Stakeholder

Analysis
Compiled by
S.Rengasamy
 S.Rengasamy –Stakeholder Analysis

Contents
Introduction ..........................................................................................................3
Why do Stakeholder Analysis? .............................................................................3
Box: Project Stakeholders ..........................................................................................4
Definition of Project Stakeholders: ......................................................................4
Project Stakeholders .................................................................................................4
Box: Purpose of stakeholder‟s analysis .......................................................................5
Types of stakeholders: ..............................................................................................5
Primary stakeholders. ................................................................................................5
Secondary stakeholders. ............................................................................................5
Key stakeholders: .....................................................................................................5
Box: Stakeholder Mapping- Power / Dynamism Matrix .................................................6
Methods of Stakeholder Mapping ...............................................................................6
Box: Power / Interest Matrix –Power Legitimacy & Urgency Matrix ...............................7
Stakeholder Matrix - Importance & Influence ..............................................................8
Diagram: Who is a StakeholderBox: Models of Stakeholder Matrix ...............................9
Box: Models of Stakeholder Matrix ........................................................................... 10
Box: Stakeholder Management ................................................................................ 11
What is Stakeholder Analysis? .................................................................................. 11
What are the benefits of Stakeholder Analysis? ......................................................... 12
On Beneficiaries & Stakeholders ............................................................................... 12
Spectrum of Stakeholder Engagement & Good Stakeholder Engagement .................... 13
Table: Identification of Stakeholder Groups, Interest, Importance and Influence ........ 14
Diagram: Stakeholder Relationship & Stakeholder Interaction .................................... 15

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 S.Rengasamy –Stakeholder Analysis

Introduction
Who are the people who will benefit from any given development activity? And whose interests
might be harmed by it?
Identifying the stakeholders,
large and small, individual &
organizational, for any given
activity is essential if all the
people who could have a
bearing on its success or
failure are to have their
voices heard. All
stakeholders need to have
their opinions taken into
account, even if some are to
be set aside at a later date.

Stakeholder Analysis allows

managers to identify the
interests of different groups
and find ways of harnessing
the support of those in favor
or the activity, while
managing the risks posed by stakeholders who are against it. It can also play a central role in
identifying real development need — and that may mean devising a different programme from
the one you thought you were about to embark upon.

Stakeholder Analysis should be an integral part of programme design, and appraisal. It is also a
useful technique to use during reviews, missions and evaluations.

Why do Stakeholder Stakeholder analysis is a term used in conflict resolution, project

management, and business administration to describe a process where
Analysis?
all the individuals or groups that are likely to be affected by a proposed
Stakeholder Analysis is action are identified and then sorted according to how much they can
used in the design and affect the action and how much the action can affect them. This
management of information is used to assess how the interests of those stakeholders
development should be addressed in a project plan, policy, program, or other action.
programmes to identify: Stakeholder analysis is a key part of Stakeholder management
 The interests of all
stakeholders who may affect or be affected by a programme;
 Potential conflicts and risks that could jeopardize a programme;
 Opportunities and relationships to build upon in implementing a programme to help make it a
success;
 The groups that should be encouraged to participate in different stages of the activity cycle;

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 S.Rengasamy –Stakeholder Analysis

Box: Project Stakeholders

Project Stakeholders
“Government of India came up with a Sethu Samudram Canal project last year. Currently, ships have
to travel around an island to reach other side. By executing this project, ship travel becomes cheaper
as it takes shorter route than earlier.
But environmentalists are concerned that this project will endanger the fragile marine ecology of the
area through constant dredging to maintain a canal depth of about 10 m. The increase in shipping
traffic will inevitably result in an increase in oil spills and marine pollution. So they protested for the
execution of the project without proper clearance from national environment group before starting the
project.” One can quote several examples like this. E.g.Projects related to Special Economic Zones
What do we understand from this story?
Environmental groups are negative stakeholders in the Sethu Samudram Canal project as they stops
the project execution. Stakeholders may have a positive or negative influence on a project.
Positive stakeholders are those who would normally benefit from a successful outcome from the
project, while negative stakeholders are those who see negative outcomes from the project‟s success
Both positive as well as negative stakeholders may exert influence over the project‟s objectives and
outcomes. The project management team must identify the stakeholders, determine their
requirements and expectations, and to the extent possible, manage their influence in relation to the
requirements to ensure a successful project.
It is Project manager‟s duty to identify all stakeholders, gather their requirements, manage their
expectations and appropriately communicating them in timely manner depending on their
responsibility & authority levels. Examples of key stakeholders:
• Project manager-The person responsible for managing the project.
• Customer/user-The person or organization that will use the project‟s product.
• Performing organization–The enterprise whose employees are most directly involved in doing
the work of the project.
• Project team members-The group that is performing the work of the project.
• Project management team -The members of the project team who are directly involved in
project management activities.
• Sponsor -The person or group that provides the financial resources, in cash or in kind, for the
project.
• Influencers -People or groups that are not directly related to the acquisition or use of the project‟s
product, but due to an individual‟s position in the customer organization or performing organization,
can influence, positively or negatively, the course of the project.
The list is just a gist of key stakeholders. But the list differs from project to project.

