Essay: Managing Stakeholders For A Project: A Report On Intercultural Stakeholder Engagement Simulation.

You are required to complete a report based on participation in The Intercultural Stakeholder Engagement Simulation. This is a work-related business simulation, in which you will participate as part of a small Student team.

In this simulation, you have just been appointed as the head of a project to complete the provision of hydro-electric energy in Laos. Your task will be to obtain as much support as possible from your boss and the 12 stakeholders for the development plan, while – at the same time – creating value for your company.

Your success will be judged on: (a) the value created by the project for your company, measured by profitability; and (b) a Sustainable Business Practices score, measured by the stakeholders’ weighted opinions.

The simulation provides work-related learning in the important areas of stakeholder management, decision-marking, and problem-solving, as well as giving Students practical experience of time management, ethics, team work and conflict resolution.

The objectives of the Simulation are to submit a proposal for construction, having made decisions and considered the impact of these business decisions on the environment and how they have impacted your stakeholders’ perceptions and opinions of your decision-making.

This requires consideration of: (a) balancing the economic and financial impact of your decisions on the company and the need for stakeholder support; (b) profiling and prioritising the key stakeholders; (c) planning, using and adapting a communication strategy; and (d) understanding of the drivers of individual behaviour.

You are required to complete the Learning Contract. After you have agreed and signed off your Learning Contract, you are to complete the Simulation programme and write a Project Report which must focus on the following.

1. A brief background and context of the Simulation, and the task and objectives that require decision-making and stakeholder engagement; (guide: 10% of your word count/content)

2. To  demonstrate  how  interaction  with  the  Simulation  programme  was organised;

3. To assess the weekly stage-gate decisions made within the Simulation, and the feedback gained from the Simulation “dashboard” about stakeholders’ perceptions and opinions (preparation, data collection and analysis);

4. To discuss the skills that you developed interacting with the Simulation;

5. To analyse and evaluate the decisions made, and the problems requiring solutions and the options that were taken, or not taken, by the Simulation decision-making process;

6. What learning you took from the Simulation by giving a portfolio of evidence (log books, critical incident diaries and feedback, to be included in the Appendices).

Scenario

The conflict between different participants arises when the individual or the organisation starts looking after its own interest and ignores the other participant’s interest. These and related issues were the basis for understanding the factors which concerned the project of constructing a Dam on the site chosen to construct a power plant at the junction of Nam Kading and rivers. Two potential dam sites were initially discussed: one on the confluence of Nam Mouan river (site ‘A’), and second just before Nam Mouan river flows into the Nam Kading (site ‘B’), asserts Lester, (2017). Although whole area is forest land, having very few settlements, locating the Dam at Site ‘A’ will flood a few settlements but by situating a dam at site ‘B’ will completely submerse an ancient burial ground which is currently under an archaeological consideration.

As the Project Manager, it was my responsibility to understand the project, explain it to the stakeholders and get acquainted with every stakeholder’s ability of affecting the success of the project, assert Atkin & Borgbrant (ed), (2009). If I am able to manage the stakeholders effectively as the PM, I have the chance to successfully complete the project and to reduce conflict between stakeholders. An ineffective PM not only leads to disruption of work, financial mismanagement and rivalry among stakeholders, it also results in dissatisfaction of the end-users. Moreover, the local community, as an external stakeholder, loses faith in the stakeholders thereby stalling any future projects involving the internal stakeholders because of the negative reaction to the ongoing project, asserts Lester, (2017). But the ground reality is that each stakeholder or group of stakeholders carry their own vested interests. Each participant mobilise its own resources, technical know-how and work culture and completes the project to fulfil its own interests. In majority of cases, these interests are concerned with financial gains for achieving a competitive edge over competitors, says Kelley, Male & Graham, (2014).

Although various literature reviews have been carried out to explain the concept of managing stakeholders, there is no single, cohesive definition of stakeholders which may be accepted universally. Ochieng, Price & Moore, (2013) describe that stakeholder management is a concept  which tries to redefine the management of stakeholders in the construction sector by understanding the affects being faced by individuals or groups because of the diverse conditions prevalent  in the construction organisations’ objectives.  Gunsteren, (2011) states that a construction organisation needs to be viewed as a group of different stakeholders. Hence, the role of the organisation becomes to manage the viewpoints, interests and needs of the individual stakeholders. Many of the literature reviews state that a conventional strategic viewpoint about stakeholders is to focus only on how to manage them while carrying on the process of creating profits for shareholders. More recently, another integrated viewpoint concerning stakeholder management has started emerging, asserts Trentim, (2015), which states that managers should follow the multi-fiduciary approach for managing the stakeholders as they are perceived as more than just participants who are after economic or legal power in the organisation.

