Project Perspectives 2010

Project PerspectivesThe annual publication of International Project Management Association 2010

ISSN 1455-4178

€8.00

Vol. XXXII

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Table of Contents3 The World of Global Projects

4 A model of success factors for Global Project ManagementJean BinderPaul D. GardinerJames M. Ritchie

12 The Collaboratory for Research on Global Projects (CRGP) Structure, Philosophy and ActivitiesRaymond E. LevittRyan J. Orr

15 International cooperation for development: Design of a competence-based model for managing programmes and projectsJosé R. CoboIsabel OrtizCarlos Mataix

20 Safety and Health Risks in International Construction ProjectsDongping Fang

26 The Gap Between Project Managers and ExecutivesPeter WijngaardHerman MooiVictor Scholten

34 Communication and Trust in Distributed Project TeamsHelgi Thor IngasonTomas Hafl idasonHaukur Ingi Jonasson

42 Overview of The Virtual Design Team (VDT): A Computational Model of Project TeamsRaymond E. Levitt

48 Formal and informal risk management actions in projectsMervi Murtonen

54 Use Confucius to improve project leadership in Chinese perspectiveWeiping JiangYun LeQinghua He

Dr. Kalle KähkönenChief Research Scientist VTT - Technical Research Cen-tre of Finland

The World of Global Projects

Acknowledgement to the IPMA WC 2009 conference. Several papers of this issue have been picked up from the Scientifi c Research Paper track of the IPMA WC 2009 conference. The original papers have then been updated and or otherwise changed by the authors to meet the needs of Project Perspectives.

Published byThe Project Management Association Finland (PMAF) in co-operation with International Project Management Association (IPMA). PMAF is:- Forum and a meeting place for project

professionals- Developer of project thinking and knowledge- Active partner within the international project

communityPMAF serves with- Two project management journals (Finnish &

English) - Yearly Project Day conference and frequent theme

events- Project management certifi cation

http://www.pry.fi /index_eng.htm

Editorial Board: Kalle Kähkönen (Editor in chief)Aki Latvanne

ISSN 1455-4178

Editorial

While businesses and companies are increasingly multi-national we are more frequently facing projects with par-ticipants representing various cultures, having different

native languages, working in different time zones and locations. In other words, this is the world of global projects. Global projects are practically creeping into the life of companies of all sizes from small enterprises to the biggest leading players.

At the same time the emerged era of global projects is already now setting new requirements to the project management compe-tencies and solutions. Later on these changes shall have impacts on the content of industrial project management standards. Binder, Gardiner and Ritchie provide an example of new arising success factors that are named as ‘Cross-Cultural Negotiation’, ‘Global Teamwork and Team cohesion’ and ‘Workfl ow Management Sys-tems’. Already the names of these success factors are characterising the new challenges we are facing with global projects.

In this issue of Project Perspectives we shall explore some recent fi ndings regarding global projects. Researchers have spot-ted the appearances and obvious signifi cance of global projects already several years ago and interesting research results have been gained from their efforts. In Standford university a specifi c center named The Collaboratory for Research on Global Projects (CRGP) have been established to study fundamental phenomena within this kind of manoeuvres. This center is presented in the paper by Levitt and Orr. Close to me has been our co-operation with CRGP and our Global Project Strategies (GPS) research ef-fort that was fi nalised in the end of March 2009. Some results originating from the GPS research are presented by Murtonen in her paper on risk management.

The named research bodies and projects represent only a few examples from the variety of studies and players in the fi eld of global projects. Practically, it is a research community with plenty of others who are providing valuable contributions and new important new knowledge. I hope that the papers of this Project Perspectives with the main messages and references can help to understand as widely as pos-sible the variety of efforts and gained results in the fi eld of global projects.

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Jean BinderHeriot-Watt University

Paul D. Gardiner The British University in Dubai

James M. RitchieHeriot-Watt University

This study explores the project management literature and produces a novel model of success fac-tors for global project management. Most academic papers provide partial recommendations on how to increase the success of global projects. However, to be effective, these suggestions should be applied in a holistic manner. This is a fundamental characteristic of the model presented in this article. The model is also modular, allowing an independent implementation of success factors, and scalable, able to accommodate newly discovered factors to be tested by future exploratory research studies.A global project management framework (GPMF), previously defi ned and published by the authors, is presented and compared to other studies carried out on the management of global projects. The success factors presented by these papers are used to test the validity and completeness of the GPMF as well as how this can be improved. This results in three new success factor categories and one knowledge area (global risk factors). A model is then created by adding (i) the concept of inputs-process-outputs to the framework as well as (ii) the main challenges of global projects, (iii) the success factors for their management aligned with existing bodies of knowledge and (iv) the benefi ts achieved from successful global project management. This systemic view allows the model to be used in future studies with potential research opportunities identifi ed throughout the paper.

A model of success factors for Global Project Management

IntoductionThe main objective of this paper is to perform a structured analysis of existing academic studies on the success of global projects. Questions such as ‘How well have previous studies covered dif-ferent geographies and methodologies over the years?’ and ‘Is it possible to have a consolidated view of all success factors for global projects?’ will be addressed. The fi ndings of the paper are presented as a holistic, modular and scalable model of global project success factors which can be used to help improve the effi ciency and effectiveness of managing such projects. The steps involved in achieving the above objective and discussed here are: (i) defi ning the challenges and consequences of this emerging project management paradigm; (ii) assessing success factors from the literature in the light of an existing framework (Binder, 2007); (iii) classifying these factors according to the methodological and geographical distribution of the studies; and (iv) creating an original model of success factors for global project management.

Literature ReviewThis study builds on previous conclusions from the authors (Binder, 2007; Binder, 2009; Binder et al, 2009) about the characteristics and success factors for global projects: The Global Project Management Framework (GPMF).

In this paper, the term ‘success factors’ refers to the areas of knowledge that increase the likelihood of success during the management of global projects. The GPMF dimensions, challenges, benefi ts, knowledge areas and categories will be briefl y explained in this section before undergoing comparison against selected studies from other authors in the following sections.

Virtual projects (also called ‘distributed’ projects) involve team members in various locations (Ghosh and Varghese, 2004; Guss, 1998). As defi ned by the GPMF, global projects are a subset of virtual projects in which team members and stakeholders are spread across countries from various cultures, speaking different native languages, working in different time zones and belonging to different organizations. This defi nition forms the basis of the fi ve GPMF dimensions (Binder et al, 2009), which determine the main challenges faced by global project managers and stakeholders: geographical distance, multicultural collaboration, multilingual communication, asynchronous interactions and cross-organizational relationships. Other studies refer to international (Aleshin, 2001), multicul-tural (Mäkilouko, 2004), intercultural (Loosemore and Muslmani, 1999) and cross-cultural projects (Pheng and Leong, 2000). In previous studies, each author uses a different combination of the fi ve GPMF dimensions.

The literature provides many examples on how these fi ve dimensions can be used to harvest benefi ts from global projects. Geographical disper-sion allows reduced costs and access to the best workers independently of their location (Binder, 2007, p.11; Haywood, 1998, p.6; Rad and Levin, 2003, pp.3-5; Mayer, 1998, p.6). A multicultural team increases the levels of fl exibility and innova-tion (Binder, 2007, p.11) by bringing a variety of perspectives to the project (Dubé and Paré, 2004). Team members that speak local languages have a more accurate picture of international custom-ers’ needs (Hofstede, 1991, p.425). Project team members in multiple time zones can align their times to the stakeholders’ offi ce hours (round-the-clock project execution) (Haywood, 1998, p.6;

This is an updated version of a paper originally published in the “IPMA Scientifi c Research Paper Series: Human Side of Projects in Modern Business” (IPMA, 2009)

Project Perspectives 2010 5

Rad and Levin, 2003, p.6). Different organizations supply technical experts in different domains and increase productivity (Haywood, 1998, p. 7; Mayer, 1998, p.11), forming alliances and partnerships (Haywood, 1998, pp.2-3).

The GPMF was defi ned in a previous study by the authors (Binder et al, 2009) based on a thorough evaluation of academic studies and practitioner books on virtual teams, virtual projects and global projects. The key success factors from the litera-ture were classifi ed according to organizational change principles into fi ve discrete knowledge areas, namely: global teams, global communica-tion, global organizations, collaborative tools and collaborative techniques. Each knowledge area was populated with fi ve categories of success factors giving a total of 25 GPMF categories (Binder et al, 2009); these categories are listed later in this paper (see fi gure 6). Globally oriented companies can use the GPMF to evaluate these factors to increase the success of their global projects and implement and foster the application of selected recommendations.

