Critical barriers affecting stakeholder management in
the construction industry
Eyiah-Botwe1, E, Aigbavboa, C1 &Thwala, W.D1
Department of Construction Management and Quantity Surveying, Faculty of
Engineering and Built Environment
University of Johannesburg, Johannesburg
*Email of corresponding authors:
[email protected]Abstract
Effective stakeholder management is essential in achieving stakeholder satisfaction and
project success targets. This paper investigates critical barriers to stakeholder
management in the construction industry of developing countries as part of a larger
study aimed at developing a “Sustainable stakeholder management framework for
construction projects in developing countries”. The present paper aim is necessary since
construction projects have numerous stakeholders and involves several activities hence
stakeholder management is vital for an enhanced project delivery. A literature review of
selected articles on stakeholder management was validated using interviews of 6 project
key stakeholders. The study confirmed five additional critical barriers relating to (1)
project managers knowledge in stakeholder management (2) public procurement
approach, (3) politicization of projects (4) project delays and (5) poor project planning
and development. These findings may not be generalized due to limited research
participants involved. Nonetheless, it serves as a useful basis for the larger dissertation
and contributes to the body of knowledge by identifying critical barriers affecting
stakeholder management in the developing nations’ construction industry for improved
construction projects delivery. Considering and managing these critical barriers will
ensure the achievement of project goals, stakeholder needs and satisfaction.
Keywords: construction industry, critical barriers, procurement, stakeholders,
stakeholder management
1. Introduction
Governments in many developing countries undertake physical infrastructure projects as
an intervention for socio-cultural and economic growth (Othman, 2013). These
developments include educational, road, transport, health and housing projects. The
achievement of cost, quality, time and stakeholder satisfaction targets is a measure of
project success (PMI, 2013). This mainly depends on the construction industry and the
key players involved in the realization of these objectives. According to Chinyio &
Olomolaiye, (2010), the construction industry in the UK employs about 1.6 million. In
Ghana, it employs10% of the working population and contributes about 5-10% of the
GDP of nations around the globe (Ofori, 2012). It is worth noting that there are several
small and medium size enterprises, demand and supply chain organisations, and
participants from different professional background involved raising a challenge in their
management on a project.
Construction projects are temporary, unique in nature, scale and size. These projects are
located in different geographical regions and involve a broad array of stakeholders
whose interests and demands should be considered for project success (Olander &
Landin, 2005).Managing stakeholders is, therefore, an essential part of project
management. Researchers have identified critical factors for project success. For
instance, the critical success factors CSFs approach has been established over 20 years
(Chan, et al., 2004). According to Yang (2010), there are also CSFs that directly or
indirectly can ensure stakeholder management success. Equally there are significant
barriers and challenges which militate against construction projects successful
stakeholder management.
The purpose of this study is to identify and investigate critical barriers to successful
stakeholder management as part of a broader study to develop “sustainable stakeholder
management framework for construction projects in developing countries”. This paper
reviews stakeholder management literature from the institutions database, journals and
validates findings by interviewing key stakeholders. This is achieved by answering the
following questions:
What is the level of understanding and consideration of stakeholders and
stakeholder management by Project Managers?
What are the procurement practices and the impact on stakeholder management?
How is stakeholder management affected by project planning and development?
2. The construction Industry and Stakeholder Management
2.1 The Construction Industry
The construction industries of Ghana, Nigeria, South Africa and Botswana were
considered. Studies have revealed these countries as having cross-country labour force,
some similarities and a reflection of many developing countries (Mwanaumo, 2012).
Firstly, the construction industry is responsible for physical infrastructure development
of a nation without which other socio-economic and socio-cultural activities cannot
function and shelter for the very survival of the citizenry and especially the poor (Ofori,
2012). In addition, the construction industry contributes significantly to employment the
economy (Chinyio & Olomolaiye, 2010). Global statistics indicates an estimated 7 -
10% of the global workforce as working in the construction industry (Mwanaumo,
2012; Murie, 2007; ILO, 2005).The construction sector is thus an area with many
participants requiring efficient management.
