Bunaken Simulation Exercise: General Information for ALL

Background- Why Dialogue?

In this simulation, YOU are asked to assume a role in a DIALOGUE among the various
stakeholders in this multi-party/multi-issue controversy.

The term “stakeholder” refers to persons and organizations that affect, or are affected by a
corporation or a group’s actions – that is, all those that have a stake in what a firm does.
“Stakeholders” include such diverse groups, as customers, employees,
stockholder/shareholder, the media, governments (local and national), professional and
trade associations, social and environmental activists, and non-governmental organizations
(NGOs).

Where do we look for the stakeholders?

Social
Legal
License to
License
Operate

COMPANY/
ORGANIZATION

Supply Chain Market

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 The Matrix or Framework
Group's Resource Position
Resources
Group Interest in Mobilization on the
Available
Issue Capacity issue
Summary of
resources
Estimate of
Estimate of held by group
which and how
the level of or to which it Estimate of
easily group can
interest of the has access group's
Name of Group mobilize
group in the (financial, position on
resources in
issue (e.g. high informational, the issue
pursuit of
to low) status,
objectives
legitimacy,
coercion)

Useful to
pro or con,
indicate may use high to
positive or
exactly what be specific low or numbers
negative or
those interests +5 to -5
-3 to +3
are
 Source: Managing Policy Reforms by DW Brinkerhoff and BL Crosby

In the stakeholder model of the firm, business organizations are seen as a network involving
many participants, each of which shares to some degree in both the RISKS and REWARDS of
the firm’s activities. Corporations are not insular. Rather, they are enmeshed in a web of
important relationships that must be continually renegotiated. A new stream of
organizational research focuses on dialogue as a critical management skill.

DIALOGUE has been defined as the “art of listening together.” (W. Isaacs) It is a collective,
multi-party conversation that seeks to draw on the understanding of all Parties to develop
solutions that none of them, on their own and acting alone, could have envisioned or
implemented. Typically, dialogue involved a series of face-to-face meetings about a problem
or issue. In these meetings, a focal organization and its stakeholders attempt to articulate
what is important to them --- their values, assumptions and goals, define a common
definition of the problem, invent innovative solutions for mutual gain, and establish
procedures for continuing the dialogue and for implementing solutions. To be successful,
the process requires that participants express their own views fully, LISTEN carefully and
respectfully to others, and open themselves to creative thinking and new ways of looking
and solving a problem.

Contemporary management theory recognizes that responding to the changing expectations

of the stakeholders is a critical part of a person/organization that has assumed a
“leadership” role. Engaging in dialogue with stakeholders carries a number of potential
benefits: deepens and enhances, at the fastest possible time, personal and organizational
learning about the “market” and specific “segments, the different “publics”- their

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expectations and values; draw on outside expertise at anytime; generate creative solutions;
and subsequently, win stakeholder support (and block/neutralize adversarial action) for
implementing them. In the end, dialogue action improves a company’s reputation for taking
constructive action.

On the other hand, corporations/organizations who refuse to engage their stakeholders face
serious consequences. Reputation may suffer. Sales dive. Advertising companies may
withdraw support. And in the end, any action by the company/organization can be
prevented. The increased globalization business and finance and the rise of technologies
that facilitate fast communications in “cyberspace” has redefined “stakeholders” and ways
for engaging in different spaces and “platforms.”

BUNAKEN* CASE FACTs

Sometime in September 1999, the Ministry of Forestry of Indonesia unveiled a

plan for the one of the country’s most beautiful marine habitats. It is renowned
for its rich marine life, and hence was a mecca to scuba divers and destination
of tourists. The plan mandated the regulation of the use of and access to the
park. It was adapted as defensive measure against the environmental threats
to Bunaken’s marine habitat.

The plan was met by a storm of protests from different sectors some of which
surprisingly, were government agencies who claimed jurisdiction over Bunaken
and who saw the Forest Ministry plan as encroachment on their turf and
territorial jurisdiction. The Ministry of Tourism, for one, saw itself as the
principal agency responsible for Bunaken inasmuch as tourism there generated
an annual revenue of 1 Billion Rupiah. The ministry felt that a loss of
jurisdiction – which is imminent if the plan was executed – would mean a loss
of revenue. The local government of Manado, in which Bunaken was
geographically situated, shared the sentiments of the Ministry of Tourism. It
wanted to retain its share of the huge tourist revenue. The Ministry of
Transportation on the other hand, was alarmed because with the plan, its ships
would have to make expensive detours to reach the neighboring islands while
the Indonesian navy was equally alarmed by the prospect that its patrol boats
would not easily access the borders between the Philippines and Indonesia
over which it had jurisdiction. For the navy, Bunaken was essential to national
security, not to mention that it was part of the sea over which it saw itself as
the guardian. The Ministry of Forestry, on the other hand, claimed that by law
it was the guardian of the park, pointing out that it had been spending from its
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budget for the park’s maintenance and conservation. As sole guardian of the
park, it maintained that it was the sole owner of the revenues derived from it.

In addition, there were several non-government stakeholders in Bunaken. On

top of the list were the people in the 26 villages on Bunaken Island most of
whom were fisherfolks who felt that their livelihood was threatened. They
feared that their fishing grounds would be reduced, and therefore would have
lesser fish catch and diminished incomes. The business groups based in
Manado were equally distressed because they were initially hopeful that they
could seize the business opportunities in the park, e.g. through more resorts
and hotels, to cash in on tourist arrivals. The ministry plan, which called for
restricted and controlled development in the park, did not reconcile with the
business community’s appetite for full-scale infrastructure development. On
the other hand, environmental groups such as WALHI (Wahana Lingkungan
Hidup) were skeptical of the plan. WALHI had no faith in the capacity of the
Ministry of Forestry to implement the plan and regarded it as just the
traditional rent-seeking behavior of the Ministry of Forestry.

One group that welcomed the advent of the plan was the dive operators
organized as the Sulawesi Watersports Association. The conservation of
Bunaken was their major interest since it was precisely the biological diversity
and the pristine beauty of the park’s marine ecosystem which attracted scuba
divers all over the world to flock to the park. Moreover, the association saw the
plan as an end to one of their problems with the local fisherfolks who
oftentimes infringed on the dive sites. Nevertheless, like the environmental
groups, the association was skeptical of the inability of the Ministry and the
police to enforce the conservation laws. The members of the association have
mulled about setting aside a portion of their earnings to fund patrols in
Bunaken to stop illegal and destructive fishing practices in the park.

After reviewing the situation in Bunaken, the vice-governor of North Sulawesi

province and chairman of the provincial task force for the preservation of
Bunaken, decided to call for a meeting of the different stakeholders to thresh
out the issues and to see whether the involved stakeholders can reach
agreements that will be acceptable to all.

* This case is based on actual Asian Institute of Management case that was written by Prof. Benjamin
C. Bagadion, Jr. The case has been slightly revised, with Prof. Bagadion’s permission, solely for the
use in this module.