Importance of Corporate Communication in Wesfarmers

This report discusses the importance of corporate communication in Wesfarmers, its strategies, and analysis. It covers the ownership and stakeholder theory, organizational behavior, and activities of Wesfarmers. It also highlights the building blocks of Wesfarmers' reputation and its interpretation.

Running head: CORPORATE COMMUNICATIONS
Wesfarmers
Corporate Communications
12/11/2018

CORPORATE COMMUNICATIONS 1
Executive Summary
External and internal policies of corporate communication support a business to uphold its
professional image while exploiting and clarifying on the ways co-workers and business
associates interrelate with each other. Business with poor strategies of communication
possess a better likelihood of confusion, misjudged delivery of service and internal disorder
that can consequence in inferior performance and productivity. The aim of this report is to
highlight the importance of corporate communication within an organization i.e. Wesfarmers.
Diverse strategies and behavior followed in the Wesfarmers are discussed in order to
understand the effectiveness of the communication. From the analysis, it has been identified
that Wesfarmers possess a strong corporate reputation in the market as compared to its
competitors. Moreover, the political and economic situations majorly affect the operations of
the company.

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Table of Contents
Executive Summary............................................................................................................... 1
Introduction............................................................................................................................ 3
Company Background........................................................................................................3
Mission of Wesfarmers...................................................................................................3
Vision of Wesfarmers.....................................................................................................4
PEST Analysis....................................................................................................................4
Political........................................................................................................................... 4
Economic........................................................................................................................ 4
Social.............................................................................................................................. 4
Technology.....................................................................................................................5
Organization Structure........................................................................................................5
Ownership Structure.......................................................................................................6
Stakeholder Theory............................................................................................................ 6
Importance of Stakeholder’s theory to understand corporate reputation.........................6
Stakeholder of Wesfarmers................................................................................................7
Shareholders..................................................................................................................7
Customers...................................................................................................................... 7
Employees...................................................................................................................... 8
Suppliers........................................................................................................................ 8
Corporate Reputation Theory.............................................................................................8
Wesfarmers behavior and activities....................................................................................9
Building blocks of Wesfarmers Reputation.....................................................................9
Interpretation of the corporate reputation..........................................................................10
Implications and Conclusion.................................................................................................10
Reference............................................................................................................................. 12

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Introduction
The intent of this report is to discuss the importance of corporate communication in
Wesfarmers and the strategies it uses in order to maintain smooth communication among its
stakeholders. It will be comprised of a detailed analysis of the ownership structure of the
company that is used to communicate effectively within the organization. The stakeholder's
theory will be used in order to understand the level of importance is provided to the
stakeholders of Wesfarmers while taking an important decision. Besides this, it will provide a
complete overview of the organizational behavior and activities into the business.
Company Background
Wesfarmers Limited is a conglomerate of Australia; with headquarter in Western Australia,
with key operations in New Zealand and Australia retail, fertilizers, safety products,
chemicals, and coal mining. With around AU$65.98 billion in 2016, Wesfarmers became the
largest company in Australia in terms of revenue, overtaking BHP and Woolworths
(Wesfarmers, 2018). The company is the biggest Australian private employer, with around
220,000 employees. In 1914, Wesfarmers was established as a co-operative in order to offer
merchandise and services to the farmers of Western Australia. The company was listed on
the Securities Exchange of Australia in 1984 (Wesfarmers, 2018).
Mission of Wesfarmers
The mission of Wesfarmers is to offer satisfactory results to the shareholders and to attain
this goals company has created a highly focused, disciplined, and unique culture within the
business (Wesfarmers, 2018).
Vision of Wesfarmers
The vision of Wesfarmers is to create long-term value for the customers. The company is
focused towards engaging with its domestic communities and reducing its environmental
influence (Wesfarmers, 2018).
PEST Analysis
Political
The political forces generally have a major influence on the retail industry of Australia. The
increasing dominance and growing business of the independent retailers like Wesfarmers

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have increased competition for the small retailers and thus, to restrict this government of the
country has implemented some required policies (Fern Fort University, 2018).
Economic
The economic situation of the Australian market widely influences Wesfarmers performance
in terms of customer's buying behavior and demand. The worldwide crisis in 2009 influenced
the consumption behavior of the market, which resulted in less disposable income. In
addition, the fertilizers and chemical business of the company is influenced because of the
natural calamity along with changes in the climate.
Social
Wesfarmers is the key employer with a vast employee’s base along with shareholders in the
organization. Wesfarmers procurement of Coles Group has been capable to aim a larger
group of people of around 22 million (Fern Fort University, 2018). The company takes many
initiatives for the development of the society; also, the business has engagement and
employment for Aboriginal and Torres Strait Islander people.
Technology
Technology performs a significant part in the business success in Australia. In order to
struggle with the strong competition, the company needs to invest in its stores that are
considered as smart i.e. through ‘One-Shop' and a new point of the state of technology (Fern
Fort University, 2018).

