Stakeholder management is defined as a systematic engagement, analysis, identification and implementation of actions which are designed to have proper engagement with stakeholders. Stakeholders are those individuals which have interest in a project, portfolio, program or business activities of a company as outcome of these aspects impacts them in a considerable manner (Bourne, 2016). Different projects and program posses a variety of stakeholders which have varied interest. This assignment is based on Prezzo which is a UK based Italian Cuisine restaurant, situated in London. This report will cover management of stakeholders within projects along with discussion of stakeholders and other management theory. Stakeholders issue in context with business is discussed and a model is prepared for stakeholder engagement.
a) Management of stakeholders in projects
A project is considered as a successful activity when it meets the expectations of different stakeholders. A project can be any business activity which is performed by an organisation in order to attain expected outcomes. Stakeholders are those persons which posses a vested interest in the business activities of an organisation. In case of Prezzo, which is an Italian restaurant in UK, potential stakeholders will be customers, government, local residents, suppliers, employees, competitors, local residents etc. Company is working on a project where new chain of restaurant will be established in England. There are some steps that can be considered by the manager in Prezzo so that all stakeholders can be managed in an efficient manner. Some of these steps are mentioned below:
- Identification of all stakeholders in the beginning of business activity or project. If they will not be identified in the starting, then their different agendas can impacts the working of Prezzo in a negative manner (Chih and Zwikael, 2015). In case of Prezzo, potential stakeholders are customers, suppliers, employees, executive and management of company. In order to achieve success, company is required to meet expectations and interest of all stakeholders.
- Another way is to assure that all stakeholders must agree on business project and their deliverables. In case all stakeholders will not agree, Prezzo will be required to carry out modifications. For ex, if restaurant is adding a new branch in England with main dish spicy pasta garnished with chilly sauce and customers in that region do not prefer to eat it or supplier denies to supply material required to prepare it. In this case, manager have to modify the dish or ingredients so that every concerned stakeholder can agree.
- Management in Prezzo is require to have effective communication and interaction with their stakeholders before or while working on project. This will benefits different stakeholders to became comfortable with one another. In this way, complexities faced by companies such as lack of funds, resources and man power can be solved in an unified manner.
- Vision of project must be clear and every stakeholder must be engaged with different activity through out the process. This will helps in maintaining interest of stakeholders with business. In case of Prezzo, as company is launching a new branch, if timely information about project will be given to the stakeholders they will feel more stasified and engaged (Eskerod, Huemann and Savage, 2015).
In this way, different stakeholders can be managed in projects without facing any difficulty. If above mentioned aspects will not be considered then it will became difficult for Prezzo to perform their business activities in a profitable and organised manner.
b) Support discussion with stakeholders and other management theories
Stakeholder management theory: It is a theory associated with business ethics and organisational management which aims to address values & morals while managing a firm. These values and ethics can be related with corporate social responsibility, social contract theory, market economy.
Freeman normative theory
This theory is given by Edward Freeman and he states that stakeholders of company are those individuals which get impacted by firm and its workings. Principles associated with this theory is defined below:
- Principles of corporate legitimacy: According to this principle, company is required to be managed so that benefits of different stakeholders can be maintained. Also, stakeholders are needed to participate in those decision which impacts their welfare. In case of Prezzo which is opening a new chain in England, new dishes must be added by taking feedback of customers and employees so that they can feel satisfied about service of restaurant (Golini, Kalchschmidt and Landoni, 2015).
- Stakeholder Fiduciary principle: Manager in Prezzo is required to take those decisions that will impact the interest of stakeholders in a positive manner. If stakeholders such as investors, suppliers, employees, customers will not satisfied by decisions of company then new project which is opening a new branch in England can became a failure.
This theory is given by Friedman and Miles and this theory states relationship between organisation and stakeholders. This typology can be defined on the basis of two distinctions which are mentioned below:
- Incompatible and compatible in respect with material interest & ideas.
- Necessary or contingent relations. Necessary relation is linked with set of logically connected idea. Contingent relation have no link with internal structure.
In this regard, different stakeholders for Prizzo are divided below:
common trade associations
- Type A: All concerned stakeholders of Prezzo are connected with one another and company in a considerable way.
- Type B: Different stakeholders have same interest but do not possess any direct relation.
- Type C: These stakeholders have opposite, unconnected and separate interests. They oppose view of each other.
