Table of Contents
CHAPTER 1: INTRODUCTION
1.1 Background and Introduction
1.2 Problem Statement
1.3 Objectives of Research
1.4 Research Questions
1.5 Significance of this Study
1.6 Purpose of Research
1.7 Structure of Thesis
CHAPTER 2: LITERATURE REVIEW
2.1 Stakeholder and Stakeholder Management
2.2 Stakeholder Involvement
2.3 Project Planning
2.4 Stakeholder Involvement in Construction Projects (In general, Public and Private)
2.5 Literature Gap Analysis
CHAPTER 3: RESEARCH METHODOLOGY AND DATA SPECIFICATIONS
3.1 Theoretical Framework
3.2 Variables Description
3.3 Collection of Data
3.4 Scope and Limitations of the study
3.5 Research Methodology
3.6 Grouping Questions and Survey Distribution
3.7 Data Analysis
Chapter 4: DATA ANALYSIS
4.1 Descriptive Statistics
4.2 Analysis of Respondents Profile
4.3 Stakeholder Engagement Importance for Organization
4.4 Benefits of Stakeholder Engagement
4.5 Stakeholder Engagement Activities
4.6 Types of Projects vs Stakeholder Engagement
4.7 Reliability Analysis
4.8 Analysis of stakeholder Involvement levels
4.9 Stakeholder Involvement Level Ranking
Chapter 5 RESULTS DISCUSSION
Chapter 6: CONCLUSION
6.1 Limitations and Direction for future Research
All praise be to Allah who has enabled me to undertake and completed this dissertation. He has blessed me with the company of people who are unique in their own way and have been of immense help to me throughout this dissertation. I would like to extend my heartiest gratitude to Dr.Rizwana Bashir, Head of the Management Sciences Program at Bahria University Lahore, who let me undergo the thesis work. I would like to express my deepest appreciation to Dr. Ghulam Mohey- ud-din whose constant support and guidance during whole of the research work has made completing this research possible. His valuable advices have always pushed me forward for doing better. I really appreciate his encouragements, understanding and supports. I would also like to thank my co supervisor Mr Ahsan Maqbool whose valuable knowledge addition for compiling the questionnaire has been very helpful.
I am also grateful to my family members whose constant support and belief in me has made this research work possible. This is only the result of prayers of my parents.
And last but not the least, special thanks to all the respondents for their valuable feedback without them this research work was not possible. I am highly obliged to them for taking time and filling out the survey.
I would like to dedicate this thesis to my parents. For their endless love, support and encouragement. Without them it was so not possible completing this thesis.
Construction projects, from their early stages to the completion phases are executed through the efforts and involvement of various groups of people. These groups are referred to as the ‘project stakeholders’. For successful implementation of a construction project, stakeholder management has got a crucial role. Stakeholder management is not an easy task and it needs proper consideration for successful implementation of a construction project. Based on the observations and previous researches, a gap has been identified regarding evaluation of stakeholder involvement during planning stage of the construction projects in Pakistani Construction industry. Therefore, the current research aims at the evaluation of level of stakeholder involvement during planning stage of construction projects at Pakistan level. One of the aims of this research is also to understand the concept of the stakeholder involvement in the construction industry and for examining the ways that stakeholder engagement can be empowered appropriately and efficiently to assist in achieving the ultimate goals of the project in shape of project out comes. Through the literature major stakeholders involved in a construction project are identified as: client, project management team, consultant and design team, contractor, sub-contractor, suppliers, employees, local communities, sponsor and government authorities. The involvement level of these stakeholders has been assessed on different project planning activities. The results show that early stakeholder involvement help the organization for finding better solutions for the problems. Moreover, it helps in aligning the project goals with stakeholder expectations. In different planning activities different involvement levels of stakeholders have been identified. Project managers have the highest involvement during the planning stage and local communities have the least. It revealed that considerate attention should be given to empowering the more effective incorporation of different project members during the project planning process. Analysis of the result also confirmed the findings from the literature stating that an effective involvement of stakeholders will highly contribute to resolving, or improving several issues involved in the project early. It is therefore recommended that the project managers should adopt improved decision making strategies for effective stakeholder involvement employing the different useful techniques for increasing stakeholder engagement.
LIST OF FIGURES
Figure 1 Potential stakeholders for projects (Adapted from Cleland 1999)
Figure 2 Duration in Current Organization
Figure 3 Nature of Organization
Figure 4 Types of projects involved
Figure 5 Clients vs Types of Projects
Figure 6 Project Manager vs Types of Projects
Figure 7 Consultants vs Types of Projects
Figure 8 Contractors vs Types of Projects
Figure 9 subcontractors vs Types of Projects
Figure 10 suppliers vs Types of Projects
Figure 11 Employees vs Types of Projects
Figure 12 Local communities vs Types of Projects
Figure 13 Sponsors vs Types of Projects
Figure 14 Government authorities vs Types of Projects
LIST OF TABLES
Table 1 Position in the Organization
Table 2 Involvement with Stakeholders
Table 3 benefits of stakeholder engagement
Table 4 Stakeholder engagement activities
Table 5 Clients Reliability
Table 6 PM Reliability
Table 7 Consultants Reliability
Table 8 Contractors Reliability
Table 9 Subcontractors Reliability
Table 10 Suppliers Reliability
Table 11 Employees Reliability
Table 12 Local Communities Reliability
Table 13 Sponsors Reliability
Table 14 GA Reliability
Table 15 Clients Involvement Level
Table 16 Project Manager Involvement Level
Table 17 Consultants Involvement Level
Table 18 contractors’ involvement level
Table 19 Subcontractors Involvement Level
Table 20 suppliers’ involvement level
Table 21 Employees Involvement Level
Table 22 local communities Involvement level
Table 23 Sponsors involvement level
Table 24 Government Authorities involvement level
Table 25 Stakeholder Involvement level Ranking
Table 26 Approaches proposed in previous studies
Table 27 types of approaches for stakeholder analysis and stakeholder engagement in construction
Table 28 Description of Approaches
List of Abbreviations
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Assessing the Level of Stakeholder Involvement during Planning Stage of Public Sector Construction Projects in Pakistan
CHAPTER 1: INTRODUCTION
1.1 Background and Introduction
Stakeholder management is a substantial characteristic of the role performed by a project manager. It is a sensible, intended and attentive act related with clear actions and outcomes. Developing a formal, acceptable, repeatable process for mapping stakeholders and formulating a clear procedure for stakeholder management can produce massive benefits to the project and create value for the stakeholders.
