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Questions and Answers
What is the primary factor that determines which stakeholder's needs are more important in a conflict?
What is the purpose of Mendelow's power-interest matrix?
What is the result of plotting each stakeholder on the power-interest matrix?
Why is it important to identify the dominant stakeholder in a conflict?
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What is the primary purpose of stakeholder mapping?
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What is the result of a stakeholder having a high level of power and interest in a decision?
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What is the term for stakeholders who have a high level of power, but a low level of interest in a decision?
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What is the term for stakeholders who have a low level of power, but a high level of interest in a decision?
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Why is it important to manage stakeholder relationships effectively?
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What is the primary source of power for employees in a conflict with management?
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Study Notes
Stakeholders in Business Organisations
- Stakeholders can be internal, external, or connected to the organisation
- External stakeholders tend to have no direct link to the organisation but can influence or be influenced by its activities
External Stakeholders
- The community at large can be a stakeholder, especially if their lives are affected by the organisation's decisions
- Environmental pressure groups may stage protests or 'sit-ins' if they feel the organisation is harming the environment
- Governments are stakeholders as they provide legislation and regulations that organisations must follow
- Trade unions take an active part in the decision-making process to ensure employees' interests are represented
Characteristics of Stakeholders
- Stakeholders have diverse objectives and needs that must be taken into account by the organisation
- Stakeholders can have conflicting objectives, such as employees vs managers, customers vs shareholders, and the general public vs shareholders
Managing Stakeholder Expectations
- Organisations must manage stakeholder expectations and needs to maintain productive business relationships
- The Mendelow framework can be used to identify the dominant stakeholder(s) and their needs
- The power-interest matrix can be used to plot stakeholders according to their power and interest in a particular decision
Mendelow's Power-Interest Matrix
- The matrix is used to identify the dominant stakeholder(s) and their needs
- The matrix plots stakeholders according to their level of power and interest in a particular decision
- The four quadrants of the matrix are:
- Low power, low interest: minimal effort required
- Low power, high interest: keep informed
- High power, low interest: keep satisfied
- High power, high interest: key players
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Description
Identify and understand the different types of stakeholders in a business organisation, including external stakeholders and their diverse objectives.
