MGT501 Business Environment

Executive Summary
To identify of stakeholder level in “H & M “organization, there is used the stakeholder analysis which
is classified the stakeholder in organization and defines their role in the business organization. “H &
M “organization provides their service in fashion industry. Stakeholder analysis report main purpose
is search out the stakeholder of the power, interest, nature, degree, and influence level. With the
help of stakeholder analysis report, I have learned about the various type of frameworks and
theories which needs to analysis the stakeholder and also get information about the stakeholder
matrix, functional area, classification of the stakeholder. In the future, “H & M “organization will
needed to work on the market search and connect with social media platform for the business
growth and analysis of new fashion trades in the markets.

1
Introduction
In the report, there is focused on the internal and external stakeholder analysis with help of business
stakeholder techniques which uses stakeholder matrix to define the stakeholder degree and nature
of influence level in organization business. With help of PESTLE tool, there is classified the various
type of stakeholder which keep power and interest in organization business growth. Here, I have
selected the “H & M” organization which provides their services in the fashion industry. Main
purpose of this assignment is analysed the select organization stakeholder analysis. This report will
be also provided information about the organization function area, stakeholder, stakeholder matrix,
and their role and influence level, peer review with stakeholder analysis. For the stakeholder
analysis purpose, there is used relevant frameworks and theories in respect of the select
organization stakeholder organization. PESTLE tool uses different type of parameters such political,
environment, social, technology, legal, and ethic.

Background information of organization

Fashion design is an art which is applying on the aesthetics, natural beauty, and designing of clothes
and accessories. This industry is influenced by social and cultural attitudes and also depended on the
timing and place. In the current time, fashion design is the major part of each person because people
are liked to up to date with fashion and stylish according to fashion market. They are conscious
about the designer clothes. According to time requirement, fashion industry introduces new product
according to customer tastes and their requirement. For this report, I have select the “H&M”
organization which provides their service fashion industry. It contains various type of stakeholders
such as internal stakeholder and External stakeholder. Hennes & Mauritz AB is a multinational
organization based on Swedish. It is well known clothing retails organization which growing in fast
manner in fashion industry. It provides their services children, women, men, and teenagers. This
organization provides their services in 62 nations with 4500 stores. According to 2015 analysis,
organization contains almost 1, 32,000 employees. In the fashion industry, this is second largest
clothing retailer in world. Hennes & Mauritz AB organization provides their online shopping services
in 33 nations. Organization’s employees annual salaried were $61,160 according to May 2008.
Media of annual salary of fashion designer is $65,170 according to 2016. “H&M” organization was
founded in 1947 which headquarters is Stockholm, Sweden. Organization’s revenue is $ 25.1919
billion in the 2016 year. It provides their product in various type of stores, markets, and
hypermarket. (Mo, 2015).

2
3
Identify functional areas
To manage the business various type of operations, “H & M” organization contains various type of
function area. Each functional area are paly major role in the “H & M” organization. To
understanding the business operation of “H & M” organization, there is defined various type of
functional areas such as

Functional Area Description Department

Operational & This functional area of “H & M” organization manage the Packaging
Production delivering and transaction activities of organization which Department
Area are needed for product and service. This department is also Brand Department
managed the organization customer requirement and Production
provides their products according to requirement. They are Department
also focused on production, packing and brand value of
clothes.
Research & This functional area of “H & M” organization manages Quality Department,
Development market policy according to customer and current market Research
Area trends. They performed the different types of survey in department,
market and get the information about the current treads, (Pakeman, Hewison,
requirement, and new gernation demand so they can design & Lewis, 2017).
their product in market. It design policy according to market
requirement to grow the business.
Financial Area This functional area of “H & M” organization manages Account department
finance activities in organization. They also created the Funds Department,
financial statements of organization according to monthly,
quarterly, and yearly base.
Marketing This functional area of “H & M” organization manages Product selling
marketing plan according to organization budget and department
customer requirement. They design their product according Supplier distribution
to age group of people, and location of the people. This department
Functional Area plays major role in the customer relation CRM department
management which helps to business growth
Admin This functional area of “H & M” organization manages admin Admin Department
department work and focus on the information flow
between higher level management and lower level
management.
Human This functional area of “ H & M” organization manages the Staff management
Resource staff hiring process in organization and also create positive Department
work environment for staffs because to improve the efforts PI Department
and work efficiency of organization. It is also focused on the (Sehgal, Seviour,
development of positive attitudes of the organization higher Moss, Mills,
level and lower level staffs. It also creates health competitive Azencott, & Ram,
environment between the organization staffs. 2015).