Most sectors of the economy of developing nations like education, health,
manufacturing, finance, housing and social welfare heavily depends on the construction
industry for its performance and growth. According to UKCG (2009), “The construction
sector is a driver of growth in other sectors due to its heavy reliance on an extended and
varied supply chain”. The industry’s contribution towards GDP of developing nations
cannot be underestimated. In Ghana, the construction industry contributes between 6-
8.5% of the Gross Domestic Product (Ghana Statistical Service, 2007). It is pertinent to
note the sector’s significant contribution towards economic growth and employment
creation. This implies that challenges to the industry and poor project delivery will
impact the economy negatively.
2.2 Challenges to the Construction Industry
The construction industry is faced with several challenges. The industry is large,
complex and geographically spread out due to project implementation throughout the
country. Areas such as building construction, civil engineering and specialised
construction can be identified (Oyedele, 2013).In addition, it is diverse with many
factors influencing its performance and prospects at many levels together making it
difficult to manage stakeholders involved. There are adversarial relationships;
inadequate involvement of suppliers, and a large number of small and medium-sized
enterprises impacting on management of participants involved (Bower, 2003a: 9-11).
The industry is typically fragmented in terms of the roles of the participants as well as
the distribution of the sizes of its component firms. Ofori (2012), states that among the
industry’s challenges are the governments’ recognition and involvement in activities. In
Africa, infrastructure development is a measure of the political achievement of a state
(Oyedele, 2013). This has resulted in political interference in project development. The
need for continuous action to improve the construction industry is necessitated by the
diverse, disorganised and uncontrolled nature of the industry and participants (Oyedele,
2013). This has resulted in poor industry performance in developing countries in
relation to achievement of project goals.
The Performance audit report of the Auditor-General on GET Fund funded
infrastructural projects in Public Tertiary Institutions in Ghana(2012), identified
planning and budgeting, managing project quality and schedule as key to enhanced
project delivery. Likewise, the “GetFund outlook 2000-2009” identified poor planning
and inadequate involvement of key stakeholders in project planning as a cause of
project failure. In Nigeria, inability to forecast completion periods, improper planning
and the resultant changes in project team participants are a major worry to the industry
and hence project delivery. According to Fugar & Agyakwah-Baah (2010), many
construction stakeholders in recent times are becoming increasingly concerned about
construction projects duration because of increasing potential disputes and claims
leading to arbitration are stakeholder issues. Ametepey et al. (2014) therefore suggest
the re-examination of traditional project management approach.
According to Emuze (2011), in South Africa, the construction industry is characterised
by fragmentation; adversarial relationships; inadequate involvement of suppliers, and a
large number of small and medium-sized enterprises becoming a primary concern. Such
similar industry challenges in the UK called for construction excellence. The Latham
(1994) and Egan (1998) reports proposed a more stakeholder-centred approach to
project delivery. In addition to stakeholder focus, there are concerns about the impact of
procurement method and routes used by the developing countries regarding project
delivery and industry growth. Love et al., (2002) state that procurement is an
organisational system that assigns specific responsibilities and authorities to people and
organisations. As a result, it shapes the relationships between the different elements of
construction in a project while establishing the contractual framework that determines
the nature of relationships for the duration of stakeholders’ interactions (Oyegoke et al.,
2009). Many researchers have focussed on the relationships between project
procurement and cost but not project procurement and stakeholder management which
this paper assesses.
2.3 Procurement Approach (PA) and the Construction Industry
The construction industry cannot thrive without procurement since there is always
demand and supply by the many fragmented units and project participants to achieve
project goals. Construction projects procurement has evolved over the period and
entailed method, routes and strategies (OGC, 2009). It is worth noting that procurement
route adopted determines the relationships, stakeholders involved and contractual
framework which contributes to the project success (Ren et al., 2012).The traditional,
design and build, management, partnering and cost reimbursable contract (RICS 2004)
are the principal methods employed.
