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When tackling significant projects based on IT systems, finance, or a business acquisition, companies rely on a diverse team of highly skilled experts to get the job done. A project will only be successful when it can achieve its objectives and meets the expectation of the stakeholders. The term "stakeholder" refers to individuals with either vested interest or care about a project. When an organisation carries out a project, it needs the collaboration of many departments and the involvement of internal and external stakeholders.
In this project, the highlight will be given on the identification and critical analysis of different approaches to improve management and engagement of stakeholders. This report will also include a critical analysis of strategies to improve the performance through effective engagement of stakeholders. To meet these objectives, Tesco Plc has to be taken, for instance. The second section of this report will include the importance of cross-functional work to deliver positive results in organisational contexts. And the last section of the report will show the challenges an organisation may face while managing conversations between external and internal stakeholders.
Discussion
Approaches to Stakeholders’ management and engagement
Tesco PLC is a UK-based multinational grocery and general merchandise retailing brand. It is also considered the third-largest retailing brand worldwide. Being such a big international organisation, the company has to deal with thousands of stakeholders directly associated with Tesco or vested interest in the brand's profit margin (Oppong et al., 2021).
On the other way, it can be stated that Tesco has both internal and external stakeholders whose engagement is essential for Tesco’s operational policies and activities.
Every stakeholder in Tesco PLC is considered essential for an organisation. However, managing and engaging the internal and external stakeholders with the organisational activities is necessary to get the best result. As per Account Ability 1000 Stakeholder Engagement Standard, the term Stakeholder engagement refers to the process by which an organisation can manage and engage its stakeholders to acquire agreed outcomes. Eskerod et al. (2015) have mentioned that "Stakeholder management and engagement is a process by which an organisation can improve communication with stakeholders to get to know them”. By knowing them, an organisation can be able to understand the followings:
What do the stakeholders want?
When do they want it?
To what extent they are engaged with the project
Based on these answers, organisations can plan to improve communication and rethink the strategies for stakeholder engagement for long-term outcomes. Additionally, stakeholder engagement and management can improve communication and provide long-term benefits to the organisation, such as brand reputation.
For stakeholder engagement and management, Tesco can use “Stakeholder Mapping” as one of the critical approaches.
Critical analysis of Stakeholder Mapping/ analysis
Stakeholder mapping/analysis is an approach to understanding the stakeholders. It identifies their expectation and importance or influence on the organisation (Eskerod and Jepsen, 2016). The importance of stakeholder mapping is that it is the visual representation of all individuals who has an influence on a project and how they are connected.
Identification of the Stakeholders of Tesco PLC:
Internal Stakeholders
External Stakeholders
1. Shareholders- they invest in Tesco with the hope of gaining profit
2. Employees - Tesco has more than 440,000 employees who have a financial interest in Tesco
3. Managers- different department of Tesco contains one manager who is responsible for meeting the business goal and ensuring the employees in other departments are performing effectively
1. Customers
2. Suppliers
3. Government
4. Local Communities
5. Trade Unions
To manage and engage the stakeholder, focus can be given to BSR’s Five-stage Approach. This framework is essential as it can help an organisation initiate and maintain stakeholder relations constructively. By engaging stakeholders, companies can value the stakeholders and use the engagement process in business strategy. This framework includes five steps, namely:
Develop a strategy: in this stage, the company can focus on reviewing the past engagement and determine the vision and mission of Tesco Plc with defined objectives.