Task

According to Atkin & Borgbrant (ed), (2009), stakeholders can be all or some of the following: shareholders, business partners, financiers, suppliers, distributors, customers, employees, stakeholders’ representatives, local communities, NGOs, Governments/policy makers, competitors, media, general public, non-human aspects such as the earth and natural environment. Most of the literature disuses strategic management when dealing with stakeholder management. In strategic management, the practice is to segment the stakeholders so that the organisation can investigate different ways to deal with each segment individually, as per Bourne, (2016). It was also articulated by Roeder, (2013) that literature reviews should treat Project Managers as leaders. Thus, as the PM, I have to act as the leader and as a stakeholder, who has access to organisation’s resources, although some literature reviews also want a PM to act a referee or a mediator between shareholders and stakeholders.

As per Lock, (2012), the success or failure of a project are dependent not only on the expectations and the perceptions of the individual stakeholders, but also on the stakeholders’ relationship with the project team and also on the Project Manager’s willingness and capability in effectively managing these relationships. In addition to this, the problems being faced by the stakeholder can be solved and management strategies implemented, if, as an effective PM, I understand the behaviour and relationship equation of the stakeholder. Hence, I find an essential need to develop a Communications Management Plan to ensure that adequate communication can be stablished with the stakeholders. Although, I prefer face-to-face meetings as they are the best way of communicating effectively with the construction project stakeholders. Under such circumstances, as the PM, I would get to read the body language of the stakeholders and hence can make better evaluation at the individual levels with regard to the satisfaction perceived by the stakeholders with regard to project activities, assert Kelley, Male & Graham, (2014).

Thus, to start an effective way, as per Atkin & Borgbrant (ed), (2009), to ensure that there exists communication between construction stakeholders and the management, I started to have a periodic review of the project’s progress. Although the Nam Kading carries large volume of water and can produce more power, it was found that site ‘B’ would produce 30% less power than site ‘A’. Moreover, a dam at site ‘A’ would affect resettlement of only 4,300 villagers but a dam at site ‘B’ will not only require the costly relocation of the burial site but will also result in its complete destruction, asserts Bourne, 2015. As such, asserts Lester, (2017), it becomes essential for the management to generate, store, disseminate and dispose-off information about the construction projects in a timely and precise manner.

An active communication channel can effectively maintain an ongoing relationship with the stakeholders and also prevents risk of miscommunication, which may result in insufficient support from the stakeholders. This is what I developed with the following stakeholders during the course of this project.

1. Ms Sharon Brown who is Executive Director for Asia Pacific with Hydro Con.
2. Mr Thongsavath Boupha, the Energy Minister of Laotian Government.
3. Mr Tanipat Thinnakorn, working as Project Head, PTE with Thai Energy Corporation.
4. Ms Birgitt Hanssen who is the Fund Manager with Investment Fund of Norway.
5. Mr Michele Chow, Project Director with World Bank.
6. Mr Soulivong, Director of Provincial Agriculture and Forestry Office.
7. Mr Keo Xayavong who is the Village Leader.
8. Mr Francois Delors, Construction Sub-Contractor with DEVELA SA, the company managing the project.
9. Mr Buk Phongvonsa who is Union Leader of the Local Construction Workers Union.
10. Ms Josephine Candor, Professor of Archeology.
11. Mr Kai Chareonkol who is a renowned Environmental Impact Expert.
12. Mr Gert Offerbach, working as an Activist with EcoAction.
13. Mr Daniel Fairbanks, the Bureau Chief of International News Agency.

My first practical stakeholder management learning came from the study and discussion of the following key considerations:

• Who are the main stakeholders and what are their interests?
• What opportunities can these interests offer to the project?
• What challenges are presented?
• What threats are presented?
• What are the levels of responsibility appropriate in meeting the stakeholders’ requirements?
• What are the necessary strategies required, such as direct dealings or accommodating or aggressive attitudes or a combination made of different course of actions?

Literature Review

These questions made it clear to me that the management process will require a good understanding about the current circumstances of the stakeholder, the most influential factors which affect them and obtaining of feedback information, so that I can help the organisation to formulate the best approach for achieving maximum benefits. I have also to ensure that the project sponsors appoint a ‘representative’ who is best placed for addressing the relevant issues of the stakeholder and also proactively helps me in promoting the stakeholder programme.

Finally, my aim is to implement the organisation’s CSR policies with regard to ethics, governance and environment sustainability and to fully embed them into the stakeholder management process. The objective of all this is to forestall PR disasters by promoting the most appropriate Relationship Marketing (RM) technique to offer greater transparency in the commercial undertakings. By achieving a common CSR rule, I can minimise the risks effectively and shape positive opinions, so that CSR decisions implemented across the operations of the organisation can completely get ingrained in the stakeholders management process and the notion of ‘doing well by doing good’ becomes part of the organisation’s competitive advantage.

