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Intoductionto Contemporary Developments in Business and Management

Emergence of concrete jungle is the symbol of development and progress. These contemporary developments in businesses have helped people transform their imagination to realities. Buildings, bridges, highways, resource network systems like water lines, electricity grids, dams, tunnels, etc. are all constructed and maintained by constructional groups. Growing population means excessive demands for new habitats. On top of these requirements, application of technology is also necessary for organisations so that consumer expectations are not hindered. Hence, it is important that organisations must keep pace with external environment.

Critical consequences can be avoided if analytical approach to business environmental factors is cultivated.

The aim of this report is to give deep knowledge regarding influence of external business environment on the functioning of Balfour Beatty. It's strategies are regularly coordinated with realistic market conditions. The company is known for its infrastructural investments and efficient constructional designs in different parts of UK and US. This assessment will also focus on technological changes and its implications on this aspect on business and construction industry so that appropriate responses and improvements can be generated. The final section of this report will demonstrate areas of Balfour Beatty which require certain changes.


PESTEL analysis refers to the major components of external factors that affect functioning of an organisation (Seddon, Calvert and Yang, 2010). Basically, when a company's external business environment is to be analysed then PESTEL analysis tool is used. Balfour Beatty has been functioning since the year 1909. A large number of transformational changes took place during these many years both in external and internal environment of company.


Government that rules over a country is majorly responsible in defining the dynamics and internal structure of every company. The political factors are formed by actions and reactions of these ruling bodies. Balfour Beatty's economy is influenced by political activities of the government. There are certain parties that practise unfair activities for which private companies have to suffer. Economy is ruined when politics takes a brutal face. Corruption is the major factor that deteriorates the economic status of companies especially in the private sector (Naidoo, 2010). New tax laws or export import duties that are introduced by government are influenced by politics in the country. Fiscal policy is also a major component of political factors affecting a business environment externally.

Running with a motive to earn profits, Balfour Beatty has been leading as the top British multinational company in the field of construction. There are certain specialised services which are to be performed by company before building a foundation for new construction. These services require permission from government officials after they screen and test the validity and strength of materials to be used. Investments are influenced by political activities going in a country (Needle, 2010). If any sort of changes are made and introduced by ruling parties regarding employment laws and trade policies then, Balfour will face a difficulty in developing its strategies and tactics for completing a particular project.


Economy is vital for survival where Gross Domestic product is a figure that determines whether a country is developing or developed or even under developed. Classification of countries on the basis of their annual income is important for understanding its financial status in the world. Foreign trade policies and competition laws are certain examples that have been formulated according to the economic conditions of nations (Chittithaworn and et. al., 2011). Business environments are crucially affected by economic factors. Effects of these changes in economic policies often have a long term impact on the firms.

Balfour Beatty has to develop its working techniques by keeping appropriate margins for economic changes. Sudden rise in prices may often lead to increasing cost of projects. As a result, company has to gather more funds for successful completion. Inflation rates, interest rates, foreign exchange policies, foreign investments, recession factors, growth patterns, etc. are certain significant elements of economic factors influencing Balfour's external environment.


Constructions are made for the public use. Be it a private sector company or public sector organisation, their purpose is to serve citizens that are residing in the country. Buildings, bridges, parks, etc. are classified under constructions (Menguc, Auh and Ozanne, 2010). Government collects revenues from citizens in the form of various taxes that are applicable on using national facilities. A part of these revenues are utilised in the construction business. Social acceptance of every infrastructure that is made is essential. Use of different culture and beliefs in structural designs must be in accordance with the social demands of community.

Culture and heritage of a society and community are influenced by beliefs and behaviours of people residing there (Tompkins and et. al., 2010). Balfour has to keep in mind the taste, expectations and cultural preferences of people before opting or designing a project. Determinants that function in the social factors include market structure, cultural trends, population demands, tastes of consumers, etc. If these elements are not considered in activity planning of company then consequences would be harmful.


Growing scientific researches and developments have helped mankind to achieve comfort and facilities that were just imagination few decades ago. Innovation is essential for every business organisation to survive in such an intense competition (Ball, 2014). When blended with technology, innovation can become much more resourceful. Construction business depends largely on technology. For undisturbed business operations, technological factors must always be considered during strategic planning. Market feasibility and production cost are highly affected on the nature of technology used and implemented in the product. Strong economies are the ones that go hand in hand with technology. Their perception for success is a step ahead from current trends in the markets.

