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12 The Collaboratory for Research on Global Projects
hile businesses and companies are increasingly multi- (CRGP) Structure, Philosophy and Activities
national we are more frequently facing projects with par- Raymond E. Levitt
ticipants representing various cultures, having different Ryan J. Orr
native languages, working in different time zones and locations.
15 International cooperation for development: Design
In other words, this is the world of global projects. Global projects of a competence-based model for managing
are practically creeping into the life of companies of all sizes from programmes and projects
small enterprises to the biggest leading players. José R. Cobo
At the same time the emerged era of global projects is already Isabel Ortiz
now setting new requirements to the project management compe- Carlos Mataix
tencies and solutions. Later on these changes shall have impacts on 20 Safety and Health Risks in International
the content of industrial project management standards. Binder, Construction Projects
Gardiner and Ritchie provide an example of new arising success Dongping Fang
factors that are named as ‘Cross-Cultural Negotiation’, ‘Global 26 The Gap Between Project Managers and Executives
Teamwork and Team cohesion’ and ‘Workflow Management Sys- Peter Wijngaard
tems’. Already the names of these success factors are characterising Herman Mooi
the new challenges we are facing with global projects. Victor Scholten
In this issue of Project Perspectives we shall explore some 34 Communication and Trust in Distributed Project
recent findings regarding global projects. Researchers have spot- Teams
ted the appearances and obvious significance of global projects Helgi Thor Ingason
already several years ago and interesting research results have Tomas Haflidason
Haukur Ingi Jonasson
been gained from their efforts. In Standford university a specific
center named The Collaboratory for Research on Global Projects 42 Overview of The Virtual Design Team (VDT): A
(CRGP) have been established to study fundamental phenomena Computational Model of Project Teams
Raymond E. Levitt
within this kind of manoeuvres. This center is presented in the
paper by Levitt and Orr. Close to me has been our co-operation 48 Formal and informal risk management actions in
with CRGP and our Global Project Strategies (GPS) research ef- projects
fort that was finalised in the end of March 2009. Some results Mervi Murtonen
originating from the GPS research are presented by Murtonen in 54 Use Confucius to improve project leadership in
her paper on risk management. Chinese perspective
The named research bodies and projects represent only a few Weiping Jiang
Yun Le
examples from the variety of studies and players in the field Qinghua He
of global projects. Practically, it is a
research community with plenty of
others who are providing valuable
contributions and new important new
knowledge. I hope that the papers of Published by
this Project Perspectives with the main The Project Management Association Finland
messages and references can help (PMAF) in co-operation with International Project
to understand as widely as pos- Management Association (IPMA). PMAF is:
sible the variety of efforts and - Forum and a meeting place for project
gained results in the field of professionals
- Developer of project thinking and knowledge
global projects. - Active partner within the international project
community
PMAF serves with
Dr. Kalle Kähkönen - Two project management journals (Finnish &
English)
Chief Research Scientist - Yearly Project Day conference and frequent theme
VTT - Technical Research Cen- events
tre of Finland - Project management certification
http://www.pry.fi/index_eng.htm
Editorial Board:
Acknowledgement to the IPMA WC 2009 conference. Several papers Kalle Kähkönen (Editor in chief)
of this issue have been picked up from the Scientific Research Paper Aki Latvanne
track of the IPMA WC 2009 conference. The original papers have then
been updated and or otherwise changed by the authors to meet the ISSN 1455-4178
needs of Project Perspectives.
A model of success factors for
Global Project Management
This study explores the project management literature and produces a novel model of success fac-
tors for global project management. Most academic papers provide partial recommendations on
how to increase the success of global projects. However, to be effective, these suggestions should
be applied in a holistic manner. This is a fundamental characteristic of the model presented in this
article. The model is also modular, allowing an independent implementation of success factors,
and scalable, able to accommodate newly discovered factors to be tested by future exploratory
research studies.
A global project management framework (GPMF), previously defined and published by the authors,
is presented and compared to other studies carried out on the management of global projects.
The success factors presented by these papers are used to test the validity and completeness of
the GPMF as well as how this can be improved. This results in three new success factor categories
and one knowledge area (global risk factors). A model is then created by adding (i) the concept of
inputs-process-outputs to the framework as well as (ii) the main challenges of global projects, (iii)
the success factors for their management aligned with existing bodies of knowledge and (iv) the
benefits achieved from successful global project management. This systemic view allows the model to
be used in future studies with potential research opportunities identified throughout the paper.
Jean Binder Intoduction Virtual projects (also called ‘distributed’ projects)
Heriot-Watt University The main objective of this paper is to perform a involve team members in various locations (Ghosh
structured analysis of existing academic studies and Varghese, 2004; Guss, 1998). As defined by
Paul D. Gardiner on the success of global projects. Questions such the GPMF, global projects are a subset of virtual
The British University in as ‘How well have previous studies covered dif- projects in which team members and stakeholders
Dubai ferent geographies and methodologies over the are spread across countries from various cultures,
years?’ and ‘Is it possible to have a consolidated speaking different native languages, working in
James M. Ritchie view of all success factors for global projects?’ different time zones and belonging to different
Heriot-Watt University will be addressed. The findings of the paper are organizations. This definition forms the basis of the
presented as a holistic, modular and scalable model five GPMF dimensions (Binder et al, 2009), which
of global project success factors which can be used determine the main challenges faced by global
to help improve the efficiency and effectiveness project managers and stakeholders: geographical
of managing such projects. The steps involved in distance, multicultural collaboration, multilingual
achieving the above objective and discussed here communication, asynchronous interactions and
are: (i) defining the challenges and consequences cross-organizational relationships. Other studies
of this emerging project management paradigm; refer to international (Aleshin, 2001), multicul-
(ii) assessing success factors from the literature in tural (Mäkilouko, 2004), intercultural (Loosemore
the light of an existing framework (Binder, 2007); and Muslmani, 1999) and cross-cultural projects
(iii) classifying these factors according to the (Pheng and Leong, 2000). In previous studies, each
methodological and geographical distribution of author uses a different combination of the five
the studies; and (iv) creating an original model of GPMF dimensions.
success factors for global project management. The literature provides many examples on how
these five dimensions can be used to harvest
Literature Review benefits from global projects. Geographical disper-
This study builds on previous conclusions from sion allows reduced costs and access to the best
the authors (Binder, 2007; Binder, 2009; Binder workers independently of their location (Binder,
et al, 2009) about the characteristics and success 2007, p.11; Haywood, 1998, p.6; Rad and Levin,
factors for global projects: The Global Project 2003, pp.3-5; Mayer, 1998, p.6). A multicultural
Management Framework (GPMF). team increases the levels of flexibility and innova-
In this paper, the term ‘success factors’ refers tion (Binder, 2007, p.11) by bringing a variety of
This is an updated version to the areas of knowledge that increase the perspectives to the project (Dubé and Paré, 2004).
of a paper originally likelihood of success during the management of Team members that speak local languages have a
published in the “IPMA global projects. The GPMF dimensions, challenges, more accurate picture of international custom-
Scientific Research Paper benefits, knowledge areas and categories will be ers’ needs (Hofstede, 1991, p.425). Project team
Series: Human Side of briefly explained in this section before undergoing members in multiple time zones can align their
Projects in Modern comparison against selected studies from other times to the stakeholders’ office hours (round-
Business” (IPMA, 2009) authors in the following sections. the-clock project execution) (Haywood, 1998, p.6;
4 www.pry.fi
Figure 1. The research project
Rad and Levin, 2003, p.6). Different organizations in details to practitioners (Binder, 2007; Binder,
supply technical experts in different domains and 2009; PMI, 2008b). This framework also innovates
increase productivity (Haywood, 1998, p. 7; Mayer, by being independent from existing bodies of
1998, p.11), forming alliances and partnerships knowledge on project management, while not
(Haywood, 1998, pp.2-3). duplicating the knowledge contained in these
The GPMF was defined in a previous study by the sources, and by providing links to theories in do-
authors (Binder et al, 2009) based on a thorough mains other than project management, e.g. coach-
evaluation of academic studies and practitioner ing, mindmapping, emotional intelligence (Levin,
books on virtual teams, virtual projects and global 2008). These factors were used by the authors in
projects. The key success factors from the litera- deciding to use the GPMF as the framework for
ture were classified according to organizational this research.
change principles into five discrete knowledge
areas, namely: global teams, global communica- Research Methodology
tion, global organizations, collaborative tools and The research used a structured approach to evalu-
collaborative techniques. Each knowledge area was ate the existing literature (figure 1). The first step
populated with five categories of success factors involved the selection of articles in peer reviewed
giving a total of 25 GPMF categories (Binder et academic journals; the Project Management Jour-
al, 2009); these categories are listed later in this nal (PMJ) and the International Journal of Project
paper (see figure 6). Globally oriented companies Management (IJPM) were selected since these
can use the GPMF to evaluate these factors to are considered the leading project management-
increase the success of their global projects and specific journals (Henrie and Sousa-Poza, 2005).
implement and foster the application of selected The second step was to eliminate book reviews
recommendations. and editorials, in order to limit the study to peer-
Before proceeding with the research, the reviewed articles (Henrie and Sousa-Poza, 2005).
literature was reviewed to determine if a more During the third step, each abstract was read to
comprehensive framework of success factors than determine which papers provided success fac-
the GPMF could be found. A number of academic tors for global projects (Henrie and Sousa-Poza,
studies identified success factors through analyti- 2005). The fourth step consisted of a complete
cal and empirical research. While being helpful to review of each article to determine whether it
validate the success factors, these models are not discussed at least one of the GPMF dimensions
comprehensive and only represent a subset of and provided success factors relevant to global
the GPMF. projects. A representation of the GPMF dimensions
It appears that the GPMF is a pioneering con- in the 47 papers selected for analysis is shown
cept (Walker, 2009, p.162) and is the only one that in figure 2. Most papers evaluated projects with
covers both theory and practice while building multicultural stakeholders in various countries
on academic research (Binder et al, 2009, p.57) and organizations. However, the effects of mul-
and describing all of the relevant success factors tiple languages and time zones are not explored
Project Perspectives 2010 5
ous studies have shown that important cultural
differences occur within regions (Hofstede, 1991;
Trompenaars and Hampden-Turner, 2005), many
countries in these 3 regions were never actually
mentioned in the papers and also there are only
few studies in South America, Africa and Middle-
East. Therefore, the current conclusions and
generalizations of the findings within this paper
are limited to only a few geographical areas and
cultures. The table on figure 5 also shows the oc-
currence of empirical studies per year for the 8
countries with most studies. This table suggests a
convergence of studies towards the same countries
which might limit even more the conclusions over
time. Future empirical studies can use this map to
compare the geographical scope of existing studies
against the spread of global project teams, defin-
ing directions for future research. (Bourgault et al,
2008, p.107; Wang and Liu, 2007, p.70).
Figure 2. Representation of GPMF dimensions in the 47 papers. During the sixth step, in light of the GPMF,
every success factor in the literature was classified
sufficiently. Future exploratory research can aim into the following knowledge areas: global team
to identify new success factors to address these management; global communication; global or-
two challenges. Other studies might identify the ganisations; collaborative tools and collaborative
relationships between these dimensions and the techniques (Binder et al, 2009). Whenever a suc-
existing success factors. cess factor from the literature did not match any
During the fifth step, the full contents of the 47 of the 25 existing categories, new potential areas
remaining papers were analysed. The geographi- were suggested and investigated. The results of this
cal dispersion of the subjects participating in the step will be presented in the next section.
empirical studies was also evaluated, and is repre-
sented in figure 3. This analysis includes all papers Research Results and Industrial Impact
except three that lacked detailed information on Paraphrasing Shore and Cross (2005, p.63), culture
one country studied in Eastern Europe (Aaltonen is only one piece of the puzzle that helps project
and Sivonen, 2008) and 26 Sub-Saharan countries managers, this study aimed to reveal the other
(Diallo and Thuillier, 2004; Diallo and Thuillier, pieces. This section reviews the main answers to
2005). The map is a novel output and suggests a the 4 research questions: the success factors in
good balance between 3 regions: North America, the literature, the success factors in GPMF that
Western Europe and Eastern Asia. However, previ- are validated by the literature, the new success
6 www.pry.fi
factors and the suggested changes in the GPMF
structure.
