LECTURE 18: PROJECT STAKEHOLDER ANALYSIS PART 2

Assistant Professor Dr. Aurangzeb Zulfiqar KhanDepartment of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 1

LECTURE 18: PROJECT STAKEHOLDER ANALYSIS PART 2

Master of Science inProject Management

PROJECT STAKEHOLDER AND COMMUNICATION

MANAGEMENT


Key Attributes of Project Stakeholders

Power, Interests, Concerns, Attitudes, Behaviors


Power


Power and Project Stakeholder Management

POWERComplex, Multi-Faceted

Concept in Project Stakeholder Management

Formal Authority and Control Over Project

Resources

Spectrum of Abilities (Individual, Group,

Organizational)

Coercion


Project Stakeholders: The Power Factor

Power in the context of project management may be broadly defined as the degree to which project stakeholders can excercize authority, influence and /or coercion with a consequent (positive, negative) impact on a project‘s (managerial, technical) pro-cesses and work activities, and its deliverables.

A project‘s cost, time, quality, risk and other para-meters can be affected, sometimes profoundly, by

the application of stakeholder power.



The power of some stakeholders may be transitory (i.e., it applies only at a certain point in time in the project life-cycle or over a short period of time in one or more project phases), while the power of other stakeholders may be non-transitory (i.e., it

may apply over one or more phases of a project or even extend over the entire project life-cycle).

The intensity of stakeholder power may change (increase, decrease) over the project life-cycle.



Some stakeholders may have a narrow power focus which is confined to one or a few specialized

project areas and activities (such as, an external quality consultant who advises the project team on quality issues), others may have a very broad power focus which can determine the course of the whole project (such as, the project steering

committee or senior management which can authorize the premature termination of the

project under certain conditions).



On a project, powerful „supportive“ stakeholders may intervene in it positively as facilitators by

providing resources, support and encouragement to the project while powerful „adversarial“ stake-

holders‘ may intervene in it negatively as obstructers causing an increase in the cost of the project, schedule slippage, undesired changes in the project scope or (in the very worst case) its

eventual abandonment or premature termination.


The “Power” of Project Stakeholders(Manifestations of Project Stakeholders Power)

P Authority of stakeholders, inde-

pendently or jointly with other stakeholders, to make, shape, amend, defer, expedite, prevent, challenge, halt, suspend and/or revoke decisions affecting the project, its phases, activities, processes and/or deliverables.

Delegation of decision-making and control over decision-making processes.



P Permanent or temporary access

of project stakeholders to (or the control over their access to) in-formational, financial, human, physical (e.g.: facilities, infra-structure), and technological resources as well as all tangible and intangible inputs needed for undertaking the project, its phases, processes and activities, and creating its deliverables.



P Ability of stakeholders to shape

project contracts with a view to enhancing their interests vis-à-vis other stakeholders.

Authority to formulate and modi-fy policies, rules and processes which govern the conduct of pro-ject stakeholders.

Authority to give, change and re-voke permits, concessions etc.



P The excercizing by project stake-

holders of a range of options at their disposal to influence the perceptions, attitudes and beha-vior of other stakeholders for or against the project.

Use of administrative, political, legal and/or legislative entities to further stakeholders goals in relation to the project.



P Possession of specialist know-

ledge, skills and long experience. Personality (charisma, charm),

status, reputation, respect and admiration commanded among project stakeholders.

Inter-personal and leadership skills (e.g.: communication, moti-vation, inspiration, negotiation, persuasion, manipulation).



P Ability of project stakeholders to

network and form coalitions with other stakeholders, or to prevent the emergence of such networks and coalitions.

Creativity and resourcefulness. Effective use of Information and

Communication Technology - and the media in support of or in opposition to the project.


The “Power” of Project Stakeholders (How Project Stakeholders Apply Power)

P Authority to compel reluctant

stakeholders to involuntarily pur-sue certain courses of action or to compel them to do likewise by resorting to illicit means such as violence and intimidation.

Control over incentives, rewards and punishments (monetary and non-monetary, hiring and firing, promotion, suspension and tran-sfer of project staff etc).


Power in Project Stakeholder Networks

Med-

High

Med+

Low+

Low- Low+

High+

Low

Med Low-

Low-

Med

Low

Low+

Low

Managing stakeholder relationships and networks can be an especially complex and challenging task for the project manager and team.

Even identifying and evaluating relation-ships between stakeholders can be very difficult, especially when there is a large and heterogenous (external) stakeholder community. Considerable skill, experience and resources may be needed to perform a satisfactory analysis.

Some project stakeholders may appear relatively “powerless” and, hence, “un-important” but in fact they may be able to influence powerful stakeholders for or against the project.


