Task Environment (Stakeholders) of Project

The another types of environment found in project is task environment. The task environment of a project immediately surrounds the project. It is made up of stakeholders. Their interests are affected by the project. They affect the project activities. Projects can influence task environment. The elements of project's task environment are:

1. Client: A project is custom-made. It satisfies the needs of a client. The client specifies the project's terms of reference. The client greatly influences the project. The project should be focused on client needs and requirement.
2. Contractors: A project involves high level of contracting and subcontracting. The greater the complexity, the greater the level of contracting. Turnkey projects are getting important. The contractors influence project progress. Almost 80% of project work is contract based.
3. Consultants: The project consists of an array of consultants from inception to completion. They exert important influences on project activities in all phases of the project life cycle.
4. Suppliers: Projects depend on suppliers for procurement of equipment, materials, services and labor. They affect efficiency, quality and schedule of project through delivery timings. Projects should build good relations with suppliers.
5. Government: the policies, attitudes and facilities by government help or constrain projects. Projects should comply with government regulations and directives. They should be environment-friendly.
6. Financiers: The financiers of the project can be owners, shareholders, organizations or donors. They affect fund mobilization for the project.
7. Competitors: Competition is everywhere. The competition for projects is intense.Work can be done almost anywhere. Competitors actions affect the project.
8. Labor Unions: Unionization is increasing in projects. Labor relations need to be effectively managed by projects. Industrial disputes leading to strikes can adversely affect project progress.

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• Internal Environment of Project

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Internal Environment in Project

Internal environment is located within the project. It is controllable by the project. It provides strength and weakness to the project. The forces in the internal environment consist of:

1. Project Objectives: Objectives are the desired outcomes or end results of the project. Project activities must be conducted within project objectives. A project must focus on objectives. It ceases to exist when the objectives are achieved.
2. Constraints: A project operates within the constraints of cost, time and quality performance. They delineate the scope and boundaries of the project.
3. Structure: A project is a temporary organization. Its structure generally cuts across organizational and departmental lines. It usually has its own management consisting of a project team headed by a project manager. Team members come from various disciplines with varied experiences. Projects must functions within the boundary of their structure.
4. Resources: A project consists of human and non-human resources. It usually has its own budget. Resource availability sets a limit on project activities.

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Social Environment of Project

Social Environment is refers to all the social surroundings that influence project. It consists of factors related to human relationships.

Projects operate within the society. They satisfy societal needs. Social factors influence the practices and activities of projects.

Important factors in the social environment consist of demographics, social institutions, pressure groups and social change.

Factors in Social Environment of Project

Factors in Social Environment of Project
i) Demographics: Demography is concerned with human population and its distribution. Demographic forces that affect labor availability in projects are:

• Size, distribution and growth of population in project area. 
• Age mix of population
• Migration of population
• Foreign employment policies.

ii) Social Institutions: They consist of reference groups and social class:

• Reference Groups: They consist of groups that have a direct or indirect influence on the attitudes and behavior of ties or professionally successful people. 
• Social Class: It is the rank within a society determined by its members. It can be classified into upper, middle and lower. Members of a class share similar values, interests and behavior. Project activities are influenced by classes in the society. Projects need to tailor their activities to meet the needs of specific social classes.

iii) Pressure Groups: They are special interest groups. They use the political process to advance their position on an issues of social concern. They pressurize and lobby government and projects to protect their interests through change in laws, policies and practices.

Pressure groups can be related to consumerism, environment protection, human rights, women rights, good governance etc.

iv) Social Change: Change is making things different. Social change implies modification in relationships and behavior patterns in a society. Life style and social values promote social change.

Life style is a person's pattern of living reflected in his activities, interests and opinions. It affects product choice.

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Project Analysis : Feasibility Analysis

Feasibility Analysis

Feasibility analysis is the process of determining the ability to implement the proposed project. It is needed to take the final decision whether the proposed project is appropriate to commit (invest) resources or not. It examines the viability of the project through detail investigation. For this purpose, it requires a multi-disciplinary team consisting technician, economist, environmentalist, managerial experts, sociologist, financial analyst who examine the proposed project from different angles like technical, environmental, managerial, marketing, economics, financial etc.

Since feasibility analysis is a series of studies and investigations to examine the project and its capacity to meets the objectives, the project is undertaken to implement if the analysis gives green signal of project success.

Technical Analysis

It is considered as main foundation of feasibility analysis. If technology is sound, project objectives can be achieved within constraint. So in this analysis, technical viability of the proposed project is studied where feasibility of meeting, technical solutions are addressed, availability of alternative technical solution are examined, viability of project design is investigated, legal provision and technical collaboration requirements are analyzed. It covers the following studies:

• Choice of technology.
• Design requirements.
• Human resource requirement.
• Size, location and geology.
• Technical risk.
• Legal provision related to technical collaboration.

Marketing Analysis

It refers to the study of marketing capability of the proposed project in terms of ability to satisfy the customer requirements. Various aspects relating to market are studied and analyze in this section which focus on:

Production capacity of the project. Aggregate demand of customer. Consumption trend. Distribution channel. Level of competition. Sales forecasting and estimated revenue. Availability of required raw materials. Quality standard. Cost and price structure. Marketing policy and strategies.

Environmental Analysis

It is conducted to ascertain the impact of the project on environment and capacity of the environment to support the project. It means it examines both the positive and negative impacts of the project. It focuses on the following area to know the feasibility of the proposed project.

Environmental Suitability:

• Capacity of environment to support the project.
• Resource management aspect.
• Environment impact assessment (guidelines issued by government)

Environmental Impacts:

• It examines the positive and negative impact of the project on the environment.
• It focuses on the impact of the project on flora-fauna, quality of air and water, scenic beauty, society, noise pollution, soil erosion, resource depletion.

Economic and Financial Analysis

Economic Analysis assesses the economic viability of the proposed project. Cost-benefit analysis is used to find out the net contribution of the project to the society and the economy. The assessment of the net contribution of the project is prime analysis in the economic analysis. It is used in private as well as in public project differently.

For a private project, cost-benefit analysis is applied to assess commercial profitability. For a public project, the analysis is use to assess the social profitability in terms of contribution to national economy by achieving the goals of poverty.

Financial analysis is conducted to measure the financial sustainability of the project. It studies the adequacy of needed fund and proper settlement of the fund. Generally the techniques of capital budgeting are used in these analysis. However the areas of focus in this analysis are:

• Total capital requirement
• Source of fund
• Projected cash flow
• Accounting and reporting system
• Projected profitability
• Break Even Point (BEP)

Managerial Analysis

Managerial Analysis is done to examine the managerial or institutional viability of the project. It studies the adequacy of the management system to direct and control the project, political and legal acceptability of the project. The area of the focus in these analysis are as follows:

i) Form of the project Organization:

• Appropriateness of the organizational structure.
• Relationship of authority and responsibility.
• Communication system.
• Flexibility.

ii) Personnel:

• Personal availability and their experience, qualification.
• Job description.
• Need of training.

iii) External linkage/ Institutional Relationship:

• Relationship with stakeholders.
• Relationship with functional department.
• Relationship with regulatory agencies.

iv) Implementation Plan:

• Required cost and resources.
• Estimated time schedules.
• Quality standard.
• Use of planning and controlling techniques.

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