The intent of this report is to discuss the importance of corporate communication in Wesfarmers and the strategies it uses in order to maintain smooth communication among its stakeholders. It will be comprised of a detailed analysis of the ownership structure of the company that is used to communicate effectively within the organization. The stakeholder’s theory will be used in order to understand the level of importance is provided to the stakeholders of Wesfarmers while taking an important decision. Besides this, it will provide a complete overview of the organizational behavior and activities into the business.
Wesfarmers Limited is a conglomerate of Australia; with headquarter in Western Australia, with key operations in New Zealand and Australia retail, fertilizers, safety products, chemicals, and coal mining. With around AU$65.98 billion in 2016, Wesfarmers became the largest company in Australia in terms of revenue, overtaking BHP and Woolworths (Wesfarmers, 2018). The company is the biggest Australian private employer, with around 220,000 employees. In 1914, Wesfarmers was established as a co-operative in order to offer merchandise and services to the farmers of Western Australia. The company was listed on the Securities Exchange of Australia in 1984 (Wesfarmers, 2018).
The mission of Wesfarmers is to offer satisfactory results to the shareholders and to attain this goals company has created a highly focused, disciplined, and unique culture within the business (Wesfarmers, 2018).
The vision of Wesfarmers is to create long-term value for the customers. The company is focused towards engaging with its domestic communities and reducing its environmental influence (Wesfarmers, 2018).
The political forces generally have a major influence on the retail industry of Australia. The increasing dominance and growing business of the independent retailers like Wesfarmers have increased competition for the small retailers and thus, to restrict this government of the country has implemented some required policies (Fern Fort University, 2018).
The economic situation of the Australian market widely influences Wesfarmers performance in terms of customer’s buying behavior and demand. The worldwide crisis in 2009 influenced the consumption behavior of the market, which resulted in less disposable income. In addition, the fertilizers and chemical business of the company is influenced because of the natural calamity along with changes in the climate.
Wesfarmers is the key employer with a vast employee’s base along with shareholders in the organization. Wesfarmers procurement of Coles Group has been capable to aim a larger group of people of around 22 million (Fern Fort University, 2018). The company takes many initiatives for the development of the society; also, the business has engagement and employment for Aboriginal and Torres Strait Islander people.
Technology performs a significant part in the business success in Australia. In order to struggle with the strong competition, the company needs to invest in its stores that are considered as smart i.e. through ‘One-Shop’ and a new point of the state of technology (Fern Fort University, 2018).
Source [(The Official Board, 2018)]
Wesfarmers is dedicated towards confirming that the Board composition continues to comprise directors who carry a suitable mix of abilities, diversity, experience, and expertise to board decision-making. Presently the board is comprised of nine directors, containing eight non-executive directors (Wesfarmers, 2018).
In 2001, Wesfarmers converted as a freely operated publicly listed organization with open ownership. The unitholders of Franked Income Fund and stockholders of Westralian Farmers’ Co-operative Ltd accepted the ownership simplification plan of Wesfarmers, which comprised every Franked Income fund and co-op stock unit being exchanged for the share of Wesfarmers (Wesfarmers, 2018).
Stakeholder theory is a concept of capitalism that focuses on the unified relationships between a company and its suppliers, investors, consumers, communities, and investors who possess a stake within the business. The theory discusses that the company must create value for every stakeholder and not just for the shareholders. This theory has become a major consideration into the business ethics study and has offered a framework for further study and growth in the published and research work of numerous academics (Phillips, 2011).
The concept of stakeholder theory is comprised of market-based view and resource-based view. General variety of stakeholder theory looks at determining the particular stakeholders of the business and then inspects the circumstances in which executives treat these parties as stakeholders (Freeman, Harrison and Wicks, 2010).
