Understanding the role and importance of stakeholders

10.2 Stakeholder mapping

In 1991, Mendelow devised a way of analysing the key stakeholders for a specific business. To do this he used the matrix method to measure stakeholder power against stakeholder interest.

There are four stakeholder categories in the matrix:

• Low power, low interest
• Low power, high interest
• High power, low interest
• High power, high interest

 The essence of the analysis is to assess the specific circumstances of particular businesses and only then decide which stakeholders fall into which category. 

The value of this categorisation is that it helps in setting priorities. As shown in the figure above, the company works hardest to stay in constant communication with high power, high interest stakeholders.

10.3 Overlapping and conflicting stakeholder needs

Certain business circumstances may be to the advantage of all primary stakeholders. If, like Primark, your business concept is working successfully overseas, there are benefits to staff (promotion prospects), the board (bonuses), suppliers, shareholders, financers and distributors. Even among external shareholders there are potential benefits to Inland Revenue and the wider community. Perhaps the only negative comments mighr come from environmental pressure groups.

However, this is not often the case. Most often, different stakeholders seem unable to stop taking advantage of any of each others weaknesses. Lloyds attempted to benefit their shareholders at the cost of the government and the taxpayer, showing clearly where their stakeholder priorites lay. They were fined £105m.

10.4 Influences on the relationship with stakeholders

One infuence…