Use of Stakeholder Theory and Maslow's Hierarchy of Needs to Analyze Problems of The Luxe Mart

Summary

For this report is going to analyze that two problems of the Luxe Mart. The reason for search Luxe Mart is a large retail chain with more than 500 branches and 250,000 employees in Australia. Within two years, the company's sales fell sharply, and closed more than 100 stores. After the search, there are two different types of problem is about two theory. One of the theories is Stakeholders theory, the stakeholder theory is a theory of organizational management and business ethics that accounts. And another theory is Maslow's hierarchy of needs. It used the terms 'physiological', 'safety', 'belonging and love', 'social needs' or 'esteem', and 'self-actualization' to describe the pattern through which human motivations generally move. This means that for motivation to occur at the next level, each level must be satisfied within the individual themselves.

According to recent research, this paper combines stakeholder theory and Maslow's hierarchy of needs to analyze the various factors that contribute to this series of issues and suggest solutions to the problem. There are two main problems with no effective management methods and low motivation.

1.0 Problem Identification & analysis

1.1 Problem 1

The first problem of Luxe Mart in business is about an unhealthy working environment and the stronger competitor enters the market and competes with Luxe Mart for customer resources. According to the Stakeholders theory, there are 4 parts about it, employees which include all workers who work for the company and help company to develop, secondly is customers that means absorbs the organisation’s outputs, thirdly is competitors, it means some company are in same area in market and have similar product. And last one is pressure groups, all interest groups that attempt to influence organizational behavior are pressure groups. After this paragraph, it is going to analyse problem in Luxe Mart by Stakeholders theory.

Fist problem is the labour of employees do not have a healthy working environment in Luxe Mart, the labour of employees means the people who work for company and support company to produce product and develop. From the report, there is an employer from NSW, tells readers he always gets shift at every weekend, he cannot have a break during this time. And the boss does not care about the employees’ situation, when working trying to talk with boss. The boss just got up and left. And it is not only reason to make an unhealthy environment. There is a good example, Low, S., & Gao, Shang. (2011) state that In the Toyota Way, leadership means directly involved in daily efforts to dig deeper into root causes and act to resolve them. These issues will not stop continuing until the actual improvements. That the reason for Toyota can successful and famous to the world. The safety of work is not guaranteed is another part of this environment. The boss does not recruit new experienced manager to manage all workers without any explanation. And every night, when the employees at shift. There are too many accidents happened at night, because no manager to a manager working and the workplace are filthy. They cannot finish work before 4 am every shift. So, we can know manager is important to a company. Tiffan, B. (2011) print out that their job is to supervise their work and tell people what to do, and make sure they do it. For those reason with this situation that make employees leave this organization, and without experienced worker. More serious consequences will occur. The problem not only inside, but also happens outside.

The second problem is Luxe mart has a strong competitor which already entre same market. It will be directly confronted by Luxe Mart. The competitor means Amazon will enter this market and produce similar services which as same as Luxe Mart, and only one result can outcome. As the report said, Amazon changes the way of shopping. Before Amazon enter, people must go to the store and shopping, after Amazon coming in, people can shop online at home and the product will be sent to the home. Amazon direct access and Luxe Mart not ready yet, that make Luxe Mart lose the first fight of the ‘war’. The reason for losing, Luxe Mart must close 100 stores in Australia, due to the trend of online sailing growth and fewer people go to the store. Hatch (2017) points out that Amazon is changing shopping way by people, more and more people are choosing shopping online because of more reasonable prices, better products, more choices, and time savings. Those reasons are making people change their way of shopping. And Luxe Mart is not only one company which must close stores.

1.2 Problem 2

For the problem of Luxe Mart is the low level of motivation in employees and management. Motivation is a kind of drug. It is processing by a person’s effect are energised. Upadhyaya, C. (2014) analysis that Maslow's hierarchy of needs is a good model for understanding human motivation, revealing the level of demand in today's business organizations. The motivation is one of the most important things in a real company. It can decide a company success or failure. Follow the Maslow’s hierarchy of needs theory, it can be used in this case. Maslow's hierarchy of needs is a motivational theory in psychology, including a five-layer model of people needs, which has a hierarchy of levels like a pyramid. Starting from the bottom of the hierarchy, the needs are physiology, Safety, love and belonging, esteem, and self-realization. Physiological needs are the individual needs of human survival. Love is about life and peace that people want to control and order. love and belonging are Important, this need includes feeling that respecting needs a desire for oneself and that the last self-realization means feeling satisfaction or feeling that we are playing our potential. In this report is going to analysis the problem that is lack of safety and esteem.

