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    what is the term for all of the groups that stand to gain or lose by the policies and activities of a business and whose concerns the business needs to address?

    James

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    Answer to Solved people who stand to gain or lose by the policies and

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    Solved people who stand to gain or lose by the policies and

    Source : www.chegg.com

    Business Stakeholders

    Internal Stakeholders

    Internal stakeholders are groups or people who work directly within the business, such as managers, employees, and owners. Managers and employees want to earn high wages and keep their jobs, so they have a vested interest in the financial health and success of the business. Owners want to maximize the profit the business makes as compensation for the risks they take in owning or running a business.

    All stakeholders are invested in the company and have some input. Internal stakeholders include employees, managers, and owners. External stakeholders include suppliers, society, government, creditors, shareholders, and customers.

    Figure 1. The picture shows the typical stakeholders of a company. The stakeholders are divided into internal and external stakeholders.

    External Stakeholders

    External stakeholders are groups outside a business or people who don’t work inside the business but are affected in some way by the decisions and actions of the business. Examples of external stakeholders are customers, suppliers, creditors, the local community, society, and the government. Customers want the business to produce quality products at reasonable prices. Shareholders have an interest in business operations since they are counting on the business to remain profitable and provide a return on their investment in the business. Creditors that supply financial capital, raw materials, and services to the business want to be paid on time and in full. Federal, state, and local governments need businesses to thrive in order to pay taxes that support government services such as education, police, and fire protection. The local community has a stake in the business because it provides jobs, which generate economic activity within the community. Society as a whole (as well as the local community) is concerned about the impact that business operations have on the environment in terms of noise, air, and water pollution. Society also has an interest in the business with regard to the safety of the goods and services produced by the business. Suppliers need the business to continue to buy their products in order to maintain their own profitability and long-term financial health.

    Check Your Understanding

    Answer the question(s) below to see how well you understand the topics covered above. This short quiz does not count toward your grade in the class, and you can retake it an unlimited number of times.

    Use this quiz to check your understanding and decide whether to (1) study the previous section further or (2) move on to the next section.

    Business Stakeholders

    Source : courses.lumenlearning.com

    5. Stakeholder Management – Project Management – 2nd Edition

    5. Stakeholder Management

    A project is successful when it achieves its objectives and meets or exceeds the expectations of the stake­holders. But who are the stakeholders? Stakeholders are individuals who either care about or have a vested interest in your project. They are the people who are actively involved with the work of the project or have something to either gain or lose as a result of the project. When you manage a project to add lanes to a highway, motorists are stakeholders who are positively affected. However, you negatively affect residents who live near the highway during your project (with construction noise) and after your project with far-reaching implications (increased traffic noise and pollution).

    The project sponsor, generally an executive in the organization with the authority to assign resources and enforce decisions regarding the project, is a stakeholder. The customer, subcontractors, suppliers, and some­times even the government are stakeholders. The project manager, project team members, and the managers from other departments in the organization are stakeholders as well. It’s important to identify all the stakeholders in your project upfront. Leaving out important stakeholders or their department’s function and not discovering the error until well into the project could be a project killer.

    First, the number of stakeholders that project managers must deal with ensures that they will have a complex job guiding their project through the lifecycle. Problems with any of these members can derail the project.

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    Let’s take a look at these stakeholders and their relationships to the project manager.

    Project Stakeholders

    Top Management

    Top management may include the president of the company, vice-presidents, directors, division managers, the corporate operating committee, and others. These people direct the strategy and development of the organization.

    On the plus side, you are likely to have top management support, which means it will be easier to recruit the best staff to carry out the project, and acquire needed material and resources; also visibility can enhance a project manager’s professional standing in the company.

    On the minus side, failure can be quite dramatic and visible to all, and if the project is large and expensive (most are), the cost of failure will be more substantial than for a smaller, less visible project.

    Some suggestions in dealing with top management are:

    The Project Team

    The project team is made up of those people dedicated to the project or borrowed on a part-time basis. As project manager, you need to provide leadership, direction, and above all, the support to team members as they go about accomplishing their tasks. Working closely with the team to solve problems can help you learn from the team and build rapport. Showing your support for the project team and for each member will help you get their support and cooperation.

    Here are some difficulties you may encounter in dealing with project team members:

    Managing project team members requires interpersonal skills. Here are some suggestions that can help:

    Your Manager

    Typically the boss decides what the assignment is and who can work with the project manager on projects. Keeping your manager informed will help ensure that you get the necessary resources to complete your project.

    If things go wrong on a project, it is nice to have an understanding and supportive boss to go to bat for you if necessary. By supporting your manager, you will find your manager will support you more often.

    Peers

    Peers are people who are at the same level in the organization as you and may or may not be on the project team. These people will also have a vested interest in the product. However, they will have neither the leadership responsibilities nor the accountability for the success or failure of the project that you have.

