D1: Evaluate the influence different stakeholders exert in one organisation

Stakeholders are groups or individuals that are affected by the operations of a business and have an interest in the objectives of the business. Every stakeholder holds a different opinion and therefore tries to influence the business in the most beneficial way to themselves and their aims; however stakeholder conflict may arise when the aims and objectives of some stakeholder groups compromise the aims and objectives of other stakeholders groups.
Employees: Employees are a primary stakeholder within Sainsbury’s whose financial situation is correlated directly with the performance of a business. Employee’s interests must be adhered to as best possible as they can influence Sainsbury’s in three main ways. They can influence staff turnover, (how long employees tend to stay) if they are unsatisfied or feel they are insecure employees may opt to work for a rival competitor such as Tesco if they feel they will have better pay or job security. Employees must possess the correct skills Employees can also influence Sainsbury’s through industrial action, where they may strike in a protest; if the employees aren’t present on a day-to-day basis this may have a devastating effect on sales that day which can be detrimental for the future. Employees have a large influence over service quality; service quality is a comparison of expectations with performance. A business such as Sainsbury’s with high service quality will meet customer needs. Improved service quality may increase economic competitiveness, and step ahead of competitors. Sainsbury’s success will stem from a strong, competitive and efficient workforce. If there is spare capacity within Sainsbury’s where resources are not being used this will decrease efficiency within departments and increase unnecessary costs, which will in turn eat into company profits.
Evidence:
“Commitment and engagement

By 2020, 20,000 of our colleagues will have reached 20 years of service at Sainsbury's.
Our progress so far * Over 14,000 colleagues have been with us for 20 years or more, including 148 with 40 years or more * 4 point inc rease in colleague engagement in our annual colleague survey vs. the results for 2012/ 13 overall * 1 point increase in those who would recommend Sainsbury’s as a great place to work vs. the results for 2012/13 overall * Well established colleague council system with new National Youth Forum created for colleagues under 25 * Developed a new policy for our colleagues who are carers with an innovative partnership with Carers UK
We ensure that everyone at Sainsbury’s can ask for flexible working, as we believe a good work/life balance creates a better, more enjoyable and more productive workplace”

In assessing the validity of this evidence from Sainsbury’s website it corresponds accurately to Sainsbury’s employees and objectives completed. It amplifies the loyalty of employees; loyal employees are a must for a successful business. They are the backbone of the company; they can make or break the product, service and customer experience provided. They are a reflection of the company and they’ll either help achieve the business goals or help bring the company down. Employee loyalty is truly a competitive advantage.

Shareholders: The objective of many shareholders is to influence the governance of Sainsbury’s to meet their individual objectives and goals which is profit in more than most cases. Shareholder influence within Sainsbury’s is dependent upon the ownership they hold in terms of the shares of stock they possess. Shareholders have direct influence on the board of directors in making important financial decisions and vote out directors if they feel they are running operations badly. Additionally, Sainsbury’s hold annual, and sometimes quarterly, meetings where shareholders can voice concerns and feedback. Sainsbury owners may neglect pursuits to appease shareholder financial goals.
Evidence:
“Corporate governance

