Stakeholders Perception Of European Companies Commerce Essay

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It would be better to say clearly at the outset, what is the aim of this report. The title is Stakeholders' Perception of Well-Known European Companies at The Time of Global Crisis, but the reader will find in it the depiction of how can Carlsberg, Heineken Holding and Anheuser-Busch InBev preformance at the time of global crisis. We use these three companies to simplify our research without reducing the goal of this report. There are several reasons why we chose these three companies. We chose brewery industry because brewery industries can reflect more clearly about the public perception toward the companies' performance at the global crisis time. They are the biggest brewery industries from Europe, which already known globaly, and listed on top 1000 companies by Forbes Magazine. We retrieve many actual information from the companies' website, like their annual report, and we process the data based on relevant theory thus becomes useful information. Besides their operational performance indicator, we also use another statistical data, like the transaction volume of these companies share, to describe the public perception. We guarantee our data is free from material error, because we use quality control to maintain the validity of data. We list the source that we used at the footnotes of the concerned pages, and in the bibliography at the end of this report.

First, we dedicate this report to Saxion University and Petra Christian University as our graduation assignment. Then, we dedicate this report to business person, as consideration for improving their own shortcomings due to the performance of their stock, which was deeply affected at the time of the last global crisis, especially for Carlsberg, Heineken Holding, and Anheuser-Busch InBev. We also dedicate this report to the readers who want to research and develop further, and to those students who want to get a broader insight about the public perception in relation with company performance, specifically.

Our first debt is due to Mr. Couperus and Ms. Gorter under whom we studied. They generously believed in and warmly encouraged our work throughout. Their range of knowledge, their critical acuity and the thoroughness with which they went thorugh the work provided the example of the profesional teacher without which this book would not have been possible. Mr. Bossnik and Mr. Meendering gave freely of his valuable time to read the report and brought many corrections and raised many questions which led us deeper into the work. To these two teacher we are very grateful indeed because without their kind interest, our shortcomings would be even more obvious. We owe thanks to many others too: our former teachers at Petra Christian University, Indonesia, who assisted us with a lot of suggestions; our lovely family who always support us everyday; our compatriots friend Nathania, Meilisa and Catherin; our friends from Indonesia; our colleagues from ACFI, ACFIA group in Saxion; and principally our God who give us chance to finish this report.


Title Page

Prefatory Note

Content Page


Chapter 1 Introduction

Chapter 2 Company Indicator

Chapter 3 Stockholders' Perception

3.1. Stakeholders' Perception Literature

3.2. Influencing Factors

3.2.1. Profitability

3.2.2. Liquidity

3.2.3. Solvability

3.2.4. Operational Performance

3.2.5. Investment Valuation

3.2.6. Continuous Improvement

3.2.7. Quality of Management

3.2.8. Goodwill

3.2.9. Corporate Social Responsibility

3.2.10. Good Corporate Governance

3.2.11. Learning and Innovation

3.2.12. Other issues

Chapter 4 Managing Stockholder Perception

4.1. Carlsberg

4.2. Heineken Holding

4.3. Anheuser-Busch InBev

Chapter 5 Conclusion




The global financial crisis that happened in 2008, had led to a profound impact for many companies' performance. However, the extent and timing of the effects differ among each other companies. Those who have good characteristic foundation, healthy financial linkages and other supporting factors can survive the financial hurricane, even though their operational activities are also affected, charcterized by some deteriorations and downturns. These companies mostly located in Eurozone, which is staging a surprising recovery after 2008 and has an attractive environment for the sustainable development and economic stability. The facts disclosed in the publication of these companies, especially from the 2008 annual report-description of their success both in managerial and operational, give special attraction for us to uncover the secret behind their going concern.

