Rio Tinto Stakeholder Analysis: Internal and External Factors

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Running Head: Business Environment: Internal And External Stakeholder Analysis
BUSINESS ENVIRONMENT: INTERNAL AND EXTERNAL
STAKEHOLDER ANALYSIS

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Business Environment: Internal And External Stakeholder Analysis
Executive summary
The assignment shows that there are various functional areas in Rio Tinto to help in increase
their revenue. Marketing is one functional area that helps to increase the company market
share by marketing their products with innovative ideas and new designs. The another
functional area is research and development of Rio Tinto products that mainly focuses on
providing good quality of products to customers so that customers have a good faith on the
company. The stakeholders of the organisation have a different interest in the company. The
trading partners of Rio Tinto main interest are to increase the revenue and dividends of
company. Then also the legal advisors have interest on providing legal help to the
organisation and interest on taxation and subsidies.

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Business Environment: Internal And External Stakeholder Analysis
Table of Contents
1. Introduction and company background.................................................................................4
1.1 Introduction......................................................................................................................4
1.2 Company Background......................................................................................................4
2. Discussion.............................................................................................................................5
2.1 Functional areas of Rio Tinto...........................................................................................5
2.2 Identification of internal and external stakeholders and their roles through PESTLE
analysis...................................................................................................................................7
2.3 Various nature and degree of stakeholder’s interest and their implications on the
interest..................................................................................................................................10
2.4 Level of influence of stakeholders..................................................................................12
2.5 Stakeholder matrix..........................................................................................................13
2.6 Comparison between two industries the stakeholder’s dissimilarities and various
differences of stakeholders interests 350..............................................................................14
3. Conclusion............................................................................................................................16
Reference list............................................................................................................................18

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Business Environment: Internal And External Stakeholder Analysis
1. Introduction and company background
1.1 Introduction
The assignment mainly focuses on the various functional areas of stakeholders in Rio Tinto
and how they are helping to develop the business. It also shows the internal and external roles
of the stakeholders in the organisation and their interest. Thus the stakeholders various
investment plan for the company and the main success behind the organisation is being
focused in the assignment. The study also focuses on various level of stakeholders and how
they are helping for the growth and development of company. Hence pestle analysis is being
shown for identification of stakeholders in the organization.
1.2 Company Background
Rio Tinto is a leading global industry of mining that focuses on finding mining from various
places and produce metal products. The company was founded in the year 1873. It is a anglo-
Australian multinational company and produce metal and mining related products. The
company mainly has a production of raw materials including iron ore, bauxite, copper etc.
Rio Tinto has a stock price of about A$ 94.77 in the market and has a revenue of about
4,052.2 crores USD in the fiscal year of 2018. It is the third largest mining company in the
world (Riotinto.com, 2019). Thus Rio Tinto has 47000 employees working for them in the
year 2019.

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Business Environment: Internal And External Stakeholder Analysis
2. Discussion
2.1 Functional areas of Rio Tinto
There are various functional areas in which Rio Tinto work for a sustainable development in
the market. The various functional areas are shown below:
● Marketing
The main functional area of Rio Tinto is marketing of their products and services and
advertising them in a unique way to target their customers. As opined by Kusiak (2018:508),
the company uses various promotional activities for marketing their products. Effective
marketing helps the organisation for a better growth of the organisation in the market. Thus
stakeholders also are responsible for marketing as they consider the main interest of
customers and implements company policy. They target and position the marketplace by
brings new and innovative marketing strategy so that customers demands increases for Rio
Tinto.
● Research and development
Another major functional area of Rio Tinto is researching and developing their products to
the market in a new way. As said by Price et al. (2018:185), the organisation uses new
innovative ideas and skills for the production process. They also uses latest technology in
their organisation to bring a new competitive advantage in market. Thus the stakeholders
does various research on the products, whether the products are of good quality or not and the
response of products in the marketplace. Creating of new design and style is also being
focused by the stakeholders of Rio Tinto to increase the demand of products and services in
the market.
● Sales
The other functional area of Rio Tinto is the sales department which plays a big role for the
success. This area is mainly responsible for generating revenue of the organisation and they

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Business Environment: Internal And External Stakeholder Analysis
ensure that the products that are being sold are creating profit for Rio Tinto. This sales
department mainly coordinates with the functional area of marketing where Stakeholders,
managers all focuses on product launching and the branding of the company. As mentioned
by Epstein (2018:44), thus they sees that quality of products are good so that demand
increases and side by there is also a increase of sales. They also focus on how to sell their
products to the targeted customers by approaching advertising techniques etc.
● Legal area
In this functional area of Rio Tinto they mainly oversee the legal issues in various
departments. As opined by Shackleton et al. (2018:88), the stakeholders in the organisation
ensure that workers follow the basic law and legal rules so that there is a flexible workplace
environment. They follow the Fair Work Act 2009 so that employees follow the legal rules
in the company.
Figure 1: Functional areas of Rio Tinto
(Source created: By Learner)
MarketingResearchanddevelopmentSalesLegalarea

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Business Environment: Internal And External Stakeholder Analysis
2.2 Identification of internal and external stakeholders and their roles through PESTLE
analysis
Factors Issues Impact on company
Political ● Due to increase of
corruption level there
is a decrease of
revenue in market
● High increase of tax
rate for products
● Trading partners
favour the company
The profit revenue of Rio
Tinto in market is reduced
due to the effect of
corruption and customers
lose faith towards the
company.
Due to high tax rates on
products customers demand
decreases from the company
products decreases. As said
by Nguyen et al. (2018:08),
hence it impacts a great loss
of Rio Tinto in revenue from
market.
Trading partners helps the
company through marketing
analysis from previous fiscal
year.
Economic ● Low education level
● Change of inflation
Due to low education level
the organisation a great

