Dependency Structure Matrix Modelling for Stakeholder Value Networks

1 INTRODUCTION During the past three decades, the concept of " stakeholders " has been deeply embedded in the thinking and practice of management scholars (Freeman, 1984) as well as the architects for large-scale engineering systems (Moses, 2004), in order to ensure an organization's " long-term success ". However, most current stakeholder models only examine the direct relationships between the focal organization and its immediate stakeholders (a.k.a., " hub-and-spoke " models), ignoring the indirect relationships that include the interactions between other stakeholders in the network (Rowley, 1997; Mahon et al., 2003; Lucea, 2007). However, arguably these indirect relationships are very important for the focal organization to appropriately estimate the power of its stakeholders and grasp the opportunity to influence stakeholders in an indirect manner. This paper develops a qualitative/quantitative network approach, namely a " Stakeholder Value Network " both direct and indirect relationships between stakeholders on the success of large engineering projects. Specifically, this paper explores the feasibility and benefit of applying the Dependency Structure Matrix (DSM) as the modelling platform for Stakeholder Value Networks. Further, an efficient algorithm is designed for computing indirect stakeholder influence and implemented in a case study for a multinational energy project. The results derived from this analysis are able to answer three fundamental questions for stakeholder management: What are the critical paths/themes for a project to engage other stakeholders? Who are the most important stakeholders for a project? How can the complexity of a large relationship network be reasonably managed? 2 STAKEHOLDER VALUE NETWORK A stakeholder in an organization (corporation, government, project, etc.) is " any group or individual who can affect or is affected by the achievement of the organization's objectives " (Freeman, 1984), and the Stakeholder Value Network is " a multi-relation network consisting of a focal organization, focal organization's stakeholders, and the tangible and intangible value exchanges between the focal organization and its stakeholders, as well as between the stakeholders themselves " (Feng and Crawley, 2008). In order to understand the impacts of both direct and indirect relationships between stakeholders (including the focal organization), this paper proposes the use of the Stakeholder Value Network as a way of modelling stakeholder relationships which consists of four steps (see Figure 1): − Mapping: At the beginning, stakeholders have to be identified and their roles, objectives, and needs are also collected from documents/interviews. Based on this information, the qualitative model of the Stakeholder Value …