3.

Stakeholder classifications
- We can identify two types of stakeholders. Primary stakeholders are those whose continued
association is absolutely necessary for a firm’s survival. These include employees, customers,
investors, and shareholders, as well as the governments and communities that provide
necessary infrastructure. Some firms take actions that damage relationships with primary
stakeholders. Ethical corporate cultures are important because they are linked to positive
relationships with stakeholders. By the same token, concern for stakeholders’ needs and
expectations is necessary to avoid ethical conflicts.
- Secondary stakeholders do not typically engage in transactions with a company and
are therefore not essential to its survival. These include the media, trade associations, and
special interest groups like the American Association of Retired People (AARP), a special
interest group working to support retirees’ rights such as health care benefits. Both primary
and secondary stakeholders embrace specific values and standards that dictate acceptable and
unacceptable corporate behaviors. It is important for managers to recognize that while primary
groups may present more day-to-day concerns, secondary groups cannot be ignored or given
less consideration in the ethical decision-making process.
Why is Stakeholder Classification important ?
Large projects may have hundreds or even thousands of stakeholders. Projects have limited
time, and resources. Therefore, the amount of effort spent on stakeholder management and
engagement needs to be prioritized. But what criteria do we use to classify the stakeholders?
How do project managers determine which stakeholders have the biggest impact or influence
on the project and deserve the most attention? How do project managers prioritize their
attention to competing stakeholders? These are exactly the problems that the stakeholder
classification models address. It is important to prioritize the stakeholders to ensure efficient
use of effort to communicate and manage their expectations. We have various models that
help classify the stakeholders according to the their power, interest, impact, influence, urgency
and other parameters.
Stakeholder Classification
Models Several models are available to classify stakeholders as described below.
Grid-based Models
The grid-based models are useful for small projects or projects with simple stakeholder
relationships. The three common grid-based models are:
Power/Interest grid
Power/Influence grid
Impact/Influence grid
These grid-based models are explained in detail in PMI Library article Stakeholder analysis - a
pivotal practice of successful projects and in MindTools' article Stakeholder Analysis.
Stakeholder Cube
The three dimensions of a stakeholder cube are:
Power
Interest
Attitude
Mosaic Project's post For Stakeholders, 2×2 Is Not Enough! provides a very good explanation of
the Stakeholder Cube.
Salience Model
The Salience Model classifies stakeholders based on their:
Power,
Urgency, and
Legitimacy
Refer to Deep Fried Brain Project's blog post The Salience Model for Stakeholder Classification
for an in-depth explanation of the Salience Model.
Directions of Influence
Stakeholders can be classified based on their influence on the project or the project team. This
method of classification includes:
Upward: Senior management, sponsor, steering committee
Downward: Project team members and experts working on the project
Outward: Suppliers, government agencies, regulators, public and end users
Sideward: Peers such as other project managers, and functional managers Prioritization
Prioritizing
stakeholders may be necessary when: Large number of stakeholders are involved Stakeholders
are changing rapidly Relationship with stakeholders is complex