ACCA Applied Knowledge · Business and Technology · Stakeholders in business organisations
Hartley plc's institutional investors hold 40% of its shares and follow the company closely. A new competitor-friendly regulation will soon be debated and Hartley's employees, previously low in interest, become strongly concerned about job losses. Their union has little formal power. Which pair of placements is most consistent with Mendelow's matrix?
Institutional investors are key players because they hold high power and high interest, while employees are in the keep informed quadrant because their interest has risen but their union has little power. Management should engage investors closely and communicate regularly with employees.
- AInstitutional investors as key players; employees as keep informedCorrect
- BInstitutional investors as keep satisfied; employees as key players
- CInstitutional investors as keep informed; employees as minimal effort
- DInstitutional investors as key players; employees as keep satisfied
Explanation
Investors holding 40% have high power and high interest, so they are key players. Employees now have high interest but the union has little power, so they sit in 'keep informed'. Option B wrongly gives employees high power.
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