British Red Cross and Tesco Stakeholders

In this paper "British Red Cross and Tesco Stakeholders Essay" we will research the concept of stakeholders and several examples of these organizations.

Stakeholders are groups or individuals that have an interest in a business. Stakeholders are important and can affect the running of the business. There are two types of stakeholders; internal and external, with different interests and priorities. Internal stakeholders are for example employees, managers and shareholders (owners). Examples of external stakeholders are customers, suppliers, government, local community and trade unions.

Tesco

Tesco has both internal and external stakeholders, which influence Tesco’s operational actions and policies.

Internal Stakeholders

Shareholders/Owners

Shareholders invest into Tesco in hopes of receiving a profit. Shareholders (Owners) have a very large influence on Tesco as without them the business would not exist. The more shareholders there are in a business the more money is available to expand and develop which regarding to Tesco this means more stores could be open resulting in more profit. Shareholders invest money in Tesco by purchasing shares and they want it to be successful so that they receive a good return on their investment. The return can be in two forms; firstly, if share prices rise, they could sell their shares for a higher price; secondly based on the level of profits for the year, Tesco issues a portion of this to each shareholder for every share that they hold this is a dividend. Therefore, the more profit Tesco makes the higher the dividends are for the shareholders.

Employees

Employees of Tesco are important stakeholders in the business. Tesco employs 440,000 in over 6,800 shops around the world. They have a financial interest in Tesco as their pay levels and job security will depend on the performance and the profitability of the business. Employees influence the running and image of Tesco, as they are the face of the company. They are responsible for meeting Tesco’s business objectives and ensuring the smooth running of the business on a daily basis. If employees do not work efficiently and promote good customer relations, they may tarnish Tesco’s reputation resulting in people not coming to the store, which could result in a decrease in profits. Employees therefore are essential to the success of Tesco’s and are important key stakeholders.

Managers

The managers in Tesco are responsible for achieving its business goals, ensuring the employees in their departments are performing effectively and that employee relations are good.

The Finance managers have responsibility for financial controls and effective financial management to meet Tesco’s business objectives. Finance managers prepare financial reports, control investment activities, and implement cash management strategies. They report on, investments (savings), tax implementations, financial statements, profit and loss details. Effective financial management is essential to Tesco maximising its profits.

The Sales and Marketing Managers have to understand customer needs and meet their needs by ensuring Tesco has high- quality goods and services and provide good customer service. Sales Managers have to sell products and services to the customer in order for Tesco business to keep on running and become the number one retailer.

The Purchasing Managers in Tesco ensure that the right quality products are available in stores on time and are in sufficient quantity to meet customer demands. They source good quality products at the best prices to enable maximum sales and profit margins.

The Human Resources Managers in Tesco are responsible for workforce planning, recruitment, training, terms and conditions, and employee relations. Tesco depends on its workforce to achieve its business objectives and the Human Resources managers are critical to ensuring Tesco’s workforce is motivated, effective and efficient.

External Stakeholders

Customers

Customers are a very influential stakeholder as they control how much income Tesco has. This is a result of them buying products and services from Tesco for example food and Tesco Mobile. Tesco customers in general want innovative products and quality goods at low costs, if Tesco is successful in providing this, they will attract more customers through word-of-mouth and various forms of advertisement, Tesco are very customer orientated and research what products and services they want. Tesco therefore is successful in meeting customer demands, which allows it to expand and maximise profit making customers an essential stakeholder in Tesco.

Suppliers

Suppliers have a key influence in Tesco’s business success. Tesco needs to source a range of suppliers to provide quality goods and services at reasonable prices. The relationship between Tesco and its suppliers is critical. Tesco was criticised for its tough tactics when dealing with suppliers in the past and in 2015, it created the Tesco Supplier Network, to rebuild its relationship with suppliers and enable suppliers to communicate with the retailer and other suppliers about a broad range of issues. This strategy by Tesco to build the community of Tesco teams, suppliers and producers from around the world, provided them with the opportunity to improve communication, share ideas and continually improve the products it provides to customers. If Tesco can get quality products and services at reasonable prices and times, then it can sell them cheaper and this increases customer satisfaction and loyalty. The relationship between Tesco and its suppliers is mutually dependent as the suppliers also depend on the business from Tesco to make money.