The traditional method mainly separates design and construction with the client bearing
the major risk (Newcombe, 1996). Stakeholders are involved at different stages and as
and when they are needed. The different routes such as ‘open’ and ‘selective tendering’
adopted, has a relationship with stakeholders involved. The Traditional Procurement
Approach TPA is the most widely used in developing nations. The Public Procurement
Act, PPA Act 663 advocates the use of TPA though with its negative impact on
stakeholder management. TPA equally remains the most popular used method in the
UK, setting up weak formal legitimate power though declining in use (Newcombe,
1996). There is a remarkable increase in the desire for ‘design and build” as compared
to developing countries. According to Ren et al., (2012) the primary concern in the
Ghanaian construction industry under the TPA is the strained relations among project
participants due to problems such as undue delays and over budget with parties focusing
exclusively on their own interest without looking at the overall impact on the whole
project. Research recommends collaborative and integrated working as the way forward
in addressing the adversarial relationship and for the achievement of construction goals
of excellence (Latham, 1994; Egan, 1998).This is achievable through enhanced
stakeholder management. The procurement approach is necessary as defines
relationships, determines participants, roles and responsibilities. Procurement approach
constitutes an important decision of the project determined by the project owner.
2.4 Stakeholders
According to PMI (2013), meeting stakeholder satisfaction and needs is a project
success measure. Freeman (1984) defined stakeholders as “groups or individuals who
can affect or are affected by the objectives of an organization. Stakeholders have vested
interest in the success of a project and the environment within which the project
operates (McElroy et al., 2000). In addition stakeholders influence, or could be
influenced by an organization, support or be antagonistic to an organisation (Necombe,
2003; Kolk & Pinkse, 2006). The most important is the full acceptance that stakeholders
have a claim or interest in a project and its activities (Nguyen et al., 2009).
Construction projects stakeholders’ are classified as internal or external members of a
project coalition (Calvert, 1995; Winch, 2002), project team or scope (Sutterfield et al.
2006) who are actively involved in the project, providing finance or are affected by the
project in a significant way. Project stakeholders may be directly or indirectly
participating in a project, considered as insiders or outsiders (Smith & Love, 2004;
Newcombe, 2003) depending on their stake, interest and influence on or by the project
outcome. They are primary or secondary stakeholders depending on whether they have
a contract or not with the project owner. Key stakeholders are also referred as primary
stakeholders. Researchers over the years have identified construction project
stakeholders to include; client, project managers, site personnel, contractors, sub-
contractors, local government, communities, media, professional bodies, members of
parliament, politicians and political parties (Eyiah-Botwe, 2015). Olander & Landin
(2005), Ward & Chapman (2008), Chinyio & Akintoye (2008) and Yang (2010) have
also mentioned client, project management team, consultant, design team, contractor,
subcontractor, supplier, employees, local communities, funding bodies, government
authorities as stakeholders. This research considers stakeholders as individuals or
organizations that are actively involved in a project or whose interests affect or are
affected by the outcome of the project. It is suggested that project success is not about
achieving project targets of cost, time and quality only but satisfaction and efficient
management of stakeholders (PMI, 2013).
2.5 Stakeholder Management
Construction projects have numerous stakeholders with diverse occupational,
professional backgrounds, different levels and types of interests in the project (Mok et
al., 2015). In addition stakeholders can be antagonistic or otherwise, can impact on a
project in several ways; the outcome being either positive or negative hence must be
managed (Newcombe, 2003; Nguyen et al. 2009). Meeting stakeholder satisfaction and
effective stakeholder management is, therefore, a success criterion (Jepsen & Eskerod,
2008).This challenge in management is compounded when projects are mega in size
resulting in (1) the involvement of numerous stakeholders, complex stakeholder
interrelationships and conflicting interests; (2) the dynamics and growing capacity
leading to high project uncertainty and (3) their governance, high public attention and
controversies (Yeo, 1995). Iyer & Jha (2006) states that schedule performance of
megaprojects could be significantly hindered due to conflict, indecisiveness and
inadequate coordination of project stakeholders. Stakeholder management is thus a
positive approach of bringing to surface concerns of stakeholders and developing robust
relationships in complex environments (Bourne & Walker, 2005)
Stakeholder management entails a systematic approach to identifying, engaging,
analyzing and monitoring stakeholders (Lock, 2007). Young (2006) suggests,
identifying stakeholders, gathering information about stakeholders and analysing their
influence. Yang (2010) develops a framework which considers a process of stakeholder
identification, assessment, decision making, action and evaluation with continuous
support after identifying 15 critical success factors for developed countries. There are
challenges in the processes of identifying stakeholder and their needs, assessing
stakeholder impacts and their relationships and formulating appropriate engagement
strategies (Yang et al., 2011). The objective of stakeholder management is to ensure a
successful project delivery by considering stakeholder interests, needs, influence, and
conflicts while enhancing stakeholders’ contribution and roles. Cleland (1986) and
Jergeas et al. (2000) stress the need for efficient management of the relationships
between the project and its stakeholders. Researchers have identified tools for analyzing
stakeholders’ management to include Stakeholder Matrix (Chinyio & Olomolaiye,
2010; Newcombe, 1999), Stakeholder Circle Tool (Bourne, 2005) and Social Network
Analysis (Bourne & Walker, 2006; Rowley, 1997) as necessary for sustainable project
development in developed countries.
