Engaging stakeholders in a business
01_Introduction
Cadbury Schweppes is one of the UK’s best-known companies. It
was formed in 1969 by a merger between two companies with
distinguished histories: Cadbury and Schweppes. It is a major
public limited company (plc).
Since 1969, Cadbury Schweppes has grown into an international
confectionery and beverages company, selling chocolate, sweets,
gum and beverages around the world. It is constantly extending its
product range by developing both new and existing products whilst
also buying other companies and using its expertise to develop
those companies’ established brands. Like any other company,
Cadbury Schweppes has to make profits as this helps to generate
wealth for the economy - funding taxes, employment and pensions.
It also has to provide a return for those who have invested in the
company. It does this by successfully continuing to offer
consumers a range of products that they want to purchase. Cadbury
Schweppes’ core purpose is "working together to create brands
people love" and some of its best-loved brands in the UK include:
• Cadbury Dairy Milk (100 years old in 2005)
• Bassett’s range including Liquorice Allsorts, Fruit Allsorts and
Jelly Babies
• Flake
• Roses
• Trebor Mints
• Maynards range including Wine Gums and Sours.
In a survey of major United Kingdom
based business leaders, Cadbury Schweppes
was voted “Britain’s Most Admired Company”.
The award was voted for by other leading
Financial Times Stock Exchange (FTSE)
businesses who rated companies against nine
criteria - quality of management; financial
soundness; quality of goods and services; ability
to attract, develop and retain top talent; value as
long-term investment; capacity to innovate;
quality of marketing; community and
environmental responsibility; and use of corporate assets.
 Stakeholder grouping
Shareowners
Owners of shares in the
company.These are primarily
large institutions but also
include a large number of
individual shareowners.
Consumers
Millions of people worldwide
who buy and/or consume
Cadbury Schweppes
products.
This Case Study looks at how Cadbury Schweppes interacts with
its stakeholders, acknowledges its responsibilities towards them
and looks to balance their various interests.
Customers
02_Stakeholders and their interests Outlets that sell Cadbury
Schweppes products. For
A stakeholder is any individual or group that is affected in some example, wholesalers and
way by a company’s activities. Stakeholders range from small retailers, such as
shareholders with a few hundred pounds worth of shares in a supermarkets, small shops
company, to communities in which a company has business and single person vendors.
premises that may employ a few, or thousands of people.
In being committed to its core purpose of “working together to Suppliers and
create brands people love” Cadbury Schweppes recognises that it business partners
does not operate in isolation and works at its commitment to each Companies that provide the
one of its stakeholders. It is governed by five goals: goods and services that
• deliver superior shareowner performance Cadbury Schweppes needs
• profitably and significantly increase global confectionery share as inputs into its own
production processes. For
• profitably secure and grow regional beverages share
example, raw materials such
• ensure our capabilities are best in class as cocoa and sugar or
• reinforce reputation with employees and society. services such as IT support.
The following table identifies Cadbury Schweppes’ main stakeholders Employees
and outlines their particular interest in the company and its activities. People who work for the
company, Cadbury
Schweppes has over 50,000
employees around the world.
Society
Organisations the company
works with that have an
interest in the communities in
which the company operates,
such as local governments,
international agencies, non-
governmental organisations
and trade unions.
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Interest in the company
Looking for sustainable,
healthy dividend payments
and a rising share price.
Wanting to buy treats or
refreshments that provide
them with quality, taste and
value.They also want to
enjoy their favourite brands
as well as exciting new
products.
Looking to maintain a good
partnership with Cadbury
Schweppes, which meets
their own needs for
appealing products and
generates increased sales and
profits for their business.
Looking to Cadbury
Schweppes to keep bringing
them business on terms
which allow suppliers to be
successful.
Looking to the company to
offer good terms and
conditions of employment, a
healthy and safe working
environment and
opportunities for personal
and professional development.
Wanting the company to act
responsibly and respect the
communities in which it
operates. For example,
assisting and supporting
communities, respecting the
environment, trading ethically
and respecting human rights.
03_The importance of
engaging stakeholders
Engaging stakeholders involves establishing good lines of
communication between a company and its various stakeholders
and then maintaining a constructive relationship with them.
Through this relationship, stakeholders can have their say and the
company can listen and respond.
The original Cadbury company was set up over 150 years ago by
the Cadbury family who believed in fair treatment for their
employees and were well known for helping in the community.
They established relationships with their stakeholders by
consulting regularly with their employees, responding positively to
their needs and aspirations and generally treating them well. This
was rare for its day and enabled them to bring several important
benefits to the company:
• employees worked hard and were seldom absent
• high morale and good health raised productivity and improved
efficiency
• the company gained a reputation as a good employer, making it
easier to recruit and retain employees
• the company became renowned for the quality of its goods,
customers wanted to supply them and consumers want to buy
them
• the company’s products became popular with customers who
chose to buy their products over and above competitors
• it became easier for the company to expand its activities –
communities welcomed its presence among them, suppliers
enjoyed working with them and investors were happy to lend
money to the company or to purchase its shares.
In the 1980s the company’s then C h a i r m a n , S i r A d r i a n
Cadbury set out Cadbury Schweppes’ commitment to its stakeholders
in a booklet called “The Character of the Company” and more
recently these views were enshrined in the company’s Purpose and
Values and its Business Principles.