We examined industrial sector that has strong correlation with the global crisis, in which this sector is not affected by seasonal effect, to give clear evidence about their perform due to global crisis. Then, we chose three companies that fulfil our criteria as object research which can represent their industrial sector as well-known european companies. We will focus our reserach on stakeholders' perception, which we believe to be the critical success factor due to their success. In the end, we will conclude the relationship between stakeholders' perception and company performance, what factors can inlfuence these perception, and how to maintain these perception to provide optimal performance while experiencing unfavorable economic conditions. We expect the result of this research also can be useful and applied to other industrial sector, wherever they are.

Chapter 1: Introduction

This report has been written because of our graduation requirement as Accounting and Finance final year student in Saxion University of Applied Sciences. This report will discuss about the factors that can affect the stakeholders' perception of well-known European companies at the time of Global crisis, especially for the financial factor. The value of the companies will depend on the stakeholders' perception towards the companies. The better stakeholders' perception, the higher corporate value will be. If the stakeholders give negative perception on the company, no matter how great the company is, it will definitely not succeed in the market. On the other hand, because of the global crisis occurred, the factors that may affect stakeholders' perception will be more diverse. We also decide to analyze Carlsberg, Heineken Holding and Anheuser-Busch InBev in this report because those companies are famous beer companies in Europe. Beer acts as daily needs goods in Europe. Almost everyday European people drink beer in their life, so the demand of the beer will not be vary in a year. This condition will make our analysis more reliable because the report, which is provided by those companies, will give us the stable result from year to year. These situations are the reason why we decide to discuss about the stakeholders perception of well-known European companies at the time of Global crisis.

This research is focused on the ways that can Carlsberg, Heineken Holding and Anheuser-Busch InBev do to influence the stakeholders' perception towards their companies at the time of global crisis. The objective of this research is providing fully information for companies regarding the factors that can influence the stakeholders' perception towards European well-known companies at the time of global crisis. In the beginning of this research we will analyze the financial report of the company to give us clear information about the company and hereafter, we will gather other information that can support our research to find the factors that can influence the stakeholders' perception. Finally, after finishing this research we will find the answer for the central question, "how can Carlsberg, Heineken Holding and Anheuser-Busch InBev influence the stakeholders' perception at the time of global crisis" and other factors that can influence the stakeholders' perception. Moreover, by doing this research not only allows us to understand broader information but also provides the information for the companies about the factors that can influence the stakeholders' perception towards its corporate value, thus the companies can prepare well if the global crisis will happen again in the future.

The content of this report is divided into 5 parts and introduction of this report will be in the first Chapter. The second chapter concerns about the company indicator. In chapter 2 we will explain briefly why we choose Carlsberg, Heineken Holding, and Anheuser-Busch InBev to be analyzed in this report. Further in chapter 3 is about the stockholders' perception. We will define the stockholder perception in the first sub-section of this chapter and the second sub-section of this part will talk about all the factors that can influence the stockholders' perception. Moving forward to chapter 4, we will begin our analysis in this part. The sub-sections in this part will analyze the strategy that Carlsberg, Heineken Holding, and Anheuser-Busch InBev have done to give a positive impression to their stakeholders. We will evaluate whether the strategy that has been implemented success or not by looking at their financial ratios. After undertaking the analysis, we will find the strategy that can contribute positively to influence stockholders' perception at the time of global crisis. Finally, in the last chapter is conclusion and recommendations.

Chapter 2: Company Indicator

Determine the object of analysis is the first step we must do. The object of analysis must be in the same industry that can depict well how stakeholders' perception at global crisis time can influence their performance. In this case, we chose brewery industry, where the demand of their product has been recognized as a daily necessity. From this though, we can find the strategy to strive in Global Crisis Time, where their strategy can be proved by a better performances indicator in the next period. Perhaps the change in performance indicators from year to year is not because of other factors such as appetite changes in beer consumption or change in preferences, but focus mainly for Global Crisis effect.

