Management of Project Stakeholders - Report Example

Project A project is any endeavour that is temporary and undertaken for the purpose of creating a unique result, product or service which the concerned stakeholders agree that it will be managed as a project (Curlee and Gordon, 2010). This implies that it is fundamental to know the relative importance of various stakeholders involved in the overall project (Kloppenborg, 2008). Projects have a clearly defined purpose that is aimed at attaining a clearly defined result. In order to solve a problem the project entails analysis of needs prior to being undertaken (Richardson, 2010). Projects are characterized by being realistic in that the firm has resources to attain its purposes (Cleland and Ireland, 2006). Projects are also time bound, that is, they have a beginning and an end. Projects also involve various players and are accompanied with various uncertainties and risks (Jones and Murray, 2008). Furthermore, projects have distinct identifiable stages. The stakeholders are brought into the project management processes in order to ensure that the projects undertaken delivers to their full potential to advantage of their host firms and the community at large. Project stakeholders Project stakeholders refers to all entities whether within or without the firm which are involved in the sponsorship of the project or have an interest in the success of the project or who may influence the project completion whether positively or negatively (Morton, 2010). A project stakeholder can also be defined as any individual or a firm that is involved actively in a project or whose interests could affect either positively or negatively the execution or successful implementation of the project. Projects need stakeholders for the successful execution and completion of the project. Thus it is extremely important that project stakeholders be identified and managed appropriately (Curlee and Gordon, 2010). This is because their influence can either be negative or positive. Stakeholders in a project include sponsors, customers, end users, program manager, project manager, portfolio manager, functional managers, sellers, legal departments, operation managers, vendors, project team and project management office. The identification of stakeholders Project stakeholder identification refers to a combination of steps aimed at identifying individuals or firms interested in the present project and documentation of the relevant information in regard to their involvement, expectation and influence on the project results. This process increases the probability of the project success (Richardson, 2010). This process is managed by the project manager who is responsible for developing stakeholder identification strategies that allows the project manager to focus on relationships that are critical for the success of the project (Heldman, 2011). The process utilizes documents such as project charter, procurement documents and enterprise environmental to identify project stakeholders. Identification of the stakeholders involves stakeholder analysis, expert judgment and finally development of project stakeholder register. Stakeholder analysis is a systematic process aimed at collecting and reviewing qualitative and quantitative information on the project stakeholders to assist in identification of concerns and interests that ought to be taken into account throughout the implementation process of the project (Richardson, 2010). A project stakeholder analysis matrix is used to rank all existing stakeholders and determination of their relationships, expectations and influence. The stakeholder results in a list of identified stakeholders. Expert judgment is an activity which involves expertise and judgment to ensure that stakeholders are appropriately identified and listed (Heldman, 2011). This process is carried out by senior management, project managers, key stakeholders, professional and technical associations and subject matter experts (SME). This process investigates the list and elements of stakeholders that have been identified including names, interest, responsibilities, influence and rights. The development of project stakeholder register is important and it utilizes the information obtained from both stakeholder analysis and expert judgment. Register development is very important for the management of stakeholders (Richardson, 2010). The register has details about the stakeholders identified. The project stakeholder register has information about the identification data of the stakeholder, contact information, assessment information and stakeholder classification. Identification data include information such as stakeholder names, positions and roles. Contact information includes phone numbers, postal addresses and emails. Assessment information includes stakeholders’ requirements, expectations and potential impact on the project. Stakeholder typology is used to select and prioritize stakeholders by interest and power influence (Heldman, 2011). The stakeholder register is created by the project manager. Stakeholder management strategy is based on the stakeholder’s register. The strategy provides an approach aimed at minimizing potential negative impacts of the stakeholders identified. Strategy and the stakeholder analysis matrix is used by the project