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Stakeholder Analysis

By Melissa Reed,2014-05-16 22:31
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Stakeholder Analysis has strong ties with SWOT-analysis and CSF-analysis, since both of them are completely or partially used in Stakeholder Analysis.

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    Stakeholder Analysis

Purpose

    Stakeholder Analysis identifies important groups of people or individuals that can have an influence

    on the Project. These Stakeholders can have their own objectives and views, which may differ and

    conflict with other Stakeholders. A Stakeholder Analysis is required to identify all the parties who

    are directly or indirectly affected by the enterprise’s operations. It sets out the issues, concerns and

    information needs of the stakeholders with respect to the Project’s sustainable development

    activities. This includes not only the traditional shareholders, but also some new groups that the

    insights of sustainable development tell us must be consulted in decisions that affect them.

    Background

    Stakeholder Analysis was created as an organizational development tool. The technique is based on

    the premis that an organization can only be successful if it interacts at a constructive manner with

    the stakeholders. (Ackoff)

Definition of a Stakeholder

    Any group within or outside the organisation

    that has a stake in the organisation's performance. (Daft 1991)

Main Catagories of Project Stakeholders

    ? Government

    ? Local Authorities

    ? Vulnerable groups

    ? Employers

    ? Workers

    ? NGOs

    Importance of Stakeholder Analysis

    Stakeholder Analysis is part of the three necessary conditions for effective change within an

    organisation or society.

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    1. Awareness: stakeholders understand and believe in the vision, the strategy and the

    implementation plan of the project, etc.

    2. Capability: stakeholders involved believe they can develop the necessary skills and can

    therefore both cope with and take advantage of these changes which projects result in;

    3. Inclusion: stakeholders involved feel that they value and are part of the changes and the

    new opportunities associated with the project and choose to behave in new ways (new

    attitudes, skills and ways of working)

    Concepts and constructs

    The Stakeholder Analysis is a technique that does not make use of special concepts or constructs.

    Though, it does distinguish several component types and relationships.

    The component types are: stakeholder, demand, wish, strategic goal, strength of stakeholder,

    weakness of stakeholder and organisation.

    The relationships are: stakeholder makes a demand / wish, wish is translated into an organisational

    goal, organisation communicates with stakeholder, organisation sends / receives goods and

    stakeholder knows strengths / weaknesses.

    Relationships with other techniques

    Stakeholder Analysis has strong ties with SWOT-analysis and CSF-analysis, since both of them are

    completely or partially used in Stakeholder Analysis. In the following we will shortly describe these

    two techniques. Finally we give an example of the usage of Stakeholder Analysis in a organisational

    process.

    Relationship with SWOT-analysis

    Stakeholder Analysis typically includes a search for SWOT - strengths, weaknesses, opportunities,

    and threats - that affect organisational performance. Strengths are positive internal characteristics

    that the organisation can exploit to achieve its strategic performance goals. Weaknesses are internal

    characteristics that may inhibit or restrict the organisation's performance. Opportunities are

    characteristics of the external environment that have the potential to help the organisation achieve

    or exceed its strategic goals. Threats are characteristics of the external environment that may

    prevent the organisation from achieving its strategic goals. External information about opportunities

    and threats may be obtained from a variety of sources, including customers, government reports,

    professional journals, suppliers, bankers, friends in other organisations, consultants, or association

    meetings. Executives acquire information about internal strengths and weaknesses from a variety of

    reports, including budgets, financial ratio's, profit and loss statements, and surveys of employee

    attitudes and satisfaction. [Daft93]

    Relationship with CSF- analysis

    Critical success factors (CSFs) are the limited number of areas in which results, if they are

    satisfactory, will ensure successful and competitive performance for the organisation. CSFs are

    obtained through lengthy interviews with individual managers, which define the manager's goals

    and methods for assessing goal attainment. Then the interviews are used to define which

    information will keep the managers apprised of key performance areas. CSFs differ from company

    to company and among managers within a firm. They force managers to consider only important

    information needs. thus eliminating useless data.

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    Activities

The following activities have to be taken to complete a Stakeholder Analysis:

    Step 1: Acknowledgement of Stakeholders:

    Identify the stakeholders mentioned earlier and others like management, liaisons, distribution

    channels, stockholders, etc. Getting the names of all stakeholders and then divide them amongst the categories mentioned earlier can do this. Or perform a market survey, to get a good idea of your target customers.

    Step 2: Create a Probable Character Profile for each Stakeholder:

    Seek answers to questions like:

    ? What is the importance of the stakeholders for the project?

    ? What does the stakeholder demand of the project?

    ? What are the expected goals of the stakeholders? Step 3: Identify the Opportunities and Threats of the stakeholders to the Project (SWOT).

    ? What are the strengths and weaknesses of the stakeholders?

    ? What are, as a consequence, the opportunities and threats of the external environment?

    External information about opportunities and threats may be obtained from a variety of sources,

    including customers, government reports, professional journals, suppliers, bankers, friends in other organisations, consultants, or association meetings.

