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Organizational Theory: The importance of Stakeholders in Project Management

Hausarbeit 2013 15 Seiten

BWL - Unternehmensführung, Management, Organisation


Table of Contents


Key Terms

Key stakeholders considered in project management

Importance of stakeholders in project management
Gives people say on how projects may affect their lives
Generating a sense of project ownership
Building Capacity and Responsibility
Ensuring Project Sustainability
Provides learning opportunities for both the project team and stakeholders
Reduces negative impact on vulnerable groups
Enables identification of potential areas of conflict




Contemporary project management recognizes the importance of stakeholder involvement in project initiation, planning and execution. This is particularly so as stakeholder’s interests, involvement and expectations all influence project execution as well as its impact. Project management is the planning, organizing, directing and controlling of resources for a relatively short-term objective that has been established to complete specific goals and objectives [1]. Stakeholders refers to any individuals, groups, or institutions who have a vested interest in the natural resources of the project area and who potentially will be affected by project activities and have something to gain or lose if conditions change or stay the same [2]. Thus in the context of project management, stakeholders are all those who need to be considered in achieving project goals and whose participation and support are crucial to its success. Stakeholders can be internal to the project or external. The major stakeholders in project management are the project managers, project team, sponsors of the project, customers or project beneficiaries, government, local communities among others. In project management, stakeholders are identified through stakeholder analysis. Stakeholder analysis identifies all primary and secondary stakeholders who have a vested interest in the issues with which the project or policy is concerned [3]. The main aims of stakeholder analysis are to identify the interests of stakeholders and potential areas of conflict as well as ways to reduce negative impacts on vulnerable and disadvantaged groups [4]. The importance of stakeholders is in project management is evident at different levels. Firstly, it gives the concerned people say over how projects may affect their lives. Secondly, it is essential for project sustainability. Thirdly, it generates a sense of ownership if initiated early in the development process. Fourthly, it builds capacity and enhances responsibility. Fifthly, it provides opportunities for learning for both the project team and stakeholders themselves. This paper thus examines the importance of stakeholders in project management informed by the view that all the important decisions during initiation, planning and execution stages of the project are made by these stakeholders.

Key Terms

Project- A project is a temporary structure to organize and manage work and ultimately to build a specific defined deliverable or set of deliverables [5]

Project team- The project team consists of the full-time and part-time resources assigned to work on the deliverables of the project. They are responsible for understanding the work to be completed; completing assigned work within the budget, timeline, and quality expectations; informing the project manager of issues, scope changes, and risk and quality concerns; and proactively communicating status and managing expectations.[6]

Constraints- Constraints are limitations that are outside the control of the project team and need to be managed around [7]

Critical path- The critical path is the sequence of activities that must be completed on schedule for the entire project to be completed on schedule [8]

Stakeholders- Stakeholders are anyone who has an interest in the project. Project stakeholders are individuals and organizations that are actively involved in the project, or whose interests may be affected as a result of project execution or project completion [9]

Milestone- A milestone is a scheduling event that signifies the completion of a major deliverable or a set of related deliverables [10]

Key stakeholders considered in project management

It is essential from the outset to highlight the fact that, the high failure rate of major projects has been attributed to a lack of attention to stakeholders. Negative attitudes of stakeholders towards a project can cause cost overruns and time schedule delays due to conflicts over project design and implementation [11]. With this in mind it is practically necessary at this juncture to define key project stakeholders as a build up to the discussion of the importance of stakeholders in project management. The key stakeholders in projects are the sponsors. Project sponsors or owners are the people who pay for the project [12]. In developing countries such as Zimbabwe, project sponsors are usually foreign donors and they normally set the goals and standards for the projects. Failure to meet or observe the standards set by the donors has affected the implementation of certain projects in Zimbabwe. For example in the past decade 2000 to 2010 most projects in Zimbabwe have collapsed or failed to take off the ground as a result of disagreements with the donors. Projects such as the dualisation of major highway routes such as the dualisation of the Harare –Beit Bridge road have moved at a snail’s pace as they have failed to attract sponsors or donors as the government is at variance with the conditions that prospective sponsors are putting in place.

Project managers are also key stakeholders who are responsible for the planning, leading, organizing and control of project activities as well as personnel to achieve project objectives [13]. In fact project managers are the ones primarily responsible for identifying and building synergies with all other relevant stakeholders. Effective project managers are those who identify all the relevant stakeholders that can contribute to the success of a project. This can only be possible if the project managers make a comprehensive stakeholder analysis. It must be reiterated that, the goal of stakeholder analysis is to develop a strategic view of the human and institutional landscape, and the relationships between the different stakeholders and the issues they care about most.

Apart from the project managers another important stakeholder are the project teams. A project team refers to the personnel employed in the project, who carry out specialized activities within the project to achieve set objectives [14]. It is crucial that the project team should work collectively so that the project goals and schedules are attained within the specified time frame. Project teams come from diverse cultural, social, economic and political backgrounds. The challenge therefore for project managers is to mould a project team that is bound by a shared vision, organizational culture and common purpose. A coherent project team is better placed to cooperate with other relevant project stakeholders increasing the chances of achieving the project objectives.

Project customers or beneficiaries are also important stakeholders. Simply stated, project customers or beneficiaries are people or groups who buy the product and obtain the benefit from the project’s outcomes [15]. Thus for any project to succeed, it has to be sensitive to the needs and demands of the project beneficiaries. In recent times the general public has become an important stakeholder in project management. Public stakeholders therefore are people who are concerned about the project’s environmental, social or economical impacts, such as the media [16]. Suppliers are part of the stakeholders as they provide goods and services used by the project. The perceptions of public stakeholders can influence a project in terms of whether it succeeds or fails to achieve its set objectives. If the public particularly views a project as desirable for society that project is often painted in positive light [17]. For example the circumcision project has received positive media coverage as it is seen as a part of the broad effort to curb HIV prevalence among the adult population in Zimbabwe. The roping in of notable entertainment icons such as the popular Winky D has increased the appeal of the circumcision project to the general public. This has seen women also welcoming and encouraging their male partners to get circumcised. Thus this shows that the stakeholder approach which targets the target beneficiaries can be enhanced if the general public and the media are also incorporated.


[1] Kerzner, H,2011:11.

[2] Boonstra, A 2006:38–52

[3] Golder, B and Gawler, M 2005:2

[4] Mitchell, R.K., Agle B.R. & Wood, D.J,1997: 83-86


[6] Ibid


[8] Ibid



[11] WWF. 2000:3.

[12] Cleland, D, I. 1986: 36.

[13] Legris, P. & Collerette, P. 2006:64-76.

[14] Kerzner, H. 2012: 11.

[15] Kerzner, H ,2012:12.

[16] Ibid p 13.

[17] Ibid p 14.


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( Atlantic International University )
organizational theory stakeholders project management



Titel: Organizational Theory: The importance of Stakeholders in Project Management