CHAPTER TWO

MANAGEMENT OF STAKEHOLDERS

2.1. The Concept of Stakeholder

The first challenge that stakeholder theory poses to management is the definition of who or what
is a stakeholder. According to Freeman (1984), the first reference to the word stakeholder in
management literature can be traced back to an internal memorandum at the Stanford Research
Institute published in 1963. In that document, a stakeholder is defined as “those groups without
whose support the organization would cease to exist”. Since then, the notion of a stakeholder has
become both a term of discussion and an integrating element of consideration in managerial
decision-making. In Freeman‟s widely used definition, a stakeholder is any group or individual
that can affect or is affected by the realization of an organization‟s purpose. In an analysis
developed by Kaler (2002), diverse stakeholder definitions can be classified into three different
groups: Claimant definitions are those that consider a stakeholder to include any group or
individual with a role-specific, strong or weak, morally legitimate claim to have their interest
served by an organization. Influencer definitions consider a stakeholder to comprise those groups
or persons that can influence or be influenced by the organization. And combinatory definitions
as the name implies combine to some extent both claimant and influencer definitions Beyond the
definition of a stakeholder which tends to be a theoretical discussion the identification and
categorization of stakeholders appears as a second challenge to the practical management of
stakeholders.

Another crude distinction is based on involvement in the value chain. Stakeholders that are
directly involved in a company‟s value chain are employees, customers, suppliers, and investors,
while stakeholders outside of the value chain can consist of environmental groups or community
organizations, e.g., Wheeler and Sillanpää (1997) developed an extension to this primary-
secondary distinction, adding the social and non-social dimension. As a result, they offer four
categories: primary social stakeholders (shareholders, investors, employees, managers,
customers, local communities, suppliers, and business partners); secondary social stakeholders
(government, social pressure groups, trade bodies, civic institutions, media and academic
commentators, and competitors); primary nonsocial stakeholders (natural environment, future
generations, and non-human species); and finally secondary non-social stakeholders
(environmental pressure groups, animal welfare organisations). Although such a differentiation is
fairly easy to make, it does not necessarily reflect the importance of a stakeholder. A secondary
stakeholder external to the value chain, social or even non-social, is not less powerful or
influential.

A stakeholder is a party that has an interest in a company and can either affect or be affected by
the business. The primary stakeholders in a typical corporation are its investors, employees,
customers, and suppliers. However, with the increasing attention on corporate social
responsibility, the concept has been extended to include communities, governments, and trade
associations.

Stakeholders in a business include any entity that is directly or indirectly related to how a
company operates, whether it succeeds, or if it fails. First the owners of the business. These can
include actively-involved owners as well investors who have passive ownership. If the business
has loans or debts outstanding, then creditors (e.g., banks or bondholders) will be the second set
of stakeholders in the business. The employees of the company are a third set of stakeholders,
along with the suppliers who rely on the business for its own income. Customers, too, are
stakeholders who purchase and use the goods or services the business provides.

 A stakeholder is an individual or group that has a legitimate interest in a company,

organization, or business.
  A stakeholder is someone who is affected by your performance. They could be
adversely or positively affected by your actions, and therefore have an interest in what
you do.

2.2. Potential Stakeholders

A stakeholder has a vested interest in a company and can either affect or be affected by a
business' operations and performance. Typical stakeholders are investors, employees,
customers, suppliers, communities, governments, or trade associations.

 Shareholders: have an interest in business operations since they are counting on the
business to remain profitable and provide a return on their investment in the business.
Shareholders are focused on a strong performance to maximize the returns on their
investments. Traditionally, many businesses have followed a shareholder centric business
 model, but increasingly are realizing that a broadening focus on all stakeholders makes
better long-term business sense. Shareholders: as owners are interested in knowing the
profitability of the business transactions and the distribution of capital in the form of
assets and liabilities.