A stakeholder is a person or group of persons who are affected directly or indirectly by a project. In the field of project management a stakeholder is an individual and/or organization having an interest in the success of a project. Project stakeholder management includes the processes required to identify the people, groups or organization that could impact or be impacted by the project. (PMBok). Stakeholder’s as described by Freeman (1984) is any group, or individual, who can affect, or may be affected by the outcomes of a corporation’s objectives. Based on the power and intention to impact the outcomes stakeholders can value or delay a project according to their individual concerns and expectations (Olander and Landin 2008). This supports the importance and relevance of doing a comprehensive study of stakeholder involvement and identifying the key methods which can help in increasing the stakeholder involvement during planning stage, in order to understand better how to commence good management of stakeholders in the construction industry.
In the past, passive approach was mostly developed by the organizations for informing stakeholders about project developments, depending upon traditional communication methods such as newsletters, printed publications and annual meetings. One-way communication strategy was adopted by such organizations (Mark Ritchie, 2008). Gradually, organisations choose to involve stakeholders more actively in the decision-making process particularly with respect to new project developments. They aim of increasing project stakeholders involvement is to encourage and ensure more positive commitment with the project outcomes.
Whenever a certain project is started the actions you take in completing that project and the projects you run will affect people. As a project manager more people you affect, the more probable it is that your actions will impact people who have power and influence over your projects. These people could be strong supporters of the project or they could block it. (Mark Ritchie, 2008). In running a project successfully Stakeholder Engagement is an important area that can help in winning support from others. It helps the Project Manager ensure that his/her projects succeed where others fail Naresh Chappidi, (2008) states that there are two major elements to Stakeholder Engagement: Stakeholder Analysis and Stakeholder Planning. Stakeholder Analysis is the technique used to identify the key people who have to be won over for the project. Stakeholder Planning is then used to build the support that helps the project succeed.
For economic development of any nation or country role of Construction industry cannot be ignored. This industry is the key provider of employment opportunities, it helps in endorsing skills in a community, enhancing standard of life, enabling the community by providing attractive life style, technology transfer from other nations. This industry earns lots of revenue. It helps in increasing GDP of a country. Stakeholder’s management is now gaining attention and improvement in construction industry of Pakistan. The economic growth of any nation can be measured by infrastructure in their country. Construction industry consumes huge amount of investment which is usually provided by investors/donors. Stakeholders are the backbone of a construction project and without them a project can never come into existence. Adaptability is escalating in this industry regarding stakeholder’s management. The industry is becoming more focused on meeting the needs and expectations of key stakeholders, identifying the key performance indicators for successful stakeholders’ management. Moreover they are becoming more active in doing analysis of stakeholders, recognition of stakeholders and coordination among stakeholders (Engr Bahar Ali et al, 2015). Construction projects, from their early stages to the post project completion phases are executed through the efforts and involvement of various groups of people. These groups are referred to as the ‘project stakeholders’ (Amir hossein, 2014). The importance of the project initial and planning phases has been advocated by scholars (Zwikael 2009; Cleland and Ireland 2006). Several of the most important decisions such as establishing different project requirements, identifying project needs and objectives, agreement on project financing, schedule and organization and setting up strategic directions are completed at these phases. Therefore any plan should be designed and established in the project initial phases like planning stage (Joaquin,Hernandez and Aspinwall 2008; Kolltveit and Grønhaug 2004).
Needs and expectations of every stakeholder need to be understood as every stakeholder in a construction project has some interest. Therefore, in implementation of a construction project successfully Stakeholder management has got a crucial role. Stakeholder management is not an easy task and it needs proper consideration for successful implementation of a construction project. Based on these observations and previous researches a gap was identified regarding stakeholder involvement during planning stage of the projects. Therefore, the research aims at the evaluation of level of stakeholder involvement during planning stage of public sector construction projects in Pakistan. Another aim of the research is to understand the concept of the stakeholder involvement in the construction industry and for examining the ways that stakeholder engagement can be empowered appropriately and efficiently to assist in achieving the ultimate goals of the project in shape of project out comes.
Through the literature major stakeholders involved in a construction project are identified. These groups as stated by many scholars (Olander and Landin 2005; Newcombe 2003; Atkin and Skitmore 2008; Yang 2010) as the major stakeholders of construction projects. So the research will take these stakeholders as independent variables whose impact will be measured on the dependent variable of project planning phase.
- Project Management team
- Consultant and designing team
- Local communities
- Funding Bodies/Sponsors
- Government authorities
1.2 Problem Statement
Construction projects, from their early stages to the completion phases are executed through the efforts and involvement of various groups of people. These groups are referred to as the ‘project stakeholders’. Stakeholders can help or hinder a project based on their power and objective to influence results in accordance with their individual concerns and expectations (Olander and Landin 2008). This alone strengthens the significance and relevance of conducting a comprehensive analysis of stakeholder involvement, in order to apprehend better how to commence good management of stakeholders. Accurate management of stakeholders is important to outcomes of the project and thus, the papers of the concept of stakeholder management has developed greatly in recent years (Yang 2010). Different viewpoints of stakeholder philosophies have been stretched due to the growth of interest in improving the management and engagement of project participants. Jones (1995) classified stakeholder theory into three major approaches:” descriptive, instrumental, and normative”. In the view of Kolk and Pinkse (2006) the stakeholder concept can be explained through three themes of “(1) recognizing the nature of stakeholders, (2) investigating how and under which circumstances, stakeholders can impact organizational decisions and operations and (3) determining different plans and strategies to deal with stakeholders.”
