Business Environment (MGT501): An Analysis of Walmart Stakeholders

This report provides a comprehensive analysis of Walmart's business environment, focusing on its stakeholders. It begins with an introduction to Walmart's functional areas, including management, operations, finance, marketing, and accounting. The report then identifies and categorizes both internal and external stakeholders, detailing their respective roles and responsibilities. A significant portion of the report is dedicated to examining the diverse interests of these stakeholders and how these interests can sometimes lead to conflicts. Furthermore, it explores the varying degrees of influence that stakeholders exert on Walmart's strategic direction, using examples to illustrate these dynamics. The report concludes with a discussion of stakeholder management strategies and the implications of conflicting interests within the organization.

Business Environment
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Executive Summary
Wal-Mart has the retail chain of stores operating in a number of countries. This report discusses
the functional areas of Wal-Mart, such as- management, operations, finance, accounting, marketing
etc. The internal and external stakeholders of Walmart and their roles are also discussed in the
report. The interest of the stakeholders is different and the difference in their interest also triggers
conflicts. The influence of stakeholders can be high or low depending upon their interest and power.
The report also discusses the variation in stakeholders of the different industries.
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Contents
Introduction......................................................................................................................................4
Functional Areas..............................................................................................................................5
Internal and External Stakeholders and their Roles.........................................................................7
Stakeholder`s Interests.....................................................................................................................9
Stakeholder`s Influence.................................................................................................................11
Stakeholder Matrix........................................................................................................................13
Discussion Forum..........................................................................................................................14
Conclusion.....................................................................................................................................15
References......................................................................................................................................16
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Introduction
This report analyses the stakeholder's interest and influence over the business organization. The
organization selected for this report is Walmart. It is a retail company and has a chain of retail
stores in several nations. This company was incorporated in the year 1969. The analysis of the
stakeholders is important to ascertain the individuals or group that may influence the activities of
the organization. Subsequently, the activities of the organization can also have an effect on the
interest of the stakeholders. The analysis of the stakeholder`s interest and influence can assist
Walmart in making effective strategies for managing the stakeholders and carrying out the
business activities constantly.
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Functional Areas
The functional Areas of Walmart are discussed below:
Management: It is the main role of managers in an organisation that they should guide the
performance of other people. The functions within the management are- planning, organising,
controlling and leading.
 Planning: Managers make strategies through setting the goals for business for a long term
along with strategies for short term which are required to execute against those goals.
 Organizing: Managers are liable to arrange the business operations in an effective
manner, making the business to make use of its resources in an effective way (Phillips &
Freeman, 2011).
 Controlling: A large portion of the manager's time is spent in managing the activities
inside the business to ensure that it is on his right way for the attainment of goals.
Managers take correct actions when they observe that processes or people are drift from
the path.
 Leading: For the organization, the managers are serving as a leader, both in practical and
symbolic methods. Work team or groups can be lead by a manager with a new processor
development of a new product. When the manager interacts with the community,
customers and suppliers then he can be seen as an organization leader (Chan, 2011).
Finance: However related to accounting planning is included in the finance function to achieve
and to manage the funds of Company. Such finance managers make strategies for short term as
well as for long term financial capital needs and to examine the effects which will be on the
business financial condition. The financial department of the company is liable to give answers
related to funds that how they have increased also about long term cost of borrowing funds and
the suggestions of financial decisions for business long term health (Phillips & Freeman, 2011).
Operations: It takes place only when inputs are changed to outputs. It just looks like a business
heart which pumps out the goods and services in a quantity and in a quality which meets with
customers need. These managers are responsible for overseeing the day to day business
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operations, which can encompass everything over obtaining raw materials to plan to give
tangible assets (Smillie, 2013).
Marketing: Whatever the company does to find out the needs and designs product and services
which meet those requirements. The marketing function also covers the promotion of the
products as well as services and making decisions regarding the marketing strategy, pricing
strategy etc. In epochs, technology-driven business environment marketing is liable to build up
and over watching the internet presence of a company. Presently, marketing through social
media is the fastest growing sector inside the marketing function (Muzi Falconi, Grunig, Zugaro
& Duarte, 2014).
Accounting: Managers get information from accountants as such information is required to
make decisions related to allotment of company resources. Finally, such an area is responsible
for validly representing the financial transactions of business to both the external and internal
parties, government agencies and investors and owners. These financial accountants are mainly
accountable for preparing Financial statements for helping entities both internally and externally
of the organization examines the financial strength of the company. Information related to asset
allocation, budgets, costs is given by managerial accountants as well as performance appraisal
for using internally by management with an intention of decision making (Blackstone &
Christian, 2010).
