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

Lantern Foods plans to close a local factory. The local community has little formal power but is strongly affected and highly interested. Using Mendelow's matrix, which approach is most appropriate?

Keep informed is the best approach. The community has high interest but low power, so regular communication and consultation fit Mendelow's matrix. Giving board seats or veto rights would overstate their power, and minimal effort would ignore their strong interest and potential to gain influence.

  1. AKeep informed, for example through regular communication and consultationCorrect
  2. BTreat as a key player with a place on the board
  3. CApply minimal effort because power is low
  4. DKeep satisfied by granting veto rights over closure

Explanation

Low power and high interest places the community in the 'keep informed' quadrant. Regular communication maintains goodwill and may prevent them gaining influence through allies such as media. Key player treatment and vetoes are disproportionate for low-power groups.

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