Persuasive Communication - How Audiences Decide. 2nd Edition

92 Understanding Rational Decision Making

The Infl uence of External Groups on Policy Decisions

Sometimes it’s important for a group or an organization to take into account the decision criteria of

external groups who have a stake in the group’s policy decision. In fact, successful policy develop-

ment in organizations often depends on managers being able to clarify and incorporate the criteria

of multiple audiences or stakeholders.^128

Table 2.8 lists decision criteria that the Federal Bureau of Reclamation found to be most impor-

tant to community interest groups who contested the Bureau’s decision to build a new dam, to

be named the Orme Dam, at a location near Phoenix, Arizona.^129 Residents and business people

from the area were concerned a dam at that location would not be adequate to control fl ooding or

prevent property damage; the League of Women Voters thought a dam at that site would not afford

suitable recreational opportunities for families; developers believed a dam located there would limit

their access to clean water; environmental groups claimed a dam at that site would destroy wet-

lands and wildlife; and tribal representatives pointed out that a dam located there would force tribe

members from their homes.

Initially, the Bureau neglected to solicit either the decision criteria of the interest groups or their

ratings of alternative dam sites. The Bureau did so only after being forced to delay construction

of the Orme Dam for more than 10 years due to protests from local citizens. The numbers in the

table indicate the average approval rating on a scale of 1 to 100 that the groups as a whole gave

each alternative dam for each decision criterion. Although as far as the Bureau was concerned, all

three dams met its two decision criteria—fl ood control and water storage—the community’s rat-

ings show it much preferred the Waddell Dam to the Orme Dam. After the community ratings

were published, even those public interest groups and politicians who had originally supported the

Orme Dam chose to support construction of the Waddell Dam instead.

Taking a stakeholder, or audience-based, approach to policy formation also makes sense in the

business world. High-performing companies tend to be run by managers who consider the cri-

teria of all of the companies’ major stakeholders—customers, employees, suppliers, investors—when

making important business decisions.^130 Studies of top management decision making show that

taking a stakeholder, audience-based approach is correlated with higher 10-year rates of return,^131

sales growth and market share,^132 talent retention,^133 CEO salaries, bonuses, and stock options,^134

and share price.^135

TABLE 2.7 The Departmental Affi liation of Group Members Often Determines Which Criteria Will Be
Used to Make a Policy Decision

(Numbers indicate percentage of statements made by each minister about each type of decision criterion)

Department
of Minister

Types of Decision Criteria Used

Foreign

Affairs-Related

Criteria

Defense-Related

Criteria

Finance-Related

Criteria

Overseas

Territories-Related

Criteria

Law-Related

Criteria

Domestic

Politics-Related

Criteria

Foreign Affairs 39 15 12 28 0 6

Defense 10 57 82 4 0 1

Finance 18 13 54 2013

Overseas
Territories

32 6 3 48 110

Prime Minister 34 6 4 40 0 16

Source: Adapted from Gallhofer and Saris (1996, p. 211)