28703368 Stakeholder Analysis

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Stakeholder Analysis Compiled by S.Rengasamy

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Stakeholder Analysis

Transcript of 28703368 Stakeholder Analysis

Page 1: 28703368 Stakeholder Analysis

Stakeholder Analysis

Compiled by S.Rengasamy

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Contents Introduction .......................................................................................................... 3 Why do Stakeholder Analysis? ............................................................................. 3 Box: Project Stakeholders .......................................................................................... 4 Definition of Project Stakeholders: ...................................................................... 4 Project Stakeholders ................................................................................................. 4 Box: Purpose of stakeholder‟s analysis ....................................................................... 5 Types of stakeholders: .............................................................................................. 5 Primary stakeholders. ................................................................................................ 5 Secondary stakeholders. ............................................................................................ 5 Key stakeholders: ..................................................................................................... 5 Box: Stakeholder Mapping- Power / Dynamism Matrix ................................................. 6 Methods of Stakeholder Mapping ............................................................................... 6 Box: Power / Interest Matrix –Power Legitimacy & Urgency Matrix ............................... 7 Stakeholder Matrix - Importance & Influence .............................................................. 8 Diagram: Who is a StakeholderBox: Models of Stakeholder Matrix ............................... 9 Box: Models of Stakeholder Matrix ........................................................................... 10 Box: Stakeholder Management ................................................................................ 11 What is Stakeholder Analysis? .................................................................................. 11 What are the benefits of Stakeholder Analysis? ......................................................... 12 On Beneficiaries & Stakeholders ............................................................................... 12 Spectrum of Stakeholder Engagement & Good Stakeholder Engagement .................... 13 Table: Identification of Stakeholder Groups, Interest, Importance and Influence ........ 14 Diagram: Stakeholder Relationship & Stakeholder Interaction .................................... 15

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Introduction

Who are the people who will benefit from any given development activity? And whose interests

might be harmed by it?

Identifying the stakeholders,

large and small, individual &

organizational, for any given

activity is essential if all the

people who could have a

bearing on its success or

failure are to have their

voices heard. All

stakeholders need to have

their opinions taken into

account, even if some are to

be set aside at a later date.

Stakeholder Analysis allows

managers to identify the

interests of different groups

and find ways of harnessing

the support of those in favor

or the activity, while

managing the risks posed by stakeholders who are against it. It can also play a central role in

identifying real development need — and that may mean devising a different programme from

the one you thought you were about to embark upon.

Stakeholder Analysis should be an integral part of programme design, and appraisal. It is also a

useful technique to use during reviews, missions and evaluations.

Why do Stakeholder

Analysis?

Stakeholder Analysis is

used in the design and

management of

development

programmes to identify:

The interests of all

stakeholders who may affect or be affected by a programme;

Potential conflicts and risks that could jeopardize a programme;

Opportunities and relationships to build upon in implementing a programme to help make it a

success;

The groups that should be encouraged to participate in different stages of the activity cycle;

Stakeholder analysis is a term used in conflict resolution, project

management, and business administration to describe a process where all the individuals or groups that are likely to be affected by a proposed

action are identified and then sorted according to how much they can affect the action and how much the action can affect 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

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Project Stakeholders “Government of India came up with a Sethu Samudram Canal project last year. Currently, ships have

to travel around an island to reach other side. By executing this project, ship travel becomes cheaper as it takes shorter route than earlier. But environmentalists are concerned that this project will endanger the fragile marine ecology of the area through constant dredging to maintain a canal depth of about 10 m. The increase in shipping

traffic will inevitably result in an increase in oil spills and marine pollution. So they protested for the

execution of the project without proper clearance from national environment group before starting the project.” One can quote several examples like this. E.g.Projects related to Special Economic Zones What do we understand from this story? Environmental groups are negative stakeholders in the Sethu Samudram Canal project as they stops

the project execution. Stakeholders may have a positive or negative influence on a project.

Positive stakeholders are those who would normally benefit from a successful outcome from the project, while negative stakeholders are those who see negative outcomes from the project‟s success

Both positive as well as negative stakeholders may exert influence over the project‟s objectives and outcomes. The project management team must identify the stakeholders, determine their

requirements and expectations, and to the extent possible, manage their influence in relation to the requirements to ensure a successful project.

It is Project manager‟s duty to identify all stakeholders, gather their requirements, manage their

expectations and appropriately communicating them in timely manner depending on their responsibility & authority levels. Examples of key stakeholders:

• Project manager-The person responsible for managing the project. • Customer/user-The person or organization that will use the project‟s product. • Performing organization–The enterprise whose employees are most directly involved in doing

the work of the project. • Project team members-The group that is performing the work of the project. • Project management team -The members of the project team who are directly involved in project management activities. • Sponsor -The person or group that provides the financial resources, in cash or in kind, for the project. • Influencers -People or groups that are not directly related to the acquisition or use of the project‟s

product, but due to an individual‟s position in the customer organization or performing organization, can influence, positively or negatively, the course of the project.

