Journal of Economics and Sustainable Development www.iiste.

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ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online)
Vol.8, No.21, 2017

Assessment of Practices and Challenges of Project Stakeholder

Management: Evidence from Mission for Community
Development Program (MCDP) Projects, Addis Ababa, Ethiopia.
Tsegaye Zekarias Gurmu
MA, Project Consultant at Addis Ababa, Ethiopia

Ammen Diakon Debebe

MA, Lecturer at Wolaita Sodo University

Dechasa Seifu Ashenafi

MSc, Lecturer at Wolaita Sodo University

P.O.BOX-138, Wolaita Sodo, Ethiopia

Abstract
The study assess the practices and challenges of stakeholder management case of Mission for Community
Development Program (MCDP) projects. Censes was used to use all stuff members of MCDP organization 30
respondents comprising 1 CEO, 1 Program Manager, 4 Project Managers, 7 Project Coordinators, 11 Frontline
Project Staff and 6 key resource persons. Structured questionnaire was used to get information from CEO,
Program Manager and Project Managers, whereas FGD questionnaire was used to provoke information from
Project Coordinators, Frontline Staff and key resource persons. The study identified donors, beneficiaries,
traditional and public authorities and Project Community as generally recognized key stakeholders to the
organization. Whereas, Project team, insurance companies, media, sister/line projects, contractors/consultants and
financial institutions were also identified as stakeholders but by some of the projects. It was discovered also that
the interests and parts of the key Stakeholders were very critical to the effectiveness of the projects. The stakeholder
management system was found to be predominantly not institutionalized (separate organizational body). The study
also revealed challenges like low commitment, conflicting interests, personal benefit seeking, ineffective
communication, low understanding of different issues, deviation from common agreement, unrealistic
expectations and high cost of management rankly were found to effect on the performance of the projects
in the organization. Finally, it is recommend that all stakeholder should be understand project goals and
objectives, ensure strong communication, identify relevant stakeholders from the project planning,
institutionalized stakeholder management and ensure full commitment from all stakeholders.
Keywords: MCDP, Challenges and Practices, Project Stakeholder Management

1.1. BACKGROUND OF THE STUDY

Running a successful project/program in the Non-Governmental Organization setup requires a high degree
of stakeholder management; stakeholders are the people and or institutions who affect and are affected by the
outputs or inputs of a project. Stakeholders in NGO programs and projects will need to be managed through every
phase of the program/project. Stakeholder management involves process and control that must be planned and
guided by underlying principles (Neil, 2011).
The work of Non-Governmental Organizations is mainly focused on the development and advocacy
needs of disadvantaged communities or citizens. Thus they aim at poverty reduction, self-help, improvement of
the welfare of the disadvantaged and encouraging the observance of human rights and other policy issues targeting
mainly national and international governing bodies, Corporate Institutions and Traditional authorities. In the
MCDP context, the operations of most of these NGOs are mainly centered in and for the interest of deprived areas
in various regions. To mention some of the projects under MCDP; Community based child development
program, Ethiopian driving growth, entrepreneurship & trade (EDGET), Prevention of unsafe migration in Addis
Ketema sub city, Women for Women (W4W) creating opportunities for women in enterprise development in
Addis Ababa, School & SHG as an approach to address child vulnerability, Child on the movie, Support for victims
of child Trafficking & child labor, Income generating activities (IGA), Community based organizations for
development, Information & communication technology for Girls’ education & women entrepreneurship
and Enhancing sustainable natural resource management & resilience of women.