Before proceeding with the research, the literature was reviewed to determine if a more comprehensive framework of success factors than the GPMF could be found. A number of academic studies identifi ed success factors through analyti-cal and empirical research. While being helpful to validate the success factors, these models are not comprehensive and only represent a subset of the GPMF.

It appears that the GPMF is a pioneering con-cept (Walker, 2009, p.162) and is the only one that covers both theory and practice while building on academic research (Binder et al, 2009, p.57) and describing all of the relevant success factors

in details to practitioners (Binder, 2007; Binder, 2009; PMI, 2008b). This framework also innovates by being independent from existing bodies of knowledge on project management, while not duplicating the knowledge contained in these sources, and by providing links to theories in do-mains other than project management, e.g. coach-ing, mindmapping, emotional intelligence (Levin, 2008). These factors were used by the authors in deciding to use the GPMF as the framework for this research.

Research MethodologyThe research used a structured approach to evalu-ate the existing literature (fi gure 1). The fi rst step involved the selection of articles in peer reviewed academic journals; the Project Management Jour-nal (PMJ) and the International Journal of Project Management (IJPM) were selected since these are considered the leading project management-specifi c journals (Henrie and Sousa-Poza, 2005).

The second step was to eliminate book reviews and editorials, in order to limit the study to peer-reviewed articles (Henrie and Sousa-Poza, 2005). During the third step, each abstract was read to determine which papers provided success fac-tors for global projects (Henrie and Sousa-Poza, 2005). The fourth step consisted of a complete review of each article to determine whether it discussed at least one of the GPMF dimensions and provided success factors relevant to global projects. A representation of the GPMF dimensions in the 47 papers selected for analysis is shown in fi gure 2. Most papers evaluated projects with multicultural stakeholders in various countries and organizations. However, the effects of mul-tiple languages and time zones are not explored

Figure 1. The research project

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suffi ciently. Future exploratory research can aim to identify new success factors to address these two challenges. Other studies might identify the relationships between these dimensions and the existing success factors.

During the fi fth step, the full contents of the 47 remaining papers were analysed. The geographi-cal dispersion of the subjects participating in the empirical studies was also evaluated, and is repre-sented in fi gure 3. This analysis includes all papers except three that lacked detailed information on one country studied in Eastern Europe (Aaltonen and Sivonen, 2008) and 26 Sub-Saharan countries (Diallo and Thuillier, 2004; Diallo and Thuillier, 2005). The map is a novel output and suggests a good balance between 3 regions: North America, Western Europe and Eastern Asia. However, previ-

ous studies have shown that important cultural differences occur within regions (Hofstede, 1991; Trompenaars and Hampden-Turner, 2005), many countries in these 3 regions were never actually mentioned in the papers and also there are only few studies in South America, Africa and Middle-East. Therefore, the current conclusions and generalizations of the fi ndings within this paper are limited to only a few geographical areas and cultures. The table on fi gure 5 also shows the oc-currence of empirical studies per year for the 8 countries with most studies. This table suggests a convergence of studies towards the same countries which might limit even more the conclusions over time. Future empirical studies can use this map to compare the geographical scope of existing studies against the spread of global project teams, defi n-ing directions for future research. (Bourgault et al, 2008, p.107; Wang and Liu, 2007, p.70).

During the sixth step, in light of the GPMF, every success factor in the literature was classifi ed into the following knowledge areas: global team management; global communication; global or-ganisations; collaborative tools and collaborative techniques (Binder et al, 2009). Whenever a suc-cess factor from the literature did not match any of the 25 existing categories, new potential areas were suggested and investigated. The results of this step will be presented in the next section.

Research Results and Industrial ImpactParaphrasing Shore and Cross (2005, p.63), culture is only one piece of the puzzle that helps project managers, this study aimed to reveal the other pieces. This section reviews the main answers to the 4 research questions: the success factors in the literature, the success factors in GPMF that are validated by the literature, the new success

Figure 2. Representation of GPMF dimensions in the 47 papers.

Figure 3. Geographical scope of the empirical studies.


factors and the suggested changes in the GPMF structure.

Success Factors in the LiteratureFigure 4 shows all the 28 GPMF success factors identifi ed during the literature analysis. The fi rst 25 categories in the picture are sorted in order of appearance in the GPMF (in blue) whereas the last 3 last categories show the new success factors that have emerged from the analysis (in green). The chart also shows the percentage of papers evaluated that mentioned each category as being of benefi t to global projects.

Validated Success Factors14 categories appear in more than 10% of the studies, these are highlighted in amber. Typical examples exist such as Cross-Cultural Collabora-tion (43%), Global Communication Techniques (30%), Global Team Leadership (26%), Confl ict Resolution (26%), Global Communication Strategy (26%) and Global Project Structures (26%). These categories show mature areas of research and strong success factors with a positive impact on the results of global projects proven by studies in different countries.

Three categories were represented in less than 5% of the papers; this weakness may be derived from their relatively recent appearance in the proj-ect management arena: coaching, PMO (Project Management Offi ce) and text-and-image tools, e.g. chats, instant messaging and web-confer-encing. There are no papers concluding that these categories have no or a negative impact on global projects; therefore more studies are recommended to validate the affects of these success factors in the project management activities instead of suppressing them from the framework.

No fi rm conclusion can be made on the re-maining 8 categories in the GPMF (highlighted in yellow). Their occurrence ranges from 6% to 9% of the papers, suggesting some impact on the success of global projects; however, more studies are required to prove their validity.

New Success FactorsThree new categories of success factors were drawn from this analysis, namely: ‘Cross-Cultural Negotiation’, ‘Global Teamwork and Team cohe-sion’ and ‘Workfl ow Management Systems’.

Cross-cultural negotiation techniques were part of the confl ict management steps of GPMF (Binder, 2007, p.64). However, other situations may exist that require specifi c negotiation techniques across cultures. “The Guide to the Project Management Body of Knowledge (PMBOK® Guide)” (4th Edi-tion) considers that ‘…negotiation is an integral part of project management’ (PMI, 2008a, p.413) being a key success factor during selection of team members (idem, p.227) and when conducting procurements (idem, p.328).

Pheng and Leong (2000, p.310) identifi ed that ‘Problems at the negotiation stage can be inevi-table when a company from a developed country is trying to access the market in a developing country. These problems occur because managers from the developed country tend to assume the responses and behaviour of their clients in the de-

veloping country without really understanding what they want and what they can offer.’ These authors also found that cultural differences amplify the negotiation challenges (idem, p.310) and recommend tactfulness and diplomacy instead of legalistic stances (idem, p.314) to deal effectively with cross-cultural negotiation, which may involve credit terms, cash fl ow arrangements and resource allocation (idem, p.311).

In terms of global teamwork and cohesion, Diallo and Thuillier (2005, p.248) observe that team cohesion is closely linked to trust and can make a contribution to the success of projects, and that ‘…nothing is possible without a well-integrated team’. Milosevic (1999, p.34) detects that teamwork is the norm in country cultures that emphasise group harmony, unity and loyalty. Bourgault et al (2008, pp.98-106) recommend project managers involve key team members in the decision-making process, create a team identity to compensate for members’ isolation, provide the team with autonomy and formalize the decision-making process.

In terms of workfl ow management systems, Badir et al (2003, p.46) recommend a model that monitors and controls the execution of multiple workfl ows operating synchronously between organizations, coordinating the information fl ow from creation to elimination and sharing project information across team members. Some benefi ts of such model are the immediate electronic updating of the project status, the effi cient and easy communication between all stakeholders, the immediate availability of project information and minimized project risks.

Changes in the GPMF structurePheng and Leong (2000, p.314) suggest that the management of inter-national projects require an understanding of key project management concepts. The relationship between basic project management principles and the success of global projects is also analyzed by Kendra and Taplin (2004), Khang and Moe (2008), and Javed et al (2006). Most of the pa-pers evaluated (77%) did not mention any body of knowledge or project management methodology, while 21% referenced only the “Guide to the Project Management Body of Knowledge (PMBOK® Guide)” (PMI, 2008a) and the remaining 2% mentioned other sources. To follow this trend, the new structure of the model will remain independent of existing bodies of knowledge, to allow use by companies adopting different standards, while referencing the PMBOK® Guide for the basic project management concepts.

