This report will concentrate on two aspects of project management, their importance within the overall project management process. The report will concentrate on Stakeholder Management and Risk Management and can include empirical evidence from various sources to critically evaluate them. Both of these aspects relate with managing the project environment due to communication networks, planning, designing and are implemented the project to match the needs of everybody involved.
According to UK Association of project management (APM) Project management is defined as "planning, organising, monitoring and control of most aspects and motivation of all involved to attain the project objectives within the agreed time, cost and performance criteria"( cited in Atkinson. R, 1999).
Project manager plays an important role in the success of the project but there are certain factors that are beyond the control of project manager, the true success of the project depends on coordinating various factors, developing the relationship with various stakeholders and integrating them towards the goal of the project (Munns A. K, 1996)
Project managers need to effectively analyse and identify their key stakeholders through the process of maintaining and developing the relations which leads to successive project completion (Bourne & Walker, 2005).
Project management involves working collaboratively, in relation to the "networking" concept(Simmons & Lovegrove, p495, 2005); dealing with both internal and external stakeholders, According to Freeman's definition stakeholders are "any group or individual who make a difference or is afflicted by the achievement of the organisation's objectives" [4] R. E. Freeman, Strategic management: a stakeholder approach, Pitman/Ballinger, Boston (1984). (Freeman, 1984, p. 46) thus stakeholders can be directly or indirectly involved in the project. According to chapman 2008 & Karlsen 2002, "internal stakeholders" are the top management, accountants, & project team and "external stakeholders" have either positive or negative view and influence through their regulations, politics and these include, suppliers, labour unions, customers, media and third parties
According to Project Management Body Of Knowledge (PMBOK, 1996) guide stakeholders are defined as "individuals and organisations who are actively involved in the project, or whose interests may be positively or negatively afflicted therefore of project execution or successful project completion". Inadequate management of stakeholders contributes to conflicts and controversies
Project stakeholder
An important aspect in stakeholder management is stakeholder analysis (jepsen) and it is "often carried out"( Andersen ES in jepsen) in the planning stage of the project. . Stakeholder analysis is completed to anticipate the opportunities and problems in the foreseeable future during the project time from the many stakeholders.
( Pouloudi and whitley cited in jepsen) declare that the "literature lacks a practical technique for actually identifying stakeholders"
Identification of stakeholders involved in the project and other potential stakeholders is an important part of project management by the project manager, the performance of the project will depend on the stakeholder's contributions and the resources available to the project manager and these resources have to be allocated or arranged so that they reach the best results. As mentioned earlier by poulodi and whitley, there is no particular literature to recognize the stakeholders but according to PMI & (Calvert cited in jepsen) suggested identification by brain storming, checklist, and interviews with experts but poulodi and whitley criticised other authors "for being too general"for any stakeholders. To anticipate the near future risks and the contribution of stakeholder, careful stakeholder analysis is carried out to find their contribution, power and influence in the project (Jepsen, A. L & Eskerod. P, 2009). But Mitchell et al(DATE) suggest that stakeholders should be categorised on three categories; power, legitimacy and urgency.
Bourne (2005) identified that analysing stakeholders specifically with the power, influence and mapping them helps project managers to understand the impact these stakeholders have on the project.
Different stakeholders must be treated differently with regards to the power or influence they hold in the project, as mentioned earlier, failure to do so leads in to conflicts between the stakeholders and the project manager. Different stakeholders have different expectations and interpret in various ways, there would be chances for conflict, therefore project managers should ensure by bringing their expectations to the compromise level (Johnson, et al 1998 pg 180). Each stakeholder has different curiosity about the projects.
Johnson and scholes(Date) formulated the energy matrix to analyse the stakeholders curiosity about the project and the energy to influence and by grouping of stakeholders in the energy matrix, and identifying their position, offers a clear understanding of that they are "likely to influence"(Johnson & scholes) the organisations strategy. "Stakeholder mapping identifies stakeholder expectations and helps in understanding priorities" (Johnson et al 1998 pg 181). Project managers use these charts to recognize the power, influence and act accordingly to resolve the problems in the project by using various communication tools and techniques.
Fig 1. Interest/ power matrix. Source Johnson and scholes "Exploring corporate starategy"
Stakeholders expecations changes through the project cycle, they exhibit different degree of interest through the various stages of project life cycle. It is very important to identify their interst and the energy and are accountable for various works in the project. A reply matrix tool helps the project manager to recognize the tasks helps the manager to overcome the issues and leads to the smooth flow of the work.
The responsibility matrix chart provides information about various stakeholders' roles and duties involved in the project. The diagram below shows the RACI chart, Where R identifies responsibility and they are the ones who need to deliver the project or a few aspects of it. A for accountability, the accountability in the project is generally senior managers who gets the right to approve the decision and to commission the project. C for consultation are those whose views have potential effect on the project and must be consulted before any decision has to be made in the project, failure to do so will affect on the results on the project. I - Inform, those people who needs to be informed about the various decisions and status of the project. It provides the project manager with clear knowledge of the stakeholder's roles in the project.