The list is just a gist of key stakeholders. But the list differs from project to project.

Box: Project Stakeholders

Ways to improve the programme and reduce, or hopefully remove, negative impacts on

vulnerable and disadvantaged groups.

Definition of Project Stakeholders:

Project stakeholders are individuals and

organizations who are actively involved in the

project, or whose interests may be affected as

a result of project execution or project

completion.

Stakeholders are all those who need to be

considered in achieving project goals and whose participation and support are crucial to its

success. So identification of all stakeholders is an important activity of the project manager to

ensure project success.

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 incoming changes. Stakeholder analysis can be done one shot or on a regular basis to track how stakeholders changed their attitudes over time.

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Purpose of Stakeholder Analysis To better address distributional and social impacts of

projects, programs and policies; and

To identify existing or potential conflicts of interest,

and factor appropriate mitigation strategies into

activity design. Stakeholder analysis is about asking the questions:

"Whose problem?" and, if a project intervention strategy is proposed: "Who will benefit?". Stakeholder

analysis is thus an essential element of poverty

analysis.

Stakeholders can be 1) individuals within the project 2) individuals or departments within the

organization & 3) individuals or groups outside the organization (can be influencers)

Box: Purpose of stakeholder’s analysis

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.

‘A stakeholder is an individual or group

influenced by and with an ability to

significantly impact (positively or

negatively) the topical area of interest’-

Glicken,

Types of stakeholders:

Primary stakeholders.

Those individuals and groups who are ultimately affected by an activity, either as beneficiaries

(positively impacted) or disbeneficiaries (adversely impacted). In a rural roads activity, primary

stakeholders might include both the petty traders and small farmers whose livelihoods are positively affected

by the new roads, and those households who are adversely affected, such as by having to relocate because of

road widening.

Secondary stakeholders.

All other individuals or institutions with a stake, interest or intermediary role in the activity. In a

primary health care scenario, secondary stakeholders might include the local health workers, health

department officials, the Ministry of Health, NGOs, other donors, private doctors and so on.

Key stakeholders:

Those (who can also belong to the first two groups) who can significantly influence or are

important to the success of an activity.

Stakeholder analysis has the goal of developing cooperation between the stakeholder and the

project team and, ultimately, assuring successful outcomes for the project. A 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.

The word „stakeholder‟ and the word „participation‟ are jargon words that have different meanings for different people and thus it can be difficult to understand what people are trying to say when they use

these words. As they are used together to describe a process that is supposed to be transparent and

inclusive this can be quite frustrating. A stakeholder is only defined in reference to a particular issue e.g. as a resident you may be a

stakeholder in a decision about what kind of flood warning system should be used in your area. You would not be a stakeholder in a decision about flood warning in an adjoining area although the water

company might be a stakeholder in both decisions.

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Power / Dynamism Matrix Gardner et al (1986)

Dynamism

Low High

Po

we

r

Low

A

Fewer Problems

B

Unpredictable But

manageable

High

C Powerful

but

predictable

D Greatest Danger

or

opportunities

Box: Stakeholder Mapping- Power / Dynamism Matrix

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., 2007:854)

(Fletcher, Guthrie et al. 2003) defined a process for mapping stakeholder expectations based on value hierarchies and Key Performance Areas (KPA),

(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 (Moorhouse Consulting 2007) A=High Power & Low Interest B=High Power & High Interest

C=Low Power & Low Interest D=Low Power & High Interest

Power /Dynamism Matrix classify stakeholders in relation to power that they hold and the

dynamism of their stance. The Power / Dynamism Map can be used to ascertain where political

efforts should be focused during the development of new stages The stakeholders in group A and B are the easiest to deal with

The stakeholders in group C are important, because they are powerful. However their dynamism is low, so their stance is predictable and their expectations can often be met in a

relatively easy manner.

Stakeholders in group D should have the most management attention, because they are powerful and their stance is difficult to predict. They can sometimes be dealt with by testing

out new strategies with them before final decisions are made.

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Power / Interest Matrix Gardner et al (1986)

Level of Interest

Low High

Po

we

r Low A

Minimal

Effort

B Keep

Informed

High C

Keep

Satisfied

D Key

Players

Power /Interest Matrix classify stakeholders in relation to the power that they hold and the

extent to which they are likely to show in the strategies of the organization. Power / Interest Matrix can be used to indicate what type of relationship the organization should have with each

of the group.

