Executive Summary
This report presents the stakeholder management portfolio for TESCO, the leading supermarket chain of the UK. This portfolio is created by identifying the major stakeholders who have the ability to impact TESCO’s relocation project though at varying degrees. Their view of this project is mapped, whether positive or negative, to understand and prioritise the stakeholders for the strategy building. Using this portfolio, a scenario is constructed to predict each category of stakeholder’s response in case of any major risks faced by the firm during this project. This assessment is made possible by risk profiling. Community engagement is described with reference to the communication strategies that can best be utilised to engage with all stakeholders and develop a positive and enabling relationship.
The data for this project has been collected from reputable secondary sources. The results have been analysed with the help of various theories of stakeholder identification and analysis including Pestle analysis, Ulrich and Reynold’s stakeholder types, Mitchell’s stakeholder salience, Mendelow’s stakeholder mapping, and allegiance. The results indicate that proper planning of communication and engagement strategies is a must for stakeholder management.
1. Introduction
Stakeholder management, simply put, is managing the interests and influences of people and institutions that have a stake in the organisation. According to Worsley (2017), Edward Freeman is the father of stakeholder management, and he has defined a stakeholder as, “any group or individual who can affect or is affected by the firm’s objectives” (Freeman, 1984). This definition is simple, but it does need some addition as the objectives of the firm may not be sufficient to include the stakeholders’ interests. For instance, a firm may operate with an objective of customer delight but if it uses resources which are sourced or processed using forced labour, it is impacting society through its operations. Therefore, it is essential that stakeholder management considers the firm’s operations than only its objectives to determine the interests of its stakeholders. As a result, it is Project Management Institute’s definition which is more suited today, “any individual, group or organisation, which may affect or be affected by any decision, activity, or outcome of a project” (Project Management Institute, 2017).
This report identifies the stakeholders who may affect or be affected by TESCO, a UK-based supermarket chain which is present in thirteen countries of the world (TESCO PLC, 2019). The study is limited to a relocation project where TESCO’s head office in Cheshunt was shifted to Welwyn Garden city. The stakeholders for this project are identified and prioritised using Freeman’s stakeholder theory. External and internal stakeholders, and role and agenda-based stakeholders are identified. Various models like Mendelow’s stakeholder mapping, PESTLE analysis and the stakeholder wheel are used for stakeholder analysis. Further, the analysis is used to recommend the right communication strategies which can maximise the purpose of each stakeholder group.
2. About TESCO FOCUS ON THE DELIVERABLES AND USE IT FOR ANALYSIS. NOT THE HISTORY OF TESCO
TESCO PLC is the third-largest retailer in the world with nearly seven thousand stores across Asia and Europe (TESCO PLC, 2019). The company began in 1934 as a shop selling dry goods and tea and escalated its operations to offer a diversified store layout today which includes a TESCO Express for convenience shopping, TESCO Extra and Superstores for an extensive line-up of products, and TESCO Jack’s for discount deals (TESCO PLC, 2019). In 2018, the company declared sales of £57.5 billion with the largest market share in its segment (27.6%).
The company does recognise its social responsibility and had initiated activities as far back as 1980s to offer healthy food alternatives and fund-raising (Khan and Kakabadse, 2014). At present, TESCO is a part of the united Nation’s Global Compact program which it supports by limiting the wastage of food in its stores, fund-raising, health awareness projects like “TESCO Eat Happy Project”, and ethical resourcing of its products (TESCO PLC, 2018). Its Social initiatives are tied with its business strategy and activities as it uses the former to create a positive brand recognition like by advertising its first zero carbon supermarket in 2010 or its long-standing partnership with Diabetes UK.
With a firm grip on its operational performance and social responsibility, TESCO is chosen as the firm for this report’s objectives as it offers a good case study to identify, analyse, and recommend appropriate strategies for stakeholder management. A specific relocation project has been earmarked for the study where 20000 m2 of office space was shifted from Cheshunt to Welwyn Garden city impacting 5300 employees from 45 departments (Premier Workplace Services, 2018). This project primarily involved removal of furniture, documents, and IT equipment, their safe transport, and reinstallation. The time allocated was eight months from September 2015 to April 2016.
3. Literature Review
The literature review describes the significant concepts of stakeholders, their significance, and how to identify them. To understand how these concepts have been defined and explained, important texts, reputed journal articles, and newspaper and business reports have been referred.
