PRACTICE OF STAKEHOLDER MANAGEMENT IN BUILDING

PROJECTS IN ADDIS ABABA CITY

A Thesis Submitted To TECH-ZONE ENGINEERING & BUSINESS

COLLEGE

In Partial Fulfillment of the Requirement for Degree of Bachelor of Science

(B.Sc.) In Construction Technology and Management

By:

NAME ID/NO

1, ABDURAZAK FIKADU CTMGR/001/2010

2, AMANUEL GETACHEW CTMGR/004/2010

3, NARDOS GETACHEW CTMGR/018/2010

SUBMISSION DATE: JULY 2022

APPROVAL SHEET I
This is to certify that the BSc thesis study entitled practice of stakeholder management in
building projects in ADDIS ABABA city was prepared by ABDURAZAK FIKADU
CTMGR/001/10, AMANUEL GETACHEW CTMGR/004/10, NARDOS GETACHEW
CTMGR/018/10 submitted in partial fulfillment of the requirement for the degree of Bachelor of
Science in Construction Technology and Management,TECH-ZONE ENGINEERING &
BUSINESSCOLLEGE

Approved by:

TAMRU ________________ ________________

APPROVAL SHEET II
As a member of the examining board of the BSc study defense, we certify that we have read and
evaluated the study prepared by ABDURAZAK FIKADU CTMGR 001/2010, AMANUEL
GETACHEW CTMGR 004/2010, NARDOS GETACHEW CTMGR 018/2010 entitled practice
of stakeholder management in building projects in ADDIA ABABA city for the degree of
Bachelor of Science in Construction Technology and Management at Department of
Construction Technology and Management, TECH-ZONE ENGINEERING & BUSINESS
COLLEGE.

Approved by:

______________________ ____________ _______________

Name of evaluator I Signature Date

________________________ ________________ ________________

Name of evaluator II Signature Date

ACKNOWLEDGMENT
Anyone who has ever accomplished anything knows there is very little one can do without
enormous support and help from others. To complete this study there is many supports.

First we would like to thank the COLLEGE for preparing this study to make us to grasp some
knowledge about a study and research that help as to have an experience to solve a problem in
our work for the future. Next we would like to give our warmest gratitude for our advisor.

But all this not said as teen without God, little did we know when how much his message of
love and forgiveness would change everything for us. That’s why we are able to do. Again thank
you Lord for help us.

Contents
APPROVAL SHEET I.................................................................................................................................i
APPROVAL SHEET II...............................................................................................................................ii
ACKNOWLEDGMENT............................................................................................................................iii
ABSTRACT.............................................................................................................................................viii
CHAPTER ONE..........................................................................................................................................9
1. INTRODUCTION...............................................................................................................................9
1.1 BACKGROUND OF THE STUDY..............................................................................................9
1.2 PROBLEM STATEMENT..........................................................................................................10
1.3 RESEARCH QUESTIONS.........................................................................................................11
1.4 OBJECTIVE................................................................................................................................11
1.5 SIGNIFICANCE OF THE STUDY.............................................................................................12
1.6 SCOPE AND LIMITATION OF THE STUDY..........................................................................12
CHAPTER TWO.......................................................................................................................................14
2 LITERATURE REVIEW...................................................................................................................14
2.1 STAKEHOLDER HISTORY..........................................................................................................14
2.2 PROJECT STAKEHOLDER...........................................................................................................14
2.3 STAKEHOLDER IMPORTANCE..................................................................................................15
2.4 STAKEHOLDER IDENTIFICATION............................................................................................15
2.5 STAKEHOLDER CLASSIFICATION...........................................................................................16
2.6 STAKEHOLDER ANALYSIS........................................................................................................18
2.7 STAKEHOLDER MANAGEMENT...............................................................................................18
2.8 CHALLENGE OF STAKEHOLDER MANAGEMENT................................................................19
2.9 STAKEHOLDER EFFECT ON THE SUCCESS OF PROJECT....................................................20
2.10. INFORMTION GROUP...............................................................................................................21
2.11. SETTING COMMON GOALS....................................................................................................21
2.12. STAKEHOLDER NEEDS AND EXPECTATIONS....................................................................21
2.13. STAKEHOLDERS' POWER........................................................................................................22
2.14. ENSURING EFFECTIVE COMMUNICATION.........................................................................22
2.15. EVALUATING STAKEHOLDER' SATISFACTION.................................................................22
CHAPTER THREE...................................................................................................................................24
3. RESEARCH DESIGN AND METHODOLOGY..............................................................................24
3.1. INTRODUCTION......................................................................................................................24
 3.2. DESCRIPTION OF THE STUDY AREA..................................................................................24
3.3. STUDY SUBJECT.....................................................................................................................25
3.4. RESEARCH APPROACH.........................................................................................................25
3.5. DATA COLLECTION METHOD ............................................................................................26
3.6. STUDY DESGN.........................................................................................................................28
3.7.DATA MANAGEMENT AND ANALYSIS...............................................................................31
3.8. VALIDITY AND RELIABILITY .............................................................................................32
CHAPTER FOUR.....................................................................................................................................33
4. RESULTS AND DISCUSSION........................................................................................................33
4.1. INTRODUCTION .....................................................................................................................33
4.2. RESPONDENTS .......................................................................................................................33
4.3. CURRENT PRACTICE OF STAKEHOLDERS MANAGEMENT .........................................34
CHAPTER 5..............................................................................................................................................39
SUMMARY, CONCLUSION AND RECOMMENDATIONS.............................................................39
5.1. CONCLUSION:........................................................................................................................39
5.2. RECOMMENDATION:.............................................................................................................40
Appendix A: Survey Questionnaire.......................................................................................................41
Appendix B: Semi-structured interview questions..................................................................................5
Reference.....................................................................................................................................................6

LIST OF TABLES

Table 1 Work Plan.......................................................................................................................17

Table 2 Cost Budget Requirement for the Research................................................................17

LIST OF FIGURE

Figure 1 Stakeholder types: source Walker (2003).........................................................................8

Figure 2 Addis Ababa Location Map............................................................................................12
 ABSTRACT
The importance of project management and its high rate of failures and challenges is a major
concern in construction industry. Among the reasons that affect project outcomes, stakeholder
influential attributes and more importantly, their effective utilization and management are
identified as the key to project success. This study aims to identify the current practice of
stakeholders who are definable influence on the delivery of building projects in AddisAbaba city.
A questionnaire survey was carried out among project participants who have role identified in
the construction project site, and it was closed and open questionnaire. Samples from each
project site were selected using a random sampling technique to select respondents from the
whole population for questionnaires and interviews. Two projects were selected for the case
study. This study identify the major factors affecting project stakeholders to cooperate in
achieving the goal of the construction organization and it evaluates the efficiency of stakeholder
management practice in construction building project in Addis Ababa city, the current practice
of stakeholder involvement and management in the planning process of building construction
projects in Addis Ababa city, and the dimensions which need to be improved for successful and
effective stakeholder management in building project of Addis Ababa city.