Map Stakeholders: this stage includes identification and prioritising the stakeholders and reflecting on the best engagement methods (Taylor, 2022). The engagement methods can be single meetings, ongoing stakeholder panels, social media engagement and so on
Prepare for the engagement: this stage will include long- and short-term goals,
Engaging stakeholders
An Action plan
(Figure 1: BSR's Five-Step Approaches for stakeholder engagement)
(Source: Taylor, 2022)
Stakeholder matrix to identify the influence/importance
It is another approach to improving stakeholder management and engagement within a project. The below figure represents the stakeholder matrix for Tesco PLC:
(Figure 2: Stakeholder matrix of Tesco PLC)
(Source:
As per the Mendelow’s Stakeholder Matrix model (1991), the stakeholders of the company can be categorised into four quadrants based on two factors, those are:
Power – the ability to influence the organisational strategy and project resources
Interest- what extent the stakeholders are interested in the corporate and project success
Stakeholder Matrix of Tesco PLC:
The first quadrat refers to High Power, High-Interest People (manage closely)- this include the stakeholders who are more engaged with the organisation and make a great effort to benefit the organisation. For example, Workers and suppliers (Monte, 2021)
Second Quadrant: High powerless interest (keep satisfied)- Trade Unions and Customers
Third Quadrant: Low power and High interest ( keep informed)- Local Communities
Forth Quadrants: Low power and low interest (Monitoring)- Local Authorities and Government (Upadhyay et al., 2022)
Based on the Stakeholder Matrix, different stakeholder engagement approaches and methods can be applied in the planning process.
The below table will focus on different strategies for stakeholder engagement:
Participation methods
Purpose
Description
Collaboration through Advisory Group
To influence the stakeholders by engaging them in the decision-making process.
Community leaders and stakeholders can make up an advisory group and work closely with the organisation. this method can create an informal, open environment and increase the flexibility of information sharing
Delegation (development of trust, involvement of local communities and councils)
To decide on a joint venture and agree with the decision
It can help stakeholders to be involved with the organisation at its implementation stage, it allows the organisation to pinpoint the plan’s shortcomings through communication with stakeholders, and it can lead to future improvement (Ludovico et al., 2020)
Public hearing and conference
To be heard before making final decision.
The authorities of Tesco can involve stakeholders in the planning and decision-making process. Ask the stakeholders for feedback and agreement.
In 2006, Friedman and Miles developed a model for "stakeholder engagement and management", relying on Arnstein’s ladder of participation. This model is ideal for identifying an organisation's style for carrying out stakeholder management (Moratis and Brandt, 2022). The lower level of the ladder refers to the situation where the organisation has no responsibility to inform stakeholders about the decision. The middle level of the ladder includes explanation, placation, negotiation and consultation between the organisation and stakeholders. And the highest level refers to the responsive initiatives to empower the stakeholders in decision-making.
(Figure 3: Friedman and Miles’ Stakeholder Engagement Ladder Model)
(Source: Moratis and Brandt, 2022)
Approaches to improve performance through effective engagement of both internal and external stakeholders for Tesco PLC
“Whenever we work, we want to help make life a little easier for our customers, colleagues and communities”- this is the approach used by Tesco PLC to engage internal and external stakeholders within the organisation.
There are several principles that Tesco PLC used to follow to engage and manage internal and external stakeholders effectively.
Principle 1
The Managers of Tesco PLC used to acknowledge and actively monitor the needs and demands of legitimate stakeholders. Managers should address stakeholders' interests precisely and consider their decision.
Principle 2
Managers should listen and communicate with Stakeholders about their concerns. Managers should use the modes of behaviour to address the concerns and capabilities of every stakeholder.
Principle 3
Managers should avoid activities that can jeopardise human rights or give rise to disagreements among stakeholders.
Principle 4
The manager should acknowledge the potential conflicts between 1. stakeholders' legal and moral responsibilities
2. their roles as corporate stakeholders
Principle 5
Managers should collaborate and cooperate with the entities, both public and private, and internal and external stakeholders to engage and manage stakeholders and improve organisational performance.
To improve the organisational performance by engaging the internal and external stakeholders, it should be necessary for the manager to identify the Stakeholders' source of Influence. In that scenario, focus can be given to "Social Networking Theory".
According to Gomes et al. (2020), a "network can be defined as a cluster of relationships". Menezes and Vieira (2022) argued that a network is used to form joint goals. Therefore it can be defined as the set of cooperative relations between the organisation and its environment. This relationship can be developed between the organisation and its external and internal stakeholders. As per this theory, network analysis includes identifying the source of influences among the stakeholders. Bispo and Gomes (2018) have mentioned that network analysis and organisational management can identify the pattern of a relationship with internal and external stakeholders and help identify the environmental sources that impact decision-making.
