2.1.2 Project Stakeholders and Organization

2.1.2.1 Project Stakeholders

Definition: Managing a project
Managing work in relation to people’s expectations.

Definition: Stakeholders
People affected or involved in a project with (usually) conflicting interests and priorities

Typical stakeholders are:

• Project sponsor
• Typically senior executive
• Provides financial resources
• Primary risk taker within the project
• Vendors / Business partners
• External organizations (suppliers / contractors)
• Supply goods / services
• Project manager
• Person authorized to manage a project
• Identifies all stakeholders
• Determines stakeholders’ interests
• Balances conflicting expectations
• Project team
• Performs the work of the project
• End users / Customers
• Will (buy and) use the product / service created by the project
• Independent if they are internal (e.g. from another department) or external (e.g. end consumer)

Definition: Hidden stakeholders
Do not work directly with a project or do not use the product / services, may include

• Physical environment
• Cultural environment
• Political environment
• Organizational structure and culture of a company

Can jeopardize the project’s success, so it’s even more important that they are identified early

Lessons learned:

• Identify (hidden) stakeholders early
• Anticipate competing demands (and balance them)
• Understand stakeholders’ roles and responsibilities (and/or make their roles and responsibilities clear to them)

Project managers key responsibilities when dealing with stakeholders:

• Balance stakeholder interests
• Manage stakeholder expectations

Balance stakeholder interests

• Communicate purpose and benefits
  (of the project to all stakeholders to motivate stakeholders to buy into the project)
• Ensure stakeholders see the project as win-win for everyone
• Have senior management backing for the project

Manage stakeholder expectations

• Communicate expected results (before the project starts clearly to all stakeholders)
• Keep stakeholders informed
• Resolve issues with stakeholders (quickly)

Stakeholder roles

• Sponsor
• Champions a project at its outset
• Develops the initial project scope and charter
• Authorizes the start of the project
• Provides project resources, incl. funding
• Bears ultimate responsibility for the project’s success
• Is expected to remove roadblocks
• Provide guidance and feedback
• Encourage the team
• Authorize major changes in scope
• Have the final say in high-risk decisions
• Vendors / Business partners
• Carry out all contracts and duties according to agreed levels of quality
• Provide specialized expertise / services
• May interact with project team and end users / customers
• Project manager
• Part of the project team
• Must be able to move from big-picture view to focusing on details quickly
• Communicator, interface between all stakeholders
• Ability to
• Motivate
• Persuade
• Negotiate
• responsible for
• Developing project and component plans
• Providing reports on project metrics
• Ensuring the project remains on schedule and within budget
• Identifying, monitoring, and responding to risks
• Project team
• Work and communicate well together
• Need to accept and work with the strengths and weaknesses of each member
• Should be aware how their work affects other team members
• Needs to commit producing quality work
• Must commit to meet project deadlines
• End users / Customers
• Provide key information about scope and project result
• Need to outline what’s needed
• Need to highlight risks or problems
• The project aims to create something for them
• May be involved in testing
• Their feedback can identify potential risks and problems
• Expected to respond to issues that arise during the project life cycle

2.1.2.2 Organizational Stakeholders

Likely to have different interests than project stakeholders


How a business is structured affects the variety and levels of organizational stakeholders, e.g.

(PMO = Project Management Office)

Business Objectives		Meet business objectives at the enterprise level – has a stake in the overall performance of all projects, programs and portfolios within the organization
		Can range from providing project management support functions to directly managing projects – ensures standardized processes
Management support or direct management

PMO's responsibilities

• Promote overall mission
• May initiate major program changes
• To help achieve an organization’s goals
• Create standardized approach for project management methodologies
• Identify
• Develop
• Standardize
• Mentor, coach and train project managers
• Communicates across projects
• Manages and coordinates across projects
• Shared resources
• Risks
• Policies
• Documentation
• Performs audits regarding project management
• Standard policies
• Procedures
• Templates
• Coordinate communication across projects
• Monitors project
• Timelines
• Budget
• Quality

Other stakeholders that operate at a strategic level that keep an eye on the big picture / across projects

• Portfolio review board
• Provides additional support for project selection and priorization
• Reviews for value, risks and ROI
• Often responds to external opportunities (e.g. tenders or Requests for Proposals)
• Portfolio managers
• Makes decisions based on business strategy
• Responsible for high-level governance of projects
• Reviews for values, risks, and likely ROI
• Authorize and prioritize projects (according to the strategy)
• Program managers
• Manage and control related projects
• Ensure projects are integrated into their program
• Ensure that the program is on budget and schedule
• Provide support and guidance to project managers
• Main interest is achieving program (not individual project) benefits
• Ensure that projects work together to achieve program benefits

Definition: Functional manager
Oversee administrative functions and are reponsible for providing services to project teams, but have no interaction with other project stakeholders. (e.g. HR or financial manager)


Definition: Operational manager
Oversee divisions that directly produce and maintain products/services. Provide project with skilled personnel. Op. managers and their teams might interact with other project stakeholders, on behalf of the project team.

2.1.2.3 Organizational Influences on a Project

Main organizational influences on a project

• Culture
• Unique ways the organization operates
• Includes unwritten rules and expectations of its members (are we more conservative or entrepreneurial?)
• Views of authority
• Values
• Policies and procedures
• Beliefs
• Norms
• Arises from the accumulated shared learning of a group
• Might be difficult to explicitly define or communicate
• Structure
• How positions and departments are defined
• Includes reporting structure and hierarchy
• Affects who gets authority and how project resources are accessed
• Process assets
• Processes and procedures
• Plans
• Policies
• Standard Processes
• Procedures & Guidelines
• Templates
• Corporate knowledge base
• Lessons learned from previous projects
• Projects files and records from previous projects

Definition: Matrix organization
Mixture between projectized organization (executives -> project managers -> project staff) and functional organization (executives -> functional managers -> staff & project staff)


Project characteristics and organizational structure

Project characteristics	Functional	Projectized
Project manager's authority	Very low	High
Resource availability	Very low	High
Person in control of budget	Functional manager	Project manager
Project manager's role	Part-time	Full-time
Project administrative staff	Part-time	Full-time