Conceptual Framework: Project Stakeholder Management and Government-funded Projects Assessment Answer

CHAPTER ONE: INTRODUCTION AND BACKGROUND

1.1 Introduction

The principle of "nothing for us without us" is deeply ingrained in the South African community, emphasising the significance of stakeholder management in any project, particularly government-funded infrastructural endeavours. All the stakeholders significantly impact the government-funded infrastructure project being measured through this research. The Government is pivotal in funding community development infrastructure projects in a developing country like South Africa. Infrastructure development projects attract many external stakeholders.

Currently, massive infrastructure projects utilised as a vital tool to reduce present infrastructure capacity issues or develop novel corporate prospects have been of utmost relevance for establishing economy and civilisation. Infrastructure projects are currently being handled globally, whether in established nations that are expanding their infrastructure capacity or in establishing countries that are constructing important infrastructure for the initial time. The greater intricacy linked with stakeholders with conflicting interests might contribute to costs and time overruns (Siraj & Fayek, 2019). Procuring government-funded infrastructure projects like hospitals, roads, and more has attained worldwide acceptance. Stakeholders might usually be defined as people, groups, or companies that can impact or be impacted by the performance or accomplishment of a project. The stakeholders might include customers, project managers, suppliers, funders, the community, etc. Therefore, it becomes essential to handle and engage stakeholders initially in the project lifecycle and keep them engaged throughout the project life. It is said that stakeholder management can provide crucial strategic information, assets, and problem-solving methods and provide diverse stakeholders with the prospect of making meaningful inputs to a project.

The study by Gichimu & Mutuku (2022) of stakeholder management of government-funded projects in Nigeria reflects projects procured in settings of numerous interests and stakes that have hindered the success of such projects at multiple stages of the project’s lifecycle. It has been found that countless developmental schedules, programs, or visions intended to establish and improve the amount and quality of infrastructure services for economic development were attempted in the absence of success in Nigeria. Another major study by Mageto et al., (2021) found that concerning Uganda, the stakeholders changing the scope of work in infrastructure projects possessed the highest influence on cost overruns and delays. Also, an investigation on the regulation challenges to road infrastructural projects efficiency trends, problems, and concerns in Uganda reflected that interior stakeholder management in respect of project communication possesses the favourable and combined foreseen strength of project stakeholder commitment.

The central aim of this research revolves around multiple categories of stakeholders in such infrastructural projects that involve community organisations, the business community, the funder (client), the user client, authorities, and a team of professionals who play a pivotal role in the successful implementation of the project. These stakeholders form part of the decision-making processes. The impact of each category has been critically evaluated, considering the risk associated with the project and enabling strategies that guide the successful implementation of the project.

The study is based at Lebotloane, a village within Moretele Local Municipality, North of Pretoria, Northwest Province.

1.2 Background to the Study

The management of stakeholders is becoming increasingly important since sustainable business projects have gained popularity. It is a component of modern project management due to the risks and complexity of government infrastructure projects. Because the various stakeholders are internal and external to the organisation, developing countries such as South Africa, Pakistan, and Columbia each have unique requirements from their governments. These countries must consider stakeholder management when formulating policies and planning infrastructure programs as it helps achieve the objective of sustainable development of the developing country (Zuniga-Teran et al., 2020). External stakeholder engagement is crucial to generating inter-organisational values such as transparent communication, faith, respect, mutual trust, and so on in the project (Lehtinen & Aaltonen, 2020).

Infrastructure Projects are established and implemented to benefit the community and/or the funder. There is a dual objective in mind when it comes to government-funded infrastructure projects. Firstly, it aims to achieve specific deliverables and outcomes. Secondly, it strives to meet the targets set by the Government concerned. To various stakeholders, the government-funded infrastructure project, particularly the construction of a school, holds different significance. The local community's immediate goal is to see the school infrastructure completed. For the contractor involved, the primary aim is to make a profit, while the professional team focuses on delivering the school within the specified scope, budget, and schedule.

However, the ultimate objective for the Government is to provide essential infrastructure that contributes to enhancing the quality of education and achieving favourable educational outcomes. Traditionally, these stakeholders would have been the main participants. Nevertheless, recent developments have introduced new dynamics, with local business forums and small and medium-sized enterprises (SMMEs) seeking to have a say and stake in local development projects.

