporate governance code. Their Board believes that they have been fully compliant with the code throughout 2017. Details of compliance with the code also preceding in a particular year in the Corporate Governance Section. They also possess clear roles, responsibilities delegated to different authorities. With the help of establishing and operating control, management assesses risks. Board also delegated day to day risks management in a particular group. Line management of the enterprise is also accountable for risk management which assists to identify risk functions with internal audit (Hair Jr, Wolfinbarger and Page, 2015). Furthermore, internal control of the chosen business facilitates effective and efficient business operations, development robust with reliable internal reporting and compliance along with rules and regulations.
The chosen organisation plays a leading role in the digital revolution of insurance and intellectual property. It creates a significant impact that assists to deliver growth of 14%. In this context, long term relationships in UK were maintained successfully. It helps to improve significantly the quote and experience generated for a new generation of insurance products. Proposition also takes subscription which can be successfully applied insurance and expected to be progressive. In many countries, this enterprise working as a joint venture so it assists to look for better work (Batkovskiy, Makarov and Khrustalev, 2015). It is UK based insurance group in which association develop successful work from 1834. They are also served with 33 million customers in more than 16 nations in all over the world.
A strong system of governance develops throughout the group which is important to ensure that the organisation run smoothly. It helps to attain effective decision making which support Aviva Plc to accomplish their objectives. Long term success is also useful perspective that management makes strategic aims, ensure an appropriate system of governance, setting the value to support culture (Hunter, Saunders and Constance, 2016).
Aviva Plc assesses operational risks and adequacy operating effectiveness to control and implement change to manage and mitigate it. This is because, it is an integral part of the group's operational risk and control management framework. Group wide reporting is in manual in relation to the international financial reporting standards (IFRC). Along with this, reporting requirements completed with financial reporting control framework (FRCF). It is relates with preparation of reliable financial reporting (Biener, Eling and Wirfs, 2016).
Frameworks of Aviva Plc are important to help and manage risks that assist to accomplish objectives. They are designed to assess and manage instead of eliminate risk of failure. It helps to attain more desired level of objectives that are reasonable and absolute assurance against material. Regularly review of frameworks assists to comply financial reporting guidance on risk management, internal control and related business reporting. There are generally three group level management committees designed that helps to members of group executives to delegate authorities (Gitman, Juchau and Flanagan, 2015). Asset liability committees chaired by chief capital officer. It assists to meet with responsibilities to manage group performances and liquidity with risk. Operational risk committee chaired to focus and supports with key operations that overseeing group operational risk profile. It monitors specific operational and conduct risks which impact on group reputation.
(B) Brief discussion of how the company is governed
Aviva Plc is governed by their board of directors so that in this aspect hierarchical structure followed. Adrian Montague is chairman of the company. He is board of director and non-executive director of the enterprise from January 2013. On 20th November 2012, the chosen organisation announced CEO of Aviva Plc who is Mark Wilson. After him, in April 2015, Adrian has been chosen as chairman of the enterprise. In board, there are 12 members are appointed in which first is chairman, seven members are independent non-executive directors and four members are executive directors appointed.
Stakeholders are independent part with whom each of those make wager deposits the money or counters wagered. In the chosen business, there are several stakeholders take participation such as investors, customers, government, employees, suppliers, etc. Board of directors possess relationship with several numbers of stakeholders such as shareholders, employees and public.
- Relationship with shareholders: Board of director need to maintain their relationship with shareholders through provide them appropriate amount of dividend. Furthermore, more benefits encourage them to invest in the business which assists to develop Aviva Plc profitability. Furthermore, range of issues also communicated with shareholders so that they can easily accomplish desired level of results at workplace.
- Relationship with employees: In addition to this, relationship also need to maintain with employees to provide them several benefits regarding their development and security in the job.
- Relationship with public: For public, they have to maintain corporate social responsibilities which assists to maintain their loyalty towards the organisation.
Disclosure committees chaired by CFO. Their role is to take support in group that ensure timely and accurate announcement that are made by group to maintain its security. Different committees work for distinctive work that explained under here:
- Risk committee: Risk committee helps to the board which oversee risk and assess it across the group. It helps to make recommendations to the board.
- Governance committee: Government committee works closely with risk committee that assists to board oversee operational risk across the group. It helps to deliver good customer relationship (Jackalas, Martins and Ungerer, 2016).
