Stakeholder analysis

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2012

Stakeholder Analysis (Economics Evaluation of Plans and Projects)

By: Elenaz Anzalimojarad Pejman Fani


Table of Contents  Introduction..............................................................................................4  Methodology …………………………………………………………..….. 4  Description………………………………………………….. ………….....5  What is Stakeholder Analysis?..................................................................5  Who Are Stakeholders?.............................................................................5  Why is this analysis useful? …………………………………………..….6  What are the steps in stakeholder analysis? ………………………….....6  What are the benefits of Stakeholder Analysis?.................................... 6  What can be achieved with stakeholder analysis? ……………….…….7  When to Conduct Stakeholder Analysis …………………………….…..8  Identification of Stakeholders ……………………………………….… 8 .  Stakeholder analysis can entail below activities …………………..….... 9  Classification of Stakeholders ……………………………………….….10  Managing Stakeholder expectations………………………………........ 10  Key Benefits of Stakeholder analysis / Managing Expectations…....... 10  Major Attributes to Consider……………………………………………11  Data Collection ………………………………………………………......11  Analyzing Data and Designing Strategy……………………………..... 12  Stakeholders – Approaches …………………………………….............14  Phases ………………………………………………………………….…15 Page 2 of 27


 Objectives ………………………………………………………….……16  Scope ........................................................................................................16  The Role of Stakeholders in an Evaluation………………………..…..18  Role in the decision making process ......................................................18  Predicting the influence of stakeholders…………………………..…...19  Understanding the area of stakeholders’ interests …………………...19  Exploring stakeholders’ needs and constraints in projects ……….…19  Using the output of the stakeholder analysis ……………………….…20  What resources does stakeholder analysis require?............................ 21  The Requirement Development Process……………………………… 21 .  On Prioritizing Your Stakeholders (Simple)…………………..……… 22  Mapping Stakeholders…………………………………………………..22  Prioritizing Your Stakeholders ………………………………………...23  Assign Your Time To Your Stakeholders…………………………….. 23  Discussions of survey results ……………………………………………24  Conclusions ………………………………………………………………25  References…………………………………………………………...….. 26

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Stakeholder Analysis for Better Projects Introduction Stakeholders are individuals and organizations “who are actively involved in the project, or whose interests may be positively or negatively affected as a result of project execution or successful project completion� (Project Management Institute, 1996). Since the nature of construction projects is uncertain and complex, stakeholder analysis and engagement in this environment is extremely challenging for project teams. To achieve project objectives, it is essential to formulate a process for stakeholder management and to identify effective approaches for stakeholder analysis and engagement (Chinyio and Akintoye, 2008). Several scholars (e.g. Karlsen, 2002; Young, 2006; and Bourne and Walker, 2006) have studied the framework of stakeholder management and proposed different methods for stakeholder analysis. However, few have attempted to consolidate the range of practical approaches that can be used for stakeholder analysis and engagement (Reed et al., 2009), except Chinyio and Akintoye (2008), and Reed et al. (2009). Both of these studies had limited scope: Chinyio and Akintoye (2008) focused on stakeholder engagement methods in construction in the United Kingdom,and Reed et al. (2009) discussed the methods for stakeholder analysis used within natural resource management research activities. These studies identified and proposed a range of approaches that have helped the practitioners to manage stakeholders. However, their limited scope means that they do not represent the complete picture. It is thus necessary to expand Chinyio, Akintoye and Reed et al.’s work. The aim of this paper is to contribution the body of knowledge about stakeholders, especially the practical methods for stakeholder management. Methodology The evaluation process will depend on certain criteria including stakeholders' attitude and influence which are largely determined by their interests and power, respectively. The methodology adopted in stakeholder analysis, for prioritizing stakeholders and extent of their involvement, consists of four main steps: 1. Developing a checklist of all potential stakeholders Page 4 of 27


