Literature Review On Project Stakeholder Management: Theory And Practice

Objectives of the Literature Review

The complicated and unpredictable nature of large construction projects required an effective system of stakeholder management accommodating the conflicting interest of the stakeholders. However, an earlier review of the project stakeholder management focused mostly on the comparatively small-scale projects. A sequential review of the stakeholder management studies in accordance with major constructions project seemed to be lacking in the previous studies.

Therefore, based on an evaluation of stakeholder management associated with each of the stage carried out by the project management, the study in the review provides a critical analysis of the project stakeholder’s management. In addition to this, the review of the literature highlights the stakeholder management theories and models that exist to address the assumptions underlying these frameworks of the theories.

Background of stakeholder management and different projects

Concept of stakeholder management

Stanford Institute of research initially brought in the concept of stakeholders to the field of management in the year 1963, wherein the stakeholders were illustrated as the groups crucial for the survival of the organisation (Mok, Shen & Yang, 2015). Following, this trend, the notion of stakeholder deviated into four-major direction considering the organisational studies. They are commercial planning, system theory, corporate social accountability and organisational model. In this context, Eskerod, Huemann & Ringhofer, (2015) stated that strategic management a stakeholder approach is broadly known as the breakthrough in the origination of stakeholder management research. In support to this statement, Joslin & Müller (2015) defined stakeholders as the individuals who have the ability to be influenced by the accomplishment of the organisational goal. After the publication of this fictional evidence, various insights about stakeholder administration came into the field such as a descriptive, instrumental and normative process of categorizing theory of stakeholder. On the contrary, Chih & Zwikael (2015) illustrated the inclusive establishment of stakeholder management through a demonstration of the stakeholder literature chart. Again, influenced by the stakeholder research of stakeholder management, scholars of construction management have dedicated their wide-ranging efforts if research on managing the project of construction in the current years.

Hornstein (2015) states that, the effective and formal process of stakeholder management is critical in obtaining the needs of the stakeholders and the satisfaction that is the essential factor for the success of the project. In this context, the constructions organisation within developed countries has successfully embraced stakeholder management as a minor project management capability to solve the projects. Eventually, these construction projects established appropriate approaches for enhancing the delivery of the project. In this context, Pinto & Winch, (2016) states that there are several studies that are associated with the failures of the projects due to the poor stakeholder management and ineffective performance of the stakeholders, or may be due to lack of formal process of stakeholder management in several countries.

Literature Review Questions

Stages of stakeholder management

A project is successful only if it achieves its goals and meets the assumptions of the stakeholders. As stated by Fernandes, Ward & Araújo (2015), the project promoter acts as the administration within the organisation with a superior authority to delegate resources and apply the decision about the project. It is the customers, suppliers and the management regulator who acts as the stakeholders within a project. The management of the stakeholder takes place in several phases.

Firstly, the group of stakeholders that the project managers needs to deal by ensuring that there will be a complicated job for guiding their project throughout the lifecycles of the project. In this context, issues with any of the group members may deviate from the project. Secondly, the project managers need to deal with the external people to manage the organisation as well as the internal environment. For instance, these activities are related to deal with the suppliers who are generally late in production crucial parts within the project that may blow up the schedule of the project. To resolve the issue, project managers may have little or no direct authority over the individuals.

Project stakeholders

Amongst the project management, the top management generally includes the chief of the organisation and divisional supervisors along with the commercial functioning committee. These people are provided with the authority to manage the strategy and development of the organisation.

The project team consists of the people who are committed to the project or hired on an impermanent basis. Badewi (2016) stated that being a manager of the project, the individual is required to provide headship, direct the team members and backing them in accomplishing the task.  In support to this statement, Loosemore & Cheung (2015) states that working in collaboration with the team members will help in solving the issues and will help in developing a rapport with the team.

Culture of stakeholder management

Head et al., (2015) states that stakeholders do not have a shared culture, project management needs to adapt to the organisation and working operations in order to deal with the cultural variances. Therefore, communication is the most representative of managing the culture. The project managers face the cultural differences while communicating in different languages. Problems may take place when project stakeholders do not share the similar language, which may slow down the flow of communication and delivery of the project as well.

