1.5.2 Stakeholder Power, Conflict & Mendelow's Matrix
Every strategic decision creates winners and losers. Master the art of stakeholder analysis to navigate conflicts and prioritize engagement using Mendelow's Power-Interest framework.
The Stakeholder Conflict Framework
Why Conflicts Arise
Finite Resources
Higher dividends = Less reinvestment in wages/R&D
Competing Priorities
Growth (employees) vs Profit (shareholders)
Short vs Long-Term
Quick returns vs Sustainable expansion
Classic Conflicts
Shareholders vs Employees
High dividends vs High wages
Business vs Community
Factory expansion vs Noise/pollution concerns
Customers vs Suppliers
Low prices vs High procurement costs
Mendelow's Matrix: Strategic Prioritization
High Power / High Interest → KEY PLAYERS
Manage closely. Constant engagement. E.g., Major investors, Government regulators
High Power / Low Interest → KEEP SATISFIED
Prevent disengagement. E.g., Dormant shareholders, Regulatory bodies
Low Power / High Interest → KEEP INFORMED
Regular communication. E.g., Community groups, Employee unions
Low Power / Low Interest → MONITOR
Minimal effort. E.g., Distant suppliers, General public
Exam Success Framework
For Analysis Questions: Always explain the chain of consequences. "Higher dividends → Less retained profit → Reduced R&D investment → Long-term competitiveness declines."
For Evaluation Questions: Use Mendelow to prioritize. "While community concerns matter, the Government (High Power/High Interest) ultimately controls planning permission, making them the most important stakeholder to satisfy."
Context Matters: A tech startup prioritizes growth over profit; a mature utility company prioritizes stable dividends. Stakeholder management depends on industry life cycle.
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