Basic definitions

Stakeholder analysis
Stakeholder analysis is the identification of a project's key stakeholders,
an assessment of their interests, and the ways in which these interests affect
project riskiness and viability. It is linked to both institutional appraisal and
social analysis, and is aimed at combining such data in a single framework.
Stakeholder analysis contributes to project design through the logical framework,
and by helping to identify appropriate forms of stakeholder participation.

Stakeholders are persons, groups or institutions with interests in a project or

Primary stakeholders
Primary stakeholders are those ultimately affected, either positively (beneficiaries)
or negatively (for example, competitors).

Secondary stakeholders
Secondary stakeholders are the intermediaries in the aid delivery process. This
definition of stakeholders includes both winners and losers, and those involved
or excluded from decision-making processes.

Key stakeholders
Key stakeholders are those who can significantly influence, or are important to the
success of the project (according to the client's priority policy objectives and project

Complexity in organizations

Why stakeholder analysis?
Stakeholder analysis helps investors to assess a project environment, and to inform
their negotiating position in project talks. More specifically, doing a stakeholder
analysis can:
- draw out the interests of all stakeholders in relation to the project.
- identify conflicts of interests between stakeholders, which will influence a project's
riskiness before a investment is made.
- help to identify relations between stakeholders which an investor can be built upon,
and may enable "coalitions" of project sponsorship, ownership and cooperation.
- help to assess the appropriate type of participation by different stakeholders, at
successive stages of the project.

When should it be done?
Stakeholder analysis should always be done at the beginning of a project,
preferably before starting negotiations, even if it is a short list of stakeholders
and their interests. Such a list can be used to draw out the main assumptions
which are needed if a project is going to be viable, and some of the key risks.
Thus, stakeholder analysis will contribute to the eventual success of the negotiations.

After a project has reached the stage of implementation, it will be useful to do
a stakeholder analysis every couple of years, to ensure that the investor maintains
an up to date overview of all relevant stakeholders and their interests in the project.

What is special about China?
Chinese culture is usually referred to as collectivist or communitarian. Chinese
derive their individual and group identities from their social relations. Different
social relations therefore construct different identity perceptions. Internal stakeholders
in Chinese companies have tighter relationships with external ones, which makes a
stakeholder analysis in China even more imperative. See the Application section of
this site for more on the cultural background.