Stakeholder Analysis Report:
Bell Fire Equipment
Executive Summary
Stakeholder analysis serves the purpose of identifying the various stakeholders of business organisations as well as determining the extent of relationship and influence that these have on the business firm. Key stakeholders or those with the strongest influence on the firm are likely to direct firm operations as well as management and marketing efforts. However, there is also need to consider common interests to accommodate various stakeholders that influence the organisation albeit to varying degrees as a means of maximising outcomes. The stakeholder analysis of Bell Fire Equipment applied the new stakeholder view that classified stakeholders within the dimensions or resource base, industry structure, and socio-political arena that also comprise the different relationships with the company that in turn affects wealth creation. The most significant stakeholders of the company are its employees taking charge of product innovation to meet the changing demand of employees, customers that determine demand, government and private companies that constitute the primary market and collaboration partners. By identifying its stakeholders, the company can then develop strategies that accommodate the interests and perspectives of these stakeholders to support wealth creation and ultimately sustainability.
Table of Contents
Executive Summary
Table of Contents
Introduction
Company Background
Purpose of the Report
Scope of the Report
Stakeholder Analysis
Procedure/Theory/Framework
Stakeholders and Impact on Bell Fire Equipment
Specific Stakeholders
Conclusion
Recommendations
Appendices
Reference List
Introduction Company Background
Bell Fire Equipment is a small firm in the fire protection industry with 30 employees delivering wide-ranging products and services including fire protection equipment and installation, maintenance, and training services. The company holds long-term contracts with government agencies for the provision of fire protection products and services as well as maintenance and repair of fire protection equipment. (Bell Fire Equipment 2008)
Purpose of the Report
The report covers stakeholder analysis of Bell Fire Equipment by identifying the different stakeholders of the company and determining the influence that these have on the strategies of the company. This operates due to the recognition that stakeholders, directly and indirectly influence strategic decision-making and planning in the company through the value accorded by the company to their respective interests.
Scope of the Report
The report is limited only to the discussion of the framework used in the stakeholder analysis as well as the stakeholder analysis of Bell Fire Equipment. However, the results and conclusion can have implications to similar firms.
Stakeholder Analysis Procedure/Theory/Framework
Stakeholders refer to the parties associated with a business organisation accruing gains or losses depending on the success or failure of the strategic actions of the company (Friedman 2007). It becomes important for the company to identify all its stakeholders and determine ways of winning the different stakeholders to support the implementation of the strategic plans (French & Delahaye 1996).
A stakeholder analysis is the approach and tool that enables the company to investigate the parties and the extent of influence that these have on the goal achievement of the company. This contributes the core benefit of utilising the interests and opinions of powerful stakeholders to support business success. (Prost, Preston & Sachs 2002)
The framework of the stakeholder analysis is the new stakeholder analysis view (Prost, Preston & Sachs 2002) shown below. This converted the traditional stakeholder view by identifying the relative positions of the stakeholders with regard to three dimensions, which are resource base, industry-market, and socio-political aspect. The relative position of the stakeholders then affects the wealth creation process of the organisation. This finds basis on the principle that relationships instead of transactions create wealth in organisations so that understanding stakeholders in terms of the extent of influence relationship instead of the frequency or nature of transactions with stakeholders is more important. However, the organisation needs to determine critical stakeholders with whom to establish long-term relationships to ensure successful wealth creation.
Stakeholders and Impact on Bell Fire Equipment
Bell Fire Equipment has a number of stakeholders shown below.
The safety design engineers, sales and marketing personnel, and administrative personnel fall under the resource base stakeholders of the company. Bell Fire Equipment has an innovative culture to support its continuous and intensive engagement in research and development of state of the art fire equipment. This means the key role of innovative safety design engineers and marketing personnel in continuously gaining new knowledge to improve existing products and develop new fire equipment for its market (Prusak 1997). The extent of innovativeness of employees determines the success of the company in achieving improved products and services that meet the changing needs of its customers (Thompson, Strickland & Gamble 2007); especially since the occurrence of various fire-related incidents and anticipation of possible fire scenarios increase the demand for effective fire protection equipment, knowledge and skills. In addition, the extent of direction of employees towards collaboration, teamwork and information sharing also constitute another area of employee influence on the company through effective direction or leadership of administrative personnel. However, there are also problems in relation to these stakeholders, which include efficiency in resource utilisation as well as collaboration between the safety design engineers and marketing departments in introducing new products to the market.