2. Identify each stakeholder's interest and attitude towards the issue in hand 3. Estimate the level of power and the degree of influence of each stakeholder 4. Evaluate the need, and degree, of involvement of each stakeholder. Description What is Stakeholder Analysis? Stakeholder analysis is a process of systematically gathering and analyzing qualitative information to determine whose interests should be taken into account when developing and/or implementing a policy or program. Stakeholder Analysis (SA) is a methodology used to facilitate institutional and policy reform processes by accounting for and often incorporating the needs of those who have a ‘stake’ or an interest in the reforms under consideration. With information on stakeholders, their interests, and their capacity to oppose reform, reform advocates can choose how to best accommodate them, thus assuring policies adopted are politically realistic and sustainable. Although Stakeholder Analysis originated from the business sciences, it has evolved into a field that now incorporates economics, political science, game and decision theory, and environmental sciences. Current models of SA apply a variety of tools on both qualitative and quantitative data to understand stakeholders, their positions, influence with other groups, and their interest in a particular reform. In addition, it provides an idea of the impact of reform on political and social forces, illuminates the divergent viewpoints towards proposed reforms and the potential power struggles among groups and individuals, and helps identify potential strategies for negotiating with opposing stakeholders. Who Are Stakeholders? Actors (persons or organizations) who have a vested interest in the policy that is being promoted are considered stakeholders in the process. These stakeholders or “interested parties� can usually be grouped into the following categories: international, public, national political, commercial/private, nongovernmental organization (NGO)/civil society, labor, and users/ consumers. A stakeholder is any entity with a declared or conceivable interest or stake in a policy concern. The range of stakeholders relevant to consider for analysis Page 5 of 27


varies according to the complexity of the reform area targeted and the type of reform proposed and, where the stakeholders are not organized, the incentive to include them. Stakeholders can be of any form, size and capacity. They can be individuals, organizations, or unorganized groups. In most cases, stakeholders fall into one or more of the following categories: international actors (e.g. donors), national or political actors (e.g. legislators, governors), public sector agencies (e.g. MDAs), interest groups (e.g. unions, medical associations), commercial/private for-profit, nonprofit organizations (NGOs, foundations), civil society members, and users/consumers. Why is this analysis useful? Knowing who the key actors are, their knowledge, interests, positions, alliances, and importance related to the policy allows policy makers and managers to interact more effectively with key stakeholders and increase support for a given policy or program. By carrying out this analysis before implementing a policy or program, policy makers and managers can detect and act to prevent potential misunderstandings and/ or opposition to the implementation of the policy or program. A policy or program will more likely succeed if a stakeholder analysis, along with other key tools, is used to guide its implementation. What are the steps in stakeholder analysis? The following are the major steps in the process:  Planning the process  Selecting and defining a policy  Identifying key stakeholders  Adapting the tools  Collecting and recording the information  Filling in the stakeholder table  Analyzing the stakeholder table  Using the information

What are the benefits of Stakeholder Analysis? A stakeholder analysis can help a project to identify:

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  

The interests of all stakeholders, who may affect or be affected by the project Potential issues that could disrupt the project Key people for information distribution during executing phase Groups that should be encouraged to participate in different stages of the project Communication planning & stakeholder management strategy during project planning phase Ways to reduce potential negative impacts & manage negative stakeholders

Engaging stakeholders throughout the project life cycle is a key to (but not a guarantee of) project’s success. Managing stakeholders expectations & ensuring their active involvement is very much important to project as: 

  

It is indispensable for continuation of the project & its successful completion It gives opportunity to individuals or groups to express their ideas/issues/concerns over the project It gives a sense of accountability and enhances responsibility It enables effective risk identification & response planning It opens up excellent learning opportunity for both the project team and stakeholders

What can be achieved with stakeholder analysis? Stakeholder analysis yields useful and accurate information on health reform stakeholders. This information can be used to provide input into other analyses; to develop action plans to increase support for a reform policy; or to guide a participatory, consensus-building process. To increase support or build consensus for reform, policy makers and managers must take additional steps following the stakeholder analysis. They should use the information generated by the stakeholder analysis to develop and implement strategic communication, advocacy, and negotiation

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When to Conduct Stakeholder Analysis Timing is an important factor in the implementation of Stakeholder Analysis to assure the usefulness of the results for policy formulation. In most cases, SA should precede the finalizing of reform proposals. In early stages of policy formulation, SA can help gauge the likelihood of acceptance and sustainability of anticipated policy reforms. By initiating SA prior to the introduction of the reform and continuing to modify the policy proposal during the design process, potential obstacles to implementation and results can be avoided. When used at the right time and in conjunction with other tools such as qualitative political economy analyses and social impact assessments, Stakeholder Analysis can inform task team strategies to overcome opposition, build coalitions, and channel information and resources to promote and sustain proposed reform. Identification of Stakeholders The construction industry involves a wide range of stakeholders, each bringing them with a great variety of interests, concerns, requirements and potential opportunities. In this study, in order to provide structure when covering these stakeholders, they have been grouped in seven main categories, based on common interests and needs. These categories, and examples of the groups included in them, are as follows: A. Clients – This includes individuals or organizations that initiate the building process/generate the need for a building (e.g. businesses, housing associations and private developers). B. Professional teams – This includes individuals or organizations that are involved in the project management, design, planning, insurance, and contractual and financial control of the building process (e.g. architects and design engineers). The key difference between these stakeholders and those in category C is that they do not construct or manufacture building elements. C. Constructors – This includes companies that are involved in building, testing and commissioning of the building (e.g. manufacturers and suppliers). D. Occupants – This includes individuals or organizations that use the building (e.g. residents and office workers). E. Occupant support services – This includes individuals or organizations that are responsible for the ongoing maintenance & operation of the Page 8 of 27


