Stakeholder Involvement By Suhel Khan

Stakeholders Stakeholders can be defined as “those groups or individuals who have a stake in, or expectation of, the organisation’s performance and include employees, managers, shareholders, suppliers, customers and the community at large” (Johnson and Scholes, 1993).

Stakeholder Analysis This is a tool that can be useful in understanding how expectations of groups and individuals influence the purposes of an organisation. In other words, a stakeholder analysis is a technique that one can use to identify and assess the importance of key people, groups of people, or institutions that may significantly influence the success of a business activity. In graphical terms stakeholder analysis can be illustrated with the use of the following Power/Interest (Stake) matrix:

Low Stake High Stake MONITOR MINIMAL EFFORT KEEP INFORMED KEEP SATISFIEDMANAGE CLOSELY Low Power High Power

Mapping Stakeholders Stakeholder Power / PotentialLow Stake/ ImportanceHigh Stake / Importance High Influence / Power Keep Satisfied – Useful for decision and opinion formulation. For example regulatory bodies need to be kept satisfied Manage Closely – Most critical stakeholder group: collaborate with closely. Low Influence / Power Monitor (minimal effort) – Least priority stakeholder group: monitor or ignore. Keep Informed – Important stakeholder group, in need of empowerment: involve, build capacity and secure interests.

The above matrix clearly classifies stakeholders in relation to the power they hold and the extent to which they are likely to show interest in the organisation’s strategies. The matrix also establishes the type of relationship which the organisation will need to establish with each stakeholder group. The above analysis can help to identify which group of stakeholders are likely to be the key blockers and facilitators of change are in relation to new business strategy formulation. This is important as managers need to identify conflicting expectations of stakeholder groups and need to construct strategies to suit their business goals and objectives and at the same time manage stakeholder expectations to ensure acceptance of the strategies which are formulated