Figure 4. Occurrence of the Success Factors in the literature.

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Figure 5 shows the percentage of papers that establish a link between each of the PMBOK® Guide knowledge areas (PMI, 2008a) and the success of global projects. To identify these relationships, a contextual analysis was preferred to keyword search, in order to ensure relevance to the research topic. The high frequency of studies identifying success factors related to human resources (26%) and communications (43%) confi rms the need for two existing categories in the GPMF (Global Teams and Global Communication).

Existing studies indicate that the global project challenges impact the processes used to manage integration, scope, time, cost, quality and procurement. However, such a low number of studies do not allow the generalization of this conclusion to most projects. This uncertainty sug-gests that global project managers should identify global risks to mitigate such impacts. The high occurrence of papers covering risk management (38%) in comparison to the remaining six areas (averaging 12.5%) con-fi rms this conclusion. As one example, projects having stakeholders in various countries face a range of international threats identifi ed in the

literature as political, legal, economical, socio-cultural and managerial (Dikmen et al, 2007, p.497; Khattab et al, 2007, p.735; Ling and Hoi, 2006, p.262; Ozorhon et al, 2007, p.800; de Bakker and Somani, 2006). Therefore, three strong links exist between the PMBOK® Guide (PMI, 2008a) and the new model, also shown in fi gure 8: (1) the success factors for human resource management in global projects (GPMF: Global Teams); (2) the factors for effective global communication (GPMF: Global Communication); and (3) the global causes of risks that might have an impact in all other PMBOK® Guide processes (GPMF: Global Risks, new area). Future research can use this model to investigate the impact of each GPMF success factor on the PMBOK® Guide knowledge areas.

There is also a link between project management behavioural competences and the success of global projects. The GPMF completes the ICB (IPMA, 2006) by adding the skills required by global projects for leadership, engagement and motivation, creativ-ity, negotiation and confl ict management. These relationships are another potential area for future research, as well as identifying global character-istics of other competences, such as self-control, assertiveness, relaxation, openness, results orien-tation, effi ciency, consultation, reliability, values appreciation and ethics (IPMA, 2006).

Implementation and exploitationThis study suggests a novel structure to explain the success factors associated with global proj-ect management, this is highlighted in fi gure 6. The content of each cell in the concept model is grounded in the conclusions and best practices found during the review and analysis of the litera-ture and, from this, global project managers can evaluate which success factors are relevant to their needs. The organizational policies, standards and culture can be improved according to the recom-mendations that emerge. This structure can serve

Figure 5. Relationship between the GPMF and the PMBOK® Guide. NB The areas of the circles are directly proportional to the

occurrence of each knowledge area in the literature.

Figure 6. New model of success factors in Global Project Management.


Jean Binder, PMP, MBAHeriot-Watt University, School of Engineering and Physical Sciences, Edinburgh, Scotland

[email protected]

Jean Binder is an international speaker with more than 20 years of experience working in project environments, most of them living abroad and communicating in multi-cultural and multi-language environments. He has particular experience of managing global projects, having implemented collaborative tools and techniques in a number of global organizations. The framework discussed in this article is the foundation for his PhD research (in progress).

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as a maturity model of the companies’ practices in global project management which can be im-proved based on technological choice, company culture and the different cultures of the people participating in the process. This novel model can also serve as a basis for a career development path, orienting global project managers and other stakeholders towards training modules that can improve their technical, people management and communication skills. Academic researchers can test the model and investigate how well each GPMF factor addresses the global project chal-lenges and what types of benefi ts can be achieved by global projects as well as extending the model where necessary.

ConclusionsThere are an increasing number of academic stud-ies suggesting success factors for global project managers, covering different geographical areas and using various methodologies. These stud-ies validate the success factors proposed by the Global Project Management Framework previously defi ned by the authors and indicate the existence of 3 new success factors and one new category. A new model of success factors in Global Project Management was developed from this.

The implementation of a new set of practices, processes and skills related to this model also imply a change in the cultural mindset. Therefore, the success factors must be applied in a holistic man-ner, according to organizational change principles. The model presented in this study satisfi es this requirement by presenting all of the key success factors present in 10 years of academic studies in a single structure.

Every project is unique by defi nition; the geo-graphical dispersion of the team members, the composition of country cultures and languages, and the organizational mix are also unique. Therefore, a global project management model must be modular and allow an independent imple-mentation of success factors to meet the specifi c requirements from every project confi guration. The model presented in this study satisfi es this need since each module provides an independent set of success factors, grouped according to a logical structure.

Global projects are intimately linked to tech-nologies, tools and techniques that evolve over time. Therefore, a global project management framework must be scalable to accommodate new success factors discovered and tested by explor-atory research studies, as well as new collaborative technologies and tools being developed around the globe. The novel structure of the model presented by this study satisfi es these criteria and can be easily expanded to include such developments.

By using proven methods such as grounded theory and action research, and by evaluating people in various countries, future studies can identify relationships between: (i) the 33 areas of success factors; (ii) these success factors and existing bodies of knowledge and competency baselines; and (iii) each challenge, success factor and benefi ts. The model is also open to include new categories, knowledge areas and success factors that might be discovered in future studies.

Paul D. GardinerThe British University in Dubai, Faculty of Business, Dubai

UAE; [email protected]

Dr Paul Gardiner is a senior lecturer in project management at The British University in Dubai. He studied and completed his PhD in project management at the University of Durham. He worked for fi fteen years in Heriot-Watt University teaching undergraduate and postgraduate students in the areas of strategic project manage-ment and construction management. Dr Gardiner has established, designed, implemented and taught postgraduate programmes in project management at Heriot-Watt in Dubai (Academic City) and in universities in Italy, Sweden and the UK. He is Vice Chairman for APM Scotland and a member of the PMI. He is also an external examiner for the University of Bradford and the University of Ulster and an Honorary Fellow at the University of Manchester

James M. Ritchie, BSc, MScHeriot-Watt University, School of En-gineering and Physical Sciences, Edin-burgh, Scotland

[email protected]

James M. Ritchie is a professor of Mechanical Engineering specializing in design, manufacture and management. Recent funded research has investigated the use of digital tools, espe-cially virtual reality, for the automatic generation of design and manufacture process mapping and knowledge acquisition future project will include project management applications. Other funded research projects in quality methods in the food industry, design process analysis, logistics for SMEs and capability maturity modeling. With over 130 publications, he is also Director of his institution’s Advanced Manufacturing Unit.

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The Collaboratory for Research on Global Projects (CRGP) at Stanford University is a multidisci-plinary center that supports fundamental and applied research, education and industry outreach to improve the long-term economic, environmental and social sustainability of large infrastructure development projects that involve participants from multiple institutional backgrounds. Its studies have examined public-private partnerships, infrastructure investment funds, stakeholder mapping and engagement strategies, comparative forms of project governance, and social, political, and institutional risk management. The Collaboratory, established in September 2002, serves as the hub of a global network of scholars and practitioners—based on fi ve continents—with expertise in a broad range of academic disciplines and in the power, transportation, water, telecommunica-tions and natural resource sectors. This brief overview summarizes the composition, philosophy and recent activities of CRGP.

Raymond E. LevittStanford University

Ryan J. OrrStanford University

The Collaboratory for Research on Global Projects (CRGP):Structure, Philosophy and Activities

CRGP Academic partnersAt Stanford University, CRGP brings together a network of academics from multiple disciplines, including Engineering, Project Management, Law, Finance, Economics, Sociology, Psychology and Political Science) interested in the fi nancing, governance and development challenges of global infrastructure projects. In addition the Collabora-tory links to a number of research hubs around the world that share its interest in this domain and that bring together groups of scholars and industry practitioners into a local network. The fi rst, and still most active, Collaboratory partner network includes a group of scholars at the Hel-sinki University of Technology, Helsinki School of Economics, and VTT (The Finnish national research laboratory) plus a group of Finnish companies engaged in global project business. Other global Collaboratory partners include a network of schol-ars in India at IIT-Madras and IIM-Bangalore, and smaller Collaboratory hubs in Australia, China, Malaysia, Norway, South Africa, and UK.