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Organization Structure
Source [(The Official Board, 2018)]
Wesfarmers is dedicated towards confirming that the Board composition continues to
comprise directors who carry a suitable mix of abilities, diversity, experience, and expertise
to board decision-making. Presently the board is comprised of nine directors, containing
eight non-executive directors (Wesfarmers, 2018).
Ownership Structure
In 2001, Wesfarmers converted as a freely operated publicly listed organization with open
ownership. The unitholders of Franked Income Fund and stockholders of Westralian
Farmers’ Co-operative Ltd accepted the ownership simplification plan of Wesfarmers, which
comprised every Franked Income fund and co-op stock unit being exchanged for the share
of Wesfarmers (Wesfarmers, 2018).

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Stakeholder Theory
Stakeholder theory is a concept of capitalism that focuses on the unified relationships
between a company and its suppliers, investors, consumers, communities, and investors
who possess a stake within the business. The theory discusses that the company must
create value for every stakeholder and not just for the shareholders. This theory has become
a major consideration into the business ethics study and has offered a framework for further
study and growth in the published and research work of numerous academics (Phillips,
2011).
The concept of stakeholder theory is comprised of market-based view and resource-based
view. General variety of stakeholder theory looks at determining the particular stakeholders
of the business and then inspects the circumstances in which executives treat these parties
as stakeholders (Freeman, Harrison and Wicks, 2010).
Importance of Stakeholder’s theory to understand corporate reputation
The stakeholder theory has a strong association with social responsibilities, which reflects
that the social value of the company is focused towards promoting the complete potential of
all members. This is to highlight, the theory majorly focus on maintaining the economies and
ethics together, and attain objectives of corporations. In other words, the business must
operate its activities for the advantage of the stakeholders and executives are liable towards
them (Bourne, 2014). This concept produces double connotations of the theory: first, one is,
businesses cannot make use of stakeholders for their own benefits in the long run, in its
place earning profits for stakeholder is the essential goal of the companies. Second, as
"mediators," management needs to be responsible to the stakeholders and manage the
different stakeholder’s interest. To explain it in another way, executives should be hard
working and allegiant to stakeholders and reveal all the actions that they are going to take
and involve stakeholders into the operations of the companies. All these actions of the
company reflect its priority towards the stakeholders and help in maintaining the corporate
reputation of the organization in the eyes of every stakeholder.
Stakeholder of Wesfarmers
All the divisions of the company interact with the stakeholders in the suitable manner of its
operations, considering the stakeholder group’s needs. At the Group level, Wesfarmers
always takes care about the interest of the extensive cross-section of stakeholders, defined
by the possible influence of the business on their interest (Wesfarmers, 2010). The key
stakeholders of Wesfarmers are:

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Shareholders
The company distinguishes the significance of offering shareholders with access to updated
information and the capability to contribute to the company's shareholder decisions
(Wesfarmers, 2010).
Customers
Every business unit of Wesfarmers possesses communicating mechanisms in order to listen
to their consumers. Feedback of the customer is considered in the pertinent business in the
first instance.
Employees
As of 2015, the company hires around 205,001 people. All over the Group, the company put
its efforts to encourage an open culture that give importance to the empowerment and
inspires direct employee’s feedback (Sustainability at Wesfarmers, 2018).
Suppliers
Wesfarmers is dedicated to long-standing consequences that benefit both suppliers and
shareholder while distinguishing that healthy negotiations are a portion of acceptable and
normal practices of the business and add to innovation, competence and the enduring
sustainability and attractiveness of all the parties.
In addition to this, the company is also involved in other stakeholders also such as
Government, non-government organizations, media, and community.
Corporate Reputation Theory
Creating a positive reputation of the business obliges the capability of the company to please
the stakeholders and customers’ expectations. If this condition is not satisfied, businesses
cease to exist. This is because of the breach of the trust bond with stakeholders and
customers. If it is possible then the businesses with a respectable reputation in the market
can fail, it is also acceptable that the absence of business reputation, a poor reputation,
certainly influence the business's survival. Due to this reason, companies must repeatedly
enhance their reputation in the market. It is to diminish the risk level to break or weak trust
bond with the stakeholders and customers (Nicolò, 2015). The good reputation of the
companies can create strong relationships with the strategic partners. These partnerships
possess adverse influence when strategic partners have a poor reputation in the market.