Many factors are responsible for the low level of final project quality such as, the use of low-quality raw materials, use of an untrained labor, poorly retained equipment and machinery and climatic conditions (Jha and Iyer 2006; Joaquin et al. 2010; Pheng and Wei 1996). Amongst these factors, is the lack of appropriate performance management of different parties throughout the project lifecycle (PLC). Other researchers (Arditi and Gunaydin 1998; Yung and Yip 2010; Gransberg and Molenaar 2004) assert the obvious role of different project members in determining the levels of quality in construction projects and authenticate that attaining the desired quality level, demand key stakeholders’ effective involvement from the beginning through to latter project phases.On the other hand, the importance of the project initial and planning phases has been promoted by scholars (Zwikael 2009; Cleland and Ireland 2006).Many of the most important decisions such as establishing the project requirement for quality, identifying project needs and objectives, agreement on project financing, schedule and organization and setting up strategic directions are completed during these phases. Therefore any improvement plan should be designed and established in the project shaping stages (Joaquin,Hernandez and Aspinwall 2008; Kolltveit and Grønhaug 2004).
To conclude, although substantial study into the introduction of stakeholder management practices in the construction industry has been undertaken separately (Tang et al. 2009b; McIntyre and Kirschenman 2000; Arditi and Gunaydin 1997; Elghamrawy and Shibayama 2008; Yang 2010; Brian and Martin 2008; Olander and Landin 2005a), no major studies have been embark on to date to particularly determine the level of stakeholder involvement during planning phase of public sector construction projects. Therefore this research aims at:
“To evaluate the level of stakeholder involvement during the planning stage of public sector construction projects in Pakistan through the perception of people involved during the planning stage of projects.”
1.3 Objectives of Research
Following are the major objectives of the research:
- To examine the level of stakeholders involvement during planning stage of public sector construction projects
- To Identify the major stakeholders involved in a Public Sector construction Project
- To evaluate the key benefits which can be gained through early stakeholder involvement
- To evaluate the key methods for Engaging stakeholders in projects.
1.4 Research Questions
The research questions for this research are:
- What is the current level of stakeholder involvement in planning stage of construction projects?
- Who are the major stakeholders involved in a Public Sector construction Projects?
- What are the key benefits which can be achieved through early stakeholder involvement?
- What are the key methods for Engaging Stakeholders in projects?
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1.5 Significance of this Study
The research findings are expected to help the organizations in assessing the stakeholders’ involvement during the planning stage of the project. It will help the project managers in knowing the impact of effective stakeholder involvement during planning stage on project outcomes. It may help in evaluating that how project performance can be improved by active stakeholders involvement at early stage of the project. And it will help in identifying that what are the key methods through which stakeholder involvement can be increased. This will eventually help in getting a clear picture of stakeholders’ expectations and importance. The focus on public sector construction projects is because in Pakistan major construction projects are being undertaken by the public firms. It will help the project manager and project team in the public organizations to enhance the effective stakeholder involvement during planning stage of the project which will help them in getting the desired project outcomes which will eventually help them in satisfying the customers. Nonetheless, not many studies have focused on how effective project parties’ integration can potentially impacts upon quality issues of the project. Greater involvement in helping of preparation of different project management plans and shaping strategic project directions will not only assists construction companies to solve those problems directly related to stakeholders, but will also be a great help for overcoming other problems which arise from other sources of defects.
1.6 Purpose of Research
The major purpose of the research is to understand the concept of the stakeholder involvement in the construction industry and for examining the ways that stakeholder engagement can be empowered appropriately and efficiently to assist in achieving the ultimate goals of the project in shape of project out comes. This has been done by evaluating the level of stakeholder involvement during planning stage of public sector construction projects of Pakistan. Much research has been done on the topic of stakeholder engagement internationally, but locally not much research has been done on the topic before related to Pakistani construction industry. This gave the opportunity to explore this area and derive results for effective stakeholder’s involvement in the planning stage. The results from the study also provides a list of stakeholders who are or not involved in the planning stage and will help in identifying where the gap exists in managing the stakeholder involvement during planning stage of the project. It helps in clarifying that who are the stakeholders, whose involvement is more required during the planning stage.
1.7 Structure of Thesis
This thesis consist of five chapters, a brief description of the contents of each chapter is described below.
Chapter 1 Introduction: The thesis begins with an introduction of the topic and gives the background of the topic. The chapter also includes the discussion regarding justification of the topic along with the problem statement and major objectives of the research. This is then followed by a brief purpose of the research and the significance of the research.
Chapter 2 Literature Review: This chapter gives a detailed description of the previous researches which have been conducted on the topic or related topic. This chapter critically discusses the previous studies which have already conducted on Stakeholder management including stakeholder engagement. The major areas which have been covered in the literature review are stakeholder management, which includes different definition of the term. Then it focused on stakeholder involvement in which majors researches related to different stakeholder involvement methods in the construction industry has been discussed in detail. Then the literature related to project planning phase has been discussed in detail which highlights how planning phase is being catered in the construction industry and emphasizes on the importance of this phase. Eventually stakeholder involvement has been discussed in the context of construction industry.
Chapter 3 Research Methodology: This chapter gives a detailed description of the methods used for this research. In this chapter theoretical framework of the research and the variables used in has been discussed. Questionnaire has been described in detail. Then it highlights different methods through which data has been collected and how it is analyzed. This chapter basically explains the correlation between the research questions, objectives, data collection methods and data analysis techniques.
