MGT501 Business Environment: Ambuja Cement Stakeholder Analysis

This report provides a comprehensive stakeholder analysis of Ambuja Cement, examining both internal and external stakeholders and their respective roles and interests. It identifies key functional areas within the company and explores the nature and degree of influence exerted by various stakeholders, including shareholders, employees, suppliers, customers, and the government. The analysis delves into the implications of conflicting interests among stakeholders and assesses the external environment using a PEST framework. The report also includes the creation of a stakeholder matrix, an examination of the challenges faced by the company, and strategic compliance through stakeholder management. In addition, the report highlights the company's vision, mission, and competitive advantages.

BUSINESS ENVIRONMENT

Executive summary
Ambujha cement is a cement producing company established in India. The report will
undertake to consider the related relevance of the stakeholders in the company, who affect the
stakeholders either directly or indirectly affecting the business operation. The stakeholders
can be further classified on the basis of their participation in the organisation such as internal
stakeholders as well as external organisation (Hueske, & Guenther, 2015). Internal
stakeholders are defined as the way of affecting the business operations within the
organisation and these stakeholders are committed to serve the organisation such as senior
management, directors, board members, employees, and workers. On the other hand, external
stakeholders affect the organisation in every possible external environment but they do not
engage in the organisational decision by working within the organisation as per the activities
and preferences. For example- local community, suppliers, regulators, government agencies,
creditors, investors and society (Hueske, & Guenther, 2015).

Contents
Executive summary....................................................................................................................1
Introduction................................................................................................................................3
Identify functional areas.............................................................................................................3
Identify internal and external stakeholders and their roles........................................................4
Identify the nature and degree of main stakeholders’ interests, and implications of conflicting
interests......................................................................................................................................5
Nature and degree of the stakeholders interest depends on the interest of that stakeholder in
the organisation..........................................................................................................................6
Identification the level of main stakeholders’ influence............................................................7
Analysis of external environment..............................................................................................8
Create a stakeholder matrix........................................................................................................9
Challenges faced by company and their strategic compliance through stakeholder................10
Conclusion................................................................................................................................11
References................................................................................................................................12
Appendix..................................................................................................................................14

Introduction
Ambuja cement limited is a public limited established in 1983. The organisation is
headquartered in Mumbai whereas the founder of the company is Suresh Kumar Neotia. The
shares of the organisation have been traded under BSE (Bombay stock exchange) and
National stock exchange (NSE). The organisation owns strategic partnership with the
Holcim, which is the largest cement producing company. As far as the stakeholder analysis is
concerned, Ambuja has a mission to create value for their stakeholders as it tries to achieve
goals and objectives (Hueske, & Guenther, 2015).
Some of the important stakeholders of Ambuja cement include shareholders, investors,
dealers, suppliers, employees, community, NGOs, industry Association, construction
professionals, community locals, government and regulatory authorities, media and
customers. A stakeholder affect the internal and external operations in an organisation
(Hueske, & Guenther, 2015).
Identify functional areas
Every company is divided into several departments so that it could accomplish the goals of
maximum productivity (Hueske, & Guenther, 2015). Some of the main functional areas of the
company associated with the business activities of Ambuja are-
Business development
Process designs
Finance
Stratification for the location
Supply chain management

Human resources management
Contracting and sub-contracting
Franchisees
Marketing and sales
Identify internal and external stakeholders and their roles
Shareholders- Authority of decision-making power is one of the common ways to understand
the role of stakeholders in a public traded organisation.
Internal stakeholders-
Employees- With the assistance of employees, any company succeeds to perform and excel in
the market. Whereas, an employee is dependent on the company to earn its livelihood.
Maintaining positive and cheerful productive environment will totally depend on the
coordination of the employees. Manager should undertake to overlook at the business
operations, improve efficiency, and motivate employees at the same time.
Investors- stakeholders are seen as large investors that can either decrease or increase they
controlling power in the company as per the performance of company. The role of some
investors are related to risky investments and disinvestments considered in the movement of
the share price and finally attract the media for this issue (Hueske, & Guenther, 2015).
External stakeholders
Suppliers- being a stakeholder, a supplier`s role is to avail raw material and also the other
components where the company can use the products and enhance its productivity. These
volunteers can turn to boost the income level of the company. A non-trustable supplier can
increase the risk to organisation because of poor quality goods. A business cannot purchase