Key Words: Building Project, Construction Industry, Stakeholder Management

CHAPTER ONE
1. INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Construction building projects, from their early stages to the post occupancy phases are
implemented through the efforts and involvement of various groups of people. These groups are
referred to as the ‘project stakeholders’. Freeman (1984) describes the concept of ‘stakeholders’
as any group, or individual, who can affect, or may be affected by the outcomes of a
corporation’s objectives. Stakeholders can benefit or impede a project based on their power and
intention to impact outcomes in accordance with their individual concerns and expectations
(Olander and Landin 2008). This alone underpins the significance and relevance of conducting
an inclusive analysis of stakeholder influence, in order to understand better how to undertake
good management of stakeholders.

Correct management of stakeholders is significant to project outcomes and thus, the

identification of the concept of stakeholder management has developed greatly in recent years
(Yang 2010).

Stakeholder management is the process of identifying stakeholder groups, the interests they
represent, the amount of power they possess, and determining if they represent inhibiting or
supporting factors toward the transformation (Kassinis, G., and N. Vafeas, 2006).

Forman, J. B. &Discenza, R. (2012) stated that stakeholder management is a critical process for
the success of every project. It is a strategic discipline that successful project managers use to
make their project competent and survive in the midst of stiff competitive environment.

Every project will have stakeholders who are impacted by or can impact the project in a positive
or negative way. While some stakeholders may have a limited ability to influence the project,
others may have significant influence on the project and its expected outcomes. The ability of the
project manager to correctly identify and manage these stakeholders in an appropriate manner
can mean the difference between success and failure (PMI, 2013).

Project failures and poor delivery of construction projects in developing countries have been
attributed to several factors such as cost and time overruns, poor quality of delivery, late scope
changes, poor and late payment, relocation of projects, delays and poor planning of projects
which are attributed to the numerous participants involved in a project: project manager, client,
owner, sponsor, consultants, contractors, sub-contractors and suppliers referred as stakeholders
(Fugar& Agyakwah,2010).

Atkin and Skitmore (2008) suggest that any study of stakeholder management concepts should
also examine the application of the perceptions of stakeholders to real world problems, and not
only as pure research, which focuses exclusively on the development of stakeholder theory.

As has been stated by many authors successful completion of projects relies largely on meeting
the differing needs and expectations of participants who have a major effect on the project that
are stakeholders. Therefore, the purpose of this study is to identify the current practice of
stakeholders which are experienced in Addis Ababa city building project sites who have
definable influence on the delivery of project in construction organization.

1.2 PROBLEM STATEMENT

The ability to effectively identify and manage project stakeholders significantly improves the
chances of successful project execution and organizational success. The project manager's ability
to seek agreement on the goals of the project among the key project stakeholders, including the
project team, management, and the customer, plays a large part in the project's success. Failure to
do so may expose the project to unnecessary delays, missed opportunities, negative financial
impacts, and potential damage to the organization's reputation (Retfalvi, 2014)

Disagreement among participating parties rose during the implementation of projects which
adversely impacted the ability of the management teams to deliver the construction project
within the time and allocated budget and expected degree of project success
(HiwotBahruGemeda, September 2012). Different stakeholders have power and interest on the
organizations that they have direct and indirect relationship. Stakeholder management deals with
managing these powers and interests for the best interest of the organization. The diversity of the
nature of stakeholder and its demands will produce a conflict of interests.
It is highlighted that many problems such as poor quality of products, delays, increased cost and
slow pace are the results of poor interaction and mismanaged relationship with major
stakeholders (Olander and Landin 2005a).

So far, to the best of the researchers knowledge there is no study conducted in stakeholder’s
management in Addis Ababa city. Due to this we are motivated to study on what is the current
practice of stakeholder’s management seems in the successful delivery of building projects and
determining the level of the problem that affects effective practice of management in order to
enhance and make effective practice management of key stakeholder in Addis Ababa city.

Stakeholder disagreement and disputes arise because of conflict of interest among the key
stakeholders’, time delay and cost overrun in the delivery of the building project, and corruption
among them are identified problem in this research.

1.3 RESEARCH QUESTIONS

1. What is the current practice of stakeholder involvement and management in the
planning process of building construction projects in Addis Ababa city?

2. What factors are affecting the stakeholders’ management practice in Addis Ababa
city?

3. What are the dimensions which need to be improved for successful and effective
stakeholder management in building project of Addis Ababa city?

1.4 OBJECTIVE

1.4.1 GENERAL OBJECTIVE

The main objective of the research is to identify the current practice of stakeholder management
in Addis Ababa city.

1.4.2 SPECIFIC OBJECTIVE

1. To evaluate the current level of stakeholder management practice in Addis Ababa city.

2. To identify the factors that affect stakeholder management in Addis Ababa city.
 3. To provide the enhancing mechanism of effective stakeholder management that needs to
be taken in Addis Ababa city.

1.5 SIGNIFICANCE OF THE STUDY

This study will identify the factors that lead to poor management of stakeholders which hinder
achievement of construction organization goal. Moreover, it will be crucial to gain a better
understanding of how stakeholder management concepts can be more successfully implemented
in the construction projects and how it can improve the success of project completion. This
understanding is based on the views of stakeholders about the practical approaches which can
maximize the effectiveness of their involvement which will help to accomplish targeted outcome
and best practice processes to be applied to the projects.

Not only this, the study will also increase awareness of inefficient project stakeholder
management practices by identifying the factors of successful management. Above all the
researchers acknowledges that stakeholder management is crucial which can determine the
success and failure of projects.