We are committed to high standards of corporate governance in our business, and apply the principles and supporting principles of the UK Corporate Governance Code. This emphasizes the need for well-balanced, effective boards, strong overseeing of risk management, and alignment of remuneration policies with shareholder interests, and sound shareholder relations.
The board and committees
The Board comprises three Executive Directors and six Non-Executive Directors. There is a clear division of responsibilities between the Chairman and the Chief Executive. All the Non-Executive Directors are considered to be independent. They bring wide and varied commercial experience to Board deliberations.
The Chairman is responsible for leadership of the Board, setting its agenda and monitoring its effectiveness.
The Chief Executive is responsible for executing the strategy once agreed by the Board.
The Remuneration, Nomination and Audit committees have written terms of reference that define their authorities, duties and membership. These Committees are made up exclusively of the Non-Executive Directors. Justin King is not a member of the Nomination Committee, although he is invited to attend meetings.
Internal controls and risk management
The Board has overall responsibility for the system of internal controls, including risk management.
The system of internal controls is designed to manage rather than eliminate the risk of failure to achieve the Company's business objectives and can only provide reasonable and not absolute assurance against material misstatement or loss. It comprises all controls including financial, operational and compliance controls and risk management.
The process used to assess the effectiveness of the internal control systems are ongoing, enabling a cumulative assessment to be made.
The system of internal control and risk management is embedded into the operations of the Company, and the actions taken to mitigate any weaknesses are carefully monitored.
Corporate responsibility
Sainsbury's has a strong record in its commitment to Corporate Responsibility, which is an everyday part of how we do business. Sainsbury's company values underpin its goal to provide healthy, safe, fresh and tasty food at fair prices. This has full support from the very top of the organization, whereby members of our Operating Board hold accountability for each of our five values and their steering groups became accountable for their own targets within our new strategy.
Investor relations
The Company is committed to maintaining good communications with investors. Normal shareholder contact is the responsibility of the Chief Executive, Chief Financial Officer and the Head of Investor Relations. The Chairman is generally available to shareholders and institutional investors. The Company invites Buyside and sellside analysts to briefings immediately after the announcement of the Company's interim and full-year results. They are also invited to participate in Conference calls following the announcement of Trading Updates. The content of these presentations, conference calls and webcasts are available in the presentations section so as to be available to all investors. Shareholders have the opportunity to meet and question the Board at the Annual General Meeting.”
In assessing the validity of this evidence from Sainsbury’s it corresponds accurately to Sainsbury’s shareholders and objectives completed. It clearly shows the authority they possess within the organisation through the decision process.
Suppliers: Suppliers are able to influence Sainsbury’s in many different ways, which is why their stakeholder needs must also be met so that the firm can remain competitive and successful. Suppliers can alter price orders therefore if they decide to raise prices for orders, this can affect Sainsbury’s profits. A supplier's reliability could affect production and if orders do not arrive on schedule they won’t be ready for shipping to customers. This chain of events to the customer who is vital in order for Sainsbury’s to receive that income, puts a large amount of responsibility on the supplier to continuously deliver. Suppliers can change credit terms, which may have cash flow issues for Sainsbury’s, so there accounting procedure, may have to change in this case.
Evidence
“Ethical trading
Our Code of Conduct for Ethical Trade covers the employment practices we expect from our suppliers, both in the UK and abroad.
Our customers want to be confident that the people who make and sell our products are not being exploited, or exposed to unsafe working conditions. Our Code of Conduct for Ethical Trade covers the employment practices we expect from our suppliers, both in the UK and abroad. As founder members of the Ethical Trading Initiative, our Code of Conduct is consistent with the ETI Base Code and national and international laws.
We pride ourselves on having good supplier relationships and work with them to support our ethical trade goals in the following areas:
Policies and procedures
We were the first supermarket to implement a voluntary code of conduct that went beyond the obligations contained in the previous Supermarkets Code of Practice. We have consistently supported the strengthened and widened Grocery Supply Code of Practice (GSCOP) which came into force in February 2010 following the Competition Commission report into the grocery market. We have made significant investments to implement GSCOP throughout our business.
Our Supplier Handbook, which is issued to all suppliers, is our legally binding code of commercial practice. It incorporates GSCOP and our Code of Conduct for Ethical Trade. Where there have been disagreements with suppliers about a particular trading practice or decision we have a proven record of effective internal escalation and resolution. We support effective GSCOP enforcement, but we remain of the view that an additional enforcement body is unnecessary, as the strengthened provisions in the GSCOP and the existing enforcement regime are already self-sufficient and fully address the areas of concern identified by the Competition Commission.
All our new suppliers are risk assessed prior to us establishing a relationship and are required to sign up to our terms and conditions which incorporate the Code of Conduct for Ethical Trade. Our assessment tools determine the level of ethical trading risk of each supplier and require suppliers to undertake a third-party, independent ethical audit where necessary. This in depth analysis allows us to determine whether a supplier is eligible to work with us. Suppliers are required to ensure that our Code of Conduct is applied to their suppliers and sub-contractors.
Auditing and tracking
We work with lower risk suppliers to assess their risks and performance against our Code of Conduct whilst higher-risk suppliers are required to have independent, third party ethical audits. Over 1,700 audits and site visits were conducted at Sainsbury's suppliers last year.
Suppliers' ongoing ethical trade performance is then regularly tracked through the Supplier Ethical Data Exchange (SEDEX), our own internal databases and our supplier scorecard. Corrective actions which are identified through audits are resolved in a timely manner by suppliers with support from our ethical and technical teams. We report back to internal colleagues on supplier compliance and best practice on a regular basis and share our performance externally through meetings and workshops. Our Product Technologists and Ethical Trade teams visit suppliers throughout the year to ensure that our ethical requirements are being met and provide support on ethical issues where required.
Close monitoring of suppliers means that we are able to identify trends of common issues. It also enables us to give additional support to those suppliers who may find it challenging to achieve our standards.”
In assessing the validity of this evidence from Sainsbury’s it corresponds accurately to Sainsbury’s suppliers and objectives completed. It amplifies the loyalty of suppliers which is a must for a successful business. They are responsible for the company’s order process; they can make or break the product.
Customers: Customers contribute to profit levels and turnover in Sainsbury’s. Sainsbury’s survives through customer loyalty. Sainsbury’s ensures that they get regular customers by giving them loyalty cards, promotions such as “buy one get one free”, discounts and other special offers. They are getting regular customers, which bring in more profit, which then can be used to help expand the business. Sainsbury’s made customer loyalty-marketing work when so many other retailers failed. They give vivid insights into how Nectar card benefits Sainsbury’s and more importantly, its customers. Customers demand cheaper products so local and national stores such will try to have the cheapest products for customers to buy which then encourages competition between the stores, whichever store has the cheapest price for a particular product then they would be attracting all the customers. Customers keep the business running and without them a supermarket such as Sainsbury’s would not survive.
Evidence
Sainsbury's chief executive Justin King believes Britain's new coalition government will probably announce a rise in VAT as it gets to grips with Britain's record budget deficit.
King, who runs Britain's third-biggest supermarket chain, today urged the government to get the timing of any VAT hike right and give retailers plenty of notice.
A rise in VAT on non-food items looks "more likely than not," King said this morning. It is expected to be announced in the emergency budget that will be held within the next 50 days. Retailers are likely to absorb some of the increase initially before passing it on in full to customers, King added.
A BBC poll of 28 economists shows today that 24 expect VAT to go up. The majority predicted a rise from 17.5% to 20% before the end of 2011. Analysts say a 20% rate would raise about £11.5bn a year for the public coffers.
"We'd like lots of notice, we'd like any change at a sensible time of year [ie not around Christmas] and stability for the long term," King said. He thinks imposing VAT on food would be "bizarre" and "regressive" as it would hit poorer families the most, adding that he saw no signs that this was about to happen.