8 www.pry.fi
as a maturity model of the companies’ practices
in global project management which can be im-
proved based on technological choice, company
culture and the different cultures of the people
participating in the process. This novel model can
also serve as a basis for a career development
path, orienting global project managers and other
stakeholders towards training modules that can Jean Binder, PMP, MBA
improve their technical, people management and Heriot-Watt University, School of
communication skills. Academic researchers can Engineering and Physical Sciences,
test the model and investigate how well each Edinburgh, Scotland
GPMF factor addresses the global project chal-
lenges and what types of benefits can be achieved jjean@k-binder.be
by global projects as well as extending the model Jean
J Bi
Binder
d iis an iinternational
t ti speaker with more than 20 years of
where necessary. experience working in project environments, most of them living
abroad and communicating in multi-cultural and multi-language
Conclusions environments. He has particular experience of managing global
There are an increasing number of academic stud- projects, having implemented collaborative tools and techniques in
ies suggesting success factors for global project a number of global organizations. The framework discussed in this
managers, covering different geographical areas article is the foundation for his PhD research (in progress).
and using various methodologies. These stud-
ies validate the success factors proposed by the
Global Project Management Framework previously
defined by the authors and indicate the existence
of 3 new success factors and one new category.
A new model of success factors in Global Project
Management was developed from this.
The implementation of a new set of practices, Paul D. Gardiner
processes and skills related to this model also imply
a change in the cultural mindset. Therefore, the The British University in Dubai, Faculty
success factors must be applied in a holistic man- of Business, Dubai
ner, according to organizational change principles. UAE; paul.gardiner@buid.ac.ae
The model presented in this study satisfies this Dr Paul Gardiner is a senior lecturer in project management at The
requirement by presenting all of the key success British University in Dubai. He studied and completed his PhD in
factors present in 10 years of academic studies in project management at the University of Durham. He worked for
a single structure. fifteen years in Heriot-Watt University teaching undergraduate and
Every project is unique by definition; the geo- postgraduate students in the areas of strategic project manage-
graphical dispersion of the team members, the ment and construction management. Dr Gardiner has established,
composition of country cultures and languages, designed, implemented and taught postgraduate programmes in
and the organizational mix are also unique. project management at Heriot-Watt in Dubai (Academic City) and
Therefore, a global project management model in universities in Italy, Sweden and the UK. He is Vice Chairman
must be modular and allow an independent imple- for APM Scotland and a member of the PMI. He is also an external
mentation of success factors to meet the specific examiner for the University of Bradford and the University of Ulster
requirements from every project configuration. and an Honorary Fellow at the University of Manchester
The model presented in this study satisfies this
need since each module provides an independent
set of success factors, grouped according to a
logical structure.
Global projects are intimately linked to tech-
nologies, tools and techniques that evolve over
time. Therefore, a global project management
James M. Ritchie, BSc, MSc
framework must be scalable to accommodate new
success factors discovered and tested by explor- Heriot-Watt University, School of En-
atory research studies, as well as new collaborative gineering and Physical Sciences, Edin-
technologies and tools being developed around the burgh, Scotland
globe. The novel structure of the model presented J.M.Ritchie@hw.ac.uk
by this study satisfies these criteria and can be
easily expanded to include such developments. James M. Ritchie is a professor of Mechanical Engineering
By using proven methods such as grounded specializing in design, manufacture and management. Recent
theory and action research, and by evaluating funded research has investigated the use of digital tools, espe-
people in various countries, future studies can cially virtual reality, for the automatic generation of design and
identify relationships between: (i) the 33 areas manufacture process mapping and knowledge acquisition future
of success factors; (ii) these success factors and project will include project management applications. Other
existing bodies of knowledge and competency funded research projects in quality methods in the food industry,
baselines; and (iii) each challenge, success factor design process analysis, logistics for SMEs and capability maturity
and benefits. The model is also open to include new modeling. With over 130 publications, he is also Director of his
categories, knowledge areas and success factors institution’s Advanced Manufacturing Unit.
that might be discovered in future studies.
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Raymond E. Levitt The Collaboratory for Research on Global Projects (CRGP) at Stanford University is a multidisci-
Stanford University plinary center that supports fundamental and applied research, education and industry outreach
to improve the long-term economic, environmental and social sustainability of large infrastructure
Ryan J. Orr development projects that involve participants from multiple institutional backgrounds. Its studies
Stanford University have examined public-private partnerships, infrastructure investment funds, stakeholder mapping
and engagement strategies, comparative forms of project governance, and social, political, and
institutional risk management. The Collaboratory, established in September 2002, serves as the
hub of a global network of scholars and practitioners—based on five continents—with expertise
in a broad range of academic disciplines and in the power, transportation, water, telecommunica-
tions and natural resource sectors. This brief overview summarizes the composition, philosophy
and recent activities of CRGP.
CRGP Structure CRGP Academic partners
Collaboratory for Research on Global Projects was At Stanford University, CRGP brings together a
set up as an interdisciplinary “Center” at Stanford network of academics from multiple disciplines,
University. Centers at Stanford are virtual orga- including Engineering, Project Management,
nizations overlaid across department and school Law, Finance, Economics, Sociology, Psychology
hierarchical structures that can facilitate collab- and Political Science) interested in the financing,
orative research and engagement with a group of governance and development challenges of global
industry and government affiliates to solve critical infrastructure projects. In addition the Collabora-
societal problems. Centers do not directly employ tory links to a number of research hubs around
faculty, admit students or award degrees. Rather, the world that share its interest in this domain
they act as “intellectual magnets” to attract in- and that bring together groups of scholars and
terested faculty, postdoctoral fellows and students industry practitioners into a local network. The
from different departments to work together on first, and still most active, Collaboratory partner
important and challenging societal problems. network includes a group of scholars at the Hel-
The industry affiliates provide problem defi- sinki University of Technology, Helsinki School of
nition, access to real world projects and data, Economics, and VTT (The Finnish national research
critique of research results, and a vehicle for laboratory) plus a group of Finnish companies
implementing findings of centers. Unlike most engaged in global project business. Other global
other centers at Stanford, the focus of CRGP was Collaboratory partners include a network of schol-
on global projects and infrastructure development ars in India at IIT-Madras and IIM-Bangalore, and
and finance activities. So, in addition to the typical smaller Collaboratory hubs in Australia, China,
Stanford center model of engaging with faculty Malaysia, Norway, South Africa, and UK.
from multiple Stanford schools and departments,
CRGP also decided to build ties to complementary CRGP Industry and government partners
groups of scholars and practitioners around the CRGP maintains extensive relationships with
world in order to: engage with a broader set of infrastructure experts at multilateral banks, infra-
industry and government stakeholders; gain access structure funds, transaction advisors, contractors,
to a more complete range of global best practices; engineering companies, law firms, investment
and facilitate collaboration on cross-national banks, commercial banks, insurance companies,
studies of the challenges facing global capital and pension consultants. Industry experts share
facility development projects. their knowledge and understanding of problems
12 www.pry.fi
with CRGP scholars through participation in - Developing new theoretical frameworks for
research projects and regular roundtables that understanding institutional and organizational
focus on specific topics related to infrastructure "costs" associated with global projects based
financing, governance and development. These on research in management, sociology, law,
organizations also provide funding for CRGP seed psychology, anthropology, and other pertinent
research and administration through annual affili- disciplines and using surveys, case studies, and
ate contributions. CRGP regularly submits propos- research methods to validate and calibrate the
als to outside agencies for larger-scale funding emerging theoretical frameworks;
based on the findings of its most promising seed - Developing new models, visualizations, and
research projects. predictive tools to help leaders in government
and industry improve planning and manage-
Visiting Scholar Program ment practices on global projects;
The Collaboratory has a Visiting Scholar program - Creating formal curricula incorporating results
and typically hosts three to eight industry and of CRGP research to teach principles, know-
academic visitors annually for a period of three how, and tools for designing global projects,
to twelve months. Visiting Scholars are required and disseminate them via the Stanford Center
to have a Ph.D or to be a recognized world expert for Professional Development's SU-Online e-
in their professional discipline. Industry profes- learning platform, 24/7, around the globe.
sionals have used the Visiting Scholar program to
stay engaged and do reading and writing during CRGP Activities in 2009-2009
career transitions. Academics frequently use the During 2008-2009, CRGP researchers and industry
Visiting Scholar program as a source of new ideas affiliates continued an active program of research,
and inspiration during a sabbatical year. Visiting education and outreach to industry and govern-
Scholars are assigned an office, participate in ment. Significant activities from the most recent
Collaboratory seminars and meetings, audit Uni- year are listed below.
versity courses, publish research, and assist with
Collaboratory projects. Research and Educational Activities
CRGP researchers in Stanford's law school, busi-
CRGP Philosophy ness school, engineering school and department
CRGP serves as Stanford University's primary fo- of sociology were engaged in the following studies
rum for systemic studies of global projects. CRGP and publications during the 2008-2009 academic
defines "Global Projects" as projects that involve year:
participants from multiple societal or cultural - White Paper on America's Infrastructure Strat-
systems and/or geo-spatial locations. Its research egy (Author: Michael Garvin) Co-Published by
activities primarily focus on studying the impacts CRGP and KPMG, 40 Pages
of organizational and institutional parameters on - 300 Page Book on the Distribution of Chinese
projects that are difficult to quantify and yet have Infrastructure Investors and Contractors in
proven historically to have detrimental impact on Africa, by Country and by Sector (Partners:
overall project efficiency. CRGP, OECD, World Bank, Tsinghua University),
CRGP studies the kinds of global projects In-Press
that are large enough to have regional and - Comparative Assessment of Rationale for PPPs
even national economic and social impacts, Across 7 U.S. States (Author: Sanjee Singla,
that involve multiple engineering disciplines; Management Science and Engineering) In
that have significant impact on our environs press.
where eco-sustainability becomes critical; that - White Paper on Expanding Options for Infra-
are organizationally complex with participation structure Renewal in California (Author: Ryan
from multiple cultures; and that have complex Orr; Gregory Keever, CRGP Industry Affiliate) In
institutional issues and concerns stemming from press.
conflicts over goals, values, cultural norms, work - Major Sponsored Project of Factors Predicting
practices, and technology. NGO Opposition to Water and Pipeline Projects
CRGP researchers use multiple research frame- (Team: Ray Levitt, Ryan Orr, Dick Scott, Jenna
works—ethnographic, case study, survey and Davis, Doug McAdam + 8 grad students) Three
computational modeling—to develop, test and journal papers in press.
deploy innovative theories, methodologies and - Comparative Due Diligence of 50+ Global In-
tools. Results from CRGP research are disseminated frastructure Funds (Research Team: Ryan Orr +
through graduate and executive education and 10+ Students from Graduate School of Business)
through a variety of publication media. Published.
The CRGP global network of Affiliate Members - Comparative Analysis of PPP Coordination
and Collaboratory Partners is engaged in a portfo- Agencies Globally (Authors: Christine Farrugia,
lio of activities aimed at developing frameworks, Tim Reynolds, Grad. School of Business) Working
tools and strategies to improve the outcomes of paper published.
global projects, and to educate a new "global - Ph.D Thesis on How Global Construction, Engi-
project savvy" breed of professionals. These activi- neering and Project Development Companies
ties include: Capture and Share Knowledge and Best-Practice
- Conducting surveys, case studies, other kinds Across their Organization and Supply Chain (
of field research, mini-internships, and Round- Student: Dr. Amy Javernick Will, Civil & Envi-
tables to understand the generalizable chal- ronmental Engineering) Published; three journal
lenges that beset global projects; papers in press.
14 www.pry.fi
International cooperation for development
Design of a competence-
based model for managing
programmes and projects
Managing international cooperation for development projects is a complex task that involves tech- José R. Cobo
nical, political, socio-economic and cultural variables. The technical, contextual and performance Isabel Ortiz
competences of those who manage these kinds of projects must take this complexity as their starting Carlos Mataix
point and tackle it with all their accumulated experience to decide what actions need to be carried Universidad Politécnica de Madrid
out. This research includes an analysis of the theory and application of the project management Departamento de Ingeniería de
methodologies currently used by development organisations; an analysis that takes a critical look Organización, Spain
at the success or failure of development interventions, assessing the components of competences
and the essential skills for project managers. It also examines how proposals for cooperation project
management methodology are drawn up, specific training programmes in this area, the coordina-
tion between players, and knowledge management, with the purpose of enhancing the impact of
development interventions.