CRGP Industry and government partnersCRGP maintains extensive relationships with infrastructure experts at multilateral banks, infra-structure funds, transaction advisors, contractors, engineering companies, law fi rms, investment banks, commercial banks, insurance companies, and pension consultants. Industry experts share their knowledge and understanding of problems

CRGP StructureCollaboratory for Research on Global Projects was set up as an interdisciplinary “Center” at Stanford University. Centers at Stanford are virtual orga-nizations overlaid across department and school hierarchical structures that can facilitate collab-orative research and engagement with a group of industry and government affi liates to solve critical societal problems. Centers do not directly employ faculty, admit students or award degrees. Rather, they act as “intellectual magnets” to attract in-terested faculty, postdoctoral fellows and students from different departments to work together on important and challenging societal problems.

The industry affi liates provide problem defi -nition, access to real world projects and data, critique of research results, and a vehicle for implementing fi ndings of centers. Unlike most other centers at Stanford, the focus of CRGP was on global projects and infrastructure development and fi nance activities. So, in addition to the typical Stanford center model of engaging with faculty from multiple Stanford schools and departments, CRGP also decided to build ties to complementary groups of scholars and practitioners around the world in order to: engage with a broader set of industry and government stakeholders; gain access to a more complete range of global best practices; and facilitate collaboration on cross-national studies of the challenges facing global capital facility development projects.


with CRGP scholars through participation in research projects and regular roundtables that focus on specifi c topics related to infrastructure fi nancing, governance and development. These organizations also provide funding for CRGP seed research and administration through annual affi li-ate contributions. CRGP regularly submits propos-als to outside agencies for larger-scale funding based on the fi ndings of its most promising seed research projects.

Visiting Scholar ProgramThe Collaboratory has a Visiting Scholar program and typically hosts three to eight industry and academic visitors annually for a period of three to twelve months. Visiting Scholars are required to have a Ph.D or to be a recognized world expert in their professional discipline. Industry profes-sionals have used the Visiting Scholar program to stay engaged and do reading and writing during career transitions. Academics frequently use the Visiting Scholar program as a source of new ideas and inspiration during a sabbatical year. Visiting Scholars are assigned an offi ce, participate in Collaboratory seminars and meetings, audit Uni-versity courses, publish research, and assist with Collaboratory projects.

CRGP PhilosophyCRGP serves as Stanford University's primary fo-rum for systemic studies of global projects. CRGP defi nes "Global Projects" as projects that involve participants from multiple societal or cultural systems and/or geo-spatial locations. Its research activities primarily focus on studying the impacts of organizational and institutional parameters on projects that are diffi cult to quantify and yet have proven historically to have detrimental impact on overall project effi ciency.

CRGP studies the kinds of global projects that are large enough to have regional and even national economic and social impacts, that involve multiple engineering disciplines; that have significant impact on our environs where eco-sustainability becomes critical; that are organizationally complex with participation from multiple cultures; and that have complex institutional issues and concerns stemming from confl icts over goals, values, cultural norms, work practices, and technology.

CRGP researchers use multiple research frame-works—ethnographic, case study, survey and computational modeling—to develop, test and deploy innovative theories, methodologies and tools. Results from CRGP research are disseminated through graduate and executive education and through a variety of publication media.

The CRGP global network of Affi liate Members and Collaboratory Partners is engaged in a portfo-lio of activities aimed at developing frameworks, tools and strategies to improve the outcomes of global projects, and to educate a new "global project savvy" breed of professionals. These activi-ties include: - Conducting surveys, case studies, other kinds

of fi eld research, mini-internships, and Round-tables to understand the generalizable chal-lenges that beset global projects;

- Developing new theoretical frameworks for understanding institutional and organizational "costs" associated with global projects based on research in management, sociology, law, psychology, anthropology, and other pertinent disciplines and using surveys, case studies, and research methods to validate and calibrate the emerging theoretical frameworks;

- Developing new models, visualizations, and predictive tools to help leaders in government and industry improve planning and manage-ment practices on global projects;

- Creating formal curricula incorporating results of CRGP research to teach principles, know-how, and tools for designing global projects, and disseminate them via the Stanford Center for Professional Development's SU-Online e-learning platform, 24/7, around the globe.

CRGP Activities in 2009-2009During 2008-2009, CRGP researchers and industry affi liates continued an active program of research, education and outreach to industry and govern-ment. Signifi cant activities from the most recent year are listed below.

Research and Educational ActivitiesCRGP researchers in Stanford's law school, busi-ness school, engineering school and department of sociology were engaged in the following studies and publications during the 2008-2009 academic year: - White Paper on America's Infrastructure Strat-

egy (Author: Michael Garvin) Co-Published by CRGP and KPMG, 40 Pages

- 300 Page Book on the Distribution of Chinese Infrastructure Investors and Contractors in Africa, by Country and by Sector (Partners: CRGP, OECD, World Bank, Tsinghua University), In-Press

- Comparative Assessment of Rationale for PPPs Across 7 U.S. States (Author: Sanjee Singla, Management Science and Engineering) In press.

- White Paper on Expanding Options for Infra-structure Renewal in California (Author: Ryan Orr; Gregory Keever, CRGP Industry Affi liate) In press.

- Major Sponsored Project of Factors Predicting NGO Opposition to Water and Pipeline Projects (Team: Ray Levitt, Ryan Orr, Dick Scott, Jenna Davis, Doug McAdam + 8 grad students) Three journal papers in press.

- Comparative Due Diligence of 50+ Global In-frastructure Funds (Research Team: Ryan Orr + 10+ Students from Graduate School of Business) Published.

- Comparative Analysis of PPP Coordination Agencies Globally (Authors: Christine Farrugia, Tim Reynolds, Grad. School of Business) Working paper published.

- Ph.D Thesis on How Global Construction, Engi-neering and Project Development Companies Capture and Share Knowledge and Best-Practice Across their Organization and Supply Chain ( Student: Dr. Amy Javernick Will, Civil & Envi-ronmental Engineering) Published; three journal papers in press.

14 www.pry.fi

- Ph.D Thesis on Comparing he Institutional Fields supporting Public Private Partnerships in three countries. (Student: Stephan Jooste, Civil & Environmental Engineering) Ongoing.

- Ph.D Thesis on Factors and Processes Effecting LNG Terminal Siting Decisions in the U.S. (Stu-dent: Hilary Schaffer, Interdisciplinary Program in Environment and Resources) Ongoing.

- Ph.D. Thesis on Shifts in Bargaining Power Over the Lifecycle of Investment Agreements. (Author: Henry Chan) Ongoing.

- Ph.D. Thesis on the Role of Freelance Expatri-ates on Large-Engineering Projects in China and Taiwan. (Student: ShuFang Chi) Ongoing.

- Book on Governance of Global Infrastructure Projects (Editor: W. Richard Scott) Ongoing.

- Offered executive education program on Man-aging Global initiatives as part of The Stanford Advanced Project Management Program. (Avail-able online through http://apm.stanford.edu )

CRGP Outreach Activities in 2008-2009- Hosted a Roundtable for California Governor’s

Offi ce- Assisted Assembly Woman Anna Caballero in

preparing draft legislation for public-private partnership center of excellence in California

- Assisted Los Angeles Metro in evaluating pro-posals from transaction advisors

- Testifi ed before the Little Hoover Commission on bottlenecks to infrastructure delivery in California

- Presented to Public Works Directors from across California Cities at an annual conference hosted by the California League of Cities

- Submitted ideas for draft legislation for U.S. National Infrastructure Bank

- Presented fi ndings of research on public private partnership agencies at World Bank Institute Public-Private Partnership in Infrastructure Days

- Hosted a Roundtable on the opportunities and challenges for public and private pension fund investments in US infrastructure projects.

- Professor R. Levitt and Lecturer A. Vives ap-pointed as Commissioners of the California Infrastructure Advisory Commission (PIAC) 2009.

