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12TECHNICAL SCIENCES
ANTI-RISK MANAGEMENT TOOLS OF STAKEHOLDERS IN AGRO-INDUSTRIAL COMPLEX
Krol K.
PhD Student in Management KROK University, Kyiv, Ukraine
Abstract
The author proposes anti-risk management tools of stakeholders in agro-industrial complex projects. It is determined that for effective management of stakeholders of agricultural projects it is necessary to take into account the mentality of stakeholders of such projects. The article presents a model of the mental space of stakeholders of agro-industrial complex projects, which visualizes the general and different mentalities of each of the stakeholders of the project. It is recommended to apply a mathematical model of anti-risk management of stakeholders in agro-industrial projects, to increase the efficiency of stakeholder management, and reduce the overall risk of the project. The author proposes to build alternative versions of the network schedule of the project so that on the critical path the contractors were appointed those stakeholders in whose mental space is more common, and calculating their risks and the risk of the whole project, choose a version of the network schedule, the risk of a critical path which will be minimal.
Keywords: anti-risk stakeholders management, mentality, anti-risk stakeholder's management models, agricultural projects.
Crop loss due to drought, especially in the southern regions, has drawn attention to the issue of risk management of agricultural projects in the context of climate change. An increase in average annual temperatures and a decrease in precipitation require urgent measures to conserve water resources. Agricultural business directly depends on the provision of water production. Water shortage, as well as its surplus, is a critical risk of agricultural projects. This risk not only affects plant yields and animal productivity, such a risk situation can lead to the death of animals and plants. That is, the provision of production of water resources directly affects the projects of the agro-industrial complex and can not lead to the forced closure of such projects. We should not forget such projects in animal agriculture, which are related to aquatic bioresources and aquaculture. In such projects, water and its safety are a prerequisite for project implementation. The state policy [1] on the use and protection of water and reproduction of water resources, as well as international cooperation on these issues in the context of climate change should be a priority. Currently, the implementation of state policy in the field of management, use and reproduction of surface water resources, water management and land reclamation and operation of state water management facilities, inter-farm irrigation and drainage systems, as well as making proposals to ensure the formation of state policy in the field of water management and hydraulic reclamation of land, management, use and reproduction of surface water resources is the State Agency of Water Resources of Ukraine [2]. From the perspective of implementation of agro-industrial projects, the mentioned State Agency is one of the important stakeholders of such projects, and in the future its role and influence on the implementation of agro-industrial projects will grow. Public authorities to which they belong, public institutions and institutions that have the right to issue permits and other documents required for the implementation of projects are consid-
ered stakeholders of such projects, as they affect the implementation of the project [3]. It should be noted that when we talk about stakeholders of the project, even if we call an organization or public institution, we are always talking about living people, meaning individuals with feelings, perhaps with different cultures, mentalities and different worldviews. Problems with any of these participants can disrupt the project.
The management of stakeholders of agricultural projects, like any other, is through the construction of relations between them, meaning relations between people, which are inherent in all aspects of human relations [4]. According to scientists Hrabar V. V., Sama-kov M.M. [5], the desire of stakeholders to maximize their own benefits mainly in the short term is considered the main cause of conflict of interest of stakeholders, and it is difficult to disagree. Scientists Danchenko O.B, Denchyk O.R, Krol K.J [6] emphasize the importance of interaction with all stakeholders of the project without exception and building a constructive dialogue with them. Mitchell R., Agle B. and Wood D. also hold this view and in their work [7] noted that it is necessary to pay attention to the management of all stakeholders, even those who do not interact directly with the organization. Project managers should consider all stakeholders of project as a single structure, where all elements are linked by common interests. The key to the prosperity of each of the project participants is the general prosperity of all participants without exception. In [8] Sisodia, R., Wolfe, D., Sheth, J.N note that none of the groups can be considered as the main.
Processes of management of stakeholders of project are reflected in the international project management standards PMBOK PMI [3], P2M [9], ICB IPMA [10], ISO 21500 [11].
The importance and complete step-by-step instructions for involving stakeholders in the company's business processes are described in AA1000 Stake-
holder Engagement Standard (SES) 2018 [12], developed by the Institute of Social and Ethical Account Ability.
