study on the influence of stakeholders in construction...

International Journal of Engineering Technology, Management and Applied Sciences

www.ijetmas.com June 2016, Volume 4, Issue 6, ISSN 2349-4476

31 P. Ganesh Prabhu

Study on the Influence of Stakeholders in Construction

Industry

P. Ganesh Prabhu

Assistant Professor, Department of Civil Engineering,

Kamaraj College of Engineering and Technology,

Virudhunagar, Tamilnadu, India.

ABSTRACT

Interest in stakeholders has grown considerably since Freeman’s (1984) seminal work “Strategic Management: A

Stakeholder Approach” was published. The interactions and interrelationships between stakeholders largely determine

the overall performance of a construction project, and have the crucial responsibility for delivering a project to

successful completion. An important component of stakeholder management is stakeholder analysis. Two case studies are

conducted in Southern part of Tamil Nadu (India). The main objective was to carry out stakeholder analysis using

Microsoft Excel, considering the data’s collected from the project execution team using questionnaire. During data

collection the key stakeholders were identified, to know how to manage them, their interest, power, attitude level etc, for

quality improvement. Analyze the results using the software Microsoft Excel and modeling of stakeholders is to be done.

Finally validate the models of the projects. These findings may mainly reflect the stakeholder management environment

in the respective regions of project implementation.

Keywords: Stakeholders, identification, prioritization, power, interest and attitude level, validation

1. INTRODUCTION

1.1 GENERAL

Stakeholder management is an important issue in project management as a project can be seen as a

temporary coalition of stakeholders to create something together. As per Reference [1], Freeman defines a

project stakeholder as “a person or a group of persons, who are influenced by or able to influence the project”

and also he defines a stakeholder in an organization is “any group or individual who can affect or is affected

by achieving the organization‟s objectives”. Nevertheless, a broad stakeholder definition was presented by

Reference [2], R. Phillips defined stakeholders as parties contributing to and/or being affected by a decision

making process. The origin of this theory is often attributed to Freeman (Goodpaster1991; Logsdon and Wood

2000). Stakeholder management is rooted in business management and often associated with „Corporate

Social Responsibility‟ where ethical considerations are emphasized but an economic factor influences the

implementation of the concept also. Stakeholder management should ideally be auditable and supported by the

executives of an organization (Wheeler and Sillanpaa1997). The main participants in a construction project

coalition are the client, the architect and the contractor. The interactions and interrelationships between these

participants largely determine the overall performance of a construction project, and have the crucial

responsibility for delivering a project to successful completion. Stakeholders can be divided into internal and

external, internal stakeholders being those directly involved in an organization‟s decision-making process (e.g.

owners, customers, suppliers, employees) and external stakeholders being those affected by the organization‟s

activities in a significant way (e.g. neighbours, local community, general public, local authorities). In

construction, there has traditionally been a strong emphasis on the internal stakeholder relationship such as

procurement and site management, while the external stakeholder relationships to some extent have been

considered a task for public officials via the rules and legislation that concern facility development.

An important component of stakeholder management is stakeholder analysis. A variety of techniques can be

involved either individually or collectively to gather the information for the analysis, such as workshops,

focus group discussions, individual interviews and various Participatory Rapid Appraisal (PRA) techniques.

But Individual Interviews and through E-mail only we are conducted in this Stakeholder analysis. There are a

number of possible tools that can be used to represent information gathered in a stakeholder analysis. These

diagram tools are used to provide a visual representation of the relative importance of different activity



32 P. Ganesh Prabhu

variables. In this thesis two different construction projects from Tamil Nadu were chosen as case studies. The

first case study was executed by Company 1, Tuticorin. The second case study was executed by Company 2,

Erode. Important stakeholders were identified from each project separately and feed into the Microsoft Excel

and results were obtained. The ratings for each stakeholder were interviewed and feed into the software.

Modeling the influence of stakeholders in each project is plotted with the help of the software and finally

validates the models.

1.2 OBJECTIVES OF STAKEHOLDER MANAGEMENT

You can use the opinions of the most powerful stakeholders to shape your projects at an early stage. Not

only does this make it more likely that they will support you, their input can also improve the quality of

your project.

Gaining support from powerful stakeholders can help you to win more resources – this makes it more

likely that your projects will be successful.

By communicating with stakeholders early and frequently, you can ensure that they fully understand what

you are doing and understand the benefits of your project – this means they can support you actively when

necessary.

You can anticipate what people's reaction to your project may be, and build into your plan the actions that

will win people's support.

