Background of the Company
Corporate reputation is very important for the success of an organization. Corporate reputation involves the overall estimation of a business performance and how the business is perceived by the stakeholders both internally and externally, based on present and past behaviors. This actions can also be extended to view the business based on its future aspirations. The impact of a bad reputation is mainly seen by the plunge of share prices of the business in the market value. It is important for businesses to consider guarding reputation and brand image in all their operations. A good name is one of the greatest assets that a business can own as it helps in building goodwill among the stakeholders. This report will analyze the effects of corporate responsibility of Woolworths.
Woolworths is an Australian based grocery and supermarket chain under the ownership of Woolworths Group limited. Woolworths was founded in 1924 previously under the name Wallsworths Bazaar limited (Walsh, 2014). The company had its first store in Imperial Arcade on Sydney Pitt Street. The company has since grown to attract more shareholders and investors. By 1940, Woolworths had stores in nearly all the states of Australia (“Woolworths Supermarkets – Woolworths Group”, 2018). After successfully launching their stores, the company started transitioning to become exclusively a grocery store (“Woolworths Supermarkets – Woolworths Group”, 2018). Woolworths has subsidiaries in New Zealand. It is the largest supermarket chain in Australia. The slogan of the business is “The Fresh food People.”
The PEST analysis is a tool of measurement for analyzing the market and business external factors that affect its operations. The acronym for PEST is political, economic, social and technological (Gupta, 2013). Under the political factor, Woolworths operates in Australia and New Zealand. The two countries have political stability which has been significant for the growth of Woolworths. Political factors critically influence the operations of retail stores. Economically, recessions affect significantly the operations of Woolworths (“Woolworths Supermarkets – Woolworths Group”, 2018). The global financial crisis negatively impacted the operations of Woolworths leading to the closure of its UK branch. Social factors are based on the consumer. Woolworths has taken a step towards satisfying consumer needs by selling items at low prices. In relation to social trend, the business launched the loyalty program that has attracted over 900,000 members (“Woolworths Supermarkets – Woolworths Group”, 2018). Technologically, Woolworths has self-service checkout that enhances customers’ experience. Additionally, the business has a service-oriented architecture (SOA) for support of technological integration.
Woolworths Limited functions under the retail sector of Australia’s food industry. Woolworths is basically a supermarket store chain with branches all over Australia. The brand focuses primarily on grocery and food retailing among other merchandise.
Woolworths is an Australian national business owned by Woolworths Group Limited, which is a public listed company in Australia. It is ranked third out of two thousand companies in Australia (“Our Businesses – Woolworths Group”, 2018). The company is under the leadership of Mr. Brad Banducci, who is the Managing Director and Chief Executive Officer. The chairman of the brand is Mr. Gordon Cairns (Sawang & Kivits, 2014). Woolworths operates as a retailer for food, liquor, and general goods. Additionally, Woolworths has stakes in the gaming and hospitality sector. The main division and subsidiaries of the group are the following. In Australia Food, the company operates 992 supermarkets and 3 Thomas dux grocery stores. In New Zealand food, the group has 184 grocery stores under the name Countdown. Under Endeavour Drinks Group, Woolworth Group Limited retail liquor online and in-store through its businesses; BWS, Dan Murphy, Langtons, Cellarmasters and winemarket.com.au (“Our Businesses – Woolworths Group”, 2018). Under the brand Big W, the company has 186 Big W departments in Australia. The hotel subsidiary consists of Australian Leisure and Hospitality Group that operates 329 venues and gaming operations across the country (“Our Businesses – Woolworths Group”, 2018). Lastly, the group offer financial services through Woolworths Money Division, which offer services such as gift cards, reloaded MasterCard, credit cards and insurance products.