1.6 SCOPE AND LIMITATION OF THE STUDY

1.6.1 SCOPE OF THE STUDY

The scope of this study is delimited to Addis Ababa city public building construction site on the
subject of practice of stakeholder management which may restrict generalization of the findings
to Addis Ababa city building construction site. The study specifically investigates how
stakeholder management is being practiced in Addis Ababa city building construction site.

1.6.2 LIMITATION OF THE STUDY

There are several expected limitations to the study. First the building construction site in Addis
Ababa city is large and it is difficult to address all of them. Second since the project will have
political implications, and stakeholder issues might not be sound for the clients or officials thus
they might be reserved for the actual problem to cooperate with this study. The last one is really
difficult to get published or detail assessed researches regarding to this title in Addis Ababa city,
So that we have limitation of information or previously done researches in our country.
 CHAPTER TWO

2 LITERATURE REVIEW
This chapter focused on the history of the stakeholder concept, project stakeholders,
stakeholders’ importance, stakeholder’s identification, stakeholder’s classification, stakeholder’s
analysis, stakeholder’s behaviors, project stakeholder’s management, stakeholder management
(the stakeholder circle tool), challenges of stakeholders management in a project, and stakeholder
effect on the success of a project.

2.1 STAKEHOLDER HISTORY

Stakeholder’s concept were emerged at Stanford Research institute in 1963 and then the concept
divided into four namely corporate planning, systems theory, corporate social responsibility and
organization theory. Elias A (2002). The second concept was developed by Freeman in 1984 in
its book of strategic Management: A Stakeholders Approach. Then the theory was classified into
descriptive/empirical, instrumental and normative aspect by Donaldson & Preston in 1995 by
their book of Stakeholders Theory of Corporation. After then, Stakeholders theory was further
developed and reached to the current empirical Studies.

2.2 PROJECT STAKEHOLDER

There are so many authors and scholars who defined project stakeholder in different ways. The
much known scholar Freeman (1984) describes project stakeholder as“any group or individual
who can affect or is affected by the achievement of the organization objectives and are those
groups without whose support the organization would cease to exist”. The other author Gibson
(2000) explained as “A person or a group of people who have a vested interest in the success of
a project and the environment within which the project operates”. More specifically Gardiner
(2005) stated it as “individuals, groups and organizations who are actively involved in the
project, or whose interests may be positively or negatively affected as a result of the project”.
Others author Bourne (2009) described as “Individuals or groups who have an interest, or any
aspect of rights or ownership, in the project, and can contribute to, or be impacted by, either the
work or the outcomes of the project and /or an ability to exert influence”. It is also narrated as
“individuals or groups who are actively involved in the project, or whose interests may be
positively or negatively affected as a result of project execution or successful project
completion” (Project Management Institute, 1996). Moreover, (Bryson, 2004) defined the term
“stakeholder” to persons, groups or organizations that must somehow be taken into account by
leaders, managers and frontline staff. Last but not the least Li. Y. L , (2011) defined stakeholders
as “those who can influence the project process and/or final results, whose living environments
are positively or negatively affected by the project, and who receive associated direct and
indirect benefits and/or losses”.

2.3 STAKEHOLDER IMPORTANCE

The efficient stakeholder management in building and engineering projects has huge role in
achieving project success (El-Naway, Mahd, Badwy& Al-deen, 2015). B Ali (2015) stressed that
construction project stakeholders are known to exercise their respective interests and needs with
the construction process after understanding their needs and essence of taking part in the project.
For the success of any construction project, the ability to manage stakeholder’s need and diverse
interests is very important and most notably pivotal.
Bal M (2013) maintained that co-ordinated stakeholder management process present the platform
and basis for project stakeholders to collaborate efficiently and in the process ensure improved
work quality and ultimately increase economic sustainability. The engagement of stakeholders
and the subsequent management of the stakeholders encourage a cordial and healthy relationship
on the construction project.

Stakeholders must be managed in each undertaking to avoid any of their negative influences,
especially those that could be opposed to the objectives (Cleland and Ireland, 2002). There is a
natural tendency for stakeholder to influence the implementation of projects in line with their
individual concerns and needs (Olander and Landin, 2008).

2.4 STAKEHOLDER IDENTIFICATION

It is essential to identify as many as stakeholders as possible at the beginning and throughout the
project and categorize them into different segments according to their level of interest, influence,
importance, position, and expectations at the earliest stages of the project as much as possible.
(Cleland, 1986; Karlsen, 2002). (Briner, W, 1996) identified four sets of stakeholders: client;
project leader‘s organization; outside services; and invisible team members. Tres Roeder (2013)
discuses four attributes (1) power (the stakeholder‘s level of authority), (2) impact (the
stakeholder‘s ability to affect changes to the project‘s planning or execution), (3) interest (the
stake holder‘s level of concern regarding the project outcomes) and (4) influence (the
stakeholder‘s level of active involvement in the Project). Cleland (1995) also recognized the
need to develop an organizational structure of stakeholders through understanding each
stakeholder‘s interests and negotiating both individually and collectively to define the best way
to manage stakeholder needs and wants.

Cleland (1995) also offers, after the first step of identifying stakeholders has been achieved, it is
a simple way to visualize stakeholders and their likely impact and influence. Thus, a permanent
identification and prioritization of stakeholder‘s throughout the project life cycle is considered as
good practice (Burke & Barren, 2014).

2.5 STAKEHOLDER CLASSIFICATION

Buchholtz and Carroll (2008) classified stakeholders as either primary or secondary stakeholders.
A primary stakeholder group is those who play main role in project and the organization cannot
survive without them. Whereas, secondary stakeholders are those who influence or are
influenced by the project but they are not essential to the organization survival. (Calvert, 1995)
Stakeholders in a project can be divided into internal stakeholders those who are members of
project or external stakeholders those are affected by the project and some can be very critical to
the project and others less critical. Fassin (2009) divides stakeholders into two groups: normative
and derivative. Normative stakeholders refer to those stakeholders who are explicitly related to
the organization, and to whom the organization has an ethical duty, Derivative stakeholders
refers to those stakeholders who have no direct relationship with the organization; however, they
can either hurt the organization (or its function) or gain from the organization.