Skills and education level of employees should be appropriate to handle the technology appropriately (Harris and McCaffer, 2013). Often mishandling of equipment leads to disastrous outcomes. Balfour Beatty PLC has to meet certain conditions that are to be met before applying technology. Automation, more investment in research and developments, etc. are the determinants of technology. These not only help in producing the best outcomes but also improves reputation in the global markets. The functioning of company depends on awareness about latest technology and its applications.


Every human activity has some effects on the environment. Globalisation and industrialisation has led to various deteriorations in natural balance. Resource depletion, ozone reduction, etc. were the consequences of these activities (Kibert, 2016). Hence, governments major nations decided to implement certain laws which will reduce damaging activities of industries. Maintenance and care of surrounding environment is therefore essential. Particular industries like tourism, farming, agriculture, construction, chemical production, etc. have a great impact on the surroundings in which they operate.

Balfour's activities are regulated and monitored by government so that any sort of infrastructural changes that may harm environment can be detected. Weather conditions are crucial before taking any decision in construction business. Storms, tornadoes, floods, earthquakes or any other natural calamity that occurs during execution of a strategy form a part of environmental factors for a company. Dominant environmental factors are not in the control of organisation or government (Scarbrough and Corbett, 2013). Precautionary measures have to be planned in such a manner that no major loss would occur to labourers and people that reside at constructional site. Balfour group has to effectively choose working locations and make decisions accordingly so that less loss to economy is experienced during crisis times.


Internal and external business environment has to be guided by rules and regulations that are put forward by company and the ruling government. Legislations are passed so that certain level of discipline is maintained in the country (Bloom and et. al., 2014). In order to prohibit illegal activities or protect consumers from exploitations, rules are defined. Human resources are the drivers of a company. Generally, private sector organisation get engaged in certain activities which involve undeclared use of labour so that more profits can be earned. Exploitation of human resource can only be handled if government intervenes and monitors organisational activities (Ashworth and Hogg, 2014). Hence, legal factors have a great impact on organisational dynamics.

Balfour Beatty has to obey federal laws and changes that occur in these laws. Consumer Protection acts, labour laws, customer service policies, etc. are declared under the legal factors of external environment. Organisational structure has to be made according to the legal complications of a country. Infrastructures that are not in consonance of legislations of UK will be demolished or prohibited from further construction (Finkel, 2015). An analytical view must be obtained by Balfour Beatty before making strategies. This view must consult legislations and competitor activities so that no human rights or laws will be disrespected.


1. i) Relevance of technological changes and their influence

Science has been an inseparable part of every individual's life irrespective of their stream of learning and working. Every single human being is connected to science and technology in some way or the other. Changes are as constant as time. Technological advancements take place when scientists develop their working capacities and come up with new ideas. Construction is one such industry that has evolved immensely (Kelly, Male and Graham, 2014). Automation systems have helped businesses to complete complex structures. Balfour Beatty has to develop strategies every time a new technology is introduced in the global markets. Investments in research and developments helps companies gather more profits because the rights are reserved by company for using particularly developed technology.

There are certain specialised activities that are conducted by construction businesses. Aforementioned activities can only be carried with help of equipments and devices that use information and technology for performing certain tasks. Day to day operations are easily executed with help science and technology (Handmer and Dovers, 2013). Computers, internet and their accessibility have helped businesses to acquire more information related to specific tasks. 3-D modelling and virtual architecture help designers that are hired by construction companies to visualise the project on computer screens. This not only helps in better practical applications but also detects flaws or loopholes in the proposed structure (About Us, 2017). Citizens do not have to suffer any sort of losses due to wrong constructional design.

Intelligence when combined with smartness helps in performing actions with greater ease and comfort. Smart building structures is one such aspect that has changed with scientific developments. BAS or building automation system is one such structure that monitors complete functioning that is related to a building (McCabe, 2014). It helps in conserving energy by gathering all information at one place or centre point. Efficiency has increased with technical advancements and business organisations require less human resource to operate huge tasks. The perseverance of construction as a labour oriented industry has changed. Less labour can execute good quality and quantity of work in short period of time.

