Stakeholders and their Impact on the Projects

Who are the Stakeholders?

Stakeholders are those who can positively or negatively impact the output of the projects. It is very important for an efficient project manager to identify the names of stakeholders during the initiation stage of the projects. The stakeholders can be external and internal both.

Few examples of stakeholders can be the customers, the clients, the project team members, the functional managers, the account managers, the operation managers, sellers, buyers, sponsors etc. It is mandatory for a project manager to identify the stakeholders and manage their expectations throughout the life-cycle of the project(s).

Internal stakeholders include other managers and employees and are those that are situated within the company and affect the daily routine of the project. External stakeholders are those who are not directly linked to the projects but can influence the activities of the project through various ways. They include the Government, neighbors, pressure groups, political groups, local councils, and the surrounding communities.

Identify stakeholders:

Ideally, a project manager should identify the stakeholders at the initial stages as it will cost hugely if you missed out any key stakeholders during that period. As per PMI®, it is an initiation process in communication knowledge area.

Impact of the stakeholders on the projects:

It can be very costly if you ignore any of the stakeholder’s expectations and it can hugely impact the project negatively like delay in deliveries. Suppose you need the resources for running the project as planned and if you have managed the expectations of HR manager positively then you will surely get a soft support from your HR manager because you’ve managed his/her expectations at the initial stage and the result can be vice-versa in case you have not managed his/her expectations initially.

Furthermore, a project manager must manage the influence of all the stakeholders in relation to the project requirements to ensure a required output. The project manager should take care of the interests of the stakeholders balancing the requirements of the project.

Co-ordination with a geographically located team:

If you are working with a team which is geographically placed then in that case you should be aware of what are the best ways of communication with that team so that you can work effectively. And these things should be drafted at the initial stage of the project which should be communicated to them in advance in the required language. In this way, you can manage a team globally without any trouble. You can save enormous time in your project through it.

Mode of effective communication with stakeholders:

A project manager should know the mode of communication and time of communication (in case of a virtual team) of all the identified stakeholders. A well-discussed format of a report (MS-Word, MS-Excel, Power point) can reduce the problem of communication a lot. So, a project manager should know the right format which the stakeholders require for viewing progress report, work status, trend report etc. A lot of controversies can be reduced adopting these systems of reporting.

Advantages of managing stakeholder’s expectations:

It is always plus for your project if you have successfully identified your internal and external stakeholders. Ideally, you should involve your key stakeholders starting from contracts, SOW, creating project charter (if a project manager is doing this) and he/she should involve in an effective planning stages. As a project manager, you should monitor their expectations regularly so that you can align the project requirements with their requirements. In the meantime, you have to maintain your milestone dates, quality planning, cost budgeting as a whole your performance baselines balancing the stakeholder’s expectations. If you are managing all these – your project are all right in every aspect. You can save time and money if you are managing the stakeholder’s expectations effectively.

Disadvantages of not managing stakeholder’s expectations:

Your project can be hampered effectively if you missed out any key stakeholders and their expectations. The stakeholders are known as the skeleton for any project. You can not run your project smoothly without their involvement. In any case, if you have missed out key stakeholders, you have invited trouble for your project. They can create a lot of unwanted trouble in your project. They can demand an unacceptable scope change which can impact on pricing, timing, and the schedule. So, smartly you should define scope involving the key stakeholders so that you can monitor the scope effectively as per scope baseline. This is sure, if you have failed to identify and manage the stakeholder’s – your project will be over-budgeted and behind the schedule.

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About the Author


Chandana is working as a Senior Content Writer in and handles variety of creative writing jobs. She has done M.A. in English Literature from Gauhati University. A PRINCE2 Foundation certified, she has a unique and refreshing style of writing which can engross the readers to devour each sentence of her write-ups.

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