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Stakeholders are groups or individuals interested in the results of a project or decision-making process. For example, neighborhood groups, parent-teacher groups and employee groups are part of stakeholders. Stakeholder analysis is often performed in a company to understand how stakeholders influence business activity and processes (Bryson 34). Inclusive working relations with several stakeholders must be established between project managers and decision makers in companies. As such, stakeholder’s political concerns, values, and ability of affecting the top management several times have the impact of shadowing the impact of technical viewpoints in a company. Thus, the values of stakeholders have to be included in the risk assessment process. Further, the obtained results from the decision-making process, which is adopted, tend to have a good chance of being viewed as credible and fair when there is an allowance of the stakeholders to engage in the deliberation process.
It is paramount for the firms to always identify the stakeholders who could influence or be affected by the processes and activities, which are undertaken in the company. This is followed by understanding the impact of stakeholders on the organization, as well as how they are impacted. It is also paramount to focus on the anticipation of consequences, which are related to the changes in the organization activities. The success criteria for stakeholders should also be established. A successful outcome is ensured in an organization through the adoption of a good co-operation with stakeholders.
Advantages
A key benefit of stakeholder analysis is that it creates an opportunity to comprehend the location of the main power of stakeholders in a given firm. As such, it becomes easy to make good decisions for the company. These decisions are supported by embracing an effective communication channel with stakeholders, which assists in avoiding situations of conflict development among individuals. Furthermore, such an analysis creates an opportunity for a company to ensure that it is making better strategies, which are focused on steering the growth, development, and performance levels.
The analysis is also beneficial since it creates an opportunity for getting a better understanding of the stakeholders. Such occurs through the identification of risks, having relative power, importance, and interests among individuals. It also becomes possible to manage the relationships of people in society in an effective manner. Further, it creates an opportunity of avoiding anticipated mistakes before the execution of a given project. For example, when the analysis depicts that the ownership is weak, it assists in re-evaluation of a policy in spite of the positive impacts, which are anticipated.
The stakeholders also tend to develop a great acceptance of the firm from the conduct of the stakeholder analysis. As such, they are unique insights into the existing issues in the company (Bryson 35). They also facilitate in securing resources to help you in making decisions for the project. Further, the involvement of stakeholders assists in building trust, which has the impact of having an increased consensus with regard to final decision or the project under consideration. This results into the attainment of a transparency, which is good for decision making in an organization.
The analysis of stakeholders creates room for having strategies, which can be used to address the opposition. As such, it becomes easier to know the nature and characteristic of the opposition and develop a good strategy, which leads to overcoming such opposition. This occurs since it becomes easier to understand the types of interests, which are held by individual stakeholders from different groups of concern. Some of the strategies include delaying the implementation of the project, compensating for the losers, and engaging in a public campaign.
In a company, stakeholders tend to have a given attitude, which could be opposed, neutral, or supportive. Hence, an organization needs to focus on prioritizing on the needs of the community members. The most important area of focus should be the organization and how benefits could be gained from its offerings. This contributes in making stakeholders appreciate what is ahead of the company and not offer any form of resistance towards the growth and development, as well as the execution of different projects as guided by the project managers and supervisors. Placing the needs of the stakeholders at the onset of different actions for the company assists in building the brand. The analysis helps in supporting business management ethics and building corporate social responsibility. The outcome of this is strengthening the brand of the firm.
Conducting a stakeholder analysis helps in identifying resourceful people or groups, this can improve the quality of the project or steer it towards achieving the anticipated growth. This occurs as it becomes easy for stakeholders to assist in winning resources, which make the project to be a success in society. Early communication with stakeholders also ensures that these individuals are able to comprehend the main purpose of the project, as well as the anticipated success level. This implies that these individuals will support a person in completing the project successfully. Moreover, it is easy to anticipate the reaction of the people towards the project. It is from here where it becomes easy to formulate a plan, which is focused on winning the support of people towards the project.
The analysis of stakeholders creates an opportunity for different groups of people to have a say on the impact of the project or formulated policies on their lives. This includes the essence of having sustainability of such new decisions in the conduct of business activities of an organization. It is also good foundation of establishing ownership to the development process at an early stage, which assists in eliminating cases of bias on the negative impact of the project. This includes enhancing a great level of responsibility and building capacity among all the involved parties in a project.