Assessing whether a company may be cited as a well known company is not an easy task. Every stakeholder [1] has different judgment method, criteria, and standards emphasis to assess companies. For example, Government can emphasis their assessment from tax perspective, Investor will be more emphasis on return, Creditor will focus on solvency perspective, and so on. To overcome this problem, first, we set some main criteria that can be generally accepted by whole stakeholder. Those main criteria are:

It must be a multinational company

It should list on at least one stock market

It should have international premium brand products

It must be a leader in its own local market

Then, we set some key performance indicators that can represent the needs of every single stakeholder. We make sure that our preferred companies have a better post crisis performance.

We also use the source from Forbes to decide the well known companies for our research. Forbes is a leading publishing and media company [2] . Forbes provide source for the latest business, financial news and analysis, including the source that is useful for our research. The company that we are going to analyze in this report will be in the list of the Forbes Global 2000 [3] . The Forbes Global 2000 are the biggest, most powerful listed companies in the world. Making use of Stakeholders "well known" criteria and the result from Forbes Global 2000, finally, we decide to categorize Carlsberg, Heineken Holding and Anheuser-Busch InBev as three of the well known companies in our research. In later paragraph, we shall present the reason why we decide those companies as well known companies in this research.

The first company is Carlsberg. Calrlsberg is the world's fourth largest brewery groups [4] and according to Forbes Global 2000, Carlsberg stood in the 435 of the world's rank [5] . In 2009 Carlsberg is the fourth largest brewery group in the world employing around 45.000 people [6] . Its business portfolio [7] consists of brewery activities in three geographical regions: Northern and Western Europe, Eastern Europe and Asia. The Carlsberg beer portfolio includes more than 500 brands. The brand portfolio includes the well-known international premium brands Carlsberg, Tuborg, Baltikan and 1664, and strong local brands such as Ringnes (Norway), Feldschlosschen (Switzerland), Lav (Serbia) and Wusu (Western China). The strength of the Group's brand portfolio is highlighted by the fact that Baltika, Carlsberg and Tuborg are among the six biggest brands in Europe, with Baltika ranked as number one. Carlsberg's French brand, Kronenbourg, holds a tenth position in Europe. Supported by this information, we are certain that Carlsberg is one of the biggest and one of the most famous brewery companies in the world.

The second Company is Heineken Holding. There is no doubt that Heineken is available in almost every country on the globe and is the world's most valuable international premium brand. Heineken has wide international presence through a global network, owns and manages one of the world's leading brewers in terms of sales volume and profitability [8] and was ranked 383rd in Forbes Global 2000 [9] . Heineken Holding international brands are Heineken and Amstel, but Heineken group also sell more than 200 international premiums, regional, local and speciality beers and ciders, including Primus, Birra Morreti, Sagres, Cruzcampo, Star, Foster's, Strongbow, Kingfisher, Tiger, Newcastle Brown Ale, Zywiec and Ochota. Moreover, Heineken Holding has been able to remain one of the world's leading customer and corporate brands for more than 130 years [10] . All of this information is used as a basis for selecting Heineken Holding to become one of the well-known companies in this research.

Anheuser-Busch InBev is the last company that will be analyzed in this research. Anheuser-Busch InBev is Brewery Company based in Leuven, Belgium. Anheuser-Busch InBev is the largest global brewer with nearly 25% global market share and one of the world's top five consumer product companies [11] by EBITDA [12] . Anheuser-Busch InBev leverages the collective strength of approximately 116.000 people based in operations in six operational zones, including, North America, Latin America North, Latin America South, Western Europe, Central and Eastern Europe, and Asia Pacific. This company manages a portfolio [13] of well over 200 brands including three global flagship brands: Budweiser, Stella Artois and Beck's, multi country brands like Leffe and Hoegaarden, and strong local beer such as Bud light, Skol, Brahma, Quilmes, Michelob, Harbin, Sedrin, Klinskoye, Siberian Crown, Chernigivske, and Jupiter. In addition, Anheuser-Busch InBev was ranked 70th in Forbes Global 2000 [14] and got the highest Market Value [15] among the companies in Belgium [16] .

