Expectations Of Primary Stakeholders
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Stakeholders are a person, group or organization that concern in an organization and the actions of stakeholders can affect the organization as well as the organizational actions affect to the stakeholders also. The different type of stakeholders has different types of requirement and identification of their requirement is more important because stakeholders are the strengths of an organization. This study will help to identify the organizational stakeholders and expectations of primary and secondary stakeholders. In addition to that it will support to understand and monitor their requirement and identify opportunities for analysing contribution to primary and secondary stakeholders. Finally it will help to understand the impact of developed offering methods and methods to evaluate the impacts of development offering on the stakeholders related to the Marks and Spencer public limited company in the UK.
About Marks and Spencer
Marks and Spencer are a public limited company that focus on selling of clothing and luxury food products. It was founded in 1884 by Sir Michael Marks and Thomas Spencer and became a first British retailer in 1998. There are about 703 stores I United Kingdom and 361 stores across more than 40 countries by serving the world wide. There is a large number of employees in the company and product range also high. Some products are women wear, sportswear, children wear, cosmetic and perfumes, food and drinks etc. M & S plc Website (2013).
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Figure 1.0 Marks & Spencer UK
1.1 Difference between customer and stakeholders of Marks and Spencer
Friedman and Miles (2006: p. 56) say that customers are the person who is the recipient of good, services, product or idea from a seller or a supplier and known as client as well. It can be defined as a party that receive or consumes goods and services and who has the ability to choose between different products and suppliers. The people who come to buy the products from Marks and Spencer are the customers of it.
Lamb et al. (2008: p. 34) say that there are two types of customers such as internal and external customers. An external customer is a person who uses company products or services but not a part of the organization. As an example in Marks and Spencer the people who enter to the outlets of Marks and Spencer and buy the products or external customers of the Marks and Spencer. An internal customer is a person who is a member of the organization and relies to fulfil the job such as sales representatives of Marks and Spencer.
Not affiliated with the company
Connected to the company
Not familiar with sellers
Familiar with seller
Essential to success in any business
Not in the purchasing giving good customer service play a key role in success
Provide revenue through purchasing
Support to increase the revenue
Table 1.1 Difference between external and internal customers
Source: Bye own with reference to Friedman and Miles (2006: p. 58)
Friedman and Miles (2006: p. 76) say that a stakeholder is a person or a group of people who have an interest in a success of the organization and there are lots of various types of stakeholders that carrying various tasks such as consumers, suppliers, employees, shareholders, government, environment, management etc.
Figure 1.1 Stakeholders of a company
Source : http://www.bl3strategies.com/Sustainability/stakeholders.htm
In addition to these people stakeholders of the company consist of many business partners such as wholesalers, retailers, suppliers, banks, creditors as well as labour unions and competitors also. As a famous clothing industry of UK Marks and Spencer have various types of stakeholders that influence the business. They are one of leading retailers selling over a large number of different products with a wide range of categories such as food , clothing and home ware and the company has diversified and complex supply chain with 2000 suppliers and 20,000 farmers in locally as well as the internationally and large number of employees are involved in production and distribution activities. It has a good management team with top management as well as brand managers and competitors such as ASDA and TESCO according to Annual Report M& S (2012).
2.1 Primary stakeholders of M&S
According to the Sharma and Starik (2004: p. 78) ) primary stakeholders are the people who are directly affected or engage with the organisation. Most of the time each and very activity or the decision taken by the organisation has an effect to these people. The best example is the stakeholders are as below
Shareholders - people who invested on M&S and expecting a return from the investments. This includes the owners and another miner share owner of the company
Suppliers - M&S is not producing many of the products. They purchase from the outside organisation and does reselling. In this scenario, the people who are supplying goods and services are the suppliers to the organisation.
Creditors - Any business can not run on its own money they need a kind of financial support to do the business. This can be in a form of a bank loan or any other means of financial lending. The institutes who are ending such as Banks or any other institution is becoming a creditor to the M&S with reference to Kew and Stredwick (2005: p. 54).
Employees - Each and every activity or the action taken by the M&S are directly affecting on employees as well. They are one of the important asset to the organisation. Employees are getting benefited directly from the benefit that the organisation is getting as well as the vice versa in the findings of the Sharma and Starik (2004: p. 82).
