Dubai Islamic Bank Business Environment

BUSINESS AND THE BUSINESS ENVIRONMENT

[Name of the Student]

[Name of the Institution]

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 Dubai Islamic Bank Business Environment

Executive Summary

The purpose of creating this report is to provide a thorough understanding and knowledge of the
selected business and its functions performed in varied business environments. It is important to focus
on different types of organisations, to comprehend their size and scopes; to understand their way of
operating. This will help in exploring the broader range of relationships and opportunities available
among the organisations studying the impact and influence of the external environment.

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 Dubai Islamic Bank Business Environment

Table of Contents
Introduction.................................................................................................................................................1
LO1:.............................................................................................................................................................1
P1: Different types and purposes ...........................................................................................................1
P2: Size and scope...................................................................................................................................3
M1: Structure, size and scope of organisations link with business objectives.........................................4
Organisational size and its link with business objectives ....................................................................4
Organisational scope of Dubai Islamic Bank and link with business objectives...................................5
The organisational structure of Dubai Islamic Bank and link with business objectives .......................5
LO2..............................................................................................................................................................7
P3: Organisational functions and their linkage with objectives and structure.........................................7
M2: Advantages and disadvantages........................................................................................................8
Advantages..........................................................................................................................................8
Disadvantages......................................................................................................................................8
LO1 and LO2................................................................................................................................................9
D1: Critical analysis of the complexities in business structures...............................................................9
LO3:...........................................................................................................................................................10
P4: Positive and negative impacts of macro environment.....................................................................10
M3: PESTLE model ................................................................................................................................11
LO4:...........................................................................................................................................................13
P5: Strengths and weaknesses...............................................................................................................13
P6: Strengths/ weaknesses interrelationship with external macro factors...........................................14
M4: Apply SWOT analysis .....................................................................................................................14
D2: Impacts of macro and micro factors on business objectives and decision-making.........................16
Conclusion.................................................................................................................................................17
Reference List............................................................................................................................................18
Appendices................................................................................................................................................21
Appendix 1.............................................................................................................................................21
Appendix 2.............................................................................................................................................22
Introduction.................................................................................................................................................1
LO1:.............................................................................................................................................................2

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 Dubai Islamic Bank Business Environment

P1: Different types and purposes............................................................................................................2

P2: Size and scope...................................................................................................................................3
LO2..............................................................................................................................................................4
P3: Organisational functions and their linkage with objectives and structure.............................4
M2: Advantages and disadvantages............................................................................................................5
Advantages..............................................................................................................................................5
Disadvantages.........................................................................................................................................5
LO1 and LO2................................................................................................................................................6
D1: Critical analysis of the complexities in business structures...............................................................6
LO3:.............................................................................................................................................................6
P4: Positive and negative impacts of macro environment.......................................................................6
M3: PESTLE model...................................................................................................................................7
LO4:............................................................................................................................................................8
P5: Strengths and weaknesses.................................................................................................................8
P6: Strengths/ weaknesses interrelationship with external macro factors.............................................9
Conclusion...................................................................................................................................................9
Reference....................................................................................................................................................9

List of Figures and Tables

Figure 1: DIB’s structure. (Source; Self-created)............................................................................5

Figure 2: Interrelationship of business functions for business objectives. (Source; Self-created).. 7
Figure 3: Line organisational structure. (Source; Chand, 2019).....................................................9
Figure 4: GDP per capita in the UAE. (Source; World Bank, 2019)............................................10
Figure 5: Micro and Macro factors. (Source; Business management, 2019)................................16

Table 1: Business types and purposes. (Source; Self-created)........................................................1

Table 2:

Size and scope. (Source; Self-created)............................................................................................3

Table 3: SWOT/TOWS of Dubai Islamic Bank. (Source; self-created).......................................14

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 Dubai Islamic Bank Business Environment

Introduction
A business environment influences and relates to a business in both internal and external factors. Within
the first task of the report different types, scope and size of organisations are discussed. Within task 2,
interrelationships among different organisational functions are discussed and their link with the
structure of organisation is evaluated. In task 3, positive and negative effect related to changes caused
by macro environment on various operations of businesses are discussed. Internal strengths and
weaknesses are determined in task 4, where relationship of these internal attributes with external
macro factors are discussed. As scenarios require, Dubai Islamic Bank is selected for evaluation in this
report. Dubai Islamic Bank has started up its banking operations in the year of 1975 and focus on reliable
services has enabled the firm to expand its operations in the Dubai and whole UAE (Dubai Islamic Bank,
2019). The main reason behind the selection of this firm to explore the effect of its size on the
achievement of organisational objectives, effect on scope and other external elements prevailing in the
industry. The main centre of attraction to produce a report on this firm is that limited research on this
firm is available.

