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

Tarn Ltd plans to close a factory. The local community was low interest and low power, but after a media campaign it becomes highly interested and organises with a trade union that has strong bargaining power. According to Mendelow's matrix, what is the most appropriate response by Tarn's management?

The group has moved into the high power, high interest quadrant, so management should treat it as a key player and engage actively, such as consulting it on the closure plans. Minimal effort or one-way information ignores its new power and risks effective opposition.

  1. ATreat the community and union as key players and engage them actively in the decisionCorrect
  2. BContinue with minimal effort since the community has little power individually
  3. CKeep the community only informed, because interest alone gives no influence
  4. DIgnore the union and focus on keep-satisfied shareholders

Explanation

The campaign raised interest and the union alliance raised power, moving the group to high power, high interest, the key player quadrant. This requires active engagement and involvement in decisions. Minimal effort or merely informing would ignore the shift and risk effective opposition.

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