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Wesfarmers behavior and activities
The primary objective of Wesfarmers is to distribute reasonable profits to the shareholders
by financial discipline and excellent organization of an expanded range of businesses. The
Wesfarmers Way is the outline for the business model of the company and includes the core
values of the company related to openness, entrepreneurial spirit, integrity, and
accountability. The Wesfarmers Way, with the Code of Conduct, direct the behavior of all the
employees operating for Wesfarmers as it is focused towards attaining its key objective. The
senior and board executives of the complete Group focused towards confirming consistent
decisions and actions with core values of the Wesfarmers (Wesfarmers, 2018).
Building blocks of Wesfarmers Reputation
The key reason behind the reputation of the Wesfarmers is its expertise in understanding the
demand and needs of the customers, which makes the customer feel happy and enforce
them to make a repetitive purchase. Besides this, the reputation of the company is
dependent on its core values of accountability, boldness, and openness. In order to maintain
these assets, the company regularly remain in the contact of its stakeholders and take their
feedback in order to take important decisions. Moreover, the reputational associations of
Wesfarmers with government and non-government organizations offer it an advantage over
its competitors to maintain a good image in the market. The company always comply with
the federal government competition policy in order to protect the rights and profits of small
retailers (Wesfarmers, 2015). Moreover, the company does have a good presence in the
mind of customers' offline as well as online. The code of conduct of the company requires all
the business units to adopt an honest and transparent approach while operating with the
stakeholders.
Wesfarmers is one of the reputed businesses in the New Zealand and Australian retail
market. It majorly focused towards the benefit to the stakeholders of the business. The
company involves all its stakeholders such as employees, customers, government, suppliers
in all the significant decisions that are taken within the business. All the decisions that are
taken are communicated properly to all the responsible team such that to avoid the chances
of conflicts and mismanagement of the work (Wesfarmers, 2018).
Interpretation of the corporate reputation
Wesfarmers touches the million people’s lives: as suppliers, employees, customers, and the
community members in, which they operate their activities operate. The company operates
in the market with good reputation and reason behind this area;

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Team Work – The employees of the company are encouraged to work as a team with their
management as this brings out better productivity from them.
Regular Feedback – The Wesfarmers customer service team regularly takes feedback from
its customers as well as employees in order to get better suggestions while taking decisions.
Besides this, taking feedback from both customers and employees supports organization in
making improvements within its operations (Wesfarmers, 2018).
Proper Planning – Wesfarmers is known for doing proper planning while developing
products for the customers.
Measuring Changes – If any alterations are needed in the organization the management of
the company takes proper feedback from its employees.
Implications and Conclusion
From the above analysis, it has been identified that the company is very much focused
towards maintaining a good corporate reputation in the market by offering quality products to
the customers. The company is always concerned about its organizational behavior. For
effective organizational behavior, the company needs to frame OB plan, which supports in
attaining improved performance level within the company.
In conclusion, it could be said that the Wesfarmers is effectively managing its reputation in
the market with the help of its expert understanding of the customer's demand. Besides this,
the company is successfully managing its reputation through integrity, boldness, openness,
and accountability. Wesfarmers is known for maintaining good relations with its stakeholders
such as customers, employees, government, suppliers, etc. All the stakeholders possess a
stake in the company. The company does not only give major priority to its shareholders but
stakeholders are also treated with the utmost care. Moreover, Wesfarmers encourage the
spirit of teamwork within the organization such that all the employees can work effectively
with the management and offer superior productivity.

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Reference
Bourne, L. (2014). Understanding stakeholder theory. Retrieved from
https://mosaicprojects.wordpress.com/2014/07/11/understanding-stakeholder-theory/
Fern Fort University. (2018). Wesfarmers Limited PESTEL & Environment Analysis.
Retrieved from http://fernfortuniversity.com/term-papers/pestel/nyse4/4814-
wesfarmers-limited.php
Freeman, R.E., Harrison, J.S., and Wicks, A.C. (2010). Stakeholder Theory: The State of the
Art 1st ed. U.K: Cambridge University Press.
Nicolò, D. (2015). Towards a theory on corporate reputation and survival of young firms.
Procedia Economics and Finance, 22(2015), 296-303.
Phillips, R.A. (2011). Stakeholder Theory 1st ed. U.K: Edward Elgar Publishing.
Sustainability at Wesfarmers. (2018). People. Retrieved from
https://sustainability.wesfarmers.com.au/our-principles/people/people-development/
The Official Board. (2018). Wesfarmers. Retrieved from
https://www.theofficialboard.com/org-chart/wesfarmers
Wesfarmers. (2018). Who we are. Retrieved from https://www.wesfarmers.com.au/who-we-
are/who-we-are
Wesfarmers. (2010). Wesfarmers Sustainability Report. Retrieved from
https://www.wesfarmers.com.au/docs/default-source/reports/2010-sustainability-
report.pdf?sfvrsn=2
Wesfarmers. (2015). Stakeholder engagement. Retrieved from
http://2015.sustainability.wesfarmers.com.au/our-approach/stakeholder-engagement/
Wesfarmers. (2018). About Wesfarmers. Retrieved from
https://sustainability.wesfarmers.com.au/our-report/about-wesfarmers/
Wesfarmers. (2018). Approval Of Wesfarmers Ownership Simplification Plan. Retrieved from
https://www.wesfarmers.com.au/who-we-are/our-history/approval-of-wesfarmers-
ownership-simplification-plan

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Wesfarmers. (2018). Ethical and responsible behaviour. Retrieved from
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governance/ethical-and-responsible-behaviour/
Wesfarmers. (2018). Mission Australia. Retrieved from https://www.wesfarmers.com.au/our-
impact/community/partnerships/our-community-partners/mission-australia
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