Stakeholder Analysis
A stakeholder is any person or organization who can be positively or negatively impacted by, or cause an impact on the actions of a company.
Stakeholder analysis is a form of analysis that aims to identify the stakeholders that are likely to be affected by the activities and outcomes of a project, and to assess how those stakeholders are likely to be impacted by the project. Stakeholder analysis has the goal of developing cooperation between the stakeholder and the project team and, ultimately, assuring successful outcomes for the project.
A stakeholder analysis is performed when there is a need to clarify the consequences of envisaged changes or at the start of new projects and in connection with organizational changes generally.
It is important to identify all stakeholders for the purpose of identifying their success criteria and turning these into quality goals.
Types of Stakeholders
· Primary stakeholders: are those ultimately affected, either positively or negatively by corporation's actions.
· Secondary stakeholders: are the ‘intermediaries’, that is, persons or organizations who are indirectly affected by corporation's actions.
· Key stakeholders: (who can also belong to the first two groups) have significant influence or importance in corporation.
Methods of Stakeholder Mapping
The following list identifies some of the best known and most commonly used methods for stakeholder mapping.
- (Mitchell, Agle et al. 1997) proposed a classification of stakeholders based on power to influence, the legitimacy of each stakeholder’s relationship with the organization, and the urgency of the stakeholder’s claim on the organization. The results of this classification may assess the fundamental question of “which groups are stakeholders deserving or requiring manager’s attention, and which are not?” This is salient - “the degree to which managers give priority to competing stakeholder claims” (Mitchell, Agle et al., 2007:854)
- (Fletcher, Guthrie et al. 2003) defined a process for mapping stakeholder expectations based on value hierarchies and Key Performance Areas (KPA),
- (Savage, Nix et al. 1991) offer a way to classify stakeholders according to potential for threat and potential for cooperation.
- (Turner, Kristoffer and Thurloway, 2002) have developed a process of identification, assessment of awareness, support, influence leading to strategies for communication and assessing stakeholder satisfaction, and who is aware or ignorant and whether their attitude is supportive or opposing.
Mapping techniques include the following sub-set of results from a Web search of analysis techniques being used by aid agencies, governments or consultant groups:
- Influence-interest grid (Imperial College London)
- Power-impact grid (Office of Government Commerce UK 2003)
- Power-interest grid (Moorhouse Consulting 2007. Also Mendelow)
A=High Power & Low Interest / B=High Power & High InterestC=Low Power & Low Interest / D=Low Power & High Interest
- Three-dimensional grouping of power, interest and attitude (Murray-Webster and Simon 2005)
- The Stakeholder Circle (Bourne 2007)
The first step in building any stakeholder map is to develop a categorized list of the members of the stakeholder community. Once the list is reasonably complete it is then possible to assign priorities in some way, and then to translate the ‘highest priority’ stakeholders into a table or a picture. The potential list of stakeholders for any project will always exceed both the time available for analysis and the capability of the mapping tool to sensibly display the results, the challenge is to focus on the ‘right stakeholders’ who are currently important and to use the tool to visualize this critical sub-set of the total community.
Stakeholder Analysis for Participation
Stakeholder Analysis is a vital tool for identifying those people, groups and organizations who have significant and legitimate interests in specific issues. Clear understanding of the potential roles and contributions of the many different stakeholders is a fundamental prerequisite for a successful participatory process, and stakeholder analysis is a basic tool for achieving this understanding. To ensure a balanced representation, the analysis should examine and identify stakeholders across a number of different dimensions. For example, the analysis should separately identify relevant groups and interests within the public sector, within the private sector, and within social and community sectors. In addition, the analysis can seek out potential stakeholders to ensure proper representation in relation to gender, ethnicity, poverty, or other locally relevant criterion. Cutting across these categories, the analysis can also look at stakeholders in terms of their information, expertise and resources applicable to the issue. However, stakeholder analysis by itself only identifies potentially relevant stakeholders - it does not ensure that they will become active and meaningful participants; other measures to generate interest and sustain commitment will be necessary as well.
Purpose
1. Ensure inclusion of all relevant stakeholders
Experience has shown that inclusion of the full range of stakeholders is not only an essential pre-condition for successful participatory decision-making but also vital for promoting equity and social justice in all development projects. For example, when decisions are made, priorities set, and actions taken without involving those relevant stakeholders, the result is usually misguided strategies and inappropriate action plans which are badly (if at all) implemented and which have negative effects on the beneficiaries and on the community at large. These approaches, which fail to properly involve stakeholders, have been widely proven to be unsustainable.
This Stakeholder Analysis Tool therefore encourages a far-reaching review of all potential stakeholder groups, including special attention to marginalized and excluded social groups such as the poor, women, elderly, youth, disabled, or others. This allows identification of representatives of these groups, so that they may be included in the decision making framework.