3.1. Stakeholders
Stakeholders are any entity, individual, group, or organisation, that has a stake or an interest in the firm. This interest has been described to be associated with the firm’s objectives (Freeman, 1984), to an event (Getz, 2012), to a project’s outcome (Muller, 2017). The most comprehensive definition identifies the fact that stakeholders can have an interest in a firm’s decision, activity, or outcome (Project Management Institute, 2017). This recognition of the stakeholders’ interest is a recent phenomenon. An earlier point of view recognised solely the shareholders as the primary stakeholders in a firm as their money was invested in it and it was the duty of the firm to make profits and pay them dividends (Friedman, 2007). It was Freeman (1984) who initially disputed this myopic view by emphasizing the moral responsibility of firms and their managers. Therefore, this shift in mentality has come with a realisation that firms not only have a financial value, but also a societal one (Shenhar, Levy and Dvir, 1997).
3.2. Stakeholder Management
Stakeholder management is a process which identifies stakeholders for a project, manages them, and ensures their continued commitment to the firm or the project. According to Preble, (2005), stakeholder management involves the identification of the stakeholders and their influence, the performance gaps between their expectations and current performance, prioritization of their demands, development of appropriate responses for them, and monitoring and control of the stakeholder position and progress (Appendix 1). A similar model is prescribed by Worsley (2017) who prescribes the stages of identifying and documenting, analyse, developing strategies, plan approaches, engage, and watching, listen, reacting, and reviewing.
A dialogic change model of stakeholder management suggests both their management and the communication initiatives that should be employed (Kuenkel, 2019).
Figure 1: Dialogic Change model of stakeholder management (Kuenkel, 2019).
This model has four stages: exploring and engaging with the stakeholders, building and formalizing relationships, implementing and evaluating projects, and developing them further to institutionalise them. Several sub-stages are prescribed to facilitate progress through each stage of the process with expected outcomes.
3.3. Stakeholders’ identification
Stakeholder identification is an essential exercise as it identifies the key entities involved in a project, what are their expectations and level of influence in it, and how they should be managed (Worsley, 2017). Project stakeholders are recognised internally, as well as externally. Investors, suppliers, local community, the media, and other entities that are external to the project and are outside the project manager’s authority are defined as external stakeholders. In contrast, the internal stakeholders are within the project manager’s purview and are easier to communicate with. Another classification segregates stakeholders into three categories: the client who set the objectives, the decision-maker who controls the resources, and the expert who possesses the technical expertise (Ulrich and Reynolds, 2010). Table 1 shows the roles and success criteria for all three types of stakeholders.
Table 1: Type of Stakeholders (Ulrich and Reynolds, 2010; Worsley, 2017)
| Type of stakeholder | Role | Success criteria | |
| Role-based stakeholders
(Legitimate and visible role) |
Client | Sets objectives | · Return on investment of the project
· Improvement in efficiency and effectiveness |
| Decision-maker | Possesses resources | · Quality of decisions
· Transparency · Credibility |
|
| Expert | Possesses technical expertise | · Quality of input | |
| Agenda-based stakeholders (Influence is determined by power base and influence) | Witness | Provide interaction between environment and project | · Represent external points of views |
The role-based stakeholders are also called primary stakeholders while agenda-based stakeholders are termed secondary (Preble, 2005). Though it may be believed that the primary stakeholders have more priority, for a project the ultimate test of stakeholder salience lies in the power, legitimacy of the claim, and its urgency as perceived by the project manager (Mitchell, Agle and Wood, 1997; Boesso and Kumar, 2016). The identification of the stakeholders helps in understanding their salience and in setting up the right communication strategy to approach them.
Figure 2: Stakeholders’ salience and their types (Mitchell, Agle and Wood, 1997, p. 864)
The identification of stakeholders according to their salience creates three categories. The green coloured circles in the Venn diagram (figure 2) are latent stakeholders with low salience. The amber coloured circles denote expectant stakeholders who possess two attributes among power, legitimacy, and urgency. The red circles are of definitive stakeholders who possess all three attributes and should be given immediate priority. The subcategories in each of these classes are shown in Appendix 2.
3.4. Stakeholder Analysis
Stakeholder analysis is that stage in the management process where each stakeholder category’s salience, nature of claims, and communication strategies are established. Mendelow (1981)’s stakeholder mapping segregates stakeholders into four categories depending on their power to influence the project and their interest in doing so. These categories include the key players, the “show consideration”, “meet their needs” and minimal interest groups. After identifying these attributes, the level of involvement and the stage of involvement for the stakeholders should also be analysed. This will help the project manager to decide the attitude, influence, accessibility, and approachability of each category.
