Stakeholders are individuals or groups that have some claim on the project or the company. They can be divided into internal stakeholders and external stakeholders. Internal stakeholders are usually stockholders and employees including executive officer and board members. External claimants are all other individuals and groups affected by the company’s actions.
Typically they comprise customers, suppliers, government, unions, competitors, local communities and the general public. Every stakeholder has its responsibility and expectations. Employees provide labor and skills and in exchange expect commensurate income and job satisfaction. Customers want value for money. Suppliers seek dependable buyers. Union demand benefits for their members in proportion to their contributions to the company. Local communities want companies that are responsible citizens. The general public seeks some assurance that the quality of life will be improved as a result of the company’s existence. Government insists on adherence to legislative regulations. Even Rivals seek fair competition.
A company has to take these claims into account when formulating its strategies or else stakeholders may withdraw their support or create issues in project management. The mission statement thus becomes the company’s formal commitment to its stakeholders.
STAKEHOLDER IMPACT ANALYSIS
A company cannot always satisfy expectations of all stakeholders. These expectations of different groups may conflict and in practice only few organizations have the resources to manage all stakeholders. For example Labor Union’s claims for higher wages can conflict with consumer demands for reasonable prices and stockholder demands for acceptable returns. Often the company must make choices. To do so, it must identify the most important stakeholder and give highest priority to pursuing strategies that satisfy their needs.
Typically, stakeholder impact analysis involves the following steps.
1. Identifying stakeholders
2. Identifying stakeholder interest and concerns
3. Identifying what claims stake holders are likely to make on the organization
4. Identifying the stakeholders that are most important from the organization’s perspective.
5. Identifying the resulting strategic challenges
For example if community involvement is identified as a critical stakeholder claim, it must be incorporated in the mission statement and any strategies that conflict with it must be rejected. Manager should pursue strategies that are in the best interest of the stockholders and maximize stockholder wealth.
From the beginning of your project you should be clear about what is in scope and out of scope. This will set the ground rules and expectations for stakeholders. You can increase the likelihood of acceptance of your project by attempting to negotiate or influence your stakeholders into fulfilling project goals. Furthermore, be ahead of issues and discuss potential threats to manage risks appropriately. The open feedback will allow for more efficient resolution to known issues and better completion of your project.
Being able to communicate with your stakeholders and negotiate conflict will help to ensure those stakeholders with high levels of interest and influence remains happy and informed. If you do not communicate issues and changes with skilled negotiations, presentations and documents then your stakeholders will not support you. To actively manage your stakeholders’ expectations, create a register or list of all relevant stakeholders. This list should illustrate both the levels of interest and influence a stakeholder possesses. Maintaining thorough issue and change logs can be effective when you need to communicate to your stakeholders. Having a concise and thorough project management plan that covers the project scope, goals and ground rules can help reduce problems in your communication with stakeholders by defining a template for success.
Managing the expectations of stakeholders, throughout the project life cycle, is critical to the success of the project. This is proven by successive project surveys which consistently highlight this fact. But the point to remember is that all expectations of every stakeholder cannot be fulfilled considering the various project and organizational constraints.