Chapter 3: Stakeholders' Perception

3.1. Stakeholders' Perception Literature

The development of the stakeholder concept begins in 1963, when the word appeared in an international memorandum at the Stanford Research Institute, defined as 'those groups without whose support the organisation would cease to exist'. Stakeholder itself is derived from two words, stake which means everyone with an interest, and holder which meaning is the same with constituent. Nowadays, the concept becomes commonly use especially in strategic business and development, and economic term. In business term, stakeholder can be defined as any group or individual who can affect and is affected by the achievement of the firm's objectives (Elias & Cavana, 2000). Stakeholders of company can be classified into two big categories, internal and external.













Figure 1: Internal and external stakeholders of a company

Stakeholder also can be identified by power, legitimacy, and urgency attribute to attain salience in the minds of company. We can classify the stakeholder into 4 classes. The stakeholder can shift from one class to another when the salience of stakeholder increase or decrease by attaining or loosing one or more of the attributes (Elias & Cavana, 2000).

Latent Stakeholder; only have one of three attributes and have low stakeholder salience.

Dormant Stakeholder

This type of stakeholder just possess power attribute, for example: Mass Media.

Discretionary Stakeholder

Only possess legitimacy attribute, for Example: Shareholders that have fewer than 20% ownership.

Demanding Stakeholder

Stakeholders that only possess urgency attribute, for example: competitor.

Expectant Stakeholder, have two of three attributes and have moderate stakeholder salience.

Dominant Stakeholder

Stakeholder that possesses power and legitimacy attributes, for example: tertier institution like market regulator due to public company.

Dangerous Stakeholder

Stakeholder that possess power and urgency attributes, for example: Labor Union

Dependant Stakeholder

Stakeholder that possesses urgency and legitimacy attributes, for example: Company's Bank, Creditor.

Definitive Stakeholder, have all of the attributes and have high stakeholder salience. Example: Customer, Government.

Non Stakeholder doesn't have any attribute.

Figure 2: Stakeholder Attribute

Sources: Elias & Cavana, figure 2, p5.

Perception means a way of understanding, interpreting and seeing. In accordance with stakeholder, then stakeholder's perception describes how stakeholders perceive a brand or a company, based on its behaviour and the actions of its people. To stakeholders, perception is their reality. Perception may be positive or negative, depends on the experiences that stakeholder might have had and other factor that stakeholder group take into account as primordial factor, regarding to the company issues. Hence, stakeholder's perception should be managed to ensure that the reputation of the company is maintained. By managing perception, the company builds reputational value which is very useful in supporting their ability to survive in the competition.

Based on the stakeholder attribute, we can say that the 4 classes of stakeholder have different perspective, especially when facing difficult times, such as the global crisis. By psychological, these different perspectives will lead into different behaviours, and they can affect each other directly or indirectly. That is why we need to understand the typology of stakeholder's perception, so we can provide the appropriate actions for each stakeholder to affect their perspective and manage them well.

Non supportive Stakeholder

Strategy : Defend

Marginal Stakeholder

Strategy: Monitor

Supportive Stakeholder

Strategy: Involve

Mixed Blessing Stakeholder

Strategy: Collaborate







Figure 3: Stakeholder Treatment

According to this figure, we can apply suitable treatment based on characteristic of stakeholder.

Mixed Blessing stakeholder is stakeholder that both have high potential of threat and cooperation. For Example: regulator, government, can support the company's objective but also can make legislation to threat company's objectives. The suitable strategy is collaborating with them, comply the rules.

Supportive stakeholder is stakeholder that has high cooperation level, but low threat level. The appropriate strategy is involving this stakeholder into company's activity. For example, company can involve their retailer to control the customer satisfactory level.

Marginal stakeholder is stakeholder that both have low potential of threat and cooperation. The applicable strategy is monitoring them to avoid them become any threat in near future.