The atmosphere of company has influence on workfare in inner and outer issues. In the first task
of the research, various kinds, scopes and sizes of companies are debated. In the second task,
correlation amid various purposes of companies are debated and their connection to the
arrangement of the company is analysed. Within the third task, optimistic and undesirable effects
linked with variations produced by surroundings on different activities of workfares are debated.
Inner powers and deficiencies are discussed in the fourth task, which debates on the link between
inner characteristics and outer big issues. Keeping the requirement in mind, Sharjah Islamic
Bank is choses for analyzing this in this research. Sharjah Islamic Bank was set up in 1976. Its
market capitalization (1*2) is 840 Million Dhs (Rao., 2000). The major cause of the selection of
this company is the exploration of the effects of its magnitude, effects on choices and various
outer components which prevails in this sector. The major point of charm in producing this
research on this bank is that narrow evaluation on this company is accessible.

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 Dubai Islamic Bank Business Environment

LO1:
P1: Different types and purposes
Table 1: Business types and purposes. (Source; Self-created).

Banking industry is a knowledge-intensive industry (Shih et al., 2010) as its key resources are
intangible and intellectual in nature and these assets are more important than physical capital in
the process of wealth creation (Al-Bannany, 2008; Kamath, 2007; Goh, 2005).

PUBLIC PRIVATE VOLUNTARY

DEFINITION Such kinds of Such companies Such kind of
companies contain operate for earning companies operate
non profitable profit. They can be for performing
companies that are possessed by the state activity for the
possessed by the and private sectors. benefit of the
states. Their aim lies community. Mostly,
on the basis for they get funds and
providing facilities found by non-
for the advantage of profitable companies.
the community.
Purpose The aims of these These companies are A volunteer company
firms are possessed the basic backer is established by the
by the governmental which contributes to participation of
parties which the financial stability
different companies.
functions for of a state. Such The major reason for
providing products companies are mostly their actions is
and facilities to the possessed by a party providence of
bodies that serve the or persons. The main prosperous
state including armed aim of this sector isassistances and
forces, law to earn revenue. Theydevelop the
enforcement agencies are an important to community possibly.
etc. generate per head This is done by trying
revenue, which helps best not to earn any
in the progress of the
revenue with their
Gross Domestic actions. These
Product (Hillary, companies perform
2017). for the welfare of the
community.
Link with the chosen The company chosen It can be The chosen company
bank is Sharjah Islamic demonstrated through is Dar al Ber society
Bank. It is among the the example of Aldar of United Arab
very top of the Properties, emirates. This
industry. It has a functioning as an company gives
good image of international communal facilities
providing a nice rate company in the through investments

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 Dubai Islamic Bank Business Environment

of currency to the property sector, in aiding persons by

clients for generating chasing for earning giving academic fee,
optimistic values for more revenues. installation of ACs in
the community. institutes, in
healthiness and
institutes of religion.

Sharjah Islamic Bank Legal Structure: Many economic goods provided includes saving
accounts, credit cards, home equity loans, and matching goods for attracting clients for investing.
Dar al Ber Legal structure: Sharjah Islamic Bank has made a viable place as a beneficial
company, which works for charity for helping community in reaching their necessities. The
arrangement utilized in the company is primarily founded on hierarchy, in which various units
back the company in reaching its missions. The law unit of the company is connected with the
Ministry of Labour and Social Affairs. Zakat is collected for providing assistance to the
community inside United Arab Emirates (Dar al Ber, 2019).

P2: Size and scope

One of the strongest evidence of the increasing role of (IC) Intellectual Capital is the large and
the growing gap between market values and book values of firms which is often attributed to IC
(Al-Musalli and Ku Ismail ., 2011, November). According to Liu et al. (2009), the market value
of firms could be several times the book value, indicating that the difference represents the value
created by IC.
Public Private Voluntary
Definition These types of These organisations These organisations
organisations include are operating to earn are operating to
not-for-profit firms, profits. They can be perform social welfare
which are government- both owned by the activities. They are
owned and their government as well as usually funded and
purpose is based on other private bodies sourced by not for
the provision of such as groups and profit organisations
services for the social individuals (Benington, (Benington, 2011).
benefit (Benington, 2011).
2011).
SizePurpose The purpose of public The private sector is A voluntary
sector organisations is the primary contributor organisation is formed
owned by the to the economic by the contribution of
government bodies wellbeing of a country. various organisations.