    Executives acquire information about internal strengths and weaknesses from a variety of reports, including budgets, financial ratio's, profit and loss statements, and surveys of employee attitudes and satisfaction.

    Step 4: Select the main Area of Attention:

Combine the SWOT-analysis with the Critical Success Factors of the Project. In CSF-analysis you

    will define what are the most important factors that will ensure successful and competitive

    performance for the organisation. [Boyt84] In combination with SWOT-analysis you can see what

    the strengths, weaknesses, opportunities and threats are, and scale them in importance with CSF-

    analysis. The main areas of attention should follow from the opportunities and threats that are the most critical.

    These four steps result to a written report and can be put into a Stakeholder Analysis Table.

    Develop a Stakeholder Analysis Table like the one below:

    Stakeholder Interest(s) Assessment of Potential Strategies for Obtaining Stakeholder in the Project Impact Support or Reducing Obstacles

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    Second Stakeholder Analysis Technique

    Here is a step-by-step description of a method which can be used for stakeholder analysis. For any

    decision or action, a stakeholder is anyone who is affected by, or can influence, that decision or action.

    The process can be used by a single person. It works better, however, if a diverse small group does it.

    1. Draw up a chart

    Prepare a chart on electronic whiteboard, or perhaps paper, like this:

    Att=attitude Inf=influence E=estimate C=confidence

You will notice that the chart has 6 columns. The four columns in the middle need only be wide

    enough to contain a three or four letter symbol. You need a little more width in the right-hand column

    than in the left-hand one.

     2. List stakeholders

    Identify and list the stakeholders. These may be individuals, or stakeholder groups, or

    some combination. If stakeholders can be treated as a group, use groups. The most

    effective way of doing this is to list as many stakeholders as you can on a working sheet

    of paper. Then transfer them to the left hand column of the chart. It may help to list

    them in rough order of importance. (You may change your mind about their

    importance after this analysis.)

     3. Estimate attitude and confidence For columns 2 to 5, work across the page. Record your estimates of the following in the

    columns. In order, they are:

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    Column 2: Your best estimate of the stakeholder's attitude, fromsupportive to opposed. I usually find

    it is adequateto use a 5-category code --

++ strongly in favour

     + weakly in favour

     o indifferent or undecided

     - weakly opposed

    -- strongly opposed

Column 3: How confident you are about your estimate in column 2. Here you can use

     / (a tick) for fully confident

     ? for reasonably confident (some missing information, perhaps,

     or some doubts about interpretation)

     ?? for an informed guess

    ??? for wild guess or sheer fantasy

Unless the group achieves immediate agreement, then at least one question mark is warranted.

    Column 4: Your best estimate of the influence of the stakeholder. A three-category code is usually

    enough --

     H high; this person or group has power of veto, formally or

     informally

     M medium; you could probably achieve your goals against this

     person's or group's opposition, but not easily

     L this person can do little to influence the outcomes of your

     intended actions

Column 5: How confident you are about your estimate in column 4. You can use the same codes as in

    column 2.

     4. Plan strategies Plan your strategies for approaching and involving each person or group. Your estimates in columns 2

    to 5 help you to do this. Your strategy is written in column 6. It usually takes the form of obtaining

    more information, or of involving the stakeholder in the planning for the change.

    In general, question marks indicate a need for more information. The more question marks, and the

    more influence the person has, the greater the need. On some occasions you will choose to approach

    the person concerned. On other occasions you may instead approach someone else who can be

    assumed to know about the person's attitude or influence.

    (On occasion, you may want to obtain some of this information before completing the analysis.)

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    In general, high influence indicates a need to involve the person in some way. (Or, if you choose not to

    do this, and they are opposed, you may choose to find some way to neutralise their influence.) The

    people or groups who require most attention are those who are influential and opposed.

    For involvement, decide the extent. For example:

    ? involved only as informants

    ? consulted

    ? directly involved in decision-making

    ? involved as co-researchers and co-actors

or some similar categories.

    Where the stakeholder is a group rather than an individual, you will probably want to include in your

    decision the style of participation appropriate: for example, direct participation of everyone, or

    representation.

    Stakeholder Analysis Example

    (from the WB Source Book)

Creating a Forum for Stakeholder Communication and

    Innovation

    The Task Manager for an Industrial Efficiency and Pollution Control

    project for the Philippines took the initiative to create communication

    linkages among government, the Bank, industry, and nongovernmental

    organizations (NGOs) to establish a common Bank-borrower team

    approach to the project preparation process.

    Through the local counterpart agency, the Task Manager organized a

    series of stakeholder meetings to further refine problem formulations and

    define the objectives for a project that had yet to be identified.

    A ZOPP-based approach was used to bring together stakeholders who

    initially felt that their conflicting priorities would prevent them from

    reaching consensus on project objectives.

    Not only did stakeholders achieve consensus on objectives and

    prioritization, but the communication linkages begun in the two-day

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workshop began a dialogue on systematically focusing on community-

level demands to encourage participation and ownership at the local level.

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