Governance and Stakeholder Management

Governance and Stakeholder Management

Question 1: Governance Problems And Solutions

Insufficient scoping and planning

Lack of proper planning for projects results in different expectations among the stakeholders. There is a possibility that the project planners may not have the whole picture of what to expect for large projects. The client may have a vision, but they may not have a proper way of putting forward their expectations and assume that the project developers know what they expect (“Yahoo is now a part of Oath,” 2018). In other cases, the clients may have a vision of their project, but there are other better ideas for implementing the project. This means that, in the end, the client will not be satisfied with the project results, resulting in confusion. For instance, the objectives of Perth Arena were not clearly defined (Western Australian Auditor General’s Report – The Planning and Management of Perth Arena, 2010). The auditor general report suggested that this lack of clear planning could result in unacceptable outcomes.

Solution. The solution to the problem of insufficient planning is to have a clearly defined plan before commencing any large project. Such a plan ensures that the client and the project developers come to a consensus on what is to be achieved at the end of the project. It also gives a chance to the stakeholders to pursue alternative ideas of what to come up with. The stakeholders will know what to expect in the end and will, therefore, be satisfied with the project’s outcomes. Do you need help with your assignment ?

Lack of Accountability

As seen in the Auditor General’s report of the Perth Arena, the project would cost $483 million as opposed to the initial budget of &160 million. The difference in the expected expenditure was more than three times the budget (“Venues For Hire In Perth | VenuesWest”, 2018). Most government projects lack clear accountability and records of how the allocated money was used. This unaccountability has resulted in these projects costing more than their actual value (“Perth Arena”, 2018). Some of the finances allocated to these projects are directed to personal use by either government officials or other people in charge of the project.

Solution. All major projects should be subjected to external scrutiny so that the responsible persons can account for the finances allocated. Monitoring will ensure that the finances are used to complete the project and not for the personal benefit of the project developers and government officials in charge (Clarke, 2018). The people responsible should provide periodical reports to the stakeholders explaining how far the project has gone, how the allocated funds have been used, and how much more is required. This will result in transparency in the government projects.

Question 2a: Stakeholder Circle

The stakeholder circle ensures that all the stakeholders are informed of the project’s progress. This tool guides the project manager to identify, prioritize, visualize, engage, and monitor the stakeholders (“What comes after those ellipses?”, 2018). The five stages of the stakeholder circle have been described in detail below about the Perth Arena project.

Stakeholders

The stakeholders are all the individuals or groups who influence a project’s progress or are affected by a project (Bourne & Walker, 2005). In the Perth Arena project, the stakeholders are as listed below:

The Building Contractor

The contract for building Perth Arena was allocated to BGC Construction. This is part of a group of companies known as the BGC (Australia) Pty.

The Client-Agency

The client-agency for the Perth Arena is the WA Sports Centre Trust, which is responsible for operating the Arena.

Procurement Agency

VenuesWest is the agency responsible for the procurement process to engage the arena operator.

Government Agencies

The government sponsors the Arena, and therefore, there are government agencies responsible for overseeing the construction. These agencies are listed below:

• Department of Housing and Works (DHW) – This department was responsible for scoping, planning, tendering, and issuing contracts for the Arena.
• Office of Strategic Projects (OSP) – They took over the role played by DHW in 2007. They reported directly to the Ministry of Housing and Works.
• Department of Treasury and Finance (DTF) – they work with the OSP to ensure the success of all strategic projects.

Prioritize Stakeholders

This is aimed at assessing each stakeholder’s importance based on the ratings generated by the project team (Bourne & Walker, 2005). For the Perth Arena Project, the rating can be as done below:

The Sponsors – (Rating 4)

The project is government-sponsored; therefore, the government agencies will have the final say on how they want the project to run, what they expect as the final product, and whether they are satisfied with the outcome. All other stakeholders will be answerable to these agencies.

The Procurement Agency (Rating 3)

VenuesWest was the agency in charge of procurement and received all the funds from the sponsor. This means that the client and the contractor will present their budget to them, and they will decide what is viable and what is not. They are, however, answerable to the government.

The Client Agency (Rating 2)

WA Sports Centre Trust is responsible for the construction and issues instructions directly to the contractor. They have to advise the government on completing the Arena and the level of satisfaction.

The Contractor (Rating 1)

BGC Construction is the construction company entrusted with ensuring that the Arena is built to completion. They are answerable to all other stakeholders.

