Internal and External Stakeholder Analysis of Wesfarmers

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Executive Summary

Stakeholder analysis is a major activity for business practitioners to study the internal and

external environment of a business. In the present, Wesfarmers organization is chosen to perform

the stakeholder analysis completing the following activities.

 Introduction to the business background of the Wesfarmers

 Identification of functional areas of the Wesfarmers

 Finding the internal and external stakeholders and Their Roles

 Interests of the Stakeholders and Implications of Conflicting Interests

 Influence of Main Stakeholders with respect to their importance in the organization

 Development of stakeholder matrix

 Comparison of Wesfarmers stakeholders interests and influences with Woolworths business

Table of Contents
Executive Summary.........................................................................................................................2
1. Introduction..............................................................................................................................3
2. Functional Areas of Wesfarmers..............................................................................................4
3. Internal and External Stakeholders and Their Roles................................................................5
4. Interests of the Stakeholders and Implications of Conflicting Interests...................................7
5. Influence of Main Stakeholders...............................................................................................9
6. Development of Stakeholder Matrix......................................................................................11
7. Comparison of Stakeholder Interests and Influences.............................................................12
8. Conclusion..............................................................................................................................12
References......................................................................................................................................14
 1. Introduction

Wesfarmers is an Australian company established in the year 1914. Its headquarters are located

in Perth city in the area of Western Australia. It has diversified set of operations including the

general merchandise, outdoor living, home improvements, office supplies, safety products,

fertilizers, chemicals, energy, and apparel merchandise. Wesfarmers is the biggest company in

terms of shareholders and an employee base of 490, 000 (Wesfarmers, 2019). Its main objective

is to the facilitation of satisfactory benefits to the shareholders. It wants to accomplish the

objectives by studying the customer needs, offering high-quality competitive edge products and

services, development of fair relationships with the suppliers engaging sustainably and ethically,

and facilitation of flexible and safe working environment to the team members. Wesfarmers

focused on the employees and community to minimize the impact of their operations on the

environment and creating value on long-term (Wesfarmers, 2018). It has high growth in the

future with respect to diversified operations of the business. By considering this fact, needs to

perform the stakeholder analysis on the organization based on the PESTLE analysis. The present

report is planned to discuss the functional areas of the business, internal and external stakeholder

analysis and their roles, studying and the nature and degree of interests of the stakeholders and

impact of conflicting interests, identifying the level of influence of main stakeholders,

development of stakeholder matrix, and comparing with other business to identify the differences

and dissimilarities. It will help to gain more knowledge on the stakeholders of Wesfarmers and

how they are influencing the business operations.

2. Functional Areas of Wesfarmers

Regular functions are key to the Wesfarmers business. It has various functional areas to perform

the business including Human resource management, production, sales and marketing, customer
service, Research and development, inventory management, supply chain management, and

administration.

Human Resource Management: It is responsible for recruiting and retaining talented

employees in different functional areas. It always made efforts towards the retention of

employees, creation of succession planning, and development of plans and focuses towards the

achievement of gender balance and resolving of employee problems immediately.

Production (coal mining department): It produces the coal, mining, fertilizers, chemical, and

energy products to offer to the customers following the effective strategies. It performs activities

like collection of required resources for production, drilling, and removing the wastage

(Sahadeo, 2018). It monitors the work in progress, finished goods, raw materials, and wholesale

and retail finished products to distribute them to customers

Sales and Marketing: Sales and marketing playing the biggest role for this organization in the

improvement of sales and marketing all kind of products among the customers. The sales

department is aimed to guarantee the revenues and profits from the sales while the marketing

department focused on the enhancement of knowledge among the people about the products and

services offered.

Customer Service: Through this department, Wesfarmers is offering high customer service

through a different type of channels. It effectively managing the changing behavior of the

customer to offer customized services to them. It investing in customer service to make

transformations.

Research and Development: It is the crucial department of the Wesfarmers to explore the

market trends, market opportunities, and development of ideas to offer new kind of products and
expansion of the business (Bolton, 2014). Experienced professionals are working with the

Wesfarmers to find investment opportunities and capitalizing decisions.

Inventory Management: This department facilitating the required raw materials to complete the

production of the products. It controls the cost of inventory, minimizing the in-store stock,

improve the health, and disciplined inventory management.

Supply Chain Management: It works with suppliers in a responsible manner with the suppliers

to enhance environmental and social practices (Ray, 2018). It focused on the improvement of

transparency to avoid slavery in supply chains.

Administration: Administration department at the Wesfarmers focused at handle the financial

reviews, planning, and decision-making to ensure proper flow of operations and information

communicating with other departments.

3. Internal and External Stakeholders and Their Roles

Wesfarmers has both internal and external stakeholders to support their operations. The

stakeholders are the key people associated with business operations either directly or indirectly.

