Project Management
Chapter 5. Stakeholder Management
,5.0 Learning Objectives and Overview
Learning Objectives
1. Describe the process to identify stakeholders in a project and create a stakeholder
register.
2. Explain the management of stakeholders to meet their needs and expectations,
address issues, and foster appropriate stakeholder engagement involvement.
3. List the conditions when project managers need to update the stakeholder
engagement plan.
5.0 Overview
A project is successful when it achieves its objectives and meets or exceeds the expectations of the
stakeholders who are individuals, groups, teams, businesses, corporations, communities, government
organizations, or non-governmental organizations who either care about or have a vested interest in a
project. They may affect the whole project, its outcomes, some activities, or even only a decision, an
activity, or an outcome of the project negatively or positively. Stakeholders may be actively involved
with project activities or have something to either gain or lose as a result of the project. Project
managers and their teams spent most of their time communicating and collaborating with the
stakeholders. Indeed, project managers, themselves, spent 90% of their time communicating. This
chapter discusses stakeholder management and how project managers should pay attention to while
they communicate with the stakeholders including their key stakeholders such as project team
members, sponsors, internal or external clients, customers, end-users, and regulatory and government
agencies.
Project Management Institute. (2017). A guide to the Project Management Body of Knowledge (PMBOK
guide) (6th ed.). Project Management Institute.
122
, Project Management
5.1 Identifying Stakeholders and Managing Their
Expectations
A project starts with two processes – developing the project charter and identifying stakeholders. Triple
constraints (scope, schedule, cost) and stakeholders constitute the main pillars of a project. If
stakeholders are not identified properly, the project and its outcomes cannot address all the
stakeholders’ expectations and concerns. Incomplete elicitation of the requirements from stakeholders
might leave some key requirements out of the equation, putting the project and its outcomes in danger.
Stakeholders are those who have a positive or negative influence on the project, or who are or might be
positively or negatively affected by the project, or its activities, decisions, and outcomes. Stakeholders
can be anyone including, but not limited to, individuals, groups, teams, businesses, corporations,
communities, government agencies, not-for-profit organizations, international bodies, and non-
governmental organizations. They may affect the whole project, or only one or some of the decisions or
activities, or the outcomes of the project negatively or positively. Stakeholders may be involved actively
or passively in the project, or its activities and decisions. When you manage a project to add lanes to a
highway, motorists are stakeholders who are positively affected by the outcome of this project whereas
they may be affected negatively during the construction due to the closed roads and detours. However,
your project may negatively affect residents who live near the highway during your project (with
construction noise) and after your project with far-reaching implications (increased traffic noise and
pollution). Stakeholders can be inside the implementing or client organization (e.g., subcontractors who
undertake the construction work of additional lanes) or outside it (e.g., motorists, residents).
Internal stakeholders which are inside the organization, but not limited to, are:
Project sponsor
Project manager
Project team members
PMO (Project Management Office)
Program manager
Project/Portfolio steering committee
Board of trustees
Company owners/founders
Top management (e.g., C-level executives)
Project managers of other projects in the organization
Functional departments/units in the organization, their managers, and all employees (e.g.,
research & development, finance, accounting, human resources, sales, marketing,
manufacturing)
123
, Project Management
End users in functional departments, regional offices, and international offices of the
organization
Regional offices/branches of the organization
International offices/branches of the organization
External stakeholders which are outside the organization, but not limited to, are:
Customers
End users outside the organization
Suppliers
Contractors and subcontractors
Shareholders
Regulatory bodies
Government agencies (e.g., federal, state, local, county)
Current and potential competitors
Often there is more than one major stakeholder in the project. An increase in the number of
stakeholders adds stress to the project and influences the project’s complexity level. The business or
emotional investment of the stakeholder in the project and the ability of the stakeholder to influence the
project outcomes or execution approach also impact the stakeholder complexity of the project. In
addition to the number of stakeholders and their level of investment, the degree to which the project
stakeholders agree or disagree also influences the project’s complexity and outcomes.
While identifying stakeholders, in the initiation stage of a project, a project charter generally consists of
key stakeholders whose power or interest levels are at a high level. Key stakeholders can make or break
the success of a project. Even if all the deliverables are met and the objectives are satisfied, if your key
stakeholders aren’t happy, nobody’s happy. This is why all the key stakeholders must be identified
before proceeding with the preparation of the project management plan. However, identifying the
stakeholders doesn’t finish in the initiation stage, but is an ongoing process through which project
managers should review and analyze their interests, involvement, interdependencies, influences, and
potential impact on project success regularly during the project life cycle. Data representation
techniques such as stakeholder power/interest grid/matrix help a lot to review where stakeholders are
positioned based on the criteria used and be prepared and implement strategies to manage
stakeholders. In the following subsection, we will discuss one of the common data representation
techniques, power/interest grid (matrix) based on a scenario.
There are many project decelerators, one of which is the lack of stakeholder support. Whether the
stakeholders support our project or not, if they are important to the project, we must secure their
support. How do you we that? First, we must identify who our stakeholders are. Just because they are
important in the organization does not necessarily mean they are important to our project. Just because
they think they are important does not mean they are. Just because they don’t think they need to be
involved does not mean they do not have to be. The typical suspects that we should consider would be
our top managers, relevant departments’ managers, supervisors or key employees, and the project
124
Chapter 5. Stakeholder Management
,5.0 Learning Objectives and Overview
Learning Objectives
1. Describe the process to identify stakeholders in a project and create a stakeholder
register.
