Kellogg: Internal and External Stakeholders
The food industry has always been a very challenging environment for most organizations due to rigid standards for quality and changes in customers’ demands. However, Kellogg’s experience must be among the most complicated ones due to the issues that the firm has had with the engagement of its stakeholders. Because of the inconsistency in the corporate philosophy and the mismanagement of its brand, Kellogg has been experiencing difficulties with engaging its stakeholders despite the rather effective strategies that it utilizes.
At present, several stakeholders can be identified for the Kellogg Company. The internal ones include the company’s staff members and managers. Investors should also be included in the list along with the company’s Board of Directors (BoD) (Kellogg’s case study, 2019). External stakeholders are, in turn, much more numerous; moreover, they may vary depending on the environment and market in which a company operates. For Kellogg, external stakeholders include their customers, suppliers, shareholders, investors, and health organizations. The society, in general, can be deemed as another stakeholder whose needs Kellogg’s leaders have to take into account (Kellogg’s case study, 2019). Overall, the list of the firm’s external stakeholders is rather large.
Defining both internal and external stakeholders of the organization is crucial for creating the strategies that it should use to improve its performance. The analysis of stakeholders provides an insight into the demands and expectations that they have for Kellogg. Thus, the firm will have a chance to improve its situation and positively re-establish its brand image.
Stakeholder Engagement: Significance
To succeed in maintaining the levels of loyalty toward the organization among its stakeholders, one needs to engage with stakeholders actively. The notion of stakeholder engagement might seem rather plain since it mostly involves maintaining interaction with them (Kellogg’s case study, 2019). However, due to differences in the needs and demands of stakeholders, the interest that they have n an organization, and their unique characteristics, the tools for keeping the levels of stakeholder engagement vary extensively (Barrett, Oborn, & Orlikowski, 2016).
For Kellogg, ensuring that the rates of stakeholder engagement become higher means introducing the notions of clarity and Corporate Social Responsibility along with people-oriented values into its organizational setting (Kellogg’s case study, 2019). As soon as the firm proves that its values align with its current strategies and that it has the best outcomes for its stakeholders in its intentions, the levels of stakeholder engagement can be increased.
As a phenomenon, stakeholder engagement allows an organization to accomplish its goals and attain success in the selected area. For Kellogg, increased stakeholder engagement implies that the firm will receive the impetus for managing the current drop in its share prices and increase its profit margins. Furthermore, with the rise in the stakeholder engagement rates, Kellogg will be empowered to increase its influence and gain the attention of new audiences, at the same time keeping the current ones invested. Stakeholder engagement leads to a rise in stakeholder support and the levels of their loyalty, which are essential assets for any organization.
Support and engagement are of particularly high importance for Kellogg since the company has not been doing sufficiently well in the food market and, thus needs a significant boost to increase its performance rates.
Moreover, stakeholder engagement provides an organization such as Kellogg with crucial information about its audience, including customers, influencers, suppliers, and other participants that affect the organization’s performance in the UK market. By building stakeholder engagement, a firm such as Kellogg will gain critical insight into the expectations of its customers and investors, define the strengths and weaknesses of its partners, and develop the strategies for maximizing the quality of its staff’s performance (Kellogg’s case study, 2019).
Therefore, stakeholder engagement is a notion that can be used to empower a company such as Kellogg for a positive change and expand its profit margins. While assuming that stakeholder engagement is the ultimate solution to all internal problems and external threats for Kellogg would be an overstatement, the described notion should be integrated into the organization’s current strategy. Thus, strategies that will lead to a rise in stakeholder engagement levels should become the foundation for the company’s current decision-making.
Strategies for Engaging with External Stakeholders
Maintaining communication with the target audiences is one of the pillars on which the concept of stakeholder engagement rests. Kellogg’s dialogue with its stakeholders has been consistent over the past few years, with new technological opportunities having been introduced recently (Kellogg’s case study, 2019). Currently, the firm uses its K-values guide as one of its strategies for keeping the stakeholder engagement levels high (Kellogg Company, n.d.).