Factors Influencing the Organization and its Reputation
Stakeholder holds a significant position for the success of a business. The stakeholder theory has vast constituent for corporate reputation. Stakeholders are any individual or group which can be affected or have an effect on the business. They include the shareholders, suppliers, consumers, employees, the media, action groups, the government and the community from which the business operates from (Harrison & Wicks, 2013). Stakeholder theory is an organizational management theory that involves practicing ethics and moral values in the management of a business. Stakeholder theory was critically discussed by Edward Freeman. He discussed stakeholder concept as those group whose lack of support will result in the cease of the organization (Harrison & Wicks, 2013). The stakeholder theory takes diverse forms. Descriptively, it entails that those managers who aim at maximizing the output of the organization as they will take stakeholders’ interest keenly. Normatively, the theory entails the interaction between the business and the stakeholder. The stakeholder theory gives rise to the issue of ethics, as to whether the manager should focus on profitability and overlook the interest of other stakeholder or should the manager be inclusive of stakeholders’ interest for short-term and long-term goals of the organization.
In recent times, reputation has constantly received attention from consumers and the community alike. Since reputation is the external perception of the activities of the organization, it is mainly carried out by the stakeholders (Bepari, & Mollik, 2016). Contemporary stakeholders are interested in organizations that show responsibilities in terms of sustainability and social protection. The stakeholders have the sole responsibility of keeping the business in check through various checks and balances. In stakeholder theory where the manager is inclusive of all the stakeholders, the business may acquire a good reputation because of openness and accountability. A good reputation is essential for creating a good brand image.
Woolworths group Limited stakeholders include consumers, shareholders, suppliers, business partners, unions, NGOs, government, regulators, academia, communities, and the media, among others. The stakeholders are mapped according to their ability to inform various decisions (Burch, Dixon & Lawrence, 2013). Additionally, Woolworths considers all the stakeholders in planning and decision making. The business considers key principles in stakeholder engagements which include transparency, mutual respect, interaction and ultimate recognition of the stakeholders. For sustainability, Woolworth group identifies factors that are key and emphasized by the stakeholders (Bepari & Mollik, 2016). Such factors involve ethical sourcing, supporting healthy living, environmental and water conservation, community empowerment, local sourcing, and recycling. Woolworths understand the huge impact the stakeholders have for the success of the business. However, the level of influence and interest of the stakeholders vary according to their needs, location, and impact of Woolworths’ interactions. The following table depicts the relationship of Woolworths with its stakeholders
This analysis shows the different needs of the stakeholders and their expectations towards Woolworths Group limited. Each of the stakeholders has specific issues that need to be addressed to facilitate their satisfaction and uphold the reputation of the company. The stakeholders are important to Woolworths as they facilitate the operations of the business.
The Organizational Structure of Woolworths
Corporate reputation has lately attracted huge interest from different disciplines. Corporate reputation is the outlook of the actions of an organization involving past, present and future actions and developing a perception towards them (Dijkmans, Kerkhof & Beukeboom, 2015). Corporate reputation theory is linked to the performance of the organization. There are a number of critical reputation theories. This is the resource-based theory, signaling theory, game theory, role theory, and institutional theory. However, the resource-based view theory is the one which is widely accepted. This theory is based on the VRIN framework which views resources as either valuable, rare, inimitable or non-substitutable. Reputation is therefore considered under the stated terms (Pérez, 2015). Proponents of the resource-based theory argue that reputation leads to a sustained competitive advantage and market positioning. Corporate reputation significantly improves the overall performance of the organization (Dijkmans, Kerkhof & Beukeboom, 2015). Reputation under the resource-based theory is considered to be immobile, rare, inimitable and non-substitutable. It is a valuable resource because it improves the general performance of a business. Bad reputation adversely affects the profitability of a business as it results in loss of consumers and key stakeholders. Reputation cannot be quantified and it is, therefore, measured by the actions and performance of the business (Pérez, 2015). Among the common measurement, framework includes business sustainability programs such as corporate social responsibility and the transparency of the business towards the stakeholders.
