1. Management & Development of Complex Projects Course Code - 706
MS Project Management
Management & Development of Complex Projects
Course Code - 706
Stakeholder Management in Complex Projects
Lecture # 7

2. Summary of Previous Lecture
In previous Lecture, we have discussed about
Construction projects types
Structure of Construction Industry of Pakistan
National economy and construction
Work hunt in construction
Registrations, decision to bid, construction project organization
Engaging supplier/ sub contractors, establishment of site camp, site surveys
Issues in construction industry

3. Definition of Project Stakeholder
Many organizations may have different definitions of stakeholders. In PMBOK 4, the stakeholders were defined as
„individuals and organizations that are actively involved in the project, or whose interests may be affected as a result of project execution or project completion“.
[Project Management Body of Knowledge, 4th Ediction 2008, p.23]

4. Definition of Project Stakeholder
The definition of the project stakeholders has been revised in PMBOK 5 and now project stakeholder is defined as
„ A stakeholder is an individual, group, or organization who may affect, be affected by, or perceive itself to be
affected by a decision, activity, or outcome of a project“.
[Project Management Body of Knowledge, 5th Ediction 2013, p.28]

5. Definition of Project Stakeholder
Stakeholders include all members of the project team as well as all interested entities that are internal or external to the organization.
The project team identifies internal and external, positive and negative, and performing and advising stakeholders in order to determine the project requirements and the expectations of all parties involved.
[Project Management Body of Knowledge, 5th Ediction 2013, p.28]

6. Project Stakeholders: An Alternative Definition
Development Financing and Implementing Institutions have a different perception as to who constitutes a project’s stakeholders.
Example: According to the African Development Bank’s Handbook on Stakeholder Consultation and Participation in ADB Operations, Stakeholders are people/communities who may - directly or indirectly, positively or negatively – affect or be affected by the outcomes of projects or programmes;
Source: Dr. A Z Khan‘s Lecture Presentations

7. The Project Stakeholders; Some Facts
Stakeholders must be „managed“ throughout a project so that their ideas and concerns are taken into consideration, they can contribute to the project, they understand the project decisions taken and accept them more readily and they will be project supporters instead of project adversaries
Depending on the nature of the project, the stakeholders can, at one extreme, be very small in number and easily identifiable, or they can be numerous, highly dispersed, and difficult to identify on the other.
Terms commonly used in the project management literature to denote and differentiate stakeholders on a project are „Primary Stakeholders“ and „Secondary Stakeholders“, „Internal and External Stakeholders“ and „Key Stakeholders“
Source: Dr. A Z Khan‘s Lecture Presentations

8. Project Stakeholder Management
“Project Stakeholder Management includes the processes required to identify the people, groups, or organizations that could impact or be impacted by the project, to analyze stakeholder expectations and their impact on the project, and to develop appropriate management strategies for effectively engaging stakeholders in project decisions and execution“.
[Project Management Body of Knowledge, 5th Ediction]

9. Project Stakeholder Management
Identify Stakeholders:
The process of identifying the people, groups, or organizations that could impact or be impacted by a decision, activity, or outcome of the project; and analyzing and documenting relevant information regarding their interests, involvement, interdependencies, influence, and potential impact on project success.
Plan Stakeholder Management
The process of developing appropriate management strategies to effectively engage stakeholders throughout the project life cycle, based on the analysis of their needs, interests, and potential impact on project success.
Source: PMI‘s PMBOK 5

10. Project Stakeholder Management
Manage Stakeholder Engagement
The process of communicating and working with stakeholders to meet their needs/expectations, address issues as they occur, and foster appropriate stakeholder engagement in project activities throughout the project life cycle.
Control Stakeholder Engagement
The process of monitoring overall project stakeholder relationships and adjusting strategies and plans for engaging stakeholders
Source: PMI‘s PMBOK 5

11. Project Stakeholder Management Framework
Project Stakeholder Management Process 1
Understand the Project Context 2
Identify All Project Stakeholders
update 3
Analyze and Map the Project Stakeholders
revise 4
Design Stakeholders Engagement Strategy
revise 5
Implement Stakeholders Engagement Strategy
Project Completion 11

12. Understand the Project Context (Complexity of Project)
High
On projects, the attention given to managing the stakeholders will vary, depending on the type of stakeholder.
Project Complexity
It is reasonable to assume that as a project’s complexity increases, more care needs to be exercised by the project implementers in “managing” the project stakeholders otherwise the project goal and the project investment may be jeopardized.
Low
Focus on Effectively Managing the Project Stakeholders
Low
High