The infrastructure project means different things to different stakeholders, with the Government aiming for improved education, contractors looking for profitability, the local community desiring a functional school, and emerging local businesses demanding inclusion and representation in the development process.

Potential consequences of poor external stakeholder management in government-funded infrastructure projects such as delays, cost overruns, and conflicts may affect the project's intended objectives. Therefore, Project stakeholders will have their interests and perspectives depending on their engagement level and role. Government-funded Infrastructure projects are becoming increasingly larger and more complex. Therefore, the impact of project stakeholder management on government-funded projects is important to safeguard the investment.

The researcher identifies the relevance of external stakeholder management to achieve infrastructure project success. The large-scale infrastructural development and implementation of the project affect the different interests of its stakeholders. The positive influence of such a project can lead to improvement in communication and generate a higher standard of living for external stakeholders. Contrary to this, infrastructural project such as construction creates degradation and modification on a regional scale. External stakeholders, like society, citizen associations, etcetera, invest their related concerns in the project (Pacagnella Júnior et al., 2015). According to a study by Molwus (2014), the failure to admit the concepts of opposed external stakeholders is found to contribute to a prolonged and postponed scheduling and designing procedure because of the assimilated backing of opposing stakeholders working against the project’s progress as a consequence of supposed non-engagement and consideration of their interests. Also, the project managers must communicate with the external project stakeholders in a manner that is not detrimental to the project goals. Therefore, the process of stakeholder management needs to be planned out to improve projects within the public sector, particularly from the perspective of a country still developing its economy like South Africa. In the context of Thulare High School, this research aimed to determine the frequency within which external stakeholder management is utilised to construct public sector infrastructure (Tirumala & Tiwari, 2022).

1.3 Statement of the Problem

Government-funded infrastructure projects involve multiple stakeholders with diverse technical expertise, levels of involvement, and distinct objectives. Effective stakeholder management is essential for achieving project goals such as continuous improvement, robust stakeholder engagement, and customer satisfaction. This becomes particularly crucial in projects marked by unpredictability, financial scrutiny, and public attention (Thizy et al., 2019).

Infrastructure development projects demand significant capital (Inga et al., 2020). Successful project management relies on support and collaboration from external stakeholders, offering a competitive advantage (Ninan et al., 2020). In projects involving inter-organisational collaboration, external stakeholders play a pivotal role by contributing valuable insights into project functions, responsibilities, and diverse interests (Lehtinen & Aaltonen, 2020).

The classical interpretation of "stakeholder" encompasses any group or individual affected by project objectives (Freeman, 1984). Stakeholders encompass various roles, including owners, managers, employees, service providers, community representatives, interest groups, visitors, and more (Smith & Love, 2004). Stakeholder Management (SM) is vital for successful project outcomes (Pacagnella Júnior et al., 2015). Internal stakeholders actively engage in project execution, while external stakeholders are mainly affected by the project (Waris et al., 2022).

Developed countries prioritise stakeholder management to enhance decision-making and project implementation, while developing countries employ public participation to reduce socioeconomic and environmental conflicts during infrastructure projects (Almer and Koontz, 2004). Despite the growing relevance of sustainability in project management, stakeholder project management has recently garnered scholarly attention, emerging as a new perspective (Silvius, 2017). Successful government-funded infrastructure projects aim to address the needs and concerns of external stakeholders while meeting project objectives. However, laxity in processes, often due to funding sources, may compromise project success (Waris et al., 2022). Effective engagement of external stakeholders in projects, balancing inclusivity with socio-economic considerations, and preserving technical integrity remain critical challenges. Striking the right balance in decision-making involving external stakeholders is a key consideration.

This revised statement provides a concise overview of the problem, emphasizing the importance of stakeholder management in government-funded infrastructure projects and the challenges associated with it (throw more light / substantiate / Indicate the research gap).