Chapter 4 Data Analysis: This chapter examines and evaluates the current level of stakeholder involvement during planning stage. It also gives an overview of the reliability statistics of the research and a frequency distribution of the respondents’ profile. Based on the analysis obtained this section discussed the findings and clarifies the level of stakeholder involvement during planning stage and different methods which respondents think are effective for involving stakeholder leading to the discussion about the benefits which Public sector organizations think they are gaining as a result of different stakeholder engagement activities. It clarifies the relationship between research questions and findings.
Chapter 5 Conclusion: This chapter being the final chapter of the results includes summary of the major findings, discusses the general conclusion of the research and describe significance of the research and recommendations for the future research.
CHAPTER 2: LITERATURE REVIEW
This chapter provides an overview of the current literature related to stakeholder management in the construction industry and the planning phase of the construction projects. The chapter further focuses on the impacts of stakeholder involvement in the early planning stage. This includes the review of the importance of planning phase and the major components of a planning phase in construction projects.
From the time when Freeman’s (1984) important effort on Strategic Management: A Stakeholder Approach has been printed; concentration on stakeholders has developed significantly. Although to have its backgrounds in strategy management, theory of stakeholder has been in use to multiple areas together with project management of construction. It has been claimed by Jones (1995) that three key methodologies to stakeholder theory exists: descriptive approaches, which tell us what happens, instrumental approaches which describe what happens if, and normative approaches which describe what should happen.
The core emphasis of project management of construction has been the process of planning, plus management of the complex range of activities which are necessary to complete a project of construction (Morris 1994). For construction project teams managing stakeholders is thus a critical skill (Vinten 2000). Fulfilling the stakeholders anticipation throughout the project lifecycle is critical for successful completion of construction projects (Cleland 1995), together with clients, project managers, designers, subcontractors, suppliers, funding bodies, users, owners, employees and local communities (Newcombe 2003). Because of the lack of concentration of project management teams countless project failures has been occurred because the project management team fail to report the problems of construction project stakeholders (Bourne and Walker 2005), mostly since participants in construction have the funds and ability to end the projects (Lim et al. 2005). As a result, a strong amount of work has been established on the matter that by what means to manage and recognize the interests and relationships of different project participants (Olander 2006). Management of internal stakeholders has been of more focus as compare to external stakeholders.
illustration not visible in this excerpt
Figure 1 Potential stakeholders for projects (Adapted from Cleland 1999)
In context of project implementation Olander and Landin discussed the elements affecting the process of stakeholder management. Two projects with comparable basics, but with very different results in the process of stakeholder management, have been studied. Conclusions can be drawn from the comparison of the projects regarding those determinations in a process of management of stakeholder that may have encouraging as well as damaging effects and influences. How management of stakeholder can be utilized as a basis of addition to the whole performance of a construction project can be assessed through Olander and Landin’s paper, as highlighting the positive aspects of stakeholder engagement.
For discussing the methods which can be used while engaging with stakeholders Chinyio and Akintoye conducted with not the same organizations some interviews. The paper had been inscribed from the viewpoint of an organization who even when the powers and beliefs of its stakeholders are in clash; the organization needs to collaborate with its numerous stakeholders and fulfill their needs. By means of utilizing different blends of strategies for involving with different stakeholders has been the focus of the paper. The power and interest greatly defines a stakeholder’s influence that is why this is a complex issue because these are ever-changing. For an organization it is thus necessary to comprehend the viewpoint of its stakeholders for each part of the project life cycle and be should capable enough to answer back in the most suitable manner.
Mathur et al. highlighted through a conceptual analysis that how the growing discussions on engagement of stakeholder, sustainability and the situation valuation are gradually making consideration to discussion centered methodologies. The writers claim that current practices view engaging of stakeholder as:
(1) Generally from a management viewpoint;
(2) From an ethical perception occasionally;
(3) Not as much as a mixture of the two;
On the whole with the existing concentration on sustainability in project conveyance, management of stakeholder has developed as an important function in worldwide projects. Through corresponding studies Rowlinson and Cheung in; Australia and Hong Kong explored the exercise of management of relationship as a means for engaging project participants. A multiple perception view of performance related to project has been adapted to bond relationship management, project participants and sustainability in a framework, they recognized stakeholder typologies and which allows examination of projects and their success. They acknowledged drivers and inhibitors of relationship management and specify the connections and differences carried by social perspective based on case studies in the two countries. They then presented an evolving model of management of stakeholder which recognizes project related issues, insights, consent and processes of relationship management as factors to successful project completion.
Walker et al. prompt us that there remained an absence to texts concerning the areas that can add to project manager’s development of soft individuals and engagement skills regardless of the accessibility to immense literature to managers of project regarding development of rigid project skills addressed on cost control, time control, and quality control. Identification of Stakeholder, engagement of stakeholders plus management of stakeholders remain considered as significant skills of managing project; though, this is a soft skill that requires both awareness and a tough aptitude for examination. Extremely difficult problem explaining activities are involved in stakeholder management. Visualization tools are of great value for stakeholder management. In the paper the improvement and practice of two such tools are defined. Although both of them are autonomously valuable they could be united effectively. This view might improve success through having clearer pictures of stakeholder influence patterns thus reduce the chances of project failures. Better engagement of stakeholder can help with handling their expectations, minimizing unpredicted threats and setting free positive drives or decreasing adverse activities or reactions that have likely influence on success of the project. Thus this paper offers comprehensive argument of two greatly useful tools and indicates that how these may be used for better engagement of project participants and for managing the project teams as well as the many external stakeholders of the project.
