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LECTURE 18: PROJECT STAKEHOLDER ANALYSIS PART 2

Master of Science in Project Management. Project Stakeholder AND COMMUNICATION Management. LECTURE 18: PROJECT STAKEHOLDER ANALYSIS PART 2 . Key Attributes of Project Stakeholders. Power, Interests, Concerns, Attitudes, Behaviors. Power. Power and Project Stakeholder Management.

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LECTURE 18: PROJECT STAKEHOLDER ANALYSIS PART 2

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  1. Master of Science in Project Management Project Stakeholder AND COMMUNICATION Management LECTURE 18: PROJECT STAKEHOLDER ANALYSIS PART 2

  2. Key Attributes of Project Stakeholders Power, Interests, Concerns, Attitudes, Behaviors

  3. Power

  4. Power and Project Stakeholder Management Formal Authority and Control Over Project Resources POWER Complex, Multi-Faceted Concept in Project Stakeholder Management Spectrum of Abilities (Individual, Group, Organizational) Coercion

  5. Project Stakeholders: The Power Factor Power in the context of project management may be broadly defined as the degree to which project stakeholders can excercize authority, influence and /or coercion with a consequent (positive, negative) impact on a project‘s (managerial, technical) pro-cesses and work activities, and its deliverables. A project‘s cost, time, quality, risk and other para-meters can be affected, sometimes profoundly, by the application of stakeholder power.

  6. Project Stakeholders: The Power Factor The power of some stakeholders may be transitory (i.e., it applies only at a certain point in time in the project life-cycle or over a short period of time in one or more project phases), while the power of other stakeholders may be non-transitory (i.e., it may apply over one or more phases of a project or even extend over the entire project life-cycle). The intensity of stakeholder power may change (increase, decrease) over the project life-cycle.

  7. Project Stakeholders: The Power Factor Some stakeholders may have a narrow power focus which is confined to one or a few specialized project areas and activities (such as, an external quality consultant who advises the project team on quality issues), others may have a very broad power focus which can determine the course of the whole project (such as, the project steering committee or senior management which can authorize the premature termination of the project under certain conditions).

  8. Project Stakeholders: The Power Factor On a project, powerful „supportive“ stakeholders may intervene in it positively as facilitators by providing resources, support and encouragement to the project while powerful „adversarial“ stake-holders‘ may intervene in it negatively as obstructers causing an increase in the cost of the project, schedule slippage, undesired changes in the project scope or (in the very worst case) its eventual abandonment or premature termination.

  9. The “Power” of Project Stakeholders(Manifestations of Project Stakeholders Power) P • Authority of stakeholders, inde-pendently or jointly with other stakeholders, to make, shape, amend, defer, expedite, prevent, challenge, halt,suspend and/or revoke decisions affecting the project, its phases, activities, processes and/or deliverables. • Delegation of decision-making and control over decision-making processes.

  10. The “Power” of Project Stakeholders(Manifestations of Project Stakeholders Power) P • Permanent or temporary access of project stakeholders to (or the control over their access to) in-formational, financial, human, physical (e.g.: facilities, infra-structure), and technological resources as well as all tangible and intangible inputs needed for undertaking the project, its phases, processes and activities, and creating its deliverables.

  11. The “Power” of Project Stakeholders(Manifestations of Project Stakeholders Power) P • Ability of stakeholders to shape project contracts with a view to enhancing their interests vis-à-vis other stakeholders. • Authority to formulate and modi-fypolicies, rules and processes which govern the conduct of pro-ject stakeholders. • Authority to give, change and re-vokepermits, concessions etc.

  12. The “Power” of Project Stakeholders(Manifestations of Project Stakeholders Power) P • The excercizing by project stake-holders of a range of options at their disposal to influence the perceptions, attitudes and beha-vior of other stakeholders for or against the project. • Use of administrative, political, legal and/or legislative entities to further stakeholders goals in relation to the project.