The stakeholders in Group A requires only minimal effort and monitoring The stakeholders in Group B should be kept informed. They can be important to influence the

more powerful stakeholders. The stakeholders in Group C are powerful, but their interest is low. They are generally relatively

passive, but may suddenly emerge as a result of certain events, moving to the group D on that issue. They should be kept satisfied

The stakeholders in Group D are both powerful, and highly interested in the strategies of the

organization. The acceptability of strategies to these key players should be an important consideration in the evaluation of new strategies

Box: Power / Interest Matrix –Power Legitimacy & Urgency Matrix

Power, Legitimacy and Urgency Model maps stakeholder behavior into seven types depending on the

combination of three characteristics.

Power of the stakeholder to influence the organization

Legitimacy of the relationship and actions of the stakeholder with the organization in terms of desirability,

properness or appropriateness

Urgency of the requirement being set for the organization by a stakeholder in terms of criticality and time

sensitivity for the stakeholder

The stakeholders who show only one of the 3 characteristics (number 1, 2 and 3 in the picture) are defined as the

Latent Stakeholders. They are sub classified as dormant, discretionary or demanding stakeholders.

The stakeholders who show two out of 3 characteristics (number 4, 5 and 6 in the picture) are defined as

Expectant Stakeholders. They are sub classified as dormant, dangerous or dependent stakeholders.

The stakeholders showing all the 3 characteristics are called as Definitive stakeholders

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Stakeholder analysis is an essential part of developing a useful Engagement Plan. A common method of

stakeholder analysis is a Stakeholder Matrix. This is where stakeholders are plotted against two variables.

These variables might be plotting the level of „stake‟ in the outcomes of the project against „resources‟ of the stakeholder. Another is the „importance‟ of the stakeholder against the „influence‟ of the stakeholder. The

concept is the same, though the emphasis is slightly different.

Stakeholder Matrix - Importance & Influence

Box A

These are stakeholders appearing to have a high degree of influence on the project, who are also of high importance for its success. This implies that the implementing organization will need to construct good working relationships with these stakeholders, to ensure an effective coalition of support for the project. Examples might be the senior officials and politicians or trade unions.

Box B These are stakeholders of high importance to the success of the project, but with low influence. This implies that they will require special initiatives if their interests are to be protected. An example may be traditionally marginalized groups (e.g. Indigenous people, youth, seniors), who might be beneficiaries of a new service, but who have little ‘voice’ in its development.

Box C

These are stakeholders with high influence, who can therefore affect the project outcomes, but whose interests are not necessarily aligned with the overall goals of the project. They might be financial administrators, who can exercise considerable discretion over funding disbursements. This conclusion implies that these stakeholders may be a source of significant risk, and they will need careful monitoring and management.

Box D

The stakeholders in this box, with low influence on, or importance to the project objectives, may require limited monitoring or evaluation, but are of low priority.

Importance of Stakeholder

Unknown Little /No Importance

Some Importance

Significant Importance

Significant Influence

Somewhat Influence

Little or no Influence

Unknown

Influence of Stakeholder

C A

D B

Latent

1. Dormant 2. Discretionary

3. Demanding Expectant

4. Dominant 5. Dangerous

6. Dependent

7. Definitive 8. Non Stakeholder

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Diagram: Who is a Stakeholder

Who is a Stakeholder? In the context of a development project, a stakeholder can be defined as any group or individual who can affect, or is affected by, any initiative undertaken by that project.

What is a Stakeholder Analysis? Stakeholder analysis can be defined as an approach for understanding a system by identifying the key actors -or stakeholders. in the system and assessing their respective interest in that system. (Grimble et al.1995). It refers to a range of tools for the identification and description of stakeholders on the basis of

their attributes, interrelationships and interests related to a given initiative or resource.

Why do we need a Stakeholder Analysis? There are several reasons to carry out a stakeholder analysis:

Empirically discover existing patterns of interactions;

Improve and target interventions;

As a management tool in policy-making; and

As a tool to predict and/or manage conflicts

What is the Purpose of a Stakeholder Analysis? The basic objectives of stakeholder analysis are to: Identify all those people, groups or institutions. who might be affected by an intervention or can affect its outcome; Identify local institutions and processes upon which to build; and Provide a foundation and strategy for participation

Categories of Stakeholders

Primary stakeholders: These are project beneficiaries. IFAD regards the poor and marginalized groups as the primary beneficiaries and tries to focus its efforts on fostering their participation.

Secondary stakeholders: They comprise government agencies, NGOs, research institutions, etc. They participate in the project because they either have a stake/interest in or can contribute to it.

External-or other-stakeholders: These are people groups and/or institutions that are not formally involved in specific project activities but can have an impact on or be affected by a project.

