MGT501: Stakeholder Analysis of Reliance Industries Ltd.

This report provides a comprehensive stakeholder analysis of Reliance Industries Ltd. (RIL), a major multinational company in India. It begins by outlining the functional areas of RIL, including human resources, marketing, customer service, sales, accounting, research and development, production, operations, and legal departments. The report then identifies and analyzes both internal stakeholders (employees and board of directors) and external stakeholders (shareholders, government, investors, and customers) using the PESTLE model. A stakeholder matrix is also presented. Furthermore, the report includes a comparative analysis with HSBC, highlighting dissimilarities in stakeholder interests and influences between the two companies. Finally, the report concludes with key findings and insights regarding RIL's stakeholder management and business environment.

Running head: STAKEHOLDER ANALYSIS OF RELIANCE INDUSTIRES LTD.
STAKEHOLDER ANALYSIS OF RELIANCE INDUSTIRES LTD.
Name of the Student:
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Author Note

1STAKEHOLDER ANALYSIS OF RELIANCE INDUSTIRES LTD.
Executive Summery
 Reliance Industries Ltd is one of the biggest company of India.
 The main functional areas of its business are human resource, account and finance,
research and development, marketing, operation and like.
 Employees and Board of directors are the major internal stakeholders of the firm.
 While, Shareholders, Government, Investors, Customers and supplier are the external
shareholder of RIL.
 The main stakeholders of the industry in the basis of the PESTLE analysis are the
internal owners, public owners and institutional owner.
 There are various differences in between the stakeholders of the industry of HSBC
and Reliance industry.

2STAKEHOLDER ANALYSIS OF RELIANCE INDUSTIRES LTD.
Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................4
Functional areas of Reliance Industries Limited....................................................................4
Internal and External shareholders of Reliance Industries Limited.......................................7
Nature and Degree of main stakeholders’ interest of RIL.....................................................9
Stakeholders Matrix of Reliance Industries Ltd.....................................................................9
Comparison with the HSBC.................................................................................................10
Conclusion................................................................................................................................10
References................................................................................................................................12

3STAKEHOLDER ANALYSIS OF RELIANCE INDUSTIRES LTD.
Introduction
Reliance Industries Limited is a multinational company of India. Headquarter of the
company is situated in Mumbai which is in the states of Maharashtra. The main business of
Reliance Industries Limited (RIL) includes the petrochemical, energy, natural resources,
retail, telecommunication and textiles business across India. The Reliance Industries is one of
the most profitable company of and in India. This is also the largest publicly traded company
in India in the basis of the market capitalization as well as the largest Indian company as per
the revenue (Reliance Industries Limited, 2019). In the year of 2007, the Reliance Industries
Ltd becomes the first Indian company to reach the $ 100 billion market capitalization. As per
the 2018 data, the RIL got the position of the 148th in the list of the Fortune Global 500 of
world’s biggest company. Reliance Industries is the largest exporter of India accounting the
total of 8 % of the total merchandise export of India in more than 110 countries. This is not
only the highest tax payer in the private tax payer but also it contributes more than 5 % of the
government income from the customs and excise duty which is also highest by any private
sector company in India.
This report is prepared to identify and analyse the functional areas in the business as
well as the internal and external stakeholders of Reliance Industries Ltd. To identify and
analyse the stakeholders of the firm this report use the PESTLE tool of analysing the
stakeholders. Further, this report also compare the considered point with the peers company.
Here, the peers chosen company is the HSBC. Lastly, the report also prepare the stakeholder
matrix of the RIL for better understanding.

4STAKEHOLDER ANALYSIS OF RELIANCE INDUSTIRES LTD.
Discussion
Functional areas of Reliance Industries Limited
The functional areas is the grouping of activities or processes as per their need in
accomplishing one or more tasks. The followings are the main functional areas of Reliance
Industries Limited as well as the any organisation: -
 Human Resource: - The human resource is the most important asset in any business.
Any organisation depends on his human resources as this is the hearth of any
organisation (Cascio, 2015). As discuss above, the human resources is an important
functional area of the Reliance Industries Ltd too. The key human resource activities
of RIL involves the main HR process areas, Manpower planning, Recruitment and
staffing, human resource development, compensation and benefits and leadership
development (Crosby, 2019). The major issues faced by the Reliance are the issues in
various companies of Reliance industries, employee retention issues, poor HR
policies and the cash and compensation issues. The RIL is the largest private sector
company have provide the high number of employment in India. This is one of the
reported company of India and always try to improve their HR policy for their
employees.
 Marketing: - Marketing and the promotion is the best way to communicate between
the customers of the target market. This helps the firm to communicate with their
targeted customers about their new products and services (Polonsky, Polonsky &
Scott, 2015). The effective marketing or promotional strategy can help the firm to the
long term success, profitability as well as the growth in their market share. The
Reliance follows the 360 branding and aggressive brand promotion. Reliance heavily
depended in their advertising and in their brand promotion. The company also spends
a huge amount in their marketing and advertising (Kottler & Keller, 2016). Reliance

