Stakeholder Theory

This report discusses the concept of stakeholder theory and its application in Kmart Australia. It includes stakeholder mapping and analysis, recommendations for Kmart, and a conclusion.

RUNNING HEAD: STAKEHOLDER THEORY
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Stakeholder Theory
Report
Student Name
3/27/2019
WCC: 500

Stakeholder Theory
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Table of Contents
Introduction.................................................................................................................................................2
Stakeholder Map and analysis.....................................................................................................................2
Recommendation........................................................................................................................................3
Conclusion...................................................................................................................................................3
References...................................................................................................................................................4

Stakeholder Theory
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Introduction
Stakeholder theory views all the groups who are affected by the company activities or workings
are considered as stakeholder for the organization. The groups include customers, shareholders of the
company, government, suppliers and media (Freeman, 2010). Firms are successful if only they try to
engage with their stakeholders and satisfy them to make the company healthy and to gain long term
success (Freeman, Harrison, & Zyglidopoulos, 2018). Stakeholder analysis or mapping helps in knowing
the influence of each stakeholder on the company on the basis of power and their level of interest
(Boucher & Rendtorff, 2016). To understand this concept more appropriately given below the Kmart
stakeholders mapping that clearly categorize the stakeholder on the basis of power-interest level in an
organization.
High
Low
Low Level of Interest High
Stakeholder Mapping: Kmart
Source: (O'Riordan, 2017)
Stakeholder Map and analysis
This stakeholder theory applied in Kmart Australia and for that stakeholder map is drawn which
help in identifying impact of internal and external stakeholder on Kmart. The organization mainly
Power
Keep them satisfied
 Customers
 Regulator
 Investors
Minimal effort
Non-Government
Organizations
Key players
 Top management
 Board of Directors
 Public Relation
Keep them informed
 Low return customers
 Suppliers
 Society
 Employees

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focuses on their shareholders as they have high level of power to take part in decision making and they
come under dormant stakeholders. The dominant stakeholders of Kmart are its Top management, Board
of Directors and Media which have high level of interest and power to manage the activities. Kmart
maintain close working relationships with their suppliers and keep them informed but suppliers don’t
possess high power but have high interest in the organization activities because it directly or indirectly
affect them. Kmart contact their customers through emails, letters and websites which help the
company to communicate with them as customers are king and any organization should focus on
satisfying them because they possess power in group to affect the working of Kmart. NGOs are
considered as discretionary stakeholder they have low power and low level of interest in an organization
(Lindgreen & Maon, 2019). Involvement of government and regulatory bodies in Kmart is less they have
power don’t have any interest to involve in all activities carried by the Kmart. In the view of Kmart their
some dependent stakeholders who have high level of interest are society, this group need to be
informed because company uses society resources and they have to give them back. So here
stakeholders of Kmart are identified on basis of their influence in company activities.
Recommendation
Kmart mainly neglected their customers and employees, company should focus on engaging
them in decisions and try to understand behavior their views and demand by taking feedback from
them. Customers have more influence on business activities so Kmart should consider their feedback
and work on satisfying need of customers. Furthermore they should involve their employees in
discussion as they are also important stakeholders of the company and vastly affected by the company
decisions. They can use number of channels to maintain high relation with their employees that include
surveys, discussions and personal contact (Phillips, 2012).
Conclusion
The main objective of stakeholder theory is to manage or prioritize the stakeholders effectively
because stakeholders have power and interest that can affect the working of organization as well as
affect the stakeholders. The Stakeholder mapping helps in knowing and categorizing the types of
stakeholders as dominant, dormant and discretionary. It can be concluded that main focus of Kmart is
on its most important stakeholders and the company neglected its stakeholders who might affected by
the organization working such as customers and employees for that Kmart should focus on increasing
their involvement.
.

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References
Boucher, M. B., & Rendtorff, J. D. (2016). Stakeholder Theory: A Model for Strategic Management. UK:
Springer International Publishing.
Freeman, R. E. (2010). Strategic Management: A Stakeholder Approach. UK: Cambridge University Press.
Freeman, R. E., Harrison, J. S., & Zyglidopoulos, S. (2018). Stakeholder Theory: Concepts and Strategies.
UK: Cambridge University Press.
Lindgreen, A., & Maon, F. (2019). Engaging With Stakeholders: A Relational Perspective on Responsible
Business. New York: Routledge.
O'Riordan, L. (2017). Managing Sustainable Stakeholder Relationships. UK: Springer International
Publishing.
Phillips, R. A. (2012). Stakeholder Theory. UK: Edward Elgar Publishing .