Strategic responses to external stakeholder influences

Abstract

When external stakeholders manipulate inputs and influence a project directly, managers need to respond strategically to keep the project moving forward. This study follows a grounded theory approach to establish a model of strategic responses to stakeholder influences. Results show that managers can take a negotiating or conceding approach while under external pressures. The former approach suggests countering the impacts, including four strategies: manipulating, persuading, bargaining and litigating. The latter implies that managers accept such pressures and attempt to keep things going forward, employing three strategies: complying, diverting and terminating. The ways that a manager selects response strategies are informed by eight factors: socio-legal environment; organisational characteristics of the owner; behavioural stability of input holders; characteristics of inputs; project adaptability; the timing of responding; project legitimacy; and the harmony of interests amongst the beneficiaries, affected parties and other actors external to the project. When dealing with pressure from input holders, managers can use the repertoire of response strategies as an aid to making timely decisions; they can also select the most appropriate strategy by examining explanatory factors from the macro to micro level.