1. INTRODUCTON TO PROJECTSTAKEHOLDER MANAGEMENT Week 1

2. Lesson Outcome 1.1 The needs to manage stakeholder 1.2 Organizational stakeholder 1.3 Project stakeholder 1.4 Some examples of stakeholder influence 1.5 Some examples of successful stakeholdermanagement 3. Introduction SUCCESSFUL ORGANIZATION /PROJECTS Bring project in on time, on Meet all stakeholderbudget and satisfying itsexpectations objectives for the customers 4. Stake A stake is an interest or a share in an undertaking. Example: If a group is planning to go out to dinnerand a show for the evening, each person in thegroup has a stake, or interest, in the groupsdecision. No money is being invested yet but eachmember sees his / her interest (preference, taste,priority) in the decision. 5. A stake is also a claim. A claim is a right to something. A claim is ademand for something due or believed to be due. Example: Stockholder has an interest in and anownership of a share of a business. 6. Stakeholder Stakeholder is an individual or a group that has oneor various kinds of stakes in a business. Stakeholders may be affected by the actions,decision, policies, or practices of the organization.Also, these stakeholders also may affect theorganizations actions, decisions, policies, orpractices. Therefore, there is a potential two-way interactionor exchange of inuence between stakeholders andorganization. 7. What is Stakeholder? Classic definition (Freeman, 1984): Any group or individual who can affect or is affectedby the achievement of the organizations objectives Freeman, 2004: Those groups who are vital to the survivaland success of the organizationR. Edward Freeman(December 18, 1951-Present) Click Here 8. StockholdersTheGeneral Creditors Public LocalEmployeesCommunitiesType of StakeholdersCompetitors Customers UnionsSuppliersGovernments 9. Example of stakeholders and theirinterestsStakeholders Examples of interests Participate in distribution of profits, election of board of directors,Stockholders additional rights as established in the contract with the corporation.CreditorsCredit score, new contracts, liquidity.EmployeesRates of pay, job security, compensation, respect.CustomersValue, quality, customer care, ethical products. Providers of products and services used in the end product for theSuppliers customer, equitable business opportunities.Government Taxation, low unemployment, social welfare.Trade Unions Product quality, staff protection. Norms established by society and the industry for competitiveCompetitors conduct.CommunityJobs, environmental protection, social protection. 10. The Need to Manage Stakeholder Stakeholders are individuals or groups that benefitfrom an organization. Stakeholders can affect an organizationsfunctioning, goals, development and survival. They are beneficial when they help you achieveyour goals and they are antagonistic when theyoppose your mission. Therefore, stakeholders have power to be either athreat or a benefit to an organization (Gibson,2000). 11. The Need to Manage Stakeholder Their influence can be small or great and can beexercised either intentionally or incidentally. Individuals and organizations need to be wary oftheir stakeholders and their influences. If stakeholders have negative influence on us, whyshould we deal with or bother about them? WHY? 12. The Need to Manage Stakeholder Simply because organizations are depending onexternal stakeholders for resources, services andinformation. Stakeholders have claims, rights and expectationsthat ought to be honored and not taken lightly. Thus, stakeholders must be managed properly toavoid any negative influences, especially those thatcould contrary to the organizations objectives. 13. Organizational StakeholderExample of an organizations stakeholders (Caroll &Buchholtz, 1999) 14. There are 2 steps for analyzing organizationalstakeholders1. Step 1: Identify Stakeholders Think of all the people within the organization who are impacted by your work, who have influence over it, or have a stake in its successful completion.2. Step 2: Prioritize Stakeholders Which stakeholder influence or interest is at the highest priority. 15. It is important that an organization understands itsstakeholders, strategies to satisfy all stakeholdersgoal and objectives, along with a prediction of thefuture impact of that stakeholders actions on aprojects outcome. 16. Project Stakeholders 17. Project Stakeholders Each project has its own unique set of stakeholders.Considering the potential influenceof the projects stakeholdersDevelopment of Identification of all strategies to facilitateproject stakeholders the management ofand their relevantthe stakeholdersstakes in the project. during the life cycle of the project. SuccessfulProjectManagement 18. Example Aprojectmanagerswhomustmakerecommendation concerning the design of a newplant must be aware of the state and local landuse, plant design, tax laws and the areas likelypattern of growth. HmmIs that all?Are you sure? 19. The project manager also must be aware of:1.Local political climate.2.Availability of a skilled labor force.3.Public attitudes towards the location of the plant inthe community.Politics can also have profound impact on the outcome of a project.1.E.g.: The project manager who neglects the buildingand maintenance of alliances with key politicalstakeholders will soon find indifference or oppositionto his/her project. 20. The success of a project depends on taking intoaccount the potential impact of project decisions onall stakeholders during the entire life of the project. 21. Stakeholder Influence Stakeholders will manifest the attributes oflegitimacy and power (Carroll and Buchholts,2006). Legitimacy - validity of a claim to a stake Power - the capacity to induce or persuade theactions of others and is displayed when one part ina relationship is able to impose its will on the otherpart (Johnson et al.,2005). 22. Stakeholder Influence Power may be displayed through:1. Force (coercive power)2. Material or financial resources (utilitarian power)3. Symbolic resources (normative power) 23. Stakeholder Influence Therefore, stakeholders must be managed to avoidany of their inuences contrary to an organizationor project objectives. An ideal way is to optimize by maximizing thebenets from stakeholders while minimizing theirpotential negative impacts. 24. Example of Stakeholder InfluenceExample 1 In a 1-million-square-foot addition to the New YorkHospital, environment, political and socialchallenges existed. Over 45 agencies stakeholders Need to besatisfied even though no public money was involved inthe project. Issues such as the highway, the river,working space, historical preservation and other issuesneed to be considered. 25. Example of Successful StakeholderManagementExample 1 James Webb and his colleagues at NASA practicedstakeholder management during the Apolloprogram. NASAgained the support not only from the aerospace industry and related constitutions but also from the educational community, the basic sciences and weather forecast profession. 26. Example of Successful StakeholderManagementExample 1 The 12.5 miles, $490 million highway projectthrough Glenwood Canyon in Colorado is one of theexpensive nonurban sections of the interstatesystem. Required more than 10 years to plan and 12 years toconstruct. Involved a high degree of cooperation among projectteam, environmentalists and tourists to create a majorhighway that preserved and enhanced the nationspremier natural settings. 27. Theproject experienced fierce opposition initially, countless design changes and physical constraints but a remarkable cooperation between all stakeholders created a four-lane highway that even environmentalists love.NEXTGlenwood Canyon highway (source: wikipedia) 28. Group Activity Gather one example of a successful and oneexample of a failure in the implementation ofstakeholder management. Requirements (due date: 20/9/2012)1. Work in a group of 52. Explain the background or purpose of the project.3. Why is the project a successful / failure one.4. Groups will be randomly picked to present their findings. 29. Additional Requirement:1.Successful in Implementation (minimum 200 words).2.Failure in Implementation (minimum 200 words).3.Hard copy Typed4.Presentation slides Max 6 slides. 30. END