Page 18 - CIMA MCS Workbook February 2019 - Day 1 Suggested Solutions

CIMA FEBRUARY 2019 – MANAGEMENT CASE STUDY

EXERCISE 3

Strategic decision making requires the consideration of stakeholders. How these stakeholders are
affected by or can affect strategic developments is assessed by the use of two parameters:

Stakeholder Power
Stakeholders can affect the success of a strategy, depending on whether they support or oppose
it. For example, the lack of availability of suitably skilled staff would disrupt CROWNCARE’s
strategy of “maintaining market share” via “technical innovation and product quality” potentially
resulting in lost customers, damaged reputation and brand. CROWNCARE must therefore
consider stakeholders before setting, revising or implementing strategic objectives.

Power may be assessed by considering for example:

 The status of the stakeholder
 The claim on resources that the stakeholder has
 Level of representation in the decision making process

Stakeholder Interest

CROWNCARE must ensure that its decisions do not ignore the interests of all stakeholders, not
just the shareholders of the company, for example the trade unions and associations who will be
interested to protect the best interest of their members e.g. the Varentian Dental Council

Interest may be assessed by considering for example:

• employees – require reward, job security, good working conditions

• customers – a complex area for CROWNCARE given that there are many different socio‐
demographic groups who will have a variety of demands such as fair prices, quality etc. It
would however seem that the main requirements for customers are quality, reputation and
of course “value for money”.

• suppliers – the inputs, specifically the materials, are undifferentiated (with the exception of
technological developments). Every dental practice is trying to create similar products. This
is a complex area for CROWNCARE given the processes involved in the provision of services.
The suppliers are nonetheless important and they will require payment on time, fair
negotiations, etc., some of which will be subject to contractual agreement.

• governments – imposing taxation, regulations defining which ingredients can be used,
government legislation re environmental control and charges etc.

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