Direct Indirect
Project Delivery Partners Society
Beneficiaries Beneficiaries
Efficiency
Effectiveness
and development agency managers to adopt a developing countries reaffirmed their commit-
more systematic approach to all aspects of project ment to policies and actions to promote economic
and programme management. growth and reduce poverty, and the developed
Many institutions and agencies in both devel- countries supported them with more effective
oped and developing countries now use a variety aid and trade policies. In this context of shared
of practical MfDR techniques. These include responsibility, world attention has moved towards
results-based strategic planning, the use of logic management strategies in order to achieve re-
models or project results frameworks, results- sults. At the international round table on results
based budgeting, risk management and results- in Marrakech (February 2004), the development
based evaluation and monitoring (Fontaine, 2004). agencies gave their backing to five central prin-
Management in the public sector used planning, ciples for management by results. More recently,
programming and cost control models in the at the High Level Forum on the Effectiveness of
1960s, placing an emphasis on financial plan- Aid in Paris (March 2005), the member countries
ning and cost accounting. ‘Input’ management and the donors backed the Paris Declaration,
(human resources, operating costs…) became which contains specific commitments related to
more important demonstrating control over the Managing for Development Results: actions to be
management, distribution and use of financial taken both separately and jointly to “administer
resources (Osborne and Gaebler, 1993). and implement aid in a way that is focused on
Programme management by activities (PMBA) the desired results and uses the information to
reached its peak between the seventies and the enhance decision-making”.
eighties when donor organisations got involved in Development results-based management is cen-
infrastructure and industrial development projects. tred on a strong notion of causality. It is supposed
This combined with different activity planning that certain inputs and activities logically lead to
tools and techniques (project structure break- certain results (Binnedijk, 2001). The relevance of
down, Gantt diagrams, the Critical Path Method, these results follow an increasing order: the most
Programme Evaluation and Review Technique) basic results (the ‘products’ or outputs) contribute
boosted the implementation of activities in line to the success of the most complex results (‘effects’
with a programming framework that became or outcomes) and finally lead to getting ‘impact’,
extended to management systems in the building which is the most far-reaching result. Therefore,
industry and engineering (Hailey and Sorgenfrei, attention must be paid to achieving results at every
2003). In the field of international cooperation stage of the management process, from planning
the introduction of management methods by to monitoring and evaluation, since every level of
objectives goes back to this period Such methods development of every process is affected.
were the Logical Framework Approach (LFA) at the For those working on this incipient programme,
United States Agency for International Develop- however, it is sometimes difficult to know how
ment (USAID) and the Objective Oriented Project and where to begin, who to include and where to
Planning methods (GTZ). seek aid. There are no black and white answers to
The 2002 Monterrey Conference called for these questions because every country and agency
creating a new partnership for development: the has its own unique situation. Notwithstanding,
16 www.pry.fi
as certain agencies and countries advance in this
Technical Competences Importance
work, they have begun to mark out a path that
M SD
can be useful to others.
Out of the search for this balance certain Parties involved 3,11 0,78
recent proposals have arisen aimed at improv- Risk and opportunity 4,78 0,68
ing the quality of participation of all the parties
interested in the life cycle of an intervention and Quality 4,31 0,69
in making planning models more flexible so that Project Organisation 2,98 1,28
they better interact with their surroundings and
thereby re-guide activities and results according Teamwork 2,88 1,44
to how the context evolves. This work takes ac- Project Coordination 2,86 1,69
count of all the theories on development, as well Scope and deliverables 3,93 0,75
as the management approaches used: the logical
framework approach (Gómez Galán and Cámara, Time and project stages 1,97 1,18
2003), results-based management, the process Resources 2,74 1,00
approach to learning (Korten, 1987), projects as
experiments (Rondinelli, 1993) and organisational Cost and financing 3,04 0,89
learning-based processes approach (Chambers, Supplies and contracts 1,51 0,93
1994). In addition, we have studied how interna-
tional organisations plan, evaluate , and manage Changes 2,56 1,18
development projects: UK Department for Inter- Control and reports 2,77 1,41
national Development (DFID), Japan International Information and documentation 4,25 0,42
Cooperation Agency (JICA), Deutsche Gesellschaft
für Technische Zusammenarbeit (GTZ), Canadian Project Completion 1,53 1,02
International Development Agency (CIDA).
18 www.pry.fi
exclusive or complementary tools for project plan- International Project Management Association
ning? Development and Practice, 10 (5), 687-690. (2007), Project Management competence baseline,
version 3.0. The Netherlands.
Binnedijk, A. (2001)
Results based management in the development Khang, DB., Moe, TL (2008)
co-operation agencies: a review of experiences, Success criteria and factors for international de-
CAD-OCDE, París. velopment projects: a lifecycle-based framework.
Project Management Journal, 39(1):72–84.
Chambers, R. (1994)
The origins and practice of participatory rural ap- Korten, D. (1987)
praisal. World Devolopment, 22 (7), 953-969. Third generation NGO strategies: a key to people
centered development. World Development, 15,
Coordination NGO for Development Spain (2008). 145-159.
The NGO for Development Code of Conduct. www.
congde.org. McClelland, D.C. (1973)
Testing for competence rather than for intelli-
Crawford L, Bryce P. (2003) gence. American Psichologist, 28, 1-14.
Project monitoring and evaluation: a method for
enhancing the efficiency and effectiveness of aid Osborne, D. and Gaebler, T. (1993)
project implementation. International Journal of Reinventing Government: How the entrepreneurial
Project Management, 21:363–73. spirit is transforming the public sector.
Fontaine, E. (2004) Rondinelli, D. (1993)
Implementation of results-based management Strategic and results based management in CIDA:
in the United Nations organizations, Inspection reflections on the process’. Strategic Management.
Departmen, Ginebra. Canadian International Development Agency.
Ottawa.
Gómez Galán, M. y Cámara, L. (2003)
Logical Framework Orientations. Cideal. Madrid. UNDP (1997)
Measuring and Managing Results: Lessons for
Hailey, J. and Sorgenfrei, M. (2003) Development Cooperation.
Measuring Success? - Issues in Performance
Management. Keynote Paper 5th International UNDP (2008)
Evaluation Conference on Measurement, Manage- Human Development Report 2007/2008.
ment and Accountability. KDKConference Centre,
The Netherlands. Williams, R.S. (1998)
Performance Management, Thomson, London.
20 www.pry.fi
Survey Description n = number of people surveyed
The survey was based on 13 safety and health risk i i i i = evaluation of the criticality of the ith risk factor by the
factors (Table 1) identified through a literature R =P I
j j j R j jth person surveyed
review on construction risk management. The 13 i = evaluation of risk occurrence level by the jth person
risk factors were categorized into 4 groups, namely n
i P j surveyed
political & economical risks, social risks, environ- i Rj i = evaluation of risk impact level resulting from the ith risk
mental risks, and project risks. Because the safety R= n j=1
I j factor by the jth person surveyed
and health risk situation may vary from region to i
region, the international construction market was
R = criticality index of the ith risk factor.
20
Data Analysis and Findings 19
In this research, the risk criticality index was
used to prioritize the risk factors for the three 15
international construction regions. The risk criti-
cality index was intensively adopted by previous
researchers to extract the critical risks from a risk 10 11
checklist (Shen et al 2001; Fang et al 2004; Sun et
al 2008; Zou and Zhang 2009). Formula (1) and (2)
demonstrate how to calculate the risk criticality 5
index according to the experts’ assessment on the
risk occurrence and the risk impact.
The statistical analysis was conducted to inves- Developed Developing Middle East
Region
tigate the differences between the risk criticality
indices of different risk factors. The major statisti- Figure 1. The amounts of responses for the three regions
22 www.pry.fi
significant difference while the other test Middle East
showed none, the risk factor would be The risk criticality indices were computed for the
grouped into the medium risk category 13 risk factors for the international construction
according the conservative point of view projects in Middle East (Table 5). There are 6 risk
of “never underestimate the risk”. factors with criticality indices greater than 9 so
that they are grouped into the high risk category,
Developed Regions including bad economical situation, extreme natu-
Risk criticality indices of the 13 risk factors for the ral condition, labor risk, language barrier, cultural
international construction projects in developed difference and conflict, and difference in laws &
regions were then computed and the results were regulations. The last risk factor in this group is
listed in Table 3. Three risk factors (namely labor the risk factor “difference in laws & regulations”.
risk, extreme natural condition and natural disas- The comparison of the criticality indices were
ter) were in the high risk category with criticality conducted between the risk factor “difference in
indices greater than 9. The risk factor “natural laws & regulations” and the risk factors with the
disaster” is the last risk factor with its criticality criticality values less than 9. The statistical analysis
index value more than 9. Based on the statistical shows that only 1 risk factor (lack of infrastruc-
comparison of the criticality indices between ture facilities) should be grouped as medium risk
“natural disaster” and the risk factors with the category and 6 risk factors would fall into the low
criticality values less than 9, seven risk factors risk category, including terror attack, war, natural
were in the medium risk category (e.g. terror at- disaster, disease, crime and civil unrest.
tack, language barrier, bad economical situation,
crime, cultural difference and conflict, difference The Critical Risk Factors of the Three
in laws & regulations and disease) and three risk Regions
factors were in the low risk category (e.g. lack of The most important risk factors of concern are
infrastructure facilities, war and civil unrest). those with high criticality index values in all three
international construction regions. These critical
Developing Regions risk factors can serve as a means for developing
The risk criticality indices of the 13 risk factors an effective risk management strategy that should
for the international construction projects in de- be implemented in an efficient way. A score rang-
veloping regions were computed (Table 4). Eight ing from 1 to 3 was given to qualitatively explore
risk factors, e.g. labor risk, lack of infrastructure the critical risk factors of the three regions. For
facilities, cultural difference and conflict, crime, a specific region, 1, 2, or 3 was assigned to a risk
disease, language barrier, difference in laws & factor respectively if the risk factor was in a low,
regulations and bad economical situation, had medium or high risk category (Table 6). The labor
criticality indices greater than 9. The risk factor risk received an average score of 3, meaning that
“bad economical situation” is the last risk factor it was high in each of the three regions. Five other
with its criticality index value more than 9. The risk factors had average scores of 2.67, including
comparison of the criticality indices were con- bad economical situations, cultural differences
ducted between the risk factor “bad economical and conflicts, differences in laws & regulations,
situation” and the risk factors with the criticality extreme natural conditions and language barriers.
values less than 9. The results indicate that all the These five risk factors were categorized as high
5 risk factors with less than 9 criticality values risk in 2 regions and medium risk in one region.
should be categorized as medium risks. Along with the labor risk factor, these should be
regarded as the critical risk factors on safety and
Table 6. The critical risk factors for all the three regions
health issues in international construction proj- 3. The Middle East has the distinct feature
ects. In summary, the large number of high critical that differs from the developed and devel-
risk factors (6 of 13 or 46.15%) confirms that the oping regions. There are 6 high risk factors
safety and health issues in international construc- and 6 low risk factors, with 1 medium
tion projects are serious problems from a global risk factor. The 6 high risk factors are bad
point of view and warrant serious consideration economical situations, extreme natural
to properly address them. conditions, labor risks, language barriers,
cultural differences and conflicts, and dif-
Summary and Conclusions ferences in laws & regulations;
The objective of this paper was to provide a bet- 4. Six critical risk factors were identified
ter understanding of the safety and health risks through further analysis, which were cat-
in international construction projects. According egorized as high risk in at least 2 regions
to the risk criticality index and statistical analysis, and were not marked as low risk in any
four criteria were developed to categorize the risk regions. These critical risk factors comprise
factors as high risk, medium risk, and low risk. The labor risks, bad economical situations, cul-
detailed outcome of this paper is summarized as tural differences and conflicts, differences
follow: in laws & regulations, extreme natural
1. Of the three international construc- conditions and language barriers.
tion regions, the developing region has
the greatest risk situation on safety and Acknowledgement
health issues in international construction This research effort was a part of project 70772013
projects. In the developing region, all the supported by the National Natural Science Foun-
risk factors are in the high and medium dation of China. The authors gratefully acknowl-
risk categories. The high risk category for edge the National Natural Science Foundation
the developing region consists of 8 factors, of China for providing funding for this research.
namely labor risks, lack of infrastructure Appreciation is also given to the Program for Key
facilities, cultural differences and con- International S&T Cooperation Projects of Ministry
flicts, crime, disease, language barriers, of Science and Technology, China (Project No.
differences in laws & regulations, and bad 2003DFB00015). The support for questionnaire
economical situations. survey from Mr Kavin Berg, the global vice presi-
2. Compared to the developing region, the dent of Bechtel Group, is also greatly appreciated.
developed region is less risky with 10 risk The work of this research was ever presented at
factors (76.92%) falling into the medium the CIB conference in Melbourne Australia and
and low risk categories. There are three appreciation is given to the CIB conference for
risk factors in the high risk category for providing opportunity to share the results of our
the developed region, including labor risks, research.
extreme natural conditions and natural
disasters.