Stakeholder theory

Interest in stakeholders has extensively increased since Freeman’s (1984) work Strategic management has been publishing. Eventually, more than 100 articles and journals have been published on the use of stakeholder theory, with many more published since that period. The notion of stakeholder is increasingly gaining the attention within academic texts, media publication as well as the government publication.  

Historical Account of Stakeholder Management

However, Head & Alford (2015) states that Stakeholder theory is the model of organisational management and ethics. The theory opposes the free market notion of shareholder capitalisation and promotes the maximisation of the stakeholders. Bredillet, Tywoniak & Dwivedula (2015) counter-argues the statements stating that for several years’ economies have been illustrating the purpose of business as a tool to capitalise on the stakeholders. Greco, Sciulli & D’Onza (2015), stated that this is misunderstanding, as a law has not defined any legal purpose of the business to capitalise on the stakeholders.

Stakeholder management theory

Construction projects are usually innovative in nature in bringing together do9ffernet and conflicting interest. In this context, different researchers have illustrated and categorised the stakeholders of the project in a different way. In this theory, Miller et al., (2015) state that, construction stakeholders are appointed with the responsibility to manage the stakeholder such as owners, project manager, users as well as facility managers, employees and the customers. In this context, Cantrell, Kyriazis & Noble (2015) commented that project managers have been always represented the customers as the major stakeholders of the project that is required to be changed. In this contrast to this Adams, Smart & Huff (2017) suggest that meeting the requirement of all the stakeholders and satisfaction is a necessary project success factor. Therefore, stakeholder’s theory has emerged out of the need to provide concern for all the stakeholders. 

It is notable fact that stakeholder theory of management has achieved a huge popularity in the last three years that focuses mainly on the different opinions about the way in which managers of the different organisation needs to manage their stakeholder. In this context, Head & Alford (2015) states that stakeholder model is different from the traditional theorises that shows the interest of the individuals influenced by the activities of the organisation. In this Loosemore & Cheung (2015) classifies that there are four areas of stakeholder theories, such as commercial theory, systems theory and organisational theory as well as corporate social accountability, which emerged out from the management studies.

Corporate strategy

The literature recommends that researchers contradicted for rejection of the stakeholder theory in a classic book of commercial strategy, as it represented objectives and accountabilities as synonyms. This part was a fight for sustaining the stakeholder theory. The theory depicted that the importance of the stakeholder will decline since the business was going to run for the sake of the other stakeholders associated with the business.

Systems theory 

Theoretical Frameworks and Models for Stakeholder Management

This theory contributed to the establishment of the theory of stakeholder. In this context, Loosemore & Cheung (2015) contradicted for the participation of stakeholder within the system, this is because scholars suggested that stakeholder’s communication and assistance will help in mitigating the social issues,

Corporate social accountability

Many researchers became highly concerned with the concept of corporate social accountability. According to Dobele et al., (2014), corporate social responsibility is the approach of business that helps to contribute towards the sustainable growth of the business by offering financial, social and ecological advantages for all the stakeholders within the project and organisation. However, the concept of CSR has several illustration and practices.

Construction industry

The nature and results of the activities carried out within contributions industry are highly significant for several reasons. These industries contribute to the country’s socio-economic development and provisions of the physical set up for the required productivity and health and civic accountabilities. However, Yang & Zou (2014) states that the industry of construction contributes potentially to the gross domestic product of a country. In this context Hörisch et al., (2014) suggested that comparatively low productivity of UK’s construction industry consistently attracted the attention of the government. Similar to this, in South Africa, the low performance of the construction industry and international resection was a major issue. It was seen that these countries contribute almost 5-10% of the GDP amongst all the countries. Therefore, the construction industry is the driver of growth amongst all the other sectors (Hornstein, 2015). This is the reason that all the project management and stakeholder management practices are being undertaken by construction industry mostly.

In this context, international statistics show that almost 7-10% of the international workforce works in the construction sectors. It is the huge size of the industry, which influences the expansion of the economy owing to its workforce employment activities. Moreover, it has been noted by Adams et al., (2017), it is the major sector if every economy. In this context, Dobele et al., (2014) suggested that the formal historical review has shown that in the different forms of contract development and stakeholders communication there are several separated management and integrated activities. Therefore, these newly established contracts are the increased focus of the stakeholders as these activities consist of different players such as customer, project managers, contractors, suppliers linked within the formal contract.

