Sample MGT501 Business Environment Report 2

MGT501 Business Environment Report 2 Sample

Context:

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.

Instructions:

In this assessment, you will examine a business organisation in an industry that you have either previously worked or would like to work 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 discussion and contributions are based on Modules 2-4.

Note for Assessment 2 Discussion Forum:

• The business organisation and its functionalities selected for the Discussion Forum MUST be the same with Assessment 2 write-up and submission.

• You MUST make some references to subject contents, including other readings.

• You are ENCOURAGED to employ minimum of 3 reference sources for each topic, two (2) academic (textbooks & peer-reviewed journal articles) and one (1) other sources (newspaper article, business/trade publication, or substantiated website).

• You are REQUIRED to extract and enclose each topic’s responses (e.g., your responses, and critique of your peer’s responses) of your ‘Assessment 2 Discussion Forum’ as appendix in your final Assessment 2 document.

Please Remember your contributions to the discussion topics are one of the assessment attributes. (LMS please create an Assessment 2 Discussion Forum separately in the Assessment area of blackboard as students are required to participate in this to complete the assessment)

Presenting a business example and contributing to the discussion forum, you will:

• identify and analyse functional areas in the business

• identify and analyse the internal and external stakeholders

• compare two industries with each other

• create a stakeholder matrix

• discuss chosen stakeholders and industries in the context of relevant theories and frameworks

Solution

Introduction:

Flight Centre Travel Group is a selected company in the Tourism and Travel Industry in Australia. Flight Centre Travel Group (FLT) is a renowned Australian Travel Agency. The Company founded in 1982 and the headquarters of the company is located in Brisbane Region, Australia. For Assignment Help The FLT Group is one of the largest travel retailers across the world. The Group is also known as the largest corporate travel managers across the world. The Group has owned corporate and leisure travel business across 23 countries including New Zealand, Australia, Europe, The Americas, South Africa, The United Kingdom, Asia and The UAE (About Us - Flight Centre Travel Group. 2021). Due to the outbreak of the Covid-19 and restriction on travel and tourism, the company faced a loss of $662.1 Million and it also decreases the revenue of the company from $3055.3 Million in 2019 to $1898.1 Million in 2020 (FLT-2020-Annual-Report 2020). The Company employed 10615 total employees across all location the company operated their business (Our Story So Far - Flight Centre Travel Group. 2021). The assessment identified the functional areas, internal stakeholders and external stakeholders of the Company. It also discussed the interest and level of influence of each stakeholder on business.

Identification of Functional Areas of Flight Centre Company:

Following are the main functional areas of the company:

Sales and Marketing Department: The Sales and Marketing Department of the Company is responsible for promoting the services of the Company through using different Marketing Media like Social media platform, TV Ads, Newspaper and Magazine Ads. The Sales and Marketing department is especially responsible for developing and researching the marketing opportunities.

Human Resources Department: The main responsibility of the HRM Department is recruiting, organising and utilizing the company’s workforce for ensuring better performance, and implementing the reward system for the employees (About Us - Flight Centre Travel Group. 2021). They are also responsible for maintaining the corporate social responsibility of the company. They are also responsible for delivering positive egalitarianism and diversity practices among the FCTG employees (Corporate Social Responsibility - Flight Centre Travel Group. 2021).

Finance Department: This department of the company is responsible for acquiring the required funds for the company. Moreover, the department is responsible for managing the funds, expenditures, profit and losses within the organisation.

Transportation department: The department is responsible for reservation and management of transport tickets, managing Airline ticketing and reservation, car rental and hiring services, managing rail passes and journey, offering deals and discounts, assisting customers, offering travel insurance etc.

Tourism and Entertainment Department: This department is also responsible for planning tour packaging and consulting with the sales department for pricing and costing of the packages, providing travel guide, managing events, holiday packages, offering discounts on leisure activities and travelling activities, etc.

Accommodation Sector: The department is responsible for accommodating hotel, entertainment services, accommodating cruise services, managing the cruise service and packages, managing standard and quality of the accommodation services etc (Palgan, Zvolska & Mont, 2017).

Food and Beverage Sector: The department is also responsible for managing food and beverages for their customers in Cruise ships, hotels, offering discounts on food services, managing food packages, maintaining high standard and quality of the food and beverage services, etc.

Identification of Internal and External Stakeholders and their Roles:

Political Forces: The FCT Group operated their business in several countries. Australia and UAE is a politically stable country. However, UK, America is a politically unstable country. Political instability and stability create an effect on the business operation and rate of intervention by the Government (restriction and rules, tax rate and trade policies) in the business (Bello & Kamanga, 2020). These can create an effect on the business and its operations. It can increase the cost of the business operations.

Economic Forces: Interest rate, exchange rate, disposable income of customers and GDP and inflation rate can create an impact on the demand of services offered by the company. The proper investment decision, marketing and sales planning and promotional decision of the owners and recommendation by the managers of the company are essential to handle the economic investment of the company in the target market. The proper fund investment by the investors helps in the growth of the business (Investors - Flight Centre Travel Group. 2021).