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Technological change definitely influences policies and decision making of Balfour Beatty. Highly advanced equipments require highly skilled labourers and employees to operate them. Hence, education level is the first consideration for any organisation before it recruits a candidate. Balfour Beatty being a multinational has to look after complex network solutions. Since, its operational areas are UK and US; the responsibility of giving high quality services increases. The company has to keep pace with technology because developed nations have greater access to technology. Recruitment policies are improvised when technological changes are introduced in the company (Forcada and et. al., 2013).

Balfour Beatty has to implement certain technology in its organisational structure. Training and development programmes becomes growing need when these are implemented. The reason behind sudden need of training is that employees are the one who will use this technology to complete specific projects (Fulford and Standing, 2014). If they are not taught about basic operation then, expected results won't be obtained. Moreover, productivity of the company will decrease rapidly. Hence, strategies have to be changed and recreated so that technology doesn't become a curse for the company (Aziz and Hafez, 2013). There are some more influences that technological changes have on policies and decision making of Balfour Beatty:

Valuable production is achieved. Customers are attracted towards advancing technology. When these are used in constructing projects or buildings, then more clients would like to work with the company. Balfour Beatty can acquire greater market share in this sector. Hence, decisions regarding business expansions are influenced.

Being the primary external factor that influences business environments, changes with rapid technical progress means more investment for purchasing high tech equipments. This requires acquisition of capital either through government support or through increasing selling prices. This will incur more revenues from clients, which can be invested in research and development projects.

1. ii) Effectiveness of organisation's response

Balfour Beatty was introduced to major technical advancements during the on set of 21srt century. Computers and automation have helped construction industry to flourish internationally (Groff, 2015). It was highly difficult to develop pathways and highways in hilly areas or were terrain was not even. Certain equipments and diamond cutters helped in solving this problem. Tunnels were made from inside cliffs and mountains. Small villages and big cities were connected through transportation networks. Railways, roadways and airways developed rapidly. Living standards of individuals changed. People wanted more comfort and less pain in performing their daily tasks. Hence, technology has played a vital role in a person's life. Organisational response to this development has been positive.

Balfour Beatty group was highly dependent on daily wage labourers. Technology helped them reduce their dependency on human resource. Major contribution to this advantage was from the automation industry. CAD systems are helpful in designing a layout for prosed design. From manufacturing to production; complete operations chain was transformed (Ball, 2014). Blueprints that were usually manually designed are not digitally framed and organised. It becomes more accessible to designers and company executives. Moreover, loss of information to competitors is not faced when technological implications are mentioned. Effectiveness of Balfour Beatty's responses to technological changes can be clearly understood from following facts (Chaffe, 2016):

1.Internet and its applications

Internet has definitely helped organisation to gain better information management. Technical growth is not only useful in progress of the company but also helps in adding values to production of services and products. Better customer relations are developed due to global access through internet. This response to technological change has been greatly effective in long run for Balfour Beatty.

2.Construction management software

Managing tasks at national level is not easy. Budgets, bills and time all have to be handled crucially. Company has adopted well to construction management software that tackle all these processes efficiently.

3.Computer Aided Design

Before taking initial steps in construction, CAD or computer aided design helps in hosting possible issues that can occur during execution of action plan. The company was able to evaluate better designs and create remarkable structure with technological support (Fulford and Standing, 2014).


Drones were recently introduced in the past decade. They gathered a lot of publicity and favouritism from consumers because of its compact design and easy adaptability. Balfour Beatty were relived up to a great extent with launch of this technical device. The functions and operations of surveillance, mapping and evaluating specific constructional areas is performed easily through this device. Company can easily monitor activities at any point of time and heigh with help of this supportive equipment.

5.Health and safety

Company's adaptability to technical products have ensured greater health and safety standards of employees. Casualties have declined. Unlike earlier times, it was difficult for workers to carry heavy slabs of concrete and marbles from one place to another. Transportation, cranes and other supporting equipments have helped solve these problems (McCabe, 2014).

Moreover, awareness in industries regarding safety measures and regulations also ensure health benefits of workers and employees.

These technological changes and advancements along have been positively adopted in the dynamics of organisation. Response to such changes have been gathered but every step that business organisations take have certain impact. The effectiveness of this impact is understood only when functioning of the company is hindered.

