Wesfarmers Stakeholder Management Report: Financial Crisis Impact

This report identifies and analyzes the stakeholders of Wesfarmers in the context of a recent financial crisis. It details the issues faced by the company, including the impact of the recession and changing customer demands. The report identifies key stakeholders such as employees, customers, shareholders, and suppliers, and examines their claims and power implications related to the financial crisis. It also assesses performance gaps between Wesfarmers and its stakeholders, prioritizing stakeholder demands based on urgency and legitimacy. The report concludes by suggesting actions to improve stakeholder relationships through enhanced communication, trust-building, and responsiveness to stakeholder needs and expectations. This student-contributed assignment is available on Desklib, a platform providing a range of study tools and resources for students.

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Running head: STAKEHOLDER MANAGEMENT
STAKEHOLDER MANAGEMENT
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Executive summary
The purpose of this report is to identify the stakeholders of the chosen company
Wesfarmers. The recent crisis faced by the company is financial issue, the report focuses on the
issue that is faced by the organization. It identifies the stakeholders related to the issue faced by
Wesfarmers. It identifies the nature of the stakeholder’s claims and power implications related to
the issues. It discusses the claims of the primary stakeholders. It has determined the performance
gaps of the organization and the demands of the stakeholders pertaining to the issue. The
stakeholder’s expectations are identified and the current shortfalls of the company. Further it
explains the influence strategy of the organization. It identifies the priority of the key
stakeholders and their strategic importance. Lastly, it concludes the possible actions of the
organization that can improve its relationship with its stakeholders.

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Table of Contents
Introduction......................................................................................................................................3
1. Description of issues faced..........................................................................................................3
2. Stakeholder claims and power implication of the stakeholders pertaining to the financial crisis.
.........................................................................................................................................................4
3. Performance gaps between the stakeholder and Wesfarmers......................................................5
4. Priority of stakeholder demands..................................................................................................6
Conclusion.......................................................................................................................................7
References:......................................................................................................................................9

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Introduction
The crisis faced by the chosen organization wesfarmers has led to an unstable situation
for the company. Due to the changing and dynamic environment in the business scenario, the
business organization faces certain crisis at one point. Wesfarmers have been facing financial
crisis recently. It has significant effect on the key stakeholders like the customers, employees,
suppliers and the shareholders. The report identifies the issues faced by the organization and
provides details of the issues. The report identifies the claims and power implication of the
stakeholders and classifies them. It determines the performance gaps between wesfarmers and
the identified stakeholders. It defines the stakeholder expectations and prioritizes the stakeholder
demands; it identifies the strategic importance of the stakeholders. Lastly, it concludes listing the
possible actions taken to resolve the issue.
1. Description of issues faced
Wesfarmers have been faces a serious issue regarding availability of financial resources.
During the period of recession, the money market had been highly dominated, it was because of
this reason the company faced a financial breakdown in the organization. The Australian money
market had taken over the business of the country. Unfortunately due to the emerging financial
crisis the company had to keep the cost price of share low (Businesstimes.com, 2019). This has
led to significant financial crisis of the organization and has impacted the performance of the
company thereby affected the potential stakeholders. The financial crisis faced by the company
is primary. Due to certain change in the buying pattern of the customers, choice, habits and
demands the demand for the products offered by the company went down. The customer’s power

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to spend less and affected the company. Further due to lack of financial availability of the
company, the organization lacked productivity; this was the top concerns of the company.
Figure 1: Stakeholder map
(Source: Tashman & Raelin, 2013).
It can be understood that a lot of effort needs to be given to convince and persuade the
stakeholders of the organization. The company needs to meet the needs and requirements of
primary stakeholders of the company, the potential investors, customers, employees and the
suppliers. The secondary stakeholders of the organization include the general public, community,
government officials. The company needed to engage with them constantly and regularly. They

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are needed to be communicated effectively. The company has to show consideration and
encourage the involvement of the stakeholders.
2. Stakeholder claims and power implication of the stakeholders pertaining to the financial
crisis.
stakeholder Stakeholder claims/ power implication
employees Compensation claims,
customers Product quality, service levels
shareholders Profit and dividends
suppliers Service orders/ purchase orders
Pertaining to the claims of the stakeholder, during the financial crisis faced the employees
of the organization claim for increase in compensation of the employees. During the financial
crisis, there had been significant delay in the compensation and wage. The company had to deny
compensable claims which had further impacted the employees of the organization. The trust
factor between the employee and the employee had been affected. The claims of the employees
were not addressed. During the financial crisis, the product quality and the service levels had
been hampered. Therefore, the customers claim for better quality products and service. During
the crisis, the stakeholder’s claims for dividends, that also has been delayed by the company.
Due to lack of financial availability of the company the company had not been prompt in its
purchasing order, thus it hampered the productivity and its reputation (Fifka & Adaui, 2015).
3. Performance gaps between the stakeholder and Wesfarmers

