Research Summary

Dealforum Design for Large, Multiparty Negotiations

by James K. Sebenius

Description

When large projects such as mines, pipelines, oilfields, or powerplants are proposed, negotiations often commence with many kinds of interested parties. Such 'stakeholders' can range from corporate or government project sponsors to international financial institutions, environmental groups, advocates for indigenous people, and other NGOs. Two very different approaches bracket common approaches to undertaking these kinds of long term negotiations. Caricaturing only slightly, they might be called "decide-announce-defend" ("DAD") and "full consensus" ("FC") models. Both approaches have a high failure rate, even for projects that arguably create value for most stakeholders. By contrasting a variety of field cases utilizing these polar approaches, I have highlighted and investigated the effects of a variety of underlying "dealforum" design choices. Such design choices--sometimes explicit and sometimes implict-- include the auspices, mandate, participation, agenda, decision rules and procedures, staging, external communication, process support, and post-deal arrangements. By tailoring the dealforum design choices to the specific negotiating challenges for a particular project, the odds of sustainable success can be enhanced.