MS thesis in Project Management Managing the unmanageable ...
Transcript of MS thesis in Project Management Managing the unmanageable ...
MS thesis
in Project Management
Managing the unmanageable: Deviation in project success within the project life cycle in the Icelandic
construction industry
Svanborg María Guðmundsdóttir
Inga Minelgaite, Professor.
February 2021
Managing the unmanageable: Deviation in project success within the project life cycle in the Icelandic
construction industry
Svanborg María Guðmundsdóttir
MSc Thesis in Project Management
Supervisor: Inga Minelgaite
School of Business
School of Social Sciences, University of Iceland
February 2021
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Managing the unmanageable: Deviation in project success within the project life cycle in the Icelandic construction industry. This thesis corresponds to 30 ECTS credits and is the final thesis for an MS degree in Project Management at the School of Business in the School of Social Sciences at the University of Iceland. © 2021 Svanborg María Guðmundsdóttir The thesis may not be copied without prior permission from the author. Online publication Reykjavík, 2021
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Prologue
Ritgerðin er lokaverkefni til meistaraprófs í Verkefnastjórnun við Viðskiptafræðideild
Háskóla Íslands. Ritgerðin er metin til 30 ECTS eininga af 120 eininga námi. Rannsóknin
sem ritgerðin byggist á hófst í mars 2020 vegna útskriftar í febrúar 2021.
Leiðbeinandi minn var Inga Minelgaite og vil ég þakka henni kærlega fyrir góða
leiðsögn, stuðning og frjáls vinnubrögð. Fyrir að kenna mér frá fyrsta degi að í
Verkefnastjórnun er mikilvægt að practice what you preach. Takk. Sömuleiðis vil ég þakka
besta vini mínum og ástinni minni Ívari Erni Hákonarsyni fyrir að hafa óbilandi trú á mér,
fyrir mikla þolinmæði og gagnlegar ábendingar við framkvæmd rannsóknarinnar.
Foreldrum mínum, Guðmundi Smára og Ingveldi fyrir ómetanlegan stuðning í þessu
verkefni sem og öðru sem ég hef tekið mér fyrir hendur. Ömmum mínum sömuleiðis.
Vinum mínum og vinkonum fyrir orku, gleði, hlátur og gagnlega aðstoð við gerð
ritgerðirnar. Ég vil minnast sérstaklega á Írisi fyrir okkar daglegu símtöl á tímum Covid-19
og ritgerðarskrifa.
Að lokum uppáhalds manneskju minni, Hákoni Smára, fyrir alla þá gleði og hamingju
sem þú gefur okkur. Það er ekkert betra en að geta gleymt mér í lok dags með þér. Sem
og litla bumbubúanum, sem er von á í heiminn 2 mánuðum eftir að þessari ritgerð er
skilað.
Ég vona innilega að þessi ritgerð muni koma að góðum notum inn í fyrirtæki landsins sem
leggja áherslu á árangursrík verkefni.
Verk þetta tileinka ég góðum vini mínum Daníel Frey. Þú ert hjá okkur á þinn einstaka
hátt. Ég sakna þín þó alla daga.
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Abstract
Globally, the construction industry has a significantly low score regarding the number of
projects which attain their stated aims. Research shows that construction projects most
often overrun. Construction projects can be very complex, and many layers need to
synergize for them to be successful. The construction industry in Iceland is no exception,
and many construction projects are not completed according to schedule. It is extremely
costly when projects do not achieve their goals. Previous research shows there are
various reasons for this kind of deviation to occur in the construction industry. Examples
include poor project management and/or organization, lack of scope, poor use of labor,
clients whose budgets are insufficient, interference from the client, and also
uncontrollable factors such as the weather. The influence of the newest obstacle,
COVID19, is extremely unpredictable.
The purpose of this research was to investigate the Icelandic construction industry to
enquire and establish exactly where deviation occurs within project management, why it
does so, and how such deviations manifested during the project life cycle. To perform this
research, a qualitative research method was used. Eight semi-structured interviews were
conducted with experienced engineers, who have either been project managers or part
of a project management team. Based on these interviews, the research indicates that
deviation in projects mostly occurs due to four factors. Firstly, when the client is too
indefinite about their requirements. When the client is indefinite, it leads to an
undervaluation of the project’s actual scope in the deviation phase; the resulting lack of
planning then creates an extended executions phase, often with greatly increased costs.
Secondly, attitudes that are quite prevalent in Icelandic culture, an aspect that was not
unknown to previous researchers, appear to impact detrimentally on the project
outcome. This specifically relates to how comfortably people can live with uncertainty
whilst maintaining their optimism. In this context, the fact that the rules are frequently
applied in a fairly informal way is not helpful. Thirdly, there is a lack of standardization
regarding the operations of project managers, specifically. Finally, there are sometimes
unpredictable factors in the external environment that cannot be controlled.
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Table of Contents
Table of Figures .............................................................................................................. 8
Table of Tables ............................................................................................................... 8
1 Introduction .............................................................................................................. 9
1.1 The research problem ...................................................................................... 11
1.1.1 Research question ................................................................................ 13
1.1.2 Significance and originality of the research .......................................... 14
2 Literature review ..................................................................................................... 15
2.1 Project management ........................................................................................ 15 2.2 The project life cycle as a framework for project success analysis .................. 18
2.2.1 Defining phase ...................................................................................... 20
2.2.2 Planning ................................................................................................ 21
2.2.3 Execution .............................................................................................. 22
2.2.4 Closing stage ......................................................................................... 22
2.3 Project success ................................................................................................. 24
2.3.1 The project manager role in project success ........................................ 28
2.3.2 Project failure ....................................................................................... 30
2.4 The construction industry ................................................................................ 32 2.5 Construction project life cycle .......................................................................... 33 2.6 Deviation in construction projects ................................................................... 35 2.7 Icelandic culture ............................................................................................... 39
3 Research Methodology ........................................................................................... 43
3.1 Qualitative Research Methods ......................................................................... 43 3.2 Participant Selection ........................................................................................ 44 3.3 Data Collection ................................................................................................. 44 3.4 Data Analysis .................................................................................................... 46 3.5 Ethical Considerations ...................................................................................... 48 3.6 The company .................................................................................................... 49
4 The Results .............................................................................................................. 50
4.1 Icelandic culture: "it will sort itself out" ........................................................... 50 4.2 "The customer is always right” ........................................................................ 53 4.3 “The customer is constantly changing requirements” ..................................... 55 4.4 Lack of standardization with project managers ............................................... 57
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4.5 “The things we cannot control” ....................................................................... 60 4.6 The dilemma of a cost schedule ....................................................................... 61 4.7 Keeping the triangle in balance ........................................................................ 63 4.8 "In a perfect world” regarding the organization .............................................. 65 4.9 Summary of results .......................................................................................... 68
5 Discussion ................................................................................................................ 70
6 Conclusion ............................................................................................................... 81 Appendix 1 ................................................................................................................. 101
Appendix 2 ................................................................................................................. 103
Appendix 3 ................................................................................................................. 104
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Table of Figures
Figure 1: A visual picture of the research gap and the importance of this reseach ........ 13
Figure 2: The project life cycle phases and durations ...................................................... 22
Figure 3: The definition of project success, the iron triangle. ......................................... 25
Figure 4: The construction project life cycle according to Bennett (2003) ...................... 35
Figure 5: How project management deviations manifest during the project life
cycle and where it effects the iron triangle that is often used to define
project success (*scope and quality) ................................................................... 79
Figure 6: A visual answer to the overall question of this research. ................................. 80
Table of Tables
Table 1: The project life cycle in different industries (showing how the phases are
different) .............................................................................................................. 20
Table 2: The project life cycle tasks in every phase according to Larson and Gray
(2017). This table was used to structure the interview frame in this
research. .............................................................................................................. 20
Table 3: The participants, their level of experience and duration of interview.
(Level 1 experience: 0-10 years, Level 2 experience: 10-20 years, Level 3
experience: 20+ years) ......................................................................................... 45
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1 Introduction
More than $10 trillion is spent globally each year on the construction industry, making it
one of the largest sectors in the world economy. That is 13% of the world’s GDP, and this
percentage is predicted to grow. According to the McKinsey Global Institute, the value of
global construction projects is expected to increase to $14 trillion in 2025. The industry
employs 7% of the world’s working population (McKinsey & Company, 2017). There are
around 7 million employees within the sector in the United States alone, and each year
they construct buildings and structures with a collective value of more than $1.3 trillion
(Simonson, 2020). The Icelandic construction industry constituted around 21% of the
economy in 2019, contributing more than $1 billion to the Icelandic economy (Samtök
iðnaðarins, 2020). During the Icelandic banking crisis in 2008, the industry became even
more important. A lot of people lost their employment at that time and many projects
needed to be put on hold (Vinnumálastofnun, 2010). However, three major construction
projects helped to support the industry and the economy at that time. These were
Sæmundarskóli (a public grade school), the University of Reykjavík and Harpa (the world-
famous concert hall and event venue) (Jónsson, 2008). At the present time, in the midst
of the COVID-19 crisis, innovation is once again playing an extremely important role in
supporting the economy and getting it back on track. Now, as then, the construction
industry plays a big part when it comes to innovation (Samtök iðnaðarins, 2020).
Even though the construction industry contributes hugely to the world's economy, the
industry has a long history of poor productivity, and productivity has only grown by 1%
over the last 20 years (McKinsey & Company, 2017). Flyvberg et al. (2003) examined 258
large projects in over 20 countries and 9 out of 10 projects ran over schedule. According
to Ansah and Sorooshian (2017), overrunning is especially common in construction
projects. For example, the Boston Big Dig, otherwise known as the Central Artery/Tunnel
Project, went 275% or $11 billion over budget, Chunnel, the tunnel connecting the U.K.
and France went 80% over budget, and Denver’s International Airport came very close to
incurring costs that were 200% higher than estimated (Flyvbjerg, 2005). The Icelandic
construction industry is no exception, with multiple projects failing to adhere to their
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original plans and going over budget. For example, Harpa went over its time schedule and
cost estimate by 52%, and the Reykjavik City Hall project ran over schedule by 150%
(Jóhannesson, 2014). Reykjavík Energy (Orkuveita Reykjavíkur) is yet another example
and was the most expensive building ever built in Iceland, running 109% over the initial
plan (Marselíusarson, 2017). It has since been revealed that significant moisture damage
has taken place because the building was defective, and, unfortunately, the building is no
longer usable. An investigation revealed that construction work was poorly done, and one
contractor said that he was ordered to lay parquet flooring on wet concrete
(Guðmundsson, 2018), which is a clear sign that something had gone wrong during the
project life cycle.
Construction projects can also feature quite prominently in the news, especially when
the causes and explanations as to why projects have not gone according to plan are
striking. Establishing who is to blame seems to be an important stimulus for this kind of
journalism. The recent Braggi case (Braggamálið) is a good example. The rebuilding of this
former 2nd World War barrack building by Nauthólsvík in Reykjavík had been estimated
to cost 125 million ISK, according to the 2015 cost schedule, however, it actually cost
Reykjavík City Council 425 million ISK. That is an overrun of 240%. According to the
records, the project had a project manager, and weekly schedule meetings were taking
place during the period when the project went over its cost schedule (Reykjavíkurborg,
2018).
According to McKinsey Global Institute (2017), there is a $1.6 trillion productivity gap
in the construction sector, which means there is an opportunity to increase value by 16%.
This fact alone provides a good reason to investigate why this gap exists, and identifying
the causes is an important initial step towards reducing or even closing that gap. Another
important factor is that the productivity within the construction industry has risen very
slowly over the past 20 years, increasing by only 1% (McKinsey & Company, 2017). There
has been a lot of research on project success (Hsu et al., 2017), however, regardless of
this, researchers have not identified any solutions that have achieved a positive impact
on this issue. It can be argued, because of the economic size of the construction industry,
that it is extremely costly and time consuming when projects do not go according to plan
(Bennett, 2003).
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This research was implemented by employing a qualitative methodology, where eight
semi-structured interviews were taken with an engineering company in Iceland that has
a lot of experience in the construction industry. The company’s name and any other
identifying information will not be disclosed to ensure confidentiality.
The first important step to preventing failures in projects is to discover where they
occur. That is why the project life cycle is used in this study. The project life cycle is the
entire process of a project from when the idea was formed to its completion. The
methodological frame is built on the project life cycle to make it easier to identify exactly
where problems begin to manifest.
This research demonstrates that deviations in projects principally occur due to four
factors, and how these can manifest at different points in the project life cycle. Firstly,
the client can be too indefinite. When this occurs, it leads to an undervaluation of the
project’s actual scope in the deviation phase; the resulting lack of planning then brings
about an extended executions phase, often with greatly increased costs. Secondly,
certain Icelandic cultural attitudes, which were not unknown to previous researchers,
appear to impact detrimentally on the project outcome, specifically relating to how
readily people live with uncertainty, whilst usually remaining optimistic. Thirdly, there is
a lack of standardization regarding the operations of project managers, specifically.
Finally, there are things in the external environment that cannot be controlled.
1.1 The research problem
There is a need for a better understanding of the deviation that occurs in the construction
industry in Iceland, which prevents project success – this encompasses projects finishing
on time, together with their cost, quality, and scope. To the best of the author’s
knowledge, the Icelandic construction industry has not yet been examined through the
theoretical lens of the project life cycle, even though this is something applicable to all
projects, and it covers everything from the formation of the idea of the project to its
completion. The project life cycle referenced in this study has four phases and is inspired
by Larson and Gray (2017): Defining phase, planning phase, execution phase and closing
phase. It can be argued that it is important to know where a problem originated to
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prevent it from happening in ongoing or future projects. Therefore, the goal of this
research is to point out exactly where problems originated within the project life cycle of
an established firm in the construction industry. This research is important, impactful,
and valuable because it is extremely costly when a construction industry project fails to
go according to plan, given that the projects are often very large. Thus, the objective of
this research is to investigate where, why, and how deviation appears in project
management and prevents projects attaining success.
A qualitative methodology was chosen for this research. Eight semi-structured
interviews were undertaken taken with the participants, all of whom work at an
engineering company which manages construction projects in Iceland. The interviews had
a research frame that reflects the project life cycle framework, to facilitate spotting
exactly where failures manifested in the project life cycle.
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Figure 1: A visual picture of the research gap and the importance of this reseach
1.1.1 Research question
Ø Where do project management deviations originate in the construction industry in Iceland and how have they manifested during the project life cycle?
Defining phase
Planning phase
Execution phase
Closing phase
Project success Construction
projects
Deviation
Why is the project not
within time, budget,
quality and scope
estimates?
The industry
in Iceland
Where does
deviation occur in the
project life cycle?
9 of 10 construction projects overrun
This thesis is the first to use the
theoretical lens of the project life cycle in the
construction industry in Iceland
There is no lack of
research on why project
are successful
But still .. A need to investigate why
A need to
investigate
where
A need to
investigate
how
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1.1.2 Significance and originality of the research
This thesis seeks to advance knowledge within the construction industry in Iceland and
to gain a deep understanding of why, where and how deviation occurs in project
management, and how such deviation manifests during the project life cycle. Practical
advantages will derive from a better understanding of the following issues:
Ø Exactly where problems occur within the project life cycle
Ø The importance of project management, especially when a project is of high complexity
Ø The role of project managers in construction projects
Ø The ways in which the client can influence a project
Ø How Icelandic culture influences the way projects work in Iceland
Ø How the organizational culture effect the strategy of the project
Ø Gain an overview of how the Icelandic construction industry functions in relation to deviation
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2 Literature review
2.1 Project management
A project is not routine work or an everyday task like cleaning the house, which requires
little organizing, and which will probably not deliver any surprises along the way (Larson
& Gray, 2017). A project is somewhat more complicated (Archibald et al., 2012). Planning
a wedding or building a hotel are good examples of a project (Möller, 2019). A project can
be defined as follows: "A project is a sequence of unique, complex, and connected
activities that have one goal or purpose and that must be completed by a specific time,
within budget, and according to specification.” (Wysocki, 2019, p.4).
All projects go through several different phases that form the life cycle or life span
(Möller, 2019). The Project Management Institute (2004) states that a project is
temporary with a clearly defined beginning and a defined end. A project is also unique
and something that has not been done before, even though there have been many that
are similar, for example, a hotel has been built before, but each individual hotel building
is unique. There would also be different owners, designs, locations, contractors and so on
involved (PMI, 2004). A project may involve a single person or many thousands and can
take from one day or up to many years. A project may involve a single unit of one
organization or many organizations working together as partners in joint ventures.
