Construction management lecture

2. STAKEHOLDER ASSESSMENT AND
MANAGEMENT
LECTURE-8
BY
PROF. DR. SAJJAD MUBIN
2022

3. STAKEHOLDERCONCEPT

4. STAKEHOLDER
Any group or individual who can affect or is affected by the achievement of the
organization objectives.
(Freeman 1984, p.46 in Friedman & Miles 2006, p.4)
An individual, group, or organization who may affect, be affected by, or perceive itself to be
affected by a decision, activity, or outcome of a project.
(PMBOK 2013, p.563)
Stakeholder theory has its origins in the year 1984. Freeman's definition is often cited as the
classic stakeholder definition.
(Boonstra, 2006; Achterkamp &Vos, 2008)
Stakeholder management has become an important soft skill in projects.
(Crawford, 2005; Morris, Jamieson, & Shepherd, 2006;
Winter, Smith, Morris, & Cicmil, 2006)

5. PROJECT STAKEHOLDERS
• Project Stakeholders are individual or organizations that are actively involved in the
project, or whose interests may be affected as a result of project execution or project
completion. They may influence the project objectives and out comes negatively or
positively.
• Project management team must identify the stakeholders, assess and determine their
requirements and expectations.
• Positive and Negative stakeholder i.e a business leader and environmentalist.
Key stakeholders on any project:
1. Sponsoring Agency
2. Project Manager and Project Management team members
3. Beneficiaries/Customers/ Users
4. Executing agency
5. Project execution team
6. Influencers

6. PROJECT STAKEHOLDERS

7. STAKEHOLDER MANAGEMENT PROCESS
• The systematic process of identification, analysis and management (engagement) of
stakeholders.
• The systematic identification, analysis and planning of actions to communicate with and
influence stakeholders. (PMI 2014)
• Stakeholder Management, being the 10th & last Knowledge Area of PMBOK guide
contributes to the project success by taking care of stakeholders & their interests.
The Project Stakeholder Management knowledge area
has four processes:
• Identify Stakeholders
• Plan Stakeholder Engagement
• Manage Stakeholder Engagement
• Monitor Stakeholder Engagement
The stakeholder
impact/probability-matrix
(Olander, 2007)

8. STAKEHOLDER MANAGEMENT (PMBOK 5th ED.)
• A revised version of the Project
Management Book of Knowledge
(PMBOK) is released every five years.
The latest 6th edition of the Project
Management Body of Knowledge
(PMBOK®) Guide was released in
September 2017.
• While all the knowledge areas have the
same names, a new knowledge area,
called Project Stakeholder
Management, has been added in 5th
edition of PMBOK released in 2013.

9. STAKEHOLDER MANAGEMENT PROCESS (PMI)

10. SIGNIFICANCE OF SM PROCESS

11. SM INPAKISTANCONSTRUCTIONINDUSTRY
• The construction industry of Pakistan has not fully been able to embrace the vast importance of
managing stakeholders in projects.
• It presently focuses largely on the internal stakeholders that include clients, contractors, consultant
etc., isolating the external stakeholders who are usually affected by the projects i.e. end users, local
communities, judiciary, media and others.
• Disagreement among participating parties rose during the implementation of projects which
adversely impacted the ability of the management teams to deliver the construction project
within time, allocated budget and expected degree of quality. These disagreements are often
caused by inappropriate identification and management of the different stakeholders involved in
a project.
• Shaping project scope & objectives to consumer requirements has become a critical success factor
for mega construction projects.
• Yet, paradoxically, the poor performance of projects and the disappointment of project stakeholders
and beneficiaries seem to have become the rule and not the exception in contemporary reality (Ika et
al., 2012).

12. SIGNIFICANCEOFSTAKEHOLDERMANAGEMNT

13. STAKEHOLDERIDENTIFICATION&
CLASSIFICATION

14. STAKEHOLDERSCLASSIFICATION

15. Project Initiation
Project Planning
Approval
Project Execution
Origination
Impact/
Degree
of risk
PC-I
Preparation
Efforts/
Cost
Time
Concept
Clearance
PC-II
Execution of project
(Design, Erection/Installation/Construction)
Termination
Planning phase
Degree of risk
Cumulative Cost
Project Close out
Project
Terminal
Evaluation
(PC-IV)
PC-I
Approved
Implementation
LIFECYCLEAPPROACHOFSTAKEHOLDER
IDENTIFICATION
Project
Performance
Monitoring
(PC-III)
Project
Impact
Evaluation
PC-V
Pre-PDWP
Project
Scrutiny
(Project
Appraisal)

