CASE STUDY – Stakeholder Analysis

The Austrian based regional HQ of an MNC in the heavy industry wanted to boost its sales orders in a post-Soviet country. Although the MNC was assumed to be well established in the market and have a capable sales force in the country, the acquisition of new orders declined steadily. As a first countermeasure, the company’s management decided to increase the budget for sales activities in the respective market, but without tangible results.

When LM Prisk was hired to analyze and solve the problem, we restructured the problem statement and designed a more comprehensive approach. Firstly, we analyzed the market development in general to find out whether the company was in a declining, stagnating or growing market. Secondly, we analyzed the competitors’ sales expenditures and procedures. And thirdly, we carried out a thorough analysis of the MNC’s head of sales in the country. The person has a local background and seemed to be well connected with the relevant decision-making bodies. We applied our unique method which links the individual with the political system he or she is embedded in to reveal the individual’s social capital as well as the system’s volatility. In our stakeholder analyses, we collaborate with well-informed, high-level regional experts.

While the results of the overall market development and the competitors’ sales activities unveiled a growing market and even smaller sales forces of the MNC’s competitors, our stakeholder analysis revealed that the local head of sales suffered from severe shortcomings that had evolved over time. Although he scored well on our model’s scale of individual reliability, his score for stability and centrality was inadequate. Both aspects, however, are crucial as they describe how stably the person is connected and how close he or she is to the decision makers. The analysis revealed that the head of sales had lost his stable and central connections because of a recent regime change and was not capable of reconnecting to the new elites. We also identified new aspirants and established contacts between the MNC and a suitable candidate. The MNC has since been profiting from the growing market again.