2.1 Stakeholder and Stakeholder Management
“A stakeholder in an organization” as “any group or individual who can affect or is affected by the achievement of the organization’s objectives” (Freeman, 1984). The project management institute (PMI) defined stakeholder as “A stakeholder is an individual, group, or organization who may affect, be affected by, or perceive itself to be affected by a decision, activity, or outcome of a project” (PMI 2013, p.394). The Project Management Body of Knowledge (PMBOK) notes that a project has many stakeholders whose interests may be related, or in conflict (PMI 2013). A helpful illustration by Briner (1997, 83) is shown in the figure, which provides a widely accepted mapping of a project’s main stakeholders:
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The stakeholders can influence the project in the direction they desire that is why they perform in accordance to their focus and use their control to the project (Nilson & Fagerstrom, 2006). Additionally stakeholders exist also as any individual or association that has sincere concern with project (El-Gohary, Osman & El-Diraby, 2006), who may disturb or may get disturbed through organizations with their administrative activities (Kolk & Pinkse, 2006; Lim, Ahn & Lee, 2005) and by the project during the course of the whole project’s life cycle (Nilson & Fagerstrom, 2006); those who share a certain set of considerations and consequences regarding the progress of a specified tool (Boonstra, 2006), having an ethical and a firm privilege to effect its results (Olander & Landin, 2005:p321; Bourne & Walker, 2005).
Manfong et al. (2009) in his research offered a summary of earlier studies in the area of management of stakeholder, and suggest implications for the construction industry. The summary of prior readings exposes that study interest related to management of stakeholder has revolved to the descriptive method. From end to end evaluation of management of stakeholder process, three main complications of earlier studies are identified: to identify all stakeholders and their interests very limited procedures and tools are available; management of change about the stakeholders’ impact and association has not been studied up to limit; and the influence of the entire relationship network in practice has very limited studies capable of reflecting it. The accomplishment of an organization does not rest mainly on the effective management and controlling of its processes, nonetheless on the creation and preservation of a helpful discussion with all substantial external and internal project participants that may affect its actions in a positive and negative ways as mentioned by Clarkson, (1995), Frooman (1999) and Mitchell, Agle & Wood (1997) . Kaler (2002) differentiates among two types of definitions of stakeholders as those comprehending stakeholders as “applicants” and those knowing them as “influencers”. For the sake of business values, he claims that project participants should be distinct as those with a right on the organizations’ services.
Management of Stakeholder has been labeled as a tool for strategic management (Langtry, 1994). Relationships with stakeholders of all kinds can affect the organizational fortune, which can be created or destroyed; handling relations with stakeholder for shared advantage is vital for delivering successful project (Post, Sauter-Sachs and Sreston, 2002) this meant that that stakeholders themselves can gain benefit from the formation of significance to an organization, or be unfavorably affected (Schneider, 2002); they may willingly or unwillingly tolerate some risk through the organization’s act of value creation (Clarkson, 1994).
Management of stakeholder help in defining the techniques and actions by which an organization influence its relations with its numerous stakeholders (Freeman, 1984). We are quite familiar with the aspect that how diverse methodologies to management of stakeholder affect a firm’s financial performance by studying the complex effects of these processes (Jones, 1995; Margolis & Walsh, 2003), and by reviewing the characteristics of stakeholder groups themselves, we can have growing understandings into the exterior powers that outline a firm’s attitude to management of stakeholder (Mitchell, Agle, & Wood, 1997; Rowley, 1997).
It is also argued that an organizations’ benefits are basically dependent on its ability to effectively manage stakeholders (Verbeke and Tung 2013). Depending on the relationship between the stakeholders and the organization, they can usually be divided in two main categories, ‘internal’ and ‘external’ (Olander 2006, 2007; Aaltonen and Kujala 2010). Internal stakeholders are those actively engaged and formally connected to the project such as owners, project managers, employees. This group in many cases are openly involved in the project and have a regular and prescribed partnership with the company (Atkin and Skitmore 2008). They are sometimes referred to as primary stakeholders.
Whereas, stakeholders which are external to the project, may not get involved directly in the project decision making process, but still can affect, or might be affected, by the project (Aaltonen and Kujala 2010). The term secondary stakeholder is often used for the groups of stakeholders who are not directly connected with the company and that may not directly get involved in any financial decision making. Secondary stakeholders, however, may still have an important effect on project outcomes; hence their interests and expectations should be considered in a proper manner.
Roshana, 2009, has given an investigation of the method used to identify stakeholders of the project, the aspects to manage their requirements and anticipations, and the suggestions about mishandling their desires and hopes in the expansion of Malaysian projects of construction. The findings reveal that for identifying stakeholders of a project a formalized process is more effective. There is a difference between managing the stakeholder’s needs and expectations in private and public sectors. The government officials and advisers are certain that public and governmental matters are of the ultimate importance, however the private sector puts a great stress on creating project associations for management of the stakeholders’ needs and expectations.
The perceptions of stakeholders’ regarding the value created by the project and the nature of their relation with the project group is directly related to the project success and failure. This study (Bourne, 2005) establishes a straight relationship among the management of successful relation between the project and its participants and the stakeholder’s calculation of a successful project outcome. The success, or failure of a project, is powerfully subjective to the potentials and insights of its participants, and the ability and enthusiasm of project managers to be able to manage these aspects and the organization’s politics equally. The study validated that identification of the right stakeholder at the right phase of a project lifecycle did have an encouraging influence on the probability of project success. It also specified the variety of skills that Project Management groups must develop for better engaging with stakeholders. Results from the study can be categorized into two groups. The Stakeholder Circle was assessed as an appreciated instrument that can support project teams in recognizing the “right” stakeholders to involve in the project; the second was an understanding of the level of capability and willingness of people in different organizations to manage project relationships. Two main methods to manage the relationships with different stakeholders have been explained by (Freeman and McVea 2001) - buffering and bridging. Buffering means to establish obstacles between an organization and its stakeholders, in an effort to bind the effect and influence of stakeholders (Harrison and St. John 1996). In compare bridging look for shaping a partnership with a stakeholder by creating common ground and action (Elias et al. 2004). Hillman and Keim (2001) claim that the second tactic to the management of stakeholder can help forming the competitive advantage and provide additional resources to the firm.
