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Stakeholder Management

5 minutes 5 Questions

Stakeholder Management is another essential concept in Project Portfolio Management. Stakeholders are individuals, groups, or organizations who may affect, be affected by, or perceive themselves to be affected by a decisions, activities, or outcomes of a project. Stakeholder management ensures that these stakeholders are adequately engaged in the project depending on their influence and potential impact. Good stakeholder management allows projects to avoid conflicts and misunderstandings that could put a halter to the project's development, thus ensuring smoother operations.

Guide on Stakeholder Management (CAPM - Project Portfolio Management)

Stakeholder Management is a crucial aspect in the field of Project Portfolio Management under the CAPM (Certified Associate in Project Management) framework. Using this guide, you will understand its importance, definition, working principles, and how to answer questions about it during an examination.

Importance: Stakeholder Management is essential for successful project execution as it helps in understanding and addressing the needs, concerns, and interests of all stakeholders involved. It also fosters a positive working environment by encouraging collaboration and constructive feedback, thus minimizing project risk and resistance.

What it is: Stakeholder Management is a process that involves identifying people, groups, or organizations that could impact or be impacted by a project, and implementing strategies to engage them effectively. It lies at the heart of strategic planning, ensuring that all project decisions are in line with stakeholders' expectations.

How it Works: Stakeholder Management is a multi-step process. Initially, it involves stakeholder identification, followed by understanding their needs and expectations through analysis. Subsequently, it incorporates the development of appropriate strategies and plans for effective communication and engagement of stakeholders. Finally, it includes continuous monitoring and management of stakeholder relationships.

How to Answer Stakeholder Management Questions in Exam: When answering Stakeholder Management questions in the exam, ensure to first understand the question thoroughly. Provide clear and concise responses, highlighting key stakeholder management practices such as identifying, analyzing, planning and monitoring stakeholder engagement. Use practical examples wherever possible to illustrate your answer.

Exam Tips: Answering Questions on Stakeholder Management

  • Relate the theoretical aspects with practical scenarios
  • Mention the specific techniques and tools used in stakeholder management
  • Understand the different stakeholder types and their impact in a project context
  • Highlight how effective stakeholder management can lead to project success

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CAPM - Project Portfolio Management Example Questions

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Question 1

A critical stakeholder constantly demands changes that affect the project scope. As project manager, what should be your approach?

Correct Answer: Discuss the changes, analyze their impact and use formal change control process.

The best approach is to 'Discuss the changes, analyze their impact and use formal change control process'. This is because changes are common in any project and should not be disregarded or implemented without proper assessment. 'Ignoring the stakeholder's demands' is not a viable approach, as stakeholder concerns need to be taken into consideration to ensure the project's success. However, these needs to be handled with a formal change control process. 'Implementing the changes without assessing their impact' can lead to unforeseen complications and potential project failure, as not every change is beneficial. 'Directly disagreeing with the stakeholder to prevent scope creep' also doesn't provide the flexibility required in most projects. It's the project manager's responsibility to balance stakeholder demands with the project's scope and objectives.

Question 2

During the execution phase, a stakeholder previously classified as having low interest shows increased interest and starts demanding regular updates. How should you manage this change?

Correct Answer: Reassess the stakeholder’s classification and update the stakeholder engagement plan.

The best course of action when a stakeholder shows increased interest and starts demanding regular updates is to 'Reassess the stakeholder's classification and update the stakeholder engagement plan'. This is because stakeholder classifications can change over the course of a project, and it is important for the project manager to constantly monitor and adjust based on these changes. Ignoring an interested stakeholder may lead to loss of their support or even resistance, and while it's important to inform higher management, this is not a mutually exclusive action and doesn't suffice to manage the stakeholder’s new demands. Simply providing all the requested information can lead to information overload and may not be what's best for the project or the stakeholder, especially if the demands go beyond what’s manageable. The stakeholder engagement plan should be updated to manage the new level of interest.

Question 3

During the project execution phase, the project manager realizes that a key stakeholder has not been actively engaged in project communications. As a result, there is a risk that the stakeholder's expectations may not be met. What is the best course of action to address this issue?

Correct Answer: Initiate direct communication with the stakeholder to understand their expectations and clarify the project status.

The best course of action is to initiate direct communication with the stakeholder to understand their expectations and clarify the project status. This approach allows the project manager to address the issue at its source and ensure that the stakeholder's needs are met. Scheduling a meeting with the entire project team may not be the most efficient solution, as it involves individuals who may not be directly relevant to the specific stakeholder's concerns. Sending an email update to all stakeholders may not effectively address the unengaged stakeholder's specific expectations and could potentially be overlooked. Assigning a team member to act as a liaison is not as effective as the project manager directly communicating with the stakeholder, as it may lead to miscommunication or delays in addressing the stakeholder's needs.

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