The stakeholder theory has a strong association with social responsibilities, which reflects that the social value of the company is focused towards promoting the complete potential of all members. This is to highlight, the theory majorly focus on maintaining the economies and ethics together, and attain objectives of corporations. In other words, the business must operate its activities for the advantage of the stakeholders and executives are liable towards them (Bourne, 2014). This concept produces double connotations of the theory: first, one is, businesses cannot make use of stakeholders for their own benefits in the long run, in its place earning profits for stakeholder is the essential goal of the companies. Second, as “mediators,” management needs to be responsible to the stakeholders and manage the different stakeholder’s interest. To explain it in another way, executives should be hard working and allegiant to stakeholders and reveal all the actions that they are going to take and involve stakeholders into the operations of the companies. All these actions of the company reflect its priority towards the stakeholders and help in maintaining the corporate reputation of the organization in the eyes of every stakeholder.
All the divisions of the company interact with the stakeholders in the suitable manner of its operations, considering the stakeholder group’s needs. At the Group level, Wesfarmers always takes care about the interest of the extensive cross-section of stakeholders, defined by the possible influence of the business on their interest (Wesfarmers, 2010). The key stakeholders of Wesfarmers are:
The company distinguishes the significance of offering shareholders with access to updated information and the capability to contribute to the company’s shareholder decisions (Wesfarmers, 2010).
Every business unit of Wesfarmers possesses communicating mechanisms in order to listen to their consumers. Feedback of the customer is considered in the pertinent business in the first instance.
As of 2015, the company hires around 205,001 people. All over the Group, the company put its efforts to encourage an open culture that give importance to the empowerment and inspires direct employee’s feedback (Sustainability at Wesfarmers, 2018).
Wesfarmers is dedicated to long-standing consequences that benefit both suppliers and shareholder while distinguishing that healthy negotiations are a portion of acceptable and normal practices of the business and add to innovation, competence and the enduring sustainability and attractiveness of all the parties.
In addition to this, the company is also involved in other stakeholders also such as Government, non-government organizations, media, and community.
Creating a positive reputation of the business obliges the capability of the company to please the stakeholders and customers’ expectations. If this condition is not satisfied, businesses cease to exist. This is because of the breach of the trust bond with stakeholders and customers. If it is possible then the businesses with a respectable reputation in the market can fail, it is also acceptable that the absence of business reputation, a poor reputation, certainly influence the business’s survival. Due to this reason, companies must repeatedly enhance their reputation in the market. It is to diminish the risk level to break or weak trust bond with the stakeholders and customers (Nicolò, 2015). The good reputation of the companies can create strong relationships with the strategic partners. These partnerships possess adverse influence when strategic partners have a poor reputation in the market.
The primary objective of Wesfarmers is to distribute reasonable profits to the shareholders by financial discipline and excellent organization of an expanded range of businesses. The Wesfarmers Way is the outline for the business model of the company and includes the core values of the company related to openness, entrepreneurial spirit, integrity, and accountability. The Wesfarmers Way, with the Code of Conduct, direct the behavior of all the employees operating for Wesfarmers as it is focused towards attaining its key objective. The senior and board executives of the complete Group focused towards confirming consistent decisions and actions with core values of the Wesfarmers (Wesfarmers, 2018).
The key reason behind the reputation of the Wesfarmers is its expertise in understanding the demand and needs of the customers, which makes the customer feel happy and enforce them to make a repetitive purchase. Besides this, the reputation of the company is dependent on its core values of accountability, boldness, and openness. In order to maintain these assets, the company regularly remain in the contact of its stakeholders and take their feedback in order to take important decisions. Moreover, the reputational associations of Wesfarmers with government and non-government organizations offer it an advantage over its competitors to maintain a good image in the market. The company always comply with the federal government competition policy in order to protect the rights and profits of small retailers (Wesfarmers, 2015). Moreover, the company does have a good presence in the mind of customers’ offline as well as online. The code of conduct of the company requires all the business units to adopt an honest and transparent approach while operating with the stakeholders.
Wesfarmers is one of the reputed businesses in the New Zealand and Australian retail market. It majorly focused towards the benefit to the stakeholders of the business. The company involves all its stakeholders such as employees, customers, government, suppliers in all the significant decisions that are taken within the business. All the decisions that are taken are communicated properly to all the responsible team such that to avoid the chances of conflicts and mismanagement of the work (Wesfarmers, 2018).
Wesfarmers touches the million people’s lives: as suppliers, employees, customers, and the community members in, which they operate their activities operate. The company operates in the market with good reputation and reason behind this area;
Team Work – The employees of the company are encouraged to work as a team with their management as this brings out better productivity from them.