Projects are often critical for organizational strategy and performance (PMI, 2000). Due
to the complexity of projects, there are often a lot of specialties necessary to complete
them (Larson & Gray, 2017). The same can be said concerning the timescale of a project,
since sometimes a project will take less than one week to complete and other times it will
be up to five years or longer. This also depends on different industries, for example, in
engineering the timescale can be from a couple of months to two years, while in the
construction industry it is more common for the intended timescale to be up to a couple
of years (Kerzner, 2009). Projects are thus used to achieve certain strategic goals but also
to gain a competitive advantage (Müller & Turner, 2010).
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Projects have been going on as long as mankind has existed. But project management
is a very new tool in comparison to the length of time projects have taken place, and it
was first instigated by the U.S. Navy in 1950 (Hussein & Seymour, 2014). The aim of
project management is to make the project process a lot smoother and more effective
(Kerzner, 2009). According to the Project Management PMBOK (2004), project
management can be defined as,
Project management is the application of knowledge, skills, tools and techniques to project activities to meet project requirements. Project management is accomplished through the application and integration of the project management processes of initiating, planning, executing, monitoring and controlling, and closing. (PMI, 2004, p.8).
It is important to realize that the success of a project within an organization does not
in itself mean that the company is successful in project management. Projects can
succeed despite no formal project management (Kerzner, 2009). However, it has been
shown that good project management is not only a successful way to succeed for
companies, it also promotes economic growth (Larson & Gray, 2017) and can be said to
be the basis for companies to succeed in the market. Kendra and Taplin (2004) say:
For organizations to be successful with the adoption of project management, they need to establish a shared set of values and beliefs (a project management culture) that aligns with the social and technical aspects of proj- ect management to achieve the organization’s business objectives (Kendra & Taplin, 2004, p. 43)
It is important to implement the project efficiently and effectively (Raymond &
Bergeron, 2008). Peter Drucker states that efficiency is "doing things right" or maximizing
output in relation to a given quantity of inputs or resources, and effectiveness is "doing
the right things" to attain the projects goal and objectives. Drucker claims that
effectiveness is more important than efficiency (El-Mashaleh et al., 2007). Completing
projects within the contract time is often considered to be an indicator of efficiency (Chan
& Kumaraswamy, 1997). The ways to improve effectiveness and efficiency are better
project planning, scheduling, monitoring, and controlling (Reymond & Bergeron, 2008).
There are several things which characterize a good project, among other things these are
managing strategy and stakeholders, and it is also argued that this is more important than
concentrating only on budget and scheduling (Bloch et al., 2012). Building strong
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teamwork with a common goal and motivation is also important. Those involved must
possess the right expertise, experience, and education to deliver the project. It is also
important that those with the right knowledge, experience and personalities work
together correctly in order to succeed as a team (Bloch et al., 2012; West, 2012). In
project management there is a project manager with overall responsibility for controlling
and leading the project. The project manager is responsible for keeping the project on
track and within its allotted time frame, on budget and completed according to
specification (Wright, 1997), it is also important that the project manager has good
communication flow and implements strict quality control checks (Block et al., 2012).
Larson and Gray (2017) set up several project management steps on and established
that defining the project scope is the first step, and the second step is to define the
project’s priorities in terms of cost, time and quality. Along with a work breakdown
structure that sets out the components of the project, for example, an engineering
project might be separated into the subprojects of tasks, subtasks and work packages
(Tausworthe, 1979). But firstly, it is necessary and very important that the project is
clearly defined (Larson & Gray, 2017). The scope refers to the guiding light of the project
and what the project should deliver. It is a guide to keep in mind whilst working on the
project because it should be reflected in the final outcome of the project. The scope
should also reflect the customer’s wishes and their expectations concerning the final
result (Larson & Gray, 2017; PMI, 2004). According to Larson and Gray (2011), it is
important that the scope is specific, tangible and described in measurable terms. Scope is
a tool to make the project less chaotic and it also helps to identify all the important details
(PMI, 2006). The more clearly the scope is defined before the actual work commences,
the more likely it is that the project will be successful (Brotherton et al., 2008). A study
involving 1400 project managers in the United States and Canada found that over 50
percent of planning problems were related to an unclear delineation of scope and
goals (Larson & Gray, 2017).
Secondly, there is the issue of cost and time that are inversely proportional to one
another. Cost is a huge consideration throughout the project management life cycle, and
sometimes the customer has a certain figure in mind and cannot deviate from it, and it is
then extremely important that the project manager organizes these resources very well.
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The downside to this is that sometimes the estimate has been rather optimistic, and thus,
the available resources of time and money do not correspond to reality. Sometimes the
project manager is able to request additional funds to reflect the real cost when this has
been established. The client also specifies a time frame within which the project must be
completed, but regardless of whether time is used wisely or not, this is often exceeded
(Wysocki, 2019). However, despite the above there is a strong need to prioritize the
project plan budget and time frame (Larson & Gray, 2017). Tasks may be scheduled to
stop because a specific item needs to be completed before another task can be started,
or resources or expertise are needed to complete or start a task. Therefore, there is a
strong need to plan and prioritize projects (Möller, 2019). Sometimes the client adds tasks
to the project along the way, and these must then be added to the plan and prioritizing
list (Larson & Gray, 2017).
2.2 The project life cycle as a framework for project success analysis
A project life cycle is the process that each project goes through, all the way from the
idea that spurned it until the completed project is delivered to the client (Guan et al.,
2020), and it also provides the basic framework for managing the project (Patanakul et
al., 2010). Because of the complexity and uncertainty that a project can have, it is
necessary to divide each project into phases to improve management control and to
make it easier for the project manager and the team to implement it (PMI, 2000).
The purposes of the project life cycle are to give the staff working with the project an
overview and an understanding of the processes that are to be followed throughout the
life of the project. It is important to capture and document the lessons learned from
previous and ongoing projects, so that these can be applied to the continual improvement
of future projects. All the project roles and responsibilities and every aspect of the
project’s planning, estimating, scheduling, together with the monitoring and control
methods and tools, should be appropriately related to the overall project life cycle
management process. Another useful benefit from the project life cycle is, if it is well
documented using appropriate computer software, all of the information about the
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project will be held in one place. This makes it far easier for other, similar projects to
schedule, control and manage in the future (Archibald et al., 2012).
In the early days of project management, it was common to treat each phase as a
single separate project, with each phase having a different project manager. Each phase
would be planned, scheduled, and managed from start to finish as a separate entity.
However, it was soon realized that this could easily lead to misunderstandings and
unnecessary complexity, and often it was also more expensive and took more time. A
new method then developed where the overall project would be treated as a single
phase, with the same project manager in charge of the whole project (Archibald et al.,
2012).
Project life cycles usually set out what technical work the project rescuers are
responsible for on each phase and who should be involved in the phases. Most life cycles
have three factors in common with regard to the PMI’s PMBOK Guide (2000). Firstly, it is
a priority to keep cost and staff levels low in the beginning, but as the project progresses
cost and staffing levels increase rapidly, but then these reduce very fast during the final
phase of the project. Secondly, the probability of successfully completing a project is
lowest at the beginning, mainly because the uncertainty and risk is highest at this stage.
The third point named in the book is that it is harder for the stakeholders to influence the
final characteristics of the project’s product, and the project costs are highest at the start
and get much lower as the project progresses (PMI, 2000).
Because of the complexity of projects, it is in reality hard to examine all projects using
the same life cycle model. Many life cycle models are uniquely suited to a certain
specialized industry. An engineering industry project may use a totally different life cycle
model to an art project. The art project may need a more flexible model for creative
processes, whilst it is important for an engineering project to be as specific as possible
from the beginning, so that the project will start off in the right way (Larson & Gray, 2017).
According to Larson and Gray (2017), the most common life cycle has four stages, but in
some cases, there are nine stages, and sometimes just one to two stages (PMI, 2000).
As already mentioned, there are many project life cycle models with many phases,
names and numbers of phases, but the most common project life cycle has four phases:
defining, planning, execution and termination (Larson and Gray, 2017). This is the project
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life cycle model that was utilized in this study. The need for a pre-project phase where
the idea is formulated, and a post-project phase in which the results of the project are
reviewed, both operationally and productively, has been subjected to some criticism
(Archibald et al., 2012).
Table 1: The project life cycle in different industries (showing how the phases are different)
Table 2: The project life cycle tasks in every phase according to Larson and Gray (2017). This table was
used to structure the interview frame in this research.
Defining phase Planning phase Executing phase Closing phase
Goals
Specification
Task
Responsibilities
Schedules
Budgets
Resources
Risks
Staffing
Status report
Changes
Quality
Forecasts
Train customer
Transfer document
Release resources
Evaluation
Lessons learned
2.2.1 Defining phase
The defining phase is the first phase in the project, which commences as soon as the
project begins to be formulated (Archibald et al., 2012). A need for something new has
arisen because a problem needs to be solved or there is an opportunity. The client is in
the central role and presents a desire to create a solution with regard to a certain project.
The client can be an individual, a project group or a contractor. Often an organization will
Software development Engineering Manufacturing Computer programming Construction
1. Definition 1. Start-up 1. Formation 1. Conceptual 1. pre-planning2. Design 2. Definition 2. Buildup 2. Planning 2. planning and
designing3. Code 3. Main 3. Production 3. Definition and design 3. Contractor selection
4. Integration/test 4. Termination (Kerzner, 2009)
4. Phase-out 4. Implementation 4. Project mobilization
5. Maintenance (Larson & Gray, 2017)
5. Final audit (Kerzner, 2009)
5. Conversion (Kerzner, 2009)
5. Project operation
6. Project closeout and termination (Benette, 2003)
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be specified within the industry most closely related to the project. The client produces
tender documents providing information about the project, including its goals,
specification, tasks and responsibilities. Often the client wishes to obtain cost and time
schedules from different organizations who can offer a deal to the client (Möller, 2014).
When the client has found suitable workers or companies for the project, it is important
that his needs are fully expressed (Patanakul et al., 2010). The necessary information is
collected and analyzed for the potential project. The greater the information that is
known, the greater the capacity to predict future progression (Archibald et al., 2012), In
addition, the decisions made in this phase seems to have a significant impact on the final
cost, and a higher level of definition within this phase is associated with less risk overall.
This is also the phase where the greatest uncertainty about the future will be
encountered (Uher & Toakley, 1999). The time required for this phase can range from a
few days to many months, depending on the size, timescale and cost, and also the
complexity, risks, skills required and other factors (Archibald et al., 2012).
2.2.2 Planning
Planning is the pre-execution phase and it determines how activities will be performed,
and a strong and decisive plan will lead to a more efficient execution stage. If there is an
absence of planning, or very poor planning, this is a strong sign for a project failure
(Westland, 2007). Planning is completed when the senior managers have given their
blessing to launching the project (Pinto & Slevin, 1988).
Westland discusses the importance of performing a plan which encompasses the
resource, financial, quality, risk, acceptance and communication aspects (Westland,
2007). Larson and Gray (2017) say it is most important to consider the scope, cost, time
and quality components, with the main focus being on resourcing, and this will be
explained later in the section discussing resources. At this stage, the most important
factors are goals and scope, cost, time and quality (Uher & Toakley, 1999) along with
responsibilities, tasks and specifications of the project (Larson & Gray, 2008).
22
2.2.3 Execution
Execution is the longest phase in the project, and this is when everything depends on the
planning and defining phase (Westman, 2007). This is the phase where the project is
actually performed, and all of the work is actioned. Time, cost, and specification plans are
used for controlling and oversight (Larson & Gray, 2008). It is important that the customer
is informed of the processes and their requirements are met, and the project manager
monitors and controls the actions (Westland, 2007). Projects are often high in complexity
and, thus, a lot of flexibility is required and other decision-making along in the execution
phase (Mian & Dai, 1999).
2.2.4 Closing stage
Larson and Gray (2017) argue that this phase includes three stages: delivering,
redeploying and post-project review. In other words, the project is delivered to the
customer, the use of resources in future projects, and the lessons learned (Larson & Gray,
2008).
Figure 2: The project life cycle phases and durations
Defining
Planning
Execution
Closing
23
Lessons learned
Lessons learned often materialize after the closing phase of the project life cycle (Kerzner,
2009), but they can manifest at any phase in the project life cycle when those things that
are progressing well or badly are reflected upon (Jugdev, 2012). According to researchers,
if lessons are learned during the project this can have a hugely positive affect on the
project, and deliver far better end results (Chirumalla, 2016). According to the PMI’s
PMBOK Guide (2010) lessons learned is the learning gained from the process of
performing the project. This is an efficient way to understand what to do better in the
next project, what was good and where there is a chance to improve (Jugdev, 2012). If
lessons learned are well documented and communication within the project team is
good, with knowledge being forwarded to other team members, this can deliver effective
results for future projects. Incorporating lessons learned into the process can lead to
improved competitive advantages because knowledge-based practices can be unique and
difficult for other organizations to copy, and often it is the case that expertise is difficult
to imitate (Jugdev, 2012). Another benefit from lessons learned is that they are a key
factor in enabling an organization to have an advantage on the market and make them
more valuable (Chirumalla, 2016). If the lessons learned are not implemented, then the
organization can be at risk of losing knowledge that is precious for the company and
others who are employed in similar projects. This is something that can lead to costly
mistakes. That undermines trust, good atmosphere within the company, and efficient
cooperation which is important for a more effective outcome (Judgev, 2012).
Sometimes the methods and habits within a company are not conducive to
promulgating lessons learned throughout an organization or company. This requires that
the employees communicate after the project and also that the lessons learned are
documented (Judgev, 2012). Employees and partner companies are often unwilling to put
their names to a mistake, or to face the truth behind work that should have been done
better (Kerzner, 2010). It is also often the case that employees don’t want to share their
knowledge, and the concept that "knowledge is power” is quite dominant, whilst other
times participants put up barriers against learning anything from others, taking a "this
doesn’t apply to me” attitude (Jugdev, 2012). Kotnour (1999) indicates that the culture
and structure of the organization are important and will often determine whether an
24
organization utilizes lessons learned or not. Holding to old ways and habits can lead to
poor outcomes for organizations, with deeply valuable information being missed
(Chirumalla, 2016).
There are different ways that companies can effectively capture and implement
lessons learned (Kerzner, 2010), and this depends upon the readiness and willingness of
the organization to question expectations, values, experiences, and actions and to include
their staff in the processes. Some use a centrally held in-built feedback document which
makes it is easy for the employees to document any lessons learned (Chirumalla, 2016).
Most companies prefer to hold meetings with the team after the project, when it is
important that a culture of trust prevails, so those present feel able to honestly discuss
what should have been done differently to obtain a better result, and also to learn from
what was positive for the project. Case study documentation can also be an effective way
for future employees to learn from previous employees (Kerzner, 2009). Another way to
teach lessons learned is to make a video, telling the story and creating drivers to creativity
(Chirumalla, 2016).
2.3 Project success
There is no one explanation on project success and how it is best defined (Shenhar et al.,
2001). Jugdev and Müller (2005) compare it to defining a piece of art, the merits of which
are often an individual’s preference. Before a project success is defined, it is important
not to confuse this process with project management success. Project management
success can be defined as how effective the project and its processes are. This amounts
to the success of the group that takes part in the project. Most authors and researchers
agree on the most common definition of project success, which is to define project
success according to the iron triangle and project managers generally refer to as “triple
constraint”. The iron triangle states that a project should be successful with respect to
time, cost, and scope, project quality is affected by balancing these three factors (PMI,
2004) along with delivering stakeholder satisfaction (Collyer & Warren, 2009; Ika, 2009;
Gardiner & Stewart, 2000; Kerzner, 2009; Larson & Gray, 2017; Munns & Bjeirmi, 2006;
PMI, 2013; Serrador & Turner, 2015). Larson and Gray (2017) argue that often the longer
a project takes, the more expensive it becomes. Often there is no balance between time,
25
cost and scope, and therefore sometimes it is necessary to use cheaper equipment or
labor to get the triangle into balance again.
Tukel and Rom (2001) claim that quality is the primary determinant of project success.
Other researchers say that most projects do not achieve success because of the lack of a
clear definition for the project scope (Mirza et al., 2013). Turner and Zolin (2012) say that
ultimate project success is best judged by the stakeholders. It is important to keep in mind
that even though a project does not follow the iron triangle, it can still be successful, and
the client can be very happy with the end result of the project (Collyer & Warren, 2009).