 Management:

In small businesses, management may include the owners. In huge organizations, however,
management is usually made up of hired professionals who are entrusted with the responsibility
of planning and controlling day to day operation of the business. They act as agents of the
owners.

Managers are focused on project management and how individual elements or departments of the
business are run. The degree of autonomy they have, level of influence over their teams, and
support they are given to perform their roles are their key priorities.

The board of directors is interested in maximizing the profit the business makes and achieving a
return for investors. Efficient business operations are therefore a prime focus for them.

Example Investors are internal stakeholders who are significantly impacted by the associated
concern and its performance. If, for example, a venture capital firm decides to invest $5 million
in a technology startup in return for 10% equity and significant influence, the firm becomes an
internal stakeholder of the startup. The return on the venture capitalist firm's investment hinges
on the startup's success or failure, meaning that the firm has a vested interest.

 Potential Investors:
An individual who is planning to make an investment in a business would like to know about its
profitability and financial position. An analysis of the financial statements would help them in
this respect.

 Creditors:

As creditors have extended credit to the company, they are much worried about the repaying
capacity of the company. For this purpose they require its financial statements, an analysis of
which will tell about the solvency position of the company.

 Creditors that supply financial capital, raw materials, and services to the business
want to be paid on time and in full.

 Government:

Governing bodies of the state, especially the tax authorities, are interested in an entity's
financial information for taxation and regulatory purposes. Accounting data are required for
collection of sale-tax, income-tax, excise duty etc.Federal, state, and local governments need
businesses to thrive in order to pay taxes that support government services such as education,
police, and fire protection.

 Employees:

Like creditors, employees are interested in the financial statements in view of various profit
sharing and bonus schemes. Their interest may further increase when they hold shares of the
companies in which they are employed.
  Researchers:

Researchers are interested in interpreting the financial statements of the concern for a given
objective.

 Customers:

Customer or clients may become interested in knowing whether a company is capable of

continuously providing their needs. This happens when a customer uses the goods from a
particular company as raw materials or supplies in his own business or when he is heavily
dependent upon the goods or services of the company.

 . Society as a whole (as well as the local community) is concerned about the impact that
business operations have on the environment in terms of noise, air, and water pollution.
Society also has an interest in the business with regard to the safety of the goods and
services produced by the business. The local community has a stake in the business
because it provides jobs, which generate economic activity within the community

 Suppliers need the business to continue to buy their products in order to maintain their
own profitability and long-term financial health.

In summary, users of the business (stake holders)basically fall in to two broad

categories: Each has their own set of priorities and requirements from the business.

Internal (primary) stakeholders

  It refer to the members of a company's management and other individuals who use
information in running and managing the business.

A company‟s employees, managers and board of directors make up a business‟s internal

stakeholders. Employees of the company are invested in the company‟s performance to ensure
they continue to be paid and retain their jobs. Depending on the nature of the business,
employees may also have a health and safety focus. For many, alignment between their own
sense of purpose and the aims of the business is also important.

1. Internal stakeholders are groups or people who work directly within the business, such
as managers, employees, and owners.The internal users of a business include all
individuals within the company who utilize financial information in making decisions for
the business.

 Managers and employees want to earn high wages and keep their jobs, so they have a
vested interest in the financial health and success of the business.

 Owners want to maximize the profit the business makes as compensation for the risks
they take in owning or running a business.

Internal users include all levels of management (top, middle and lower level management), it is
usually called Management group.

Example:

CEO, head departments, supervisors etc

External (secondary) stakeholders

 External stakeholders are groups outside a business or people who don‟t work inside
the business but are affected in some way by the decisions and actions of the business.

 External users are entities or individuals who do not participate in running or managing
the business but are interested in the financial information of the company.

 Unlike internal users, they do not make decisions for the business.

 In other words, an external user is a person outside of an organization who does not
directly run its operations and uses financial or accounting information about that
company to make decisions.

 Examples of external stakeholders are customers, suppliers, creditors, the local

community, society, and the government. Customers want the business to produce quality
products at reasonable prices.

