Question
The paper is divided two parts:Part one Topic(max 1900 words) Managing stakeholders effectively is crucial for successful implementation of projects and for realising intended organisational benefits. Based on your research, this assignment asks you to articulate theoretical foundations of stakeholder management in the context of project management, critically evaluate the factors that influence effectiveness of stakeholder management, and based on this evaluation, make well-argued recommendations to project managers.
Part 2(600 words max)Earned Value Management (EVM) approach may help a project manager to control the cost and time required to execute a project. Based on your research, explain how using EVM can add value to project management. Further explain any limitations in using this approach. You may support your explanations with the help of examples or case references.You need to look at the requirement carefully before you writing the paper. There are instruction telling you what you should write, there are different classification under each part that you need to write, and you also need to look at the marking criteria to make sure you meet the requirements.
The most important part in this essay is the part 1 (C) make sure you pay more attention on it.I am also post you several lecture notes that you need to use some theory from the lecture.Do not copy, Below is the website that clearly talks about what is the paper about, you can take a look at it. https://cloudstor.aarnet.edu.au/plus/s/9TqbADhC1TzaBfBLinks to an external site.Password: rJpgo4^6JJ92
Executive Summary
This report aims at exploring the concept of stakeholder management and the earned value management (EVM) methodology as used in project management. The first part of the report delves into the issue of stakeholder management, its analysis in the context of project management, factors that influence its effectiveness, and recommendations for project managers on ways to improve the efficiency of stakeholder management. The report finds that communication, project manager competency, and transparency are among factors that affect effective stakeholder management. Furthermore, the report recommends that project managers should develop proper communication management plans, transparency, and appropriate processes such as stakeholder identification, analysis, and prioritization to enhance the effectiveness of stakeholder management.
The second part of the report addresses the issue of the use of EVM in project management. The report finds that EVM creates value in projects by helping project managers track the cost and schedule of a project, and take corrective actions where need be. However, the report also identifies that the methodology has limitations, such as the inability to measure the quality of projects and the potential of creating confusion about the exact project status.
Part 1
Introduction
Over the past few years, stakeholder management has become an essential practice in project management; it is attributed to project success. Despite its growing popularity, there still exist gaps in the literature about the application of the concept in projects. Therefore, this report aims at exploring the theory in-depth, including factors that affect its use in projects. The first and second section of the report provides a review and analysis of the concept in the context of project management. The third part addresses the factors that may influence the effectiveness of stakeholder management. The report then discusses approaches to improving stakeholder management in projects and provides recommendations for project managers on ways of enhancing the effectiveness of stakeholder management.
The Concept of Stakeholder Management
A few years ago, the aspect of stakeholder management was incorporated in the Project Management Body of Knowledge (PMBOK), a guideline for project management. This move signified the essentialness and relevance of the concept in project management. Since then, the concept in the context of project management has increasingly received scholarly attention, as the majority of the researchers strive to analyze the relationship between stakeholder management and successful projects.
The Theory of Stakeholder Management
In essence, the theory of stakeholder management in the broader organizational context began decades ago with the works of scholars such as Freeman. Notably, Freeman argued that the primary assumption of stakeholder management theory was that “the purpose of a firm is to create and distribute value to a plurality of stakeholders and that the achievement of this purpose depends on the cooperation and support of the stakeholders themselves” (cited in Minoja, 2012, p.67). In the stakeholder management view, the firm should meet the expectations of all stakeholders; and stakeholders, through their decision and cooperation, have a significant influence on the overall success of the organization.
Furthermore, the theory of stakeholder management provides the basis for the concept of stakeholder management in the context of project management. Scholars view the concept as all the processes required in identifying the people and groups that may impact or be impacted by a project, analyzing their expectations and developing appropriate management strategies for their engagement (Junior, Porto, Pacifico & Junior, 2015). The theory assumes that any given project is complex and consists of diverse stakeholders such as the client, outside interested parties, and the project’s team. Therefore, the creation of a successful project depends on proper management of the stakeholder’s negotiations and agreements.
Additionally, the growing literature tries to analyze the concept of stakeholder management using a stakeholder matrix. Notably, Atkin and Skitmore (2008) assert that although all stakeholders are equally important in a project, their control varies depending on their levels, types of investment, and interests in projects in which they are involved. The varying degree of influence implies that the project manager must develop strategic approaches to communicate critical information to different stakeholders.
