Event Stakeholder Management in Festival and Convention

1. Assignment type: Essay
Word limit: 3,000 words
Topic: Evaluation of primary and secondary stakeholders for an event are crucial for effective
management. Discuss comparing two different types of events giving applied examples.
Introduction
This essay examines the significance of stakeholder management for successful event project
management, drawing from the two types of event, which are festival and convention. According to
Reid and Arcodia (2002), stakeholder theory has been developed since 1960s in the business
management field, and then applied in the event management field. Although Young (2010)
acknowledges a fundamental complexity of stakeholder management, O’Toole (2011) asserts that
events involves more stakeholders than other types of projects. Therefore, scrutinising the case
studies would be reasonable to explore more insights into stakeholder management. The two
different types of event comes from the categorisation by Bowdin, et al (2011). Regarding
convention, this essays draws from wider literature since the convention industry embraces
meeting, incentive travel, conference and exhibition (MICE) (Nadkarni and Leong Man Wai, 2007),
and convention and visitor bureau (CVB) (Sheehan and Ritchie, 2005; Ford and Peeper, 2008; Ford,
et al, 2009; Woo and Ladkin, 2011), moreover congress and seminar (Rogers, 2003). Hence, this
essay will firstly review the development of the concept of stakeholder management, and then will
examine festival and convention cases in stakeholder management point of view, then finally will
conclude with insights.
Background
Stakeholder Management in the Business and Project Management Fields
Stakeholder management has been developed in the business management field, and then the
project management field. Applying the first ever conceptualisation of stakeholder by Stanford
Research Institute in 1963, Freeman (1984) defines stakeholder as “any group or individual who
can affect or is affected by achievement of the organization’s objectives” (p. 46). In the stakeholder
theory, managing confliction with stakeholders is essential for business development, and also the
success of business is measured based on various perspectives of stakeholders (Reid and Arcodia,
2002). Also, only companies that are able to attain loyalty from stakeholders can survive in the
competitive business environment (Campbell, 1997).
Underpinning this view, succeeding scholars have developed the theory in the project
management field. Stakeholders exist inside as well as outside an organisation, and also in the
peripheral business environment at large (Keeling, 2000). Further, they have objectives to be
involved in the project with particular views and opinions (Nokes, et al, 2003). Moreover, have
power and influence that impact on the project (Young, 2010). In addition, they measure the success
of the project from multiple aspects other than time, performance and cost, which are fundamental
requirements of the successful project (Lock, 2007). However, Campbell (1997) claims that it is
difficult to explicitly mention who are stakeholders and who are not, and what they expect
regarding the project. This is because their objectives may be closed or hidden (Young, 2010).
Keeling (2000) explains the characteristics of stakeholders as internal stakeholders are easily
identified and their expectation is clear, and external stakeholders are also easily identified, but their
expectations are various and less obvious, whilst peripheral stakeholders are difficult to be
identified.
This complexity of the stakeholder environment necessitates appropriate stakeholder
management (Young, 2010). For effective management, Keeling (2000) suggests identifying,
grouping, and communicating as approaches. In terms of identification and grouping, Wheeler and
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2. Sillanpää (1998) provide the framework of primary and secondary stakeholders. Primary
stakeholders are directly involved in the organisation, which might include customers, employees,
invester, supplier, local community and other business partners, whilst secondary stakeholders are
indirectly involved, which might include civil society and interest groups (Wheeler and Sillanpää,
1998). Nokes, et al (2003) believe effective communication with identified stakeholders allows the
organisation to gain support from them, which consequently becomes the significant factor of the
successful project.
Stakeholder Management in the Event Management Field
Following the development in the business and project management studies, stakeholder theory has
been applied in the event management field. This would be because project management approach
is deemed to be transferable to event management field since they have significant similarities in
their principles (Williams, 2012). Also, as its nature, establishment of an event necessitates
cooperation with others. Moreover, as the event has grown, it has involved wider sectors from
public to private, which consequently require the event to address wider objectives (Bowdin, et al,
2011). Therefore, the development of stakeholder theory in event management field would be
spontaneous.
