PSAF – L2 – Q16.3 – Stakeholder Analysis

(a) Explain stakeholder analysis in relation to public sector governance.

(b) Identify four primary stakeholders of the hospital and discuss their expectations about the hospital.

(c) Explain three tools available for conducting stakeholder analysis in the public sector.

(a)

Stakeholders in the public sector are individuals, groups, organizations, or entities that have an interest in or are affected by government policies, programs, decisions, and activities. They play a crucial role in the functioning of public sector entities and governance processes. Stakeholders in the public sector represent a diverse array of interests, perspectives, and concerns.                                                                                                                                                                                                                                                                      (b)  The stakeholders of the hospital include:

  • Governing board and management of the hospital. These are key stakeholders in decision-making, and their actions or inactions will significantly affect the operation of the hospital.
  • Staff of the hospital. These are the workforce of the hospital, including doctors, nurses, and other non-essential staff. They are key stakeholders of the hospital, and without them, the hospital cannot operate.
  • Government agencies such as National Health Services and the Ministry of Health. These are regulators and financiers of the hospital and, therefore, are important stakeholders in the governance of the hospital.
  • Clients. Patients and other clients of the hospital are recipients of the services of the hospital.                                                                                                                                                                                                                                                                                              (c)
    1. Mendelow’s Power-Interest Matrix
      The Power-Interest Matrix categorizes stakeholders based on their level of power (influence) and their level of interest in the project or decision. Stakeholders are classified into four quadrants: high power, high interest; high power, low interest; low power, high interest; and low power, low interest. This model helps prioritize stakeholders for engagement strategies based on their level of influence and interest.
    2. Position-Importance Matrix
      It’s a framework designed to manage stakeholders based on their significance and support regarding a specific matter. Stakeholders are placed within the grid based on their anticipated level of backing and relevance to the issue.
      The vertical axis rates the intensity of expected opposition or support, ranging from 1 to 5. Meanwhile, the horizontal axis measures stakeholder importance on a scale of 1 to 10 (Nutt, 2002, p113). Stakeholders deemed crucial but likely to oppose a decision or action are labeled as antagonistic and may be selected for inclusion in a focus group to address key concerns. The resulting strategies for managing the stakeholders are:
    • Antagonistic stakeholders: Much effort is required to obtain their buy-in to ensure the success of the policy or program.
    • Problematic stakeholders: These are stakeholders that oppose the policy or program strongly even though they are of low importance to the entity. This creates a strategic dilemma for the policymaker, whether to ignore them or pursue them with minimal effort.
    • Advocate stakeholders (supporters): Those who strongly support the policy or program and are of considerable importance to the entity as well. The strategy is to support the policy.
    • Low-priority stakeholders: Those whose support does not mean much since they are not important stakeholders of the entity. Much attention should not be given to them in the policymaking process.
    1. Stakeholder Salience Framework:
      Mitchell, Agle, and Wood (1997) crafted the stakeholder salience framework with the aim of aiding managers in discerning and ranking stakeholders by evaluating three key attributes: power, legitimacy, and urgency. This framework suggests that the more of these attributes a stakeholder possesses, the more salient that stakeholder is perceived by the managers. The central proposition of the model of stakeholder salience is that stakeholder salience will be positively related to the cumulative number of stakeholder attributes—power, legitimacy, and urgency—perceived by managers to be present. Power is the ability of a stakeholder to influence the outcomes of the project or the organization. Legitimacy is the perception that a stakeholder has a valid claim or right to be involved. Urgency is the extent to which a stakeholder’s demands or expectations require immediate attention.
      The salience framework is based on an ordinal scale that ranges from high to low and that helped Mitchell et al. (1997) to categorize stakeholders into seven classes: three possessing only one attribute, called latent stakeholders; three possessing two attributes, called expectant stakeholders; and one possessing all three attributes, called definitive stakeholders. In the model, a stakeholder is assigned higher salience if three attributes are perceived by a manager to be present, moderate if two attributes are perceived to be present, and lower if one attribute is perceived to be present. Moreover, a constituent is not assigned stakeholder status if no attribute is perceived by the manager to be present.