- Type D: These stakeholders are linked with company but their relationship is threatened.
c) Select a case study and describe it as stakeholders issue
Prezzo is a British owned Italian restaurant which is successfully operating in London. In order to enhance its market presence, company is planning to open a new branch in England. Area where company is planning to introduce their new chain is situated at north side of England. This location have less human population due to geographical structure. In this regard, company has initiated meetings with different stakeholders to acknowledge their opinions and help. Different stakeholders of restaurant are investors, suppliers, employees, manager, executive, government etc. In accordance with this proposed plan, meetings were conducted. Managers and executive of company seems fine with the decision of launching new branch in north side of England. But other stakeholders such as investors, employees, suppliers etc. are not satisfied and they are predicting some issues that can take place. These issues are concerned with food Supply systems.
Company has planned to open new brand in that location because property rates are cheap there and that place have some tourist spots. But concern of other stakeholders is that opening restaurant in that area will results in less sales and revenue. In case of food distribution and home deliveries, restaurant employees will face difficulty due to rugged terrain surfaces. This will results in late arrival of food to customers due to which they may lose interest in service of company (Heagney, 2016). Suppliers are concerned that they will face difficult in supplying required resources and materials in that area. Investors are not in favour because they feel, this plan will not be able to achieve success due to which their investment will go in vain and they will face financial issues. In this way, stakeholders of Prezzo are facing different issues which are related with food supply systems.
d) Model for stakeholder engagement in project management
According to the Bernie Roseke, (2018) Stakeholders are the important component of an organisation who are responsible for providing their maximum efforts for the growth of the company. These stakeholders needs to keep engaged in the business activities so that they can continuously provide their efforts to the organisation (Heravi, Coffey and Trigunarsyah, 2015)(Joslin and Müller, 2015). Prezzo is launching their new branch in the England and the management needs to engage the different stakeholders of this new branch in the business operations of projects. The management of the Prezzo restaurant needs to identify their stakeholders in order to engage them in the business activities in an effective manner. These stakeholders can be identified by the management of Prezzo by using the Project Stakeholder Management. There are 4 processes in this model which are discussed below:
- Identify Stakeholders: It is the first process in which the stakeholders of the project are identified by the managers of Prezzo before initialising the project. This step is essential so that the requirements of the stakeholders can be fulfilled. This is also beneficial for satisfying their needs so that they can engage in the project based on their interest rather then engaging forcefully or by pressure. The stakeholders of the project of the Prezzo can be customers, suppliers, employees, investors etc.
- Plan Stakeholder Engagement: It is the second process in which the plan for engaging the stakeholders in the project is developed. This process is the component of the overall Project Management Plan which is developed by project manager of Prezzo in order to specify about how the project will interact with each and every stakeholder. This plan determines and analyses the two items for each stakeholder which are The level of interest the stakeholder has in the project, and their ability to control their interest in the project (Sánchez, 2015). The technical knowledge of the stakeholders may be the major factor for planning the front end of project. This process also present and analyse the concerns of all the stakeholder for ensuring the success of the project of Prezzo.
- Manage Stakeholder Engagement: This is the third process in which the project manager of Prezzoconsults with the different identified stakeholders throughout the project in order to ensure that their needs and expectations are meeting accordingly while the project is being executed. The interaction with the stakeholder is done according to the plan developed for Stakeholder Management in second process and changes are done accordingly in the plan for meeting their expectations.
- Monitor Stakeholder Engagement: This is the last process of this model which is a part of the Monitoring & Controlling process group. This process should needs to be executed in regular intervals of time throughout the entire project in order to determine the effectiveness of the Stakeholder Management Plan. However some of the actions are no specified or defined in this process as in other process such as M&C processes (Sunder M, 2016). These actions includes reviewing stakeholder communications, gathering information about them, asking them regarding their feeling in the project or their concerns for the project etc.
Through this above discussed model, the project manager or management of the Prezzo can satisfy the needs and expectation of their stakeholders of England branch in order to satisfy them. Also the managers can engage the different stakeholders effectively in various projects if their needs are satisfied or met (Turkulainen, Aaltonen and Lohikoski, 2015).
From above mentioned report, it is concluded that stakeholders constitute an essential position in managing projects. There are different kind of stakeholders such as customers, employees, management of company etc. These stakeholders possess a visible impact on the company and its operations. Stakeholder issues can reduce the interest of stakeholders in business activities due to which company can face complexity in managing their businesses. PMBOK is an aspect that will helps in preparing right model so that engagement of stakeholders within company can be sustained.
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