Reviewing Corporate Social Responsibility Commerce Essay


The business organisational success and long term stability manly depend on the way of managing it primary external and internal influences. To manage that influences first of all organisation should identify, measure and react for those factors in proper way. The organisation can used several analytical techniques for identifying and measuring it influences, including SWOT, PEST, and Michel Porter 5 Forces etc...However modern corporate world if any business organisations want to continue their compatitevnas and market stability they should integrations with new business strategies , for example innovation, corporate social responsibility etc...The first task of this report I will briefly explaining organisational external and internal influences as well as illustrate and analysed the UK based Lloyds Banking Group PLC external and internal influences through SWOT and PEST analytical tools. Furthermore second task of this report illustrate how Lloyds Banking Group intergrated with corporate social responsibility concept.

Task 1


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Recently, there has been considerable discussion of the organisation primary internal and external influences which known as key facts in organisational function area how effect to the organisational success and long term stability. The organisation internal influences are controllable variables. However organisation external influences are uncontrollable variables, which are capable directly or indirectly impact of the many activates in organisation. If the organisation able to identify or mature impact of their business environmental internal and external influences in right way they can achieved toward to their objectives and goals. (Robson /1997) (Quick MBA, Strategic Management / 22-01-10). The modern businesses are using several important tools for mature or analyse their internal and external influences. The most popular and effective businesses environmental analyse or mature tools are SWOT and PEST. In this report, I will assess and evaluate the UK based Lloyds Banking Group plc internal and external factor by using SWOT and PEST analyses, as well as critically analyse and demonstrate their corporate social responsible (CSR) activates in market .

SWOT analyses

SWOT analyse is tool that can be mature and identifies the organisational strength, weakness (internal influences) as well as opportunity and threats (external influences). There are number of reasons behind that business use SWOT analyses in more frequently , such as identifies organisation and its competitors' s weakness and strong areas and it will be indicate future business opportunity and possible threats which are facing in existing market. According to Wendy Robson SWOT can define as "reminder of the need for balance and attempt to judge the options available". (Robson /1997).

PEST analyses

PEST/STEP stands for social, technological, economic and political variables. It is very important tool which organisation can mature their external (uncontrollable) influences. Such as their market influences. In addition to that it recently been further extend to STEEPLE/STEEPLED. Because of modern business much prefer to adding education and demographic factors to that analyses. (Quick MBA / 22-01-10) (Answers. com / 27-05-10).

About Lloyds Banking Group plc

The Lloyds Banking Group plc is the currently UK based biggest retail banking and financial services group, which offering a wide range of banking and financial services in the UK and more than 30 other countries through number of well recognised brands which including Lloyds TSB, Halifax, Bank of Scotland , Scottish Widows , Clerical Medical and Cheltenham & Gloucester. Furthermore it has approximately 145000 employee based in all over the world. (Lloyds Banking Group Annual Report / 2009). (DATAMONITOR/ 13-05-2008).

The SWOT analyse in Lloyds Banking Group plc.


Strong and wider presence in UK

Lloyds Banking Group has approximately 3000 branches with nearly 145000 staff based. In addition to that it has a strong asset base and a well stable network for their operational locations. Furthermore they have had highly qualified pool of UK expertises and other nations. (DATAMONITOR/ 13-05-2008) (LSE / 27-05-2010).

Strong product portfolio

The Lloyds Banking Group plc offer wider range of financial and non financial services. For instance wealth managements, retail banking, insurance and investment with current account, internet banking Etc... (See appendix 1.1) (DATAMONITOR/ 13-05-2008).

Enhanced productivity and efficiency

Before starting global economic crises they were constantly improved productivity and efficiency. For instance in 2005 they have 69778 employee based. However in 2006 they reduced head count of their employee to 6200. As same as they were improve their cost to income ratio witch 50.8% in 2006 from 52.8 in 2005. Moreover during economic crises time also there were able to manage their business in sufficiently. For example during crises time they were acquiesced Halifax banking group. (DATAMONITOR/ 13-05-2008) (LSE / 27-05-2010).


