Impact of Stakeholder Management on Construction Industry

1.0 Introduction/Background

Project management is an evolving discipline which is relatively new in both practice and academics hence knowledge is drawn from other disciplines to further advance both theory and practice in managing projects. Consequently this research will draw from different academic disciplines for its theory and the construction industry for its practice.

To this end a project could be described as a strategy used by organisations to achieve its strategic goal, the strategy could be suggested to have a start and an end date (Turner 2009 p.20; Holton 2002 p.10-2). It could also be suggested that the word ‘organisation’ in the above definition by Turner 2009 could be called the project stakeholder. Olanda and Landin (2005 p.321) defined project stakeholders as a ¦group of people who have a vested interest in the success of a project and the environment within which the project operates.

This research is focused on investigating the impact of stakeholder management and its contribution to project success in the construction industry. It could be suggested that the use of PM’s life cycle phases be adopted for the entire project plan as seen in figure 1 below.

Figure -Project Lifecycle

The project initiation phase of this report will include proposing a project research topic, assigning a project supervisor or project sponsor and proposing a research plan. While the project planning phase will include reviewing of the available project materials and the execution phase will involve writing up the literature review and project methodology. Handover and closeout will involve submitting the final report to supervisor and award of Msc degree in Project Management. Lessons learnt could be suggested to be the feedback and experience gained in during the research.

1.2 Project Context

Project Context could be suggested to be the setting in which a project is carried out (ApmBok 2009). In relation to the above description, the aim of this research is in agreement with the above suggestion (Achterkamp and Vis 2008 pg 749).

1.3 Project Rationale

1.3.1 Academic Rationale

The academic research into project stakeholders has been attractive and extensive to researchers and professionals. Evidence shows that the construction industry accounts directly for 10% GDP growth in the UK (Cridland and Wates 2009 p.5),this goes to justify the need to investigate the impact of stakeholder management and its contribution to project success in the construction industry and also fulfil the academic requirement of the award of Masters Degree.

1.3.2 Business Rationale

The economic implications for any organisation if projects fail will be devastating considering the above report by Wates and Cridland (2009 p5), this report shows that the construction industry account for 10% GDP growth. Project failure of any kind in the current economic climate will cost the organization its finance and jobs e.g. BP deep horizon in the US Gulf Coast where the collapse of a well led to fatalities which in-turn increased BP’s financial burden.

1.3.3 Personal Rationale

It could be suggested that as a project management professional, embarking on this research will help one better understand the principles of stakeholder management. The knowledge gained from this research will clarify any unanswered questions at the end of this research.

1.4 Aim and Objectives

This research is aimed at:

Investigating the impact of stakeholder management and its contribution to project success in the construction industry

Objectives

• To explore the principles of stakeholder management and project success.
• To assess the benefits and challenges of stakeholder management.
• To correlate a relationship between stakeholder management and project success.
• To propose a strategy for measuring the impact of stakeholder management thereby assessing its impact on project success.
• To make recommendations for improved stakeholder management practices.

1.4.2 Project Scope

According to Burke (2003 p. 104) project scope identifies when a project has been successfully completed within specified requirement. The scope for this project will involve activities such as writing the literature review, research methodology and drawing on the findings of the above mentioned activities to come up with a conclusion and recommendation. The scope of this research excludes the execution of the primary research.

1.4.3 Project Deliverables

Project deliverables for this research is suggested to be the outcome of the report at every stage of the lifecycle (ApmBok 2009 p.135). The deliverables as shown in Table 1 are generalised and subject to being revised at the end of this report.

Table – Project deliverables

Deliverables

Description

Project Research Plan

Introduction/ Background

Project Context and Project Rationale

Project Definition

Project Approach

Research Project Schedule

Resource Requirements

Ethical Considerations

Literature Review

Research of theory and practice within the construction industry

Project Approach or Methodology

It involves the description of the process in the collection and evaluation of data that will be used to achieve the overall aim and objectives of this report.

Project Proposal

This involves outlining a research proposal from the finding and the analysis done in the project approach section.

Conclusion and Recommendation

This section involves the final summation of all the data used and presenting recommendation(s) where necessary.

1.4.4 Assumption, Constraints and Considerations

Assumptions

The project will be delivered on time, quality and within budget.

The literature / materials needed to complete the project will be readily available.

