ExpertStakeholders in Business Organisations
Learning outcomes
- Categorise stakeholders into internal, connected, and external groups.
- Apply the Mendelow Matrix to manage stakeholder conflicts.
Who are Stakeholders?
A stakeholder is any person or group that can affect, or is affected by, the actions of an organisation.
Categories of Stakeholders
- Internal: Employees, management. (Inside the firm)
- Connected: Shareholders, customers, suppliers, financiers. (Direct contractual relationship)
- External: Government, local community, pressure groups. (No direct contract, but impacted by or impacting the firm)
Which of the following is considered a 'connected' stakeholder?
Shareholders: Internal or Connected?
Students often classify shareholders as 'internal' because they own the company. For ACCA BT, shareholders are connected stakeholders because they provide capital but usually do not work inside the day-to-day operations.
Mendelow's Matrix
Stakeholders often have conflicting interests (e.g., employees want higher pay; shareholders want higher dividends). Mendelow's Matrix helps management decide how to treat different stakeholders based on two variables: Power and Interest.
- Low Power, Low Interest: Minimal effort.
- Low Power, High Interest: Keep informed.
- High Power, Low Interest: Keep satisfied.
- High Power, High Interest: Key players (manage closely).
According to Mendelow's Matrix, how should a company manage a stakeholder with High Power and High Interest?
Applying Mendelow
In the exam, you will be given a scenario (e.g., a major institutional investor). You must assess their power (high, due to voting rights) and interest (high, due to financial stake) to classify them as 'Key Players'.
A major bank provides 80% of a firm's debt financing but rarely interferes in daily operations. How should the firm treat the bank?
Which stakeholder conflict is most likely to occur during a period of corporate cost-cutting?
An environmental pressure group is campaigning against a mining company. They are classified as:
Ready to put this into practice?
Ready to test yourself?
ACCA BT — Business & Technology Practice Exam 3
Premium mock exam replication for ACCA Business and Technology (BT). This exam mirrors live computer-based testing parameters, featuring 46 Objective Test Questions (Section A) and 6 Multi-Task Questions (Section B). It covers the complete syllabus: Business Organization, Structure & Governance, Technology & Regulation, Leadership, Personal Effectiveness, and Professional Ethics.