An example of this is the Oscar-winning movie, Titanic, which was the first movie to reach
$2.8 billion in sales. The stakeholders were happy with the outcome and the movie won
11 Oscars. However, at that time, it was the most expensive movie ever made and the
cost of $200 million went far over budget (Bronte-Stewart, 2015; Munns & Bjeirmi, 1996).
Another example is the Sydney Opera House, which cost five times more than planned
and took three times longer than predicted to construct (Shenhar et al., 2001), but it was
still regarded as highly successful and it is one of the main tourist attractions in Sydney
today. There are also examples of projects where, despite following the iron triangle, they
ended up being a flop. The second generation of Ford Taurus cars, that came out in 1995,
are a good example (Ika, 2009).
Figure 3: The definition of project success, the iron triangle.
Time
Cost
Stakeholders
Quality/scope
26
It is, however, a fact that as time has passed the definition of project success has
evolved into something that is slightly more complicated. The iron triangle and the
stakeholder’s satisfaction are possibly a great simplification of what constitutes the
modern definition of project success (Ika, 2009; Kerzner 2009). Westerveld (2003) adds
that a better definition of how project success should be measured is whether the project
actually achieves its project goal. Project success has been researched at least since the
late 1960s, and project managers have been trying to define critical factors for project
success ever since (Cooke-Davis, 2002). The success of projects has often been defined
by the final outcome of the project (Munns & Bjeirmni, 1996), such as the examples of
the movie Titanic and Sydney Opera House referenced above. It can also be said that
project success is a set of circumstances, facts, or influences which contribute to the
project outcome (Lim & Mohamed, 1999). Ika (2009) defines project success as the iron
triangle but adds the strategic objective of client organizations and business success.
Furthermore, he lists benefits to stakeholders, project personnel and symbolic and
rhetoric evaluations of success and failure to the list of success criteria along with end-
user’s satisfaction.
Even though there is no lack of articles, studies and discussion concerning project
success in project management, projects still seem to fail. Researchers in project
management claim that there is no such thing as a universal project success checklist that
will ensure project success. The criteria for success is different from project to project,
depending on their size, uniqueness and complexity (Westerveld, 2003). The goals for
projects are often high and unrealistic, and it is common that projects do not follow the
original plan and the iron triangle. About half of all construction projects do not progress
according to the original plan. Project sponsors say that it could be argued that 50%
should be added on top of the calculated time and cost estimate at the beginning of a
project (Gardiner & Stewart, 2000). Factors underpinning project success seem different
with respect to project types and industries. Certain success criteria and success factors
are common across different project types, whereas some are critical factors for project
success (Cserháti & Szabó, 2014).
Research on a sample of 448 projects supports the importance of planning and
particularly emphasizes the importance of quality of planning. The quality of planning has
27
a positive effect on both efficiency and customer satisfaction. However, if there is a need
to change the plan and the goal, although the planning was good, it will have a negative
effect. It is possible to change the plan, or the goal individually, and still have a quality
plan which leads to a positive outcome, but not both together (Dvir & Lechler, 2004). The
same can be said with regard to scope changes in a project, as these can have a very
negative effect on the project, and they must be kept to a minimum (Kerzner, 2009).
Research shows that there is a strong connection between a well-defined project scope
and the likelihood that the project will succeed (Larson & Gray, 2017). The complexity of
the project can also affect the success rate, along with technical uncertainty, demand
uncertainty, unexpected occurrences and geological features. Other root causes which
explain cost overruns and delays are pure bad luck, and either a too optimistic or a lack
of strategy (Flyvbjerg, 2013).
Pinto and Slevin (1987) argue that planning and goal setting is the most critical factor
for project success, along with other eight important factors. Firstly, the factor of the
project mission, which is similar to the project goal but wider. The project mission should
ensure that the goals are clear and understood by everyone in the team and other
departments in the organization. It is also key that the goals are in line with the
organizational structure and objectives. The second factor is top management support. It
can be very helpful for project success to have support from the top of the organization,
receiving direction and benefitting from their authority. This can also encompass financial
support, together with manpower and time issues. Factor three is classified as the project
schedule/plan, since it is important that the plan is well-detailed with respect to aspects
such as the time schedules, milestones, manpower and equipment requirements. The
fourth factor is labelled client consultation, and this helps the project manager to meet
the client’s expectations and give the team in the organization a better understanding of
what is required of them to deliver the best project result. The fifth factor is personnel
issues, including the training and selection of staff for each team that is needed to ensure
the project’s success. It is key that the project teams are committed to the project’s
success. The sixth factor is technical tasks, which enables the project team to deal with
technical issues and have the technical knowledge to be able to facilitate the project. The
seventh factor links closely to step four, which is client consultation and acceptance. A
common mistake is for project managers to think that the client will accept the final result
28
of a project without getting their acceptance first. The eighth factor is monitoring and
feedback. This applies not only to budget and time but also team performance. The ninth
factor is communication, and this is a very important factor. Lack of communication
between the client and the organization, or within the team, is a negative influence on
project success. When communication is effective, everyone knows about the problems
that are being faced and no one is hiding information. The tenth and final factor is
troubleshooting, which makes it easier not only to diagnose problems when they occur
but also make forecasts about possible issues that might emerge in the future. These ten
factors are not ranked from one to ten in terms of their importance to project success,
but rather they should be considered across all stages of the project, and it should be
noted that the factors can have a strong influence on each other (Pinto & Slevin, 1998)
Cooke-Davis (2002) conducted a detailed analysis of 136 projects from Europe
between 1994 and 2000, covering a total of 23 organizations. The main goal was to find
out what factors are critical to project management success, and the resulting 12 factors
were different to those of Plinto and Slevins (1987). They included risk management
factors and a lack of risk management education and maturity, and in addition, poor
project organization and inadequacy of documentation concerning organizational
responsibilities. The shorter the project, the greater the likelihood of project success, and
Cooke-Davis (2002) claimed that a duration of three years was too long for a project to
have a strong probability of success. The author advised allowing changes to scope only
through a mature scope change control process. In addition, organizational strategy
should be developed so as to deliver benefits to stakeholders and the portfolio and
enable learning from experience. To the author’s surprise it was found that there were
only limited links between cost and time when there were delays in project. Only a small
amount of extra cost was incurred when projects were delayed, out of the sampled
projects (Cooke-Davis, 2002).
2.3.1 The project manager role in project success
Early studies claim that one of the critical success factors of a project is how it is controlled
(Westerveld, 2003). The project manager is usually the one controlling and planning the
project. This does not mean the project cannot be successful if the project manager is not
29
doing so, because it can still meet overarching and long-term objectives. A successful
project manager needs to possess excellent planning skills covering all aspects of the
project and a strong commitment to completing the project. It is necessary for the project
manager to make sure that communication is good and there is information flow, and
that the personal goals for individuals are aligned with the overall goal of the project
(Munns & Bjeirmi, 1996).
Crawford (2005) pointed out that the role and capability of the project manager can
have a huge effect on the project outcome and organizational performance, which really
stands out in some projects. Thus, it is crucial for the success of a project that the right
project manager is chosen (Sadeghi et al., 2013), and the wrong project manager being
selected can be the main reason why a project does not work out (Avots, 1969). It is
important here to not only consider the capability of the project manager with regard to
the necessary hard skills (technical), but also to ensure they also possess good
communication skills and the rather imprecise soft skills needed to fill the role. Soft skills
also include social skills, adaptability and the willingness to work in a team (Carvalho &
Rabechini, 2015). It must be remembered that all projects are different, and they differ
between industries and it is to be expected that project managers will bring different
skillsets to the table (Takey & Carvalho, 2015). According to the Project Management
Institute (2013), the project manager is responsible for reaching the project goals.
Larson and Gray (2017) claim that that job of project manager is a little different from
a typical managerial job, because the project manager organizes everything, creates the
schedule, motivates and is in overall control. The project manager is not only responsible
for overseeing the whole project, but they are also in control of how and when the
aspects of the project should be operated. Another factor that is unusual about this role
is that they are in control of a project that is temporary but with a defined final
conclusion. It is also their job to build effective teams and plan how they will work
together on the project. The project manager is usually the one who is in communication
with the client and stakeholder, and thus, they must possess the capacity to deal with any
dissatisfaction that arises during the life of the project.
Research by El-Saba (2001) established six capabilities that are helpful for a project
manager to possess. These are communication, organization, team building, leadership,
30
technical, and adaptability skills. Posner (1987) argued that the biggest challenge for
future project managers are communication skills, together with management and
leadership skills, along with flexibility and creativity.
The most useful project manager competencies are experience and education,
whereas certification is only moderately important (Stevenson & Starkweather, 2010).
Project management education is a fairly new field of study (Thomas & Mengel, 2008).
Often the project manager has been trained on the job and has no formal project
management education (McHenry, 2008). In Ahsan et al., (2013) the research discussed
a job description for a project manager issued by a company in Australia and New-
Zealand. Out of 795 applicants, only around 20% held a project manager certification.
This provides ample evidence that project managers are not necessarily required to have
a project management education, even though they are in overall charge of the project.
In the construction industry, the project manager has the important role of controlling
the project, and this can often become quite complicated due to the many parties and
factors involved in a project. Experience of other construction projects can be very
advantageous. Another essential factor is that all team members and staff have the
required expertise to efficiently execute their part of the project. It is also important that
the project manager has good computer skills, because these are necessary to control
any complex project. Another extremely valuable project manager skill is the capacity to
take an overview, effectively ‘looking over the balcony’ to take a look at the overall plan
as it unfolds into the future. Looking out for issues that could arise unexpectedly, checking
material deliveries, determining manpower and training requirements, and identifying
potential future problems and possible changes to the work structure are all part of the
role (Bennett, 2003).
2.3.2 Project failure
Project failure can happen with big or small projects in any industry (Discenza & Forman,
2007). Few people agree on how to define project failure, but if the project success is
defined as a balance between time, cost, quality, scope and happy stakeholders, then we
are closer to determining what project failure is (Kerzner, 2009). Emam and Koru (2008)
31
claim that project failure is not always a bad thing. Sometimes it is an opportunity for
substantial learning or critical business decisions (Emam & Koru, 2008). The downside of
project failure is often a high sunk cost and the significant wastage of time that is
associated with it (Discenza & Forman, 2007).
According to research completed in 2005 and 2007, which focused on project failure
in software companies in the US, Australia, the UK and Canada, out of 232 responses from
the 2005 study, 15% of the projects were cancelled. In 2007, similar research was
undertaken with 150 responses being acquired, and 11% of these projects were
cancelled. 16 – 22% were considered unsuccessful on the basis of their performance
(Emam & Koru, 2008). McManus and Wood-Harper (2007) say that only 12.5% of
information technology projects can be considered truly successful, with failure being
described as those projects that do not meet the time, cost and quality standards that
were specified by the client and incorporated in the original goals of the project
(McManus & Wood-Harper, 2007). Meeting scheduled targets and goals was consistently
the most challenging aspect for delivered software projects (Emam & Koru, 2008). Emam
and Koru (2008) said that going over budget, lack of management commitment,
inappropriate management skills and bad project management could be one of the major
reasons why projects fail. More than one aspect usually goes wrong and a complex
situation combining several factors is usually responsible for such failures (Lehtinen et al.,
2014).
McManus claims that only a few organizations have the capability to lead a project to
success, and usually there is a need for better education, training, infrastructure, or it is
found that management skills were lacking. Research indicates that more than half of all
information technology projects become runaways – going over budget, timeline and
failing to meet their goals (McManus & Wood-Harper, 2007).
Articles on software engineering project failures specify that the causes of such failures
are often the project environment, tasks, methods and the people involved. Moløkken-
Østvold and Jørgensen (2005) claim that having too many people involved in a software
project is a huge risk factor when it comes to project failure. A survey based on the
responses of 300 software professionals found that the client’s impact on a project is
huge. This often leads to project failure due to the client changing requirements or even
32
having new wishes regarding the project (Grimstad et al., 2005). McManus found from
prior research that 65% of project failures arose from poor leadership in project delivery,
along with bad communication with stakeholders, together with poor risk management
and insufficient management support (McManus & Wood-Harper, 2007). Egorova et al.,
(2014) claim that the spirit within a team is crucial to whether a project will fail or be
successful.
2.4 The construction industry
As already stated in the introduction, the construction industry comprises a large part of
the world economy with many jobs relying on the industry and it is a big part of society
(Simonson, 2020). The industry is very dependent on public-sector demand (McKinsey &
Company, 2017). Construction projects, especially those commissioned by the
government, are usually put out to tender (Liu et al., 2020). Some research argues that
the bid price is very relevant to the actual cost of the project (Corazzini et al., 2019).
Sometimes there are other influencing factors apart from the best price, such as some
specific expertise or experience that is important to the project being tendered for
(Bennett, 2003). According to the Icelandic law relevant to public procurement (number
120/2016) day bills will be recorded in the contract if this is a requirement of the client
(Lög um opinber innkaup, 2016).
The scope of the construction industry is very wide, and it includes residential
construction, the construction of commercial facility buildings, and heavy engineering
construction including infrastructure construction and industrial construction that
requires specialist abilities (Puspasari, 2005). Construction projects can be put in three
categories determined by their unique features. 62% fall within the building and real
estate sector along with social infrastructure such as hospitals, schools and stadiums. 25%
is civil infrastructure, including transportation, power, water, and telecommunications
projects. The remainder, or 13%, is industrial construction, including structures for
manufacturing, oil, gas and mining (McKinsey & Company, 2017).
Bennett (2003) argued that construction projects can be separated into two broad
categories, general building construction and engineered construction. General building
33
construction is usually designed by architects or the owner and these are buildings for
human habitation, for example, houses and apartments. General building construction
can also include shopping centers, office buildings and school buildings. The second of
these broad categories is engineered construction. These are slightly more complicated
projects and usually the design will be prepared by engineers and these are normally
government projects requiring a high degree of mechanization and heavy equipment.
Examples include highway or tunnel construction.
Construction projects are in many ways different from projects in other industries due
to their long execution periods, complicated processes, the high sensitivity of
environmental influences, and the diverse interests of the different stakeholders
together with the dynamic structure of project teams, which often makes delivering a
project on time quite challenging (Zou et al., 2007).
For a construction project to achieve its mission, a compilation of many factors must
work together (Clough et al., 2000). Construction projects are usually particularly complex
because they are often large and many parties are involved in the project, with multiple
specialties and expertise sectors required, which is why it is very important to coordinate
the project correctly (Puspasari, 2006). Different areas involved can include electrical
work, concrete laying, excavation, plumbing, and roofing. It is crucial that a large
construction project is efficiently controlled (Clough et al., 2000).
Due to the size of these projects and the number of people involved in them, the flow
of information is often deficient with information getting lost, especially between
different phases in the project life cycle, and this can have a discouraging and detrimental
effect on the project. This also emphasizes the importance of the project manager who
manages such projects having a great deal of appropriate knowledge (Hu, 2008).
2.5 Construction project life cycle
A construction project is considered to be successful when it is completed on time, within
budget and all of the stakeholders are satisfied with its quality (Gündüz et al., 2013).
According to Bennett (2003) there are usually six project life cycle phases in the
construction industry. It is important that each phase is respected and that the next phase
is not rushed into if the previous one has not been fully completed, or if more scheduling
34
or research needs to be done. That can have a negative effect on the project, even though
it can be very tempting (Clough et al., 2000). Prior to commencement of the project, when
the idea for it is being considered, the project owner needs to decide which way the
project will be worked. Does the owner want to be included or to get external contractors
and subcontractors to do the work is an important question (Bennett, 2003). At this stage
there is a lot of uncertainty, and it will not amount to much more than an idea and maybe
some sketches. How high the level of uncertainty is will depend on the available data, and
also lessons learned from other projects, and to what extent it can be utilized together
with standardized components and solutions, and also what kind of technologies can be
used to resolve the challenges posed by the project. The further the project life cycle is
progressed the more uncertainty is reduced, because more information becomes
available (Clough et al., 2000).
The next step is the planning and design phase, and this phase is about planning,
defining the scope and deciding the budget. The more that is known about the project
and its design the better, and all project specifications must be put into place before the
next step, the contractor selection phase, can be entered into. When contractors are
selected, it is important to ensure they will be available to work when the they will be
required to, fitting around the complex demands of the project. In big projects there are
often many contractors and subcontractors, with each contributing their own specialist
skills.
