Stakeholder analysis

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 analysis of an issue consists of weighing and balancing all of the competing demands on a firm by each of those who have a claim on it, in order to arrive at the firm's obligation in a particular case. A stakeholder analysis does not preclude the interests of the stakeholders overriding the interests of the other stakeholders affected, but it ensures that all affected will be considered.^[1]

Stakeholder analysis 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.

Types

Types of stakeholders include:

• 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 and, ultimately, assuring successful outcomes for the project

Methods of Stakeholder Mapping

A stakeholders matrix showing which strategies to use.

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)
• Three-dimensional grouping of power, interest and attitude (Murray-Webster and Simon 2005)
• The Stakeholder Circle (^[2] 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)

Benefits

Stakeholder analysis helps with the identification of the following:^[3]

• 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

See also

• Crowdsourcing
• Participation (decision making)
• Public consultation
• Stakeholder theory

References

1. DeGeorge, Richard T. (2010). Author. 7th Upper Saddle River: Pearson Education Inc. p. 192.
2. Stakeholder Relationship Management
3. What Is Stakeholder Analysis?, S. Babou, 2008

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.
• A. M. Hein; A. C. Tziolas; R. Osborne (2011), "Project Icarus: Stakeholder Scenarios for an Interstellar Exploration Program", JBIS, 64, 224-233
• 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).

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