|ASSESSMENT 2 BRIEF|
|Subject Code and Title||MGT501 Business Environment|
|Assessment||Internal and External Stakeholder Analysis|
|Learning Outcomes||This assessments addresses the following Subject Learning Outcomes:|
|Total Marks||50 marks|
Business stakeholder analysis is a technique for identifying stakeholders and analysing their roles. The aim of the analysis is to map out the stakeholders’ level of influence and degree of interest with regards to the business. Stakeholder analysis can also be used to assess the relationships between different stakeholders and the issues they care about most.
Internal stakeholders are individuals or groups who are directly involved in the business, such as owners, board members, managers, employees, and investors. External stakeholders are indirectly influenced by the business activities, like customers, suppliers, competitors, society and government.
By understanding both perspectives, the business can engage and enhance communication with relevant stakeholders, reduce or prevent risks, identify business opportunities, improve internal stakeholders’ commitment in the business and the reputation of the business amongst external stakeholders.
In this assessment, you will examine a business in an industry that you have either previously worked in or would like to in the future. Leading up to the assessment submission, you must participate in the Assessment 2 weekly discussions in the Discussion Forums on Blackboard. You will locate this discussion forum in the Assessment Area of blackboard. Weekly contributions are required in Modules 2-4.
Presenting a business example and contributing to the discussion forum, you will:
Your individual stakeholder analysis should follow standard report structure and include the following:
Support your observations and statements by incorporating links to theory and conceptual frameworks. Please ensure your sources are referenced clearly in the APA 6th style both in-text and in the reference list.
It is essential that you use the appropriate APA style for citing and referencing research.
Internal and External Stakeholder Analysis
This project describes the analysis of the key stakeholders of the software IT industry. The functional areas and basic interest of the software It industry is analysed through the PESTLE analysis. The nature of the interest of the stakeholders is also stated with some implications to reduce the conflicts. The classification of the different types of the stakeholders of the software IT industry is also identified in the stakeholder matrix. At the end of the project t the comparison of the software IT industry is conducted with retail industry. This part describes the roles and dissimilarities of the different types of stakeholders of the both industry. The overall project describes the dimensions of the business dynamics of the software It industry through which the industry can increase its prosperity.
Business is developed by the collaboration of different entities that helps to operate and sustain the business for the long term. One of the most important factors involved in a business is its stakeholders. Stakeholders are the individuals or the groups or organizations that are involved in the business operation of a company who influence the business operation. Stakeholder analysis helps to identify the stakeholders of a company and their roles and interests in the business operation of that company (Dembek, York, & Singh, 2018). The following report discusses the different roles and interests of different stakeholders of software IT industry, more specifically Accenture and compares it with the retail industry’s stakeholders for a better understanding.
Key functional areas of the software IT industry
There are various functional areas of the software IT industry such as Accenture. Following are the key functional areas of Accenture.
1. Research and development
This is the most important functional area of the company and software IT industry as all of the programming personnel who do the research on different software and develop new applications and computer programs work in this area (Ali & Lai, 2018). Thus, this area is responsible for the main production of the business in the software IT industry. This area of the business is dependent upon the primary internal stakeholders of the company, that is, the IT personnel, the CIO and so on.
This functional area deals with all the financial operations of the business. The internal stakeholders of the business, that is, the investors come under this functional area. The investors are the secondary stakeholders of the company and do not influence the main function of production of the company but involve in the monetary investment of the business (Jiao et al., 2017).
This functional area involves in the promotional process of the product and services of the Software IT Industry. The external stakeholders of the company, that is, the marketers are involved in this functional area of the business.
4. Human resource
The human resource (HR) department of the Software IT Industry and Accenture operates the recruitment of skilful employees and in the training and development process of the individual employees and teams to unlock their potential and enhance the overall organizational performance itself (Accenture, 2020). The HR department and personnel are the internal stakeholders of the business.
The legal functions of the Software IT Industry help them to minimize the risk and maintain all the legal rules and regulations related to the business. The legal associates of the industry and company are the external stakeholders of the business.
6. Geo services
This part of the company manages the real estate of the business and helps to develop innovative and suitable workspace for the business. The real estate agents are the external stakeholders of the company and are secondary in nature as their job does not influence the core business production of the company.
