Stakeholder Analysis in Management of Rural Development

Dr. Debabrata Basu

Bidhan Chandra Krishi Viswavidyalaya

The term ‘stakeholders’ became buzz word in every field of development during the last few decades. In fact, stakeholders are being involved in every steps of management process, and rural development is no exception.

Aenis and Nagel (2000) have defined participatory management as “the process solving the specific problems of interdisciplinary research which is a more internal view, while at the same time ensuring co-operative decision making by all relevant actors, a more external view”. A participatory management programme or project finds application in varied fields ranging from business sciences, natural resource management, conflict management etc. Whatever the case may be, Poolman and Giesen (2006) opined lack of understanding by the project organization of the interest and views of stakeholders to be major lacunae which need to be filled up. For this, they suggested the formulation of adequate and appropriate forms of stakeholders’ engagement that will ensure information exchange and participation as an essential. A stakeholder analysis, well conducted could serve the purpose.

Concept of Stakeholders

The world ‘stakeholder’ was first recorded in 1708 as ‘a person who holds the stake or stakes in a bet’ (Ramirez, 2001). In business context, a stakeholder as defined by Freeman (1984) is ‘any group or individual who can affect or is affected by the achievement of a corporation’s purpose’. However, Röling and Wagemakers (1998), in the context of natural resource management defined stakeholders as ‘natural resource users and managers’.

ODA (1995) defined stakeholders as ‘persons, groups or institutions with interest in a project or programme’. This definition of stakeholders includes both winners and losers and those involved or excluded from decision – making process.

Another definition given by Cleland (1998) state stakeholders as ‘Individuals or organizations who are actively involved in the project, or whose interest may be positively or negatively affected as a result of the project execution or successful project completion.

According to ODA (1995) and Allen and Kilvington (2001), there are two types of stakeholders.

i)           Primary stakeholders: They are those who are (will be) ultimately affected either positively (e.g., beneficiaries) or negatively (e.g., those involuntarily resettled). They are immediate communities of interest.

ii)         Secondary stakeholders: They are the intermediaries in the aid delivery process. They may include government agencies and other institutional bodies. Often these groups do not consider themselves as stakeholders because they feel they own the process.

There is another party called the Tertiary Stakeholders. This group consists of those individuals or organizations that do not have any particular ‘stake’ in the initiative. However, their activities affect the project’s functioning and outcome.

Stakeholder Analysis

Stakeholder Analysis refers to the range of techniques or tools used to identify and understand the needs and expectations of major interest inside and outside the project environment (Smith, 2000).

According to ODA (1995), stakeholder analysis is a tool by which the key stakeholders of a project are identified, their interest in the project are assessed and the ways in which are interest affects project riskiness and viabilities are judged.

Although stakeholder analysis finds its origin to business and managerial science, it is currently used in fields ranging from political science to policy development and international relations (Chevalier, 2001). The concept and related methodology have made significant inroads to poverty reduction studies and applied research pertaining to issues of sustainable livelihood, community based natural resource and conflict management (Ramirez, 1999).

Steps of doing a Stakeholder Analysis

There is no general consensus as to how to do a stakeholder analysis. However, the steps normally followed and recommended by experts are.

I. Drawing a stakeholder table

II. Prioritization of stakeholders

II. Identifying appropriate stakeholders’ participation.

Stakeholder analysis table

**Assess the influence and importance of the stakeholders. ‘Influence’ refers to ‘how powerful a stakeholder’ is and ‘importance’ refers to those stakeholders whose problems, needs and interest are the priority of organization’s aid. (Basu and Banerjee, 2006)

2. Prioritization of stakeholdersThis is done by positioning stakeholders in relative terms according to their ‘importance to’ and ‘influence on’ the project in a two-by-two matrix. Influence is plotted along the Y-axis and importance along the X-axis. The matrix can be prepared as this.

Fig. 4.1 : Matrix for prioritizing stakeholders

(adapted from ODA,1995 and http://www.cphp.uk.com/downloads/GN%20stakeholders%20analysis%20form.pdf)

 Interpretations

1)      Boxes A, B and C signify the key stakeholders of the project – those who can significantly influence the project or are important if project’s objectives are to be met.

2)      Box A stakeholders are of high importance to the project but low influence. This implies that they will require special initiative if their interest are to be protected.

3)      Box B stakeholders who appears to have a high degree of influence on the project are also of high importance for its success. A good working relationship need to be constructed with them to ensure an effective coalition of support for the project.

4)      Box C stakeholders have high influence and can therefore affect project outcomes, but their interests are not the target of the project they are those who posses significant risk and they will need careful monitoring or evaluation.

5) Box D stakeholders have low influence on or importance to project objectives. They may require limited monitoring or evaluation but are of low importance to the project. They are unlikely to be the subject of project activities and management

3. Identifying appropriate stakeholder participation

An important issue concerning participatory management is the relationship between participation and the different stages of project cycle. To understand this relationship a ‘participation matrix’ with the left hand vertical column representing the project cycle and the horizontal rows illustrating the type of participation is prepared. The matrix is filled up in such a way that stakeholders who are involved (could be involved) in the project stages are placed in the column of the type of participation occurred (could occur) (Basu and Goswami, 2006).

