Stakeholder Management Strategies For KEF Gas Pty’s Fracking Project In Australia

Gathering tools

The stakeholders in this business of KEF Gas Pty are the owners of the company the employees, the community where the business is set up, the shareholders, the government and the customers. The stakeholders are the ones who are directly or indirectly involved in the business (Sierra?García, Zorio?Grima & García?Benau, 2015). All the stakeholders need to be engaged from the initiation till the end of the project.

Gathering tools

There are certain tools which have been used here to inform and engage the stakeholders. These include the radio announcements regarding the impact of the project, the T.V ads for the project briefing purpose, the surveys conducted to get the reviews of the stakeholders on the project and its impact. The internet, usage like emails and social media is used for stakeholder involvement and informing them regarding the proceedings of the project. There are pamphlets circulated throughout the community to create knowledge and awareness about the project and its subsequent impacts on the stakeholders.

Power/Interest Matrix 

Table 1: Stakeholder Management Strategies

Code	Stakeholder	Interest	Influence	Management strategy	Engagement strategy
G	Government	Low interest- they do not have any direct interest on the company	High influence- it is quite important for the firm to keep them satisfied	The government would be informed regarding the changes associated with the firm	Government would be engaged through rpodviing them with the detailed reports of taxation files and development procedures
S	Shareholders	High interest- major interests are associated with the company	High influence- shareholders acts as investors who take a vital part in the establishment and development of the firm	Shareholders would be managed by providing them regular progress reports	Shareholders would be informed regarding the progress of the firm along with setting of meetings and interactive sessions
E	Employees	High interest- employees have a high interest on the whereabouts of the firm	High influence- their influence is quite important as they add productivity of the company	Employees would be monitored, managed and trained	Employees should be engaged through meetings and setting of milestones
C	Community	Low interest- community has minimal interest on the processes of the frim	Low influence- the influence of the community is not much	The community would be managed through yearly issuance of reports	Community would be engaged through annual magazines and brochures
CT	Customers	High interest- the customers have high interest on the products of the company	Low influence- their influence is not as important. They are consulted for betterment	Customers would be managed by acknowledging their requirements	Customers would be engaged through interactive sessions

Task 2

There are many issues which need to be taken into account by the sponsors of the KEF-Gas Pty. Project. There are political matters, communication issues as well as environmental impacts of the project which need proper management.

Political Issues

As the government is also a stakeholder in this case, there are many political issues here like social cost of the project, the cost benefit analysis by the government to give the project its permission for proceeding, revenue in the form of tax earned from the project, etc.

Environmental Issues

The community members might feel that the project is affecting the environment adversely. Hence there arises environmental costs of managing the project and executing it in eco—friendly manner. The environmental hazard should not be caused otherwise the project will be sealed and banned (Percival, Schroeder, Miller & Leape, 2017).

Communication issues

The communication plays a very important role in any project. The major business communications with the stakeholders must be through written emails. The other communications can be through meetings, calls, seminars, etc. The communication with customers can be through advertisements and social pages (Mesároš & Mandi?ák, 2016).Within the organisation all the departments should have an effective manner of communication for better relationship building. The communication with the customers and the mass must be transparent so that they want to associate or support the organisation.

Executive Summary

This is a business outline for the client KEF Gas Pty which is engaged in drilling of natural gas. They are trying to establish themselves as a model company in developing shale gas. This gas could be used for generating electricity in a safer way and act as an alternative to coal. Throughout the course of this business outline, the background of the business and the fracking activity has been discussed. Furthermore, the financials, budget, milestones, risks and communication of the project have also been focused upon. The stakeholders of the company need to be managed so that they feel a part of the project and support it. An effective stakeholder management plan is also laid for this project. Finally some recommendations have been made which could make this project a success.

Power/Interest Matrix

Background

On fracking there had been a two-year moratorium which was lifted by the Northern Territory (NT) in the year 2018 during April. This facilitated the extraction of gas. The reserves which were available onshore were now unlocked for all the regions which had rich resources. This trend was followed by the adjoining regions as well. From the centre of Australia the NT expands for about 1.4 million sq km towards the north coastline.

The activity of hydraulic fracturing which is mostly known as fracking had been banned in the NT (Boudet, et.al, 2014). The reasons for stopping this fracking were that this activity had a bad impact on the environment due to the process of drilling which was involved. The government was greatly concerned about the environmental problems arising from fracking. But after the inquiry and investigation about the process was made, it was found that though there were risks from fracking yet they could be managed. The environment, economy and society are influenced by this fracking activity and the side effects of this can be handled through proper planning.

Client

Our client the KEF-Gas Pty. is an exploration company from Australia which is owned by an American company of Atlanta named KE Factors Inc. The company is mainly engaged in the process of extraction, exploration, discovering and recovery of the natural resources from the earth. The natural gas can be drilled and extracted by this company as per its license which gives it permission to carry out their activity all throughout Australia for two years. But they are very concerned about the environmental impact of their business activity and wan to minimize the adverse effects from it.