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Internal and External Stakeholders and their Roles
A business survives in a vast setting and a lot of aspects have an effect on the business in a direct
and indirect manner. Each and every organization have its stakeholders, whatever their its
purpose, nature, structure and size. The stakeholders can be regarded as any individual or group,
who persuade and can be affected by the activities of the organization. With reference to the
business environment, the classification of stakeholders can be done into two class- internal
stakeholders, and external stakeholders (Chinyio, 2015). Internal stakeholders are those parties
and individuals that subsists within the organization. In contrast to this, external
stakeholders correspond to outside parties, who get affected by or impinge on, the activities of
the business.
Internal Stakeholders: A group or a party or can be an individual who is responsible for taking
participation in the company's management are known as internal stakeholders. Such people
directly affect business performance and conducts the success and failure of the company. List of
the internal stakeholders and their role are discussed below:
 Employees: A group of people who carry out the tasks as delegated by the management
of the company and get paid for it. Their main role is to carry out the tasks assigned by
the management or manager so that organizational goals and targets could be
accomplished.
 Owners: An individual or a group as owning a position in an organisation in a form of
shareholders, partners etc.
 Board of directors: An individual's groups controlling the incorporated entity. Such
people are chosen by the company's members in annual general meeting. Their role is to
control the operations of the organization.
 Managers: An individual managing the whole department in several forms such as
general manager, sale manager etc. Their role is to manage the operations of business or
organization (Collins, 2011).
 Investors: A group or individual making an investment in an organisation. Their role is to
provide funds or making an investment in the company so that operations could be
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carried out. As finance is requisite for each and every organization for the execution of
their business operations.
External Stakeholders: A group of people whose interest is towards the affairs of a company
are known as external stakeholders. Such people directly affects the affairs of the company and
also policies or decisions which are adopted by the organisation.
 Customers: Consumers are known as the king of business because they are the only one
who consumes the product of the company.
 Suppliers: Such people give inputs to the organisation such as equipment, raw material
etc.
 Creditors: These are known as financial or bank institution or an individual who are
providing funds for the organisation (Chinyio, 2015).
 Competitors: These are known as the rivals for the company who makes competition with
the organisation for resources and also for the market.
 Clients: A party with whom the company is making deals and enhancing its services.
 Intermediaries: A marketing channels which develops a link between the customer and
the company such as retailers, distributors, wholesaler etc.
 Society: Company has a responsibility towards the society as the valuable resources of
the company are used by the enterprise.
 Government: Rules and regulations of Government are guiding and controlling the
organisation as taxes and duties are paid by it as imposed on it by government (Collins,
2011).
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Stakeholder`s Interests
The stakeholders have an interest in the company`s activities, decisions and processes. Because
these aspects can make an influence on their interest or it is also not wrong to say that interest of
the stakeholder can also make an influence on the organization`s activities.
The interests of the stakeholders are outlined in the table given below:
S. No. Stakeholders Interest Degree
1. Customers Product or service of the
company
High
2. Employees Job security and income Low
3. Investors Interest in the financial returns
of the organization
High
4. Vendors and Suppliers Safety and revenue High
5. Government GDP delivered by the
company and in earning tax
from the company
High
6. Competitors They have interest in
comprehending knowledge
about the contenders for
making improvement and
modification in their own
strategy
High
7. Communities Safety and health of their
community
Medium
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Below figure exhibits the interest and power grid of the stakeholders:
(Image Source: https://www.mindtools.com/pages/article/newPPM_07.htm)
The stakeholders who have low interest and low power shall be monitored; the stakeholders who
have high power and low interest shall be made satisfied; stakeholders have high interest and low
power shall be informed about the business activities; stakeholders who have high power and
high interest shall be managed closely (Lindberg, 2013) (Luyet, Schlaepfer, Parlange & Buttler,
2012).
The implication of Conflicting Interests
There could be a conflict between the stakeholders of Walmart because of the differences in their
interests. There could be subsistence of conflicting interests of stakeholders because of the
incompatibility of the goals or desire of the stakeholders. Below are some of the examples which
outlines the possible conflicts between stakeholders:
S. No. Reason of conflict (Business
Decision)
Stakeholder in
Support
Stakeholder in
Opposition
1. Cutting jobs to trim down costs Banks
Shareholders
Employees
2. Introduction of latest machinery for
reinstating manual work
Shareholders
Customers
Employees
3. Additional shifts for increasing Suppliers Employees
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capacity of the factory Customers
Management
4. Raising the selling price with an
intention to augment profit level
Management
Shareholders
Customers
(Calton, 2015)
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Stakeholder`s Influence
The influence of the stakeholders can be observed in the strategic direction of Walmart. The
influence of the main stakeholders on Walmart is discussed below:
Employees: Employees of Walmart are an important concern in the decision-making of the
company in managerial perspectives. There are two main concerns of employees: Job security
interests to make certain that Walmart will retain the workers as a component of its company;
whereas, higher wages can be regarded as a common interest, particularly for the reason that the
company proceeds to provide low salaries to its workers (Vance-Borland & Holley, 2011).