1.2. STATEMENT OF THE PROBLEM

According to Beringer et al. (2013), stakeholder management is considered, from both a professional and an
academic standpoint, to be extremely important for achieving success in projects. For these authors, the

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stakeholders have a dual relationship with the performance of the project, because their actions can influence the
project, but, on the other hand, the results of the project may affect their interests. Stakeholder management in a
project must also involve an understanding of the behavior of the stakeholders during the life cycle of the project,
with the aim of performing actions that meet their expectations (Beringer et al. 2013).
Projects have always required planning, management and control to deliver the desired outcome, from the
building of the pyramids in ancient Egypt to the implementation of new information and communication
technology (ICT) systems in the modern world, satisfying key stakeholder requirements has been central to
achieving a successful outcome (Bourne, 2006).
Today, many different types of organizations have embraced the concept of projects as a mechanism
for delivering change and to find a way of involving stakeholders in planning and designing of projects.
The particular problem in the projects stakeholder management is that limited commitment from stake holders,
incentive expectations from stakeholders especially from government sectors (wants payment from stakeholder
meeting), turn over in government office stakeholder members and not equal understanding level in stakeholder
members. Also, the ability of these projects to effectively address the increasing and complex stakeholder
management challenge is limited due to limited idea on the nature and trade-offs of stakeholders.
Therefore, this study seeks to assess the stakeholder management practices and challenges encountered
by these NGOs particularly in the MCDP Projects.

1.3. RESEARCH OBJECTIVES:

The overall objective of the study is to assess the practices and challenges of stakeholder management case of
Mission for Community Development Program (MCDP) projects. The specific objectives of this research are:
To identify the types, responsibilities and interests of stakeholders
To assess the stakeholder management practices in MCDP
To examine the challenges of stakeholder management in MCDP

1.4. REVIEW OF RELATED LITERATURE:

1.4.1. Concepts of “STAKEHOLDER”
The word 'stakeholder' has assumed a prominent place in public and nonprofit management theory and practice in
the last 20 years, and especially in the last decade. The term refers to persons, groups or organizations that must
somehow be taken into account by leaders, managers and frontline staff (Bryson, et al., 2002). According to
Freeman (1984), a stakeholder is ‘any group or individual who can affect or is affected by the achievement of the
organization's objectives’.
1.4.2. The Role of Stakeholders
To this end, it is obvious the relevance of stakeholders towards the achievement of every organization‘s
objectives is to some extent manifest in the above conceptualizations from the different authors but more
of it can be seen in Bryson (1995) and Moore, (1995), when they said; Attention to stakeholders is important
throughout the strategic management process because 'success' for public organizations and certainly survival
depends on satisfying key stakeholders according to their definition of what is valuable.
Attention to stakeholders is also needed to assess and enhance political feasibility, especially when it comes
to articulating and achieving the common well (Bryson et al., 2002; Campbell and Marshall, 2002). Finally,
attention to stakeholders is important to satisfy those involved or affected that requirement for procedural justice;
procedural rationality and legitimacy have been met (Eden and Ackermann, 1998; Suchman, 1995; Alexander,
2000).
1.4.3. Stakeholder Identification
According Peter (2008), the first step in developing Project Stakeholder Management strategy is to identify the
stakeholders. These are people or organizations that are actively involved in a project, or whose interests
may be positively or negatively affected by execution or completion of the project. Overlooking negative
stakeholders can increase the likelihood of failure. Whatever list you produce will need to be re-visited during the
project lifecycle as new information becomes available and as the project progresses.
1.5.4. Stakeholder Analysis
Stakeholder analysis is a more in-depth look at stakeholder group interests, how they will be affected and
to what degree, and what influence they could have on your project (IFC, 2007). It is a critical process that feeds
into stakeholder engagement and organizational change process in general; according to the International Finance
Corporation, It is not practical, and usually not necessary, to engage with all stakeholder groups with the same
level of intensity all of the time.
Stakeholder analysis should assist in this prioritization by assessing the significance of the project to each
stakeholder group from their perspective, and vice versa. The IFC (2007) added that whilst doing this, it is
important to keep in mind that the situation is dynamic and that both stakeholders and their interests might change
over time, in terms of level of relevance to the project and the need to actively engage at various stages. It is

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frequently used during the preparation phase of a project to assess the attitudes of the stakeholders regarding the
potential changes.