Amidst the development of the theory, argument has embraced the concept of the event
lifecycle. Although Bowdin, et al (2011) explain that the cycle consists of initiation, planning,
implementation, staging and shutdown stages, Van der Wagen and White (2010) highlight that
stakeholder management can shape event planning and implementation, whilst O’Toole (2011)
stresses that stakeholders affect the entire cycle. When it comes to the stakeholder management
approach, Bowdin, et al (2011) define identification, classification and communication as a process.
In this regard, Reid and Arcodia (2002) suggest categorisation of primary and secondary
stakeholders based on directness of involvement. Primary stakeholders are directly involved
individuals or groups in the event, which the event necessitates for implementation. This includes
employees, volunteers, sponsors, suppliers, spectators, attendees and participants. Secondary
stakeholders are indirectly involved ones, which might impact on the event. It includes government,
host community, media and tourism organisations (Reid and Arcodia, 2002). Regarding this
management approach, O’Toole (2011) states that appropriate classification of stakeholders allows
the event organisation to communicate and manage stakeholders efficiently.
Festival Type
The first case of festival type is the study by Spiropoulos, et al (2006) regarding an ethnic festival
20th Greek Festival of Sydney (GFS) in 2002, which examined stakeholder identification and
categorisation, and assessed the festival in stakeholders management perspective. Based on the
interview to eight key members of GFS organisation, observation of the organisation and festival
visitors, and organisation’s document analysis, the study identified stakeholders and classified them
into three main groups as follows. The first group is the marketing stakeholders which include
contents, venue and promotion stakeholders and visitors. The second group is the administration
stakeholders that include human, financial and infrastructural resource providers. The third group is
the production stakeholders which include local authority and event-production suppliers. When it
comes to the assessment, in marketing stakeholders perspective, significant cooperation of Greek
government enhanced contents quality, particularly in terms of artists provision. Also, endorsement
from Australian government allowed the festival to be highly profiled, as the government
acknowledges that the festival is one of the official cultural events in Sydney. Furthermore, the
venue, which is not relevant to Greece, was preferred by visitors owing to highly accessible
location. In addition, wider media involvement, not only Greek community media, but also city-
wide media, contributed to attract further visitors. In terms of administrative stakeholders
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3. perspective, the festival benefited from considerable support from a voluntary ethnic community
Greek Orthodox for resources provision, which includes festival bord member, office and
equipment, and finance.
As the case of multiple festivals, Getz, et al (2007) investigated 13 festivals, from music and
party to multiculture, film and performing arts themes, in Canada and Sweden regarding
stakeholders identification, classification and relationship between the festival organisations and
their stakeholders. Having conducted the survey to festival managers, the study identified seven
stakeholder roles as follows. Festival organisation is a central position as it includes event owner,
director, employees and volunteers. Co-producers are voluntary participating organisations.
Facilitators are organisations that assist resource provision. Suppliers and venues are resource
providers. The audiences and the impacted are festival visitors and anyone who is affected by the
event or the organisation. Allies and collaborators are organisations that provide intangible
cooperative support. Regulators are the bodies that authorise any regulations related to the event.
When it comes to the relationship between the organisers and their stakeholders, some key issues
were described as follows. Firstly, cities are likely involved in as the one of key stakeholders since
the most of festivals rely on public funding. However, it was also indicated that the cities play the
multiple roles other than financier, such as collaborator for promotion and regulator of safety
requirement. Secondly, sponsor development, such as from supplier to partner, was indicated, which
could be important aspect for resource securement. Finally, although conflicting group against the
event might exists in local communities, majority of event visitors come from the community. This
would imply carefull management with the city is required.