Internal stakeholders and their roles: The internal stakeholders are the people related to the

internal environment of the Wesfarmers. These include employees, executive board, investors,

shareholders, and managers and interested in the success of the company. The key role of the

internal stakeholders is that voting of their opinions owned the percentage of company

operations and having the number of shares (Anderson, Havila, & Nilsson, 2013). Executive

board play a key role in the acquisition of other businesses or merging with other businesses,

making strategic decisions, liquidation, hiring the important positions, budget development, and
distribution of the profits. Managers and employees have a larger stake in the development of

new product ideas, new marketing programs, and conducting meetings with leaders.

External stakeholders and their roles

The external stakeholders need to be identified based on the PESTLE analysis factors including

the Political, economic, social, technical, legal, and environmental factors. Based on these

factors, the external stakeholders include regulatory body, community, creditors, consumers,

suppliers, legal authorities, Department of Environment and Energy Australia, trade systems, and

technology vendors for production facilities (Robbins, Bergman, Stagg, & Coulter, 2014). The

role of these stakeholders is reflecting in various areas including the government, community,

and environmental concerns. Wesfarmers requires the support and permission from the

environmental board and city council to focus on whether the products developing by

Wesfarmers really add benefits or not. If this organization ignores the concerns of the

government and environmental protection agency leads to blocking of products and sometimes

may be the projects. Support from the technology vendors is must in the establishment of the

production plants to manufacture the various products coal, chemical, and fertilizers

(Wesfarmers, 2017). Customers and community are the key sources of income in the form of

product sales and revenues. The interests and concerns of these people must consider in

developing new products. Suppliers are crucial to collection and facilitation of raw materials

required for the production. Creditors have a role in changing the interest rates of finance based

on market conditions. Wesfarmers need to consider all these stakeholders to manage their

business operations effectively.

 4. Interests of the Stakeholders and Implications of Conflicting Interests

The interests and implications of the six major stakeholder groups including the employees or

executive board, customers, environment protection board, shareholders, suppliers, and

technology vendors.

S. No Stakeholders Degree and nature of stakeholder Implications of conflicting

interests interests

1 Employees These are oriented towards the success The conflicting nature of

and executive of the organization and they are resistance to change

board interested to grow professionally management will have a

taking the on-job training. They are serious impact on the

well aligned with the organization customers, hinders the growth

diversity policies and employee of the business, and

engagement policies. Sometimes competition levels in the

employees are resistant to change. market.

2 Customers Consumers have a positive nature and Consumer traffic is high to the

high level of interest to use the departmental stores and

products offered. Many of the supermarkets during the

Australians are purchasing the items in weekend and it may be

a large quantity those are sufficient for sometimes a problem for

a week. It is advantageous for customers handling their

Wesfarmers to have more storage and requests

supermarkets.

3 Environmental It is strict towards the producing of The conflicting nature of

 protection coal, chemical, and fertilizers products environment protection board

board and giving permission to the sometimes leads to a ban of

establishment of new plants. It products and lack of interest

imposes fines when the level of among the consumers

pollutants released into the

environment is exceeded.

4 Shareholders/ Shareholders are sincerely engaged Shareholders only focus on the

investors with the organizational activities to profits leads to the creation of

add more value to the creation of value some uncertain situations to

to customers. They involve Wesfarmers and limit the

environmental issues in controlling company capabilities to

energy consumption and pollution. achieve more growth

But, they are only associated profits

and returns on the investments

5 Suppliers 15000 Suppliers are supporting the Dependency on too many

company facilitating the required suppliers at a time leads to

resources to meet the demands of the create problems in Wesfarmers

customers. At present, it has limited in making inventory orders.

competition for suppliers and multiple Increase in the cost of the

suppliers are supporting the business. product leads to decreased

They will change the price of the customer base.

products when economic conditions

are changed.
 6 Technological These are interested to offer Changes in technology will

vendors technology to implement the lead to increased cost and

innovation changes in the future overcoming the competition in

business. They are provided a good the market.

technological base to the production of

energy, fertilizers, chemicals, and coal

mining.

Table 1: Stakeholders Interests and Implications (Harrison, Barney, Freeman, & Phillips, 2019)

5. Influence of Main Stakeholders

The influence of the main stakeholders is described as shown in the below mentioned table.

S. No Stakeholders Influence Importance

1 Employees and These have the formal power to These have high importance

executive board control the changes and policies of and involved in the decision-

the organization and the executive making process

board has to influence the leadership

styles (Jungnitsch, Stoffers, &

Neessen, 2016).

2 Customers Customers have a high influence on High importance should be

the operations, production, sales, given to the customers to know

and marketing activities. It will be their preferences, tastes, and

through changing the mindsets of purchasing habits of products

the customers towards the products.

