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

Brightway Ltd is a charity-funded training provider. Its main donor, which provides 80% of funding, has low interest in day-to-day operations but would withdraw funds if outcomes fell. Management begins sending the donor only an annual report. Which assessment is most accurate?

The approach is broadly appropriate. The donor has high power from supplying most funding but low interest, so Mendelow's matrix suggests keeping it satisfied with outcome reporting, while watching for increased interest if performance falls. Ignoring the donor would be risky and daily involvement is unnecessary.

  1. AAppropriate: the donor is high power and low interest, so keeping satisfied with outcome reporting is suitable, though monitoring for rising interest is neededCorrect
  2. BInappropriate: the donor is low power and should receive no communication
  3. CInappropriate: the donor is a key player who must join daily management decisions
  4. DAppropriate: since interest is low, the donor can be ignored entirely

Explanation

Funding of 80% gives the donor high power; low interest places it in 'keep satisfied'. Outcome reporting suits this, but because power is high, any fall in outcomes could raise interest, so monitoring is needed. Ignoring it or involving it daily are both wrong.

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