manager in determining the impacts of the stakeholder and in identification of their level of involvement and participation. This is also used in getting stakeholder groups representatives. Roles and the influence of project stakeholder on project management End users and customers are people who will be utilizing the project end results (Richardson, 2010). They can influence the project success or failure. For instance, if a project involves introduction of a new technology in the operation of the business and the end users expected to use the technology resist the adoption of the technology then the project will be deemed a failure. Thus project managers need to prepare these individuals prior to completion of the project in order to avoid instances of rejection of the project outcome by people expected to utilize it. Sponsors acts as advocates of the project and provide financial support to the project (Heldman, 2011). They have the responsibility of acting as escalation path for the issues that cannot be handled by project manager. They are responsible for providing the scope and the project charter. Thus sponsors can influence the scope of the project. Portfolio manager is involved in the prioritization of a firm’s projects. Thus, he/she can increase or decrease the priority of the project. He is also involved in the selection of the project via evaluation of the returns on investment. Thus, the portfolio manager can influence whether a project will be undertaken or not. Program manager is charged with the responsibility of supporting and overseeing the project (Curlee and Gordon, 2010). Without such support and oversight roles the project might not be able to successful attain its objectives on time. On the other hand, the project management office plays a role of providing support and guidance to project management team (Heldman, 2011). This guidance influences how the project objectives are executed and hence the success of the project. Project manager is the key person with the responsibility of attaining the objectives of the projects. He plays a role of managing key constraints of the project and as such influences the success or failure of a project. On the other hand project team entails all team members who are involved in the project (Schwalbe, 2010). They are charged with the responsibility of executing the project (Richardson, 2010). Their knowledge, skills and competencies determine the successful attainment of the project and time span taken (Heldman, 2011). Without their proper management, the project might not be able to achieve the set objectives (Cleland and Ireland, 2006). Functional managers are essential in the project because they provide the functional resources for functional expertise in the project (Curlee and Gordon, 2010). For instance, a project aimed at implementing a new technology will require the inclusion of functional managers from say marketing, sales and production department to ensure that the new technology being implement meets the special needs in such departments for it to successful serve the market. Operational managers are essential for the successful utilization of the project outcome. Once the project is accomplished it is handed over to operational managers. They influence the outcome if the project because they are the one charged with the responsibility of influencing end users to adopt the project outcome. Some expertise might not be available in the firm and thus a firm may decide to outsource such products and services from vendors and sellers. Vendors and sellers can influence the success of the project. For instance inappropriate choice of a vendor may result in provision if a substandard product or service that can impact negatively on the success of the project. Furthermore, a seller who is not efficient may delay the execution f a project and thus such a project may lag behind schedule due the influence of the seller (Curlee and Gordon, 2010). The figure below shows the main stakeholders in a project. Adapted from http://eq4pm.typepad.com/eq4pm/images/stakeholders_v1.gif Categories of project stakeholders Stakeholders are classified using either the two type project stakeholder classification model or the four type stakeholder classification model. Two type stakeholder classification One of the two project stakeholder classification distinguishes between supply chain stakeholders and direct/indirect horizontal relationships. Another category of two project stakeholder classification distinguishes between primary and secondary stakeholders. In this case primary stakeholders are people or groups on the project team who have been legally or contractually obligated to the project team and have the responsibility and authority of managing and committing resources in accordance to schedule, cost and technical performance objectives (Curlee and Gordon, 2010). On the other hand, secondary stakeholders are people or group of people who have no formal contractual relationship to the project but who can have strong interest in the project (Richardson, 2010). Another category of two type project stakeholder classification model categorizes project stakeholders as proponents and opponent stakeholders (Heldman, 2011). The proponents in this case are interested parties who have positive and direct stake in the