Discuss about the Global Marketing and Advertising Paradoxes.
Woolworths is one of the largest retailers present in the market Australia. It has been famous for its transparent business operations and has a huge footfall of the customers. They are committed to hard work and have down-to-earth values. The senior leaders of the organization started their career in the floors of the shop and hence, the down-to-earth culture is embedded among the senior and the junior employees (Woolworthsgroup.com.au, 2016). Customers are their priority and they aim to make the lives of the customers better, simpler and easier.
This report will mainly look into the corporate governance of Woolworths. The report will start with discussing the concept and the theory of corporate governance. It will move on to discussing the influence of the corporate governance on the operations of Woolworths. Finally, the business strategy of the company will be discussed. In addition to this, the impact of the international and domestic factors on the business strategy will be discussed at the end of the report.
The governance theory mainly talks about collective decision-making within an organization that will help the company to enhance their business by keeping in mind the customers as well as the employees in the organization (Ruggie, 2014). The theory of governance seeks the advice and does not explain their work to the people (Vatn, 2015). The theory seeks the future by explaining the present. They seek the answer of the question ‘what might be?’
Stoker best described the concept of governance when he said that governance can be referred to the development of an organization when the governing styles applied by them blurs the distinction between the public sector and the private sector (Chhotray & Stoker, 2008). When an organization will be able to think beyond profit and will help in the development of the society, then it can be said that the company is able to develop proper governance (Lusch & Vargo, 2014). In addition to this, the decisions of the organization should be beneficial not only for the business but also from the people who are working in the company.
Woolworths is among the famous retailer of the organic food and they aim at enhancing the health of the people. Selling of organic food can be concerned as the present. As per the governance theory, they should seek the answer to ‘how to spread the awareness regarding organic food among the people who are not aware of its usage?’. As per the governance theory, they should spread the concern about heath issues, so that people get inclined to organic food. Generally, organic foods are costlier than the normal food and hence, the customers avoid buying this food. The main aim of the organization would be to sell the food at a lower rate so that huge number of people could afford it (Hollensen, 2015).
Even after being one of the best retailers in town the governance at Woolworths does not seem up to the mark as the hardware business of Woolworths has suffered a loss of AU$1 million (Malley, 2016). The department of Woolworths that deal with home improvement and the hardware has been declared a failure and hence, the company has thought of closing that particular section of the company. The interest of the 460,000 shareholders has been said to be overlooked by the company. There have been a lot of warnings, fall in the share price and degradation in the credit rating. A certain section of business might not work for the organization but the shareholders should not be overlooked for at cost (De Mooij, 2013).
To practice corporate governance in the organization, Woolworths adhere to certain governance policies:
The board charter keeps a check on the activities that deals with the sensitive issues and confidential information (Woolworthsholdings.co.za, 2016). The board keeps a check that none of the employees is able to benefit from the confidential information within the organization.
The conflicts of the interest policy help the organization to keep the employees connected with each other. The senior management should adhere to the information with the employees if there is any change in the operations. The senior management should take a decision that should be in adherence to the interest of the employees.
Ethics is another factor that is one of the main factors in the corporate governance of the organizations. Woolworths has set of ethics that guides the business of the organizations and the relations with stakeholders. The code of ethics is helpful for meeting the standards of the organization and supports the values of the organization. The ethics help the organization in dealing with competitors, suppliers, business partners, customers, employees, shareholders and community.
While discussing about the policies in corporate governance it might seem that, the policies take care of trivial things in the organization. However, if the organizations will view the factors in larger context, then it will help them to operate in a better manner.
The policies adopted in governance by the organization will be helpful in influencing the business strategies adopted by the organization (Menon et al., 2015). The policy regarding diversity will give the desired recognition to the company in the international market. They have a multicultural workforce that shows diverse population in Australia. The diversity gives an impression that Woolworths does not discriminate the employees based on cultural background of the employees. In addition to this, there is no discrimination between the male and female employees in the organization. The female employees are given roles in senior positions. It will also help them to promote themselves in the international platform.
