One thing is evident in business and project management's complex and interconnected world: stakeholders matter. Successful organizations understand that nurturing positive stakeholder relationships is not just a choice but a necessity. This article will explore the various stakeholder types and shed light on what can go wrong when these relationships are mismanaged. 

Understanding Stakeholder Types

We are not dogmatic in our thinking; the approach to stakeholder relationships depends upon the relationship and position of that stakeholder in the project and organization. To understand how to approach it, we define some categories of stakeholders.  

  • Internal Stakeholders: Individuals or groups within your organization are directly interested in the project's outcome. Examples include employees, managers, and shareholders. Internal stakeholders are vital to achieving organizational objectives. 

  • External Stakeholders: External stakeholders include parties outside your organization with a stake in the project. They can be customers, suppliers, regulatory bodies, or the local community. Their input and satisfaction often directly impact your organization's success. 
  • Primary Stakeholders: These individuals or groups are most closely linked to your project and have the greatest influence. They typically include customers, employees, and investors. 
  • Secondary Stakeholders: Secondary stakeholders may not be directly involved in your project but can still be affected by its outcomes. This category can encompass the media, competitors, or advocacy groups.
  • Latent Stakeholders: Latent stakeholders may not be immediately apparent but can become stakeholders under certain conditions. For example, government agencies may become stakeholders if your project faces regulatory scrutiny.











When Stakeholder Relationships are Mismanaged? 

Plenty of things can go wrong in the project, and one of those categories is the stakeholder relationships. From experience, mismanaged stakeholder relationships can be a significant source of failure, or at least unwanted disturbances, adding risk to our project. 

  • Communication Breakdown: Failing to establish effective communication channels with stakeholders can lead to misunderstandings and mistrust. This can result in crucial information being overlooked or misinterpreted. 
  • Loss of Support: Stakeholders may withdraw their support When they don't feel their needs and concerns are being addressed. This can hinder project progress and lead to hostile public relations. It is up to the project manager to rebuild this relationship. Loss of support can occur in multiple ways, including undermining the project's success. 
  • Scope Creep: Mismanagement of stakeholder relationships can lead to uncontrolled changes in project scope, which can strain resources and timelines. This often results from ambiguous or changing requirements from stakeholders. 
  • Reputation Damage: Poorly managed relationships with stakeholders, especially those in the media and advocacy groups, can lead to negative publicity and harm an organization's reputation. Damage control becomes essential, diverting resources from core project objectives. 
  • Legal and Regulatory Issues: Mismanaging relationships with regulatory authorities or external agencies can lead to legal complications, fines, or the halting of projects. It's crucial to understand and adhere to all applicable laws and regulations. 
  • Loss of Talent: When internal stakeholders, such as employees, feel undervalued or unheard, they may seek opportunities elsewhere. This can lead to a talent drain and increased recruitment costs. 
  • Missed Opportunities: Failing to identify or engage with potential stakeholders can mean missed collaboration, innovation, and growth opportunities. 

The Road to Successful Stakeholder Relationship Management

First, we need to say there is no silver bullet; that would be some dogmatic belief.  I am afraid we will have to think our way through these things. Not that this burden rests entirely on the project manager; our team members are part of the stakeholder entourage and will contribute to the solutions, albeit while often contributing to the troubles at times. 

  • Identify and Prioritize Stakeholders: Identify and prioritize all relevant stakeholders based on their influence and impact on your project or organization. 
  • Resolve Conflicts: Conflicts may arise among stakeholders. It's important to address conflicts constructively and find acceptable solutions for all parties involved. Mediation or negotiation may be required. 
  • Effective Communication: Establish open and transparent lines of communication, ensuring that all stakeholders are heard and informed.  It can be stressed enough how critical communication is with stakeholders. The project manager must hear, understand, and document each stakeholder's needs, expectations, and concerns. 
  • Tailor Communication: Customize your communication to suit the preferences and needs of different stakeholders. Some prefer detailed reports, while others prefer brief updates or face-to-face meetings. 
  • Communication Plan: Create a Communication Plan that includes all stakeholders. 
  • Document Everything: Keep records of all interactions and communications with stakeholders. This documentation will help in maintaining transparency and accountability. 
  • Consistency and Trust: Build and maintain trust through consistency and reliability. Ensure that your actions align with your words. 
  • Feedback and Evaluation: Seek feedback from stakeholders on how the relationship and project management can be improved. Use this feedback to refine your approach. 
  • Responsive Engagement: Active listening and responding to stakeholders' concerns and feedback. Show that you value their input and are committed to addressing their needs. 
  • Adaptability: Be prepared to adjust your strategies based on stakeholder feedback and changing circumstances. 


Successful organizations understand that effective stakeholder relationship management is the key to success. Managing requires an abundance of clear communication up and down the communications channels.

By recognizing the different stakeholder types and proactively addressing their needs and concerns, businesses can reduce the risks associated with mismanaged relationships and create a positive and supportive ecosystem for their projects and operations.