Curtin University of Technology, T12/1

School of Architecture Construction and Planning

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Stakeholder Management Topic No. 12
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Curtin University of Technology T12/2
School of Architecture Construction and Planning



STAKEHOLDERS






CONTENTS



1.0. STAKEHOLDER MANAGEMENT - STEPS............................................................... 3
Step 1: Stakeholder Identification .................................................................................... 3
Step 2: Gather Information on the Stakeholders .............................................................. 3
Step 3: Determine the Stakeholder Mission...................................................................... 4
Step 4: Assess Stakeholders Strengths and Weaknesses.................................................. 4
Step 5: Identify the Stakeholder Strategy.......................................................................... 5
Step 6: Predict Expected Stakeholder Behaviour............................................................. 5
Step 7: Plan how Each Stakeholder Should be Dealt with. .............................................. 5
Step 8: Implement Stakeholder Management Plans ......................................................... 6
Step 9: Maintain Stakeholder Management Plans ........................................................... 6
2.0.REFERENCES .................................................................................................................. 6
SELF ASSESSMENT QUESTIONS...................................................................................... 7



Stakeholder Management Topic No. 12
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School of Architecture Construction and Planning
1.0. STAKEHOLDER MANAGEMENT - STEPS

The following is a nine-step stakeholder management process (Cleland, 1986; Dinsmore, 1995;
Wideman, 1988):

1. identify stakeholders
2. gather information on them
3. determine the external stakeholder mission
4. assess stakeholders strengths and weaknesses
5. identify the stakeholder strategy
6. predict expected stakeholder behaviour
7. plan how each stakeholder should be dealt with.
8. implement stakeholder management plans.
9. maintain stakeholder management plans.

Each of these steps is explained below.

Step 1: Stakeholder Identification

It is a good idea to identify the project stakeholders during early project planning/conceptual
phases (Wideman, 1998; Tuman, 1993). Stakeholders must be identified as individuals with
names and faces, not just departments or groups (Dinsmore, 1995). The result of the
stakeholder identification process is a list of a number of stakeholders, all of which need to be
managed (Cleland, 1986).

Step 2: Gather Information on the Stakeholders

Cleland & King (1988) suggests that the following questions need to be considered when
gathering stakeholder information:
What needs to be known about the stakeholder ?
Where and how can the information be gathered ?
Who will have the responsibility for the gathering, analysis, and interpretation of the
information ?
How and to whom will the information be distributed ?
Who has responsibility for the use of the information in the decision context of the project ?
How can the information be protected from leakage or misuse ?

Stakeholder Management Topic No. 12
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School of Architecture Construction and Planning
Tuman (1993) suggests that information can be obtained about stakeholders by talking to them
and opening lines of communication, through advertising, surveys, public meetings, and
information hotlines.

Step 3: Determine the Stakeholder Mission

Once the stakeholders have been identified and information gathered about them, analysis is
carried out to determine the nature of their mission or stake. Not only will different groups be
concerned with different issues, they may have different stakes in different issues. For example,
Greenpeace may have a high stake and expectations in the projects environmental
performance, but a lower stake in the projects industrial relations policy (Polonsky, 1995).

Step 4: Assess Stakeholders Strengths and Weaknesses

An assessment of stakeholder strengths and weaknesses is a prerequisite to understanding their
strategies (Baker et al, 1988). The output of this process is a list of the most important
strengths that the stakeholder may use against the project, and a list of weaknesses that they will
probably avoid in pursuing their interests on the project.

There is a need to establish the relative importance of each stakeholder to the project, and in
particular, identifying the high risk stakeholders (Wideman, 1998). Project team members
should then focus their energy and resources on the stakeholders that have the greatest power to
hinder project success (Tuman, 1993; Wideman, 1998). However, the cooperative potential of
many stakeholders should not be overlooked, as this can be used to great advantage for the
project (Polonsky, 1995).