Walker (2003) categories stakeholders into four groups: -

1. Upstream stakeholders, comprising the paying customer and end users of the
product/service.

2. Downstream stakeholders, including suppliers and sub-contractors.

3. External stakeholders, including the general community and independent concerned

individuals or groups who are impacted by the project and its outcomes; invisible
stakeholders who engage with the project team in delivering the ultimate project benefit,
but whose cooperation and support is vital for project success; and also the knowledge
network that interacts with the project delivery team in a variety of ways.

4. Highly visible project stakeholders group, comprising the project sponsor or champion
as well as the project delivery team.

Scholars like Cleland (1995), Bourne and Walker (2006) Wessinger (2012) suggest that key
stakeholders roles on every project include the project manager, customer/user, the performing
organization, project team members, sponsors, champions and the project management office
(PMO).Nonetheless, all the scholars, of course, make it clear that a complete list of stakeholders
is impossible to provide.
Figure 1 Stakeholder types: source Walker (2003)

2.6 STAKEHOLDER ANALYSIS

Stakeholder analysis deals with the identification and prioritization of stakeholders as individuals
or stakeholder groups (Freeman 1984). He also stated the purpose of stakeholder analysis is to
capture important stakeholder information in a way that allows team members to structure
stakeholder engagement and target communication strategies to each one’s position and interests.
Burns, S. (2011) proposed a five-step stakeholder analysis process, and the steps are:

1) identify the key sectors and stakeholders relevant to the project;

2) describe the important characteristics of each stakeholder group;

3) analyze and classify the stakeholders, according to stakeholder attributes;

4) examine the dynamic relationship among the stakeholders; and

5) Evaluate generic stakeholder- management strategies.

2.7 STAKEHOLDER MANAGEMENT
Project Management Guidelines (2013) provide an overview of the essential components of
project management methodology and identify eleven key elements that should be applied
throughout the project Lifecycle, and the stakeholder management is one of the key elements in
the project management process, in order to ensure the success of the project throughout the life
of the project. Stakeholder management has been one of the core soft skills that have been
highlighted as being necessary for project management to advance. Stakeholder management is a
process and control that must be planned and guided by underlying principles Cleland (1995).

Eskerod (2009) clarified the premises underlying project stakeholder management, which
includes making deliberate efforts to exert influence on project stakeholders in order to gain their
contributions to the project, allocating limited resources in such a way that they achieve the best
possible results, and expanding efforts spread across a range of stakeholders than concentrated
on a few. Therefore, project stakeholder management is indispensable to control the negative
impacts of stakeholders, maximize the perceived benefits, and achieves the preset mission
(Olander and Landin, 2005). Aladpoosh, et.al. (2012) stated project requirements are not static
but dynamic; there is a need to continue management of the stakeholders’ interest and make
balance between their needs and expectations as possible. Stakeholders have claims, rights and
expectations that ought to be honored and not taken lightly.

The Stakeholder Circle methodology consists of five parts:

1) identify stakeholders and then categorize into groups indicating how they may influence
the outcomes of the project:

2) Prioritize stakeholders considering three factors that can assess the relative importance of
stakeholders. That is power (to influence significant or relatively limited), proximity
(closely associated or relatively remote from the project) and urgency

3) visualize stakeholders reflect the project‘s unique relationships:

4) engage stakeholders centered on identifying engagement approaches tailored to the

expectations and needs of these individuals or groups:
 5) Monitor effectiveness of communication.

2.8 CHALLENGE OF STAKEHOLDER MANAGEMENT

The barriers to effective stakeholder management arise from the engagement and participation of
stakeholders, stakeholder’s attitude, communication tendencies as well as nature of interactions
among the project participants (Kivits, 2013). Some of the other challenges could include but not
limited to project leadership issues, lack of transparency and accountability. Whilst Ihugba and
Osuji (2011) reflected that barriers on the part external stakeholders’ community arise from lack
of awareness. The authors further stated that inadequate resource allocation and strong resistance
are other significant barriers to efficient stakeholder management in project delivery.

Bpayne and Adrienne Watt stated that when project stakeholders do not share a common culture,
project management must adapt its organizations and work processes to cope with cultural
differences. The three major aspects of cultural difference that can affect a project are
communications, negotiations and decision making. Daniel Raymond described three major
sources of stakeholder management challenges are unclear stakeholders (those who do not
clearly articulate enough or who are not open and honest about their interests and expectations),
unidentified stakeholders (those who were not identified early in the project) and unreasonable
stakeholders (those who do not embrace what some refer to as “reason” and “the laws of
physics”).

2.9 STAKEHOLDER EFFECT ON THE SUCCESS OF PROJECT

There are many indicators of project success, but what do you need to be measuring while the
project is in motion? At various points during the project you want to evaluate four points:
schedule, quality, cost, and stakeholder satisfaction (Project Manager, 2019). Some writers
considered time, cost, and quality as the main criteria; others suggest that success is more
complex (Chan and Chan, 2004) and it depends on more factors. The extant research suggests
that project success involves not only cost, time and quality, but also the effective management
of the stakeholders involved (Jepsen and Eskerod, 2008). It is not easy to say that every project
that are delivered on time, within budget and meet scope specification may not necessarily be
perceived to be successful by key stakeholders. Because, the project product does not solve a
problem it was meant to (Jepsen and Eskerod, 2013). Project success is linked to the strength of
the relationship created by effective and regular communication with all members of the
project‘s stakeholder community (Bourn and Walker, 2005). Jergeas et al. (2000) consider that
“efficient management of the relationship between the project and its stakeholders is an
important key to project success”. A project that does not meet expectations of influential
stakeholders is not likely to be regarded as successful, even if it remains within the original time,
budget and scope (Derek H. T. Walker and Steve Rawlinson 2007). Relationship between a
project and the management of its stakeholders is central to the success of projects (Jergeas,
Williamson, Skulmoski and Thomas, 2000).

Baker, et al (1988) strongly confirmed the importance of including client satisfaction within any
measure of project success: “If the project meets the technical performance specifications and or
mission to be performed and if there is a high level of satisfaction concerning the project
outcome among the people in the client organization and key users or clients of the project effort,
the project is considered on the overall successful”.

