Stakeholder theory

Question 1

What is the power matrix?

Answer 1

Categorising stakeholders into how much urgency, legitimacy and power they posses.

A stakeholder who possess all three or two qualities are primary stakeholders

Question 2

What are the differences between shareholder management and stakeholder collaboration?

Answer 2

Shareholder management:

• Fragmented among various departments
• Managing relations
• Reduce stakeholders interfering with internal operations
• Linked to short term goals
• Dependent on departments of interest and managers persona style

Stakeholder collaboration:

• Integrated approach
• Relationship building
• Focus on creating opportunities and benefits
• Linked to long term business goals
• Driven by mission, values, strategies

Question 3

According to Freeman (1984) why is stakeholder management and engagement important?

Answer 3

“Corporate survival depends on ‘fit’ between values of the corporation and managers, the expectation of stakeholders in the firms and societal issues”

Question 4

What is an issue within stakeholder management and engagement?

Answer 4

• Stakeholders can threaten an organisation, increasingly dictating / pushing organisations to act how the stakeholders want
• If organisations start to focus too much on stakeholder agendas and societal changes then profit will decline which is the core objective of a business