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Decline net interest margins

According to research so far I had done Lloyds TSB had a problem of it net interest margin. Because of last few years they were decline their net interest margin very significantly. For example £5671 million in 2005 to £5537 million in 2006. The decline of their net profit margined badly impact for their profitability. (DATAMONITOR/ 13-05-2008).

Inefficient lending strategy and weak performance of the insurance and investment segment

According to DATAMONITOR journal report last few years Lloyds TSB lost significant amount of money as a result of inefficient lending and weak investment decision. Such as in fiscal year of 2006 there were losses on loans and advances increased significant percentage, which calculate as nearly 20% of lone and advance payment. It money valued show £1,555 million. On the top of that in same year their insurance and investment declined by 25.7% in compare to year 2005. The DATAMONITOR research journal report show in 2006 there were decline their profit before tax 6.2% in compare to 2005. Which can mature as value of money £1383 million in 2006 from £1474 million in 2005. (DATAMONITOR/ 13-05-2008).


Launch of Islamic banking

The Lloyds TSB Group plc identified they can gain such large advantage of gap in between Islamic banking sector in UK market. Because of in 2006 when they start Islamic banking which are fallow shariah,( the legal code of Islam) only three banking services provider in UK market . However at that time the UK Muslim population approximately 2 million. So new entry able to caught big market share in such a short time . (DATAMONITOR/ 13-05-2008) (See appendix 1.2).

Ability to rice assets management market

The Lloyds TSB Group plc was able to provide higher level of assets management services through their insurance and investment sector. Because of asset management and custody banks industry had $49157 billion worth asset in 2005. Moreover according to their assumptions that asset worth will increase nearly $ 68, 210.3 billion in 2010. So as a leading and well recognize financial services provider, Lloyds TSB could contribute to very significantly way to world asset industry. (DATAMONITOR/ 13-05-2008).

The emerging off- shoring (out sourcing) trend

As many other organisations Lloyds TSB also has been attempting to out sourcing program of back office work in India in 2004. That diction gain advantage of not only cost efficiencies but also that oversees locations presents major advantage for them to improve their operating margins. (DATAMONITOR/ 13-05-2008)


Increase in online frauds

The rapid increase of online banking frauds manly cause to make frustration situation to banking sector. It directly affects all banking sector. The association of payment clearing services (APACS) stated that "online banking frauds has increased 16 times to 5059 in the first half of fiscal 2006" (DATAMONITOR/ 13-05-2008). (See appendix 1.3).

High interest rate regime

The last few years central bank were forced to increase interest rate as a part of controlling inflation. However according to DATAMONITER research report that desiccation badly influence for retail banking industry. Because of it reason to discouraged credit card, business expansions and purchases borrowing. So that reason was man cause to current Lloyds TSB credit services down demand. (DATAMONITOR/ 13-05-2008)

The PEST (STEEPLE/STEEPLED) analyse in Lloyds Banking Group PLC.

Political factors

The definition of political factors are government regulations, legal issues and both formal and informal rules under which the firm must operate. Such as tax policy, employment low, environment regulations ... etc. (Quick MBA/ 22-01-10)

However as a leading financial institution Lloyds Banking Group must fallow their operation existing countries rules and regulations in right way. As an organisation they have very flexible political view. Moreover as a multinational business there are ready to adopt different political views and situation according to their business prospective. (See appendix 2.1)

Economical factors

It can define as "the purchasing power of potential customers and the firms cost of capital in the macro economy" (Quick MBA / 22-01-10). It includes economic growth, interest rate, exchange rates etc... As an active business organisation Lloyds Banking Group able to manage their business activity and organisation stability in different economical situation. For instant resent global economical crises time (2008/2009) they were able to keep their company stability and acquire Halifax Banking Group despite of as some of other organisation became bankrupt. For example American based Lehman's Brothers financial bank. (DATAMONITOR/ 13-05-2008)

Social and Demographical factors

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The social factors can define as "the demographic and cultural aspects of the external microenvironment. Such as the factors affect customer needs and the size of potential markets" (Quick MBA/ 22-01-10). For instant influencing factors are people life trends buying patterns, demographics, people cultural views, believes and norms etc...As a multinational organisation Lloyds Banking group understand and act right way for above mansions factors. Because I said that it can identify through how they located their branches, their employees recruitment policy as well as their all operation. For example Lloyds TSB has offer flexible work option to it all staff. The main reason behind that decision was provide ability minimise their employees social responsible pressure. (The Times 100/02-06-2010).

