Stakeholder in a Business Essay Example for Free

Stakeholder in a Business Essay If a customer’s concern was that the product they want to buy is never in stock Tesco’s aim would then be to make sure they always had products in stock and on the shelves. Customer comments make the most impact because they are telling Tesco’s exactly what it is doing wrong and what needs to be done to improve it so Tesco is encouraged to improve their store for the sake of their customers. They have a big influence on the store because if Tesco’s did not listen to their concerns it would lose customers and sales which could go to other competitors. Customers are split into socio economic groups based on he occupation of the head of the household. It is used to see how people in different socio economic groups react to the same stimuli. The first 3 socio economic groups A, B and C1 will shop at Harrods because they have better more professional jobs which in return they will have more money so they like the finer things in life so therefore shop at Harrods. The last 3 socio economic groups C2, D and E will shop at Tescos because they have average jobs and are likely to be on minimum wage and Tesco if affordable so will therefore shop there. The groups are as followed: Socio economic group| Occupation| Tesco or Harrods| A| Higher managerial, administrative, professional example surgeon| Harrods| B| Intermediate managerial, administrative, professional example bank manager and teacher| Harrods| C1| supervisory, clerical, junior managerial example shop floor supervisor, bank clerk, sales person| Harrods| C2| skilled manual workers example electrician or carpenter| Tesco| D| Semi skilled and unskilled manual workers example assembly line worker, refuse collector, messenger| Tesco| E| Casual labourers, pensioners, unemployed example pensioners without private pensions and anyone living on basic benefits| Tesco| Customers of Tesco and Harrods could complain or give feedback in store or online and the business would do their best to fix these problems in order for the business to run at its full potential. (B) Employees Employees are an important stakeholder to Tesco because without them there would be no one to sell the products. Their job affects the growth of the business because if they do their job well and sell the products the business will bring in money. Employees depend on the business to make sure they are working in a clean and safe environment, there is job security and opportunities for promotion and discounts. Employees can also affect the business if they go on strike because then the business would have no workers to help the business run. They also want the business to do well so they can keep their job because if the business wasn’t doing well it might have to lose workers or close completely. Employees can also have an effect on the business if they let their personal life get in the way of their job. Relationships and emotions can cause an employee not to put their full effort into the job which could result in poor sales and losing customers. It is vital Tescos employees put all their effort into their jobs so the business excels. The employees at Tesco’s and Harrods could potentially quit their job if they feel they are not getting treated properly so it is a main priority that the employees are a big priority to the business. For the employees to be treated well at Tesco they want 24 hour security to make sure they are always safe, to know that anything personal is kept confidential and that they get a fair income for the work that they do. Employees at Tesco will be much different to employees at Harrods and they will both want different things. C) Suppliers Suppliers supply the products and services to a business. They can affect the running of a business if the products are not supplied on time. Not having stock on the shelves could lead customers to competitors. The suppliers want to have a long term contract with the businesses so they know they are always in business and will never lose money. The suppliers can affect the time, quantity, quality and cost of a product. Without suppliers the business could not guarantee that it will always have sufficient high quality materials. It is important that the business maintain good quality relationships with the suppliers so that raw materials and components can be ordered and delivered at short notice. The suppliers of Tescos and Harrods need to maintain their standard if they want to keep contracted with the business losing customers would affect the sales of the suppliers and also the running of the business. (D) Owners Owners and shareholders are interested in the business because they will be interest in their dividends and capital growth of their shares. Shareholders also have the power to elect the managing directors who make the decisions for the business. Owners have a big say in the aims and objectives of the business and how they should be decided. The shareholders can receive return in two ways. Firstly by a rise in the share price, so that they can sell their shares at a higher price than the purchase price known as capital gain and secondly based on the level of profits for the year, the company issues a portion of this to each shareholder for every share that they hold called a dividend. Below I have a copy of the major shareholders of Tesco. Harrods is a private limited company therefore is owned fully by quartar holdings. (E) Pressure groups Pressure groups are interested in whether the business is acting appropriately towards their area of interest. They are organisations of people who believe in the same cause. They have strongly held views and wish to influence some aspect of the society. These groups of people have more affect to the business than just one individual. Pressure groups have the right to criticise the government, hold meetings, protest and be able to have their views broadcasted and heard by the media. Pressure groups have to inform the local authorities and police to let them know they are going to protest. Pressure groups can protest in a number of different ways such as Internet, petition, letters and mass media. These can have a big effect9i on the public and if large numbers of people protest this could lead to the business changing. Pressure groups at Tesco’s will campaign for Tesco’s to stock fair trade products because they believe the workers are getting paid a fair price. (F) Trade unions Trade unions represent the interest of workers. Their main priorities are to guide, protect, help and support fellow workers. This creates a group of professionals wanting a say in their profession making individuals power stronger. They aim to achieve common goals such as protecting the integrity of its trade, achieving higher pay and increasing the number of employees. Trade unions originated in Europe and then they became popular in many countries during the industrial revolution because many workers were mistreated and underpaid. Trade unions may enforce strike or resistance to lockouts in furtherance of particular goals. Trade unions can also promote legislations favourable to the interests of their work members. Trade unions can provide benefits such as to insure members of unemployment, old age and funeral expenses. If trade unions put forward they wanted a pay rise of 5% there would be negotiation on both sides, the case would be unlikely but they could reduce the pay rise to 2. 