Non supportive Stakeholder is stakeholder that has high threat level and low cooperation, and even can do wrongful act to reach their objective. We must defend from this kind of stakeholders. For example, competitor and other industry that against our objective.

3.2. Influencing factors

The organizations are responsible to their Stakeholders and the stakeholders hold particular perceptions of those enterprise, build upon their behaviours and actions. From one stakeholder group to another stakeholder group will have different perceptions but however the perception should be understood and managed before they can be leveraged and managed. General factors that can influence stakeholders' perception towards companies will be listed in figure three below.





Operational Performance

Learning & Innovation

Other Issues

Continous Improvement


Investment Valuation

Quality of Management




Figure 3: Stakeholders' Perception Influencing Factors

3.2.1. Profitability

Profitability defines the amount of profit made, shown as a percentage of costs or sales revenue [17] . The long term profitability of an organization is substantial for both the advantage received by stakeholders and the survival ability of the organization. The perception of almost all the stakeholder groups is influenced by profitability factors. The higher profit the better stakeholders' perception. The huge profit determines the organization's power to provide a huge return to all of the stakeholders groups.

3.2.2. Liquidity

Liquidity means the firm's ability to pay its bills on time [18] . Liquidity is related to the quickness and ease with which a firm able to covert its non-cash assets into cash, as well as the size of the firm's investment in non cash assets relative to its short term liabilities The liquidity of the company can be seen from its liquid assets [19] . When the company has some amount of liquid assets, it can be guaranteed that they will likely have the ability to pay off its short term debt obligations that are coming due in the near future and still capable to fund its ongoing operations. In most cases, the company with a low rate of liquid assets compared with its short term liabilities means as a sign that the company will have difficulty to run its operations, as well as to meet its obligations. Creditors are one of the stakeholder groups that would be influenced most by this factor. With the high level liquidity, creditors will easily give credit to the company, but on the other hand when the company has low level of liquidity they will unlikely give credit to the company.

3.2.3. Solvability

Solvability determines the firm's ability to be able to pay all its debts on the due date. Solvability can be also viewed as the level of financial risk a company and its stakeholders face. The higher the amount of long term obligations held by the company the higher the financial risk of bankruptcy. The stakeholder groups that is most affected by this factor is creditors, especially the bondholders. Bondholders are the group of stakeholder who own a bond of the company. The Bondholder definitely will not buy a bond from the company that has a great level of financial bankruptcy.

3.2.4. Operational Performance

Operational performance is the way a company manage its ongoing operations. Principally, Operational performance measures at how effectively and efficiently a company is utilising its resource to increase stakeholder value and generate sales. Most of the stakeholder groups will be influenced by this factor, because this factor also related to the ability of the company to yield profit. The more effective and more efficient a company run its operations the easier for a company to generate revenue.

3.2.5. Investment Valuation

Investment valuation factor is the factor from investor perspective. Basically, this factor is influenced by the share price in the market. Investor will prefer a company that has high level of investment valuation factor, because it means that company has the ability to survive in the market and give high return to the investor. An investor will regard the company better when the company share price is high, which can lead to better result in investment valuation factor level.

3.2.6. Continuous Improvement

Continuous improvement means the effort of the company to improve its products, services and processes, so the company can satisfy its stakeholders. Nearly all of the stakeholder groups will be affected by this factor. When the company is always continuing to improve its company, the company can adjust to the unpredictable needs of the market as time passes and address to the development that has been done by the competitor. This factor is crucial to the stakeholders, because they will think the company is very unlikely to survive in the market if it can not adapt to the market.

3.2.7. Quality of Management

The quality of Management describes how well the company manage its operation to generate profits, including how the company handle the conflict within its internal process and respond to the complaints of the employees or the customers. If the company manage its operation with the quality, the stakeholders will see it as a good signal to the survival ability of the company.

