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Management Decision Making

Management Decision Making

 Management Decision Making


1.0 Introduction

Humans are social animal, who tend to thrive together with the help of meaningful relationships. These relationships help in the cultivation of goods, products and knowledge which helps in the efficient functioning of our society. To achieve this, companies need investments from individuals or groups and such people, called stakeholders, generally are liable for the failure or success rate of the project. Stakeholders tend to support actions that they perceive to be profitable and will withdraw support whenever threat is perceived. Hence, smooth flow of information between the stakeholders and marketers ensure that right decisions are taken by the stakeholders. Therefore, it is important to identify the stakeholders that are vital to the organization and ensure that they have the information that are relevant to make their decisions. Such streamlined approach to stakeholder management can help reduce the various difficulties related to communication and stakeholder engagement. Engaging stakeholders for collaboration involves constant vigilance in a constantly changing landscape of relationships with stakeholders whose support, interests and influence fluctuates unpredictably (Bourne, 2016).

A project is not just the delivery of a product, service or result; projects help to create a sense of change in the organization. The main challenge faced by organizers to propose effective projects in an environment of constant change is to ensure that all groups affected by change and the stakeholders are properly engaged to further influence their collaboration. Effective communication between all the groups is the key to achieving proper stakeholder management. Therefore, there are two methods to approach stakeholder theory - the company stresses on the stakeholders to enact effective managerial techniques and the stakeholder’s rights towards the organization. It is a symbiotic relationship where the company depends on the stakeholders for effective management strategies and the stakeholders’ liability towards the organization. This article shall strive to highlight the various communication structures present in the hierarchy of the organization and how these factors affect the various decisions taken by the stakeholders and their liability towards the same. According to Gomes (2006), the main assumption of the stakeholder theory is that an organization’s effectiveness is measured by its ability to satisfy not only the shareholders, but also those agents who have a stake in the organization. In addition to the stakeholder theory, managers tend to use other models like resource dependence, transaction cost analysis and agency theory to compensate for the shortcomings presented by the stakeholder theory.

The process used to aid policy and institutional reform processes by evaluating or incorporating the needs of individuals who hold a ‘stake’ in the reforms under consideration is called stakeholders’ analysis. Modern forms of Stakeholders Analysis incorporate a variety of methods, both quantitative and qualitative data to evaluate stakeholders, their needs and wants and their position. The major attributes to consider for stakeholder analysis are the stakeholder’s position, his/her level of influence, their interest in the project and the specific team to which they belong.

It is therefore important for companies to analyze their stakeholder’s relationship in respect to their organization in order to properly formulate strategies to meet market standards. Companies should continuously survey their stakeholders’ relationships and the communication models in order to streamline the whole process. This can help in reducing the factors that are inherent to stakeholders’ relationships with their respective companies.

2.0 Discussion

2.1 Poor relationship management

The failure of projects results in strategic objectives not being met as planned, wastage of valuable resources and inability to meet the expectations of stakeholders. Stakeholder relationship management involves ensuring that all potential stakeholder interests are taken into account while a project planning and execution is made. The process of stakeholder relationship management is considered good, when it achieves the objectives of the business and exceeds the expectations of the interest of the stakeholders. However below is illustrated the case of Construction of Heathrow Airport Terminal 5, which proved to be a famous example of poor stakeholder relationship management.

Heathrow’s Terminal 5 construction was considered a case of poor stakeholder relationship management. The terminal 5-project construction was a huge investment involving technology, human processes and technological systems. The construction started in 2002, was completed March 2008, it involved modern and innovative practices of project management (Airportsinternational.keypublishing.com 2018).  The project completion happened in time, within budgetary limits and extremely good risk management was in place as there was only cost of two human fatalities (accidents). However, what ensued was that the many areas proved to be disastrous. The baggage handling area due to 12 breaks led to full confusion. The airport was opened by HM Queen Elizabeth and on beginning, operation there was major chaos, passengers were stranded, baggage was lost, there was complete IT failure in calculation of flight timings. There were huge issues with car parking; the non-familiarity with the new building also caused major panic. The House of Commons had to put an enquiry into this resulting in the report being generated that it was a case of poor planning and lack of training (Mosaicprojects.com.au.2018).

