Stakeholder Analysis and Its Utility in Development Projects - Essay Example

What is a stakeholder analysis and what is its utility in development projects? Introduction The notion of development has been associated with factors such as “economic growth, modernization, and nation building, and industrialisation, betterment of life opportunities, poverty eradication and good governance” (Pieterse, 2001: 158). This multifaceted nature of development has presented many challenges in the implementation of effective development projects. These challenges have especially been notable where issues of gender, culture as well as varying interests of different groups have had to be taken into account in the conceptualising and implementation of development projects. This essay will focus on the need and importance of analysing and incorporating the interests of different groups in development projects; an exercise that is commonly regarded as stakeholder analysis. The scope of this essay will focus on two essential aspects. Firstly, the essay will present a comprehensive meaning of the term stakeholder. Once that has been done, the essay will focus on defining the term stakeholder analysis. This definition will concentrate on highlighting the objectives and importance of carrying out stakeholder analysis in development projects. Secondly, the essay will draw attention to the use of stakeholder analysis in development projects. Essentially, this part of the essay will aim to answer the question of when, how and why stakeholder analysis should be carried out. The ultimate objective of this sector of the essay is to establish the utility of stakeholder analysis in development projects. Finally, the essay will conclude with a summary of the important factors that form the stakeholder analysis process. Different types of stakeholders The identification of a wide range of stakeholders is an essential process in development projects. Any institution, group or individual that has a clear or potential vested interest in the development project can be regarded as a stakeholder. The effective accommodation of the different needs of each stakeholder presents a challenge to the effective implementation of development projects. Essentially therefore, a stakeholder consists of all parties that need to be taken into consideration in insuring the successful achievements of development project goals. The support and participation of stakeholders is often key in the smooth implementation of a project and in the long run, the overall sustainability of the development project. There are essentially two categories of stakeholders. These are namely internal stakeholders and external stakeholders. Internal stakeholders consist of people who are directly working for the project. These include project management, team members, consultants and sponsors. For example, it is often the case that project sponsors will have an interest on how the funds will be effectively utilised, while project management maintain the timescales and control the resources involved in the implementation of the project. On the other hand external stakeholders consists of people and organisations outside the project implementation team but that have the power to impact on the project progress and its overall success and sustainability. As such, non-governmental organisations, villagers, business and trade organisations municipal and government officials, educational institutions as well as the village chief are all examples of what constitutes an external stakeholder. Under the two categories, we can further identify three types of stakeholders. These are namely primary, secondary and tertiary stakeholders. In development projects, primary stakeholders are made of the community members whose demands need to be met in order to foster development in the community. They are essentially the project end users. The objective of a development project is therefore to meet the needs of primary stakeholders. Secondary stakeholders consist of local and regional administrators as well as regulators. These are the key authorities that tend to influence how and when the project should be implemented. In development projects, a project cannot progress without the favourable cooperation of these important secondary stakeholders. Finally, the tertiary stakeholders comprises of non-governmental organisations and financing organisations that tend to provide the funding for development projects as well as advocate for development issues to be made into a priority. These tertiary stakeholders tend to impact the size of the project as well as the amount of resources available for the implementation of a development project. Defining stakeholder analysis Once these stakeholders have been identified, it become essential to establish their potential interests in the development project and determine whether these interests will positively or negatively impact the overall development process. Stakeholder analysis is primarily about the process of identifying all stakeholder views, concerns, objectives and goals that may be similar or different to the project objectives. It is a systematic information gathering exercise with the intention of identifying the project stakeholders and their interest levels. Stakeholder analysis therefore refers to the various techniques that are utilised to gather information and understand the key interests, needs and expectations of all parties concerned directly or indirectly in the implementation of a development project. Through stakeholder analysis interrelationships, attributes, character, power and concerns of project opponent and proponents are taken into consideration in the project planning process. The purpose of stakeholder analysis is to clearly identify all issues that can impact the implementation and sustainability of a development project in one way or another. It also assists in determining what can and cannot be negotiated and/ or modified about the project. Through stakeholder analysis, vital needs and expectations of parties likely to be affected by the project are identified early enough to be incorporated into the project implementation plan. How and when to conduct stakeholder analysis Stakeholder analysis should ideally be an ongoing practice that should commence in the project planning stage. There are however three notable stages to stakeholder analysis that are implemented in all well designed stakeholder analysis. The first stage concerns the identification of all stakeholders to a project. This can be done through background research about the area where the development project will take place. It is during this early phase of stakeholder analysis that one should also conduct interviews with people who are regarded as knowledgeable or experts about the project region as well as read up on other researches, reports and articles written about the area. Factors such as the most cultural and gender appropriate method of carrying out stakeholder analysis usually emerge during this preliminary stage. Once