1.6. Stakeholder Management Challenges

Management comprises planning, organizing, staffing, leading or directing, and controlling an organization
(a group of one or more people or entities) or effort for the purpose of accomplishing a goal. Resourcing
encompasses the deployment and manipulation of human resources, financial resources, technological resources,
and natural resources (Peter, 2007).
Tuchman‘s account in her book, -The Match of folly identifies some challenges in stakeholder management
when she wrote that, ignoring the interests of, and information held by, key stakeholders and 'Three
outstanding attitudes: obliviousness to the growing disaffection of constituents, primacy of self-aggrandizement,
and the illusion of invulnerable status are persistent aspects of folly'. Nutt (2002) analyzed 400 strategic
decisions and revealed that half of the decisions 'failed' -that is they were not implemented, only partially
implemented or otherwise produced poor results -in large part because decision makers failed to attend to
interests and information held by key stakeholders. Additional problems and uncertainty caused by
stakeholders that contribute to project failure include poor communication, inadequate resources assigned to
the project, changes in the scope of work, unfavorable news about the project in the press, and negative community
reactions to the project (Kalsern, 2002). A study carried out by Karlsen (1998) revealed that stakeholders
create both problems and uncertainty regarding project execution. From the research, such problems and
uncertainties are caused by decisions that were not taken unexpected changes in specifications the client was too
focused on details the stakeholder did not understand his or her role in the project political guidelines that were
unexpected changed, and the end user did not know his or her needs.
According to Kastner (2010) there are three major sources of Stakeholder Management challenges:
Unclear Stakeholders- those who do not clearly articulate enough or who are not open and honest about
their interests and expectations
Unidentified Stakeholders- those who were not identified early in the project
Unreasonable Stakeholders- those who do not embrace what some refer to as reason and the laws of the
organization.

1.7. RESEARCH METHEODOLOGY

The research is carried by self-administered questionnaires to collect the response. The research design was a
descriptive type which describing a particular practices and challenges on a particular project at one point in time.
It also includes a background of what the study is about; this study is mainly a survey one that combined secondary
data sources with primary data was collected from the field using structured and semi-structured questionnaire as
well as focus group discussion and key resource persons discussion. The study was conducted on the employees
and management body of the organization. According to the information gathered from the Administration
and Finance head department of MCDP, there are 30 employees who are responsible to planning,
implementing, coordinating, managing and supporting the overall projects implementation of the organization.

1.8. DATA ANALYSIS AND DISCUSSION

In conducting the study, 30 questionnaires were distributed out of which 30 were returned and answered.
Therefore, the response rate was 100%.

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1.8.1: Types of Stakeholders of the sector

Table 1: Range of Stakeholders of the sector
Range of likely Freq. Percent Why a given group is or not your stake-holder
stakeholders for
Yes
1 Donors/project 30 100% Provide funds, Community mobilization, they have
sponsors power to cause change(positively or negatively),
they have the interest in project goals
2 Traditional authorities 30 100% Community mobilization, they have critical role to
play, they have power to cause change(positively or
negatively)
3 Public authorities 30 100% They have power to controller policy, have interest
in project goals, they are implementation
mobilizers, they provide facilitation & technical
Services
4 Beneficiaries(Clients 30 100% They are the main targets, they are the center of
end users) work, they are the owners of project
outcome(products or service)
5 Project community 30 100% Part of the project beneficiaries, they are the owners
of project results
6 Project team 25 83.33% They are the essential key process drivers, they are
the main planner, implementers of the project goals,
7 Sister/line Projects 23 76.67% Have common interest, support each other to
implements & achieve project goals
8 Contractors/ 21 70% They are expertise/technical service providers, they
consultants support the project work in project planning,
monitoring and evaluation works
9 Financial institutions 15 50% They are financial services providers
10 Media 24 80% They Publicity and announce the project
performance, project end result, give education in
different issues of the project goals
11 Insurance Companies 25 83.33% They ensure project property and staff
Source: computed from own survey data, 2017
The above table depicts that Stakeholders like Project team, Sister Organizations, Contractors/ consultants,
financial institutions, Media and Insurance Companies are not selected by all respondents. The reason behind this
fact is that, their project type that their projects are not includes these stakeholders as their stakes and the other
reason is that their understanding gap in some respondents.
Table 2 below shows that who becomes a stakeholder: who has a stakeholder or interest in a given project or
activity as well as who has a responsibility towards the project activity and what is the level of relevance of the
stakes?
Table 2: Stakeholders Interest, Responsibility and Level of Relevance
Stakeholders Stakeholders Responsibilities or Level of relevance of
Interests Contribution the responsibilities
1 Donors/project  Enhance Funding of projects  Very critical
sponsors development in Technical service 30(100%)
all aspects Monitoring and Evaluation
 Efficient use of
Funds
 Achieve project
Goals
2 Traditional  Secure livelihood Mobilize the local  Very critical
authorities of their Community 30(100%)
Community Mentoring the local

