O L DE R

TA KEH
J EC T S
PRO EM EN T
MA N A G

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LEARNING OBJECTIVES

• Develop a list of project stakeholders.

• Develop a project charter.

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Project Stakeholders

• Stakeholders are persons or organizations (e.g.,

customers, sponsors, the performing organization, or
the public), who are actively involved in the project or
whose interests may be positively or negatively
affected by the performance or completion of the
project.
• Stakeholders may also exert influence over the project,
its deliverables, and the project team members.
• The project management team must identify both
internal and external stakeholders in order to
determine the project requirements and expectations
of all parties involved.
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Project Stakeholders

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Project Stakeholders cont.
Stakeholders have varying levels of responsibility and authority when participating on
a project and these can change over the course of the project life cycle.

Stakeholder identification is a continuous process and can be difficult. An example is

late recognition that the legal department is a significant stakeholder which results in
delays and increased expenses due to legal requirements.

A project can be perceived as having both positive and negative results by the
stakeholders. Some stakeholders benefit from a successful project, while other
stakeholders perceive negative outcomes from a project’s success. Overlooking
negative stakeholders can result in an increased likelihood of failure.

Part of the project manager’s responsibility is to balance these interests and ensure
that the project team interacts with stakeholders in a professional and cooperative
manner.

E.g. In Limpopo when Medupi was being built, community demanded jobs and work
had to be stopped.
E.g. people complaining that rdp house is too small while the builder is happy that it is
completed within the constraints. 5
Project Stakeholders cont.
There are several stakeholders in a home construction project.

• The project sponsors would be the potential new homeowners. They would be the
people paying for the house and they could be on a very tight budget, so they would
expect the contractor to provide accurate estimates for the costs of building the
house. They would also need a realistic idea of when they could move in and what
type of home they could afford given their budget constraints. The new homeowners
would have to make important decisions to keep the costs of the house within their
budget. Can they afford to finish the basement right away? If they can afford to finish
the basement, will it affect the projected move-in date? In this example, the project
sponsors are also the customers and users of the product, which is the house.

• The house may require financing by a bank which will secure a legal interest in the
property and the finished home. This institution is an example of a legal stakeholder
who must be informed of any changes to the plans or schedule because the project is
part of a legal contract.

How will owner of house exert influence on PM?

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Project Stakeholders cont.
• The project manager in this example would normally be the general
contractor responsible for building the house. The project manager
needs to work with all the project stakeholders to meet their needs and
expectations.

• The project team for building the house would include several
construction workers, electricians, and carpenters. These stakeholders
would need to know exactly what work they must do and when they
need to do it. Their work would need to be coordinated because many
interrelated factors are involved. For example, the carpenter cannot put
in kitchen cabinets until the walls are completed.

• Support staff might include the buyers’ employers, the general

contractor’s administrative assistant, and people who support other
stakeholders. The buyers’ employers might expect their employees to
complete their work but allow some flexibility so they can visit the
building site or take phone calls related to building the house.

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Project Stakeholders cont.
• Building a house requires many suppliers. The suppliers would provide the
wood, windows, flooring, appliances, and other materials. Suppliers would
expect exact details on the items they need to provide, and where and when
to deliver those items.

• A project might have opponents. In this example, a neighbour might oppose

the project because the workers make so much noise that she cannot
concentrate on her work at home, or the noise might wake her sleeping
children. She might interrupt the workers to voice her complaints or even file
a formal complaint.

• As you can see from this example, projects have many different stakeholders,
and they often have different interests. Stakeholders’ needs and expectations
are important in the beginning and throughout the life of a project.

• Successful project managers develop good relationships with project

stakeholders to understand and meet their needs and expectations.

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Processes of stakeholder
management
The four processes in project stakeholder management include the following:
1. Identifying stakeholders involves identifying everyone involved in the project or
affected by it, and determining the best ways to manage relationships with them.
The main output of this process is a stakeholder register.

2. Planning stakeholder management involves determining strategies to effectively

engage stakeholders in project decisions and activities based on their needs,
interests, and potential impact. Outputs of this process are a stakeholder
management plan and project documents updates.

3. Managing stakeholder engagement involves communicating and working with

project stakeholders to satisfy their needs and expectations, resolving issues, and
fostering engagement in project decisions and activities. The outputs of this process
are issue logs, change requests, project management plan updates, project
documents updates, and organizational process assets updates.