1.3 SCOPE OF STAKEHOLDER MANAGEMENT

The main scope of the project is to identify the key stakeholder groups and assess their positioning with

respect to the change in initiative, to identify potential opportunities and threats to project implementation and

finally to determine the extent to which certain groups should participate in project planning, implementation

and evaluation. Stakeholder analysis is carried out in the early stages of planning, a quality improvement

initiative.

1.4 TYPES OF STAKEHOLDERS

1.4.1 INTERNAL STAKEHOLDERS: Stakeholders which directly influence the project.

Examples: Owner, Customers, Contractors, Suppliers.

1.4.2 EXTERNAL STAKEHOLDERS: Stakeholders which indirectly influence the project.

Examples: Local Community, bank, Government.

1.5 BENEFITS OF STAKEHOLDER ANALYSIS

Stakeholder analysis helps with the identification of the following

Stakeholders interests

Mechanisms to influence other stakeholders

Potential risks

Key people to be informed about the project during the execution phase

Negative stakeholders as well as their adverse effects on the project

1.6 CRITICAL SUCCESS FACTORS

1.6.1 Power level: A person, group or firm having great influence or control over others.

1.6.2 Interest level: A state of curiosity or concern about or attention to something.

1.6.3 Attitude level: A predisposition or tendency to respond positively or negatively towards a certain idea

or object, person or situation.

2. REVIEW OF STAKE HOLDERS MANAGEMENT

2.1 INTRODUCTION FOR STAKEHOLDER MANAGEMENT:

Stakeholder management is a critical component to the successful delivery of any project, programme or

activity. A stakeholder is any individual, group or organization that can affect, be affected by, or perceive



33 P. Ganesh Prabhu

itself to be affected by a programme. Effective Stakeholder Management creates positive relationships with

stakeholders through the appropriate management of their expectations and agreed objectives. Stakeholder

management is a process and control that must be planned and guided by underlying principles.

2.2 KEY PRINCIPLES OF STAKEHOLDER MANAGEMENT:

Communicate: To ensure intended message is understood and the desired response achieved.

Consult, early and often: To get the useful information and ideas, ask questions.

Remember, they are human: Operate with an awareness of human feelings.

Plan it: Time investment and careful planning against it, has a significant payoff.

Relationship: Try to engender trust with the stakeholders.

Simple but not easy: Show your care. Be empathetic. Listen to the stakeholders.

Managing risk: Stakeholders can be treated as risk and opportunities that have probabilities and impact.

Compromise: Compromise across a set of stakeholders' diverging priorities.

Understand what is success: Explore the value of the project to the stakeholder.

Take responsibility: Project governance is the key of project success

3. METHODOLOGY

3.1 LITERATURE REVIEW:

Researchers have done many works on stakeholder management in construction projects is clearly

studied. In the study we clearly understood some ideas that they found out the key stakeholders who influence

the projects for the successful completion and improves the quality of the project. The key stakeholder is also

managed at the time of unsuccessful completion of the project. Thus the literature study is helpful to gain

knowledge about the study of work to identify the key stakeholder and to manage the key stakeholder for the

improvement of project quality.

3.2 PILOT STUDY:

The Pilot study is the preliminary work started in the project to evaluate the stakeholder and to

improve the questionnaire survey. The pilot study is for our purpose to design the questionnaire survey.

3.3 IDENTIFICATION OF VARIOUS STAKEHOLDERS:

In our project we selected Pearl City Engineering Builders, Thoothukudi and Priya Construction, Erode as the

construction Industry. These two companies are one of the leading construction industry in our field. The

project undertaken by those companies are the construction of ECE and Canteen Block Extension in Sivakasi

and Aavin feed plant industry in Erode. Although “Leadership” as Power level, Interest level and Attitude

level permeates all levels of organization, the vast literature on the topic but we focuses on top level leaders

such as Owners, Project Management Consultancy, Project Manager, Consultants, Architects Safety Manager

and Engineers. We identified 13 stakeholders in Pearl city Engineering Builders and Priya Construction.

3.4 DESIGN OF QUESTIONNAIRE:

The Design of Questionnaire form was designed as a tool for the assessment of identifying the stakeholder in

the category of Power level, Interest level and Attitude level as mentioned earlier. The questionnaire design

targets the Owner, Project Management consultancy, Project Manager, Consultant, Architect, Safety Manager

and Engineers of construction industry to get the feedback. The questions prepared can relate the real time

problems of the current practice. The questions are given equally important of information source.

3.5 IDENTIFICATION OF COMPANIES:

In previous research the stakeholders analysis is performed in Northern India, Dubai, Kuwait and

Other countries. But In our project we identified Southern Tamil Nadu firms based on their completed projects

(Pearl City Engineering Builders & Priya Construction).

