Contemporary Developments in Business Management

This report will feature in this task an organisation from Section Q (Human health and social work activities). It will feature an NGO organisation in Oxfam and how the external business environment factors impact the organization. “Whether it’s an international bank, university or a multinational motor manufacturer no organisation exists within a vacuum, there will be competitors, be subject to international, national and local government regulations, pollution regulations, technology changes and fortunes of the global economy” (Brooks et al 2011).

Oxfam logo (Oxfam International, 2018)“The name Oxfam comes from the Oxford committee for Famine Relief founded in Britain in 1942.” Oxfam International was founded in 1995 by a group of NGOs (Non-Governmental-Organisations) with an aim of reducing poverty and injustice on an international stage. The group campaigned for food supplies to be sent through an allied naval blockade to starving women and children in enemy-occupied Greece during the Second World War. Oxfam has become the world’s leading relief delivery institution also helps vulnerable communities develop, end unfair trade rules, demand global health and education services for all as well as combating climate change. Oxfam is Global and operates in Africa, North & South America, Australia, Asia and Europe (Oxfam International, 2018).

Impact of External Influences on Oxfam

As a multinational corporation Oxfam have been able to freely operate across many borders, enter into join ventures with corporations and serve society. All of this is due to improved transport, connections and communication as a result of globalization (‘the narrowing of international borders to allow corporations to operate under a single umbrella as a global village’) (Guy, 2007). Oxfam however still have to comply with the politics and economics of international business. Oxfam operating in Kenya would have to comply with political and economic forces that may affect their operations. A Pestle analysis is a good tool to analyze Oxfam’s external environment and also analyse strengths, weaknesses, opportunities and threats that may present themselves in the form of the overall environment of the NGO.

PESTLE Analysis Oxfam Kenya

In a country Like Kenya and the African continent in general poverty is rampant, thus increasing the need for social and international aid. Oxfam would have to be aware of the external PESTLE (Political, Economic, Social, Technological, Legal and Environmental) forces that may affect their organization.

Political & Legal

Oxfam would need to be observant of Government regulations such as environmental pollution regulations i.e. (plastic bags and bottles) and preservation of Natural resources i.e. (rivers and lakes). In order to provide humanitarian services to those in need, Oxfam would have to comply with business regulations in Kenya and East Africa as well as taxation laws, import and exports laws while dealing with sponsors and government intervention during natural disasters e.g. earthquakes and floods. Oxfam would also need to comply with the fiscal benefits demanded by the government as well as annual NGO reports of operations that need to be submitted to the government (Oxfam International, 2018). Political and legal factors are likely to affect Oxfam in terms of weaknesses, strengths, opportunities as well as threats to the way Oxfam operate.

Economical

Kenya has the largest economy in East Africa and is undergoing rapid urbanization, however 17 million Kenyans are suffering from poverty and living in non-urban areas. Oxfam are looking to provide aid to these people but some economic issues to consider would be; recession which affects NGOs more than profit making firms i.e.(fuel and food costs) which would slow down operations with sponsors in order to deliver necessary aid to those in need (Oxfam International, 2018). Economic factors may affect Oxfam in terms of strengths, opportunities and threats.

Social

Social factors would really be contracts with sponsors, partners and donors e.g. which individuals and organisations would be willing to join the cause of Oxfam in the particular region and help them provide aid to the needy (Gromel, 2011). Social factors are likely to play into Oxfam’s strengths and present more opportunities.

Technological

Changing opportunities and earlier mentioned urbanization and globalization can only help increase the reach of Oxfam in Kenya and Africa in order to be able to reach a wider audience in order to be able to help those in need e.g. social media platforms used to generate awareness of issues that need to be addressed i.e. hunger, famine and gender equality (Gromel, 2011). Use of tracking systems of supplies and food and vehicles to be able to deliver and help communities in need. These are some of the ways technology can aid Oxfam in their mission (Oxfam International, 2018). Technological factors are likely to benefit Oxfam in terms of strengths as well present more opportunities.

Environmental

Environmental issues that may have an impact on Oxfam would be environmental regulations that have to be followed i.e. regulations against emitting harmful gases, chemicals or substances into the o-zone and conservation of trees, forests and wildlife. As well as natural disasters that may generate an opportunity for aid but at the same time leave a lot of people in suffering. Other environmental influences maybe competitors competing for sponsors in order to launch initiatives to benefit the eco-system e.g. Red Cross and UNICEF (Oxfam International, 2018). Environmental factors are likely to generate opportunities as well as threats for Oxfam.

Porters Five Forces Model (Oxfam)

Five Forces Model (Soul High, 2012)

Expanding from the pestle framework, the above porters framework looks at the five forces affecting NGO’s and this can be applied to Oxfam in the following ways:

Power of suppliers - in the case of NGO’s suppliers are donors and can also be customers, they hold a big impact in ensuring the mission and resources of Oxfam are achieved. Suppliers not only help in delivery of goods but also necessary services needed from professionals i.e. doctors, sponsors, volunteers, farmers and teachers.

Power of large costumers - The power of large costumers’ maybe corporate funders and other donor organisation. They are very important as they influence the adaptation of a company’s model i.e. schools management that may require aid for the students and rely on Oxfam to do a good job or a displaced community looking for aid. Donor customers work hand in hand with the NGO to provide necessary resources such as food, clothing and shelter.

Level of rivalry in the market - This maybe other NGO’s working to provide the same services as Oxfam e.g. Unicef, Red Cross, United Nations children’s fund etc. The rivalry among NGO’s is usually respectful as NGO’s work in different territories to provide aid where it is scarce and will not intrude on rival territories.

Threat of potential entrants to the market - The barriers to entry into the non-profit sector are really low due to lack of profit and new entrants would need large donations, so this isn’t really a large threat for established NGO’s like Oxfam.

Threat of Substitutes - The threat of substitutes for NGO’s which is product and service based i.e. (food and health services) may be Water Aid, Doctors without borders, food for the hunger, free education. In the words substitutes may come from the government or other NGO’s and this could be a substantial threat to Oxfam in certain areas.

Conclusion

This task offered an in depth look at the external environmental forces affecting Oxfam, as a Non-profit organisation and how some of these forces may play into Oxfam’s favour and how others maybe a disadvantage to Oxfam However it is necessary to analyze such forces in order for Oxfam to be able to deliver their services effectively and develop new programs in the process. Models/theories used in this task include the porter’s five forces theory and the Pestle analysis.