Stakeholder Analysis and HR Strategies for Best Buy: A Business Report

This report provides a comprehensive analysis of Best Buy, examining the interests of various stakeholders including shareholders, management, employees, creditors, and suppliers, and explaining how their interests are intertwined with the company's performance. The report then identifies and discusses several key environmental factors affecting Best Buy, such as competition for top talent, the technological environment, and the economic environment, and explores how these factors impact the company's operations, particularly in its Results Only Work Environment. Furthermore, the report analyzes recruitment methods like recruitment agencies, social media, and headhunting, and discusses strategic reward approaches, including flexible work schedules, performance bonuses, and promotions, to retain key employees. The report concludes by emphasizing the importance of strategic human resource management in addressing these challenges and ensuring Best Buy's continued success.

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Executive summary
Different stakeholders have varying interests in an organization. There are some
stakeholders with a bigger interest in the performance of a company more than others. The
interest on performance depends on the amount of money invested and the benefit that the
stakeholder stands to gain if the company performs well. Some of the stakeholders with
interest in the performance of the company include shareholders, employees, management,
suppliers and creditors. This paper analyzes the reasons why each of the above stakeholders
have interest in the performance of the company. There are several environmental factors that
might impact on Best Buy. Some of these factors include competition for top talent,
technological factors as well as economic factors. Best Buy can use several recruitment
methods to acquire the best employees in the market. These strategies include using
recruitment agency, headhunting as well as web advertising and social media. The strategies
used to retain employees include performance bonuses, employee promotion and introducing
flexible work schedules.

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Contents
Introduction.....................................................................................................................................2
Stakeholders interested in the companies performance................................................................3
Environmental factors affecting Best Buy.......................................................................................4
Competition for top talent...........................................................................................................4
Technological environment.........................................................................................................5
Economic environment................................................................................................................6
Three selection methods.................................................................................................................7
Recruitment agencies..................................................................................................................7
Social media and web advertising...............................................................................................7
Headhunting................................................................................................................................7
Strategic reward approaches to retain key employees...................................................................8
Introducing flexible work schedules............................................................................................8
Performance bonus.....................................................................................................................8
Promotion of performing employee............................................................................................9
Conclusion........................................................................................................................................9
References.....................................................................................................................................10

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Introduction
An organization consists of many stakeholders who contribute differently to the success
of the organization. Some stakeholders are, however, interested in the success of an organization
more than others. Some of the stakeholders who are highly interested in the performance of the
organization include shareholders, management, employees, creditors, and suppliers (Ong, 018).
This paper, therefore, discusses the interest of each of the stakeholders and reasons why they are
interested in a companies performance. The environmental factors that could affect Best Buy,
which is using the Results Only Work Environment, are discussed. The advice on how these
factors can be handled is also provided based on human resource theories. This document also
discusses the appropriate methods that the human resource department, like Best Buy, can use to
recruit new employees. Given that the company is using a non-traditional work environment
framework, it is critical to hiring employees who are self-driven and results-oriented to move the
company forward. The appropriate reward criteria to motivate and retain performing employees
are also discussed in this paper.
Stakeholders interested in the companies performance
Different stakeholders have different interests in each business, and their value to the
organization differs. For any company to operate smoothly, all the stakeholders are critical since
the input of each one of them helps in contributing to performance in one way or the other.
However, some stakeholders have more interest in companies` performance than others.
Shareholders/owners are the stakeholders with the most significant interest in any company. The
owners/shareholders contribute to the capital or equity, which is used to run the business
smoothly. The shareholders invest a lot of their money in the company with the hope of getting
high returns on their investment. For example, at Best Buy, the people who own the company

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invested money in it with the hope that they will multiply their wealth out of the profits made by
the company. The better the performance of the company, the higher the returns on investment
for shareholders, and the lower the performance, the lower the returns on investment. If the
company makes loses, it means that the shareholders also lose their money and hence the fate of
the two is intertwined (Papa et al., 2018)
The management of a company also has a significant interest in the performance of the
company. This is because their performance as managers is gauged by the overall performance
of the company (Raguseo, 2018). The management is involved in the day to day running of the
company. The decisions that they make regarding the company affects the performance of the
company. Therefore the management team has the best interest of the company since their
performance is measured depending on the performance of the company. Failure to perform by
the management team means that they lose their jobs. Excellent performance by the management
also brings handsome rewards in the form of bonuses, and this, therefore, motivates the
management to push the company to perform at best possible level.
The employees of the company are also interested in the performance of the company.
According to Ng et al. (2017), employees are interested in companies` performance because it
determines whether they have a job or not. Furthermore, excellent performance may result in
additional salaries and other benefits, and hence they do everything possible to ensure that the
company meets its performance objectives.
Creditors also have an interest in the performance of Best Buy. Creditors are the
institutions that lend money to the company. They, therefore, have a significant interest in the
business since failure by the company to perform means that it might fail in paying the debts and
hence might affect them financially as well (Siddiqi & Tangem, 2018).

