Week 2 - Project stakeholders
What is an organisation and what is a group?
An organisation is a group of individuals that are formally organised, have leader/manager A group is a group of individuals that aren't formally organised, don't have formal leader
What does salience mean?
The degree to which managers give priority to competing stakeholder claims
What does the operator do?
o It can be the Owner of the infrastructure (but some operators are not owners and vice versa) o Assumes the risk and responsibilities for operating the major project infrastructure o Performs all technical and commercial activities required to run the asset o Responsible for any associated products or services (e.g. generating electricity, providing the transport service)
What is a stakeholder according to PMBOK?
"Stakeholders can be individuals, groups, or organizations that may affect, be affected by, or perceive themselves to be affected by a decision, activity, or outcome of a portfolio, program, or project." Future generation and environment are not stakeholders Stakeholders also directly or indirectly influence a project, its performance, or outcome in either a positive or negative way
Which stakeholder is the easiest to forget but often one of the most important?
(Local) Communities People living close to the project If they protest and How do you deal with local communities? Can do compensation, e.g. financial benefits for poor people. Otherwise change the project. E.g. build a tunnel so the railway doesn't disturb the small villages on the way
What are the five PMBOK best practices regarding project stakeholder management?
• Identifying all stakeholders, not just a limited set • Ensuring that all team members are involved in stakeholder engagement activities • Reviewing the stakeholder community regularly, often in parallel with reviews of individual project risks • Consulting with stakeholders who are most affected by the work or outcomes of the project through the concept of co-creation. Co-creation places greater emphasis on including affected stakeholders in the team as partners • Capturing the value of effective stakeholder engagement, both positive and negative. Positive value can be based on the consideration of benefits derived from higher levels of active support from stakeholders, particularly powerful stakeholders. Negative value can be derived by measuring the true costs of not engaging stakeholders effectively, leading to product recalls or loss of organizational or project reputation
What characterizes the client-side?
• Organisation that receive the asset from the main contractor/project delivery chain • Primarily involved in specifying the project's requirements • Can be responsible for the selection of the first tier contractors • Often the most influential project stakeholders (often, the client is also the sponsor) • Have its own understanding of the project o Sometimes do not have technical understanding (buy a computer for your mum...) o There are many employee, which one to listen? • Sometimes the client is a partnership or "joint venture" • To keep involved and updated • Long term perspective o Future projects o Words of mouths
What is a RACI model? Describe it!
A RACI model is a responsibility assignment matrix Responsible - the person doing the work Accountable - the "responsible", executive producer Consulted - provide information to the project, or whose input is required, Subject matter experts Informed - need to be informed of progress or outcomes, internal or external to the project • Responsible. This denotes the individual (or group of individuals) assigned to carry out a task or activity. The responsible party undertakes the task, but is not necessary held accountable in the case of success or failure • Accountable. This highlights the individual who has ownership for the task, activity, outcome or makes the final decision. It is good practice for this to be one person with sufficient expertise and authority. In the case of a mistake or error, the person or organisation who is accountable for this element takes ownership of the mistake • Consulted. This refers to individuals (or groups of individuals) who provide information to the project, or whose input is required before a decision can be made. Subject matter experts could be an example of this, and they could be internal or external to the project • Informed. This outlines individuals (or groups of individuals) that need to be informed of progress or outcomes. These could be internal or external to the project
What are the four categories of stakeholders?
Categories (type of organisation) 1. Public stakeholders - government, public agency (often stakeholder in large projects). They set regulations and legislation. Often sponsor, client, financer, contractor. Might have selfish behaviours, e.g. do projects to get more votes in the upcoming election 2. Industrial stakeholders - construction firms, utilities, manufacturing corporations, service providers. Advise firms on contracts. Contractors and suppliers. Contractors are the ones doing the work at site(in the project). Suppliers are the ones doing work for the project but outside of the site. Often have "local content" as a restriction with the contractors i.e. a part of the budget is forced to be used on local contractors/workforce. When selecting contactors there are many aspects that need to be addressed, i.e. cost, flexibility. Price - set by the market Cost - internal costs Value - what the client experiences 3. Financial stakeholders - customers equity, banks, other debt providers, export credit agencies(supports a company to do business in another country, banks don't want to do this due to high risk), government, insurances, institutional investors. Essential in planning and delivery of major projects 4. Other stakeholders - interest groups, trade associations, competitors, citizens, industrial associations (is biased/invested interest). Citizens are very important, (nibmy - not in my backyard, usually a problem that people don't want things close to them e.g. windfarms)
What do the client- and supply-side mean in the roles of stakeholders in a project?