Subsequently, developing the earlier study, Getz and Andersson (2010) examined 193
festivals across Sweden, Norway, Australia and the UK specifically concerning the relationship
between festival organisation and stakeholders. Based on the survey to festival managers, the study
conceptualised four stakeholder relationship patterns as follows. Firstly, venue-first is the case that
event depends on specific venue, which is the most popular pattern among Norway, Australia and
the UK. However, it was pointed out that this tendency might deteriorate visitor experience in the
event, such as accessibility. Secondly, government-first is that the event pursues local policy as a
community social institution rather than profitable organisation in market mechanism. Thirdly,
customer-first is the case that the event takes visitors into account the most, which is particularly
popular in Sweden. This type of event likely largely depends on ticket sales, which indicates
potential financial risk that comes from insufficiency in sponsors. Finally sponsors-first is the type
that the event relies on sponsors, which is the least popular pattern in the study. This would be
explained because most festivals are not profit-oriented and also also might avoid reliance on
sponsors since they position themselves as a community-serve organisation. Overall, festivals tend
to be venue first and government first, therefore, customer as well as sponsor are likely secondary
objectives, which implies potential unbalance of resourcing. This would be improved by adopting
more market-purposed strategy such as customer and supporter development such as attracting new
segment of consumers and turning supplier to supporter. These attempts can also carry
sustainability to the event.
Convention Type
The first case of the convention type is the study by Sheehan and Ritchie (2005) regarding
CVB through International Association of Convention and Visitor Bureaus (IACVB), which
examined stakeholders identification, evaluation and management approach. Having conduct the
survey to 91 executives registered in IACVB, the study revealed the diversity of stakeholders
identifications and management strategies. Firstly, regarding identification, the executives listed 32
different stakeholders in total. Secondly, regarding recognition and perception, the executives
acknowledged that the most important stakeholder is hotel, which 63% of the executives mentioned,
followed by local government, and regional and national government. This would highlight
importance of hotel as a key supplier of conference, and of governments as significant finance
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4. providers. In fact, the executives expressed that the most important role of stakeholders is to
provide and to assist finance, and also that the most crucial threat is withdrawal of finance. Thirdly,
concerning stakeholder management strategy, the tendency were shown as follows. The most
common strategy is collaboration and involvement, which include cooperative activities and
solicitation of opinion for decision making. It was also revealed that the reasons of the previous
least successful projects are derived from insufficient communication, over reliance on a few
stakeholder’s voice, and exclusion of some stakeholders from decision making. This would clearly
indicate salience of appropriate stakeholders management.
Also convention is examined in CVB context by the Ford and Peeper (2008) and Ford, et al
(2009). Firstly, Ford and Peeper (2008) investigated CVB industry in the US through the interviews
to 18 CVB executives, and concluded that successful executives are aware of importance of
managing stakeholders. Subsequently, Ford, et al (2009) examined stakeholders classification and
management approach. The categories are divided into 6 according following conditions; Firstly,
resource allocation to CVB is direct or indirect, and secondly, overall stance is supportive, neutral
or conflicting. The study specifically highlighted the importance of taking neutral stakeholders into
account since they can become positive as well as negative. Although it is crucial to manage direct
but negative stakeholders, it is also important to involve indirect but positive stakeholders because
CVB can gain more resources from them. The study concluded that the framework enables CVBs to
efficiently allocate their time and effort to manage key stakeholders with priority, and in turn to
secure resources to operate. Also it was stressed that it is necessary not only to identify the
stakeholders, but also to maximise and benefit from the relationship with stakeholders. This
argument was evidenced by the example in the study as follows. Although an executive experienced
criticism from a TV station, the executive pointed out its sponsors predominantly consist of local
car dealers. Subsequently, to explain how much the CVB can contribute car industry, the executive
gave presentations to the dealers. As a result, since the dealers recognised the importance of the
CVB, the TV station ceased the criticism. This case would implicitly show the executive
transformed the neutral stakeholder, the car dealers, into the supportive stakeholder.
Unlike the earlier two studies, Morla and Ladkin (2007) examined successful factors of the
convention industry in Santiago de Compostela in Galicia, Spain from stakeholders perspective, and
the study indicated that the stakeholders have consensus on the competency of the industry. The
survey was conducted to 12 representatives of public and private sectors in the city, which include
department of congresses, conventions, and incentive travel in Galicia, PALEXCO, the convention
and exhibition centre in Galicia, Santiago de Compostela Convention Bureau, and Turgalicia,
Galician tourism agency as public, and European Federation of the Association of Professional
Congress Organisers, conference and exhibition centers, travel agencies, hotel organisations, and a
research consultant as private. The findings indicated mostly the stakeholders acknowledge the
excellence of the convention industry, and agree the quality of infrastructure, transportation, human
resource and marketing, which menas that the stakeholders have positive consensus regarding the
industry. Also, the study concluded with suggestion of further cooperation for continuous success of
the industry since strong consensus and integrated strategy among stakeholders can generate
competitive advantage.