Gomes et al. (2020) suggested that Network analysis for stakeholders will include:
Choose the internal and external partners based on their required resources
Creating a consensus aligning with the organisational goal
Creating a temporary organisational arrangement between the organisation and its stakeholders
Managing conflict between organisation and stakeholders
For Tesco PLC, the stakeholders' sources of Influence are as follows:
Internal Stakeholders
External stakeholders
Hierarchy, senior position and authority
Control of strategic resources- labour, materials, and financial resources
Influence- leadership style
Internal links- networking
Control of strategies- responsibility for strategic product
Knowledge and skill- cooperation, subcontractors
Control of environment- the network of relationships with external stakeholders, negotiation
Involvement in strategic implementation- strategic partner with organisational distribution channel
Involvement in strategy implementation-taking responsibility for strategic projects
With these theoretical approaches, Tesco PLC can improve organisational performance by effectively managing and engaging the internal and external stakeholders in the corporate decision-making.
Evaluation of cross-functional working to deliver positive results
The effectiveness of a business performance largely depends upon its ability to conduct cross-functional work. A business organisation is run beneath the working of the various departments such as finance, marketing, sales, production, human resource and so on. The functions of all these departments are separate but, at the same time, interlinked at their core (Wiedemann et al., 2019). The roles of cross-functional teams are crucial for any business. Cross-functional teams comprised of the stakeholders from different departments such as finance, sales and marketing, production, customer support and so on, ensuring the equal representation at the table at which strategic decisions are being made. The cross-functional work is crucial for streamlining internal operations and bolstering productivity, efficiency and quality and, in turn, the overall organisational performance (Dussart et al., 2021). Tesco Plc is one of the leading supermarket chains that highly relies on cross-functional working to effectively implement its strategies and achieve its business objectives. In order to efficiently deliver cross-functional working, Tesco plc relied on its Customer Team, which is responsible for ensuring collaboration within the different departments of the organisation and delivering and executing effective business strategies. The Customer team of Tesco is comprised of the representatives of different functional departments, including finance, marketing, customer executives, HRM and production and so on. Within its cross-functional framework, the organisation aims to hold a customer-oriented approach, which gives customer satisfaction the first and foremost priority (Silva et al., 2020). The Customer team of Tesco is further comprised of two segments which are Trade Planning and Range & Space. The cross-functioning team ‘Trade Planning’ works across the business to generate and execute ideas, ensuring the delivery of effective events for external stakeholders like customers and suppliers. On the other hand, the cross-functional team Range and Space on an average of 50,000 products within a year under its category range change events. The entire Customer Team is designed to ensure effective cross-functional working, which is crucial to leading the organisation towards effective performance. According to Awadari and Kanwal (2019), the Customer Team is the heart of all commercial activities at Tesco Plc. It ensures the product planning, backing up with the information of the finance department and marketing department. The marketing department plans its activities based on the specific requirement ensured by the product team, and the process goes on.
Based on the evaluation of the importance of cross-functional working in the present time business scenario, the following aspects have been found which positively deliver the positive organisational performance.
Cross-functional team enhances efficiency: in the traditional working process, projects move through one department before passing through the other, which is time-consuming and also associated with the high risk of coordinator failure. Cross-functional teams simply enhance the efficiency of project completion as the personnel of different departments are working together towards a common goal addressing the potential challenges in the process of achievement of the goal (Kujala et al., 2019). For example, For instance, the project will lose time if the product development department develops a novel new product only to learn that the sales department has reservations about actually selling the product. On the other hand, prospective problems can be addressed sooner to reduce lost time and sunk costs if the sales department collaborates with product development in a cross-functional team.
Cross-functional teams boost innovation: Departments frequently lose sight of the big picture when they become too preoccupied with honing their own skills and accomplishing their individual objectives. But cross-functional teams can boost innovation of both processes and products by fusing various perspectives and knowledge, as they can view the perspectives of different functionalities and also may identify comprehensive solutions to fulfil the needs of the organisation.