That the project aim and objectives will be met at the end of the project.

Constraints

The time required by the sponsor to complete the report.

Combining three live projects at the same period. i.e. CPD, Group placement and dissertation.

Considerations

That the report will inspire its readers to proceed towards a primary research.

That there will be more research into the impact of project stakeholders and its contribution to project success within the construction industry.

1.5 Initial Literature Review

1.5.1 Stakeholder Management

Project stakeholders have been widely discussed in various project management literatures. Fewings (2005 p.34) described project stakeholders as people that their interest could affect the outcome of the project while Olanda and Landin (2005 p.321) agues that although project stakeholders are group of people with different interest in a particular project, they are also interested in a successful outcome no matter the level of interest. Since this research will be focusing on stakeholder management, McElroy and Mills (2007 p.270) suggested that stakeholder management deals with the relationships between stakeholders within projects. This relationship must be developed and structured so as to achieve a successful outcome. McElroy and Mills (2007 p.270) description of stakeholder management is convincing because different bodies of knowledge are yet to agree on a particular description for stakeholder management.

Fewings (2005) and Olanda & Landin (2005) perspectives on project stakeholders in relation to stakeholder management is valid in that all agreed that stakeholders are made up of more than one individual, so managing this relationship as described by McElroy and Mills (2007 p.270) will determine if a project is a success or a failure .

1.5.2 Project Success

Yu et al. (2005) suggested that a:

‘Project is a success if its created product adds value to the client, considering the cost to the client at the point of acceptance’

While there is no definite definition to what project success is or what will be the best way to define success, this report would look into critical success criteria used in the construction industry to determine when a project is successful. The ApmBok (2009) defined project success as:

‘…the satisfaction of stakeholder needs measured by the success criteria as identified and agreed at the start of the project…’

1.6 Project Research Approach

In this section it could be suggested that a proposed research approach be developed, this approach would be aligned with the project aim and objectives.

To achieve the above this report has identified two methods or type of research, this are the Primary and Secondary research.

A primary research entails the collection of new data or expansion of existing theories in project management body of knowledge. This could be achieved by using the following methods: the use of questionnaires, sampling and survey.

Data for this research would be collected though documentary research. This involves analysing various literatures relating to the research; given that this research is a secondary research, a qualitative method will be employed.

1.6.1 Ethical Consideration

Sekaran (2000, p17) defined ethics as

‘a code of conduct or expected societal norm of behaviour while conducting a research or project ‘.

Below in table 2 are the ethical considerations used to compile this research.

Table -Ethical Consideration

This research was carefully structured to avoid any misrepresentation or distortion of data collected.

All information used for this research was adequately referenced to avoid plagiarism.

This report was written with due respect for the subject and authors

All information used for this report is in line with universities academic guidelines.

Sekaran ( 2000, p.261)

1.7 Project Planning / Report Schedule

Burke (2003, p.94) defined project schedule as

‘¦a process required to ensure that various elements of the project are properly managed and controlled…’

The project schedule will be used to assign expected start date and expected finish date. The schedule is in a Gantt chart, this could be suggested to be in agreement with (Burke 2003) definition. See Appendix 1 for more details.

1.8 Project Resource Requirements and Budget

The resources required for a successful completion of this project is listed in Table 2 and the cost estimate that would apply to both primary and secondary research is in Table 3

Figure -Resources Requirement

Human Resources

Description

Hours

Researcher

Researcher would carry out a secondary research and prepare a primary research plan to be used to further analyse the project aim

600

Academic supervisor

The academic supervisor would give guidance, review and monitor project to ascertain if the project is within scope.

60

Project sponsor

The project sponsor and management would be need during an actual primary research.

100

Table – Project Budget

Activity

Budget

Source

Cost for Researcher and supervisor

£3000

RGU and Sponsor

Printing of dissertation and buying of CD drives ( hard and soft copies)

£200

Researcher and Sponsor (in the case of a primary Research)

Transport is Dependent on the location of the organisation and RGU library

Not Determined at present

Researcher and Sponsor

1.8.1 Risk Matrix

Risk management is a key area in APM and PMI bodies of knowledge; projects are often associated with one form of risk or another (Raz &Michael 2000), controlling this risk is an important task for any researcher. To this end, this report will take a proactive role in controlling risks associated to this project by developing a risk plan which can be seen in Table 4