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Introduction to Managing Stakeholder Engagement

A person or groups that have interest in the firm and influence decisions of organization are known as stakeholders. They take part in meetings to determine actions, objectives and policies. The report will explain the key stakeholders for McDonald’s and evaluate their needs and expectations (Ayuso and et. al., 2011). McDonald’s is a food chain organization having 35000 restaurants worldwide. They have more than 97000 employees who deliver quality food to their customers. Report will analyze the methods for effective stakeholder engagement and develops a communication strategy. It will also explain the issues that may affect stakeholders’ relationship and assess the methods to elicit stakeholder’s reviews on policies and other organizational issues.

LO 1 Analysis Of Key Stakeholders

1.1 Types of Stakeholders

Stakeholders can be divided in two categories for McDonald’s such as internal and external stakeholders. They take part in the decision making, planning and strategy section for the improvement in sales and profits.

Internal stakeholders:

Employees: The employees of McDonald’s need timely payment and promotion from the organization for their services (Laplume, Sonpar and Litz, 2008). They want good working environment and other facilities like incentives, rewards, job security and respect for motivation.

Managers: McDonald’s manager wants support of top management to implement plans and strategies within McDonald’s for improvement. They expect timely wages and promotions for their contribution into organization.

Owner: The owner of McDonalds needs improvement in sales and profits for increasing the market share and target area (Sarkis, Torre and Diaz, 2010). Owner’s expectation is to sustain top position by offering quality products and services.

External stakeholders:

Suppliers: They need timely payments for their raw materials which are provided by McDonald’s. Supplier expects share in the organization’s profits and other facilities like involvement in meeting and decision making.

Society: The community needs jobs and improvement in the lifestyle from the organization (McWilliam and Siegel, 2000). They expect that organization will contribute for the betterment of culture and values. Society also wants environmental protection and quality products.

Government: They need that organization follows its rules and regulations for the development of business culture and provide support for improving foreign currency account. Government expects organization to operate the business legally with truthfulness.

Creditors: The requirements of creditors are that, they want their interest for the capital they provide for operating business to McDonald’s. They expect that the organization improve its market share, profits and liquidity.

Customers: Their requirement is to get value for their payments (Morsing and Schultz, 2006). Customers want quality food products, ethical process, and care from the McDonald’s.

1.2 Managing Relationship With Stakeholder

Mc Donald’s can evaluate its relation with stakeholders by using mapping technique. Stakeholder mapping includes four steps to manage relationship.

Define stakeholders: The key stake holders for Mc Donald’s are customers, suppliers, government, creditors, employees, managers and owner.

Analysis of stake holders: Company performs analysis of stake holders by the impact of their work and contribution in the development of business. McDonald’s evaluates the needs and importance of current stake holders to map relationship.

Plan for communication: To manage relationship with all the respective stakeholders, organization collects information and develops channel to distribute reports and project (Morsing, 2003). For that Mc Donald’s prefers face to face, online, printed documents and audio visual methods.

Engagement: To achieve the desired objectives, organization is required to have conversation to encourage participation of stakeholders. The meetings and conferences motivate stakeholders to develop partnership for improving business.

RACI analysis:

This method is used to evaluate the roles and relationship of stakeholders with Mc Donald’s. In that process organization follows these steps:

Responsible: In this, Mc Donald’s evaluates the performances of stakeholders before assigning them roles and responsibilities (Garsten and Hernes, 2008).

Accountable: Organization studies the process and operation and provides authority to person and department for approving the project. It is responsibility of stake holder to be accountable about their tasks and roles.

Consulted: For making changes and implantation of new strategy and plan, Mc Donald’s requires to consult the stake holders. By that analysis company identify the responsible person to provide input about task.

Inform: This is used to communicate the information for specified stake holder, for the changes the organization made in its plan and strategy. This will evaluate the active and non-active stakeholder’s relation.