In fact, cooperation with stakeholders was exemplified by Woo and Ladkin (2011) regarding
the CVB industry in Busan, South Korea. The study reported that executives of CVB in Busan
identify more then 100 stakeholders locally, such as accommodation suppliers, professional
conference and event organisers, advertising firms, travel companies, transportations, media, local
government and its agencies, and subsequently made the MICE alliance with them, which
encourages stakeholders to participate in MICE related conference, oversea advertisement, MICE
packaging and other marketing activities.
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5. The evaluation study from stakeholders perception was also undertaken by Nadkarni and
Leong Man Wai (2007) regarding MICE industry in Macao, China. Based on the survey to 76
domestic and oversea, public and private stakeholders, such as Macao Government Tourist Office
and Macao Institute of Trade and Investment Promotion, the study showed stakeholders evaluation
to the industry. As a result, service quality and government support were highly praised, which are
derives from the establishment of Macao Business Tourism Centre by the Macao government, while
MICE facilities and lodging was evaluated relatively low, which likely come from under
development of accommodation by private sector.
Discussion
Examining the two types of event above, firstly, diversity in stakeholders would be explicitly
demonstrated both in festival and convention. In the festival cases, Spiropoulos, et al (2006)
classified the stakeholders into marketing, administration and production stakeholders. Also Getz, et
al (2007) categorised them in festival organisation, co-producers, facilitators, suppliers and venues,
the audiences and the impacted, allies and collaborators and regulators. In convention cases,
Sheehan and Ritchie (2005) identified 32 stakeholders from private as well as public sectors. This
would be the evidence that the events locate in the business environment in which numerous
stakeholders exist. Hence, managing stakeholder could be inevitable.
Secondly, resource mangement point of view is given in festival as well as convention. In
festival cases, Getz, et al (2007) stated that stakeholder management allows the organisation to
secure resources. This view was then evidenced by the development of the dependence patterns by
Getz and Andersson (2010), which consists of venue-first, government-first, customer-first, and
sponsor-first. In festival cases, Sheehan and Ritchie (2005) revealed that the CVB executives pay
attention to stakeholder relationship especially in terms of venue and finance provision. Further,
Ford, et al (2009) developed the management approach to stakeholders who provide resources.
Moreover, Getz and Andersson (2010) acknowledged that appropriate resource management
enables the event to be sustainable in longer-term.
Finally, particularly in convention cases, competency perspective was described. Morla and
Ladkin (2007) suggested that further collaboration of stakeholders can develop the convention
industry in Santiago de Compostella. Also, Nadkarni and Leong Man Wai (2007) revealed that
competitiveness of Macao CVB industry comes from collaboration of private and public sectors.
This view was exemplified by Woo and Ladkin (2011), as the study reports competitive advantage
of CVB industry in Busan is derived from MICE alliance of wider stakeholders. These perspective
would clearly show importance of stakeholder management for competitive advantage.
Conclusion
To be concluded, stakeholder theory has been developed in business management and project
management fields, then in event management field. Freeman (1984) defined stakeholders as any
individual and groups that affect on or are affected by the organisation, and successive scholars
have developed salience and approach of stakeholder management. Especially in event management
context, O’Toole (2011) explains that appropriate stakeholders classification allows an event
organisation to communicate with and manage stakeholders efficiently.
Following the review of the preceding literatures, significance of stakeholder management
was examined from the two types of event; festival and convention. The examination firstly
evidenced that event might involve various stakeholders. Secondly it is also demonstrated that
stakeholder management is important to maintain resources, and to gain competitive advantage.
Hence, this essay concludes stressing the uniqueness of the business environment of the event, and
the significance of stakeholder management especially in resource securement and competency
points of view.
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