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 Dubai Islamic Bank Business Environment

that are functioning to These organisations are The main idea behind
provide goods and usually owned by a their operations is to
services to the group or individuals. A provide welfare
government serving private organisation benefits and enrich
institutions like the has the core purpose of society as much as
police, military, public earning a profit. They possible without
transits and others. are a vital source for earning any profit on
Public sector generating per capita their operations. They
comprises of not very income, which work for the
big workfare kinds, contributes to growth betterment of society
which offers less and development and increasing social
chances of jobs and increasing the GDP of wealth.Voluntary
the budget for the country as well sector comprises of
investing is little. . (Hillary, 2017).Private
workers, along with
The amount of sector of workfare volunteers. It
workers in public works independently. includes
sector are 10-49 There is lesser organizations from
(OCED, 2018). amount of individuals many nations, which
working for provides guidance for
functions. The increasing
amount of workers in development quickly.
private sector are The amount of
fewer than 250 workers in public
(OCED, 2018). sector are above 250
(OCED, 2018).
Relationship to The organisation This can be exemplified The selected
Selected selected is the Dubai from the case of Aldar organisation is Dar al
OrganisationScope Islamic Bank, which is Properties, operating Ber Society of the UAE.
currently one of the as a Multinational This organisation
leading money properties firm provides social services
changing banks (Dubai pursuing to earn by investing in helping
Islamic Bank, 2019). greater profits and out individuals by
The bank has a revenue. The profits providing them tuition
progressive reputation will benefit the group fees, implanting air
of offering a good value or individual conditioners in schools,
of money to the owners.This kind is in health and religious
customers so that mostly possessed by institutions.This sector
positive value property owners and comprises of
generation can be Private companies. companies from
made possible for the They establish various nations,
whole society. In third partnership for which are linked
world states, this kind increasing chances governmental sectors.
of company is and associations; that Such companies get
functioning at a is why they vary in big profits, and use
larger scale. They size, structure and them for earnings for
provide good chances income (Bryman and development for
of jobs and increase Bell, 2015). A model tomorrow. The

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 Dubai Islamic Bank Business Environment

finance. The of this is Aldar international

workfare price is Properties. organizations look for
lowered with the developing inner
existence of small Structure. Sharjah
businessmen. A Islamic Bank is a
model of this is Dar good model of this
al Ber. sector.
Dubai Islamic Bank Legal structure: As renowned money changing bank, the multiple
financial products offered like saving accounts, credit cards, residential mortgages, and
complementary products to attract customers towards investment and insurance. The Dubai
Islamic Bank has created a positive impact on society by building a trustable relationship with
people and stakeholders can earn a sustainable profile for them (Dubai Islamic Bank, 2019).
Dar al Ber Legal structure: Dubai Islamic Bank has secured a prominent position as a welfare
organisation working towards philanthropy to help society in meeting their unmet needs. The
structure used in the organisation is mainly based on hierarchical setting, where different
departments support organisation in the accomplishment of organisational goals. The legal
structure of organisation is linked with Ministry of Labour and Social Affairs. Collection of
Zakat is used to provide support to the whole society within the UAE (Dar al Ber, 2019).

P2: Size and scope

Table 2: Size and scope. (Source; Self-created).

Public Private Voluntary

Size This category includes This category of This category includes both
the small business types business is working employees as well as voluntary
that are offering low under independent memberships. It also has
employment ownership. There is a multination bodies guiding them
opportunities and small number of people to increase their growth at a fast
investment capital is employed for pace. The number of employees in
low. The number of operations. The number these organisations is more than
employees can be of employees in these 250 (OCED, 2018).
between 10 to 49 organisations can be
employees (OCED, less than 250 (OCED,

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 Dubai Islamic Bank Business Environment

2018). 2018).
Scope In developing countries, This type is usually This category includes
this type of organisation owned by sole multinational companies that are
is operating in a large proprietors and private associated with the government
number all the supplies bodies. They form sector. These organisations earn
are compelled by micro partnerships to increase high revenues. They reserve the
businesspersons. This opportunities and profits for future developmental
creates better income collaborations; this is projects. The multinational
opportunities and adds the reason why they companies are looking for a way
value to the economy. have varying sizes, to develop the internal structure.
The business cost is also structures, and revenue Dubai Islamic Bank is the best
reduced due to the (Bryman and Bell, 2015), example of this category.
presence of micro- the most suitable
entrepreneurs The example of this category
example is Dar al Ber, is Aldar Properties.
the philanthropic
organisation of the UAE.

M1: Structure, size and scope of organisations link with business objectives
After studying the examples of all three types of organisational type and structure, the main aspect is
the size and scope of each organisation.

Organisational size and its link with business objectives

As per Jahangir (2018), the size of organisations can be different as per the number of employees they
have and markets in which they are operating. Hence, when it comes to small enterprises, they have
lower than 50 employees and thus, objectives set up by them are usually more focused on profitability
and revenue maximisation. However, when they become small and medium enterprises, they develop
more objectives to grow their relationships with customers. For instance, the Dubai Islamic Bank in this
stage has focused on using online channels and internet banking to retain current customers as well as
attaining new ones from the market. Increase in size of Dubai Islamic Bank (DIB), with increase in
number of employees up to 8,000 as current statistics shows have developed its business objectives to
invest in new markets (Owler, 2019). Thus, DIB gained expansion in operations and created an attempt

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 Dubai Islamic Bank Business Environment

to gain competitive edge in the market. This is done to get unique position in front of rival businesses
including MetroBank, Aldermore, Lloyds bank, Saga and others (Owler, 2019). The objectives of the
business are not only focused on gaining growth in the UAE market yet, but objectives are also focused
on strategies to become a world’s largest bank. The organisational size has a strong link with this
business objective and enabling DIB to invest in the accomplishment of this target.