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Suppliers also have a significant interest in companies' performance. This is because the
performance of the company has a direct impact on the business interest of the supplier. If Best
Buy fails to perform, it means that the suppliers will not be able to suppliers the same quantities
as before, and this might impact on their revenues and profitability.
Environmental factors affecting Best Buy
Competition for top talent
According to the resource-based view theory of human resources, People within an
organization are the most valuable resource of an organization (Mohammed & Quddus, 2019).
Organizations should, therefore, establish a good relationship with the employees to gain a
competitive advantage. Furthermore, an organization must recruit employees who are highly
talented and who are suited to its needs. Therefore, one of the significant environmental factors
affecting Best Buy is the effect of competition on recruiting. Since Best Buy is using ROWE, it
needs to recruits employees who are highly disciplined and focused. The ROWE work
environment requires that individuals are assessed based on performance and not work hours.
Therefore, Best Buy has to ensure that it recruits employees who are capable of meeting their
objectives without much supervision. The company also needs to hire employees who are
innovative to help the company compete with peers in the industry. Given the huge competition
in the electronic retail industry, it is challenging to find such a pool of employees since there are
not many who meet the profile, and there is also intense competition for these kinds of
employees. Therefore, even after recruiting, retaining the employees might prove a challenge due
to the competitive nature of the industry and the realization by many organizations on the value
of employees to the organization (Stewart & Brown, 2019).

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Technological environment
The other major environmental factor which could affect Bes Buy is a technological
environment. Technological factors affect business significantly, especially in this era of digital
technology(Basile & Beauregard, 2016). In the retail market, there has been a tremendous
advancement in technology. Companies such as Amazon lead the way in using technology for
retail. Best Buy is one of the most prominent pioneer electronic retailers,s struggled to adapt to
the changing technology and how it affected consumer behavior. After the popularity of
Amazon, most customers preferred buying commodities online due to the convenience and the
low prices offered by e-commerce retailers. This, therefore, resulted in Best Buy losing a
significant market share to Amazon and other online retailers. Although Best Buy has launched
its own e-commerce business through a partnership with companies like Google, it still has not
retained the market power that it possessed previously. This factor, therefore, underlines the
importance of having innovative and highly talented employees. Technology will continue to
evolve over the next few years, and companies that make the first steps towards coming up with
innovative technology will benefit more than market followers (Mishra et al., 2018). To achieve
this, strategic human resource is very critical. This is because the employees within the company
are the ones expected to come up with innovative technological ideas that will give Best Buy a
competitive advantage over rivals in the future.
Economic environment
The other environmental factor that would impact Best Buy is the economic environment.
This is a major external environmental factor that could affect the operations of Best Buy.
Recession, economic boom, and inflation have a direct impact on Best Buy's operation. This is
because economic factors affect the buying power of consumers. If the economy is booming, it
means that the consumer's ability to purchase is higher, and hence the revenues of the company

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are higher. Economic recession contributes to a decline in the purchasing power of consumers,
and this, in turn, leads to a reduction in the companies` performance. The unemployment rate
also affects the market rate of wages and salaries. This, therefore, may involve strategic human
resource management since it could have a direct impact on the performance of the employees.
The HR department has to be careful of how the changes in economic factors might impact their
employees and how it could, in turn, impact the performance of the company. Globalization has
also brought a new aspect of the economic environment. This is because globalization has
brought about increased competition. This, therefore, means that Best Buy should have a
workforce that is highly productive and efficient to ensure that the company remains competitive
in the international stage (Tan & Rider, 2017).
Three selection methods
Recruitment agencies
One of the best ways to ensure that Best Buy recruits the best talent in the company is the
use of recruitment agencies (Hess, 2017). The use of recruitment agencies is appropriate for Best
Buy because it will provide an opportunity for the company to source talent from a massive pool
of qualified individuals. The advantage of recruiting using this method is that the agent has better
knowledge of the human resource market, and hence they stand a better chance of recruiting the
best candidate. The other advantage of this method is that reputable recruitment agents have
more extensive networks which they can use to identify the appropriate candidate.
Social media and web advertising
Best Buy can also recruit through social media and web advertising. According to
approximately one-quarter of companies in the UK and US, recruit through social media and
web advertising. One of how Best Buy can achieve this is by advertising positions on its