project and its prosperity where those with potentially negative attitudes toward the project are the opponents. Under this classification the proponents are sometimes referred to as beneficiaries whereas opponents are referred to as adversarial stakeholders (Cleland and Ireland, 2006). Thus beneficiary stakeholders refer to those stakeholders who are targeted to receive specified benefits from the project who often have positive interest in the project. On the other hand adversarial stakeholders refer to stakeholders who are not prepared to discuss and negotiate issues related to the project. The figure below is an illustration of a two type project stakeholder classification model which categorizes project stakeholders as proponents and opponent (resistors) stakeholders. Four type stakeholder classification Internal stakeholders External stakeholders Basically the primary stakeholders Basically the secondary stakeholders Divided into demand and supply stakeholders Grouped further into the private and public stakeholders One of the four type stakeholder classification involves identification of two stakeholder types within the internal and external stakeholders (Chinyio, 2010). In this categorization, the internal stakeholder is associated with primary stakeholders while the external stakeholders are associated with secondary stakeholders (Curlee and Gordon, 2010). Internal stakeholders are further grouped into demand side and supply side stakeholders while the external stakeholders are further grouped into private and public stakeholders (Cleland and Ireland, 2006). Another four type classification categorizes stakeholders into project champions, project participants, community participants and parasitic participants (Richardson, 2010). In this case Project champions may include sponsors of the project, project participants may include project team and project manager, and community participants may include end users and consumers while parasitic participants may include beneficiaries of the project who are not involved actively in the project (Haugan, 2006). Another four type classification categorizes stakeholders based on the power/interest of the stakeholder in the project. Affected Identify concerns and keep informed Key players Actively involve in all phases Marginal Monitor regularly for changes Potentially influential Understand and satisfy needs Adapted from http://projectleadershipwaterloo.files.wordpress.com/2011/10/4_5.png The figure illustrates the four type classification based on the level of interest and the power of influence to the success of the project. This classification allows measurement of the potential influence of the stakeholder on the project. Analysis of stakeholders Stakeholders in projects come from diverse backgrounds and have varying perspectives and objectives. The analysis of stakeholders is based on three main components which define stakeholders (Chinyio, 2010). These components include stakeholder salience, frames of reference of the stakeholder and stakeholder networks. Stakeholders are differentiated based on salience. This is the degree to which managers give priority to competing stakeholder claims. Stakeholder salience is a combination of stakeholder power, legitimacy and urgency. This implies that a stakeholder who has access to coercive, utilitarian or normative means of power, he/she can impose his/her principles onto the relationship. Thus it is essential to understand the power relationship between the stakeholders and how this relationship could vary with time. Legitimacy is what is generally acceptable or expected by the general society. The acceptance of an individual or a group as stakeholder will be dependent on their legitimacy (Curlee and Gordon, 2010). To earn legitimacy in a project the potential stakeholder’s actions must be perceived or assumed to be desirable, appropriate or proper within the context of the project’s norms, definitions and values. Urgency is the degree to which managerial delay in reacting to the claim or relationship and the importance of the claim or the relationship to the stakeholder (Richardson, 2010). It is argued that urgency is created by temporality and criticality which determines the degree of importance that is attached to the paying attention to the claim of the stakeholder. Thus by measuring the power, legitimacy and urgency commanded by potential stakeholder, his/her salience can be determined. This provides a basis for considering the relatively important stakeholder in a project. This also provides an indication of possible actions that can be undertaken by a stakeholder (Cleland and Ireland, 2006). Thus, using salience a firm is able to determine how it deals with each stakeholder. Stakeholders’ frames of reference refer to the way the stakeholder views the world. This frame of reference is unique to each individual and is shaped over time by experience, culture, education and familial relationships. However, the policies of an individual can overlap with those of others and thus yield a policy discourse (Richardson, 2010). The policy discourse refers to the way a group of individuals perceives a topic and how they will behave toward such a topic and their interaction with other people on the same topic (Cleland and Ireland, 2006). By understanding the policy