16. LISTOFSTAKEHOLDERSGENERALL
YINVOLVEDINPUBLIC
SECTORPROJECTS
 S1: The Sponsor, Owners, Client
 S1A: Client Employees/Site Team
 S2: General Public, End Users, Potential users
 S2A: Community, Land owners, ROW affectee
 S3: Project Contractor/managers
 S3A: Subcontractors
 S3B: Material Suppliers
 S3C: Operation & Maintenance Team
 S4: Facilities managers
 S5: Project Designers (Structural & Architectural)
 S6: Local Governments (e.g. Punjab Provincial Government)
 S6A: National Governments (e.g. Federal Government)
 S6B: Government Establishments, Regional Development
Agencies
 S7: Project Approval authorities (e.g ECNEC, P&D),
Regulators, Legal authorities
 S7A: Research and Development Department
 S7B: Controlling organizations (e.g. Anti-Corruption, NAB,
Police)
 S7C: Utilities companies (e.g. SNGPL, WASA, PTCL, PSCA)
 S8: Financiers, Partners, Sponsors, Equity Holders
• S8A: Banks, Insurance companies
• S9: The media
• S10: Judiciary
• S11: Protection Agency (e.g. EPA Punjab, Department of
Archaeology Punjab)
• S11A: Environment groups, Environmentalists
• S11B: Archaeologist
• S12: Political Group/Parties, Local Government & Community
Development Department
• S12A: Elected Public Representatives, Neighbourhood leaders
• S12B: Labor unions, Lobbying Organizations
• S12C: Interest groups for the preservation of the city image
• S12D: Pressure Groups
• S12E: Business Community, Trade Organizations
• S13: Civic institutions (e,g. parks, libraries, city halls and cultural
facilities)
• S13A: Tourists and Visitors
• S14: Nongovernmental organizations
• S14A: International transparency agencies (Transparency
International, Moody's Corporation)
• S15: Academic Staff
• S16: Think Tanks

17. A STAKEHOLDER’SIDENTIFICATION
(CLASS PARTICIPATION)
YOUR STAKES IN PUBLIC SECTOR DEVELOPMENT PROJECTS?
1. LAHORE ORANGE LINE METRO TRAIN PROJECT
2. PAKISTAN KIDNEY & LIVER INSTITUTE, LAHORE
3. ESTABLISHMENT OF SPORTS COMPLEXES IN 11 NA CONSTITUENCY OF LAHORE
CITY
4. ESTABLISHMENT OF MUSAFFIR KHANAS AT 05 DIFFERENT LOCATIONS OF
LAHORE CITY
5. BUS RAPID TRANSIT PESHAWAR
6. RAWALPINDI – ISLAMABAD METROBUS PROJECT

18. STAKEHOLDERASSESSMENT

19. STAKEHOLDERS’ATTRIBUTES
1. Power
2. Legitimacy
3. Urgency
4. Vested Interest
5. Proximity
6. Knowledge
7. Attitude

20. Stakeholder’ Power

21. Stakeholder’ Legitimacy
legal obligation contractual obligation moral obligation

22. Stakeholder’ Urgency

23. Stakeholder’ vested interests
nature of stakeholder
nature of the project

24. Stakeholder' proximity

25. Stakeholder' knowledge
Power Legitimacy Urgency

26. Stakeholder’ attitude

27. ASSESSMENTBASEDON
STAKEHOLDERS’SALIENCE
Mitchell et al. (1997) assessed and
categorized stakeholders based on whether
or not they possess the power to influence
decision and progress, legitimacy in relation
to other stakeholders and Urgency of claim
on the project.
Salience = Power + Legitimacy + Urgency
• Power only: Dormant;
• Legitimacy only: Discretionary;
• Urgency only: Demanding;
• Power and Legitimacy: Dominant;
• Power and Urgency: Dangerous;
• Urgency and Legitimacy: Dependent;
• Power, Legitimacy and Urgency:
Definitive.

28. ASSESSMENTBASEDON
STAKEHOLDERS’ATTRIBUTES
1. Calculation of impact factor (I) consuming attribute factor which is founded on addition of
power, legitimacy, urgency, knowledge and proximity i.e
I = P + L + U + K + D …………. (Nguyen et al., 2009) Eq 3-1
Where, I = Impact; P = Power; L = Legitimacy; U = Urgency; K = Knowledge; D = Proximity
2. Determination of stakeholder vested interest-impact index (ViII), by using
𝐕𝐢𝐈𝐈 =
𝐈∗𝐯
𝟐𝟓
…………….(Bourne and Walker (2005) equation) Eq 3-2
Where, ViII =Vested interest impact index; I = Impact; v =Vested interest
3. Assessment of Position value (Pos)
4. Calculation of Salience (A)
Salience (A)= Power + Legitimacy + Urgency ………….(Mitchell et al. (1997)
5. Calculate Stakeholder Impact Index for each stakeholder by using
SII =ViII * A * POS ……………………(Nguyen et al., 2009) Eq 3-3 (SHEET)
Where, SII = impact index;ViII = vested interest impact index; A = stakeholder salience value;
Pos = Attitude position value.
For the calculation ofVested interest level, Bourne and Walker (2005) suggested to fetch data
using ordinal data collection technique e.g. Likert Scale. Factors used for level of impact
equations (power, legitimacy, urgency, proximity, knowledge), the exact approach of Bourne
and Walker (2005) could be employed using the questionnaire survey.
Based on stakeholder impact index values, Stakeholders are prioritized based on the impact
they could create for their needs and concern. Since, this prioritization strategy is composed of
all the attributes of stakeholder; a realistic assessment of stakeholder’s ranking was achieved.

29. STAKEHOLDERMANAGEMENTPROCESS
Stakeholder Engagement

30. QUESTIONS ARE WELCOMED!