HI6005 Group Assignment: Stakeholder Relationship Management Report

This report examines stakeholder relationship management, focusing on its critical role in organizational success. It begins with an executive summary that highlights the importance of stakeholder management for business growth, particularly in a capitalist market. The report then delves into the concept of stakeholder management, defining stakeholders and emphasizing the four-step approach: identification, ranking, understanding needs, and relationship management. A case study of Woolworths, an Australian supermarket chain, illustrates poor stakeholder management practices, specifically concerning employee relations. The report analyzes Woolworths' internal and external environments and proposes a multi-advocacy approach to improve stakeholder relationships. The discussion includes the negative impacts of poor employee relations, such as reduced productivity and high turnover. Finally, the report concludes by advocating for the implementation of effective stakeholder management strategies to resolve issues and foster business growth.

Running head: STAKEHOLDER RELATIONSHIP MANAGEMENT
STAKEHOLDER RELATIONSHIP MANAGEMENT
Name of the Student
Name of the University
Author Note

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Executive Summary
The effective functioning of every organization around the world is dependent considerably
on the aspect of management within such firms and how such decisions are taken by the
cornered people. There are many stakeholders which can be identified within the different
business firms. For instance, the managers of a firm are the internal stakeholders, along with
the employees. Furthermore, the external stakeholders identified are those of the customers
who form the target group of the business and the suppliers of raw materials. All of such
stakeouts are found to have a vested interest in the functioning pf the firm and therefore, they
are all interested to see the growth and expansion of the concerned business organization. The
main objective of every business around the world in this age of the capitalist market
structure, is to earn a higher level of profit margin. This is due to the fact that the higher is the
amount of profits earned, more shall be amount of money which is percolated at the lower
levels of the firm. This increased and additional money earned by the various stakeholders
keeps them happy and satisfied. The purpose of this paper is to understand the asepct of
stakeholder relationship management as an important theory which aids in the growth of a
particular business organization. Stakeholder management is a very important component for
a peaceful and smooth running of the business organization. A stakeholder is either an
individual or group or any organization that can affect or be affected by a program or activity
taking place in the organization. The paper has looked in to a case study whereby the
organization faces an internal issue with the employees. The stakeholder theory tries to
understand how this issue of the employees can be resolved, by looking in to the four step
approach, comprising of the identification of the stakeholder and the ranking of the
stakeholders. Furthermore, the needs and the agendas of the stakeholders are identified along
with the identification of the relationship as shared between the stakeouts. The paper
concludes with how these various steps can aid in resolving the problems as seen to be in

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existence in the various business firms of the world, thereby advocating for the need of such a
theory in the field of management.

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Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................3
An example of poor stakeholder management in Woolworths, Australia:............................3
4 step approach to stakeholder relationship management......................................................4
Case study:.................................................................................................................................8
General external environment of Woolworths:..........................................................................8
Specific external environment of Woolworths:.........................................................................9
Multi-advocacy approach to stakeholder relationship management:.........................................9
References................................................................................................................................11

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Introduction
Stakeholder management is a very important component for a peaceful and smooth
running of the business organization. A stakeholder is either an individual or group or any
organization that can affect or be affected by a program or activity taking place in the
organization (Bepari and Mollik 2016). Stakeholder management consists of the four steps.
They are identifying, recognizing and acknowledging stakeholder, determining their interest
and influence, establishing a communication management plan and influencing and engaging
the stakeholders Effectively managing the relationship with the stakeholders thus plays a vital
role in resolving the various issues faced by the organizations.
The organizational influence on the stakeholders motivates them to regulate the
organizational operations and financial performance. The main aim of the stakeholder
relationship management is to motivate and influence the attitudes, actions and decisions of
the stakeholders for mutual benefit. It is essential for every organization to identify the
stakeholders and in turn prioritize the stakeholders (Mok, Shen and Yang 2015). Stakeholders
are usually mapped out on an Interest Grid and identified by their power and interest.
Stakeholder management helps in creating positive relationships with the stakeholders by
fulfilling their objectives and expectations from the organization
Stakeholder management is a process that should be guided and controlled by various
principles. The report intends to create and analyse a case study of Woolworths by referring
to its poor stakeholder relationship management and its influence on the management’s
decision making framework (Crane and Livesey 2017). The paper reflects on the good side of
the management system as refined strategies that is going to refer critically the general as
well as specific environment of the case study company and ponder on the significance of