2.10. INFORMTION GROUP

Freeman et al. (2007) believe that identifying stakeholder information is an important task for
assessing stakeholders as this is the backbone of project success. Before undertaking any
management activities, information about the project and its stakeholders, extensive research and
analysis is required. The information includes project missions, full list of stakeholder, area of
stakeholders’ interests, and their needs and constraints to the project (Yang et al. 2009b). The
stakeholders’ commitments, interest and power should be fully assessed so that the project
manager can tackle the key problems in the stakeholder management process and the potential
impact on success in the project.

2.11. SETTING COMMON GOALS

The identification of a clear mission for a project at different stages is widely considered to be
essential for the effective management of stakeholders (Winch, 2002). Before every stakeholder
management activity, project management team should have a better understanding of the tasks
and objectives of the particular stage of the project Lifecycle, including the issues of such as
cost, schedule, budget (Yang et al., 2009b). They further proved that “setting common goals,
objectives and project priorities” is significant for improving stakeholder management, and he
also suggested that the purpose of the project should be understood, and feedback from
stakeholder be solicited in order to achieve alignment between stakeholder and project team,
since this the way that expectations could be managed, and hidden agendas could be brought to
the surface and project priorities could be established.

2.12. STAKEHOLDER NEEDS AND EXPECTATIONS

Numerous different and sometimes discrepant interests can be affected, both positively and
negatively, throughout the course of a major infrastructure and construction project. Failing to
address and meet the concerns and expectations of the stakeholders involved has resulted in
many project failures (Li et al., 2013). During the project process, all stakeholders’ needs should
be assessed “so that a satisfactory and realistic solution to the problem being addressed is
obtained”.

2.13. STAKEHOLDERS' POWER

Brourne (2010) defied the power as an individual or group that may have to permanently change
or stop the project or other work. The power as a factor is considered to be a key driver of
stakeholder-manager relations for several reasons, since the definitions of stakeholders
undoubtedly imply that relationships between stakeholders and the project reflect social-business
exchanges, and power means the ability to “control resources, create dependencies, and support
the interests of some organization members or groups over others” (Mitchell et al., 1997).
Bourne and Walker (2005) believe that successful project managers should have the ability to
understand the “invisible power” among stakeholders.

2.14. ENSURING EFFECTIVE COMMUNICATION

To ensure the success of a project much information, including expectations, goals, needs,
resources, status reports, budgets and purchase requests, need to be communicated on a regular
basis to all major stakeholders. Communications includes the processes required to ensure timely
and appropriate generation, collection, distribution, storage, retrieval, and ultimate disposition of
project information. Effective project managers spend about 90% of their time communicating
with team members and other project stakeholders, whether they are internal (at all
organizational levels) or external to the organization. Effective communication creates a bridge
between diverse stakeholders involved in a project, connecting various cultural and
organizational backgrounds, different levels of expertise, and various perspectives and interests
in the project execution or outcome (Walker et al, 2008).
2.15. EVALUATING STAKEHOLDER' SATISFACTION
Yang et al., (2011a) placed an emphasis on the recognition of the fact that there are several
stakeholders whose expectations and influences must be included in the project management
process. And it has been emphasized that if a project’s key stakeholders are not satisfied with the
ongoing project outcomes, the project team will as a result be required to adjust scope, time, cost
and quality in order to meet the stakeholders’ requirements and expectations. In terms of the
construction industry, stakeholder satisfaction can be defined as the achievement of stakeholders'
pre-project expectations in the actual performance of each project stage.

CHAPTER THREE

3. RESEARCH DESIGN AND METHODOLOGY

3.1. DESCRIPTION OF THE STUDY AREA

This research was undertaken at Addis Ababa which is the capital city of Ethiopia.

Figure 2 Addis Ababa Location Map

3.2. STUDY SUBJECT
The study was conducted in Addis Ababa city to investigate critical factors affecting
effectiveness of stakeholder management in public building construction in order to achieve the
objective of the study. The researcher used descriptive analysis of data.

3.3. RESARCH APPROACH

In this research we used descriptive research design. The questionnaire was constructed based on
literature review of stakeholder management for building construction projects. We used both
qualitative and quantitative data with the aim to identify the level of problem and to evaluate the
stakeholder management practiced in Addis Ababa city.

3.3.1. Quantitative research approach

The approach involves the generation of data in numerical form (Kothari, 2004). The major
benefit of the quantitative approach is that it enables the us to utilize statistical techniques. As the
data in quantitative approach are numerical, the numbers are readily collected, coded,
summarized and analyzed. The major weakness of a quantitative research is that the researchers
knows only about the collective or average experience of study participants but not their
individual experiences (Dunn, 2012).

A quantitative research approach supports the use of the questionnaire to elicit data, as well as
using precise, reliable measures, testing hypotheses, and generating representative data through
random sampling (Fellows & Liu, 2015).

3.3.2. Qualitative Research approach

The main benefit of using qualitative approach as stated by (Dunn, 2012) is that the information
gathered is of no fixed variety; hence, it represents open systems view. The openness of the
approach becomes very useful when it comes to developing hypothesis in the early stages of
investigating a topic. However, the disadvantages of qualitative researches are the data cannot be
quickly, easily, or efficiently summarized nor is it often possible to generalize from given
qualitative observation to another situation (Dunn, 2012).

3.3.3. Mixed methods approach

No two-construction sites are entirely similar or exhibit the same characteristics and each has a
unique characteristic. Therefore, to achieve a comprehensive understanding of the how effective
stakeholder managment affects the efficiency of construction, this research needed to use the
mixed approach to identify the current practice of stakeholder management in Addis Ababa
public construction.

3.4. Data collection method

In our research we use both primary and secondary data collection .In primary data collection
information collected directly from original source by means of observations, interviews,
questionnaires, and by conducting case studies.

We have also collected from readily available data s which are previously collected by another
person (secondary source).these sources of secondary data will be used in this study are books,
published and unpublished data, journals, websites and previously completed literatures.

3.5.1. Quantitative data

(Easterby-Smith et al., 2012) provide a broader definition of surveys as a research strategy that
needs structured collection of data from a sizeable population. They further note that although
the term is frequently used to describe the collection of data using questionnaires, it can also
involve other techniques such as structured interviews and structured observation.