Woolworths Group limited established a code of conduct that safeguards the corporate reputation through maintaining ethical and moral standards in their business dealings. Employees are expected to comply with the law and the company’s policies, protect the company’s assets, and maintain mutually respectful business relationships and practice honesty and fairness (“Woolworths Supermarkets – Woolworths Group”, 2018). Woolworth additionally has set values that maintain their brand image. For example, they put the needs of the consumer first, they reward exemplary performance by the employees, the company also practices diligence and ensure the safety of employees and customers. The management emphasizes transparent procurement processes that are in line with fair trading policies (Klettner, Clarke & Boersma, 2014). Woolworth additionally takes safety and health in high regards. The company constantly works towards setting new standards for improvement of safety and health. Woolworths train their employees to operate safely and they are provided with qualified supervision to facilitate this.
In 2018, Woolworths was ranked first in diversity and inclusions according to Thomson Reuters Diversity and inclusion index (“Woolworths Group named top Australian company in 2018 Thomson Reuters Diversity & Inclusion (D&I) Index – Woolworths Group”, 2018). This ranking was based on key corporate reputation factors that painted Woolworths as a reputable company. The company was recognized for its role in gender pay parity, refugee programs, indigenous employment and LGBTI inclusion (Caddy, 2013). Woolworths additionally received the Gold Tier Status in the Australian Workplace Equality Index Awards for its inclusion programs. Such diversification and inclusions are the building blocks for the company’s reputation. In their corporate association, Woolworths Group limited has listed the services of professional Public relations as the agency for corporate communications (“PPR Wins Woolworths Public Relations from One Green Bean – B&T”, 2018). Corporate communication is essential for passing key messages to the stakeholders and additionally campaigning for the business brand. However, Woolworths has constantly faced criticism from customers reviews based on their product (2018). This is because the business focuses more on demand-oriented purchase rather than product oriented affecting the overall quality of fresh produce. Most farmers have complained of Woolworths’ cost of accreditation as most of their products are returned because of cosmetic faults. To reach Woolworths’ cosmetic standards, the farmers argue that they will be required to use more pesticide and intensive farming methods which may result in ecological unsustainability.
Stakeholder Theory
Woolworths is perceived differently with each stakeholder groups. Of essence are the suppliers, consumers, shareholders and the communities around which the business operates. Woolworth’s consumers have shown mixed reactions on the company’s overall performance. Some hail the company for their good products, efficient services, and low prices. Additionally, some consumers are satisfied with the sustainability stance taken by Woolworth (“Woolworths Supermarkets – Woolworths Group”, 2018). However, quite a number of Woolworths’ consumers are dissatisfied by the service. This has been seen mostly on the company’s online system. Most of the customers complain that the products delivered to them do not match the quality they asked for (2018). Across the Australian states, most communities are lamenting the incursion of Woolworths into their local space. The economies of scale enjoyed by Woolworths has crippled smaller businesses functioning in the locality. Woolworths has seen to be an intruder to communities that thrive on small family-owned businesses. The company has also experienced criticism for facilitating re-zoning of community lands for the construction of its stores. However, some communities have welcomed Woolworths into their locality because the company is an avenue for job opportunities (“Woolworths Supermarkets – Woolworths Group”, 2018). While some suppliers have enjoyed profit and business security by doing business with Woolworths, others are lamenting the strict accreditation policies of Woolworths. The company has constantly been accused of placing cosmetic value for fresh produce first as compared to taste and nutritional benefits. By being among the most profitable company in Australia, Woolworth has guaranteed the return of investments to its shareholders. The company’s revenues have been soaring each year, consequently increasing the dividends paid to the shareholders. Additionally, non-governmental organizations are satisfied with Woolworths’ sustainability measures and practices such as indigenous employment and LGBTI inclusions (Amaladoss, & Manohar, 2013). The above factors have both impacted Woolworths both negatively and positively. However, their good public relation practices have enabled the company to continue being profitable.
Conclusion
Woolworths has in many instances been able to communicate effectively with its stakeholders. The company has a strong incline towards protecting its brand image and value. However, this has not always been the case when it comes to its certain operations. Some customer review indicates that the company does not have an efficient delivery system. Additionally, some suppliers are complaining of seclusion by the company based on their produce not attaining certain cosmetic values. The growth of Woolworths into the Australian retail market has also greatly affected small businesses due to unfair competition.