Identification of internal and external stakeholders and their roles
Table 1: PESTLE analysis
Source: (Created by author)
Stakeholder identification through PESTLE
Following are the stakeholders of the software IT industry companies like the Accenture:
According to the technological environment of businesses in Australia, it can be said that there is a huge opportunity for getting efficient and productive workforce, that is, the software engineers for research and development in the business as the country has a rapidly evolving technological structure.
The employment rate of the country is quite well. Thus, there is an adequate human resource for the companies in the software IT sectors in the country for requiting the functional operation employees in the company.
The country had a high rate of technological investment as the digital economy of the country is rapidly growing. Therefore, enough investors will be available for the business in the country.
As there is a good inclusion of new innovative technologies in the country, there will be an adequate number of hardware suppliers for the software sectors of the country.
The consumers are becoming more technology aware and their need and requirements in the software are rapidly evolving with the invention of new innovative applications with time in this age of digitization. Therefore, the software sector has a huge opportunity for growth in future in the country.
Nature and degree of interests of prime stakeholders and implications of Conflicting interests
All the prime internal stakeholders of the software IT sectors of the country, like Accenture, have one major interest in the business and that is to produce the maximum revenue in the business possible. Therefore, there is a low chance of conflicts in the interests of the prime stakeholders of the business. While the basic employees of the company are more focused on more personal interests such as delivering a productive and efficient performance for getting more opportunities and promotional benefits in the job and maintain a standard amount of income asset to their respective job roles. The investors are more concerned about maximizing the overall business profit margin so that the business can return profitable revenue.
Fig 1: Structural and measurement models for stakeholders
Source: (Garcia-Torea et al., 2016)
These two interests are basically dependent on each other as a more productive employee performance will ensure the enhancement of the overall productivity and profitability of the organization (Baernholdt et al. 2018). In the case of wither of the interests is not satisfied properly, the other will also suffer the consequences. If the employee performance degrades then the overall organization performance will also degrade and if the business is not able to generate profitable revenue then the company will not be able to satisfy the employee interests as well.
Level of major stakeholders’ influence
The major stakeholders of the software sector like Accenture are the investors, programmers and consumers. The investors of the business do not directly influence the production process of the company but have a high level of power to stop or start the production of the business. Without proper investment, it is impossible to process the business operations of the company. The investors also have a strong influence about modifying and moderating the business terms according to their opinion for making the organization to generate profitable revenue in return (Charan & Murty, 2018). The programmers and software developers are other major stakeholders of the business as it is for them the company is able to operate the business by producing new software and technological applications in the market. The researcher and developers are thus a direct internal influence in the business that regulates the entire production process of the company. They shape the production process and influence the productivity and efficiency level of organizational performance. It is for them the company is able to deliver high performance and enhance the productivity of the organization. This also regulates the profitability of the business.
Whereas the consumers of the business, that is, the customers that buy the products and services of the company and use them, are not directly connected to the business operation but are one of the most important stakeholders of the business. The business operation is modified and based on customer requirements and preferences. It is very important for the company to meet these needs and requirements of the customer and modify their products and services according to the customer preferences so that the company could attract more customers to the brand and increase their sales generating a profitable return in the business (Parsons, 2017). Therefore, the consumers do not hold any direct power over the business operation of the firm, but deeply affects the designing and development decisions of the products and services provided to the customers of the company. With a satisfied customer, the company gains a strong customer base in the industry and is able to promote the organizational value in the respective digital market of the country. It helps to enhance the organizational growth in the respective software industry of the country.
The stakeholder matrix displays the link among the different types of stakeholders who are involved in the business dynamics of an industry. The stakeholder matrix in this project is defined and described on the basis of the software IT industry.