Analysis about stakeholders is usually used as an approach for identifying and describing the stakeholders on the basis of their interrelationships, attributes and the interests shown by them in relation to a specific issue. The analysis, as per Kelley, Male & Graham, (2014), can also be used as a tool to understand the system by identification of the key stakeholders connected with the project and thereby making an assessment of their interest in the project. In large organisations, stakeholder analysis is often used during the process of change in management, risk assessment, key issues in the project and promoting project activities. Hence, asserts Lock, (2012), stakeholder analysis can be effectively carried out for discovery of existing patterns of interaction among the stakeholders and make analytical improvements. It can also be used as an effective management tool while formulating policy decisions and is a perfect tool for identifying / predicting conflicts. Since stakeholder analysis can be used for differentiating and studying the stakeholders, on the basis of their attributes, this can be used as an appropriate criteria to prioritise the stakeholders choices during specific situations and may predict the relative power and interest factor of every stakeholder, their threatening and collaborating potential and the influence they have on the outcome of the project, according to Ochieng, Price & Moore, (2013).

Stakeholder analysis may also help in the analysis and management of the project stakeholders effectively. Through this analysis, the objectives of the stakeholders and their behaviours can be easily predicted, their power can be assessed and implications of the strategies with stakeholders can be anticipated. Moreover, states Trentim, (2015), stakeholder analysis can also help in determining the alternative strategies which are likely to contribute to the success of the project. Besides ascertaining the effect of the established strategies on the success of every group of stakeholders, the stakeholder analysis may also help in the mapping of relationships between the different stakeholders. Subsequently, the stakeholder analysis can then be associated with stakeholder management while creating the process of strategies formulation and control of the subsequent activities, asserts Roeder, (2013).

Assessment Of Simulation

This analysis has helped me as the Project Managers in prioritising the project stakeholders and explaining to them the project, especially its benefits towards community development.

This part of Laos is an economically poor region which has a below average standard of living compared to the poor economics of other regions of Laos. This project has been developed keeping in view the low level of community development investment in the area. This investment being made for the region’s community development shall go towards improving local infrastructure for the local populations, says Lock, (2012).

The community development level is a measure on a scale of 0 to 5 with 5 being the highest level of development. This level is affected by the dam project and the level of community development investment chosen. The Landscape impact rating is an outcome measured on a scale of 0 to 5, with 5 representing a high impact on the landscape and 0 representing no impact. Of course, simply the building of the dam or dams on this site will inevitably impact the local landscape. Furthermore, other choices made in the site development plan will affect the impact on the landscape to a greater or lesser degree. A summary of the facts and figures about the economic benefits has been provided in Appendix – A at the end of the report, as per Freeman, (2010).

Conclusions

This project will help in creating job opportunities for the local communities throughout its duration. The jobs created will not only be for low-skilled construction workers, but will also create more employment opportunities for highly skilled technicians and engineers. This project’s outcome shall dispense more than the expected annual energy requirements of the region, once the plant becomes fully operational. The energy to be generated from this power plant however will be dependent on the supply of water to the dam constructed and also on the flow of water in the concerned rivers, asserts Gunsteren, (2011). Because there is a greater water flow all-round the year in Nam Mouan, the dam at site ‘A’ will generate more power than that constructed at site ‘B’.

Profitability is another important business measure for Hydro Con when comparing the relative success of the two project sites. The Profitability measure has been calculated by using the projected future cash flows of power generation business, starting from the construction period and lasting throughout the operational lifetime of the power plant. Corporate taxes, which the Government shall get from the project are also an important economic measure, especially for the Lao’s population, apart from their interest in the venture. Although the authorities have proposed various tax concessions during the grant of the licence for the project, once revenues start flowing-in from the sale of power generated and the construction costs have been recovered, the government expects to collect corporate taxes in full from the profits made by the plant, as per Gunsteren, (2011).

As per Lester, (2017), in construction project internal stakeholders are those who are either the owners, project leaders, clients or core team members, including professionals such as Architects, designers, contractors, subcontractors and suppliers. On the other hand, external stakeholders include groups such as, the regulators and local and national authorities, the general public and / or community groups, financiers, media and end-users or independent groups having special interests. As every group / individual stakeholder has different objectives and interests in the project, they also wield different levels of influence on the outcome of the project. Hence, for the managements, it is very important to know the different kind of expectations and levels of attention required from the managements and to what extent such groups can and will exert influences, as per Eskerod & Jepson, (2013).

