This document discusses stakeholder management in projects. It defines stakeholders as individuals or groups that can influence or be influenced by a project. Effective stakeholder management is important for project success. The key steps in stakeholder management include identifying stakeholders, analyzing their interests and impact, planning engagement strategies, managing engagement throughout the project, and controlling engagement. The document provides details on tools and techniques for each step of stakeholder management.

1. 13 PROJECT STAKEHOLDER MANAGEMENT
Objective of This Chapter:
A stake is an interest or a share in an undertaking while a stakeholder is an individual with
a stake. Hence stake holder is a person(s), group(s) or organization(s) that has direct or
indirect interest or concern in ongoing project.
Stakeholders can affect or be affected by the project, its objectives and policies. Their
influence can be minor or major and can be exerted either deliberately or incidentally.
Individuals and organisations need to be wary of their stakeholders and their influences.
Stake holder management includes the processes required to identify people, groups or
organizations who could impact or be impacted by the project, to analyze stakeholder
expectations and their impact on the project , and to develop appropriate strategies to
effectively engaging stakeholders in project decisions and execution. Stakeholder
management is used to indicate that a wider set of interests needed to be satisfied through real
estate project certainly beyond the narrow and dominant interests of the builder and
expanded to include customer ,contractors, sub-contractors, suppliers and construction
workers.
Stakeholder management is important because it helps an project manager to complete
project successfully . Stakeholder management is also important because it helps identify
positive existing relationships with stakeholders. These relationships can be converted to
coalitions and partnerships, which go on to build trust and encourage collaboration among the
stakeholders.
Objective of this chapter is to understand the best practices in real estate project stakeholder
management.
The checklist of stakeholders in a construction project is often large, following figure shows
key stakeholders in a real estate project

2. Types of stakeholders
Internal stakeholders i.e persons within the project team and external stake holders i.e
persons outside project team who can influence project or are influenced by project.
Please note that in a typical real estate project:
 External Stake Holders :
o Customers relationship is managed by sales , marketing or relationship
manager team
o Relationship with government and banks / financers is managed by head
office i.e. by directors , legal , finance department etc
o Contractors , consultants related to construction site are appointed by head
office and relationship is managed by on-site project team
 Internal Stake Holders : For small real estate project the on-site project team
comprises of project manager (who may handle one site or multiple sites, senior
engineers, junior engineers, supervisors, store in charge, store keepers).
As the complexity of the project increases more roles and responsibilities are added to
project team. Following is example of project team structure for a big construction /
real estate project
Let’s understand the interests of key stake holders in a construction project:
 Builder :
o Ensure the project will support the organization’s strategy
o Ensure the organization’s resources will be used economically and effectively
o Ensure the project is completed successfully in terms of quality, time and cost
o Provide financial support; maximize return with minimized risk
o Purchase the construction product
 Architect :
o Develops the design of the project

3. o Produces drawings and specification
o Ensures that a project is implemented within cost and time, and according to
quality control
 Contractor :
o Carries out and completes the work designed by consultants to meet time, cost
and quality objectives
o Supervises and manages operations on site
o Sometimes assists in design
o Coordinates and supervises all sub-contract work, materials and suppliers
o Sub-contractors : Carry out work assigned by main contractors
o Labourers : Finish tasks assigned, earn living, learn skills
 Suppliers Supply, install and commission the hardware that constitutes the finished
building (e.g. materials suppliers, equipment suppliers and manufacturers)
 Government authorities : Ensure that the project abides by laws and regulations; may
be indifferent to any project so long as it complies with codes (e.g. planning
department, electrical and mechanical services department, transport department,
highways department, etc.)
 Town planning board : Ensures the project will be in line with district planning
 Customer : Make sure that the builder delivers project on time without any cost
escalation and as per the promised specification & quality.
It is worthwhile to consider stakeholders as being supportive, neutral, or anti. The anti’s are
often in the minority but can create bigger issues for successful project delivery. The Project
team’s endeavour should be to shift stakeholders from the neutral and especially anti side of
the fulcrum to the supportive side.
The key considerations in practical stakeholder management should include the following:
 Who are our stakeholders?
 What are their stakes?
 What opportunities do they present?
 What challenges or threats do they present?
 What responsibilities do we have towards our stakeholders?
 What strategies or actions should we use to engage our stakeholders?
 Should we deal directly or indirectly with our stakeholders?
 Should we be aggressive or defensive in dealing with stakeholders?
 How and when should we accommodate, negotiate, manipulate or resist the overtures
of our stakeholder?
Principles of stakeholder management:
 Acknowledge and actively monitor the concerns of all legitimate stakeholders, and
should take their interests appropriately into account in decision-making and
operations.
 Listen and openly communicate with stakeholders about their respective concerns and
contributions, and about the risks that they assume because of their involvement with
the corporation.
 Adopt processes and modes of behaviour that are sensitive to the concerns and
capabilities of each stakeholder constituency.
 Recognise the interdependence of efforts and rewards among stakeholders, and should
attempt to achieve a fair distribution of the benefits and burdens of corporate activity
among them, taking into account their respective risks and vulnerabilities.

