A Case Study of How Stakeholder Management Influenced Project Uncertainty Regarding Project Benefits

A Case Study of How Stakeholder Management Influenced Project Uncertainty Regarding Project Benefits

Hans Petter Krane (Norwegian University of Science and Technology (NTNU), Norway), Asbjørn Rolstadås (Norwegian University of Science and Technology (NTNU), Norway) and Nils O.E. Olsson (Norwegian University of Science and Technology (NTNU), Norway)
DOI: 10.4018/jitpm.2012040102
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Abstract

The influence of stakeholders and stakeholder management on project uncertainty is examined, and particularly uncertainty regarding functionality delivered by projects. The case studies, two projects in the Norwegian Rail Authority (Jernbaneverket), included interviews with representatives of internal and external stakeholders and also examination of project documentation. In addition, conflicts and use of power between stakeholders in the projects were studied. The projects actively managed relations with external stakeholders, thereby reducing the risks of negative media attention and neighbour disputes, and also cost and time overruns that such disputes may cause. Both of the projects focused on risk reductions regarding costs and time schedules, and less on the functionality delivered by the project. While mastering potential conflicts with external stakeholders well, the largest project appears to have handled internal disputes less convincingly. The smaller project handled internal disputes well, but experienced problems concerning both costs and time schedules.
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Motivation For The Study

Projects may be regarded as either examples of ‘a set of unified activities to create a predefined outcome’ or ‘a scene of war’ where conflicts are an essential part of the picture. Neither of these alternatives holds the full truth, but both have important elements which should be borne in mind when trying to understand how projects evolve. In this article we will look closer into how conflicts led to two case study projects achieving success or failure to a greater or lesser extent. Conflicts are not necessarily antagonistic, but many project decisions may easily be seen as a matter of someone winning and someone losing. Differences in interests are often quite obvious, with the outcome that some will gain and some will lose. To give a general example, the ‘iron triangle’ of time, cost, and quality which rules most projects (Atkinson, 1999) renders it necessary to make choices and compromise between the three aspects. The divergences between project stakeholders need not be antagonistic, however, and quite frequently what are regarded as opportunities for one stakeholder may prove to be disadvantages or even threats to another stakeholder. This study focuses on risk management of benefits or delivered functionality from the projects, and not of project costs or time scheduling. In particular, we examine how internal and external stakeholders influenced the studied projects, whether they increased or reduced the uncertainty as to the functionality delivered, and also how the projects and the base organization interacted. By base organization, we here mean the larger, permanent organization that the project will eventually be delivered to, i.e., the larger project owner organization. In this case, the base organization was Jernbaneverket (JBV), the Norwegian Rail Authority.

We selected two projects in a setting where the stakeholders are many and different, and where demands to the projects repeatedly changed quite substantially. Furthermore, we selected projects which had quite recently been finished, thereby affording fairly good and easy access to information from projects and stakeholders. We selected two railway projects close to the Norwegian capital, Oslo. In the same surroundings a few years earlier, a major railway project – intended to establish a high speed rail link to the capital’s newly built main airport – had experienced serious setbacks, resulting in large delays and budget overruns (Smedstad, 1997; NOU, 1999). This is an important part of the backdrop to the project setting.

To explore the size effects on the phenomena studied, one large and one small project were chosen. To focus the study, the following set of research questions was addressed:

  • Q1: How does the prioritization between the project’s functional deliveries versus its costs and time schedule influence the interaction between stakeholders and project management?

  • Q2: What is the influence on risk management from conflicts between stakeholders?

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