ACCA Applied Knowledge · Business and Technology · Stakeholders in business organisations
Under Mendelow's power-interest matrix, a pension fund holds a large shareholding in a company but takes little interest in day-to-day operations. How should the company classify and generally treat this stakeholder?
The pension fund is high power and low interest, so under Mendelow's matrix the company should keep it satisfied. Its large shareholding gives it influence, but with little interest it needs enough attention to avoid it becoming concerned and using its power against management.
- ALow power, high interest: keep informed
- BHigh power, low interest: keep satisfiedCorrect
- CLow power, low interest: minimal effort
- DHigh power, high interest: key player, manage closely
Explanation
A large shareholding gives the fund high power, and its limited involvement indicates low interest. Such stakeholders are kept satisfied so they do not become hostile and exercise their power. Key player treatment applies only if interest were also high.
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