Page 19 - CIMA May 18 - MCS Day 1 Suggested Solution

SUGGESTED SOLUTIONS

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 quality service provider products or suitably skilled staff
would disrupt MENTA’s strategy of “providing safe, reliable, customer‐centred transport services
that deliver excellent customer experience at a competitive rate” potentially resulting in lost
customers, damaged reputation and brand. MENTA 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
MENTA 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 Confederation of Passenger
Transport (CPT) in the UK.

Interest may be assessed by considering for example:

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

• customers – a complex area for MENTA 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 safety, reliability and
of course “value for money”.

• suppliers – again a complex area for MENTA given that there will be a wide range of
independent manufacturers. They will require payment on time, fair negotiations, etc.,
some of which will be subject to contractual agreement.

• governments – imposing restrictions on fuel efficiency, emission control and charges,
health and safety legislation, tenders and concessions etc.

Stakeholders may be categorised for MENTA as follows:

• internal stakeholders are those individuals inside the company whose objectives are likely to
have a strong influence on how it is run. Internal stakeholders for MENTA would include Directors
and management, employees etc.

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