Households and business firms within the Picton & Kwinana/Southern Metropolitan Industrial Areas together with the Career Fire & Rescue Service of Western Australia (the fire department servicing Western Australia) are the firm’s customers also forming part of the resource base of the company. The fire department is the firm’s longest and biggest customer in terms of sales. These exercise influence through repeat purchases, loyalty to the company, long-term engagement of the services of the company, collaborative relationship with the company to identify problem areas and determine areas of improvement, and uptake of new products and service features (Neale 1997; Porter 1998) and to a greater extent by the fire department. Through these areas of influence, the continuity of the relationship of the company with the fire department determines its wealth creation and sustainability. This implies the need to exercise customer-oriented management, focusing on this specific customer, for the company to meet long-term demand to prevent switching especially large-value contracts with the fire department.
National Australia Bank is the primary R&D investor falling under the resource base of the company by extending investment loans to the company. Since the company is heavily engaged in product and system innovation, it requires financial resources to support this area of operation. However, not all R&D investors provide valuable terms to the company so that the firm has to determine investors willing to accept the basic terms that allow the company to optimise returns (Friedman 2007).
The Fire Protection Association, Industrial Design Council of Australia, and Fire and Emergency Services Authority of Western Australia are the regulatory authorities under the industry structure dimension. The Fire Protection Association provides safety standards for fire protection products and services. The Industrial Design Council of Australia recognises different innovations in various areas including fire protection as incentives for continuous innovations. Compliance with the requirements of regulatory authorities influences the company’s business success in terms of the continuity or renewal of its license to conduct business and the consistent product quality (Murphy 1996). However, there are also problems such as the communication of new regulations to the company and consistency of quality of materials obtained from suppliers that could affect the firm’s operations.
Honda is the biggest supplier of engines for the company’s fire fighting vehicles sold to the Career Fire & Rescue Service of Western Australia. Honda is a known car manufacturing company with a good reputation for its engines so that this supplier aligns with the efficiency goal of the company. However, quality issues of Honda would adversely affect the company requiring consistency in the quality of Honda’s engines.
Career Fire & Rescue Service of Western Australia (the fire department of Western Australia) and the Fire and Emergency Services Authority of Western Australia (the regulatory authority charged with the development of fire protection priorities and policies) are the stakeholders under the socio-political arena dimension. These organisations represent the interest of public welfare, which the company needs to integrate into strategic decisions to be in good standing with these organisations. In addition, the fire department is the company’s longest contractual partner requiring the company to engage in processes such as biding for government contracts and handling political issues as well as establish wide-ranging networks with different private companies. However, a problem that could arise is the involvement of the company in political conflicts (Dyllick & Hockerts 2002) in connection with these stakeholders.
Specific Stakeholders
Based on the influence of the various stakeholders on the strategic management of the company, the most significant stakeholders are design engineers, marketing personnel, administrative personnel, Career Fire & Rescue Service of Western Australia, and Fire and Emergency Services Authority of Western Australia. The group of employees and managers are included as significant stakeholders since they determine the ability of the company to meet its value offering to customers and support sustainability. The fire department was included as an important stakeholder since these determine the direction of product and service development and marketing strategies.
Determining stakeholder inclusion in decision-making of the business is through the extent of the relationship with the company and impact on the operations of the company. Stakeholders with strong and positive long-term relationship with the company are the key stakeholders (Cooper 2004). The strength of relationship can be determined by the respective attributes of stakeholders as promoters, defenders, latents and apathetics respectively according to the degree of influence. The group of employees and managers together with the fire department are promoters. This is an important technique in assessing stakeholders as contexts change.
Conclusion
The stakeholder analysis supports the direction of stakeholder decision-making at Bell Fire Equipment. In the case of the company, its most significant stakeholders highly influence the decisions of the company on the direction of product development and service enhancement as well as management and marketing strategies to support long-term sustainability of the company.