Example: creditors (E.g. Bank), potential investors, government, researchers/financial analyst ,

customers and usually employees

Customers want to receive the best possible product or service. They may also want to see the
business making a positive contribution to society and reducing its impact on the environment.
Suppliers want to see increased demand for the business‟s products or services so that there is
greater requirement for their own.

Governments and regulatory bodies want the company to follow laws, employ more people and
uphold good financial practice to support the economy.

Communities look upon the business as a source of local employment, supplier of local goods
and services, and purchaser of local materials. They are also invested in the impact the business
has on the immediate environment and its involvement in community projects.

We can further classify external users in to two sub groups as:

1. External users with direct interest

2. External users with indirect interest

External users with direct interest:

 users who do not have direct involvement in managing the business but they provide
finance to the business.

They are also called Financing group.

Example: shareholders/owners and creditors

 External users with indirect interest:

  users neither involving in managing the businesses nor supplying finance to the
business but they are stakeholders(having an interest in the affairs of the business
activities).

They are also called Public group.

Example: Government, customers, researchers, media etc

2.3. Stakeholder Management

Stakeholder management is the process of maintaining good relationships with the people who
have most impact on your work. Communicating with each one in the right way can play a vital
part in keeping them "on board."

Stakeholder management refers to the practice of identifying and organizing your stakeholders
by priority and developing a plan to engage with them. When you read a project manager‟s job
description, stakeholder management frequently occurs. As we move from product ideation
to product launch, stakeholders strongly influence decision-making. Maintaining good
relationships with stakeholders becomes essential, and that‟s when stakeholder management
comes into play.
Stakeholder management is determining, organizing, prioritizing, and engaging stakeholders all
through the product development process.

Stakeholder management helps improve your relationship with your stakeholders as a product
manager or product team. Excellent stakeholder management will allow you to coordinate your
transactions and evaluate the quality of your relationships with various stakeholders.

It‟s an integral part of product management because stakeholders—individuals or groups who

can influence the success and execution of a project or the product itself—play a significant part
in its life cycle.

Traditional stakeholder management is a four-step procedure. Identifying stakeholders,

determining their influence, developing a communication management plan, and engaging
stakeholders are steps in the process. Stakeholder management is the process by which you
organize, monitor and improve your relationships with your stakeholders. It involves
systematically identifying stakeholders; analyzing their needs and expectations; and planning and
implementing various tasks to engage with them. A good stakeholder management process will
be the means through which you are able to coordinate your interactions and asses the status and
quality of your relationship with various stakeholders.

Most definitions of stakeholder management tend to focus around the idea that you can “manage
your stakeholders (in order to get them to do what you want)”. The emphasis is placed on
creating a stakeholder management plan that maps the level of interest and influence of
stakeholders and list various levels of engagement for the different groups. A plan that is usually
created at the start of the project and then filed away to gather dust.

This guide takes a different focus. We‟re not going to show you how to herd sheep, put them in
neat little pens and then pretend that they are all heading in the direction you want. In most cases
there is a legal and a strategic objective to undertaking stakeholder engagement/consultation/
management. You might have a statutory or legal requirement to consult. And you hopefully
have a clear idea of the strategic benefits you might derive from doing it well. This guide will
show you how you can achieve both those objectives.

2.4. Significance of Stakeholder Management

For a product‟s overall success, it‟s critical to identify the right people and groups, develop a
deep understanding of stakeholders, and manage engagement with them. Furthermore, key
stakeholders have significant control over resources, budgets, and other critical components
required to bring a product to market. Product managers should strategically employ product
management processes to bring vital stakeholders aboard. It establishes trust, strengthens
interpersonal and team relationships, and aligns a product concept with strategic goals. Effective
stakeholder management can also boost team collaboration and knowledge sharing. With the
increased involvement of law enforcement and contracts, a systematic stakeholder management
process becomes critical to any organization.