24 www.pry.fi
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Researchers and practitioners have drawn attention to the differences in thinking and acting between the project manag-
ers and executives in project management. These differences - also called the gap in this paper - may negatively impact
project results. However, knowledge about this gap is lacking in current research. This study aims to investigate this gap
and quantifies the different perceptions that project managers and executives have. The research consisted of a literature
study followed by a survey among project managers and executives to gather the experiences, and to identify the size
and the impact of this gap. The result made clear that the gap is caused by the differences in perspectives, in strategic
insight and in understanding of each others behaviour. If the gap is present, it was perceived by both project managers
and executives that it had a negative impact on the project results.
Introduction project managers and executives if both Recognizing the different perceptions
In today’s organizations the role of of them do not fully understand the towards project management may help
projects is evident. Many organiza- other’s perception. In this research we to prevent the gap from occurring.
tions implement their innovations and investigate this gap.
re-organizations through projects. Research on project management Literature Review
Projects are considered to have a strong has extensively investigated the rela- To identify and to bridge the gap be-
contribution to the strategic goals of an tionships between project managers tween project managers and executives,
organization, however, the benefits from and their team, the project sponsors or it is necessary to give a clear definition
a project for an organization may differ the steering committee. Relatively few for this gap in this research. A differ-
from one project compared to another studies have focused on the relationship ence in thinking and acting between
project. This may be partly due to the between project managers and execu- the project managers and executives
different views that executives and proj- tives. Their relationship, differences in may always be present. A large portion
ect managers have on projects. On the perceptions on project management, of this difference is most probably due
one hand, executives tend to view a cer- way of thinking and behaviour may to their different position in the organi-
tain project with respect to the strategic impact not only the project success but sation and their different roles in the
direction of the organization. On the also the overall organizational success. organisation and in projects. But when
other hand, project managers empha- In order to get a better understand- this difference has a negative impact on
size to focus on the success of a certain ing on the presence and perceptions of results, we talk about a gap (Wijngaard
project. They are directly involved in the a gap between project managers and et al., 2008):
execution of the project and in that way executives we formulated the following A gap in project management is
they contribute to the overall strategic research questions: the distance between the project
direction of the company. - To what extent project managers and manager and the executive in the
Hence, both executives and project executives have different perceptions work process – as a result of the
managers contribute to developing the on the presence of a gap in project difference in perspective caused
strategy of the organization but their management? by their different roles – with a
approach may differ. Executives have - What are the causes for this gap negative impact on project results
an overall view of the projects and according to project managers and and with that on the organization
make decisions based on high-level executives? goals.
information of all the projects in the - How do views between project man-
portfolio. Project managers focus on the agers and executives differ concern- A gap between project managers and
performance of their project and try to ing the business case? executives in project management
give their project the best position in The results of this study can be used Open culture and co-operation is ideal
the organization. These different roles to improve the relationship between but in practice this does not always
of executives and project managers project managers and executives. They happen. Especially, in situations where
can lead to different perceptions about can improve their understanding of executives delegate to the project man-
the management of projects. Different the views and perceptions they both ager the authority for taking decisions
perceptions can lead to a gap between have regarding project management. to execute the project. During the ex-
26 www.pry.fi
ecution of the project, the information tion can be an important factor influ- results of the questionnaire that were
that project managers and executives encing the size of the gap. Shenhar et al. addressed to the project managers and
have can be a-symmetric. This might (2001) made clear that well-performing the executives. We asked both project
bring the executive in a state of insecu- projects are characterized by close co- managers and executives the same ques-
rity. A reaction of the executive might be operation and less structure. Also the tions that allow for comparisons be-
the introduction of many controls which way of communicating is important; tween the two groups. Out of the 3032
factually decrease the decision-making (only) written reports have a negative questionnaires that were sent to the
authority of the project manager. In his impact, personal communication a project managers we received 299 useful
turn, the project manager might inter- positive. Communication can both be questionnaires in return, representing a
pret these controls as a lack of trust by formal (reports) or informal (day-to- response rate of about 10%. With re-
which the gap is enlarged (Müller and day talks). spect to the response by the executives
Turner, 2005). we received 56 useful questionnaires out
The research of Shenhar et al. (2001) Specificity of the business case of the 1134 that were sent, representing
clarified that project managers and As is well-known, the roles of the execu- about 5% response rate. The distribution
executives are working according to a tive and project manager are different of the respondents among sectors, size
different timescale. The project manager per definition, which also explains the of company, and experience are given
leaves the project when it is finished existence of the gap between them. The in the following tables.
but the executive is faced with the extent to which a project is translated Following the descriptive data of our
long-term results – both positive and into a clear business case can be deter- response, we analyzed the extent to
negative – of this project. This differ- mined by how realistic project budget which project managers and executives
ence can result in a conflict situation, is, or its schedule. Discussion about this experienced a gap and the perceptions
and therefore enlarges the gap. between the executive and the project they have with respect to the causes
manager will help decreasing the gap. of the gap. We furthermore focused
Impact on the project results As also the explicitness of the quality on specific elements as hierarchical
Various factors may influence the gap requirements and the possibilities to differences, the impact of skills and
and have a positive or negative impact discuss issues related to the project. knowledge, the strategic alignment and
on the project results. An example of a Therefore we expect that a more specific the role of the business case.
positive impact is the fact that a certain business case will diminish the existence
tension is probably needed between the of a gap in project management. Experiencing the gap
project manager and the executive to In Figure 1 we present the different views
achieve an efficient project execution. The Research Project that project managers and executives
On the other hand, a negative example To get an actual view on the gap and have on the gap. The majority of project
could be that if the project manager is to verify the different statements in managers (66%) often experience that
unaware of the strategic relevance of a literature, Atos Consulting and the compared to their executives they have
project. This could have been prevented Delft University of Technology initiated different views with respect to project
by exchange of information about the a practice-oriented research
strategic relevance from the executive study. The practical approach Sector Project Executives
to the project manager. allows to get a more realistic Managers
understanding of the presence
Interaction between the executive of a gap between executives Consultancy 51% 30%
and project manager and project managers and Financial Sector 15% 15%
The interaction between project man- moreover can help extracting
agers and executives can be the source managerial. Governmental auth. 15% 15%
to the gap. We investigated three main The research consisted of a Telecommunications 10% 12%
areas of the interaction between project literature research, a quantita-
managers and executives. tive and qualitative analysis. Industry 9% 28%
For the quantitative analysis, Table 1. Division respondents among sectors.
Hierarchical differences a questionnaire was sent to
With respect to the hierarchical dif- 3032 project managers and
Size of Company Project Executives
ferences it is important that there is 1134 executives. A regression Managers
mutual recognition and coaching. Both analysis was applied to extract
executive and project manager should conclusions about which vari- > 250 employees 67% 70%
value each others skills and personal- ables influence the creation of
ity. If the executive judges the project problems within a project, and 50-250 employees 15% 17%
manager in a positive way, this will which can therefore explain < 50 employees 18% 13%
result in rising support and confidence the distance between project
towards the executive. This can improve managers and executives. Table 2. Size of company.
the chance of success of the project. On The qualitative analysis con-
the other hand, if the project manager sisted of an in-depth study Years of Experience Project Executives
has confidence in the executive, he will of a few projects, and several Managers
have less reluctance to report bad news, interviews. Both executives as
and therefore give the executive a bet- project managers were inter- > 10 years 52% 15%
ter possibility to steer. Based on this we viewed to get the two points 5-10 years 33% 30%
expect that the gap can be narrowed. of view regarding projects and
possible distances. < 5 years 15% 40%
Communication
No experience 0% 15%
Communication is an essential element Results of the Research
for project success. Lack of communica- In this section we present the Table 3. Experience in Project Management.
management. This experience of a gap gap. It is remarkable that, compared to indicate that they know the strategy of
is also perceived by approximately 62% project managers, about 35% of the the company. Similarly a large number
of the executives. When it comes to the executives think that they are respon- of executives (88.7%) agree and state
consequence of the gap they both have sible for the gap. Next we identified that project managers are aware of
a strong feeling that it negatively affects the role of executive involvement as a the strategic goals of the organization
the outcome of the project. About 90% cause to the gap. The results in Figure 2 and the role of project management to
of the project managers think this has a show that more than two-third of the achieve the strategic goals. We also ran
negative impact and about 82% of the project managers (68.6%) agree to the correlation analysis between strategic
executives agree on that. With respect statement that gap could be smaller alignment and the perception of a gap
to bridging the gap we found that if executives pay more attention to for the project managers. We found
approximately three-quarter of both project management. Executives agree that higher levels of strategic align-
the project managers (74.1%) and the even more to the statement and almost ment was associated with lower levels
executives (74.3%) claim a necessity to three-quarter (73.5%) of the executives of gap experience (r= -0.161; p <0.05).
mitigate the gap. signify that their attention to project The correlation was not significant for
management could decrease the gap on the executives.
Hierarchical differences project management.
We analyzed the role of hierarchical dif- Perceived realistic budget, time and
ferences as causes to the gap, see Figure Communication and alignment quality
2. This hierarchical difference between In Figure 3 we present the findings With respect to the different views
project managers and executives can from the different views that executives on the expectations we analyzed the
manifest as political, managerial or and project managers have on project project criteria that were set by execu-
organizational, or directly caused by managers. In the first place this differ- tives for the project. It can be seen in
executives or by lack of executive in- ent view can manifest in disagreement Figure 4 that the expectations on the
volvement. More than half of the project between project managers and ex- budgets, planning and quality level were
managers (55.1%) think that political ecutives on the management approach perceived as quite realistic and on the
aspects have an influence on the gap. that is adopted in a certain project. same level by project managers and ex-
Almost a similar amount of executives Compared to project managers (53.8%) ecutives. Time planning was perceived as
(47.1%) agree to that observation and a slightly larger amount of executives the least realistic by both parties (68%
say that political issues indeed affect (58.8%) indicate that they disagree with and 65% only agreed to that). Also, the
the gap in project management. For project managers on the management perceived necessity of and expectations
the management and organization of approach. Concerning the acceptance met on the amount of discussions on
project we found that only about 37% of criticism, a large amount of project project issues were (comparably) high
of the project managers and 27% of managers (even 98%) think that they are between project managers and execu-
the executives indicate that it influ- open to it, however, executives thinks tives. The agreement on these items is
ences the gap. Even a smaller amount that project managers are less open at least striking: from sounds heard in
of project managers (27.9%) suggests to criticism (though still about 85%). practice a much larger gap on these
that executives are responsible for the Quite a lot of project managers (94.0%) items was expected.
Figure 3. Alignment of executives and Figure 4. Perceived realistic budget, time, quality and
project managers. interaction.
