Project Stakeholder Management Importance

Introduction

Currently, the majority of organizations are engaged with diverse projects attempting to create their value. Projects are usually guided by managers who possess a set of tools and help to achieve the project goals. There is usually a team involved in a project’s accomplishment and stakeholders interested in its successful completion. Definitely, project progress depends on the selected tools, techniques, and technologies.

Nevertheless, participation of people as well as their perception of the project’s objectives has been frequently decisive. Therefore, it is important to engage and manage stakeholders effectively to contribute to project’s successful delivery. This paper aims to define the concept of project stakeholder management, reveal the features of effective project stakeholder management, and discover the importance of this process.

Defining Project Stakeholder Management

To define the concept of project stakeholder management, it is necessary to consider the meaning of the term “stakeholder” first of all. Thus, according to the Project Management Body of Knowledge (PMBOK) Guide defines a stakeholder as “an individual, group, or organization that may affect, be affected by, or perceive itself to be affected by a decision, activity, or outcome of a project” (The Project Management Institute, 2017, p. 550).

Project stakeholders can be both internal and external to a project as well as their involvement can be active or passive. Moreover, there are cases when stakeholders are not aware of the project. Also, stakeholders can influence the project positively and negatively and, in turn, be positively or negatively affected by the project. For example, sponsors, resource managers, program managers, team members, etc. are internal stakeholders. At the same time, customers, suppliers, end users, shareholders, and competitors are external stakeholders (The Project Management Institute, 2017).

Project stakeholder management comprises the processes necessary to “identify the people, groups, or organizations that could impact or be impacted by the project, to analyze stakeholder expectations and their impact on the project, and to develop appropriate management strategies for effectively engaging stakeholders in project decisions and execution” (The Project Management Institute, 2017, p. 503).

These processes include identification of stakeholders, as well as planning, managing, and monitoring their engagement. They are expected to empower the work of the project team and allow analyzing the expectations that stakeholders have, assessing the impact of stakeholders on every stage of project implementation and the influence of project on stakeholders, and developing strategies that can be utilized for engaging stakeholders in support of project planning and execution of project activities (The Project Management Institute, 2017).

To identify the stakeholders, it is necessary to consider such inputs as project charter, the existing business documents, project management plan, project documents, agreements, enterprise environmental factors, and organizational process assets (The Project Management Institute, 2017). A project manager can use such tools and techniques to provide stakeholder identification as expert judgment, data collection, data analysis, data representation, and meetings.

The expected outputs that can be obtained during this process are stakeholder register, possible change requests, and updates of the project management plan and project documents. According to Eskerod, Huemann, and Savage (2015), stakeholder identification can comprise diverse assessments, such as determination of contributions needed from a stakeholder, thr requirements of every stakeholder, their wishes, and concerns about the definite project.

The process of planning stakeholder engagement demands knowledge of a project charter, the presence of the project management plan, project documents, agreements, enterprise environmental factors, and organizational process assets, which are similar to the inputs for stakeholder identification (The Project Management Institute, 2017). Tools and techniques that can be applied during this process are also identical. The output of this process is a developed stakeholder engagement plan.

Management of stakeholder engagement is a process that needs a project management plan, project documents, enterprise environmental factors, and organizational process assets (The Project Management Institute, 2017). This process demands more various tools and techniques compared to the previous processes. Thus, apart from expert judgment, a manager needs communication skills, interpersonal and team skills, ground rules, and meetings.

As for the outputs, they are likely to include change requests, and updates of the project management plan and project documents. Finally, monitoring of stakeholder engagement needs the same inputs as the management process, uses similar tools and techniques, and, in addition to plan updates and change requests, is expected to provide work performance information.

Effective Project Stakeholder Management

Project managers usually have limited resources for interacting with stakeholders (Eskerod & Jepsen, 2013). Consequently, the task of a manager is to distribute both time and resources carefully and thoughtfully to achieve the best result. In fact, the process of stakeholder management implies strategic decisions about the efficient use of resources. Project stakeholder management comprises several important aspects.

