One concern within the existing stakeholder analysis research is the concentration of roles or interests of groups collectively or individually. According to Wolfe and Putler (2002), not all stakeholder group members have identical interests. Each of the members possesses their own self-interests. In relation to this, Freeman (1984) identifies that stakeholder analysis has to overlook the specific-generic differentiation of stakeholder interest. He added that there are possibilities of heterogeneity of interest with the stakeholder group which needs to be uncovered and managed.
Another critical yet undermined question of stakeholder is: who and what can be considered as stakeholder? What form can a stakeholder take (Starik, 1994)? There is a divergence of ideas relating to this basic question. There are scholars that limit stakeholders to living human beings (e.g. Donaldson and Preston, 1995) and there are scholars who would consider non-human physical entities (Bucholz, 1993; Stead and Stead, 1992; Starik, 1993 cited in Starik, 1994). There are also those who accept mental images, without physical forms through the organisational mind (Mitroff, 1983). Approaching stakeholders with the notion of „affect or is affected‟ Starik (1994) suggested that a natural environment should be considered as a stakeholder. He added that consideration needs to be given towards the subjective and value oriented nature of
stakeholders. With a non-human, natural environment and mental images in consideration, the concern over the representation, proxy and embodiment arises. 2.3.5 Stakeholder and information systems (IS) research
A review of IS literature on the application of the stakeholder concept indicates an encouraging result. Analysis of a major database on the use of the term stakeholder within abstract, keywords and subjects for top ten IS research journals from 1993 to 2010 (July) resulted in 109 hits. In general, over these 18 years, the number of articles that employ the use of the term stakeholder fluctuates, but in a positive trend it reaches its peak in 2005 with 15 articles. Unfortunately, of these 109 articles only seven IS research articles cited at least one stakeholder related article. The others only applied or used the term stakeholder liberally (Coakes and Elliman, 1999) to identify groups or individuals involved in the IS project. This analysis shows the positive trend of IS related articles that consider the notion of stakeholders. As mentioned earlier, the socio- technical aspect of IS is causing project complexities and needs to be explored in detail; this increasing trend reflects such needs.
Within IS research, stakeholder analysis is defined as a tool, a technique 1) to examine, 2) to identify and understand, 3) to identify and record, 4) to determine a) external environment, b) inside and outside needs and expectations, c) perceptions, d) who is important (influences) for decision making purposes (Bailur, 2006; Pouloudi and Whitley, 1997; Freeman, 1984; Smith, 2000; Atkinson et al., 2001). Collectively, stakeholder analysis can be summarised as an approach that can serve to identify and understand the internal and external environment of an IS project or a system artefact in order to ensure sound planning and decision making are achieved.
2.3.5.1 Why IS needs a detailed stakeholder analysis
Similar to the management approach, stakeholder analysis in IS consists of three major phases, which are stakeholder identification, classification and management.
Pouloudi and Whitley (1997) have come up with four stakeholder identification principles to assist in this process. These principles were derived to satisfy the concern over prior stakeholder identification approach (e.g Freeman (1984) stakeholder list and
map). This is in agreement with Lyytinen and Hirschheim‟s (1987) concern over the “too coarse” and “inadequate” classification of a stakeholder.
Lyytinen and Hirschheim (1987) and Lyytinen (1988) have also developed stakeholder criteria to assist in the identification of the stakeholder, which is somewhat different from Pouloudi and Whitley‟s (1994) approach but possesses a certain degree of relationship. While Pouloudi and Whitley (1997) are looking at stakeholders in a context-specific manner, Lyytinen and Hirshheim (1987) and Lyytinen (1988) are looking at it in the IS context, which is more general. Lyytinen (1988) adds a new criterion that involves not only considering internal but also external groups of stakeholders, who also possess their own expectations towards IS, similar to Pouloudi and Whitley‟s. Based on their earlier stakeholder criteria, Lyytinen (1988) has also drawn a comparison between the traditional and the current approach of stakeholder identification. This is in addition to the original four dimensions of stakeholders identified by Lyytinen and Hirschheim (1987).
Firstly, according to Pouloudi and Whitley, the stakeholder must be identified in a specific context within a time frame. Different things carry different meanings in different time frames. The notion of context specificity or the environment has also been addressed in organisational theory and inter-organisational literatures (Pouloudi and Whitley, 1997).
Secondly, each stakeholder cannot be viewed in isolation. Each stakeholder interacts with other stakeholders through co-operation, competition, „coalition‟ or „conflict.‟ These complex interrelations within and between stakeholders groups are an interesting occurrence in stakeholder analysis (Pouloudi and Whitley, 1997). The concept of interaction and interrelation between and within stakeholder groups identified by Pouloudi and Whitley resembles Lyytinen‟s stakeholder identification through the level of stakeholder‟s aggregation. While previous research identifies stakeholders into general groups, further identification of stakeholder within each group is required to ensure each of their interests and expectations are taken into consideration, since within
each group there are members that have different expectations and interests in the IS that need to be resolved to avoid conflicts.
This is in relation to Pouloudi and Whitley‟s (1997) next dimension. Each stakeholder has different interests or expectations towards a project outcome and they will take action in order to achieve these expectations. Since these stakeholders possess different levels of power and influence on the project, their wishes may not be realised. As a result, they need to adapt within the available contexts. There are other reasons for these unattainable wishes which include having an unrealistic vision or lack of resources (technology or human) (Pouloudi and Whitley, 1997).
