Systems for Analysing the Achievement of Primary and Secondary Stakeholder Expectations - Literature review Example

Managing Stakeholders Expectations INTRODUCTION Stakeholder management is crucial to the success of every project in any organisation. This unit is all about identifying organisational stakeholders, determining and monitoring their expectations and identifying opportunities to enhance stakeholder provision. At the end, a conclusion will summarize the context presented here. The case study that is chosen is of British Telecommunication (BT). This company is the world’s oldest telecommunication company. The origin of BT came as a result of the amalgamation of both the first commercial telegraph services and the electric telegraph company which was introduced in 1846. As these companies amalgamated, the survivors were transferred to state control under the post office. Later, it became a privatized company, British Telecommunication (BT) PLC serving customers in over 170 countries. 1.1 DIFFERENTIATE BETWEEN ORGANISATIONAL CUSTOMERS AND STAKEHOLDERS Every organisation has different people within its fore. These people can affect the organisation either positively or negatively. Example of these might be the customers or the stakeholders. According to Maxwell School (2011), organisational customers are people or groups that are beneficiaries of the organisation. They are either enjoying the services or the products. For example, BT customers benefit for substantial saving on essential utility services like landline, mobile phones, internet, non-geographic numbers, combined phone and broadband package (British Telecommunication 2011). On the other hand, organisational stakeholders are individuals and groups that are affected by organisational policies, procedures and actions. A “stake” implies that one has an interest or share in the organisation and its operation (CMI 2011). For example, the board of directors starting from the Chairman, Sir Michael and all other staff who contribute immensely to the success are British telecommunication stakeholders. Further examples are the British telecommunication customers, that is, those people that are using their services like trade unions, government, media and so on. DISTINGUISH PRIMARY AND SECONDARY STAKEHOLDERS Various sets of stakeholders have emerged but basically, these sets of stakeholders can be divided into primary and secondary stakeholders. Primary stakeholders define the business and are vital to its continued existence (CMI 2011). For example, those people who are using BT services like internet, BT phone line, BT vision TV and so on are part of the primary stakeholder. Further examples of primary stakeholders are BT suppliers, employees, shareholders, community, managers, supervisors and others. Secondary stakeholders are those who may affect relationships with primary stakeholders (CMI 2011). For example, competitors like talk-talk, virgin media, utility warehouse discount club and many more may influence BT customers by suggesting that BT services fail to meet the required standards. Additional examples of secondary stakeholders are the government, media, trade unions, pressure groups, etc. The diagram below further illustrates in a precise and concise manner the dichotomy that exists between primary and secondary stakeholders. In the above diagram, the management or organisation is likened to the British telecommunication. The second layer in the diagram is called the primary stakeholder while the outer ones are the secondary stakeholders. 2.1 DIFFERENTIATE BETWEEN THE EXPECTATION OF PRIMARY AND SECONDARY STAKEHOLDERS Having identify what primary and secondary organisational stakeholders represent, it is now essential to know their expectations. To set the ball rolling, one of the primary stakeholders as mentioned in assessment criteria 1.2 are the shareholders. Wealth enhancement is one of the stakeholders’ expectation. A shareholder invests in a company by buying stocks or by having shares in the company. For example, equinity manages every shareholding in BT. Customer is another primary stakeholder mentioned in assessment criteria 1.2. product reliability at lowest possible price is the customer’s expectation. For example, all British telecommunication customers want to have the best service when compared to others like talktalk or utility warehouse and at the lowest price. Let us consider employees’ secure, stimulating and rewarding career environment is the employee expectation. This is true in the case of employees in British telecommunication. Now, let us give an undivided attention to secondary stakeholders. Government is one of the secondary stakeholders. Honest tax payments, safety of public and proper utilization of resources are all government expectations. British telecommunication ensures that their staff are well secured and they ensure that taxes are paid as and when due. The union also constitutes part of the secondary stakeholders. Good working conditions and job security for members is trade union’s expectation. Suppliers’ expectation is to receive the highest sustainable prices. 2.2 MONITORING SYSTEMS FOR ANALYSING THE ACHIEVEMENT OF PRIMARY AND SECONDARY STAKEHOLDER EXPECTATION First and foremost, what is monitoring? According to Iadb (2011), monitoring is a procedure for checking the effectiveness and efficiency of implementing a project by identifying strengths and shortcomings, and recommending corrective measures to optimize the intended outcomes. For example at BT , the highest monitoring systems are the board of directors comprising of the chairman Sir Michael Rake, the chief executive lan Livingston, the group finance director Tony Chanmngam and others. All these board, non executive directors and so on at BT ensure that everything is put in place in achieving both primary and secondary organisational stakeholder expectations. Iadb (2011) identifies five monitoring systems. Project familiarization is the first one. The project monitor must familiarize himself with the project. The project monitor must understand the project context and history. For instance, as regards to shareholding and help with many things from changing an address to buying and selling shares (British telecommunication 2011). Equinity serves as the project monitor in this case and because of its understanding with the shareholding information, equinity is in the best position to offer advice as regards to buying and selling of shares. The second monitoring system is to determine the information requirement and stakeholders’ information needs. This is to give the right information to the people and at the right time in order to ensure that monitoring assists in enhancing project performance. The project monitors must identify the primary and secondary stakeholders. For example at BT any of the primary and secondary stakeholder is shareholder and government, respectively. The right information must be given to the shareholder as regards to their stocks and the best information must be given to government as regards to tax. The third monitoring system is to establish a management information system (MIS). This is the process of identifying information users, clarify users needs, determining appropriate method for meeting information needs, identifying roles and responsibilities, etc. For example, the information users at BT could be the customers, employees, government and so on. The need of the customer is to get the best services. The need of employee is to be paid while the need of government is to get accurate tax. The fourth is to report to monitoring stakeholder, the monitoring stakeholder with shareholding information at BT is equinity proper information should be given to this monitoring stakeholder. The earlier a problem is identified, the easier the problem is to be resolved. The fifth which is the last but not the least is intervening to improve project performance. 