Managing Stakeholders in Construction

Application oriented article in depth description of managing stakeholders in construction

Abstract

This article focuses on managing stakeholders in the construction process. There are in complex construction projects many different stakeholders that are to be kept satisfied during the entire project. This article focuses on the different management tools that can be applied to managing the stakeholders and their requirements. The article contains a literature review that identifies and reviews the different articles and books used in the article. Furthermore a detailed section of the different management theories about stakeholders are presented. These theories include the general definition of stakeholders and the importance of identifying these different stakeholders in a construction project. It also includes the theory about classifying the stakeholders and comparing them internally as a management tool. Different management solutions are presented, such as stakeholder mapping, stakeholder salience and framework solutions. In the solution of mapping stakeholders, the impact/probability-matrix is defined as an important tool in managing the stakeholders. Furthermore the theory behind stakeholder salience is presented as the model that can help the project manager to identify the important stakeholders, to which the project manager should pay close attention. The final solutions that are presented are the different framework solutions that can be used for implementing the stakeholder management tools in projects. The recommendations based on the studies for this article are more digital solution that could combine stakeholder requirements in construction with the building information modelling. The article concludes the importance of the identifying, classifying and mapping the different stakeholders in construction projects. The frameworks presented in the article are not fully comprehensive, but there is a future in developing new methods for managing stakeholders in construction projects.

Overview

The project stakeholders are those actors that will incur – or perceive they will incur – a direct benefit or loss as a result of the project. (Winch, 2010). A project stakeholder is defines as an “individual or group who have an interest or some aspect of rights or ownership in the project, can contribute in the form of knowledge or support, can contribute in the form or can impact or be impacted by the construction project. (Aapaoja & Haapasalo, 2014) It is the project manager’s role to manage the stakeholders in a construction project and ensure that they are satisfied so that the project can be completed without delaying the project or going over budget. Dealing with stakeholders as a project manager means having a role as a facilitator among different constituencies, as well as ensuring the project requirements are fulfilled satisfactory conditions for all parties. Project stakeholder management is the systematic identification analysis and planning of actions to communicate with and impact stakeholders (Aapaoja & Haapasalo, 2014). As a project manager several tools and methods can be used when dealing with a construction projects stakeholders. The tools are applied to avoid uncertainty in the project, as some stakeholders can have a lot influence on the success of the project. Stakeholders’ ads complexity to a project, and it requires planning from the project manager and in developing the processes the project managers’ role is important. The element of complexity regarding the stakeholders often involves a large number of stakeholders with different requirements, and the interference in the project by key stakeholders. It can also mean the opposite that key stakeholders show little interest in the project, which also can be a challenge for the project manager. (Maylor, 2010)

Stakeholder Management

Project stakeholder management in constructionis the systematic identification, analysis and planning of action to communicate with and impact stakeholders. Stakeholder management is an essential part of the project management process. The process is illustrated in Figure 1. The process consists of executing the management functions of planning, organising, motivating, directing and controlling the stakeholders. (Olander, 2003)

Stakeholder Identification

It is an important tool for the project manager to identify the stakeholders of a project, as one of the first step in managing the stakeholders. It is often useful to categorize the different types of stakeholder before being able to analyse them. Often a number of questions are used for identifying the stakeholders on a project. (Aapaoja & Haapasalo, 2014)

• Who might be affected by the development concern to be addressed?
• Who are the voiceless for whom special efforts may have to be made?
• Who are the representative of those likely to be affected?
• Who is responsible for what is intended?
• Who is likely to mobilize for or against what is intended?
• Who can make what is intended more effective through their participation or less effective by their non-participant or outright opposition?
• Who can contribute financial and technical resources?
• Whose behaviour has to change for the effort to succeed?

Typically in construction one divides stakeholders into internal and external parties. The internal stakeholders are defined as a stakeholder that is in legal contract with the project or finances the project. They can also be defined as primary stakeholders. The internal stakeholders can be broken down to two categories, the demand side and the supply side. On the demand side the client, the financiers and the tenants are placed among others. On the supply side the architect, engineers and the materials supplier can be found among others. The external stakeholders have a direct interest in the project without being legally bound by a contract to the project. The external stakeholders are also described as secondary stakeholders. As well as the internal stakeholders, the external stakeholders can be divided into to two categories – private and public. The private external stakeholders are neighbours, landowners or NGO’s. The public stakeholders are the local and national government. In Figure 2 a lot of internal and external stakeholders can be seen.

There are often a conflict of interest on the demand side and supply side of the internal stakeholders since they compete to appropriate the income stream of the project. The internal stakeholders will more likely be in favour of the project compared to the external stakeholders, who will more likely be against or indifferent (Winch, 2010). Identifying the stakeholders means finding out who have an interest in the project, and who could in the future have an interest in the project. After identifying the stakeholders it is crucial to gather information about the stakeholders and thereby being able to identify their stakeholder mission(Olander, 2003).