The next dimension reflects the dynamics of the stakeholders during the IS project, where the position of the stakeholder may change over time (Pouloudi and Whitley, 1997). As discussed above, each stakeholder is being identified according to specific contexts and these contexts change diachronically. The dynamic nature of these contexts will also affect each of the stakeholder‟s structure and position. According to Pouloudi and Whitley, these stakeholders may at any point in time participate in multiple categories, or changes in the context may result in conflicting stakeholder group objectives and priorities (1997), and vice versa. It is thus agreed that the position of the stakeholder changes over time in order to adapt to changes in its environment context.
On the other hand, Lyytinen and Hirshheim (1987) and Lyytinen (1988) suggested a more fundamental dimension. The first is the nature or the view of the IS. According to them, IS should be viewed from a more symbolic, communicative and organisational dimension rather than as a static technological artefact. Second is the type of relationship between the stakeholders to the IS. In other words, who are the owners of the IS? It was the producer or the developer who was actually involved in the IS before being identified as a stakeholder. With more user involvement in IS development and the greater impact of IS towards the organisation, more claimants are being considered as stakeholders. This is in relation to the next dimension, where, according to Lyytinen (1988), the depth of impact towards the IS project needs to be considered. The
identification of direct or immediate impacts posed by the developers or the users towards the project are critical, but as discussed earlier, other stakeholders who also have expectations towards the IS are indirectly impacted, such as the government and sponsors.
In all, these stakeholders are identified within a complex environment and sub- environment (Lyytinen, 1988). Davison et al. (2003; 2006) also created categories which are similar to Lyytinen and Hirschheim (1987) and Lyytinen (1988) that include direct, indirect and interfacing stakeholders. Both of these principles and criteria are complementary and thus their combination (Lyytinen and Hirshheim, 1987; Lyytinen, 1988; Pouloudi and Whitley, 1997) will ensure a robust approach in stakeholder identification.
The next phase of the analysis is stakeholder classification. Within IS research, there are several approaches for classifying the identified stakeholders. Based on the articles that have been reviewed, adoption or the reference that was made to the stakeholder, salient (Mitchell et al., 1997) attributes were encouraging. This approach classifies the stakeholders based on their combination of the attributes which are, power, legitimacy and urgency. The application of this salient approach provides information on the stakeholder roles and insight into the stakeholder‟s possible actions (De Vries, 2003) during the IS process. Another approach to stakeholder classification was through the ranking (Pfeffer and Salancik, 1978 in Tan et al., 2005) of the identified stakeholders. These stakeholders were classified according to their impact and the extent to which it moderates its consequences (Tan et al., 2005). In the literature, Tan et al. (2005) have also referenced Clarkson‟s (1995) classification schemes that categorise identified stakeholders into primary and secondary stakeholders. The primacy of the stakeholders is based on the vitality and the influence of the roles that they play (Clarkson, 1995).
The third stage involves the management of the stakeholders. Planning for the efficient management of the stakeholders is only worth considering if the identification and classification stages are robust. We refrain from using the word „complete‟ due to the dynamic and iterative nature of stakeholders. The term „robust‟ encapsulates the
observation of stakeholder principles or criteria or a combination of both during identification and classification.
There are multiple aspects of a stakeholder‟s stake (Mitchell et al., 1997; Carroll, 1989; Reed, 1999). It includes interest, expectations, perceptions, needs, roles, behaviour, power, influence (Smith, 2000; Lyytinen, 1988b; Pouloudi, 1999; Freeman, 1984; Coakes and Elliman, 1999) that need to be managed. The success of satisfying the multiple interests of stakeholders constitutes the ultimate test of corporate performance (Donaldson and Preston, 1995) or in our case, the IS.
Above all, a critical understanding should be placed on the dynamics of different aspects of the environment. As pointed out by Lyytinen (1988) stakeholders act on a complex environment with their own sub-environment. Thus understanding towards the dynamics of the organisational processes surrounding the stakeholders, where interests are formed and realised, expectations shift and the formulation of commitments are vital (Lyytinen, 1988). The author adds that detailed analysis of environments are critical to clarify different outcomes within IS projects for a given stakeholder group (Lyytinen, 1988).
The dynamics of stakeholder groups are also important to consider. Understanding the group‟s formation, its objectives, norms and roles are complex but critical (Ruohonen, 1991). Consideration on objectives and interests should also be placed not only at, but also within the group that is in an individual member‟s interests and objectives. Another important aspect of group dynamics is the relationship between groups of stakeholders. Understanding how they interact and their communication and collaboration strategy are critical (Ruohonen, 1991). According to Hirt and Swanson (2001) the relationship or interaction between the internal and external groups, within and between group participants is crucial in determining management strategy.
Another major issue within stakeholder management is the dynamic nature of IS itself. Changes in the IS environment may create a ripple effect for stakeholders‟ expectations.
Stakeholders‟ expectations are evidently dynamic (Lyytinen, 1988). It is established through verbalisation and ongoing concern of the stakeholders (Kling and Scacchi, 1982). Failure to manage these expectations will create a gap between the expectations and actual IS performance (Lyytinen, 1988). Changes in the IS environment will shift individual stakeholders interests and expectations. They will create a conflict, competition or sense of opposition (Smith, 2000) between stakeholder group members, thus changing the composition, objectives, norms and roles.
Trends within stakeholder analysis on IS research also identified the aspect of stakeholder relationship conflicts and coalition of expectations and perception (Ruohonen, 1991; Newman and Sabherwal, 1996; Lyytinen and Hirschheim, 1987; Lacity and Hirschheim, 1995).