3.6 DISTRIBUTION OF QUESTIONNAIRE:

There are many methods in distributing the questionnaire form. The questionnaire forms are

distributed by E-mail, Telephonic Interview and Personal Interviews. The feedback of the questionnaire is



34 P. Ganesh Prabhu

adequate in achieving the aim of this study. The stakeholders were filling up the form at the particular time of

appointment for personal Interview. In addition comments, suggestions are mentioned in the questionnaire and

discussions are done with the stakeholders.

3.7 DATA ANALYSIS

The data‟s are analyzed by using Microsoft Excel software and it is used to helping the presenting the

result of the study into a more attractive form.

3.8 SUMMARY

Thus the methodology helps to monitor the project work. And it is helpful to stabilize the instruction through

adopting the better management system.

4. QUESTIONNAIRE

4.1 POWER LEVEL

1. How is decision making power of the stakeholders involved in the project?

2. How is managerial power of stakeholders involved in the project?

3. What is the power level to set the strategies and aims for the project?

4. What is the risk evaluating and resolving responsibility for the project?

5. Do you have the authority to issue orders?

6. Do you have the authority to meet political issues concerned with the government sectors?

7. Do you have the power to satisfy the customer needs?

8. Do you have the authority to make penalty?

9. What do you think is the leadership power of the stakeholders?

10. How do you think is the motivational power of the stakeholder?

11. Do you have the power to make financial control throughout the project?

12. How much power do you think to recruit manpower of the project?

13. Do you have the power to procure the materials on time?

14. Do you have the power to acquire or hire the machines or equipment on time?

15. Do you have power to execute worker‟s incentive scheme for the project?

4.2 INTEREST LEVEL

1. To plan the project activities how much interest is needed?

2. Total involvement in the project?

3. To arrange material on time how much interest is needed?

4. Planning for the proper cost control measures?

5. Interest level on safety related problems?

6. Interest level of quality aspects in stakeholders?

7. Interest level to adopt new technologies in the project?

8. Interest to recruit manpower for the project?

9. Interest to attend the site meeting or conferences?

10. Interest to investigate the risk factors involved in the project?

11. Interest to make the forecast of tasks involved in the project?

12. Interest of the stakeholders to fulfil the consumer‟s needs?

13. Interest to prepare and solving the technical aspects of the projects?

14. What is the interest level of each stakeholders relation with other stakeholders?

15. What is the increase total productivity for the project, interest level of stakeholders?

4.3 ATITUDE LEVEL

1. Notch of motivation towards goal?

2. Total participation in the project?

3. The degree of effort that used for attaining the objectives?

4. Attractive power of stakeholders in the project?

5. Attitude towards the problem solving in the project?



35 P. Ganesh Prabhu

6. Hazard solving environment of the stakeholders?

7. How is the leadership quality of stakeholders involved in the project?

8. What is the decision making attitude of stakeholders?

9. New technology attitude of stakeholders involved in the project?

10. Relational skills of stakeholder involved in the project?

5. FACTORS CONSIDERED FOR PREPARATION OF SOME QUESTIONNAIRE

TABLE.1 PROJECT ACTIVITIES

STAKEHOLDERS

S.No DESCRIPTION OWNER PMC

ARCHITE

CT CONSULTANT CONTRACTOR ENGINEER

SAFETY

MANAGER

1 Feasibility

Report L H L M L M L

2 Approval H H H M L M L

3 Land

Acquisation H M L L L L L

4 Finalisation

of PMC H M L L L L L

5 Detail

Engineering L H H H L L L

6 Placement

of orders H H M M M L L

Civil/

Mechanical/

Electrical/

Others

7 Implementation

of works L H H H H H H

Project

Review

8 Timeline H H L M H H M

9 Cost H H L L M M M

10 Quality M H M H H H L

11 Safety M H L L H M H

12

Work completion

and

handing over

M H L M H M L



36 P. Ganesh Prabhu

TABLE.2 MATERIALS ON TIME

STAKEHOLDERS

S.No DESCRIPTION

OWNER PMC ARCHITECT CONSULTANT CONTRACTORS ENGINEERS SAFETY

MANAGER

1

Building

Materials

(Cement, Fine

and

Coarse aggregate,

Water etc...)