Phase four is the project mobilization phase, and there are many tasks that that need
to be accomplished before construction work can commence. Various bonds, licenses and
insurance certificates must also be obtained during this phase. The workplace must be
set up to enable the labor force to have somewhere to rest during their breaks and also
in between providing services that are temporarily required. The budget and cost aspects
must be controlled and scheduled for the next phase, the project operations phase. This
is the phase when the construction work is actually done, and three factors are very
important in this phase, which is often the biggest phase. The first factor includes
monitoring and controlling, resource management, and documentation and
communication (Bennett, 2003). The second factor is knowing exactly where the project
stands at any moment regarding timing, budgeting and the required quality. Net present
35
value (NPV) is a useful tool to calculate this phase of a construction project, ensuring it is
easy to know exactly where the project stands according to its overall plan. It is very
important to monitor the work to evaluate the project performance and identify exactly
where it stands in relation to the schedule (Gardiner & Stewart, 2000). The final factor is
the project closeout and termination phase, and there are a few steps that need to be
completed before the project can be said to be concluded. The closing papers have to be
completed and all of the contractors must be paid. Various professional opinions and
certifications need to be obtained, as well as ensuring that the project has achieved the
goals that were initially intended (Bennett, 2003).
Figure 4: The construction project life cycle according to Bennett (2003)
2.6 Deviation in construction projects
Construction projects need to be delivered on time, within budget, fulfill the project
scope and deliver the required quality. In order to have the opportunity to succeed they
must be well controlled, organized, monitored and evaluated together with employing
the right people with the required specialist skills (Raymond & Bergeron, 2008). Project
delays and uncertainty often afflict projects and are very common, and there is a
Pre-project phase
Planning and designing
phase
Contractor selection
phase
Project mobilization
phase
Project operations
phase
Project closeout and termination
phase
36
significant delay rate in the construction industry (Ansah & Sorooshian, 2017). There are
indications that around 50-80% of construction projects experience cost overruns
(Flyvbjerg et al., 2003). Productively has only grown by 1% over the last twenty years,
which is less than in other industries, such as manufacturing where the growth rate has
been 3.6% per year (McKinsey & Company, 2017). This is despite the fact that there is no
lack of construction project research which argues that a lot improvements are necessary
in the industry regarding cost control, scheduling, design practices, labor training and
quality control (Arditi & Mochtar, 2000). It can also be argued that it is important to know
the factors that can cause a project to be delayed in order to prevent them (Gündüz et
al., 2013).
Many synergistic factors lead to deviation in projects and often there is no single
explanation, and instead a series of unrelated events caused deviations to occur in the
project (Munthe et al., 2014). There are only certain things that can be planned for in a
project, and others cannot be factored in. It is very hard to plan for the effect of the
external environment (Youker, 1992). Many construction projects have reported
deviations that were caused by the environment and there can be no control over such
things (Ansah & Sorooshian, 2017). Akinsola et al., (1997) argue that the external
environment is everything outside of the project and that includes, for example, a
product’s nature, customers and competitors, political situations, the economy,
geographical settings and even the climate. It can now be said that COVID-19 is the
newest external effect on projects (Hall et al., 2020).
Larson and Gray (2017) add that the external environment is hard to control and
manage. Because of the deviations that can occur in construction projects, it is important
to account for them in the project processes. Bennett (2003) advised construction
management to be aware of the external environment when scheduling the project so
that this kind of deviation would be less of a surprise when it occurs. Larson and Gray
(2017) say that constant scanning of the external environment is necessary to enable the
project to adapt to the external environment.
In the article, "Construction on plausible grounds" (Framkvæmdir á hæpnum
forsendum), Jóhannesson (2014) explores why such enormous underestimation is
common in projects in the construction industry. One explanation is based on the so-
37
called anchoring bias and this phenomenon has been confirmed in many experiments. It
is based on the fact that the criterion that are started with will affect the result. An
example that Jóhannesson (2014) uses in his article is that two groups were asked about
the age of death of Mahatma Gandhi. The first group were asked if he died before the
age of 9 and the second group were asked whether he died before he was 140 years old.
The group who got the question referencing the lower age guessed within a much lower
age than the group whose question referenced the higher age. Thus, the commencing
criteria has an influence on the result. Jóhannesson said another explanation could be an
overly optimistic attitude and excessive flexibility on the part of consultants, since if they
are bored or under pressure, they are less likely to object. Sometimes the cost estimate
is adapted to fit around an available construction idea, and such estimates are usually
unreliable.
In respect of 248 building projects that were researched in Australia, the client (41%)
and the consultant (25%) were responsible for more than half of the project variations,
which increased time and cost in these building projects (Chan & Kumaraswamy, 1997).
Chan and Kumaraswamy (1997) investigated the construction industry in Hong Kong,
where similar reasons for poor project productivity were found to exist using quantitative
research involving 137 construction companies. The most significant reasons for time and
cost overruns could mostly be traced to five factors: poor management and supervision,
unforeseen ground condition, slow speed of decision-making involving the whole project
team, client initiated variations, and necessary variations of works.
Al-Momani (2000) undertook an analysis of the construction delays within 130 public
building projects that were constructed in Jordan during the period 1990-1997, and the
findings pointed to seven factors which caused such delays. These major causes related
to designers, user changes, weather, site conditions, late deliveries, economic conditions,
and increases in quantities.
Gündüs et al., (2013) found 83 factors influencing deviations in the construction
industry in Turkey. The aim of this particular study was also to find which factors had the
greatest effect on deviations in projects. Firstly, it should be mentioned that contractors
need to have sufficient experience to be able to take on the project. This is of critical
importance because, as the study showed, the contractors having insufficient suitable
38
experience was the most often cited cause of deviation. Secondly, it should be mentioned
that contractors need to monitor the plan and organization of the project more
thoroughly. This study expounds the view that only projects that are prepared and
planned can graduate on time. It is also important to note that good managers consider
the overall project. Project owners may make changes to the project during its life, but
this should not happen if the changes would enter the project too late and thus jeopardize
the success of the project. It is important to keep in mind that changing the scope of the
project, adding or dropping parts of it unless absolutely necessary, can have major
consequences for the outcome of the project. It is essential that approval for any changes
is obtained from the project owners, as not doing so can cost more and also prolong the
project.
A study conducted by Assaf (1995) in Saudi Arabia identified 56 influences on deviation
in construction projects. This research found that the approval of shop drawings was
usually the most influential stage in a project, whilst other significant causes included the
contractors not being paid on time, design changes and errors, conflicts in subcontractor
work schedules, too slow decision-making, and deficient labor skills.
A study by Kaming et al., (1997) also addresses this aspect, finding 31 deviations which
hindered project success. The most influential factors were design changes, poor labor
productivity, inadequate planning and resource shortages.
Another study by Sweis et al., (2008) states that the biggest factor influencing
deviations is poor organization and preparation, financial difficulties and too many
changes made by the project owners when the project was already underway. At the
same time, it can be said that the workers did not have enough knowledge or were not
diligent enough.
The barrack (Braggamálið) conversion project in Iceland veered severely off-course in
multiple ways, finishing with a cost overrun of 240%. Reykjavik City Council formulated a
detailed report setting out what went wrong. According to this assessment, multiple
factors synergized, and it was this that lead to such a bad result. Examples included the
following: the design for the rebuilding of the barrack was formulated after the cost
schedule was completed; the project manager was the architect who designed the new
barrack building; weekly project meetings were held but these were badly monitored
39
with little follow up within the project. Lastly, there were no formal contracts in the
project, other than the rental contract, and no structure around the project
(Reykjavíkurborg, 2018).
The MGI Construction Productivity Survey (2017) confirms many reasons for poor
performance. The survey established that there was a general lack of relevant skills in the
project, something which was also evident in the project design. Project owners are often
inexperienced, and the project manager is often marginalized, with the execution stage
being poorly completed. Sometimes there can even be corruption within the industry and
little transparency, and contracts have been mismatched in risk allocations and rewards.
2.7 Icelandic culture
There is a need to talk about culture in this thesis, because this research indicated that
culture can possibly affect deviation in project management.
“Culture eats strategy at breakfast” was said by Peter Drucker, which is a reference to the
culture that is strongly ingrained in a society, a workplace, or anywhere else (Prado et al.,
2017). A country’s culture is the set of values, symbols, beliefs, languages and norms that
guide human behavior within that country. It is a learned behavior that grows from
childhood to adulthood (Mondy & Martocchio, 2016). Culture can be compared to an
iceberg, a portion that is visible and a part that is invisible. The culture that is visible is
only a fraction of it, comprising of rules, goals, behaviors, speech, work facilities, clothing,
the customer, and the organizational chart of an organization. Invisible culture includes
all of the unwritten rules that apply, and many underlying factors such as attitudes,
expectations, differences, skills, knowledge, opinions, values, feelings and
communication patterns within the organization (Mooij, 2004). National culture has been
extensively researched and this can also help us to understand the cultural differences
between organizations.
Iceland is an island in the North Atlantic Ocean and the nation is comprised of 350,000
people. The community culture is built on the history of the Icelandic people. The Saga
Age marks the first century of modern Icelandic history, and the narratives capture the
character of the people, exemplified by the qualities of determination, a strong mindset,
adaptability and a desire to expand and explore their horizons and the resources around
40
them (Minelgaite et al., 2018). It can be argued that these societal characteristics, in
tandem with challenging events, have shaped the core of Iceland's culture, and examining
this can help us to understand the underlying factors within Icelandic culture.
Guðmundsdóttir and Aðalsteinsson (2011) submitted a survey based on Hofstede's
questionnaire, which conducted a study of national cultures in more than 40 countries.
The purpose of the study was to study how the national culture of the Icelanders differs
from the national culture. 427 answers to the questionnaire were received, all from
students at the University of Iceland, and the results covered the 5 dimensions of
Hofstede which will be explained. PDI (power distance) refers to how power is distributed
within the institutions and the community. If there is a weak power distance, then
everyone is considered to be equally right, hierarchy is limited, and great emphasis is
placed on the responsibility of individuals. IDV (individualism) reflects the concept that
everyone is, first and foremost, responsible for themselves and their family. The
connection to others is weak and an individual's freedom of action is great. MAS
(masculinity) indicates how the roles of the sexes are different. If the masculine
dimension is high, the role of the sexes is very different. UAI (uncertainty - avoidance)
indicates how much individuals in society are threatened by uncertainty and unknown
circumstances. The members of the community work hard when needed and emphasis is
placed on accuracy and punctuality. Countries that rank high in this area are afraid of
vague circumstances and unknown risks. LTO (long-term orientation) covers the long-
term and short-term attitudes of individuals. The countries that espouse short-termism
have a greater respect for tradition, with a strong emphasis on the order and duty of
individuals. Long-term thinking places more emphasis on prudence and perseverance
(Hofstede, 2001).
According to the results, Icelandic national culture can be characterized by low power
distance (PDI), high individualism (IDV), low masculinity (MAS), high uncertainty-
avoidance (UAI) and average long-term orientation (LTO) (Aðalsteinsson &
Guðmundsdóttir, 2011). Even though Icelandic culture scores highly in individualism
(IDV), Iceland scores lowly in class deviation.
41
Icelandic leadership is characterized by being better at dealing with harshness or
difficulties than overheating, and thus it could be said that perseverance is one
characteristic (Minelgaite et al., 2018).
Icelandic culture has been described as a family culture, where everyone knows
everybody, people have easy access to people and all communication channels are short
(Aðalsteinsson & Guðlaugsson, 2007). Iceland scores high in uncertainty avoidance which
represents the degree to which people prefer to experience structured over unstructured
situations, with the rules of behavior being clear for any given circumstance. These rules
may be expressed, or they may be unwritten and merely exist as a matter of custom or
tradition. It should also be said that Icelanders often take risks, live with uncertainty and
make quick decisions (Minelgaite et al., 2018). Eyjólfsdóttir and Smith (1996) say that
Icelanders prefer to work in harmony with others, something that is, for example, due to
the location of the country, isolation, environmental instability, and economic insecurity.
Icelanders also prefer to rely on informal rules and feel comfortable in uncertain
situations. From the perspective of outside parties, Icelanders are considered to be rather
unorganized and inaccurate. At the same time, Eyjólfsdóttir and Smith (1996) express the
view that Icelanders are rather optimistic and happy, and that more often than not this
is a sign of carelessness, something that is reflected in the Icelandic saying “þetta
reddast”, which means “it will sort itself out” indicating everything will be okay in the end.
Organizational culture
Workplace culture is the basis of the whole organization. It is not just one piece of the
jigsaw puzzle that is additional to the organization, but the jigsaw puzzle itself
(Pacanowsky & O Donnel-Trujillo, 1982). It can therefore be argued that the workplace
culture is a key contributor to the success of the organization, and research indicates that
workplaces with a strong workplace culture achieve better results than others
(Aðalsteinsson et al., 2010). There are many definitions of workplace culture. According
to Drennan (1992), it is "how things are done around here". For Edgar Schein
organizational culture is “based on employees’ underlying assumptions, the beliefs,
attitudes and values espoused by the organization and the interactions and
42
communication patterns that have evolved within the organizations” (Aðalsteinsson et
al., 2007, p., 27).
However, it is important to keep in mind that workplace culture is complex and there
is no single definition of what a workplace culture is. Workplace culture is in fact the force
that prevails within the organization as a whole and what drives the organization as a
whole (Aðalsteinsson et al., 2010). Research indicates that Icelandic managers have
certain characteristics: are rather friendly; informal in their behavior; make decisions
quickly; they want to solve problems; getting the best out of people on the job; and think
little about hierarchy. In many ways, they behave like entrepreneurs, being risk averse
but encouraging innovation. Encouraging their staff to take action, they are often good
role models who thrive in a competitive environment and have a success-orientated
mindset. If some part of the system needs to be fixed it will simply be fixed, which is
usually done with a lot of hard work, and the results are celebrated with the heroic stories
of the managers (Aðalsteinsson et al., 2010).
Óladóttir and Jóhannesdóttir (2008) found that the Icelandic management style is very
similar to that used by other Nordic managers, but the Icelanders are characterized by
rather quick decision-making and a lot of work. Research on Icelandic workplace culture
indicates that the factor that scores the highest is a clear and purposeful policy, which
means that the future vision is clear for the organization as a whole and its employees.
This policy is likely to create a certain competitive advantage, but it is rather surprising
that the scores in respect of coordination and integration score are low. This means that
despite clear policies, the processes to implement them are poorly defined and poorly
run, and different units within the organization do not work well together (Aðalsteinsson
et al., 2010).
43
3 Research Methodology
In this section, the research methodology will be presented. First, the qualitative research
will be explained, together with the grounded theory inspired process of data analysis,
along with participant selection, data collection processes and ethical considerations. The
researcher will also explain why this topic was chosen and what the researcher hopes it
will accomplish (see 3.2).
3.1 Qualitative Research Methods
Qualitative research methods are the most suitable approach to use in order to gain a
better understanding of the phenomenon researched, particularly when the existing
body of knowledge on the topic is limited (Merriam & Tisdell, 2015). As in this research,
the statistics behind the many construction projects which do not progress according to
schedule or go over budget (Flyvbjerg, 2005) are known. However, there is a lack of
understanding as to why and an absence of deep insight into the project manager
experience and mindset. That is why this method was chosen: to evaluate deviation in
the construction industry, with the project life cycle being used as a method. This has not
been investigated in Iceland before, to the best of the author’s knowledge. Qualitative
research is a good method when there is little or no existing knowledge of an area, or
there is a need to gain a new understanding on things or make sense of a complex
situation (Morse & Richards, 2012). Qualitative research gives us a better insight into the
root thinking of the project managers, exploring where they feel things go wrong and
what the main issues are in their opinion (Ragin & Amoroso, 2011). It can give us a better
understanding of their experiences, behaviors, feelings, culture, and communication
(Hennik et al., 2011).
When doing a qualitative research project, it is common that the researcher does not
want to form research questions beforehand, because doing so could close some
44
doorways that might happen to open up during the interviews. The research questions
should be influenced by the field and are modified over time (Tracy, 2019).
3.2 Participant Selection
The researcher contacted an engineering company and asked if there were some factors
that the company would find useful to analyze and get an improved insight into. The
frame of this project is one of the ideas that the engineering company suggested. It is
hoped that this research will not only be useful for the company, but also for other
construction companies, and that it will lead to greater efficiency and improved
outcomes in project management in the construction industry. Hopefully, this study will
fill an existing gap, and guidance from the research will provide construction companies
with a better understanding and insight into their work. The idea to contact this specific
engineering company came after a visit to their premises with my university, when one
of their main project managers welcomed us and talked to us about project management,
how it operated and their work.
Time has a monetary value, and the researcher is very grateful for the time that the
employees gave to this research, something that is highly appreciated. Their manager
selected the participants and motivated them to take part in this study, although they
could, of course, have decided not to participate. As Corbin and Strauss (2009) say, a
researcher can never be certain as to why people agree to become research participants.