    Your relationship with peers can be impeded by:

    Peer support is essential. Because most of us serve our self-interest first, use some investigating, selling, influencing, and politicking skills here. To ensure you have cooperation and support from your peers:

    Resource Managers

    Because project managers are in the position of borrowing resources, other managers control their resources. So their relationships with people are especially important. If their relationship is good, they may be able to consistently acquire the best staff and the best equipment for their projects. If relationships aren’t good, they may find themselves not able to get good people or equipment needed on the project.

    Internal Customers

    Internal customers are individuals within the organization who are customers for projects that meet the needs of internal demands. The customer holds the power to accept or reject your work. Early in the relationship, the project manager will need to negotiate, clarify, and document project specifications and deliverables. After the project begins, the project manager must stay tuned in to the customer’s concerns and issues and keep the customer informed.

    Common stumbling blocks when dealing with internal customers include:

    To meet the needs of the customer, client, or owner, be sure to do the following:

    External customer

    External customers are the customers when projects could be marketed to outside customers. In the case of Ford Motor Company, for example, the external customers would be the buyers of the automobiles. Also if you are managing a project at your company for Ford Motor Company, they will be your external customer.

    Government

    Project managers working in certain heavily regulated environments (e.g., pharmaceutical, banking, or military industries) will have to deal with government regulators and departments. These can include all or some levels of government from municipal, provincial, federal, to international.

    Contractors, subcontractors, and suppliers

    There are times when organizations don’t have the expertise or resources available in-house, and work is farmed out to contractors or subcontractors. This can be a construction management foreman, network consultant, electrician, carpenter, architect, or anyone who is not an employee. Managing contractors or suppliers requires many of the skills needed to manage full-time project team members.

    Any number of problems can arise with contractors or subcontractors:

    Many projects depend on goods provided by outside suppliers. This is true for example of construction projects where lumber, nails, bricks, and mortar come from outside suppliers. If the supplied goods are delivered late or are in short supply or of poor quality or if the price is greater than originally quoted, the project may suffer.

    Depending on the project, managing contractor and supplier relationships can consume more than half of the project manager’s time. It is not purely intuitive; it involves a sophisticated skill set that includes managing conflicts, negotiating, and other interpersonal skills.

    Politics of Projects

    Many times, project stakeholders have conflicting interests. It’s the project manager’s responsibility to understand these conflicts and try to resolve them. It’s also the project manger’s responsibility to manage stakeholder expectations. Be certain to identify and meet with all key stakeholders early in the project to understand all their needs and constraints.

    Project managers are somewhat like politicians. Typically, they are not inherently powerful or capable of imposing their will directly on coworkers, subcontractors, and suppliers. Like politicians, if they are to get their way, they have to exercise influence effectively over others. On projects, project managers have direct control over very few things; therefore their ability to influence others – to be a good politician – may be very important

    Here are a few steps a good project politician should follow. However, a good rule is that when in doubt, stakeholder conflicts should always be resolved in favour of the customer.

    Assess the environment

    Identify all the relevant stakeholders. Because any of these stakeholders could derail the project, you need to consider their particular interest in the project.

    Identify goals

    After determining who the stakeholders are, identify their goals.

    Define the problem

    Culture of Stakeholders

    When project stakeholders do not share a common culture, project management must adapt its organizations and work processes to cope with cultural differences. The following are three major aspects of cultural difference that can affect a project:

    Communication is perhaps the most visible manifestation of culture. Project managers encounter cultural differences in communication in language, context, and candor.

    Language is clearly the greatest barrier to communication. When project stakeholders do not share the same language, communication slows down and is often filtered to share only information that is deemed critical.

    The barrier to communication can influence project execution where quick and accurate exchange of ideas and information is critical.

    The interpretation of information reflects the extent that context and candor influence cultural expressions of ideas and understanding of information. In some cultures, an affirmative answer to a question does not always mean yes. The cultural influence can create confusion on a project where project stakeholders represent more than one culture.

    Example: Culture Affects Communication in Mumbai

    A project management consultant from the United States was asked to evaluate the effectiveness of a U.S. project management team executing a project in Mumbai, India. The project team reported that the project was on schedule and within budget. After a project review meeting where each of the engineering leads reported that the design of the project was on schedule, the consultant began informal discussions with individual engineers and began to discover that several critical aspects of the project were behind schedule. Without a mitigating strategy, the project would miss a critical window in the weather between monsoon seasons. The information on the project flowed through a cultural expectation to provide positive information. The project was eventually canceled by the U.S. corporation when the market and political risks increased.

    Not all cultural differences are related to international projects. Corporate cultures and even regional differences can create cultural confusion on a project.

    Example: Cultural Differences between American Regions

    On a major project in South America that included project team leaders from seven different countries, the greatest cultural difference that affected the project communication was between two project leaders from the United States. Two team members, one from New Orleans and one from Brooklyn, had more difficulty communicating than team members from Lebanon and Australia.

    Managing Stakeholders

    Often there is more than one major stakeholder in the project. An increase in the number of stakeholders adds stress to the project and influences the project’s complexity level. The business or emotional investment of the stakeholder in the project and the ability of the stakeholder to influence the project outcomes or execution approach will also influence the stakeholder complexity of the project. In addition to the number of stakeholders and their level of investment, the degree to which the project stakeholders agree or disagree  influences the project’s complexity.