Regular Feedback – The Wesfarmers customer service team regularly takes feedback from its customers as well as employees in order to get better suggestions while taking decisions. Besides this, taking feedback from both customers and employees supports organization in making improvements within its operations (Wesfarmers, 2018).
Proper Planning – Wesfarmers is known for doing proper planning while developing products for the customers.
Measuring Changes – If any alterations are needed in the organization the management of the company takes proper feedback from its employees.
Implications and Conclusion
From the above analysis, it has been identified that the company is very much focused towards maintaining a good corporate reputation in the market by offering quality products to the customers. The company is always concerned about its organizational behavior. For effective organizational behavior, the company needs to frame OB plan, which supports in attaining improved performance level within the company.
In conclusion, it could be said that the Wesfarmers is effectively managing its reputation in the market with the help of its expert understanding of the customer’s demand. Besides this, the company is successfully managing its reputation through integrity, boldness, openness, and accountability. Wesfarmers is known for maintaining good relations with its stakeholders such as customers, employees, government, suppliers, etc. All the stakeholders possess a stake in the company. The company does not only give major priority to its shareholders but stakeholders are also treated with the utmost care. Moreover, Wesfarmers encourage the spirit of teamwork within the organization such that all the employees can work effectively with the management and offer superior productivity.
Reference
Bourne, L. (2014). Understanding stakeholder theory. Retrieved from https://mosaicprojects.wordpress.com/2014/07/11/understanding-stakeholder-theory/
Fern Fort University. (2018). Wesfarmers Limited PESTEL & Environment Analysis. Retrieved from https://fernfortuniversity.com/term-papers/pestel/nyse4/4814-wesfarmers-limited.php
Freeman, R.E., Harrison, J.S., and Wicks, A.C. (2010). Stakeholder Theory: The State of the Art 1st ed. U.K: Cambridge University Press.
Nicolò, D. (2015). Towards a theory on corporate reputation and survival of young firms. Procedia Economics and Finance, 22(2015), 296-303.
Phillips, R.A. (2011). Stakeholder Theory 1st ed. U.K: Edward Elgar Publishing.
Sustainability at Wesfarmers. (2018). People. Retrieved from https://sustainability.wesfarmers.com.au/our-principles/people/people-development/
The Official Board. (2018). Wesfarmers. Retrieved from https://www.theofficialboard.com/org-chart/wesfarmers
Wesfarmers. (2018). Who we are. Retrieved from https://www.wesfarmers.com.au/who-we-are/who-we-are
Wesfarmers. (2010). Wesfarmers Sustainability Report. Retrieved from https://www.wesfarmers.com.au/docs/default-source/reports/2010-sustainability-report.pdf?sfvrsn=2
Wesfarmers. (2015). Stakeholder engagement. Retrieved from https://2015.sustainability.wesfarmers.com.au/our-approach/stakeholder-engagement/
Wesfarmers. (2018). About Wesfarmers. Retrieved from https://sustainability.wesfarmers.com.au/our-report/about-wesfarmers/
Wesfarmers. (2018). Approval Of Wesfarmers Ownership Simplification Plan. Retrieved from https://www.wesfarmers.com.au/who-we-are/our-history/approval-of-wesfarmers-ownership-simplification-plan
Wesfarmers. (2018). Ethical and responsible behaviour. Retrieved from https://sustainability.wesfarmers.com.au/our-principles/governance/robust-governance/ethical-and-responsible-behaviour/
Wesfarmers. (2018). Mission Australia. Retrieved from https://www.wesfarmers.com.au/our-impact/community/partnerships/our-community-partners/mission-australia
Wesfarmers. (2018). Our Impact. Retrieved from https://www.wesfarmers.com.au/our-impact/our-impact
Wesfarmers. (2018). Our Reputation. Retrieved from https://2013.sustainability.wesfarmers.com.au/sustainability-approach/our-reputation/
Wesfarmers. (2018). Structure and composition of the Board. Retrieved from https://sustainability.wesfarmers.com.au/our-principles/governance/robust-governance/structure-and-composition-of-the-board/
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