stakeholder+analysis+-+business+strategy+(updated+version) (1)
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Business Strategy -October 26th, 2009
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Stakeholder Analysis
Revised Version)
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Learning Outcome
Explain the significance of
stakeholder analysis as ameans of identifying the
influence of different
stakeholder groups in terms of
their power and interest.
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STAKEHOLDERS
Analysis:
Stakeholder map: relationships
and patterns of interdependence
between stakeholders
Stakeholder roles: Performance
and support
Degree of reliance: Disruption,replacement, Uncertainty
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Issues
The effect of stakeholders
Stakeholder risks
Stakeholder analysis
Stakeholder mapping
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1. Three broad types
Internalemployees &Management.
onnected
shareholders,customers, suppliers, financiers
Externalgovernment,community, pressure groups.
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Major Stakeholders Shareholders
Employees
Customers
Suppliers
Society Creditors
The Government
Competitor
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Shareholders look for
High profits
High Dividends
Long term growth
Prospect of capital gain
A say in business
A Positive Corporate image
Preferential treatment ascustomer
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Employees look for
High pay
Job Security
Good working conditions
Fair treatment
Fringe benefits Health and safety
Promotion prospects
Training opportunities
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Customer look for
Low prices
Value for money
High quality products
Good service
Innovation
Clear and accurate information
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Suppliers look for
A long term relationship with firm
Large size and high value of
contracts
Frequent and regular orders
Prompt payment
Fair prices
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State look for
Compliance with Law &
Regulations
Efficient use of resources
Employment
Payment of taxes
Contribution to the national
economy
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Creditors look for
Payment of interest on
outstanding debt
Credit worthiness of
organization
Sufficient positive cash flow tomeet obligation.
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The Community look for
Employment prospects
Safeguarding the environment
Ethical Behavior
Acceptance of social
responsibility
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2. Stakeholder risks
How stakeholders relate to the
management of company depends
very much on what type of
stakeholdersthey are, and on the
level in the management hierarchyat which they are able to apply
pressure.
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3. Stakeholder analysis
Important for the development of
knowledge and understanding about
other organizations in the firms
environment.
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Steps to take
Step 1: List all stakeholders
Step 2: position them on astakeholder map, whichindicates the main relationshipsand patterns ofinterdependence betweenstakeholders.
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Two primary
shareholder roles
Performance Role
Directly involved with adding value
SupportRole
Banks, governments supporting the
performing members.
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Stakeholders are
Those individuals or groups
who depend on an
organisation to fulfil their
own goals and on whom, inturn, the organisation
depends.
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Stakeholders of a Large
Organization
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Stakeholder Analysis (Example)
Stakeholder Objective Power &
Influence
Shareholders Share price
growth,
dividend
Election of
directors
Employees &unions
Salary, jobsecurity, job
satisfaction
Staff turnover,strike
Customers Reliable
supply, value
for money
Revenue is
derived from
customer
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Stakeholders Mapping
Stakeholder mappingis used to
assess the influence of
stakeholders.
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Stakeholder Mapping:Power / Interest Matrix
Minimal Effort Keep Informed
Keep Satisfied Key Players
HIGH
interest/aspirations
LOW
interest/aspirations
LOW
power/influence
HIGH
power/influence
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Categories of Stakeholders in terms of their
INTEREST against their LEVEL OF
INFLUENCE
MINIMAL EFFORT low interest, low
influence segment
do not have great ability
to influence strategy &
do not have much
interest in the
organisation
e.g. indirect competitors
KEEP SATISFIED
low interest, high
influence segment
must be treated with
care capable of being key
players
e.g. large institutional
shareholders
KEEP INFORMED high interest, low
influence segment
do not have great ability
to influence strategy but
their views can be very
important in influencing
more powerful
stakeholders
e.g. charities, community
representatives
KEY PLAYERS
high interest, high
influence segment
strategy must be
acceptable to them
e.g. major customer
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HOW TO ASSESS THE INFLUENCE OF
STAKEHOLDERS using Stakeholder
Mapping
TYPES STAKEHOLDERS STAKEHOLDER MAPPING
KEY
PLAYERS
KEEP
SATISFIED
KEEP
INFORME
D
MINIMAL
EFFORT
Internal
Stakeholder
s
Management
Employees
Connnected
Stakeholder
s
Shareholders /
Customers /
Competitors
Suppliers
Bankers
External
Stakeholder
s
CentralGovernment
Local Authorities
ProfessionalGroups
Pressure Groups /