ConclusionThrough this portfolio of activities, CRGP provides new knowledge about the fi nancing, governance and development of global infrastructure projects, and creates a forum for the exchange of best practices and for an effi cient dissemination of the new global project knowledge base. In these ways, CRGP aims to enable leaders in government and industry to analyze and design the organizations and institutions needed to deliver complex global projects more effectively, with more sustainable outcomes

More detailed information about CRGP activi-ties, affi liate members, and downloadable publica-tions is available on the CRGP website at http://crgp.stanford.edu

Raymond E. Levitt is Professor of Civil & Environmental Engi-neering and a Senior Fellow at Stanford’s Woods Institute for the Environment. He directs Stanford’s Collaboratory for Research on Global Projects and Advanced Project Management executive pro-gram. Dr. Levitt’s early research showed how construction owners and top managers could improve their safety performance. In 1988, he co-founded Stanford’s Center for Integrated Facility Engineering. He developed organization modeling and simulation theory and tools to reduce schedule and quality risk for fast-track projects and project-based companies. His current research explores how na-tional cultural and institutional differences affect governance and performance of multinational project teams. ASCE awarded Levitt its 2000 Computing Award; 2006 Peurifoy Construction Research Award; and elected him ASCE Distinguished Member in 2008. Dr.

Levitt was co-founder and has served as a Director of: Design Power, Inc., Vité Corporation, and Visual Network Design, Inc.

Ryan J. Orr is executive director at the Collaboratory for Research on Global Projects (CRGP) and teaches Global Project Finance to engineering, law school and MBA students at Stanford Univer-sity. Dr. Orr serves on the editorial review boards of the Journal of Structured Finance, Public Works Management and Policy, and the Journal of International Business Studies. His current work focuses on public-private partnership agencies, infrastructure funds, and pension investment in infrastructure. Dr. Orr’s students and research assistants have been placed at Arup Engineering, Bechtel Corp., BNP Paribas, Ferrovial, Goldman Sachs, Highstar Capital, Macquarie, Parsons Brinkerhoff, and other name brand infrastructure organiza-tions.

CRGP provides new knowledge about the fi nancing, governance and development of global infrastructure projects


Managing international cooperation for development projects is a complex task that involves tech-nical, political, socio-economic and cultural variables. The technical, contextual and performance competences of those who manage these kinds of projects must take this complexity as their starting point and tackle it with all their accumulated experience to decide what actions need to be carried out. This research includes an analysis of the theory and application of the project management methodologies currently used by development organisations; an analysis that takes a critical look at the success or failure of development interventions, assessing the components of competences and the essential skills for project managers. It also examines how proposals for cooperation project management methodology are drawn up, specifi c training programmes in this area, the coordina-tion between players, and knowledge management, with the purpose of enhancing the impact of development interventions.

Design of a competence-based model for managing programmes and projects

IntroductionPublic sector development projects or programs specifically designed for economic and social needs of developing countries, usually fi nanced by a donor are known as international development projects. These projects are either implemented by recipient governments under a bilateral agree-ment with the donor country, or through an ‘implementing partner’ of the donor – frequently a nongovernmental organization or professional contractor (Crawford and Bryce, 2003). Interna-tional development projects differ from industrial or commercial projects. The objectives of devel-opment projects by defi nition, concern poverty alleviation and improvement of living standards, environment and basic human rights protection, assistance for victims of natural or people caused disasters, capacity building and development of basic physical and social infrastructures (Khang and Moe, 2008).

The Millennium Declaration with its ensuing defi nition of objectives, goals and common indi-cators represents an attempt to internationalise a Management Model for Development Results (MfDR) in International Cooperation programmes and projects, indicating the path to be followed by the countries in the world as a whole and putting forward the importance of partnership for development. This is a unique and extremely novel experience within the sphere of public policy which sets a simple, easily communicable action framework that is highly suited to mobilising resources. Beyond having realistic and achievable goals, the Objectives of the Millennium Develop-

ment have established the way to cooperate in recent years. This research work aims to verify the hypothesis that a better training in competences and skills for programme/project managers in the areas of intervention leads to a sustainable impact and results based on the shared social processes of empowerment and learning. The following questions need answering: Do the currently used methodologies adapt to the new context of inter-national cooperation for development? Do project management training strategies adapt to the local context in terms of satisfying local expectations? Are currently used project management models and the sustainability of long-term actions being strengthened? To what extent do local partners, counterparts and the benefi ciary population take part in planning, monitoring and evaluating inter-ventions? Do they have the necessary mechanisms to be able to meet the requirements for control, monitoring and evaluation?

This paper reports on research that sets out to identify the competence profi le of effective man-agers of cooperation for development projects, with the purpose of promoting an improvement in development interventions within the new framework of cooperation through the training in, and strengthening of competences and skills adapted to local contexts.

The evolution of project management models for development and the new frameworkThe gradual introduction of results-oriented man-agement techniques has helped many public sector

José R. CoboIsabel OrtizCarlos MataixUniversidad Politécnica de MadridDepartamento de Ingeniería de Organización, Spain


International cooperation for development

16 www.pry.fi

and development agency managers to adopt a more systematic approach to all aspects of project and programme management.

Many institutions and agencies in both devel-oped and developing countries now use a variety of practical MfDR techniques. These include results-based strategic planning, the use of logic models or project results frameworks, results-based budgeting, risk management and results-based evaluation and monitoring (Fontaine, 2004). Management in the public sector used planning, programming and cost control models in the 1960s, placing an emphasis on fi nancial plan-ning and cost accounting. ‘Input’ management (human resources, operating costs…) became more important demonstrating control over the management, distribution and use of fi nancial resources (Osborne and Gaebler, 1993).

Programme management by activities (PMBA) reached its peak between the seventies and the eighties when donor organisations got involved in infrastructure and industrial development projects. This combined with different activity planning tools and techniques (project structure break-down, Gantt diagrams, the Critical Path Method, Programme Evaluation and Review Technique) boosted the implementation of activities in line with a programming framework that became extended to management systems in the building industry and engineering (Hailey and Sorgenfrei, 2003). In the fi eld of international cooperation the introduction of management methods by objectives goes back to this period Such methods were the Logical Framework Approach (LFA) at the United States Agency for International Develop-ment (USAID) and the Objective Oriented Project Planning methods (GTZ).

The 2002 Monterrey Conference called for creating a new partnership for development: the

developing countries reaffi rmed their commit-ment to policies and actions to promote economic growth and reduce poverty, and the developed countries supported them with more effective aid and trade policies. In this context of shared responsibility, world attention has moved towards management strategies in order to achieve re-sults. At the international round table on results in Marrakech (February 2004), the development agencies gave their backing to fi ve central prin-ciples for management by results. More recently, at the High Level Forum on the Effectiveness of Aid in Paris (March 2005), the member countries and the donors backed the Paris Declaration, which contains specifi c commitments related to Managing for Development Results: actions to be taken both separately and jointly to “administer and implement aid in a way that is focused on the desired results and uses the information to enhance decision-making”.

Development results-based management is cen-tred on a strong notion of causality. It is supposed that certain inputs and activities logically lead to certain results (Binnedijk, 2001). The relevance of these results follow an increasing order: the most basic results (the ‘products’ or outputs) contribute to the success of the most complex results (‘effects’ or outcomes) and fi nally lead to getting ‘impact’, which is the most far-reaching result. Therefore, attention must be paid to achieving results at every stage of the management process, from planning to monitoring and evaluation, since every level of development of every process is affected.

For those working on this incipient programme, however, it is sometimes diffi cult to know how and where to begin, who to include and where to seek aid. There are no black and white answers to these questions because every country and agency has its own unique situation. Notwithstanding,

Figure. 1. Results chain for the Development Results Management Model.

Area of ControlInternal

EfficiencyEffectiveness

Med-TermOutcomes(indirect)

OutputsReachDirect

Area of InfluenceExternal to the

Short TermOutcomesOutputsActivities

Inputs(resources)

Long Term Impact

Internal Risks

Project Delivery Partners Direct Beneficiaries

Indirect Beneficiaries Society

External Risks


as certain agencies and countries advance in this work, they have begun to mark out a path that can be useful to others.

Out of the search for this balance certain recent proposals have arisen aimed at improv-ing the quality of participation of all the parties interested in the life cycle of an intervention and in making planning models more fl exible so that they better interact with their surroundings and thereby re-guide activities and results according to how the context evolves. This work takes ac-count of all the theories on development, as well as the management approaches used: the logical framework approach (Gómez Galán and Cámara, 2003), results-based management, the process approach to learning (Korten, 1987), projects as experiments (Rondinelli, 1993) and organisational learning-based processes approach (Chambers, 1994). In addition, we have studied how interna-tional organisations plan, evaluate , and manage development projects: UK Department for Inter-national Development (DFID), Japan International Cooperation Agency (JICA), Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ), Canadian International Development Agency (CIDA).

