- 20 Marks
BMIS – L1 – QA3 – Stakeholders
Question
(a) Describe Mendelow’s power-interest matrix.
(b) Identify factors that may give substantial power to a stakeholder or a group of stakeholders in an entity, who are either inside or external to the entity.
(c) Suggest how the power-interest matrix may be used by the management of an entity as an aid to implementing a strategic change.
Answer
(a). The power/interest matrix can be used by an entity to ‘map’:
- the relative interest of various stakeholders in the decisions of the entity, and
- the power of each of these stakeholder groups to affect the outcome of those decisions.
Power is rated on a scale of 0 to 10 (low to high) on one side of the matrix and interest is also rated on a scale of 0 to 10 (low to high) on the other side of the matrix.
(b). Sources of the power of individual stakeholders or stakeholder groups include the following:
| Internal stakeholders: sources of power | External stakeholders: sources of power |
|---|---|
| Position in the management hierarchy | Control over key supplies |
| Control over strategic resources | Involvement in the implementation of the decision |
| Relevant knowledge/skills | Relevant knowledge/skills |
| Personal influence | When the government is a stakeholder |
| Ability to block a proposal (e.g. shareholders may be able to vote down a management proposal) |
(c). The matrix may be used when a change is planned. It can be used to identify, for each stakeholder or stakeholder group, the strength of their interest in the change and their power to influence its outcome.
Measures can then be taken to satisfy each stakeholder, and reduce the risk of their opposition to the planned change. In general terms the matrix provides the following recommendations:
| Power | Interest | Tactic |
|---|---|---|
| Low | Low | Minimal effort required |
| Low | High | Keep these stakeholders informed about plans and developments |
| High | Low | Make sure that these stakeholders are kept satisfied |
| High | High | Key players: these stakeholders must be given the most attention and consideration. |
- Tags: Mendelow Matrix, Stakeholder Management, Strategic Change
- Level: Level 1
- Uploader: Samuel Duah