28 www.pry.fi
Conclusions
Although the results of the research do D Peter Wijngaard studied Forestry at the Wagenin-
Dr.
not give a completely new understand- gen University, the Netherlands, and did his PhD in Op-
g
ing and insight of the gap, it certainly eerations Research at the same university. After that he
contributes to our knowledge about the worked mainly in IT- and project management func-
w
gap in project management and pro- ttions at the Corus Steelplant IJmuiden and Agricultural
vides a scientific base for this phenom- Research Institute. Since 13 years he is working as
R
enon. Overall, the response from both project and program manager for Atos Origin and -
p
executives and project managers were tthe latter 6 years - for Atos Consulting and has broad
relatively comparable, which in its own eexperience in (inter)national projects in industry. Peter
right is already a remarkable result. The has an IPMA-B certification.
h
major findings from our literature search
and survey among project managers and
executives reveals that: Dr. Victor Scholten is Assistant Professor at the Delft
- There is a difference in be- University of Technology, the Netherlands, where he
haviour between the project joined in 2007 the research group on Technology,
manager and the executive, and Strategy and Entrepreneurship. His current research
this causes a gap. focuses on high-technology-based start-ups in aca-
- The gap was shown to have a demic and corporate environments. His is particularly
perceived impact on the project interested in high technology based entrepreneurship,
results (significant for project new business projects and business networks. In 2006
managers). he completed his PhD research on the early growth of
- Understanding for each others Dutch academic spin-offs at the Wageningen Univer-
behaviour and actions reduces sity, the Netherlands.
the gap.
- Strategic understanding by the
Dr. Herman Mooi studied and did his PhD in Mechani-
project managers improves the
cal Engineering at the University of Twente, The Neth-
performance.
erlands. After that he worked for 10 years as project
- Informal communication reduces
and line manager at TNO, a Dutch research institute,
the gap, as opposed to formal
in the field of Crash Safety. Since 3 years Herman is
communication (reports).
Director of the Delft Centre for Project Management
and associate professor Project Management at the
Most striking survey results are:
Technical Univeristy of Delft, The Netherlands.
- The perceived cause of the gap
was according to most respon-
dents (60-75%), not the organi-
sation nor the executives. Ap-
proximately half of the respon-
dents blamed internal politics as References
a cause of the existence of the Bergeron, Francois, Raymond, Louis and Kerzner, Harold (2006) Project manage-
Rivard, Suzanne (2003) ‘Ideal patterns ment best practices: achieving global
gap. of strategic alignment and business excellence, John Wiley & Sons, Inc.
- On the other hand, a small performance’, Information & Manage-
majority of the respondents ment, vol. 41, pp. 1003-1020. Kliem, Ralph L. and Ludin, Irwin S. (1992)
(68-74%) had the opinion that The people side of project management,
the gap could be decreased by Cleland, David I. (1994) Project manage- Gower Publishing.
ment: strategic design and implemen-
an increased attention of the Kloppenborg, Timothy J., Stubblebine, Pat-
tation, 2nd edition, McGraw-Hill.
executives for project manage- rick C. and Tesch, Debbie (2007) ‘Project
ment. Cooke-Davies, Terence J. (2005) ‘The ex- manager vs. executive perceptions of
- There was a remarkable align- ecutive sponsor - The hinge upon which sponsor behaviors’, Management Re-
ment in answering of both organizational project maturity turns’, search News, vol. 30, pp. 803-815.
groups (project managers and PMI Global Congress Proceedings.
Müller, Ralf and Turner, J. Rodney (2005)
executives). Crawford, Lynn (2005) ‘Senior manage- ‘The impact of principal-agent relation-
ment perceptions of project manage- ship and contract type on communica-
By giving insights in the source of ment competence’, International tion between project owner and man-
the existence of the gap, the findings Journal of Project Management, vol. 23, ager’, International Journal of Project
of this research can contribute to giv- pp. 7-16. Management, vol. 23, pp. 398-403.
ing handles to project managers and Dinsmore, Paul C. (1999) Winning in busi- Morris, P.W.G., Patel, M.B. and Wearne, S.H.
executives to optimize the use of project ness with enterprise project manage- (2000) ‘Research into revising the APM
management in an organisation by bet- ment, Amacom. project management body of knowl-
ter project results might be obtained. edge’, International Journal of Project
Englund, Randall L. and Graham, Robert
Management, vol. 18, pp. 155-164.
J. (1999) ‘From experience: linking
projects to strategy’, Journal of Product Shenhar, A.J., Dvir, D. and Levy, O. (2001)
Innovation Management, vol. 16. ‘Project success: a multidimensional
strategic concept’, Long Range Plan-
This is an updated version of a paper originally Johns, Thomas G. (1998) ‘On creating
ning, vol. 34, pp. 699-725.
published in the “IPMA Scientific Research organizational support for the project
management method’, International Wijngaard, P.J.M., Mooi, H. and Scholten,
Paper Series: Human Side of Projects in Modern
Journal of Project Management, vol. 17, V. (2008) De kloof, Atos Consulting
Business” (IPMA, 2009) pp. 47-53. Trends Institute.
30 www.pry.fi
cal and mental health of them. So we
can do analysis easily by changing all PD PC Active attending Inactive attending
treasures to paying health subsidies to
fit the game model’s need. From this Timely payment H, M+B1 DH, M+B2+C
way, there are two choices for PD, one
is to take treasures actively which can Deferred payment H+B1, M-B2 DH+B1, M-B2+C
be interpreted as paying timely health
subsidies, the other take no treasures or
take treasures inactively which can be H HTD project;
interpreted as paying deferred health DH Disharmonious together-development project;
subsidies. Then the strategy set is S1= M Health subsidies;
(timely payment, deferred payment). B1 PD earnings by using health subsidies money to invest for other usage;
They are two kinds of strategies for B2 Interest of health subsidies for PC (the interest corresponds to the additional
PC, one is to do HTD actively, assuring earnings by the effective treasures);
quality and effect. The other one is to C Cost saved under inactive attending condition by PC.
do HTD inactively. From the standpoint
of PC, attending HTD actively, carrying Table1. Earnings matrix of both sides in the complete information
out activities and putting into resource source static game model
will raise cost, however, attending HTD
inactively, decreasing human resource, So the Nash equilibrium of the game guarantee funding, these two treasures
material, and money will bring down model is: (deferred payment, inactive are as follows:
corresponding cost. Then the strategy attending). 1. Positive incentive treasures——awards
set is S2=(active attending, inactive The above game equilibrium is ana- setting. the third-party awards the
attending). lyzed from game earnings matrix. If PD timely payment PD the title of “out-
3. The earnings of two sides doesn’t pay the health subsidies in good standing PD”, and award the active
The earnings of two sides can be ex- time, the PC surely will not do the HTD attending PC the title of “outstand-
pressed as earnings matrix by table 1. actively, and they will delay or cancel ing PC” ,and these titles can only be
many kinds of HTD activities deliberately occurred when PD and PC both do
1. The project can obscure the harmony and force the PD to pay the health sub- good in HTD. These awards include
during construction stage or not is sidies. If the PD pays the health subsidies money and reputation, which can
mainly decided by active extent of in good time, the PC will control the bring about positive values for PD
HTD activities and support extent by devotion of human resource, material, when bidding in the later and PC’s
PC residents. If positive, the project and money to a certain extent for the future development.
can be recognized as harmonious best choice, and this will decrease many 2. Negative stimulus treasures——guar-
one named H, otherwise, it will be kinds of cost. antee funding. Before the project
recognized as disharmonious one In the Nash equilibrium for this beginning and HTD activities, PD and
named DH. model, it is absolutely rational choice PC must have some guarantee fund,
2. B1 means PD earnings by using money for each side, but finally the choices or security of the issue by relative
for due health subsidies to invest for have brought on the worst result for the financial institution. PD and PC both
other use, B2 means interest of health collectivity, that means PD and PC both need enough guarantee fund to force
subsidies for PC. It is can be inter- have gone into “prisoner's dilemma”. them to do HTD, including timely
preted like this: B1 means earnings payment for PD and active attend-
by paying health subsidies delayed Going Out of the “PRISONER’S ing for PC. In a word, the security of
by PD, and B2 means earnings for PC DILEMMA” in HTD During the performance bond for PD is assurance
by health subsidies. Construction Stage for payment of health subsidies, and
3. C means cost saved under inactive There are no good for both PD and PC if security of performance bond for PC
attending HTD condition by PC, in- they went into prisoner's dilemma. The is assurance for active HTD activi-
cluding expenses on human resource, main reason for occurrence of this is ties. If contract breach has occurred,
money and material for kinds of both sides not cooperating. The solution the credit level of PD and PC will be
activities and service. It is sure that treasures are including non-mandatory decreased and they will be punished
there would be much adverse infer- positive incentive like awards setting by severe sanctions in the following
ence for the normal carrying out of and mandatory negative stimulus like awards and undertaking follow-up
HTD and the goal achievement for project process.
harmonious project if PC has saved C,
just like taking a indifferent attitude, Active attending Inactive attending
doing HTD inactively and so on. PD PC
The Nash equilibrium of the game Timely payment H+A1, M+B2+A2 UH, M+B2+C-I2
model for HTD
It is can be seen from earnings matrix Deferred payment H+B1-I1, M-B2 UH+B1-I1, M-B2+C-I2
that:
If there is no other restriction, PD will A1 Incentive awards of outstanding PD;
choose deferred payment as optimal A2 Incentive awards of outstanding PC;
strategy in no matter that PC do HTD I1 HTD guarantee fund of PD;
actively or not. PC will choose inactive
I2 HTD guarantee fund of PC.
attending HTD strategy in the case of no
other restriction in no matter that PD Table 2. The earnings matrix after the adding of incentive
do timely payment or deferred payment. awards and guarantee fund
Conclusions
The LEPs are facing complex and
changeable construction environ-
ment, long-term, close relevance and
strong interaction between stakehold-
ers, which have significant impact on
society, environment, and budget, and
these have been concerned by the
public, and unsuitable treatment may
bring about serious society problem.
LEP like Expo has been obviously bear-
ing the construction of harmonious
society in current environment. Under
great background of market economy,
many sides having relationship with
construction containing and inferring
with each other should be analyzed
as stakeholders, and it is necessary to
convert contradictions and optimize
solution plans to the problems using
Figure 1. The construction site and PCs of Shanghai 2010 Expo China. the game theory. The general Shanghai
32 www.pry.fi
Figure 2. Visiting the Expo site by the invitation of PD Figure 3. Medical service provided by PC for PD workers.
for PC residents.
Expo organizer converts the “prisoner's Wang Yingluo (2008) Overall project management team for
dilemma” which may be occurred into Contemporary Engineering Values and EXPO2010 construction of Tongji
harmonious development and win-win Engineering Education, Engineering Sci- University (2007), The construction pro-
situation for PD and PC using awards ences, 10 (3),pp17-20. gramme management plan of Shanghai
2010 Expo China.
setting and guarantee funding system. BENT B. FLYVBJERG et al (2003)
This exploration may vividly be one of Megaprojects and Risk: An Anatomy Overall project management team for
the exhibits for Shanghai 2010 Expo of Ambition ,Cambridge: Cambridge EXPO2010 construction of Tongji Uni-
China, and it’s one of the methods to University Press, pp1–5. versity (2008), The project management
managing the stakeholders in LEP which administrative working handbook of
Xie Shiyu (2002) Shanghai 2010 Expo China.
may be used for reference in other proj- Economic game theory, Shanghai:
ects or social events relating to different Fudan University Press. Guo Wen (2007)
stakeholders. Establishing Engineering Ethics and
She Zhipeng, Ma Liang, Xu Huixuan (2008) Building the Harmonious Society,
Study on the Harmonious Together-de- Journal of China University of Petro-
References velopment Manner Between the Build-
PMI Standards Committee (2000) leum (Edition of Social Sciences), 23(4),
ing Construction of World Expo 2010 pp26–29.
A guide to the project management Shanghai China and the Peripheral
body of knowledge, Project Manage- Community, One of granted project of
ment institute. the Harmonious Society Theory Study
Bureau of Shanghai World Expo Coordina- of Tongji University,pp88-97.
tion, 2006, Summary of Registration HE Qinghua, MA Liang, LU Yujie (2008)
Report for Shanghai 2010 Expo China, Study On The Construction Programme
http://www.expo2010.gov.cn/zlzx/zcbg/ Management Of World Expo 2010
new_zcbgzy.htm. Shanghai China,iccrem2008, pp29-37.
Virtual teams are a part of modern globalized business environment. They have their own unique
problems for managers when members meet rarely and communicate through computer mediated
forums, across space, time, and many different cultures. This paper addresses communication and
trust in virtual teams. A survey was done amongst the members of the social networking site of
the Association for Information and Image Management (AIIM). Approximately 300 people from
over 50 different countries participated in this survey.
