Stakeholder management for building design and construction
A stakeholder is anyone who has an interest in the process or outcome of a project (Fewings, 2005.) In a typical construction project any or all of the following may be a stakeholder; the client, the principal contractor, designers, subcontractors, people employed in any capacity in the project, local authorities, the end users of the product, professional bodies, local residents, local business owners, politicians, environmental groups, and many more.
 Stakeholder classification
 Direct stakeholders
Direct stakeholders are those directly associated or involved in the project. These include the client, project sponsor, project manager, members of the project team, technical and financial services providers, internal or external consultants, material and equipment suppliers, site personnel, contractors and subcontractors as well as end users (Lester, 2007). They are also known as internal stakeholders.
 Indirect stakeholders
Indirect stakeholders are those indirectly associated with the project, such as; internal managers of the organisation and support staff not directly involved in the project, national and local government, public utilities, licensing and inspecting organisations, technical institutions, professional bodies, and personal interest groups such as stockholders, labour unions and pressure groups (Lester, 2007). They are also known as external stakeholders.
 Positive stakeholders
Positive stakeholders are those who are likely to have a favourable impact on a project. These people or organisations tend to also be direct stakeholders, and stand to gain from the project’s success. Examples would be the organisations involved in the work itself that stand to benefit financially.
 Negative stakeholders
Negative stakeholders are those who are likely to have a detrimental impact on a project. They tend to be people or organisations not directly involved in a project, but who are still affected by it in some way. An example would be local residents with concerns about loss of public areas to a new project. (Burke, p40)
 Legitimacy and power
Stakeholders are further differentiated between those with legitimacy and power, and those without it, as this will influence the degree to which they can affect the project, whether positively or negatively.
- Legitimacy is the perceived validity of a stakeholder’s claim to importance on the project.
- Power is the stakeholders ability to influence the project and the parties involved in some way, whether finically, legally or by some other form of pressure (Olomolaiye & Chiniyo, 2010).
In order to run a successful project it is important to address the needs of the projects stakeholders, effectively predicting how the project will affect them and how they can affect the project. The effective management of project stakeholders is considered an important key to project success (Olomolaiye & Chiniyo, 2010). Ineffective stakeholder management can result in dissatisfaction with the final product and negative impacts on the projects budget and schedule (Olomolaiye & Chiniyo, 2010).
 Stakeholder management strategies
During the development stages of a project, a stakeholder management strategy should be developed. An organisation should consider the following factors when developing a stakeholder management plan (Caroll and Buchholtz, 2006):
- 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?
This process will allow the projects stakeholders to be effectively mapped out. The next step is to assess their key characteristics and present this information in a way that helps the project team implement effective stakeholder management initiatives (Olomolaiye & Chiniyo, 2010,). While it may not be possible to please all stakeholders on every project, effective stakeholder management should endeavour to satisfy as many as possible, which will often involve strategic prioritisation of the different stakeholders needs. A common technique used for this is the stakeholder matrix or stakeholder map, which allows the priority level of the stakeholder to be assessed using the power and legitimacy criteria previously described.
 1. Inform
This category contains those stakeholders who require minimal effort. Stakeholders with lower power but higher legitimacy need to be kept informed of decisions taken that may affect them directly (Olomolaiye & Chiniyo, 2010).
 2. Consult
These are stakeholders who require more than just being informed about the project. Since the secondary stakeholders with higher power but lower legitimacy need to be kept onboard they should be consulted in order to seek their opinions and input for key decisions that directly or indirectly affect them. It is unlikely that the strategy will be altered as a result of such consultation, but tactics may be adjusted to maintain higher levels of commitment (Olomolaiye & Chiniyo, 2010).
 3. Involve
Stakeholders with high power levels, even those with low legitimacy, need to be involved in all activities in the project according to their interest since they have power to make decisions that impact on the project. The management should work directly with these stakeholders to ensure that their concerns are consistently understood, considered, and reflected in the projects development (Olomolaiye & Chiniyo, 2010).
 4. Partner/collaborate
Primary stakeholders have high enough levels of legitimacy and power to effect project success and as such, they should be treated as partners to increase their engagement and commitment. This can be achieved by revising and tailoring project strategies, objectives, and outcomes if necessary to win their support (Olomolaiye & Chiniyo, 2010).
 Related articles on Designing Buildings Wiki
- Collaborative practices
- Consultation process.
- Design quality.
- Design review.
- Egan report.
- Latham Report.
- Stakeholder map.
- Third party dependencies.
- User panels.
 External references
- Carroll, A & Bucholtz, A. (2012) Buisness & Society: Ethics, Sustainability and Stakeholder Management. 8th ed. Mason, OH. South-Western Cengage Learning
- CSCS Website (2013). [online]. [Accessed April 20th 2013]. Available at: http://www.cscs.uk.com/CCSheme Website (2013). [online]. [Accessed April 20th 2013]. Available at: http://www.ccscheme.org.uk/index.php/ccs-ltd
- Fewings, P. (2005) Construction project management: an integrated approach. Abingdon: Taylor Francis
- Lester, A. (2007) Project management, planning and control. 5th ed. Oxford: Butterworth-Heinemann
- Olomolaiye, P & Chiniyo, E. (2010) Construction stakeholder management. Chichester: Wiley-Blackwell
Featured articles and news
What will the General Data Protection Regulations (GDPR) mean for you when they come into force in May?
Business Secretary chairs a new taskforce to monitor and advise on mitigating the impacts of Carillion’s liquidation.
Sir John Armitt is appointed the new chair of the National Infrastructure Commission.
High quality and high density homes - is it what we need or is it storing up trouble?
Government announces its intention to strengthen planning rules to protect music venues and neighbours.
National Audit Office reports that there is little evidence that PFI offers better value than other forms of contracting.
What is liquidation and how does it apply to contractors in the construction industry?
Scrutiny is placed on Carillion's controversial 2013 decision to extend subcontractor payment terms to 120 days.
RSHP unveil their involvement in a boundary crossing which will provide a new entry point into Hong Kong.
With PFI currently under the spotlight due to Carillion, this introductory article explains what they are.
Estimates suggest that up to 30,000 small firms could be at risk of non-payment as a result of Carillion's collapse.