High Power, Low Interests
High Power, High Interests
Low Interest, Low Power
High Interest, Low Power
Table 2: Stakeholder matrix
Source: Created by author
From the above adjoining stakeholder, matrix displays the different types of stakeholders in the software IT industry. The stakeholders like the Software Financiers, Functional operators, Hardware and software suppliers, Software analysts, IT developers and Programmer falls under the section of the High Power with Low Interests (Thames & Schaefer, 2016). The stakeholders like the Customers, Government and CEO falls under the section of the High Power with High Interests. The stakeholders like Society and Local Communities falls under the section of the Low Interest with Low Power. At the last, the stakeholders like the Staffs, Managers and Software and hardware engineers falls under the section of the High Interest with Low Power. This describes the framework of the stakeholders who are involved in the progression of the business of the software IT industry.
Comparison of industries: Retail industry and Software IT industry
In this part of the project, the Software IT industry is compared with the Retail industry. The comparison is based on the evaluations of the stakeholders of both the Retail industry and Software IT industry.
Significant points of stakeholder dissimilarities
The software IT industry is based on the scientific progressive applications and the retail industry is based on store and delivery of the goods and products. The stakeholders of both industries are quite dissimilar as their functions are also dissimilar. The roles of the engineers as the stakeholder in the Software IT industry are of high demand and efficiencies (Zhang et al., 2018). The software industry is based on engineers for its development and progressions. On the other hand, the retail industry does not require engineers to expect during times of technical purposes. The retail industry is dominated by the managers as to the significant stakeholders and whereas in the software industry the mangers are not so significant t as in the retail industry. The main objective of the software industry is developing the software and applications which can be applied to other kinds of industries including the retail industry to process the data management, record storing and information transferring. The retail industry depends on the software industry for its development and advancement of its offline and online services to the customers. The potential customers of the retail industry are local individuals, group and organizations. The customers of the software IT industry are the other industries who require software for the progression of their marketing mechanics.
The suppliers of the retail industries are linked with the local strokes, local and small companies and SMEs. The investors of the retail industry are based on the shareholders and the initial public offerings and it cannot produce large talent pools in comparison to the software IT industry.The software IT industries have the stakeholders in the form of and Software and hardware engineers, Software Financiers, Functional operators, Hardware and software suppliers, and project managers. The software industry is depending on the process of more and more productions of the new software. The retail industries depend on the process of storing, selling and delivery process. The retail industry uses multiple channels for the process of delivery (Balaji & Roy, 2017). The software industry does not use the channel but it uses the project for the development of new software and applications. The projects are assigned from different industries which are the distinguished customers of the software industries (Chatterjee, 2017). The investors in the software industries are easily available as it creates a huge talent pool of diversified knowledge. The chances of profitability are more in the software industry as it is able to create new technologies which are parallel to the demands of the modern world. On the other aspect, the retail industry has some chances to get frequent loses if its material and products are not properly marketed.
Analysis of the differences in stakeholder influences and interests
There are various variations of the stakeholder influences of the software and retail industry. The prime stakeholders of the software industry are the software developers and researchers of the company and the investors of the business as well. The influence of the consumers is comparatively low on the business operation. Whereas, in the retail industry the consumers hold a high power and deeply affects the business operation. Although they do not involve directly in the production of the functional process of the business, the consumers have a strong influence in the product and service development in the industry (Rebs et al., 2018). In the software industry, the main focus is on the production and development of software applications and technological products and the consumer hold comparatively much lesser knowledge about it than the developers and programmers working in the software industry. Thus, the production process and development of new products is moderated by the employees of the IT firms itself. The only thing that gets partially influenced by the consumers is the product design and presentation which are not necessarily the core development factors of software. The investors also play a much stronger role in the software industry than that of the retail sectors. The software industry needs a huge amount of investment for developing a new technology or software application. Thus, investors influence the production process a lot in the software industry. While in the retail industry although there is a need for investment in the initial development stage, the later investments in the business are majorly generated by the organizational savings and revenues.
The above discussion provides an overall understanding of different stakeholders of software IT sectors and their individual roles and influences in the business operation of a company. From the above discussion, it can also be seen that the level of interests and influences of these different kinds of stakeholders in the business operation vary from each other. The report also discusses the similarities and differences of the software and the retail industry and hoe they ruction differently from each based on their stakeholder involvement in the business. The levels of influences of the consumers of these two industries are diffident from each other as in retail industry, it can be seen that the consumer influence is quite higher than that of the consumer influence in the software industry. But the investors and employee interests of these two industries are quite similar to each other.