The business of Woolworths is kept safe with information security policy where the employees are not allowed to trade in certain conditions. It helps the organization to maintain a reputation in international as well as in domestic market. One of the important parts of the business is reputation. If the reputation of the organization is corroded, it will affect the business transactions of the company (Sheth & Sisodia, 2015). As the employees are the ones who should be responsible for the business, hence, they should abide by information security policy of the company.
The shareholder of the communication policy helps in maintaining a clear communication among the employees in the organization. Websites of the company helps the shareholders to get an idea about the business and operations of the company. As far as the business strategy of Woolworths is concerned, transparency helps the organization to keep in touch with customers and the employee of the organization. Once the business dealing will be transparent, it will help the company to remain clean with the transactions of business (Strauss, 2016).
The stage that is marked as number one is the phase where the policies are being formed. The policies that are included in the corporate governance of the organization helps in developing the base of the organization. Other factors like proper pricing, quality service, fresh products are based on the governance that is being implemented by the organization are secondary. Once the base of the business strategy will be strong, the organization will be able to take care of the customers.
Conclusion
After going through various concepts of governance and the governance theory, it can be concluded that steps taken by an organization to look after the employees and the business can be described as the corporate governance. In this matter, Stoker has been able to describe the concept of governance. He summed up that when the actions of an organization blurs the difference between a public and a private sectors then the corporate governance of the organization can be said to be successful. Woolworths seem to have strong corporate governance. The policies of the organization keep a check on information that is being shared in the organization, the ethics in the organization, the shareholder communication policy. The policies help the organizations to make its presence felt in the international as well as in the domestic market. However, the case of the Woolworths household that deals with the home improvement, which resulted in huge loss, was a huge blow the corporate governance of the organization. The company did not take care of the shareholders who are involved in operations of the organizations, which should have been the main concern for the organization. Hence, it can be recommended that the organization should take care of the shareholders even when the organization is in danger or going through any rough phase.
References
Chhotray, V., & Stoker, G. (2008). Governance theory and practice: A cross-disciplinary approach. Springer.
De Mooij, M. (2013). Global marketing and advertising: Understanding cultural paradoxes. Sage Publications.
Hollensen, S. (2015). Marketing management: A relationship approach. Pearson Education.
Lusch, R. F., & Vargo, S. L. (2014). The service-dominant logic of marketing: Dialog, debate, and directions. Routledge.
Malley, A. (2016). Board must take the rap for Woolies mess. Financial Review. Retrieved 16 January 2017, from https://www.afr.com/opinion/the-woolworths-chair-and-board-must-be-held-accountable-for-poor-governance-20160201-gmingn#
Menon, A., Bharadwaj, S. G., Adidam, P. T., & Edison, S. W. (2015). Effective Marketing Strategy-Making: Antecedents and Consequences. In Proceedings of the 1997 Academy of Marketing Science (AMS) Annual Conference (pp. 224-224). Springer International Publishing.
Ruggie, J. G. (2014). Global governance and “new governance theory”: Lessons from business and human rights. Global Governance, 20(1), 5-17.
Sheth, J. N., & Sisodia, R. S. (2015). Does marketing need reform?: Fresh perspectives on the future. Routledge.
Strauss, J. (2016). E-marketing. Routledge.
Vatn, A. (2015). Markets in environmental governance. From theory to practice. Ecological Economics, 117, 225-233.
Woolworthsgroup.com.au, (2016). How we do business – Woolworths Group. [online] Woolworthsgroup.com.au. Available at: https://www.woolworthsgroup.com.au/page/about-us/our-approach/how-we-do-business/ [Accessed 17 Jan. 2017].
Woolworthsholdings.co.za, (2016). WOOLWORTHS HOLDINGS LIMITED | CORPORATE GOVERNANCE | CORPORATE GOVERNANCE POLICIES. [online] Woolworthsholdings.co.za. Available at: https://www.woolworthsholdings.co.za/governance/governance_policies.asp [Accessed 17 Jan. 2017].
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