3 Environmental The government rules against the Wesfarmers give less

 protection board pollution will have an influence on importance to this stakeholder

the use of materials in production as it is already following and

which will be disposed of and has implementing the corporate

less impact on the natural social responsibilities and

environment. But, this influence low investing a lot of funds in

and these impact only the use of association with shareholders

environmentally friendly materials

in producing coal mining, energy,

and fertilizers products.

4 Shareholders/ These have a high influence on the High importance should be

investors organization in the facilitation of the given to this stakeholder as

required funds into the Research and these have a considerable stake

Development and making in company operations

experiments to the expansion of the

business in various target markets.

5 Suppliers Suppliers have less influence on The importance is low for the

organizational operations due to the suppliers no scarcity is there

increased availability of suppliers for the products to sell in the

(Graham, 2017). store and raw materials to

produce new things

6 Technological These have a high influence on the These have low importance in

vendors company operations and improving the organization as many

the interaction between the technology vendors are

 company, customers, and suppliers available in the market.

and eliminating the efforts and time

incurred in production activities.

Table 2: Stakeholder Influence (Hauswald, 2013)

6. Development of Stakeholder Matrix

For developing the stakeholder matrix, the stakeholder engagement matrix is developed by

segregating them into the five categories including unaware, resistant, neutral, supportive, and

leading. This effectively explains the involvement of the stakeholders in a project

S. No Stakeholder Unaware Resistant Neutral Supportive Leading

s
1 Employees No Resistance is Not neutral. They Employees take
shown Engage in supportive of key roles as
towards a new product projects project team
change development members
projects.
2 Customers Yes They don’t These are Wesfarmers They do not lead
have any neutral about engages any activity or
resistance the projects customers in project
towards the requirement
activities and collection
projects
3 Environment No They have They take They give They do not lead
al protection resistance on action against permission if the project
board the the everything is
environmental Wesfarmers if good with
concerns on rules are operations of
the products violated the
organization
 4 Shareholders No They resist an No They are They lead an
/investors activity when supportive of activity or a
income is the projects project to avoid
generated with high exceeding
(Karten, profitability planned costs
2016)
5 Suppliers No They do not They are They support They do not have
resist any neutral until providing the authority to
activity or they receive required lead the project
project an order for materials on
materials or time.
products from
the
organization
6 Technologic No They do not They are They support They don’t have
al vendors resist offering neutral until highly the power to lead
a technology they receive a facilitating the the project
or service call from the technology to
organization improve
for the production
required activities
technology
Table 3: Development of Stakeholder Matrix (Singh, 2014)

7. Comparison of Stakeholder Interests and Influences

Woolworths is the company and operating in the retail industry. It has a mainly different type of

stakeholders including the employees, shareholders, suppliers, community interest groups,

competitors, media, employee unions, government, and customers. It has been maintaining good

relationships with the stakeholders through engagement processes. Stakeholder interests and

influences have some dissimilarities and influences. Customers of Woolworths are interested in
getting high quality and value products. They are expecting the establishment of more stores in

the nearest locations to purchase more products and influencing the decisions of discounts

offered on the products. The number of employees of Woolworths is very low only 46000

throughout the globe (Woolworths Holding Limited, 2019). They are showing more interest in

the learning opportunities offered by the Woolworths and spending time to enhance the skills.

Communities in South Africa, New Zealand, and Australia are expecting more initiatives through

corporate social responsibility to enhance the improvements to the infrastructure of the areas.

Suppliers are more interested to supply the required materials and expecting to provide long-term

strategies and favorable conditions to supply the products in a direct and indirect way. Debt

funders are the key source of the funds and capital to address the risks and meeting the business

goals.

8. Conclusion

Stakeholder analysis is an important activity for a business firm to focus on their interests and

influence on business operations. To analyze the internal and external stakeholders, an Australian

company called Wesfarmers is chosen. The different functional areas of the Wesfarmers

Company are identified as human resource management, production department, sales and

marketing, Research and Development, customer service, inventory management, supply chain

management, and administration. The key internal stakeholders of the company are identified as

employees, managers, shareholders, investors, and executive board clearly with their roles. The

external stakeholders such as customers, community, regulatory bodies, Department of

environment and energy of Australia, creditors, suppliers, and technology vendors. Six major

stakeholders among internal and external stakeholders are considered including the customers,

employees or executive board, suppliers, technology vendors, shareholders, and environmental

protection board. These stakeholders are clearly analyzed with their nature and degree of interest

and illustrated with conflicting interests. Influence and importance of the stakeholders are

studied analyzing how they are related to operations of the business. The stakeholder matrix is

developed to determine whether the stakeholders are supportive or unaware or neutral or

resistant or leading. The stakeholder interests and influences are compared with other company

chosen by a peer to identify the dissimilarities and differences. Wesfarmers needs to focus on

these stakeholder interest and influences to manage them effectively, to identify the business

opportunities, and to develop the strategies.

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