In the management process of the stakeholder, the management has to evaluate needs and expectations of the stakeholder with the help of stakeholder analysis. The management applies stakeholder management strategies with an aim to increase the effectiveness by which they can manage the stakeholders’ varied interests and their influence disposition. However, the biggest challenge for the managements is to find the best resolution which can be accepted by all stakeholders, asserts Eskerod & Jepson, (2013). In this regard, the managements are constantly making efforts to reach to the goals of effective management of the construction stakeholders by using the most appropriate stakeholder analysis. The purpose of all this is to improve stakeholders’ relationship through an effective communication system, maintain sustained stakeholders’ commitment and increase the satisfaction level of the stakeholders. As per Bourne, (2015), project stakeholders are generally defined as individuals or organizations which are actively involved in the working of the project or those who have interests which are negatively or positively affected by the results of the project’s execution or by the successful completion of the project. The Project Manager and his team members have the responsibility of dealing with and managing the project stakeholders. They adopt different management strategies which can be either formal or informal or detailed or broad, and this depends on the project’s size, needs and complexity, explains Bourne, (2015). By identifying the stakeholders, assessing their expectations and interests throughout the life cycle of the construction project, the PM is hopeful for forecasting the project stakeholders’ behaviour and the effect it has on the project’s outcome, suggests Bourne, (2015).

When all the stakeholder groups, involved in the working of the project, show the inclination to recognise the benefits of the collaboration in stakeholder mapping, identification and engagement process, the probability of engaging the stakeholder successfully gets enhanced. In case the collaborative approach does not get the required encouragement from all sectors of the industry, including the client, the designer, the contractors, the subcontractor and the suppliers and the team is not constituted from all those involved, the effects of the gathered data will get reduced, thereby reducing the effectiveness of the stakeholder engagement activities and this will increase the failing possibility of the project, asserts Lester, (2017). However, even if the full cooperation of all the parties involved in the project is not available, application of an appropriate methodology by the project team can provide valuable information and insights for the success of the project. Using an appropriate methodology will also help the project team in identifying the relationships which need to be immediately nurtured and those stakeholder groups which must be engaged for success of the entire project, says Gunsteren, (2011).

On the whole, it is the responsibility of the construction project managers to manage the construction sites and effectively deal with the numerous internal and external parties, hence they must learn to adequately utilize the stakeholders’ power needs so that they can avoid any possible conflict. An effective and proactive stakeholder management strategy shall rely on the exerting power of the project manager, his decision making power, the referent power, and his reasoning for consultation, selection and communication, says Gunsteren, (2011). A balanced and well-managed relationship with the shareholders and the stakeholders can bring positive outcomes to the project. With the help of informal networking, the project manager will be able to obtain invaluable insights, because an informal feedback is more candid and emotive as compared to the written or formal reports. The most important thing for the management to do is to proactively reach out to the stakeholders, actively create cordial relationships, mutual trust and consistently keep the stakeholders informed, consulted, involved and collaborated, suggests Lester, (2017).

Reference List

Atkin, B. and Borgbrant, J. (ed). 2009, Performance Improvement in Construction Management. Routledge, Oxon.

Bourne, L. 2015, Making Projects Work: Effective Stakeholder and Communication Management. CRC Press, Boca Raton, FL.

Bourne, L. 2016, Stakeholder Relationship Management: A Maturity Model for Organisational Implementation. CRC Press, Boca Raton, FL.

Eskerod, P. and Jepson, A.L. 2013, Project Stakeholder Management. Gower Publishing, Ltd., Surrey.

Freeman, R.E. 2010, Strategic Management: A Stakeholder Approach. Cambridge University Press, New York.

Gunsteren, L. A. 2011, Stakeholder-oriented Project Management: Tools and Concepts. IOS Press, Amsterdam.

Kelley, J., Male, S. and Graham, D. 2014, Value Management of Construction Projects, 2^nd ed. John Wiley & Sons, West Sussex.

Lester, A. 2017, Project Management, Planning and Control: Managing Engineering, Construction and Manufacturing Projects to PMI, APM and BSI Standards, 7^th ed. Butterworth-Heinemann, Oxford.

Lock, D. 2012, Project Management in Construction. Gower Publishing, Ltd., Hunts.

Ochieng, E., Price, A. and Moore, D. 2013, Management of Global Construction Projects. Palgrave Macmillan, London.

Roeder, T. 2013, Managing Project Stakeholders: Building a Foundation to Achieve Project Goals. John Wiley & Sons, Hoboken, NJ.

Trentim, M.H. 2015, Managing Stakeholders as Clients: Sponsorship, Partnership, Leadership and Citizenship. Project Management Institute, New York.