building and the functions that take place within it (e.g. utilities companies and waste management and maintenance). F. Regulatory bodies – This includes organizations that provide and enforce codes and standards (e.g. environment agency and local authorities). These codes and standards constrain other stakeholders. G. Infrastructure – This includes physical and social infrastructures around the building (e.g. transport links and emergency services). Although in reality these groups will sometimes overlap and the boundaries between them blur, they represent the majority of all stakeholder types.

Stakeholder analysis can entail below activities  

Capture and document the characteristics of key stakeholders. Capture the interests of stakeholders in relation to the problems that the project is seeking to address Capture conflicts of interests between stakeholders helping to manage such relationships later in the project Capture relations between stakeholders that may enable “coalitions” of project sponsorship, ownership and cooperation Identify the capacity of different stakeholders and stakeholder groups to participate Capture and document appropriate level of participation by stakeholders e.g. inform, consult, partnership or all of these

So chances are more people your project impacts by its outcome and activities, it’s obvious that more people will also have some degree of influence over the projects direction in a positive or negative way. Some of these “impacted “will likely benefit directly or indirectly and will become supporters in your endeavors. Similarly people who are likely to impacted negatively by the project will block the project activities or act in a manner to delay. Hence it is important to ensure to cultivate more supporters and engage affected for managing their expectations to an extent possible without digressing on the project’s deliverables or products. Therefore it is essential to analyze these stakeholders from the perspective of your project. For simplicity, project stakeholders can be classified in following types.

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Classification of Stakeholders 1. Primary stakeholders: are those ultimately affected, either positively or negatively by an organization’s actions. 2. Secondary stakeholders: are the ‘intermediaries’, that is, persons or organizations who are indirectly affected by an organization’s actions. 3. Key stakeholders: have significant influence upon or importance within an organization (they can be part of either two groups above) Managing Stakeholder expectations Essentially you will need to develop a strong working relationship with key stakeholders. Primary or Key stakeholders are required to be engaged proactively time to time for consultation, key decisions, support and selling the benefits of project outcome to ensure the strategic objectives of the project or program are achieved. This also draws on the robust communication management to keep these stakeholders engaged and abreast of current challenges, issues and any significant success through regular communication and in person interactions to meet their information needs. The communication plan may document who receives communications, when, how and to what level of detail. Protocols may be established including security and need to know parameters. Key Benefits of Stakeholder analysis / Managing Expectations 

Influential stakeholders can be identified early and their input can then be used to shape the scope and deliverables Cultivating support from the powerful stakeholders will help the engagement win more resource, thus making the project or program more likely to succeed. The project and program management team identify conflicting or competing objectives among stakeholders early and draft plan to resolve the potential issues By engaging and interacting with stakeholders early and frequently, the team can ensure that they fully understand and are convinced of the benefits of project goals

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Major Attributes to Consider Four major attributes are important for Stakeholder Analysis: the stakeholders’ position on the reform issue, the level of influence (power) they hold, the level of interest they have in the specific reform, and the group/coalition to which they belong or can reasonably be associated with. These attributes are identified through various data collection methods, including interviews with country experts knowledgeable about stakeholders or with the actual stakeholders directly. The level of influence depends on the quantity and type of resources and power the stakeholder can marshal to promote its position on the reform. The level of interest or salience is the priority and importance the stakeholder attaches to the reform area. Broadly, these attributes signal the capability the stakeholder has to block or promote reform, join with others to form a coalition of support or opposition, and lead the direction/discussion of the reform. SA therefore provides a detailed understanding of the political, economic, and social impact of reform on interested groups, the hierarchy of authority and power among different groups and the actual perceptions of the reform among different groups, all of which are important for reform advocates to consider. Data Collection Several methods can be employed to collect data on stakeholders in a comprehensive and efficient manner. Prior to the actual collection, a brief review of background literature and country studies can provide a useful understanding of the country’s political economy. One method of collecting data is to conduct interviews directly with the stakeholders involved in the specific policy area. The second method is to interview local experts in the field who are knowledgeable about the issue and the important groups and individuals involved in the policy area. Some country team members (e.g. country managers) often hold extensive local Knowledge and can provide a critical first hand understanding of which stakeholders are relevant to the reform area. However, unless resources and time do not permit, interviewing of local and international experts in the policy area or country and/or the stakeholders themselves is imperative. Broad, all-inclusive interviews will lead to an effective Stakeholder Analysis process since it will uncover many facets of the country’s political economy. The content and questions of the interviews should focus on background Page 11 of 27


