Power-Interest Matrix of Stakeholders

Stakeholder Management

Stakeholder:

Stakeholders are the different groups of people who are affected by, or can have an effect upon, the company’s strategies. (Bowhill, 2008)

Stakeholders and their objectives:

Stakeholder group	Objective
Share holders	Shareholders will be concerned with the increase in wealth, i.e. future cash inflows, in the form of annual dividends and in the movement in the share price. They will also be concerned with the risk that dividends and share price will not grow at the expected rate.
Managers	Salaries, bonuses, status, security, challenge, responsibility
Employees	Probably similar issues to the managers. However, potentially employees have a different view of the impact of policies than the managers.
Customers	Quality of the product or service, the price
Suppliers	Prompt payment, consistent orders, price paid.
Leaders	Interest payments, loan repayment, security.
Government	Tax payment, provision of employment, compliance with law.
Pressure group	Compliance with interests of the pressure group
Local community	Employment opportunities, pollution of the environment.

[Source: Bowhill, 2008] 

Considering the interests and power of stakeholders:

If an organisation wished to achieve certain objectives, then it is important to take particular account of those stakeholders who have an interest in particular issues being affected by a firm’s objectives and strategies and also those with a level of power that they can exert.

In 1991, Mendelow suggested that stakeholder influence can be mapped using a power/interest matrix.

		Level of Interest
		Low	High
Level of Power	Low	A (Minimal effort)	B (Keep informed)
	High	C (Keep satisfied)	D (Key player)

Figure: Power-Interest Matrix of Stakeholders [Adopted from: Bowhill, 2008] 

Key Player (D): If an organisation has an objective and strategy that is of interest to a particular set of stakeholders who also have the power to prevent or impede its successful implementation, then the organisation needs to recognize these stakeholders as key player. The organisation will need to consider how to deal with these key players in order that its objectives can be achieved.

Minimal effort (A): If stakeholders have little power and/or influence then it is possible that the oranisation will need to make minimal effort to take account of their objectives

Keep satisfied (C): Where stakeholders have high power, though little interest in specific objectives, then it is necessary to keep these stakeholders satisfied.

Keep informed (B): Where the stakeholders have low power, but high interest, it is necessary to keep them informed.

Bibliography:

Bowhill, B. (2008), Business Planning and Control: Integrating Accounting, Strategy, and People, England: John Wiley & Sons Ltd.