Research projectAdapting the system of International Cooperation to MfDR, involves a profound change in methodol-ogy, but, above all, a medium and long-term effort that means a change in organisational culture, in management and in actions for cooperation. It is for these reasons that new technical, personal and contextual skills have been identifi ed in this area. Development programme/project managers work in a rapidly changing context, with many parties involved and external infl uencing factors. Proj-ects are more numerous, complex and of a more varied nature. The demand on managers and their teams’ personal and contextual skills has become more pronounced and exacting in the last decade (IPMA, 2007). The need for a broad, real descrip-tion of the skills needed to manage development projects and programmes in this changing context is top priority.

The methodology used to support this research programme took its lead from the established McBer job competence assessment process initially developed for industrial psychology by McClel-land (1973). Over the last 30 years, a number of studies have demonstrated the effectiveness and validity of the McBer job competence as-sessment methodology which comprises: (i) The identifi cation of those criteria defi ning effective performance; (ii) the identifi cation of a criterion sample group of performers; (iii) data collection through behavioural event interviews; (iv) the identifi cation of core competences; (v) the valida-tion of the competence model. The participants were 24 International Cooperation programme and project managers specialised in all the human development sector areas (UNPD, 1997): rural development, education, health, water and sanita-tion, environmental sustainability, technology and innovation, culture, gender, migration and peace-building. A variety of data were collected from the managers selected. Initially, they were asked to describe their job tasks and key responsibilities

Technical Competences ImportanceM SD

Parties involved 3,11 0,78

Risk and opportunity 4,78 0,68

Quality 4,31 0,69

Project Organisation 2,98 1,28

Teamwork 2,88 1,44

Project Coordination 2,86 1,69

Scope and deliverables 3,93 0,75

Time and project stages 1,97 1,18

Resources 2,74 1,00

Cost and fi nancing 3,04 0,89

Supplies and contracts 1,51 0,93

Changes 2,56 1,18

Control and reports 2,77 1,41

Information and documentation 4,25 0,42

Project Completion 1,53 1,02

Behavioural Competences ImportanceM SD

Leadership 3,21 0,89

Commitment and motivation 4,62 0,76

Creativity 1,74 0,64

Results-oriented 4,81 0,88

Effi ciency 2,04 0,50

Consultation 2,15 1,25

Negotiation 3,47 1,31

Confl icts and crisis 3,65 0,87

Reliability 2,98 1,08

Ethics 4,71 0,71

Contextual Competences ImportanceM SD

Project-oriented 4,01 1,31

Programme-oriented 4,04 1,08

Continuous improvement of projects and pro-grammes 4,82 0,65

Coordination with the parties involved 3,71 0,78

Personnel management 3,53 0,71

Safety, health and environment 2,98 0,46

Table 1. Most important technical, behavioural and contextual competences for cooperation for development programme and

project managers.

18 www.pry.fi

in order to identify competence requirements of their roles.

Next, behavioural event interviews were used to assess the behaviours underlying effective per-formance in their role. Interviewees were asked to recount an occasion where they had to manage a complex or problematic situation or event. Each informant was asked to describe a range of critical situations they had encountered, what events led up to them, who was involved, what they thought, felt or wanted to do in that situation and fi nally, what they actually did and what they thought the outcome was. Later a workshop was set up with the participants so that experiences concerning Devel-opment results management could be shared. The group worked to identify what MfDR parameters were managed by the organisation up to present and which not in order to get to know the diffi cul-ties and the requirements needed to implement this management model in the sector.

Results and discussionTaking account of all the variables considered previously, the results of the interviews were as shown in the following table.

After the study undertaken, it is clear what the development project manager’s profi le is within the new framework of international cooperation. This study will enable specifi c training programmes to be designed in this area, to coordinate players and manage knowledge so as to enhance the im-pact of development interventions. Therefore, it can be considered that the essential competences for project management are:

Risk and opportunity. The project manager is responsible for keeping themselves and the team members working actively, be aware of risks and opportunities, and be committed to the risk management process in order to involve the par-ties in this process. Having made a quantitative assessment of risks and opportunities, they are classifi ed according to the importance, impact and probability of their occurring. This classifi cation is used to decide what strategy to use to deal with each risk and opportunity.

Quality. Project quality management embraces every stage and part of the project, from its initial defi nition up to the processes of the project, its team management, its deliverables and its comple-tion. The functionality demanded of the product must be validated against its real functionality (at appropriate stages in the course of a project) with the customer in order to ensure compliance with product requirements.

Information and documentation. Information management includes modelling, compilation, selection, and project data storage and retrieval. A documentation system must have rules as to what information it contains, in what sort and type of document and what format this informa-tion should take in the document.

Commitment and Motivation. Commitment is a project manager’s personal contribution to a project and the contribution of the people inside the project or connected with it.

Results-oriented. The team’s attention must be focused on key objectives to obtain optimum results from all the parties involved. The project

manager must be convinced that the project re-sults satisfy the parties involved.

Ethics. Ethics allows the people to carry out the project and deliver the results satisfactorily. They represent personal and professional freedom as well as limits. Ethics must be respected so that people work with no moral confl icts concerning the project, the parties involved or society.

Continuous improvement of projects and programmes. To improve project and programme management skills, as well as to increase the organisation’s success in implementing its stra-tegic plan, continuous improvement is required. Implementing project, programme and portfolio management in an organisation involves designing the best possible processes, methods, techniques and tools, it also involves changing attitudes and applying organisational changes in a continuous exercise of improvement.

ConclusionsThe MfDR reform process must allow building on existing foundations without this leading to un-necessary confl ict. The effort put into planning in recent years is noteworthy. The general, country, thematic and sector documents produced are high quality, in some cases refl ecting the “state-of-the-art” of the issues analysed (the ability to govern, gender, environment …). However, quite often they are more often ideological reports that give the broad outline - undoubtedly necessary - rather than authentic management tools.

The way processes and monitoring mechanisms have evolved has also been important. In this case, what is needed is to capitalise on the investment made in order to focus the tools on the results and transform them into more useful manage-ment tools.

The most diffi cult change will undoubtedly be cultural change. This involves MfDR development strategy going hand-in-hand with a spirit to com-municate and train that involves the persons and groups that are most able to infl uence their peers in the process.

The framework of competences presented in this work clearly defi nes the parameters deemed to be most important by experts in the area of interna-tional cooperation for development. The develop-ment of training programmes in this direction will make it easier to confront the organisational change that will be seen in this sector in the next few years. With this paper we hope to be able to contribute to the improvement of the quality of actions for International Cooperation in third world countries, so that interventions will be more effective, and the process monitoring and follow-up system will be in closer contact with the project. It is hoped that programmes and projects will be easier to assess through indicators that can truly measure the impact of actions in the fi eld.

ReferencesAbraham, S.E., Kams, L.A., Shaw, K. and Mena, M.A.

(2001). Managerial competencies and the mana-gerial performance appraisal process. Journal of Management Development, 20(10), 842-52.

Aune, J. (2000)Logical framework approach and PRA – mutually


José R. Cobo is a lecturer in Project Management at the Higher Technical School of Industrial Engineers at Madrid Technical University. He is a member of the Group of Cooperation in Or-ganisation, Quality and the Environment (www.gocma.com) at this university and his lines of research are focused on educational in-novation in engineering, project management and cooperation for development.

E-mail: [email protected]

Isabel Ortiz, PhD lectures in Project Management at the Higher Technical School of Industrial Engineers at Madrid Technical Univer-sity. She is director of the Innovation Education Group (GIE Project-UPM). She is a Project Manager Professional (PMP), Master in Total Quality Management, and European Master Degree in Quality of Complex Integrated Systems (EFQM). Her line of research is educa-tional innovation in engineering, project management and quality in cooperation for development.


Carlos Mataix, PhD lectures in Industrial Management at the Higher Technical School of Industrial Engineers at Madrid Technical University. Their lines of main investigation are logistics, strategic planning and international cooperation. It has published diverse articles and books related to cooperation for development. He was an associate Founder and President of the Spanish Confederacy of Associations of Engineering without Borders (ISF), being at present vice President of ISF-ApD.


exclusive or complementary tools for project plan-ning? Development and Practice, 10 (5), 687-690.