Finance

The company is involved in extraction of natural gas from the natural off shore oil reserves. For this activity they need to plan their finances and arrange for necessary funds so that they can carry forward their business. In the past the KEF-Gas Pty had a bad experience regarding their financials and funds, so now they want to plan their business well in advance. In the year 2016 during the month of June the company had gone bankrupt. However due to the effective management of debts and its immediate reduction the company could reorganise and get back to the normal path of business on 14^th October of the same year. They are now on the New York Stock Exchange again. Post this financial crisis the company is very conscious about the management of their finances.

Political Issues

They try to preserve the maximum capital as possible. The monitoring and controls over the financials is maintained very strongly by the KEF-Gas Pty. Now the business proposal is regarding the development of the company so that they can become a model company and extract and develop in Australia the shale gas. For this they need enough funds. The funds will not only be generated towards the extraction of gas but also towards preparing and implementing a proper safety plan so that the environment is least affected (Sovacool, 2014).There are various equipment and facilities which will be needed at the drilling sites. These include the shale gas pad, mobile offices and test drilling equipment, space for parking and operating required by vehicles, power supply, water supply, cement, steel, piping, maintenance cost, transportation cost, etc (Wang, Chen, Jha& Rogers,2014).

These requirements for the business can be met with the funds or the capital. The main source of funds is the revenue which is earned. As the business starts the revenue will be earned. However the initial start of the business will need a big investment. The capital invested in the beginning can come from bank loans and stakeholders’ investment. The capital will be used to set up the business and continue it further till it can bring goods returns.

The business in the infancy may not earn huge profits but the revenue should b enough to make up for the costs incurred in the activity of drilling. The main aim of the KEF Gas Pty is to make sure that they have a good financial planning so the expenses are kept under control. The development of shale gas in Australia would need investment that will come from personal investments, bank loans, floating of equities, etc. A well designed business financial plan can prevent any situation of bankruptcy arising.

Objectives

The objective of this business outline is to plan the business for our client KEF Gas Pty. The company aims at setting their business in Australia which will facilitate better development of the society. However the business is in its infancy stage and so it need proper business proposal to approach the investors, a plan to start the business and further execute it, paper documentations, etc. Therefore in this business outline the planning for the further business execution of the company is made in various stages.

The aim of the company, KEF Gas Pty is to be a model company. They want to be useful to the society and work with the people of the surrounding communities. They are also aware of the environmental impact of their business activity and want to take the best measures for making the extraction process harmless for the environment and society (Jackson, et.al, 2014). After the development of shale gas in Australia, the use of coal as a fuel can also be reduced. Electricity can be generated through shale gas in a much cleaner and safer way than generating it from coal.

Environmental Issues

Benefits

The business activity which the company KEF Gas Pty has planned is a very beneficial one for various reasons. The business will develop shale gas in Australia. The shale gas could be a substitute for coal in generation of electricity. This can make the process of electricity generation faster and at a low cost. Besides the generation of electricity, the company will be operating in Australia. This implies that the local Australian population would be employed for the jobs in various roles. This is also acting as a source of employment for the local people or community. As the objective of the company is not only profit making but also social development, they will take due care that their business activities do not affect the environment adversely. Therefore the business of KEF Gas Pty has multiple benefits like job creation, environmental protection and finding an alternate source of energy.

Stakeholder issues

The owners will be directly affected by the profit and loss of the organisation. This will impact the employees as their job security and remuneration will be dependent on profit which the business earns. Moreover the community will be affected by the development of the business and also the side effects of the business. The healthy development will have a positive effect on the society while environmental pollution will incur huge social costs. There are already many protests taking place against the business activity saying that it will create more damage to the environment. The company has to prove that the drilling of shale gas can be a safe and clean activity too (Caulton, et.al, 2014).

The profit and the growth of the business will affect the shareholders of the company. The government too will involve in this company’s business in two ways. The government will either earn higher taxes from the company or impose restrictions due to their negative environmental impacts. The customers are the stakeholders who will benefit if the end product is of any use of them (Blok, Hoffmans & Wubben, 2015). The shale gas can be used as a source of electricity generation which will be beneficial to the customers.

Stakeholder management plan

The stakeholders of KEF Gas Pty need to feel involved throughout the life cycle of the business plans. The interest of the stakeholders needs to be taken into account. The needs of the stakeholders must be taken into account while planning any project (Bourne, 2016). The impact of each project on the stakeholders needs to be considered beforehand so that after their implementation it does not result in any kind of dissatisfaction among the stakeholders. In case of any crisis the stakeholders need to be informed from the initial stage and not at the last minute (Sandman, 2017).

Communication issues

When there are regular meetings with stakeholders to discuss the growth, management and problems of the business organisation, the stakeholders feel a part of the organisation and also feel informed and important. Therefore they enable better management of the project and least effort is needed for further stakeholder management under crisis period. Throughout this life cycle of the project the stakeholders need to be engaged into the business(Andriof, Waddock, Husted & Rahman, 2017).

Key milestones

The key milestones refer to the particular points during the course of a project which need to be achieved (Wagner & Reeves, 2015). The different points are the starting date, the ending date, the review dates, the budget presentation date, etc. In this business the major milestones are the start of the project, the checks for budget, the evaluation of outcome and the end date. Milestones are not necessarily time bound but they are of course the points which are reached during the project span.