4
5
Identify internal and external stakeholders and their roles
Stakeholder represent a group of people or individual person who make the decision in organization.
In this section, I have defines the internal and external stakeholders of the “H & M” organization. For
the stakeholder classification, there is used to PESTLE analysis tool.

Internal Stakeholder:
In this section, we define the internal stakeholder of organization such as

 Staff: “H & M” organization contains various type of department which needs staffs to
manage the organization work operation. Organization staffs help to achieve the goals and
objective the organization and decided the future plan. They works according customer
requirements and higher management requirement in the organization.
 Store manager: Store manager is an internal stakeholders for “H & M” organization which
plays major role to make plan and regulating plan in the select organization, and act as an
important opinion in operational decisions of “H &M” organization.
 Shareholders: They have full right in “H & M” organization who makes the decision in the
organization for non-financial and financial decisions. These decisions play major role in the
business failure or success. They also gain the financial benefits in organization according to
their investment.
 Board of directors: This is internal stakeholder of the organization which manage
organization daily based activities. It also creates the report on based of the organization
future plan, strategies, and performance. They are also responsible to resolve management
issues and make the final decision in organization.
 Investors: Investors are group of people who invest in “H & M” organization and make the
decision in the organization in respect of finance, marketing, and communication. They also
work on the information. For the organization success and growth, they are playing crucial
role. They are invested in the organization to gain financial benefits (Brunton, Eweje, &
Taskin, 2017).

External Stakeholder:
In this section, we define the external stakeholder of organization such as

 Customer: Final product of “H & M” organization designs according to customer

requirement because they are external stakeholder of the organization. They contain

6
 different type of fashion requirement which depends on age group, customer income and
geographic location.
 Supplier: They are external of the stakeholder of organization. They provide the raw
material for fashion organization according to organization requirement. Without their
support, organization cannot image their market growth. Product price depends on the raw
material.
 Government: They are external stakeholder of the organization. Local government and
government make the policy, permit, and interest rate for the fashion industry. Tax policy of
organization depends on the government rule.
 Trade Union: They are type of external stakeholder of “H & M” organization which make
the discussion on working condition of the organization staffs. They are also able to make
the discipline in the organization (Mazur, & Pisarski, 2015).

7
Identify the nature and degree of main stakeholders’
interests, and implications of conflicting interests
“H & M” organization contains two type of stakeholder in the organization such as internal
stakeholder and external stakeholder which are classified according to their role in the organization.
This section defines the nature and degree of stakeholder interest in organization which may affect
through the power and interest in organization. There are four type nature of stakeholder such as
Latent nature, Apathetic nature, Promoters nature, and Defender nature.

Figure 1: Nature and degree of stakeholder according to power and interest

Stakeholder of “H &M” Power in the Interest in the Stakeholder

organization organization organization organization

Government H L Latent nature

Suppliers L L Apathetic nature
Investors H H Promoters nature
Customer L H Defender nature
Board of Director H H Promoters nature
Staff L L Apathetic nature
Store manager H L Latent nature
Trade Unions L H Defender nature
Shareholder H H Promoters nature

 Here H represent High level in the respect of power and interest

8
  L represent Low level in the respect of power and interest
 P represent Promoters nature in respect of nature of stakeholder
 L represent Latent nature in respect of nature of stakeholder
 A represent Apathetic nature in respect of nature of stakeholder
 D represent Defender nature in respect of nature of stakeholder (Johnson-Cramer, Berman,
& Post, 2017).

Implications of conflicting interests

According to above situation, there is provided the clear information about each stakeholder
influence power, nature, and interest in “H & M” organization. Business Analysis techniques uses to
evaluate the influences and interest of stakeholder. In the below section, I have defined the
confliction among “H & M” organization stakeholders such as

Confliction decision opposed stakeholders supported stakeholders

There is enhance the shift to improve the Trade union Customers, Suppliers, and
organization capacity Store managers
To reduce the manual work and efforts in Trade union and Staffs Investors and customer
the organization, there is introduced the
new machinery product
To reduce the costing in “ H & M” Trade union and Staffs Board of director
organization, there is reduce the job
opportunities
To improve the profit of organization and Customers Store Managers and
quality of product, there is increasing the Investors (De Langen,
price of product 2006).