- Audit committee: It is working closely and respond to assists board to meet with responsibilities. Hence, it integrates financial systems of internal financial controls, monitoring effectiveness, performance and objectives with internal and external auditors.
Responsibilities and activities of different committees set with respective reports in annual report and accounts (Lock and Seele, 2015). It assists to mitigate risks in systematic manner to attain more desired level efficiency and outcomes.
In addition to this, Aviva Plc considers different types of insurance plan that offers in wide variety to customers. As a result, structure is carried accordingly that leads the market in protection and child plan with world class products and strong sales force (Jackalas, Martins and Ungerer, 2016).
- Insurance plans: Aviva Plc consider insurance plans that cater to all basic needs and requirement of the customers. It is very competitive that take care of all necessities for customers with insuring against sorts of all risks (Hunter, Saunders and Constance, 2016).
- Plans for individuals: The enterprise consist wide range of life insurance plans to cater needs of each individual. With the help of these plans, against financials constraints different kinds of insurance offers successfully. In this regard, different kinds of plans are generally offered by Aviva Plc such as saving plan, retirement plan, child plan, rural plan, etc. (Hair Jr, Wolfinbarger and Page, 2015).
- Group insurance plans: Group insurance plans are special that cover in a particular group within the organisation or member of association. Plan can be successfully carried in term of term insurance, gratuity/leave encashment, rural/credit, etc. Therefore, successful operations and functions in Aviva Plc carried with different premium plans (Gitman, Juchau and Flanagan, 2015).
2. Analysis effect of external environment factors on the selected business
Importance of conduct PESTLE analysis in the organisation
PESTLE analysis consider strategic tool that assist to analysis macro environment in the business. It stands for political, economic, social, technological, environment and legal factors that impact on Aviva Plc. Changes in these factors create direct impact on the organisation and shape strategy with competitive landscape level in the whole industry. With the help of this analysis, great details provides to face operating challenges with competitive forces. For instance, it is highly profitable with strong growth in unstable political environment (Biener, Eling and Wirfs, 2016).
3. Briefly discuss the PESTLE factors
It includes the following elements that create impact on the chosen enterprise:
- Political factors: Political factors consider significant role to determines elements that can impact on Aviva Plc. It is long termed profitability in certain nation or market. It is operating in insurance so that it expose with different kinds of political environment and systems. Success can be accomplish as dynamic insurance industry across the different nations that diversify systematic risks of political environment. It is closely analysis factors such as political stability and importance for the insurance sector of the country. Furthermore, there is wide risk of military invasion (Hunter, Saunders and Constance, 2016). Due to high level of corruption regulations also create major issue in financial sector. Legal framework for contract enforcement is one of the element of political factor so that it helps to develop significant results at workplace. Pricing regulations are also related with regulatory mechanism for financials. Along with this, industrial safety regulations in the financial sector are major perspective that impact on the chosen organisation. Product labelling and other requirements in insurance create major impact before entering and investing in certain market (Lu, Wang and Kweh, 2014). Trade related regulations and tariffs related financials are major perspective that are closely determines with different markets. Moreover, wage legislations must be implement with minimum wage and overtime. Main benefit to the company is political stability in the country that assist to focus on government regulations to the financial service industry.
- Economic factor: Economic factors are also major perspective in the nation. For instance, inflation rate, savings rate, interest rate, etc. (Jackalas, Martins and Ungerer, 2016). In economic cycle aggregate demand and investment exist in the economy that create impact on Aviva Plc. Micro environment factors such as competition norms create impact on competitive advantage of the enterprise. Aviva Plc can use elements of economic factors for example growth rate, inflation and economic indicators, etc. Type of the economic system is also major perspective in front of the chosen business to assess that how stable it is. Government intervention in the free market and related financial also impact on the results (HarangozÃ³ and Zilahy, 2015). UK has effective efficiency of financial market so that it helps to raise the capital in local areas. Infrastructure quality in insurance industry is also important that assists to meet with comparative advantages. In the host country and financial sector in particular nation must be continuous develop to focus on competition norm. Economic growth rate, discretionary income, unemployment rate, etc. elements create negative impact on the results of country (Aviva Plc PESTEL & Environment Analysis, 2018). Economic performance of UK is positive so that it influence income levels and purchasing behaviour of consumers as well.
