Stakeholder Impact Analyses

The use of analytical tools and techniques to analyze the effect of business decisions on stakeholders

What are Stakeholder Impact Analyses?

Stakeholder impact analyses or stakeholder analyses refer to the use of analytical tools and techniques to analyze the effect of business decisions on stakeholders.

 

Stakeholder Impact Analyses

 

Understanding Stakeholder Impact Analysis

Stakeholder impact analysis uses analytical tools and techniques to quantify and analyze the effect of business decisions on the stakeholders of the business. It is a key task for the management of a company. It is used to formulate business strategy and make production, distribution, and final sales-related decisions. Common frameworks used to evaluate stakeholder impact analyses include the following:

  1. Mendelow’s Power-Interest Grid
  2. Bourne and Kasprczyk Stakeholder Circle
  3. Murray-Webster Simon 3D Cube

 

Mendelow’s Power-Interest Grid

 

Stakeholder Impact Analyses - Mendelow’s Power-Interest Grid

 

Mendelow’s Power-Interest Grid categorizes stakeholders on the basis of two key characteristics: Power over the business and Interest in the business. Power can be defined as a stakeholder’s ability to influence the core structure of the business. It includes the ability to make key business decisions such as overall strategy and resource allocation.

Interest can be defined as the degree of correlation between the stakeholder’s aims and ambitions and the business’ aims and ambitions. For example, the CEO of a business has a lot of interest in the business and also has a lot of power over the business. The government may have very little interest in the business but may hold a lot of power over the business.

 

Bourne and Kasprczyk’s Stakeholder Circle

 

Stakeholder Impact Analyses - Bourne and Kasprczyk’s Stakeholder Circle

 

The Bourne-Kasprczyk Stakeholder Cycle seeks to first define a company’s overall culture and then uses that culture to analyze how a decision will impact the company’s shareholders.

The introduction of stakeholder relationship management practices and processes in an organization may be affected by four types of cultures, which include organizational, professional or industry, national/regional, and generational cultures.

 

Murray-Webster-Simon 3D Cube

 

Stakeholder Impact Analyses - Murray-Webster-Simon 3D Cube

 

The Murray-Webster-Simon Power-Interest-Attitude Cube is an extension of Mendelow’s Power-Interest Cube. The Murray-Simon-Webster Cube applies Mendelow’s mapping to a specific business project while incorporating the additional dimension of attitude.

The Murray-Simon-Webster Cube approach categorizes stakeholders on the basis of three key characteristics: Power, Interest, and Attitude. Power, as previously noted, is defined as a stakeholder’s ability to influence the core structure of the business. It includes the ability to make key business decisions such as overall strategy and resource allocation.

Interest is defined as the degree of correlation between the stakeholder’s aims and ambitions and the business’ aims and ambitions. Attitude is a project-related measure that can be defined as a stakeholder’s attitude toward a specific project.

 

Murray-Webster-Simon 3D Cube - Interpretation

 

Additional Resources

CFI offers the Financial Modeling & Valuation Analyst (FMVA)™ certification program for those looking to take their careers to the next level. To keep learning and advancing your career, the following CFI resources will be helpful:

  • Competitive Advantage
  • Operations Management
  • Stakeholder vs Shareholder
  • Types of Businesses

CFI's Corporate & Business Strategy Course

Learn to perform Strategic Analysis in CFI’s online Business Strategy Course! The comprehensive course covers all the most important topics in corporate strategy!