Friday, July 15, 2011

Stakeholder Management in Construction Projects

Many believe effective stakeholder management is one of the most important aspects of successful project management. In an article written by Jergeas, Williamson, Skulmoski, & Thomas (2000), they surveyed three companies who manage construction projects in the oil and gas industry.

In the article the authors discuss the confusion around identifying stakeholders and compare some industry definitions of stakeholders. They provide a high-level outline of the process they underwent to deliver the survey and compile the results. Ultimately they were able to consolidate the responses from the three companies and compile a succinct list of some of the problems that project managers create by ineffective stakeholder management. In addition, they provide some tactics for effective stakeholder management. Although the company sampling is too small to compile a complete list, the information received from the sampling provides an excellent start to identifying the issues and associated with managing stakeholders.

What is a Stakeholder?

If you were to ask five people to define a project stakeholder, you will probably receive five different definitions. During a discussion about project management in a class at the University of Phoenix Online (2004), the students, many of which have numerous years of project management experience, struggled to agree on a definition of a project stakeholder. One student defined a stakeholder as anyone who has a stake in the project. Another viewed stakeholders as CEO and Executive level individuals. More formal sources such as the Project Management Institute (2001) define stakeholders as “individuals and organizations who are actively involved in the project, or whose interests may be positively or negatively affected as a result of project execution or successful project completion.” In addition, authors separate stakeholders in “primary” and “secondary” groupings (Cleland & Ireland, 2002). However, Jergeas believes “it makes little practical difference for project management purposes as members of both groups have to be identified, their claims understood, and their potential effect on the project assessed.”

Impact of Ineffective Stakeholder Management

Once stakeholders are identified, why does the project manager need to effectively manage them? The authors believe that the probability of project success is greatly reduced if stakeholders are ineffectively management. The authors believe that without stakeholder involvement, the project manager will struggle to clearly define the project objectives. Without clearly defined project objectives, neither the project manager nor the stakeholders will know when the project has met its objectives (Meredith & Mantel, 1995). In addition, even if the project is successful from the project manager’s perspective, unless the project meets stakeholder objectives, Jergeas experesses concern that “the stakeholders may not be satisfied with the project’s outcome.”

Jergeas draws from other sources to identify additional problems that contribute to project failure. For example, Black (1995) identifies “poor scope and work definition, inadequate resources assigned to the project (both in terms of quantity and quality), unforeseen regulatory changes, and negative community reaction to the project” as potential problems associated with ineffective stakeholder management. Ultimately, Jergeas believes that any problems caused by stakeholders because of their lack of involvement in the project has the “potential to affect budgets and schedules and may place a strain on the relationship with stakeholders.”

Tactics for Effective Stakeholder Management

If ineffective stakeholder management is so potentially troublesome for projects, what can project managers do to more effectively manage project stakeholders? During the survey process the authors asked representatives from the three sample companies questions about their processes for obtaining stakeholder buyiin, tactics they use to manage stakeholders, stakeholder feedback mechanisms, and methods used for effective communication. After consolidation of the respresentatives responses, Jergeas recommends the following tactics while managing construction projects in the gas and oil industry:

Involve stakeholders in front-end planning (Skulmoski & Hartman, 1999). Unfortunately, many project managers wait until far into the planning process before they involve project stakeholders. However, without adequate stakeholder involvement, the project manager may miss critical information, which one obtained may require plan rework, adding to costs and delaying the advancement of the project. Instead, the project manager should identify and involve the stakeholders as early in the process as possible.

Communicate with stakeholders (Jergeas et al., 2000). Stakeholders can only provide input into the planning process if they know about the project and have aa opportunity to communicate their ideas. Look for ways to open communication channels with stakeholders and encourage their ideas and requirements. In addition, keep stakeholders informed as the project progresses by sending updated information in a format that is most effective for individual stakeholders.

Integrated stakeholders into the project team (PMI, 2001). If the project manager needs continuous involvement from certain stakeholders, the project manager should invite the stakeholders to become part of the project team. Not only does the integration of the stakeholder ease communication challenges, but integrating stakeholders into the project team also ensures stakeholders are involved and support decisions that are made during each project lifecycle.

Formalize process used to identify and interview stakeholders (Jergeas et al., 2000). Project managers should continuously look for ways to improve stakeholder management. When an idea is used during a project and shows to help with stakeholder management, the project manager should document the tactic and use it during future projects, where applicable. Likewise, the project manager should develop checklists for identifying stakeholders and procedures to ensure effective interviewing techniques.


Although the article by Jergeas was intended for application within the gas and oil industry, any project manager can apply these stakeholder management tactics. In any project it is critical to have stakeholder buy-in and support (Jergeas et al., 2000). Effective stakeholder management helps gain stakeholder support which will help to ensure the deliverables of the project meet stakeholder expectation, reducing unnecessary pain for all. Likewise, as the project manager learns and applies ways to better involve the stakeholders in the project and to incorporate stakeholders in communication and decisions, the likelihood of project success will greatly increase.


Black, K. (1995). Causes of project failure: a survey of professional engineers. PM Network (November, 1995), 21-24.

Cleland, D. I., & Ireland, L. R. (2002). Project Management: Strategic Design and Implementation (4th ed.). New York: McGraw-Hill.

Jergeas, G. F., Williamson, E., Skulmoski, G. J., & Thomas, J. L. (2000). Stakeholder management on construction projects. Retrieved September 13, 2004.

Meredith, J. R., & Mantel, S. J. (1995). Project Management-A Managerial Approach. Canada: John Wiley & Sons.

PMI. (2001). A Guide to the Project Management Body of Knowledge (2000 ed.). Newtown Square, PA: Project Management Institute, Inc.

Skulmoski, G. J., & Hartman, F. (1999). Alignment: key to successful cost engineering. AACE International Transactions(AACE, 1999).

Students. (2004). General newsgroup discussions. In CPMGT/301 (Ed.). University of Phoenix Online.

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