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The demands of the stakeholder include employee safety and wellbeing, the demand a
workplace with safe and clean. The workers of the organization demand for safety tools and
machinery with advanced technology which would enable them to work safely and efficiently
(Wheelen, et al., 2017). However, the customers of Wesfarmers demands for cost efficient and
reliable quality products. The suppliers demand for timely purchase orders and timely payments
from the company.
There has been significant performance gaps between the needs and expectations of the
stakeholders and the company failed to efficiently communicate with the potential stakeholders.
The company had failed to provide the customers with optimized products. The productivity was
hampers due to low wage rate and reduces productivity.
The current shortfalls in the stakeholder interacts inability to meet the needs and
expectations of the potential stakeholder. The company is facing challenge in applying
procurement principles; this has impact the smooth flow of communication between the
stakeholders. The communication flow among the stakeholders of the company is highly
incompetent (Tashman & Raelin, 2013). The company’s competitors, competencies and the
influence strategy of the stakeholders are formulated in the company’s vision, mission and
objective. The company has to scan the environment analysis. The strategic influence of the
stakeholders is means of identified strengths of the organization to opportunities.
4. Priority of stakeholder demands
stakeholders Priority
shareholders, customers Urgent priority

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Government Legitimate
HR, PR relations Dominant stakeholders
Employees, suppliers Moderate salience
The power of the organization over the claims of the primary stakeholders like customers,
employees, suppliers and shareholder, they have legitimate power over the company. The
amount of legitimacy or power of a stakeholder’s claim could be risky as they have legal, moral
as well as financial claim. Urgency is stated as a degree at while the stakeholders of the
organization demand for immediate action (Rodrigue, Magnan & Boulianne, 2013). The
stakeholders whose claims are considered to be urgent are the customers they have the power to
influence the firm. They have the power to access the physical, material, social and esteem
means of the firm.
The other attributes include the power, legitimacy and urgency. The power and
legitimacy are related and they overlap. The customers must be highly prioritized, as they are
considered as urgent claims. The legitimate stakeholders are the community or local residents;
they lack sufficient power to directly claim the organization (Bakker, Maat & van Wee, 2014).
Therefore, the company gives them less priority. The employees of the organization have
sufficient power and means.
Conclusion
From the above analysis it has been identified that due to the financial crisis, Wesfarmers
and their relationship between the stakeholders have decreased. In order to improve the

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relationship with the stakeholders, communication and trust has to be encouraged. The
organization needs to commit itself to build and maintain a long lasting relationship. Proper and
timely information must be communicated to the stakeholders. The needs and requirements of
the stakeholders must be fulfilled. By identifying its stakeholders and prioritizing them, the firm
can build good relationship with them.

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References:
Wheelen, T. L., Hunger, J. D., Hoffman, A. N., & Bamford, C. E. (2017). Strategic management
and business policy (p. 55). Boston: pearson.
Andriof, J., & Waddock, S. (2017). Unfolding stakeholder engagement. In Unfolding stakeholder
thinking (pp. 19-42). Routledge.
Fifka, M., & Adaui, C. R. L. (2015). Managing stakeholders for the sake of business and society.
In New perspectives on corporate social responsibility (pp. 71-87). Springer Gabler,
Wiesbaden.
Businesstimes.com 2019. Australia's Wesfarmers launches US$1.1b rare earths bid. Retrieved
from https://www.businesstimes.com.sg/energy-commodities/australias-wesfarmers-
launches-us11b-rare-earths-bid
Tashman, P., & Raelin, J. (2013). Who and what really matters to the firm: Moving stakeholder
salience beyond managerial perceptions. Business Ethics Quarterly, 23(4), 591-616.
Bakker, S., Maat, K., & van Wee, B. (2014). Stakeholders interests, expectations, and strategies
regarding the development and implementation of electric vehicles: The case of the
Netherlands. Transportation Research Part A: Policy and Practice, 66, 52-64.

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Rodrigue, M., Magnan, M., & Boulianne, E. (2013). Stakeholders’ influence on environmental
strategy and performance indicators: A managerial perspective. Management Accounting
Research, 24(4), 301-316.