5STAKEHOLDER ANALYSIS OF RELIANCE INDUSTIRES LTD.
rope with the Bollywood actor Hrithik Roshan for endorsing the reliance telecom.
The company also provide various discount in their retail store to their customers to
promote their brand.
 Customer service support: - It involve the range of the services which is provided
by any company to its customers in making the cost efficient as well as correct use of
the products. In this a firm provides the various services to its customers which
includes the installation, maintenance, planning and others for a product. The
Reliance Industries Ltd. provides good customer services to its customer both before
sell and after sell as the company knows the customer retention is important for the
company.
 Sales: - In the department of sale, Reliance Industry is one of the top company in
India. The RIL does not only generate its sell from the Indian market but also from
the foreign markets. Hence, this one of the largest industry of India too in export. The
RIL process its sales from the retail market which sells product direct to customers,
through the distributors and franchises. The company have an extensive supply chain
across India which helps the company to boost their sell and become the Indian’s top
company in terms of sell and profit.
 Accounting and Finance: - After the Human Resources of any company, the
accounting and finance is the most important for any organisation which consider all
the money matters of the firm. The money is a very aspect of any firm as it is not
important for any firm to operate any firm without the money although the business
can be started without money. This functional area involves with that what money is
going in the firm and what is going out. The Reliance Industry have very strong
accounting and financial management, the company focuses more in investing the
money in their new business or in other business to generate the profit rather than

6STAKEHOLDER ANALYSIS OF RELIANCE INDUSTIRES LTD.
keeping it with them self. The accounting and financial of RIL properly make all the
investment decision of the firm that the result RIL India’s ranked on company in term
of the market capitalization and value.
 Research and Development: - In this continues changing world, every firm need to
be updated and upgraded to compete in such environment. This can be only possible
by research and development. Hence, the RIL has been aggressively investing in the
research and development to support their various services (Ril, 2019). A huge
amount of profit of RIL is go into the research and development, recently the
company invested over 1,824 rupees crores in their research and development.
 Production: - In this functional area of the business that turn the raw material into
the finish goods or products by the various process of the production. To sell the
produced product required the good quality and less defects, this is also comes under
the production function to ensure the quality of the product. RIL has the good
production department which never compromises with the quality of the products.
The quality of the product of RIL can be understand by its market coverage as the
company successful exporter of the product in more than 110 countries and the
number one exporter of India in merchandise.
 Operation: - The main function of the operation department is varies from firm to
firm but the ultimate goal of it is the same to the goal of the manager who run them.
The main responsibility of this department is to observe, control and manage the
process of production. This also contribute in redesigning the operations of the firm if
necessary. The operation department of RIL work very efficiently as the all the
manager level employees of the firm is high qualified and experienced.
 Legal Departments: - The legal division of any firm is responsible for providing
legal services and advises to the company as well as the employees and department

7STAKEHOLDER ANALYSIS OF RELIANCE INDUSTIRES LTD.
(Çera et al, 2019). The legal department of RIL is very effective as they plays a vital
role in the development of the firm.
Apart from the above mentioned functional areas of the Reliance Industries Ltd. there are
various other functional areas which is involved in the business operation.
Internal and External shareholders of Reliance Industries Limited
To identify and analyse the internal as well as external stakeholders of the Reliance
Industries Limited, this report uses the PESTLE model of analysing the internal and external
factors that affect the performance of the firm. In the basis of the PESTLE analysis the
followings are the main stakeholders of the Reliance Industries Ltd: -
Employees: - The employees of the Reliance is one of the major stakeholder of the firm. The
employees of the firm is an internal stakeholders as the employees of the firm is directly
affected by the decisions of the firm. The employees have many interest in the in the industry
like economical, work, time, physical health, mental health and timing. The level of influence
of the employee in the RIL is very high hence the chances of the conflict interest is also high.
Board of Directors: - The board of director is another internal stakeholder of the Reliance
Industries Limited. The board of the directors includes the most important persons of the firm
who make the several decision for the company which directly affect the profitability of the
firm. The board of director also have the high influence in the company’s decisions as they
have several interest in the firm like economic, social responsibilities and duties and like.
Shareholders: - The shareholder are those who invest their money in the firm. The
shareholder is not only an important stakeholder of Reliance but also of any publicly trading
company. The shareholder is the external stakeholder of the firm who have the economic
interest in the firm and highly influenced by the decisions of the firm. Shareholder of RIL is
the most important external stakeholder of the firm as the shareholders have the high level of