 Development Community

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3 Public  Empowerment of  Policy and info support  Very critical

authorities their people  Insure legality of the 30(100%)
 Insure Projects
development,
Secure livelihood
of their people
4 Beneficiaries(Cl  Achieve Project Taking ownership  Very critical
ients end users) Deliverables Implementation of the 30(100%)
project plan
5 Project  Insure Implementation of the  Very Critical
community Development project plan 30(100%)
 Support the
project ideas
6 Project team  Flourish the  Planning of the project  Very Critical
image of their Activities 25(83.33%)
Organization Implementation  Critical
 Insure  Execution and facilitation of 5(13.37%)
Development different issues
 Achieve project
Goals
7 Sister/line  Experience Provide information  Very Critical
Projects Sharing  Support in monitoring and 23(76.67%)
 Women evaluation process  Critical 6(20%)
Empowerment  Not Critical
 Development 1(3.33%)
8 Contractors/  Development Expertise supports  Very critical
consultants  Achieve project (technical, evaluation 21(70%)
Objectives services, etc.)  Critical
7(23.33%)
 Not critical
2(6.67%)
9 Financial  Maximize profit Financial services  Very critical
institutions Technical services 15(50%)
 Critical
5(16.67%)
 Not critical
10(33.33%)
10 Media  Public education Publicity  Very critical
 Profit Public education 24(80%)
 Accountability Provide Information  Critical 2(6.67%)
 Not critical
4(13.33%)
11 Insurance  Profit Insurance  Very Critical
Companies Technical services 25(83.33%)
 Critical 3(10%)
 Not critical
2(6.67%)
Source: computed from own survey data, 2017
As different as the stakeholders are, also the stakeholder’s interests, responsibility and relevance level is
different; they range widely from poverty alleviation for entire communities to personal and institutional economic
rewards. Poverty reeducation or change or community development issues are mentioned by a number of the
stakeholders groups. For stakeholder responsibilities they also came in variedly representing the potential wealth

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of resources at the clearance of the projects and its effectiveness can be connected through effective stakeholder
management.
As shown in the last column, the level of relevance of their contributions comes in levels ranging from very
critical to not critical. It can be seen here that the level of relevance of most of the groups and institutions to the
sector varied from project to project. There reason behind this fact may not be that relevant to project or an
indication that there is no universality of relevance of some stakeholders to all projects. Some stakeholders like
Donors, Beneficiaries, Public Authorities, Traditional Authorities and Project Community were generally seen to
be very critical stakeholders by respondents. On the other hand, stakeholders like Media, Contractors/Consulates
and Sister/Line organization were not seen as very critical stakeholders by many respondents.
Figure 1: SH identification Processes used by respondents

