Woolworths Company Term Paper

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Woolworths Limited is a well-known name in the retail business. It was established in 1924 covering the largest share in the Australian food retail chain and New Zealand second largest retail chain. Its operation is spread on in Australia, New Zealand and India and Hong Kong (NZPA, 2007). Woolworths is listed as the public limited company on the Australian Securities Exchange (ASX) and headquarter physically located in Bella Vista, New South Wales, Australia. Woolworths is committed to serve million of its customers by providing high quality at low prices and with great variety (McWilliams, 2000).

Woolworths specialize in the retail business in the categories of food & grocery, liquor, petrol, general merchandise and consumer electronics. Woolworths ltd have committed itself to the communities firstly through economically by creating jobs, growth in shareholder wealth, innovation and creativity in product development and growth in the agricultural and production sector; secondly socially through educational development of its thousands of employees by incorporating advance level training programs, providing safe and secure retail environment, act as a center for the collection and dissemination of donation and promoting activities of charities (Krajewski, 1996). Lastly it contributes to society through environmentally by identifying materials that affect environment and use them in friendly way which the company has made it an integral part of corporate responsibility. The company is strongly convicted on the corporate values of retail passion, integrity, leadership and responsibility (Kotler, 2001).

The management committee of Woolworths Ltd. constitutes the following:

Table 1: Management Committee Structure



Managing Director and Chief Executive Officer

Michael Luscombe

Deputy Chief Executive Officer & CEO Designate

Grant O'Brien

Finance Director

Tom Pockett

Director of BIG W

Julie Coates

Director of Supermarkets, Liquor & Petrol

Greg Foran

Director Corporate and Public Affairs

Andrew Hall

Company Secretary and General Counsel

Peter Horton

Director Human Resources

Kim Schmidt

General Manager Liquor

Steve Greentree

Industry and activities

Woolworths under its various brands are operative in various fields of retail business. The categorization of its business and its branding is done as under:

Table 2: Brand Categorization of Woolworths Ltd.


Brand A

Brand B

Brand C

Brand D

Brand E


Woolworths -- the central supermarket chain operating throughout the jurisdiction under the slogan of "Fresh Food People" since 1987

Woolworths Online- allows customers to shop from their homes.

Food for Less- It is the discount supermarket located in Queensland and New South Wales.

Flemings-Operative since 1960s is a group of 4 supermarkets.

Macro Whole Foods Market-Organic food product chain operative since 2009


Safeway Liquor

BWS (Beer Wine Spirits)

Dan Murphy's

Woolworths Liquor



ALH Group


Caltex Woolworths/Safeway

General Merchandise


Consumer Electronics

Dick Smith

Dick Smith Large


Home Improvements

Masters Home Improvements

Source: Sharp, Ari (2008). "Woolies shelves Safeway brand"; ALH Group home page and "Woolworths Limited - Half Year Presentation HY10" (PDF)

Stakeholders Theory

Stakeholder theory is the organizational management theory that defines the principles of business ethics, morals and values governing the business philosophy (Phillips, R., Robert; Edward Freeman, 2003). The description on the stakeholder theory is made in many different ways but the central point of this theory is the firm's responsibility towards its stakeholder instead of just on the stock holders (Friedman, 1970). The social responsibility of the corporation to provide profits to its owners is now being criticized in the stakeholder theory that holds corporate responsible to all the people involved in the company or its stakeholders. In the generic form stakeholders includes suppliers, customers, stockholders, employees, competitors, social groups, communities and government at large. The simplest form of stakeholder's definition is restricted to customers, suppliers, distributers, employees and financial institutions. Whatever the definition of stakeholder is considered the theory confirms organization's responsibility not limited to profit maximization of its stock holders (Carroll, 1999) (McElwee, 1993). The diagrammatic view of the stakeholder and the organization can be viewed as:

Political Group





Trade Association




Diagram 1: Stakeholder Theory representation

Source: Donaldson, T. & Preston, L. 1995. The stakeholder theory of the modern corporation: Concepts, evidence and implications. Academy of Management Review 20, 65-91

Stakeholder theories by different perspectives

Richard Edward Freeman is well-known name in making the concept of stakeholder and organization's responsibility towards stakeholder familiarized with the world. His work was further elaborated and extended by various authors and thinkers in the field of business management and in the recent time it is expanded by the addition of business ethics and corporate social responsibility to the subject (Weiss & Harrison, 1994). The list of authors and their contributions in building the theory is discussed in the following table.

