Stakeholder analysis
Encyclopedia
Stakeholder analysis in conflict resolution
, project management
, and business administration, is the process of identifying the individuals or groups that are likely to affect or be affected by a proposed action, and sorting them according to their impact on the action and the impact the action will have on them. This information is used to assess how the interests of those stakeholders should be addressed in a project
plan, policy
, program, or other action. Stakeholder analysis is a key part of stakeholder management
.
A stakeholder is any person
or organization
, who can be positively or negatively impacted by, or cause an impact on the actions of a company, government, or organization. Types of stakeholders are:
Therefore, stakeholder analysis has the goal of developing cooperation between the stakeholder and the project team
and, ultimately, assuring successful outcomes for the project. Stakeholder analysis is performed when there is a need to clarify the consequences of envisaged changes, or at the start of new projects and in connection with organizational changes generally. It is important to identify all stakeholders for the purpose of identifying their success criteria and turning these into quality goals.
Mapping techniques include the following sub-set of results from a Web search of analysis techniques being used by aid agencies, governments or consultant groups:
The first step in building any stakeholder map is to develop a categorised list of the members of the stakeholder community. Once the list is reasonably complete it is then possible to assign priorities in some way, and then to translate the ‘highest priority’ stakeholders into a table or a picture. The potential list of stakeholders for any project will always exceed both the time available for analysis and the capability of the mapping tool to sensibly display the results, the challenge is to focus on the ‘right stakeholders’ who are currently important and to use the tool to visualise this critical sub-set of the total community.
The most common presentation styles use a matrix to represent two dimensions of interest with frequently a third dimension shown by the colour or size of the symbol representing the individual stakeholders.
Some of the commonly used ‘dimensions’ include:
, there is a data collected about stakeholders as maps – tabular, graphical or pictorial has been adopted by researchers and consultants from the earliest studies. The key element of an effective mapping process is as far as possible to replace subjectivity with objective measures and to make the assessment process transparent. This transparency will allow the basis of any assessment to be clearly understood by others and will facilitate review and updating as appropriate.
We would suggest there are three basic approaches used to help visualize, map and understand stakeholders.
The approach with the highest profile in general business is the ‘customer relationship management’ or CRM approach. This approach requires substantial data sets to be gathered about a key segment of the business’ stakeholder community (typically customers) followed by the use of data mining techniques allow trends and opportunities to be identified, graphed and communicated. These reports inform management decision making and help the business prosper. CRM works effectively in situations where the business is relatively stable and there are a large class of stakeholders interacting with the business in a reasonably common way.
A second approach that cannot be ignored is the extensive body of work focusing on influence networks. This research focuses on the importance of relationships through the study of ‘influence networks’, ‘social networks’, ‘social capital’, viewing projects as ‘temporary knowledge organizations’ (TKOs) and more recently the idea of CRPR (Complex Responsive Processes of Relating)(Weaver 2007). All of these theories emphasize the critical importance of the relationships between different stakeholders both within and around the project team. The strength and effectiveness of the internal relationships enable the project team to function effectively and allows the team (or the project) to interact and influence its surrounding stakeholder community. The difficulty in using these strands of research lies in building the influence/relationship maps; the work is difficult, time consuming and invasive requiring extensive interviews with the stakeholders. Consequently whilst an appreciation of these ideas is critical for effective stakeholder management, the opportunities to undertake a detailed analysis of a particular stakeholder community are very limited and typically only occur as part of an academic research assignment.
The need for a practical, usable approach to visualizing many different stakeholder communities has led to the development of a range of listing and mapping techniques by academics, consultants and businesses over the years. These approaches trade the richness of data available under the CRM approach for a holistic view of the whole stakeholder community and largely ignore the complex network of relationships considered in CRPR and the other network theories outlined above for a simpler consideration of ‘importance’ in some form. Obviously the ‘importance’ of a stakeholder is directly associated with his or her ability to influence the project through their network of relationships; the difference in the analysis is in the way this is assessed. All of the mapping techniques discussed above use a qualitative perception of a stakeholder’s ‘importance’ rather than a quantitative analysis of the influence networks and relationships surrounding the stakeholder to determine an absolute value for that person’s ‘importance’.
A more recent form of Stakeholder Analysis can be seen in Triple Task Method
. An approach which seeks to blend three disciplines: psychoanalytic theory
, systems analysis
and action research
.
Conflict resolution
Conflict resolution is conceptualized as the methods and processes involved in facilitating the peaceful ending of some social conflict. Often, committed group members attempt to resolve group conflicts by actively communicating information about their conflicting motives or ideologies to the rest...
, project management
Project management
Project management is the discipline of planning, organizing, securing, and managing resources to achieve specific goals. A project is a temporary endeavor with a defined beginning and end , undertaken to meet unique goals and objectives, typically to bring about beneficial change or added value...