from the suppliers if it does not avail proper services and goods (Kearns, Apollonio, &
Glantz, 2017).
Community- A company always operates with the help of resources availed by the
community and society. A social responsible organisation demands to contribute to fund local
schools and the community. When an organisation`s activities affect the community in an
direct way such as ethical responsibility, and ecotourism ventures where community groups
plan its own activities (Hueske, & Guenther, 2015).
Government- These stakeholders is authorised to collect taxes from Ambuja and also impose
several laws related to environmental protection so that it does not pollute.
Customers- The main role of customers is under the construction of strategies, which is to
determine whether the organisation provides great services or not. This can force the
organisation to serve best quality at lowest price (Hackshall, Kassis, & Sutherland, 2014). It
is important to note that no business can ignore the customers as if it will not sell its products
then it will not be able to make products and finally can go bankrupt. According to the Peter
Drucker, it is important to know the main purpose of the organisation i.e. to create its
customers where it can not survive without customers as every situation will be treated as per
the needs of the customers.
Identify the nature and degree of main stakeholders’ interests, and implications of conflicting
interests
The conflicting nature of interests occurs between the stakeholders as the interest of each
stakeholder differs from one another. For example- it is the responsibility of the company to
cater the CSR activities and spend money to serve services from its profitability. On the other
hand, shareholders and investors may prefer to retain their own and ask the company to
distribute those profits ads dividend (Kearns, Apollonio, & Glantz, 2017). Another

conflicting interest can be when the company decides to purchase new machinery so that it
can reduce their cost of production by enabling the production to higher quality with low
cost. On the other hand, employees are worried as the organisation will not need labour and
there will be cutting in the employee`s salary. Therefore, there is a conflict between the
interests of the stakeholders as low cost of production can hurt the employment of the
employees (Kearns, Apollonio, & Glantz, 2017).
Nature and degree of the stakeholders interest depends on the interest of that stakeholder in
the organisation.
Customers- the nature of pressuring customers include affordable pricing, customer
education, greenhouse gases, and brand image. It is important to note that a customer can
impose degree of interest on the basis of purchasing affordable prices on the basis of brand
image it uses. The degree also can be how a product can be used in a better manner while
saving the resources with least efforts (Ramus, & Vaccaro, 2017). Customer’s satisfaction is
the root of goodwill, fairness, and trust. Keeping them satisfied can be a challenging task for
the organisation. In order to satisfy the needs and demands of the customer, an organisation
has to establish a sense of trust among them by availing them high quality goods and services
and also ensuring them a strong base to their construction that can be their house, or other
building (Kearns, Apollonio, & Glantz, 2017).
Investors The level of investor`s interest always lie in its investment and its returns from
earnings. An investor has the feature of profitability, demand generation, land acquisition,
and the cost saving (Brunton, Eweje, & Taskin, 2017). It is important to understand that there
should an important questioning get questions such as suppliers are more that in numbers and
includes public advocacy The Company has started to cater the needs of ambuja cement
(Ramus, & Vaccaro, 2017). The company has also started to come up with new set of self-
employment actions and creating value (Ramus, & Vaccaro, 2017).

Suppliers- the pressure and the power to influence covers the profitability, brand awareness,
longer and distributive boss. This stakeholder group depends on supplier`s profitability and
they are happy with the Ambuja brand. The suppliers strongly believe that Ambuja has
followed the procurement standards in order to improve the business as well as the brand.
Transporters are very much concerned about the time idly even during the lean season.
According to the external agency, it enables to foster the sustainability practises at the end of
suppliers (Rodrigues, Nikhil, & Jacob, 2016).
Identification the level of main stakeholders’ influence
The level of pressuring of stakeholders exerts severe pressure on the Ambuja cement where it
is related to several activities. This pressure will finally lead to conduction of organisation’s
activities (Brunton, Eweje, & Taskin, 2017). This pressure enforces to conduct the business
as per them-
External stakeholders often plays an important role while accomplishing the goals of the
company in regards to every stakeholder they engage in-
Customers- this group of stakeholders is quite important to decide to what extent it has
gained trust among the customers. On the basis of their productivity, the performance can be
measured in terms turnovers that has been generated from sales. The interest of customers lie
in its offerings where they actually evaluate whether the company has been providing high
quality at moderate or low prices or not (Rodrigues, Nikhil, & Jacob, 2016). Their interest
lies in the construction of building and their sustainable quality with new flavours with an
appropriate change strengthened in the mixture of cement. Customers have attained a great
space where special customers avails huge cash discounts. It is seen that customers can have
severe impact on the strategy made on the corporate level as well as business level
(Groupmap, 2019).

