Part one

A stakeholder is any individual or group who can affect or is affected by the actions, decisions, policies, practices, or goals of the organisation (Freeman 1984, 25). They have the interests in the activities of an organization and can be divided into internal and external stakeholders. In addition, there are different levels of stakeholders: primary and secondary. The level of stakeholders depends on the political, economic and social environment. Internal stakeholders are those from within the business, e.g. managers, employees and shareholders. In the Icelandic banks, the internal stakeholders are managers, staff and employees of the Icelandic bank, and there is no doubt that the owners are the most important stakeholders among all of them. The staff and employees get the paid from company directly and do service for them, that is why they are the internal stakeholders. The external stakeholders are such as suppliers, government, financiers which influence and are influenced by organization but are not its internal part (business dictionary). The primary stakeholders are 300,000 British citizens and Icesave housing customers like David Pedrick and his wife, even though they just has a little interest in it domestic creditors are also a part of external stakeholders. The secondary stakeholders are governments, the media, the pressure groups Liberty and the communities where organizations are nearby or located like Kaupthing Singer& Friendlander which is the subsidiary company. Moreover, the strongest stakeholder is the National Council for Voluntary Organizations. Because it controls many important things and makes more decisions.

Part two
The purpose of a power/interest matrix is that helps people analyse the relative power and interest of the stakeholders and divide them into different groups on the base of the level of interest and power of them. Stakeholder analysis is part of the strategic management function of a firm. The analysis can be used for a number of purposes: identifying and managing social responsibility roles and relationships between a company and its constituents in a given or projected situation in which exchanges between the firm and external groups (Joseph W.Weiss,1994, Business Ethics,31).

This matrix shows the positions of the stakeholders, it includes four groups. At first, the stakeholders with high power and high interest who are given serious consideration in the organisation and must be key players. Secondly, the people with high power and low interest are those who should be kept satisfied and feel that they get expected returns. Additionally, the people with low power and high interest are those who are able to use a little power to affect the whole organisation and should be kept informed. Finally, the people with low power and low interest are those who have a little interest but we can not ignore them because of the potential influences they make. To sum up, owners and managers can know the relationships among the stakeholders in the company through the matrix, and ensure the strategies are suitable for their own organisation.

Matrix:
Low A: --community interest high B: --Iceland housing customers --the media --employees and staff in the bank -- some UK and Icelandic citizens, Charities --non-executive director D: -- Government group --Managers --Shareholders --Owners of bank

C: --some investors --the pressure Liberty

Icelandic

Low

Power

High

Part three
According to the situation of the Iceland bank, we can guess the approximate trend of the power and the interest of the

stakeholders in the continuing months and years. Firstly, in the next 12 months, it will probably not be changed in a significant way. In spite of everything will be changed whenever, the extent of the changing depends on the external and internal factors like business environment. Personally, one year is not enough for the bank returning such a huge number of money and keeping the bank function well-balanced at the same time. Some of staff may change their jobs to other banks. But in the next 5 years, it may have a considerable change of the power and interest of the stakeholders.

In the first place, key players who have high power and high interest need to give concernful suggestions and decisions to develop and improve the future of the organisation. If they do not think judgmatically, they will let the bank down. Furthermore, institutional shareholders who keep satisfied with high power and low interest is difficult to manage, some of them will strike when they heard about the people who keep informed with lower power and higher interest than them. Besides, the stakeholders who just

have minimal power and interest are important as well. Even if the organisation only need invest a glimpse of effort, no one has rights to ignore them. Because they play a main role in the organisation, for instance, customers are very vital for institutions to increase the profit they get.

The definition of external organizational environment is all elements existing outside the organizations boundaries that have the potential to affect the organization (Richard L. Daft,

organization theory and design, 5th Ed). The banks external environment is complex and interrelated, but it is an essential part of the bank. It can affect and change the interest and power of stakeholders by some potential influences. In order to keep the company balance and get more profit, the owners and managers should find out more useful strategies to deal with the uncertain external environment.