1.3 Commitment of Stakeholders

For the improvement in business environment of Mc Donald’s and to survive in the industry stakeholder engagement is essential (Mulleart, 2011). To make decision and develop plan or strategy for expanding business, organization requires commitment from the stakeholders. Their support and suggestion help to improve organization culture. Company engage stakeholder in dialog to find out issues for society and environment to sort out the problems and improve decision making process. Stakeholder involvement influence groups and other corporate by communicating and explaining their policies about important issue. The views of stakeholder support and guide Mc Donald’s for changes in procedure and observe trends in the market. They identify opportunities in market and provide all relevant information to organization to expand their business and help them to make decision according to information. For the legal decision and development of ethical polices company consult their stake holder to make sure the validity of decisions. Engagement help organization create valuable CSR, different stakeholder provide views for developing effective policies to contribute for society and environment (Nielsen, 2008). So it is considered that the engagement of stakeholder important for Mc Donald’s to manage task and support their process for achieving desired results.

LO 2 Development Of Effective Stakeholder Engagement Strategy

2.1 Methods Used Engaging Stakeholders

For engaging stakeholders various methods can be used. Following methods can be used by Mc Donald’s to validate the implication of policies.

Communication and stakeholder engagement strategy:

Mc Donald’s can follow the strategy to sustain and embed creation of projects and operations. This strategy provides effective communication with all the stakeholders by understanding their needs and developing plan to accomplish their expectation from the company. By performing responsibility towards stakeholder, McDonald’s can improve their relation with them. This will help organization to design and implement valid policies and improve market share (O’Riordan and Fairbass, 2008). This strategy determines priorities for stakeholders and help organization to support and meet the requirements and improve the participation of all stake holders.

Establishment of specific ‘action’ groups:

Mc Donald’s will use this method to make strong relation with their stakeholders to make effective process in order to achieve established objectives. Organization can determine specific task for each groups of stakeholders to develop policies and implement them for the betterment of company. This strategy will evaluate the contribution of each group and assign role and responsibility to implement policies at different level and monitor to achieve objectives. Establishment of specific action for groups help Mc Donald’s to manage operations and develop action plan to make things better for production and marketing (Binet and et.al, 2007).

2.2 Communication strategy for effective engagement of stakeholders

Mc Donald’s communication strategy will be using different communication method to communicate different stake holders to stay engage with them. Communication is a must to develop and implement changes at workplace. It will make projects easy to understand and perform. Here are some communication methods which can be followed by the Mc Donald’s:

Meetings: Organization can arrange meeting to explain their planning and ask stakeholders opinion to make decision (Pimentel, 2010). It is very effective and easy to convey message to stake holders. It will be successful for employers and suppliers.

Presentation: Mc Donald can perform presentation to explain planning and suggest their views about organization’s policies. It will take less time to communicate all stake holders and engage them to work for the improvement in business. It will be effective for manger and creditors to explain figures and engage with them.

Electronic media: in the current scenario Mc Donald’s can prefer to use electronic media such as e-mails, social networking sites and online activities stay engage with stake holder and take the guidance to draft changes. This can be useful for customers to provide information about their location and food product. It also can help organization to take feedback from customer and all other stake holders.

Written: It is traditional method for communication and stay committed with stakeholder like government and society (Schröder, 2005). By publishing reports and sharing important documents with government organization can communicate with these stake holders.

In house communication is important for Mc Donald’s to pass messages and engaged with their internal stake holders. For the outside stakeholders, organization can use online method for convey their important message.

LO 3 Built And Maintain Relationship With Stakeholders

3.1 how to built relation with stake holders

There are many methods available to build and maintain good relation with the stakeholders. Mc Donald can apply these methods to manage relation.

Value to stake holders: Mc Donald’s needs to understand values and feeling of stakeholders to meet their needs. If organization shows respect to the stakeholders then they can manage good relation with them which improve organization culture.

Appropriate timing: Organization need to identify specific timing to contact with their stakeholders in order to maintain good relation with them (Schröder, 2005). Company cannot contact their employees, suppliers and government to have word with them. For that they have to decide appropriate timing to built relation.