Organisational scope of Dubai Islamic Bank and link with business objectives
According to awareness fortified by Jahangir (2018), the scope of organisations can be national and
multinational, which are quite influential in achieving organisational objectives. Wide organisational
objectives to address a variety of customer needs cannot be addressed with limited organisational
scope. For instance, DIB has invested in three different markets to address the business objective of
catering varying needs of customers (Dubai Islamic Bank, 2019). Comparing the scope of Dubai Islamic
Bank with HSBC bank, it can be demonstrated that their scope is much wider and have wide business
objectives to address needs from different regions of the world including Asia, Africa, America and
Europe (HSBC, 2019). Here, DIB is in a strong need to broad down its scope and invest in other markets
to business objectives relating to competitive edge.

The organisational structure of Dubai Islamic Bank and link with business
objectives
The organisational structure has a strong influence on the achievement of organisational objectives. For
instance, DIB’s objectives are to get maximum outcomes within a sustainable manner, which is one of
the reasons that it has focused a lot on information technology, resource sharing and others aspects in
its structure. The management structure of the Dubai Islamic Bank can be evidenced by the figure
provided below:

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 Dubai Islamic Bank Business Environment

Figure 1: DIB’s structure. (Source; Self-created).

CEO

Director
General

Risk Finance Credit Risk Operations Service Quality

Management Management management Management Management

The importance of structure in the achievement of organisational objectives is that it creates strong
alignment among different operations required for the production of financial products and services.
Decision-making processes in this type of structure are centralised and executives are involved in it.
Whereas, employees utilise two-way communication for the achievement of business objectives. Here,
the structure of the Dubai Islamic Bank creates limitation in the generation of innovative ideas apart
from employees. The core objective of organisation is to become a world-leading Islamic bank by
surpassing customer service, growth, innovation as well as continuous engagement of employees (Dubai
Islamic Bank, 2019a). In this instance, addition of service quality management ensures that employee
engagement can create a strong link towards the achievement of customer satisfaction. Other divisions
added in structure ensure the development of competitive edge of bank in the market with effective
operations management and risk throughout organisation. In a conclusive manner, the structure of DIB
is significant to enhance output with effective management of different functions as well as their
coordination so that organisational objectives can be accomplished.

LO2
P3: Organisational functions and their linkage with objectives and structure
To help the companies sustain their market position, several departments are working as back support
to respond to increased risk and competition. Some of them are as follows:

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 Dubai Islamic Bank Business Environment

Marketing: This department serves as the most essential parts of an organisation (Storey, 2016). In DIB,
Marketing department also works on improving the brand image of the organisation; they are
continuously engaged in publicity activities and increasing customer interaction by using multiple tools
and methods

Finance: This is another most crucial department and has control over the various expenditures and
looking over the firm’s legal requirements (Dalton, 2013). In DIB, finance department also has to look
after the investment portfolio of the firm to increase its profits. However, the financial or profitability
targets are quite low in contrast with those targets set up in HSBC due to the differences in
organisational size.

HR: This department aims to create strategic and effective human resource planning to utilize all the
resources for internal work processes in the best possible manner. In DIB, HR department mainly
focuses on an efficient recruitment process, by hiring talented staff to work in the DIB and increase
overall productivity.

Operations: They look after the overall process related to production. The task of bringing efficient and
smooth products and services depends on operations. DIB’s operational department has to meet the
expectations of the firm and customers daily.

The interrelationships among these functions have the potential to affect the accomplishment of
business objectives.

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 Dubai Islamic Bank Business Environment

Figure 2: Interrelationship of business functions for business objectives. (Source; Self-created).

Marketing
Objectives

Achievement
HR Finance
Objectives of business Objectives
objectives

Operational
Objectives

For assisting organizations in maintaining their level in the Market, various units work as backup
for responding to high risks and oppositions. A few of them are listed below:
Marketing: Marketing unit works like thee top necessary components of a company (Storey,
2016). In Sharjah Islamic Bank, this unit also work on raising the company’s reputation. It is
constantly linked in advertising campaigns and raising client’s communication through various
mechanisms.
Finance: The Finance unit controls different spending and looks after the company’s law needs
(Dalton, 2013). Inside Sharjah Islamic Bank, the financial unit looks over the asset collection of
the company to raise revenue. Despite, the objectives for economics are relatively less compared
to HSBC because of the difference in the magnitude of the companies.
HR: It hopes to develop tactics and efficient Human Resource Planning for utilizing every
resource for inner operations. In Sharjah Islamic Bank, Human Resource unit aims for an
effective recruiting procedures through appointing expertise as employees in Sharjah Islamic
Bank and raise the production.
Operations: This department is in charge of procedures relating to makings. The objective of
conveying effective goods and facilities is dependent on functions. SIB’s unit for operations
needs to reach the expectancies of the company and clients every day.
The interconnections between these departments has the potency to change the execution of
workfare goals

