Stakeholder Management: Theory and Strategy
Stakeholder Management: this article explains Stakeholder Management in a practical way. Next to what it is, this article also highlights the basis of support, the different interests, the strategy and application, the communication and influence. After reading you will understand the basics of this project management tool. Enjoy reading!
What is Stakeholder Management?
Organizations that intend to implement large-scale changes need to provide all parties concerned with accurate and timely information.
When they fail to do so, it is likely that the parties involved will oppose these changes and perhaps even protest against them, which may interfere with the strategic objectives. When this happens, it is time for Stakeholder Management.
What are stakeholders?
Within a company there are always several people involved in projects, change or company activities. For example employees, shareholders, interest groups, government bodies and customers. They are called the stakeholders. All of these key stakeholders have their own interests and expectations.
Stakeholder management is about taking all of these interests appropriately into account.
Stakeholder Management is especially recommended in case of reorganization, mergers, relocation, expansions and company management.
Basis of support
It is important to steer the expectations and interests of all stakeholders in a project in the right direction.
There are two key factors in this: creating a fast and effective basis of support and providing a safe environment in which each individual can perform excellently.
Each stakeholder has their own interests and reasons to either support or reject the project. Their acceptance of this project is of fundamental importance for any change that an organization envisages.
An organization would do well to take into account that the expectations and interests of the different stakeholders do not necessarily agree with each other and could even conflict with one another. Relocation abroad could possibly go down well with the shareholders.
For them it is mainly about new opportunities and higher profit margins. Employees will undoubtedly oppose this because they have no intention of leaving their homes.
Strategy and application of Stakeholder Management
In order to be able to apply Stakeholder Management well, it is important to identify the stakeholders and key stakeholders first.
Then it has to be established who will be impacted by the proposed decision, who has the power to influence and who will take the decisions within the organizations. In regard to the latter, think for instance of the shareholders of a public company.
The ultimate objective is to work jointly towards a shared opinion. Good and clear communication is essential in this.
All stakeholders should feel that they are heard and understood. This reinforces and facilitates cooperation both within and outside of the organization.
By listening carefully to what the interested parties have to say about a project, decision or change, the organization will know what concerns them and whether there could be any misinterpretation or lack of understanding.
Employees, customers and shareholders can provide good feedback. They have knowledge and experience, which is invaluable for an organization. This is what creates a basis of support and makes people move in the same direction.
An organization should build a relationship with each of the groups and to communicate in different ways.
To keep all parties well-informed of the forthcoming change, a communication plan will be most effective. This is accessible to everyone who has a role or an interest in the organization.
Firstly, all possible stakeholders are identified. Then their interests and influence are considered.
By building and maintaining a good relationship with the different stakeholders, all of these parties will be more inclined to be loyal during a project.
This is why an organization has to inform, involve, consult and persuade all stakeholders and perhaps even use them as ambassadors.
It’s Your Turn
What do you think? How do you identify your stakeholders? How do you see the relationship between project management or marketing versus Stakeholder Management? What are other success factors to create good type of Management?
Share your experience and knowledge in the comments box below.
- Carroll, A., & Buchholtz, A. (2014). Business and society: Ethics, sustainability, and stakeholder management. Nelson Education.
- Freeman, R. E., & McVea, J. (2001). A stakeholder approach to strategic management.
- Hillman, A. J., & Keim, G. D. (2001). Shareholder value, stakeholder management, and social issues: what’s the bottom line?. Strategic management journal, 22(2), 125-139.
How to cite this article:
Mulder, P. (2016). Stakeholder Management. Retrieved [insert date] from Toolshero: https://www.toolshero.com/project-management/stakeholder-management/
Original publication date: 02/02/2016 | Last update: 02/13/2024
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