Walmart is only somewhat efficient in approaching the employee`s interests as stakeholders. The
programs and policies of the company render a substantial degree of job security. On the other
hand, Walmart keeps its condition of reducing salaries. Consequently, the company does not
adequately approach the employees' interest in context to wages (Schindhelm et al., 2012).
Investors: The main interest of investors is towards only profits. Their urge is for Walmart to
gain more profits it translates to higher dividends or earning per share. Interrelated, investors
have an interest in minimizing the company's operational costs (BONNAFOUS-BOUCHER,
2016). Generally, lower cost conducts higher profits and these are profitable for investors of
Walmart. Walmart gives importance to investors in its planning. It is the reason why Walmart is
continuing to reduce its cost, like through reducing the wages. Such theory suggests that the
main objective of a business is to formulate profits as there would be no business at all. Hence in
giving importance to investors as the primary stakeholders, Walmart has fulfilled such
theoretical main goal of its business (Missonier & Loufrani-Fedida, 2014).
Customers: Usually, the consumers are involved in the form of stakeholder group in the
business. In the case of Walmart, consumers were interested in the lower prices or with products
affordability as such goods have the acceptable quality. This is a true fact among consumers of
America who were likely to gravitate among retailers which offer low prices like Walmart (Johri,
2010). The interest of customers was addressed as stakeholders by Walmart. The generic method
of cost leadership is maintained by Company which covers the offering of reasonable prices.
Consequently, Walmart is famous as it offers products and services at low prices. Hence, it can
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be stated that Walmart is efficient and strong in approaching the customer`s interests as a
stakeholder (Lindberg, 2013)
Suppliers: Most of the suppliers make their interest in selling their products on a profitable
margin at Walmart store. This is not only profitable for suppliers only by selling the products of
the supplies Walmart stores also earn a good profit. From the point of the business, the suppliers
are the stakeholders they sell their products through Walmart stores so that they can earn a high
percentage of profit. If there is a little bit increase in the price of the products is always profitable
for the suppliers (Blackstone & Christian, 2010).
Its cycle goes like this- suppliers are at the bottom so it would be profitable for the stakeholders.
Its work like these suppliers supply the goods in the company and them stores the products. In
the business world, Walmart is the biggest retails and have a large business so that they can
influence the suppliers. In comparison to its company has more strong than suppliers. Due to this
suppliers does not get a higher profit margin as per they want (Muzi Falconi, Grunig, Zugaro &
Duarte, 2014). For instance, Walmart purchases the products from suppliers at a lower price if
they do not sell their products to Walmart it can be a loss for them and Walmart will not sell their
products.
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Stakeholder Matrix
Below is the stakeholder matrix for Walmart
S. no. Stakeholder Interest Power Influence
1. Government Low High In case Walmart does not
comply with the regulation,
the Government may impose
the heavy tax.
2. Suppliers High Low Suppliers may negotiate on
the cost of the supplies.
3. Customers Low High Customers can switch to
other company
4. Investors High High In case there are continually
low returns then investors
may not show interest in
making further investments
(Calton, 2015)
The stakeholder analysis state that the government has high power and low interest in Walmart.
The in compliance of law may tend the government to use its power in imposing taxes. The
suppliers have a high interest in Walmart because of the supply level. The high power of
customer may influence the business as customers can switch to other company if they do not
feel satisfied. Above all, both the interest and power of the investors is high which mean
Walmart has to look after investors to keep them satisfied (Luyet, Schlaepfer, Parlange &
Buttler, 2012).
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Discussion Forum
The business within the retail industry is completely different from non-profit organizations. As
the interest and the influence of the stakeholder gets change in this industry. The stakeholder can
be anyone from the external or internal business environment and have a stake in the
performance of the organization (Chinyio, 2015). However the stakeholders of the non-profit
organization are- beneficiaries, local community, members, volunteers, employees, donors,
beneficiaries, The purpose of the non-profit organization, is to accomplish its explicit principle at
the same time as offsetting costs (Vance-Borland & Holley, 2011). However, for the profit
organization such as Walmart, stakeholders possess an empowered interest in the firm`s
profitability, concentrating on the company`s holistic image. In the for-profit business,
stakeholders use to have different expectations in contrast to the stakeholders of the non-profit
organization. As the main concern of the stakeholders of the non-profit organization is in context
to the outcomes of fundraising activities, benefactors reached and the way organization will use
those funds for society`s benefits (BONNAFOUS-BOUCHER, 2016).
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Conclusion
Stakeholders who have joined corporate business activities have a strong effect on business
performance and business operations. Every stakeholder owes power, interest and influence on
the business which are not similar to others. However, the essential thing is to carry out the
assessing of the stakeholders, as it will not abrupt the success of the company.
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