Government

The Government has a stake in all businesses including Tesco; businesses have to comply with rules laid out by the government and it legislates how businesses must operate. Government rules and regulations are constantly changing and businesses need to keep up to date. Government taxation policy affects Tesco’s business for example a rise in corporation tax, which is based on business profits, will influence overall profits. Also all Tesco employees are required to pay income tax and Tesco needs to ensure payroll systems comply with income tax rules. Another government policy that can affect Tesco is interest rates; if the government decides to raise interest rates, the cost of the business borrowing money will rise; also, consumers may spend less, which may result in a fall in sales for Tesco. Tesco also has to comply with legislation such as health and safety, employment, equality, data protection, planning permission, environmental etc. With regarding Health and safety legislation, if there are major breaches the government can close Tesco down. Tesco has to comply with any changes the government makes, which can influence the way it operates its business.

Local Community

Tesco has an impact on local communities in a range of ways. It provides jobs and links with local businesses and suppliers. Tesco runs a Community Champion scheme across all its stores and works with hundreds of charities and local community organisations. Each UK store holds a community budget to help support with requests for local fundraising events. Its agency, N20, organises charity and food collections. Local charities or schools can request a booking at its local Tesco store to hold collections .Tesco have a policy to support the projects and organisations that matter locally. Therefore, they have set up community grant programmes in the UK, Republic of Ireland and Central Europe that allow customers to choose which local projects Tesco supports financially. In Ireland Tesco has donated €3 million to support over 11,000 local projects countrywide including schools, animal shelters, sports groups, elderly care centres, health organisations. These activities for Tesco improve its corporate image. However, there can also be some negative impacts on the local community for example there can be increased traffic congestion and also increased noise pollution from delivery lorries which could potentially decrease the value of housing.

Trade Unions

Trade unions influence Tesco as they represent the interest of workers in Tesco. Their two main functions are to represent their members and to negotiate with Tesco employers therefore; they have a big influence on the business. They support and represent employees with the aim of achieving job security, the best working conditions and pay deals for its members. The trade unions also protect employees against unfair dismissal and other issues relating to employment legislation. They attend grievance and disciplinary hearings in support of their members. In some cases the employer/trade union relationship can become confrontational for example if agreement cannot be reached in pay and condition negotiations; the trade union may take industrial action such as work to rule or even strike action. However, in most cases Tesco and the trade union representatives have a constructive relationship. It is important that good employee relations exist in Tesco to ensure high employee morale and motivation and avoid industrial action or employees taking tribunal cases for discrimination, equal pay or unfair dismissal. The costs of these actions can be high and impact on Tesco’s profits and reputation.

British Red Cross

The British Red Cross unlike Tesco is a not for profit organisation. However, similar to Tesco the British Red Cross also has internal and external stakeholders.

Internal

Trustees

A board of trustees governs the British Red Cross. The board is made up of seven elected members (chosen from is volunteer base) and up to six co-opted members appointed by the board (which include the roles of chair and treasurer). Their role is to ensure that The British Red Cross is effective in working towards achieving its vision, using its resources to maximum effect and upholding its ethos and values. They set the overall strategy for the organisation and therefore are highly influential in determining how the organisation operates.

Employees

Employees are key stakeholders in the British Red Cross and are vital to the organisation achieving its aims. The organisation has a number of executive leadership teams, which lead the day-to-day management of its employees and volunteers. The teams also report to the board of trustees. The People and Learning Director is responsible for manage human resources, volunteering, leadership development, organisational development and change management. They also deal with learning and development, youth engagement, employee relations, international security, health and safety, diversity and environmental/carbon reduction.

