Unit 1 – Business and the Business Environment

2.2 Size and scope of organisations

(Part 03)

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2.2.6 Managing stakeholder expectations
§ Apportioning Stake Holders
§ Factors affecting stakeholder interest and managing it

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Stakeholder?
§ In business, a stakeholder is any individual, group, or party that has an interest in an
organization and the outcomes of its actions. They can be either from the Internal
environment or the External environment. Below shown is the common examples :

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Factors affecting stakeholder interest

§ Their role in the project or organisation

§ History of commitment and associated relationships

§ The threats or benefits to their organisation

§ Risk of losing credibility

§ Prejudices or old alliances

§ Brand considerations

§ Desire for innovation

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Stakeholder’s and their Interest (Stake)
§ Customers
ü Stake: Product/service quality and value
§ Employees
ü Stake: Employment income and safety
§ Investors
ü Stake: Financial returns
§ Suppliers and Vendors
ü Stake: Revenues and safety
§ Communities
ü Stake: Health, safety, economic development
§ Government
ü Stake: Taxes and GDP

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Apportioning stakeholder resources

§ With a wide variety of stakeholders potentially being involved or affected by project

outcomes, managers will want to prioritize how much time and resources they want to
allocate to boosting relationships with each group.

§ Not all stakeholders have equal interest or influence, so isolating the most important
people will give you a much better idea of where to focus your efforts.

§ As a result business organizations started to use an analysis matrix : Stakeholder

Mapping Matrix

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Stakeholder Map
This is a process of systematically gathering and analyzing qualitative information to
determine whose interests should be considered when developing and/or implementing a
policy or program. Main 4 categories be as follows ;

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Benefits of Stakeholder Analysis
A stakeholder analysis can help a project to identify:
§ The interests of all stakeholders, who may affect or be affected by the project

§ Potential issues that could disrupt the project

§ Key people for information distribution during executing phase

§ Groups that should be encouraged to participate in different stages of the project

§ Communication planning & stakeholder management strategy during project planning

phase

§ Ways to reduce potential negative impacts & manage negative stakeholders

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Stakeholder Expectations

§ Once the business has identified its stakeholders and their importance to the business, it
can begin to plan based on their needs and expectations. Each stakeholder has concerns
that it expects to be met by the business.

Example :
the business's owners expect it to be
profitable and to distribute that profit to
them while local and federal government
agencies expect it to obey the law and pay
its taxes on time

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Managing Stakeholder Expectations

§ The process of managing stakeholders is an activity of communicating

with stakeholders and managing their expectations and concerns for the purpose of
meeting the stakeholder needs, addressing issues, resolving conflict situations,
and achieving the project goals.

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Stakeholder Management processes

§ Identifying all stakeholders

§ Documenting stakeholders needs

§ Assessing & analyzing stakeholders interest/influence

§ Managing stakeholders' expectations

§ Taking actions

§ Reviewing status & repeat

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Importance of Managing Stakeholder
Expectation
§ It is indispensable for continuation of the project & its successful completion

§ It gives opportunity to individuals or groups to express their ideas/issues/concerns over

the project

§ It gives a sense of accountability and enhances responsibility

§ It enables effective risk identification & response planning

§ It opens excellent learning opportunity for both the project team and stakeholders

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