Types of Stakeholders in a Project

Question:

Describe about the Required Process And Documentation For Stakeholder Management Strategy For An Organisation Change Program?

The central topic of the project is the required process and the documentation for the stakeholder management strategy for an organizational change program. All the member of the project team can be regarded as the project stakeholder. The customers can also be denoted as a project stake holder as he gets involved on the project. In a particular project, there are three types of stakeholders, they are:

• Internal and external stakeholder
• Positive and Negative stakeholder
• Performing and advising stakeholder

All of the above set of stakeholders possess different kinds of activities I the process of project. The project manager plays a very important role in shaping g, supporting, guiding and influencing the stakeholders in the projects to obtain successful and positive result.

Now let us focus on some types of business stakeholders:-

The relationship of the firm with the stakeholder has various forms.  For example, there are typically in two ways the firm establishes relationship with the stakeholders. Those that supply raw materials to the firm called the suppliers and those that participate in the process of consumption of the products of the firms called the customers or consumers. There are two other components of stakeholder, the employee and the owner. Employees are workers that participate in the process of project making and activities and the owner is the one that provides the necessary resources and financial support for the completion of the project.

Business stakeholders are of two types:

• Primary- those that establishes connection directly with the firm and fortify the success of the firm are the primary stakeholders. For example, Employees and Suppliers
• Secondary- those that establishes connection indirectly with the firm and also bears the objective to ensure success of the firm are secondary stakeholder. For example, customers as they indirectly deals with the firm.

Now let us understand some point s regarding the stakeholders group. The stakeholder’s groups can be categorized into three types, such as,

• Core stakeholders which are the crucial part of the survival of the firm.
• Strategic stakeholders are those that render solution for any new problem and opportunities for future success of the firm.
• Environmental stakeholders looks into the matter of environmental problems caused by the firms and provides solutions.

Three attributes of the stakeholders are classified as:

Legitimacy- this is the provision of suitable time limit to a stakeholder’s claim to stake.

Power- this enables a stakeholder to exercise authority.

Urgency- this enables the stakeholder to work effectively and reach the required deadline.

There are three approaches for a stakeholder, they are:

• Strategic approach determines a stakeholder as a factor manager who manages and tracks the profits of the stakeholder.
• Fiduciary Approach determines the fiduciary powers and responsibility of the stakeholder’s group.
• Synthesis approach considers the stakeholder’s group to manage ethical responsibilities.

The stakeholder model comprises of three values:

1. Descriptive values- it describes the features of an organization, assessing the behavior of the firm and ascertains the activities performed by the firm in the process of project making. It also depicts the corporate constituencies that the board of directors maintain while managing the firms.

2. Instrumental values- It recognizes the interrelation between the stakeholder group management and the achievements of the corporate objective by empirical data analysis maintain the effectiveness and the count of profitability.

3. Normative approach examines the function of the corporation and identifies the philosophical or moral guideline for the management and the corporation.

These types of capabilities are needed for an effective Stakeholders management.

Rational level includes the mapping of an organizations stakeholders group. It defines interest accurately in each and every operation which are included in the processing of the project.

Transaction level includes the establishing and executing of a win-win transactional exchange with the stakeholder.

There are some points about the organizational culture for a project which some people terms as Depart. It runs the activities of the project processing and conducts the project according to the organization culture and style. Culture and style are the group phenomena which can be denoted by cultural norms that develop over the time. It includes the establishing approach for initiating and planning a project and the acceptability of the work done. It also includes the recognized authority who will make and influences the decision.

Types of Business Stakeholders

Further the discussion continues about the Projects stakeholders’ governance which includes the alignment of the project with stakeholders need and the objectives. These are critical for the successful management of the stakeholder’s engagement and the achievement of organizational change.

Project governance enables organizations to consistently manage projects, maximize the value of project outcome and align the project with business strategy. Furthermore we can say that project governance provides a framework in which the project manager and the sponsor can make the decision. The decision satisfies both the stakeholders need and expectations and the organizational strategic objectives to address circumstances where they may not be in alignment.

A Stakeholder has various types of responsibility and authority in a project. It can change over the course of the project life cycle. Their involvement may range from occasional contribution in survey and focus group, to full project sponsorship. This includes providing financial, political, and other support. Some stakeholders may also detract from the project, actively or inactively. The project stakeholder requires the project manager’s attention throughout the project life cycle, and must plan to resolve any issue that may arise. Thus it can be stated that a stakeholder is hugely involved throughout the entire project life cycle.

Identifying the role of a stakeholder is an essential work for the success of a project. Understanding the relative degree of influence of a stakeholder and the technique which balances the demand and need of a stakeholder must be verified in the process of the project. An organization should have the knowledge about the expectations of the stakeholder’s requirement in their product.

Reasons for cancellation of a product:

• Delay in completion of a product.
• Low production
• Increased cost of production, and
• Poor quality of product.

For example like a late realization of considering legal department as a significant stakeholder. It results in delay in time and increased expenditure due to legal requirements that are required to be met before the completion of the project.