Employees- Amnbuja cement addresses several concerns related to their training programs
where their main motive to grow them personally on the behalf of the company. These
stakeholders are authorised to many fair consideration for their favours such as training,
career goals, and fair wages (Groupmap, 2019). Employees are officially trained so that they
properly mix the chemicals to manufacture the cement at lower level management and
formulation of strategies towards the middle and op level management. Employees are
properly trained to avail rigours services when it needs (Rodrigues, Nikhil, & Jacob, 2016).
Government- The government association with their partnership can assist nation as well as
the company to grow where it will lead to reduction in the unemployment rate related to
stakeholders. Fresh investment will certainly lead to growth of sector while availing jobs to
the people (Groupmap, 2019).
Local community- WWF aims to avail many localised solution to maintain the sustainability
of water availability enabled with accessing issue at the targeting site. The company`s interest
is the outreaching of several programs in relation to charity and many community outreaches
for the programs. The follow up and interest of the stakeholders is to foresee the extensive
outreach enabled with investment in order to support the business activities (Rodrigues,
Nikhil, & Jacob, 2016).
Analysis of external environment
PEST is abbreviated as political, economic, social, and technological factors, which is an tool
to analyse external factors that affect the organisation’s existence.
Political factors- It is one of the main factors affecting the operations of the organisation.
Most important thing is that government is the major client of Ambuja as it owes to large
construction projects (Crisil, 2019). Economic factors of India signify that GDP is expected
to grow more than 8 percent. Therefore, this industry will react positively in the growth

projections. Certain reforms have been undertaken by government authorities, which affect
many industries as the deregulation of the diesel price inclusive of direct transfer pricing, get
subsidy, and hike in FDI capital for insurance and defence. Social factors consider the cement
industry, which comprises of both organised as well as unorganised sector. India has large
young population where Indian purchasers ultimately lean on purchasing of market brands
such as Jaypee Cement, Ultratech, and Lafarge Cement. Many families have dominantly
become nuclear families where it has raised the demand for housing (Business Today, 2014).
Technological factors where government plan to procure innovation for the cement industry
where administration talk about technology transferring in the concern of energy
conservation.
Create a stakeholder matrix
A. Minimum Effort B. Keep informed
C. Keep Satisfied D. Key Players
This matrix signifies the importance of every stakeholders. In business operations where
stakeholders are divided on the basis of competitiveness and potential to cooperate while
affecting the organisation (Groupmap, 2019). It is being evaluated that customers, regulators,
and sponsors will possess high power enabled with low interest in relation to profitability as
well as operations (Crisil, 2019). Other many categories will include top-level management,
senior management, and the senior executives will certainly possess high power of interest

with low power of potential in the company (Groupmap, 2019). On the other hand, suppliers,
and receptionist have low power and low interest in the company. Some of other important
stakeholders are developers, testers, and internal users do have high interest with low
influencing power. For instance- A supplier will always look after the current and quick
feasibility of the organisation (Rodrigues, Nikhil, & Jacob, 2016).
This matrix has been divided into four quarters and each portion can signify its relevance on
the basis of competitiveness and potential to influence or cooperate. Offensive stakeholder
can include stakeholders with high potential and also with low competitiveness while
affecting the organisational goals. Stakeholders will menace to organisational strategy where
maximum stakeholders are customers (Hackshall, Kassis, & Sutherland, 2014). The
stakeholder will impose high power in affecting the staff in the retail sector as well as the
manufacturing sector where customers are under offensive. Swing- it considers those
stakeholders that have huge competitiveness with potential; to cooperate (Zhuang, & Jiang,
2016). The three main ideas to deal with stakeholder is to lead as per the changes in the laws,
enforces the organisation to undertake several decisions that will certainly differ from
existing ones. On the other hand, government agencies can impose higher penalties on the
organisation as organisation does not have profitability in regards to potential but its affect to
great extent (Zhuang, & Jiang, 2016).
Hold- These stakeholders impose low potential enabled with low competitive threat. It is easy
to manage these stakeholders because they do not affect the organisation much in decision-
making especially related to negativity (Crisil, 2019). For instance- suppliers for which the
company has the responsibility to uphold the direct suppliers in order to help the company to
avail an opportunity to serve its customers well by quenching the delivering as required
services and its related products as needed by the customers (Rodrigues, Nikhil, & Jacob,
2016).