Considering the significance of the topic, there are lack of empirical research, thus less information is available on this. The existing research provided less information to have more specifications regarding this topic. Most of the research focused on infrastructural development and external stakeholder management as individual topics rather than analyzing them together in the project works of community development. The government perspectives, external stakeholders’ expectations, etc. have not been justified previously. Some researchers adapted the quantitative research method and conducted surveys where the outcomes were less impactful as opinions vary due to individual perspectives. Limited questions were asked in the questionnaire that failed to cover all the areas of external stakeholder management in the infrastructural development project work and the impact it has on community development as well as meeting the expectations of each involved in the project work. For this reason, only the qualitative research method is conducted here by utilizing reliable or authentic resources to conceptualize the project work (Gichimu & Mutuku, 2022).

There exists a huge research gap regarding the respective topic and its impact on the infrastructural development of the community. Several challenges still exist in the process of gathering more information from genuine resources and from projects that are successfully accomplished with the involvement of external stakeholders (Balakrishnan & Johar, 2023).

1.4 Research Questions

The qualitative research questions that follow are:

• What are the current practices and strategies used in project stakeholder management in the context of government-funded infrastructure projects, and what are their strengths and weaknesses?
• How important is project stakeholder management in government-funded infrastructure projects, and how does it contribute to project success and stakeholder satisfaction?
• Who are the key stakeholders involved in the Thulare High School project, what roles do they play, and how do their interests and power dynamics impact project decision-making and implementation?
• How effective are the current stakeholder management strategies in the Thulare High School project, and where can improvements be made for better project outcomes?
• Based on the findings from the Thulare High School case study and relevant literature, what recommendations and guidelines specific to the context of South Africa can be developed to enhance stakeholder management practices in government-funded infrastructure projects?

1.5 Research Objectives

The research objectives are:

Examine Stakeholder Management Significance:

• To critically investigate the importance of project stakeholder management in government-funded infrastructure projects, with a specific focus on its role in ensuring project success and stakeholder satisfaction.

Analyze Stakeholder Management Impact:

• To empirically analyze the influence of project stakeholder management on the outcomes and overall effectiveness of government projects, using the Thulare High School case as a representative example.

Evaluate Current Practices and Propose Improvements:

• To identify and assess existing practices and strategies in project stakeholder management, emphasizing their strengths and weaknesses. Based on these findings, to propose recommendations for enhancing these practices.

Quantify Stakeholder Management Contribution:

• To assess the extent to which effective stakeholder management contributes to the success of government-funded infrastructure projects, utilizing the Thulare High School project as a detailed case study to draw substantial conclusions.

Profile Key Stakeholders and Analyze Dynamics:

• To identify and profile the key stakeholders involved in the Thulare High School project, analyzing their roles, interests, and power dynamics, and exploring how these factors impact project decision-making and implementation.

Evaluate Strategy Effectiveness and Identify Enhancements:

• To assess the effectiveness of stakeholder management strategies employed in the Thulare High School project, identifying areas for improvement. Furthermore, to suggest best practices applicable to future government-funded projects.

Develop Context-Specific Recommendations and Guidelines:

• To create tailored recommendations and guidelines for enhancing stakeholder management practices in government-funded infrastructure projects in South Africa. These recommendations will be derived from insights gained through the examination of the Thulare High School case study and relevant literature.

1.6 Rational /Motivation/Justification for the Study

Projects are becoming an increasingly common tool for managing policy and ensuring that public services are carried out effectively as an increasing number of organizations are collaborating to provide public services through networks. People typically believe that participating in projects will allow them to be flexible and generate new ideas (Urbinati et al., 2021).

The empirical results will show what practices should be avoided and how projects can be made to be more innovative. When done properly, involving various stakeholders in developing public sector projects is believed to impact innovation. Public sector organisations' motive is to serve the public at a large scale. There are many problems that a project manager might face in managing the projects of the public sector, which include conflicts in setting up the goals, dealing with the management of multiple layers of stakeholders, problem in managing cooperation and performance external agencies for ensuing quality purchasing, hiring and in performing other functions (Wirick, 2009).

There are vast risks and complexities involved in developing public infrastructural projects. This has increased the role of management of external stakeholders in project management, as in countries that are in their developing phase management of stakeholders becomes essential for managing the policies and developing plans for the infrastructure as it assists in meeting the expectation of different stakeholders, especially those who are external to the organisation. When these external parties are considered while developing the goal, this helps overcome the barriers to making decisions and enables smooth communication (Karlsen, 2002).