The communication plan as stated in Verzuh(2003) indentifies that there is a relationship between the responsibility matrix and the Statement of Work(SOW), communication in virtually any project is vital. "Among the major contributing factors to project failure is insufficient communication with stakeholders"(verzuh, 2003 pg149). Improper communications impacts the project implementation and leads to conflicts between the various stakeholders(Olander. S & Landin. A 2005). It is therefore very important to have a constant, frequent, communication between the project managers and the stakeholders to provide the success of the project. A communication strategy should be implemented to deliver the right message to the "right people in the right format at the right time"(verzuh, 2003) to overcome the conflicts, that causes the success of the project. Below is an exemplory case of communication plan used in project management.
There should be an utmost effective way of managing the stakeholders from the" initiation" to the "closeout"(Cleland, 1995 cited in visualising and mapping)in the project. Failure to provide the needs of stakeholder's requirements, within enough time, budget and scope will not deliver the success of the projects. A "Good stakeholder management has clear instrument value for the firms" (Berman, et al, 2009).
Example
ElectroCo established in 1991 based in Singapore as a subsidiary of an Japanese corporation, in 1998 ElectroCo wished to implement a fresh proposed project to remove paper based systems in the procurement department. they relied on one single source for the majority of their production materials and wished to order high volumes of materials for cheap prices which suppliers couldn't confirm. Knowing about the project the employees of the orgnaisation quickly resisted to the project because of the assumption that their would be more automised jobs adversely effecting their job security. The procrument manager was alert to this issues but nonetheless turned a blind-eye and proceed with the project, thus disregarding the stakeholders requiment being unfulfiled. The Information Systems (IS) manager acknowledged this and was opposing to the project as he knew that the procurement manager wouldn't normally be conducting a complete comprehensive stakeholder anlaysis. As the project was developing employees resisted in giving information to the IS people developing the project which also resulted in delays, but consequently worked against two employees and resulted in disciplinary action. Following this issue was address the procrument manager was assured that the project was then allowed to run smoothly. He was plainly unaware that the suppliers were plotting against and attempting to cause interference.
The new imposed project didn't settle well with the suppliers as they knew that the project implementation would cause the loss of business to ElectroCo, this resulted in the suppliers joining forces and interfering with the project which eventually resulted in project abandonment. Several concerns occurred during the development of the project and during implementation which revolved throughout the decisions made by procurement management.
Another exemplory case of stakeholder management is the street builders adapted from Maylor. H Pg 170. Every corner of the world people moan and concerned about poor roads, one particular example in UK when the neighborhood council decided to resurface the road that causes the major tourist area in the extreme summer, during the peak demand of the growing season. For some weeks time the project was delayed because of the bad weather conditions and it caused lot of problems by heavy machinery and traffic halts. Local residents were horrified to carry the work on "antisocial hours" and producing noise from the machinery. Even though the project got delayed in the original phase due to bad working conditions, finally the project was finished 6 weeks before the schedule. Even the local paper was so impressed about the project management team. The success of the project completing prior to its deadline indicates that there should have been a good stakeholder management and have implemented proper tools and techniques of project management. It would not have been possible without stakeholder support after delaying the work in starting phase due to the climate. This success of the project could have achieved by proper stakeholder management planning and implementing.
Management of risk in projects is also one of the main tasks for project managers. According to Project Management Institute PMI, risk management is one of the eight main areas in project management body of knowledge (Raza, 2001). According to Chapman and cooper (1983), Risk is thought as exposure to economical or financial loss, physical damage or delay due to uncertainty while pursuing a plan of action (CITED IN PRASANTA KUMAR). According to PMBOK (2000, pg 127)"risk management is defined as systematic process of identifying, analyzing, and responding to project risk". The project risks will be a threat to the organisation's objectives and also to the project objectives. It is therefore essential to identify and control the potential risks which occur in the project management by "modelling the project objective functions against project variables" (Jaafari. A, 2001).
There are lots of risk management processes that are proposed by various authors with some variations. According to (boehm cited in raz) RM includes two phases, risk assessment which include identification, analyzing & risk prioritization and the other phase is risk control which includes planning, risk monitoring, risk resolution and lastly tracking and taking the corrective action to solve/mitigate the risk. However, Project Managemnt Body Of Knowledge presents four phases of risk management in project management, which are Identification, quantitative risk analysis, risk response planning and risk monitoring & control.
Turner(1999) cited in prasanta claim that identification of risk factors are done through "expert judgement, assumption analysis, decision drives and brainstorming" but however Perry & Hayes (1985)suggested checklist. The factors of the chance may be financial risk, technical risk, commercial risk, execution risk, contractual risk and common project risks such as absentism, resignation, poor training, additional staff skills unavailable.
Risk analyisis is completed to quantify the effects on the project discovered earlier(Perry. J. G)
Stakeholder management involves building and maintaining the active support and commitment of the people to facilitate the timely implementation of the change or project. By understanding a person's motives and position, it becomes possible to influence, in a positive way, the process of change, and also to minimise or resolve issues which may have become a barrier to improve. ( para phrase)