According to Eskerod and Jepsen (2013), the first significant step is to identify the stakeholders, which means to find out individuals who can affect or be affected by the project under consideration. The second step is to reveal how these stakeholders need to add to the project’s success and evaluate their ability to contribute in a necessary way as well as how to motivate them. Finally, it is necessary to set priority on one of the stakeholders who potentially has the greatest impact, positive or negative, on a definite aspect of project accomplishment, and focus resources on this individual (Eskerod & Jepsen, 2013). This step can be completed through stakeholder analyses during the project planning and implementation.

Consequently, effective project stakeholder management includes two major activities such as “conducting project stakeholder analyses to provide information needed for stakeholder management” and “interacting purposefully with the project stakeholders” (Eskerod & Jepsen, 2013, p. 28). Also, effective stakeholder project management is grounded on some tailoring considerations that should be taken into account.

Thus, it is important to remember that stakeholders can be diverse. Therefore, the definition of their number as well as of cultural background of stakeholder community is crucial for the project and its successful outcome. Moreover, it is necessary to assess the complexity of stakeholder relationships (The Project Management Institute, 2017). In this case, project success can depend on the complexity of stakeholder relationships within their community, the character of the existing networks and stakeholder groups, and the way they receive information about the project and presence of misinformation.

Finally, communication technology is a meaningful consideration that involves the availability of technology as well as its support mechanism that contributes to a better value. Bourne (2015) claims than effective stakeholder and communication management are vital for a working project and lead to its successful accomplishment.

To manage stakeholders effectively, the manager should be aware of strategies and practices that can be utilized in the course of a project. The choice of strategies for the project managers can be grounded on the project stakeholder type framework developed by Savage et al. (as cited in Eskerod & Vaagaasar, 2014, p. 73). This framework is grounded on the stakeholder’s potential for cooperation or help as well as for threatening or harm to the project.

Both cooperation and threatening potential is evaluated as low and high. Thus, a stakeholder with high cooperation and high threatening potential demands a mixed blessing strategy, which is collaborative. A stakeholder with high help potential and low harm potential can be effective with supportive strategy, which is to involve (Eskerod & Vaagaasar, 2014). A stakeholder with low help and harm potential can be managed through a marginal strategy of monitoring. Finally, low potential for cooperation and high potential for threatening the project need a non-supportive strategy, which is to defend the project (Eskerod & Vaagaasar, 2014).

Another aspect of project stakeholder management to consider is the opportunity of including this concept into project management standards (Eskerod & Huemann, 2013). Currently, stakeholder issues are frequently treated without enough attention in the project management standards. It is a mistake because discussion of stakeholder management in the context of sustainable development can stimulate the change in its paradigm (Eskerod & Huemann, 2013).

At present, project stakeholder practices are characterized by a “management-of-stakeholders approach” (Eskerod & Huemann, 2013, p. 37). It means that stakeholders are expected to comply with project needs. At the same time, a shift to a “management-for-stakeholders” approach can be more productive. Moreover, it is crucial to take into account the type of a project and select a standard that is applicable to project peculiarities.

The Importance of Project Stakeholder Management

Project stakeholder management is critical for any project that is expected to be established and accomplished with the most of the benefits. For decades, the major task of project management was to deal with individuals or groups who may affect or be affected by the project processes, contents, or outcomes. It is evident that these individuals or groups make the project stakeholders.

Nevertheless, there are some problems in stakeholder management due to the fact that in many projects, the expectations of stakeholders are not considered the way they are expected to be or are not met (Eskerod et al., 2015). This gap can become bigger because of diversity in defining project success factors by stakeholders. Thus, properly organized project stakeholder management can contribute to elimination of these problems and reduce their negative impact on project accomplishment.

One of the issues to discuss within the problem of project stakeholder significance is the role of stakeholder participation in the project. For example, Ackoff (as cited in Eskerod et al., 2015) develops systems theory as related to stakeholders and suggests that stakeholders should be treated as elements of a system (p. 8). The researcher also argues that system problems can be resolved only with the involvement of stakeholders. Therefore, a conclusion can be made about the importance of project stakeholder management because this process includes definition of all the stakeholders that allowing project managers introduce them to every project problem for its quicker solution.