9
Stakeholder Influence Level in the organization
This section defines the stakeholder influence level in “H &M” organization which depends on their
power and interest in organization. Stakeholder influence level affects the business organization
operation in the positive or negative manner. Each stakeholder connects with “H & M” organization
because they influence with organization policy and objective, and gaols

Stakeholder Level of Reason

influence
Government High Level They are influence with “H & M” organization marketing policy and
make the change in organization rules and regulation according
their terms and condition.
Suppliers Medium Level They are influence with “H & M” organization product because
suppliers provides organization raw materials with manual
understanding.
Investors High level They are influence with “H & M” organization with organization
objective and goals and also market value of the organization.
Customer Low Level They are influence with “H & M” organization’s product and their
service price and quality. Organization provides their services 24 * 7
through the online store.
Board of High Level They are influence with “H & M” organization because they have
Director power to make the decision in the organization and policy and
other guidelines for organization.
Staff Medium level They are influence with “H & M” organization because staffs put
their efforts to achieve the organization goals and objective and
make the brand value. They also focused on growth.
Store High Level Store managers of “H & M” organization are responsible to get the
manager goals and objective with given time periods and create the health
work environment in organization.
Trade Unions Low level Trade Unions of “H & M” organization are responsible to create the
discipline in the organization and manage the work at low level
management.
Shareholder High level They are influence with “H & M” organization with organization
objective and goals and also market value of the organization and
also manage the organization profit and revenue. (Doh, & Quigley,
2014).

Stakeholder matrix
Stakeholder analysis is a process of evaluating the system and possible chance which may be related
to interest and relevant stakeholders. To analysis the stakeholder, there is used the stakeholder
matrix. It is type of tool which used in the project management. Main purpose of stakeholder matrix
defines the organization goals and takes action according to their goals. With help of stakeholder
matrix, there is defined “H & M” organization’s stakeholder interest and power which may be
represented in the decision making process in organization. In the below section, stakeholder matrix

10
designed according to “H & M” organization’s which showed the power and interest of the
stakeholders such as

Figure 2: Stakeholder matrix

 Keep satisfied principle followed by those stakeholders in “H & M” organization who have
high level power and low interest in the organization. Main example of these types of
stakeholders are government and store manager
 Manage closely principle followed by those stakeholders in “H & M” organization who have
high level power and high interest in the organization. Main example of these types of
stakeholders are shareholder, investors, and board of director
 Monitor principle followed by those stakeholders in “H & M” organization who have Low
level power and low interest in the organization. Main example of these types of
stakeholders are supplier and staff
 Keep informed principle followed by those stakeholders in “H & M” organization who have
Low level power and low interest in the organization. Main example of these types of
stakeholders are customer ad trade unions (Jepsen, & Eskerod, 2009).

11
Compare and peer review on stakeholder dissimilarities and
analyse the differences in stakeholder interests and
influences
In this part, a comparison of the chosen industry or business with a business chosen by any peer will
be done. Following are the points which differentiate “H & M“organization from Zippy Cleaning &
Maintenance Services Pty Ltd:

As per the industry chosen by my peer, Monique Grelli, Zippy Cleaning & Maintenance Services Pty
Ltd is a commercial business intended in providing cleaning and maintenance services to the clients.
The clients could be individual person, medium and large business enterprises and government
offices. “H & M” acts as a clothing retailer and provides services in the fashion industry to various
sections of common as well as elite people.

The business of “H & M” is influenced by competition, society and cultural differences across the
nations whereas the business of Zippy is influenced by costing, competition and partnerships.

The stakeholder dissimilarities between “H & M” and Zippy are as follows:

1. Customers, suppliers, subcontractors, government & Creditors are the external stakeholders
for Zippy services whereas customers, suppliers and investors are the external stakeholders
for “H & M”.
2. Board of directors, Store manager, Trade unions play a major role as internal stakeholders
for “H & M” organization whereas administration staff, management staff and cleaning staff
play a major role as internal stakeholders for Zippy services. (Reynolds, Schultz, & Hekman,
2006).
3. The stakeholders for Zippy services have been categorized according to the high interests
and high powers/influence whereas for “H & M”, the stakeholders have been categorized
according to their high or low influences and as per their nature.