Visualize the Stakeholders

The visual circle shown below represents each stakeholder’s influence on the project. It is derived from the ratings above. The lowest-rated stakeholders are in the innermost circle in ascending order outwards (Bourne & Walker, 2005). The stakeholder in the outermost circle can change all the inner stakeholders (“Stakeholder Circle Methodology”, 2018). The power of the stakeholders increases outwards.

The government

The government is the project sponsor and, therefore, it can terminate the whole project. They can also initiate change in all other stakeholders in the inner circles. The government can issue the resources to make the project a success.

Procurement Agency

They receive the funding for the projects directly from the sponsor. They advise the government on how much is required to make the project successful. They also advise the client on what deals are viable. They decide on which deals to undertake and which deals not to under the direction of the government. They have the power to influence the budget of the client.

Client

They give instructions to the contractor on what they expect. They have the final say on whether they are satisfied with the project or not. They can influence changes in the contract of the project.

Contractor

They are responsible for the actual development process. They influence the final result of the project. They are answerable to all other stakeholders.

Question 2b: Key Stakeholders

Government

Interests

Improving the economy. The government is involved in development projects to improve the economy of the region in which the projects are located. For instance, for the Perth arena, people will converge in large numbers utilizing resources, improving the economy.

Enhancing social interaction. The government aims to enhance social interaction among the citizens who will be converging in the Arena. This will bring stability in the region, giving the government a humble time to execute their plans.

Influence

The government is responsible for funding the project and directly influences the final results. Their influence can be viewed in two dimensions. They can provide all the necessary resources to the project developers, making the project a success, or failing to provide resources, causing a failure.

Distance

The government is not close to the project. They have government agencies entitled to supervise the project’s progress on their behalf.

Contractor

Interests

Building a Brand. The project’s contractor aims to build a brand by completing the project. Completing such a big project will put their name on the map, and they can be trusted with such big projects in the future.

Making Profits. The contractors will aim to generate profits for their company through the construction. They will complete the project and see that they profit from their work.

Influence

The contractor has been trusted to ensure completion of the project. They can complete the project in the best possible ways to make it a success or do substandard work to make it a failure.

Distance

The contractors are directly involved in the day-to-day progress of the project. They are the closest to the project and directly impact the final results.

References

Bourne, L., & Walker, D. (2005). Visualising and mapping stakeholder influence. Management Decision, 43(5), 649-660. doi: 10.1108/00251740510597680

Clarke, T. (2018). Late, over cost: Auditor-General slams Perth Arena. Retrieved from http://www.watoday.com.au/wa-news/late-over-cost-auditorgeneral-slams-perth-arena-20100310-pykq.html

Perth Arena. (2018). Retrieved from http://en.wikipedia.org/wiki/Perth_Arena

Stakeholder Circle Methodology. (2018). Retrieved from http://www.stakeholdermapping.com/stakeholder-circle-methodology/

Venues For Hire In Perth | VenuesWest. (2018). Retrieved from http://www.venueswest.wa.gov.au/our-venues/

Western Australian Auditor General’s Report – The Planning and Management of Perth Arena (2010). Retrieved from https://audit.wa.gov.au/wp-content/uploads/2013/05/report2010_01.pdf

What comes after those ellipses?. (2018). Retrieved from http://www.businessdictionary.com/definition/stakeholder.html

Yahoo is now a part of Oath. (2018). Retrieved from http://au.news.yahoo.com/thewest/wa/a/5793007/new-arena-doubt-on-cost-timing/

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Governance and Stakeholder Management

Aim of the Assignment:

• Application of program management processes via a case study – Governance and Stakeholder Management

Western Australian Auditor General’s Report – The Planning and Management of Perth Arena:

• Source: https://audit.wa.gov.au/wp-content/uploads/2013/05/report2010_01.pdf

Additional support reading links as follows:

• http://www.venueswest.wa.gov.au/our-venues/
• http://en.wikipedia.org/wiki/Perth_Arena
• http://au.news.yahoo.com/thewest/wa/a/5793007/new-arena-doubt-on-cost-timing/
• http://www.watoday.com.au/wa-news/late-over-cost-auditorgeneral-slams-perth-arena-20100310-pykq.html

Governance and Stakeholder Management:

This assignment is based on answering questions in regard to the Case Study. In answering the assignment, make any necessary but reasonable assumptions.

1. Summarise the Governance problems and suggest solutions (30 marks)

2a. Using Borne and Walker’s article (see embedded object below), Draw a Stakeholder Circle to show the influence and power of all Stakeholders in this project. Remember to include a legend to clarify each stakeholder.

2b. Using your Stakeholder Circle, Identify TWO key stakeholders, analyse their interests, influence and distance, and suggest and justify how they should be managed (refer to embedded object at the end of this document).