The current study required identifying major factors that affect the effectiveness of stakeholder
management and key mitigation measures to minimize the influence of this factor in the
successful delivery of projects. Useful information could be gathered by asking construction
professionals a sequence of questions about the variables of perception. The traditional
quantitative questionnaire approach was therefore believed appropriate for gathering quantitative
information.

3.5.1.1. Questionnaire design

In designing the questionnaire, the questions used for the research were derived from the
literature review. Questionnaire was designend in the way respondents can easily answering in
order to get high response rate. The questionnaire was distributed to the public building
construction site that are in Addis Ababa city and the stakeholders who participate in the
construction of the project fill the distributed questions then we collect the papers in the next
day.

The quantitative questionnaire was designed primarly according to our objective we want to
acheive. It comprises the current level of stakeholder management in Addis Ababa public
building construction site, factors that affect the effectiveness of stakeholder management in the
project with their mitigation or enhancing method.

3.5.1.2 Questionnaire development

According to the research ethics the development of questionnaire the development of
questionnaire was started in face to face visit with targeted construction professionals by going to
the public sites. The questionnaire was organized in to three sections they are;

 The first section was designed to elicit general information about the respondents. This
include name, current organization working, current position and educational
background

 The second section of the questionnaire comprised factors affect effective stakeholder
management in successfull delivery of project and the influence of stakeholder on the
project time, cost, quality, and satisfaction of client in the service.

 The third section centered on mitigation measure for enhancing the stakeholder
management in project delivery.

3.5.2. Qualitative data

(Yin, 2014) stated that the case study method is the most likely and appropriate strategy for
“how” and “why” research questions. This strategy was used to address those research questions,
such as how stakeholder management factors influence successful delivery of the projects in
Addis Ababa city. And also, to give an in-depth knowledge about a current practice and level of
the problem in selected site. Yin (2014) suggested a single case study is appropriate for exploring
the unique characteristics of a particular case. However, we conducted the study in multiple
construction sites. The multiple case study categories are more preferred because of the logic of
replication: the more the cases studied, the more robust are the results of the investigation
(Rowley, 2002).
3.6. STUDY DESGN

3.6.1 STUDY TYPE

3.6.2. SAMPLE SIZE AND SAMPLING PROCEDURE

Project owners, project managers, construction engineers, architects, structural engineers, site
engineers, and other professional officials working at the regulatory agency were participate in
responding to questionnaires and interviews. To determine the required number of this
respondent the number of public building construction projects were determined first and then
the number of these professionals in each project site is identified.

In order to ascertain a suitable number of participants to select for the survey from the sampling
frame, the iterative formula used by (Cochran, 1977)was adopted:

Z 2 pq
n o=
e2

Where:-

no is the sample size

Z is confidence level

e is the desired level of precision ( marginal error )

P the estimated proportion of an attribute that is present in the population ( p= 0.5 which is
standard )
q is 1-p= 1-0.5=0.5

Z is confidence level of our confidence level corresponds to a Z-score. This is a constant value
needed for this equation. Here are the z-scores for the most common confidence levels: -

Z-score (%) confidence level

(Z)
99 2.326
95 1.96
90 1.645

For this study we choose 90% confidence level with 10% marginal error and + or -5 confidence
interval.

(1.64)2 0.5∗ 0.5

n o= 2
= 67.24≈68
0.1

Based on the above minimum sample requirement the minimum questionnaire distributed has
been 68.

a n∗ 100
n=
ℜ( %)

Where:-
Na is the actual sample size required
n is the minimum sample size
re is the estimated response rate expressed as a percentage ( 30% )
68∗ 100
n a= =226.67 ≈ 227
30
 So our target group or sample group is 227, so among the 227 sample we distributed, we can
achieve the minimum requirement we need, which is 30%= 68 sample size
Since our sample size is vast we narrow our target group and specified it to construction
professionals,who are the client, contractor, and consultants.This are classified among their
professions and discipline or role. The disciplines are:- Architects, CoTM, Structural Engineers,
Site Engineers

Samples from each project site were selected using a random sampling technique to select
respondents from the whole population for questionnaires and interviews. Two or more projects
will be selected for the case study.

3.6.3. case study strategy

A case study research strategy was included in the research on the grounds that a case study
research can adjust to new issues and ideas as they surface (Creswell, 2003). This feature was
particularly relevant to the study due to the nature of the investigation and different sites
conditions are available.

There is shortage of previous empirical research focusing on the area on effective stakeholder
management research especially in Addis Ababa city the level of problem is not known. Hence
an exploratory approach was necessary. (Yin, 2014) argued that the case study approach is
suitable for exploratory inquiry where “how” and “why” research questions are to be answered.
An exploratory case study provides an opportunity to study the case in its natural setting, by
taking a holistic approach that gives an in-depth understanding of a complex phenomenon like
stakeholder management. An exploratory case study approach was therefore chosen in the
prospect of finding why and how effective stakeholder management affects the quality, time and
cost of construction projects.

3.7.DATA MANAGEMENT AND ANALYSIS

It is important for research to adopt appropriate techniques of data analysis in order to correctly
handle the data collected from the field survey (Blaxter et al., 2006). Two streams of data were
collected, the qualitative and quantitative data. Hence, this research could employ multiple
analytical methods so as to improve the reliability and validity of the research results.

This research used closed ended questionnaire for some of the questions to enable the researchers
obtain the exact information needed for the study purpose, the rest of the questions were open
ended to elicit information. In addition to this, taking into consideration their academic status,
questionnaires designed for producers, supplier designers and market facilitators were in
Amharic, while others were prepared in English language.

3.7.1. Quantitative data Analysis

In analyzing the quantitative data, there are descriptive and inferential statistical techniques are
known. For this research only descriptive statistics (including percentiles, and mean scores) were
used to analyze the background information of the respondents and listed factors affect confined
site.

3.7.1.1. Mean score Analysis

The questionnaire items required participants to respond on series Likert items of 1 to 5. The
mean score of each of the variables was determined to establish the significant factors in each of
the constructs. The mean was used in analyzing the opinions of respondents that could range
between e.g. very high 5 points, very low 1 point. The mean score had been employed by many
researchers (Kumar, 2010) and this was determined for each construct using the formula given
below.