2.6 Critical Factors
Every project with a set of parameters for measuring success has critical factors that
impact on the project outcome. Saraph et al. (1989) viewed them as “those key areas of
managerial planning and action that must be practiced in order to achieve effectiveness
Critical success factors (CSFs) for stakeholder management are activities, practices and
considerations that directly or indirectly can ensure successful stakeholder management.
Yang et al., (2010) have confirmed 15 CFS for developing countries and Hammad,
(2013) 23 CFS for the Gaza strip construction industry. Equally critical barriers are
factors militating against the achievement of successful stakeholder management and
project set targets of cost, time and quality. While many studies have considered CSFs,
no research has considered critical barrier factors (CBFs) to effective stakeholder
management in developing countries. Yang, (2010) had these factors, found within
management groups of: ‘Stakeholder Identification’, ‘Stakeholder Assessment’,
‘Decision Making’, ‘Action and Evaluation’ and ‘Continuous Support. It is worth
noting that these activities become challenge and barriers to stakeholder management if
not properly managed. These are also not peculiar to developing countries.
Similarly, El-Sawalhi and Hammad, (2015) identified challenges to stakeholder
management in the Gaza strip construction industry as; hiring a project manager with
high competency, transparent evaluation of alternative solution, ensuring effective
communication between the project and its stakeholder. In addition, setting common
goals and objectives for the project, exploring the stakeholders' needs and expectations
were identified as challenges.Their impact is thus dependent on the active or otherwise
management of the factors. This study aimed at identification and evaluation of factors
and activities that hinders project managers’ effort hence constituting barriers. 10
factors based on literature were outlined and grouped as “Project Planning and
Development”, Project Set Targets”, “Project Stakeholder Management Process”.
Table 1. Factors acting as Barrier to Effective Stakeholder Management Process
Newcomb
Amankw
l 2015
Othman,
Oyedele
Freeman
a, 2003
Chinyio
Mok et
Eyiah-
Botwe
Ofori,
et al.,
Yang,
2013
item Group/Factor
1984
Project Planning and
Development
1 Project manager’s unfamiliarity with x x x x
SM process
2 Project planning and control x x x x x x x
3 Procurement approach x x x x x x
4 Political influence x x x
Project Set Targets
5 Project cost increase x x x
6 Project scope changes and quality x x x
7 Project delays x x x
Stakeholder Management Process
8 Stakeholder identification x x x x x x
9 Stakeholder engagement x x x x x x
10 Stakeholder analysis and monitoring x x x x x x
3. Methodology
This study used a two-stage approach. Stage one considered an in-depth literature
review of selected articles from databases and journals such as Science Direct, Emerald
Insight, Elsevier, and Journal of Construction Management, Taylor and Francis
publications. Articles were filtered using a combination of keywords such as
stakeholder, stakeholder management, construction stakeholder management.
Emphasis was also on renowned authors with articles on stakeholder management and
developing countries. Mok et al. (2015) and Yang, (2009) had used a similar method in
previous research. Ghana, Nigeria, South Africa and the Gaza Strip were considered for
data.