In the same context, scholars proceed to classify stakeholders based on two attributes; power of influence and level of interest. According to scholars, power is the ability used by individuals or organizations to bring the outcomes they wish (Rajablu, Marthandan & Yusoff, 2015). Rajablu et al. (2015) also emphasize that stakeholder’s power influences project survival. Based on this information, it is evident that stakeholder management requires identification of the degree of power that a stakeholder has on the project, managing their engagement, and ensuring that the power is directed to the achievement of success of the project.
Literature also suggests that stakeholders can be categorized based on their level of interest. Notably, this attribute refers to the degree to which stakeholders are interested in pursuing their expectations and their power to do so (Rajablu et al., 2015). Kumar (2015) also adds that understanding stakeholders based on their level of interest helps in prioritizing the latter. Notably, using the stakeholder matrix, the project manager can determine stakeholders that hold the highest interest in the project and choose the most effective communication strategy of keeping them engaged in the project’s life.
Analysis of the Concept of Stakeholder Management in the Context of Project Management
Unlike the day-to-day organizational activities, projects are unique in scope, resource, and time, and these attributes increase the relevance of stakeholder management in recent years. For example, by nature, almost all projects are temporary; they have a definite life-cycle, after which clients expect to see the results of their investment. The transient nature of projects necessitates a proper understanding of all the people involved and developing appropriate strategies to manage their engagement to ensure that the project goal is met before the time-lapse.
Furthermore, the majority of the projects have fixed or limited resources, both human and financial. As such, coupled with their limited time frame, projects are subject to the risks of not being completed on time within the initial budget, or not producing the desired benefits (Tan & Petros, 2009). The susceptibility of projects to the highlighted risks and the limited resources calls for proper management of stakeholders to ensure timely release of funds to finance the various stages of the project life and successful negotiation among stakeholders to ensure that they have a joint project goal.
Factors that Influence the Effectiveness of Stakeholder Management in Planning and Executing Projects
The effective management of the diverse stakeholders and the subsequent success of projects relies on multiple factors, among them the availability of competent project managers. Prior research conducted among stakeholders in the construction of the Gaza Strip showed that project manager competencies ranked in the first position as a critical factor that influences the stakeholder management process (El-Sawalhi & Hammad, 2015). Notably, in every project, regardless of the level of complexity, there are different individuals with varying understanding of the technical processes of the overall work. Hence, the degree of competency of the project manager to present data to the vast audience with varying technical cultures is a significant factor in determining whether or not the stakeholders will be managed effectively during the planning and execution of projects (El-Sawalhi & Hammad, 2015). Therefore, for effective stakeholder management, a competent manager must be hired.
Communication is also a critical factor for the effective management of stakeholders in the planning and execution of projects. As observed by Bourne (2016), to engage with and influence the diverse stakeholder community, effective communication strategies must be established. Notably, the communication approach adopted by project managers determines, to a large extent, the attitude and actions of the stakeholders towards a project. In scenarios where chosen communication strategies take into account the diversity and complexity of the stakeholder community, the project manager can effectively manage all the involved parties.
Apart from communication, transparency is also an essential factor that determines the effectiveness of stakeholder management. Scholars define transparency as the process of publishing the decentralized processes and status information that can be used to improve process controlling (Nedbal, Auinger & Hochmeier, 2013). In the context of project planning and execution, transparency entails publishing the exact status of a project to all the involved stakeholders. Arguably, in a scenario where transparency is taken into account as a core element of project evaluation, it may be easier for the project manager to determine the exact expectations of each stakeholder and develop appropriate management strategies for engaging the different needs of the stakeholders into achieving a common goal. Conversely, lack of transparency in the evaluation of a project can compromise stakeholder engagement, jeopardize the latter’s trust, and consequently lead to the overall failure of the project, as the stakeholder may be unwilling to disburse funds in the project.