Reorganization of expectation: Mc Donald’s has to identify the needs of stake holders and make efforts to meet them on time to have good relation with them. This method will be more effective for to please every stake holder and make strong bounding with them.

Priorities: Organization requires defining priorities for stakeholder and trying to meet them on time and allow them to provide their opinion for operations (Schröder, 2005). It will encourage them to be loyal with organization.

Create win-win condition: Company can maintain good relation with stakeholders by sharing their profits and offer value to them. It will influence stakeholders to have good relation with organization.

3.2 Issues affect relationship with stakeholders

In the business market there may issues which affect the relationship with stakeholders. Following factor influence relation:

Political issues: Government policies and regulation affect the relationship of Mc Donald’s and stakeholders. They need to determine price according to tax rate of government which force company to raise cost of their products, which affect the relation with customers.

Social issues: Organization uses beef content in their products which affect the values of their employees and customer (Caemmerer, 2009). Some of them dislike this particular activity that affect the bounding of these stakeholders with McDonald’s.

Resources issues: Use of resource affects the relation with government. Government tries to allocate equal share of resources to all companies within the industry. Excess use to these resources generates conflicts with government, which affect their relationship.

Cultural issues: Mc Donald’s operate their business in different culture that creates complexity to understand values of stake holders. This results into damaging relationships with all respective stake holders. It is up to company as to what kind of culture they are willing to follow to maintain their sales and profits but some time it creates problems for them.

3.3 Potential conflict situations and possible resolutions

In the business many situation arise when conflicts with stake holder affect the process of operations and flow of work (Birgelen and Wetzels, 2005). There some situation for conflicts and there solution to avoiding them.

Defining goals: Mc Donald’s define their goals and objectives to improve their sales and profits. In this process stake holder also provide their views and aim to include in the development plan. This situation creates conflicts between company and stakeholder. To avoid such condition, organization can ask stakeholder to provide their ideas and try to manage them according to major and mutual object of whole company (Benoit-Moreau, 2011). This will help Mc Donald’s to keep away from these situations.

Expectation: This is a major issue for Mc Donald’s which generate conflicts and affects the relation with stake holders. All stakeholders have expectations with Mc Donald’s like timely payment, respect, promotions and value for money. Some time organization get fail to match the expectation and create situation of conflicts. In order to avoid this condition Mc Donald’s requires meeting expectation of all stake holders on time.

3.4 Importance of monitoring and reviewing stakeholder engagement

It is important to monitor stakeholders to ensure their engagement with the objectives of Mc Donald’s development process (McDonald’s Marketing Mix, 2009). Organization face problems in sustaining their position in the market, for that they need contribution and support of stakeholders. Their ideas and feedback help organization to achieve goals and gain high position in market. Monitoring is essential for organization benefits because supplier and creditor get engaged with other companies for their personal benefits. It makes their position suspicious for Mc Donald’s. So to ensure the engagement of stake Holders Company has to monitor them, in order to maintain good relation and acquire their support for achieving goals. Reviewing of engagement of stake holder is important to make changes in decisions and policies to improve business size and share. Reviewing of stake holder’s feedback create strong relations and motivate them to engage wit organization for their benefits. McDonald’s can use questionnaires, focus group and interview methods to review their policies and identify areas for improvements. They can collect feedback from employees, customers, suppliers and creditors to review their engagement of all these for company’s improvement (The 6 Principles of Stakeholder Engagement, 2008).

LO 4 How To Engage With Stake Holder Groups

4.1 Methods to elicit stakeholder views on policy and other issues

Some of the important methods that Mc Donald’s can adopt in order to elicit or take views from the stakeholders regarding the issues and policies of the company are as follows –

Meetings – One of the significant methods that can be used by Mc Donald’s is organizing of meetings timely. Meetings that involve both the stakeholders and the organization can be used by the company in interacting with them openly and discus with them aspects related to policies that are of concern to them.

Interviews – Another method of involving stakeholders and taking their views is of taking their interviews from time to time. This would help the company to get an overview of the interests of the group and also their opinion regarding the various policies of the company and issues faced by it (The 6 Principles of Stakeholder Engagement, 2008).

