Stakeholder management for building design and construction

1 What is a stakeholder?
2 Who might be stakeholders on a construction project?
3 Stakeholder classification
4 How can stakeholders be managed?
- 4.1 Stakeholder management strategies
5 Related articles on Designing Buildings
6 External references

[edit] What is a stakeholder?

A stakeholder is anyone who has an interest in the process or outcome of a project.

[edit] Who might be stakeholders on a construction project?

On a typical construction project stakeholders might include:

The client.
The main contractor.
Project sponsors and financing bodies.
Insurers.
Designers.
Subcontractors and suppliers.
People employed in any capacity in the project.
Central government.
Local authorities.
Licensing bodies.
End users.
Local residents, community groups and neighbours.
Special interest groups, pressure groups and lobbying organisations.
Unions.
Local business owners.
Politicians.
Lobby groups.
Statutory bodies.
Other third parties.

[edit] Stakeholder classification

Stakeholders can be classified in a number of different ways, and this may affect how they are managed.

[edit] Direct stakeholders

Direct stakeholders are those directly associated or involved in the project. These include the client, project sponsor, project manager, members of the project team, technical and financial services providers, internal or external consultants, material and equipment suppliers, site personnel, contractors and subcontractors as well as end users. They are also known as internal stakeholders.

[edit] Indirect stakeholders

Indirect stakeholders are those indirectly associated with the project, such as; support staff not directly involved in the project, national and local government, public utilities, licensing and inspecting organisations, technical institutions, professional bodies, and personal interest groups such as stockholders, unions and pressure groups. They are also known as external stakeholders.

Positive stakeholders are those who are likely to have a favourable impact on a project. These people or organisations tend to also be direct stakeholders, and stand to gain from the project’s success. Examples would be the organisations involved in the work itself that stand to benefit financially.

[edit] Negative stakeholders

Negative stakeholders are those who are likely to have a detrimental impact on a project. They tend to be people or organisations not directly involved in a project, but who are still affected by it in some way. An example would be local residents with concerns about loss of public areas to a new project.

[edit] Legitimacy and power

Stakeholders are further differentiated between those with legitimacy and power, and those without it, as this will influence the degree to which they can affect the project, whether positively or negatively:

Legitimacy is the perceived validity of a stakeholder’s claim to importance on the project.
Power is the stakeholders ability to influence the project and the parties involved in some way, whether financially, legally or by some other form of pressure.

[edit] How can stakeholders be managed?

In order to run a successful project it is important to address the needs of the projects stakeholders, effectively predicting how the project will affect them and how they can affect the project. Ineffective stakeholder management can result in dissatisfaction with the final product and negative impacts on the projects budget and schedule.

[edit] Stakeholder management strategies

During the development stages of a project, a stakeholder management strategy should be developed. An organisation should consider the following factors when developing a stakeholder management plan:

Who are the stakeholders?
What are their stakes?
What opportunities do they present?
What challenges or threats do they present?
How significant an impact can they have on the project?
Are they likely to be for or against the project?
What responsibilities are there towards stakeholders?
What strategies or actions should be used to engage stakeholders?

This process will allow the projects stakeholders to be effectively mapped out. The next step is to assess their key characteristics and present this information in a way that helps the project team implement effective stakeholder management initiatives. While it may not be possible to please all stakeholders on every project, effective stakeholder management should aim to satisfy as many as possible, which will often involve strategic prioritisation of different stakeholders needs.

A common technique is the stakeholder matrix or stakeholder map which allows the priority level of the stakeholder to be assessed using the power and legitimacy criteria previously described. The result of these processes is a 4-tier hierarchy of stakeholder importance levels, which will dictate how stakeholders are managed:

[edit] 1. Inform

This category contains those stakeholders who require minimal effort. Stakeholders with lower power but higher legitimacy need to be kept informed of decisions taken that may affect them directly.

[edit] 2. Consult

These are stakeholders who require more than just being informed about the project. They need to be kept onboard and should be consulted in order to seek their opinions and input for key decisions that directly or indirectly affect them. It is unlikely that the strategy will be significantly altered as a result of such consultation, but tactics may be adjusted to maintain higher levels of commitment.

[edit] 3. Involve

Stakeholders with high power levels, even those with low legitimacy, need to be involved in all activities in the project according to their interest since they have the power to make decisions that impact on the project. The project team should work directly with these stakeholders to ensure that their concerns are consistently understood, considered, and reflected in the projects development.

[edit] 4. Partner/collaborator

Primary stakeholders have high enough levels of legitimacy and power to affect project success and as such, they should be treated as partners to increase their engagement and commitment. This can be achieved by revising and tailoring project strategies, objectives, and outcomes if necessary to win their support.

[edit] Related articles on Designing Buildings

[edit] External references

Carroll, A & Bucholtz, A. (2012) Buisness & Society: Ethics, Sustainability and Stakeholder Management. 8th ed. Mason, OH. South-Western Cengage Learning
CSCS Website (2013). [online]. [Accessed April 20th 2013]. Available at: http://www.cscs.uk.com/CCSheme Website (2013). [online]. [Accessed April 20th 2013]. Available at: http://www.ccscheme.org.uk/index.php/ccs-ltd
Fewings, P. (2005) Construction project management: an integrated approach. Abingdon: Taylor Francis
Lester, A. (2007) Project management, planning and control. 5th ed. Oxford: Butterworth-Heinemann
Olomolaiye, P & Chiniyo, E. (2010) Construction stakeholder management. Chichester: Wiley-Blackwell
ProjectCubicle (2018). [online]. [Accessed April 20th 2018]. Available at: https://www.projectcubicle.com (2018). [online]. [Accessed April 20th 2018]. Available at: https://www.projectcubicle.com/stakeholder-analysis-management/

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Comments

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I like the stakeholder categories which covers all key categories. It may also be worth considering stakeholders not just by category, but also by power and interest. To this use a square split it into four smaller squares, label the bottom of the square interest and the left side of the square power. Analyse your stakeholders using these two parameters so that you identify key players - high interest & high power, least important - low interest & low power and so on. This page http://www.stakeholdermap.com/stakeholder-analysis.html gives a step by step tutorial to analyse stakeholders.