The differences in stakeholder interests and influences are as follows:

1. The internal stakeholders at Zippy Services have very high interests and high influence. Their
impact on the business is very high as the stakeholders contain cleaning staff, maintenance
staff and administrative staff who manage all the internal work at the organization. The main
pillar of Zippy Services is managed alone by staff whereas at “H & M”, the most important
stakeholders are Store managers and trade unions.

12
2. The influence and interests of investors in “H & M” are both high as compared to the
creditors of Zippy Services who have low influence but high interests. The differences in the
suppliers influence are also present. The influence of suppliers as stakeholders in Zippy
services is high because they get all the cleaning materials from the suppliers whereas “H &
M” can import clothes from wholesalers, suppliers as well as other retailers which leaves
them with low influence as a stakeholder. (Greenley, Hooley, Broderick, & Rudd, 2004).

13
Conclusion
This report is concluded on the base on business stakeholder analysis for “H & M” organization
which is a methodology or technique which used to classify the stakeholder. For this report, I have
select the “H & M” organization which provides their service in fashion industry according to current
trades. This stakeholder analysis report contains the information about the stakeholder and their
roles with influence level. Influence level of stakeholder depended on the nature and degree of
implication stakeholder of “H & M” organization. There is also defined function area of “H & M”
organization which needed for the business growth and enhance the market value of organization so
these functional area plays major role. This assignment gave the information about the select
organization internal level stakeholder and external level of stakeholder with their roles in the
organization. According to situation and their interest, there is also defined the nature and degree of
the stakeholder in “H & M” organization business growth. This report also defined the “H & M”
organization’s stakeholder influence level with help of the stakeholder matrix with help of power
and interest of stakeholder in the organization.

14
References
Brunton, M., Eweje, G., & Taskin, N. (2017). Communicating corporate social responsibility to
internal stakeholders: Walking the walk or just talking the talk?. Business Strategy and the
Environment, 26(1), 31-48.
De Langen, P. W. (2006). Stakeholders, conflicting interests and governance in port clusters.
Research in Transportation Economics, 17, 457-477.
Doh, J. P., & Quigley, N. R. (2014). Responsible leadership and stakeholder management: Influence
pathways and organizational outcomes. Academy of Management Perspectives, 28(3), 255-
274.
Greenley, G. E., Hooley, G. J., Broderick, A. J., & Rudd, J. M. (2004). Strategic planning differences
among different multiple stakeholder orientation profiles. Journal of Strategic Marketing,
12(3), 163-182.
Jepsen, A. L., & Eskerod, P. (2009). Stakeholder analysis in projects: Challenges in using current
guidelines in the real world. International journal of project management, 27(4), 335-343.
Johnson-Cramer, M. E., Berman, S. L., & Post, J. E. (2017). Re-examining the concept of ‘stakeholder
management’. In Unfolding Stakeholder Thinking 2 (pp. 145-161). Routledge.
Mazur, A. K., & Pisarski, A. (2015). Major project managers' internal and external stakeholder
relationships: The development and validation of measurement scales. International Journal
of Project Management, 33(8), 1680-1691.
Mo, Z. (2015). Internationalization process of fast fashion retailers: evidence of H&M and Zara.
International Journal of Business and Management, 10(3), 217.
Pakeman, R. J., Hewison, R. L., & Lewis, R. J. (2017). Linking functional traits and species preferences
to species’ abundance and occupancy trends through time to identify habitat changes in
coastal ecosystems. Perspectives in plant ecology, evolution and systematics, 27, 35-44.
Reynolds, S. J., Schultz, F. C., & Hekman, D. R. (2006). Stakeholder theory and managerial decision-
making: Constraints and implications of balancing stakeholder interests. Journal of Business
Ethics, 64(3), 285-301.
Sehgal, V., Seviour, E. G., Moss, T. J., Mills, G. B., Azencott, R., & Ram, P. T. (2015). Robust selection
algorithm (RSA) for multi-omic biomarker discovery; integration with functional network
analysis to identify miRNA regulated pathways in multiple cancers. PloS one, 10(10),
e0140072.

15