2.2 Secondary stakeholders of M & S
Kew and Stredwick (2005: p. 62) say that secondary stakeholders are the people who has an interaction with M&S. But they don't have a special interest in the operation or any other development of the company. The interest may be due to the law of the country or may be due to the statutory regulations.
Government - Government has an interest in the business of the M&S. It is due to the authority that they are having to manage the organisations. They may worry about the tax payment to the government, labour rules and standards and many other governmental rules and regulations
Local Authorities - In most of the parts of the locations where the branches are located, the main government linked organisation is the Local government authorities. They are responsible for the tax collection and provide any other services required by the companies the Sharma and Starik (2004: p. 86).
2.3 Expectations of primary stakeholders
Due to Kew and Stredwick (2005: p. 67) primary stakeholders are the people expecting a direct return from the M&S. The return may be in different form. It can be cash benefit or non cash benefits. Shareholders are investing in a company purely with the intension of making a profit. Therefore they sometimes get into the board and managing the organisation to maximise the profit. They are very keen to know how the business is doing and whether the company will be able to make profits at the end of the year. Shareholders are eligible to check the M&S accounts to understand the way the company managed during the last year.
Lamb et al. (2008: p. 87) say that suppliers most of the time supplies goods and services to the company on credit basis. After sometimes the payments will be collected from the M&S. Supplier need to supply goods and services according to the information requesting on the documents. Changes to the procurement procedures will make a significant role in supplier document preparation as well. Any significant change happens in an organisation directly affects the payment to the supplier.
Creditors provide financial support to the company. If the business requires more money they provide it a loan or a financial aid to the company. Since the M&S is a stable company there is a less chance or risk. But when the company request a loan, bank checks all the documentary evidence related to the investment. This is mainly to make sure the investment has a reasonable return on investment plan. If the ROI is not properly mentioned bank or financial institutions think twice to grant it because the recovery may be difficult if the company does not make money in the Annual Report M&S (2012).
The second most important people for the M&S are the employees. Because they are the real operators of the business. Employees work for M&S for a salary. If the company performs well the employees are generally receiving a bonus. If the workload is high again the pressure comes to the employees of the organisation. When the organisation is performing better the employee income also growing as per the findings of Lamb et al. (2008: p. 87).
2.4 Expectations of secondary stakeholder
Secondary stakeholders are not directly involving with the operations side of the business. But they are trying to regularise or collect taxes for the operations done by the M&S. Government related labour relations organisations are closely monitored M&S salary payments and the payment of the EPF and ETF to the department. This is due to most of the organisations are not properly paying these contributions. It is the responsibility of the department to collect these payments. On the other hand the government is considering about the environmental factors and the effects due to the operations of the business. If there is any environment related issue immediate actions will be taken and if compensations will be collected due to Polonsky (2005).
Local government authorities from the other hand directly dealing with each and every respective branch of M&S in the local government area. They consider of collecting various taxes according to the power given by the constitution from the company. There are many chances where the local government organisations help doing the planning and supporting in infrastructure developments to start a new business in the area.
2.5 Monitor and analyse stakeholder performance
According to the Allen (2006: p. 123) any company needs to prepare financial accounts of the business activities. This is for the purpose of account maintenance and bookkeeping purposes. These final accounts are getting a record with the amounts paid to employees as their salaries as well as other allowances. M&S can gather this information and analyse based on the revenue and the salary expenses whether to continue that location or not. Based on the information send to labour department they consider the EPF payments. If there is any dispute the second option is to check the financial accounts of the organisation. The local government is charging their taxes on the revenue collected from the branch location. Bank loans and other payments due to suppliers also available in the main accounting books. Based on the financial accounts the year end profit or loss will be calculated. This is the figure deciding by the board of directors to pay the deviance to shareholders as per the findings of Worth (2007: 56).
M&S is not doing any of these processors in the manual process. They have a comprehensive accounting system which connected to stores, purchase department and stores. Each item comes to stores getting recorded in the system. Similarly all sales information is getting updated lively to the main system. Using these informative reports can generate any way the user wants to reference to M & S Website (2013)
3.1 Importance of Stakeholder analysis
Hillebrand (2010:p. 56) says that different stakeholders are having different objectives in their mind. Shareholders try to maximise profit. Employees want to get a better salary. Banks are trying to increase their profitability by providing better loan options for the companies. Suppliers are trying to supply more goods and services and generate a better revenue. Keeping all stakeholder objectives aside M&S is trying to make the company a profitable establishment. Therefore the governing body or the M&S need to consider all these factors to consider interests of all the parties to its best but keeping M&S objectives in the first place. Managing stakeholders in the best manner is to success in business and M&S is applying these methodologies
3.2 Stakeholder analysis techniques
According to the Allen (2006: p. 45) to analyse stakeholder values "stakeholder planning" method could be used. This method has three steps. By going through these it is possible to prioritise the requirements and values of the stakeholders. Following are the three steps to do the stakeholder analysis.
