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What Is a Project Stakeholder?

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  • Written By: Mary McMahon
  • Edited By: Nancy Fann-Im
  • Last Modified Date: 05 December 2016
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A project stakeholder is a party with an interest, financial or otherwise, in the development and outcome of a project. This includes company owners, end users, members of the development team, and investors. The project manager must balance the needs of the various stakeholders while controlling the development and production, with the goal of satisfying as many stakeholders as possible without compromising the end quality of the project. This can be a delicate balancing act in some situations.

Stakeholders often have different approaches to a project. Company owners want a project that will generate profits, preferably with low development costs. Members of the development team usually want to put out the best project possible, with a focus on quality and features. Consumers and testers expect a completed project that will meet their needs and be flexible enough for use in the long term. Investors want to see a return on their investment and may have specific expectations about the amount of that return. Each project stakeholder must be considered when making decisions.

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The project stakeholders exert various degrees of influence. Investors and company officials may have the power to shut down a project or radically change the scope if they are not satisfied, while testers and consumers have input at the level of requesting features and making comments. Their influence can be significant in the long term, as feedback from focus groups and testers shapes the design and determines who will buy the project in the end. Members of the project team can determine how quickly the project progresses and what happens in the development stages.

Each project stakeholder may have a level of direct involvement as well. The developers are most involved, as they work on the project on a day-to-day basis and shape the features. Management may take a remote approach, allowing the project manager a high degree of control, or executives could be closely involved. An investor acting as a project stakeholder is often held at a distance to reduce conflicts, but may expect periodic reports and provide feedback, such as threatening to withdraw funding if she doesn't like the direction of the project development.

The level of personal interest can also vary with each project stakeholder. For members of the development team, their careers may be on the line, especially with a major project. Investors may have substantial funds tied up in the project, or only a small amount. In a small company, major projects can eat up significant resources, making them a critical part of the company's operations, while big companies may have relatively small project groups that won't make or break the company with their activities. For end consumers, a project could be very important; patients waiting for artificial kidneys, for example, have a high level of interest.

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