4. Critical analysis, evaluation and examination
The data collected from reputed reports and official website was used to collect data about the relocation project for TESCO. This section carries out stakeholder identification and analysis and creates recommended communication strategies to approach each stakeholder category.
4.1. Relocation project’s stakeholder identification
The PESTLE analysis identifies the political, economic, social, technological, legal, and ecological factors for making strategies. This framework can be applied well to identify stakeholders after careful background research and expert opinions.
Table 2: PESTLE analysis for stakeholder identification
| PESTLE Analysis | ||
| Political:
· TESCO’s Relocation committee · Alliance Partners · Relocation consultant: Premier Workplace Services · UK Government · Welwyn Council managers
|
Economic:
· TESCO’s shareholders · Customers · Cheshunt Council |
Social:
· Affected Employees · Supervisors · Senior leaders of TESCO · Local community · Future Recruits |
| Technological:
· Construction and engineering contractors · IT support staff · Architects and interior designers of new building
|
Legal:
· TESCO’s Legal department · TESCO employees’ unions (Mandate 11000 employees) (Mandate, 2019) |
Ecological:
· UN’s SDGs · Local environmental groups · Media
|
Apart from the PESTLE analysis, the project manager can also conduct a governance checklist or who else? Analysis to identify the stakeholders. Both these exercises are best conducted by committees or teams; hence, this report does not present its results.
4.2. Stakeholder types
The next step is to categorise these stakeholders as primary and secondary or role and agenda-based stakeholders. Table 3 presents the categorisation of the stakeholders for TESCO’s relocation project.
Table 3: Types of stakeholders for TESCO’s relocation project
| Type of stakeholder | Stakeholder | Success criteria | |
| Role-based stakeholders
|
Client | Relocation consultant
|
· Return on investment of the project
· Efficiency and effectiveness of the relocation |
| Decision-maker | TESCO’s relocation committee
Senior leadership |
Quality of decisions
Transparency Credibility |
|
| Expert | Construction and Engineering contractors
IT Support Architects Interior designers |
Quality of new office
Ease in shifting Comfort in new surroundings Time taken to become productive. |
|
| Agenda-based stakeholders | Witness | Employees
Supervisors Trade union Local community Customers |
Improvement in working conditions
Improvement in product offer |
This identification of the stakeholders will aid in their further analysis.
4.3. Stakeholder Analysis
The first model for stakeholder analysis is suggested by Mendelow (1981) to map the stakeholders according to the level of interest they have in the project and their influence over its process and outcomes.
Figure 3 shows that the UK government, local community, and the environmental groups are apathetic stakeholders. The trade union, employees, contractors, architects, and designers are defenders. The shareholders, media, and customers are latents while the relocation committee, consultant, and the senior leaders are the promoters for the project.
Figure 3: Stakeholder mapping for TESCO (Mendelow, 1981)
It is important to note here that this stakeholder mapping is not only limited to the relocation project for TESCO, but also by the context where a simple organisational decision is taken to shift the office premises. This is the reason why the trade union is considered to have a low level of influence and the government and local community are designed to be largely unaffected by the project. In case this was a shifting of a factory with hazardous processes, or which was leading to the loss of jobs for employees, the mapping would have shown a very different picture. As it is, the Cheshunt council which lost TESCO’s head office and the associated revenue to local eateries and other consumer spending by the TESCO employees, is in the minimal effort category. This is supported by the lack of any intimation to the council management by TESCO before planning the relocation (White, 2015). On the other hand, Welwyn council gains more revenue and prominence as a place of importance and is, hence, placed in the keep informed category.
Another important model for the stakeholder analysis is mapping their salience over three attributes of power, legitimacy, and urgency of the stake.
Figure 4: Stakeholder salience model (Mitchell, Agle and Wood, 1997)
T1: Relocation committee and consultant, Senior Leaders
T2: Contractors, Designer, Architect, Employees, Cheshunt & Welwyn Councils
T3: Trade union, UK government, Alliance Partners, Local community
T4: Shareholders, Media, Customers
This salience clarifies the prioritisation of the stakeholders further. With both salience and stakeholder mapping showing the relocation committee, consultant, and senior leaders as the key players or definitive stakeholders, with the contractors, engineers, architects and interior designers, along with the employees forming the next priority category – the dependent stakeholders who should be kept informed.