  13. The “Power” of Project Stakeholders(Manifestations of Project Stakeholders Power) P • Possession of specialist know-ledge, skills and long experience. • Personality (charisma, charm), status, reputation, respect and admiration commanded among project stakeholders. • Inter-personal and leadership skills (e.g.: communication, moti-vation, inspiration, negotiation, persuasion, manipulation).

  14. The “Power” of Project Stakeholders(Manifestations of Project Stakeholders Power) P • Ability of project stakeholders to network and form coalitions with other stakeholders, or to prevent the emergence of such networks and coalitions. • Creativity and resourcefulness. • Effective use of Information and Communication Technology - and the media in support of or in opposition to the project.

  15. The “Power” of Project Stakeholders (How Project Stakeholders Apply Power) P • Authority to compel reluctant stakeholders to involuntarily pur-sue certain courses of action or to compel them to do likewise by resorting to illicit means such as violence and intimidation. • Control over incentives, rewards and punishments (monetary and non-monetary, hiring and firing, promotion, suspension and tran-sfer of project staff etc).

  16. Power in Project Stakeholder Networks Med- Med+ Managing stakeholder relationships and networks can be an especially complex and challenging task for the project manager and team. Even identifying and evaluating relation-ships between stakeholders can be very difficult, especially when there is a large and heterogenous (external) stakeholder community. Considerable skill, experience and resources may be needed to perform a satisfactory analysis. Some project stakeholders may appear relatively “powerless” and, hence, “un-important” but in fact they may be able to influence powerful stakeholders for or against the project. Low+ High+ High Low+ Low Low- Low+ Low- Low- Med Low Med Low

  17. Power and Project Stakeholder Engagement More time, cost and effort must be expended to keep these stakeholders satis-fied and supportive High Power of Stakeholder Moderate Less need for intensive resource allocation for stakeholder engagement Low Importance of Developing and Implementing Effective Project Stakeholder Engagement Strategies Low High

  18. I Stakeholder Attribute: Interests • Stakeholders have by definition some “interest” in a project. • There are many possible interests, for e.g., economic, financial, social and ecological. • The intensity of interest will vary for different stakeholders as they are affected by the project diffe-rently. Interests can change over time.

  19. Stakeholder Interests in a Project Interest-Precipitating Issues and Concerns High Interest? Moderate Interest? Does Stakeholder have an “Interest” in the Project? YES T I M E F A C T O R Low Interest? No

  20. Stakeholder Attribute: Concerns C • A concern is a feeling or emotion which a stakeholder has towards an issue (economic, financial, eco-logical, and so forth) associated with a project. • A stakeholder may have several concerns of varying priority which influence his/her/its attitude and behavior towards the project. Concerns are not static – they may change over time.

  21. Abraham Maslow’s Pyramid of Needs Abraham Maslow (1908-70) was an American psychologist and Professor at Brandeis University. His pyramid of needs was first proposed in his paper A Theory of Human Motivation dating from 1943 and subsequently modified.

  22. Class Discussion ? As part of an acquisition project, a large IT software developer will be taking over one its smaller com-petitors. Identify as many concerns as you can which an em-ployee in the smaller orga-nization may have in con-nection with this project.

  23. The Complexity and Multifacetedness of Project Stakeholder Concerns (Acquisition Project) ? • A multitude of questions about the pro-posed corporate acquisition project would probably be floating in the mind of the affected employee of the to-be-acquired firm. These evolve against the backdrop of his individual concerns which are derived from his needs, desires, ambitions, hopes and fears. • If the employee feels he will benefit over-all significantly, then he is more likely to support the project. An effective informa-tion strategy of the project planners /im- plementers would focus on this.