2.2 Stakeholder Involvement
Analysis of stakeholder is a substantial practice to recognize and evaluate the competence and salience of significant participants (Bal 2013). A complete analysis will help to bring the most capable and significant people into the strategic and decision making process (Nguyen et al. 2009). Merely identifying the stakeholders is not adequate, managers and owners are required to evaluate the interest of each stakeholder in order to clear their prospects on decisions of the project (Johnson and Scholes 1999). In the project life cycle the number and nature of stakeholders may change, it is therefore recommended to review the identification throughout the project (Moodley 2002). Olander (2007) encouraged that it is the key responsibility of project leaders to answer the requirements and needs raised by their project participants and to be able to carry out, control and manage the project decision making process. Inappropriate management and supervision of stakeholder can cause problems in the technical and management mechanism of a project. In addition, Bourne and Walker (2005) highlighted that the conflicting and unseen stakeholder agendas, if not well managed, can lead to many project failures. As stated by Olander, 2005 for a project management team an important issue is the identification of those stakeholders who can affect the project, and then managing their opposing requirements through good communication in the early stages of a project. That is why this research has been focused on evaluating the level of involvement of stakeholder during planning stage. As the stakeholders influence is not fixed. During the entire life cycle of the project the analysis of stakeholder must be conducted and updated, to attain the purpose of gaining knowledge about the potential influence various stakeholders have at different stages of the project (Olander, 2005).
According to Cleland (1995), successful implementation and completion of projects is reliant on fulfilling the anticipations of different groups of stakeholders including clients, project managers, designers, subcontractors, suppliers, funding bodies, users, owners, employees and local communities (Newcombe 2003). Participants with extraordinary influence and great importance such as project manager and owners should be closely involved in the entire project lifecycle to increase their provisions to the project (Post et al. 2002). However, when in certain situations, their involvement cannot be assisted; it can result in serious problems such as wrong planning and resourcing, time and cost overruns, quality issues, confusing objectives and other similar problems (Mohammed and Abdullah 2006; Doloi 2013). Hossein et al. (2015) in his study examined the existing level of stakeholder participation during the project's process of quality planning. According to the writers stakeholders have the capability of controlling the communication and movements of resources in the project and frequently provide the needed resources. Proper managing and participation of significant project participants should be an essential part of any project management plan because they have a solid influence on an organization’s continued existence. For identifying and categorizing substantial phases involved in the planning of the project a series of literature reviews was conducted in this study. Outcomes of the study validate the levels of engagement of the four stakeholder groups involved in the process of planning and create a basis for further improvement of involvement of stakeholder.
Effective engagement of stakeholder enables better planning and more knowledgeable strategies for projects, programs and services. Engagement of stakeholder can be equally useful on behalf of the Project team and the stakeholders. For participants, the advantages of involvement include the chance to add in as a specialist in their field to project development, have their problems received and contribute in the process of decision-making. For the Project managers, the advantages of engagement of stakeholder include better-quality of data and having the chance to ‘road-test’ policy plans or suggestions with all the project participants. These remunerations are to be recognized earlier if the stakeholders are engaged in the project earlier. (Department of Education and Early Childhood Development, 2011).
Heravi (2014) gave us a framework for improving the efficiency of stakeholder involvement during the project life cycle through better decision-making approaches in the project early phases, with the crucial purpose of improving project quality delivery. In the research the practices and approaches that can be applied to improve the effectiveness and efficiency of stakeholder involvement were explored and categorized. These findings provided a structure from which a new Effective Stakeholder Involvement (ESI) framework is developed. An examination of the previous works has been conducted to discover the critical factors that negatively affect project quality, concluded that the lack of use of suitable management practices and insufficient involvement of key stakeholders are major problems that result in many quality issues during, and at the back-end of, the project lifecycle. A mix-methods approach has been adopted for this research. Both survey and case study research techniques were used to collect the required data, and the focus has been kept on residential building projects. Firstly Questionnaire surveys were distributed to examine the current level of key stakeholder involvement during the project planning process, and secondly, to assess the degree of possible improvements that could accumulate in resolving quality issues through implementing better stakeholder involvement strategies. The researcher also commenced a number of case studies in order to examine the prospective approaches and fundamental principles that could positively contribute to enhance the engagement of stakeholders both the in planning process stage and during the whole project lifecycle. Thus this research will be different from the research of Heravi from the perspective that first it is not focused on building projects and it won’t be catering the quality needs of the projects.
Presently there exists a need for an organized methodology for engaging with stakeholders who have high salience in relation to sustainability. Bal et al. (2013) states that attaining goals related to sustainability in projects of construction is progressively becoming a key performance indicator. At hand there are several diverse stakeholders in a project of construction and so far sustainability is a complex concept. Some stakeholders are commonly known as essential, i.e., the client and main contractor, however there are remaining who are not all the time supposed as such and whose nonattendance from the decision-making processes may result in failure of the project. The research suggests six steps for the process of engagement of stakeholder:
(ii) relating stakeholders to different sustainability-related targets;
(v) measuring performance; and
(vi) Putting targets into action
The outcomes recommend that to recognize the diverse plans of stakeholders and for measuring their performance the use of key performance indicators are important to be emphasized in any process of engagement of stakeholder.