2. Maximize the role and contribution of each stakeholder
"Stakeholder Analysis ensures the inclusion of all stakeholders and maximization of their roles and contributions"
It is well recognized that broad-based stakeholders involvement and commitment is crucial to successful strategy and action plan implementation and therefore to sustainable water resource projects. With a multi-stakeholder approach to implementation, a wider variety of implementation instruments can be utilized. The stakeholder analysis facilitates mapping of potential stakeholder roles and inputs and access to implementation instruments. This will indicate how best to maximize the constructive potential of each stakeholder while also revealing bottlenecks or obstacles that could obstruct realization of their potential /contributions. For example, an analysis could identify a particular stakeholder's lack of information and skills for dialogue and negotiation, factors which undermine the contribution or influence of an otherwise importantly affected group of stakeholders.
Principles
"Stakeholder Analysis ensures the inclusion of relevant groups while incorporating gender sensitivity"
Inclusiveness. Ensure inclusion of the full range of different stakeholders, including marginalized and vulnerable groups.
Relevance. Includes only relevant stakeholders - those who have a significant stake in the process (i.e., not everyone is included).
Gender Sensitivity. Both women and men should have equal access within the participatory decision-making process.
How It Works
"A comprehensive long listing of stakeholders is the starting point for stakeholder mapping and analysis"
Stakeholder Analysis can be seen in terms of five generally sequential stages of activity:
1. Specifying issue(s) to be addressed. Stakeholders are defined and identified in relation to a specific issue - people and groups only have a concrete "stake" in a specific issue or topic. Hence, the stakeholder identification process operates in respect to a particular specified issue.
2. Long Listing. With respect to the specified issue, a "long list" of possible stakeholders, as comprehensive as feasible, should be prepared, guided by the general categories of stakeholder groups (e.g., public, private, and community/popular, with further sub-categories for each, gender, etc., also identifying those which:
· are affected by, or significantly affect, the issue;
· have information, knowledge and expertise about the issue; and
· control or influence implementation instruments relevant to the issue.
3. Stakeholder Mapping. The "long list" of stakeholders can then be analyzed by different criteria or attributes. This will help determine clusters of stakeholders that may exhibit different levels of interest, capacities, and relevance for the issue. Knowledge of such differences will allow systematic exploitation of positive attributes. Identify areas where capacity building is necessary for effective stakeholder participation, and highlight possible "gaps" in the array of stakeholders. One of the several forms of stakeholder mapping is by degree of stake and degree of influence, as shown in the matrix below:
Influence-Interest Matrix
Low Influence / High InfluenceLow Stake / least Priority Stakeholder Group / useful for decision and opinion formulation, brokering
High Stake / important stakeholder group perhaps in need of empowerment / most critical stakeholder group
"Stakeholder Analysis ensures that no important stakeholder is left out - optimizing potential roles and contribution which in turn maximizes efficiency and equity gains"
Stakeholder Analysis ensures that no important stakeholder is missed out. It also provides the framework for optimizing the roles and contributions of stakeholders. Inclusiveness and the right mix of roles and instruments are key elements of successful stakeholder participation. Where participation is generated through careful analysis of the key players, their roles and contributions, the process becomes more effective and efficiency as well as equity gains will be maximized.
Exercise
1.Draw up the chart
Prepare a chart on electronic whiteboard, or perhaps butcher paper, with columns on stakeholders, interest in project, influence on the project, how to engage/interact?, and the need for capacity building/awareness raising.
2.List stakeholders
Identify and list the stakeholders. These may be individuals, or stakeholder groups, or some combination. If stakeholders can be treated as a group, use groups. The most effective way of doing this is to list as many stakeholders as you can on a working sheet of paper. Then transfer them to the left hand column of the chart. It may help to list them in rough order of importance. (You may change your mind about their importance after this analysis.)
3.Identify their Interest and Influence on the Project/Issue
For columns 2 to 5, work across the page. Record your assessment of the stakeholders’ interest and influence in the columns.
4.Plan strategies
Plan your strategies for approaching and involving each person or group. Your assessments in columns 2 to 5 help you to do this. Your strategy is written in column 4 (how to engage/interact). It usually takes the form of obtaining more information, or of involving the stakeholder in the planning for the change.
In general, question marks indicate a need for more information. The more question marks, and the more influence the person has, the greater the need. On some occasions you will choose to approach the person concerned. On other occasions you may instead approach someone else who can be assumed to know about the person's interest or influence.
(On occasion, you may want to obtain some of this information before completing the analysis.)
In general, high influence indicates a need to involve the person in some way. (Or, if you choose not to do this, and they are opposed, you may choose to find some way to neutralize their influence.) The people or groups who require most attention are those who are influential and opposed.
For involvement, decide the extent. For example:
· involved only as informants
· consulted
· directly involved in decision-making
· involved as co-researchers and co-actors
or some similar categories.
Where the stakeholder is a group rather than an individual, you will probably want to include in your decision the style of participation appropriate: for example, direct participation of everyone, or representation.
Stakeholder list: assess interests and influence
# / Stakeholders / Interest in project(positive/negative)
+/ - / Influence on the project
+/- / How to engage/interact? / Need for capacity building/ awareness raising
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Stakeholder Map