The Effectiveness of Stakeholder Management in Supporting Delivery of Successful Projects - Essay Example

Critically access the effectiveness of stakeholder management in supporting delivery of successful projects Introduction In present day project management, business complexity involved has increased by many folds. As a result, role of stakeholder management has become increasingly important for success of different projects. According to Loosemore (2006), past decades observed uncertainty in a number of projects as companies suffered from poor stakeholder management. The purpose of this paper is to highlight growing importance of stakeholder management in success of modern projects. Furthermore, the project will also study stakeholders and their role in project management. In addition, the paper will also evaluate current issues prevailing in project management and real instances in order to assess role of stakeholders in management of different types of projects. Project Stakeholders Project stakeholders are a group of individuals who has positive or negative interest in a project, which in turn affect functionality of the project. In general, interests and attitudes of individuals can be dissimilar towards a project. In any project, the primary stakeholders include: Beneficiaries of project interventions Funding organisation such as, banks and financial institutions Partners such as, governmental and non-governmental organisations Project staffs and volunteers Local authorities such as, state and national governments National and international regulatory bodies Social, political and religious entities Since different stakeholders have separate set of interest in a project, their influence differs across various groups or individuals. However, every stakeholder is important for a project and one should understand their level of interest in the project as this affects success or failure. Moreover, it is the stakeholders who judge performance of a project, instead of project team and manager (Kerzner, 2013). Considering the role of stakeholders, it is crucial that their priorities, need, influence and interest are thoroughly analysed. The analysis results in better understanding of important stakeholders and development of appropriate communication strategy for stakeholder management. One of the important tools is stakeholder mapping, where key stakeholders are identified and categorised as per their interest and influence (Newcombe, 2003). Stakeholder management A decade ago, stakeholder management was an area, which drew least amount of attention and was hardly considered in any sort of project development. Yet, growing complexity in the project management area has resulted in consideration of stakeholders as critical element of projects. There are internal as well as external stakeholders and they differ on grounds of project scope, geographical location and external environment of the project. It is a difficult task to manage the stakeholders and requires continuous involvement of project members such as, managers, for continuous improvement in relationship and building mutual trust (Pan, 2005). An important aspect of stakeholder management is that it helps in managing expectations. This implies that it is possible to map the expectations and share information with different stakeholders about relevance of the project. It has observed that when project beneficiaries are not involved in project planning and management, they have a high tendency of turning their back on the project as they feel unimportant. Key stakeholders have the power or authority to disrupt development of the project. Thus, their insufficient involvement and absence of frequent communication cause project failure (Baker, Murphy and Fisher, 2008). Major challenges present-day project management is facing 1. Lack of clarity in defining project goals and scopes The scope of a project is the basis of all future decisions related to the project. When goals and scope of the project is unclear, it becomes extremely difficult for the team to perform appropriately as well as for the management to approve the same. Similarly, when a stakeholder fails to understand need of the project, they tend to deviate. One such example is that of scraping a £ 100 million project by BBC in 2013 as the project scope was not clearly defined and the company later realized that the project may generate little or no asset (BBC, 2013). 2. Lack of accountability and sufficient skills A project is developed as a team and is responsibility of every member, not only the project manager. Lack of accountability among team members, in the shape of avoiding responsibility and blaming others for flaws, has frequently resulted in halting of projects. In addition, lack of right skill often results in improper execution of project. In big corporate houses, in order to avoid project failures, teams are approved by both internal and external stakeholders. For instance, improper management of payroll resources caused failure of $ 254 million project, MyCalPAYS in California. 3. Ambiguous contingency plans and improper risk management Risk management is an essential part of project management and managers must prepare appropriate contingency plans for risk tolerance. Gathering information regarding input resources, developing trust and relationship and understanding the weak links is part of risk management and job of the project manager. Weakly identified risks create ambiguous contingency plans and wastage of resources (Raz, Shenhar and Dvir, 2002). 