 Ways to improve the programme and reduce, or hopefully remove, negative impacts on
vulnerable and disadvantaged groups.
Stakeholder analysis is a term that refers to the
action of analyzing the attitudes of stakeholders
Definition of Project Stakeholders: towards something (most frequently a project). It is
Project stakeholders are individuals and frequently used during the preparation phase of a
organizations who are actively involved in the project to assess the attitudes of the stakeholders
project, or whose interests may be affected as regarding the incoming changes. Stakeholder
a result of project execution or project analysis can be done one shot or on a regular basis
completion. to track how stakeholders changed their attitudes
over time.
Stakeholders are all those who need to be
considered in achieving project goals and whose participation and support are crucial to its
success. So identification of all stakeholders is an important activity of the project manager to
ensure project success.
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 S.Rengasamy –Stakeholder Analysis

Stakeholders can be 1) individuals within the project 2) individuals or departments within the
organization & 3) individuals or groups outside the organization (can be influencers)

Box: Purpose of stakeholder’s analysis

A stakeholder is any person or
Purpose of Stakeholder Analysis organization, who can be positively or
 To better address distributional and social impacts of
projects, programs and policies; and
negatively impacted by, or cause an
 To identify existing or potential conflicts of interest, impact on the actions of a company,
and factor appropriate mitigation strategies into government, or organization.
activity design.
Stakeholder analysis is about asking the questions: ‘A stakeholder is an individual or group
"Whose problem?" and, if a project intervention influenced by and with an ability to
strategy is proposed: "Who will benefit?". Stakeholder significantly impact (positively or
analysis is thus an essential element of poverty
analysis.
negatively) the topical area of interest’-
Glicken,
Types of stakeholders:
Primary stakeholders.
Those individuals and groups who are ultimately affected by an activity, either as beneficiaries
(positively impacted) or disbeneficiaries (adversely impacted). In a rural roads activity, primary
stakeholders might include both the petty traders and small farmers whose livelihoods are positively affected
by the new roads, and those households who are adversely affected, such as by having to relocate because of
road widening.
Secondary stakeholders.
All other individuals or institutions with a stake, interest or intermediary role in the activity. In a
primary health care scenario, secondary stakeholders might include the local health workers, health
department officials, the Ministry of Health, NGOs, other donors, private doctors and so on.
Key stakeholders:
Those (who can also belong to the first two groups) who can significantly influence or are
important to the success of an activity.

The word „stakeholder‟ and the word „participation‟ are jargon words that have different meanings for
different people and thus it can be difficult to understand what people are trying to say when they use
these words. As they are used together to describe a process that is supposed to be transparent and
inclusive this can be quite frustrating.
A stakeholder is only defined in reference to a particular issue e.g. as a resident you may be a
stakeholder in a decision about what kind of flood warning system should be used in your area. You
would not be a stakeholder in a decision about flood warning in an adjoining area although the water
company might be a stakeholder in both decisions.

Stakeholder analysis has the goal of developing cooperation between the stakeholder and the
project team and, ultimately, assuring successful outcomes for the project. A stakeholder analysis
is performed when there is a need to clarify the consequences of envisaged changes or at the start
of new projects and in connection with organizational changes generally. It is important to
identify all stakeholders for the purpose of identifying their success criteria and turning these into
quality goals.

