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

A retailer's major institutional shareholder has historically shown little interest in day-to-day matters. The retailer now announces a controversial plan that sharply cuts dividends, and the shareholder becomes highly concerned. What is the most appropriate interpretation using Mendelow's matrix?

The shareholder moves from keep satisfied to key player, because its power remains high while its interest has risen. It should now be managed closely, with active engagement, as it can influence the dividend decision. Stakeholder positions on the matrix change as issues change.

  1. AThe shareholder has moved from keep satisfied to key player, so should be managed closelyCorrect
  2. BThe shareholder has moved from keep satisfied to keep informed because its power has fallen
  3. CThe shareholder remains in the same category because the matrix is static

Explanation

The shareholder's power is unchanged and high, but interest has risen, so it moves from high power/low interest to high power/high interest, which is key player. The matrix is not static; positions change with issues. Power has not fallen, so keep informed is wrong.

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