Source: computed from own survey data, 2017

Figure 1 above presents the stakeholder identification process. The options are: a) Project team brainstorming
(to identify some core relevant duty bearers as they are alternatively called, usually at the project team level), b)
Stakeholder Forums (the project problem and objectives are discussed, roles identified, resources are assessed and
more duty bearers are identified and tentative action plans made), c) Snowballing/through peers (used to reach out
to more stakeholders; in some cases, checklists are developed and used in identifying Stakeholders) and the last
option is Combination of all (using all options above).
Figure 1 depicts that, 23.33% of the respondent use project team brainstorming, 16.67% of the respondents
use stakeholder forums and 16.67% 0f the respondents use snowballing. The rest 43.33% of the respondents use
combination of all mentioned above.
The International Finance Corporation (IFC) did indicate that, -Remember that certain stakeholder groups
might be pre-determined through regulatory requirements, or they do not make exhaustive use of all the available
stakeholder management tools and processes. This finding indicates that these identified processes are not full of
all stakeholder identification processes the scenario here gives a majority of the respondents could either be dealing
with predetermined stakeholders.

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1.8.2: STAKEHOLDERS MANAGEMENT PRACTICES

Institutionalization of Stakeholder Management
Table 3: Institutionalization of SHM, Who Takes Charge of SHM and Need for SHM unit
Is there a unit of SHM in your projects? Frequency Percent

1 Yes 0 0%
2 No 30 100%

Total 30 100%
Who takes charge of SHM?

1 CEO 2 6.67%
2 Program Mangers 4 13.33%
3 Project managers 9 30%
4 All team members 15 50%
Total 30 100%
Is there a need for SHM unit?
1 Yes 26 86.67%
2 No 4 13.33%
Total 30 100%
Source: computed from own survey data, 2017
Table 3 above proven clearly that there is no distinct functional unit in the organization to manage
relationships and& communications. At the same time, the level of Stakeholder institutionalization in the MCDP
organization is zero (0%), even though there is general awareness and appreciation for the Stakeholder
management function in the MCDP projects. Without even a desk put in charge of the critical role of Managing
Stakeholders thereby leaving that function to either the all team members (50%), Project Managers (30%), Program
mangers (13.33%) or CEO (6.67%) as shown in table4.7.2 above, but this is against best practice requirements
because, according to Peter (2007), whilst traditional Project managers focus on tools and templates that allow us
to complete the creation of the products or services being delivered, the discipline of Stakeholder management
focuses on human dynamics; managing relationships and communications.
From this finding it is simple to conclude that, Stakeholder management is a unique discipline or function
that may not be successfully handled by anybody in the project team especially due to the fact that it has to do with
human relations; according to Society of Professionals in Dispute Resolution (SPIDR), Practices (1997) the
growing utilization of stakeholder processes has drawn a growing number of individuals and firms into the field.
While many of these newer entrants are well qualified, a number possesses neither sufficient knowledge of
stakeholder process management nor substantive understanding of the issues. In addition, there is a growing need
to ensure that activities labeled as stakeholder processes do, in fact, live up to the expectations and standards of
experienced practitioners in the field.
1.9.3: STAKEHOLDER MANAGEMENT CHALLENGES
It is usual that managing the activity of stakeholders is indeed faced with several challenges as presented in table
4 below.

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Table 4: Stakeholder Management Challenges

Frequency Challenge Source Extent of effect
Challenges (Frequency)

Mild Moderate Severe

Donors, Public
1 Low commitment 9 Authorities, 1 6 2
Beneficiaries,
Low understanding of Traditional
2 different issues 3 Authorities, 1 2
Public Authorities
Conflicting interests,
3 opinions, beliefs 5 All 1 3 1
and orientation
4 Personal benefit seeking 4 Beneficiaries, Project 1 1 2
Community
5 Unrealistic expectations 2 Beneficiaries, Project 1 1
community, Public
Authorities
6 Ineffective communication 3 All 1 2
7 High Cost of Management 1 All 1
Deviation from common
8 agreement 3 Public Authorities, 1 1 1
Beneficiaries
Source: computed from own survey data, 2017
Table 5 in the next page shows most popular and common challenges that in ascending order from top to
bottom using frequency values for of the challenges.
The commonest challenges here are the ones that are felt by more projects, therefore the higher the frequency,
the more common the challenge in the project and the first in that order is low commitment in releasing funds,
diminishing donor support, conflicting interests, opinions, beliefs or orientation and personal benefit seeking
whereas, with the less popular challenge being high cost of management.
Figure 2: Challenge rankings by frequency