Electronic methods - Mc Donald’s can also make use of electronic methods like use of e- mails and taking reviews of the stakeholders. By use of these methods, the company can send e - mails to the stakeholders and also make special option on its official website where the group can post their reviews. With such type of electronic methods those stakeholders who are not able to attend the meetings can also give their views to Mc Donald’s.

Telephone – One another method that can be used by Mc Donald’s is of making telephonic calls to the stakeholders and taking their views related to policies and procedures of the company. This method is useful as it helps in getting personalized opinion of the stakeholders (Rhodes, 2007).

Presentations – Views and opinions of the stakeholders can also be gained by Mc Donald’s through presentations organized on a large level such that the parties are free to get the required information and they can also express their views in an open manner to the organization.

4.2 Ways to gain stakeholder validation and agreement for policies and plans

Getting views of stakeholders is not enough rather equally important is to take an agreement of the group on the various policies and plans of Mc Donald’s. Some of the methods that can be adopted by the company in getting agreement of stakeholders are as follows-

Showing ways of dealing with concerns and issues – In order to gain validation as well as agreement of the stakeholders, Mc Donald’s can show them the various ways in which issues and concerns for the group has been dealt with and making them aware of the best measures that are taken so as to ensure them that company is concerned about them and thus involve the stakeholder group (Husted And Allen, 2010).

Ways of working – Another method through which Mc Donald’s can get the agreement of stakeholders is of revealing them the way the company work and controls its operations that are of concern to them. By having an overview of the working of the firm the group can give validation on its issues and concerns in a more proper manner.

Making negotiations – Negotiations are discussions that generally take place between two parties, that is, stakeholders and the company. By properly negotiating on the issues and policies with the interested parties Mc Donald’s can gain their agreement as the discussion will involve raising of their concerns and with this company can get their agreement on the policies (Kaur and Lodhia, 2014).

Giving assurance – Another way of getting agreement of stakeholders on policies and issues of Mc Donald’s by the stakeholders is that of ensuring them that company is working towards their benefits and by giving them the certainty that all policies as implemented are the best for them (Ayuso and et. al., 2011).

Conclusion

From the report it is consider that all stake holders have different needs and expectation from McDonald’s and support organization to achieve its objective. Mapping of stakeholders is important for the company to assign role and responsibility and maintain relation according to role of stakeholder. Report develops the strategy to analysis the validation of relationship with stakeholders and communication methods for different stakeholders. It also provided the methods to maintain good relation and situation that affect the bounding of stake holders with organization. Monitoring is important to check the level of engagement of stake holder, and methods of interacting with stake holders.

References

  • Ayuso, S. and et. al., 2011. Does stakeholder engagement promote sustainable innovation orientation? Industrial Management & Data Systems.
  • Benoit-Moreau, F., 2011. Building brand equity with environmental communication: an empirical investigation in France. EuroMed Journal of Business.
  • Binet, L. and et.al, 2007. Marketing in the ERA of Accountability: Identifying the Marketing Practices and Metrics That Truly Increase Profitability. World Advertising Research Center.
  • Birgelen, M., and Wetzels, A, 2005. The role of socially desirable responding in international services research. Emerald Group Publishing Limited.
  • Caemmerer, B., 2009. The planning and implementation of integrated marketing communications. Marketing Intelligence & Planning.
  • Garsten, C. and Hernes, T., 2008. Ethical Dilemmas in management. Routledge.
  • Husted, B. W. And Allen, D. B., 2010. Corporate Social Strategy: Stakeholder Engagement and Competitive Advantage. Cambridge University Press.
  • Kaur, A. and Lodhia, S. K., 2014. The state of disclosures on stakeholder engagement in sustainability reporting in Australian local councils. Pacific Accounting Review.
  • Laplume, A. O., Sonpar, K. and Litz, R. A., 2008. Stakeholder Theory: Reviewing a Theory That Moves Us. Journal of Management.
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