Defensive- this category signifies for low potential and high competitiveness. It is seen that
investors and shareholders are some of the important defensive stakeholders as the suppliers
ensures that could be either stable or comply with the ethical behaviour (Zhuang, & Jiang,
2016).
Challenges faced by company and their strategic compliance through stakeholder
As far as the comparison is concerned, construction and Cement Company will include
project sponsors, lenders, technological advancement, suppliers of the raw materials,
chemical dealers, and subcontractors (Zhuang, & Jiang, 2016). External stakeholders for the
Ambuja cement are labour unions, licensing, debentures, interest groups, long-term lenders,
and licensing organisation. After looking at the differentiation, internal and external
stakeholders can affect both the industries at same level, as no operations remain untouched
with the external stakeholders. Another example can be body shop who serve the community
at the priority basis where a great portion serves as the profitability for any social cause with
higher quality, which becomes the reason for customer loyalty (Zhuang, & Jiang, 2016).
Conclusion
Stakeholders of any company affect the organisation or being affected by the actions of the
shareholders with the help of actions, policies and the objectivity of the company. From the
discussion given above, it is seen that different stakeholders many differ their potential to
affect and their competitiveness in their effectiveness. The three crucial suggestion is
concerned with dealing with the stakeholder that comply with the rules and regulations in an
appropriate way. Changes in the law as per the implementation and laws as per the services
can lead to collaborating with the WWF in order to protect the hygiene of water where
communities may suffer a lot from the unhygienic water.

References
Brunton, M., Eweje, G., & Taskin, N. (2017). Communicating corporate social responsibility
to internal stakeholders: walking the walk or just talking the talk?. Business Strategy
and the Environment, 26(1), 31-48.
Business Today, (2014). Concrete Growth. Retrieved from:
https://www.businesstoday.in/magazine/corporate/shree-cement-growth-path-
consistent-performance-behind-success/story/210086.html
Crisil, (2019). Chunky price hikes by cement makers after a long drought. Retrieved from:
https://www.crisil.com/content/dam/crisil/pr/press-release/2017/12/chunky-price-
hikes-by-cement-makers-after-a-long-drought.pdf
Dobbs, M. (2014). Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review, 24(1), 32.
Groupmap, (2019). Stakeholder Analysis. Retrieved from: https://www.groupmap.com/map-
templates/stakeholder-analysis/
Hackshall, D., Kassis, N., & Sutherland, J. (2014). Putting the customer first. CIO, (Spring
2014), 16.
Hueske, A. K., & Guenther, E. (2015). What hampers innovation? External stakeholders, the
organization, groups and individuals: a systematic review of empirical barrier
research. Management Review Quarterly, 65(2), 113-148.
Kearns, C. E., Apollonio, D., & Glantz, S. A. (2017). Sugar industry sponsorship of germ-
free rodent studies linking sucrose to hyperlipidemia and cancer: An historical
analysis of internal documents. PLoS biology, 15(11), e2003460.

Nelson, M., Smith, M., Ly, A., Gustavsson, A., Sudlow, C., & Bexelius, C. (2018). D2. 3
Stakeholder generated lists of priority RWE relevant outcomes and D2. 4 Disease
progression and outcomes classification matrix.
Ramus, T., & Vaccaro, A. (2017). Stakeholders matter: How social enterprises address
mission drift. Journal of Business Ethics, 143(2), 307-322.
Rodrigues, J., Nikhil, S., & Jacob, S. (2016). Promotional Strategies of McDonalds and
Market Effects. Journal of Management Research and Analysis, 3(1), 53-55.
Wang, C. H., Lin, I. H., & Tsai, J. Y. (2018). Combining fuzzy integral and GRA method for
evaluating the service quality of fast-food restaurants. Journal of Interdisciplinary
Mathematics, 21(2), 447-456.
Xue, H., Cheng, X., Zhang, Q., Wang, H., Zhang, B., Qu, W., & Wang, Y. (2017). Temporal
growth and spatial distribution of the fast food industry and its relationship with
economic development in China—2005–2012. Preventive medicine, 102, 79-85.
Zhuang, K., & Jiang, Y. (2016). An analysis of the development of the Chinese fast food
industry. Journal of Asian Business Strategy, 6(5), 85.
Appendix
(Source: Nelson et al., 2018)