information on the policy making process, information that identifies key stakeholders from a variety of groups in the reform process, and clarifying assumptions about stakeholders power and interest in the decision-making process. The number of interviews is determined by the research team, taking into consideration field conditions and logistical constraints (e.g. sensitivity, access, time, budget, etc.). Stakeholder Analysis can inform task team strategies to overcome opposition, build coalitions, and channel information and resources to promote and sustain proposed reform. Analyzing Data and Designing Strategy Data from interviews – including scaled values assigned to the attributes and relative rankings calculated accordingly – are catalogued and presented in charts and/or matrices, highlighting the following attributes: • group • their interest (or salience) • influence (power) • position on the reform An important measure called “effective power” (degree of power the stakeholder holds over other groups in relation to a reform area) is determined by weighting a combination of a stakeholder’s salience and influence. A clear assessment of each stakeholder’s power and likely impact on the policy making process is conducted through several steps. The first step is to create a continuum. Stakeholders are mapped on a continuum indicating support for the reform on a scale of 0 to 100 from low (far left) to high (far right). The varying degrees of support are marked on the line with a value indicating their reform preference. This implement also provides a quick visual of the ‘lay of the land’, illuminating clusters of groups that support, oppose or are indifferent to reform. The next step is to organize the stakeholder data according to relative power/influence and salience of each stakeholder to understand their potential support or opposition for the proposed reform. Often, a matrix is used to organize and classify the stakeholder data. One form is to map salience/interest and influence on the axes. This matrix provides a shorthand categorization and analysis of which stakeholders will gain or lose from a proposed reform and whether they can significantly impact the process. To guide strategic responses,

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stakeholders are categorized by their power and salience in a grid according to the following attributes: • Promoters: Stakeholders who attach a high priority to the reform policy a priority and whose actions can have an impact on the implementation of the policy • Defenders: Stakeholders who attach a high priority to the reform policy but whose actions cannot have an impact on the implementation of the policy • Latents: Stakeholders whose actions can affect the implementation of the reform policy but who attach a low priority to this policy •Apathetics: Stakeholders whose actions cannot affect the implementation of the reform policy and who attach a low priority to this policy The above grid and an additional one facilitate scenario-building and discussion and helps task teams determine appropriate responsive strategies (e.g. which stakeholders to target for negotiations and tradeoffs, or which to buttress with resources and information, etc.). One of the main goals of Stakeholder Analysis is to reveal, and therefore potentially assist in reducing, the power imbalance among weaker groups which is often revealed during policy reform process. Depending on the attributes of the stakeholder (e.g. their level of influence vs. their salience on the issue), strategies may be tailored to address their concerns. For example: • Maintain or increase power of reform supporters through building coalitions, and providing information and resources • Convert opposition into support through negotiations, information and/or coalition building, including offering tradeoffs. • Offset or counter powerful and not so powerful opponents Because stakeholders and their positions may change over the course of negotiations and analyses, SA should remain an ongoing process allowing for policy design to adjust as more is known about the political reality. Ultimately, Stakeholder Analysis is a critical tool in clarifying the micro political economy of a policy area and can help identify interested parties that should be incorporated in the decision-making process, in addition to understanding the basis for their inclusion.

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Stakeholders Approaches A. strategic approach A strategic approach to stakeholder analysis – often just called “stakeholder analysis “is used to support the design, implementation and evaluation of a proposed project. The main purpose of this approach is to assist in the design and evaluation of projects. Some donors now require a stakeholder analysis as an integral part of project preparation. A good example is the UK’s Department of International Development (ODA, 1995). This type of stakeholder analysis includes the drawing up of matrices or checklists which show the interests of the stakeholders and what hey can contribute to the project, as well as identifying risks for successful project implementation due to conflicts between stakeholder interests and project interest. These risks can then be included directly in the logical framework of the project. Based on these risks and assumptions the desired type of stakeholder participation in the various stages of the project cycle is identified as well as strategies for consensus building. The steps that are usually followed in this approach are: 1. Draw up a list of stakeholders 2. Identify the interests of the stakeholders identified, in relation to the project or problem area 3. Evaluate the importance and influence of the stakeholders, and the implications of this for the project 4. Evaluate the implications for cooperation between stakeholders and the risks to the project represented by the different interests 5. Determine which stakeholders should participate in the project, when and how.