Approaches to Improve Stakeholder Management in Projects
As noted, a considerable number of projects fail due to the ineffective management of stakeholders, an aspect that necessitates immediate improvement in this particular area. Among the approaches that can be used to improve stakeholder management is the effective planning of the three parameters of stakeholder management, starting with stakeholder identification. Notably, before the project manager develops strategies for stakeholder engagement, they should sufficiently use a stakeholder map to identify all the interested parties, either internal or external, to the project (Kumar, 2015). Stakeholder identification is also emphasized by Waghmare, Bhalerao, and Wagh (2016), who aver that construction projects need to consider and gratify various stakeholders such as end-users, customers, designers, contractors, and maintenance team. The output of the process of identifying stakeholders can facilitate better management of stakeholders as project managers may have a clear picture of all the involved parties, and develop an effective communication plan that would keep as the individuals informed about the progress of the project.
The second step of improving stakeholder management in projects is conducting a stakeholder analysis to ascertain the latter’s relationship with the project and establish the most appropriate communication management plans. As defined by Waghmare et al. (2016), stakeholder analysis is the reorganization of stakeholder’s needs, concerns, wants, authority, common relationships, and aligning the information within the stakeholder matrix. For example, in the scenario of a construction project, the project manager should analyze each of the identified stakeholders and assess their specific wants and interest in the project. Stakeholder analysis can help improve stakeholder management by enabling the management to evaluate the needs of the involved parties and develop appropriate communication management strategies that foster the engagement of the participants in the project based on their particular wants and concerns in the project.
Furthermore, a stakeholder matrix can also be utilized to improve stakeholder management in projects. Minoja (2012) states that stakeholder matrix maps stakeholders based on their power of influence, to support or obstruct a project, and interest in the initiative. Kumar (2015) also adds that the tool positions stakeholders in a project based on their level of influence and the enhancement they may provide to the project, as shown in figure 1. For example, in a construction project, stakeholders such as the safety teams, designers, construction workers, and development teams can be categorized based on their power and influence in the project. Categorization of these stakeholders can enhance stakeholder management by allowing the project manager to identify parties that are likely to obstruct the project and develop effective engagement strategies of ensuring that their influence is redirected to the successful completion of the work. Besides, using the stakeholder matrix can help managers identify the magnitude of impact that each stakeholder has and develop appropriate communication approaches of keeping the latter informed of the project developments.
Recommendations
As noted in the research, among the factors that may hinder effective management of stakeholders in a project is the lack of proper communication. Therefore, for project managers to effectively manage stakeholders, they must ensure that appropriate communication management plans are put in place to facilitate the sharing of essential data between the project and other parties. Besides, effective communication could enhance stakeholder engagement in the project and their willingness to continue funding the project based on the information provided regarding the status and progress of the initiative. However, each communication approach should match the interest and influence of each stakeholder. For example, there should not be frequent communication with stakeholders with lower interest and influence in the project. Instead, the project manager should identify occasional communication mediums such as annual reports to inform this category of stakeholders about the progress and status of the project. The opposite approach should also be used for parties with high interest and influence in the project.
Furthermore, to enhance the effectiveness of management, project managers should always follow the three parameters of stakeholder management; identification, analysis, and prioritization. Notably, through identification and analysis, project managers can have adequate knowledge of the different parties involved in the project and develop effective communication management plan to share information with them. Further, prioritization can help enhance the effectiveness of stakeholder management by helping project managers know whom, how, and when to engage participants in the crucial decision-making of the project.
Conclusion
Synthesis of information from the research reveals that stakeholder management is a vital determinant of the success or failure of a project. Notably, the study establishes that if proper measures are not put in place to identify and engage the diverse community of stakeholders in the project, then the likelihood of failure of the initiative increases considerably. These findings imply that project managers have a role in ensuring that communication, transparency, and appropriate processes such as stakeholder identification, analysis, and prioritization are adopted to enhance the effectiveness of stakeholder management.
Introduction to Earned Value Management (EVM) Approach
Over the past few decades, the concept of EVM has mostly been applied in diverse fields such as construction and engineering projects to allow managers to gain adequate visibility on project status. According to scholars, the project management methodology accomplishes this objective by helping managers track the costs and labor schedules till a given point in a project (Gasparotti, Raileanu & Rusu, 2017; Urgiles, Claver & Sebastian, 2019). If used properly, EVM can foster value creation in project’s life; however, the methodology is still subject to a few limitations such as failure to measure project quality and possibility to confusing the true status of the project, thus necessitating project managers complement it with other project management processes.
