Stakeholders in Project Management

July 26, 2020
Fahad Usmani
stakeholders in project management

Your project’s success depends on the satisfaction of your stakeholders. Sometimes, you have completed the project; the client has accepted all deliverables. However, the project is not successful because some of your stakeholders are not happy.

Stakeholder satisfaction is the sign of successful project completion.

Now, you might be wondering who the stakeholders are and whom you have to satisfy for the successful completion of your project.

I am writing this blog post to answer these queries, and I hope to clear up any doubts you may have about project stakeholders

Stakeholders

According to the PMBOK Guide, “A stakeholder is an individual, group, or organization who may affect, be affected by or perceive itself to be affected by a decision, activity, or outcome of a project.”

Put more simply, a stakeholder is a person, a group of people, or an organization that has an interest in your project or is affected by its outcome, directly or indirectly. It may include project team members, project sponsors, organization members, and people outside of your organization.

If the project is small, you will have a few stakeholders. For a larger project, you may have a huge number of stakeholders, which may include communities or the public. In this case, managing stakeholders will be challenging.

For example, if you are going to construct a dam, the number of stakeholders will be large. They will include governments, local authorities, the population that is going to be displaced, the population living near the dam, environmentalists, the project management team, higher management, etc.

Not all stakeholders are equal. Everyone has different requirements and expectations. You should treat them according to their requirements and expectations. Failing to do so can jeopardize your project’s success.

If you understand stakeholders’ needs, expectations and requirements, your chances of success increase. Overlooking any important stakeholder can make the situation more difficult for you at later stages of the project. It may cause a delay in the project, cost overrun, and in the most severe cases, abrupt project termination.

Types of Project Stakeholders

Project stakeholders can be grouped into two categories:

  1. Internal Stakeholders
  2. External Stakeholders

Internal Stakeholders

Internal stakeholders are within the organization. For example:

  • A sponsor
  • An internal customer or client (if the project is for an internal need of an organization)
  • A project team
  • A program manager
  • A portfolio manager
  • Management
  • Another group’s manager internal to the organization (e.g., functional manager, operational manager, admin manager, etc.).

These stakeholders generally have the highest interest in the project’s success.

External Stakeholders

External stakeholders are outside the organization. For example:

  • An external customer or client (if the project is a result of a contract)
  • An end user of the project’s outcome
  • A supplier
  • Subcontractors
  • The government
  • Local authorities
  • Local communities
  • The media

As you can see, external stakeholders include clients, governments, and local authorities, and these are very powerful entities. Therefore, you have to manage them carefully.

Positive Stakeholders and Negative Stakeholders

Stakeholders can be positive or negative.

A positive stakeholder sees the project’s positive side and benefits from its success. These stakeholders help the project management team to complete the project successfully.

On the other hand, a negative stakeholder see the outcome and may be negatively impacted by the project or its outcome. This type of stakeholder is less likely to contribute to the success of the project.

Many professionals think that competitors are also negative stakeholders as your project affects them as well. Please note that competitors are not negative stakeholders because you have to manage your stakeholders proactively to complete your project successfully, but you do not manage or fulfill your competitors’ requirements.

The public can be a stakeholder, as we have seen in the earlier example. In this case, it would be impractical to manage the whole population, so you will consult their public figures or leaders to understand their requirements and expectations. 

Some examples of this type of project are related to mining, the environment, roads, railways, dam building, etc.

You should identify your stakeholders at a very early stage of the project, and record them in the stakeholder register.

Some stakeholders will have low interest or influence on your project. However, you have to manage them as well, because they could become influential stakeholders.

Summary

Stakeholders are individuals or a group of individuals who are affected by your project or have an interest in it. It is important to identify stakeholders at the beginning of the project and develop a strategy to manage them and their requirements. This will help you complete the project with minimal obstruction because getting them involved with your project will render support you need it

What about your project’s stakeholders? How did you find them? Please share your thoughts in the comments section.

This topic is important from a PMP certification exam point of view; you are going to come across many questions on this topic.

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Speak Your Mind

  • can you explain types of stakeholders in terms of 1) neutral stakeholders 2) Supportive stakeholders 3) leading stakeholders 4) Influencing stakeholders

    • A deliverable is a tangible or intangible good or service produced as a result of a project that is intended to be delivered to a customer (either internal or external). A deliverable could be a report, a document, a software product, a server upgrade or any other building block of an overall project. (Source: Wikipedia)

  • I am preparing for the CAPM exam, I was wondering if you could guide or give out some tips that would benefit me in preparing for the exam. Your guidance will be greatly appreciated.
    Thank you.

  • Thanks fahad for this article, pls can u direct me to a Web site where i can get ” The role of user as stakeholder in project management process”.

  • This is superb contributions to PM student, but what of categories of stake holders, as antogonistic, low priority as well as supportive stake holders taught by my lecturer???

  • Hello, I am a student and this is really beneficial for me.
    Just wanted to know if you could give me the questionnaire of this research it would be really helpful.

  • {"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}

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