Situation analysis

Prior to project formulation and construction of the logical framework matrix (see the section on the Logical Framework Approach), structured analysis of the existing situation should be conducted. This comprises stakeholder analysis, problem analysis and objective analysis, and strategy assessment. The analysis facilitates formulation of the logical framework elements as well as the definition of the scope of the project. Stakeholder, problem and objective analyses are an iterative and simultaneous process.

Stakeholders are individuals or institutions that may – directly/indirectly, positively/negatively – affect or be affected by a project. Usually different sub-groups must be considered (please see box below). The analysis of stakeholders, their needs and interests, is an important part of the situation analysis. The purpose of the stakeholder analysis is to gain an overview of important groups or players who have or may develop vested interests in a certain situation or working context. Core stakeholders are those who are well informed and can help to analyse and discuss the main issues that the analysis will focus on. The main purposes of the stakeholder analysis are:

• To better address and manage the distributional and social impacts of projects, programmes and policies; and
• To identify existing or potential conflicts of interest and to factor appropriate mitigation strategies into activity design.

How to proceed:

1. Identify the principal stakeholders at various levels – local, national, regional and international;
2. Investigate their roles, interests, and relative powers and capacities to participate;
3. Identify the extent of cooperation or conflict in the relationships among stakeholders; and
4. Interpret the findings of the analysis and define how they should be incorporated into project design.

See some tools for conducting the stakeholder analysis in the Project Cycle Management Guidelines from page 62.

In order to understand a situation to be influenced by a project, it is essential to be aware of problem conditions which constitute development constraints as well as their causes. Problem analysis identifies the negative aspects of an existing situation and establishes the « cause-effect » relationship between the problems identified. Precise description of problems as deviations between some desired conditions and the status quo, and the major root causes of the situation need to be identified in order to devise effective ways of dealing with them. Problems and their inter-relationships can be identified and visualized using the so-called “problem tree”. The problem tree is a diagram showing the cause–effect relationships between problem conditions in a defined contest.

How to proceed:

1. Define precisely the situation (sector, subsector, area, and so on.) to be analysed;
2. Define some (approximately five) major problem conditions related to the selected situation;
3. Organize the problem conditions according to their cause –effect relationships;
4. Add additional problems, thus describing causes and effects; and
5. Check the diagram (tree) for completeness (most relevant conditions) and logical order.

The following is an example of problem tree from the EC PCM guidelines:

It is important to identify, on the basis of the problem analysis, the objectives and results that the project is intended to achieve. If there is no secure commitment from all the parties concerned to the project’s objectives and results, then friction may occur among stakeholders, leading to poor project implementation. The problem structure shown in the problem tree can serve as a basis to identify and visualize potential objectives a project might want to achieve. The objective tree is created by transforming the hierarchy of problems into a hierarchy of objectives describing future conditions which are desirable and realistically achievable. The objective tree can form the basis for further decision -making on alternative interventions (projects) that would aim to influence a given situation.

How to proceed:

1. Reformulate the problems as objectives;
2. Check the logic and plausibility of the means- to-ends relationship;
3. Adjust the structure wherever necessary and revise statements;
4. Delete objectives that are not desirable;
5. Check whether rewording will lead to meaningless or ethically questionable statements; in that case, reformulate the objective or indicate that this problem cannot be solved in the given context; and
6. Add new objectives if they appear to be relevant and necessary in order to achieve the stated objective at the next higher level.

See an example of objective tree from the EC PCM guidelines:

The situation analysis is concluded with the selection strategy, i.e. the exercise of synthesising a significant amount of information then making a complex judgement about the best implementation strategy (or strategies) to pursue. The figure below summarizes the passage from the situation analysis to planning:

Sources and useful links:

• PCM Guidelines, (EC 2004)