2.3 Project Planning
Project planning recognizes the requirements and limitations of projects at the project-level and arranges the activities, resources, budget, and timeline for the project. It is a significant procedure for construction project since it assists for reaching on a common ground among the different stakeholders of the project. As management of project is a central competency in the industry of construction, high-quality planning processes of project are essential for delivering successful project. Ofer (2008) in his paper put a focus on acute processes of planning in construction projects. In his research it has been evaluated that, organizations fitting into the sector of construction accomplish a higher class of planning of project and the utmost rate of success. As compared to other sectors; schedule planning, quality planning, and procurement planning are most regularly performed in the projects of construction. Lastly, the effects of the different processes of planning on success of the project are examined. “Activity definition” and “project plan development” are the processes that have the utmost influence on success of the project in the construction sector. On the other hand, project managers of construction projects do not always spend adequate determination in these critical processes of planning. That is why current research is focused on evaluation of the involvement level different stakeholder have during planning stage of project.
As compared to other phases in the project lifecycle the importance of planning and conceptualization is quite noticeable and it has a noteworthy influence on project success (Meyer and Utterback, 1995; Zwikael, 2009; Globerson and Zwikael, 2002). While final goal for a company is to improve the success of a project, each process during the planning phase, follows particular objectives.
In this planning process defined by Juran, the purpose of the first phase i.e. establishes the project is to offer clear goals and correct directions of the project. Some of the major tasks of this step include: identify the projects to fulfil the organization’s policy, clarify the mission of each project, allocate project team members and prepare a complete project plan. The second phase of identify customers offers an organized identification and complete understanding of all project stakeholders and their needs, expectations and requirements. By identifying customers and clearly evaluating their expectations, the understating and perception gaps can be avoided. The specific project, quality planning tools, techniques and technology for the industry are required to be applied to produce a real design, compatible to stakeholders needs entirely. The main purposes of 3rd step i.e. develop the project is to identify and implement the activities that result in delivering the final project that adapts to such requirements and without insufficiencies (Juran and Blanton Godfery, 1999). Develop the process step confirms that the whole process and its elements are made proficient enough to deliver the project as it was planned and designed. It also monitors that the process is constant with project planned objectives. Lastly, the operational gap can be closed in the last phase of control and operations by developing and competently shifting the plans over to the operational team. According to PMI (2013), one of the important outputs of the quality planning process is the quality management plan, which defines how the team of project management should device the acting company's quality strategy. It (PMI, 2013) also stresses that a key concern to be accepted in mind is that project planning and quality planning should not be treated as separate processes since they include many similar activities that interact with each other as well as with other processes of the planning phase.
In the planning, implementation, and completion of any construction project evaluation of stakeholder demands and influence should be considered as an essential and significant step (Olander, 2005). Storvang, 2014 investigated into fact that in what way stakeholders can contribute in the initial phases of construction projects and by what means related understandings can be collected from stakeholders with very different backgrounds and interests. The findings of the research show how generating and enabling a workspace as a sociotechnical space across limitations can overwhelmed obstacles and improve the involvement of stakeholders’ and hence deliver better understandings of the requirements, standards and worries of different stakeholders. Aki Aapaoja et al. (2013) explained involvement of stakeholder in the early project definition phase. The determination of the study is to observe which of the stakeholders should be involved early in the project phase. This study discussed the procedure and nature of the project definition phase in Relational Project Delivery Methods, with the central emphasis on early stakeholder involvement. The stakeholders, their roles and at which stage they should each be involved in the project definition process in the renovation project, are determined. The results show that involvement of stakeholders in early phases allows room for creative solutions and the exhaustive interchange of thoughts. Different levels of stakeholder involvement are there in a project, whose necessities and dedications must be measured and accomplished. Attaining success in projects of public construction is problematic since it needs budget, good organization, excellence, equality and clearness. These projects are employed because of the demand of owners/customers and practically involve numerous entities and are also answerable to external economic review and observance organizations. Tabish et al. 2011 analyzed the public sector construction project by evaluating the stakeholder identification and success factors of these projects. The key to attaining success in these projects is to identify the success factors of the project. Important factors for success of public sector construction projects are considered to be the attentiveness of and compliance with rules and regulations; pre-project planning and clarity in scope; effective partnering among project participants; and external monitoring and control.
Project planning identifies the goals and objectives for the project. It recognize the project activities mutually related to administrative and technical tasks, their interdependencies, estimations of required resources, and financial plan or cost estimations for each task, the project schedule and the project’s risks. The outcome of this planning is the Project Plan. This plan recognizes the comprehensive plans of work for both the administrative and technical tasks. The plan also includes the estimations of the resources like people, equipment, and facilities etc. necessary for each task along with an expected budget for each task. It classifies the milestones of significant proceedings and events, and establishes a schedule for the project. Each activity’s in detail plan of work is established to find its required inputs and outputs and an explanation of the procedure used to carry out the activity.
2.4 Stakeholder Involvement in Construction Projects (In general, Public and Private)
Projects today are performed by alliances of a group of stakeholders that have differing benefits, aims, and sociocultural backgrounds which are becoming extremely challenging for construction projects. These projects face trials in not only in the identification and management of stakeholders but also in filling their necessities. Haapasalo (2014) developed a structure to identify stakeholder and classify them in construction projects. This study presents a structure that is established to support project managers in enabling management of stakeholder and requirement engineering, especially in the initiation phase of the project. The framework enhances the value creation of the project through stakeholder identification, classification, and requirement engineering. Two wide- ranging styles to stakeholder involvement have been recognized - commercial and independent (Ridley and Jones, 2002). Private sector’s craving for cheapness in the market is the purpose of the consumerist approach, however the independent style believes in the process of involvement for the moral concerns of fairness and authorization of average citizens (Rowe and Shepherd, 2002). McAdam et al. (2005) have highlighted that there exists a noteworthy dissimilarity among the concentration of the private sector on determining the requirements of their ‘customers’; and the purpose of public sector in pursuing to speak about the matter of several ‘stakeholders’ who might have varied and sometimes even contradictory benefits.