The only demand that I made was that those selected would all be experienced project
managers within the company. This is in line with the conclusions of Ritchie et al., (2013),
who asserted that the participants need to fit the requirements of the researcher, so that
a better understanding on the subject can be achieved.
3.3 Data Collection
The data collection took place in March 2020. As already stated, the company’s project
managers are highly educated specialists, and I was able to interview eight of them, all of
whom worked in the same department. Their length of experience with the company
45
varied from five to thirty-two years. They are all educated engineers and have a lot of
experience as project managers or within the project management teams. All of the
project managers that participated in the interviews have some kind of formal education
in project management, either in the form of project management courses or have IPMA
certification.
Their real names are not used in the research, but the participants have been accorded
aliases to make the research more personal. Those names are: Alex, Ari, Aron, Chris,
David, Sunny, Robert and Svali. One of them is the manager of the department. The
figures given for levels of experience and the length of the interviews are all authentic.
Table 3: The participants, their level of experience and duration of interview. (Level 1 experience: 0-10
years, Level 2 experience: 10-20 years, Level 3 experience: 20+ years)
Names: Experience Length of interview
Alex Level 1 1:06
Ari Level 2 1:01
Aron Level 3 57
Chris Level 3 1:22
David Level 3 1:02
Sunny Level 1 1:10
Robert Level 3 54
Svali Level 3 38
The gender balance is 25% women and 75% men. Measures have been taken to ensure
the confidentiality and anonymity of the respondents because confidentiality was
promised to the interviewees. The names allocated here do not reflect their gender.
Some names related to places and certain construction projects are not revealed to
make certain that no highly sensitive information will be revealed in this study. Again, this
is something that was promised to the participants when their interviews took place.
Due to COVID-19 all the interviews took place via Microsoft Teams, with both sound
and video recording taking place, and this happened with the participants’ express
46
agreement. It should be noted that two of the interviewees did not want to appear on
camera, and so the researcher was unable to see their facial expressions as they spoke,
making it harder to analyze their feelings about things. Qualitative research is about
getting a deep insight into the participants’ mind and feelings and trying to understand
what is behind the words (Ragin & Amoroso, 2011). It is valuable to note the emotions
expressed when doing the analysis, because incorporating the emotional aspects is part
of the process (Corbin & Strauss, 2009), however, that is much harder when you are
unable to see the face. Research shows that facial expression conveys a lot of emotion
(Ekman, 1970), and without it you can only perceive emotion via the words uttered and
the tone of voice. This may possibly have affected the outcome of the interviews, as may
the fact that the interviews took place via a computer screen. The recordings of the
interviews have since been deleted.
The interviews followed the structure of the project life cycle approach, as set out in
the book by Larson and Gray (2017). The interviews were semi-instructed interviews, and
the research frame was built beforehand (Esterberg, 2002). To facilitate a better flow and
gain a deeper understanding, other questions were asked in between the questions that
all interviewees were asked, and these differed from interview to interview because they
depended on the flow of the interview (May, 2011).
3.4 Data Analysis
Qualitative research is a combination of art and science. It requires analysis,
brainstorming, and trying out different approaches until a conclusion is arrived at. The
art aspect is being creative and thinking outside the box to tell the story that feels right
to the researcher. The science aspect stems from concepts that are grounded in data and
seeking those factors that the interviews have in common and attempting to discover
what is behind the words, and gaining a deeper understanding of the subject (Corbin &
Strauss, 2009). This research is inspired by grounded theory. Grounded theory (GT) is,
first and foremost, a research method that was first instigated in 1967 (Corbin & Strauss,
2007). Grounded theory is especially useful when processes are being investigated or
finding a new theory (Merriam & Tisdell, 2009). Qualitative research is concerned with
47
processes rather than simply with outcomes or products (Bogdan & Biklen 2007). The
data is viewed and analyzed in a structured way and information is added during the
research process (Corbin & Strauss, 2014).
The analysis began in the first interview, where open ended questions were used (see
appendix 1). The manner in which the researcher asks the questions and the words that
are used are important. It is not possible to convert the interview results into numbers or
a bar chart, and the way in which the questions are presented can influence the results
(Esterberg, 2002).
Sub-questions were asked to get a better understanding and great emphasis was
placed on listening to the unspoken meaning behind the words. When something stood
out, such as a facial expression or the tone of voice when a question or its reply triggered
sensitivity, this was carefully noted. A record was also kept of those occasions when there
was a longer silence than usual, or a laugh or something else punctuated the flow of
words. The researcher transcribed the interviews, which amounted to almost 90 pages
of text.
Following the method set out by Corbin & Strauss (2009), the next step was to open
code the interviews. Open coding is about breaking the data down into coding categories.
Every item has its own space according to its category, which is rather like the way
products are organized in a supermarket, for example, the yogurt will be in the dairy
department, the bananas with the fruits, and Coca-Cola with the soda products (Bogdan
& Biklen, 2007). Open coding is similar, but it is more complicated because there is often
a meaning behind the words and this must be closely monitored. The words and lines
that share the same or similar meanings, or a common characteristic, were grouped
together (Corbin & Strauss, 1998). After the data had been closely analyzed and sorted
into relevant groups and color coded, the groups that were related were given the same
color codes on the transcripts of the interviews (see appendix 3). This provided a good
oversight of the similarities and differences between interviews, which formed the frame
around which deviation in the Icelandic construction industry was evaluated, according
to the experience of the participating project managers.
48
3.5 Ethical Considerations
It is essential to remember the importance of ethical considerations when undertaking
qualitative research. The participants must be informed about the level of confidentiality,
and any risk they could incur by taking part in the study. It is critical that the participants
disclose any partisanships, and that they are aware that they do not have to answer all of
the questions, and they can skip a question if they do not like it. They were also assured
that there would be no risk of negative consequences. To give the fullest protection to
the participants, they were allocated fake names, which do not relate to the gender of
each individual, and also other data, such as place names related to the interview
discussions, have been concealed, or simply not mentioned. All interviewees gave their
verbal consent to participating via Microsoft Teams and they, likewise, agreed that the
interviews could be recorded.
Gaining the trust of the participants is key to ensuring the interviews will flow
smoothly and yield a high volume of pertinent information for the research (Esterberg,
2002). The researcher understands the responsibility that accessing such valuable
information brings, together with the need to make certain that it is handled with the
highest regard to confidentiality requirements.
Sensitivity
As already stated, the researcher was very careful to mention in each of the interviews
that the participant could opt out of answering any question that they did not like. The
researcher was hoping to obtain maximum information, but it was observed that some
subjects, especially those related to their clients, were very sensitive. This created a sense
that asking some things that were strongly desired would have been too invasive or
uncomfortable. So some questions that the researcher thought about asking were not
asked because it was understood that some things are highly sensitive. Some of the
interviewees shared some information and then went on to say "please don’t put that in
the paper" .. and another said "no I am not going to talk about that". Often it was very
hard to get to the root of why a project went wrong and what actually happened because
the interviewees felt it was their responsibility not to say anything. They were staying
49
loyal to their clients, and these were very often cases that have featured in the media.
One example of this occurred when David was asked a sensitive question:
No, I don’t think I can come with any examples or I don’t want to come with any examples, I think it is beginning to be too much information, I think we just have to talk more broadly about it instead of so specifically. I can’t start talking about some things, but you know the conversation that is going on.
3.6 The company
The participants in the study all work in the same department within an engineering
company operating in Iceland. The company specializes in energy, industry and
infrastructure projects, and provides engineering advice, prepares tender documents,
participates in contracting, design reviews and countless other aspects of project related
construction work. An email from one of the project managers stated:
There are around 2/3 building construction projects, others are industry and energy. They are mainly an engineering company that do design but also monitor projects in construction and are project managers of construction projects.
The company also has offices abroad and operates on four continents. The company
describes itself as an international consulting company with engineering as the basis of
many of its projects, and engineers, scientists and technically educated staff are
employed. The company's goal is to ensure the profitability of projects and pay close
attention to customers’ requirement, with an emphasis on safety, the environment and
professionalism. According to the company’s website, they have undertaken numerous
large and small projects. It is important to note that the company is certified in
accordance with international quality management standard ISO 9001, the
environmental management standard ISO 14001, and the safety management standard
OHSAS 18001.
50
4 The Results
This chapter will discuss the results of the qualitative study on the information obtained
from the eight semi-structured interviews, which was conducted in accordance with a
methodology inspired by grounded theory. The themes that emerged from the data
were: Icelandic culture: “it will sort itself out”, “the customer is always right”, a lack of
standardization with project managers, “the things we cannot control”, the dilemma of
cost scheduling, “keeping the triangle in balance”, and “in a perfect world”. The goal of
the interviews was to create flow and get valuable information to provide an in-depth
understanding of the factors behind project management in the construction industry in
Iceland. The aim was to find answers to the research question:
Ø Where do project management deviations originate in the construction industry in Iceland and how have they manifested during the project life cycle?
4.1 Icelandic culture: "it will sort itself out"
The Icelandic saying “þetta reddast”, meaning "it will sort itself out”, was strongly
reflected across the interviews, with it being indicated that the projects would all work
out in the end. Despite projects not going exactly to plan, they were finished, and the end
results were good enough. That the necessary preparation for a project was often not
completed was something that shone through the interviews. Instead, they tended to
place trust in the diligence and perseverance that had enabled the Icelanders to survive
and prosper since the settlement age.
The motivation the interviewees felt for their projects, together with their willingness
to do what it takes and belief that it would all work out, was apparent. David described
how he had studied abroad. When he had talked to his colleagues from Germany, they
had been surprised that Icelanders sometimes just went ahead with projects, even
though the plan for the project had not yet been completed.
Ben had experience of working with a client from the USA who had some construction
projects in Iceland. He says the difference between working with them and Icelanders are
black and white, even to the point where he laughed at the Americans and said "it is so
weird.” He was referring to the laws and regulations associated with projects they were
51
completing (it was for a very strict organization). The client in the USA put all the
responsibility on the contractor and wanted to receive a single offer with everything
included. American companies have certain standards that they must follow, and they
just will not go anywhere near uncertainty, and the contractor bears all of the
responsibility.
Alex said working with clients from Denmark was totally different to working with
Icelandic clients. In Denmark, nothing is done before everything has been planned and
thought out. If a task is added or an extension is requested, they have formal processes
that, accordingly, update the project cost. They simply say: "it will take x length of time
and x amount of money”. You cannot negotiate with a Danish company to get them to
change the time and budget frameworks, without proper scheduling. Icelanders are
different and a little more impulsive, and they just want to start the job right away. As
David said, "we need to start shoveling right away”, and thus there is a need to see
evidence of activity straight away. David further explained, "it is some kind of seasonal
fishing element in us”.
David said they rush into decisions that he called "shortcuts”, however, afterwards
they can see that they should have approached the project in a completely different way.
Svali agreed and said that Icelandic people are always in a hurry, so they rush to start
projects before the plan or the design is ready, and neither do they wait for the right
conditions to arise before starting a project. That is maybe the main reason why projects
do not keep to the cost and time schedule on the plan. Pressure from the client to start
projects right away was also a commonly occurring factor throughout the interviews. The
participants described how they feel on this, that they give in to pressure from the client,
because otherwise the project will be given to some other company instead. David
described how the culture in Iceland, and unwillingness to stand against pressure from
the client amplify one another.
…national characteristics, we lose focus and want to please the buyer or the environment which leads to something being rushed. Too often I have been a part of a project that I knew would not go well... But if you do not give in to the customer demands, someone else will. There needs to be two to lie, you know, lying is my job, you know, I am in some project, there is a plan, and it is all a lie because you just know it will not go according to plan, there need
52
to be two to lie, one that lies and another who wants to be lied to, you know about the due date and cost plan.
Alex explained there is often pressure from the client to start the project right away,
even before a plan is created. Often there is a lot to do in the organization, so they are
very busy, and they just have to get things started. When this happens, there is no
coordination in the project, i.e., “someone could be working with the load capacity and
others with the pipes, which makes no sense”. Alex followed up with: "… we are going to
start something, and everything is happening you know, and no one just sits down and
just asks how are we going to do this, so we might often be starting too early”. It also
happens that there are changes made to the project, but there is no structured process
regarding signing off the changes.
Ari described the Icelanders as too optimistic, and said it seems there is a national
optimism when it comes to planning and the sufficiency of funds and time to complete
projects.
…it is just how we are made here in Iceland, it is different in other countries where the darkest forecast is always presented first instead of the most optimistic. Then you go with your plan to the buyer and he always wants to lower the cost and have it done in sooner. Then it is tempting to say "yes ok, we can probably do that”.
Ari laughed a little bit when talking about this and he put in a light joke when he
described the culture in Iceland, and it was said with maybe a little pride. It was the same
with the other interviewees. They do not speak about this with a sense of shame, but
rather in a light and humorous way.
Chris says that project management is still a new product in Iceland, and that the best
colleges offering project management qualifications are in the USA, Australia and the UK.
When an aluminum plant was developed in 1997, the Icelanders were not trusted with a
project of that size because they did not have the structure, project management tools
or experience. The project managers in charge understood that there was a need for good
53
preparation and the client understood that it was best not to try to influence the project
and just to allow the specialists to do their job.
4.2 "The customer is always right”
As has been evidenced, the client often makes high demands on the construction
company and yet prefers to get everything for next to nothing.
A client demands to start a road project immediately and finish everything before Christmas for a fixed cost, yet he does not want any accidents on the road, he does not want to exceed costs or time, he does not want any quality problems and he doesn’t want anyone to die.
This is how Chris described things when asked what are the demands that clients make
before a project is started, and it is something that the other interviewees seem to agree
upon. However, success is obviously a rather likely outcome without proper planning and
preparation. It can be interpreted from almost all the interviews that the participants do
not feel like the client is sufficiently educated concerning what is required to make a
project successful. The client has quite a lot to say about the project and can make
demands as to which professionals at the company will be involved in the project. They
often even obtain Curriculum Vitaes in respect of prospective project managers within
the company, before choosing which project manager will be assigned to their project.
Naturally, this will depend on the strict the client is, and whether they have very high
demands regarding experienced people, the technical knowledge of those involved, or
exactly what kind of specialist they want for the project. Sometimes a client brings their
own project manager who does not work for the company, which is done to protect the
interests of the buyer and ensure that the customer's interests will be paramount. Alex
emphasizes that it is very important to update the client as soon as possible about time
and cost changes and delays. It is worse to update the client afterwards or put the
problem on ice.
If you have 100 hours to work in a project and you have worked 80 hours, but you know you have to work at least 50 more hours […] it is best to update the client and the team right away.
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When you update immediately, you can have a conversation about what to do concerning
the delay, and also find out why the delay happened and what you can learn from it. Aron
said that they must inform the client if there are any unexpected events in the project
that might cause its delay. It is very bad if the costs were supposed to be 100 million and
then this figure suddenly rises to 120 million, and such rises can be hard to justify if the
client was not involved right away. Sunny was the only interviewee who thought that
clients were usually fairly flexible, and it was not a big problem to notify them that their
project was behind schedule. A good explanation would be given and then they could
agree on a new project end date. Financial penalties are, however, often involved for
every day that a project goes beyond the agreed upon deadline. Alex said that sometimes
the company forgot to let clients know that changes in the project would impact upon
the deadline, which caused frustration. Some situations with clients were very
complicated, and Ari explained that these cases were quite often determined by the
court. The disputed amounts were often well into the millions, and as Ari mentioned, the
question of “who is to pay” is a difficult one to answer.
Chris mentioned an example where a project went terribly wrong. The client had not
wanted to take the company’s advice regarding the cost schedule. The company had had
this drawn up by specialists for the client, but they did not want to use it, and produced
their own cost schedule instead. The project overran the schedule in too many ways, and
the organization had known beforehand that the client’s own cost schedule was wrong
(as the client probably did too), but they had just wanted to get the project approved so
they could take it on. Svali said that often the clients have very unrealistic demands:
They just want the house ready in three months and there is no digging started and then we say this is not possible and it will not work out, the concrete has to dry and this will not work out in three months. Then the client says, yes, this is how it is supposed to be and it is your job to make sure of it.
