stakeholder+analysis+-+business+strategy+(updated+version) (1)

8/10/2019 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 /

stakeholder+analysis+-+business+strategy+(updated+version) (1)

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