Significance of stakeholder management in construction projects - Essay Example

1. Rationale for Study Construction projects result in a product like residential buildings, dams, parks etc. that is further utilized to house a number of other products. A construction project may impact several interests positively or negatively. Positive impacts may include high quality living and better facilities, while negative impacts may comprise deterioration and change to environment not only at construction site but on all levels (Winch, 2010). Those impacted by the project are referred to as project stakeholders. A stakeholder is a person or a group whose interests are affected by the execution or operation of a project. They may exert influence over the project through their attributes of power, legitimacy, expertise and urgency but may not otherwise be considered as stakeholders (Chinyio and Olomolaiye, 2010). Generally, there are five key stakeholders in every project: project manager, performing organization, team members, sponsor and end user. However, geographical differences and natural events directly affect the successful execution of the construction project and may involve a number of unique stakeholders like environmental and community groups being effected by the building process or its operation after completion and may not be involved in other type of projects (Walker, 2007). Similarly, regulatory agencies who control certain aspects of the construction by issuing permits and certificate are also key stakeholders. These stakeholders, if not managed well, can influence the project by delaying, changing the scope and even cancelling the project. Stakeholders may be attributed different names and categories as internal, external, sponsor, team, seller, contractor, government, media, and society at large. According to Project Management Institute (2008), this naming is primarily aimed to identify individuals and groups as stakeholders where they may have varying and overlapping interests. These interests determine their responsibility and authority and may change as the project progresses. This responsibility and authority may range for occasional participation to full sponsorship and political and financial support of the project. Stakeholders who do not assume their responsibility and authority can bring damaging impact to the project outcomes. However, stakeholders may essentially be categorized as either positive or negative stakeholders (Ward and Chapman, 2008). Positive stakeholders are those who are actively involved in project execution and are concerned with project completion without compromising the project’s objectives and outcomes while negative stakeholders view project success as a negative. The challenge for the project manager and project team is to adapt plans and approaches to varying requirements and expectation of various stakeholders. This necessitates developing the understanding of not only technical aspects of projects but also their relations with environment and community at large (Javeed, 2002). Project manager and project team often overlook negative stakeholders and fail to appreciate their influence that may impact project success and thus bring high risk of failing the project (Olander, 2007). Project team who ignores any key stakeholders must expect damaging impacts to the project objectives. The ability of stakeholders to impact the project is high in the beginning and gets lower as the project progresses; however, costs associated with the changes and error correction in the later part of the project gets higher than the cost of changes made in initials (Leung et al., 2004). The project team must identify each and every stakeholder, measure their requirements and expectation to the possible extent, and manage their influences to ensure project success. Stakeholders that are missed or ignored are likely to emerge during later stages of project management and when discovered with their requirements may bring changes to the project. The changes incorporated towards project ending would be more costly and more difficult to integrate with project. Identification of all stakeholders in the beginning of the project would enable more structured, organized and objective oriented project (Olander and Landen, 2005). Knowing what stakeholders want and interpreting their expectations into wants and requirements is crucial to project success. Expectations are what stakeholders desire to happen and are usually ambiguous, undefined, intentionally or unintentionally hidden and unstated. These expectations if not determined and worked upon may have detrimental consequences to the project completion by directly impacting scope, cost and quality (Kline and Carlson, 1993). To know these expectations, it is important to communicate with stakeholders, involve them throughout the project, and manage their influences. The purpose of this research work is to determine, enhance and contribute to the knowledge on management of stakeholders in construction projects, and to identify methods, tools and techniques for analyzing the stakeholder’s wants and