, and business administration, is the process of identifying the individuals or groups that are likely to affect or be affected by a proposed action, and sorting them according to their impact on the action and the impact the action will have on them. This information is used to assess how the interests of those stakeholders should be addressed in a project
Project
A project in business and science is typically defined as a collaborative enterprise, frequently involving research or design, that is carefully planned to achieve a particular aim. Projects can be further defined as temporary rather than permanent social systems that are constituted by teams...
plan, policy
Policy
A policy is typically described as a principle or rule to guide decisions and achieve rational outcome. The term is not normally used to denote what is actually done, this is normally referred to as either procedure or protocol...
, program, or other action. Stakeholder analysis is a key part of stakeholder management
Stakeholder management
The importance of stakeholder management is to support an organization in achieving its strategic objectives by interpreting and influencing both the external and internal environments and by creating positive relationships with stakeholders through the appropriate management of their expectations...
.
Overview
Stakeholder analysis is a term that refers to the action of analyzing the attitudes of stakeholders towards something (most frequently a project). It is frequently used during the preparation phase of a project to assess the attitudes of the stakeholders regarding the potential changes. Stakeholder analysis can be done once or on a regular basis to track changes in stakeholder attitudes over time.A stakeholder is any person
Person
A person is a human being, or an entity that has certain capacities or attributes strongly associated with being human , for example in a particular moral or legal context...
or organization
Organization
An organization is a social group which distributes tasks for a collective goal. The word itself is derived from the Greek word organon, itself derived from the better-known word ergon - as we know `organ` - and it means a compartment for a particular job.There are a variety of legal types of...
, who can be positively or negatively impacted by, or cause an impact on the actions of a company, government, or organization. Types of stakeholders are:
- Primary stakeholders : are those ultimately affected, either positively or negatively by an organization's actions.
- Secondary stakeholders : are the ‘intermediaries’, that is, persons or organizations who are indirectly affected by an organization's actions.
- Key stakeholders : (who can also belong to the first two groups) have significant influence upon or importance within an organization.
Therefore, stakeholder analysis has the goal of developing cooperation between the stakeholder and the project team
Project team
A project team is a team whose members usually belong to different groups, functions and are assigned to activities for the same project. A team can be divided into sub-teams according to need. Usually project teams are only used for a defined period of time. They are disbanded after the project is...
and, ultimately, assuring successful outcomes for the project. Stakeholder analysis is performed when there is a need to clarify the consequences of envisaged changes, or at the start of new projects and in connection with organizational changes generally. It is important to identify all stakeholders for the purpose of identifying their success criteria and turning these into quality goals.
Methods of Stakeholder Mapping
The following list identifies some of the best known and most commonly used methods for stakeholder mapping:- (Mitchell, Agle et al. 1997) proposed a classification of stakeholders based on power to influence, the legitimacy of each stakeholder’s relationship with the organization, and the urgency of the stakeholder’s claim on the organization. The results of this classification may assess the fundamental question of “which groups are stakeholders deserving or requiring manager’s attention, and which are not?” This is salience - “the degree to which managers give priority to competing stakeholder claims” (Mitchell, Agle et al., 1997:854)
- (Fletcher, Guthrie et al. 2003) defined a process for mapping stakeholder expectations based on value hierarchies and Key Performance Areas (KPA),
- (Cameron, Crawley et al. 2010) defined a process for ranking stakeholders based on needs and the relative importance of stakeholders to others in the network.
- (Savage, Nix et al. 1991) offer a way to classify stakeholders according to potential for threat and potential for cooperation.
- (Turner, Kristoffer and Thurloway, 2002) have developed a process of identification, assessment of awareness, support, influence leading to strategies for communication and assessing stakeholder satisfaction, and who is aware or ignorant and whether their attitude is supportive or opposing.
Mapping techniques include the following sub-set of results from a Web search of analysis techniques being used by aid agencies, governments or consultant groups:
- Influence-interest grid (Imperial College London)
- Power-impact grid (Office of Government Commerce UK 2003)
- Mendelow's Power-interest grid (Aubrey L. Mendelow, Kent State University, Ohio 1991)
Low interest High interest High power A B Low power C D
- Three-dimensional grouping of power, interest and attitude (Murray-Webster and Simon 2005)
- The Stakeholder Circle (Bourne 2007)
The first step in building any stakeholder map is to develop a categorised list of the members of the stakeholder community. Once the list is reasonably complete it is then possible to assign priorities in some way, and then to translate the ‘highest priority’ stakeholders into a table or a picture. The potential list of stakeholders for any project will always exceed both the time available for analysis and the capability of the mapping tool to sensibly display the results, the challenge is to focus on the ‘right stakeholders’ who are currently important and to use the tool to visualise this critical sub-set of the total community.
The most common presentation styles use a matrix to represent two dimensions of interest with frequently a third dimension shown by the colour or size of the symbol representing the individual stakeholders.
Some of the commonly used ‘dimensions’ include:
- Power (high, medium, low)
- Support (positive, neutral, negative)
- Influence (high or low)
- Need (strong, medium, weak)
Other Forms of Stakeholder Analysis
In SwedenSweden
Sweden , officially the Kingdom of Sweden , is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden borders with Norway and Finland and is connected to Denmark by a bridge-tunnel across the Öresund....