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multi-advocacy approach in stakeholder relationship management that can answer sensitivity
of it .
Discussion
An example of poor stakeholder management in Woolworths, Australia:
Woolworths Supermarket is an Australia based company and owned by the
Woolworths group. It is a grocery company and has more than 3000 stores in all parts of
Australia and New Zealand. The company is headquartered in Sydney (Ferro et al. 2017).
Around 180000 employees work in this organization. It serves approximately 21 million
customers every week through its different stores. In today’s time, it is essential for every
organization to main healthy relation with their customers and the internal stakeholders of the
business. The internal stakeholders of the company include the shareholders, employees, the
management team of all levels and labours. It is very essential for every organization to
maintain good relation with all the stakeholders in order to increase the productivity of the
business .
The stakeholders of Woolworths include the employees, the government,
shareholders, investors and the customers (Flax, Bick and Abratt 2016). The other
stakeholders of the company include the community interest groups, organized business,
NGOs, unions, franchises and media. Woolworths deals with the interest groups and
advocacy. Although, the company pays attention to the active stakeholder engagement
process, in order to maintain healthy relationship with the stakeholders, the employees of the
organization faces major issues in the organization. The employees face poor working
conditions in the organization.

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The employees usually have to work for 12 to 13 hours per day. They do not have the
flexibility to leave their office earlier than their usual time or enter late than their usual time
but offers no long-term or short-term benefit to the employees This in turn impacts the
employees negatively (Granville, Mehta and Pike 2016). They suffer from the various health
problems, increased medical costs, lower job performance, lower commitment of job, higher
job turnover, reduced quality of work and decreased productivity. They do not have a wok-
life balance. During the time of any emergency, the employees have to work for 15 to 16
hours and spend most of their time in the organization.
They are not even allowed to take their regular week offs during the peak seasons.
This results in highly de-motivation of the employees and in turn they do not put efforts to
meet their targets. The employees even stay back at office during the month ends as they are
loaded with tasks and are asked to finish it within the stipulated time (Gregory 2016). The
employees are highly agitated by the behavior of the organization towards the employees.
The employees have complained a number of time against their employer, but the
management did not take any strict actions against their complaints. The employees in turn is
leaving the organization and in turn is increasing the attrition rate of the organization.
The company is not taking any strict actions to retain the employees instead has
applied strict rules against the employees which they need to follow. The company is
recruiting skilled labors every other week in order to maintain the smooth and easy flow of
the business (Grimmer 2018). This behavior of the organization is leading to bad reputation
of the company through word of mouth of the employees. The employees are leaving the
organization and joining their competitors in the area as they are feeling less important in the
organization.

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4 step approach to stakeholder relationship management
Stakeholder relationship could be a complex topic to discuss on because of the fact
that the main thing that has to be considered is the fact that there are numerous stakeholders
in a company and it is important to maintain a good relationship with all of them for the
purpose of making sure that they keep their support to the business (Noe et al. 2017). It is for
this reason why it is important to have a detailed step by step approach to the management of
relationship with the various stakeholders of a business. The four steps to stakeholder
relationship management are to be discussed vividly in the following paragraphs.
Step 1: Identifying stakeholders
A stakeholder is anyone who is highly interested in the business that an organization
undertakes, including the various projects related to it, or are impacted directly or indirectly
by the business or the projects undertaken by the business (Notteboom et al. 2015). The main
thing that an organization has to consider is to identify who exactly are directly or indirectly
impacted by the same. There are several people who would be in the list of people directly or
indirectly impacted by the company. However, stakeholders vary from project to project and
from time to time. For example, if a shareholder withdraws his or her shares from a company,
it means that the company would not be considering this person as a stakeholder for its next
project (O'Byrne and Daymon 2014).
Stakeholders are also people who fund projects, and even if a significant investor does
not invest in a certain project or are in no way to be impacted by the same, he or she is not
identified as a stakeholder for the upcoming project. Even customers are major stakeholders
of a company. When a company releases a product or a service, it is not necessary that this
would be of interest to its usual target customers, and hence, they would have to put some
time into considering who would rather be the more relevant stakeholders in this regard

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(Meixell and Luoma 2015). It is vitally important to identify the stakeholders in the first place
for the purpose of being sure who to keep good relations with.
Step 2: Ranking stakeholders
Ranking stakeholders could be a complex process to begin with. Firstly, since
companies have a lot of stakeholders in a project or in the business of the company in
general, it could be tough for them to identify who matter more than the other (Lim and
Greenwood 2017). Ranking stakeholders is highly necessary for the purpose of making sure
that the efforts into relationship management with the stakeholders is utilized efficiently, and
the people who are most relevant and important to the business are kept enough content for
the purpose of making sure that they continue their support for the business of the
organization, without which, the project or the overall business could simply collapse.
Ranking stakeholders is only a continuation from the first step, which is identifying
the stakeholders. This means that only the stakeholders who matter in a particular project
would be ranked. There are several ways of ranking stakeholders. However, the most
common way of ranking stakeholders is by the use of the power/interest model (Andriof et al.
2015). This is a model that puts stakeholders in a matrix, which has power on the X axis and
interest in the Y axis. Power refers to the stakes that the stakeholder holds in a given project,
while interest refers to how much interest stakeholders have in a particular project. Priority is
given according to the plotting of the stakeholders on the matrix.
Step 3: Understanding stakeholders’ needs and agendas
Now that all of the stakeholders in a project have been identified, the next step is to
make sure that all of the needs and agendas of the identified stakeholders are identified and
understood properly (Kettunen 2015). This is for the purpose of making sure that the way of