Stage two involved evaluation of ten (10) factors identified from the literature reviewed
(table 1) aimed at addressing the research questions and objectives. These are (1) “what
are the critical barrier factors to stakeholder management”, (2) “are they peculiar to
developing countries” and (3) “how do they impact on project stakeholder
management”. A qualitative technique using a structured questionnaire was sent to six
experienced industry practitioners (2 architects, 2 quantity surveyors and 2 project
managers) who all act like project managers for an interview. A purposive sampling of
industry professionals and key stakeholders were identified. The interviews were
conducted face to face with an architect’s assistance who also recorded the responses of
interviewees performed through the same set of questions. The interview lasted about an
hour of half (average) with an interviewee. Interviewees’ responses (table 2) were analysed
using coding and descriptive survey method.
4. Findings and Analysis.
Table 2. Response by Interviewees on Critical Barrier Factors
item Group/Factor Source
Int 1 Int Int 3 Int Int 5 Int score
2 4 6
Project Planning and
Development
1 Project managers’ unfamiliarity with x x x x x 5
SM process
2 Project planning and control x x x x 4
3 Procurement approach x x x x x x 6
4 Political influence x x x x 4
Project Set Targets
5 Project cost increase x x x 3
6 Project scope changes and quality x x x 3
7 Project delays x x x x x 5
Stakeholder Management Process
8 Stakeholder identification x x x 3
9 Stakeholder engagement x x x 3
10 Stakeholder analysis and monitoring x x 2
4.1 Project managers’ PM knowledge on SM
Five interviewees ranked PMs’ poor knowledge as a major CBF for an effective SM.
Interviewees agreed that SM practice cannot be enhanced except the PM understands,
can implement and is ready to embrace it. An interviewee exclaimed “How can one
practice something he is not an expert in”. The two architects interviewed agreed that
though architects continue to be team leaders and act the role of project managers,
without training and education lack of knowledge will continue to be a barrier. One
project manager suggested that. “Consultants’ should be made to submit their SM plan
as part of project approval requirements”. On the impact on SM and project success,
interviewees agreed that lack of knowledge affects project planning, results in delays,
litigations and the entire stakeholder process.
4.2 Project planning and control
Four interviewees agreed that project planning and control as considered in project
development was a CBF to SM. On project manager asked, “Do you appoint project
manager at project post contract stage”? Another interviewee suggested that “a PM
should be appointed during feasibility stage since SM should be considered before
designs are even prepared. One architect interviewed mentioned that change of project
location and inability to sign off a phase changes a lot of stakeholders and their interest.
“How do you manage stakeholders you don’t even know and their budget?” was an
interviewee’s response to the late involvement of sponsors. On impact, it was noticed
that new involvement of some key stakeholders among others affects stakeholder roles
and negotiated stakeholders’ interests. Since they are not part of the planning process,
their engagement becomes difficult, always insisting on their interest.
4.3 Procurement approach
All the six interviewees suggested that the traditional procurement approach is a CBF.
These are because when projects are designed and managed without external
involvement, it is easier to identify all stakeholders, agree on funding, address all
interests and agree on project targets readily suggested one interviewee. Interviewees
were of the opinion that the traditional approach to project development results in
different stakeholders involved at various stages hence the difficulty in managing them.
One project manager asked, “Don’t you realize that ‘design and build’ and ‘partnering’
has few stakeholder problems? This is because there can be several stakeholders but
having worked together enhances project communication. On impact, late scope
changes, identification of stakeholders and having several stakeholders working
together for the first time militates against effective SM. It requires entirely new process
and SM plan for every project. One quantity surveyor mentioned that… “There are
stakeholders you will never want to work with but meet them on a project because you
don’t have a choice in their selection”. Some stakeholders may not be identified at the
initial stages while the procurement approach dictates project responsibilities and
communication channels.
4.4 Political influence
Four interviewees mentioned political influence as a critical barrier factor CBF.