    A small commercial construction project will typically have several stakeholders. All the building permitting agencies, environmental agencies, and labour and safety agencies have an interest in the project and can influence the execution plan of the project. The neighbours will have an interest in the architectural appeal, the noise, and the purpose of the building.

    Example: Tire Plant in India

    A U.S. chemical company chartered a project team to design and build a plant to produce the raw materials for building truck tires designed for unpaved roads. The plant was to be built in India a few years after an accident that killed several Indians and involved a different U.S. chemical company. When the company announced the new project and began to break ground, the community backlash was so strong that the project was shut down. A highly involved stakeholder can significantly influence your project.

    Example: Wind Turbine on a College Campus

    A small college in South Carolina won a competitive grant to erect and operate a wind turbine on campus. The engineering department submitted the grant as a demonstration project for engineering students to expose students to wind technology. The campus facilities department found only one location for the wind turbine that would not disrupt the flow of traffic on campus. The engineering department found that location unacceptable for students who had to maintain the wind turbine. The county construction permitting department had no policies for permitting a wind turbine and would not provide a building permit. The college had to go to the county council and get an exception to county rules. The marketing department wanted the wind turbine placed in a highly visible location to promote the innovative approach of the college.

    Each of the college’s stakeholders had a legitimate interest in the location of the wind turbine. The number of stakeholders on the project, multiplied by their passion for the subject and the lack of agreement on the location, increased the complexity of the project. Significant time and resources of a project will be dedicated to identifying, understanding, and managing client expectations.

    Example: Stakeholders and a Bridge Project

    The Department of Highways chartered a project to upgrade a number of bridges that crossed the interstate in one of the larger cities in South Carolina. The closing of these bridges severely impacted traffic congestion, including a large shopping mall. The contract included provisions for minimizing the impact on the traffic and communities near the construction areas. This provision allowed businesses or interested parties to review the project schedule and make suggestions that would lessen the impact of the construction. The project leadership invested significant time and resources in developing alignment among the various political stakeholders on the project approach and schedule.

    Relationship Building Tips

    Take the time to identify all stakeholders before starting a new project. Include those who are impacted by the project, as well as groups with the ability to impact the project. Then, begin the process of building strong relationships with each one using the following method.

    These are the basics of building strong stakeholder relationships. But as in any relationship, there are subtleties that every successful project manager understands – such as learning the differences between and relating well to different types stakeholders.

    How to Relate to Different Types of Stakeholders

    By conducting a stakeholder analysis, project managers can gather enough information on which to build strong relationships – regardless of the differences between them. For example, the needs and wants of a director of marketing will be different from those of a chief information officer. Therefore, the project manager’s engagement with each will need to be different as well.

    Stakeholders with financial concerns will need to know the potential return of the project’s outcomes. Others will support projects if there is sound evidence of their value to improving operations, boosting market share, increasing production, or meeting other company objectives.

    Keep each stakeholder’s expectations and needs in mind throughout each conversation, report or email, no matter how casual or formal the communication may be. Remember that the company’s interests are more important than any individual’s – yours or a stakeholder’s. When forced to choose between them, put the company’s needs first.

    No matter what their needs or wants, all stakeholders will respect the project manager who:

    Supportive Stakeholders are Essential to Project Success

    Achieving a project’s objectives takes a focused, well-organized project manager who can engage with a committed team and gain the support of all stakeholders. Building strong, trusting relationships with interested parties from the start can make the difference between project success and failure.

    Tools to Help Stakeholder Management

    There are many project decelerators, among them lack of stakeholder support. Whether the stakeholders support your project or not, if they are important to your project, you must secure their support. How do you do that?

    First, you must identify who your stakeholders are. Just because they are important in the organization does not necessarily mean they are important to your project. Just because they think they are important does not mean they are. Just because they don’t think they need to be involved does not mean they do not have to be. The typical suspects: your manager, your manager’s manager, your client, your client’s manager, any SME (subject matter expert) whose involvement you need, and the board reviewing and approving your project. Note that in some situations there are people who think they are stakeholders. From your perspective they may not be, but be careful how you handle them. They could be influential with those who have the power to impact your project. Do not dismiss them out of hand.

    Second, you need to determine what power they have and what their intentions toward your project are. Do they have the power to have an impact on your project? Do they support or oppose you? What strategies do you follow with them?

    Third, what’s the relationship among stakeholders? Can you improve your project’s chances by working with those who support you to improve the views of those who oppose you? Table 5.1 summarizes the options based on an assessment of your stakeholders’ potential for cooperation and potential for threat.

    Strategy: Monitor

    Strategy: Defend

    Strategy: Involve

    Strategy: Collaborative

    Stakeholder communication template. Image description available

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    5. Stakeholder Management – Project Management – 2nd Edition

    Source : opentextbc.ca

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