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 Dubai Islamic Bank Business Environment

Marketing
Objectives

Achievement
HR Finance
Objectives of business Objectives
objectives

Operational
Objectives

M2: Advantages and disadvantages

Advantages
One of the advantagesOf many, one advantage is that there shouldmust be strong
interrelationshipsdurable correlations to ensure coordination among organisational functionsmake
sure the management between firms’ roles and higher coordinationsynchronization is
advantageousbeneficial for achieving the achievement of business objectives. Interrelationships can
support the attainment of improvements in financial company’s goals. Interconnections could back
the execution of developments in economical and non-financial performance.economical
presentation. For instanceexample, the marketing department helpsadvertising unit aids the
organisation in developing a strong interactioncompany to develop a solid communication and
relationshiprelation with the business operationsworkfare activities and customers. The
interactionclients. Communication with the finance departmentfinancial unit is important for the
achievement of profitability goals developedessential to achieve profitable missions made by finance
managersfinancial leaders (De Winne and Sels, 2010).

Disadvantages
One of the main disadvantagesOf many, one major disadvantage is that
Interrelationshipsinterconnections may develop occasions of conflict at some points because 1
unit can sometimes create conflicting situations as one division can support one aspect, while second 1
feature, and others can support completely different onesback the rest (De Winne and Sels,
2010). For instance, while making decisions they can go against example, in developing choices,
their opinions may come into conflict with each other when finance department prioritisethe
financial unit gives priority to reduce cost, HRCost reduction, and Human Resource is

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 Dubai Islamic Bank Business Environment

likelyexpected to come up with a decision of offering pay increments to employeespropose increased

salaries for increasing their motivation level. The conflicting aspects among functions can lead
organisations to changeworkers to increase their structure in an attempt to reduce these issues.
inspiration. The unmatched features amid units may direct companies to alter their arrangements,
so that the concerns could be reduced.

LO1 and LO2

D1: Critical analysis of the complexities in business structures
Noe et al. (2017) demonstrated the factdetermined that complexitiesdifficulties in business
structure the arrangement of workfare are usually ariseraised when structures adoptedthe
structural adoptions by the firm are differentcompany varies from their organisational needs
requiredfirms’ requirements needed by business objectives. Bureaucratic Structure has complex large
procedures and processes, which is usually adopted more to follow strict rules or regulations. On the
other handBusiness goals. The structure of bureaucracy contains difficult plans that are very big,
and mostly implemented more for following hard governances. Contrarily, Chand (2019)
highlightedsaid that the complexityposition in difficulty level in Line organisational structure is
quite lowerline with company’s arrangement is very low, where managersleaders from different
divisions are requiredvarious units need to present reports to report CEO (figure 3). The exemplified
structure can be seen from the figure provided below. However, the complexity in this structure is that
it creates issues in planning and most managers are only obliged to develop plans.

Figure 3: Line organisational structure. (Source; Chand, (2019).

Chand (2019) showed) stated that lineLine and staff organisational structure forms upEmployees
Company’s arrangement develops a more complex structuredifficult arrangement, where

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 Dubai Islamic Bank Business Environment

interrelationships among different divisionsinterconnections within various units are also identified
(appendix 2). This marked – which is one of the weaknessesweakness in the Line organisational
structure. Appendix 3 is showing divisional structure, which can be designed on departmentalisation is
done on the basis of different functions, products, projects as well as geographic territories. In
contrast,line company arrangement. But Fairfield (2016) demonstrateddemonstrates that firms
who have international operationscompanies having multinational functions are more likely to
adoptfurther inclined towards adopting a divisional structure asregional arrangement because they
can develop division basedmake unit on geographies. Within the selected casebasis of
Dubaigeography. In the example of Sharjah Islamic Bank, it has used divisional structure
divideduses Divisional Structure fragmented into different operational functionsvarious functional
activities, which is important in developing interrelationships among functionsessential to delvelop
interconnections within units for the effective achievement of business objectives. efficiently
achieving workfare goals.

