Stakeholders

Contents

• What are stakeholders?
• Types of stakeholders
• Stakeholder management theory
• Key tools for stakeholder management
• Stakeholder mapping
• Stakeholder matrix

What are stakeholders?

Stakeholders are individuals or legal entities that have a direct or indirect influence on the activities of an organization and have certain expectations regarding its outcomes. Literally, the term "stakeholder" translates to "holder of a stake," which in business terminology implies anyone interested in the company's operations.

Stakeholders include:

• People actively involved in the project, such as managers, employees, investors, contractors, and partners;
• Users of the project results — clients, buyers, and business partners;
• Individuals not involved in the project but capable of influencing it, such as shareholders and government regulators.

In organizational theory, stakeholders shape the company’s environment, exerting varying degrees of influence on it. In project management, they represent parties whose interaction is critically important for the successful completion of the project. Understanding the roles of stakeholders simplifies the selection of optimal methods for engaging with them.

Types of stakeholders

There are several approaches to classifying stakeholders, which can be categorized as follows:

By interaction principle

• Internal: All those who directly work on the project, including owners, founders, shareholders, and employees.
• External: Individuals who influence the project indirectly, including government bodies, contractors, and the media.

By level of influence

• Primary: The inner circle that actively influences the organization, such as the project team and clients.
• Secondary: The outer environment that exerts indirect influence, such as investors and competitors.

By level of interest

• Primary: Individuals constantly involved in the company's operations, such as shareholders and employees.
• Secondary: Individuals who do not have permanent ties to the company but are interested in its outcomes.
• Excluded: Individuals who do not influence the company’s activities, such as children and disinterested members of the public.

Stakeholder management theory

The concept of stakeholder management began to develop in the 20th century when it became clear that companies are not just tools for profit extraction. They are also part of the ecosystem in which they operate. In the 1970s, R. Ackoff proposed the idea that many societal problems could be solved through effective stakeholder engagement.

The stakeholder theory, popularized by Professor R. E. Freeman in the 1980s, offers a model in which an organization’s success depends on how well managers consider the interests of various parties. The primary focus is on creating value for all participants, rather than merely increasing profits.

The process of stakeholder management includes six key stages:

1. Identifying stakeholders and grouping them;
2. Analyzing needs and expectations;
3. Determining the interests and influence of each stakeholder;
4. Developing an action plan;
5. Implementing initiatives;
6. Evaluating results and adjusting actions.

Key tools for stakeholder management

Effective stakeholder management begins with their analysis. This requires studying all processes to identify all interested parties and assess their influence. During the analysis, the following questions may arise:

• Who is most interested in achieving the project goals?
• What are the interests of each stakeholder?
• Who can hinder the achievement of goals?

After identifying the stakeholders, it is important to create a detailed table that describes their interests, level of influence, and needs, which will allow for the development of individual engagement strategies.

Stakeholder mapping

The stakeholder map is a visual tool that shows how a project leader can interact with various stakeholders. The map highlights three areas:

• Authority area: Individuals under the leader's authority.
• Direct influence area: Those who can interact with the leader.
• Indirect influence area: Individuals whom the leader cannot influence directly.

This map helps identify threats and opportunities for engaging with each stakeholder.

Stakeholder matrix

The stakeholder matrix is used to prioritize interactions with various groups of stakeholders. Each stakeholder is assessed based on importance and influence, allowing them to be categorized into four groups:

1. Good relations: High importance and high level of influence.
2. Protect: High importance but low level of influence.
3. Monitor: Low importance but high level of influence.
4. Low priority: Low importance and low level of influence.

Regularly updating these tools is key to successful stakeholder management, as their influence and interest may change over time.