A vital part of running a successful project is to develop and maintain good relationships with
those communities who will be affected and other stakeholders. Investing time in identifying and
prioritising stakeholders and assessing their interests provides a strong basis from which to build
your stakeholder engagement strategy. An in-depth understanding of your stakeholders
supported by a sound engagement plan that is strategic, clear and prioritised help you develop
and maintain relationships with those affected, mitigate risks, align business goals and eliminate
delays.

Companies that have grasped the importance of actively developing and sustaining relationship
with the affected communities and other stakeholders are reaping the benefits of improved risk
management, increased stakeholder support, and better outcomes on the ground. Good
stakeholder management also brings in „business intelligence‟. Understanding stakeholder
concerns and interests can lead to ideas for products or services that will address stakeholder
needs; and allow the company to reduce costs and maximize value.

Reputation
Competitive advantage
Corporate governance
Risk management
Social license to operate

2.5. Key Processes of Stakeholder Management

Here are five steps involved in a basic stakeholder management process:

Stakeholder Identification

You must first outline who your key stakeholders are. Furthermore, segregate them into their
groups or constituencies. It is crucial to note that stakeholders from the same group may not hold
similar opinions or preferences.

Before the management can begin with multiple processes within a project, identification is
essential. The identification includes an initial brainstorm investigating all stakeholders who are
potentially affected by any decision throughout the project. Stakeholders can be businesses,
companies, individuals or educational industries; therefore, spending a sufficient amount of time
on the identification process is fundamental. The following questions should be asked during the
brainstorming session to embark on the identification process

Who is the suppler of the project?

Who is the customer?
Who influences the main stakeholders?
Who can be affected by the project?
Who is working towards solving the project?
Who has the decisions over resources?
Who is ultimately in charge of the success of the project?
Once these questions have been answered, the stakeholders can be classified and analysed.

The identification process is the basis for any Stakeholder Manager in the beginning of a project,
program or portfolio. Therefore, this process should be conducted with known stakeholders
before an analysis process can begin. Thereafter, the analysis of individual stakeholders can
commence.

Stakeholder Analysis

Once you have identified and grouped your stakeholders, it‟s time to determine their
interests. During stakeholder analysis, try to gauge how much influence a particular group has
and how your project influences them in return. All information related to their needs, triggers,
and influence is essential.

The analysis looks at an in depth classification of individuals in order to find the most relevant
for certain situations. This is conducted to aid the Stakeholder Manager within the project in
scenarios such as:

- Disruptions of the project due to a stakeholder

- Key stakeholders to inform about critical decisions

- Communication method

- Reducing negative impacts of certain stakeholders

- Timeline for completion of events

- Resources needed from stakeholders

Managing these and engaging key stakeholders is a tool that creates a successful project. The
stakeholders can be analysed using a variety of processes. Three of which are shown here.

Power/Interested Grid

One method is the Power/Interested Grid. By classifying each stakeholder by power over work
or interest over work.

High power, interested people: Stakeholders who hold the most power over a project and you
must make the largest effort to satisfy. These Stakeholders are extremely important as they are
engaged within the project but also have the influence to close down or input with more
resources. Hence, keep these stakeholders as satisfied as possible.

High power, less interested people: Stakeholders who hold the most power but are not that
engaged within the project. Equally as important as the prior stakeholder in regards to power but
these are not highly interested within the project at hand. You should keep these satisfied but
weekly meetings and messages are more relaxed.
Low power, interested people: Stakeholders who do not have the power over the project but are
highly keen on the outcome or issues that may arise. The Stakeholders who are interested but
low in power may aid the project in multiple ways as they will be involved. Important to note
that these stakeholders are often from outside businesses and although resources might be limited
to begin with, investments are frequent as projects come to completion.

Low power, less interested people: Stakeholders with little power and are no interested with the
project at hand. These Stakeholders are the least important but they should still be monitored and
analysed for future reference incase they move into a different position.