1. iii) Areas for improvement in response of company

Country's development totally depends on the development of its citizens and economic contributors. Construction is one such industry that signifies large scale development by giving habitation facilities to people (Finkel, 2015). Manufacturing and up-gradation both go hand in hand. Several equipments and digital devices help mankind in executing particular task with least number of errors. Balfour Beatty has been experiencing various technological changes in its functioning styles (About Us, 2017). The company has bought various equipments and software that help in managing constructional activities. The company focuses on details which assures exemplary output. As discussed earlier, there are certain complicated effects which are faced by an organisation and its related industry when certain changes are introduced. These are described below:

  • Lack of skills and efficiency in existing human resource of the company
  • Disruptions caused to natural environment
  • Implementation and maintenance costs are to be recovered.

These areas can be improvised and utilised for collective growth of organisation as well as operational country. Human resource management techniques must be scaled and strategically implemented to get increased productivity levels. Skills and knowledge can only be enhanced when trainings or learning sessions are involved. Apart from induction trainings, it is an essential duty of organisation to provide regular trainings. This improves comfort levels of employees. Usability of technology increases when required skills are learnt and imparted. Hence, it is essential for Balfour Beatty to improve its labour force management to get uninterrupted progress.

The biggest impact of any sort of organisational change in construction industry if faced by environment. Natural surroundings are depleted in search of resources and sustainability options decrease as a result (Tompkins and et. al., 2010). The principles of sustainable development include looking after environment, people and profits all together. There are certain limits up to which resources can be drained. If this limit is crossed then ecological balance is disturbed. After satisfying needs and demands of employees, strategies must be developed in such a manner that natural ecology is not damaged. Technological changes must be included but with precautionary measures and a set up that will help in contributing to sustainable business (Bloom and et. al., 2014). Environmental laws and conservation policies must always be kept in mind before commencing any project. CAD is a tool that helps in analysing these facts. With help of such tools a premature design can be prepared that will give Balfour Beatty an idea regarding impact of proposed design.

Profits earning motives help in acquiring great business positions in international markets. There are various digital platforms and techniques that determine budgets and billing processes which will be required for future plans (Ashworth and Hogg, 2014). These can be used for improving profit approaches of the company. Investments are made with an objective to receive appropriate returns. Despite of using high tech supplies a project doesn't help in incurring all expenses, this means that proper budgeting was not performed. This can only be resolved if finance department of company is managed and effective (Ball, 2014). As every technical change requires certain investment and regular maintenance for long term benefits, costing and pricing strategies must be correctly designed.

Response to internet and its application by Balfour Beatty was quite positive. From clients to employees all were easily connected by emails and social networking platforms. Moreover, professional communication got a different perspective after technology progressed (Scarbrough and Corbett, 2013). This transformation definitely helps in stepping ahead of competition but effective management skills must be utilised so that sustainability in markets is maintained.


Ruling government organisations are responsible for major developments and deteriorations in a country. Their actions and decisions majorly affect business organisations and their environment. Balfour Beatty has been affected by certain policies and reforms which include labour laws, consumer protection laws, trade restrictions, social and cultural complications and certain environmental factors. These legislations are constituted in external influential factors that affect Balfour Beatty, in the above assessment. Major aim of the report was to get an understanding of business functioning when certain factors are introduces. Companies face certain effects when changes are introduced in their organisational structure. Here, technological changes are discussed. When equipments and computerised software are introduced for performing certain tasks then, less time is consumed for execution. Employees gain valuable skills with help of technological developments and this helps in reducing human errors.

Transitions from traditional working systems to automated ones causes a lot of changes in company dynamics. The adaptability of these changes defines organisation's response. There are certain areas which can be improved for gaining better response of organisation. These are human resource, sustainable development and budgeting departments. Although technology brings in a lot of support and progress when correctly implied, there are chances that misuse of this technology will lead to closure of the company. Recommendations that are mentioned at last can be imbibed by Balfour Beatty to improve its response.


  • Ashworth, A. and Hogg, K., 2014. Added value in design and construction. Routledge.
  • Aziz, R. F. and Hafez, S. M., 2013. Applying lean thinking in construction and performance improvement. Alexandria Engineering Journal. 52(4). pp.679-695.
  • Ball, M., 2014. Rebuilding Construction (Routledge Revivals): Economic Change in the British Construction Industry. Routledge.
  • Bloom, N. and et. al., 2014. The distinct effects of information technology and communication technology on firm organization. Management Science. 60(12). pp.2859-2885.
  • Chittithaworn, C. and et. al., 2011. Factors affecting business success of small amp; medium enterprises (SMEs) in Thailand. Asian Social Science. 7(5). p.180.
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