Today, Cadbury Schweppes continues
to listen and work with its
stakeholders. It has open and regular
conversations with them and what
they say and do continues to influence
how the company thinks and acts.
For example, Cadbury Schweppes
maintains a close relationship with its
consumers to ensure it is making
products that meet their needs.
Listening to consumers in this way
helps the company to maximise its
investment in product research and
development and grow its market
share.
Engaging with stakeholders helps ensure potential problems are
addressed, or changes communicated and understood.
For these reasons it is important for companies to find ways and
means of engaging with all their stakeholders, including shareowners
whose willingness to hold shares underpins a company’s financial
position. Cadbury Schweppes has the advantage that working closely
with stakeholders has long been central to the way in which it
conducts its business.
The next section looks at how Cadbury Schweppes engages with
its stakeholders.
04_How to engage stakeholders
Cadbury Schweppes has open and regular discussions with its
stakeholders and uses different ways to communicate with
different stakeholder groups:
Shareowners – Cadbury Schweppes has over 60,000 registered
shareowners. These include private individuals as well as large
institutional investors, such as pension funds and banks. All
shareowners are also entitled to attend the Annual General
Meeting, at which they have the opportunity to ask questions,
discuss the company’s performance and vote on certain issues.
Consumers – Consumers can contact the company by various
means and Cadbury Schweppes deals with consumer enquiries on
a daily basis. It performs market research to track changing
consumer trends. Many parts of the business also use surveys and
market research panels to find out what consumers think of
products.
Customers – The company has ongoing discussions with its
customers. Wholesalers and retailers provide the vital link to
consumers and it is they who make Cadbury Schweppes’ brands
widely available. The company works in partnership with
customers to meet their need for attractive, high-quality products
and business success.
Suppliers (and business partners) – Cadbury Schweppes has
40,000 suppliers around the world and its Ethical Sourcing
Standards set out how to work with them. The company is in
regular dialogue with its suppliers and responds to their
suggestions. For example, if a supplier had views on ways of
improving quality or efficiency then Cadbury Schweppes would
listen and possibly act on ideas if they made good business sense.
Working in partnership with suppliers makes it possible to find out
their needs and also to ensure they satisfy Cadbury Schweppes’
requirements for quality materials while operating in a socially
responsible way. Cadbury Schweppes evaluates potential suppliers
against a set of standards such as environmental protection and
ethical labour practices prior to doing business with them and
encourages their principles and standards to be upheld during the
relationship.
Employees - Cadbury Schweppes has a tradition of encouraging
direct, two-way involvement and communication with employees.
Managers hold regular individual and team meetings to inform
colleagues about the business and hear their views. The company
also conducts surveys to check how its employees feel about
working at Cadbury Schweppes. Internal newsletters, a group
website and many local websites help employees keep up to date
with what is going on.
Society – The company regards itself as a citizen in the countries
in which it operates and enters into regular dialogue with
organisations such as national governments and international
bodies. For example, the World Health Organisation (WHO) to
discuss issues that effect the company. These issues can be
anything from agricultural policy to education and skills.
Cadbury Schweppes also encourages its employees to get involved
in community programmes so they can give something back to
society and gain new experiences and broaden their horizons.
QUESTIONS
1 Explain the role of public relations in engaging stakeholders.
2 Discuss negative publicity and its effects on stakeholders. Give a few examples.
3 Why does a company’s management need to balance stakeholder views? Discuss Cadbury’s attempts.
4 Explain the terms corporate responsibility and corporate social responsibility.
5 Present an official CSR report of an organization operating in Pakistan, which has been made public.
05_Balancing different
stakeholder views
The table in section 2 demonstrates that not all stakeholders share
the same interests. Cadbury Schweppes listens to its stakeholders
and balances their interests with the long-term benefits to the
company. For example, it may be in the shareowners short-term
interest to want Cadbury Schweppes to keep all costs to a
minimum in order to maximise their near-term return on
investment, through profits and dividends. However, Cadbury
Schweppes has a target of 1% of pre-tax profits which it invests in
communities around the world because it believes it has a
responsibility to help build prosperous stable communities where it
operates and that this is good for long-term business growth and
success. This activity is recorded in the company’s Corporate and
Social Responsibility Report.
06_Conclusion
Engaging is about providing open access and Cadbury Schweppes
has always taken its responsibility seriously. It knows that listening
to and engaging with stakeholders is essential to its success and has
The Times Newspaper Limited and ©MBA Publishing Ltd 2005. Whilst every effort has been made to ensure accuracy of information, neither the publisher nor the client can be held responsible for errors of omission or commission.
benefits for stakeholders. Engaging with stakeholders does more
than sustain their goodwill and co-operation: it enables the
company to remain competitive and successful, to keep in touch
with wider social expectations, as well as making sure that the
values and business principles of the company are upheld.
Glossary
Annual General Meeting: A yearly meeting at which a
company’s Board of Directors reports to shareholders and at
which the shareholders can ask questions and vote on some
key issues.
Financial Times Stock Exchange (FTSE): An index
covering the UKs largest 100 companies by market
capitalisation.
Public Limited Company: A business whose shares can
be bought from share dealers and be resold on the
Stock Exchange.
Market research panels: A g roup of people who
collect and examine information about things/products that
people may buy.