A Presentation to the Construction Industry in the cities of Bangalore, Bombay, Calcutta, Madras and New Delhi on behalf of the Consultancy Development Centre, New Delhi, India - January 1990

Table of Contents | Introduction | Understanding | Environment
Education | Summary | Appendix A | Appendix  B | Appendix C

The Environment External to the Project

Events external to the project often come as a surprise to the project team and are therefore seen as obstacles to progress. However, projects generally exist only because of that external environment. Hence, it is most important for the project team to recognize that they must be responsive to it.

3.1 The Project Manager's External Responsibility

The project manager's job is not confined to controlling events within his or her own project organization. Equally important - often more so to achieve a successful project outcome - is the need to track the project's linkages to the external environment. This is particularly true of "infra-structure" projects which place emphasis on "development" and innovation and must respond to increasingly rapid change.

It is not sufficient to think of project management as simply the monitoring of time and cost by planning, scheduling and resource leveling, as many software programs might have us believe. Nor even is it sufficient to include the many other organizational tasks of the project manager, as leader of the project team. Vitally important as all these things are, these are not sufficient for effective and successful project management in today's dynamic world.

The reason is because every development project exists for a purpose relating to, and within, its surrounding environment. It is convenient to refer to this environment as the project's external environment, as distinct from the project's internal organizational environment.

3.2 The External Environment

What is this project external environment ? It includes the established and latest state-of-the-art technology in which the project is based, its customers and competitors, its geographical, climatic, social, economic and political settings, in fact, virtually everything that can impact its success. These factors can effect the planning, organizing, staffing and directing which constitute the project manager's main responsibilities.

This external environment represents a complex set of inter- dependent relationships, which constantly react with the project as it is brought into reality. Conversely, most projects are intended to impact the environment in one way or another, and this is particularly true of infrastructure projects. Therefore, for the project to be ultimately successful, these inter- dependencies must be taken into account.

Even more important, the factors noted above have a habit of changing during the life of the project, especially if the project takes a number of years to complete, and is brought on- stream in phases. This constitutes a high degree of uncertainty or risk involved with the project, as a result of its external environment. In fact, the greater the degree of interdependence, the greater the degree of uncertainty, and the greater the challenge for the project manager and his team.

Clearly, the environment will not be the same for every project. In fact, it is likely to be determined principally by three considerations, namely:

  • The product or service resulting from the project
  • The technology and the manner of its application, and
  • Its physical location

Thus, to identify potential difficulties, assess their probability of occurrence, and to try to solve them in advance, the project team must learn to interact frequently with those individuals and institutions which constitute the most important elements of the project's external environment. Together with the project's sponsors, owners and users, these people constitute the project's direct and indirect stakeholders.

3.3 The Project Stakeholders

ŠOne technique for dealing effectively with this situation is to prioritize the required stakeholder linkages by conducting a stakeholder analysis. Such an analysis would be designed first to identify all the potential stakeholders who might have an impact on the project, and then to determine their relative ability to influence it.

Potential stakeholders may be thought of in the following categories:

  • those who are directly related, i.e. suppliers of inputs, consumers of outputs, and regulators of the process
  • those who have influence over the physical, infra- structural, technological, commercial/financial/ socioeconomic, or political/legal conditions
  • those who are hierarchical such as government authorities at local, regional and national levels, and
  • those individuals, groups and associations, who have vested interests, sometimes quite unrelated to the project, but who see it as an opportunity to pursue their own ends.

3.4 Stakeholder Categories

Having identified the various stakeholders, each may be assigned to a category according to their relative ability to influence the project. There are three categories, namely:

  • Those who are controllable
  • Those who are influenceable, and
  • Those who need to be appreciated

Within each category, each stakeholder may then be further rated by degree of importance according to their ability to influence the project. Members of the project team can then prioritize their efforts accordingly, and maintain appropriate external linkages, to arrive at the best chances of ultimate project success.

Understanding and Running a Successful Project  Understanding and Running a Successful Project

Home | Issacons | PM Glossary | Papers & Books | Max's Musings
Guest Articles | Contact Info | Search My Site | Site Map | Top of Page