The Impact of

Artificial Intelligence
on Stakeholder Relations
Management Practices1
By Harold Kerzner, Ph.D. and Elissa Farrow, Ph.D.

International Institute for Learning

Visit us at www.IIL.com
+1-212-758-0177
+1-800-325-1533
 Every year, numerous articles are written that describe
new approaches to management and leadership
practices. The applications for the new approaches
cover all industries and situations. The focus of this
paper is to discuss some of the challenges facing the
linkage between artificial intelligence (AI), project
management, and stakeholder relations management.

The Benefits of AI
The world-wide project management community of
practice has recognized how AI will be able to improve
the implementation of project management. Some of the expected project management
benefits from AI include:

Elimination of mundane tasks or repetitive jobs

Elimination of human errors

More risk mitigation options

24/7 availability

Better data analysis

Improvements in project staffing

Unbiased decision-making

Reduction in the time needed for decision-making

Elimination of emotions in decision-making

More information available for project decision-making

Better understanding of the root causes of some problems

Lowering of project costs

Better tracking of assumptions, constraints, and trends

Better use of “what if” scenarios

Better tracking of the enterprise environmental factors

1
Part of this paper has been adapted from Harold Kerzner, Project Management: A Systems Approach to
Planning, Scheduling and Controlling, 13e, 2022, Section 10.6, Stakeholder Relations Management;
John Wiley Publishers.

1 © 2023 International Institute for Learning. All rights reserved.

There are, of course, more benefits that could have been included. Whenever leaders
discuss the benefits of new practices, leaders tend to focus more on the present or short
term than in the longer term. Decision making criteria seem to be more concerned with
the ways that AI might impact and bring economic or competitive benefit today rath-
er than the broader implications that this form of technology may have in the future.
Without considering what lies ahead, decisions can be made that negatively impact
an organization’s future and the firm’s relationships with its stakeholders. In this article,
stakeholders can mean employees, customers, clients, suppliers, and general members of
the community. Stakeholders can be impacted, have an interest or be able to influence a
project’s benefits realization and overall success.

Challenges with the Growth of

Project Management
During the past few years, several factors have emerged
that impact project and program management
approaches. Some of these project management
factors can be treated as “challenges” and include:

Strategic Competency: Project management

is now recognized as a “strategic competency”
necessary for the growth and survival of the
organization rather than just another career path position. Some companies
define strategic competency as one of the four or five most important career
paths for the future, and project management falls into this short list.

Strategic Projects: Project management no longer focuses on just traditional or

operational projects that begin with well-defined requirements and a business
case. We are now using project management practices for strategic projects that
involve significant levels of design, creativity, innovation, and R&D. Many of these
projects begin with just an idea and the scope of the project evolves as the
project is implemented.

New Documentation: The new types of projects require changes in the forms,
guidelines, templates, and checklists that established our project management
comfort zone for years. Including many ‘documents’ are now being systematized
with automated decision trees and electronic signoffs to match the complexity of
the organisation.

© 2023 International Institute for Learning. All rights reserved. 2

 Flexible Methodology: The new types of projects have identified the need to
replace or combine the more rigid waterfall methodology with more flexible
approaches such as Agile and Scrum or hybrid variants of these.

Increased Risks: The risks and impact of the VUCA Environment (Volatility,
Uncertainty, Complexity, and Ambiguity) have forced us to reconsider how we
manage projects. For example, the COVID-19 pandemic put employees under
more stress, changed the way some companies make decisions, and required
some decisions to be made faster and with incomplete information.

More Information: There is an increasing volume of available information and

data and new techniques such as Big-Data stores and AI to support project
problem-solving and decision-making.

All these challenges are forcing organizations to consider new and better ways to
maintain stakeholder relations management practices. AI may have the greatest impact
on how we collaborate with stakeholders. Most people understand the challenges
imposed by these six bullets and seem to agree that AI will increase the capabilities of
project managers (PMs). AI will not fully replace the PM, nor will AI provide the creativity
and innovation that humans possess (yet). However, AI will become a significantly
important tool for project managers to use, especially for problem-solving and
decision-making. How easy or difficult will it be to get stakeholders to support
AI practices?

The Stakeholder Support Challenge

The benefits of using AI are certainly well-elaborated
in the literature along with the applications to project
management. Everyone expects AI to assist in making
better decisions on projects. However, there is still one
very important element that needs to be considered,
and is rarely discussed in articles:

How will stakeholders react to projects where project

problem-solving and decision-making use AI?