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B. Scenario approach B approach to stakeholder analysis is used to look at complex situations and predict future situations and scenarios. It looks at conflict of interest between stakeholders and trade-offs between objectives. The aim is to improve the understanding of natural resource problems, structural changes and policy issues. Rather than starting with a project, this approach looks first at an agreed problem. By exploring the stakeholders interests and objectives, it is possible to understand their behavior. This approach is not used to facilitate project design and implementation. The people using this approach must also take up an ‘outsiders’ position. C. Participatory approach C participatory approach to stakeholder analysis is needed if it is to be used for facilitating dialogue and negotiating among stakeholders. The analysis of stakeholders’ interest, perceptions, relationships, knowledge and experience should be done by the stakeholders themselves. The researchers or staff become facilitators and have a specific role. Stakeholders can then use participatory methods to understand their different interests, views and values. They can better understand how well they are organized to deal with particular problems, or not. It also allows them to develop commitment for collective action in future. One such approach is called RAAKS – or “Rapid Appraisal of Agricultural Knowledge Systems” (Engel and Salomon, 1997). RAAKS consists in looking at the process of innovation from the different perspectives of the different stakeholders, through a series of iterative “windows” grouped in three major Phase of the Project The A phase - defining the problem - can be subdivided into 5 windows: The B phase – analyzing constraints and opportunities – can be subdivided into 7 windows: Page 15 of 27


The C phase – planning strategies and actions – consists of 3 windows: Objectives General objectives based on providing background information on stakeholder analysis in terms of definitions, objective, need for conducting stakeholder analysis also, the systematic approach for conducting a stakeholder analysis within the framework of Wadi Project. The objectives of stakeholder identification are twofold:  to get a clear understanding as to who the main stakeholders are, and  to understand their values, beliefs, problems and attitudes towards the project. Stakeholder identification will also give you a good understanding as to who should be directly involved in project planning. Scope The purpose of the research project is to contribute to, and increase, knowledge concerning external stakeholders for construction projects, and to develop methods and tools for the analysis of the influence of external stakeholders. The 6 aim is to formulate a theoretical and general model to describe the process of analyzing external stakeholder needs and concerns for construction projects. The model will form a baseline for actions intended to improve the decision– making process for the implementation of construction projects. The research process has focused on understanding the influence of external stakeholders. Models have been developed for external stakeholder analysis in construction project management. A systems approach has been adopted and a case study has been used as the main method of research in combination with literature reviews. The case study method was chosen because of the qualitative nature of the research. Five project cases were examined. The projects were chosen for their different characteristics, i.e. they differ in size, type (civil engineering or housing) and purpose (local, regional or national). The common feature is that all projects, proactively or reactively, have had to consider and commit resources to a process of external stakeholder influence. The research process has focused on understanding the influence of external stakeholders. Models have been developed for external stakeholder analysis in construction project management. A systems approach has been adopted and a Page 16 of 27


case study has been used as the main method of research in combination with literature reviews. The case study method was chosen because of the qualitative nature of the research. Five project cases were examined. The projects were chosen for their different characteristics, i.e. they differ in size, type (civil engineering or housing) and purpose (local, regional or national). The common feature is that all projects, proactively or reactively, have had to consider and commit resources to a process of external stakeholder influence. From the studied cases and literature reviews the external stakeholder analysis process can be described as consisting of the following five components: 1. stakeholder identification 2. stakeholder needs and concerns 3. stakeholder impact analysis 4. evaluation of alternative solutions 5. level of acceptance. The process is dynamic and iterative, where the different components interact across the project life cycle, and where every part of the analysis will have to be conducted several times over as the project progresses in order to provide sufficient information about the effects of different project decisions. From the perspective of the developer and the project manager, the external stakeholder analysis must be conducted with respect to the project’s purpose. The aim must be to complete the project according to the requirements of the project owner. The challenge is then to find trade-offs that fulfill as many external stakeholder needs and concerns as possible. The external stakeholder analysis should provide a basis for forthcoming project decisions. One clear reason for controversy and conflict is that decisions on a course of action for the project were made without analyzing the consequences for external stakeholders. The result of this was that the project manager was not prepared for the possible conflict that might arise, and thus had no plan of how to resolve or handle them. External stakeholder analysis is a relevant and neglected area of expertise. Four of the five projects studied had not conducted any analysis of how the project would influence external stakeholders or how the stakeholders could have influenced 7 project decisions. The research findings are thus important for construction project managers and facility development companies to help them Page 17 of 27


understand the influence external stakeholders might have on the implementation of projects. The theoretical contribution of this research is increased understanding about the influence external stakeholders has on construction projects, and how construction project managers can analyse and structure information about stakeholders in the form of models and tools that support analysis.