Cross-functional working is crucial for effective organisational performance, but there are also certain downsides to the approach of a cross-functional team (Gurzawska., 2020). For instance, cross-functional teams are comprised of stakeholders from different functional department, who holds different perspectives, so the rise of issues and conflicts can impact the performance of such a team and, in turn, performance of the organisation.
From the overall analysis of the cross-functional working approach in terms of delivering positive results, it can be said that cross-functional working brings collaboration within the working of different departments within an organisation. Tesco plc effectively implemented cross-functional working through its Customer Team approach, which allows the organisation to serve its 'customer first strategy. But as the cross-functional teams largely determine the performance of the organisation, it is crucial for the organisation to ensure the effectiveness of such teams.
Impact of collaborative working and managing difficult conversations with internal and external stakeholders in at organisational context
Working together to accomplish a common goal is what is meant by collaborative working. Within an organisational set-up, members of the teams brainstorm solutions or ideas for a product as a team, seeing the objective through to completion or resolution. Setting and achieving goals together increases productivity and gives employees a clear sense of direction (Xinyun., 2018). Collaborative working is a crucial approach in terms of managing various internal as well as external stakeholders. Within an organisational context, every stakeholder holds different interests and expectations, and sometimes the interest of the stakeholders can be contradictory to the interest of the other stakeholders and also the organisation as a whole. In such a scenario, the approach of collaborative working enables the organisation to tackle the situation by effectively managing the difficult conversation with the involved internal and external stakeholders. At Tesco plc, one of the three strategic priorities, along with enhancing its competitiveness in the UK and bolstering its bank sheet, is rebuilding trust. To rebuild confidence, the organisation must comprehend the challenges that are important to all its stakeholders, particularly consumers and local communities. In such a context, the organisation effectively implements the collaborative working approach at the very ground level of the organisational operations. Tesco, plc collaboratively works with the shareholders like suppliers and NGOs (Dussart et al., 2021). The collaborative working approach enables the organisation to build a trusted network of suppliers and also implement ethical aspects like ethical sourcing. To ensure stakeholder satisfaction, Tesco plc implements the three-step approach of Listen-Understand-Take Action.
Listen: Listening is the first step. Tesco believes that it must comprehend the concerns of its clients, co-workers, suppliers, and other stakeholders. These can range from problems in their local communities to worries about the effects our products have on the environment.
Understand: After it is heard, the organisation needs to take some time to consider how the company might address these issues and make a difference. Examining our impact and the many actions we may take to leave a lasting impact is a crucial component of that.
Take action: Finally, the organisation want to materiality evaluation to provide precise instructions on how the company may act to address big social issues and make a good contribution to society.
As per Chief Product Officer of Tesco plc, Jason Tarry, the organisational executive, directly visits the suppliers to understand their perspective of the suppliers so that the organisation could improve its approach (Monte., 2021). Tesco plc has implemented the Supplier Helpline to make sure the quick resolution of the issues. Besides that, Tesco plc gives huge focus on listening to the aspects of the customers. The brand maintains an effective customer support framework to ensure issues faced by the customers are getting solved as soon as possible. Such collaborative working with the stakeholders allows the brand Tesco to deal with issues that arise from the side of the various stakeholders.
Conclusion
In this report, an attempt has been made to construct a critical discussion of the focused area 'developing collaborative relationships'. In the practical field of business, organisations have to deal with complex scenarios of relationship management with its various shareholders holding different relations, interests, and expectations with/from the organisation. In this report, Tesco plc has been taken into consideration to analyse the various aspects of collaborative relationships in the arena of business. Tesco Plc is effectively maintaining its relationship with its different stakeholders. The organisation hold can effectively manage and engage its stakeholders. Cross-functional working is crucial to building collaboration and coordination between the different departments of an organisation, and when it gets effectively managed, it allows the organisation to deliver positive results. Finally, the reports discuss the impact of collaborative working in terms of managing different stakeholders and found that a collaborative approach is crucial to solving the stakeholder issues and generating greater stakeholder engagement.
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