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