Power and Project Stakeholder EngagementPo

wer

of S

take

hold

er

Mod

erat

eH

igh

Low

Importance of Developing and Implementing Effective Project Stakeholder Engagement StrategiesLow High

More time, cost and effort must be expended to keep these stakeholders satis-

fied and supportive

Less need for intensive resource allocation for

stakeholder engagement


Stakeholder Attribute: Interests

I Stakeholders have by definition

some “interest” in a project.

There are many possible interests, for e.g., economic, financial, social and ecological.

The intensity of interest will vary for different stakeholders as they are affected by the project diffe-rently. Interests can change over time.


Stakeholder Interests in a Project

Does Stakeholder have an “Interest” in

the Project?YES

No

High Interest?

Moderate Interest?

Low Interest?

Interest-Precipitating Issues and Concerns

TIME

FACTOR


Stakeholder Attribute: Concerns

C A concern is a feeling or emotion

which a stakeholder has towards an issue (economic, financial, eco-logical, and so forth) associated with a project.

A stakeholder may have several concerns of varying priority which influence his/her/its attitude and behavior towards the project. Concerns are not static – they may change over time.


Abraham Maslow’s Pyramid of Needs

Abraham Maslow (1908-70) was an American psychologist and Professor at Brandeis University. His pyramid of needs was first proposed in his paper A Theory of Human Motivation dating from 1943 and subsequently modified.


Class Discussion

? As part of an acquisition project, a large IT software developer will be taking over one its smaller com-petitors.

Identify as many concerns as you can which an em-ployee in the smaller orga-nization may have in con-nection with this project.


The Complexity and Multifacetedness of Project Stakeholder Concerns (Acquisition Project)

? A multitude of questions about the pro-posed corporate acquisition project would probably be floating in the mind of the affected employee of the to-be-acquired firm. These evolve against the backdrop of his individual concerns which are derived from his needs, desires, ambitions, hopes and fears.

If the employee feels he will benefit over-all significantly, then he is more likely to support the project. An effective informa-tion strategy of the project planners /im- plementers would focus on this.


? Job Security Income Monetary and Non-Monetary Incen-

tives and Fringe Benefits Promotional Prospects Interesting, Exciting and Challenging

Work Environment Knowledge, Skills and Experience Additional Responsibilities (Desired,

Undesired)

Possible Stakeholder Concerns (Acquisition Project)


? Authority, Status and Privileges Travelling, Training and Professional

Development Utilization of Creative Potential Adaptation to New Work Environ. Workload Stress Level Health and Emotional Well-Being Aggregate Working Hours Flexible Working Hours



? Formal and Informal Monitoring, Assessment and Control

Organization‘s Culture, Policies, Rules, Standards and Processes

Competition for Work Resources Conflicts at Work Conformance and Performance

Pressure Exposure of Concealed Deficiences Recognition and Respect



? Relocation Modification of Work Routine Benefits to Colleagues Office Space Compulsion to Work With or Under

Unliked Persons Current Work Assignments Disruption of Social Networks Creation of New Social Networks Time for Family and Friends



? Impact on Organization‘s Image Consultation About the Acquisition Understanding of the Need for the

Acquisition Follow-On Projects in Future



Stakeholder Attribute: Attitude

Attitude is the feeling of like, dis-like or indifference stakeholders exhibit towards a project or parts thereof (for e.g. other project stakeholders, project events).

Attitudes are determined by many factors and can change over time. Good stakeholder engage-ment strategies seek to influence attitudes in favor of the project.

A


Stakeholder Attribute: Attitude(Key Determinants of Stakeholder Attitudes)

AFamily, Peers, Community, Society, Nation

Culture, Tradition, Religion, Value System

Knowledge, Intelligence, Personal Experiences

Systems (Education, Administrative, Political, Legal etc.)

Attributes of the Attitude-Shaping Entity (Time Factor)

Access to Information and Knowledge

Needs, Wants and Desires, Goals, Concerns


Stakeholder Attribute: Behavior

B Behavior is the conduct of a

stakeholder towards a project. It is usually – but not always – a re-flection of the stakeholder’s atti-tude towards the project.

Stakeholders may exhibit sup-portive, indifferent or adversarial behavior towards a project with varying intensities. Behavior can change over time.


Stakeholder Attributes: Consistency and Inconsistency of Attitude and Behavior

BAttitude and Behavior of Project Stakeholders are Consistent (i.e. behavior reflects attitude)A→

BA→XAttitude and Behavior of Project Stakeholders are Inconsistent (i.e. behavior does not reflect attitude)



B Attitude and Behavior of Project Stakeholders are Consistent (i.e. behavior reflects attitude)A→

Example 1: (A) Stakeholder X is passionate about preserving old colonial era buildings (B) Stakeholder X will (possibly fiercely) oppose projects to construct commercial plazas in the old part of his/her town.