Stakeholder Interest and Impact Table

A second process for stakeholder analysis is to use a Stakeholder Interest and Impact Table. The
table takes all the stakeholder identified in step one, lists them on the left hand-side of the table
then remarks all interests of said stakeholder. Once all interests are listed, a project impact rated
from low-high with a + or - is given. The impact noted gives an integer priority number from 1 -
n, with 1 being the most influential stakeholder. From the analysis section, stakeholders need to
stay engaged. The following section explains how to engage all stakeholders and how influential
the commitment of stakeholders outlines a project.
Figure 3: Stakeholder Interest and Impact Table with an example

The table gives an overview of which stakeholder has the highest priority based on their interests
and how that impacts the project. If the estimated project impact for all the interests are high then
the priority should also be high and visa versa.

Salience Model
The Salience Model looks at the The degree to which managers give priority to the competing
stakeholder claims. The priority of analysis is based on 3 factors; Power, Legitimacy and
Urgency. Power is a social factor where Stakeholder A can force Stakeholder B to do something
that they would not have otherwise done. Legitimacy is how appropriate a stakeholder‟s desires
and actions are based on social norms, beliefs and definitions. Urgency is how fast the
stakeholder acts upon an immediate decision or action. If the stakeholder is one out of three of
the factors, this is known as a latent stakeholder, making them low on the salience scale. If they
have 2 attributes, the stakeholders are known as expectant. These are medium on the salience
scale. If the stakeholder has power, legitimacy and urgency they are a definitive stakeholder with
the highest salience. The Venn Diagram below represents the Salience Model.
Once the stakeholders are all defined via a Salience Model, the definitive stakeholders should
have the highest priority. The next stakeholder depends on the project at hand but one of the
expectant stakeholders should follow. Finally, the latent stakeholders should be last on the list of
importance according to the Salience Model. If a stakeholder does not fit onto the model then
they are not relevant for the project.

Organisational Political Map Technique

The final analysis which can be used is the Organisational Political Map Technique. It involves
analysing who can affect a decision and where they stand within the company. Begin with the
identification phase, followed by your overview milestones of the project. Once the milestones
are found, stakeholders should be placed into which milestone they influence. Not only for the
final decision of the milestone but also for those who influence in a smaller manor. Then 4 steps
should be followed:

1) Rank the stakeholders by their position in the company. Anyone who has a final say in the
decision or puts highly sort after resources into the project should be very high.

2) Rank their ability to influence all decisions within the milestones.

3) Graph these two factors against each other (Influence vs Position) to illustrate which
stakeholders have the largest stake in the project.

4) Map the relationship of all stakeholders. Any relationships which are neutral should not be
noted; only strong positive (solid line) and strong negative (dashed line).
The diagram shows that if Cal wants a milestone accepted then he should ask Pat and Jack.
Whereas Zoe and Matt have a negative relationship so should not work together unless
necessary. This tool is powerful tool for understanding the politics behind the company. If a
decision is made within that milestone of the project, who is in control of the influence and who
is high up in the company and can change this decision. Stakeholder Managers should use this
tool in companies which they often do not know well or they want to understand better.
Consultants should use this to enable and develop strategies for interacting with all stakeholders
and ensuring a desired result is reached.

Stakeholder Strategy

Now that you know about each stakeholder group, you form a strategy on how you will approach
them. Here, you may prioritize the stakeholders in order of influence.How will you engage with
different priority stakeholders?

Stakeholder Responsibility

This is one step most organizations neglect. It is critical to determine who is responsible for
stakeholder engagement within the organization or team. Which individual or team takes up
which tasks related to stakeholder management? Is there any scope for collaboration?