Woolworths should focus largely on improving consumer satisfaction by guaranteeing the quality of the delivered product. The company can communicate to consumers and educate them on their return policies in the situation where the product does not meet the set standards. Woolworths should additionally improve on product quality by not only focusing on cosmetic value but also more important values such as taste and nutrition content of their fresh products. The company should also follow guidelines of Australian competition and consumer commission to curb predatory pricing and misuse of market power.
References
(2018). Retrieved from https://www.glassdoor.com/Reviews/Woolworths-Group-Reviews-E7481.htm
Amaladoss, M. X., & Manohar, H. L. (2013). Communicating corporate social responsibility–A case of CSR communication in emerging economies. Corporate Social Responsibility and Environmental Management, 20(2), 65-80.
Bepari, M. K., & Mollik, A. T. (2016). Stakeholders’ interest in sustainability assurance process: An examination of assurance statements reported by Australian companies. Managerial Auditing Journal, 31(6/7), 655-687.
Burch, D., Dixon, J., & Lawrence, G. (2013). Introduction to symposium on the changing role of supermarkets in global supply chains: from seedling to supermarket: agri-food supply chains in transition. Agriculture and Human Values, 30(2), 215-224.
Caddy, I. (2013). Remuneration and gender in Australia: background review and recent analysis. International Employment Relations Review, 19(2), 38.
Dijkmans, C., Kerkhof, P., & Beukeboom, C. J. (2015). A stage to engage: Social media use and corporate reputation. Tourism Management, 47, 58-67.
Gupta, A. (2013). Environment & PEST analysis: an approach to external business environment. International Journal of Modern Social Sciences, 2(1), 34-43.
Harrison, J. S., & Wicks, A. C. (2013). Stakeholder theory, value, and firm performance. Business ethics quarterly, 23(1), 97-124.
Klettner, A., Clarke, T., & Boersma, M. (2014). The governance of corporate sustainability: Empirical insights into the development, leadership and implementation of responsible business strategy. Journal of Business Ethics, 122(1), 145-165.
Our Businesses – Woolworths Group. (2018). Retrieved from https://www.woolworthsgroup.com.au/page/about-us/our-brands
Pérez, A. (2015). Corporate reputation and CSR reporting to stakeholders: Gaps in the literature and future lines of research. Corporate Communications: An International Journal, 20(1), 11-29.
PPR Wins Woolworths Public Relations From One Green Bean – B&T. (2018). Retrieved from https://www.bandt.com.au/media/ppr-wins-woolworths-public-relations-account
Sawang, S., & Kivits, R. A. (2014). Greener workplace: understanding senior management’s adoption decisions through the Theory of Planned Behaviour. Australasian journal of environmental management, 21(1), 22-36.
Walsh, B. (2014). Chain store retailing in Ireland: a case study of FW Woolworth & Co. Ltd, 1914-2008. Journal of Historical Research in Marketing, 6(1), 98-115.
woolworths group limited stakeholder analysis – Google Search. (2018). Retrieved from https://www.google.com/search?biw=1600&bih=796&tbm=isch&sa=1&ei=C_4PXNjhMYrVvgSdkJLAAQ&q=woolworths+group+limited+stakeholder+analysis&oq=woolworths+group+limited+stakeholder+analysis&gs_l=img.3…5857.10474..10912…0.0..0.869.10614.5-14j2……1….1..gws-wiz-img…….0i30j0i24.MswKhTxjEC0#imgrc=GGXSL_QKcgFNQM:
Woolworths Group named top Australian company in 2018 Thomson Reuters Diversity & Inclusion (D&I) Index – Woolworths Group. (2018). Retrieved from https://www.woolworthsgroup.com.au/page/media/Press_Releases/woolworths-group-named-top-australian-company-in-2018-thomson-reuters-diversity-and-inclusion-di-index/
Woolworths Supermarkets – Woolworths Group. (2018). Retrieved from https://www.woolworthsgroup.com.au/page/about-us/our-brands/supermarkets/Woolworths
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