The concept of Corporate Social Responsibility is also integrated into the set of techniques that the company utilizes to increase its stakeholder engagement. Kellogg has been reinforcing the idea of CSR as the principle that it uses in all of its decision-making processes and, thus encouraging the people and organizations that support it to consider the specified notion as well. The focus on CSR has led to the creation of the setting in which its members strive to improve the levels of local and global well-being (Kellogg’s case study, 2019).
Thus, the firm has affected the global community positively and encouraged it to accept the changes associated with saving the environment. The application and occasional update of Kellogg’s Global Code of Ethics is another strategy that the company adopts to boost the levels of engagement among its stakeholders. The described tool helps to promote positive ideas to the company’s stakeholders, thus inviting them to participate in the initiatives from which the global community benefits significantly.
Strengths
The appeal to the target audience’s emotions and, therefore, the creation of a connection on an emotional level is a doubtless advantage of Kellogg’s current approaches toward enhancing stakeholder engagement. Remarkably, the notion of emotional involvement is characteristic of each strategy for boosting emotional engagement that Kellogg utilizes. As a result, the bond that Kellogg creates with its customers as a category of its stakeholders remains very strong and difficult to disrupt.
Environmental awareness is another positive aspect of the tools that Kellogg uses. Specifically, the adoption of the framework that is based on the firm’s code of ethics and the subsequent compliance with environmental standards needs to be regarded as a critical advantage (Sterling et al., 2017). In the era of environmentalism and ecological concerns, an organization has to develop a sustainable approach toward its production process and the relevant issues.
Finally, appealing to communities and creating a stronger bond with them is an important decision making which Kellogg has strengthened its engagement initiatives significantly. By creating food banks that support local charities, as well as offering opportunities for encouraging sustainable agriculture, Kellogg has promoted environmentalism in target communities, as well as within the industry, in general. The resulting drop in the levels of waste has affected the environment.
Weaknesses
However, the approach that Kellogg uses to boost engagement among its stakeholders also incorporates several weaknesses. The first one concerns the disconnection between the tools that the company uses to engage with its stakeholders and the approach that it deploys to promote its products. Due to the absence of any links between the corporate brand and the engagement strategies, the organization may fail to keep its audiences devoted, which will lead to a gradual loss of interest toward Kellogg’s products.
The lack of opportunities for managing the possible problem of stakeholder conflict is another disadvantage of the tools that the firm currently utilizes to engage with its stakeholder. While the organization invests in both current stakeholders and future ones, it also needs to consider possible issues that may cause discontent among certain groups when appealing to the needs of others. For example, in its endeavor at attracting a wider range of buyers to its brand, Kellogg has recently failed to consider the health implications of increasing the percentage of sugar in its cereal, which has led to legal issues (Scandelius & Cohen, 2016).
Similarly, Kellogg refused the attempt at supporting several charities at once after it had decided to invest in the development of breakfast clubs for children (Kellogg’s case study, 2019). The latter issue, however, is linked to the problem of task prioritization rather than external obstacles.
Engagement Initiatives and Vision for Sustainable Future
Given the current state of the company’s performance and success in increasing engagement levels among its stakeholders, it is strongly recommended to shape the company’s vision and mission toward a more focused framework. For example, the company will need to continue its food bank initiatives and the related environmental advances to reduce the negative effect of the recent mistake that the company made with food colorants.
The proposed decision will ensure external stakeholders, including its buyers, investors, and the global society, in general, that Kellogg made an honest mistake, and that the firm will avoid similar issues in the future. Moreover, the suggested strategy aligns with the current focus on environmentalism.
The change in the company’s approach toward engaging its audiences will require the application of the Stakeholder Theory (ST). According to the key tenets of ST, organizations need to create value-based not only on the needs of their shareholders, but also on the demands of stakeholders (Jones, Harrison, & Felps, 2018). ST suggests splitting stakeholders into two categories mentioned above, specifically, internal and external ones (Kull, Mena, & Korschun, 2016).