1.7 Significance of the Study

Justify the rationale behind the research.

The research rationale defines the importance of the contributions that inter-organizational as well as external stakeholders performed due to personal interest in infrastructural developments. There is a potential need to provide thorough information on this topic as government-aided infrastructural projects tend to be appointed frequently due to the present development of the community. The rationale successfully identifies the significant impact of appointing external stakeholders to project works. This research topic enables more information on the positive impact of work collaboration between external stakeholders with government. Furthermore, this was chosen to benefit the community development.

In today’s advanced world, the infrastructural development industry is potent to fulfill several perspectives of external stakeholders. In this area of development, the government aims to benefit the community by providing availability in terms of advanced educational institutions, better medical infrastructures, etc., while external stakeholders like contractors tend to look for the profit of their company while involved in the projects, etc. This topic was chosen to indulge external stakeholder management in infrastructural development for the benefit of inter-organizational and external stakeholders and government perspectives of community development (Arkorful, Hilton, & Awaah, 2023).

The rationale portrays potential obstacles and risks regarding the development of government-aided infrastructural projects, as well as the importance of external stakeholder management. The rationale shows that in order to achieve the goals of the project, appointing or inviting external stakeholders into the process enables the government to make sustainable as well as Innovative decision making. The barriers that affect effective decision-making regarding the project work and the steps to eradicating them are pointed out in the project rationale. In the rationale, the need for effective communication during the process of project work among various stakeholders and governments to improvise the outcome of sustainable project work is mentioned to benefit each of the individuals (Gichimu & Mutuku, 2022).

1.8 Assumptions of the Study

There are different assumptions made in the study. The stakeholder theory is driven by various factors in addition to profits and productivity. The study assumptions suppose the relations between project management and project stakeholders in qualitative as well as quantitative methods. Employers have discovered that when workers are satisfied with their jobs, their mental health significantly improves. It will also improve the social and economic standing of the company in the neighborhood where it is located. When one business implements stakeholder theory, it motivates other businesses to do the same. This results in a competitive environment that benefits companies and the people they serve as stakeholders (Urbinati et al., 2021).

1.9 Limitations of the Study

This research is based on Government funded projects, therefore,

• Restricted Data Accessibility:

It is imperative to acknowledge that not all information may be publicly accessible, potentially posing challenges in data acquisition and analysis for this study.

• Preservation of Confidentiality:

Recognising the importance of maintaining data confidentiality, it is crucial to emphasise that confidential information must not be disclosed to the public during the research process.

• Contractual Safeguards:

In consideration of the complexity of this research, it is noteworthy that contractual agreements, often accompanied by stringent non-disclosure clauses, are typically in place between the client or funder and service providers. These agreements may impose constraints on data sharing and reporting.

• Response Limitations Due to Apprehension:

It is imperative to acknowledge that the study's pool of potential respondents may be limited due to concerns related to potential intimidation or reprisals. This apprehension can influence participation rates and requires careful consideration when evaluating the research's scope and reach.

1.10 Delimitation of the Study

This includes developing management plans to maintain their active project involvement and interest. It is possible that there will be more than one kind of stakeholder involvement in the project, and that their goals will not always align perfectly with one another.

1.11 The Theoretical Foundation

The theoretical framework underpinning this study draws heavily from stakeholder theory and stakeholder management, with a foundation built on an extensive review of relevant literature, including the work of Thizy (2019). In this context, stakeholders encompass a broad spectrum of actors, such as customers, suppliers, employees, investors, and communities, all of whom harbor a vested interest in the success and prosperity of a business entity.

This perspective transcends the traditional notion of corporations merely serving the interests of shareholders. Instead, it posits that companies bear a broader set of responsibilities that encompass the well-being and concerns of a multitude of stakeholders. The primary objectives of stakeholder theory are twofold: first, to equip management with the tools necessary for delineating and comprehending the diverse array of stakeholders, and second, to guide their strategic management.