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At the beginning of the problem is the lack of safety in Luxe Mart. The manager in Luxe Mart does not care about the employer’s working environment and don’t have enough attention to employees. Safety needs need both physically and psychologically safe in the workplace for commitment to be possible. According to the case, the employees in Luxe Mart are worried about their safety. On the physical level, there is a dirty work environment and don’t have a good manager. Both of it make employees cannot focus on the working, not only are they unable to get the job done, but they also cause a lot of unexpected situations happened. The company let young staff work at night but without a good leader, they don’t know what need to do. They were will be making terrible to the experienced worker and easy to make an accident happened. Without manager is not only one reason, but the employees are also always concern about their jobs, they can be dismissal if they got two warning. It is on the psychologically level. Two different types of problem with safety make a low level of motivation. But safety is not only one reason to make motivation low, but esteem is also another problem of Luxe Mart.

The second demand in the Luxe Mart is that lack of esteem and lack of respect. Osabiya, B & Joseph, B (2015) state that esteem often referred to as self, self-respect, self-confidence, strength, independence, and the desire for freedom, in addition to the respect of others… Employees have no normal goals, and everyone is too easy. They have no challenges in their work. This situation prevents employees from achieving success through their work. On the other hand, some employees must work uninterrupted for a long time because the manager chooses to work for them. If this is the only problem, then there is no problem. However, age discrimination in the Luxe Mart already exists. The manager chooses young workers to go to work, and then some experienced old employees do not have the opportunity to get more opportunities. It is age discrimination. All those reasons let a low motivation happened. Working with low motivation, as a result, we can know sale decreased.

Recommendation

Base on the explanation and analysis of two main problems. Luxe Mart needs to start with the management mechanism and incentives to reorganize the company's internal operational processes. For two problem above, it includes 4 small questions. There are employees do not have a healthy working environment in Luxe Mart, Luxe mart has a strong competitor which already entre same market, the lack of safety in Luxe Mart and in the Luxe Mart is that lack of satisfaction and lack of respect.

For the first question, employees do not have a healthy working environment at Luxe Mart: Luxe mart needs to hire experienced managers and try to listen to the needs of employees and can make a questionnaire. Luxe Mart also needs to arrange reasonable arrangements for employees. And clean the workplace to allow employees to work in a clean environment. Then we can let the workers stay in the company. This is good for the company's development.

For the second small problem Luxe mart has a strong competitor which already entre the same market: Luxe mart must develop more sales channels and improve them. In the current era, more and more people rely on online shopping. So luxe mart should also develop online sales channels.

For the third small problem the lack of safety in Luxe Mart: A clean working environment is a necessary factor, for example, it is forbidden to accumulate garbage in the aisle, and it is forbidden to put heavy objects in the high place. The managers should have more tolerance for employees. Luxe mart should develop more accurate rules and regulations to let employees understand what should be done and what should not. Let employees no longer worry about being fired.

For the last problem in the Luxe Mart is that lack of satisfaction and lack of respect: Managers need to set more difficult goals for employees to complete so that people who are discriminating against age should be warned or even fired. Let employees have a better working environment. Luxe mart can create a training program allows old employees to teach new employees how to work.

Reference

1. Low, S., & Gao, Shang. (2011). Bridging Western management theories and Japanese management practices case of the Toyota way model. Bingley]: Emerald Group Publishing.
2. Tiffan, B. (2011). Four important roles of a manager. Physician Executive, 37(4), 94-6.
3. Upadhyaya, C. (2014). Application of the Maslow's hierarchy of need theory; impacts and implications on organizational culture, human resource and employee's performance. International Journal of Education and Management Studies, 4(4), 353-356.
4. Osabiya, B & Joseph, B (2015). The effect of employees’ motivation on organizational performance. Academicjournals. Vol. 7(4) pp. 62-75, DOI: 10.5897/JPAPR2014.0300.
5. Hatch. P (2017). How Amazon will change the way we shop (1th ed.). The Sydney Morning Herald. Retrieve from: https://www.smh.com.au/business/companies/how-amazon-will-change-the-way-we-shop-20171122-gzqn40.html