These are often the most difficult issues as the company places a large emphasis on
maintaining a good relationship with their customers, "the customer is always right", so
there needs to be a certain balance where this is concerned. Svali says that often the
client does not want to know the realistic numbers involved, and neither do they request
any advice regarding the cost and time schedule. In the contract, it is simply stated how
long the project should take, together with the cost figure the client has requested and
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the different cost figure that the company has in mind, which is more realistic. Both cost
figures appear in the contract, just to document the fact that the company did not
necessarily agree with the client’s figure. This is so, even though the company applies its
best efforts to following their client’s wishes, and the organization emphasizes the
importance of maintaining good relationships with their clients.
4.3 “The customer is constantly changing requirements”
Chris described the buyer as sometimes being "inconvenient" or "naughty” because, as
he explains, a lot of inconvenience can be caused when the client acts as though they are
in overall charge. It is bad for any project to effectively have two managers leading it. The
client is especially "naughty” when they decide to add new things into a project after it
has commenced. Most often, such additions consist of things that are not necessary, but
they are rather "nice to have”. This can have a huge effect on the drawings, designs,
calculations and the cost of the project, and the client does not always realize this. This
interviewee put forward the example of a roof bar that the buyer in a certain project
decided should be incorporated after the project had started. This altered the load-
bearing capacity of the project and dealing with this impacted in a significant and negative
manner upon the calculations of time and cost for the project.
Chris says that it is best when the client does request additional requirements and they
are not constantly meddling in the project. Aron had a similar story to tell and mentioned
an example regarding the windows to be installed in a house. The owner visited the
construction site and said that they had all of a sudden changed their mind and wanted
to select different windows. Apparently, they had just seen another beautiful house with
more fabulous windows, and this had given them different ideas. Aron said it with a light
tone, but the researcher really got the feeling that he was actually making fun of how
these things often are. Ari explained that it is important to use change management and
to make sure that everything is signed off by the customer regarding all changes, and that
this must take place before work on the project continues.
Chris said that if these dilemmas were addressed in advance at the beginning of a
project, it would probably add just 2% to the overall time and cost that the client would
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need to invest. Proper planning and preparation would ensure smoother and more
predictable progress, which would in turn probably lower the overall cost of the project
and deliver a better end result for both the client and the organization.
What is often complicated for people who are deciding if they should go on with a project or not is spending money in the beginning, because if you decide to not go on with the project it is lost money.
The more that is known about a project and the more the scope is defined the fewer
the surprises along the way. However, the client usually does not understand this and
would rather proceed having accepted 50% in unanticipated costs and this involves taking
on a high level of risk from the beginning. David says that they try to talk sensibly and
realistically with clients but very often the client just does not want to hear this. Chris
stated, without any real expectation that client behavior would change, that the project
will be cheaper if the client uses money for schedule making and organization at the
beginning, "because it’s cheaper to change some design than to break down walls and
build new ones”.
Svali agreed with this and said that clients rarely want to invest any time or money in
preparation. Alex often said that client do not understand the need to properly organize
the projects. The client does not understand that this will actually save the money and
time, so they see no benefit to taking time in the beginning to prepare the project from
start to finish, and this tone was echoed throughout the interviews. Alex also explained
that sometimes the client does not understand that time delay must also cause an
increase in cost, "that is probably the most common argument we have with our clients,
to bring them down to earth in regards to this..” and Chris added:
When a client has made up his mind, he tends to simply want to proceed and doesn’t realize that he is taking a huge risk without proper planning. It is like competing in a 100km race without any practice.
Ari agreed and said that too often project management is not carried out as it should
have been, and that this really comes down to the project manager. Sometimes the client
does not want to pay for risk management and there can be conflicts between the needs
of the company and those of the client. The clients often do not want to pay for a monthly
report updating them on how their project is going, and "it all cost a lot of money’ is an
often heard refrain. That it is often difficult to handle the situation when a client needs
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to be informed that their demands concerning time and cost might not be realistic, was
something that Chris mentioned.
In general, the interviewees agreed that project management is still new to Icelanders,
saying "it is still a new product on the market" that the client does not necessarily want
to buy. When it comes to the quality of the project, this is perceived differently because
the client understands that the quality needs to be high and that accidents must be
prevented. "… it (the importance of quality) is more in our (Icelanders/clients) DNA…”
says Chris. He explained that where this is concerned, the organization was very good at
following up and that is because the client understands that quality needs preparation
and work. But the client does not understand that cost and time also needs preparation,
time and budget, and this is the underlying reason why the client does not understand
the processes and needs imposed by project management.
4.4 Lack of standardization with project managers
Chris says that the best and most experienced project managers are selected for the
biggest and most complicated projects. The organization has a system which determines
how they are chosen. The project managers are categorized as level A, B or C according
to how capable they are in the job. The project manager is responsible for the project but
others are involved in preparing the tasks. The project manager has to source the right
people for each part of the project, and this will often depend on who is available at each
time. The project manager is the boss and “the king in the ship”, as Chris described it.
Sometimes a project can be so big and take up so much time and energy (up to 5 years)
that there is a need to involve two to three project managers over its lifespan. "They (the
project managers) burn out or people get tired… and sometimes it is sensible to change".
Chris is a very experienced project manager and at one time he was in control of a project
which took 5 years and cost $700 million to complete, which he said was pretty
demanding. Sunny mentioned that sometimes a project manager will be changed
because they are not capable enough to control the project, something that can have a
huge effect on a project, including time and consulting. When this happens, there can be
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a large impact on the cost, and therefore "sometimes it gets very bad so there is a change
of project managers", as Chris described.
Alex explained that project managers vary in how diligent they are in following up the
project and keeping the people involved up to date with information. The project
managers are different, and some can be quite soft, which can also influence the outcome
of the project. It can happen that they secretly allow changes to be added to a project to
keep the client happy. Chris says:
It often depends. Maybe the project manager was not in the mood for signing the papers that day, you know if it is a small change, but when it is all put together the changes get bigger and the project manager forgets to follow change management.
Alex said that there is often a lack of information flow between different sectors
working on the project, and that it often depends on the project manager and how strict
they are about keeping everyone informed regarding the project. He laughed when he
was telling this, as though he was tired of lack of standardization with project managers.
Chris further explained that it can have negative consequences when the project
manager does not follow up with the project or negotiating earned value. Chris says there
is an example of a project going 2 billion ISK over schedule and no one had even noticed.
Chris says it is very important that the project manager is on top of things and analyzes
the project at least once a month, or even better once a week. The project manager needs
to realize the earned value at each stage and to see how far the project has gone. It is
very bad for the project manager or the project owner to realize that they are 6 months
behind after 2 years of work. Svali said the same, that it is the project manager’s
responsibility to keep the project and all of the teams involved on track. Alex agreed with
this and reiterated that the project manager is responsible for calling everyone to a
meeting to go over the schedule and provide any updates relating to earned value and
how far the project has come.
Sunny agreed that project managers work very differently and added that some are
more educated in project management methodology than others. Ari agreed and said
that it is different when project managers are well educated, and who the manager of
the project is and how much knowledge they possess can make an enormous difference
to how the project progresses. He said that often the project managers were engineers
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who were not educated in project management, or they do not know project
management theory. It is often the project manager who sets the tone for the project,
and often it just depends on the manager whether there is a goal for the project or not.
In all the interviews when the researcher asked about the project goal, the answer was
that the project should complete within the time and budget schedule. It is also important
that the quality is good and there are no accidents. Robert said that the goals could be
better documented, but he sounded a little unsure when he said that, maybe because
the goals are usually not documented specifically. Alex said it is the project manager who
decided if there should be a clear goal or not.
Ari voiced that sometimes when the client brings their own project manager to the
project, they often lack education about project management and the project is not as
strictly run as the organization would have wanted it. Ari explains what went wrong in a
specific project that their organization controlled. The project manager was a guy from
the old school, who didn’t know any professional project management, "...he did it the
way it has always been done, and it has always been built in the end.” The project went
terribly wrong and way beyond the cost and time schedule. But it is also true that the
project was finished in the end.
Alex said he thinks that project managers should be more involved but that the
problem can arise in the organization. They may, for example, often have a project
manager who is a civil engineer and they will know best when it comes to load capacity.
However, while he is very focused on load capacity, other important things are often
neglected in the project. Project managers often put too much focus on the area of their
own expertise knowledge, but they forget other important factors that they must
consider now that they are project managers. Alex said that sometimes the success of a
project depends as much on good organizational skills as it does on good project
management. For example, when the organization places a bid on a project that is too
low so that they can acquire the project. The reason for doing so can often be that they
need the project to expand the experience of the company, by, say, taking on a project
to build a bridge. The company then needs make sure they have a very experienced
project manager who is very conscious of the consequences if the schedule is not adhered
to. When this is the case, the project manager needs to closely follow all the extra work
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that the client adds into the project, updating and charging for it accordingly, as well as
being extremely organized so the project will keep to the tightly laid plan.
4.5 “The things we cannot control”
There are so many things that happen unexpectedly in a project and this is something
that it is important to keep in mind when starting a new project, as was explained by
Chris. There was common agreement amongst all of the interviewees that there is always
something unexpected in each project, and this must be considered when creating the
schedule. Thomas said there is no one explanation as to why projects fail to go according
to plan, and Dora mentioned that unexpected environmental factors that can have an
impact on the project and should also be taken account of. Aron explained that when he
managed a swimming pool project in Iceland, everything was ready to begin with, then
suddenly the authorities arrived and stopped the project, which was totally unexpected
and a very unpleasant surprise for both the company and their client. Aron also
mentioned another example of an unexpected delay:
All of a sudden when we were digging to make the foundation for a new factory we had to stop because of some ancient artifacts that had been dug up. We had to get some men shoveling with teaspoons because we had found some antiquities, all of a sudden, I mean, that is why it is totally unexpected and it can be bizarre.
David said that the newest influence from the external environment is COVID-19 and
that is something that no one could have foreseen. Svali voiced that when the external
environment is interrupting projects, it is important to inform all of the people involved
in the project, because many different components of the work will be upset. The project
manager must sit down with the client and the employees and/or contractors and discuss
things to arrive at some kind of solution. Some external problems can be hard to
anticipate, such as the large number of factories around the world that have closed,
creating supply problems for projects. However, especially if the issue is COVID-19, then
everyone has a good understanding of the circumstances affecting the project. The
monthly report to the client should always explain how any situation is affecting the
project and what solutions are seen to be possible. Thomas said that, for example, hotel
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constructions are currently subject to many kinds of delay that are happening because of
COVID-19, people can’t come to work, and there are also issues with manufacturing and
importing materials. In these kinds of situations, the whole plan will need to be
reconstructed. Thomas also referred to an example from the banking crises in 2008 when
the wages of employees could not be paid. There were so many things that could happen
then that we just had to “sit down and try to find a solution, you know, the external
environment it is something we can't control”. Alex said that now is an exciting time for
project management and there is a lot that we can learn from the extreme external
factors that arose due to COVID-19. There are a lot of manufacturers that have closed
their factories, and it is easy to say "we didn’t expect this and we have to predict the risk
factors that exist”.
Dora said that some projects need to stop for a certain time and then to minimize the
damage as best they can in the circumstances. Unexpected environmental issues can also
be unpredicted extra cost, and Chris said it was hard to get unexpected cost down to less
than 15% because there are so many things that we cannot know beforehand. Chris
provided the example of a contractor who suffered bankruptcy in the middle of a project,
which necessitated sudden changes to the project plan. Ari voiced that when a project is
delayed, costs will be added. Although there can be many reasons for delays, projects
must always be pushed forwards.
Like in the X case where we had organized all the imports in the project, and we were ready to order it all in June. But we didn’t get the green light to order it […]. If we had got permission to order it 3 months before it would all have gone beautifully. Then there was this COVID this winter and crazy weather that all affected the time on the imports.
4.6 The dilemma of a cost schedule
Ari opined that it is very hard to produce a cost schedule because you are setting a range
of prices for something that does not yet exist and it has not been done before, "it is not
as though you can buy it in a store, it is often something that has never been made”. Dora
said that the work involved in producing the cost schedule depends on what stage it is on
each time. David brought up a very interesting point of view about the cost schedule,
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saying "you can say that the last version of the cost schedule is right, it has just been
changing all the time [...] it depends on what edition you are looking at”. Aron voiced that
it depends on what stage the design is at how the cost schedule is made and how specific
it can be. It is possible to take the average cost of ten similar buildings to give the client
an idea of how much their building will cost. Dora mentioned that they have a special
computer system that helps them to work out the cost schedule and they can also see
older project schedules in the system. But it is important to keep in mind that a 10,000m2
building is not the same as another 10,000 m2 building. The cost and design can be very
different. Ari, who is has a great deal of experience with cost schedules, said that the way
in which cost schedules are prepared can be quite different in different projects, and this
depends on what stage the project is at each time. Ari produced an example of a project
where there was no design done in the project plan, so there was no reliable way to
create a cost schedule. However, the cost schedule was produced, leaving Ari with many
queries:
There is maybe a design from an architect, but there is no load capacity, and there is nothing about how thick the walls should be and how many retaining walls are necessary. Then you just try to predict something out of the information that you have and put a certain uncertainty over that price.
Ari was very passionate when he was discussing cost schedules, and he seemed a little
annoyed about what the researcher thought. Chris said that cost schedules are very
uncertain and they go way out of hand and fail to follow what was expected at the start.
Aron added that it was rare for a cost schedule to hold according to the original plan:
…especially on projects controlled by the government, they maybe go ahead with a project just to get the project through even though they know it will cost a lot more, and when the project is started it is too late to stop it and then they need more money.
Ari explained that the client often misunderstands the figure that is given by the
organization, and they sometimes think that the quoted figure is what the project will
cost overall, but very often this is just the cost before the design, capacity and other
factors have been included. Often, when a project that has overrun its cost estimate is
featured on the news, the fact that the referenced planned cost had an uncertainty of
plus 100% minus 50% will not be mentioned. Ari and Aron both said that 20-30% should
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be added to every cost schedule to factor in uncertainty. David expressed the point of
view that the news media will usually mention a cost figure that is often 2 years old, and
that estimate was made when just 10% of the project was designed:
The cost schedule was right at that time with the knowledge we had, […] but when the politics comes into it and when the media just throw something out there, because someone wants to make it look a certain way, I just shake my head, it is not relevant […]
When talking to the client about the price, it is very hard to name a figure, and it is
much better to reference a ballpark price range which gives a good idea of the cost, and
also to be very clear about the uncertainty. Svali added that very often when the project
cost schedule is calculated, the client can be very indecisive about what they want. For
example, the client intends to build an apartment building but does not know how large
it should be, or whether there will be a basement, but they still want to know the price.
In these circumstances, the organization will do its best, extrapolating the figures
involved in other, similar apartment buildings projects that have been completed.
However, as has already been said, it is very hard to produce a reliable cost schedule
when there is no design, and the client is very unspecific about the requirements. Clients
often do not understand that the cost schedule is just a rather unspecific predicted figure,
and they should always add at least 10% to it, which was something that Svali
emphasized. Of course, when something goes wrong, the client will quote the original
figure to the media, and will not mention that this figure was established on very weak
evidence. David said that it is much better to have a well-organized cost schedule, and he
wished that would happen more often because "… that is much better than a bad surprise
in the end”.
4.7 Keeping the triangle in balance
Chris says that many projects overrun the original plan, but we also have examples of
projects that went according to plan, with the triangle in balance. That happens when
there is sufficient time to prepare the project and the client understands that they need
to invest both money and time in the preparation. Chris named an example in which the
project went 100% according to plan, after a preparation stage which lasted 10 months.
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They had plenty of time and organized everything in the project down to the last screw,
and this was important because just one ship delivered to project destination each year,
with a year to wait until the next ship the extremely detailed plan had to adhere to. This
project required a balance between cost, time, and quality.
You just couldn’t go to the store, so this had to be planned very well from A to B, we had to plan all the stuff that should be sent to the ship and the time schedule needed to be perfect, we had to organize each little step of the way. The project went perfectly according to plan.
Chris said it is much cheaper in the end if a project is planned effectively at the
beginning. There are then far fewer things that can surprise you. It will cost more money
at the start of the project to plan it well, but this produces benefits along the way and the
client will get a better result. Chris said that he did not even want to think about how the
project referenced above would have gone if they had not had 10 months to plan it before
it got underway. He laughed a little at the thought that it would probably still be going on
because of the need to catch that one ship per year with all of supplies. Chris then
mentioned another example, this time of a project that failed to go according to plan,
which had not been prepared at the start. This project ended up costing 300 million ISK ,
when it probably did not need to cost more than 100 million ISK. There was no plan or
balance between budget or time in that project. They just went ahead and sent the bill
to the client who had no idea how far the project had progressed or when it would
complete.
