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 ............................................................................................................................. 4
2. Functional Areas of Wesfarmers ............................................................................................. 4
3. Internal and External Stakeholders and Their Roles ............................................................... 6
4. Interests of the Stakeholders and Implications of Conflicting Interests .................................. 8
5. Influence of Main Stakeholders ............................................................................................. 10
6. Development of Stakeholder Matrix ..................................................................................... 12
7. Comparison of Stakeholder Interests and Influences ............................................................ 13
8. Conclusion ............................................................................................................................. 14
References ..................................................................................................................................... 16
 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 taking management will have a serious

the on-job training. They are well impact on the customers,

aligned with the organization diversity hinders the growth of the

policies and employee engagement business, and competition

policies. Sometimes employees are levels in the market.

resistant to change.

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

high level of interest to use the products departmental stores and

offered. Many of the Australians are supermarkets during the

purchasing the items in a large quantity weekend and it may be

those are sufficient for a week. It is sometimes a problem for

advantageous for Wesfarmers to have customers handling their

more storage and supermarkets. requests

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 imposes products and lack of interest

fines when the level of pollutants among the consumers

released into the environment is

exceeded.

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

nvestors with the organizational activities to add profits leads to the creation of

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

customers. They involve environmental Wesfarmers and limit the

issues in controlling energy company capabilities to

consumption and pollution. But, they achieve more growth

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 technology Changes in technology will

vendors to implement the innovation changes in lead to increased cost and

the future business. They are provided overcoming the competition in

a good technological base to the the market.

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, and given to the customers to know

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

through changing the mindsets of the purchasing habits of products

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

stors 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 for

increased availability of suppliers the products to sell in the store

(Graham, 2017). 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 company, technology vendors are

customers, and suppliers and available in the market.

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
operations of
 concerns on rules are the
the products violated 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, 2016) profitability planned costs
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.
References

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