13. No. of Project Stakeholders
Understand the Project Context (Complexity Involved in Managing Project Stakeholders)
High
New Product Development projects
Complex, capital-intensive and high-visibility projects such as dams, roads, power stations and pipelines.
No. of Project Stakeholders
Projects being imple-mented in and for individual departments of organizations.
Some social development projects undertaken by NGO’s
Low
Level of Heterogenity of the Project Stakeholders and Complexity of Managing Them
Low
High

14. Number of Stakeholders and Project Stakeholder Engagement
More time, effort and cost must be spent here
High
Number of Stakeholders
Moderate
Low
Importance of Developing and Implementing Effective Project Stakeholder Engagement Strategies
Low
High

15. New Technology and Project Stakeholder Engagement
More time, effort and cost must be spent here
High
Technological use
Moderate
Low
Importance of Developing and Implementing Effective Project Stakeholder Engagement Strategies
Low
High

16. Identify Stakeholders
Identify Stakeholders is the process of identifying the people, groups, or organizations that could impact or be impacted by a decision, activity, or outcome of the project, analyzing and documenting relevant information regarding their interests, involvement, interdependencies, influence, and potential impact on project success

17. Information Regarding Stakeholders
When in project life cycle, this information will be collected?
What are the available sources of information on the project stakeholders?
Which tools can be used to gather information?
Who will collect the information and when?
Is the information accurate, adequate and cost-effective?
How can the information be safeguarded?
To whom, when and how will information be distributed?
What will happen to the information after use?

18. Identification of All Project Stakeholders
Brainstorming
Survey
Ask the Consultant
Ask Experienced Team Members
Ask other Project Managers
Organization‘s Existing Documentation
Locals
Case Studies
Other Organziation‘s Stakeholder Dirctory
Website

19. Project Primary & Secondary Stakeholders
According to Cleland/Ireland [Strategic Design and Implementation, 2002]:
Project primary stake-holders are those individuals or organizational entities who or which have a contractual or legal obligation to the project team and have the responsibility and authority to manage and commit resources according to schedule, cost and technical performance objectives.
Using Cleland/Ireland‘s definition of primary stakeholders s a reference,
Project secondary stakeholders are those individuals, groups of individuals and organizational entities [and, as we shall see, communities and even countries] who or which have no formal contractual relationship to the project in question, but who/which believe they have a stake in it because it can affect them in some way or other.

20. Project Primary Stakeholders: Examples
Corporate Shareholders
Project Team
Primary Stakeholders can be
internal or external to the
Project-implementing
organization
Managing all these stake
holders is challenging but
routine for the project
manager and project team
Senior Management
Project Partners
Project Sponsor
Project Customers
& Users
Project Steering
Committee
Project Input Suppliers
& Vendors (ext.)
Project Management
Office
Project Contractors /
Subcontractors
Chief Project Officer /
Programme Manager
Project Consultants
Functional /
Resource Managers
Project Financers (ext.)
Project Manager
Local, State and Federal
Government Entities

21. Project Secondary Stakeholders: Examples
Secondary Stakeholders are
external to the
project organization
Managing secondary
stakeholders can be especially
challenging for the project
manager and project team
Competitors
Intervenor Groups
Consumer Interest
Groups
Environmentalists
Civic and Professional
Organizations
Local Communities
Political Organizations
Private Individuals
Local, State and Federal
Government Entities
Tourists
Media
The General Population
Academia & Researchers
Countries, Regions,
World Community

22. Stakeholder Analysis
Stakeholder analysis is a technique of systematically gathering and analyzing quantitative and qualitative information to determine whose interests should be taken into account throughout the project.
It identifies the interests, expectations, and influence of the stakeholders and relates them to the purpose of the project

23. Stakeholder Analysis
Stakeholder Analysis is a useful and frequently used tool by project managers for identifying, understanding and planning for engaging the stakeholders on a project for success of the same.

24. Project Stakeholders: The Power Factor
Power Factor is the measurable degree to which stakeholders can have a positive or negative impact on a project.
On any given project, some stakeholders may be quite powerful and able to intervene in it ‚positively‘ by providing resources and support to the project manager and team or they may intervene in it ‚negatively‘, causing at best a delay or cost increase in the project, or a change in its scope, or at worst causing its abandonment.

