LECTURE 4

Stakeholder Analysis
 Topic Outline
I. Strategic purpose
• Understanding the concepts
• Influences on strategic purposes
II. Stakeholder analysis
• Who are the stakeholders
• Stakeholder conflicts
• Stakeholder mapping
• Power
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 I. Strategic purpose
1. Understanding the concept:
• Strategic purposes refer to the purposes drive the strategy of
organization.
• Organization can express strategic purpose in different ways
including:
– Mission statement
– Vision statement
– Statement of value
– Objective
These concepts have been explained in lecture 2.
?: who influences such purposes and who monitors performance
against them?

2. Influences on strategic purpose

Figure 4.1 Influences on strategic purpose (course book)

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Influences on strategic purposes (cont)
• Governance structure: the concern is with the way in which
formally constituted bodies such as investors or boards
influence strategic purpose through the formalized processes
of supervising executive decision and actions.
• Social responsibilities and ethics refer to which purposes an
organization should fulfill; how should managers respond to
the expectations society has of the organization; both in terms
of corporate responsibility and behavior of individual within
organization.
• Stakeholder expectations: different stakeholders’ expectations
have relative influence on strategic purpose. This requires an
understanding of both power and interest of different
stakeholder groups. This can be addressed through
stakeholder analysis.
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 II. Stakeholder analysis

1. Who are the stakeholders?
Stakeholders are those individuals or groups
who depend on an organisation to fulfil their
own goals and on whom, in turn, the
organisation depends.

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Stakeholders of a large organisation

Figure 4.4 Stakeholders of a large organization (course book) 7

2. Stakeholder conflicts of expectations

Table 4.1: Some common conflicts of expectations (course book)

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 3. Stakeholder mapping

Stakeholder mapping identifies stakeholder

expectations and power and helps in
understanding political priorities.
Determining purpose and strategy – whose
expectations need to be prioritised?

Stakeholder mapping: the power/interest matrix

C D

A B

Stakeholder mapping: the power/interest matrix (Serra, 2020)

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 a. Power

Power is the ability of individuals or groups to

persuade, induce or coerce others into following
certain courses of action.

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 Sources of power

Table 4.2: Sources and indicators of power (course book)

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 Indicators of power

Table 4.5 (cont): Sources and indicators of power (course book)

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 b. Interest/Attention
Stakeholders vary in the interest they pay to the
organization and particular issues within it.
Three factors determining the interest of stakeholders:
• Criticality: Stakeholders will pay more attention to issues that are
critical for them.
• Channels: Stakeholders will pay more attention where there are
good channels of information and communication.
• Cognitive capacity: Sometimes stakeholders simply do not have
the cognitive capacity to process all the information they have.

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 Stakeholder mapping issues

Building stakeholder coalitions is at the core of strategy. Therefore,
stakeholder mapping can help in three aspects of the coalition-
building process:
•

• Analyzing who the key blockers and facilitators of a strategy are likely to be
and the appropriate response.
• Repositioning of certain stakeholders is desirable and/or feasible: for
example, to lessen the influence of a key player or, in certain instances, to
ensure that there are more key players who will champion the strategy (this
is often critical in the public-sector context).
• Maintaining the level of attention or power of some key stakeholders: for
example, public ‘endorsement’ by powerful suppliers or customers may be
critical to the success of a strategy. It may also be necessary to discourage
some stakeholders from repositioning themselves. This is what is meant by
keep satisfied in relation to stakeholders in segment C, and to a lesser extent
keep informed for those in segment B.
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 Example 1
Stakeholder mapping of Emirates Airlines

Source: IvyPanda Website, 2020

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 Example 2
Stakeholder mapping of Manchester United FC

Source: IvyPanda Website, 2020

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Essential readings:
• Chapter 5: Stakeholders and governance
Course book: Johnson, G. et al (2017). Exploring
strategy: text and cases. Harlow: Pearson.

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