Module Objective
Understand the importance of stakeholder management
Understand Key stakeholder management activities performed during each project focus area (process group)
Understand Stakeholder register
Understand Stakeholder classification and associated Stakeholder management strategies
Understand various types of powers
Understand stakeholder engagement metrics
Anyone who is affected positively or negatively, by doing a project or by not doing it or by delaying it is a stakeholder
Stakeholder management starts from the beginning of the project till the completion of the project
During the initiation phase, stakeholder register is prepared
During the planning phase;
Stakeholders are prioritized based on;
Their power to influence the project
Their interest in the project
The main tool used is the Power - Interest Grid
After stakeholder prioritization, strategies to deal with various groups of stakeholders are developed
During the execution phase of the project;
The stakeholder management strategies are implemented
Stakeholder engagement levels are monitored and controlled (Stakeholder engagement metrics)
A project stakeholder is any individual, group, or organization that can affect, be affected by, or perceive itself to be affected by the project or its outcomes.
This definition is widely used in modern project management and is described in the A Guide to the Project Management Body of Knowledge (PMBOK Guide)
Stakeholders may influence:
Project objectives
Project resources
Project decisions
Project success or failure
Because of this influence, effective stakeholder identification and engagement is a critical responsibility of the project manager.
Stakeholder management happens throughout the project.
During project initiation a stakeholder register is prepared for the first time and gets updated throughout the project.
During Project Planning phase of the project, the stakeholders are analysed, classified and stakeholder management strategies are identified.
During Project execution phase, the stakeholder management strategies are implemented. Project monitoring and controlling focuses on ensuring appropriate levels of stakeholder engagement levels.
Stakeholders are generally categorized as internal or external.
These stakeholders belong to the project-performing organization.
Examples:
Project sponsor
Project manager
Project team members
Functional managers
Senior management
Project Management Office (PMO)
Internal stakeholders usually have direct involvement in project execution.
These stakeholders are outside the organization but are affected by the project.
Examples:
Customers or clients
Suppliers and vendors
Government agencies
Local communities
Regulatory authorities
Investors
Media
External stakeholders often influence approvals, regulations, funding, or public perception.
Project Sponsor - Provides financial resources, strategic direction, and executive support.
Project Manager - Responsible for planning, executing, monitoring, and closing the project.
Project Team - The people who perform the project work.
Customers / Users - Those who use the final deliverables of the project.
Functional Managers - Managers responsible for departments such as engineering, procurement, finance, or HR.
Regulators - Government bodies that ensure legal and environmental compliance.
Effective stakeholder management helps to:
Reduce project resistance
Improve decision-making
Increase project acceptance
Prevent conflicts and delays
Improve communication and transparency
Poor stakeholder management is one of the most common causes of project failure.
Typical activities include:
Identify stakeholders
Analyze stakeholder expectations
Classify stakeholders
Develop stakeholder engagement strategy
Manage and monitor stakeholder relationships
This power comes from a person’s official position in the organization.
Examples
CEO
Project sponsor
Functional manager
Government authority
Example in projects:
A project sponsor can approve budgets and major project decisions because of their formal authority.
This power comes from the ability to provide incentives or rewards.
Examples
Salary increments
Promotions
Performance bonuses
Recognition
Example in projects:
A functional manager may reward team members who perform well on a project.
This is the ability to punish or impose penalties.
Examples
Disciplinary action
Removal from project
Negative performance review
Contract penalties
Example in projects:
A contract manager may impose penalties if a vendor fails to meet deadlines.
This power comes from knowledge, skills, or expertise.
Examples
Senior engineers
Subject matter experts
Technical consultants
Example in projects:
A BIM expert or cybersecurity specialist may strongly influence project decisions because of their expertise.
This power comes from personal charisma, reputation, or relationships.
Examples
Respected leaders
Influential senior professionals
Well-known industry experts
Example in projects:
A highly respected architect may influence decisions even without formal authority.
This power comes from access to important information.
Examples
Market analysts
Financial analysts
Data scientists
Example in projects:
A stakeholder who controls critical market data or customer insights can influence strategic project decisions.
To manage stakeholders effectively, project managers classify them based on power, interest, influence, or impact.
Stakeholders are classified based on:
Power (ability to influence the project)
Interest (level of concern about the projects
Category
High Power – High Interest (Manage Closely)
High Power – Low Interest (Keep satisfied)
Low Power – High Interest (Keep informed)
Low Power – Low Interest (Monitor)
Classifies stakeholders based on:
Power
Influence over project decisions
Used often in large infrastructure or government projects.
Classifies stakeholders based on:
Ability to influence decisions
Degree to which the project affects them
Useful for public projects and social projects.
Stakeholders are classified based on three attributes:
Power - Ability to influence the project
Legitimacy - Valid involvement in the project
Urgency - Need for immediate attention
Stakeholders with all three attributes receive highest priority attention.
Stakeholder engagement levels
Unaware - Not aware of the project
Resistant - Opposes the project
Neutral - Neither supports nor opposes
Supportive - Supports the project
Leading - Actively promotes the project
Comple the assessment given below