Stakeholder Prioritisation in Infrastructure Asset Decisions

This article discusses the prioritisation of stakeholders in infrastructure asset decisions by Mayors and CEOs. It explores the stakeholder theory and the roles of Mayors and CEOs in the decision-making process. The study analyzes the effects of stakeholder values on different stakeholder groups and compares the leadership styles of Mayors and CEOs. The research was conducted on 420 LGAs in 2011, highlighting the importance of stakeholder alignment for efficient decision-making.

EXECUTIVE SUMMARY 1
Executive Summary of the article- “Stakeholder prioritisation by Mayors and CEOs in
infrastructure asset decisions”
The article centres on the consideration of the stakeholder’s interests in the public sector
climate and the attitude of the Mayors and the Chief Executive Officers of the Local
Government Authorities (LGAs) engaged in infrastructure set up. The initial segment of the
article sheds light on the stakeholder’s theory as proposed by Freeman’s (1984), Mitchell et
al.’s (1997), Dake and Anthony (2000), Gomes and Gomes (2009) and others suggesting that
stakeholder’s considerately influence the decision making process. The objective of the study
is identified to be the extension of the existing literature on the lines of the Mitchell et al.’s
(1997) model for the identification of the stakeholders and the evaluation of the roles of the
Mayors and the CEOs. This is followed by the second objective of analysis of the effects of
the stakeholder values identified as above on different stakeholder groups. It is significant to
note that the powers of Mayors and CEOs are derived from the state legislations in the
Australian context because of the absence of the independent constitutional status to the local
governments. One of the key functions identified therein is the creation of public utility
infrastructure, which includes transport networks, power and water, sewerage and other
incidental facilities; followed by the maintenance of the same. The review of the stakeholder
theoretical frameworks reveal that in the LGAs there are multiple stakeholder groups, which
are broadly categorised into two groups namely the regulators and the local public or
community which include the fund providers, media, special interest groups and likewise.
The model proposed by Mitchell et al. (1997) is comprehensively explored and the three
main attributes of the stakeholder groups is identified namely power, legitimacy and urgency.
Each of the stakeholder groups constitutes different intensity of the above listed attributes.
According to the attributes identified, the managers render priority to the particular
stakeholder group. Further, the article explores compares and contrasts the role of Mayor and
CEO in the LGA’s infrastructure decision-making process, because both of them have been
elected differently and therefore have a different focus in terms of accountability. While the
Mayor is regarded as the first citizen of the Council, the local government is managed
through the CEO and is accountable to the Council. Further, it has been stated that various
leadership styles of the Mayors and the CEOs influence the administration of the council and
the working relationship between Mayors and CEOs as accorded by Martin and Simons
(2002) in their survey. The highlight of the survey was that it is the duty of the Mayors and
CEOs to work in harmony with each other and the same is facilitated by the similar

EXECUTIVE SUMMARY 2
managerial styles. The different election background of Mayors and CEOs indicate that while
the position of the Mayor is more inclined to serve the stakeholder groups who influence the
local government elections such as the ratepayers, the position of the CEOs have an
inclination towards the groups they directly deal with namely senior bureaucrats, State
Auditor-General’s Office and likewise. It has been stated that the managerial values lead to
the determination of the observed salience of substitute stakeholder groups. Further, the
control factors are highlighted such as the gender, age, and academic qualifications, of
individual and population density, type of the demographics of LGA. The article highlights
the research conducted on 420 LGAs in the year 2011, where the data was collected through
mail survey, and 30 LGAs through pilot survey. Data was analysed on the lines of the
demographic details of the Mayors and CEOs, and perceptions towards the stakeholder
groups. It was concluded in the study that there is a similarity in the perception of the Mayors
and CEOs towards the traits of several stakeholder groups. The study led to the findings that
local media, State government department, and community interest groups hold higher power
in contrast to the ratepayers, community interest groups and users who possess the attribute
of the higher urgency. Thus, the study suggests that the conjunction in the Mayors and CEOs
inclination and perception towards the stakeholders would lead to the relatively efficient and
decisive processes in the infrastructure decision-making in LGAs. However, the study also
depicted an indication that some prejudiced priority may be conferred to the “public
stakeholder” category as equated to the “higher-tier government” category. This is when
there is a positive relationship between a CEOs observation of the public stakeholders and the
Mayor’s managerial values, thereby leading to efficient policy formulations as a whole.