Not all stakeholders will have the same knowledge concerning AI practices as do the PMs.
The critical issue is in determining the best way to use and quote the use of AI in projects
when there are several external stakeholders. At first, a number of stakeholders may be
resistant to the use of AI within their projects, or they may simply be opposed to the use
of the recommendation made by AI.

3 © 2023 International Institute for Learning. All rights reserved.

Categories of Stakeholders
Exhibit 1 identifies typical categories of stakeholders. Stakeholders may be either di-
rectly or indirectly involved throughout the project as part of problem-solving and deci-
sion-making or may function simply as observers. Stakeholders can shift from a passive
role to becoming an active and key member of the project team and participate in critical
decisions.

Exhibit 1. Typical Categories of Stakeholders

When a company manages projects focusing on internal stakeholders, such as the

organizational stakeholders in Exhibit 1, there is usually a stronger company commitment
for the use of AI and how problem-solving and decision-making will be handled. This is
due to a range of factors including the initial decision process in relation to AI adoption
and a clearer understanding of its scope, data store and security treatments.

On small or traditional projects, project managers generally interface with the project
sponsor as the primary stakeholder and any impacted stakeholders. The sponsor usually
is assigned from the organization that funds the project. Getting agreement on the
use of AI may not be difficult. But the larger the project, the greater the number of
stakeholders with which you must interface. The situation becomes even more
potentially problematic if you have many stakeholders, geographically dispersed, all at
different levels of management in their respective hierarchy, each with a different level
of authority, and language and cultural differences. Trying to interface with all these
people on a regular basis and make decisions, especially on a large, complex project is
very time-consuming. The situation becomes even more problematic when several of
the stakeholders are opposed to the use of AI.

© 2023 International Institute for Learning. All rights reserved. 4

 Getting Agreements
Lining up all the stakeholders in a row and getting
them uniformly to agree to all decisions is more
wishful thinking than reality. You may discover that it is
impossible to get all the stakeholders to agree, and you
must simply hope to placate as many as possible at a
given point in time. Your company may have long-term
objectives in mind for this project, and those objectives
may not necessarily be aligned to each stakeholder’s
objectives. How should you handle a situation where the
output from AI supports your strategic objectives but not those of other stakeholders?
How should you respond when the output from AI supports stakeholder objectives but
not your company’s objectives?

Another form of agreement involves developing a consensus on how stakeholders will

interact with each other. It may be necessary for certain stakeholders to interact with
one another and support one another regarding sharing resources, providing financial
support in a timely manner, and sharing of intellectual property. While all stakeholders
recognize the necessity for these agreements, they can be impacted by politics, economic
conditions, and other enterprise environmental factors that may be beyond the control
of the project manager. How should the PM manage stakeholders when disagreements
revolve around whether AI should be used?

It is important to realize that not all stakeholders may want the project to be successful.
This will happen if stakeholders believe that, at the completion of the project, they may
lose power, authority, hierarchical positions in their company, or in the worst case even
lose their job. Sometimes these stakeholders will either remain silent or even be
supporters of AI results that they know can lead to failure.

It is very difficult to identify stakeholders with hidden agendas. These people can hide
their true feelings, be reluctant to share information, or even share the wrong informa-
tion intentionally. There are often no telltale or early warning signs that indicate their true
belief in the project or the use of AI. However, if the stakeholders are reluctant to approve
scope changes, provide additional investment, or assign highly qualified resources, this
could be an indication that they may have lost confidence in the project.

5 © 2023 International Institute for Learning. All rights reserved.

Stakeholder Mapping
On large, complex projects with a multitude of
stakeholders, it may be impossible for the project
manager to properly cater to all stakeholders. Therefore,
the project manager must know who the most influential
stakeholders are and who can provide the greatest
support for using AI on the project. Typical questions
to ask related to AI might include:

Which stakeholders are powerful and would

support using AI?

Who will have or require direct or indirect involvement for decisions made by AI?

Who has the power to stop the project if they are uncomfortable with decisions
made by AI?
Who may require more or less information than others concerning AI?

Not all stakeholders are equal in influence, power, or authority to make decisions or
support AI decisions in a timely manner. It is imperative for the project manager to know
who sits on the top of the list as having these capabilities.

It is important to remember that stakeholders can change over the life of a project,
especially if it is a long-term project. Also, the importance of certain stakeholders can
change over the life of a project and in each life-cycle phase. The stakeholder list is
therefore an organic document subject to change.

Stakeholder mapping is most frequently displayed on a grid comparing their power and
their level of interest. For simplicity’s sake, stakeholders can be mapped into four groups:

Manage closely. These are high-power, interested people who can make or break
your project. You must put forth the greatest effort to satisfy them. These people
must be aware of the benefits of AI and hopefully support its use on your project.