One key outcome of this theoretical approach is the development of a stakeholder map. This map serves as a dynamic tool, allowing for the grouping and classification of stakeholders based on the interests they hold and the influence they wield within the company (Ebekozien et al., 2023). At its core, stakeholder theory emphasises the critical importance, particularly for large-scale enterprises within the infrastructure sector, of identifying and continually engaging with stakeholder interests. It promotes an ongoing process of forming and reshaping these stakeholder relationships to generate enhanced value for a broader spectrum of stakeholders (Ebekozien et al., 2023). In essence, this theoretical foundation underscores the imperative for massive corporations, especially those operating in the infrastructure industry, to recognise, acknowledge, and actively respond to stakeholder interests. It promotes the idea that by consistently evolving these relationships and aligning them with stakeholder interests, these corporations can drive increased value creation for a multitude of stakeholders, thereby fostering sustainable growth and success.

Stakeholders to Construction Projects

Source: Ebekozien et al. (2023)

1.12 CONCEPTUAL FRAMEWORK

The conceptual framework is as follows:

1.12.1 Stakeholder Dynamics

This entails the following indicators:

• Resolving conflicts amongst stakeholders effectually
• Handling the changes of interests of stakeholders
• Handling the changes of influence of stakeholders
• Handling the changes in relation amongst stakeholders
• Foreseeing stakeholders’ likely responses for executing project decisions.

1.12.2 Stakeholder Attributes And Project Attributes

This entails the following indicators:

• Evidently forming the project mission
• Certifying the usage of a favourable procurement technique
• Recognizing and comprehending the stakeholders’ areas of interest in the project
• Certifying flexible project organisation
• Diligently recognizing and listing the project stakeholders

1.12.3 Project Success

This entails the following indicators:

• Completion of project on time
• Accomplishment on budget
• Achievement to definite standards or qualities
• Completion to the gratification of a myriad of the project stakeholders

Source: Author Presentation

Figure 1: Conceptual Framework: The Relationship between Project Stakeholder Management and Project Success of the Government-funded Projects

This framework helps the scholar to know that engaging stakeholders in the government-funded projects is a formal procedure of relation management to lessen the threats by aligning mutual interests.

1.13 Summary of the Chapter

The readers were provided with a summary of the research’s background and problem statement. Besides, the research aims, objectives, and questions were all encompassed in this section of the thesis. The fundamental terms utilised throughout the study were described for the readers. This section has introduced the study emphasising project stakeholder management in government-funded projects in developing nations. The underlying premise of this study is the establishment of the stakeholder management outline to manage government-funded infrastructure projects in developing countries. The present pertinent literature offers specialized value to stakeholder management however, it does not evidently and adequately address the problem of how project management can enhance values in infrastructure projects by managing stakeholders consequently. The current study establishes a novel approach and possess the capability to refine on available approaches.

Reference

Arkorful, H., Hilton, S. K., & Awaah, F. (2023). Community engagement in development projects: government versus private funded projects in Ghana. Journal of Enterprising Communities: People and Places in the Global Economy, https://www.researchgate.net/profile/Fred-Awaah/publication/358644987_Community_engagement_in_development_projects_government_versus_private_funded_projects_in_Ghana/links/625edfcf9be52845a90fccfe/Community-engagement-in-development-projects-government-ve.

Balakrishnan, K., & Johar, T. N. (2023). The Role of Stakeholders in Managing Government Research and Development Funding for Defence Industrial Innovation: The Case of Malaysia. Defence and Peace Economics,, https://www.tandfonline.com/doi/pdf/10.1080/10242694.2022.2100588.

Gichimu, E. M., & Mutuku, M. (2022). Stakeholder management and performance of county government funded projects in Nyeri County, Kenya. The Strategic Journal of Business & Change Management, https://www.researchgate.net/profile/Morrisson-Mutuku/publication/366395315_STAKEHOLDER_MANAGEMENT_AND_PERFORMANCE_OF_COUNTY_GOVERNMENT_FUNDED_PROJECTS_IN_NYERI_COUNTY_KENYA_STAKEHOLDER_MANAGEMENT_AND_PERFORMANCE_OF_COUNTY_GOVERNMENT_FUNDED_PROJECTS_IN_NY.

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