There is a varying degree of stakeholders’ involvement for different firms. The idea of observing the stakeholders interest keenly and communicating firms own position clearly has been the focus of the management of stakeholder theory from the beginning (Freeman, 1984), the current readings endure to highlight the use of different communication channels—the possibilities by which organizations engage with their stakeholders—as an significant interpreter of the quality of relationships among firm and its stakeholder (Lawrence, 2002; Morris, 1997; Rowley, 1997).
The collections of stakeholder engagement signs are enormous: circulars, works councils of employees, focus groups of customer, community town meetings, and active public affairs officers. Over-all, these methods of engaging with the stakeholders signify a firm’s efforts to associate with its important stakeholder and to grow deeper roots with the people involved in the project and beside these networks flow prospects of sharing data and participate in mutual influence (Rowley, 1997). For success of a project, the project manager must be familiar with how to work inside the organization’s culture and administrative environment to ensure that both the project organization and the stake holders have their needs met (Pinto, et al., 1998; Post, et al., 2002). Brian and Martin (2008) and other scholars (Bosher et al.,2007; Cole, 2005; El-Gohary et al., 2006; Olander and Landin, 2005b) reviewing stakeholder issues related to construction area, have realized that the actions and practices commenced by major group of people involved in a project have unquestionable influences on project results. Therefore, identification of the important roles of key people involved in the projects has therefore developed more in recent years. According to PMI (2013) in order to acquire required project results, a project manager needs to enable the influence of stakeholders in various project phases. However, in the view of Joaquin et al. (2008) using the mechanism of active collaboration with stakeholders to increase project outcomes and to achieve success is not predominantly apparent in the construction industry practices.
Different stakeholders can be involved in a large project's decision-making team and how they get involved and what their roles are they may subject to have different interests, impacts and motivations for a project (Kolltveit and Grønhaug, 2004). To precisely estimate the importance and influence levels of the stakeholders and their possible coordination towards the project should be a substantial part of the project management process (Olander, 2007; Winch and Bonke, 2002). An organized evaluation on Management of Stakeholder studies in relative to Mega Construction Projects seems to be lacking. Jing yang .et.al 2014 in his research analyzed the latest research development of mega construction projects (MCP) by going through the particular articles published from 1997 to 2014. In this paper four major study themes have been identified: “stakeholder interests and influences”, “stakeholder management process”, “stakeholder analysis methods” and “stakeholder engagement”. This study exposes that Stakeholder Management methods in Mega Construction Projects are matter of national environment of the project. Furthermore, traditional techniques of analysis of stakeholder are usually implemented in MCP; for that reason a social network methodology for handling the stakeholder interrelationships in these projects is needed.
Jing Yang et al. (2009) in his research explored 15 critical success factors for management of stakeholders in construction projects and search their level and fundamental relationship. The top three ranked factors for management of stakeholder were “management of stakeholders with social responsibilities”, “assessing the stakeholders' needs and constraints to the project”, and “communicating with stakeholders properly and frequently”. The grouping of 15 CSFs were done into five dimensions namely, precondition factor, stakeholder estimation, information inputs, decision making, and sustainable support. All these five groups and their association were involved in a structure for effective stakeholder management in construction projects. These outcomes will help in explaining what the high ranked factors are, and could also be used as a valuation tool for estimating the performance of stakeholder management and thus help in identifying areas for improvement.
In order to attain a mutual aim; multidisciplinary stakeholders from Public engagement (PE) involve in a project contribute their perspectives to a project. Qi Liang et al. 2013 highlighted on enlightening public engagement in construction development projects from a stakeholder’s perspective. The study explored the complex connections between stakeholder’s power, interests, conflict, and project satisfaction. The outcomes exhibited that diverse practices of power and interest influenced final satisfaction with PE projects either directly or indirectly, over conflict. To enable active engagement of different stakeholders the Public Engagement managers are fortified for including more agents from diverse sets of stakeholders in the team decision-making process and to establish an organized and reasonable decision making process involving whole team will decrease task conflict.
Takim 2009, offers an examination of the procedures utilized for recognizing project participants, the dynamics used for managing their requirements and beliefs, and the consequences of mishandling their wants and anticipations in the expansion of Malaysian construction projects. A formalized method is more real to identify project stakeholders as per results disclosed by the research. The criteria of urgency used for managing the stakeholders’ requirements and potentials vary among the private and public sectors. The government and consultants are assured that community and governmental problems are of the maximum significance, while a great deal of emphasis is put in the private sector on establishing project partnerships for managing the stakeholders’ requirements and beliefs.
Hammad 2013 investigated the management of stakeholder in the construction projects at Gaza strip. This research purposes to enable the role of different project participants in construction projects in the Gaza Strip. The key aspects affecting the management of stakeholder process are to hire a project manager with high skill, to transparently evaluate the substitute solution, to guarantee actual communication among the project and its stakeholder, to agree on a mutual aim and objective of the project, and to explore the stakeholder want and probability. The main significant stakeholders are the client and donor, who have the most power in the construction project in the Gaza Strip.
Fulfilling the stakeholders anticipation throughout the project lifecycle is critical for successful completion of construction projects (Cleland 1995), together with clients, project managers, designers, subcontractors, suppliers, funding bodies, users, owners, employees and local communities (Newcombe 2003). A project management group can develop the value of project and the productivity of its different processes and as a result, improve project outcomes. This call for the project management team to hold important information about the project and be skilled enough to accurately analyze that information and outline relevant project strategies. Contractors, sub-contractors and suppliers are those who might not get engaged in very early stages of projects, however, since they provide materials, equipment and on-site labor, they can still greatly impact the project outcomes.
- Quote paper
- Ayesha Ahmad (Author), 2016, Assessing the Level of Stakeholder Involvement During Planning Stage of Public Sector Construction Projects in Pakistan, Munich, GRIN Verlag, https://www.grin.com/document/324077