HSBC Introduction

Hongkong and Shanghai Banking Corporation is a world leading banking and financial services

organisation. Its mission is to assist both private and business customers, to enhance economic

prosperity which eventually improves people’s living standards and community wellbeing. HSBC

operates in more than 80 locations serving 58 million customers. (HSBC Group, 2013). External

environment are the factors and forces outside the organisation which affect the organisation’s

performance (Robbins, Bergman, Stagg, Coulter, 2009). The business environment is comprised of

a set of relationships between agents or stakeholders in the environment – relationships that are

changed by individual decisions taken (Mason, 2007). As HSBC operates internationally, its external

environment is complex and due to the nature of the industry, the environment is turbulent and

instable. The specific environment is the external factors that directly impact on manager’s decisions

and relevant to the organisation. The general environment is the broader external factors that

influence an organisation, but less influential and direct than specific environment (Robbins et al.,

2009). To illustrate, macro factors are economic conditions and technological changes whereas

operating factors are unions and competitors. It is important for managers to realize and react to

these factors because they can be opportunities or threats to the organisation. Managers should

accept the fact that the world is rapidly changing and they have to work towards these changes as

there are direct impacts on their managerial roles.

External Environment Analysis

External environment refers to forces and institutions outside the organisation that can

potentially affect its performance (Robbins et al., 2009). A common method to scan the