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ACCA Applied Knowledge · Business and Technology · Stakeholders in business organisations

A company is planning a major expansion. Its bank has high power and high interest, while its employees have low power but high interest. Management has a limited budget for engagement. Which approach to stakeholder management is most consistent with Mendelow's matrix?

Management should treat the bank as a key player and involve it in the plan, while keeping employees informed. The bank has both power and interest and can block the expansion. Employees have interest without power, so communication is enough. Equal effort or focusing on interest alone ignores the matrix.

  1. AEngage the bank as a key player in the plan, and keep employees informedCorrect
  2. BSpend equal effort on both groups to treat them fairly
  3. CConcentrate on employees because their interest is highest

Explanation

The bank is a key player, so management should involve it and seek its support, as it can block the expansion. Employees are in keep informed and need communication, not equal engagement. Focusing only on interest ignores the bank's power. Equal effort ignores the matrix, which prioritises by power and interest.

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