4.  Work cooperatively with other entities, both public and private, to ensure that risks
and harms arising from corporate activities are minimised and, where they cannot be
avoided, appropriately compensated.
 Acknowledge the potential conflicts between (a) their known roles as corporate
stakeholders and (b) their legal and moral responsibilities for the interests of
stakeholders, and should address such conflicts through open communication,
appropriate reporting, incentive systems and, where necessary, third-party review.
Stake Holder Conflict Management:
Due to differing claims, rights and expectations of stakeholders, they can exert tangential
forces in different directions. This results in conflict among the stake holders. Example the
builder and RCC contractor might have different view about the quality of work done and
hence there might be dispute in payment processing.
This effect must be countered by managing stakeholders collectively in accordance with the
objectives of the project. The assessment of conflict between stakeholders in construction
projects depends on four essential factors:
o the type/power, characterization and relationships of the stakeholders (internal,
external, authority/public/contractor);
o the stage of the construction project cycle (pre-contractual, execution, post-completion)
o the type, nature and stage of the conflict (behaviour, data, needs, values, latent,
potential, processes, etc.)
o the legal and regulatory context

5. Following strategies can be used for conflict resolution:

6. In order to achieve this, a variety of tactics may be employed that may be divided into the
following three categories :
o Positional tactics : aim at providing some form of advantage over the other party or at
placing the other party at a psychological disadvantage. Examples of this are insisting
that meetings take place at a place you may feel more comfortable than your opponent
or trying to outnumber the number of participants of the other side for some
functional reason.
o Initial tactics are used in order to try to achieve a favourable bargaining position from
the start. Examples are to place your major demand first in the agenda or to start the
negotiation with a higher demand than you really expect to obtain.
o A range of general tactics may also be used, the most common of which are:
flattering, persuasion, promises or threats and irreversible decisions.
Cooperative negotiation is sometimes called win/win negotiation and as the name suggests
pre-empts a very different approach from the competitive negotiation. There are five basic
elements to this approach:
o Separate people from the problem: The opponent should be regarded not as someone
you do not like and wishing to cause damage to you personally but as someone with
whom you will have the chance of solving a problem through a mutual advantageous
solution. Accordingly, negotiators should focus on the problem rather than in each
others.
o Focus on interests not on positions: In an organization, interests are what really
matters for problem solving not the victory of your position on the problem.
Accordingly, negotiators should focus on the reasons for their demands.
o Generate options for mutual gains: Generally, it is better for you to fi nd ways of
increasing mutual benefits than to discuss with your opponent how to share it.
Competitive negotiators will seek to obtain as much as possible during the negotiation
process.
o Insist on using objective criteria: If criteria used during a negotiation process are
validated by all parties involved, then chances will increase of getting a good
agreement. Win/ win negotiators will adopt mutual recognized criteria to measure the
outcome of their bargain.

7. o Consider the best alternative to a negotiated agreement: Negotiators should evaluate
the consequences of not reaching an agreement through the negotiation process they
are carrying.
Let’s understand the process of stake holder management
13.1 Identify Stakeholders
This process identifies people and organizations that may be impacted by the project and
determines their level of interest, involvement and potential impact on project success. It is
vital to identify stakeholders early and devise strategies for maximizing positive influences
and minimizing negative impacts. Considering the limitations on a project manager’s time
and the potentially large number of stakeholders, it is also important to prioritize the relative
importance of each stakeholder

8. 13.1.1 Inputs
13.1.1.1 Project Charter: The charter usually provides information about stakeholders such as
customers, the sponsor(s), and people participating in the project (team members, project
manager, departments, and external organizations).
13.1.1.2 Procurement Documents: lf a project involves outsourcing and a contract exists, the
parties in the contract are stakeholders.
13.1.1.3 EEFs: Factors potentially relevant to stakeholder identification include
Organizational culture and structure and governmental or organizational regulations or
standards