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 S.Rengasamy –Stakeholder Analysis

Box: Stakeholder Mapping- Power / Dynamism Matrix

Methods of Stakeholder Mapping

The following list identifies some of the best known and most commonly used methods for
stakeholder mapping:
 (Mitchell, Agle et al. 1997) proposed a classification of stakeholders based on power to
influence, the legitimacy of each stakeholder‟s relationship with the organization, and the urgency of
the stakeholder‟s claim on the organization. The results of this classification may assess the
fundamental question of “which groups are stakeholders deserving or requiring manager‟s attention,
and which are not?” This is salience - “the degree to which managers give priority to competing
stakeholder claims” (Mitchell, Agle et al., 2007:854)
 (Fletcher, Guthrie et al. 2003) defined a process for mapping stakeholder expectations based on
value hierarchies and Key Performance Areas (KPA),
 (Savage, Nix et al. 1991) offer a way to classify stakeholders according to potential for threat
and potential for cooperation.
 (Turner, Kristoffer and Thurloway, 2002) have developed a process of identification,
assessment of awareness, support, influence leading to strategies for communication and assessing
stakeholder satisfaction, and who is aware or ignorant and whether their attitude is supportive or
opposing.
Mapping techniques include the following sub-set of results from a Web search of analysis techniques
being used by aid agencies, governments or consultant groups:
Influence-interest grid (Imperial College London)
Power-impact grid (Office of Government Commerce UK 2003)
Mendelow's Power-interest grid (Moorhouse Consulting 2007)
A=High Power & Low Interest B=High Power & High Interest
C=Low Power & Low Interest D=Low Power & High Interest

Power / Dynamism Matrix Gardner et al (1986)

Dynamism
Low High
A B
Fewer Unpredictable
Low
Problems But
Power

manageable
C D
Powerful Greatest Danger
High
but or
predictable opportunities

Power /Dynamism Matrix classify stakeholders in relation to power that they hold and the
dynamism of their stance. The Power / Dynamism Map can be used to ascertain where political
efforts should be focused during the development of new stages
The stakeholders in group A and B are the easiest to deal with
The stakeholders in group C are important, because they are powerful. However their
dynamism is low, so their stance is predictable and their expectations can often be met in a
relatively easy manner.
Stakeholders in group D should have the most management attention, because they are
powerful and their stance is difficult to predict. They can sometimes be dealt with by testing
out new strategies with them before final decisions are made.

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 S.Rengasamy –Stakeholder Analysis

Box: Power / Interest Matrix –Power Legitimacy & Urgency Matrix

Power / Interest Matrix Gardner et al (1986)

Level of Interest
Low High
A B
Low Minimal Keep

Power
Effort Informed
C D
High Keep Key
Power /Interest Matrix classify stakeholders in relation to thePlayers
Satisfied power that they hold and the
extent to which they are likely to show in the strategies of the organization. Power / Interest
Matrix can be used to indicate what type of relationship the organization should have with each
of the group.
The stakeholders in Group A requires only minimal effort and monitoring
The stakeholders in Group B should be kept informed. They can be important to influence the
more powerful stakeholders.
The stakeholders in Group C are powerful, but their interest is low. They are generally relatively
passive, but may suddenly emerge as a result of certain events, moving to the group D on that
issue. They should be kept satisfied
The stakeholders in Group D are both powerful, and highly interested in the strategies of the
organization. The acceptability of strategies to these key players should be an important
consideration in the evaluation of new strategies

Power, Legitimacy and Urgency Model maps stakeholder behavior into seven types depending on the
combination of three characteristics.
 Power of the stakeholder to influence the organization
 Legitimacy of the relationship and actions of the stakeholder with the organization in terms of desirability,
properness or appropriateness
 Urgency of the requirement being set for the organization by a stakeholder in terms of criticality and time
sensitivity for the stakeholder
The stakeholders who show only one of the 3 characteristics (number 1, 2 and 3 in the picture) are defined as the
Latent Stakeholders. They are sub classified as dormant, discretionary or demanding stakeholders.
The stakeholders who show two out of 3 characteristics (number 4, 5 and 6 in the picture) are defined as
Expectant Stakeholders. They are sub classified as dormant, dangerous or dependent stakeholders.
The stakeholders showing all the 3 characteristics are called as Definitive stakeholders

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 S.Rengasamy –Stakeholder Analysis