The stakeholders and project team members get an opportunity to learn. This occurs since there is intensive interaction on the impact of the project, the proposed decisions, and the policy on the lives of all the interested parties. Hence, a good exchange and interaction platform is established, which assists in sharing of knowledge and information on how activities should be executed in the firm. This also helps in ensuring that negative impacts are reduced significantly on the disadvantaged and vulnerable groups under consideration.
Drawbacks
A key limitation of stakeholder analysis is that such a process could be subjective. This is because firms often focus on stakeholders who are considered to be important in the running of business activities and processes. The obtained data is also too detailed that it becomes complex to interpret. For example, it is impossible to determine the sufficient ownership by the simple calculation of “adding up” support groups and opposition, which is similar to the force vectors utilized in physics. This is because having a strong support from a given group does not necessarily imply that the opposing group will be neutralized.
The interaction between the government action and characteristics of the stakeholders could be subtle. Further, resources, which include membership size, money, and groups, tend to affect the government via cultural affinity, social affinity, perceived trustworthiness, and role played in the process of economic growth and development in society. The analysis is also often representative, which indicates that there is a room for having misinterpretation of the information. Such could also be problematic when a consideration is done for stakeholders who tend to have high degrees of influence in the organization.
At times, the stakeholders may establish expectations, which are impossible to be fulfilled by the company. The consequence of this is the development of litigation, which has the impact of distracting the management team from utilizing resources effectively and ensuring the attainment of commercial success. Further, the transparency, which is prevalent in the stakeholder analysis may benefit one group or individual, but harm another group or individual at the same time. Thus, a conflict of interest develops among the stakeholders of the organization. The situation develops since it is complex to measure and understand how power should be distributed among the stakeholders in an organization. It also becomes complex to understand how the rights should be understood with respect to stakeholders who need to benefit from success of the company and those who should not benefit from the same situation. The outcome is having a distortion of wealth creation, which may negatively impact the business performance of the company.
Stakeholder’s involvement often takes a lot of time in an organization. As such, with respect to the timeline or nature of the project, it might be challenging to engage the stakeholders. This implies that the analysis will be of not benefit to the organization business activities and processes. On the same note, it is impossible to measure the involved stakes. Quantification of shareholding is easily done. 100 percent committed suppliers have a livelihood, which has an equal dependence level as the employee. Therefore, account broadening from money to social variables and humans makes it impossible to measure and compare the involved stakes.
The analysis also has to be done on regular basis in order to make sense in an organization (Bryson 35). Furthermore, not all interests of the stakeholders can be met at one time by doing a stakeholder analysis. Hence, a company often faces significant challenges in reconciling and balancing the interests of groups in accordance to the urgency or importance of stakeholders. Such checks and balances of the interests tend to lead to the attainment of a conflict among stakeholders on how the project should be executed or the impact of the formulated policy in the organization.
Firms also find it complex to determine who the key stakeholders are. Outside interests of the firm need to be determined exogenously. As such, this should occur irrespective of the views of management or company board. However, the challenge is how such can be achieved or the variety and range of having a legitimate identification of the group. Further, there is also a confusion of purpose. This is because different groups of stakeholders will not share a common purpose for the company. For example, some of these groups may want the firm to maintain its current size while others focus on it having a significant growth. The consequence of this is having company processes and activities being confused or frustrated by the multi-fiduciary policies adoption by the management teams. On the same note, success could have a different meaning among the stakeholders. The outcome of such a situation is the frustration of the various efforts, which are adopted by the management team in the accomplishment of different projects in the organization.
Conclusion
In conclusion, the engagement of stakeholders in decision-making processes and projects has its own advantages and drawbacks. When this is engaged in a proper manner, it creates an opportunity to gather valuable input, build consensus, and improve outcomes. As such, an organization has to focus on quality planning in order to engage the stakeholders. This is followed by effective determination of the stakeholders who have interests on the decision-making process or the project. However, a balance has to be established on the interests of all stakeholders so that there is no conflict that develops among these groups. The process should be outlined ahead of time and shared among participants where there are clear timeframes. It is also paramount to ensure that there is a good clarification of the goals of a venture prior to involving stakeholders. Such helps in avoiding undue conflict, which emerges as members engage in asking numerous questions related to the project.

Works Cited

Bryson, John. What to do When Stakeholders Matter: Stakeholder Identification and
Analysis Techniques, Public Management Review, Vol 6 Issue 1: 34 – 35, 2004.

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