By building the input/output model that defines the relationships between all agents affecting an organization, its leaders can build an environment in which the firm’s efforts will remain appreciated. Moreover, the proposed model will allow determining possible sources of conflict and informing a company about the strategies available for resolving the conflict in question (Jang, Zheng, & Bosselman, 2017). From the perspective of the ST, Kellogg will need to reconsider its current communication and information management techniques.
It will be crucial for Kellogg to introduce an innovative approach toward communication with its external stakeholders. Innovative technology provides extensive options for keeping the dialogue with the target audiences uninterrupted, which is why Kellogg should consider incorporating blogging and online consultations into its range of tools for keeping its buyers’ engagement high. As far as the rest of its external stakeholders are concerned, using innovative approaches toward managing communication is also crucial.
Therefore, the organization will have to use networking to create and sustain a digital stakeholder engagement strategy (Illia, Romenti, Rodríguez-Cánovas, Murtarelli, & Carroll, 2017). The specified step may involve engaging the target population via digital channels such as corporate networks and similar tools. Among the advantages of the proposed technique, the opportunity to keep the information contained and reducing the chances of data leakage should be mentioned first (Grand, Holliman, Collins, & Adams, 2016). Therefore, the design of a network within which Kellogg will be able to contact its stakeholders is critical for the rise in their engagement levels. The opportunity to increase the speed and quality of feedback is another strength of digital engagement tools.
Increasing the levels of sustainability is also to be regarded as a necessary step toward improving the firm’s current situation and building loyalty levels among its stakeholders. Therefore, it is reasonable for Kellogg to consider investing in the engagement initiative that involves the promotion of sustainable agriculture. The specified choice will help Kellogg to address two issues simultaneously, both opening the dialogue with the community and supporting the environmental cause (Hagemann & Potthast, 2015).
Apart from supporting mainstream approaches to sustainable agriculture, Kellogg will need to explore other options. For example, the support of organic agriculture to reduce the carbon footprint that Kellogg’s activities may have on food will have to be included in Kellogg’s framework.
Despite the current problem with the company’s popularity among its customers and other external stakeholders, Kellogg still has the chance to build the rates of stakeholder engagement and retain them at the necessary level. However, the goal of increasing engagement rates implies changes to the corporate policies and the shift toward the consistent dialogue between Kellogg and its stakeholders. Thus, the sustainable future of the organization hinges not only on the selection of environmental policies but also on more basic issues such as effective communication and openness. The current lack of transparency affects the company negatively, making its every mistake work to the firm’s detriment instead of providing an opportunity for further improvements.
To make the necessary changes toward sustainability and engagement of stakeholders, Kellogg will need to change its corporate atmosphere toward a more open one, as well as start building the relationships with its external stakeholders based on mutual trust. Marketing itself as the organization that caters to the needs of its every stakeholder, Kellogg needs to meet the set standards, which means that it has to introduce new communication channels, process feedback carefully, and respond to its stakeholders respectively, addressing the sources of their discontent.
With the application of the proposed strategies for building stakeholder engagement, Kellogg will be able to establish improved, trust-based relationships with its external stakeholders, thus attracting possible investors and reinforcing the strength of its presence in the target market. Given the recent problems that the firm has had with its production processes and quality control, it is also important to develop effective control tools for the organization to keep the levels of customer satisfaction high and ensure that its brand integrity stays intact.
The specified steps will allow the organization to reconsider some of the aspects of its corporate philosophy and business ethics by introducing a stakeholder-oriented approach and the focus on global well-being into the firm’s value system. The expected outcome includes a rise in both stakeholder engagement rates and the levels of the firm’s popularity in the target market.
References
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Hagemann, N., & Potthast, T. (2015). Necessary new approaches towards sustainable agriculture–innovations for organic agriculture. In Know your food: Food ethics and innovation (p. 550). Wageningen, Netherlands: Wageningen Academic Publishers.
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