Stakeholders + Stakeholder Mapping

Question 1

What are stakeholders?

Answer 1

Stakeholders are those who have an interest in a business and can affect or be affected by the business’s actions, objectives, and policies.

Question 2

What are shareholders?

Answer 2

Shareholders are individuals or entities that own stock in a public or private corporation, making them partial owners of the company.

Question 3

What are pressure groups?

Answer 3

Pressure groups are organised groups that attempt to influence business decisions or government policies to align with their specific interests or causes.

Question 4

What are the types of stakeholders?

Answer 4

• primary stakeholders (direct involvement)
• secondary stakeholders (indirect involvement)
• internal stakeholders
• external stakeholders

Question 5

Examples of internal stakeholders

Answer 5

shareholders, employees, managers, etc.

Question 6

Examples of external stakeholders

Answer 6

customers, suppliers, banks/investors, local community, pressure groups, government.

Question 7

Why does conflict between stakeholders occur?

Answer 7

When looking at stakeholder needs it is often difficult to appease the needs of all. This can often result in disagreements and conflicts of the two.

Question 8

Why may there be conflict between employees and managers?

Answer 8

Job security and high wages which may increase costs, versus high bonuses paid as a result of improved cost efficiency.

Question 9

Why may there be conflict between customers and shareholders?

Answer 9

Good quality products and low prices which may reduce profits, versus high profits and dividends.

Question 10

Why may there be conflict between local community/pressure groups and shareholders?

Answer 10

Reduction in the adverse impact of business activity on the environment which may increase costs, versus low costs leading to high profits and dividends.

Question 11

What is a win-lose outcome of conflict?

Answer 11

Where a company has a fixed pot of benefits to share out, and it is not possible to meet all stakeholder needs.

Question 12

What is a win-win outcome of conflict?

Answer 12

A firm aims to grow the ‘pot of benefits’ so all stakeholders share in success. This can require a long term approach.

Question 13

What is stakeholder mapping?

Answer 13

Medelow’s power - interest matrix includes the level of power and the level of interest for a range of stakeholders.

Question 14

What is the aim of stakeholder mapping?

Answer 14

It is designed to help manage stakeholder’s conflicting interests.

Question 15

What does the position of the stakeholder depend on?

Answer 15

Their relative power and interests in current business operations.

Question 16

What are the different quadrants in stakeholder maps?

Answer 16

• low interest low influence: monitor
• low interest high influence: keep satisfied
• high interest low influence: keep informed
• high interest high influence: manage closely

Question 17

Why might interest be high for a stakeholder?

Answer 17

• staff have a personal, financial, or career investment in the business.
• there are few alternatives.
• official bodies (councils) are accountabel for actions.

Question 18

What might power depend on?

Answer 18

• status, pay, reputation, social standing.
• claim on resources in terms of size of budget/department.
• extent of represenation in meetings.

Question 19

How should a business interact with the low interest high influence quadrant of stakeholders?

Answer 19

KEEP SATISFIED
Keep this group satisfied in order to avoid them gaining more interest and shifting to the high interest high influence quadrant.
This could be by informing them of the likely outcomes of any changes in advance, or for shareholders, giving a positive dividend forecast.

Question 20

How should a business interact with the high interest high influence quadrant of stakeholders?

Answer 20

MANAGE CLOSELY
Key players could be major supporters or opponents, that will influence the business’s level of success. Extensive communication needed to assure them of necessity of decisions.

Question 21

How should a business interact with the low interest low influence quadrant of stakeholders?

Answer 21

MONITOR
Lack of interest means they are more likely to accept decisions, so minimal effort needs to be devoted to managing expectations.

Question 22

How should a business interact with the high interest low influence quadrant of stakeholders?

Answer 22

KEEP INFORMED
Stakeholders are interested but lack power in realtion to decisions. Rational explanations would be required, and proactive communication. Evidence of consultation may placate them.

Question 23

What are the benefits of effective communication and consultation?

Answer 23

• discussion can help shape support for projects.
• working with powerful stakeholders can improve chance of success.
• active communication can help manage expectations.