Problems regarding trust in virtual teams are typically associated with the beginning of the project.
Groups that meet face to face have fewer incidents where lack of trust becomes a problem. No cor-
relation was found between the type of media used and lack of trust. Intense communication with
different types of media seems to lead to reduced trust. A prediction model for risk factors in virtual
teams was designed, based on the findings.
Helgi Thor Ingason Introduction where communication is through information
Tomas Haflidason During the last 20 years, a tremendous technical technology. Some define distributed teams as
Haukur Ingi Jonasson evolution has taken place with increased access those who never meet whilst others define them
School of Engineering and to high-speed internet connections, internet as teams which meet very rarely (Maznevski and
Natural Sciences connected mobile phones and visual commu- Chudoba, 2000). Some scholars also differentiate
University of Iceland nication through the internet. Communication between globally distributed teams and those who
Iceland technology has never developed as quickly and work within the borders of one country. Typical
organizations have had to adjust themselves to problems in globally distributed teams may be
this rapid development, amongst other means by different than in teams who work within the same
using dispersed teams.. Dispersed teams they offer borders; language problems, different cultural
various opportunities but they are also fraught backgrounds and large distances (Jarvenpaa og
with danger. These teams are often put together Leidner, 1999, Binder, 2007).
without the members knowing each other. They The development of information technology
need to break through a communication barrier and organizations’ needs for increased competi-
often created by the fact that the team members tiveness has resulted in the use of distributed
rarely or never meet. They are often manned with teams in various types of projects such as product
individuals from many different countries and development, design and software development,
therefore with very varied cultural backgrounds, engineering and construction (Duarte and Snyder,
which can create considerable problems. 2001). Globalization is another reason for orga-
The aim of this research was on one hand to nizations to use distributed teams (Cascio, 2000).
look into different communication media and Organizations constantly have to shorten product
what effect they have on the building of trust and development time to stay competitive and one
cooperation within the project, and on the other way to achieve this is by using distributed teams
hand to investigate how it is possible to evaluate (Edwards and Wilson, 2004). Distributed teams can
possible problems distributed project teams may create an environment where the knowledge can
encounter, before the work starts. The idea is that be reached where it is needed, and it is possible to
by evaluating the risk beforehand, project manag- acquire knowledge which is not available within
ers can systematically reduce it. the organization or in proximity to the project
execution. These individuals need not be a part of
Literature Review the organization (Lau, 2004, Edwards and Wilson,
Distributed project teams 2004). Working time can also be increased by
In the IPMA competence baseline ICB 3.0 (2006), moving a project from one area to another, thus
a team is defined as a "group of people who work gaining around-the-clock work on the project
This is an updated version together to realize specific objectives." Many (Edwards og Wilson, 2004).
of a paper originally definitions exist for distributed teams. Most of Niedeman and Beise (1999) categorize distrib-
published in the “IPMA these define distributed teams as teams where uted teams by their communication methods.
Scientific Research Paper the bulk of the communication is done with the Teams who rarely meet and have little electronic
Series: Human Side of aid of information technology. Lipnak and Stamps communication, are called inactive. Teams who
Projects in Modern (1997) define distributed teams as groups which meet regularly, but do not use much electronic
Business” (IPMA, 2009) work across space, time and organizations and communication, are called traditional. Jarvenpaa
34 www.pry.fi
and Leidner (1999) categorized teams according and Kraut, 1994, Hightower and Sayeed, 1995,
to three variables; how long the team worked Handy, 1995).
together, what sort of communication was used
and whether the team members worked in prox- Trust in distributed project teams
imity to one another - or dispersed. Kimble, Li Mayer, Davis and Schoorman (1995) define trust
and Barlow (2000) proposed another model to in terms of the faith and belief in another indi-
categorize distributed teams. Their model also vidual or group that the relevant party will fulfill
categorizes teams according to three variables; expectations in the future. Trust can depend on
whether all the team members work within the situations and have its limitations. In some rela-
same time zone, whether they work in the same tionships, trust is only dependent on simple basic
location or in several locations, and whether they variables but as relationships mature and members
all work for the same organizations or for various get to know each other, individuals learn to trust
organizations. or distrust the team members according to their
Binder (2007) uses five variables to compare characteristics (Lewicki, McAllister and Bie, 1998).
teams - the number of locations, the number of According to this, it is possible both to trust and
organizations, the number of nationalities (cul- distrust the same individual.
tures), the number of languages used in the teams Trust develops with understanding and knowl-
and the differences in time zones. This information edge of people who communicate, including real
is then set up in a pentagram, yielding a graphical experiences with the people in question, and
representation. Of the various ways to compare common opinions and values which unite a team
distributed teams, Binder’s model addresses the (Blois, 1999, Iacono and Weisband, 1997). Building
largest number of variables. On the other hand, trust is not an easy task. It is probably the most
it does not address communication media nor complicated issue in forming a successful and ef-
how long the teams work together. None of these fective team (Zaheer, McEvily and Perrone, 1998).
models takes into account the team size, which Trust and relationships between group members
can have considerable influence on the team com- increases creativity and critical thinking, as well as
munication (Stables, Wong and Cameron, 2003, creating a more positive environment (Reina and
Leenders, van Engelen and Kratzer, 2003). Reina,1999). Kramer (1999) points out that trust
encourages members to devote time to projects,
Communication in distributed project teams keep their focus on joint objectives, help each
Successful distributed teams have to be ready to other, and work harder.
use diverse ways of real-time (synchronous) and Communication and trust are connected. Most
delayed-time (asynchronous) communication scholars believe that individuals need to meet in
through technology such as e-mail, chat rooms, person (Handy, 1995) but others have point out
data meetings and other technical communication that after a long time, trust in distributed teams
modes, to achieve success (Pauleen and Corbitt, becomes comparable to when individuals have
2003). Distributed teams are more prone to com- direct communication (Chidambaram, 1996).
munication trouble, compared to traditional Building trust takes time, but research has also
teams, mostly due to the lack of unspoken com- shown that people start to trust those whom they
munication. Teams that meet face to face build meet regularly in person sooner than in an envi-
up stronger relationships than those who do not ronment where communication is mainly through
meet. This is particularly relevant when it comes to electronic methods. If language difficulties and
project kick-offs (Bélanger and Watson-Manheim, diverse backgrounds are added, it becomes even
2006, Hightower and Sayeed, 1995, Rocco, 1998, more difficult (Krebs, Hobman and Bordia, 2006,
Behrend, Whelan and Thompson, 2008). Initial Duarte and Snyder, 2001). It has been pointed out
team building is more important in distributed that distributed teams which use many methods
teams than in traditional ones (Staggers, Garcia of social communication, manage to build more
and Nagelhout, 2008). Handy (1995) stated that trust and achieve more success (Jarvenpaa og
teams who do not meet face to face could not Leidner, 1999).
establish the necessary trust. Creating solid relationships can be difficult
In project management, the Tuckman model when direct communication is not used (Stein-
(Tuckman, 1965 and Tuckman, Jensen, 1977) on field, 2002). Trough computer communication,
team development is often quoted. Tuckman di- the communication elements which individuals
vides the team life cycle into four stages; forming, use to transfer trust, warmth, empathy and other
storming, norming, performing and adjourning. affections can be lost, according to Duarte and
Johnson and his team (2002) found out that the Snyder (2001). Handy (1995) thinks that trust
Tuckman model described distributed teams quite requires physical touch and is therefore difficult
well, but only in regard to three of the stages; to establish through computers. However, others
forming, norming and performing. believe that it simply takes longer time for trust
Chidambaram (1996) showed that if distributed to develop but that in the end, comparable trust
teams were given enough time to develop team will be achieved to that in traditional teams (Bos,
relationships and to adapt to the communication et al, 2002, Krebs, Hobman and Bordia, 2006,
method, they would communicate just as well as Greenberg, Greenberg and Antonucci, 2007). Platt
traditional teams. On the other hand it has been (1999) points out that one way to build trust in
stated that distributed teams exchange informa- distributed teams is to create a discussion arena
tion in a less effective manner than traditional in the beginning, where members can share their
teams, even if distributed teams communicate expectations of each other and discuss how they
quantifiably more than traditional ones (Galegher will work together.
36 www.pry.fi
a day or more often, or 79%. Only 4% never had 40
e-mail communication. Very few of the teams used
chat software. In fact, the teams either became 35
quite familiar with it and used it extensively, or
they bypassed it entirely. Around half of the teams 30
did not use project management systems, but
28% used them once a day or more often. Most 25
teams used the telephone once a week, or 37%, %
Lack of management
Lack of commitment
Language difficulties
Technical problems
Cultural differences
never used video conferencing, or 73%. The other
Time differences
Religious beliefs
Teams too large
27% used it at some point or other in the project 10
Lack of trust
but only 1% used it once a day or more often.
Distance
Table 1 gives an overview of the main methods 5
Conflict
participants used to improve communication ef-
ficiency in multicultural communication. 0
Figure 1 shows how the participants evaluated
Figure 2. Problems encountered in the project teams.
project success on a simple 6 step scale. Most of
the projects showed acceptable, good or very good
results, or 92%. On the other hand, a very low
percentage of the projects were not concluded or difficult to speak to members who did not speak
finished with results below expectations, or 8%. the project language well and there were delays
This implies that either the projects were simply due to translation of documents into languages
very successful or that the members had kept that everyone could understand. It was evident
successful projects in mind when answering the that a large number of participants in the survey
questionnaire. believed that cultural differences had created
problems. However, some participants thought
Problems that occurred in the projects that this had more to do with individual differ-
Figure 2 shows the main problems encountered in ences. A difference was still believed to exist in the
the project teams. Language difficulties and time way decisions are made in different cultures.
zone differences were the most common problems Table 2 shows the correlation between various
by far, but cultural differences, technical problems background variables and some of the key vari-
and lack of managerial support also registered. ables studied in the survey.
Very few encountered problems due to the number There is a slight correlation between gender and
of organizations involved, the team being too large experienced lack of management on behalf of the
or because of religious beliefs. participant, where a higher percentage of women
About 23% of participants had experienced have experienced this lack. Lack of management
different holidays in the distributed teams as was not correlated to the number of locations
a problem and as the number of participating until this number reached five different project
countries increases, the odds of different holidays work locations, when the number of participants,
having an effect on the project increases. The who cited lack of management being a problem,
survey showed some language problems; it was increased rapidly. There is also a slight correlation
Table 2. Correlation table by participant background variables (*p < 0,05 ** p <0,01).
38 www.pry.fi
Conclusions the early stages is valuable for this purpose. This
Certain problems are more likely to occur than corresponds to previous research. Too frequent
others in distributed teams. Language difficul- communication through a communication median
ties are a potential problem, as well as problems can lead to a lack of trust in the distributed team.
caused by time zone and cultural differences. One The reason is unclear but it might be a worthy task
of the benefits considered in employing distributed to assess weather confusion in a distributed team
project management has been that it is possible is increased when the frequency of communication
to work on projects around the clock and around through a median reaches a threshold.
the year. The problem of different holidays in dis- It is our conclusion that a simple assessment
tributed project teams is risk factor has not been of five important variables can help to evaluate
given much attention in previous research. potential risk in the work of distributed project
Our results show that perceived lack of manage- teams. Size of group, number of languages, num-
ment increases when the number of work loca- ber of organizations behind the team, number of
tions reaches 5. This indicates that managers have locations and the maximum time zone difference
difficulty retaining overview on projects when the are variables that are correlated with lack of trust
number of project locations reaches a threshold. in the team. These variables can be assessed in
No statistically significant correlation was the beginning, the results can be represented in
found between the communication means and a simple graphical tool and communicated to all
trust, but findings still indicated that there is relevant parties. Some actions can then be taken
more trust in teams who have considerable direct to reduce the risk and thus create more favourable
communication. It is however obvious that initial conditions for the building up of trust within the
communication has a great deal of effect on the distributed group.
building of trust and direct communication in
Haukur Ingi Jónasson finished a cand. theol. degree from the Theo-
logical Department of the University of Iceland in 1994. He holds a
S.T.M., M.phil., and Ph.D. degrees from Union Theological Seminary
(Columbia University) in New York and has full clinical certifica-
tions in both pastoral counseling from Lennox Hill Hospital / The
HealthCare Chaplaincy Inc. and in psychoanalysis from the Harlem
Family Institute in New York. Haukur has pursued economic and
business management education both at Indiana University School
of Business and at the Hariot-Watts, Edinburg Business School in
Scotland. He is the co-founder of the Nordica Consulting Group
where he works as a senior consultant. Haukur is an assistant profes-
sor in management and leadership at the School of Engineering and
Natural Sciences at the University of Iceland and teaches in both the
MPM (Master of Project Management) and the MBA programs of
the university.