LO3:
P4: Positive and negative impacts of macro environment
The positive macro environmental impact gained in terms of new opportunities prevailing within large
desirable impacts on the market and outside atmosphere earned through latest chances arising
from the market. ThisMarket and other means has leddirected the firm to expand business
operations.company in expanding workfare activities. For instance,example, Sharjah Islamic
Bank has started new outlets for the DIB has opened up new branches so that customers can find
convinceease of clients in reaching out toapproaching the firmcompany. The factpoint is that
business scandalsworkfare Scandals and matters for banking issues willshall be critically focused on
new branches with strong governance policiesseriously concentrated on latest outlets, having
serious governmental policy and management. administration.
The negative impact is in terms of legal, political, economic, technological and environmental threats
(Market Publishers, 2019). For instance, outdated technologies utilized in some of the branches are
creating a security risk, which can hurt the performance of these banks. When it comes to legal factors,
the firm has laid special emphasis on the implementation of insurance and payment protection plans
due to various rules and regulations. It protects them from bad publicity and there are no negative
impacts of macro environment. In order to omit the negative impact of economic factors, the
organisation has made changes in operations and development to cope with any financial crisis. One of
the positive economic aspects can be observed from figure provided below showing an increasing trend
in GDP per capita within UAE, which has potential to maximise savings are done in banks and revenues

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 Dubai Islamic Bank Business Environment

of Dubai Islamic Bank can be positively affected (World Bank, 2019). The negative and positive impact of
different environmental factors can be traced from Pestle analysis provided in below section.

Figure 4: GDP per capita in the UAE. (Source; World Bank, 2019).

The undesirable effect is in the aspect of Legal, Political, Economic, Technological and
Environmental hazards (Market Publishers, 2019). For example, out-of-date technical assistances
used inside a few outlets creates a danger for safety, which is able to alter the productivity of this
sector. Coming to the Legal issues, the company has particular attention on implementing
Insurance and amount guarding procedures because of different laws and acts. It safeguards them
of the undesirable advertising and there exists no undesirable effects on the surroundings. The
company has altered activities and growth to handle any economic crunch for removing
undesirable effects of finance issues. The illustration below shows a desirable financial point
through a raising standard in gross domestic product Per Capita in United Arab Emirates, which
contains the potency to increase revenues. Profits of Sharjah Islamic Back can also be effected in
an optimistic way.

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 Dubai Islamic Bank Business Environment

M3: PESTLE model

PESTELPestel AnalysisEvaluation
Political As an internationally acclaimed bank, DubaiLike a globally recognized
Bank, Sharjah Islamic Bankbank has expandedgrown its operations
inside the UAE activities in and outsideout of it.United Arab Emirates.
To safeguardsecure their position while working in different lawplace in
operating in unlike laws and regulated environmentsregulatory
surroundings, the DubaiSharjah Islamic Bank adopts policiesadopted
measures as per the lawlegal criteria, which is effectiveefficient for
their financial systemits unit of finance and provides them protection
strategiesgives safe tactics and restrictions imposed bylimits forced
from the government.state.

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 Dubai Islamic Bank Business Environment

Economic DubaiSharjah Islamic Bank has acquired massive growth due to

economic stability alonggained big expansion because of the financial
stableness besides with stock marketsthe Stock Markets and foreign
exchange (Crane and Matten, 2016).Foreign Exchange. In the year of
2014, GDPthe gross domestic product per capitaperson was
approximately highernearly more than 38,000 and this showed a
continuous increasing up to the year, which represented a constant
increase till 2018 and reached $ approached $43,000 (World Bank,
2019). This aspectfeature has the potential to maximise savings
donepotency to increase reserves in banks and investment
circulationbanking sector and the capital circulating can be
higherincrease, which can enhance profitability as well. enhances profit
also.
TechnologicalSocial They have put the focus on changing trends to keep the customers
satisfied. Social changes can be observed from the preferences of
consumers as they are changing ways they want to obtain services from
banks. For instance, social trends are leading maximisation in the
utilisation of social media networks. The utilisation of these platforms to
offer services to customers can be helpful in maximising customer value
and their satisfaction level. Sharjah Islamic Bank has put in capital in
technical safety for the protection from Cyber-Attacks as well. It not
only protects the information of the clients, but also improves
performance. The statement of Kumar (2019) says that an Indian
refugee has a loss of nearly Dh 6,511 when client was utilizing online
banking. Link of account and site had similarity; but the site was
bogus. Such incidents levy fears in the whole industry of banking.
TechnologicalEnvironm Dubai Islamic Bank has also invested in technological security to protect
ental themselves from cyber-attacks. This will protect customer data and
improve functionality. This can be exemplified from the report of Kumar
(2019), where the author has shown that Indian expatriate lost almost Dh
6,511 while customer was using online bank account. The link of account
and website was similar to the bank; however, the website was fake.
These cases impose threats on all the banks.Sharjah Islamic Bank aims
to lower Carbon emitting from its activities to raise the standard of its
activities and contribute maintainable assignation for its supplying
network. Hazards like these in the banks and for Sharjah Islamic
Bank are much fewer as mostly, their risks are for companies of the
making industry.
EnvironmentalLegal Frauds in withdrawals may develop Legal concerns for Sharjah
Islamic Bank. It is clear from the incident of financial setback of
2009-09, when bank(s) utilized unmoral strategies to increase their
development and profits and then collapsed. So legal risks are more
but these may be dodged with suitable suggestions of Basel III in
actions (Asmundson et al., 2011).Dubai Islamic Bank has also set a goal
to reduce carbon emission from its operations to improve its operations
and add sustainable engagement to its supply chain. These threats in the