Technological factor

Technological factors can define as "factors can lower barriers to entry, reduce minimum efficient productions levels and influence outsourcing decisions" (Quick MBA /22-01-10). Some of technological factors which are include R&D activity, automation, technology incentives etc... The technology is one of most important and necessary area of modern business. Because of it is main survival factor of today business. Without sufficient level of technological influences business cannot retain in existing market. The Lloyds banking group is in highly competitive business sector. If they want to achieve their main objective which is "being recognised as the best financial services company in the UK", (Lloyds Banking Group annual report 2009) they must bite other competitors in market. Therefore they should used technology (Information system/Information Technology) very effectually and efficiently. Today there are using very advanced technological systems and infrastructures for their operations. It allows gaining maximum services for their customers and gaining much better advantage as a business. For instant they were became first bank in UK to offer a range of banking services allowing customers to monitor and manage their money through mobile phones. (Web Wire /02-06-10).

Task 2

The Business Corporate Social responsibility (CSR)

The concept of CSR appeared beginning of the 20th century, in the US. It was result of conflict of big corporations and general public. The meaning of CSR is "a corporation should be held accountable for any of it action that affect people, their communities, and their environment" (Lawrence, Weber /2008). According to the Commission of the Europe Communities, CSR is "companies integrate social and environmental concerns into their business operations and interactions with their stakeholders on a voluntary basis" (CEC/2001 cited by Perrini /19-01-2006). During last five decades this concept was change it focuses many time. However today vast majority of well known business organisations are accepts and activate concept of CSR in corporate world. Because of they know through that they were able to increase their stakeholders' trust and build a good reputation in the existing market and provide opportunity to long term improvement. (Brammer , Pavelin/2004 cited by Perrini / 19-01-2006). Moreover according to Bowman firms would like to engage with CSR concept for reduce potential business risk, such as government regulation, labour unrest or environmental damage. (Bowman/1980 cited by Cruz /08-08-2007).

Reason for chosen Lloyds Banking Group plc

The Lloyds Banking Group is the current biggest banking group in UK. Furthermore CSR directly influences for their policies and decisions making in business sector. They were illustrate it through their CSR definition as fallows, "in the market that is now generally covered by the term CSR we believe that we are a leader", "being UK's number one corporate giver" (doing good), "having award winning policies in the fields of employee relations" (being good), "leading innovation in the management of change and environmental risk" (Lloyds annual report/ 2003 cited by Caupland /18-10-2005). This report will briefly analyse and illustrate how CSR concept engages with Lloyds Banking Group policies and decision making poses as well as activate with general organisation activates.

Corporate social Responsibility in Lloyds Banking Group PLC

Lloyds Banking Group main business objective which is "to be recognized as the best financial services company in the UK by customers, colleagues and shareholders" (Lloyds Banking Group annual report 2009) the base of their CSR program. According to their 2009 annual corporate responsibility report they were divide their CSR program in several sub topics, such as embedding corporate responsibility across the group , our stakeholders, our people etc...

Embedding corporate responsibility across the group

As a responsible business they are consider individual corporate responsibility issues right through the years. They were established new corporate responsibility management group, whose are including some seiner executives from across the all over the organisation. The chair of that group is Angie Risley, Group HR Director. That group meeting is holding regular basis to review their CSR strategy, monitor progress and evaluate result of their CSR activates. (Lloyds banking group annual report/ 2009). Most of their CSR activates ongoing their business deviations. That activates lead by number of group senior managers whose are active as CSR championess, as well as they are the key responsible holding persons for organisation CSR activates. Furthermore Lloyds Banking Group top management levels are showing true executive commitment to corporate responsibility. For instant

Chairman, Sir Victor Blank, is an advisor to the Oxford Environmental Change Institute.

