Question

How do management techniques for high-priority stakeholders differ from those of low-priority stakeholders? Give examples.

Answer 1

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It is important for the management of any company to prioritize the needs of the stakeholders as provided by the stakeholder theory. Management re categorizes different stakeholders on the basis of priority where they categorize the stakeholders on the basis of:-

1. High power high-interest factor

2. High power low-interest factor

3. Low power high-interest factor

4. Low power low-interest factor

This means that the main focus of any company should be the factor of high power and high interest. This is due to the fact that these stakeholders are the ones that provide the most valuable resources to the company. This could include sponsors and especially in the case of such stakeholders, businesses should include the factor of high priority as well as returns to them. The least important factor is the factor of low power and low interest. This does not mean that the company forget about these stakeholders but, their interests need not be prioritized over the needs of the other stakeholders. Management style plays a big role in this process especially when they need of the most important stakeholders is considered. Management needs to be able to respond to changes in the priorities of this stakeholder and need to be able to make quick changes to their function as well as their structure and their culture.