3. An Organisation's Stakeholders Flashcards
What is a stakeholder?
Any person or institution that is affected in any way by an organisation.
What are the three types of stakeholder?
- Internal stakeholders
- Connected stakeholders
- External stakeholders
Who are internal stakeholders?
Those who are inside the organisation.
E.g. employees, managers.
Who are connected stakeholders?
Those who are outside the organisation, but are connected by a contract or similar.
E.g. suppliers, customers, shareholders, lenders.
Who are external stakeholders?
Those entirely outside the organisation with no contractual relationship.
E.g. people living near a factory, the government.
Why is the study of stakeholders important?
Because they usually want conflicting things.
It is important to be able to balance each stakeholder’s needs and get them to compromise.
Give some examples of what may happen when stakeholders stop cooperating.
- Workers may strike.
- Customers won’t buy products.
- Local populace may push for government regulations.
- Director’s may give themselves larger bonuses despite being agents of the shareholders.
What is the agency relationship?
The relationship between shareholders (the principals) and the directors (the agents).
It is the legal duty of agents to act in the best interests of the principals, but it is tempting for directors to put themselves ahead of the shareholders.
What is Mendelow’s matrix?
A model for the analysis of stakeholders.
What are the two axes in Mendelow’s matrix?
Level of interest
How likely it is that a stakeholder will take action.
Power
How able a stakeholder is to influence a change.
What are the four quadrants of Mendelow’s matrix?
Power:Level of interest
- Low:Low Minimal effort.
- Low:High Keep informed.
- High:Low Keep satisfied.
- High:High Key player.
