Stakeholder reactions

Stakeholder are outside organizations,groups or individuals who have a stake in the outcomes of the organization.They depend on the organization to fulfill their objectives.The organization also depends on them to fulfill its objectives.They can shareholders,supplies,customers,competitors,government,labour unions,financial institution and presser groups.They provide political dimension to the organization's acceptability of a strategic option.
The acceptability of a strategic option depends on:

• Understanding the likely reaction of stakeholders.
• Ability to manage stakeholder reactions.

The approaches for analyzing stakeholder reaction can be :

• Stakeholder mapping :The power matrix is used to map stakeholders.Level of interest is the degree of interest in strategic option.Power ability to influence a strategic option.The acceptability of strategic options to key players is important for strategic choice.
• Game theory :It is concerned with anticipating how competitor reaction to various strategic option ti assess acceptability of strategic option.

The organization anticipates the reaction of competitors in game theory.This theory assumes :

• The competitors will behave rationally to win for their own benefit.
• The competitors is in an interdependent relationship with other competitors.