A stakeholder is an individual or group that has an interest, concern, or influence in the outcome of a project or activity.
Stakeholders can be broadly classified into two categories: physical (e.g., landowners, government agencies) and social (e.g., customers, employees).
Understanding the diverse interests and needs of stakeholders is crucial for informed project planning and decision-making.
There are many different types of stakeholders, and they can be categorized in various ways.
A framework by Mitastle (2004) suggests that stakeholders can be grouped based on their level of interaction with the organization, including supporters, detractors, and milquetoasts.
They may also be categorized by their level of involvement, their level of interest, or their level of influence.
Identifying and assessing the needs of all stakeholders of a land surveying business is crucial before embarking on a project or undertaking any change initiative.
What is a stakeholder?
A stakeholder is an individual or organization that has an interest, concern, or influence in the outcome of a project or activity.
Based on Williamson’s (2000) stakeholder theory, stakeholders can be internal (e.g., employees) or external (e.g., shareholders), and their interest and influence can significantly impact the organization’s strategy and decision-making.
Projects often have multiple stakeholders with different objectives, so it’s essential to identify and assess them early on.
By understanding their objectives and needs, organizations can manage expectations and build relationships with key stakeholders.
The different types of stakeholders
The concept of stakeholders originated from Lee Bolman and Terrence Deal’s 1984 article, “Planning for Organizational Change,” where they defined stakeholders as “key players who have significant stakes in an organization’s change effort.”
In essence, stakeholders are individuals or groups who have a vested interest in the success or failure of an organization or project. According to a study by the Harvard Business Review, stakeholders can be broadly categorized into four main types: primary, secondary, internal, and external.
Primary stakeholders are those who are directly involved in the project or organization. They have a vested interest in the success or failure of the venture. This includes key players such as clients, employees, and management teams, as identified by a study by the American Marketing Association. For instance, in the construction industry, clients are primary stakeholders as they have a direct interest in the project’s completion and quality.
Primary stakeholders
Secondary stakeholdersSecondary stakeholders, on the other hand, have a lesser level of involvement in the project or organization. They may have a vested interest in the organization’s success but are not directly affected by it. According to a study by the Journal of Marketing Management, secondary stakeholders can include investors, suppliers, and the media. For example, investors are secondary stakeholders as they have a vested interest in the organization’s financial performance but are not directly involved in the project.
Internal stakeholders refer to those who are within the organization, including employees, management teams, and board of directors. They have a vested interest in the organization’s success and are often involved in decision-making processes. A study by the Journal of Organizational Behavior found that internal stakeholders are crucial in driving organizational change and can significantly impact the organization’s performance.
External stakeholders are those who are outside the organization, including customers, suppliers, and regulators. They have a vested interest in the organization’s success but are not directly involved in the project.
Understanding the different types of stakeholders is crucial in stakeholder engagement and management, as it enables organizations to build relationships with stakeholders and manage their expectations effectively. By identifying and engaging with stakeholders, organizations can improve their performance and achieve their goals.
Primary StakeholdersPrimary stakeholders are those who have a significant level of control or influence over the project or organization.
- Employees involved in day-to-day operations
- Management team
Internal StakeholdersInternal stakeholders are those who work within the organization but are not directly involved in the project.
- Employees who may be impacted by changes
- Organizational directors and managers
External StakeholdersExternal stakeholders are those who are not directly involved in the project or organization, but who may be affected by its outcome.
- Suppliers and vendors
- Community members and stakeholders
How to Identify Stakeholders
A stakeholder is anyone with an interest in what you’re doing. This can be customers, suppliers, employees, shareholders, the community, the environment – really anyone that will be affected by your actions.
The benefits of engaging with stakeholders
According to a study by Harvard Business Review, engaging with stakeholders can lead to improved communication and understanding, crucial for the success of an organization. This is because stakeholders bring diverse perspectives and knowledge to the table, enabling organizations to make more informed decisions. By engaging with stakeholders, organizations can also foster greater transparency and accountability, as individuals become aware of how their actions are impacting the organization. Furthermore, such engagement leads to increased buy-in and support for the organization’s programs, projects, and decisions, ultimately contributing to its long-term success.
The risks of ignoring stakeholders
Ignoring stakeholders can be detrimental to an organization’s overall performance. When stakeholders are left unheard, they may harbor valuable insights that could help the organization avoid potential pitfalls. By neglecting stakeholders, organizations risk losing significant opportunities to build relationships and create mutual value. This can ultimately lead to eroded trust and goodwill, damaging the organization’s reputation and making it challenging to secure future funding or support.
Conclusion
A stakeholder is an individual or group that has a vested interest in the outcome of a project, categorized as either internal or external to the organization. Identifying stakeholders early on is essential to manage their expectations. According to a report by the Project Management Institute, proper communication with stakeholders is critical for the success of any project, as it enables the organization to address stakeholder needs, build trust, and create a positive relationship. By engaging stakeholders, organizations can unlock their full potential, ultimately leading to improved project outcomes.
The Importance of Identifying Stakeholders in Project Management
A stakeholder is an individual or group that has an interest in the outcome of a project, and can be either internal or external to the organization. Effective stakeholder management can lead to increased project success rates, reduced conflicts, and improved overall outcomes.
Stakeholders can be categorized into different types, including project sponsors, team members, customers, and vendors. By adopting a stakeholder-centric approach, project managers can ensure that all stakeholders are informed and engaged throughout the project lifecycle.
Proper communication with stakeholders is critical to the success of any project. By actively listening to stakeholders, providing regular updates, and addressing their concerns and issues promptly, project managers can ensure that all stakeholders are informed and engaged throughout the project lifecycle.