Example 2: (A) Stakeholder Y is a local government official who desires to alleviate poverty in his/her provincial district (B) Stakeholder Y will support a project by a large foreign development-implementing agency to provide training to local youths in developing technical skills.


B→XAttitude and Behavior of Project Stakeholders are Inconsistent (i.e. behavior does not reflect attitude)


Example 1: (A) Stakeholder D strongly believes the rights of minorities must be respected (B) Stakeholder D pickets the construction site of a planned counseling center for immigrants.

Example 2: (A) Stakeholder F is a devoted environmentalist (B) Stake-holder F votes in a community referendum to support a large copper mining project in close proximity which has been proposed by a foreign company.

A


Economic and Financial Gains and Losses(Individual, Neighborhood, Community, Organizational)

Impact on Society(Neighborhood and Community Cohesion and Spirit, Cultural and Religious Perspective, National Sensitivities)

Impact on Health(Physical, Psychological, Emotional)

Impact on the Physical Environment (Air, Water, Land, Acoustics, Aesthetics)

Impact on Ecology(Bio-/Ecosystems (Fauna, Flora))

Project Stakeholders‘ Attitude and Behavior (Key Determining Factors)


Conservation (Cultural Assets, Archeological and Historical Heritage)

Political Dimension(Personal Ideology, Local, Regional and National Outlook)

Attitude To Change (Life Style, Sentiments, Anticipated Opportunities for Personal and Organizational Development etc.)

Security (Individual, Group, Organizational)

Reputation(Project Owners / Developers)

Project Stakeholders‘ Attitude and Behavior (Key Determining Factors)


Supportive

Indifferent

Adversarial

Strongly

Moderately

Marginally

Marginally

Moderately

Strongly

Perceptoion of Net Gain

Perc

epto

ion

of N

et Lo

ss

Passive

Active

Passive

Active

STA

KEHO

LDER

C

OM

MU

NIT

Y PROJECT STAKEHO

LDER MAN

AGEMEN

T AN

D ENGAGEM

ENT STRATEGIES

Strongly - Marginally

Strongly - Marginally

Managing and Engaging Project Stakeholders (Attitude and Behavior Patterns)


Project Impact on Stakeholders

Project Phase

Post-Project Phase

Pre-Project Phase Project’s Change Impact(economic, financial,

social, ecological , security, etc.)

Level of Interest

Concerns and Motivations

Expectations and Perceptions

Attitude and Behavior

Power / Influence

CONSIDERATIONS

Rational Behavior, Access to Informa-

tion, Long-Term Per-spective, Relational

Constellations

Stakeholder Engagement


Managing and Engaging Project Stakeholders(Stakeholder Expectations and Perceptions)

PROJECT STAKEHOLDERS

Expectations (What Outcomes Will Project Bring?)

Perceptions (What Outcomes Is Project Bringing?)

Information * Observation * Experience * Interaction With Other Stakeholders * Attitude

Cognitive & Intuitive Process


Stakeholder Perceptions Of Projects

A project to develop a Walt Disney Theme Park near a township would probably generate more support among stakeholders than a project for construction of a nuclear power station because of the stigma which is attached to the nuclear power industry.

The intensity of stakeholder supportiveness, indif-ference or adversity towards a project is determined

primarily by the nature of the project and the per-ceptions which the stakeholders develop about it based on the information they have and, possibly

their previous experience with similar projects


Stakeholder Perceptions of Projects: The Concept of Rational Behavior

Project stakeholders who „behave rationally“

will try to maximize their „quality of life“

In evaluating a project, stakeholders will carefully consider its respective pros and cons. To do this they must have access to

all the requisite information they require in order to carefully analyze the project‘s

potential impact on them over time, which includes the period of time both before as

well as after the project‘s completion.

Is the stakeholder’s perceived gain from the project greater

than (>), equal (=) to or less than (<) its

perceived loss from the project?


Stakeholder Perceptions of Projects: The „Quality of Life“ Dimension

When the Perceived Gain from the Pro-ject [i.e. Improvement in the Stakehol-

der‘s Quality of Life] > the Perceived Loss from the Project [i.e. Reduction in the

Stakeholder‘s Quality of Life]: Stakeholders will Support the Project!

Project Gain > Project Loss




der‘s Quality of Life] = the Perceived Loss from the Project [i.e. Reduction in the

Stakeholder‘s Quality of Life]: Stakeholders will be Indifferent!

Project Gain = Project Loss




der‘s Quality of Life] < the Perceived Loss from the Project [i.e. Reduction in the

Stakeholder‘s Quality of Life]: Stakeholders will Oppose the Project!

Project Gain < Project Loss

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LECTURE 18: PROJECT STAKEHOLDER ANALYSIS PART 2