  24. Possible Stakeholder Concerns (Acquisition Project) ? • Job Security • Income • Monetary and Non-Monetary Incen-tivesand Fringe Benefits • Promotional Prospects • Interesting, Exciting and Challenging Work Environment • Knowledge, Skills and Experience • Additional Responsibilities (Desired, Undesired)

  25. Possible Stakeholder Concerns (Acquisition Project) ? • Authority, Status and Privileges • Travelling, Training and Professional Development • Utilization of Creative Potential • Adaptation to New Work Environ. • Workload • Stress Level • Health and Emotional Well-Being • Aggregate Working Hours • Flexible Working Hours

  26. Possible Stakeholder Concerns (Acquisition Project) ? • Formal and Informal Monitoring, Assessment and Control • Organization‘s Culture, Policies, Rules, Standards and Processes • Competition for Work Resources • Conflicts at Work • Conformance and Performance Pressure • Exposure of Concealed Deficiences • Recognition and Respect

  27. Possible Stakeholder Concerns (Acquisition Project) ? • Relocation • Modification of Work Routine • Benefits to Colleagues • Office Space • Compulsion to Work With or Under Unliked Persons • Current Work Assignments • Disruption of Social Networks • Creation of New Social Networks • Time for Family and Friends

  28. Possible Stakeholder Concerns (Acquisition Project) ? • Impact on Organization‘s Image • Consultation About the Acquisition • Understanding of the Need for the Acquisition • Follow-On Projects in Future

  29. Stakeholder Attribute: Attitude A • Attitude is the feeling of like, dis-like or indifference stakeholders exhibit towards a project or parts thereof (for e.g. other project stakeholders, project events). • Attitudes are determined by many factors and can change over time. Good stakeholder engage-ment strategies seek to influence attitudes in favor of the project.

  30. Stakeholder Attribute: Attitude(Key Determinants of Stakeholder Attitudes) A Family, Peers, Community, Society, Nation Culture, Tradition, Religion, Value System Needs, Wants and Desires, Goals, Concerns Knowledge, Intelligence, Personal Experiences Access to Information and Knowledge Systems (Education, Administrative, Political, Legal etc.) Attributes of the Attitude-Shaping Entity (Time Factor)

  31. B Stakeholder Attribute: Behavior • Behavior is the conduct of a stakeholder towards a project. It is usually – but not always – a re-flection of the stakeholder’s atti-tude towards the project. • Stakeholders may exhibit sup-portive, indifferent or adversarial behavior towards a project with varying intensities. Behavior can change over time.

  32. Stakeholder Attributes: Consistency and Inconsistency of Attitude and Behavior A B • Attitude and Behavior of Project Stakeholders are Consistent (i.e. behavior reflects attitude) → A B • Attitude and Behavior of Project Stakeholders are Inconsistent (i.e. behavior does not reflect attitude) → X

  33. Stakeholder Attributes: Consistency and Inconsistency of Attitude and Behavior A B • Attitude and Behavior of Project Stakeholders are Consistent (i.e. behavior reflects attitude) → • Example 1: (A) Stakeholder X is passionate about preserving old colonial era buildings  (B) Stakeholder X will (possibly fiercely) oppose projects to construct commercial plazas in the old part of his/her town. • Example 2: (A) Stakeholder Y is a local government official who desires to alleviate poverty in his/her provincial district  (B) Stakeholder Y will support a project by a large foreign development-implementing agency to provide training to local youths in developing technical skills.

  34. Stakeholder Attributes: Consistency and Inconsistency of Attitude and Behavior B A • Attitude and Behavior of Project Stakeholders are Inconsistent (i.e.behavior does not reflect attitude) → X • Example 1: (A) Stakeholder D strongly believes the rights of minorities must be respected  (B) Stakeholder D pickets the construction site of a planned counseling center for immigrants. • Example 2: (A) Stakeholder F is a devoted environmentalist  (B) Stake-holder F votes in a community referendum to support a large copper mining project in close proximity which has been proposed by a foreign company.