4. Improper communication Flow of communication is very important in a project so that progress and expectations related to the project are well-communicated to team members, top management and stakeholders. Ineffective communication causes disinterest among individuals who are directly and indirectly associated. One of the communication related catastrophe is failure of Avon in Canada. The major contributing factors in this case were improper analysis of salespersons’ expectations and that of stakeholders (Williams, et al., 2005). Role and responsibilities of stakeholders in success of projects In present day, the role of stakeholders is very important for success of a company. For instance, Apple became a huge success within a mere 15 years and it was not an easy task to achieve this success or exceed expectations of its stakeholders. The major stakeholders of Apple’s project team involve strategic plan developer, line-of-business owner (also user of its applications), architects and developers, funding agencies and outsourcing teams. It was observed the company has defined and distributed job roles for each member and as a result, the company is presently at the pinnacle of success (Gallo, 2011). It is responsibility of the stakeholders to understand main drivers of business and ensure that they correspond with strategies and requirements of the projects. The operational management may not be thorough with the financial plans and budget of the project; so, it is important the stakeholders such as, top-level managers, delegate such information to them so that the project does not exceed expected cost (McMahon, 2013). There are four important steps in a project: defining goals, specifications, tasks and responsibility, planning schedules, budgets, resources and risk, execution of the project and closing the project by delivering product to consumers. It is important that the stakeholders maintain their patience and calm throughout various stages of project development (McMahon, 2013). For instance, one of the unexpected success projects is launch of Google android smart phones by Motorola. Only a few years back, Motorola had phased out of the market due to low acceptance of its products. However, the company re-launched products such as, Moto-G and Moto-X with Google in 2014, which have been accepted worldwide. This was only possible because the stakeholders had held their trust in both these companies (Google, 2014). Committing necessary resources and taking ownership of requisite deliverables is important on the part of stakeholders. These steps reduce repetition of errors in activities and resource allocation. Additionally, this will ensure great involvement of stakeholders, better allocation of resource and steadiness in the project. It is noted that with increasing flexibility in business environment, growing number of organisations are employing and supporting change management as a part of their project management. Many organisations have undertaken participatory planning for greater involvement of stakeholders. Generally, stakeholders have vast amount of information and knowledge, which they acquire over time with growing experience. A project can be benefited greatly by utilising this information for developing sustainable and efficient solutions (McMahon, 2013). There are several examples, where stakeholders’ involvement resulted in success of the projects. For instance, presently, the most convenient way of using a technology is ‘plug and play’ or using USB (Universal Serial Bus) devices. Even so, the technology was nowhere in existence even ten years ago, but invention of the product and support of stakeholders in further development and integration have served millions of consumers. It is crucial on part of the stakeholders to provide required support and have clear communication throughout the project life (Pan, 2005). Conclusion The paper has recognised various stakeholders associated with a project and their role and responsibilities in its development. The essay has further analysed importance of stakeholder management under project management and the impact of stakeholders in dealing with present-day challenges faced by projects. In this regard, certain failed as well as successful projects have been highlighted along with their respective causes. Reference list Baker, B. N., Murphy, D. C. and Fisher, D., 2008. Factors affecting project success. Project Management Handbook, Second Edition, pp. 902-919. BBC, 2013. BBC abandons £100m digital project. [online] Available at: [Accessed on 19 June 2014]. Gallo, C., 2011. The Innovation Secrets of Steve Jobs: Insanely Different: Principles for Breakthrough Success. New York: McGraw-Hill. Google, 2014. Facts about Google’s acquisition of Motorola. [online] Available at: [Accessed on 19 June 2014]. Kerzner, H. R., 2013. Project management: a systems approach to planning, scheduling, and controlling. New Jersey: John Wiley & Sons. Loosemore, M., 2006. Risk management in projects. UK: Taylor & Francis. McMahon, C., 2013. Roles and responsibilities of key stakeholders. [online] Available at: [Accessed on 19 June 2014]. Newcombe, R., 2003. From client to project stakeholders: a stakeholder mapping approach. Construction Management and Economics, 21(8), pp. 841-848. Pan, G. S., 2005. Information systems project abandonment: a stakeholder analysis. International Journal of Information Management, 25(2), pp. 173-184. Raz, T., Shenhar, A. J. and Dvir, D., 2002. Risk management, project success, and technological uncertainty. R&D Management, 32(2), pp. 101-109. Williams, T., Ackermann, F., Eden, C. and Howick, S., 2005. Learning from project failure. Management of Knowledge in Project Environments, pp. 219-236. Read More