Justification of Value Creation in Projects using EVM
When in use, EVM creates value in the project by helping managers evaluate schedule and budget-related parameters at an early stage and take corrective measures based on the established variances. As observed by Nkiwane, Meyer, and Steyn (2016), the general awareness created by the methodology on how far behind or ahead of schedule the project is, is what enhances the decisions at all levels of the project team. For example, when using the EVM, a project manager can track the labor costs and amount of work completed until a given point of a project. This data is then compared with the planned work at the beginning of the project to establish any variances in the work breakdown structure. The comparison of the two variables creates the possibility of the project team to identify deviations and implement corrective measures at an early stage, thus creating an overall value to the whole project in terms of budget and schedule.
Limitations
Despite its possibility of creating value in project management, the EVM approach is subject to a myriad of constraints, among them failure to measure project quality. As opined by Solanki (2009) and Hickson and Owen (2015), the EVM can indicate that a project is under budget and ahead of schedule, but still have ultimately disastrous results. Therefore, EVM cannot be solely relied on as a manager’s tool as it may not provide a true reflection of the project in terms of quality.
Finally, despite several scholars advocating for the use of EVM in project management, there exist concerns over the methodology, creating confusion regarding the actual status of a project. As observed by Venkataraman and Pinto (2011), the tool sometimes uses the percentage completion rule with excess levels, which can be quite confusing. The authors also add that, where a five percent increment is used in the earned analysis, it may be challenging to delineate the points in the project activities (Venkataraman & Pinto, 2011). Therefore, with the incorporation of such an excessive level of details, project managers and stakeholders may experience difficulties in identifying the exact status of a project.
References
Atkin, B., & Skitmore, M. (2008). Stakeholder management in construction. Construction Management and Economics, 26(6), 549-552.
Bourne, L. (2016). Targeted communication: The key to effective stakeholder engagement. Procedia- Social and Behavioral Sciences, 226(2016), 431-438.
El-Sawalhi, N.I., & Hammad, S. (2015). Factors affecting stakeholder management in construction projects in the Gaza strip. International Journal of Construction Management, 15(2), 157-169. doi: 10.1080/15623599.2015.1035626
Gasparotti, C.G., & Raileanu, A., & Rusu, E. (2017). The earned value management- A measurement technique of the performance of the costs and labor in the project. Economica, 13(2), 220-233.
Hickson, R.J., & Owen, T.L. (2015). Project management for mining: Handbook for delivering project success. SME publishers.
Junior, A.C.P., Porto, G.S., Pacifico, O., & Junior, A.P. (2015). Project stakeholder management: A case study of a Brazilian science park. Journal of Technology Management & Innovation, 10(1), 39-49.
Kumar, S.S. (2015). Modeling and managing stakeholder’s power and influence for quality improvement in construction projects- A case study at “Jaipur Metro”. International Journal of Civil Engineering, 2(4), 16-20.
Minoja, M. (2012). Stakeholder management theory, firm strategy, and ambidexterity. Journal of Business Ethics, 109, 67-82.
Nedbal, D., Auinger, A., & Hochmeier, A. (2013). Addressing transparency, communication and participation in enterprise 2.0 projects. Procedia Technology, 9(2013), 676-686.
Nkiwane, N.H., Meyer, W.G., & Steyn, H. (2016). The use of earned value management for initiating directive project control decisions: A case study. South African Journal of Industrial Engineering, 27(1), 192-203.
Rajablu, M., Marthandan, G., & Yusoff, W.F.W. (2015). Managing for stakeholders: The role of stakeholder-based management in project success. Asian Social Sciences, 11(3), 111-125. doi:10.5539/ass.v11n3p111
Solanki, P. (2009). Earned value management: Integrated view of cost and schedule performance. Global India Publications.
Tan, A.W.K., & Petros, T. (2009). Strategic information technology and portfolio management. Idea Group Inc.
Urgiles, P., Claver, J., & Sebastian, M.A. (2019). Analysis of the earned value management and earned schedule techniques in complex hydroelectric power production projects: Cost and time forecast. Hindawi, 2019(3190830), 1-12.
Venkataraman, R.R., & Pinto, J.K. (2011). Cost and value management in projects. New Jersey, U.S: John Wiley & Sons.
Waghmare, Y.M., Bhalerao, N., & Wagh, S.V. (2016). Analysis of the factors affecting the stakeholder management process in building construction project. International Journal of Innovative Studies in Sciences and Engineering Technology, 2(7), 48-56.
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