The influence that stakeholders exert on Tesco Essay
The influence that stakeholders exert on Tesco
Evaluate the influence different stakeholders exert in one organisation
I am going to evaluate the influence that stakeholders exert on Tesco. I will be evaluating the following stakeholders: customers, employees, shareholders and suppliers.
The first stakeholder I am going to evaluate is customers which are external stakeholders. Customers contribute to profit levels and turnover through buying products and services. People are stakeholders in a company for financial reasons, customers do not want to have to spend an excessive amount of money to purchase a product, so if the product is cheaper in one store, such as Tesco, than in another store then customers will buy the cheaper one which then attracts more customers.
An organization survives through customer loyalty i.e. having regular customers. Tesco ensures that they get regular customers by giving them loyalty cards, promotions such as “buy one get one free”, discounts and other special offers. Tesco are getting regular customers which bring in more profit which then can be used to help expand the business. Tesco made customer loyalty marketing work when so many other retailers failed. They give vivid insights into how Club card benefits Tesco and more importantly, its customers.
Customers demand cheaper products so local and national stores such as Tesco will try to have the cheapest products for customers to buy which then encourages competition between the stores, whichever store has the cheapest price for a particular product then they would be attracting all the customers.
The second stakeholder I am going to evaluate is employees which are internal stakeholders. An employee is any person hired by an employer to do a specific job. Employees are important as any other stakeholder because they have first contact with customers so if the customers want to ask a question about the organization or about a product then the employees can help with that and that employees could also recommend products to customers which will bring in more customers.
Employees can influence the success of Tesco by their productivity and efficiency in the job, duties and tasks they do every day. They can also resort to industrial action if they disagree with working conditions, pay or company policies. This could take the form of work to rule, bans on overtime, sit-ins or in extreme cases withdrawal of labour (a strike). Treating employees as their most valued assets, promoting a nondiscriminatory work environment and actively involving employees in important decisions are among the ways Tesco has been influenced by emphasis on employees as a stakeholder influence.
Interest and expectations of Tesco:
Fair terms and conditions
Managers who help
To be treated with respect
Opportunities to get on
Health and safety work place
It is vital that we listen to and engage with our people as often and as well as we do with our customers. Our staffs give anonymous feedback through our annual viewpoint survey.
The third stakeholder I am going to evaluate is shareholders which are internal stakeholders. A shareholder is any person who is an owner of shares in a company. Shareholders can influence a business in many ways. Shareholders have direct influence on a business because they have voting rights on major corporate decisions. Shareholders vote, for instance, on elections of Tesco board members. If Tesco leaders want to split the company’s stock or spin off a separate business unit, shareholders usually have a right to vote on the move. Additionally, Tesco holds an annual meeting where shareholders can voice concerns and feedback. Activist shareholders who own large amounts of stock may also voice concerns publicly in an effort to sway company decisions.
Shareholders impact the approach Tesco to take other stakeholders, including employees, customers, business partners and environmental groups. Other times, shareholders purchase stock because of both the financial benefits and Tesco’s social and environmental responsibility.
The fourth stakeholder I am going to evaluate is suppliers which are external stakeholders. Suppliers are someone whose business is to supply a particular service or commodity. Suppliers can decide whether to raise prices for orders which can obviously affect a Tesco’s profits. Also a supplier’s reliability could affect production. If orders do not arrive on time finished goods may not be ready to put out to customers. Suppliers can also change credit terms which may have cash flow issues for Tesco’s and they could decide whether or not to allow discounts for bulk orders or loyal customers. Suppliers are as important as any other stakeholders because they are the ones that are giving you all the goods so you can sell and make a profit and run a business.
Tesco has built strong long-term partnerships with suppliers at all levels. This partnership approach ensures that their customers have a reliable supply of goods, and new and better products through investment and innovation. Tesco does not encourage practices which are unsustainable such as below-cost selling. These are bad for suppliers, and are therefore bad for customers and for Tesco. A partnership approach benefits our suppliers by giving them a certain and growing market for their products, regular payments and payments on time, and our commitment to sharing our understanding of customers and changing consumer behaviour.
Tesco know that they can’t achieve their ambitions alone. They worked with their stakeholders to make sure they use their scale and expertise to contribute to society, as well as to find out what they already are doing well in and where they can improve. By doing this Tesco has become Britain leading grocery retailer. I believe that all stakeholders influence Tesco in their own way up to a certain extent.