This analysis is used for practical application by determining the allegiance of the stakeholders that will indicate how they should be managed.
4.4. Stakeholder Allegiance
Mapping stakeholder allegiance is recommended for large projects where the support or opposition from the key stakeholder groups can be an important tool for deciding the strategy (Covell, 2005). If the project involves change, like in the case of TESCO’s relocation of its head office, it is even more essential that the enablers and barriers to the change are identified and tackled.
Table 4: Stakeholder Allegiance for TESCO’s Relocation project
| Assessment | Stakeholder | How to manage |
| Advocates | Relocation Committee, Senior Leaders | Active communication and collaboration |
| Followers | Consultant, Contractors, Employees, Shareholders, Welwyn Council | Keep informed through frequent communication and involvement in required areas |
| Indifferent | Government, Local Community, Media, Customers | Inform through formal communication channels.
Follow rules and governance guidelines. |
| Blockers | Union? | Ensure the purpose, need, and significance of the relocation is explained properly while initiating the project.
|
| Opponents | Some employees may have to relocate.
Cheshunt Council |
Attempt to provide real solutions to ward off the opposition. These can include suggesting commutation routes, supporting in finding accommodation and schools, and offering time off to adapt to the relocation.
Explain the need to shift to Welwyn for cost saving to Cheshunt council.
|
Allegiance mapping is helpful in understanding the need for communication. It indicates the frequency and channels of communication, but a more concrete communication strategy is definitely needed. Stakeholder allegiance is a significant tool for effective change management in projects like TESCO’s relocation where a large-scale transition is planned which will affect many employees (5300 employees from 45 departments). A change of this scale needs effective and well-planned strategies to ensure that all stakeholders remain in the followers or indifferent categories. By communicating and offering rewards to possible opponents and blockers, TESCO’s relocation committee and the project manager can ensure that the change proceeds smoothly and is accepted.
Table 5: Stakeholder management strategy
Table 5 has presented a snapshot of all stakeholders, their stake in the relocation project, the expected impact of their influence on the decision, and the expectations from them. Depending on these considerations, and the risks associated with their opposition, a communication strategy is suggested for dealing with each stakeholder. The stress is placed on frequent communication through formal and informal channels where each stakeholder, irrespective of the impact, is kept in the loop about the impending change. The aim is to not allow any stakeholders to remain unaware and find a cause to be opposed to the relocation. For instance, if the senior leadership or project relocation committee do not address the trade union about the decision, they may become opposed to it and channelize discontent among all employees. This would be very harmful and cost a lot of time, resources, and efforts to control the damage. In this scenario, the only opposed and unsupportive stakeholder is the Cheshunt council who are losing a valuable community resource. However, as their power to influence the decision is very low, TESCO can afford to ignore their concerns. The primary task for the core team of stakeholders: relocation committee, the hired consultants, and the senior leadership, is to ensure that as much as possible, all of their stakeholders should remain engaged and involved in the project so that it can be accomplished in the most efficient and effective manner possible.
5. Conclusion
This report has presented the stakeholder management process for a major relocation project for TESCO. TESCO planned the project to save costs and build newer office premises which are more environmentally friendly. It was a major project that transferred 5300 employees over a period of nine months. A project of this scale needs meticulous planning which includes careful consideration of all stakeholders, their interests and influences, and to make sure that both are fulfilled. Stakeholder management offers a systematic process of ensuring not only that the interests of stakeholders are fulfilled, it also assures their engagement and commitment to the project. The latter is an important factor for TESCO, which was going through a decline in sales and needed support. Stakeholder identification through PESTLE analysis revealed a comprehensive list of stakeholders for TESCO’s project. This list of stakeholders was then assessed using role-based and agenda-based classification which accorded more clarity about the stakeholders’ interests in the project. The next step was to analyse the stakeholders by mapping them using Mendelow’s stakeholder mapping matrix which yielded four types of stakeholders. The UK government, local community, and the environmental groups were identified as apathetic stakeholders. The trade union, employees, contractors, architects, and designers were defenders. The shareholders, media, and customers are latents while the relocation committee, consultant, and the senior leaders are the promoters for the project. Stakeholder salience modelling helped in further clarification about the power, legitimacy, and urgency of stakes for each stakeholder.