Project stakeholder management is critical for any project that is expected to be established and accomplished with the most of the benefits. For decades, the major task of project management was to deal with individuals or groups who may affect or be affected by the project processes, contents, or outcomes.

It is evident that these individuals or groups make the project stakeholders. Nevertheless, there are some problems in stakeholder management due to the fact that in many projects, the expectations of stakeholders are not considered the way they are expected to be or are not met (Eskerod et al., 2015). This gap can become bigger because of diversity in defining project success factors by stakeholders. Thus, properly organized project stakeholder management can contribute to elimination of these problems and reduce their negative impact on project accomplishment.

One of the issues to discuss within the problem of project stakeholder significance is the role of stakeholder participation in the project. For example, Ackoff (as cited in Eskerod et al., 2015) develops systems theory as related to stakeholders and suggests that stakeholders should be treated as elements of a system (p. 8). The researcher also argues that system problems can be resolved only with the involvement of stakeholders. Therefore, a conclusion can be made about the importance of project stakeholder management because this process includes definition of all the stakeholders that allowing project managers introduce them to every project problem for its quicker solution.

Stakeholders have diverse levels of responsibility, duties and authority in a project. Therefore, project stakeholder management is necessary to define these responsibilities in the course of a project and use them for project development. As it was already mentioned, some stakeholders can have a negative impact on a project, and their monitoring is even more significant to minimize their influence and preserve the pace of project implementation.

Both issues become possible due to stakeholder identification, which is an integral part of project stakeholder management. This continuous process lasts throughout the project life cycle and allows identifying changes in stakeholders’ roles any time. The last aspect to mention is the importance of project manager’ responsibility, which is to manage stakeholder expectations.

Conclusion

Project stakeholder management is critical for any project that is expected to be established and accomplished with the most of the benefits. For decades, the major task of project management was to deal with individuals or groups who may affect or be affected by the project processes, contents, or outcomes. It is evident that these individuals or groups make the project stakeholders. Nevertheless, there are some problems in stakeholder management due to the fact that in many projects, the expectations of stakeholders are not considered the way they are expected to be or are not met (Eskerod et al., 2015).

This gap can become bigger because of diversity in defining project success factors by stakeholders. Thus, properly organized project stakeholder management can contribute to elimination of these problems and reduce their negative impact on project accomplishment.

One of the issues to discuss within the problem of project stakeholder significance is the role of stakeholder participation in the project. For example, Ackoff (as cited in Eskerod et al., 2015) develops systems theory as related to stakeholders and suggests that stakeholders should be treated as elements of a system (p. 8). The researcher also argues that system problems can be resolved only with the involvement of stakeholders.

Therefore, a conclusion can be made about the importance of project stakeholder management because this process includes definition of all the stakeholders that allowing project managers introduce them to every project problem for its quicker solution.

References

Bourne, L. (2015). Making projects work: effective stakeholder and communication management. Boca Raton, FL: CRC Press.

Eskerod, P., & Huemann, M. (2013). Sustainable development and project stakeholder management: what standards say. International Journal of Managing Projects in Business, 6(1), 36-50. Web.

Eskerod, P., & Jepsen, A. L. (2013). Project stakeholder management. Surrey, England: Gower Publishing.

Eskerod, P., & Vaagaasar, A. (2014). Stakeholder management strategies and practices during a project course. Project Management Journal, 45(5), 71-85. Web.

Eskerod, P., Huemann, M., & Savage, G. (2015). Project stakeholder management—Past and present. Project Management Journal, 46(6), 6-14. Web.

Huemann, M., Eskerod, P., & Ringhofer, C. (2016). Rethink! Project stakeholder management. Newton Square, PA: Project Management Institute.

The Project Management Institute. (2017). A guide to the project management body of knowledge (6th ed.). Newton Square, PA: Project Management Institute.