discourses of various stakeholders one is able to know the objectives and goals pursued by these stakeholders and hence enhancing the effectiveness of engagement practices and thus project implementation. Stakeholder network is the last component that defines a stakeholder. This is the complicated interrelationships among stakeholders. It is argued that all stakeholders surrounding a specified issue are linked intrinsically to one another via a social network that in this case refers to stakeholder network. The fact that stakeholders claim a stake in certain issue implies that the stakeholders are likely connected to the principal problem owner. The following diagram illustrates a simplified network diagram. By examining the social ties that exists between different stakeholders one is able to perceive clearly how stakeholders are analysed in social context (Zaval and Wagner, 2011). This can provide information on how different stakeholders can be approached and how to involve them in a meaningful dialogue. Thus social networks are defined using the strength, density and concentration. Categorization of stakeholders is based on two broad approaches: top down analytical categorization and bottom up reconstructive methods (Chinyio, 2010). This is a method which gives the stakeholders an opportunity to define the parameters themselves. This means that much of what it reflects is the concerns of the stakeholders. The strategic perspective kind of categorization is different because uses the workshops and interviews with the organization’s stakeholder for the purposes of analysing comparing and identifying the goals of all of the different groups. This is very advantageous because the groups that share common goals are very easily identified. In the analytical categorization, stakeholders are classified by the analysts based on their observations of the phenomenon in question (Walker, 2007). Analytical categorization methods include power, urgency and legitimacy method; cooperation and threat method and cooperation and competition method. On the other hand, reconstruction methods allow parameters to be defined by the stakeholders themselves to reflect their concerns more closely (Cleland and Ireland, 2006). Another method used to categorize stakeholders is the perspective analysis which uses interviews or workshops with stakeholders to identify and compare the goals of different groups and the perceived opportunities and constraints that they have with respect to reaching their goals (Curlee and Gordon, 2010). This allows stakeholders to be grouped together based on what they share in common. Discourse analysis is another method used to categorize stakeholders based on the way people talk about an issue and how the share and perceive an issue. This analysis employs Q-methodology to group individuals (Richards, and Wilson 2004). It also employs factor analysis to extract social discourses that allows stakeholders to be categorized based on empirical evidence rather than theoretical perspectives. Focus Form of categorization Details in terms of analysis detail The main tool of research salience Competition and cooperation Obstruction vs. cooperation Low Workshop/document analysis Urgency, legitimacy and power Urgency, legitimacy and power high Workshop/document analysis/surveys/ interviews Card sorting reconstruction The groups are according to the own criteria of stakeholders high Workshop/document Frame of reference Analysis due to strategic perspectives Constrains, opportunities and goals high Personal interaction/Workshop/document analysis The analysis of policy disclosure Policy frames high interviews / survey Document analysis network Matrices of Actor-linkage Descriptive relationships Low document analysis / observation / Interviews The analysis of social network Quantitative relationships high interviews / survey/ Document analysis / observation References Chinyio, E. 2010. Construction Stakeholder Management. Jakarta: John Wiley and Sons Cleland, D., and Ireland, L. 2006. Project Management: Strategic Design and Implementation. Chicago: McGraw-Hill Professional. Curlee, W., and Gordon, R. 2010. Complexity Theory and Project Management. London: John Wiley and Sons Haugan, G. 2006. Project management fundamentals: key concepts and methodology. California: Management Concepts. Heldman, K. 2011. PMP Project Management Professional Exam Study Guide, 6th Ed. New York: John Wiley & Sons. Heldman, K. 2011. Project Management JumpStart, 3rd Ed. New York: John Wiley & Sons Jones, R., and Murray, N. 2008. Change, strategy and projects at work. Cabrera: Elsevier Kloppenborg, T. 2008. Contemporary Project Management. London: Cengage Learning Morton, L. 2010. Pathways for Getting to Better Water Quality: The Citizens Effect. Sydney: Springer Richardson, G. 2010. Project management theory and practice. London: Auerbach Pub./CRC Press. Richards, G., and Wilson, J. 2004. The global nomad: backpacker travel in theory and practice. London: Channel View Publications Schwalbe, K. 2010. Information Technology Project Management, 6th Ed. London: Cengage Learning. Walker, A. 2007. Project Management in Construction, 5th Ed. London: Wiley-Blackwell. Zaval, L., and Wagner, T. 2011. Project Manager Street Smarts: A Real World Guide to PMP Skills, 2nd Ed. London: John Wiley & Sons. Read More