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websites. Any qualified and interested individual who comes across the message can apply for
the positions. Additionally, the company can use social media sites such as Linkedin, which have
become very popular with attracting new talent (Al-Omari & Okasheh, 2017). The advantage of
this method is that it advertises the brand of the company exposes the potential candidate to the
culture of the organization. Hence, the company can identify employees who meet a particular
skill set.
Headhunting
Headhunting is another appropriate method that companies can use to identify and recruit
the best employees in a particular industry. This is method has become very common in tech
companies as they compete for rare talents that can transform organizations for good.
Headhunting works best when recruiting senior employees and with specialized roles in the
organization. Best Buy can identify a candidate in a particular company or industry that they
think has a set of skills and personality required to achieve a particular objective. The company
can then convince the candidate to ditch the other company and sign to work with the company.
The advantages of this method are that it is cost-effective, time-saving, and ensures that the right
candidate is recruited.
Strategic reward approaches to retain key employees
Introducing flexible work schedules
According to Hess et al., (2017), replacing employees who have departed the company
costs approximately 05 to 2 times their salaries. Replacing key employees could cost more than
that, and in some cases, key employees cannot be replaced at all. According to the theory of
strategic human resource management, one of how companies can retain employees is by giving
employees flexible work schedules (Al Mamun & Hasan, 2017). One of the primary reasons why

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employees leave their jobs is due to dissatisfaction due to failure to enjoy their work. Employees
leave their jobs because they find the work environment boring or due to a poor working
relationship with their colleagues. This problem can be solved by allowing employees to work
with flexible schedules like the case with Best Buy (Lee, 2019). Flexibility is a reward for
performing employees and may reduce employee turnover, as witnessed with Best Buy.
Performance bonus
The use of performance-based rewards can be very effective in retaining key employees.
Most of the big companies which have the power to attract good employees have very
competitive and desirable performance-based reward schemes (Kim et al., 2016). This means
that the employees are given monetary rewards, depending on their level of performance. If a
company has the best bonus scheme in the industry, it is tough for an employee to leave and join
a rival company. Bonuses motivate employees to work harder and to remain in the organization
for a long duration. Furthermore, employees can be allowed to co-own the company by
purchasing shares within the company. This ensures that their commitment to the organization
increases because they have a financial interest in the company, and hence they are unlikely to
leave the company.
Promotion of performing employee
Organizations can use promotion reward criteria to encourage employees to stay with the
company for a long duration. Research indicates that a substantial number of employees leave
companies because they feel that they are not progressing as they expected. Key employees need
to rise in the organizational hierarchy. Therefore, one of how key employees can be retained is
by promoting top-performing employees. This ensures that they feel valued and rewarded for
their performance, and hence the turnover rate reduces significantly.

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Conclusion
The introduction of the ROWE human resource management framework by Best Buy in
the year 2004 transformed human resource management greatly. Many companies have adopted
the performance-based reward criteria, and it has been very effective in improving the
performance of the companies. The performance-based criteria have also improved the ability of
organizations to retain their employees. Some of the shareholders with interest in the
performance of the company include shareholders, management, employees, creditor, and
suppliers. The main environmental factors which impact on Best Buy include technological
factors, human resource availability, and economic environment. SHRM theories have
emphasized that employees are the main and most important assets for an organization, and this
has contributed to many organizations shifting their focus on recruiting and retaining key
employees. Some of the recruitment methods used in recruiting qualified employees include the
use of recruitment agencies, headhunting, and advertising through the internet and social media.
Employees can be retained by offering them competitive performance bonuses and offering them
flexible work schedules, which helps in improving employee satisfaction and hence improving
employee retention rate.

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References
Al Mamun, C. A., & Hasan, M. N. (2017). Factors affecting employee turnover and sound
retention strategies in business organization: a conceptual view. Problems and
Perspectives in Management, (15, Iss. 1), 63-71.
Al-Omari, K., & Okasheh, H. (2017). The influence of the work environment on job
performance: A case study of an engineering company in Jordan. International Journal
of Applied Engineering Research, 12(24), 15544-15550.
Basile, K. A., & Beauregard, T. A. (2016). Strategies for successful telework: How effective
employees manage work/home boundaries. Strategic HR Review.
Hess, E. D. (2017). Best Buy Co., Inc. Darden Business Publishing Cases.
Kim, H., Bailyn, L., & Kolb, D. M. (2016). Revisiting The Dual Agenda: Why Companies Miss
the Point if They Retract Flexible Work Arrangements during Bad Times. In Work-Life
Balance in Times of Recession, Austerity and Beyond (pp. 185-199). Routledge.
Lee, A. S. (2019). The relationships among the socialization behaviors used by supervisors,
socialization outcomes, organizational commitment, and work outcomes among
newcomer employees in three large companies in Korea (Doctoral dissertation, the
University of Illinois at Urbana-Champaign).
Mishra, D., Kumar, S., Sharma, R. R. K., & Dubey, R. (2018). Outsourcing decision: do strategy
and structure matter?. Journal of Organizational Change Management.
Mohammed, D., & Quddus, A. (2019). HR Analytics: A Modern Tool in HR for Predictive
Decision Making. Journal of Management, 6(3).