Client-side Sponsor, operator, owner Often the most influential project stakeholder Supply-side Prime contractor (or Main Contractor), Subcontractor, Suppliers
What is external/internal stakeholders?
Internal stakeholders - choose/want to be in the project, contractor Stakeholders who are part of the project delivery chain Client(demand)/supply External stakeholder - not linked with a contract to the project, local population The external stakeholders are external to the project delivery chain Private/public Different management approach to deal with internal and external stakeholders
What is the Mitchell framework, also called "The Who and What Really Counts Principle"? What are the three attributes?
It's a model for evaluating which stakeholders are important and which are not. The attributes are • Power • Legitimacy • Urgency if the group/individual/organization doesn't have any of these three attributes it is not a stakeholder
What does legitimacy mean?
Legitimacy - perception of what is right Can be individual, organizational, societal
What's the project managers role?
Managers have the responsibility to reconcile divergent interests by making strategic decisions and allocating strategic resources in a manner that is most consistent with the claims of the other stakeholder groups It is the firm's managers who determine which stakeholders are salient and therefore will receive management attention.
What does power mean? What are the three types of power?
Power - A relationship among social actors in which; one social actor, A, can get another social actor, B, to do something that B would not have otherwise done Financial resources, physical resources, symbolic resources
What is project governance?
Project governance - The set of policies, processes, and standards that guide and control a project's decision-making and direction You have to discuss who is doing what, has to set up the project governance, who is taking the risk e.g. if the material prices is increasing - who is paying
What characterizes the supply-side?
Provide the project with material, workforce, produce goods and equipment
What the six different roles of stakeholders in a project?
Roles (in the project) 1. Owner - own the infrastructure (client-side) 2. Sponsor - owns the business case (client-side) 3. Operator - who runs the infrastructure (client-side) 4. Main/prime contractor - wins the contract often through bidding (supply-side) 5. Subcontractor - contracted by the main contractor (supply-side) 6. Supplier - produce goods and equipment, provide material (supply-side) There are political choices involved in thise.g. if you believe nuclear plants should be owned by the government or a private company
What does urgency mean?
Urgency - stakeholder comes to you when they have the urgency to do it, when it is important for them, when they can't wait • Time sensitivity-the degree to which managerial delay in attending to the claim or relationship is unacceptable to the stakeholder • Criticality-the importance of the claim or the relationship to the stakeholder
How do you use the Michell framework?
When using the Mitchell framework, make a list of all stakeholders, then discuss the ones with all three attributes, then the ones with two then the ones with only one attribute
What does the suppliers do?
o Organisations involved in the production of goods and equipment o Different to contractors (i.e. The prime contractor, and subcontractors): they do not directly work at the construction site o Examples: suppliers of construction material (e.g. Concrete, steel, cabling, pipes, large forged items), suppliers of operating materials (e.g. Fuel and other input material for the major project), and energy suppliers
What does the subcontractor do?
o Organisations involved in the production of goods or services for the major project o They do not interact directly with the client: • They work with the prime contractor or other subcontractors and suppliers. • Subcontractors are usually governed (either directly or indirectly) by the contractor.
What does the owner do?
o Own the infrastructure o Often liable of decommissioning - end of life costs
What does the sponsor do?
o Secures the funding and owns the business case o The project remains strategically aligned and viable, and that benefits are likely to be realised o In some contexts, the same organisation assumes the roles of sponsor and client o Often, there is more than one sponsor o The sponsors are either industrial organisations (e.g. construction contractor, critical suppliers, utilities) and/or public institutions (i.e. governments or their associated administrations)
What does the prime/main contractor do?
o The organisation that the client awards the contract to, usually through a bidding process o Work in close proximity to the client and are likely to have negotiated directly with the client about the project's requirements and key aspects of delivery such as financing, schedule and risk management o Major projects often need a main contractor who undertakes project management activities and acts as system integrator for the project delivery chain o Might be an existing firm (e.g. construction developer, engineering firm, technology vendor) or a brand new organisation such as a consortium or a special purpose entity
What are four activities that PMBOK suggest for stakeholder management?
• Identify Stakeholders—The process of identifying project stakeholders regularly and analyzing and documenting relevant information regarding their interests, involvement, interdependencies, influence, and potential impact on project success. • Plan Stakeholder Engagement—The process of developing approaches to involve project stakeholders based on their needs, expectation, interests, and potential impact on the project. • Manage Stakeholder Engagement—The process of communicating and working with stakeholders to meet their needs and expectations, address issues, and foster appropriate stakeholder engagement involvement. • Monitor Stakeholder Engagement—The process of monitoring project stakeholder relationships and tailoring strategies for engaging stakeholders through the modification of engagement strategies and plans.