The Role of Stakeholders in an Evaluation Stakeholder perspectives may influence every step of the CDC Framework. Obviously, stakeholder input in “describing the program” ensures a clear and consensual understanding of the program’s activities and outcomes. This is an important backdrop for even more valuable stakeholder input in “focusing the evaluation design” to ensure that the key questions of most importance will be included. Stakeholders may also have insights or preferences on the most effective and appropriate ways to collect data from target respondents. In “justifying conclusions,” the perspectives and values that stakeholders bring to the project are explicitly acknowledged and honored in making judgments about evidence gathered. Finally, the considerable time and effort spent in engaging and building consensus among stakeholders pays off in the last step, “ensuring use,” because stakeholder engagement has created a market for the evaluation results. Stakeholders can be involved in the evaluation at various levels. For example, you may want to include coalition members on an evaluation team and engage them in developing questions, data collection, and analysis. Or consider ways to assess your partners’ needs and interests in the evaluation, and develop means of keeping them informed of its progress and integrating their ideas into evaluation activities. Again, stakeholders are more likely to support the evaluation and act on results and recommendations if they are involved in the evaluation process. Role in the decision making process Although it is widely accepted that corporate reputation influences organizationstakeholder interactions, there is no theoretical framework that conceptualizes this aspect in stakeholders' decision-making processes for establishing various forms of relationships with a firm. By adopting an interdisciplinary approach, Page 18 of 27


this article provides a theoretical model that explains the role corporate reputation has in the process through which stakeholders decide to establish relationships with a firm. It is argued that the stakeholder decision-making process for exchange with a company is based on several exchange rules: corporate reputation, social legitimacy, pragmatic legitimacy, and exchange benefits. The article concludes with a case study of James Hardie Industries in Australia, which illustrates the function of the proposed conceptual model.

Predicting the influence of stakeholders Project management procedure is affected by project stakeholders (Olander 2007). Therefore recognizing the stakeholders’ influence is important to “plan and execute a sufficiently rigorous stakeholder management process” (Olander and Landin 2005). Olander (2007) developed the “stakeholder impact index”, and he considers that analyzing the potential impact of stakeholders indicates to determine the nature and impact of stakeholder influence, the probability of stakeholders exercising their influence and each stakeholder’s position in relation to the project. Understanding the area of stakeholders’ interests There are various stakeholders’ interests due to the complex nature of construction projects (Cleland 1999). (Freeman et al.2007) believe that identifying stakeholder interests is an important task to assess stakeholders, and they listed stakeholders’ interests including product safety, integrity of financial reporting new product services, and financial returns. Similarly, Karlsen (2002) also presents one possible consideration to evaluate stakeholders “his or her area of interests in the project”. Exploring stakeholders’ needs and constraints in projects Exploring stakeholders’ needs and constraints in projects means to anatomize stakeholders’ area of interests and list the detailed issues stakeholders’ concerns (Freeman et al. 2007). During the project process, all stakeholders’ solutions to the problem being addressed is obtained” (Love et al. 2004). Homoplastically, Kocak (2003) clarifies that stakeholders’ needs can provide an indication of the stakeholder groups’ concerns, the problems the project team faces, and Page 19 of 27


