Influence Of Different Stakeholders Such As Customers, Employees And Government On Tesco Company

Evaluate the influence different stakeholders exert in one organisation

Tesco is the largest retailer I the U.K and the third largest in the world. Tesco specialise in grocery and general merchandise. Tesco has many different stakeholders which influence the organisation in many ways; some have higher influence than others. In this piece of work I will be evaluating the different levels of influence that each stakeholders share.

Customers

Out of all the stakeholders I strongly believe that customers are the most important stakeholders for a business in terms of the influence they have on Tesco’s and any other businesses.

Customers have a very big role when it comes to Tesco meeting its aims and objectives. Businesses that ignore the concerns of customers find themselves losing sales to rivals; the customers are important because they determine whether a business will become or remain successful.

Tesco has to take into account all the interests of every stakeholder. For customers, if Tesco decided they wanted to import more fair trade products the customers would find that more products become slightly more expensive due to the share both the company and the fair trade organisation requires to make a profit.

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Customers could easily exert their influence by simply not buying the more expensive products or any at all as they’re unable to afford more expensive products which may result in Tesco losing out on potential profits. Customers are more than likely going to come into play with every decision Tesco makes hence they’re one, if not the most important stakeholder to a business.

I have extracted in an article written by the daily mail which states that Tesco’s profits have raised within the last year, this is because Tesco have introduced more price cuts and discounts. ‘’ Tesco’s profits have risen 10 per cent in a year to a record £3 billion – as food prices in stores have soared. The supermarket ‘s tills take more than £1 billion a weeks and profits, better than City analysts expected, are running at more than £8.6 million a day. Bosses say business is thriving despite the recession, because Tesco attracts customers with price cuts and discount ranges.’’

This extract is a very reliable source from the Daily Mail as it includes quotes from the Chief executive, Sir Terry Leahy and includes figures directly from Tesco. This article shows that the customers have a high influence as they have forced Tesco to introduce discounts and price cuts to keep the customers level of purchasing high.

Employees

Secondly, employees have a big influence on business because they are carrying out Tesco’s day to day jobs and have a big effect on a company’s aims and how employees are treated. As internal stakeholders, it is important for a company like Tesco to ensure they are working in a good environment which in, in turn means that there is less chance of any striking for higher wages.

All employees are important to Tesco as they all play a vital role in keeping the business rolling. If Tesco’s employees feel as if they’re treated poorly, underpaid or overworked then it’s highly likely that strikes will occur within the employees unions

‘’Tesco is facing more misery after 700 drivers and warehouse staff threatened to strike for the first time in the run-up to the Christmas period. Britain’s biggest supermarket has frozen pay for drivers and warehouse staff in Belfast and Doncaster for this year. The workers, represented by their union, are now being balloted on industrial action, with the earliest time they could strike being December 18, during the crucial weeks leading up to Christmas.’’

This source allows us to understand the importance of Tesco employees and the influence they have over the business. Tesco was strongly influenced by the business as they were forced to reconsider what their actions and eventually meet many of the employees demands due to the need of lorry drivers who import and export products for Tesco to sell. Without employees Tesco wouldn’t be able to have become the business it is today. For a group of 700 employees, what they did shows us that they have a great influence over the third largest industry in the world and should be taken very seriously in the workplace as they’ll be the ones providing the services to the even more important customers.

Government and Local Communities

The government is one of the leading influencers of Tesco as they’re able to stop and potential plans Tesco has to expand its store, reduce or increase the national minimum wage and create new laws that may affect large industries within Britain.

The government has previously rejected plans for Tesco to expand its business to new territories within Britain and this has shown the influence it has over Tesco’s and any other business. Councils within communities were able to have their say on the expansion and this is an example of how they are able influence business like Tesco. Both the government and the local community were successful in influencing Tesco’s plans which shows the strength both the government and local communities have. However, without the use of the government it is unlikely that local communities would be able to stop such a large industry expanding outwards as they wouldn’t have much of an impact on possible plans of Tesco.