This analysis clarified that allegiance of all stakeholders, irrespective of their type, was important to this project as it was an organisational change which was important to its operations. As a result, a communication strategy is drafted for each stakeholder so that their involvement can be assured. Finally, a stakeholder management strategy is useful to understand the risks associated with each stakeholder and the expectations from them. Analysing these factors shows the gap between what is needed and what can happen. It is this gap that needs to be bridged through a well-planned strategy. Without this strategy, the accomplishment of the project objectives is in jeopardy. The trade unions can be opposed to the move, the employees may feel cornered and burdened, the shareholders may refuse to bear the economic burden and lose confidence in the management. Drafting a communication strategy where the firm promotes its usage of recycled furniture, zero-carbon energy, and a well-planned move to the media is more likely to yield a positive association with the brand. Leaving this communication could allow the resentment of Cheshunt council or the inconvenience to the employees to become big issues causing harm to the brand image of TESCO. Therefore, stakeholder management has to aim for engagement through aligned communication strategies.
Bibliography
Boesso, G. and Kumar, K. (2016) ‘Examining the association between stakeholder culture, stakeholder salience and stakeholder engagement activities: An empirical study’, Management Decision. doi: 10.1108/MD-06-2015-0245.
Covell, D. (2005) ‘Attachment, Allegiance and a Convergent Application of Stakeholder Theory: Assessing the Impact of Winning on Athletic Donations in the Ivy League’, Sport Marketing Quarterly.
Freeman, R. E. (1984) Strategic Management: A Stakeholder Approach, Analysis. doi: 10.2139/ssrn.263511.
Friedman, M. (2007) ‘The Social Responsibility of Business Is to Increase Its Profits’, in Corporate Ethics and Corporate Governance. doi: 10.1007/978-3-540-70818-6_14.
Getz, D. (2012) ‘Event studies: Discourses and future directions’, Event Management, 16(2), pp. 171–187. doi: 10.3727/152599512X13343565268456.
Khan, N. and Kakabadse, N. K. (2014) ‘CSR: The co-evolution of grocery multiples in the UK (2005-2010)’, Social Responsibility Journal. doi: 10.1108/SRJ-06-2012-0069.
Kuenkel, P. (2019) ‘Stewarding Sustainability Transformations in Multi-stakeholder Collaboration’, in Stewarding Sustainability Transformations. Springer, pp. 141–205.
Mandate (2019) TESCO workers together.
Mendelow, A. L. (1981) ‘Environmental Scanning–The Impact of the Stakeholder Concept’, International Conference on Information Systems, pp. 407–417. Available at: http://aisel.aisnet.org/icis1981%5Cnhttp://
aisel.aisnet.org/icis1981/20.
Mitchell, R. K., Agle, B. R. and Wood, D. J. (1997) ‘Toward a theory of stakeholder identification and salience: Defining the principle of who and what really counts’, Academy of Management Review. doi: 10.5465/AMR.1997.9711022105.
Muller, R. (2017) Project governance. Routledge.
Preble, J. F. (2005) ‘Toward a Comprehensive Model of Stakeholder Management’, Business and Society Review, 110(4), pp. 407–431. doi: 10.1111/j.0045-3609.2005.00023.x.
Premier Workplace Services (2018) TESCO Transformation Project. Available at: https://www.premierworkplaceservices.co.uk/case-studies-articles/TESCO-transformation-project/ (Accessed: 15 March 2019).
Project Management Institute (2017) Project Management Body of Knowledge: A Guide to the Project Management Body of Knowledge, Newtown Square, Pennsylvania: Project Management Institute. doi: 10.1002/pmj.20125.
Shenhar, A., Levy, O. and Dvir, D. (1997) ‘Mapping the Dimensions of Project Success’, Project Management Journal. doi: Article.
TESCO PLC (2018) Helping to Support the SDGs. Available at: https://www.TESCOplc.com/little-helps-plan/un-sustainable-development-goals/ (Accessed: 20 January 2018).
TESCO PLC (2019) Our Businesses.
Ulrich, W. and Reynolds, M. (2010) ‘Critical systems heuristics’, in Systems Approaches to Managing Change: A Practical Guide. doi: 10.1007/978-1-84882-809-4_6.
White, A. (2015) ‘Cheshunt council “gobsmacked” by TESCO shock closure of HQ’, The Telegraph, 8 January.
Worsley, L. M. (2017) Stakeholder-led Project Management: Changing the Way We Manage Projects. New York: Business Expert Press.
Appendices
Appendix 1: Preble’s (2005) Stakeholder management model
Source: (Preble, 2005, p. 415)
Appendix 2: Stakeholder types in detail according to salience
Source: (Mitchell, Agle and Wood, 1997)