2. Explain the management of stakeholders to meet their needs and expectations,
address issues, and foster appropriate stakeholder engagement involvement.
3. List the conditions when project managers need to update the stakeholder
engagement plan.
5.0 Overview
A project is successful when it achieves its objectives and meets or exceeds the expectations of the
stakeholders who are individuals, groups, teams, businesses, corporations, communities, government
organizations, or non-governmental organizations who either care about or have a vested interest in a
project. They may affect the whole project, its outcomes, some activities, or even only a decision, an
activity, or an outcome of the project negatively or positively. Stakeholders may be actively involved
with project activities or have something to either gain or lose as a result of the project. Project
managers and their teams spent most of their time communicating and collaborating with the
stakeholders. Indeed, project managers, themselves, spent 90% of their time communicating. This
chapter discusses stakeholder management and how project managers should pay attention to while
they communicate with the stakeholders including their key stakeholders such as project team
members, sponsors, internal or external clients, customers, end-users, and regulatory and government
agencies.
Project Management Institute. (2017). A guide to the Project Management Body of Knowledge (PMBOK
guide) (6th ed.). Project Management Institute.
122
, Project Management
5.1 Identifying Stakeholders and Managing Their
Expectations
A project starts with two processes – developing the project charter and identifying stakeholders. Triple
constraints (scope, schedule, cost) and stakeholders constitute the main pillars of a project. If
stakeholders are not identified properly, the project and its outcomes cannot address all the
stakeholders’ expectations and concerns. Incomplete elicitation of the requirements from stakeholders
might leave some key requirements out of the equation, putting the project and its outcomes in danger.
Stakeholders are those who have a positive or negative influence on the project, or who are or might be
positively or negatively affected by the project, or its activities, decisions, and outcomes. Stakeholders
can be anyone including, but not limited to, individuals, groups, teams, businesses, corporations,
communities, government agencies, not-for-profit organizations, international bodies, and non-
governmental organizations. They may affect the whole project, or only one or some of the decisions or
activities, or the outcomes of the project negatively or positively. Stakeholders may be involved actively
or passively in the project, or its activities and decisions. When you manage a project to add lanes to a
highway, motorists are stakeholders who are positively affected by the outcome of this project whereas
they may be affected negatively during the construction due to the closed roads and detours. However,
your project may negatively affect residents who live near the highway during your project (with
construction noise) and after your project with far-reaching implications (increased traffic noise and
pollution). Stakeholders can be inside the implementing or client organization (e.g., subcontractors who
undertake the construction work of additional lanes) or outside it (e.g., motorists, residents).
Internal stakeholders which are inside the organization, but not limited to, are:
Project sponsor
Project manager
Project team members
PMO (Project Management Office)
Program manager
Project/Portfolio steering committee
Board of trustees
Company owners/founders
Top management (e.g., C-level executives)
Project managers of other projects in the organization
Functional departments/units in the organization, their managers, and all employees (e.g.,
research & development, finance, accounting, human resources, sales, marketing,
manufacturing)
123
, Project Management
End users in functional departments, regional offices, and international offices of the
organization
Regional offices/branches of the organization
International offices/branches of the organization
External stakeholders which are outside the organization, but not limited to, are:
Customers
End users outside the organization
Suppliers
Contractors and subcontractors
Shareholders
Regulatory bodies
Government agencies (e.g., federal, state, local, county)
Current and potential competitors
Often there is more than one major stakeholder in the project. An increase in the number of
stakeholders adds stress to the project and influences the project’s complexity level. The business or
emotional investment of the stakeholder in the project and the ability of the stakeholder to influence the
project outcomes or execution approach also impact the stakeholder complexity of the project. In
addition to the number of stakeholders and their level of investment, the degree to which the project
stakeholders agree or disagree also influences the project’s complexity and outcomes.
While identifying stakeholders, in the initiation stage of a project, a project charter generally consists of
key stakeholders whose power or interest levels are at a high level. Key stakeholders can make or break
the success of a project. Even if all the deliverables are met and the objectives are satisfied, if your key
stakeholders aren’t happy, nobody’s happy. This is why all the key stakeholders must be identified
before proceeding with the preparation of the project management plan. However, identifying the
stakeholders doesn’t finish in the initiation stage, but is an ongoing process through which project
managers should review and analyze their interests, involvement, interdependencies, influences, and
potential impact on project success regularly during the project life cycle. Data representation
techniques such as stakeholder power/interest grid/matrix help a lot to review where stakeholders are
positioned based on the criteria used and be prepared and implement strategies to manage
stakeholders. In the following subsection, we will discuss one of the common data representation
techniques, power/interest grid (matrix) based on a scenario.
There are many project decelerators, one of which is the lack of stakeholder support. Whether the
stakeholders support our project or not, if they are important to the project, we must secure their
support. How do you we that? First, we must identify who our stakeholders are. Just because they are
important in the organization does not necessarily mean they are important to our project. Just because
they think they are important does not mean they are. Just because they don’t think they need to be
involved does not mean they do not have to be. The typical suspects that we should consider would be
our top managers, relevant departments’ managers, supervisors or key employees, and the project
124