Respondents agreed that public infrastructure projects are a measure of political
achievement hence key stakeholders of most projects are politicians than a public
servant. District Secretaries, Coordinating Directors, Members of Parliament and
Assembly Members are stakeholders who can be antagonistic or proponents. Another
asked, “How many projects stakeholders are found actively involved in a project after
election year”? Interviewees agreed that the most difficult stakeholders’ are the
politicians on a project whose interest will have to be satisfied at all cost. A project
manager interviewed mentioned that there is also a frequent change of representatives
with some merely dormant, unclear and uninterested in the project. On impact, an
architect interviewed said that some stakeholders may not be qualified such as
contractors and suppliers but may be forced to manage them, in addition, the difficulty
in determining scope and duration. One of the quantity surveyors mentioned that
political stakeholders can misinform others and increase support base to rally against
project decisions and other stakeholders’ interest. “The project can even be run by the
politicians” was the answer from another interviewee.
4.5 Project set targets of cost, scope and quality changes
Three interviewees mentioned project cost increase, scope and quality changes each as
affecting stakeholder management. The respondents agreed that changes in these set
targets frequently lead to increased duration which leads to changes in end users, and
client representatives. One architect interviewed stated that some projects might have
consultants even changed after long delays. Change in stakeholders leads to change in
interest, roles and stakeholder attitude on the project. Though they militate against SM,
their impact may be indirect.
4.6 Project delays
Five interviewees stated that project delays were a major CBF for stakeholder
management. An interviewee mentioned that project delays were always associated with
changes in scope and stakeholder representatives especially from the community and
client organization. Different stakeholders always have different interest and level of
impacts on project outcome. This requires a new approach to stakeholders monitoring.
On impact, a quantity surveyor interviewed mentioned that it leads to strained
relationship and misunderstandings when project cost increases due to variation and
scope changes.
4.7 Stakeholder Management (SM) process
Three interviewees mainly the two quantity surveyors mentioned that stakeholder
identification, engagement are critical barriers to the entire SM process. The architects
interviewed were of a different opinion. One architect responded that “if the whole
project planning and development is properly done then the SM process is smooth”. The
project managers agreed that stakeholder identification, analysis and monitoring could
be critical barriers. However, they were also of the opinion that depending on the
procurement approach, stakeholder management process can be very smooth. A PM
further asked ‘Why are these shopping mall projects running smoothly’? Is it not as a
result of partnering, design and build? Interviewees, however, agreed that inadequate
stakeholder identification, engagement and analysis affects SM process by having to
reconsider and negotiating interest, roles and responsibilities.
5. Conclusion
This study sought to identify critical barrier factors affecting stakeholder management
SM process in developing countries, evaluate their impact on SM process as part of a
broader study aimed at developing SM framework for construction projects in
developing countries. Ten new factors were identified through literature review as
possible critical barrier factors and evaluated by interviewing six experienced key
stakeholders: architectural, quantity surveying and construction management
background but are project managers. These project managers unfamiliarity with
stakeholder management, poor project planning and control, procurement approach
adopted and political influence. In addition project cost increase, scope changes and
quality project delays were found. Finally were project managers’ ability to conduct
stakeholder identification, engagement, analysis and monitoring. The study confirmed
that five of the factors as peculiar to developing countries. These are (1) project
managers’ unfamiliarity with SM process (2) procurement approach adopted, (3)
political influence on projects (4) project delays and (5) poor project planning and
development. Though the other factors can be considered as barrier factors, they are not
critical to stakeholder management only in development countries.
The study revealed that the absence of formal stakeholder management process is as a
result of the unfamiliarity of the process by many project managers. The procurement
approach determines the type of contract the project owner will have with stakeholders
and the stage they are involved in the project. Poor project planning and development
contributes to project delays and scope changes. Consequently, project stakeholders
vary during the project implementation stage changing the stakeholder interest. Political
influence impacts on project targets, planning and stakeholders involved. Stakeholders’
allegiance is to political leaders rather than achievement of project goals. This paper
contributes to the body of knowledge in the built environment by identifying critical
barrier factors that impacts on construction stakeholder management in developing
countries.
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