Tomas Haflidason received his BSc and MSc in industrial engineer-
ing from the University of Iceland. He is presently pursuing his PhD
at the University of Iceland in industrial engineering.
40 www.pry.fi
”IPMA certification has given
me self-knowledge, an extended
network and verification of
my competence”
Per-Olof Sandberg
Program Manager,
Major Programs
SEB Bank, Sweden
For more information about the IPMA certification and the IPMA Competence Baseline
(ICB) please visit www.ipma.ch
A Computational Model
of Project Teams
Raymond E. Levitt Introduction way in which exception handling in coordination
Department of Civil & The Virtual Design Team research was launched to took place within organizations assigned to do
Environmental Engineering enable managers to “Design Project Organizations such project work.
Stanford University as Engineers Design Bridges”—i.e., to model and Since then, we have extended the representa-
USA simulate multiple alternative configurations to tion and reasoning in VDT step-by-step, to address
predict and evaluate their performance in advance the modeling requirements of less routine work
of implementing them. performed by increasingly flexible and dynamic
VDT was based on the notion first articulated by organizations—non-routine product develop-
Herbert Simon and refined by Jay Galbraith that ment, service and maintenance work (including
the first order determinant of an organization’s healthcare delivery), and highly non-routine
success is its ability to process all of the informa- work performed in communities of practice—but
tion associated with: still assuming negligible institutional cost. Since
- Direct work, involved in competing as- 2002, we have extended VDT to model multicul-
signed tasks by individuals or groups; tural project teams engaged in global projects to
- Coordination work, arising from the need develop infrastructure, for which institutional
to resolve task interdependencies and costs are significant. Also, VDT has been extended
handle exceptions; and as “POWER” to model highly non-routine work
- Institutional work, arising from the need in extremely decentralized “Power to the Edge”
to resolve differences in goals, values and organizations.
cultural norms. This white paper provides an overview of the
The “big idea” behind the VDT research pro- VDT research program and its evolution over the
gram was that direct work, coordination work past 20 years, describes the current status of VDT,
and institutional work could all be viewed as and describes our ongoing research in this area.
quantities of information to be processed serially
by the workers and managers in an organization. VDT in a Nutshell
Jay Galbraith had proposed this idea as early as The Virtual Design Team simulation system is a
the 1970s, but his formulation of the problem computational discrete event simulation model
was descriptive and qualitative, and could thus of project organizations. VDT analyzes how task
not be used to make specific predictions. VDT has interdependencies generate coordination needs
progressively quantified, extended and validated and how individual team members' skills and
Jay Galbraith's information processing view of experience, organization design parameters and
organizations over the past 20 years to encompass communication tools change team information
a broad range of project-oriented work processes processing capacity, and hence project perfor-
and organizations. mance. VDT explicitly models actors, activities,
We began this research in the late 1980s and communication tools and organizations. VDT simu-
directed our initial focus on project organiza- lates actors working on their assigned tasks and
tions engaged in semi-custom engineering work the interactions between actors aimed at resolving
under tight time constraints. For such organiza- interdependencies between their interdependent
tions, we could assume a relatively high level of tasks, and interactions aimed at handling technical
congruency of goals culture and values, so that or interface “exceptions” between subordinates
institutional costs were negligible and could be and their supervisors.
ignored. However, performing highly interdepen- The “information processing” view of organi-
dent work under tight time constraints creates zations was first articulated by Herbert Simon
high coordination costs as interdependent ac- and James March in the 1950s, and elaborated
tivities increasingly overlap one another in time. by Jay Galbraith during the 1970s. It asserts that
Primary emphasis was on modeling the sources the first-order determinant of an organization’s
of interdependence in project workflow and the success is its ability to process and communicate
42 www.pry.fi
all of the information required to carry out and Evolution of The Virtual Design Team
coordinate its work processes. Galbraith’s infor- (VDT) Research Program
mation processing model of project teams was The Virtual Design Team (VDT) research was initi-
descriptive and qualitative, not quantitative; it ated in the late 1980s with the goal of developing
could not make specific predictions about par- new micro-organization theory and embedding
ticular organizations. Over the past two decades, it in software tools that could be used to design
Levitt’s ongoing VDT research and its subsequent organizations in the same way that engineers
commercial implementation have extended, design bridges, semiconductors or space stations—
quantified and validated Jay Galbraith's (1974) by modeling, analyzing and evaluating multiple
information processing view of organizations to virtual prototypes of the system to be designed
model and simulate team members’ behavior and in a computer.
resulting team performance outcomes quantita- We recognized from the outset that this was a
tively, with ever-increasing accuracy, for a broad significant challenge. Micro-theory and analysis
range of project-oriented work processes and tools for designing bridges and airplanes rest on
organizations. well-understood principles of physics, and involve
VDT builds on and quantifies Jay Galbraith’s continuous numerical variables, describing materi-
theories of information processing in project als whose properties are relatively uniform, and
teams, and views both the direct work and result- are straightforward to measure and calibrate.
ing coordination work that must be performed Thus analysis of these physical systems yielded
by actors on a project as quanta of information easily to solution via sets of differential equations,
to be processed by responsible actors with finite and subsequently numerical computing. The ap-
information processing capacity—i.e., “boundedly proach used to develop this engineering science
rational” actors (March & Simon 1956). It simulates and technology was to embed well-understood
the project team executing tasks and coordinating micro-theory into the models, and then attempt
to resolve exceptions and interdependencies. The to reflect the interactions between elemental parts
VDT simulation of a project organization executing of a model through constraints (such as constraints
its tasks generates a range of outputs that predict that maintain consistency between the deflected
the emergent performance of the organization at positions of shared element edges in a finite ele-
both the individual actor/task level and the overall ment model). The result was increasingly accurate
project level: duration; production costs, coordina- predictions of both micro and macro-behavior of
tion costs (communication, rework and waiting); many kinds of engineered systems. For many kinds
and several measures of process quality. of buildings and bridges, stresses, strains and de-
VDT takes into consideration the relative match flections under a variety of loading conditions can
between the complexity of each task versus the now be predicted to finer tolerances than those to
skills/experience of the assigned actor to deter- which the facility can be constructed!
mine the time it would take for the actor to per- In contrast, theories describing the behavior of
form the task, and the probability of exceptions organizations are characterized by nominal and
in the execution of the task by the assigned actor. ordinal variables, with poor measurement repro-
Actors are more likely to generate exceptions when ducibility. Verbal theories incorporating nominal
confronted with a task for which they do not pos- and ordinal variables create a significant degree of
sess the requisite skills or experience. VDT models linguistic ambiguity, so that experimental results
exception handling processes to deal with any cannot be reliably replicated and contrasting or
exceptions that have been generated. Exceptions competing theories are difficult to reconcile or
take time to resolve and result in coordination disprove. In the late 1980s, our research group
costs. Actors may be required to partially or com- concluded that attempts to model organizations
pletely rework activities that generate exceptions. computationally could benefit greatly from the use
Further, actors need to attend to communica- of non-numerical or "symbolic" representation and
tions from other actors and may need to attend reasoning techniques emerging from computer
scheduled meetings. These communications and science research on artificial intelligence. Early
meetings generate coordination work and thus experiments convinced us —along with many other
increase the amount of total work that must be researchers (e.g,. Masuch & Lapotin, 89)— that this
done to complete a project. Failure to attend to was a fruitful modeling approach. However, VDT
communications or go to meetings increases the took this modeling approach to the next step,
probability of errors, thus leading to the possibil- which was to combine the symbolic reasoning
ity of increased downstream coordination and with numerical, discrete event simulation. VDT
rework costs. used symbolic reasoning about variables like skill
VDT has been calibrated to make accurate levels to set parameters for numerical variables
predictions of participant backlogs arising from like task processing speeds in a discrete event
the combination of direct Production Work and simulation.
emergent Coordination Work, and of the result- In selecting the kinds of organizations that we
ing schedule and quality risks for a given project would initially model, we picked project teams
organization. After being validated in multiple performing routine design or product development
real world scenarios, SimVision®, a commercial work. For this class of organizations, all work is
implementation of VDT, has been used commer- knowledge work so that we could fruitfully use
cially in dozens of real world projects for Fortune an information processing abstraction (Galbraith
500 companies and governmental organizations to 74) of the work. For routine product development,
highlight organizational risks and guide interven- goals and means are both clear and relatively un-
tions aimed at mitigating them. contested, so that we could finesse many of the
44 www.pry.fi
emergence of “institutional difference
exception” processing costs in global
projects within VDT. The PhD research
of Mahalingam (2005) and Orr (2005)
found that viewing national differences
in terms of Scott’s (2001) conception of
“Institutions”, a concept broader than
cultures and values, was far more pro-
ductive in understanding and predicting
cross-national exceptions in projects.
A global project contending with
significant institutional differences
needs to be realistic about the costs that
will be incurred in proceeding with the
project, and the length of time it will
take to begin to reduce these costs.
Forewarned with this kind of predic-
tion, planners of global projects can set
Figure 2. VDT Research Trajectory realistic goals, and can begin to initiate
effective institutional interventions,
with a clear notion of how long they
will take to implement.
ing these extensions. VDT-5 was released ity (the extent to which work and social Our approach was to model institu-
as POW-ER 3.3 (Ramsey et al 05), and roles are gender-stereotyped and differ- tional work in the same way that we
is in use by the US Navy, US Air Force ent; Uncertainty Avoidance (the degree modeled coordination work— that is,
Research Laboratory, NASA and other to which members of a culture can as additional quantities of information
governmental organizations. cope with risk and ambiguity in work to be processed by actors in a project
and social relations; and Time Horizon team. However institutional work may
Ongoing Research on Effects of (short-term vs. long-term orientation in also have the side effect of undermin-
Institutional Differences decisions and relationships). Hofstede ing the motivation of actors who find
Research by Geert Hofstede and his col- has collected large data sets based on themselves engaged in continual misun-
leagues (Hofstede 84). Provides one clear IBM employees in > 50 countries indi- derstandings, conflict and even sabotage
point of departure for modeling how cating that differences along one or by project team members whose goals,
differences in values and cultural norms more of these cultural dimensions lead beliefs and values, cultural norms and
can affect the behavior of participants to predictable kinds of misunderstand- legal/regulative systems are signifi-
in project teams. Hofstede identified ings, conflict and loss of motivation in cantly different than their own. Figure
five dimensions of culture that vary global work teams. 3 shows conceptually how we overlaid
systematically between workers from Drawing on Hofstede’s work and on institutional work on the production
different countries, and which affect the results of a series of workshops con- work and coordination work that we
individual and team behaviors in global, ducted with Professor Douglass North (a had modeled to date.
knowledge-intensive, dynami, global Nobel Laureate in Institutional Econom- Tamaki Horii (2005) designed and
projects: Power Distance (the difference ics at Stanford’s Hoover Institute) and conducted an initial set of computa-
in relative power across levels of the or- Professor Merlin Donald (an eminent tional experiments in which he modeled
ganization); Collectivism vs. Individu- Canadian cognitive psychologist) at the US and Japanese institutions (practices
alism (the degree to which individuals Institute for International Studies at and values) and simulated the perfor-
pursue self-interest vs. the interests of a Stanford, we developed a set of initial mance of joint venture teams consisting
larger group); Masculinity vs. Feminin- hypotheses about how to model the of US and/or Japanese managers and
workers in US- vs. Japanese-style project
organizations working on projects with
different levels of complexity. His path
breaking work won the best paper award
at CASOS 2005. This line of work has
continued since 2005 at the Collabora-
tory for Research on Global Projects
http://crgp.stanford.edu
Research to Develop
Postprocessors for VDT
Organizational design is a complex
global optimization problem involving
continuous and discrete variables. For
example, an organizational designer
must size functional capabilities, assign
staff to tasks, and set communication
and control policies. Our extended VDT
system is an analysis tool that can pre-
Figure 3. Direct Costs for Projects, and Additional Costs from Two kinds of Hidden dict schedule cost and process quality
Work: Coordination Work and Institutional Work. performance for a baseline configura-
46 www.pry.fi
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This paper presents the current risk management activities in projects. The findings are based on
a 3-year GPSII research project that was conducted in co-operation with VTT, Helsinki University
of Technology and Helsinki School of Economics. The purpose of the GPSII research project was to
identify and analyse interactions between cultural processes, network connections and risk man-
agement practices in global delivery projects. This paper discusses the project risk management
activities from two perspectives: Firstly, the current risk management procedures in projects are
briefly summarized. Secondly, the view is broadened to include more informal risk management
actions outside the formal risk management process. It is discussed whether these informal actions
are actually being used to cover the areas where formal risk management lacks the flexibility and
agility required. It is argued that the informal processes and mechanisms are often hidden and
their significance both to the project risk management process and to the risk level of the project
is not well understood. It is concluded that the efficiency in project risk management arises from
developing both the formal risk management processes and the informal activities in parallel to
creating new flexible and more interactive risk management tools.