Recommendations on corporate social responsibility are reflected in the standard ISO 26000: 2010 Guidance on social responsibility [13].
To successfully management of stakeholders of project and reduce risks, related to them, it is necessary to identify stakeholders of project and to determine in detail the features of each of them.
In the work [14] the author identified the stakeholders of agro-industrial complex projects. Of course, since each project is unique the map of stakeholders may vary.
After the identification, information about each of the stakeholders is collected for further analysis and development of a strategy for interaction with stakeholders of project.
Particular attention should be paid to the differences in the culture and mentality of the stakeholders of project.
The main aspects of cultural difference that can affect a project are communication, negotiation and decision-making.
Communication is perhaps the most visible manifestation of culture. Project managers face cultural differences in communication in language, context and openness.
Language is clearly the biggest barrier to communication. When the stakeholders of the project do not share a single language, communication is slowed down and often filtered before sharing information that is considered critical.
A communication barrier can affect project implementation when the rapid and accurate exchange of ideas and information is critical.
Interpretation of information reflects the degree to which context and openness affect the cultural expression of ideas and understanding of information. In some cultures, a positive answer to a question does not always mean so. Cultural influences can cause confusion
in a project in which stakeholders of project represent more than one culture.
Not all cultural differences are related to international projects. Corporate cultures and even regional differences can create cultural confusion in a project.
The mental space of stakeholders is one of the components of the general mental space [15]. The implementation of the project is influenced by the mental space of those who are interested or not interested in implementing changes. This mental space does not exist in isolation from the project or program itself, it, as noted in [16], interacts with other spaces.
Management of stakeholders of agro-industrial projects will be more effective due to the use by the project team of the model of the stakeholders' mental space in agro-industrial projects (Fig. 1), which is based on the description and analysis of the mental space of the project. Defining the common and different mentality of each stakeholder will help to achieve the necessary steps from each of them, as well as to understand their expectations from the project.
The mentality of each stakeholder is unique, but in some spaces of knowledge and skills it coincides with the knowledge and skills of another stakeholder, which forms a common mental space. So, in fig. 1 is shown in red color common mental space in shareholders 1 and stakeholder 5, in stakeholder 2 common mental space with stakeholders 3 and 5, in stakeholder 3 partially coincides mentality with stakeholders 2, 4, 5 and 8, in the stakeholder 9 is a partial coincidence in mentality with the stakeholder 10. And in stakeholders 6 and 7 on such a unique mentality that they have nothing in common mental space with none of the stakeholders of the project.
Stakeholders of the project affect the progress of the project, and the project affects stakeholders. The different influence of stakeholders on the project depends on different factors that the individual has. Among such factors we note: knowledge, social position, cultural level, interest, value system [17], practices, skills.
Fig. 1. The model of the stakeholders' mental space in agro-industrial projects
Stakeholders of the project are conventionally divided into internal and external stakeholders of the project. Interested parties (stakeholders) of agro-industrial complex projects have their own specifics [18]. For example, one and the same person can perform several roles simultaneously - to be a consumer of products, a member of the team and a member of a public organization. On the one hand, he may be interested in the project as an employee, and on the other hand, he may not be satisfied with the smell of animals, as a citizen living near a farm [19].
Internal stakeholders are a project team led by a project manager, initiator, customer, owner, investor. Often in agro-industrial projects the customer, owner and investor of the project is the same legal entity. Stakeholders of the external environment of the project include competitors of the main participants of the project, authorities, consumers of final products, the population, public groups and organizations, suppliers and contractors.
When managing stakeholders, it should be remembered that consumer behavior in the modern world are affected not only by the quality and price of products, but also the general image of the company, including - responsibility in its behavior on in relation to partners, workers, the environment and society in general. Consumers themselves decide what is important to
them and what is not, and themselves determine which values are dominant for them [20].
After analyzing the mentality of stakeholders of project, the project team will be able to more accurately articulate the interests of stakeholders. Under interest of stakeholders should understand the economic, social, psychological, resource and any other expected benefits from the project [21].
Timely response to information about the interests and expectations of stakeholders, even those not voiced by them and at first glance invisible, will help prevent conflicts during the project and reduce risks.