Identify stakeholders - In the first step it is required to identify who are the stakeholders. These stakeholders are the people affected due to some operations carried out by the organisation. These people can be the individuals who have power over the operations of the activity. Initially the identification of the stakeholders needs to be done considering all the factors and effects.
Prioritise the stakeholders - After identifying the stakeholders it is required to prioritise their work. It needs to be done according to the power of the stakeholder and the Interest of them. Following template can be used to map the priorities of each user Hillebrand (2010:p. 78).
Figure 3.1: Stakeholder analysis
Understand the stakeholders - As the third step it is required to understand the stakeholder and see how they can be satisfied. These factors need to be understood in terms of fulfilling their needs for the betterment of the M&S.
To apply the 3 steps for M&S they need to first identify the major stakeholders who are contributing to the system. Initially M&S would consider shareholder in the first place. Shareholder main objective is to earn more revenue or profit for the investment that they have done. M&S also running based on the influence of the shareholders. Some of the decisions will be taken in the knowledge and the understanding as well as believing on the shareholder capabilities as per findings of Allen (2006: p. 78).
The next most important stakeholder is the customer for M&S. M&S is always gathering information using different methods to understand customer requirement. Since the revenue is coming from the customers it is very important to make sure their requirements met. The next most important level identified as Employees. Employees are the brand ambassadors for the M&S. The values and the behaviour mostly affect the customer and other stakeholders. The objective of the employees is to look after their family commitments and other affairs. To satisfy the customer needs the supplier is also playing a major role. Hence the supplier objectives also need to be considered. But as an organisation there is no way to fulfil the requirement of any stakeholder individually. It is required to operate and manage all the requirements of the stakeholders as a whole to satisfy the needs as per findings of Hillebrand (2010:p. 87).
4.1 Gap exists between M&S offerings
Due to the Annual Report M & S (2012) M&S is a global player who is operated in many destinations. The prices and the standard and the quality of the products are placed in a bit higher standard where only a selected level of people can access it. They know of people who can accommodate these pricing is limited. But on the other hand the revenue generate from this group is considerable. But to move forward it is important to increase the popularity of the Marks and Spencer brand name among the majority of the people. In this situation, the pricing may be lower than the original brand. Then to maintain the Marks and Spencer name it is advisable to go for a sub brand name to maintain the integrity. These showrooms need to locate in a different place where the customers need to manage separately. The ultimate objective of this exercise is to tap the un tap market and to increase the market size of the M&S through which to increase the shareholder value and create another market segment for customers Allen (2006: p. 123).
4.2 Revised offerings of M&S towards primary and secondary stakeholders
Implementing the above it is away of generating an additional revenue for the company. But since the brand name is more popular among the high class people the image need to be maintained to demonstrate the quality of the M&S products are better and the new range is something bit below than that. Customer segment will be created with a new range of products and customer convenience to buy from many places. Suppliers' will be able to provide a new range of products to the product portfolio. Employees can be given more opportunities to enhance their career development in a way of promotions and other benefits as per findings of M & S Website (2013).
In any type of organization stakeholders are major part and they are having various types of expectation. Managing the stakeholder expectation is important in any type of organization and same as to the Marks and Spencer also because expectations are managed well all the parties feel good about the outcome. In this study the internal and external customers and primary and secondary stakeholders of the Marks and Spencer were identified and the difference between those categories was understood. In addition to that the expectations of primary and secondary stakeholders were identified and as a junior manager of Marks and Spencer and introduced a monitoring system to achieve the stakeholder expectations. The opportunities for the analysing offering and tools and techniques to meet stakeholder needs were identified. Finally the impact of the offerings on stakeholder expectation and according to the evaluation the benefits and drawbacks to the offering to the Marks and Spencer. Through whole the study it can conclude ha the managing stakeholder expectation is important and by applying those things as a junior manager it can make a good view on Marks and Spencer to the whole community.
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