3.1 OPPORTUNITIES FOR ANALYSING OFFERINGS TO PRIMARY AND SECONDARY STAKEHOLDERS The analysis should be by brainstorming all possible stakeholders. For example, the possible stakeholder, media, government, trade union and others. Then research the business environment. For example, BT operates in a competitive environment with others like talk-talk, virgin media, etc. BT must understand how others work in the same environment. It should talk to various stakeholders so as to know their motives. The table below can be used to structure the analysis: Diagram The table above highlights all the possible stakeholders. Type 1 could be both primary or secondary stakeholders. Marg 2 is a marginalized group. Stake 3 is the limit of the stakeholder’s stake in initiative for example profit. Basic 4 is the basic of the stake. For example, legal responsibilities at BT. Resource 5 are the resources that the stakeholder has at their disposal and could bring to the initiative. For example, the expectation at BT role 6 is the potential roles of the stakeholder. For example, the shareholders at BT vote towards the appointment of the board of directors. Capacity gap 7 - this is what can be done so that the stakeholders can fufill their roles. The opportunities for analysing this is to think through the variety of groups that may be affected by the initiative in question and then to probe the interests of each group more fully with an end result of better knowing and understanding the full range of stakeholders who may have an interest in a given initiative, policy or project. 3.2 DEVELOP AN OFFERING FOR A PRIMARY OR SECONDARY STAKEHOLDER THAT WOULD IMPACT ON STAKEHOLDER EXPECTATIONS Mind Tool (2011) highlighted three steps. The first step is to identify the stakeholder itself. This could be done by brainstorming. For example, BT Chairman Sir Michael Rake is one of the company’s stakeholders. All BT shareholders are also part of the stakeholders. The managers, senior executives, customers, the press, employees, suppliers and others are all the stakeholders who must be identified at BT. The step two is to prioritize the stakeholders. This can be done by taking a list of the people and organisations that are affected by BT. Some of these may have the power to block or advance the interest of British Telecommunication. Some may be interested in what BT is doing while others may not. The third step is to understand the key stakeholders BT must know how these key stakeholders are likely to feel about a project and how they will react. BT must also find out how to best engage in project and how to effectively communicate. 3.3 DEVISE A METHOD WHICH REVIEWS THE IMPACT OF THE DEVELOPED OFFERING ON THE STAKEHOLDER According to Plenert (2011), these methods are four in number. The first is to create a plan. The senior management team at BT must come together to review, discuss, challenge and finally agree on the strategic direction and key components of the plan. Without genuine commitment from the top management, successful execution will be difficult. The second method is to implement the plans. Once a plan has been created, the next step is its implementation. The top management should give serious concern to this stage because this is where most failures occur. The third method is cascading the plan. This is where the implementation breaks down. For example, in order to facilitate London 2012, the BT has put a programme in place so as to ensure the smooth running of the project. The programme may break down however, cascade may add input and take the message forward to others in the area. To ensure successful implementation, SWOT analysis should be employed. The fourth method is to consult. External consultants can play an important role in building and implementing this plan. CONCLUSION As organisation becomes more successful in their endeavors, the actions they take and the project they run will affect more and more people. The more people it affects, the more likely it is that the actions will have an impact on people who have power and influence over the project. The people could be strong supporters of the project or they could block it. A successful organisation must therefore use the stakeholder management as a means for winning support from others. REFERENCES British Telecommunication (2011) BT Group. Available at http://www.btplc.com/. Assessed on 07/06/11. CMI (2011) Stakeholder Analysis and Management. Available at http://www.membersmd.managers.org.uk/usercontrols/viewPDF.ashx?docID=1132570. Assessed on 12/06/11. Gawler M (2005) Quick Guide to Stakeholder Analysis. Available at http://www.artemis-service.com/downloads/stakeholder_analysis_0504.pdf. Assessed on 12/06/11. Iadb (2011) Evaluation and Project Implementation. Available at http://www.iadb.org/cont/evo/EngBook/evaiii.htm. Assessed on 12/06/11. Maxwel School (2011) Performance Measurement. Available at http://www.sites.maxwell.syr.edu/measuringADR/cust.asp. Assessed on 07/06/11. Mind Tool (2011) Stakeholder Analysis. Available at http://www.mindtools.com/pages/article/newppm_07.htm. Assessed on 12/06/11. Plenert G (2011) Strategy Implementation. Available at http://www.referenceforbusiness.com/management/sc-str/strategy-Implementation.html. Assessed on 12/06/11. 12 Manage (2011) Stakeholder Analysis. Available at http://www.12manage.com/methods_stakeholder_analysis.html. Assessed on 07/06/11. REFLECTIVE STATEMENT Stakeholders maintain a wide range of roles in a project work. As a manager, I have learnt how stakeholders determine organisational success. This project work has enabled me to know the difference between organisational customers and stakeholders. The stakeholder interest should be the paramount focus of a manager. When expectations of the stakeholders are actively managed, the project gets a higher likelihood for success. I have been able to understand what essentially constitutes both primary and secondary stakeholders. The monitoring system used in determining the stakeholders expectation is well understood as well. Read More