Stakeholder Management

Personally, I think stakeholder analysis is a critical tool in order to generate knowledge about individuals and organizations. The main goal is to understand their behavior, intentions, interactions, level of power and interests. In general, these stakeholders include staff, shareholders, owners, media, community, suppliers, sponsors, customers, and the project team, among others.

Terms and Benefits

Terms of stakeholder refers to individual or groups who can effect or effected by a corporation activity. People who have direct or indirect effect on any project can be called stakeholders. Stakeholder analysis is the process of deeply analyzing the attitude of stakeholder towards something (business, project, government). According to Mitchell Brown, (1997) stakeholder is classed based on power to influence.

However, according to Johnson and Schools (1993) Stakeholder analysis or stakeholder mapping has evolved in recent years as at method for analyzing the likely interests and actions of stakeholders. In my humble opinion, stakeholder analysis means assess the stakeholder according to their interest, power and influence. By the end of the day, the objective of this analysis is to find out which potential group or individual stakeholder is more likely to affect the company. Then the company needs to decide how to attend those groups or individual stakeholders. It is important to value their opinions, views and suggestions to shape the project while it is still in its nascent stage. This can significantly improve the quality of your assessment. Keep in mind that the active participation of your stakeholders in your project will make them understand the nature of the activities and I can guarantee you that they can contribute even more by actively supporting the project plan from day one until the end.

As I mentioned to my students, this is not an easy job. Image you are managing a complex project with more than 100 stakeholders located in different zones of the globe, you for sure have to consider the language barrier, the cultural differences, personalities, believes, religions, the way everyone operates on a daily basis. Yes, I am not exaggerating. You as an excellent project manager must take under consideration all these items to be able to achieve the project’s goals. On the other hand, stakeholder analysis helps to set the parameter of CSR (Corporate Social Responsibility). Early stakeholder analysis can give sufficient information about the project. Moreover it can help the managers to take decision in future as well, like CSR. Stakeholder analysis gives detail information about all kind of stakeholders, which they can use in future. CSR is one of the elements of core competence and it is easily gain by the stakeholder analysis.

After having a careful analysis, you will be able identify your key stakeholders. The final and most important stage is to ascertain what exactly motivates your stakeholders and then adopt the best way to win them. Take into consideration what kind of approach would be required and what information would the stakeholders need.

Potential Disadvantage

A big limitation on this analysis is the environment change. According to Vrvasovszky & Brugha (2000) the environment, the context of analysis, stakeholder interest, position, alliance and influence change over time. Political context can change over time. There are more likely to sudden transformation in developing countries. Therefore, stakeholder analysis is time prospective. If the analysis takes too long to finish, the situation can change. This change is mainly happened in political position and legislation, as they both can change suddenly. The analysis result could go wrong on the basis of meaning of validity. This is because the respondent stakeholder answers are base on his or her position. If the changes by the project are on their favor, they will give a positive opinion about the project. Alternatively if the project can harm their desire, they could do the opposite. (Glazer, 2009).

Sometimes it is impossible to shape the project, as to satisfy different stakeholder. This happens when different stakeholders have different interests and each oppose other. For example Tesco chain store is expanding all over UK. Recently they open a new store in Middleton, Manchester. When they built the store they need to build a leisure centre, to satisfy the council. This extra constriction cost was not accepted by some key shareholders. According to Tesco official (2015) to build a new store it takes about £10 million for each supper store. This type of cost may be oppose by key shareholders and bring a conflict between stakeholders. This also encourages the project planer over budgeting and could lead to project failure. This is just an example of many I am sure you are very well informed. When you work on projects, you must need to consider different level and different kind of stakeholders.

Conclusion

Stakeholder analysis is vital for any project. Because it brings the fundamental thing of project constrain, success factor and risk. Moreover, it shows the stakeholder engagement with the project and brings their interest. In this essay I want you to take away the message that stakeholder analysis in the early stages of planning can greatly improve the quality of your project. Every project will have stakeholders who are impacted by or can impact the project in a positive or negative way. In addition, you have to take under consideration the fact that the affect or influence of your stakeholders may not occur or become evident until later stages in the project or phase. This enables you as the project manager to focus on the relationships necessarily to ensure the success of your project.

References:

• MSH, Management Sciences for Health and UNICEF (2007), “Stakeholder Analysis” Available from: http://erc.msh.org/quality/ittools/itstkan.cfm
Accessed: 19/09/2016

• Wikipedia: The Free Encyclopedia (2007) “Stakeholder (Corporate)”
Available from: http://en.wikipedia.org/wiki/Stakeholder_%28corporate%29.
Accessed: 19/09/2016

• MindTools, Essential skills for an excellent career (2007) “Stakeholder Analysis: Winning support for your projects” Available from: http://www.mindtools.com/pages/ article/newPPM_07.htm.
Accessed: 19/09/2016

• Project Management Institute. (2013). A Guide to the Project Management Body of Knowledge. Fifth Edition. Pensilvania, USA.
Accessed: 19/09/2016