Mervi Murtonen, M.Sc. Literature Informal risk management refers to all informal
VTT Technical Research Project risk management is typically presented and intuitive actions that are taken to mitigate
Centre of Finland as a repetitious process that consists of a generic risks in order to reduce the uncertainties in a
Tampere, Finland framework (a list of tasks to be completed) and the project, intentionally or not. A low formality level
supporting tools and techniques (checklists, risk in risk assessment implies a less explicit structure,
grids, risk reviews, risk registers etc). Several risk no separate phases in timely order, informal docu-
management processes for projects are described mentation, and less clearly defined objectives and
in standards (PMI, 2004; APM, 2006) and in litera- deliverables for the process (Ward, 2006). In order
ture (Chapman & Ward, 2003; Meredith & Mantel, to be able to analyze risk management formality
1989; Kliem & Ludin, 1997). Traditionally, a risk is and informality, we need to differentiate the for-
referred to as a combination of a probability and mal risk management practices from the informal
a negative outcome. Research and development in ones. According to Li (2007) the distinguishing
project risk management has focused on methods elements of formality and informality are: 1)
to quantify risk and on how to manage the risk codification, 2) formation, 3) enforcement, 4)
after it has been quantified. power, and 5) personalization (Table 1). Formality
In risk management, formal procedures have refers to an objective, cognitive, task-oriented and
become a symbol for efficient information use, instrumental process, whereas informality refers
rational decision-making and a willingness to act to more subjective affective, people-oriented and
(Langley, 1989). Formal procedures are seen as a sentimental processes (Li, 2007).
routine that helps focus attention and decrease
uncertainty in decision-making (Becker & Knud- Dimensions Formal Informal
sen, 2005). According to Susilo et al. (1991) the
formal controls (specific rules and procedures to Codification Explicit Implicit
be followed and specific outcomes to be produced) Formation Exogenous Endogenous
are dominant at project planning and initiation,
but become less dominant over the project dura- Enforcement Tight Loose
tion. Instead, the project managers rely on more Power Hierarchical Horizontal
informal control elements (unwritten practice
codes, social values, common beliefs and tradi- Personalization Depersonalized Personalized
tions) as the project progresses. Also, when facing
a new challenge, project managers approach the Table 1. Formality – informality dimensions.
challenge informally. (Li, 2007)
48 www.pry.fi
In recent project management studies, unex- ducted in four companies both in Finland and
pected events in projects have drawn increasing in various project host countries. In addition to
research attention. Making these unexpected and project-specific interviews, thematic interviews
surprising events, their occurrence, and manage- focusing on each company’s risk sources, risk man-
ment more visible within projects, is seen to con- agement practices and processes in general have
tribute to our understanding of uncertainty man- been conducted. All the interviews were conducted
agement in projects (Hällgren, 2007; Söderholm, by at least two researchers – they were recorded,
2008). Project uncertainties can not be categorized transcribed verbatim, and the contents analyzed.
and handled as risks (Atkinson et al., 2006), and In addition to collecting research data by inter-
the current formal risk management practices do views, researchers participated in case companies'
not adequately address many particular features lessons learned sessions in order to analyze the
of project uncertainties (Ward & Chapman, 2003; practices of efficient risk knowledge transfer and
Chapman, 2006; Pender, 2001). Instead, several utilization within and across projects.
researchers agree that the formal procedures need
to be complemented by more informal and flexible Findings
ways, such as continuous interaction, communica- In project risk management following the formal
tion and reflection (Hällgren & Maaninen-Olsson, identify–analyze–mitigate process, the preliminary
2005; Perminova et al., 2008). risk analysis typically takes place early in the sales
and bidding or at the latest at the beginning of the
Methods project execution phase (Figure 1). At this point,
The research data was collected in the GPSII re- the possibilities to implement proactive measures
search project by studying altogether 21 different against the identified risks are not only the highest,
project cases that varied in the degree of success, but when also the level of uncertainty is at its peak.
network structures and cultural diversity. Both The analysis is mainly based on a predefined risk list
turnkey and system delivery projects were studied. and the assessment of the pre-specified, generic
The studied project cases were geographically risk factors. In the sales and bidding phase, the
distributed and involved projects from 17 coun- project manager's task in risk analysis is to assist
tries – including former Soviet Union countries, sales in technical and operational issues, especially
China and South American countries. The data in risk quantification and pricing. At the begin-
collection followed the principles of systematic ning of the execution phase, the project manager
combining (Dubois & Gadde, 2002). This approach usually updates the preliminary risk analysis or, if
is based on a principle of continuous back-and- that has not been done, is the main person re-
forth movement between theory and practice, sponsible in carrying out the risk analysis for the
between theoretical frameworks and empirical project. The further along the project proceeds,
observations, each informing the other as the the more uncertainties typically are resolved and
research process evolves. the smaller the need for any formal and proactive
The collected data consists mainly of interviews analysis becomes. At the end of the project, the
(92 interviews) with the project managers and post-project lessons learned sessions are used to
other project-specific key personnel, as well as summarize and share the experiences from critical
of project-related documentation (e.g. process events. In lessons learned sessions the preliminary
descriptions, project plans, risk analyses, lessons risk analyses can be reviewed and the realized risks
learned reports). The interviews have been con- can be analyzed.
Changes
Risk log
Intranet documents
CM=Commercial manager
PM=Project manager
Risk
TE=Technical engineer committee/
BC=Business control E, PM management
PT=Project team
E=Expert New
risks
Supporting
processes
Project
risk analysis
Lessons Learned
Final review
Formal risk Archives
management Preliminary Risk
Interpersonal
process risk analysis
relations reviews
Informal
actions
Time
Figure 2. Formal and informal risk management actions in a project.
50 www.pry.fi
their own experiences and skills and project man- mon habit to use the risk documentation from the
agement practices, to identify and analyze these previous projects as a reference to the risk analyses
situations and to solve them in an appropriate way. in forthcoming projects may be misleading.
This may be due to practical reasons: the project In our research data, in projects that have
managers do not analytically separate and docu- adopted a more informal approach to the risk
ment all the different events or situations that management, the cooperation, communication
come their way, but simply tackle them all as a and personal relationships as well as situational
part of their work. awareness and personal insights are emphasized.
Currently, the main purpose of the risk analyses The ability to make decisions about the risk miti-
is to make sure that all possible issues and probable gation actions quickly and spontaneously is seen
risks are taken into the consideration as early as important, discounting the fact that the ad hoc
possible, typically before the project execution. decisions and deviations from predefined risk
After the project contract is sealed, risk analyses management procedures can sometimes be fatal.
have only a subsidiary role. Also, updating the risk The informal risk management actions (e.g. re-
analyses seems to be difficult, and in most cases, scheduling, arranging a crisis meeting or replacing
the original risk analysis documents are neither a critical technical component) may be valuable
referred to nor updated during the project. If the in a hectic project work and may save the project
risk documentation is not updated during the from severe consequences. However, if these ac-
project it does not contain the full risk informa- tions remain undocumented and unanalyzed it
tion and fails to notice all the unforeseen events is difficult the transfer the knowledge to other
that have occurred during the project. Therefore, projects. Additionally, informal actions are more
the post-project evaluation based only on risk personalized and less codified by definition, which
documentation gives a wrong picture of the risk increases the risks involved.
spectrum of the project. Consequently, the com-
How can project networks What are the novel and How should a global
Research be effectively managed in effective risk manage- project be organized for
Questions different institutional and ment practices in global the effective management
business environments? project networks with of cultural variety and
several actors? diversity?
The research work in GPS II was jointly conducted by HUT, HSE and VTT and the project was ex-
ecuted during the period 1.4.2007-31.3.2009. While the main financier was TEKES, the follow-
ing organizations have participated in and also financed the project: Nokia Siemens Networks,
Wärtsilä Finland Oy, Foster Wheeler Energia Oy, Outotec Oyj, Ramboll Finland, and Synocus Oy.
Project management
- National cultures Quality Interpersonal
Business ESTIMATE relations
control Communication
Project network Finance EVALUATE and consulting
HR Coordination
TREAT and co-operation
Safety and
Security Sensemaking and
Project context sensegiving
MONITOR
52 www.pry.fi
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agement is not enough? International Journal of
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54 www.pry.fi
Wise
Precondition
Righteous
Courteous Brave
Cincere
Foundation
Benevolent
The Analects of Confucius people and strong country is the main objective
The Analects of Confucius is a book recording of management by moral, and gentlemen are the
Confucius and his pupils’ words and deeds, and direction of education (Cai Yubo, 2002). Zhao
compiled by the disciples of the disciples of him Jiuyun (1996) holds that the potentate should
(Chen Yu, Zheng Yi, 2007). It is a crucial book of manage the people by moral not the law. A moral
Confucianism composed of 20 chapters, describing potentate can impress the people with a perfect
the criteria for a gentleman. The word “gentleman” image and gets invisible power. Guo Changhua
has occurred in the book for 108 times. A gentle- (2000) considers that the government should make
man should be benevolent, righteous, courteous, the people working according to objective law and
wise, sincere, and brave. Benevolence is the fun- seasons, levy less tax and make the people rich;
dament of the other five qualities. And wisdom is cherish the people and never encroach on their
the precondition of the others. These six qualities interests; select and use the best talents; make a
interact to each other. For example, a brave man clear distinction between reward and penalty.
will do things according to rightness even he may
offend dignitaries. Likewise, a righteous man will 2. Confucianism’s enlightenment for
become brave to help people inferior to him at the enterprise governance
cost of his own interests. The inherent relationships Moderation in all things is the best of rules. There is
of the six qualities are shown in figure 1. much use of moderation in enterprise governance
It has been said for more than a thousand year (Gong Qiyao, 2000).Moderation means appropria-
in China that you can governance the world after tion and objectivity. Systems of a company should
you have read half of The Analects of Confucius. be flexible, the employees should be self-disci-
The Analects of Confucius has been seen as a clas- plined and heteronomous, a company should also
sical works about management in China. In the combine decentralization of authority and central-
modern society, easterners and occidental are both ization of power (Qiu Zhengchang, 2005). Moral is
studying Confucianism more and more. According the standard of selecting talents, and words and
to rough statistics, there are 64300 papers in Eng- deeds are also important factors. In Japan, many
lish relevant to Confucianism and 181000 papers large companies have put Confucianism into prac-
in Chinese relevant to Confucianism. But there are tice. In Hitachi Chemical, lifetime employment is
big difference in understanding of Confucianism put into use. And in Mitsubishi Heavy Industries
between the west and the east. Maybe it is the Limited Corporation, the highest ethical standard
reason of language difference that the west can is moderation (Wang Chunhong, 2004).
hardly research deeply in Confucianism. So most In a word, the Analects of Confucius mainly
of papers in English advocate Confucianism but is applied in national governance and enterprise
few put it into practice. Chinese put this thinking governance. And few scholars make research in
into practice more frequently. All of the papers how to improve leaders’ qualities. And this paper
can be concluded as two kinds: intends to make endeavors in the perspective.
58 www.pry.fi
Item Performance
Schedule
Cost
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(ICB) please visit www.ipma.ch