Stakeholder Monitoring and Reporting

Once you have everything in place, you have to decide how you will monitor stakeholder
activities. How and when will you track stakeholder priorities and changes in the plan and
mitigate accordingly?Do you hold regular stakeholder meetings, or do you have stakeholder
management software?
Managing Stakeholder Styles to Optimize Decision Making

We make many decisions every day. Should we wait patiently for the green light to cross the
street or risk an accident? Should we buy something we want or save money for the future? We
also make decisions with other people. When planning a vacation with friends or family, the
group has to decide on destination, route, dates, costs, transportation, hotels, and attractions.
Sometimes planning is easy and the result is a pleasurable outing for everyone. At other times,
some members of the group take too long to agree about the trip details; in the end, some may
decide not to travel together as they realize they have different objectives. The complexity and
flexibility of decision making is directly related to the objectives and characteristics of each
individual.

Similar situations occur during program and project execution. Project decisions can become
especially tough when they involve many people. The individual perspectives and behaviors of
various stakeholders can create differences of opinion and may raise political issues and spark
conflict between different organizational environments. When a project team is geographically
dispersed, these complexities are likely to increase. So what can program and project managers
do to avoid or minimize problems in such situations? There is no simple formula for success, but
proper communication and stakeholder management can reduce the negative effects of bad
decisions or long, drawn-out decision making processes. For complex programs and projects,
mapping psychological characteristics, including decision-making styles and personal
motivators, provides guidance on how and what to communicate to stakeholders.

Stakeholder Analysis Focusing exclusively on execution rather than paying attention to

removing barriers in the project environment may not bring the expected efficient and effective
results. Communication gaps are one of those barriers, especially in large projects. Aspart of
project communication planning, it is a good practice to carry out an accurate and systematic
stakeholder analysis by identifying and understanding who the people involved in the project are,
what their organization positions and project roles are, their contact information, how they feel
about the project, what they expect, what their interests are, what their influence levels are, and
whether they are internal/external, neutral, resistors, or supporters. Additionally, it is useful to
identify how key decision makers are likely to respond in various situations, given their decision
styles.

Understanding Stakeholder Decision Styles

Mapping likely reactions to a given situation requires a common-sense understanding on

decision style models. A good approach is offered by Rowe and Boulgarides in Managerial
Decision Making: A Guide to Successful Business Decisions. They define decision style as the
way in which a person perceives information and mentally processes it to come to a decision.
Decision style reflects a person‟s cognitive complexity and values. Understanding stakeholder
decision styles is a valuable part the stakeholder management strategy.

• Directive: This individual has a low tolerance for ambiguity and low cognitive complexity.
The focus is on technical decisions based on little information, few alternatives, and minimal
intuition, resulting in speed and adequate solutions. Generally directive individuals prefer
structured and specific information given verbally.

• Analytic: This individual has a much greater tolerance for ambiguity than the directive one and
also has a more cognitively complex personality that leads to the desire for more information and
consideration of many alternatives. This style enjoys problem solving and strives for the
maximum that can be achieved in a given situation. Generally, such people are not rapid decision
makers; they enjoy variety and prefer written reports. They enjoy challenges and examine every
detail in a situation.
• Conceptual: This individual has both cognitive complexity and a people orientation and tends
to use data from multiple sources and consider many alternatives. Concepual decision makers
have a long-range focus with high organizational commitment. Generally they are creative and
can readily understand complex relationships.

• Behavioral: Although this individual has low cognitive complexity and uses low data input, he
or she has a deep concern for the organization and people. Behavioral decision makers tend to
have a short-range focus and use meetings for communicating. They provide counseling, are
receptive to suggestions, persuasive, and willing to compromise. Using stakeholder analysis, the
project manager, with the project team‟s support, can create a stakeholder management strategy
for gaining support or reducing obstacles.