Eric Daniels, Group Chief Executive, is a trustee of Career Academies UK. (See Appendix 3.1) (Corporate Responsibility Report /2007).

Supporting business strategy

According to Lloyds Banking Group corporate responsibility annual report 2009, their business strategy is "building deep, long-lasting relationships with our customers in order to deliver high quality, sustainable results over time" (Lloyds banking group annual report/ 2009). On the other hand they believed their CSR activity reasons to build staff motivation, customer satisfaction and brand loyalty. As a result of their business strategy Lloyds banking group was rated "the sixth safest bank in the world by Global Finance and awarded the Reader's Digest readers' most trusted UK bank or building society for the eighth year running". (Lloyds banking group annual report/ 2009). In addition to that in 2009 report they were stated their community investment not only create economic value but also increase positive social contributions to. So in 2008 across their foundation nearly £37 million was distributed to local charities. (Lloyds banking group annual report/ 2009). Basically their CSR strategy is to support delivery of its business strategy by contributing to:

increased colleague engagement

increased customer satisfaction

More effective risk management (Lloyds banking group annual report and accounts/ 2008)

Lloyds Banking Group stakeholders

They defined their stakeholders as "those who are impacted significantly by the business or who might impact on it" (Lloyds banking group annual report/ 2009). Basically their stakeholders are their customers, shareholders, suppliers, employees and society and environment which their operation is held.

Our people (the staff of Lloyds Banking Group)

As business they are expect to billed deep and lasting relationship with their customers through attempt of their people(their staff). According to 2009 annual report they are identified and understand their colleagues are most valuable resource as well as managing that resource effectively is the fundamental tool to the success of the business and batter way to achieve their objectives. So for achieving their main objectives they identified they must create great place to work for their colleagues and they should attract and retain talented and high performing people in business. According to 2009 company annual report Lloyds banking group conduct several systems (courses) through organisation for building a high commitment, high performance organization. (Lloyds banking group annual report/ 2009). Those systems are

College engagement

They believe that to create a high commitment, high performance business, they need high level of staff commitment. So group using highly confidential online serve to gain information about their staff commitment level across organization. It measure employee satisfaction has a significant positive impact on employee retention, retained knowledge and experience ,consequent customer service levels, As well as that motivated, enthusiastic employees directly influence customer perceptions and their experience of dealing with Lloyds TSB. In 2009 they were gate highest response rate so far witch show as 81% in overall company. (Lloyds banking group annual report/ 2009)

Talent , recruitment and retention

The company always gives higher priority to recruiting, retaining and developing higher talent people as an employee. So during 2009 they were full fill 2 different programs, know as organizational capability review and graduate leadership which create to gain and retention talent people to the organization. (Lloyds banking group annual report/ 2009).

Performance Management, Leadership and Management capabilities.

The company conducts higher level of performance appraisal program twice time in each year and given regular feedback to the staff. It helps to evaluate their employee skill level and identified weakness. In addition to that as a business Lloyds Group always provide opportunity to improve their employee leadership and management skills. Because of it not only provide competitive advantage for but also provide greater advantage per society as well. (Lloyds banking group annual report/ 2009).

Diversity and Inclusion.

In a difficult economical period Lloyds banking group were believe their success depend on "building strong and enduring relationships with diverse groups - colleagues, customers and suppliers" (Lloyds banking group annual report/ 2009).