Table 3: Stakeholder Theory and practice a schematic study




Freeman (1984)

Strategic Management & Stakeholder's approach.

(Freeman, R.E (1984).

Business environments in late 1980s were changing the business philosophy and introduced the concept of cooperation between business, owners, labors, government, customers and suppliers. Identify the influence of environment on the internal changes.

Donaldson & Peterson (1995)

The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications.

(Donaldson and Preston,1995)

The understanding about this theoretical framework can be build on three areas:

Descriptive: To analyze the dealing of mangers with the stakeholders. The business parameter lies in the border of being competitive and cooperative. All the business has to maintain a balance in both.

Instrumental Approach: Managing stakeholders while achieving corporate goals.

Normative: Consideration of the moral guidance connected to the business management.

Freeman (1990)

Normative approach to Stakeholder

(Freeman, R.E and Evan, W.M. 1990).

Builds upon the definition of stakeholder as the firms drive the interest of stakeholder. It was based on two principles:

Principle of corporate legitimacy: Company's affairs must be managed with stakeholders who have given the authority to participate in the process of decision making to their benefit.

The shareholder fiduciary principle: Managers must act as the agent of the stakeholders and act in the interest of them based on the corporate goals and ensuring sustainability of the firm.

Mitchell, Agle & Wood (1997)

Manager's role in categorizing stakeholders in different classes and prioritizing these classes based on their relationships.

(Mitchel. Wood, & Agle 1997)

The stakeholder can be organized in the hierarchy of the company based on the three elements:

a) Stakeholder's power to influence the firm.

b) authority of the relationship

c) Urgency of the relationship.

Commission Green Paper 2001

Corporate social responsibility theory

(Commission Green Paper, 2001)

Integrate the ways business are associated with shareholders, employees, customers, suppliers, governments, nongovernmental organizations, international organizations and other stakeholders. The objective of this theory is to make firms responsible for social and environmental concerns for businesses. The topic of corporate social responsibility is further extended to business ethics, business and society and social issues in business.

Source: Charles Fontaine, Antoine Haarman, Stefan Schmidhttp 2006 The Stakeholder Theory.

Corporate Identity and corporate social responsibility of Woolworths Ltd.

Woolworths Ltd. is the leading company with strong corporate values and orgnizational culture that supports social policies, ethics and corporate governance. It is well depicted in their publication of Corporate Social Responsibility Report 2010 and Community Investment Strategy Report (available on corporate website). The Logo of the company is simple their name and the tag line which is displayed below:

Fig 1: Woolworths Ltd. Company Logo

The slogan of the company which says:

Fig 2: Tagline of the Woolworths Ltd. Company

To have transparency in their contribution to society and community, Woolworths Ltd. is a member of London Benchmark Group (LBG) which is responsible for measuring, benchmarking and reporting all the investments of the company (Lyles, 1992). The company maintains its social responsibility targets based on the number of stores they are willing to open in the future. Their targets are simple and preference if given to the usage of materials in all their construction which are environmentally friendly (Smith, 2003). The success of their corporate social responsibility can be viewed with the series of awards won by the company in this respect.

a) Woolworths Ltd. was awarded 'The best report in the retail sector' by the Association of Chartered Certified Accountants 2008 Sustainability Reporting Awards.

b) Listed on the 2009 Carbon Disclosure Global Leadership Index

c) Listed on the Goldman Sachs 2009 GS: Sustain Retail and Apparel focus list.

d) In the Wall Street Journal won three categories in the 2009 Wall Street Journal Asia:

Number 1 overall Company in Australia

Number 1 Australian company for corporate reputation

Number 1 Australian Company for Innovation

(Corporate Social Responsibility Report 2010)

Thus the company has maintained a balance between the competitive strategy and cooperative strategy for running the business on the corporate values.


Woolworths Ltd. is considered the most reputable and profitable company in the continent with its operations extended outside the geographical boundaries. The managers role is emphasized in maintain the stakeholder's rights and authorities in the business practice through their steps taken under corporate social responsibility and transparency in media relations and media presence (Steiner, George A., and John F. Steiner, 1997). The publications…

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