How do you manage competing stakeholder interests?
A core Restructuring interview question — asked in analyst and associate interviews across IB, PE, and the Big 4.
THE SHORT ANSWER
Understand each party's BATNA (best alternative to negotiated agreement). A creditor's BATNA is liquidation recovery; management's BATNA may be personal liability. Map interests, find the zone of possible agreement. The best restructuring solutions create value for everyone vs. the alternative.
WHAT INTERVIEWERS LISTEN FOR
- ✓Understand each party's BATNA
- ✓Map interests and find ZOPA
- ✓Create value for all stakeholders
COMMON MISTAKES
- ✗Ignoring alternatives or BATNA
- ✗Assuming zero-sum outcomes
- ✗Focusing only on one stakeholder
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