According to their report they are one of the best diversity employers in UK. For instant According to FTSE 100 their executive management team has one of the highest female representations within three female directors. Furthermore according to stone wall's 2009 index they're the best UK employers for lesbian, gay and bisexual (LGB) people as well as in 2009 Lloyds Group were name by the charity Working Families as one of the UK's Top 20 Employers for working parents. (Lloyds banking group annual report/ 2009) (See appendix 3.2)

Lloyds Banking Group customers

As a responsible organisation Lloyds Banking Group have had solid and highly trusted relationship with their customers. It illustrate by the winning awards in 2009 as a financial company, for example Lloyds TSB was voted the most trusted brand by Reader's Digest readers in 2009 as same as they came 1st in the super brands retail bank sector survey(Lloyds banking group annual report/ 2009). Lloyds banking group are provide number of support services for their customers except their main objectives. It main targets are provide extra help and protection for their customers. In 2009 report they were divided above mention services for several tasks. Such as

Playing our (company) part in the UK's economic recovery

Responsible lending and advice

Helping customers manage their barrowing

Protect our customers against financial crime. (Lloyds banking group annual report/ 2009) (See appendix 3.3)

Lloyds Banking Group Suppliers

I n 2009 annual report they were stated their suppliers are important for company. As well as group want to ensure they treat them fairly and pay them on time. In 2009 they were signed new contract with their suppliers which are show their "commit to pay suppliers on time and not change the payment terms agreed at the outset of the contract" ( Lloyds banking group annual report/ 2009). However bank is considering range of factors before selecting it suppliers. Such as their social, ethical and environmental proof of ability. That action taken to by ensures their commitment to corporate responsibility approach in the supply chain. (Lloyds banking group annual report/ 2009) .

Lloyds Banking Group communities

As a leading business they want to contribute their effort for improve well being and life condition of nations. So they are conducting several community services and raising fund for charities across the country. For instant during June 2008- December 2009 they collect £2 million fund for British Heart Foundation (BHF). Those funds are already being used for give support over8400 heart patios across the UK. On the other hand became official banking and insurances partner of the London 2012 Olympic and Paralympics games, gain extra motivation and opportunity for become active ethical and social organization (Beard /04-01-2007). In 2009 corporate responsible report they were illustrate their vision as official partner of Olympic Games as fallows "To inspire and support young people, communities and businesses all over Britain on their journey to London 2012 and beyond" (Lloyds banking group annual report/ 2009). As example they are provide funding for more than emerging young athletes across the country through their local heroes programme.

Lloyds Banking Group Environmental Agenda.

As an organisation they have long -term commitment to managing environmental factors. They were introduced their environmental police in 1996. Furthermore Lloyds Banking Group fully committed to UK government environmental policy. They understand that climate change is the greatest long-term challenge facing world today. Measures to tackle climate change will have potential implication for regulation, taxation and public policy will carry both risks and opportunities for companies and the public. As a company they announced a target to reduce their carbon emission by 30% by 2012 based on 2002 levels. (Corporate Responsibility Report /2007) (CSR EUROPE/09-05-2007). For gain extra help to achieve their carbon reduction target they were introduced new policies and procedures, it can taking to account newly introduced common travel policy in 2009, reduced 143000 journeys compare to 2008 and increase volume of teleconferences over 1.1 million. As same as they are "continue to promote virtual conferencing technologies to employee as an environmentally friendly, cost efficient alternative to travelling". (Lloyds banking group annual report/ 2009). Moreover they were published statement which was "An environmental fund and an ethical fund are available for clients who prefer an approach that excludes investment in companies in certain business areas." (Lloyds banking group annual report 2003/ cited by Coupland ./18-10-2005) for motivate environment friendly investment.


The businesses have many responsibilities. Manly those can divided to three sub topics. Including economical, legal and social. The main duty for management is the full fill those responsibilities without misleading their own business strategic target and goals. Above of report I mention how business organisation identifying and measuring their internal and external environment factors which are significantly impact for their objectives and responsibilities. For illustrate above things I used Lloyds banking Group as an example in first task. Moreover in second task I briefly explain and evaluate the Lloyds Banking Group how intergrated with CSR for full fill their social responsibility as well as how they used it for achieving their business long time and short time goals and targets.


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