Stakeholder Analysis: Steps and Tools Identify the main purpose of the analysis; Develop an understanding of the system and

decision-makers in the system; Identify principal stakeholders; Investigate stakeholders. Interests, Characteristics and circumstances; Identify patterns and contexts of interaction between stakeholders; and Define options for management.

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Box: Models of Stakeholder Matrix

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Box: Stakeholder Management

What is Stakeholder Analysis?

Stakeholder Analysis is an important technique for stakeholder identification & analyzing their

needs. It is used to identify all key (primary and secondary) stakeholders who have a vested

interest in the issues with which the project is concerned.

The aim of stakeholder analysis process is to develop a strategic view of the human and

institutional landscape, and the relationships between the different stakeholders and the issues

they care about most.

Stakeholder Management processes (but

not limited to) 1. Identifying all stakeholders

2. Documenting stakeholders needs 3. Assessing & analyzing stakeholders

interest/influence

4. Managing stakeholders expectations 5. Taking actions

6. Reviewing status & repeat

Management, Change Management &

Stakeholder Management

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On Beneficiaries & Stakeholders

On beneficiaries

The concept of “beneficiaries” reflect the notion that there is a „giver” and a “receiver”, in some kind of a “giving” transaction. It reduces the relations and roles to the notion that there are “recipients” of

something that the State, or NGO, will “deliver” to them (a toilet, food aid, a well, a training). Talking of “beneficiaries participation” is often a way to reflect on a consultation process with people

who will “benefit” from something, but does not take away some notion of somewhat “passive receiving” as opposed to active “take charge” characteristic of true emancipation processes.

On stakeholders

The term comes from the government and private sectors. The „stakeholder” language was meant to reflect the “inclusivity” of the State apparel and of companies thinking processes and practices.

But in reality, the “people who have a stake” in something, are the ones for whom strategies, products, programs are decided for, what will be crafted around their “needs” or the demand of the market. They

“have a say” in what is done for them. But they are not necessarily “actors” in the project. They are

“concerned” within an existing reality, project, situation, but are they actors or decision-makers? Jacques Rancier, a French philosopher, who wrote Ten Theses on Politics, refers to this as the « politics

that makes decision on the people, for the people, instead of the people” The term “stakeholder” is to the private and government sectors what the term “beneficiaries” is to a

“charity”. A Street Vendor’s reflection …. For us, street traders, being a stakeholder is a slavery term. This is because government and big business think for us, plan for us and all we are left with is to fit in their plan and do as we are told…”

What are the benefits of Stakeholder Analysis? A stakeholder analysis can help a project to identify:

The interests of all stakeholders, who may affect or be affected by the project

Potential issues that could disrupt the project

Key people for information distribution during executing phase

Groups that should be encouraged to participate in different stages of the project

Communication planning & stakeholder management strategy during project planning phase

Ways to reduce potential negative impacts & manage negative stakeholders

Engaging stakeholders throughout the project life cycle is a key to (but not a guarantee of)

project’s success.

Managing stakeholder’s expectations & ensuring their active involvement is very much

important to project as:

It is indispensable for continuation of the project & its successful completion

On Beneficiaries & Stakeholders

It gives opportunity to individuals or groups to express their ideas/issues/concerns over the

project

It gives a sense of accountability and enhances responsibility

It enables effective risk identification & response planning

It opens up excellent learning opportunity for both the project team and stakeholders

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Spectrum of Stakeholder Engagement & Good Stakeholder Engagement

Spectrum of Stakeholder Engagement

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Table: Identification of Stakeholder Groups, Interest, Importance and Influence

Identification of Stakeholder Groups, Interest, Importance and Influence Note: Influence refers to the power which a stakeholder has over a project. Importance relates to which achievement of project objectives depends on the active involvement of a given stakeholder group. Stakeholder

Groups

(Illustrative list)

Interests at

Stake Relative

to Project (list)

Effect of Project

on those Intere-

sts. positive / negative (insert +,

0, or -)

Importance of

Stakeholder for

Project Success (1 - highest, 5 -

lowest)

Degree of

Influence

over Project (rank 1 to 5)

Farmers - Smallholders

- Commercial - Landless

- Women

Other private sector

- Input suppliers - Agro-processors

- Farmers.

association - Farm lobbies

- Local NGOs - Universities

- Consulting firms

- Elected councils

Borrower (MoF)

- Central - Districts

- Other

Other ministries - Planning

- Agriculture

- Natural resources - Others (land,

women, etc.)

Donors/ Major

NGOs

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Diagram: Stakeholder Relationship & Stakeholder Interaction

Stakeholder Interaction

Positive Relationship- the stronger the relationship the thicker the line

Conflict –the more severe the thicker the line

Informal or intermittent link

Alliances