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. The way an organization deals with stakeholders, and their stakeholder perspective the legitimacy of stakeholder claims depends on the moral, ethical and political standpoint of the organization and on the level of influence and power a stakeholder has on the organization.
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Moses Manuel In business it pays to know each of the various key players or stakeholders. By stakeholders I mean people who can affect or be affected by the business. The point is we need to know more about such persons especially in terms of their power and interest in the organization. In case of your stakeholders this means their ability to influence the organization or, looking at it from a purchasing and supplies point of view, their ability to influence procurement activities Example Customers could stop buying your products, suppliers could stop to supplying although the question of the effect would depend on how big the suppliers are.
Government policies could affect your business etc. Interest Knowing the extent to which your stakeholders can influence your business is one thing, knowing if when and why they are likely to do it is another thing, which means analyzing your stakeholders in a more sophisticated way.
You end up with something like this: This is what to expect from each segment: Minimal effort A The stakeholders in this group are the type that are not interested in the organization and do not have much power either.
An example here could be the suppliers with whom the organization only does a small volume of business. The decisions relating to these stakeholders have a low impact.
What you want to do here is ensure that you do not waste resources taking these stakeholders goals or potential responses into account. Keep informed B These stakeholders have high level of interest in your organization but lower power. They are important because if these are not kept on the-know about decisions they may seek additional power and influence the running of the organization.
The recommended strategy is to keep these stakeholders informed of plans and outcomes through communication and stakeholders marketing. Keeping satisfied C Here you find stakeholders with high power, basically high ability to influence what the organization is up to, but currently have low interest in the organization.
This group is important because if dissatisfied or gets concerned their interest level may arouse. Example here could include governmental agencies and regulatory bodies, large suppliers, or even senior management from other departments. The strategy to use with these is to keep them satisfied so that they do not exert their influence.
Key players D In this quadrant you end up with stakeholders who have lots of influence and are highly motivated to express their own interest. These could be your major customers, your key suppliers, senior procurement managers etc.
What can you do here? The strategy to use with these stakeholders is one of early involvement and participation, this way their goals can be integrated with organizational goals ensuring their support.
What Is Mendelow’s Matrix And How Is It Useful?
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.
Stakeholder Analysis – Mendelow’s Matrix
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.
The Mendelow Matrix is an important tool for the aspiring entrepreneur. Stakeholders include anyone who might have an interest in or influence on your business. Stakeholder mapping provides a useful project management tool for understanding these relationships. The aim is to make the best possible use of them to further our business aims. As you enter the world of business the actions you take affect different kinds of people.