  35. Project Stakeholders‘ Attitude and Behavior (Key Determining Factors) • Economic and Financial Gains and Losses (Individual, Neighborhood, Community, Organizational) • Impact on Society (Neighborhood and Community Cohesion and Spirit, Cultural and Religious Perspective, National Sensitivities) • Impact on Health (Physical, Psychological, Emotional) • Impact on the Physical Environment (Air, Water, Land, Acoustics, Aesthetics) • Impact on Ecology (Bio-/Ecosystems (Fauna, Flora))

  36. Project Stakeholders‘ Attitude and Behavior (Key Determining Factors) • Conservation (Cultural Assets, Archeological and Historical Heritage) • Political Dimension (Personal Ideology, Local, Regional and National Outlook) • Attitude To Change (Life Style, Sentiments, Anticipated Opportunities for Personal and Organizational Development etc.) • Security (Individual, Group, Organizational) • Reputation (Project Owners / Developers)

  37. Managing and Engaging Project Stakeholders (Attitude and Behavior Patterns) Active Strongly Perceptoion of Net Gain Perceptoion of Net Loss Moderately Supportive Strongly - Marginally Passive Marginally PROJECT STAKEHOLDER MANAGEMENT AND ENGAGEMENT STRATEGIES Indifferent STAKEHOLDER COMMUNITY Active Marginally Adversarial Moderately Strongly - Marginally Passive Strongly

  38. Project Impact on Stakeholders Pre-Project Phase Project’s Change Impact (economic, financial, social, ecological , security, etc.) Project Phase Post-Project Phase Stakeholder Engagement CONSIDERATIONS Rational Behavior, Access to Informa-tion, Long-Term Per-spective, Relational Constellations Level of Interest Concerns and Motivations Expectations and Perceptions Attitude and Behavior Power / Influence

  39. Managing and Engaging Project Stakeholders(Stakeholder Expectations and Perceptions) PROJECT STAKEHOLDERS Expectations (What Outcomes Will Project Bring?) Perceptions (What Outcomes Is Project Bringing?) Information * Observation * Experience * Interaction With Other Stakeholders * Attitude Cognitive & Intuitive Process

  40. Stakeholder Perceptions Of Projects The intensity of stakeholder supportiveness, indif-ference or adversity towards a project is determined primarily by the nature of the project and the per-ceptions which the stakeholders develop about it based on the information they have and, possibly their previous experience with similar projects A project to develop a Walt Disney Theme Park near a township would probably generate more support among stakeholders than a project for construction of a nuclear power station because of the stigma which is attached to the nuclear power industry.

  41. Stakeholder Perceptions of Projects: The Concept of Rational Behavior Project stakeholders who „behave rationally“ will try to maximize their „quality of life“ In evaluating a project, stakeholders will carefully consider its respective pros and cons. To do this they must have access to all the requisite information they require in order to carefully analyze the project‘s potential impact on them over time, which includes the period of time both before as well as after the project‘s completion. Is the stakeholder’s perceived gain from the project greater than (>), equal (=) to or less than (<) its perceived loss from the project?

  42. Stakeholder Perceptions of Projects: The „Quality of Life“ Dimension Project Gain > Project Loss When the Perceived Gain from the Pro-ject [i.e. Improvement in the Stakehol-der‘s Quality of Life] >the Perceived Lossfrom the Project [i.e. Reduction in the Stakeholder‘s Quality of Life]:  Stakeholders will Support the Project!

  43. Stakeholder Perceptions of Projects: The „Quality of Life“ Dimension Project Gain = Project Loss When the Perceived Gain from the Pro-ject [i.e. Improvement in the Stakehol-der‘s Quality of Life] = the Perceived Lossfrom the Project [i.e. Reduction in the Stakeholder‘s Quality of Life]:  Stakeholders will be Indifferent!

  44. Stakeholder Perceptions of Projects: The „Quality of Life“ Dimension Project Gain < Project Loss When the Perceived Gain from the Pro-ject [i.e. Improvement in the Stakehol-der‘s Quality of Life] < the Perceived Lossfrom the Project [i.e. Reduction in the Stakeholder‘s Quality of Life]:  Stakeholders will Oppose the Project!

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