Stakeholder Matrix - Importance & Influence

Stakeholder analysis is an essential part of developing a useful Engagement Plan. A common method of
stakeholder analysis is a Stakeholder Matrix. This is where stakeholders are plotted against two variables.
These variables might be plotting the level of „stake‟ in the outcomes of the project against „resources‟ of the
stakeholder. Another is the „importance‟ of the stakeholder against the „influence‟ of the stakeholder. The
concept is the same, though the emphasis is slightly different.
Box A
These are
Importance of Stakeholder stakeholders
appearing to have a
Unknown Little /No Some Significant high degree of
influence on the
Importance Importance Importance project, who are also
of high importance for
its success. This

C A
Significant implies that the
Influence of Stakeholder

Influence implementing
organization will need
to construct good
Somewhat working relationships
with these
Influence stakeholders, to
ensure an effective
coalition of support for
the project. Examples

D B
Little or no might be the senior
Influence officials and
politicians or trade
unions.

Unknown Box B
These are
stakeholders of high
importance to the
success of the project,
Box C Box D but with low influence.
These are stakeholders with high influence, who can The stakeholders in this
This implies that they
therefore affect the project outcomes, but whose interests box, with low influence on, will require special
are not necessarily aligned with the overall goals of the or importance to the project initiatives if their
project. They might be financial administrators, who can objectives, may require
interests are to be
exercise considerable discretion over funding limited monitoring or protected. An example
disbursements. This conclusion implies that these evaluation, but are of low may be traditionally
stakeholders may be a source of significant risk, and they priority.
marginalized groups
will need careful monitoring and management. (e.g. Indigenous
people, youth,
seniors), who might be
beneficiaries of a new
Latent service, but who have
1. Dormant little ‘voice’ in its
development.
2. Discretionary
3. Demanding
Expectant
4. Dominant
5. Dangerous
6. Dependent
7. Definitive
8. Non Stakeholder

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 S.Rengasamy –Stakeholder Analysis

Diagram: Who is a Stakeholder

Who is a Stakeholder?
In the context of a development project, a stakeholder can be
defined as any group or individual who can affect, or is affected
by, any initiative undertaken by that project.

What is a Stakeholder Analysis?

Stakeholder analysis can be defined as an approach for understanding a system by
identifying the key actors -or stakeholders. in the system and assessing their respective
interest in that system. (Grimble et al.1995).
It refers to a range of tools for the identification and description of stakeholders on the basis of
their attributes, interrelationships and interests related to a given initiative or resource.

Why do we need a Stakeholder What is the Purpose of a Stakeholder

Analysis?
There are several reasons to carry out a
stakeholder analysis:
 Empirically discover existing patterns of
interactions;
 Improve and target interventions;
 As a management tool in policy-making;
and
 As a tool to predict and/or manage
conflicts
Analysis?
The basic objectives of stakeholder analysis are
to:
Identify all those people, groups or institutions.
who might be affected by an intervention or can
affect its outcome;
Identify local institutions and processes upon
which to build; and
Provide a foundation and strategy for
participation

Categories of Stakeholders Stakeholder Analysis: Steps and Tools

 Primary stakeholders: These are project
beneficiaries. IFAD regards the poor and
marginalized groups as the primary
beneficiaries and tries to focus its efforts on
fostering their participation.
 Secondary stakeholders: They comprise
government agencies, NGOs, research
institutions, etc. They participate
in the project because they either have a
stake/interest in or can contribute to it.
 External-or other-stakeholders: These are
people groups and/or institutions that are
not formally involved in specific project
activities but can have an impact on or be
affected by a project.
 Identify the main purpose of the analysis;
 Develop an understanding of the system and
decision-makers in the system;
 Identify principal stakeholders;
 Investigate stakeholders. Interests,
 Characteristics and circumstances;
 Identify patterns and contexts of
 interaction between stakeholders; and
 Define options for management.

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 S.Rengasamy –Stakeholder Analysis

Box: Models of Stakeholder Matrix

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 S.Rengasamy –Stakeholder Analysis

Box: Stakeholder Management

Stakeholder Management processes (but

not limited to)
1. Identifying all stakeholders
2. Documenting stakeholders needs
3. Assessing & analyzing stakeholders
interest/influence
4. Managing stakeholders expectations
5. Taking actions
6. Reviewing status & repeat

Management, Change Management &

Stakeholder Management

What is Stakeholder Analysis?