Binnedijk, A. (2001)Results based management in the development co-operation agencies: a review of experiences, CAD-OCDE, París.

Chambers, R. (1994)The origins and practice of participatory rural ap-praisal. World Devolopment, 22 (7), 953-969.

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Crawford L, Bryce P. (2003)Project monitoring and evaluation: a method for enhancing the effi ciency and effectiveness of aid project implementation. International Journal of Project Management, 21:363–73.

Fontaine, E. (2004)Implementation of results-based management in the United Nations organizations, Inspection Departmen, Ginebra.

Gómez Galán, M. y Cámara, L. (2003)Logical Framework Orientations. Cideal. Madrid.

Hailey, J. and Sorgenfrei, M. (2003)Measuring Success? - Issues in Performance Management. Keynote Paper 5th International Evaluation Conference on Measurement, Manage-ment and Accountability. KDKConference Centre, The Netherlands.

International Project Management Association (2007), Project Management competence baseline, version 3.0. The Netherlands.

Khang, DB., Moe, TL (2008)Success criteria and factors for international de-velopment projects: a lifecycle-based framework. Project Management Journal, 39(1):72–84.

Korten, D. (1987)Third generation NGO strategies: a key to people centered development. World Development, 15, 145-159.

McClelland, D.C. (1973)Testing for competence rather than for intelli-gence. American Psichologist, 28, 1-14.

Osborne, D. and Gaebler, T. (1993)Reinventing Government: How the entrepreneurial spirit is transforming the public sector.

Rondinelli, D. (1993)Strategic and results based management in CIDA: refl ections on the process’. Strategic Management. Canadian International Development Agency. Ottawa.

UNDP (1997)Measuring and Managing Results: Lessons for Development Cooperation.

UNDP (2008)Human Development Report 2007/2008.

Williams, R.S. (1998)Performance Management, Thomson, London.

20 www.pry.fi

The international construction market is more risky than its domestic counterpart. Numerous studies have examined many risk management aspects of international construction projects, including joint venture risks, bidding risks, fi -nancial risks and political risks. Despite this, few efforts have analyzed the safety and health risks for different international construction regions. Based on 13 safety and health risk factors iden-tifi ed in the literature and through interviews, a survey was conducted to collect information and make an assessment on the safety and health risk factors in three different geographic regions, namely developed regions, developing regions and the Middle East. Statistical analysis investigated the criticality of the 13 risk factors for the different regions. The risk factors were grouped into three categories, namely high risk, medium risk and low risk. Findings show that: 1) the developing regions have the riskiest situ-ations with 8 high risks and 5 medium risks; 2) the developed regions have much less risky situations with 10 risk factors (76.92%) falling into the medium and low risk categories; 3) the Middle East has 6 risk factors categorized as high risk and low risk respectively; 4) the six risk factors were found to be critical risks for all the three regions.

Safety and Health Risks in International Construction Projects

Dongping FangTsinghua UniversityChina

IntroductionThe Engineering News Record (ENR) reported that the top 225 international contractors generated $310.25 billion in 2007 revenues from projects outside their respective home countries. This rep-resents a dramatic increase of 38.3% over 2006. The top 225 had total contracting revenues of $826.96 billion in 2007, a 27.1% increase over 2006 (Reina and Tulacz 2008). At the same time, the international construction market presents greater risks than its domestic counterpart. After a thorough review of the literature on international construction from 1987 to 2004, Dikmen and Bir-gonul (2006) concluded that risk management was one of the most important factors for the success of international projects.

There have been a considerable number of studies pertaining to risk management on many aspects of international construction projects, including joint venture risks (Bing et al 1999), bidding risks (Han and Diekmann 2001), political risks (Wang et al 2000a) and fi nancial risks (Wang et al 2000b). A few studies have focused on the safety and health risks in international construc-tion projects, including safety and health issues in developing countries (Gibb 2006), the infl uence of the different laws and regulations on safety and health in international construction (Koehn et al 1995; Mahalingam and Levitt 2007), language bar-riers and cultural issues (Dong and Platner 2004; Escobar 2006; Kartam et al 2000; Mahalingam and Levitt 2007; Trajkovski and Loosemore 2006). It is recognized that the safety and health risk situation may vary between regions in international con-struction markets, but few efforts have addressed safety and health risks for different international construction regions over the world.

This paper presents the results of a question-naire survey aimed at making an assessment on the safety and health risk factors for the projects in different international construction regions. This provides a better understanding on the safety and health risks in international construction projects.

This paper has been fi rst published in the pro-ceedings of the CIB W99 conference.


Survey DescriptionThe survey was based on 13 safety and health risk factors (Table 1) identifi ed through a literature review on construction risk management. The 13 risk factors were categorized into 4 groups, namely political & economical risks, social risks, environ-mental risks, and project risks. Because the safety and health risk situation may vary from region to region, the international construction market was divided into six geographic regions, namely:

- Region 1 (West & North Europe, Australia and North America)

- Region 2 (Latin America/Caribbean)- Region 3 (South Asia, Southeast Asia and

East Asia)- Region 4 (Central Asia, Russia and East

Europe)- Region 5 (Africa)- Region 6 (Middle East) The respondents were asked to assess the risk

occurrence level and the risk impact level of the 13 risk factors for the international construction regions with which they were most familiar. Simi-lar to previous studies (Zhu 2007, Sun et al 2008), the Likert scale ranging from 1 to 5 was assigned to both the risk occurrence level and the risk im-pact level (Table 2). The questionnaire survey was distributed via email to three groups of targeted respondents, consisting of 1) the top 225 inter-national contractors listed by ENR in 2008; 2) the academic research networks (e.g. CIB W99, CIOB, GloNIC); and 3) the work partners of Tsinghua University and the University of Florida. By the end of June 2009, 58 valid responses were received. The estimated response rate is about 10%.

The low response rates were insuffi cient to conduct viable statistical analysis for each region. As a result, the six regions were re-categorized as three regions according to the regional level of social and economic development and the construction safety and health performance. Regions 2, 3, 4 and 5 were re-categorized as the developing region because most countries located in these regions were developing countries; the Region 1 was re-categorized as a developed re-gion because all the countries in this region were developed countries with the best construction safety and health performance in the world; the Middle East was re-categorized as an independent region because of its distinct oil-motivated inter-national construction. The amounts of responses for above re-categorized three regions are shown in Figure 1.

Data Analysis and FindingsIn this research, the risk criticality index was used to prioritize the risk factors for the three international construction regions. The risk criti-cality index was intensively adopted by previous researchers to extract the critical risks from a risk checklist (Shen et al 2001; Fang et al 2004; Sun et al 2008; Zou and Zhang 2009). Formula (1) and (2) demonstrate how to calculate the risk criticality index according to the experts’ assessment on the risk occurrence and the risk impact.

The statistical analysis was conducted to inves-tigate the differences between the risk criticality indices of different risk factors. The major statisti-

Category Risk Factor Code

Political & Eco-nomical Risk

War WA

Civil Unrest CU

Terror Attack TA

Bad Economical Situation BES

Social Risk

Crime CR

Language Barrier LB

Cultural Difference and Confl ict CDC

Difference in Laws & Regulations DLR

Environmental Risk

Natural Disaster ND

Disease DI

Extreme Natural Condition ENC

Project RiskLack of Infrastructure Facilities LIF

Labor Risk LR

Table 1. Safety and health risks identifi ed for international construction

Table 2. Likert scale of risk occurrence and risk impact

Occurence Level

Value Assignment

Impact Level Value Assignment

Impossible 1 Almost None 1

Not Likely 2 Minor 2

Possible 3 Moderate 3

Very Possible 4 Severe 4

Almost Defi nite 5 Very Severe 5

Figure 1. The amounts of responses for the three regions

Developed Developing Region

Middle East

Num

ber

of R

espo

nses

5

10

15

20

25

30

11

28

19

n = number of people surveyed

Rij Ri

j

Rijj=1

n

nR =i

Ri

=P ij

P ij

I ij

I ij

= evaluation of risk occurrence level by the jth person surveyed

= evaluation of risk impact level resulting from the ith risk factor by the jth person surveyed

= criticality index of the ith risk factor.