Given that the most important components of the personality mentality are knowledge, social position, cultural level, interest, value system, practices and skills of stakeholders of project, according to the models in [22] formalized the mental space of stakeholders (MSSH), which can be represented as:
{Ksh,SC,C,I,Vsh,Psh,Ssh}^MSSH (1)
where K sh - the set of knowledge of stakeholders;
SC - the set of their status positions;
C - the set of their cultural level;
I - the set of their interests;
V sh - the set of their values;
P sh - the set of their practices;
S sh - the set of their skills.
Given the model of the stakeholders' mental space in agro-industrial (Fig. 1) with the definition of common and different mentalities of each of the stakeholders of the project, we can conclude that the more similar in the mentalities of stakeholders of the project, the more effectively project manager will be able to manage them, through effective communications, which will reduce the likelihood of risks due to misunderstandings between stakeholders of project, and in turn reduce the overall risk of the project.
Meaning,
Msz^-max,Msr^-min,Rsi^-mm,Rs^-mm,R^-min(2)
where Msz - common in the mental space of stakeholders;
Msr - different in the mental space of stakeholders;
Rsi - the risk of the i-th project stakeholder;
Rs - general risk from stakeholders of project;
R - general risk of project;
S - stakeholder of project;
n - number of stakeholders of project.
n
Rs - (3)
/=i
One of the network methods is used in project time management planning, namely the critical path method, which calculates the longest path execution of the planned works of the project to logical final points or to the end of the project, as well as the earliest and latest date when each work can be started and completed without delaying the project as a whole.
But sometimes it is more appropriate to focus not only on the duration of the project by the method of critical path, but also on the risks of the project. Thus, according to [23], it is more appropriate to focus on such a sequence of work in the project, which will lead to the least risk losses.
The degree (measure) of risk (the measure of expected failure in achieving the goal) is defined as the product of the probability of failure (undesirable consequences) on the magnitude of these consequences (losses, payments, etc.) that occur in this case.
Therefore, the measure of risk by increasing the execution time and estimated cost of the project in quantitative terms is equal to:
bKP
Risk = 2^ Risk. (4)
i=l
where Risk - the risk of project;
Risk i - measure of risk of work of a critical path connected with increase in time of performance and estimated cost of work, UAH;
b Kp - the number of works on the critical path of the project network schedule.
Risk, Risk j (5)
where Riskij - measure of risk from a risky event of the j-th type, which affects the performance of the ith work, UAH.;
m - the number of types of risky events that affect the performance of the i-th work.
Risk{ = P¡ X C/ (6)
where Pij - the probability of a risky event of the j-th type when performing the i-th work;
Cij - the amount of losses from the risky event of the j-th type when performing the i-th work, UAH.
Risks of agricultural projects, as well as any projects, are calculated taking into account the probability of occurrence of a risky event and the amount of losses from a risky event [24]. The risk management plan of agro-industrial complex projects is drawn up by the project team at the project planning phase.
Using the above formulas, it is necessary to build alternative versions of the network schedule of the project so that on the critical path the contractors were those stakeholders whose mental space is more common, and calculating their risks and the risk of the whole project, choose the network schedule, the risk of a critical path which will be minimal.
Thus, the project team led by the project manager, guided by the calculations, experience and common sense choose the least risky path of the network schedule or take the risk and develop countermeasures to combat it.
Conclusions. Agricultural projects are extremely important for providing humanity with food. The success of such projects largely depends on the management of stakeholders of project. The risks associated with stakeholders of project can have devastating consequences for the project. When managing stakeholders, special attention should be paid to the mentality of stakeholders. The article presents a model of the stakeholders' mental space in agro-industrial projects, which visualizes the general and different mentalities of each of the stakeholders of the project. The mathematical model of anti-risk management of stakeholders of agro-industrial complex projects shows that the more similar the mentality of project stakeholders, the more effectively the project manager will be able to manage them, by conducting effective communications, which will reduce the likelihood of risks due to misunderstandings between stakeholders of project, and in turn reduce the general risk of the project. Also, it is recommended to build alternative network schedules of the project so that on the critical path the contractors were appointed those stakeholders whose mental space is more common, and calculating their risks and the risk of the whole project, choose such a network schedule, critical path risk which will be minimal.
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