Ari said it is always possible to mess up a project within a defined time frame or cost
frame, but this will always impact on other things in the project. Cost, time, and quality
all operate hand in hand. If one of these falls out of line then it will affect the other two.
If a project is time driven because it must be ready by a specific date, then it is possible
to have it ready by that time if you put more people and money in the project, "if we use
3 men instead of 1, we are 3 times as fast with the project”. David agreed with this and
added that it is all about a cooperation between the environment, facilities, supplies, and
manpower. Alex mentioned that sometimes a project will run out of money, and then the
strategies will center around making savings where possible, often using cheaper
manpower, or using employees who are known to be capable of finishing the work in
fewer hours. When this happens, it is really important to bring the right people together
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on the team and to try to establish a way to finish the project within the budget that is
available. Aron explained that when this happens the client will usually say “I don’t have
a lot of money, so the uncertainty must be only 5%, it is then really important to drop any
unnecessary or extra work and to have a clear goal”.
Svali mentioned that he was once working with a client and they overran the budget.
They then had to restructure the project, and to cancel certain parts of it. However, they
could only do that to a certain extent because the architect did not want them to change
the design too much.
David said that it is very important that everyone involved in a project knows where
the project stands, which is especially so within the organization and a meeting should
always be scheduled to examine the likelihood of further delays and cost increases.
People must be motivated according to where the project stands, and this is so in both
large and small projects. Sometimes there is are additional reasons to inform everyone
in the project teams where the project currently stands. It is then important to utilize the
right measuring instruments to locate the source of the delay, since it can be that the
production is not right or something has been incorrectly calculated, bad weather
conditions, or something else. David added, "we must break the project down to small
pieces to find the source of the problem and resolve it quickly, to make the project time
shorter”. Ari thought that the biggest influence on costs and why projects overrun their
cost schedules and budgets is that projects take longer than expected.
4.8 "In a perfect world” regarding the organization
Before the project is started there is a kick-off meeting. The project manager is
responsible for the meeting and all the right people are present at the meeting. The
owner and the contractors must all attend the meeting. The scope is agreed and set at
the meeting, the tasks to be accomplished are set out, together with who will be
responsible for different parts of the operation, and the schedule will be set in place. A
significant amount of prior preparation is required before the kick-off meeting, and it is
important the right people are included at this stage. As explained by Chris, “in the big
projects there is maybe someone who produces the schedule, and another who does the
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timeline and maybe a third person who creates the work structure, so he (the project
manager) will have a whole team around him“. Alex says the prior preparation and the
kick-off meeting seems to be something that should be done properly, but they are not.
"In a perfect world we would all be on the same page after a meeting like this (kick-off
meeting), […] everyone would be very conscious about what is and what is not extra
work.. […].”
Chris used the example of a project that was ongoing for 5 years and he was the project
manager over it, they had 3 months to prepare the job and 5-6 people were working full-
time on it.
We organized the cost schedule, scope, procurement strategy, execution strategy, you know, so many things, risk analysis, you name it. And also, defined the roles, what people and staff we need in the project, how the matrix is going to be. There are so many things we need to plan for big project, who can talk to whom and so on.
Alex said if it concerns design work, then the project manager should ask the designer
to come to the kick-off meeting, or if it is a building then someone with load capacity
knowledge should be in attendance. Representatives should also attend from the
electrical installation team, the air conditioning team and acoustic design, and so on. All
teams and work areas relevant to the project should have representatives at the meeting.
Alex also stated that they should produce a draft of the time schedule because it is usually
the case that when an organization produces a time schedule at this stage, it is not
realistic. It is important to obtain feedback from all of the staff working on the project.
Svali said that often a project is commenced far too early, before any plan has been
established and without a kick-off meeting. This effectively means that although there is
a project manager, there is no real control over the project. However, a kick-off meeting
does not seem usual for Icelandic construction projects, according to the interviewees.
Svali mentioned that the information processes are not always very good and a strong
need to compromise often arises. Svali gave the example of someone who was designing
load capacity who needed information from the teams completing the air conditioning
and the electrical work. They then just sent this request out into the cosmos and then
nothing happened, and thus no decision was made on this issue. Svali thinks there should
be better collaboration and consistency between the various departments. Of course, it
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is the project manager who should be responsible for holding meetings with the teams,
and sharing the information that is needed by each department at the relevant stage of
the project. Chris added that if they have subcontractors to do the work, they usually
design the project and then offer the work to the subcontractors. Chris says that the
organization should do all the follow up work and know exactly where the project stands.
We want to have all the threads in our hand, we want to know exactly how the project stands at each time and know where the project stands according to the schedule, if the project is not going according to schedule they want to know why, sometimes the schedule was very unrealistic and sometimes it is other things.
Alex said that prior to a kick-off meeting they receive a checklist that reflects everything
they need to think of when planning a project, and this will be part of the meeting.
It is to help both the project manager and also those who are starting to get some kind of feeling for how the project usually goes and what to think of when organizing a project and it happens that something is forgotten or done too late in the possess.
Alex mentioned that there is also a progress document as well as a special document
for roles and responsibility, and document control. The main goal for all of these
documents is to ensure the processes are followed. The checklist is only used in medium
and big projects, not the small ones. Most of the projects the organization is undertaking
these days are small ones, and so Alex has not used a checklist much, but he knows how
it works and thinks its use is a positive development. The researcher asked why the
checklist was implemented in the company and Alex responded that there was some kind
of enlightenment amongst the project managers and other team members. As the
construction industry is a tough business, the management thought there was a need for
the projects to be better organized from the beginning, since there were a lot of projects
that were going over schedule. Alex opined that there was a need for better project
management tools with the larger, medium-sized, and even the smaller projects, because
they are often very complicated.
Goals are usually set for all projects and there is agreement within the feedback
provided that aims to ensure that projects would be delivered within their time, cost and
quality schedules. Chris mentioned that another common goal was to have no accidents
and they wanted everyone to return home safely after their day’s work. Chris added that
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risk assessment is only done for big projects. Often the client thinks it is too expensive
and sometimes it can be used too little. It depends on the project how it is officially
finished. Sometimes the company will only do the design part of the work, and other
times the client will ask them to take care of the entire process, so then the organization
will know exactly where the project stands.
When the project is finished, it is registered in a project database, with all of the
knowledge that has accumulated and all the steps that were taken being entered. If the
company contracts a similar project in the future, they should be able to learn lessons
from previous mistakes, Chris explained. Dora said it would be helpful if there was a
meeting after a project has been delivered, where the project managers and the team
would go over the pros and cons of the project. This would incorporate a lessons learned
approach, where everyone would learn from the experience of everyone else within the
project. Svali contributed that there is usually only a lessons learned document after
larger and more complex projects. But this is not a rule, it sometimes happens and
sometimes it does not: “otherwise this will just be the experience of the staff and it may
be passed on that way”
4.9 Summary of results
Throughout the interviews, the ‘song’ of Icelandic culture could be heard; optimism,
perseverance and a flexible mindset. The national culture can be characterized as a little
impulsive, with an inclination to get on and start things right away, without making the
necessary preparation for the project. The participants were very aware of the
importance of organizing and scheduling, but project management is still a new concept
in the Icelandic construction industry. Often the client does not appreciate the
importance of the necessary preparations for a project, and they often do not want to
pay for project management, and they prefer to commence the project immediately.
However, most of the interviewees wished that things were more organized, with
projects being more structured as they would be in “the perfect world” (see section 4.8).
This also came across in discussions with the project managers about their work. They
69
have a different background and knowledge, but it is apparent there is a lack of formal
structure concerning how a project manager should work.
Cost planning is one of the major factors that needs to be prepared especially well for
each project, but it is very common for projects to stray off schedule. Sometimes an
informal cost schedule is created before the client has decided exactly what is required,
and/or a design has been established. This will lead to a cost figure being estimated that
can only be a provisional guide. However, when projects which commence in this way
finish up as news stories, as they all too often do, it is that figure which will be quoted. It
has also been said that this initial figure is the number that the client wants to believe in,
even though the specialists from the organization have told them otherwise. If projects
do not stay on schedule, it is possible to add staff or to invest additional finance into the
project to keep it in balance. Unexpected environmental events are very difficult to
control, and these have an undeniable effect on the outcome of the projects, but it is
important to take these factors into account when planning a project.
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5 Discussion
The overall purpose of this study was to gain an understanding of the project
management deviations that occur in construction projects in Iceland. There is a gap in
the existing knowledge, and it is the objective of this research to investigate where, why
and how deviation manifests in project management, preventing projects from attaining
a successful outcome. The research question is:
Ø Where do project management deviations originate in the construction industry in Iceland and how have they manifested during the project life cycle?
In order to answer this question, a couple of sub-questions were formulated, and
these will be discussed and reflected upon in relation to previous research that is also
discussed below. The research was also used to formulate suggestions for achieving an
improved level of success in project management in the future.
In order to ensure the results would be applicable to the research goal, themes which
emerged from interviews have been placed within the project life cycle. In this way,
specific deviations were identified within the project life cycle frame and the analysis was
guided by the project life cycle framework.
1. Where do project management deviations originate in the construction industry
in Iceland?
The results of the project indicate four main factors that affect deviation within the
construction industry, which are: culture and organizational culture, the client, project
manager, and unexpected events that are hard to control.
Culture
The Icelandic culture undeniably affects every organization that operates within Iceland.
The saying "culture eats strategy at breakfast” truly applies in Iceland, as the culture from
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the age of settlement is still strongly imprinted within the Icelandic people to this day,
and this affects organizations and the projects they operate. It can be said that Icelandic
culture is characterized by the nation’s history, and that, accordingly, the Icelander’s do
better in hard times than when they are ‘sailing on a calm sea’. The Icelanders are also
known for working hard, ranking highly with regards to perseverance (Minelgate at al.,
2018). As one interviewee said, there is a ‘fishing culture’ deeply ingrained within the
Icelandic people, and in the same way that one must pursue a shoal of fish when it is
sighted, the Icelanders are inclined to start work right away, and they want to see
immediate results. Such inclinations and ambitions were plain to witness in the
interviews, but equally the goals of project management were clearly articulated, these
being to set up the project so that it can operate within the agreed time and cost
framework.
Previous research states that Icelanders are ready to take risks and they feel
comfortable living in times of uncertainty and with rules that are informal (Minelgaite et
al., 2018). This is reflected in an interview where the project manager gave the green light
for a project, even though that project manager knew that the client had unrealistic goals
and expectations in mind. This is in line with how the Icelandic phrase “þetta reddast",
meaning “it will sort itself out", operated in Icelandic life.
Perhaps that is why the Icelandic project managers’ colleagues in Denmark and
Germany were surprised by what they perceived as their chaotic ways and lack of
preparation before the commencement of a project. If the Danish and German culture is
compared to that of the Icelanders, the Icelandic people measured 50% in uncertainty
acceptability compared to just 23% for Danes (Hofstede Insight, n.d. -a). This is a sign that
Icelanders deal with uncertainty much better. But if Germany and Iceland are compared,
the German people achieved a measure of 83% in respect of long-term orientation, which
was 28% among the Icelanders, and this is a sign that Germans place a much greater
emphasis on rules and structure than Icelanders do (Hofstede Insight, n.d.-b).
The researcher advocates setting a clear framework and defined structures
determining how project managers should operate to promote best practice. To give an
example from another field of endeavor, the Icelandic national handball team achieved
world-class success around 1990, which was after they had hired coaches from Eastern
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Europe who emphasized the benefits of discipline and structure. When the perseverance,
hard work and diligence of the Icelanders was augmented by the structure and discipline
that characterized the Eastern European coaches, the results were excellent (Minelgaite
et al., 2018).
It can be argued that a sense of carelessness in the Icelanders is not necessarily a bad
thing, but a strength, and it should be remembered that the Icelanders have succeeded
in many fields. For example, the Icelandic male national football team became, in 2016,
the smallest nation to ever play in UEFA’s European Football Championships (FIFA.com,
2016). One may wonder whether a certain carelessness that characterizes the Icelanders,
coupled with the perseverance and diligence of the nation that has nurtured them since
the age of the Sagas, has helped them to achieve goals, despite carelessness when it
comes to structure.
It is worth noting, however, that the researcher found no existing research which
showed the results of Icelanders versus foreigners with regards to the success of project
management in the construction industry. It is therefore difficult to predict how
influential the Icelandic culture has been on the success or failure of projects, although
this study certainly indicates it has contributed to project deviations.
Organizational culture
The Icelandic culture has an undeniable effect on organizational culture. There is a clear
vision, but it doesn’t seem to actualize in all of the projects. Research shows that there is
often a clear vision around projects in Iceland, but the structure is poorly defined
(Aðalsteinsson et al., 2010). That is reflected “in a perfect world summary” in section 4.8,
whereby the interviewees gave the impression that they wished the structure were more
defined and formal.
Research shows that Icelandic managers are informal in their behavior, friendly, they
make decisions quickly and want to solve problems (Aðalsteinsson et al., 2010). This is
reflected in the interviews when the project managers want to relate to their customers
in a friendly and solution focused way.
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The client
As indicated by previous research, the client is often an influencer in the project and this
can impact negatively on its efficiency, for example, it is difficult when a customer
changes their mind about the design when the project is already underway, or when their
budget is insufficient (Chan & Kumaraswamy, 1997). This research indicated that when
the client wants to have an influence on the project, this can sometimes lead to there
being two managers in charge of one project. Having two people in overall charge can
have a negative effect on the project outcome, according to previous research (Yousaf et
al., 2011).
It was clear from the interviews that the interviewees were not happy about a client
bringing their own project manager to a project. The reason why this was so is that the
client’s own project manager would not necessarily use the same project management
structure as the organization. According to Westerveld (2003), how the project is
controlled is a critical success factor, and the use of project management tools can give
an organization a significant advantage in the market (Larson & Gray, 2017).
This research indicates that if the client often changes their requirements or is
uncertain on the details of the project, this has a negative effect on the project schedule
and plan. It is much more expensive to break down walls than it is to change design. If the
client could be more precise about their design requirements earlier on it would be very
helpful. Munns and Bjeirmi (1996) say it is important to have a strict plan and schedule
before the execution stage of the project, because by doing so the project is more likely
to succeed.
All eight interviewees agreed that projects would have a better outcome if they were
better organized, but the client often does not want to fund the kind of project
management that is necessary. Kerzner (2009) says that project management tools make
a very effective contribution to controlling a project and increasing the likelihood that it
will be successful. This is especially so with very complicated projects, where there are a
lot of specialists who need to be included in the project and a lot of money is at stake.
Research shows that organizations that use project management tools can get a
competitive advantage in the market (Müller & Turner, 2010). One of the interviewees
said that the clients do not understand the importance of project management because
74
it is still a new product for Icelanders, and it takes time to sell a new product. The clients
also do not understand the importance of project management and they want to
commence the project right away.
That the cost schedule was often misread or misunderstood by the client, and also that
clients are not inclined to listen to specialist advice regarding the cost schedule, shone
through in the interviews. It is extremely hard to predict a price and a timeline for a
project if the client has not yet decided what is required and the design has not been
created. The cost schedule often takes time to prepare and the costs are set out within a
range.
The client can require day fines if the project is not finished on a certain date according
to Icelandic law 120/2016 (Lög um opinber innkaup, 2016), and the construction industry
has frequently been covered in the news. Perhaps this is so because it is often
government funds that are at stake. These factors could be one of the reasons why the
organization allows the client to have so much control, and the organization also places
great emphasis on maintaining a good relationship with the client. The market in Iceland
is small, and if the organization is not willing to take the project, and the client
expectation that goes along with it, then another company will do so. Research by Munns
& Bjeimi (1996) stresses the importance of good communication between the
construction company and the client and the interviews reflect good relationships with
the clients. But sometimes the researcher wonders if the organization could possibly
benefit if they were to have stricter standards regarding the client.
The inspiration for solutions to this problem might be found in the analogy of good
parenthood, namely, the senior authority refusing to provide the desired reward in
consideration of the longer-term benefits.
If the client wishes to engage the construction company for their project, then they
have to pay for the project management process and in return their project will be far
more likely to be delivered on time and on budget. In the long run, project management
pays off, and who does not want to be do business with a company that is known for
achieving its goals and saving its customers both cost and time? The interviews showed
that it is possible to achieve project success when the project is well prepared from the
outset. For example, when there was only one ship each year to the project destination,
75
the project was planned in great detail, and everything was organized when the execution
phase began. That project was successful and within schedule. The interviewees said that
if the client is ready to pay for the project management, then this will almost always
provide a better outcome for the project.