Project Budget

The project is highly dependent on the budget laid for it. Therefore the project budget needs to be planned well in advance so that the financials are controlled, the capital is optimally used and the funds are preserved for future use.

Cost	Amount in AUD
Employment cost	18500
Equipment	9000
Infrastructure	6700
Research & Development	9000
Transport & Communication	7000
Miscellaneous	4000

Risks

There are various risks involved in this business project of drilling shale gas. The first risk is that of financial failure or bankruptcy in case of misuse of funds. The second risk is that of fall of equity prices in case the project is not earning good profits. The third risk is that of environmental hazard and government ban on the project (Jaspal & Nerlich, 2014). Besides, there are always chances of facing natural calamities or sudden accidents.

Assumptions

The assumptions in this business outline are that there are no close competitors of the business organization. The business has no change in its immediate settings in near future is assumed for convenience of the plan.  

Project Communication

Project communication is very important so that each stakeholder gets complete and transparent information regarding the project. Moreover the communication management plan is followed for facilitating the internal as well as external communication.

Constraints

The major constraint of this business is the public support. There are already protests against the business and so it is probably not going to be popular as a project among the mass. The communities have failed to understand the benefit of the project and have already contemplated its negativities on the society. The other constraint is that of funding. The investors will be reluctant to spend on a project which is already disliked and disapproved of by the public.

Executive Summary

Dependencies

The project of developing shale gas is highly dependent on its shareholders and investors for it funds. Above all, the government needs to support and permit the organization to drill and carry on with their business activity. Thus the government and law impact the business.

Options considered

The other options which are considered in this business outline are the threats from the public which will be handled through the proper government permits, law of the state and proper documents being presented in case of any disputes.

Recommendations

The development of this business project can be enhanced if the funds are better managed. The equities need to be profitable enough so that the shareholders want to purchase them. The project needs to ensure the public about environmental safety. There should be open public awareness campaigns in response to the protests so that their right to information is regarded and they are told that this project could generate electricity in a safe manner. The business communication, intra organisation and across the nation needs to be improved. There is lack of information which is resulting in miscommunication. The better the mass is informed, the lesser will be the disputes.

References

Andriof, J., Waddock, S., Husted, B., & Rahman, S. S. (2017). Unfolding stakeholder engagement. Abingdon, Oxfordshire: Routledge.

Blok, V., Hoffmans, L., & Wubben, E. F. M. (2015). Stakeholder engagement for responsible innovation in the private sector: Critical issues and management practices. Journal on Chain and Network Science, 15(2), 147-164.

Boudet, H., Clarke, C., Bugden, D., Maibach, E., Roser-Renouf, C., & Leiserowitz, A. (2014). “Fracking” controversy and communication: Using national survey data to understand public perceptions of hydraulic fracturing. Energy Policy, 65, 57-67.

Bourne, L. (2016). Stakeholder relationship management: a maturity model for organisational implementation. Abingdon, Oxfordshire: Routledge.

Caulton, D. R., Shepson, P. B., Santoro, R. L., Sparks, J. P., Howarth, R. W., Ingraffea, A. R., … & Stirm, B. H. (2014). Toward a better understanding and quantification of methane emissions from shale gas development. Proceedings of the National Academy of Sciences, 34(7), 201316546.

Jackson, R. B., Vengosh, A., Carey, J. W., Davies, R. J., Darrah, T. H., O’sullivan, F., & Pétron, G. (2014). The environmental costs and benefits of fracking. Annual Review of Environment and Resources, 39(5), 327-362.

Jaspal, R., & Nerlich, B. (2014). Fracking in the UK press: Threat dynamics in an unfolding debate. Public Understanding of Science, 23(3), 348-363.

Mesároš, P., & Mandi?ák, T. (2016). Use of communication technologies in document exchange for the management of construction projects. Selected Scientific Papers-Journal of Civil Engineering, 11(1), 23-30.

Percival, R. V., Schroeder, C. H., Miller, A. S., & Leape, J. P. (2017). Environmental regulation: Law, science, and policy. London, United Kingdom: Wolters Kluwer Law & Business.

Sandman, P. M. (2017). Environmental risk and the press. Abingdon, Oxfordshire: Routledge.

Sierra?García, L., Zorio?Grima, A., & García?Benau, M. A. (2015). Stakeholder engagement, corporate social responsibility and integrated reporting: An exploratory study. Corporate Social Responsibility and Environmental Management, 22(5), 286-304.

Sovacool, B. K. (2014). Cornucopia or curse? Reviewing the costs and benefits of shale gas hydraulic fracturing (fracking). Renewable and Sustainable Energy Reviews, 37, 249-264.

Wagner, S. J., & Reeves, S. (2015). Milestones and entrustable professional activities: The key to practically translating competencies for interprofessional education?. Journal of interprofessional care, 29(5), 507-508.

Wang, Q., Chen, X., Jha, A. N., & Rogers, H. (2014). Natural gas from shale formation–the evolution, evidences and challenges of shale gas revolution in United States. Renewable and Sustainable Energy Reviews, 30, 1-28.