VAT was temporarily cut to 15% to aid the economy in the depths of the recession last year, and any rise is likely to lead to shoppers tightening their belts further. Consumers already have to contend with higher petrol prices – up from 95p a litre to over 120p over the last year – and many fear for their jobs. Unemployment is still rising across the economy, and thousands of public sector jobs are likely to go as part of the £6bn spending cuts pledged by the Conservatives.
The validity of this evidence corresponds accurately and directly to the consumer to a certain extent however the part where “VAT was temporarily cut to 15% to aid the economy in the depths of the recession last year, and any rise is likely to lead to shoppers tightening their belts further” clearly shows the impact customers can have on company profits.
I believe that the stakeholder with the most influence is the employee. The employees play a pivotal part in Sainsbury’s foundation and are the basis which they can build on for their continued success. The formula to success in a business like Sainsbury’s is good management, organisation and delivery. The shareholders deal with the financials and politics of the business and the suppliers are a key variable, which must be closely watched, but the employees are the most important as if they do not produce, the business cannot process. Regardless of whether there is stock on the shelf, customers waiting and shareholders with profits, if there are no employees in work due to a strike, Sainsbury’s cannot continue. Customers play an important role in the way that if the products aren’t bought, then revenue can’t be made, if profits can’t be made the business cannot run let alone expand therefore this is also vital. The employees are the ground running work employed to carry out the operation day in day out, especially in the retail industry where they are invaluable to Sainsbury’s