Keep satisfied. These are high-power, less-interested people who can also
make or break your project. These stakeholders should have at least a cursory
understanding of AI and its benefits. You must put forth some effort to satisfy
them, but not with excessive detail that can lead to boredom and total disinterest.
They may not get involved until the end of the project approaches.

© 2023 International Institute for Learning. All rights reserved. 6

 Keep informed. These are people with limited power but who are keenly
interested in the project. They may or may not understand AI and its implications.
They simply want to be informed and possibly participate in some decisions.

Monitor only. These are people with limited power who may not be interested in
the project unless a disaster occurs. Provide them with some information but not
with too much detail such that they will become disinterested or bored. These
people may not be concerned about AI or its benefits and limitations.

Typical stakeholder mapping is shown in Exhibit 2. PMs may include the names and
titles of each stakeholder in each of the cells.

Exhibit 2. Typical Stakeholder Mapping

Early Stakeholder Engagement is Key

Stakeholder engagement is when you meet and engage with
the stakeholders and determine their needs and expectations.
Engagement is multi-modal and, in these post, Pandemic
times, many project teams are getting back into physical
engagement processes rather than working or engaging
virtually. Ideally given the growth in AI utilization it is
important that stakeholder engagement take place at the
start of the project to understand their position on the use of AI and their comfort of
using it as part of the decision-making and problem-solving process. As part of this
engagement, you must:
Understand them and their expectations.
Ensure the ethical AI and safety protocols and assurance structures are clear.

7 © 2023 International Institute for Learning. All rights reserved.

 Understand their needs, including their support or resistance to the use of AI, and
their desire to participate in problem-solving and decision-making.
Value their opinions.
Find ways to win their support on a continuous basis while considering
their position on AI.
Identify any stakeholder problems early on that can influence the project
and resist support for AI.
Even though stakeholder engagement follows stakeholder identification, it is
often through stakeholder engagement that we determine which stakeholders are
supporters, advocates, neutral, or opponents to the use of AI in decision making.
This may also be viewed as the first step in building a trusting relationship between
the project manager and the stakeholders.

In Conclusion
AI releases this year such as ChatGPT and the explosion in its use have demonstrated
the need to form clear objectives and criteria to determine what the appropriate level
of AI use in project decision-making and problem-solving needs to be. Decisions in
many organizational contexts are often based on concepts of power and control. Those
who influence or ‘speak’ the loudest, may get heard. Deciding on the level of AI utilization
will require agreement and transparency with impacted stakeholders. If a decision is
offered that impacts human life, what process is needed to validate this (a subject of a
future article).

If stakeholder trust in the use of AI cannot be developed, it may be necessary to consider

making decisions or solving problems in the project without using AI practices. This will
become less possible in larger organisations that determine AI use as an efficiency
provider. Companies must have a clear ethical position on giving stakeholders a choice
at the onset of a project as to whether AI can or should be used and if so, to what extent.
Early stakeholder engagement is critical. This enables adequate time to prepare but also
commences to move people up the engagement curve from hearing the message, to
understanding their place in the verification and validation of the decision and to then
own the outcome.

© 2023 International Institute for Learning. All rights reserved. 8

About the Authors
Dr. Harold Kerzner, Ph.D.
Senior Executive Director
International Institute for Learning

Harold D. Kerzner, Ph.D., is Senior Executive Director at the

International Institute for Learning, Inc., a global learning
solutions company that conducts training for leading
corporations throughout the world. He is a globally recognized
expert on project, program, and portfolio management,
total quality management, and strategic planning. Dr. Kerzner is the author of bestselling
books and texts, including the acclaimed Project Management: A Systems Approach to
Planning, Scheduling, and Controlling, Thirteenth Edition.

Dr. Elissa Farrow, Ph.D.

Senior Consultant and Facilitator
International Institute of Learning

Dr Elissa Farrow is a futurist, author, facilitator, coach, and

strategist. She has over 25 years of experience in research,
organisational innovation, design, adaptation, and benefit
realisation. Dr Farrow is known for her compassionate
leadership and engagement approach. She is an experienced
leader and has been a partner in transformation in various industries. Dr. Farrow is a
published author, and her doctoral research explored the implications of Artificial
Intelligence on organisational futures. Her research created innovative adaptation
principles for leaders and delivery teams as well as new knowledge relating to how to
best transform organisations operating models to anticipate and create positive futures.
In 2023, Dr. Farrow became an Adjunct Fellow at the University of the Sunshine Coast.

9 © 2023 International Institute for Learning. All rights reserved.