Social Forces: The high and middle incoming capability of consumers and rich, healthy and wealthy lifestyle can increase demand for tourism and travel services. However, poor incoming capability, high cultural barriers, poor lifestyle of consumers etc. can reduce the demand for tourism and travel services (Kvasnová, Gajdošík & Maráková, 2019). Moreover, the effective presence of potential competitors and high consumers’ demands towards the services of the competitors can hamper the business operation in the market.

Technological Forces: Poor technological knowledge among the workforce of the country can damage the success of the business. However, high technical knowledge of the workforce of the country can increase the productivity of the company in the market. Moreover, the high technological circumstance of the competitors of the company can increase the competitive pressure on the business.

Environmental Force: Poor environmental rules and regulations maintained by the company and its suppliers can hamper the business operation in the target market. The negative environmental impacts on the local community due to poor business operation can reduce the business profitability factor in the market. The company maintains proper environmental regulations to enhance the positive image of the local community and it can reduce the environmental threats on the business.

Legal Forces: Positive involvement of the Union of the company can manage the company to satisfy the legal needs (employee protection law, customer right law, and health and safety law for employees). An unethical relationship between the suppliers and the company can damage the quality of the services supplied by the suppliers towards the company.

Based on the overall analysis, the internal stakeholders of the company are employees, investors and owners, managers, Union of the FCT Group.

The main role of the employees is to provide proper customer care services to the consumers of the Company.

The role of the managers is to build proper investment planning, marketing and sale planning and promotional planning for the company to cope up with the market condition in the different international market.

The role of the Investors and owners is to provide the necessary capital for running the business in the global market. Owners are responsible for making decisions about the activity of the business.

The role of the Union is to improve the working conditions for employees within the organisation.

Based on the overall analysis, external stakeholders of the company are customers, Government, suppliers, local community and competitors.

Customers are always focusing on maximises the value of their investment by receiving a high quality of services and safety while travelling.

The role of the government is to build proper rules and regulations related to the tourism, health and safety of the tourists and employees, and customers rights to improve the quality of the services offered by the tourism sectors (Rasoolimanesh et al., 2020).

The role of the suppliers is to supplying the appropriate high-quality services to the company like high-quality accommodation services, food and beverage services, and transporting services and other entertaining services.

The role of the local community is to support the business activity by utilising the travel and tourism services. They can also protest if the business activity hampers them negatively.

Competitors are rivals of the company who increases the competitive pressure on the company to improve the quality and services of the company.

Identify the nature and degree of the interest of the main stakeholders:

Employees:

Employees are the foremost asset of the company. According to the theory of Hierarchy of needs theory by Maslow, the behaviour of the employees depends on the level of the fulfilment of the needs as per their requirements (Hale et al., 2019). According to the expectancy theory by Vroom, if the services and rewards offered by the company fulfil the needs of the employees, then it increases the quality of the services (Chow & Leiringer, 2020). On the other hand, if FCT Group failed to meet the above-identified needs of the employees as per their requirements, then it affects the quality of the services offered by the employees.

Investors and Owners:

Investors are investing their money to provide the necessary capital to the company for the continuation of the business (Yeh, 2018). The amount of the return of the investment is the main key interest of the investors and owners to make a profit from their investment. The low amount of return on investment can increase conflict between business and investors and owners.

Managers:

The main interest of the managers is in developing the appropriate investment decision to attract more investors to gather more funds for running the travel and tourism business in the international market (Yusof, Awang, Jusoff & Ibrahim, 2017). Poor investment decisions can create a conflict of interest between the investors and managers.

Union:

The main interest of the Union is to enhance the facilities and services offered by the company to employees. If the FCT Group failed to meet the expectation, then it can create the issue of conflict of interest between them.

Customers:

Customers are also the most influential stakeholders for the FCT Group. The main interest of the customers is to maximise the value of the invested money by getting high-quality travel and tourism services from the company (Tuan, Rajendran, Rowley, & Khai, 2019). The poor quality of the offered services can create a conflict of interest between the company and customers.

Government:

The main interest of the Government is to improve the quality and safety of tourism and travel activities. Illegal business transaction, poor environmental capacity and poor customer service activity can create a conflict of interest between the government and the company.

Competitors:

The main interest of the competitors is to build a marketing plan to capture the market share of the rival and also reinforce customer loyalty to build competitive pressure on other companies. Either, it can create the issue of price war and conflict of interest between competitors and FCT Group.

Suppliers:

The main interest of the suppliers is getting a proper financial return and other facilities from the FCT group after supplying their quality services to the tourists of the company (Suppliers - Flight Centre Travel Group. 2021). If the nature of the work performed by the supplier not satisfied according to the expectation of the company or the supplier starts the unfair competitive activity with the company, then it can create a conflict of interest between FCT Group and Suppliers.

Local Community:

The main interest of the surrounded local community is, the FCT Group should meet the needs and requirements of the community. The company should maintain the proper corporate social responsibility to meet the needs of the community (Gurran, 2018). If the company failed to meet the expectation then it can create a conflict of interest among them.