Imperative of Stakeholder Analysis in Rural Development Management

Marshke and Nong-Kim (2003) highlighted that community based management requires support from the provincial and national level, facilitation between stakeholders is important and experimentation is an essential component of management.          

Sultana and Thompson (2004) identified the need for consensus building to arrive at preferred solutions and determine potential impacts on different stakeholders and responsibilities for implementation, monitoring and evaluation.

Audren (2001) said that differences in perception were the major reason for disagreement between stakeholders and neighours around the study area.

Considering the above opinions and statements it becomes a necessarily that for any participatory management, we need to formulate and carry out effective stakeholder analysis and inculcate the result thereof to the project plant.

Benefits of stakeholder analysis

·    Identity stakeholders with conflicting interest and provide opportunity for finely adoption of conflict resolution strategies.

·    The opinions and views of powerful and influential stakeholders serve as valuable inputs.

·    The support and co-ordination of stakeholders are ensured.

·    Ensure resource mobilization (both in terms of financial and non-financial).

·    Help to identify relations between stakeholders who can be built upon and may enable ‘Coalition’ of project sponsorship, our-ship and co-operation.

·    Identify stakeholders who are sources of risk as threat to the project.

·    Identify stakeholders who need empowerment through capacity building or institutional building.

·    Help to assess the appropriate type of participation by different stakeholders at successive stage of the project cycle.

·    Help to avoid allocation of time and resources to unnecessary individuals or organizations.

Conclusion

            A job well begun is a job half done. Stakeholders constitute an indispensable part of any project or programme. It is when their adequate and appropriate participation is ensured, that we can expect the initiative to reach its goals. Experts have opined the need for effective stakeholder analysis for project’s success. Indeed stakeholder analysis is the step which should be incorporated in the step which should be incorporated in the initial stages of a project for effective project planning and implementation.

References

Allen, W. and Kilvington, M. (Nov., 2001), Landcare Research, Manaaki Whenua. (http://www.landcareresearch.co.nz/research/ sustainablesoc/social/stakeholder.asp, retrieved in Oct., 2007).

Ramirez, R. (2001). Stakeholder analysis and conflict management, International Development Research Centre. (http:// www. iirr.org/PTD/Reading/general/RAAKS/stakeholder%20analysis%20and%20conflict%20management.htm, retrieved in Oct., 2007)

Roling and Wagemakers (1998). Facilitating sustainable agriculture: participatory learning and adaptive management in times of environment uncertainty. Cambridge University Press, Cambridge, UK.

Freeman, R.E. (1984). Strategic management : A stakeholder approach. Pitman, Boston, MA, USA.

Smith, L.W. (Dec., 2000). Project Clarity through Stakeholder Analysis, Crosstalk, the Journal of defence software engineering. (http:// www. stsc. hill. af. mil/ crosstalk / 2000 / 12 /smith. html., retrieved in Nov., 2007).

Cleland, D.I. (ed.) (1998). Field guide to project management, John Wiley and Sons.

Chevalier, J. (June, 2001). Stakeholder Analysis and Natural Resource Management, Carleton University, Ottawa. (http : // http-server.carleton.ca/~jchevali/STAKEH2. html., retrieved in Nov., 2007).

Guidelines for Concept Note, Stakeholder Analysis. (http: www. cphp.uk.com/downloads/GN%20stakeholders%20analysis%20form.pdf., retrieved in May, 2007).  

ODA (Overseas Development Administration) (July, 1995). Guidance Note on how to do stakeholder analysis of aid projects and programmes, Social Development Department, ODA. (http:/ www.cuforic.org/gb/stake.htm, retrieved in Sept., 2006).

Aenis, T. and Nagel, U.J. (2000). Participatory Management of Large Interdeciplinary Research Team, First experience from a rural research and development project in Germany, Division of Agricultural Extension and Communication Science, Humboldt University, Berlin. (http:// www.zalf.de/ home-zalf/grano/publikation/aenis-nagal/2000.pdf, retrieved in June, 2007).

Andern, H. (2001). Wetland resource use in the rainbow nation – a pot of gold ad a lot of problems? A case study of obstacles in sustainable resource management in the Mkuze Wetlands, Kwazulu Natal, South Africa.

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Basu, D. and Goswami, R. (2006). Participation in development: Concept and strategy. Participatory planning and project management in extension sciences, Agrotech Publishing Academy, Udaipur, India.

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Marschke, M. and Nong – Kim (2003). Adaptive co-management : lessons from coastal Cambodia, Canadian Journal of Development Studies, 24(3) : 369 – 83.

Sultana, P. and Thompson, P. (2004). Methods of consensus building for community based fisheries management in Bangladesh and the Makong Delta, Agricultural Systems, 82(3) : 327 – 353.  

Ramrez, R. (1999). “Stakeholder analysis and confilt managrment.” In cultivating Peace in natural resource management. Daniel Buckles (ed.), IDRC and World Bank Institute, Washington, USA. (Retrived from http://www.idrc.ca/acb  &DID=6&ProductID=389&catid=15)