MeanScore =

Where; n1 = number of respondents who answered “strongly disagree”

n2 = number of respondents who answered “disagree”
n3 = number of respondents who answered “undecided”
n4= number of respondents who answered “strongly agree”
n5= number of respondents who answered “Severe” or “most important”

In order to have a better understanding and in-depth knowledge of factors affecting the efficiency
of confined site and respective solutions, the respondents were asked to rank each of the factors
on a Likert scale of 1-5.

3.7.2. Qualitative data analysis

Practices of the selected construction sites were compared and analyzed to identify similarities
and differences across the cases using cross-case analysis technique. Cross-case analysis needs
identifying variables/ dimensions of comparison (Ryan, 2012). Hence, the dimensions and
variables found from the quantitative analysis were used as themes of analysis for the interview
and observation analysis.

3.8. Validity and Reliability

To ensure validity and reliability of the study, variables are comprehensively defined. This also
helped to reduce misunderstandings thus increase the reliability of the measuring instruments.
Moreover, triangulation of results employed to ensure reliability of the data collected. Thus, all
the data acquired from different project participants compared and cross checked.

Reliability pertains to the consistency of scores. The less consistency within a given
measurement, the less useful the data may be in analysis (Cho & Kim, 2015).
 CHAPTER FOUR

4. RESULTS AND DISCUSSION

4.1. Introduction
This chapter comprised of research analysis, findings and discussions. The findings here are an
analysis of collective fieldwork data presented based on the research objectives and research
questions. A short description of the study followed by introduction of general characteristics of
research respondents is presented at the beginning for clear understanding of these findings and
analysis. Then the next section provides a presentation and analysis of the data regarding the
research questions.

4.2. Respondents
In this research a total of twenty five (25) questionnaires were distributed and 15(60%) of
questionnaires were returned from this; 2(8%) to the clients, 4(16%) to the consultants and
9(36%) for contractors.

Table 1 below show the summary of questionnaires response rate.

Table 1 Summary of questionnaires response rate

Number of questioners returned

Category Number Percentage(%)

Client 2 8%

Consultant 4 16%

Contractor 9 36%

Total 15 60%
4.3. Current practice of stake holder management
Table 4.3 represented stakeholder’s management practice in Addis Ababa city. The descriptive
statistics shown below is describing the data based on mean and standard deviation of each
questions from strongly disagree (5) to strongly agree (1).

Table 2 Table 2 Stakeholders management practice descriptive statistics

Descriptive Statistics
Minimu Maximu Std.
N m m Mean Deviation
All key stakeholders
identified properly at
15 2 4 3.40 .737
the planning stage of
the project.
Their power and
influence is defined 15 2 4 3.07 .594
well.
Key stakeholders are
integrated well in the 15 2 4 2.87 .516
project
All key stakeholders
know well, why the
15 2 4 3.00 .756
project established and
intended goal
Project progress status
sent periodically to 15 2 4 2.93 .799
stakeholders.
Their expectation are
understood,
15 2 4 3.53 .640
acknowledged and
managed.
 All stakeholders
regularly
communicated about
15 1 4 2.73 .799
the project at planning
and implementing stage
of construction.
The interaction among
each stakeholder’s is
15 2 4 3.27 .704
sufficient enough to
achieve the objectives.
The project is
implemented as 15 2 4 2.93 .458
intended or as its plan.
The project have risk
mitigation policy in 15 2 4 2.80 .676
place.
Valid N (list wise) 15

Source: Own survey 2022

4.3 FACTORS AFFECTING THE STAKEHOLDER MANAGEMENT

Project managers can encounter numerous problems when communicating and managing
stakeholders. Communicating lightly when managing a project and communicating effectively is
expected from project managers to stakeholders.

Table 3 factors affecting the stakeholder management

Descriptive Statistics
 Minimu Maximu Std.
N m m Mean Deviation
Lack of stakeholders
15 2 4 3.33 .724
commitment
Lack of qualified
15 2 4 2.80 .676
project team
Problem due to
government 15 2 4 2.93 .594
bureaucracy
Lack of using advanced
technologies for 15 2 4 3.13 .640
communication system
Lack of standardized
stakeholder 15 3 4 3.47 .516
management guidelines
Lack of important
information sharing
between stakeholder’ 15 3 4 3.53 .516
for successfull delivery
of service
Lack of
communications,
Negotiations and
Decision making in the 15 2 4 3.27 .704
planning and
implementing of
project.
Lack of accountability
and transparency of 15 2 4 3.33 .617
stakeholders
Valid N (list wise) 15
Table 3 illustrated that the most factors that affect the managing of stakeholders in public
building as per the statistics Lack of important information sharing between stakeholder for
successful delivery of project and Lack of standardized stakeholder management guidelines is
the first two major factors with mean 3.53 and 3.47. Lack of stakeholder commitment and Lack
of accountability and transparency of stakeholders is another observed factor with mean 3.33.
The next two factors as per the statistics with the mean value between 3.1 and 3.27 are Lack of
using advanced technologies for communication system and Lack of communications,
Negotiations and Decision making in the planning and implementing of project. This may be due
to lack of good planning and training related to a project.

In general, most of the challenges are crucial and with a mean value above 3.5 might have
adverse effect on the success of the project.

Table 4 Effective stakeholder management

Descriptive Statistics
Minimu Maximu Std.
N m m Mean Deviation
Accessibility to the
decision making 15 3 4 3.60 .507
process
Clear understanding of
stakeholder interests 15 3 4 3.40 .507
and concerns
Diversity of views
15 2 4 3.13 .640
represented
 Integration of interests
15 3 4 3.13 .352
and concerns
Information exchange 15 2 4 3.07 .799
Mutual learning/respect 15 2 4 3.07 .458
Valid N (listwise) 15

CHAPTER 5

SUMMARY, CONCLUSION AND RECOMMENDATIONS

In this section of the study concluding statements of the research presented in this paper are
drawn, the research findings are discussed, and some recommendations for future researches in
the area are made. As the final section of the paper, it provides the summary of the whole
research work. It also discusses the major findings for the six research objectives (deliverables)
set aside for contemplation in this study. Subsequently, the research problem has also been
concluded by the development of the final recommendation theme. The chapter, then, presents
the contributions and implications for the theory and practice of this research. Finally, the
limitations of the research and recommendations for further research directions have been
outlined.