Identification of the level of the influence of the main stakeholders of the company:

Employees: The level of influence is high. However, the employees have limited influence on making a decision for the business. However, employees can hamper the business activity if the FCT Group is failed to fulfil the needs and requirements of the employees in the workplace (Sari, Bendesa, & Antara, 2019). If the company provide proper facility to the employees (rewards, compensation, dignity, respect, health and safety precautions), then it helps the company to maintain the high quality of the customer services.

Investors and Owners: The level of influence of the investors and owners is high because they influence the business objectives (Yeh, 2018). Investors and owners provide proper funds to help the business to grow their business operations in the market.

Managers: The level of influence is high because managers make a business decision and investing plans about the business activities to grow their business in the market ((Jaoua, 2018)). The proper planning and investment help the business to become a leading tourism company in the global market.

Union: The level of the Union’s influence is high because if the company failed to meet the needs and expectations of the Union, then it can also influence the employees’ behaviour and customers’ behaviour.

Customers: The level of the influence of the consumer is high to retain the business activity in the market. The behaviour of the consumers towards the FCT Group can help the company to decide the standard and quality of the services. When the company understand the consumers’ needs and requirements, then the organisation can easily improve the level of their services.

Government: The level of the influence of the Government is moderate while operating the business in the market. The rules and regulations passed by the government, tax rates, exchange rate and restriction on the travel and tourism activity can hamper the business operation in the market. However, a business-friendly environment can help the company to grow their business easily.

Competitors: The level of the influence is high because the pressure of the competitors influences the FCT Group to enhance their marketing and sales planning, pricing strategy and quality of the services offered towards the customers for the continuation of the business in the competitive market.

Suppliers: The level of influence of the suppliers is high. If the suppliers of accommodation services, airline, rail, car facilities and suppliers of food and beverages maintain the reliability of the deliveries and high standard of the products then it enhances the customer service facility offered by the company (Soukhathammavong & Park, 2019). However, if suppliers make any changes in the quality of the services, then it can hamper the quality of customer service offered by the FCT group.

Local Community: The level of influence is high. If the activities of the FCT group affect the local community negatively then they may protest against the company through the local council. They can also influence the business by utilising their services.

Stakeholder matrix:

Fig 1: Stakeholder Matrix For Tourism Industry
Source: (Created by Author)

Comparison with other industry:

In comparison to the retail industry, the main external stakeholders of the retail industry are customers, Suppliers, Government and competitors, community. The internal stakeholders are Owners, investors, employees, landlords, managers.

Difference:

The retail industry operates its outlets in different locations and the company operates the outlets by the small numbers of employees per outlets. The power of the Union is not strong as the travel and tourism industry, so here landlords of the area where the outlet of the retail company situated are one of the main important stakeholders according to the political, economical and legal factors and its impact on the business.

Fig 2: Stakeholder Matrix for Retail Industry
Source: (Created by Author)

Interest and influence of stakeholders:

Customers: The main interest of the customers is to get high quality, standard, healthy and hygienic products by investing their money in purchasing the product. Customers are also greatly influence the market of the company..

Suppliers: The main interest of the suppliers is to get proper financial support and return after supplying the goods. The poor working condition of the supply chain and the unethical activities by the supplier who is responsible for supplying the particular product can negatively influence the business. It can reduce the sale of the products offered by the particular suppliers.

Government: The main interest of the government is to create pressure on the retail company to meet the environmental regulations, to reduce their carbon footprint, disposal of waste and water footprint to protect the environment. The Government highly influence the business of the retail company by imposing several legal rules and restriction on supplying of some products, tax rate, exchange and trade policies, transportation rate and policies.

Competitors: The main interest of the competitors is to grab the market share of the company. The Competitors of the retail company influences them to improve the quality of the products and services and also lower the cost of the products in comparison to the competitors.

Community: They are highly interested people. If the company can create a positive impact on the community, then the community can positively influence the retail company by purchasing their products and through a recommendation to others..

Owners: They are highly interested people. They influence the business by deciding the types of products and services offered to target customers and investment planning for the growth of the business.

Investors: The main interest of the investors to get a huge return based on their investment. As the tourism industry, they influence the growth of the business by investing money to expand the business successfully.

Employees: The main interest of the employees is to meet the needs of the retail company based on the return as rewards and proper compensation.

Landlords: The main interest of the landlords is to get a proper financial return based on the investment of their land for building the retail outlet on that land location. They influence the business by giving the land for developing the retail outlet on that location.

Managers: The main interest of the managers in Retail Company is the growth of the business and increase the profit of the business in the global market. The managers influence the business by giving recommendation on the promotional planning, investment planning, products and services of the company, etc.

Conclusion:

It concluded that both internal and external stakeholders of the Company influence the business of the Flight Centre Travel Group in a different way. They are all responsible for handling the impacts of political, economic, social, technological, environmental and legal factors on the business operations. They have the different interest that helps the company to grow up their business in the global market.

References: