The objectives of an organisation will be governed by its key stakeholders. These key stakeholders be determined using stakeholder mapping. It identifies stakeholder expectations and power and helps in establishing political priorities. The process involves making decisions on the following two issues. To what extent the stakeholder has power to impose its wants? Understanding the matrix The matrix is normally completed with regard to the stakeholder impact of a particular strategy.
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What are stakeholders? A stakeholder is anyone, as an individual or a collective such as organisation that has an interest or is concerned with the actions of a business to the extent they are affected by or they can influence it. A business is likely to have numerous stakeholders including directors, shareholders, employees, customers, creditors, the government and the community in which it sits. A business will frequently find that different stakeholders have different priorities, this often leads to conflict.
For example, an employee would like to be paid more. A business will therefore need to find a way to balance the conflicting priorities of its stakeholders.
This group are likely to have the significant influence; they may be the driver behind the change or strategy. They will likely have the power to stop the change or strategy going ahead if they are unhappy. High Interest and Low Power; this group have an interest in what is happening, however they are unlikely to have the power to influence change. This group should be kept informed. Whilst they have little power themselves they could attempt to join forces with a group with power.
By keeping them satisfied they are less likely to gain interest and exercise their power to influence. Low Interest and Low Power; this group is unlikely to have an interest in the organisation and direction; this is often due to their lack of power to influence a situation. They are likely to accept the position and show little if any resistance. An essential strategic project management tool What factors may dictate whether a shareholder may exercise power?
If a stakeholder has a financial interest this will increase the level of interest, are they an investor who may consider their investment to be at risk or possibly an employee, their employment is their livelihood so would not want to risk that. As an example; employee may be averse to an organisation investing in new technology to increase automation thus placing jobs at risk.
If a stakeholder does not have alternative options to dealing with or working with the organisation, this would increase their interest.
Likewise, an organisation may supply a product that cannot be obtained elsewhere. Instances like this would increase customer interest.
If an employee lost their job, they may not immediately find another so employee interest would increase if their employment was considered at risk. Does the stakeholder have the power? Power is determined by whether the stakeholder can take action that will make an organisation sit up and think. Employees can strike, withhold their labor which can be incredibly disruptive to an organisation and its business potentially damaging relationships with customers. Banks and other finance providers can call for repayment of overdrafts or loans.
Investors can withdraw their investments especially if the organisations approach to risk is no longer aligned with their own. Primary Sidebar.
This is the traditional or stockholder view , but a more considerate approach states that companies should not have a limited view; rather they should have an extended view with regard to the whole society. The stakeholder view states that that as an organization is so powerful, socially, politically and economically, unrestrained and injudicious use of their power will eventually lead to the infringement of the rights of other people. The stakeholder theory thus proposes corporate accountability , not just to the shareholders, but to the stakeholders of the company as well. But, there is considerable dispute about who should be considered to be a stakeholder, and thus, have a legitimate claim on the company and its activities.
What Is Mendelow’s Matrix And How Is It Useful?
What are stakeholders? A stakeholder is anyone, as an individual or a collective such as organisation that has an interest or is concerned with the actions of a business to the extent they are affected by or they can influence it. A business is likely to have numerous stakeholders including directors, shareholders, employees, customers, creditors, the government and the community in which it sits. A business will frequently find that different stakeholders have different priorities, this often leads to conflict. For example, an employee would like to be paid more.
Remember, all stakeholders may seem to have lots of power or we hope they would have lots of interest, but relatively speaking, some stakeholders will hold more Power than others, and some stakeholders will have more Interest. For example, a director is likely to have high Power and high Interest in the organisation, whereas the Government would have high Power to impact strategy via regulation, but potentially less Interest — the same with a large competitor. How To Use the Tool Creating a Grid Map of Stakeholders This is based on Power and Interest allows us to identify which stakeholders are incredibly important, with High Power and High Interest which we would need to manage closely, investing a lot of time and resource. For example, your boss is likely to have how Power to influence your work and also high interest in it being successful, or a technical external agency. Keeping these stakeholders on side and keeping them informed almost daily is a priority. However, those stakeholders with low power and low interest e.