Managing StakeholdersEnterprise Strategy/AW/03a

Arj Wignaraja

Government Withdraws Private Sector Pensions Bill

Stakeholders Defined & Their Importance

CIMA Official Terminology: STAKEHOLDERS

Stakeholders are persons and organisations that have an interest in the strategy of the organisation. Stakeholders normally include shareholders, customers, staff, and the local community.

For an organization, one of the keys to a successful business strategy is identifying relevant stakeholders, engaging with them, and being aware of their particular needs and interests.

Example: Sources of Power in a Hospital Setting

Type of Power Example

Expertise Doctors, Anesthetists

Control over access to resources Hospital Budget Manager

Control over access to information Records Management Officer

Physical strength Porters

Preparedness to fight/confront Nurses Union Representative

Charisma Consultant

Networks or relationships Those with membership of a professional body

• Be profitableEconomic

Key Responsibilities of an Organization Towards its Stakeholders – Carroll (1991)

• Obey relevant lawsLegal

• Do what is right, just, and fair and to avoid harm.Ethical

• Be a good corporate citizenDiscretionary

A.Minimal Effort

B.Keep

Informed

C.Keep

Satisfied

D.Key Players

Mendelow Matrix – A Power/Interest Analysis of Stakeholders

Aubrey Mendelow, 1991

Low High

Low

High

Level of InterestPo

wer

Theory in Practice: Dyson Moving UK Factory to Malaysia

Wiltshire, UK Malaysia800 manufacturing jobs

£9/hour £3/hour

£114 sq m/year £38 sq m/year+67%

Stakeholder Power Interest Outlook

Casual unskilled

Non-unionised labour

Skilled union labour

R&D staff

Key managers

Local council

Central government

Customers

Power/Interest Analysis for Dyson Move -1

L L (-)

(-)

(-)

(-)

(-)

(-/+)

(-/+)

(-/+)

L H

H

H

H

H

L

L

H

H

H

L

H

H

Stakeholder Power Interest Outlook

Small shareholders

Minor fund managers

Major fund managers

Small local suppliers

National suppliers

Local press & media

National media

General public

Power/Interest Analysis for Dyson Move -2

(-)

(+)

(-/+)

L L

L

L

L

H

H

H

H

L

L

L

H

H

H

H

(-/+)

(-/+)

(-)

(-)

(-)