Relationship and Influence of Internal and External Stakeholders on Business Practices: A Case Study of Sainsbury

Professional discussion
notes

INTRODUCTION
Business practices are defined as the way through which organisation perform its
operations in cost effective manner. Organisation has various rules for business practices that
ensures that its employees are efficient in their work and abide by applicable laws. Stakeholders
are the individuals or group who have interest in organisational decisions and operations. In this
report chosen organisation is Sainsbury that is second largest supermarket chain founded in 1869
by John James Sainabury. Headquarter of organisation situated in London, England, UK. This
report covers relationship and influence of internal and external stakeholders on business
practices.
TASK
Stakeholders
Stakeholders are defined as the individuals or group of person who are interested on
organisational decisions and activities because these decisions and activities affect them.
Stakeholders either affect or be affected by the business operations. Sainabury has various
stakeholders that influence organisational decision making process (Stakeholder, 2021). Success
and failure of organisation impacts its stakeholders in positive and negative manner.
Internal stakeholders: Internal stakeholders are those who are directly involve in
organisational operations. Internal stakeholders of Sainsbury organisation are owners,
shareholders, employees and managers who perform operations and activities at all hierarchical
level of business. Managers and employees want to gain higher wages so they have vested
interest in financial health as well as success of business (Ren, and Jackson, 2020). Owner of
business want maximise profits the business in the compensation of risk that is owned by the
owner to run business operations.
External stakeholders: External stakeholders are those who are indirectly involve with
business. External stakeholder of Sainabury organisation includes customers, suppliers, local
community, creditors and government.
Mendelows’ Stakeholder Matrix:
Mendelows’ Stakeholder Matrix is defined as the tool that is used by the organisation to
analyse organisational stakeholders as well as their attitude towards organisation (Mendelows’
Stakeholder Matrix, 2022). It considered various factors such as interest level of stakeholders in

organisational project or business strategies and their power to influence these strategies and
decisions. It includes four quadrants that describes stakeholders interest and power (Drewniak,
Drewniak and Karaszewski, 2020). Sainabury uses these matrix to analyse stakeholders power
and interest in business activities as well as their influence on business practices. Mendelows’
Stakeholder Matrix in the context of Sainabury stakeholders are mentioned below:
Keep Satisfied: These stakeholders consists low interest and high power. This group or
stakeholders have potentiality to more into the other quadrant that posses high interest and high
power so, it is necessary for business to keep them satisfied. If they are satisfies with business
that they are less likely to gain high interest as well as exercise their power to influence.
Government is the external stakeholder of Sainsbury who has high power and low interest.
Respective organisation follows all legislations that are developed by government that protect
business from strict legal compliances and fines. Government has power to influence
organisational decisions and strategies but they are less interested in business operations and
performance level.
Manage Closely: This stakeholders posses high interest and high power so they can
easily impacts business operations and performance. These stakeholders are the key players and
business want to engage them actively. Shareholders are the internal stakeholders of Sainabury
who are the owner of business and consist power to change organisational strategies.
Stakeholders are interested in generating higher profits, improving employee morale and
sustainability (Cantele, and Zardini, 2020Heath, 2020). Business shareholders take active
participation in decision-making process and strategy formulation.
Monitor (Minimum efforts): These are the stakeholder who posses low power and low
interest in business activities and operations. They are less interested to know about what is
happening in business because due to their lack power to influence situations. Suppliers are
external stakeholders of Sainabury who are interested with business operations they are only
interested in raising demand of their goods to gain higher profits. Suppliers are only responsible
for providing quality raw material to business at reasonable prices so respective organisation
developed effective relationship with suppliers.
Keep informed: These stakeholders consist high interest and low power. These
stakeholders are more interested to know about what is happening but they do not have power to
influence change in business operations and decisions. Employees are the internal stakeholders