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 Dubai Islamic Bank Business Environment

banking industry and for DIB are quite lower as these usually cause more
threats for firms who are involved in manufacturing operations.
SocialLegal They have also incorporated the FCA act for handling the PPI claims
developing their operation (Besley, 2015). Fraudulent transactions and
other issues can create legal issues for DIB. This is evident from the case of
financial crises of 2008-09, where banks have used unethical tactics to
maximise their growth and revenues and faced collapse. Hence, legal
threats are higher however; these can be avoided with appropriate
implications of Basel III in operations (Asmundson et al., 2011). Attention
is focused on the varying tendencies to satisfy the clients. Changes in
society may be seen from the inclinations of clients because they are
varying methods for obtaining facilities from the banking sector. For
example, Social tendencies are directing increase in the usage of
Social Media Networks. The usage of these forums in offering
facilities to clients may help to maximise client value and their
satisfactory level.

Thus, organizations recognize the importance of intellectual capital and the necessity to
identifying, valuing, and managing it efficiently in order to defend and strengthen the firm’s
competitive position and ensure their future viability (Shih et al., 2010; Chan, 2009; Chen et al.,
2005; Goh, 2005)

LO4:
P5: Strengths and weaknesses.
Strengths Weaknesses Opportunities Threats
By offering a broader Their They are utilising new IncreaseA raise in
expansiongrowth is financial
rangeThrough giving methods for providing
nowcurrently in a crimeeconomic
the opportunity of critical position as they old services, which crimes.
have have made them
customergiving wide
acquiredconcerned
choices for clients, situation because of innovative and Increase in global
competition.
acquiring the status increased their growth. A raise in
they have
of a monopolistic international
emergedevolved as a firm.an unchallenged competency.
company. By applying effective
masterleader of
strategiesUsing latest
building brand mechanisms for
MoreoverFurthermore
valueconstructing , the layerscoatings of providence of aged
managementadministr facilities that created
firm’s image innovations for
ation are less thus
(Market Publishers, makingfewer, Thus, it increasing their

17
 Dubai Islamic Bank Business Environment

2019). makes the board weak development.

(Market Publishers, Through adopting
2019).Board weaker efficient tactics, they
have been able to
reduce the
operatingsuccessfully
reduced costs for
operations cost
(Market Publishers,
2019).

18
 Dubai Islamic Bank Business Environment

P6: Strengths/ weaknesses interrelationship with external macro factors.

StrengthsPowers and weaknessdeficiencies of the organisationcompany is an internal factor, which
inner issue that can arise out ofrise from the influenceeffects of external macro factorsbigger outer
reasons. For instance, Dubaiexample, Sharjah Islamic Bank haspossess the strengthcapability of
an updated systemup-to-date structure in banksbanking, and these majorly are mainly the result
of unique technological advancements availableoutcome of exclusive technical advances present in
different markets,various Markets where it is operating (Market Publishers, 2019). Howeveroperates.
Contrarily, Immervoll (2012) showedrepresented that if firmscompanies have weaknessescons in
their workforce, the reason could be external macro factorsstaff, bigger outer reasons or labour
availableworkers present in the market. Therefore, external factors of threatsMarket can be the
reasoning. Hence, outer issues of risks and opportunitiesprospects are somewhat
interrelatedsomehow interconnected with strengthspros and weaknesses. One of the
interrelationships between internal and external factors can be observed cons. The rising tendency of
Gross Domestic Product has made enhancements in figure 3, which is showing an increase in GDP
per capita within the UAE. The increasing trend in GDP has created improvements in the financial
performance of Dubaithe economic outcome of Sharjah Islamic Bank (World Bank, 2019).

M4: Apply SWOT analysis

Threats:
Due to the presence of other multinational companies like HSBC, there is higher competition for
Dubai Islamic Bank in the UAE banking industry. The gradual increase in pawn shops has led to
an awakening increase in loan growth. There are also chances of investment transaction failure,
which harms the development of the business and future decisions regarding growth (Market
Publishers, 2019).
Opportunities:
Dubai Islamic Bank is now planning to expand its operations by opening branches in developing
countries like South Africa. To increase the demand for their online banking facility, to attract
new customers the organisation has set high-end promotions to increase their sales targets
(Bendell, 2017). Another important opportunity is to utilise different social media platforms to
provide services to customers. These can include Instagram, Facebook and other channels.
Weaknesses