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Rankings of the Identified Challenges

Table 5: Challenge rankings by frequency
S Challenges Frequenc y Percent Rank Remark
No.
1 Low commitment 9 30% 1st
2 Conflicting interests, opinions, beliefs and orientation 5 16.67% 2nd
3 Personal benefit seeking 4 13.33% 3rd
4 Ineffective communication 3 10% 4th
5 Low understanding of different issues 3 10% 4th
6 Deviation from common agreement 3 10% 4th
7 Unrealistic expectations 2 6.67% 5th
8 High Cost of Management 1 3.33% 6th
Source: computed from own survey data, 2017

1.10. CONCLUSION
This study has been focus on the Assessment of Practices and Challenges of Project Stakeholder Management case
of Mission for Community Development Program (MCDP) projects, it is amid that to figure out the practices and
challenges of stakeholder management in the organization organizational level of MCDP and also the necessary
processes required to manage the challenges. The following conclusions are drawn from the above findings.
The task was therefore begun with the identification of general profile of the respondents. In this context,
majority of the respondents are female, majority of the respondents are in the age group of 30-64, majority of the
respondents has BA/BSc educational status and also majority of the respondents have 0-5 years of working
experience in the organization.
There are 11 stakeholder groups identified by respondents they include; Donors/project stakeholders,
Traditional Authorities, Public Authorities, Beneficiaries/clients end users, Project community, Project team,
Sister/line projects, Contractors/Consultants, Financial institutions, Media and Insurance Companies.
Following this was a listing of the interests, corresponding responsibilities and the level of relevance of the
various Stakeholders which bond the complex relationship between the sector members and their various actors.
The findings presents that, there are common interests, responsibilities and level of relevance shared by the various
stakeholders, there are many and conflicting interests indeed. On the institutionalizing of stakeholder management
(organize a distinct functional unit) in MCDP organization as per this study seem to be all 100% the respondents
reflect that they did not have units managing Stakeholders, instead it is the duty of all team members. Lastly, the
stud find out the challenges mentioned by the respondents to mention basic challenges that are faced by the projects;
low commitment, low understanding of different issues, conflicting interests, opinions, beliefs & orientation and
unrealistic expectations are the main challenges indicated by the respondents by descending order from the top to
bottom.

1.11: RECOMMENDATIONS
To ensure good Stakeholder management in MCDP projects, the following recommendations are forwarded out
of the empirical qualitative and quantitative findings, these are:
Need to guarantee better understanding about projects general goal and objects among all stakeholders
and ensure strong communication with all stakeholders from the project initiation up to close-out period
Always there must be an identification of all relevant stakeholders from the project planning and work
with them to accomplish project goals even if there are interests differences
Make sure that there must be active all stakeholder involvement and management at project life cycle
management (PLCM) (project initiation, planning, implementation, monitoring & evaluation and close-
out) to achieve effective result of project performance,
Avoid individual benefit seeking/rent seeking from different participation in stakeholder engagement and
work to achieve the vast development goal and see bigger picture,
Create and develop the sense of ownership in all stakeholders level about the project results and at the
same time this develop sense of responsibility and accountability,
The need to build stronger relationship by continuous engagement and information sharing as well as
coordination of stakeholder plans at all levels of the MCDP projects,
The need to be assigned a separate organizational stakeholder management unit to effective use of
stakeholder management process, and
Ensure participatory planning with full commitment from all key stakeholders mainly with project
sponsors/donors, beneficiaries, public authorities and traditional authorities (clear cut relationships and

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expectations)

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