The project manager
The interviewees indicated that project managers are very important for projects and the
company was very aware of the importance of the project manager role. For example,
they have set up their own hierarchy when it comes to project managers and how capable
they are of handling projects. Research indicates the project manager can have a huge
impact on the outcome of projects (Crawford, 2005). Throughout the interviews it
became quite clear that there was some kind of structure that a project manager should
follow, but this would also depend on the project manager and how he approaches the
work, and also how strictly he follows the structure.
It does seem to depend somewhat on what mood the project manager is in, for
example, it was stated in one of the interviews that the project manager was unwilling to
sign the necessary papers in a project because he simply was not in the mood for signing
papers. Munns & Bjeirmi (1996) indicated that being a successful project manager
requires careful planning and a commitment to completing the project, and it is
important to adequately plan all of the activities of the project.
The participants said in the interviews that they wished that the company would place
more emphasis on the lessons learned part of the project. It would be very helpful to have
just one meeting after a project has been executed. Lessons learned is mainly completed
after big projects, and if not, the lessons learned from the projects simply become a part
of employees’ own experience. Previous research shows that lessons learned can have a
huge effect on the company’s success and even give them a competitive advantage
(Jugdev, 2012). As has been stated in the interviews, different project managers work in
different ways and they often have different backgrounds. Often, they are not educated
in project management, but they are specialists in other specific fields. This is in line with
previous research that revealed that very often project managers have not been
educated in that field at all (Ahsan et al., 2013). According to Stevenson and Starkweather
76
(2010), the most effective project managers have the required education and experience.
The participants in the interviews agreed with that view and said that often the projects
progress better if the project manager knows about and uses project management tools.
The researcher advises the company to introduce a more structured process and
require their project managers to follow it. The researcher also suggested that the
organization imposes a strict framework as to how their projects are controlled and
managed. As other research indicates, there is a great need for stricter structure, and this
need increases with the complexity of the project (Neil & Rose, 2006).
Unexpected events that are hard to control
Unexpected events that are hard to control and which affect the project in a negative way
can have a huge effect on project success. Uncertainty is common in all projects (Ansah
& Sorooshian, 2017) and there is only so much that can be planned beforehand to
mitigate this (Youker, 1992). The company was very aware of this and the researcher
sensed humbleness regarding the unexpected events that are hard to control. The client
is also aware that unexpected things can happen, such as COVID-19. Weather conditions
are also a factor, and these often impact projects in Iceland. Bad weather and COVID-19
are also relevant in other counties where they also impact negatively on projects (Hall et
al., 2020). According to the Project Management Institute, unexpected environmental
situations or issues within the company should be factored into the project schedule.
When the interviewees were asked what they did when unexpected situations arose,
they said they would try to rebuild the schedule according to the new situation and they
would inform the client and work together with them to resolve the issues.
2. How have deviations manifested during the project life cycle?
There are mainly two phases of the project life cycle that stand out in this research
because they affect project success the most. These are the defining and the planning
phases. If those two phases are built on weak ground that manifests to the execution
phase, which leads to more time and money being spent on the project. This also affects
the quality and scope of the project. First the defining phase will be explained:
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Firstly, this research indicated that the client is often very indecisive and tends to
present constantly changing requirements. The client has a dominant role during the
defining phase, and research shows that it is important that the customer knows what he
wants and is clear about his wishes (Patanakul et al., 2010). When the client is indefinite,
it leads to lack of scope and that then manifests as a lack of planning in the planning
phase. Turkel and Rom (2001) claim that scope is the primary determinant of project
success. Other research agrees with this and states that most projects do not achieve
much success because of a poorly defined project scope (Mirza et al., 2013).
Secondly, the project goal is set in the defining phase of the project. Often the project
is considered successful when it is delivered on time and within the required budget,
quality and scope, and reaches appropriate performance and the customers are happy
with the end product (Collyer & Warren, 2009; Gardiner, 2000; Larson and Gray, 2017;
Kerzner, 2009; Munns & Bjeirmi, 2006; Serrador & Turner, 2015; Usoro, 2015). This
research also indicates that this is usually the goal for the projects of the company,
according to the interviews. However, I wonder if the goals are too unspecific and they
are not SMART goals (specific, measurable, achievable, realistic, time-bound) (Macleod et
al., 2012). Latham & Locke (1990) claim that goal setting is an effective and often critical
part of success. Pinto and Slevin (1987) argue that planning and goal setting is the most
critical factor for project success. It is important that the goals are clear and understood
by everyone in the team, and also other departments in the organization. A clue that a
goal is not in accordance with SMART goals can be found in the aftermath of the kick-off
meeting held by the company before the execution stage. The interviews indicate that
after that meeting, there is sometimes a little chaos, although it sounded as though the
interviewees wished that all of the people in the meeting would be on the same page
following it, and the schedule would be clearer. Projects that are well scheduled and
planned are more likely to be successful (Reymond & Bergeron, 2008).
The problem within the planning phase can also be separated into two aspects:
Firstly, the cost schedule is usually made in the planning phase, but often it seems the
budget is decided in the defining phase, as happened in the Barracks conversion case,
where a cost schedule was created before a design had been formulated
(Reykjavíkurborg, 2018). The researcher wonders if the cost schedule is made in the
78
defining phase just to get the project approved by the government in such cases, even
though the cost schedule was made without any design, and thus it must be unreliable.
In the Barracks conversion project, the mayor of Reykjavik, Dagur B. Eggertsson, signed
the project on behalf of the city (Reykjavíkurborg, 2018), enabling work to start. The
researcher argues that the mayor should have insisted upon a proper design being
produced to give him a better idea of exactly what he was signing for, and also to enable
a more precise cost schedule. This research indicates that when things are done this way,
the cost schedule is based on very weak ground. Sometimes the cost schedule is made
when the design is ready, but without engineers being included to calculate the load
capacity and how thick the walls should be. Without this information, it is impossible to
produce a precise cost schedule.
Secondly, issues can arise in the planning phase when the structure and project
schedule are planned, and these kinds of issues will undeniably manifest in the execution
phase and determine how the project will progress. A badly defined structure can lead to
chaos, and too much money and time being required to complete the project in the
execution phase. It was hinted in the interviews that sometimes the planning phase is
skipped, and the execution phase being commenced without any planning. This research
indicated that this happens due to clients wishing to start work on the project
immediately, however, it is the company’s role to bring the client and their ideas back
down to earth.
In the closing stage, the lessons learned document will be completed and there will be
a meeting for the larger projects in the organization which provided the interviewees for
this research. I would advise the organization to complete a lessons learned document
after every project, because the information that is yielded can lead to better results for
all projects throughout the project life cycle.
79
Figure 5: How project management deviations manifest during the project life cycle and where it effects
the iron triangle that is often used to define project success (*scope and quality)
Scope*
Time
Cost
Defining
phase
Planning
phase
Execution
phase
Closing
stage
Time Time Time
Cost Cost Cost Scope* Scope* Scope*
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Figure 6: A visual answer to the overall question of this research.
• Optemistic• Live in uncertanty• Perseverance• Goals to unspecific
Culture
• Does not want to pay for project management
• PressureClient
• Informal rules• Lack of PM
education
Project manager
Deviation
Defining
phase
Planning
phase
Execution
phase
The client
is indecisive
Lack of
scope Lack of planning
The client does not want to pay
for the project management
The organization
lacks structure, the
rules are too informal
Lack of lessons
learned
The project life cycle
Closing
phase
Lack of structure
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6 Conclusion
Conclusions from the literature part of the research:
More than $10 trillion is spent globally each year on the construction industry, making it
one of the largest sectors in the world economy. That equates to 13% of the world’s GDP,
a percentage that is only predicted to get bigger, but the productivity has only grown by
1% in the last 20 years (McKinsey & Company, 2017). Prior research shows that 9 out of
10 construction projects overrun and there is no one explanation as to why, rather there
are many different factors that come into play. Projects in Iceland are no exception, Harpa
went 52% over the time and cost schedule, and Reykjavik City Hall ended up running
150% over schedule (Jóhannesson, 2014). Yet another example is the Reykjavík Energy
building, which ended up going 109% over what was initially planned and is not in use
today because of poor quality (Marselíusarson, 2017). It can be argued that it is extremely
costly when projects do not hold according to plan. A project is considered successful
when it is within time, cost, scope and quality and the client is happy with the outcome.
In order for construction projects to succeed they must be well controlled, organized,
monitored and evaluated together with employing the right people with the required
specialist skills (Raymond & Bergeron, 2008). Research has shown that factors that can
affect project deviation are poor organization, lack of scope, the client changing
requirements, financial troubles, weather, or world pandemics, such as COVID-19.
Each project goes through a process that is often called a project life cycle. This life
cycle refers to the entire project process, from when the idea for a project is formed to
the very end when the lessons learned from the project have been acquired. A project
can often be complicated because it can be a product that has not been created before
and to make the cost, time, quality and scope schedule there is need for good preparation
and the use of project management tools and skills to increase the likelihood of success
(Larson and Gray, 2017). It is also more likely to succeed if the project manager has the
required education and experience (Stevenson & Starkweather, 2010).
As previously stated, there is no one explanation as to why project deviation occurs,
but previous research has not examined how culture affects the outcome of projects. The
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national culture undeniably affects the organizational culture. The Icelandic culture is
characterized by perseverance, hard work, informal rules, uncertainty, and the slogan
“þetta reddast”, which means “it will sort itself out” and has often acted as a guiding light,
indicating it will all work out in the end. Research shows that Icelandic supervisors often
set high goals but there is a lack of structure when it comes to reaching those goals
(Aðalsteinsson et al., 2010; Minelgaite et al., 2018).
Conclusion from the qualitative part of the research:
1. Deviation in project management occurs mainly due to four factors. Firstly, the
Icelandic culture affects the project efficiency and the Icelandic culture
undeniably impacts the organizational structure. There is no lack of optimism or
having high goals for projects regarding finishing them within time, budget,
quality and scope. But often there is a lack of structure.
2. Secondly, the client has too much power regarding projects and sometimes the
client even brings their own project manager to the project, which can lead to
there being two managers in a project, and this can lead to chaos. The client is
often indecisive about what is required in the project, and does not understand
the importance of project management or want to listen to specialist advice.
3. Thirdly, the project manager plays a big role in project success, but there is a lack
of structure on how he should work. Often the project manager is not educated
enough which can affect the project outcome. Sometimes there is a need to
change project managers after a project has started, which can also affect the
project result and outcome.
4. Fourthly, unexpected events from the environment that are hard to control will
undeniably affect a project, such as COVID-19 and bad weather events. There
seems to be a general understanding from the clients, contractors, and others
who are influential in the project regarding this issue.
5. Deviations in projects manifest through the project life cycle, starting from the
defining phase where the client plays a big part. If the client does not define what
he wants clearly enough, there will be a lack of scope and that translates into a
lack of planning. There can also be a lack of goal setting in the defining phase, and
83
the researcher wonders if the goals are too unspecific. In the execution phase it
sometimes happens that clients suddenly want to add, for instance, a roof top
bar, and that changes the entire design of the building. Such unplanned changes
lead to delays, which in turn leads to more cost and time in the project. In the
closing phase there is a clear lack of lessons learned to gain valuable insights into
how to improve future projects.
6. The results of this research indicate that the participants wished there would be
more structure around project management within the organization and that the
customers would understand the importance of their work and be more willing to
invest in proper project management.
Limitations
The main limitation of this study is that the sample is rather small and does not necessarily
reflect other engineering companies or project managers in the construction industry.
Qualitative research is also known for indicating experience rather that plain facts, so it
is hard to make pure statements on what works and what affects deviation in project
management. Another limitation is that the researcher did not choose the participants
and their boss advised them to participate. So, it is not known if they would have
participated if the circumstances were different. Some information was clearly not
expressed to the fullest as indicated in section 3.5, which does not give the
comprehensive oversight that is necessary to make this research as accurate as possible.
Also, the participants needed to fit the requirement that they were experienced project
manager or part of a project management team.
The interview frame was semi-structured so the sub-questions were not the same for
the participants (it depended on the flow), and therefore only a certain quantity of the
interview data can be compared between the participants.
Another limitation is that the interviews were recorded with video and voice (except
for two of the interviews which were voice only). This could lead to the participants being
more conscious of themselves and the information they were sharing. The researcher
also did not meet the interviewees face to face because of COVID-19. It can be argued
that meeting online and meeting in person is not the same and possibly some information
84
that only a human reaction can bring out was not obtained. To elaborate, possibly some
things are not expressed well via the computer, for example, body language, and it is also
possible to hide certain parts of the face during an online meeting.
Future research
Future research could focus on:
Ø Research another engineering construction company in Iceland and explore how much the organizational culture affects their project outcomes, structure and efficiency.
Ø How culture affects project management in the constructing industry and whether there is a causal relationship between culture and the effectiveness of project managers in the construction industry.
Ø Project managers in construction industry and the effect on the project if the project managers are changed during the project. Is there a possible delay because of this change? How does it affect the project?
Ø Compare a project which the organization is in sole control of from the start to the end, with a project in which the client is also trying to influence the project in some way, for example, by bringing his own project manager to the project.
85
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Appendix 1
Viðtalsrammi:
1. Kynning á mér og verkefni.
2. Mikilvægt að fá samþykki fyrir upptöku, minna á trúnaðinn fyrir starfsmanninn og
fyrirtækið.
Inngangsspurningar:
Hvað gerir þú hjá X?
Hver er þinn bakgrunnur?
Defining
• Hvernig fáið þið verkefnið til ykkar?
• Hvernig undirbúið þið ykkur áður en verkefni er hafið?
• Hvernig eru verkefnin afmörkuð?
• Eru gerð sérstök markmið fyrir hvert verkefni? Ef já – Hvernig? Ef nei – afhverju?
• Hvenig ákveðið þið hvaða hlutverk þurfa að koma að verkefnum?
• Hvaða kröfur gerir viðskiptavinurinn til ykkar áður en að verkefni er hafið?
Planning
• Getur þú lýst fyrir mér hvernig áætlanagerð fer fram?
• Hvernig vinnið þið kostnaðaráætlun?
• Hvernig tryggið þið gæði verkefnis?
• Er áhættumat framkvæmt fyrir verkefni? Ef já, hvernig? Er það framkvæmt fyrir
öll verkefni?
• Hvernig áætlið þið upphaf og endi verkefnis?
• Hvenig ákveðið þið hverjir koma að verkefnum?
• Hvernig ákveðið þið hlutverk hvers og eins í verkefnunum?
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Executing
• Hvernig er verkefninu fylgt eftir?
• Hvernig bregðist þið við ef verkefni er á eftir áætlun?
o Kostnaði?
o Gæði ekki í lagi?
o Vantar aðföng?
• Hverning bregðist þið við óvæntum uppákomum/breytingum frá ytra
umhverfinu? Enn innra umhverfi?
• Hvernig spáið þið fyrir um framvindu verkefnisins?
Closing
• Getur þú lýst fyrir mér hvernig ferlið er þegar þið afhendið viðskiptavininum
verkefnið?
• Eru verkefni almennt að fylgja upphaflegri tímaáætlun?
o Kostnaðaráætlun?
o Gæðaáætlun?
o Markmiðum fylgt eftir?
• Hvernig dragið þið helst lærdóm úr fyrri verkefnum?
• Hvar er þekkinging geymd (er til miðlægt kerfi?) og hvernig er hún notuð við
úrlausn mála til framtíðar?
• Er verið að fylgja því eftir því að starfsmenn nýti sér þessa miðlægu þekkingu sem
dregin er af fyrrum verkefnum almennt?
• Þau verkefni sem fylgja áæltun eftir, hvað einkennir þau frekar en önnur?
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Appendix 2
Coding categories (1st draft)
National culture (regarding PM)
• Doing it our way
• Communication with the client
o The client is “naughty”
§ Where is the structure? (a small market in Iceland?)
§ Why are there no formal rules? (there are formal rules!)
• Is the client the boss? (will they loose their clients?)
• Different project managers
o No formal rules! (but still there are formal rules, but it depends on pm how
they use them)
§ How many are educated? (is there a casual relationship between?)
• Lessons learned
Organizational culture (regarding PM)
• Cost schedule, taking much space in the interviews (why? – the most important
issue?)
• Unexpected cost
o Day bills
• Quality
o Why does the client understand that better?
§ Is it always this good? No.
• How the company obtains projects
o Networking??
§ Established customers
• The project processes
• Unexpected events
o COVID-19, weather, imputes missing, mistakes that needs to be fixed
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Appendix 3
An example of the thematizing process