3.2.8. Goodwill

Goodwill is a contributing factor or a "prudent value" that makes the Market give higher assessment towards company (so public willing to pay more for something), and can be used as competitive advantage [20] . Goodwill in this analysis will be focus on intangible assets [21] . The example of goodwill is advance in technology and business strategy, contemporary management technique, patetnts and trademarks, brand equity, firm reputation, etc.

Usually, companies who have high value of goodwill will be prefered more by stakeholder because their going concern and high value at market. But stakeholder must give more attention to the calculation of the goodwill, because goodwill in financial statement have a complicated calculation method that can lead to missunderstanding.

3.2.9. Corporate Social Responsibility

Corporate Social Responsibility means the effort that has been done by the company to achieve cost advantages and simultaneously act in a socially responsible manner. In addition to realizing financial returns, the companies are also expected to care for the environtment, their employees and the local community. The basic concept of the Corporate Social Responsibity is the responsible balance between people ('social well-being'), planet ('ecological quality') and profit ('economiv prosperity'). The first concept is People, which defines the range of subjects, including both eksternal and internal social policies. Internal social policy relates to the nature of employment, health and safety, training and education, diversity and opportunities, as well as labour/ management relationships, while Eksternal social policy involves the main catgegories, specifically:

Product responsibility, consists of product and services, advertising, consumer health and safety and respect for personal privacy.

Human right issues, consists of freedom of assocition, non-discrimination, security practice, indigenous rights and disciplinary practices.

Society, consists of competition, community activities and pricing.

The second concept is Planet, which relates to the impact of the company's operational activities to the environment, for example the use of scarce goods (such as water, energy or other raw materials). The last concept is Profit. Profit stands for the organization's contribution to economic prosperity, both in direct and indirect economic impact. Direct economic impact comprises the financial terms between the company and its key stakeholders, while indirect economic impact is related to the contribution of the sector to gross domestic product [22] and the spin off from company activities in term of innovation.




Figure 4: The Three Pillars of CSR

When the company operates in a poor working conditions, violates the human rights or performs enviromental scandal, they will be publicly criticised. Such critism will damage the company's reputation in the stakeholders point of view, which may lead in fall in sales and the employees becoming demotivated. By being a responsible to their social environtment, the companies will be easier to increase their market share, raise staff motivation to work for the company and elevate their innovation power.

3.2.10. Good Corporate Governance

Corporate Governance is the process affected by a set of legislative, regulatory, legal, market mechanism, listing standarts, best practices, and efforts off all corporate governance participants, including the company's director, officers, auditors, legal counsel, and financial advisors, which creates a system of checks and balances with the goal of creating and enhancing enduring and susutainanble shareholder value, while protecting the interests of other stakeholders [23] . Implementing a Good Corporate Governance has important role to creating long term shareholder value, and to incresing the value for all stakeholders. In general, Corporate Governance is composed by three aspects, namely:

Shareholder Aspect, which focuses on the creation of shareholder value.

Stakeholder Aspect, which emphasizes the value to protect the goal for all stakeholder groups.

Integrated Aspect is the aspect that combines shareholder aspect and stakeholder aspect

By implementing Good Corporate Governance, the company will be appreciated more by its stakeholder because of the efforts that has been done by the company to satisfy its stakeholder.

3.2.11. Learning and Innovation

When a company can provide and give more attention to its learning and innovation process, it will give value added for a company in the stakeholders' perspective. Company usually provide training center to satisfy their employee, where employee can expand their limitation and knowledge. Besides, company usually also have research and development departement to fulfil customer needs.

3.2.12. Other issues

Market are very reactive towards information, because information can inffluence people's perspective. Usually, not all information can be retrieved freely and sometimes, the information is not reliable. Those factor can impact stakeholders paradigm because stakeholders are extremely sensitive to spreading information. For example, issue about new regulation or issue about inflation,can influence shareholder behaviour, political issue influence pricing decision by supplier, and etc.