Analyzing of stakeholder is systematically gathering technique and a product is analyzed. There are two types

• Quantitative
• Qualitative

Quantitative is the process which is used only for calculating the quantity of a commodity more than quality.

Qualitative is the process which is used only for calculating the quality of a commodity.

There are three types of technique which is used to measure stakeholder analysis are as follows:

• Interests
• Expectation
• Influence

Of stakeholder and relates with the purpose of the project.

Moreover stakeholder analysis to help to identify relationship with the project that can be influence to:

• Build alliances and prospective partnership to increase the project’s possibility of success.
• Construct stakeholder connections that need to be impact differently at various stages of the project or stage.

Following are the steps of stakeholder analysis:

Firstly need to identify the entire prospective project stakeholder and the applicable information which includes their roles, group of project team, interest, understanding and effect levels. Moreover key stakeholders are easily identified. Furthermore for the reasons of decision making or administration what footprint by the project’s outcome is guided by the other person.  Like it can be the sponsor, project manager and the primary costumer. Moreover by interview system other stakeholder can be identify or other various method depends on psychology.

Some other methods used for identifying or analyze the stakeholder are as follows:

Categorization of Stakeholder Groups

First we have to assess the prospective impact or support of each stakeholder for the project which are generated by them. Moreover need to identify them so as to define an attitude.

In a large stakeholder organization, it is important to prioritize the stakeholder to protect the efficient use of effort to communicate and manage expectation. It should also identify that in different situation how the stakeholder are reacted ,how they can hold the situation and what will be their plan to solve the problem.

To analyze the power of the stakeholder three types of model can be used which are as follows:

• Power
• Influence
• Salience

 In this method stakeholder are divided in the group according to their power level and then need to check their involvement in the success or processing of the project.

In this method people are divided into the group who involve in the project and need to check their involvement processing and their active or creative of the project. What they can do new for further processing of the project is also need to check.

 This method narrate the grade of stakeholder which based on their power, urgency and the legitimacy.

The stakeholder needs to compare the planned engagement levels that are required for the successful completion of a project. The engagement of a Stakeholder throughout the life cycle of the project is critical to the project success.

The engagement level of the stakeholder can be classified into the following:-

Unaware: at this level the awareness about the project and its potential impacts of a project holder is categorized.

Resistant: here, the project holder should be aware about the project and potential impacts and resistant to change.

Neutral: at this level the project holder are neither supportive nor resistant.

Supportive: in this level the project holders will be aware about the project and potential impacts and supportive to change.

Leading: at this stage the project holders are aware of the project and its potential impacts, and they are actively engaged in ensuring that the project is a success.

It is necessary to meet every project stakeholder and document their ideas and views about the project in order to cover the specific goals of a project. The organization should ask what kind of changes they suggest and what alterations are necessary according to them. The stakeholder must suggest how the deliverables can be measured and verified. In order to perform these tasks a stakeholder should have a lot of knowledge about the project and they are expected to analyze the probability of success in the project.

As already mentioned, the important aspects and requirements on the process and documentation for an organizational change program is needed for proper decision making.

Importance of stakeholder and roles have already mention above in the project. Primary and secondary stakeholders are combined with the base of a project. Who are supply the raw material and works in a group or department of an organization are primarily direct linked to the project and closely linked to project base. Who helps in the success of the project are secondary stakeholder are worked indirectly in the project. Like any costumer is a secondary stakeholder. Another example of a farmer can grow crop for any kind of food factory. So farmer comes in the list of secondary stockholder. A stakeholder should aware about his responsibilities when they will combine with a project and should also aware about all the plans of the project. According to the project life and during the process of the project, the responsibilities can be change of a stakeholder. Three values of the project also help to explain about  the project model like descriptive its display all the characteristic of a project. Moreover it also shows how stakeholder can manage the team works for a project which also shows the behavior of the company. Moreover some instrumental approaches consider the actual data to explain the relationship between the stakeholder and the management.

Analysis of stakeholders involves the evaluation of the stakeholder which can be two types such as qualitative and quantitative. Can check quality of a stakeholder in the first type and can check quantity of a stakeholder in the second type as it has been mention with the name of the both type. There are three methods to analyze the stakeholder such as power, influence and salience. Most of the methods are based on psychology such as stakeholder divided in a group according to their level and check their participation in the project.  But in the second method which is influence, need to check involvement in the project.

Conclusion:

The importance of a stakeholder in the success of any project is relevant. It might be the case that the stakeholder may influence directly or indirectly. To transform the objective of any project into reality, a stakeholder plays a crucial role in achieving so. For a project to yield positive and successful results, not only stakeholders are important but other factors like ideas, innovation, finance, resources etc. are also equally important for its execution and end result. In the end, from this project we can well analyze some of the process and documentation for an organizational change program.

References:

Class work- SM 1

Class work- SM 2

Class work- SM 4

Some points include slides having the same title as the project.