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Stakeholder analysis refers to a range of tools for the identification and description of stakeholders on the basis of their attributes, interrelationships, and interests related to a given issue, olrganisation or resource. The term transcends several fields of study, including business management, public relations, international relations, policy development, participatory research etc.

To clarify the meaning of the term, it is useful to ask why stakeholder analysis is used. There are several reasons for carrying out stakeholder analysis (Grimble and Wellard 1996; Engel 1997; Röling and Wagemakers 1998):

• Empirically to discover existing patterns of interaction;
• Analytically to improve interventions;
• As a management tool in policy-making; and
• As a tool to predict conflict.

This definition is useful in that it defines stakeholder analysis as a natural resource management approach and acknowledges its limits — it cannot be expected to solve all problems or guarantee representation (Grimble and Wellard 1996).

Grimble and Wellard (1996) underline the usefulness of stakeholder analysis in understanding complexity and compatibility problems between objectives and stakeholders. Likewise, Freeman and Gilbert (1987) propose the concept of “stakeholder management” as a framework to help managers understand the turbulent and complex business environment. Hence the term “stakeholder” is often associated with corporate management. A central assumption in Freeman’s writing is the manager’s ability to manage stakeholder relationships.

A thorough description of stakeholder analysis as a qualitative method in organizational research is provided by Burgoyne (1994). Grimble and Wellard (1996) trace several other origins of stakeholder analysis, including political economy, namely through the notion of how to combine numerous individual preferences by applying cost–benefit analyses.

Stakeholder analysis is also derived from participatory methods that seek to integrate the interests and perspectives of disadvantaged and less powerful groups (Pretty et al. 1995; Chambers 1997). The questions of who is a stakeholder and under what circumstances the opinions or knowledge of stakeholders count are common to both participatory research and business literature.

Stakeholder analysis is also a central theme in conflict management and dispute resolution and has important roots in the social actor perspective in the sociology of development (Long 1992).

Stakeholder analysis seeks to differentiate and study stakeholders on the basis of their attributes and the criteria of the analyst or convenor appropriate to the specific situation. These may include:

• The relative power and interest of each stakeholder (Freeman 1984);
• The importance and influence they have (Grimble and Wellard 1996);
• The networks and coalitions to which they belong (Freeman and Gilbert 1987).

The Clarity Concept follows Grimble and Wellard 'Importance Influence' Model and identifies networks of coalitions.

For example, in conflict assessment, four types of stakeholders are expected: those with claims to legal protection, those with political clout, those with power to block negotiated agreements, and those with moral claims to public sympathy (Susskind and Cruikshank 1987).

It follows then, that in the natural resource management literature we find a range of terms such as

• Primary, secondary, and key stakeholders (ODA 1995);
• Internal or external to the organization (Gass et al. 1997);
• Stakeholders, clients, beneficiaries; and

Grimble et al. (1995, p. 7) list a flexible set of steps for conducting stakeholder analysis:

Identify the main purpose of the analysis;

• Develop an understanding of the system and decision-makers in the system ( the Clarity Concept recommends Focus Groups with wide as well as broad knowledge about the organisation or issue. ;
• Identify principal stakeholders;
• Investigate stakeholder interests, characteristics, and circumstances;
• Identify patterns and contexts of interaction between stakeholders; and
• Define options for management (which falls outside the Clarity Concept and is a management process using the insights gained).

References

Freeman, R.E. 1984. Strategic management: a stakeholder approach. Pitman, Boston, MA, USA.

Freeman, R.; Gilbert, D., Jr 1987. Managing stakeholder relations. In Prakash, S.; Falbe, C., ed., Business and society: dimensions of conflict and cooperation. Lexington Books, Toronto, Canada. pp. 397–422.

Gass, G.; Biggs, S.; Kelly, A. 1997. Stakeholders, science and decision making for poverty-focused rural mechanization research and development. World Development, 25(1), 115–126.

Grimble, R.; Wellard, K. 1996. Stakeholder methodologies in natural resource management: a review of principles, contexts, experiences and opportunities. Paper presented at the ODA NRSP Socioeconomic Methodologies Workshop, 29–30 Apr, 1996, London, UK.

Engel, P. 1997. The social organization of innovation: a focus on stakeholder interaction. Royal Tropical Institute, Amsterdam, Netherlands.

Röling, N.; Wagemakers, M., ed. 1998. Facilitating sustainable agriculture: participatory learning and adaptive management in times of environmental uncertainty. Cambridge University Press, Cambridge, UK.

Grimble, R.; Chan, M.K. 1995. Stakeholder analysis for natural resource management in developing countries. Natural Resources Forum, 19(2), 113–124.

ODA (Overseas Development Administration). 1995. Guidance note on how to do stakeholder analysis of aid projects and programmes. ODA, London, UK.