25. Power and Project Stakeholder Engagement
More time, effort and cost must be spent here
High
Power of Stakeholder
Moderate
Low
Importance of Developing and Implementing Effective Project Stakeholder Engagement Strategies
Low
High

26. Dimensions of “Power Factor”?
There are many dimensions of “power factor”. For example:
Formal authority and position in a hierarchy
Control over decision-making processes
Control over coalition-building processes
Control over information
Control over incentives, rewards and punishments
Control over financial and material resources
Control over the environment (e.g. physical, social, technological)
Networks (individual, group, organizations)
Knowledge, skills and experience
Personality Traits
Inter-personal skills (communication, motivation, inspiration)
Ability to influence perceptions of individuals, groups, general public

27. Power in Project Stakeholder Networks
Managing stakeholder relationships and networks can be complex and considerably challenging for the project manager and team.
Some stakeholders may appear relatively less powerful and, hence, unimportant or irrelevant for the project. However, they may be quite powerful because of their excellent links to powerful stakeholders and ability to influence them about the project.
Med-
Med+
High+
Low+
High
Low+
Low-
Low
Low+
Low-
Low-
Med
Low
Med
Low

28. Analysis of Interests and Concerns of Stakeholders
Issue-Based Framework of Stakeholder Analysis and few of examples are
Economic
Financial
Social
Political Ideologies
Conservation (e.g. ecological, cultural, historical, archeological)
Health (air, water and land pollution)
Personal Development
General Attitude towards Change
Emotional & sentimental
Individual & Collective Prejudices
Group Mission
Image of Project Owner / Implementer
Security Concerns

29. Interest and Project Stakeholder Engagement
More time, effort and cost must be spent here
High
Intrest of Key Stakeholder
Moderate
Low
Importance of Developing and Implementing Effective Project Stakeholder Engagement Strategies
Low
High

30. Analysis of Influence of Stakeholders
Few of the tools which may be considered include but not limited to
SWOT-Analysis of project stakeholders
Anticipated impact of the stakeholders on the project (high, medium, low)
Attitude of stakeholders towards project (supportive, neutral, adversarial)
Options available to project stakeholders to influence course of project
Stakeholder Register
Application of stakeholder visualization mapping tools

31. Classification Models for Stakeholders Analysis
There are multiple classification models used for stakeholders analysis, such as
Power/interest grid, grouping the stakeholders based on their level of authority (“power”) and their level or concern (“interest”) regarding the project outcomes;
Power/influence grid, grouping the stakeholders based on their level of authority (“power”) and their active involvement (“influence”) in the project;
Influence/impact grid, grouping the stakeholders based on their active involvement (“influence”) in the project and their ability to effect changes to the project’s planning or execution (“impact”); and
Salience model, describing classes of stakeholders based on their power (ability to impose their will), urgency (need for immediate attention), and legitimacy (their involvement is appropriate).

32. Power Interest Grid Example

33. Engagement of Stakeholders
The engagement level of the stakeholders can be classified as follows
Unaware. Unaware of project and potential impacts.
Resistant. Aware of project and potential impacts and resistant to change.
Neutral. Aware of project yet neither supportive nor resistant.
Supportive. Aware of project and potential impacts and supportive to change.
Leading. Aware of project and potential impacts and actively engaged in ensuring the project is a success.

34. Stakeholder Engagement Assessment Matrix
This example shows that stakeholder 3 is at the desired engagement level, while stakeholders 1 and 2 require further communications and additional actions to move them to the desired level of engagement

35. Managing Engagement of Stakeholders
Management Skills:
Facilitate consensus toward project objectives,
Influence people to support the project,
Negotiate agreements to satisfy the project needs, and
Modify organizational behavior to accept the project outcomes
Interpersonal Skills:
Building trust,
Resolving conflict,
Active listening, and
Overcoming resistance to change

36. Goal of Project Stakeholder Engagement
Project Stakeholders
Resistant
Unaware
Supportive
Leading
Neutral
Project achieves its goal within time and budget according to its requirements and to satisfaction of all key stakeholders.

37. Summary of This Lecture
In this Lecture, we have discussed about
Definition of stakeholder
Stakeholder management
Project stakeholder management processes & framework
Context of project & stakeholder management
Identify stakeholders
Stakeholder analysis
Stakeholder engagement framework

38. End Note
Good judgment comes from experience, and experience comes from bad judgment

39. THANK YOU!