stakeholders’ requirements of the projects. Further more, Olander and Landin (2008) also proved the importance of “analysis of stakeholder concerns and needs� by case studies in Sweden. Using the output of the stakeholder analysis The reason that stakeholders may be assigned different roles is based on the idea that there are different levels of participation. Some stakeholders may not have time or even want to be heavily involved in the training course design process; but they may like to be kept informed. This is a relatively low level of participation. Others, however, will want to be consulted, to be asked to give advice, comments or suggestions on different aspects of the course design. Training needs assessment and evaluation often involve consultation, but it is useful also to consult certain stakeholders on aims, objectives, course outlines and plans for implementation. Some stakeholders need to participate fully in course development; the trainers and trainees are two obvious groups which will be involved extensively, especially during the implementation phase, but other stakeholders such as subject matter specialists, advisors, even resource persons from the community, may become real partners. Finally, for each stage of course planning, implementation and design, an individual, a group, or an institution will be in ultimate control. They will have the responsibility for final decisions, and it is important to understand exactly who these stakeholders are in order to avoid major problems, especially at the stage of implementation. Once the different stakeholders have been identified, and their potential roles and responsibilities proposed, it is possible to begin the process of training course design with appropriate stakeholder involvement. The level of resources will of course determine the extent of stakeholder involvement. Some stakeholders may need transport, accommodation, even fees, to allow them to participate. Anyone organizing a PCD process does of course need to be realistic and pragmatic, and at some point, you will need to achieve a balance between what is desirable, and what can be afforded. However, if key stakeholders recognize direct benefit by their involvement in PCD, they may be able to provide resources themselves. Arriving at this point may take time, but it is always worth making the effort to discuss with potential stakeholders what is required of them, and also what they may expect to gain as a result. This is all part of a participatory approach. The stakeholder analysis described above can Page 20 of 27


at least help to ensure that you are well prepared as you embark on a PCD process. What resources does stakeholder analysis Require The resources needed for conducting a stakeholder analysis are: personnel time, travel money, access to a phone, copy machine and computer, and interview materials (paper and pens). The amount of resources needed will depend mainly on the number of stakeholders to be interviewed and how much travel is required to conduct these interviews. As a reference point, a national-level stakeholder analysis that interviews 35-40 stakeholders requires a four-person team working full-time for about two months, depending upon how quickly the interview appointments are made. The working group should consist of at least two persons who are skilled interviewers, knowledgeable about the health sector, able to analyze qualitative information, and computer literate. For analyses involving a smaller number of stakeholders, fewer resources are required. The Requirement Development Process A comprehensive requirement development process was developed based upon the stakeholder classification. This process comprises methodology and procedure, requirement collection, requirement verification, requirement consolidation and requirement actualization through a case study. A multi-dimensional framework for structuring the stakeholder requirements was created in the methodology and procedure development. This consists of four dimensions including European regions, stakeholder categories, building categories and technology subjects. The dimensions of building categories, stakeholder categories and European regions are used to provide more insight into the various stakeholder requirements, rather than to limit the stakeholder requirements to specific domains. For instance, good coverage of European regions is important to avoid capturing requirements relevant to only certain countries. The technology dimension was added so that identified requirements can be mapped against technological research and solutions delivered by technical work packages within the I3CON project.

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On Prioritizing Your Stakeholders (Simple) Once you have met with and feel comfortable that you have an intimate understanding of your stakeholder’s ’stake’ in your project, we now want to analyze their ’salience’ so you can focus your efforts on the stakeholders that really count rather than the ones that just make the most noise. In project and general management, the term ‘salience’ is used to describe the process of assessing the relative importance of the stakeholders and hence their requirements. While there are different types of methods, we are going to look at two for determining salience; the first “Power v Interest” is a quick and easy method for smaller projects. The second is a more complicated analysis that is more appropriate for large scale projects / programmes but more on this method in a separate post. For now let’s stick to the simple method. Mapping Stakeholders The ‘Power v Interest’ method simply rates a stakeholder’s power or influence (which can be derived from things such as job position and wealth) against their actual ‘stake’ in your project on a 4×4 matrix. Some of these may have the power either to block or advance. Some may be interested in what you are doing, others may not care. If you look below, a powerful stakeholder with only a small or negligible stake in your project probably isn’t going to waste his/her or your time but would like to keep abreast of progress. Stakeholder Potential

Power

/ Low Stake/ Importance High Stake / Importance

High Influence / Power

Keep Satisfied – Useful for Manage Closely – Most critical decision and opinion formulation, stakeholder group: collaborate with brokering: mitigate impacts. closely.

Low Influence / Power

Keep Informed – Important Monitor (minimal effort) – Least stakeholder group, in need of priority stakeholder group: monitor empowerment: involve, build or ignore. capacity and secure interests.

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In graphical terms your matrix could look something like this:

Note: the art of stakeholder management is to ensure you have an open dialogue with your stakeholders throughout the project life-cycle so you are keenly aware of changes that may affect your project. “Regulatory Body #2″in the above diagram is a good example of how, during your project, changes in their policy may shift stakeholder salience and thus changes the nature of your relationship with them (not to mention your deliverable!). Prioritizing Your Stakeholders Now that you have your stakeholders mapped out, you can easily prioritize them on the following order. For stakeholders within the same square the priority is given to stakeholders in the top right of the square. For example in the matrix above, the Project Owner is rated higher than the Internal User. 1. 2. 3. 4.