Stakeholder Analysis is an important technique for stakeholder identification & analyzing their
needs. It is used to identify all key (primary and secondary) stakeholders who have a vested
interest in the issues with which the project is concerned.

The aim of stakeholder analysis process is to develop a strategic view of the human and
institutional landscape, and the relationships between the different stakeholders and the issues
they care about most.

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 S.Rengasamy –Stakeholder Analysis

What are the benefits of Stakeholder Analysis?

A stakeholder analysis can help a project to identify:
 The interests of all stakeholders, who may affect or be affected by the project
 Potential issues that could disrupt the project
 Key people for information distribution during executing phase
 Groups that should be encouraged to participate in different stages of the project
 Communication planning & stakeholder management strategy during project planning phase
 Ways to reduce potential negative impacts & manage negative stakeholders

Engaging stakeholders throughout the project life cycle is a key to (but not a guarantee of)
project’s success.

Managing stakeholder’s expectations & ensuring their active involvement is very much
important to project as:
 It is indispensable for continuation of the project & its successful completion
On Beneficiaries & Stakeholders
On Beneficiaries & Stakeholders
On beneficiaries
The concept of “beneficiaries” reflect the notion that there is a „giver” and a “receiver”, in some kind of a
“giving” transaction. It reduces the relations and roles to the notion that there are “recipients” of
something that the State, or NGO, will “deliver” to them (a toilet, food aid, a well, a training).
Talking of “beneficiaries participation” is often a way to reflect on a consultation process with people
who will “benefit” from something, but does not take away some notion of somewhat “passive
receiving” as opposed to active “take charge” characteristic of true emancipation processes.
On stakeholders
The term comes from the government and private sectors. The „stakeholder” language was meant to
reflect the “inclusivity” of the State apparel and of companies thinking processes and practices.
But in reality, the “people who have a stake” in something, are the ones for whom strategies, products,
programs are decided for, what will be crafted around their “needs” or the demand of the market. They
“have a say” in what is done for them. But they are not necessarily “actors” in the project. They are
“concerned” within an existing reality, project, situation, but are they actors or decision-makers?
Jacques Rancier, a French philosopher, who wrote Ten Theses on Politics, refers to this as the « politics
that makes decision on the people, for the people, instead of the people”
The term “stakeholder” is to the private and government sectors what the term “beneficiaries” is to a
“charity”.
A Street Vendor’s reflection ….
For us, street traders, being a stakeholder is a slavery term. This is because government and big business think for
us, plan for us and all we are left with is to fit in their plan and do as we are told…”

 It gives opportunity to individuals or groups to express their ideas/issues/concerns over the

project
 It gives a sense of accountability and enhances responsibility
 It enables effective risk identification & response planning
 It opens up excellent learning opportunity for both the project team and stakeholders

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 S.Rengasamy –Stakeholder Analysis

Spectrum of Stakeholder Engagement & Good Stakeholder Engagement

Spectrum of Stakeholder Engagement

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 S.Rengasamy –Stakeholder Analysis

Table: Identification of Stakeholder Groups, Interest, Importance and Influence

Identification of Stakeholder Groups, Interest, Importance and Influence

Note: Influence refers to the power which a stakeholder has over a project. Importance relates to which
achievement of project objectives depends on the active involvement of a given stakeholder group.
Stakeholder Interests at Effect of Project Importance of Degree of
Groups Stake Relative on those Intere- Stakeholder for Influence
(Illustrative list) to Project (list) sts. positive / Project Success over Project
negative (insert +, (1 - highest, 5 - (rank 1 to 5)
0, or -) lowest)
Farmers
- Smallholders
- Commercial
- Landless
- Women
Other private
sector
- Input suppliers
- Agro-processors
- Farmers.
association
- Farm lobbies
- Local NGOs
- Universities
- Consulting firms
- Elected councils
Borrower (MoF)
- Central
- Districts
- Other
Other ministries
- Planning
- Agriculture
- Natural resources
- Others (land,
women, etc.)
Donors/ Major
NGOs

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 S.Rengasamy –Stakeholder Analysis

Diagram: Stakeholder Relationship & Stakeholder Interaction

Positive Relationship- the stronger the relationship the thicker the line

Conflict –the more severe the thicker the line

Informal or intermittent link

Alliances

Stakeholder Interaction

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