Applying the Decision Style Model Managing a virtual program team to integrate the
information technology (IT) infrastructure of two merging companies provided an opportunity to
confirm the value of this approach. This IT-integration program included an infrastructure
project, a commercial systems project, and a manufacturing systems project. In the planning
phase, several integration options were designed to fit business and technical assumptions. A lot
of money was required to implement any of the options of full, medium, and minimum IT
integration. (Doing nothing was the low-cost option.) Full integration would replace all the
acquired company‟s systems and infrastructure with the owner company‟s IT infrastructure. This
option would produce merger benefits anticipated by the commercial units of both companies,
but it was not aligned with the manufacturing unit‟s strategy of keeping both companies‟
manufacturing environments running with minimal changes and investments. Medium
integration would be similar to full integration but with no changes in manufacturing systems.
This option would support expected commercial benefits and be consistent with manufacturing
strategy.
It would, however, mean extra work for a few people due to a lack of some process automation.
Minimum integration would apply mandatory changes to the acquired company‟s IT
infrastructure to meet the new company‟s standards. It would mean faster implementation and
would fit into manufacturing strategy, but it would not support expected commercial benefits.
The decision-making process to select the integration option was as difficult as the program
execution. Having these clearly defined steps and requirements was essential to our success:

• A robust merge-and-acquisitions framework. This made the team aware of the steps to follow
and how to contact subject-matter experts to provide guidance when needed.
• Clear definitions of roles and responsibilities. This kept the team committed to and focused on
program goals.
• Mapping stakeholders‟ expectations and motivations and identifying the decision makers were
critical to support the stakeholder management strategy.
• As specified in the communication plan, we held regular team virtual meetings tailored for
different audiences.
• All required technical and functional specialists were invited to support the design for the
integration.
• Workshops with business and technical teams from both companies were held for gathering
business requirements and identifying key risks for the integration.
• Integration options and budgets were submitted to senior management for approval.

Given the program‟s complexity, the budget required, and the decision‟s impact on the business
of both companies, new stakeholders from higher levels of the organization joined the program
approval committee partway through the process. As they were not familiar with the project‟s
history, some of them asked for new integration options based on new assumptions. It became
clear that the decision-making process would take longer than expected. The program approval
process would have been an endless journey if we had not adjusted our communications to
respond to these new demands. Using the decision style model, I mapped the potential dominant
decision styles and updated the program stakeholder management strategy. Before the final
session for program approval, we held individual and group meetings and teleconferences
tailored to the stakeholders‟ interests and influences on the project.

To the overall presentation with the integration options and rationale for each of them, we added
additional appropriate information and adjusted emphasis to match stakeholder styles. The
majority of senior stakeholders had conceptual, analytic, and directive decision styles. The main
concern of the stakeholders with an analytic style understood the financial impacts in detail. Our
supporting materials were therefore related to on-time costs, ongoing costs, and the net present
value of each integration option. For stakeholders with a directive style, who were concerned
about understanding overall integration scenarios in a concise and objective way, we provided a
matrix and summary that went straight to the point. We showed integration level, scope, pros and
cons, risk impact, and costs for each option. The stakeholders with a conceptual style were
concerned about financial impact as well, but their questions also addressed long-term benefits,
risks, and impact on both the organizations and their people. For them, in addition to the big
picture provided by the matrix with a summary of integration options, we used supporting
material with long-term effects, such as the high risks of implementing a minimum integration or
doing nothing.

Those options would not give the acquired company the benefits of the owner company network
and services, so although low or no investment would be done in the short term, in the medium
term they would need additional budget to remediate their IT environment. In addition, the new
company‟s business would not benefit from up-to-date technology. In the end, senior
management approved the medium integration option proposed by the program team. They
agreed that the preferred integration strategy was the most cost-effective option and aligned with
the owner company‟s IT target architecture, which would support both commercial requirements
and future manufacturing strategies. Like a group that works to decide on a joint plan for a trip,
these executives only reached a common decision when the advantages, disadvantages, and risks
involved were communicated in ways that matched their decision styles. In other words, we were
successful because we were able to adjust communication channels and messages to match
stakeholders‟ behaviors and interests. We accelerated and improved the decision-making process
by giving stakeholders information in the ways they could best process it.