Strategic Analysis for Eskom

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Introduction For this assignment I will be focusing on the strategic analysis of Eskom, where I will be critically reviewing Eskom’s growth strategy in line with the case study given, Eskom – is there light at the end of the tunnel. I will be making use of the different schools of thought and aligning them to the Eskom strategy. Question One It is important for an organization to know and acknowledge its stakeholders. As Louw and Venter (2008: 60) state, stakeholders are those parties who have either a direct or indirect interest in the way an organistion does business as well as in its success. They can be both internal and external and typically include employees, shareholders, customers, the community and suppliers. According to Louw and Venter (2010) an organisation’s stakeholder can be divided into primary and secondary stakeholders. Primary stakeholders are those whose continuing participation is vital to the corporation, or those who have direct and well established legal claim on an organisation’s resources, for example shareholders, creditors, employees and government. Secondary stakeholders are those groups that are affected by the organisation but not essential to its survival, or that do not have a legal claim but rather rely on non binding or ethical obligations. The process of stakeholder analysis requires: Firstly to identifying individuals and groups that can be affected by the decision and Prioritizing these individuals and groups in the decision making process. According to (University of South Africa, 2010.) the modern strategic manager has to deal with conflicting claims of different stakeholders which make strategic decisions very complex. However these decisions need to be made in order to for the organisation to take all aspects into account. And striking a balance between conflicting stakeholder interests is a fundamental challenge for any board of director (University of South Africa, 2010.). For this reason the following steps are recommended in order to incorporate stakeholders’ conflicting claims, according to (University of South Africa, 2010.) the steps are as follows: First to identify all stakeholders, then understand the stakeholders’ 2

specific claim, reconcile these claims, assign priorities to the claims and lastly to coordinate the claims with other components of the mission statement With regards to Eskom I have identified their stakeholders and their legal claim. The stakeholders of Eskom are Government, customers, employees, Eskom management, local and provincial government departments, municipalities, local business

representatives,

suppliers,

community-based

organisations,

non-governmental

organisations (NGOs), local media, farmers’ associations and affected communities. Government has legal claim and is a primary stakeholder because it is the sole shareholder in organization so they have an invested interest in the well being of the organisation, in terms of the return on investment and also for the economic development of the country. Customers are a primary stakeholder and have a legal claim as they are directly affected by the service provided by Eskom, as the consumer benefits...
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