, there is a data collected about stakeholders as maps – tabular, graphical or pictorial has been adopted by researchers and consultants from the earliest studies. The key element of an effective mapping process is as far as possible to replace subjectivity with objective measures and to make the assessment process transparent. This transparency will allow the basis of any assessment to be clearly understood by others and will facilitate review and updating as appropriate.
We would suggest there are three basic approaches used to help visualize, map and understand stakeholders.
The approach with the highest profile in general business is the ‘customer relationship management’ or CRM approach. This approach requires substantial data sets to be gathered about a key segment of the business’ stakeholder community (typically customers) followed by the use of data mining techniques allow trends and opportunities to be identified, graphed and communicated. These reports inform management decision making and help the business prosper. CRM works effectively in situations where the business is relatively stable and there are a large class of stakeholders interacting with the business in a reasonably common way.
A second approach that cannot be ignored is the extensive body of work focusing on influence networks. This research focuses on the importance of relationships through the study of ‘influence networks’, ‘social networks’, ‘social capital’, viewing projects as ‘temporary knowledge organizations’ (TKOs) and more recently the idea of CRPR (Complex Responsive Processes of Relating)(Weaver 2007). All of these theories emphasize the critical importance of the relationships between different stakeholders both within and around the project team. The strength and effectiveness of the internal relationships enable the project team to function effectively and allows the team (or the project) to interact and influence its surrounding stakeholder community. The difficulty in using these strands of research lies in building the influence/relationship maps; the work is difficult, time consuming and invasive requiring extensive interviews with the stakeholders. Consequently whilst an appreciation of these ideas is critical for effective stakeholder management, the opportunities to undertake a detailed analysis of a particular stakeholder community are very limited and typically only occur as part of an academic research assignment.
The need for a practical, usable approach to visualizing many different stakeholder communities has led to the development of a range of listing and mapping techniques by academics, consultants and businesses over the years. These approaches trade the richness of data available under the CRM approach for a holistic view of the whole stakeholder community and largely ignore the complex network of relationships considered in CRPR and the other network theories outlined above for a simpler consideration of ‘importance’ in some form. Obviously the ‘importance’ of a stakeholder is directly associated with his or her ability to influence the project through their network of relationships; the difference in the analysis is in the way this is assessed. All of the mapping techniques discussed above use a qualitative perception of a stakeholder’s ‘importance’ rather than a quantitative analysis of the influence networks and relationships surrounding the stakeholder to determine an absolute value for that person’s ‘importance’.
A more recent form of Stakeholder Analysis can be seen in Triple Task Method
Triple Task Method
-Triple Task methodology:The research approach was originally developed by Simon G. Bell and Stephen P. Morse . The approach was first used by the authors in the European Union Seventh Framework Programme under the grant agreement n° 217207: POINT project .-Background:Triple Task or TT is a...
. An approach which seeks to blend three disciplines: psychoanalytic theory
Psychoanalytic theory
Psychoanalytic theory refers to the definition and dynamics of personality development which underlie and guide psychoanalytic and psychodynamic psychotherapy. First laid out by Sigmund Freud, psychoanalytic theory has undergone many refinements since his work...
, systems analysis
Systems analysis
Systems analysis is the study of sets of interacting entities, including computer systems analysis. This field is closely related to requirements analysis or operations research...
and action research
Action research
Action research or participatory action research – is a reflective process of progressive problem solving led by individuals working with others in teams or as part of a "community of practice" to improve the way they address issues and solve problems. Action research is done simply by action,...
.
Benefits
Stakeholder analysis helps with the identification of the following:- Stakeholders' interests
- Mechanisms to influence other stakeholders
- Potential risks
- Key people to be informed about the project during the execution phase
- Negative stakeholders as well as their adverse effects on the project
Further reading
- Fletcher, A., et al. (2003). "Mapping stakeholder perceptions for a third sector organization." in: Journal of Intellectual Capital 4(4): 505 – 527.
- Mitchell, R. K., B. R. Agle, and D.J. Wood. (1997). "Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of Who and What really Counts." in: Academy of Management Review 22(4): 853 - 888.
- Savage, G. T., T. W. Nix, Whitehead and Blair. (1991). "Strategies for assessing and managing organizational stakeholders." In: Academy of Management Executive 5(2): 61 – 75.
- Cameron, B.G., T. Seher, E.F. Crawley (2010). "Goals for space exploration based on stakeholder network value considerations." in: Acta Astronautica doi:10.1016/j.actaastro.2010.11.003.
- Turner, J. R., V. Kristoffer, et al., Eds. (2002). The Project Manager as Change Agent. London, McGraw-Hill Publishing Co.
- Weaver, P. (2007). A Simple View of Complexity in Project Management. Proceedings of the 4th World Project Management Week. Singapore.
- Hemmati, M., Dodds F., Enayti, J.,McHarry J. (2002) "Multistakeholder Procesess on Governance and Sustainability. London Earthscan
- Mendelow, A. (1991) ‘Stakeholder Mapping’, Proceedings of the 2nd International Conference on Information Systems, Cambridge, MA (Cited in Scholes,1998).