M H L L H H L

2

Doors and

Windows M H L L H H L

3 Flooring

(Granular,

Messanine,

Tile,

Mosaic,

Marble etc)

M H L L H H L

4 Cabinet M H L L H H L

5

Plumbing and

Sanitary M H L L H H L

6

Interior and

exterior Painting M H L L H H L



37 P. Ganesh Prabhu

TABLE.3 COST CONTROL

STAKEHOLDERS

S.N

o DESCRIPTION

OWNE

R

PM

C

ARCHITEC

T

CONSULTAN

T

CONTRACTOR

S

ENGINEER

S

SAFETY

MANAGE

R

1 Poor project

preparation L H H H M M L

2

Lapse in

management and

control

M H L M H H L

3 Over budgeting

M H L H H M L

4 Poor materials

L H L L H H L

5 Labour shortage

L H L L H M L

6 Increased cost of

materials M H L L H M L

7 Delays of

deliveries M H L L H M M

8 Wastage of

materials L M L L H H L

9 Unexpected

weather changes L M L L H M L

10 Loss of materials L M L L H H L

11

Insecurity and

poor

communication

L H L L H H L

TABLE.4 CUSTOMER NEEDS

STAKEHOLDERS

S.N

o DESCRIPTION

OWNE

R

PM

C

ARCHITE

CT

CONSULTA

NT

CONTRACT

OR

ENGINE

ER

SAFETY

MANAGE

R

1 Timeline M H L L H H L

2 Cost L H M H M M L

3 Quality L H L M H M L

4 Ambience M M H M M M L

5 Aesthetic

appearance H M H M M M L

6 End user safety M H L M H M H



38 P. Ganesh Prabhu

TABLE 5 NEW TECHNOLOGY

STAKEHOLDERS

S.N

o DESCRIPTION

OWNE

R

PM

C

ARCHITEC

T

CONSULTA

NT

CONTRACTO

R

ENGINEE

R

SAFETY

MANAGE

R

1 Fiber concrete

L H H H H H L

2 Prefabrication

L H H H H H L

3 Chemical Pointing

L H L M M M L

4 Life line for safety

H H H M M H H

5 User Pathway for

safety H H H M H H H

6 Epoxy injection of

cracks L H L M M M L

7 Nano particles on

glass L H H H M M L



39 P. Ganesh Prabhu

TABLE 6 RISK FACTOR

STAKEHOLDERS

S.N

o

DESCRIPTIO

N

OWNE

R

PM

C

ARCHITEC

T

CONSULTAN

T

CONTRACTO

R

ENGINEE

R

SAFETY

MANAGE

R

1 Local bye-laws H H L M H H H

2 Site Location M H M H H H L

3 Town Planning L H H M M M L

4 Financial H M L M M M L

5 Weathering

Condition L H M H H M H

6. COMPANY 1 DATA COLLECTION

POWER LEVEL

STAKEHOLDERS

OWNER PM ARCHITECT PROJECT

ENGINEER

SENIOR SITE

ENGINEER

SENIOR SITE

ENGINEER

JUNIOR SITE

ENGINEER

H H H H M M M

H H H H H H M

H H M H H H H

L H H H H H M

H H H H H H L

H L M L L L L

H H H H H H M

M H L H L L L

H M H M M L L

M H L H H M L

H H L M M M L

M H H H H H L

M H H H H H M

M H M H H H L

H L H L H H L



40 P. Ganesh Prabhu

INTEREST LEVEL

STAKEHOLDERS


ENGINEER

SENIOR SITE

ENGINEER

SENIOR SITE

ENGINEER

JUNIOR SITE

ENGINEER

M H M H H H M

M H H H H M M

M H L H H M L

H M H M H M M

H M M M M M M

H M H M H M H

H M M M H M H

M H H H H M L

L H H M M M L

M H M H M M M

M H H H M H M

H H M H M H M

M H H H H M L

M H H H M H M

M H H H H H H

ATTITUDE LEVEL

STAKEHOLDERS


ENGINEER

SENIOR SITE

ENGINEER

SENIOR SITE

ENGINEER

JUNIOR SITE

ENGINEER

H H H H H H M

M M M M M M L

H H M H M M H

M M H M H M H

H H H H M H M

M M M M M M M

M H H H M M L

H H M H M M M

M M M M H H M

M M M M M M H



41 P. Ganesh Prabhu

6.2 COMPANY 2 DATA COLLECTION

INTEREST LEVEL

STAKEHOLDERS

OWNER PMC CONTRACTORS SENIOR SITE

ENGINEER

JUNIOR SITE

ENGINEER

SAFETY

MANAGER

M H H H H H

M H H M H H

L H H H M M

H H M M H M

M H M H M H

H H M M M H

H H M M H H

M H H M M H

M H H M M H

M H H H M H

M M H M M H

H H H M M M

M H H H L H

M M H H M H

M H H H M H

POWER LEVEL

STAKEHOLDERS

OWNER PMC CONTRACTORS SENIOR SITE

ENGINEER

JUNIOR SITE

ENGINEER

SAFETY

MANAGER

H H H H M H

M H H H M H

H H H M L H

M H H M M H

H H H M L M

H H L L L M

H H H H M M

H H H L M H

M H M H M H

H H H H M H

M H H H H M

M H H M M M

L H H H M L

L H H M H M

M H L M M L



42 P. Ganesh Prabhu

ATTITUDE LEVEL

STAKEHOLDERS

OWNER PMC CONTRACTORS SENIOR SITE ENGINEER JUNIOR SITE ENGINEER SAFETY MANAGER

H M H H H H

M M M M H H

H M H H H M

M H M M M M

H H H M M H

H H M H M M

M H H H H H

L H H H M M

M H M H M H

H H M M H H

7. DATA ANALYSIS

7.1 COMPANY 1 - ANALYSIS



43 P. Ganesh Prabhu

