Managing divestments as projects: Benefits of stakeholder orientation

Abstract

We review research at the intersection of corporate divestiture and stakeholder orientation to synthesize implications for divestment project management. Divestitures are corporate restructuring projects, implying application of project management techniques and concepts can facilitate the achievement of desired goals. Managing stakeholder relationships during divestment plays a critical role in determining divestment outcomes. Findings suggest that managers practice stakeholder relationship management through determining divestiture mode, unit selection, participative management, and parenting. Moreover, stronger stakeholder orientation reduces the costs of stakeholder relationship management. For example, stronger stakeholder orientation facilitates spin-offs that align with investor interests, but they require careful consideration of a parenting relationship between a divesting firm and divested unit. Meanwhile, sell-offs involve an additional stakeholder of a new owner and may require greater stakeholder management. When divestitures are more complex, more participative project management can increase the success of corporate restructuring.