Stakeholder-Induced Disputes and Resolution Strategies in the Infrastructure Industry

Abstract

Stakeholders are classified either as internal or external in extant literature. However, it is observed that critical activities such as work front availability, clearances, and utility shifting are influenced by a third category of stakeholders who display unique characteristics that differentiate their behavior from the previous two types. Hence, this study introduces a third category-extraneous stakeholders—with characteristics distinct in their relationship to the project and behavior. The study maps the performance of such stakeholders to the resulting consequences leading to disputes in Indian Infrastructure projects. To do so, the study utilized data from 100 court cases in India that revealed dispute genres related to extraneous stakeholders. Further, semistructured interviews were conducted with 14 experts to comprehend the influence of such stakeholders’ performance on dispute-related risks. Finally, case studies of five infrastructure projects were undertaken to confirm and validate the findings. The analysis demonstrated that extraneous stakeholders usually fail to deliver time-bound results, thus increasing project uncertainties. Such uncertainties predominantly supervene the disputes between the employer and the contractor that remain challenging to settle. The incentive structures and the contractual obligations designed for extraneous stakeholders become essential. To this end, four mitigation strategies are highlighted, and the strategies’ effectiveness from the perspective of extant strategic management theories is discussed.