Manage Closely (most important) Keep Satisfied Keep Informed Monitor (least important)

Assign Your Time to Your Stakeholders This is where the ‘rubber hits the road’ and is how your communication plan will be executed. Any good time management book will tell you that you need Page 23 of 27


to plan your time against your priorities. Obviously it is up to you how you devote your time but as a rule of thumb consider the following cycles for the different levels.    

Manage Closely (touch daily or every second day) Keep Satisfied (touch weekly or bi-weekly) Keep Informed (touch bi-weekly or monthly) Monitor (monitor for shifts in salience only)

I like to use the word ‘touch’ as it has a human quality about it. It doesn’t have to be a formal report or meeting, reaching out and touching someone can be as simple as an “FYI” email and a follow up call or a short phone call to inform of a status change or even a water-cooler discussion. Regular interactions with meaningful communication with your key stakeholders will ensure a stronger relationship through the cycle. The next post, Stakeholder Information Requirements, will address the ‘meaning communication’ part of the equation to ensure supply of information meets the demand.

Discussions of survey results The research findings indicate that “Managing stakeholders with social responsibilities (economic, legal, environmental and ethical)” ranked first in different for stakeholder management in construction projects. This means that project managers considered this factor as the most important one for the success of stakeholder management. However, according to the results of factor analysis, this factor could not be included in any of the components. Owing to the significance of this factor, the authors name this factor as the “precondition factor” for stakeholder management; that is, stakeholder management should be conducted with social (economic, legal, environmental and ethical) responsibilities. The discussed framework contributes to the success of stakeholder management and their relationships. According to general management process, information should be inputted first during the process of stakeholder management, and then stakeholders could be estimated based on the information obtained. After accurately assessing stakeholders, decisions could be made. Sustainable support need to be conducted during the whole process of stakeholder Page 24 of 27


management, because in order to promote the management process, project managers need to monitor the change of stakeholders’ influence and relationships, try to keep a steady relationship with them, and most importantly communicate with them properly and frequently. Conclusions The importance of stakeholder management has been recognized by many scholars and professionals. With a focus on different aspects of stakeholder management, various sets solutions have been suggested in the literature. It is crucial to explore the relative importance and groupings of these factors. The main contribution of this study is identifying an ordered and grouped set of solutions for stakeholder management in construction projects. This helps clarify what the highly prioritized factors are. The top 3 factors were: 1. managing stakeholders with social responsibilities (economic, legal, environmental and ethical) 2. exploring the stakeholders’ needs and constraints to the project 3. communicating with and engaging stakeholders properly and frequently. Using the factor analysis and considering the high importance of the factor “managing stakeholders with social responsibilities” were grouped into 5 dimensions: 1. precondition factor 2. stakeholder estimation 3. information inputs 4. decision-making, 5. sustainable support All these 5 groupings and their relationship were included in a framework for successful stakeholder management in construction projects. These findings could also be used as an assessment tool to evaluate the performance of stakeholder management and thus help identify areas for improvement.

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References http://onprojects.net/2007/12/17/information-requirements-stakeholderanalysis-management/ http://spverma.wordpress.com/2012/01/16/stakeholder-analysis-for-betterprojects/ askgov@worldbank.org www.sbuf.se http://www.systemsguild.com http://www.volere.co.uk http://www.euforic.org/gb/stake1.htm (www.icra-edu.org) ICRA learning resources Secretariat.ICRA@wur.nl http://www.euforic.org/gb/stake1.htm www.itcon.org web.nchu.edu.tw www.phrplus.org www1.worldbank.org www.mosaicprojects.com Background Reading: Stakeholder Analysis Annex: Economic & Social Tools for Poverty & Social Impact Analysis Technical Notes USAID Publication Guidance Note: Stakeholder Analysis Guidelines for Concept Note Stakeholder Analysis and Natural Resource Management Page 26 of 27


Jacques Chevalier Stakeholder Analysis Guidelines Kammi Schmeer Dying to Reach the Negotiating Table (Example of Stakeholder Analysis Result in Real World) Lewis W. Snider, Jacek Kugler, and Brian Efird Engel, P. and M. Salomon, 1997. "Facilitating innovation for development: a RAAKS resource box/the social organization of innovation - a focus on stakeholder interaction," Royal Tropical Institute, Amsterdam, Netherlands. ODA, 1995. Comprehensive guidance note on how to do stakeholder analysis of aid projects and programmes. Social Development Department, Overseas Development Administration, London. Available online at

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