- Social factors: In the society, there are several factors exists that impact on Aviva Plc. This is because, culture of each society consist way to do work it impacts on population. It plays great role that how marketers understand customers in the particular market and design message for insurance industry. Social factors of the leadership based on demographic and skill level of population. As a result, Aviva Plc has responsibility to assess class structure, hierarchy and power which exists in particular society. Furthermore, culture is also based on the different perspective that assists to focus on gender roles. Social conventions, etc. Entrepreneurial spirit and broader nature of the society encourage people to do their work in proper manner (Gitman, Juchau and Flanagan, 2015). Attitude also assists in which health, environmental consciousness, etc. measure that create impact on the results. Customer demand and requirements change day by day so that on the basis of leisure interest insurance industry must focus on customer perspective. Social status of UK people also determine choice of different insurance services which assists to focus on development of the country. Mainly car insurance develop in successful manner which require to focus on the desired level efficiency. It assists to gain more effective work to work with different kinds of customers (Lock and Seele, 2015).
- Technological factors: Technology is fast disrupting in the different industries in particular board. There are different industries establishes to give chance and cope up with the changes in successful manner. Aviva Plc has not considered technological analysis but also develop significant advantages in the whole business. It assists to increase more profitable results and outcomes that assists to cope up with distinctive roles. It includes recent technological development that develop by competitors of Aviva Plc. Technology also create impact on products that are offering to the particular nation. Advance technology of the country also create impact of cost structure of the whole industry that assists to understand significant advantages at workplace (Awan and Tahir, 2015). It impacts on value chain structure in the financial sector that give more rate on technological diffusion. Internet technology mainly considered to influence people to access appropriate services of insurance in the enterprise.
- Environmental factors: In the different areas of the world, distinctive norms and standards exists that create impact on the profitability. In the UK, different environmental laws and liabilities exists that assists to focus on the appropriate working system. In this consideration, before entering into new areas, existing market must carefully evaluate environmental standards that are needed to operate in these markets (Mwangi and Murigu, 2015). Different areas consider distinctive weather so that it create impact on operations and functions that are play in the selected enterprise. Laws regulating environmental pollution so that it must be reduced to consider desired results. Air and water pollution regulations in the insurance industry impact on the selected business. Recycling of different products create positive impact to operate in different areas of the world. Waste management in financial sector must be identify to take support for renewable energy. It is useful to take several advantages to make green and ecological products (Jeucken and Bouma, 2017). In environment consideration, the chosen insurance company need to predetermine operations and functions in the business that helps to meet with desired level of efficiency at workplace. Environment protection is major perspective for insurance company because of paper work. As a result, waste management must be consider successfully that assists to focus on renewable energy.
- Legal factors: In several numbers of nations, legal frameworks and institutions legal factors are considered to robust enough and protect intellectual property rights in the enterprise (Schaltegger and Wagner, 2017). Therefore, Aviva Plc must evaluate before entering in such markets to lead with theft of the organisation. It assists to gain competitive advantages with legal factors that considered by the chosen organisation to enter in new market. There are different elements exists that create impact on the enterprise. For instance, anti-trust law in insurance industry and overall nation. Discrimination law must be followed by the enterprise to regulate their successful operations and functions. Copyright, patent/ intellectual property law must be carried so that it assists to focus on appropriate regulatory frameworks. Consumer protection and e-commerce are also considered in which employment law clearly discussed among different members. Health and safety law will be successfully implemented in the organisation so that employee protection can be developed in an appropriate manner (Hair Jr, Wolfinbarger and Page, 2015). Data protection act also followed so that privacy can be maintained at workplace.
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From the above report, it can be concluded that Aviva Plc considers its operations in a different perspective that assists to meet the desired level of results. With this regard, the report summarised the structure and governed it by the whole enterprise. It assists to focus on the development of the organisation that increase significant advantages with using tactics. Different committees also exist in the chosen enterprise that works to develop significant advantages at the workplace. For instance, risk, governance and audit committees. They all work together to solve issues and problems of the different customers to cater for their needs and requirements.
Moreover, the report articulated the different elements of the external environment that assist to meet with desired level of efficiency. It included political, economic, social, technological, environmental and legal factors that create a major impact on results and outcomes of insurance businesses. With the help of political stability, the chosen enterprise has the benefit to focus on effectiveness. It will increase significant advantages to operate functions in the insurance sector. Furthermore, the report summarised technological factors that advancing to perform functions in Aviva Plc.
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