9. 13.1.1.4 OPAs: Factors potentially relevant to stakeholder identification include
templates for stakeholder registers, lessons learned from previous projects and stakeholder
registers from previous projects
13.1.2 Tools And Techniques
13.1.2.1 Stakeholder Analysis: Stakeholders with sufficient influence should be managed
carefully and partnerships or coalitions may be formed to maximize project success.
Following three steps for stakeholder analysis:
 Step 1: Identify stakeholders and their roles, expectations, and levels of influence.
 Step 2: Assess the potential impact of each stakeholder and classify them using
various models such as:
o Power vs. interest grid
o Power vs. influence grid
o Influence vs. impact grid
o Salience model (considers power, urgency, and legitimacy)
 Step 3: Assess likely stakeholder responses and plan how to influence them for their
support.
13.1.2.2 Expert Judgment: Used to assist in the identification and analysis of stakeholders.
Expertise can be obtained through individual meetings, interviews, surveys, focus groups, etc.
13.1.2.3 Meetings
13.1.2 Outputs
13.1.2.1 Stakeholder Register: Contains all the information on identified stakeholders
including:
 Identification (name, position, location, role, contact information)
 Assessment (expectations, potential influence)
 Classification (internal or external, supporter or antagonist)
Stakeholder register is updated throughout project life cycle

10. 13.2 Plan Stakeholder Management
This is the process of developing appropriate management strategies to effectively engage the
stakeholders throughout the project life cycle based on the analysis of their needs, interests
and potential impact on project success.

11. 13.2.1 Inputs
13.2.1.1 Project Management Plan
13.2.1.2 Stakeholder Register
13.2.1.3 EEFs : This includes organization culture, structure, and political climate as they
help in determining the best options to support a better adaptive process for managing
stakeholders
13.2.1.4 OPAs
13.2.2 Tools And Techniques
13.2.2.1 Expert Judgement
13.2.2.2 Meetings
13.2.2.3 Analytical Tools : Following table is sample for engagement levels of different
stakeholders

12. Through the analytical tools, gaps between the current and desired engagement level can be
identified. Actions and communications required to close these gaps can be identified.
13.2.3 Outputs
13.2.3.1 Stakeholder Management Plan : Identifies the management strategies required to
effectively engage stakeholders. The plan also provides
 Desired and current level of engagement of key stakeholders
 Scope and impact of change to stakeholders
 Identified interrelationships and potential overlap between stakeholders
 Communication requirements
 Method for updating and refining the stakeholder management plan
13.2.3.2 Project Documents Update : Which includes but not limited to project schedule and
stakeholder register
13.3 Manage Stakeholder Engagement
This is the process of communicating and working with stakeholders to meet the needs /
expectations, address issues as they occur and foster appropriate stakeholder engagement in
the project activities throughout project life cycle

13. 13.3.1 Inputs
13.3.1.1 Stakeholder Management Plan
13.3.1.2 Communication Management Plan : Which includes
 Stakeholder communications requirements
 Information and content of information to be communicated
 Reasons for information distribution
 Escalation process
13.3.1.3 Change Log
13.3.1.4 OPAs
13.3.2 Tools And Techniques
13.3.2.1 Communication Methods
13.3.2.2 Interpersonal Skills : Like building trust, resolving conflicts, active listening and
overcoming resistance to change
13.3.2.3 Management Skills : Like facilitate consensus towards project objectives,
influencing people, negotiate agreements and modify organizational behaviour to accept
project outcome
13.3.3 Outputs
13.3.3.1 Issue Log
13.3.3.2 Change Requests
13.3.3.3 Project Management Plan Updates : Which includes stakeholder management plan
updates

14. 13.3.3.4 Project Documents Updates : Which includes stakeholder register
13.3.3.5 OPA Updates
13.4 Control Stakeholder Engagement
This includes monitoring overall project stakeholder relationships and adjusting strategies
and plans for engaging stakeholders. The key benefit of the process is to increase the
efficiency and effectiveness of stakeholder engagement activities as project evolves and
environment changes.
13.4.1 Inputs
13.4.1.1 Project Management Plan
13.4.1.2 Issue Log

15. 13.4.1.3 Work Performance Data
13.4.1.4 Project Documents : Which includes project schedule, stakeholder register, issue log,
change log and project communications
13.4.2 Tools And Techniques
13.4.2.1 Information Management Systems
13.4.2.2 Expert Judgement
13.4.2.3 Meetings
13.4.3 Outputs
13.4.3.1 Work Performance Information
13.4.3.2 Change Requests : recommended corrective actions and preventive actions
13.4.3.3 Project Management Plan Updates
13.4.3.4 Project documents updates : Which includes stakeholder register and issue log