Stakeholder Analysis

Stakeholder AnalysisOrganization’s challenge is to balance the needs of the different persons, groups of people and organizations that have some kind of stake or interest in the organization. They are called stakeholders.

They each have a stake in the success and actions of the organization.

While each organization will have its own cast of specific stakeholders, the generic stakeholder groups or categories remain fairly similar within industries. An organization needs to attempt to create a desirable outcome for each stakeholder.

Since different groups have different agendas, an organization must strive to understand the various stakeholder desires and expectations. Management’s job is to balance the ways in which the organization creates value for its stakeholders.

  1. How to Identify Stakeholders

The word ‘stakeholder’ refers to anyone significantly affecting or affected by someone else’s decision-making activity.

Briefly, stakeholders are groups, constituencies, social actors or institutions of any size that act at various levels {domestic, local, regional. national, international, private and public), have a significant and specific stake in a given set of resources, and can affect or be affected by resource management problems or interventions.

Stakeholders are all those, who need to be considered in achieving project goals, and whose participation and support are crucial to success.

In many circles .these are called interest groups. They can have a powerful bearing on the outcomes of the political process To identify stakeholders the following checklist may prove useful:

  • Who are the sources of reaction or discontent to what is going on?
  • Who has relevant positional responsibility?
  • Who do others regard as important actors?
  • Who participates in activities?
  • Who shape Or influence opinions about the issues involved?
  • Who falls in demographic groups affected by the problem?
  • Who have clear roles in the situation (eg. customer, friend, advisor)?
  • Who are in areas adjacent to the situation?

There are Internal Stakeholders (such as employees) and External Stakeholders (such as government). The interests of all stakeholders are closely related to the general success and wealth of the organization.

However, certain stakeholders’ interests are particularly important at times when certain issues must be addressed, for example;

  • Public/customers are important when the quality of services or deliverables are discussed.
  • Employees are important when a particular situation or work environment is discussed.
  • Government is important when dealing with the environment or legislation.

The following table may help you in identifying stakeholders in your case.

Private sector stakeholdersPublic sector stakeholdersCivil society Stakeholders
  • Business enterprises
  • Business associations
  • Professional bodies
  • Individual business leaders
  • Financial institutions
  • Ministers and advisors (executive)
  • Civil servants and departments (bureaucracy)
  • Elected representatives (legislature)
  • Courts (judiciary)
  • Political parties
  • Local government/councils
  • Military
  • International bodies (World Bank, UNO, etc.)
  • Media
  • Churches/religions Schools and Universities
  • Social movements and advocacy groups
  • Trade unions National NGOs International NGOs

 

Listing any assumptions that stakeholders are making could prove helpful.

Ask yourself, does this actor have, any special power in the situation?

If so, any of his or her assumptions could have a considerable effect on your organization.

How could these stakeholders be influenced to change their point or course of action?

  1. How to Analyze Stakeholders

A stakeholder analysis is a technique you can use to identify and assess the importance of key people, groups of people, or institutions that may significantly influence the success of your activity or organization. You can use this technique alone or with your team members.

Stakeholder analysis identifies the ways in which stakeholders may influence the organization or may be influenced by its activities, as well as their attitude towards the organization and its targets.

It helps identify key differences among groups and areas of potential common ground dnd feasible interventions aimed at better management of resources and related conflicts. When you undertake a stakeholder analysis, you will be able to identify all primary and, secondary stakeholders who have a vested interest in the issues with which the organization is concerned.

The major goal of stakeholder analysis is to develop a strategic view of the human and institutional landscape, and the relationships between the different stakeholders and the issues they care about most.

The idea of SA is catching on for several reasons.

For one thing, the methodology involves recognition of the fact that obstacles to peace, equity, sustainability or growth cannot be dealt with through technological means alone.

When, for example, tackling issues of poverty and environmental degradation, power relations, and conflicting interests must be addressed.

Social relations involving all “interested parties” must be examined and alternative practices explored if blueprints for technological change are to be grounded in reality and add up to more than pie in the sky.

Stakeholder Analysis is important for a variety of reasons

Stakeholder participation gives people some say over how change management programs may affect their lives.

It also generates a sense of ownership if initiated early in the development process.

Stakeholder participation builds capacity and enhances responsibility and thereby to a greater extent ensures sustainability. You can use stakeholder analysis to:

  • Identify people, groups, and institutions that will influence your initiative (either positively or negatively).
  • Anticipate the kind of influence, positive or negative, these groups will have on your initiative.
  • Develop strategies to get the most effective support possible for your initial and reduce any obstacles to a successful implementation of your program.
  • Identify potential conflicts or risks that could jeopardize your initiative.

You need to decide when and how to conduct a stakeholder analysis.

It is advisable to conduct a stakeholder analysis in the early stages of planning a change program (e.g., quality improvement initiative). There are a number of ways of undertaking a stakeholder analysis. Workshops, focus group discussions and interviews are three common approaches.

Whatever approach is used, there are 3 essential steps in stakeholder analysis:

  • Identify the key stakeholders and their interests (positive or negative) in the change program.
  • Assess the influence of and level of impact upon each stakeholder, and
  • Identify how best to engage stakeholders in the change program,

You can develop a Stakeholder Analysis Matrix like the one below and then follow the procedures listed under the matrix:

Stakeholder Analysis Matrix

Stakeholder Analysis Matrix

  1. Organize group brainstorming. Identify all the people, groups, and institutions that will affect or be affected by your initiative and list them in the column under ’’Stakeholder.
  2. Once you have a list of all potential stakeholders, review the list arid identify the specific interests these stakeholders have in your project. Consider issues Hke: the project’s benefit(s) to the stakeholders; the changes that the project might require the stakeholder to make and the project activities that might cause damage or conflict for the stakeholder. Record these under the column “Stakeholder Interests) in the Project”.
  3. Now review each stakeholder listed in column one. Ask the question: how important are the stakeholders’ interests to the success of the proposed project? Consider:
    1. The role the key stakeholder must play for the project to be successful, and the likelihood that the stakeholder will play this role
    2. The likelihood and impact of a stakeholder’s negative response to the project.Assign A for extremely important, B for fairly important, and C for not very important. Record these letters in the column entitled “Assessment of Impact.”
  4. The final step is to consider the kinds of things that you could do to get stakeholder support and reduce opposition. Consider how you might approach each of the stakeholders.
    • What kind of information will they need?
    • How important is it to involve the stakeholder in the planning process?
    • Are there other groups or individuals that might influence the stakeholder to support your initiative?
    • Record your strategies for obtaining support or reducing obstacles to your organization in the last column in the matrix.