Recommendations
Bell Fire Equipment should conduct regular stakeholder analysis to keep track of the perspectives of parties influencing the company who are also affected by firm decisions and activities, especially when changes or shifts are occurring in relation to its stakeholders. The stakeholder analysis of Bell Fire Equipment selected five key stakeholders. These stakeholders were picked because these establish the strongest relationship of influence with the company and parties providing important insights into business decisions and operations.
Appendices
Summary of Stakeholder Analysis
Shareholders
Effect on Business
Impact high/low
Potential
Resource Base
Employees
Safety Design Engineers
Customer responsiveness through quality innovative products and services
High
Inventions and innovations
Sales & Marketing Personnel
Customer relationship management
High
Market expansion and customer loyalty
Administrative Personnel
Strategic leadership and decision-making
High
Sustainable competitiveness
Customers
Households and Business Firms within the Picton & Kwinana/Southern Metropolitan Industrial Areas
Continuity of demand
Low
Expansion of business networks
Career Fire & Rescue Service of Western Australia
Direction of product and service development
High
Collaboration in areas of innovation
R&D Investors
National Australia Bank
Capitalisation, risk sharing
Low
Larger volume of investments to support innovative expansion
Industry Structure
Regulatory Authorities
Fire Protection Association
Regulates the safety of fire protection products
Low
More effective incentives to support greater positive impact on business operations
Industrial Design Council of Australia
Regulates and recognises innovative designs
Low
Recognition of designs for the advancement of intellectual property rights
Fire and Emergency Services Authority of Western Australia
Sets out guidelines to support fire protection priorities and needs
Low
New guidelines supporting developing issues in fire protection
Suppliers
Honda (engine)
Efficiency, cost minimisation
Low
Outsourcing, mergers, partnerships
Socio-Political Arena
Career Fire & Rescue Service of Western Australia
Large-scale and long-term collaboration
High
Sponsorship of researches and wider collaboration
Fire and Emergency Services Authority of Western Australia
Large-scale and long-term collaboration
Low
Sponsorship of researches and wider collaboration
Reference List
Bell Fire Equipment 2008, Bell Fire – Profile. Available from: <http://www.bellfire.com.au/profile.asp> [Accessed 22 August 2008]
Cooper, S 2004, Chapter 2 : Business in Society : Ethics and Stakeholders in Cooper, Stuart, Corporate social performance: a stakeholder approach, Aldershot, U.K.: Ashgate Publishing Limited, pp.13-42.
Dyllick, T & Hockerts, K 2002, ‘Beyond the Business Case for corporate sustainability,’ Business Strategy and the Environment, vol. 11, no. 2, pp. 130-141.
French, E & Delahaye, B 1996, ‘Individual change transition moving in circles can be good for you,’ Leadership and Organization Development Journal, vol. 17, no. 7, pp. 22-28.
Friedman, M 2007, ‘The social responsibility of business is to increase its profits’ in Corporate ethics and corporate governance, K Richter and M Holzinger, Springer, Berlin, pp.173-178.
Murphy, R 1996, Defining and Practising Business Ethics in Woldring, Klaas (Ed.), Business ethics in Australia and New Zealand: Essays and Cases, South Melbourne, Vic: Thomas Nelson Australia, pp. 42-50.
Neale, A 1997, ‘Organisational learning in contested environments: Lessons from Brent Spar.’ Business Strategy and the Environment, vol. 6, no. 2, pp. 93-103.
Porter, ME 1998, Competitive Advantage: Creating and Sustaining Superior Performance, New York: Free Press.
Prost, J, Preston, L & Sachs, S 2002, ‘Managing the extended enterprise: the new stakeholder view,’ California Management Review, vol. 45, no. 1, pp. 6-28.
Prusak, L 1997, Knowledge in organizations, Oxford: Butterworth-Heinemann.
Thompson, AA, Strickland, AJ & Gamble, JE 2007, Crafting and executing strategy: The quest for competitive advantage, 15th ed., New York: McGraw Hill Irwin.
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