Organizational Theory: The importance of Stakeholders in Project Management

Seminar paper from the year 2013 in the subject Business economics - Business Management, Corporate Governance, ( Atlantic International University ), language: English, abstract: Contemporary project management recognizes the importance of stakeholder involvement in project initiation, planning and execution. This is particularly so as stakeholder's interests, involvement and expectations all influence project execution as well as its impact. Project management is the planning, organizing, directing and controlling of resources for a relatively short-term objective that has been established to complete specific goals and objectives . Stakeholders refers to any individuals, groups, or institutions who have a vested interest in the natural resources of the project area and who potentially will be affected by project activities and have something to gain or lose if conditions change or stay the same . Thus in the context of project management, stakeholders are all those who need to be considered in achieving project goals and whose participation and support are crucial to its success. Stakeholders can be internal to the project or external. The major stakeholders in project management are the project managers, project team, sponsors of the project, customers or project beneficiaries, government, local communities among others. In project management, stakeholders are identified through stakeholder analysis. Stakeholder analysis identifies all primary and secondary stakeholders who have a vested interest in the issues with which the project or policy is concerned . The main aims of stakeholder analysis are to identify the interests of stakeholders and potential areas of conflict as well as ways to reduce negative impacts on vulnerable and disadvantaged groups . The importance of stakeholders is in project management is evident at different levels. Firstly, it gives the concerned people say over how projects may affect their lives. Secondly, it is essential for project sustainability. Thirdly, it generates a sense of ownership if initiated early in the development process. Fourthly, it builds capacity and enhances responsibility. Fifthly, it provides opportunities for learning for both the project team and stakeholders themselves. This paper thus examines the importance of stakeholders in project management informed by the view that all the important decisions during initiation, planning and execution stages of the project are made by these stakeholders.