needs. The aim of the project manager must be to complete the project according to its requirements and objectives, thus a project manager must view stakeholder management process from the perspective of the specific final objectives. Practically, it is not possible to meet each and every demand of all stakeholders and still meet the project objectives thus challenge is the find a balance and trade-off between the emerging requirements and project objectives (Huber et al., 2004). The analysis of stakeholders provides project managers with better vision and allows them to make future project decisions. Conflict and controversy may arise if the decisions are made without analyzing the stakeholders and the consequences of the decisions for them (Bourne, 2009). The outcome is a conflict for which project manager may not be ready as he was not expecting and thus had no plans to resolve them. 2. Aim The primary aim of this research is to study “Significance of stakeholder management in construction projects”. For this purpose, five objectives were defined outlined to a specific timeline marking the milestones of the research work. These five objectives are discussed in the next section. 3. Objectives The main objectives of this research work are as follows:- To identify and describe unique and unusual aspects of stakeholder management in construction projects To review related knowledge and practices on significance of stakeholder management; To study current working methodology of the construction sector and investigate potential impact of stakeholder analysis on successful completion of construction project; To investigate the impact of applications for specific stakeholder analysis; To conclude the research and identify potential future research areas 4. Outline Research Methods The research method would consist of two parts; deskwork for literature review and field work for data collection, analysis and interpretation. The main themes covering the broader literature review may include but not limited to: Stakeholder definition Identification of Stakeholders Stakeholder Requirements and Expectations Significance of stakeholder analysis Current industry practices Applications, tools and techniques for stakeholder analysis and management Benefits of Stakeholder management Case Studies Following are few journals and books that may help to investigate the proposed literature review: Construction Extension to A Guide to Project Management Body of Knowledge Construction Stakeholder Management The TQM Magazine Journal of Construction Management and Economics Collection, analysis and interpretation of data is justified by methodology adopted (Carrillo, 2001). According to Myers (2004), qualitative research involves interviews, case studies, direct conversation and focus groups through qualitative data collected. On the other hand, quantitative methods include experiments and surveys on objective measures rather than subjective experiences (SJI, 1999). As the research methods have been stated, the exact methodology would evolve as the research work progresses and would be aimed specific to the research objectives already stated above. References Winch, G. (2010) Managing Construction Projects, West Sussex: Blackwell Publishing Ltd, p.3-14. Chinyio, E. and Olomolaiye, P. (2010) Construction Stakeholder Management, West Sussex: Blackwell Publishing Ltd, p.13-40. Walker, A. (2007) Project Management in Construction, 5th ed. Oxford: Blackwell Publishing Ltd, p.100-102. Project Management Institute (2008) A Guide to Project Management Body of Knowledge, 4th ed. Pennsylvania: PMI, p.23. Ward, S. and Chapman, C. (2008) Stakeholders and Uncertainty Management in Projects, Construction Management and Economics, 4(6), p.563-577. Olander, S. (2007) Stakeholder Impact Analysis in Construction Project Management, Construction Management and Economics, 25(3), p.277-287. Leung, M. et al. (2004) Demystifying Stakeholders Commitment and Its Impacts on Construction Projects, Construction Management and Economics, 22(7), p.701-715. Javeed, S. (2002) Stakeholder Analysis, Oxford: Oxford Policy Management, p.24-57. Olander, S. and Landen, A. (2005) Evaluation of Stakeholder Influence in The Implementation of Construction Projects, International Journal of Project Management, 23(4), p.321-328. Kline, T. and Carlson, G. (1993) Stakeholder Perspective, Journal of Nonprofit & Public Sector Marketing, 1(2), p.57-67. Huber, M. et al. (2004) Putting Stakeholder Management into Practice, Munchen: Springer-Verlag Berlin Heidelberg, p.14-23. Bourne, L. (2009) Stakeholder Relationship Management: A Maturity Model for Organizational, Burlington: Ashgate Publishing Company, p.145. Carrillo, P. et al. (2003) Reengineering Construction Business Process through Electronic Commerce, The TQM Magazine, 15(3), p.197-212. Myers, D. (2004) Qualitative Research in Information Systems, [online] Available at: [Accessed 23 September 2011]. SJI, (1999) A Judge’s Deskbook on the Basic Philosophies and Methods of Science: Model Curriculum, State Justice Institute, USA, [online] Available at: [Accessed 23 September 2011]. Read More