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approaching and keeping relationships with the relevant stakeholders is properly understood.
Stakeholders have varying roles in a company’s business or projects that the company
undertakes, and have various perceptions to it.
Every move that a company makes, can impact various stakeholders in various
manners due to the fact that they have varying interests from the way that they support the
company. It is for this reason why the needs and agendas of every stakeholder is properly
understood. This can be done by evaluating what each stakeholder from each quadrant on the
power interest matrix expects from the company, and why they have interest in the company
in the first place.
Step 4: Understanding relationships between stakeholders
The final step is to understand the relationship that each stakeholder has with the
company. This relationship could be direct or indirect, intimate or professional. For example,
a company would share a direct relationship with the concerned suppliers and project
managers who are responsible for carrying out a particular project (Svensson et al. 2018).
However, this same company might not share a direct relationship with the store managers of
the stores that are responsible for selling the products of the company to the customers.
It is for this reason why it is so much important to identify and understand the
relations that are shared with each stakeholder by the company and it has to be made sure that
the steps taken towards managing relations with the stakeholders according to the type of
relations that are shared with them It is inevitable that a company would need to prioritize its
relations with the stakeholders with whom it shares a direct relationship, rather than the ones
with whom it shares a proper and direct relationship (Ramirez 2019). It is for this reason why
the main thing that has to be done is to make sure that appropriate strategies are adopted for
each quadrant of the stakeholder matrix in terms of stakeholder relationship.

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Case study:
With reference to the scenario of Woolworths as discussed in the previous section, the
poor performance in stakeholder relationship management of the company will gain prospect
to be converted in enhanced and good stakeholder management functions (Noe et al. 2017).
Woolworths is a company that have huge opportunities to grab from the market if it settles
and manages their stakeholder relations properly. The most significant benefit of changing
their strategies will be reflected financially as well as performance prosperity. The significant
changes to be witnessed by the change implementation will be growth of sales, improved
customer relationship and loyalty, improved stakeholder management and increased revenue.
The stakeholder as it refers connect all the individuals and groups impacting the
functions and finances of the company. Hence, to address individually and specifically the
significance of each stakeholder groups, an analysis is carried forward identifying the
external environment factors impacting the positional aspects.
General external environment of Woolworths:
In general, the external environment analysis of Woolworths will refer to its PEST
analysis that consists of the following factors and impact the company’s stakeholder
relationship management strategies:
Political factors- The overall political impact of Australia will be considered that shows its
strong international growth markets creating opportunity for the company to invest and foster
prosperity (Noe et al. 2017). Potential stakeholder here: Countries, Government.
Economic factors- The economic status of Australia is a stabled frame and expansion of
service opportunities will eventually increase the GDP and per capita income of the country.
Potential stakeholder here: Investors, laws.

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Socio-cultural factors- With variations of the culture and diversity in demography,
organisations like Woolworths get the opportunity of exploring new needs of the market and
expressing international culture.
Technological factor- The country being the most technologically developed country have
immense opportunity for the growth of industries as technically featured industries that
embraces use of internet for expansion of marketing. Potential stakeholders here: Customers
from international network, suppliers.
Specific external environment of Woolworths:
Referring to the specified external environment that impact, the stakeholder
relationship management are the communication and marketing policies. The behaviour of
the external environment like failure of communicating the marketing policies or product
specification to customer can be considered as a bad sign. Customer relationship have to be
strengthened with the improvised communication policies and engagement with customers
through more marketing tools (Svensson et al. 2018). The equivalent impact is created for the
investors who are not served good or communicated well with for meeting expected
performance of revenue growth. The internal stakeholders to be specific are employees who
are suffering from unlawful treatments and often have confronted issues with salary. This has
to be solved with implementing employee protection acts for protecting their rights to work.
Multi-advocacy approach to stakeholder relationship management:
The multi-advocacy approach a strengthened form of stakeholders’ relationship
management and decision making skills for the managers that assess the sensitivity of
relation management (Noe et al. 2017). The techniques of the approach addresses critical
analysis and strategic monitoring of the relationship management processes that inhibits