5.1.. CONCLUSION:
Our summary to this project is that, this research has provided a comprehensive investigation of
stakeholder management system in public building projects found in Addis Abeba city. This
research deals with the current practice, the factors that affect stakeholder management and the
enhancing mechanisms.
We conducted a survey and try to gather a couple of results from the questioner we have
distributed as per the findings of this study, more than 60% of the respondents focus an ideal
number of distinct stakeholders to manage.
The main objective of the research is to identify the current practice of stakeholder management
in Addis Ababa city.
“The Ability to Influence” appeared as a more important base of stakeholder identification than
the combination of all other potential bases. The analysis of the research data also displayed that
the most likely stakeholder groups are “public authorities” and “project teams”, whereas the most
unlikely project stakeholder groups are “Insurance companies”, and “Financial institutions”.

5.2. RECOMMENDATION:
 In order to ensure enhanced stakeholder management practices, effective stakeholder
involvement and management should be given priority right from project conception, and
project designers should make sure that there is adequate budgetary provision for that.
 All relevant stakeholders should always be identified from project inception so that the
maximum possible benefit can be achieved from these stakeholders.
Appendix A: Survey Questionnaire

Research Title: practice of stakeholder management in building projects in Addis Ababa

city

DESCRIPTION

Dear Participant,
This research is being undertaken as part of B.Sc. research.
The purpose of this study is to identify the current practice of stakeholder management and their
collaboration on public building construction projects' in Addis Ababa city. The study will
describe the effectiveness of stakeholders in exercising their responsibilities on the delivery of
building projects. It will also deals with the major challenges that affect the stakeholders
management process in the public building project.The outcome of this research is an improved
framework that will be used to improve the stakeholders' management process and used to
enhance the effectiveness of stakeholder management in the project delivery.
Participation in this research involves filling-in and submitting the questionnaire and is entirely
voluntary. The questionnaire includes four main parts and takes approximately 20 minutes of
your time. All your comments and responses are anonymous and will be treated confidentially.
Any data collected as part of this project will be stored securely.

Your participation is truly valuable and highly appreciated. To save your response time, multiple
responses are already given for most of the questions in the form of scales followed by legend to
the scales. You are just required to put a tick (√) in the appropriate box for your response.

If you require any further information about this research, please contact us using one of the
contact addresses: - Abdurazak Fikadu +251983767447, Amanuel Getachew +251924050170,
Nardos Getachew +251913105345.

Thank you in advance for your genuine and quick response!

Part One: Respondent’s Profile

This section (Question 1 to 3) requires information about your background and your
organization. Please tick (√) where the most appropriate answer is shown;

What is your current position in your organization?

Project Manager ()

Contract Administrator ()

Office Engineer ()
Site Engineer ()

Resident Engineer ()

Other (please specify) ______ Educational status?

Diploma ()

B.Sc. Degree ()

M.Sc. Degree ()

Ph.D. ()

What is your experience in the construction industry?

0 to 2 years ()

3 to 5 years ()

5 to 10 years ()

11 to 15 ()

More than 15 years ()

Part Two: what seems the current practice of stakeholder management

This section requires your opinion about how effectively stakeholders are involving to Please
tick (√) the appropriate box that indicates your perception of the current practice.

The questionnaire statements are developed on a 5 point Likert scale, where “1” indicates
“Strongly Disagree”, “2” “Disagree”, “3” Undecided, “4” “Agree” and “5” refers to
“Strongly Agree”.

Strongly Disagree Neutral Agree

Question Questions Strongly
disagree
no. Agree
 All key stakeholders
1.
identified properly at
the planning stage of
the project.
Their power and
2.
influence is defined
well.
Key stakeholders are
3
integrated well in the
project
All key stakeholders
4.
know well, why the
project established
and intended goal
Project progress
5.
status sent
periodically to
stakeholders.
Their expectation are
6.
understood,
acknowledged and
managed.
All stakeholders
7.
regularly
communicated about
the projectat planning
and implementing
stage of construction.
The interaction
8.
among each
stakeholder’s is
 sufficient enough to
achieve the
objectives.
The project is
9.
implemented as
intended or as its
plan.
The project have risk
10.
mitigation policy in
place.

Part Three: Major factors that affect Stakeholder management

This section requires information about the major challenges that affect the collaboration of the
stakeholders to enhance the management of stakeholder management. Rate the impact of the
following challenges faced by the project stakeholders to effectively cooperate to enhance the
management process of stakeholder. Please tick (√) the appropriate box that indicates your
perception in the current practice.

The questionnaire statements are developed on a 5 point Likert scale, where “1” indicates
“Very Low”, “2” “Low”, “3” Moderate, “4” “High” and “5” refer to “Very High”.

Rate the following challenges faced by stakeholders' to

1 2 3 4 5
effectively cooperate to improve quality
Lack of stakeholders commitment
Lack of qualified project team
Problem due to government bureaucracy
Lack of using advanced technologies for communication system
 Lack of standardized stakeholder management guidelines
Lack of important information sharing between stakeholder’ for
successfull delivery of service
Lack of communications, Negotiations and Decision making in
the planning and implementing of project.
Lack of accountability and transparency of stakeholders

Part Four: Effectiveness of Stakeholders Management

The questionnaire statements are developed on a 5 point Likert scale, where “1” indicates
“Very Low”, “2” “Low”, “3” Moderate, “4” “High” and “5” refer to “Very High”.

To what extent do you think the following dimensions are effective to manage the stakeholders?

No. Measurement indicators. 1 2 3 4 5

1. Accessibility to the decision making process

2. Clear understanding of stakeholder interests and

concerns

3. Diversity of views represented

4. Integration of interests and concerns

5. Information exchange

6. Mutual learning/respect

Name (Optional): ________________________________

Signature: _____________________________________

Date: _________________________________________

Appendix B: Semi-Structured interview questions

Interview Questions
1. Have you faced challenges regarding stakeholders' collaboration in this project?
2. What were the major challenges you faced in stakeholders' collaboration in this project?
3. What was the impact of these challenges on the satisfaction of stakeholders and
customers in the delivered service?
4. How do you overcome those challenges?
5. Do you suggest any approach that can improve the poor collaboration of project
stakeholders in the project?
6. How those approaches for better collaboration of project stakeholders can be facilitated?
7. How effective management of project stakeholders improves the successfull delivery of
service?
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