7.2 COMPANY 2 – ANALYSIS

7.3 COMPARISION OF PROJECT MANAGER AND PROJECT MANAGEMENT

CONSULTANTCY



44 P. Ganesh Prabhu

8 RECOMMENDATIONS

This project suggests some key factors to be improved for the efficient output of construction project. They

are as follows.

In COMPANY 1, PM must be converted as PMC to improve the quality of the project.

In COMPANY 1, Safety Manager is to be included to avoid the safety issues to improve the cost, time

factors and to save human resources.

In COMPANY 1, there will be low stakeholders management which will improve the efficiency and

improve the quality of the project

If we found any lacking of performance of stakeholder, by improving their involvement we can improve

the production efficiency of the project.

9. CONCLUSIONS

This project adopts an integrated process for the Identification of the key stakeholders. In general, the

stakeholder analysis is performed to analyze the stakeholders and the analyzed stakeholder is managed for the

improvement of cost, time, decision making process and save the Human resource. The stakeholder

management is mainly executed in Northern India (Jaipur and Gujarat), Mediterranean region (Dubai and

Kuwait), Hong Kong, Australia etc. But the stakeholder management is considerably less in southern part of

India this is due to the fact that there is less awareness about stakeholder management. A framework for

structuring effective stakeholder management and methods for effectively conducting stakeholder

management has been synthesized in our project. The stakeholder analysis is the main component of the

stakeholder management. In our project we came out with different ideas based on the stakeholder theory that

emphasizes the priorization of Power level, Interest level, and Attitude level. The data is analyzed in the

Microsoft Excel and represented as Pie chart and Bar chart for the easy understanding of the result analyzed.

The project involved Project Manager, Project Management Consultancy, Owner, Architect, Site Engineer,

Safety Engineer etc., but we made comparison with PM and PMC. In our project we identified PMC as the

key stakeholder as the graph represents in the above Data Analysis and he makes the project successfully

completed. The empirical study was conducted in Tuticorin and Erode, so the findings may mainly reflect the

stakeholder management environment in these two regions. However if we manage other stakeholders

considerably the quality of the project improves, cost can be controlled and also the timeline factor can be

assessed and improved. This will lead to the successful completion of the construction project. So therefore,

PMC has the maximum influence in the construction industry, if his managing skill and communication skill

is early and frequent the project in the construction industry. Therefore, more research is necessary to get the

exact analysis of the stakeholders.

10. REFERENCES [1] Freeman and R.E, Strategic management: A stakeholder approach. Boston: Pitman/Ballinger, 1984.

[2] R. Phillips, Stakeholder theory and organizational ethics: Berrett-Koehler Publishers, 2003.

[3] Mitchell, R. K.; Agle, B. R. and Wood, D. J. (1997) Toward a theory of stakeholder identification and salience:

Defining the principle of who and what really counts. Academy of Management Review, 22(4), 853-886.

[4] S.Rajeev and P.S.Kothai “Study on the Influence of Stakeholders in Construction Projects” KICEM Journal of

Construction Engineering and Project Management 3 Online ISSN 2233-95828 Vol.4, No.2 / Jun 2014.

[5] Shiv Kumar S - Modeling and Managing Stakeholder‟s Power and Influence for Quality Improvement in

Construction Projects - A Case Study at “Jaipur Metro” SSRG International Journal of Civil Engineering (SSRG-

IJCE) volume 2 Issue 4 April 2015.

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45 P. Ganesh Prabhu

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