The Finance Director manages finance, property, planning, strategic change and legal issues. The Chief information Director is responsible for technology, digital and data. They ensure that the internal systems support staff and volunteers, that the web platforms and applications provide the information that people need and that the data that the Red Cross holds is safe and secure.

The Communications and Advocacy Director is responsible for marketing the organisation strategically as well as using evidence to advocate on behalf of those in crisis. This role is crucial in helping to sustain and grow the organisation and achieving the main objectives of the organisation, which are saving lives, helping those in crisis in their community, helping those forced to flee in search of sanctuary and helping in times of international emergency.

Volunteers

The Red Cross is dependent on volunteers to achieve its aims and objectives and therefore they are a key stakeholder in the organisation. The Red Cross seeks volunteers in a wide range of roles. Mobility aids volunteer: delivering wheelchairs and other equipment, taking requests for wheelchairs from members of the public, cleaning and maintaining the stock. Emergency response volunteers help in an emergency such as a transport incident, evacuation, flood or fire. An emergency response volunteer provides support to the emergency services at a rest centre, or providing first aid or transport assistance during severe weather. Community reserve volunteer: helps in the community in case there is ever a big local crisis – such as widespread flooding or a large fire. A reserve volunteer helps with practical tasks such as preparing kit and equipment, filling sandbags, sorting supplies and making refreshments. Charity shop volunteers: serves customers, sorts donated items, and creates displays. First aid volunteers train in advanced first aid. They help at any occasion across the UK, from a community event to large-scale events such as rock concerts or Papal visits. People can also volunteer as drivers, administrators, to help refugees and asylum seekers, trainers, teachers or fundraisers. Volunteers also gain from the organisation as they can meet new people, learn new skills and gain personal satisfaction from giving practical help to those in need.

External

UK population and International Populations

Populations in need are vital stakeholders in the British Red Cross organisation. If they did not exist, there would be no need for the organisation. The British Red Cross provides services to a range of people. It provides wheelchairs to the public for a single trip or for short-term use. It provides support and care to help people live independently at home; or when they return after a stay in hospital. It also provides first aid to members of the public attending events. It also offers help with the urgent needs of refugees, asylum seekers and other vulnerable migrants. It also helps those effected by overseas emergencies for example it can provide immediate financial help if a person has been seriously injured or bereaved by terrorist incidents overseas The British Red Cross also provides people, equipment, space and resources to support those affected by an emergency, helping them to recover. When emergencies occur, support is available to individuals and families, local communities, regionally and across the UK. The British Red Cross has trained emergency response volunteers across the UK, who provides practical and emotional support to members of the public for example by setting up rest centres for those having to leave their homes for safety because of flooding, fire or bad weather. They also in major emergencies set up support lines for example following the London bombings in 2007, the Manchester Arena, London Bridge and Borough Market terrorism attacks and the Grenfell Tower fire.

The British Red Cross also works with international populations helping people overseas forced to flee their homes and helps them find safe and legal routes to new countries.

Government

The British Red Cross similar to Tesco is governed by the rules and legislation applicable to all employers and has to ensure it complies with income tax regulations, health and safety legislation, equality legislation and data protection regulations. The British Red Cross is not subject to Corporation Tax however; it is subject to regulations in place for charitable organisations. The organisation has to comply with the Charities (Protection and Social Investment) Act 2016 statement and the Code of Fundraising Practice and ensure its fundraising is open, honest and legal. It also has to ensure it operates within the requirements in the Charities Act 2011.

Donators

The British Red Cross is heavily reliant on this stakeholder group to survive. The organisation undertakes of different fundraising approaches to raise funds cost-effectively from a range of donators. It fundraises face-to-face and over the telephone; through letters, emails, television, online and press advertising; from legacies, events and community fundraising; from philanthropists, trusts, foundations and corporate partners, and through its charity shops.

Conclusion

Tesco and the British Red Cross have different types of internal and external stakeholders, with different interests and priorities. However, both organisations depend on stakeholders for their success and effectiveness and it is equally important for both organisations to take into account its stakeholders when making business decisions.