4. Controlling stakeholder engagement involves monitoring stakeholder relationships

and adjusting plans and strategies for engaging stakeholders as needed. Outputs of
this process are work performance information, change requests, project documents
updates, and organizational process assets updates.
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Processes of stakeholder
management

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Identify Stakeholders
Stakeholders can be internal to the organization or external.

Internal project stakeholders generally include the project sponsor, project team, support
staff, and internal customers for the project. Other internal stakeholders include top
management, other functional managers, and other project managers because
organizations have limited resources.

External project stakeholders include the project’s customers (if they are external to the
organization), competitors, suppliers, and other external groups that are potentially
involved in the project or affected by it, such as government officials and concerned
citizens.

• Program director; Program manager; Project manager; Sponsor; Project management

office; Project team members
• Customer; Performing organization; Other employees of the organization
• Labour unions; Governance board; Suppliers
• Governmental regulatory agencies; Competitors
• Potential customers with an interest in the project
• Groups representing consumer, environmental, or other interests
• Groups or individuals who are competing for limited resources
• Groups or individuals who are pursuing goals that conflict with those of the project
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Stakeholder register
This document can take various forms and include the following
information:
• Identification information:
• The stakeholders’ names, positions, locations, roles in the
project, and contact information.
• Assessment information:
• The stakeholders’ major requirements and expectations,
potential influences, and phases of the project in which
stakeholders have the most interest.
• Stakeholder classification:
• Is the stakeholder internal or external to the organization?
• Is the stakeholder a supporter of the project or resistant
to it?

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Stakeholder analysis
• A stakeholder analysis is a technique for analyzing
information to determine which stakeholders’
interests to focus on and how to increase stakeholder
support throughout the project.
• After identifying key project stakeholders, you can use
different classification models to determine an
approach for managing stakeholder relationships.
• For example, you can create a power/interest grid to
group stakeholders based on their level of authority
(power) and their level of concern (interest) for
project outcomes, as shown.

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Stakeholder analysis
It is also important to measure the engagement level of
stakeholders throughout the project. One can categorize
stakeholders as being one of the following:
• Unaware: Unaware of the project and its potential
impacts on them – end user of IT project
• Resistant: Aware of the project yet resistant to change –
e-toll road users
• Neutral: Aware of the project yet neither supportive nor
resistant – wholesalers of a product
• Supportive: Aware of the project and supportive of
change – government on e-tolls
• Leading: Aware of the project and its potential impacts
and actively engaged in helping it succeed – owner of a
house being built 14
Stakeholder analysis

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Stakeholder management plan
After identifying and analyzing stakeholders, the project manager and team should
develop a stakeholder management plan to help them effectively engage stakeholders
and make sure that good decisions are made throughout the life of the project.
In addition to information found in the stakeholder register, such as stakeholder
identification information, assessment information, and classification, a stakeholder
management plan can include the following:
• Current and desired engagement levels: If these levels are not the same, the project
team should develop a strategy to align engagement levels.
• Interrelationships between stakeholders
• The project manager must be in tune with the politics of the organization.
• Communication requirements: The communications management plan should specify
stakeholder requirements, and the stakeholder register can expand on unique requests
from specific people.
• Potential management strategies for each stakeholder: This critical section can contain
very sensitive information.
• Methods for updating the stakeholder management plan: All plans need some process
for handling changes and updates.
Because a stakeholder management plan often includes sensitive information, it should
not be part of the official project documents, which are normally available for all
stakeholders to review.
In many cases, only project managers and a few other team members should prepare the
stakeholder management plan.
Project Charter
The project charter is a proclamation that management has approved a
project and given the project manager its backing. Organizations use it to
announce and formally authorize the starting of internal projects. The
charter is created upon project approval, based upon a feasibility study or
acceptance of a proposal.

The purpose of the charter is to describe the project to stakeholders in the

organization, and establish the project manager’s authority to gather and
make use of resources.

It includes whatever information is necessary to give the reader a good

overview of the project; for example, it can describe the project objectives,
scope, stakeholders and their stakes, estimated budget and schedule, risk,
assumptions and constraints, resources, and key roles, and the people
responsible for filling them. Often the charter contains sections similar to the
project plan.

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