Understanding Stakeholder Relations

Power$/$Interest Matrix

This matrix is based on stakeholders' power and the extent to which they are likely to show interest in the corporation$$s activities, as shown in the figure below. Numerical estimations of the two variables are made and the location of the stakeholders is plotted on the matrix.

$0$

Low

A

Minimal

Effort

B

Keep

Informed

Power $5$

High

$10$

C

Keep

Satisfied

D

Key

Players

$0510$

Low High

Level of Interest

Source: Adapted from A$.$ Mendelow, Proceedings of $2$nd International Conference on Information Systems, Cambridge, MA$,1981$ by Gerry Johnson and Kevan Scholes, Exploring Corporate Strategy: Text and Cases, Third Edition. $($London: Prentice Hall International, $1993),176-177.$

Management must formulate appropriate relationship strategies after the stakeholders are assessed and categorized. In particular, the reaction or position of $$key players$($Quadrant D$)$ towards the corporation$$s initiatives must be considered. Stakeholders in Quadrant C are the most challenging to maintain relationships with as despite their lack of interest in general, such a stakeholder might exercise its power in reaction to a particular event or corporate activity. Managers should also be sensitive to repositioning stakeholders from one quadrant to another that may be to the corporation$$s advantage or disadvantage.

Power$/$Dynamism Matrix

The power held by stakeholders and their dynamism, that is$,$ predictability, is variables used to determine the type of stakeholders influencing the corporation. The power variable is measured from $0,$ Low, to $10,$ High, on the vertical axis, and the dynamism or predictability variable is measure form $0,$ Low, to $10,$ High, on the horizontal axis. After the values for each variable have been determined for each relevant stakeholder, the stakeholders are categorized into the four quadrants. The values would also allow for positioning of the stakeholders within the quadrant.

The power$/$dynamism matrix is presented the figure below.

$0$

Low

A

Few

Problems

B

Unpredictable

but Manageable

Power $5$

High

$10$

C

Powerful but

Predictable

D

Greatest Danger

or

Opportunity

Wells Fargo Fake Accounts Scandal $(2016)1050$

High Low

Predictability

Source: Adapted from A$.$ Mendelow, Proceedings of $2$nd International Conference on Information Systems, Cambridge, MA$,1981$ by Gerry Johnson and Kevan Scholes, Exploring Corporate Strategy: Text and Cases, Third Edition. $($London: Prentice Hall International, $1993),175-176.$

There are four possible types of stakeholders:

$$ Highly predictable stakeholders with low power that present few problems $($Quadrant A$).$

$$ Unpredictable stakeholders with low power that are manageable $($Quadrant B$).$

$$ Powerful stakeholders that are predictable $($Quadrant C$).$

$$ Powerful stakeholders with low predictability that present the greatest danger or opportunity for the corporation $($Quadrant D$).$