In order to rank stakeholders according to their potential impact on project success, Tuman
(1993) suggests allocating, for each stakeholder, a score between 1 and 5 (1=low, 5 =high)
according to the power that the stakeholder has to influence project success, and also according
to how difficult it would be to meet the stakeholders objectives. Tuman (1993) uses a
weighted scoring technique to obtain the scores, while Dinsmore (1995) suggests allocating a
score between 1 and 3 (1=low, 2=moderate, 3=high) for each of these factors.

Each score is then used to develop a stakeholder success grid, similar to the one shown in
Figure 1.1. Those stakeholders that are found to lie in quadrant I are expected to have little
impact on project success, those in quadrant II are expected to have a potential impact on
project success, those in quadrant III are expected to have a normal impact on project
Stakeholder Management Topic No. 12
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success, while stakeholders in quadrant IV are expected to have a major impact on project
success (Tuman, 1993).

Figure 1.1: Stakeholder Success Grid (adapted from Tuman, 1993, p213)



Step 5: Identify the Stakeholder Strategy

Stakeholders will formulate a strategy - either formally or informally - that sets the direction for
accomplishment of their mission. Once the stakeholders strategy is understood, then the
stakeholders probable behaviour can be understood (Baker et al, 1986).

Step 6: Predict Expected Stakeholder Behaviour

Based on an understanding of external stakeholder strategy obtained in step 5 above,
stakeholder behaviour to implement these strategies can be predicted. When stakeholder
behaviour is properly predicted, the project team can then develop strategies to deal with
adversary stakeholder influence (Baker et al, 1988).

Step 7: Plan how Each Stakeholder Should be Dealt with.

Communication and an honest attempt to meet stakeholder concerns should be key pieces of the
strategy (Sandaas, 1988). The strategy should include resource requirements, priorities, and a
schedule consistent with the project for which the process is being developed (Wideman,
1998).
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School of Architecture Construction and Planning
Step 8: Implement Stakeholder Management Plans

Implementation of the stakeholder management plans involves ensuring that the specific
actions, responsible parties, and dates that were planned in step 7 above are formally
established. Stakeholder management plans should be implemented in accordance with the
relative importance of the stakeholders (determined in step 4 above). That is, major emphasis
on the small number of stakeholders that have a strong impact, normal efforts toward an
intermediate group, and moderate attention toward stakeholders with a lesser impact
(Dinsmore, 1995).

Step 9: Maintain Stakeholder Management Plans

This step involves the continuous monitoring of the effectiveness of the program during its
application and adjusting it as necessary for optimum results (Wideman, 1998; Dinsmore,
1995).

2.0.REFERENCES

BAKER, B.N., MURPHY, D.C. & FISHER, D., 1988. Factors Affecting Project
Success. In Cleland, D. & King, W., eds., 1988.. Project Management Handbook. Van
Nostrand Reinhold, New York, pp 902-919.

CLELAND, D.I., 1986. "Project Stakeholder Management." In: D.I. Cleland & W. King,
Project Management Handbook. Sep, 17(4), pp 36-44.

DINSMORE, P., 1995. "Will the Real Stakeholders Please Stand Up ?" PM Network,
December, pp9-10.

POLONSKY, M.J., 1995. "A Stakeholder Theory Approach to Designing
Environmental Marketing Strategy." Journal of Business and Industrial Marketing,
10(3), pp29-46.

SANDAAS, R., 1988. "External Factors: A Real Threat to Effective Project
Management." In: Project Management Institute Seminar/Symposium, San Francisco,
California, Sept 17-21.

TUMAN, J., 1993. Models for Achieving Project Success Through Team Building and
Stakeholder Management. In: Dinsmore, P. AMA Handbook of Project Management
New York, AMACOM, 1993, pp 207-223.

WIDEMAN, M.R., 1998. How to Motivate All Stakeholders to Work Together. In:
D.I. Cleland, ed. Field Guide to Project Management. USA: International Thomson
Publishing Company.
Stakeholder Management Topic No. 12
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School of Architecture Construction and Planning
SELF ASSESSMENT QUESTIONS

Question 1: List 3 stakeholders on your project.:

1. determine their mission
2. assess their strengths and weaknesses
3. identify the stakeholder strategy
4. predict expected stakeholder behaviour
5. plan how each stakeholder should be dealt with.