The four-step approach to stakeholder relationship is crucial to understand the poor management in this case (Wplus.org.2018). Herein it involves identification of key shareholders, who is this case were all parties who are using the facility like the passengers, governmental regulatory bodies like the aviation ministry. The community of international passengers, creditors were also identified as stakeholders. The supplier who had supplied all construction material and those who have supported the project through human resource contractual worker availability are all external stakeholders. The assessment of interest of stakeholders’, was the second step, their expectation from the project was the smooth execution of the expansive project. The strategies, which were involved in this, were the third step, after the unsuccessful opening of the airport, there was a realisation to involve all stakeholders. The British Airlines realised that were strategic errors in lack of training of staff, there was too much focus on project completion date, and there was an oversight in the case of quality management techniques. The final step of execution or engage involved exclusively designing some features in the already present newly constructed airport such as seam less check-ins and check-outs, reducing time in baggage sorting, the punctuality of the flight arrival and departure were also improved.

2.2 Define the general external environment of your example, identifying stakeholders within it.

The launch of iPhone 8 may be considered as an example of very good stakeholder relationship. It was launched on September 29, 2017. The relationship management in this case involves a global perspective. The iPhone 8 project involves different sectors of stakeholders. The iphone 8 is a high-end phone. The phone was successfully launched            with all high-end features; there was extensive research done all over the globe in order to understand customer requirements. The most powerful camera along with the brand value of apple was found to be determining factors. Apple the American firm is very well known for managing its stakeholders. iPhone 8 grabbed the attention of users and proved to be a huge success globally. It successfully managed all stakeholders of its external and internal factors and proved to be a prime example of good stakeholder management. Value addition to all stakeholders was done through the project management of Apple’s iPhone 8.

Define the general external environment of your example, identifying stakeholders within it

The general external environmental factors that can be associated with iPhone 8 are political, economic, social, technological, environmental, and legal. As it is a global firm hence good stakeholder relationship has to be maintained in a global perspective at all levels. The political and social stakeholders associated in Apple’s case are the governmental bodies such as the lawmakers, especially taxation authorities where the company wants to sell its products, the EXIM policy formulating bodies of the country where the sales market is located. The economical factors are incorporated in the stakeholders who are the shareholders of Apple Inc. The financing bodies who have lent project finance for launch of iPhone 8 have to be considered as well. Technology has always been the forte of Apple as a firm.  All Apple phones are with extended additional features of fancy displays, state of the art cameras, the technological advancement has always been the critical success factor of Apple project management. Apple iPhone 8 incorporated the technological brilliance of the 3-D sensor for face recognition. The environmental aspect of iPhone8 is most advanced, clean energy programme, reduction of green house gases, has been a key factor in the promotion of iPhone 8 – 64 GB model (Apple.com. 2018). The stakeholder management issue has arisen in case of the legal aspect of Apple iPhone 8, as because the most innovative feature of this phone has got involved into some problems associated with its face recognition feature. There is software integration problem between the 3 D sensor and the wireless charging (Forbes.com. 2018). The external environmental factors also involve customers who were highly well managed by Apple Inc. The Apple iPhone 8 features were formulated with extensive research done initially to understand customer behaviour and to do trend analysis of the requirements and wishes of the customer base on a global perspective. When key external stakeholders are considered, the activities have to be aligned as per their wishes and on time as well as, on budget delivery are the key to successful stakeholder relationship management.



Airportsinternational.keypublishing.com. (2018). Heathrow Terminal 5: An IT Infrastructure success story | Airports International | The Airport Industry online, the latest airport industry news. [online] Available at: https://airportsinternational.keypublishing.com/2010/11/heathrow-terminal-5-an-it-infrastructure-success-story/4563 [Accessed 17 Sep. 2018].

Apple.com. (2018). [online] Available at: https://www.apple.com/environment/pdf/products/iphone/iPhone_8_PER_sept2017.pdf [Accessed 17 Sep. 2018].

Bourne, L., 2016. Stakeholder relationship management: a maturity model for organisational implementation. Routledge.

Forbes.com. (2018). [online] Available at: https://www.forbes.com/sites/gordonkelly/2017/07/12/apple-iphone-8-wireless-charging-camera-touch-id-oled/#78e700de4278 [Accessed 17 Sep. 2018].

Gomes, R.C., 2006. Stakeholder management in the local government decision-making area: evidences from a triangulation study with the English local government. Revista de Administração Contemporânea, 10(SPE), pp.77-98.

Khan, U.A., Alam, M.N. and Alam, S., 2015. A critical analysis of internal and external environment of Apple Inc. International Journal of Economics, Commerce and Management3(6), pp.955-961.

Mosaicprojects.com.au. (2018). [online] Available at: https://mosaicprojects.com.au/PDF_Papers/P128b_Stakeholder_Relationship_Management.pdf [Accessed 17 Sep. 2018].



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