this preliminary stage of stakeholder analysis has been completed, the second phase concerns the assessment of the level of influence each stakeholder carries. This is determined through carrying out interviews with the stakeholders already identified. The objective of this phase is to ascertain the level of impact (both negative and positive) each stakeholder may have on the development project. Methods such as one on one unstructured interviews as well as semi-structure focus group interviews can be carried out to gather information about stakeholder interests. Questions should be structured in such a way as to be able to uncover what is regarded as important to the stakeholder in direct relation to the development project. The stakeholder analysis process should be able to uncover the level of influence and hierarchy of authority held by different stakeholders so to determine the powers each stakeholder has in either blocking or promoting the intended development project objectives. This identification of stakeholders core interests and levels of power will assist in determining who can be involved in the project implementation process as well as how and when this involvement can take place. This stakeholder involvement can be in the form of consultation or partnership. The third phase is about deciding which stakeholder to engage in the development project. This phase is essentially about determining how to best accommodate the key stakeholders in the project. It is important that the interests of stakeholders continue to be monitored throughout the project. At times, these interests may change and modifications to a project need to be made accordingly. The different and sometimes conflicting nature of stakeholder interests, as well as their often changing nature presents tremendous challenges to the implementation of successful development projects. Often times, it is difficult to effectively accommodate equally all the interests of all stakeholders. When balancing stakeholder interests presents a difficulty it becomes essential to differentiate between primary and secondary stakeholders. Once this differentiation has been done, the interests of primary stakeholders should be prioritised but never to the extend where the interests of secondary and tertiary stakeholders are completely excluded. Conflicts tend to emerge whenever the interests of a particular stakeholder are completely ignored in the development project. The use of stakeholder analysis Stakeholder analysis can determine how stakeholder attitudes will impact on the success of the project. It essentially identifies any potential threats and/or opportunities to a project as a result of stakeholder action. For example, stakeholder analysis can clarify the role of gender in a development project by looking at women as stakeholders and establishing their relative position and power in a community. This will identify factors such as gender discrimination that can be a threat to the success of a development project. Like SWOT analysis, stakeholder analysis also identifies the project’s strengths, weaknesses, opportunities and threats. On the positive front, stakeholder analysis helps in identifying the most efficient and cost effective manner of implement a development project successfully. The identification of stakeholder interests is especially important as it aids in discovering potential conflicting interests that can adversely impact the effective implementation and sustainability of a development project. What therefore immediately emerges is that stakeholder analysis is important in reducing potential risks that could jeopardise a development initiative. Through stakeholder analysis, possible negative impacts on a development project are identified early and corrected appropriately. Stakeholder analysis can arguably be regarded as a proactive approach to identifying necessary adjustments that need to be made before the implementation of a development project. Stakeholder analysis is also the process that allows stakeholders an opportunity to have a say on how development projects should best serve their interests, goals and objectives. According to proponents of participatory development, stakeholder analysis fosters a sense of responsibility, enhances ownership and builds capacity from the onset of the development process (Morse, K and Struyk, R, 2006: 45). In addition, stakeholder analysis is viewed as an opportunity to provide project management with vital information regarding important factors that have a direct impact on the project target audience. The utility of stakeholder analysis lies in assisting to build a project common vision. Ideally, once the interests of the different stakeholders have been incorporated into the implementation plan, there should be a common awareness of what the project is aiming to achieve and how it will impact the different people concerned. Through stakeholder analysis, various skills are also identified and can be used to save costs and time in the implementation of projects as the power of some stakeholders can be utilised to speed up processes. More importantly, stakeholder analysis promotes the notion of participation in development. It encourages the bottom up approach to development which has been proven to be more sustainable as it promotes a sense of ownership amongst the project primary, secondary as well as tertiary stakeholders. The element of inclusion of various stakeholder demands, strategic goals, objectives and wishes in development projects diminishes conflict and promotes project clarity. Conclusion What has clearly emerged is that stakeholder analysis is particularly useful in gaining understanding of the different viewpoints of all parties that are likely to be affected in one way or another by a development project. It is important to not only uncover the different interests of stakeholders but also to determine the level of power and influence held by each stakeholder as this can determine the progress and sustainability of a development project. It has equally emerged in this essay that stakeholder analysis should be carried out from the beginning of the development project as it is useful in ensuring that development project goals are achieved in an efficient, effective and sustainable manner. References: 1. Chang H and Grabel, I. 2004. Reclaiming development: an alternative economic policy manual. London: Zed Books 2. Coetzee, J.K. 2001. Development theory, policy and practice. Cape Town: Oxford University Press. 3. Desai, V and Potter, R (eds). 2000. The companion development studies. London: Oxford University Press 4. Kingsbury, D et al. 2004. Key issues in development. New York: Palgrave Macmillian. 5. Morse, K and Struyk, R. 2006. Policy analysis for effective development: strengthening transition economies. New Delhi: Lynne Rienner Publishers 6. Pieterse, J.N. 2001. Development theory: deconstruction/reconstruction. London: Sage publications 7. Rapley, J. 1996. Understanding Development. 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