19
 Dubai Islamic Bank Business Environment

In terms of advanced technology, Dubai Islamic Bank still lacks implementation, which causes a
lack of investments and an unproductive set of workers. Their growth possibilities are also
limited due to poor interest rates (Market Publishers, 2019). One of the weaknesses of DIB is
that it has higher exposure with real estate sector, which is facing loss and this can also hurt
financial stability of DIB (MBA, 2019).
Strengths:
The management of the Dubai Islamic Bank is supportive and effective, which means effective
decision making on time. They ensure that there are transparency and reliability to create a
stronger bond with the customer (Rostamkalaei and Freel, 2016).
Swot analysis can directly influence the decision making of the organisation. For instance, when
organisations are required to achieve new strategies, weaknesses and threats, which are arising as
barriers in the achievement of strategies, should be explored. This is important to make decisions
regarding tactics, which can be used to reduce these barriers.
SWOT/TOWS analysis is provided below, which is showing strategies, which can enable the
omission of different internal weaknesses and external threats, with the capitalisation on
strengths as well as opportunities. In SWOT/TOWS analysis, strategies are designed, which are
significant to turn weaknesses into strengths and threats into opportunities.
Table 3: SWOT/TOWS of Dubai Islamic Bank. (Source; self-created).

Dubai Islamic Bank Strengths-S Weaknesses- W

[1.] Supportive [1.] Lack of investments in
management the implementation of
[2.] Effective decision- advanced technologies.
making. [2.] Poor interest rates have
[3.] Transparency and limited growth
reliability for the possibilities.
creation of strong [3.] Higher exposure with
customer bonds. real estate sector
Opportunities- O SO strategy WO Strategy
[1.] Planning to expand its DIB should Leverage Investing in advanced
operations Supportive management, technologies available in new
[2.] Online banking facility effective decision making, markets for the attainment of

20
 Dubai Islamic Bank Business Environment

to increase its sales transparency as well as growth. Investing in markets

targets. reliability for the expansion having good interest rates.
of operations in new markets. Exposure should be
maximised with other sectors.
Threats- T ST strategies WT Strategies
[1.] Presence of other Leveraging on strengths to Eliminating weaknesses in
multinational companies minimise threats for DIB. advanced technologies to
(i.e., HSBC and others. Strengths should be avoid security risks and
[2.] Higher default risks due capitalised and the business competitive threats from
to loan growth should start up its operations different banks.
[3.] Higher investment in other countries so that
transaction failure. more revenue generation
options can be developed.

D2: Impacts of macro and micro factors on business objectives and decision-
making.
Macro and micro environmental factors can be traced from the figure provided below. Macro
environmental factors are Pestle factors, which can pose different opportunities and threats for a firm
(Clapper, Lewin and Delgado, 2011). On the other hand, micro-environmental factors can include
participants of the market, who can include intermediaries, customers, public, competitors, company
and suppliers (Business management, 2019). All these five parties can support firm in the attainment of
market opportunities. For instance, in case of Dubai Islamic Bank, firm should have strong relationships
with publics, customers, market intermediaries and suppliers so that quality can be delivered.

Market Publishers (2019) highlighted that DIB’s Pestle factors are not showing a high-level negative or
threats imposed on operations, however, DIB is strongly in need to develop strategies for the
elimination of these. For pestle factors, it is important that business objectives and decision-making are
done in DIB should not go against these factors. MBA (2019) showed that one of the macro-
environmental factors, which can affect achievement of organisational factor, is technological trends.
The increasing challenges in this area can minimise satisfaction of customers; therefore, technologies
adopted should have lower risk level.

21
 Dubai Islamic Bank Business Environment

Figure 5: Micro and Macro factors. (Source; Business management, 2019).

MBA (2019) demonstrated that DIB should take decisions to obtain new market opportunities should be
done on the analytical outcomes obtained through pestle. In contrast, Dubai Islamic Bank (2019a)
showed that the firm’s objectives are focused on employee engagement. For this purpose it is important
that employee-related legislation and policies should be designed to develop positive workplace
environment. This can play a significant role in increasing employee satisfaction as well as their
engagement. For instance, Wage legislation should be previewed while determining wages of employees
so that compliance of laws relating to minimum wage can be done and in another case, legal issues can
arise in terms of penalties.

Conclusion
This report shows an understanding of different business environments and functions with key
context focus on the organisation Dubai Islamic Bank from the UAE. There has also been an
overview of the different types of organisations, scopes, and sizes along with the way they

22
 Dubai Islamic Bank Business Environment

operate. It also includes micro and macro aspects of an organisation's effectiveness by analysing
the various business types.

23
 Dubai Islamic Bank Business Environment

The assignment illustrates consideration of various workfare surroundings and purposes, with
main attention on Sharjah Islamic bank from United Arab Emirates. Beside Sharjah Islamic
Bank, a summary of various kinds of companies, possibilities, and magnitudes is evaluated. The
operational ways of the various companies has also been discussed. Micro and Macro features of
a company’s efficiency is also included by evaluating different workfare kinds.

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 Dubai Islamic Bank Business Environment

Appendices
Appendix 1

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 Dubai Islamic Bank Business Environment

Appendix 2

28