Management of project 

It is the stakeholders of the project, which lies under and beyond the authority of the project manager. In this, the individuals such as project group members and suppliers are also these directly and indirectly influenced by the results of the product.  However, Bredillet et al., (2015) state that construction stakeholders are categorised in several dimension based on the relationship and contractual agreement of the project. In this, primary stakeholders are critically appointed with the responsibility to deliver the project. Yang & Zou, (2014) supports this, stating that some of the stakeholders are critical for the success of project where others may deviate from their position with the progress of the project. The trend is to supervise the stakeholder’s using the development of the project. Moreover, the stakeholders are signified as the internal as well as external parts of the project. However, Joslin & Müller (2015) states that the classification of the stakeholders is based on the salience to the project based on their power, urgent needs, and legitimacy.

Stakeholder Management in Project Management Practice

Tools and methods used in project management

Project management involves with the understanding of a broad variety of factors from the management of strategy and communication within the project (Chih & Zwikael, 2015). Therefore, an environment of project management is always prone to risk or chances of adverse occurrence, which might lead to the failure in the project. As stated by Pinto & Winch (2016), in order to address these issues, the project management stakeholders utilise various models to identify the problem prior to the occurrence using project management tools such as PEST analysis, risk management strategies, scenario planning for perceiving the uncertainties of the project.

On the contrary, Hornstein (2015) states that work breakdown structure is also used to help the project stakeholders to plan the project effectively by breaking down the task into organised units of works helping to deliver the project within limited cost, schedules and resources. However, most of the IT and constructions related project management activities utilise the tools such as Gantt chart that is a horizontal chart that is used for scheduling a project. Using these tools, the stakeholders are able to depict the time for each of the task and performance in real time.

Conclusion

In the conclusion, it can be suggested that project stakeholder management is an essential component in accomplishing the objectives of the project where the stakes could be through legal or and ethical rights. Therefore, the approach of stakeholder management is usually determined by the procurement approach and integrated approach that is suggested as it is the stakeholders of the project, which carry out all the principles duties at the different phases. However, the review of literature lacks the proper approach to identify the performance and framework for stakeholder management. The gap in the review was the absence of historical evidence of stakeholder management that serves as the foundation of the establishment of sustainable stakeholder management model.

Reference list

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Badewi, A. (2016). The impact of project management (PM) and benefits management (BM) practices on project success: Towards developing a project benefits governance framework. International Journal of Project Management, 34(4), 761-778.

Bredillet, C., Tywoniak, S., & Dwivedula, R. (2015). What is a good project manager? An Aristotelian perspective. International Journal of Project Management, 33(2), 254-266.

Cantrell, J. E., Kyriazis, E., & Noble, G. (2015). Developing CSR giving as a dynamic capability for salient stakeholder management. Journal of Business Ethics, 130(2), 403-421.

Chih, Y. Y., & Zwikael, O. (2015). Project benefit management: A conceptual framework of target benefit formulation. International Journal of Project Management, 33(2), 352-362.

Dobele, A. R., Westberg, K., Steel, M., & Flowers, K. (2014). An examination of corporate social responsibility implementation and stakeholder engagement: A case study in the Australian mining industry. Business Strategy and the Environment, 23(3), 145-159.

Eskerod, P., Huemann, M., & Ringhofer, C. (2015). Stakeholder inclusiveness: Enriching project management with general stakeholder theory. Project Management Journal, 46(6), 42-53.

Fernandes, G., Ward, S., & Araújo, M. (2015). Improving and embedding project management practice in organisations—A qualitative study. International Journal of Project Management, 33(5), 1052-1067.

Greco, G., Sciulli, N., & D’Onza, G. (2015). The influence of stakeholder engagement on sustainability reporting: Evidence from Italian local councils. Public Management Review, 17(4), 465-488.

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Loosemore, M., & Cheung, E. (2015). Implementing systems thinking to manage risk in public-private partnership projects. International Journal of Project Management, 33(6), 1325-1334.

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Mok, K. Y., Shen, G. Q., & Yang, J. (2015). Stakeholder management studies in mega construction projects: A review and future directions. International Journal of Project Management, 33(2), 446-457.

Pinto, J. K., & Winch, G. (2016). The unsettling of “settled science:” The past and future of the management of projects. International Journal of Project Management, 34(2), 237-245.

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