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Business Environment: Internal And External Stakeholder Analysis
rate impact of unemployment
that decreases the production
process.
As prices of products
changes it impacts in
increase of organisations
cost process, mortgages etc.
Social ● Increase of education
level
● Culture growth
Rio Tinto has a great impact
on increase in employment
level that helps in growth of
production.
Culture growth helps Rio
Tinto to have a flexible
workplace environment
among employees.
Technological ● New technological
equipments
● Using of lithium
battery
Due to new equipments in
Rio Tinto helps to increase
the production level and
within small period of time.
In long term power cuts it
helps to run the machines for
production.

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Business Environment: Internal And External Stakeholder Analysis
Legal ● Data protection
● Health and safety law
Data protection impacts Rio
Tinto to protect their
important data and
information from hackers.
Due to following the Fair
Work Act 2009 impacts the
organisation to follow the
law.
Environmental ● Recycling
● Water pollution
This impacts Rio Tinto to
recycle their products and
have a better environment
free of pollution.
Due to water pollution Rio
Tinto have a problem in
production process as water
is required in producing
metal products.
Table 1: PESTLE analysis
(Source created: By Learner)
Identified stakeholders are:
Internal stakeholders:

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Business Environment: Internal And External Stakeholder Analysis
● Trading Partners: The trading partners play a big role in Rio Tinto for increasing the
revenue in market. As said by Li et al. (2018:09), they mainly analyse previous fiscal
year data and uses statistical method on how to increase the profit revenue through
production process of the organisation.
● Workforce: In Rio Tinto the people recruit better employees. Thus this will help the
organisation to have skilled workers that increases the productivity level and a
flexible workplace in the company. As mentioned by Crane (2018:42), the employees
in the organisation strive hard to deliver their best efforts and assigned targets to
accomplish the company goals through using latest technological equipments.
● Legal Advisors: The role of legal advisors in Rio Tinto is to provide with health and
safety tips to every employee. They also advice what steps are to be taken to increase
the revenue of organisation in market and hence increase the quality of products.
External stakeholders:
● Customers: Rio Tinto provides good quality of products to their customers hence this
increases the faith of customers towards the company and thus increases the demand
of products. As opined by Nursey-Bray et al. (2018:72), customers mainly give
feedback about the products and this helps Rio Tinto to follow the steps according to
their answers. Due to this there is a culture growth between customers and the
organisation.
● Suppliers: The suppliers of Rio Tinto help to supply products like metals, mining
related products at different places so that it is easily available to every customer in
the market.
2.3 Various nature and degree of stakeholder’s interest and their implications on the
interest
There are various natures and degree of stakeholder’s interest that are shown below:

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Business Environment: Internal And External Stakeholder Analysis
● Trading partners
This stakeholder has a positive effect on the organisation. As mentioned by Stubbs & Higgins
(2018:489), they mainly focus on necessary steps to be followed for increasing the revenue of
Rio Tinto. The stakeholder collects various fiscal year data and uses statistical method to
analyse the precious year’s revenue and necessary steps to be followed for increasing the
profit revenue of organisation. The main interest of trading partners in Rio Tinto is in the
profit revenue and dividends.
● Workforce
The stakeholder in Rio Tinto recruits skilled employees for better production and accomplish
company goals. The main interest of workforce is to get motivation while working, getting
salary at right time and properly.
● Legal advisors
In Rio Tinto the stakeholder provides advice for health and safety tips they also gives
information on how to increase the profit growth. The main interest of legal advisors is
operating legally for the organisation.
● Customers
The stakeholder in Rio Tinto mainly provides feedback to the representatives about the
quality of products. The main interests of customers are to get value for the money paid,
reliable quality and also good customer service.
● Suppliers
The stakeholder of Rio Tinto mainly supplies various products to different places so that
customers get easily. The main interest of suppliers is to increase the purchasing growth
and Contracts on long term basis.
The stakeholder’s interest and their implication towards Rio Tinto are:

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Business Environment: Internal And External Stakeholder Analysis
The main impact is it helps to increase the financial condition of the company. It also helps to
lower the cost of raw materials and thus effects to grow the financial condition of the
organisation. Another implication of stakeholder interest is it provides a great power. Thus
the conflicting interest exists to achieve the desire goal of the company that a stakeholder has
set. Hence stakeholders use approaches to influence the plans and make decisions for
sustainable growth of Rio Tinto. They handle all the problems with delicacy and try to
complete the goal of organisation.
Figure2: Various nature and degree of stakeholder’s interest and their implications on
the interest
(Source created: By Learner)
2.4 Level of influence of stakeholders
The stakeholders mainly the Trading partners in Rio Tinto influence to increase the profit
revenue by electing directors for their company. They follow the company policies and
focuses on achieving the goals. A trade partner mainly focuses on using previous year data
that helps to know the profit revenue increase in current year with relation to the previous
year data. Thus they also focuses on production process of the company as efficiently worker
are focusing on the job and doing it in the specific period of time. On the other hand
stakeholders in the workforce are motivated thus due to this there is a influence of providing
TradingpartnersWorkforceLegaladvisorsCustomersSuppliers