5%. In France, Germany and other European countries, socialist’s parties and democrats played a prominent role in forming and building up trade unions. Trade unions have been said to have ineffective policies on racism and sexism, such that a union is justified in not supporting a member taking action against another member. The 4 main trade unions in the UK are: * General unions – these are for skilled and unskilled workers performing different jobs in different industries such as cleaners and transport workers * Industrial unions – these are for different workers in the same industry example the national union of miners covering workers at all levels in the hierarchy. Craft unions – these are fairly small unions for skilled workers performing the same or similar work in different industries such as musicians. * White-collar unions – these are for professional workers who perform the same or similar tasks in the same industry example teachers or scientists. (G) Local and nationals communities The community have an interest for the business because they get their products and services from them and they l ook for jobs from them. The community can have a big say on where the businesses location will be and expects the business to be environmentally friendly and as less disruptive as possible. The community have a big impact on the business because it is them that are customers to the business. If a new business was placed in a small community such as Tesco’s it could put other small businesses out of business example butchers, corner shops which could then affect the community if there shops that they shop at regularly have been put out of business due to this one store. (H) Governments Governments have an interest in the business because they collect tax from them. The government can affect the business in many ways such as businesses have to pay a variety of taxes to central and local governments including corporation tax on their profits, VAT on their sales and business rated to the local council for provision of local services. Businesses can also benefit from government incentives and initiatives, such as new infrastructure, job creation schemes and business relocation packages, offering cheap rent, rates and low interest loans. Tesco’s and Harrods have to work with certain acts of parliament such as the; 1. The employment relations bill, 1999 which states that employees who have been in employment with the same business for a period of one year have the right not to be unfairly dismissed. 2. The employment rights act 1996, which covers unfair dismissal, redundancy and maternity. 3. The sex discrimination act 1975, which states that it is illegal to discriminate against, an employee based on their gender or marital status. 4. The disability discrimination act, 1995 stating that is illegal for a business with more than 20 employees to discriminate against an employee or applicant or a job who may be disabled. Conflict between stakeholders * The local community can often suffer at the hands of a large business. Things such as pollution, noise, congestion and the building of new factories can lead the community to complain and if the business faces strong protests from residents and pressure groups it could cause the business to relocate o shut down meaning people would be unemployed. * Levels of authority can cause conflict between stakeholders. Example, a manager may not feel it has to respect and follow anything an employee says because they are lower and less important them then. There can be conflict between owners and employees if they feel they are not getting fair pay or bonuses. To keep the employees happy you need to build up trust and offering higher benefits and award programmes will assure this. * Suppliers and owners can have conflict if the products and services are not delivered correctly or on time. If a product was not delivered on time and the shelves were out of stock of that product the customers would have to go to competitors and the business would lose out on sales. Conclusion To sum it up stakeholders are very important for Tescos and Harrods to run efficiently and smoothly. Without the stakeholders the business wouldn’t have the money to run and they would not be as successful as they are today. To conclude stakeholders are one of the key factors to a business’s success or failure. The customers are Tescos and Harrods main stakeholders and these have the power to determine whether the business is a success or failure. The employees must do their job properly to retain customer happiness and ensure they will come back. Suppliers are an important stakeholder to the company and must maintain good relationships which will result in a less amount of problems and faster service. The owners are the heart of Tescos and Harrods and their decisions can affect many things in the business. They have to make sure their decisions will not result in a downfall of customers or cause problems with other stakeholders. Pressure groups must be listened to in order for the businesses to know what to improve on and what other stakeholders want from them. Trade unions are also an important stakeholder because company’s want to know what their workers want in order for them to do their best ability when doing their job. These stakeholders all must work together in order for the business to run smoothly. One problem can complicate relationships between other stakeholders which can put a stop to the business. Recommendations * I recommend that Tescos and Harrods listen to customer concerns and take them on board, acting on them to the extent that customers stop complaining, because they are the main source of income and they are vital to the business. I recommend that Tescos and Harrods treat all employees fairly and listen to what they want so they are treated with respect. If all the employees get what they want it makes sure that they are comfortable when doing their job and there will be no complaints. * I recommend that suppliers keep a good relationship with the business so they maintain a contract with them that will always keep them in business. Doing this will also return in the businesses favour because if Tesco needed something on short notice the suppliers might be able to get the product to them quicker.