8STAKEHOLDER ANALYSIS OF RELIANCE INDUSTIRES LTD.
influence. The conflict in the interest is applicable between the shareholder and the company
when company not utilize the moneys of the shareholder properly and provide the proper
return on their investment.
Government: - The second most important external stakeholder of Reliance Industries is the
Government as per the PESTLE analysis. The Political factors of the PESTLE model is all
about the government and their rule. The Indian Government earns maximum custom duty as
well as the taxes for the RIL compare to the other companies. Hence, the influence rate of
Government is very high. The Government have the economic as well as social welfare
interest in the RIL.
Investors: - After the Government other important external stakeholder of the firm is the
investors. The investors of any firm are those person or institute which provide fund to the
company to operate their business with the motive of earning the interest. Although, the
investor only have the economic interest in the firm, the influence rate of this stakeholder is
also high. While the conflict interest is very low in this stakeholder.
Customers: - The customers of any firm is the most important stakeholder for those firm in
the point of view of company. The customers are directly and highly affected by the decisions
of the firm. The customer have various interest in the firm like economic, health, trust and
like. The conflict of interest in between the customers and the firm rarely applicable but when
it became applicable then this became the biggest issue for any firm.
Suppliers: - The suppliers of the Reliance Industries Limited is also an important stakeholder
of the firm. The supplier are those who supplier the raw material to the Reliance to produce
their finish goods. The supplier also have the economic interest in the firm with the low level
of influence. While the conflict interest is applicable when the supplier does not receive the

9STAKEHOLDER ANALYSIS OF RELIANCE INDUSTIRES LTD.
money of their supplied or not in time in the companies point view the quality and timely
delivery applies the conflict interest.
Nature and Degree of main stakeholders’ interest of RIL
The followings are the main stakeholder of the Reliance Industries Ltd: -
 Institutional Ownership: - The institutional ownership in the Reliance is 27.03 %
which is enough to consider the price moves in the large institutional transactions
especially when there is the low level of the public share is available (Bryson, 2014).
 Insider ownership: - As per the research, the insider owners are another group of
stakeholder which are directly involved in the key decision making of the company
related to the use of the available capital.
 General public ownership: - The total of 15.72 % share of the Reliance is owned by
the general public. As per the size of the ownership as well as the retail investors can
collectively plays an important role in the companies’ major policies.
Stakeholders Matrix of Reliance Industries Ltd.
POWER
 Board of Directors  Employees
 Government
 Customer
 Supplier
 Investors
 Shareholders
INTEREST

10STAKEHOLDER ANALYSIS OF RELIANCE INDUSTIRES LTD.
Comparison with the HSBC
HSBC is a multinational banking and financial service provider holding company of
British. It is the largest bank in Europe and one of the largest bank of world. The HSBC
Holdings have headquarter in London but the origin of it comes from the Hong Kong (HSBC,
2019).
Hence, the operating industry of HSBC is the banking and financing industry while
the Reliance industries works in several different industries like natural resources,
merchandise, telecommunication and likes.
The main stakeholders of the banking industry of India are the customers both
corporate customers and retail customers, employees, shareholders and investors including
the government while the major stakeholders of the Reliance industries as mentioned above
as the general public ownership, insider ownership and institutional ownership (Moodley,
Smith & Preece, 2018). The main point of the difference between the two industries is the
banking and finance industry is fully based on the direct services to the customers while
Reliance include both the direct and indirect with the higher percentage of indirect services to
the customers. Hence, in the basis of the differences between the customers and the services
provided by the industries to their customers the stakeholder of both the industries differs.
Conclusion
Lastly, the paper concludes that the Reliance Industries Ltd. is one of the biggest
industry of India in the both basis of market capitalization and profitability. The main
functional area of the industry are the human resource, marketing, financial, sells, research
and development and likes. The main stakeholders of the industries in the basis of the
PESTLE analysis are the insider owner, institutional owner and the public owner. There are
several differences in the stakeholders of the banking and financial industry and Reliance

11STAKEHOLDER ANALYSIS OF RELIANCE INDUSTIRES LTD.
industry of India. The main cause behind this is the difference between the customer bases of
both the industries.