(b) Key stakeholders
Stakeholders can be analysed using Mendelow’s power-interest matrix. This analyses
stakeholders into high or low power and interest. Management can then focus their attention on
the more significant stakeholders, especially those with high power and interest.
Government
The government can be considered a high interest stakeholder because of WG’s importance to
the Narnian economy. As the largest company on the stock market, WG is presumably an
important source of tax revenue and of jobs and the government will wish to maintain these. They
will also have an interest in the company in its capacity as regulator of the telecoms market.
The government’s power to alter laws and regulations also make it a high power stakeholder,
although its power is limited by WG’s ability to move production elsewhere in the world if they see
benefit in doing so.
Given that most of WG’s operations will still be in Narnia, they should dedicate some effort to
reassuring the government of their commitment to the country and actively managing the
relationship.
Employees
The employees will be high interest, as their jobs depend on the company’s decisions. Their
power as individuals will be very limited, particularly for the employees located in Narnia. At a time
when WG is cutting jobs, they will not have much bargaining power, and presumably WG has the
option to move even more production or abroad or even relocate to another country altogether.
On the other hand, WG will not want to alienate its workforce too badly as low morale may well
impact productivity and the performance of the company. They can try to reduce the impact of the
job losses by paying generous redundancy costs and providing reassurances as far as possible
for the remaining employees, as well as communicating the reasons for the decision and benefits
to the company as a whole.
Suppliers
WG dominates their home market and as such it is likely to be a very important customer for many
suppliers. This will make them high interest but low power. There is further evidence of this in the
fact that they seem to be following WG to the new locations where it will operate.
It is very much in WG’s interests to tell their suppliers as much as possible about what they are
doing as they do depend closely on having a reliable network of suppliers. Communication will
also make it easier for the suppliers to relocate to the new locations, which will be a significant
benefit to WG.
Shareholders
WG’s shareholders will have variable interest, depending on how large their holding in WG is as a
proportion of their total holdings. For most institutional investors, it is likely to be quite a low
proportion and therefore they will be reasonably low interest. As none of them own a substantial
proportion of WG, they will be fairly low power individually, although if they joined together to
apply pressure on a particular issue, they could have very high power, including the ability to
replace the Board.
The shareholders will mostly be concerned about the level of return from their shares so are likely
to be supportive of the move if it is likely to increase the company’s profitability.
Customers
WG’s customers can be divided into two categories – retailers who they sell directly to and the
end-user consumers who buy their product. Given WG’s scale, even the retailers are likely to be
relatively low power, and individual consumers will be very low power, as they cannot influence
WG. However, retailers may be high interest if WG products account for a substantial proportion
of their sales. End users may be high interest if they have brand loyalty to WG, and there is some
evidence of this.
However, most customers will be indifferent to the relocation of WG’s manufacturing as they will
focus on the product itself rather than where it is made. The only exception might be customers in
Narnia itself. It is possible that their move will be seen as disloyal, and could reduce brand loyalty
and domestic sales. WG could try to counteract this by publicity which stresses their continuing
Narnian roots.
Note: Credit should also be given for analysis of other relevant stakeholders. |