= evaluation of the criticality of the ith risk factor by the jth person surveyed

22 www.pry.fi

cal methods employed were Paired-samples T test and Wilcoxon test (for comparison between two risk factors in a matched-pair set). In this analysis, the comparisons were all conducted between two risk factors in the matched-pair set. As suggested in the literature (Huang and Hinze 2006), if the means and medians revealed the same prioritiza-tions between the two compared risk factors, a one-tail test was conducted. Because this research was an exploratory study, a signifi cance level of 0.1 was established to detect the differences between the criticality index values of different risk factors. Based on the results of statistical analysis, the 13 risk factors were categorized into three groups (high risk, medium risk and low risk) in accordance with the criteria as follow:

1. As the literature suggested (Zhu 2007; Sun et al 2008), if the risk criticality index of the ith risk factor was no less than “P(3)×I(3)=9”, it should be grouped into

high risk category;2. For the ith risk factor with the criticality

index less than 9, if the statistical analysis showed that there was no statistically signifi cant difference between the two criticality index values of the ith risk factor and the last risk factor with the criticality index no less than 9, it should be grouped into medium risk category;

3. For the ith risk factor with the criticality index less than 9, if the statistical analysis suggested that there was a statistically signifi cant difference between two criti-cality index values of the ith risk factor and the last risk factor with the criticality index no less than 9, it should be grouped into low risk category;

4. If the parametric and non-parametric tests showed the opposite results, which meant one test showed there was a statistically

Risk Factor Mean Median Risk Category

Labor Risk 9.55 9 High

Extreme Natural Condition 9.36 9 High

Natural Disaster 9.00 9 High

Terror Attack 8.27 8 Medium

Language Barrier 8.18 8 Medium

Bad Economical Situation 8.09 9 Medium

Crime 7.91 6 Medium

Cultural Difference and Confl ict 7.91 9 Medium

Difference in Laws & Regulations 7.82 9 Medium

Disease 7.82 8 Medium

Lack of Infrastructure Facilities 6.27 6 Low

War 6.00 5 Low

Civil Unrest 6.00 8 Low



Lack of Infrastructure Facilities 11.54 9 High

Cultural Difference and Confl ict 10.96 10.5 High

Crime 10.93 11 High

Disease 9.86 9 High

Language Barrier 9.39 8.5 High

Difference in Laws & Regulations 9.39 9 High

Bad Economical Situation 9.11 9 High

Civil Unrest 8.50 9 Medium

Extreme Natural Condition 8.25 7.5 Medium

Natural Disaster 8.18 9 Medium

Terror Attack 7.79 8 Medium

War 7.71 8 Medium

Table 3. Risk criticality indices for the developed regions

Table 4. Risk criticality indices for the developing regions


signifi cant difference while the other test showed none, the risk factor would be grouped into the medium risk category according the conservative point of view of “never underestimate the risk”.

Developed RegionsRisk criticality indices of the 13 risk factors for the international construction projects in developed regions were then computed and the results were listed in Table 3. Three risk factors (namely labor risk, extreme natural condition and natural disas-ter) were in the high risk category with criticality indices greater than 9. The risk factor “natural disaster” is the last risk factor with its criticality index value more than 9. Based on the statistical comparison of the criticality indices between “natural disaster” and the risk factors with the criticality values less than 9, seven risk factors were in the medium risk category (e.g. terror at-tack, language barrier, bad economical situation, crime, cultural difference and confl ict, difference in laws & regulations and disease) and three risk factors were in the low risk category (e.g. lack of infrastructure facilities, war and civil unrest).

Developing RegionsThe risk criticality indices of the 13 risk factors for the international construction projects in de-veloping regions were computed (Table 4). Eight risk factors, e.g. labor risk, lack of infrastructure facilities, cultural difference and confl ict, crime, disease, language barrier, difference in laws & regulations and bad economical situation, had criticality indices greater than 9. The risk factor “bad economical situation” is the last risk factor with its criticality index value more than 9. The comparison of the criticality indices were con-ducted between the risk factor “bad economical situation” and the risk factors with the criticality values less than 9. The results indicate that all the 5 risk factors with less than 9 criticality values should be categorized as medium risks.

Middle EastThe risk criticality indices were computed for the 13 risk factors for the international construction projects in Middle East (Table 5). There are 6 risk factors with criticality indices greater than 9 so that they are grouped into the high risk category, including bad economical situation, extreme natu-ral condition, labor risk, language barrier, cultural difference and confl ict, and difference in laws & regulations. The last risk factor in this group is the risk factor “difference in laws & regulations”. The comparison of the criticality indices were conducted between the risk factor “difference in laws & regulations” and the risk factors with the criticality values less than 9. The statistical analysis shows that only 1 risk factor (lack of infrastruc-ture facilities) should be grouped as medium risk category and 6 risk factors would fall into the low risk category, including terror attack, war, natural disaster, disease, crime and civil unrest.

The Critical Risk Factors of the Three RegionsThe most important risk factors of concern are those with high criticality index values in all three international construction regions. These critical risk factors can serve as a means for developing an effective risk management strategy that should be implemented in an effi cient way. A score rang-ing from 1 to 3 was given to qualitatively explore the critical risk factors of the three regions. For a specifi c region, 1, 2, or 3 was assigned to a risk factor respectively if the risk factor was in a low, medium or high risk category (Table 6). The labor risk received an average score of 3, meaning that it was high in each of the three regions. Five other risk factors had average scores of 2.67, including bad economical situations, cultural differences and confl icts, differences in laws & regulations, extreme natural conditions and language barriers. These fi ve risk factors were categorized as high risk in 2 regions and medium risk in one region. Along with the labor risk factor, these should be regarded as the critical risk factors on safety and

Table 5. Risk criticality indices for the Middle East


Bad Economical Situation 12.95 12 High

Extreme Natural Condition 12.11 12 High


Language Barrier 9.74 9 High

Cultural Difference and Confl ict 9.53 9 High

Difference in Laws & Regulations 9.47 9 High

Lack of Infrastructure Facilities 8.53 9 Medium

Terror Attack 6.89 8 Low

War 6.84 6 Low

Natural Disaster 6.74 8 Low

Disease 6.68 6 Low

Crime 6.47 6 Low

Civil Unrest 5.74 5 Low

24 www.pry.fi

health issues in international construction proj-ects. In summary, the large number of high critical risk factors (6 of 13 or 46.15%) confi rms that the safety and health issues in international construc-tion projects are serious problems from a global point of view and warrant serious consideration to properly address them.

Summary and ConclusionsThe objective of this paper was to provide a bet-ter understanding of the safety and health risks in international construction projects. According to the risk criticality index and statistical analysis, four criteria were developed to categorize the risk factors as high risk, medium risk, and low risk. The detailed outcome of this paper is summarized as follow:

1. Of the three international construc-tion regions, the developing region has the greatest risk situation on safety and health issues in international construction projects. In the developing region, all the risk factors are in the high and medium risk categories. The high risk category for the developing region consists of 8 factors, namely labor risks, lack of infrastructure facilities, cultural differences and con-fl icts, crime, disease, language barriers, differences in laws & regulations, and bad economical situations.

2. Compared to the developing region, the developed region is less risky with 10 risk factors (76.92%) falling into the medium and low risk categories. There are three risk factors in the high risk category for the developed region, including labor risks, extreme natural conditions and natural disasters.

3. The Middle East has the distinct feature that differs from the developed and devel-oping regions. There are 6 high risk factors and 6 low risk factors, with 1 medium risk factor. The 6 high risk factors are bad economical situations, extreme natural conditions, labor risks, language barriers, cultural differences and confl icts, and dif-ferences in laws & regulations;

4. Six critical risk factors were identifi ed through further analysis, which were cat-egorized as high risk in at least 2 regions and were not marked as low risk in any regions. These critical risk factors comprise labor risks, bad economical situations, cul-tural differences and confl icts, differences in laws & regulations, extreme natural conditions and language barriers.

AcknowledgementThis research effort was a part of project 70772013 supported by the National Natural Science Foun-dation of China. The authors gratefully acknowl-edge the National Natural Science Foundation of China for providing funding for this research. Appreciation is also given to the Program for Key International S&T Cooperation Projects of Ministry of Science and Technology, China (Project No. 2003DFB00015). The support for questionnaire survey from Mr Kavin Berg, the global vice presi-dent of Bechtel Group, is also greatly appreciated. The work of this research was ever presented at the CIB conference in Melbourne Australia and appreciation is given to the CIB conference for providing opportunity to share the results of our research.

Table 6. The critical risk factors for all the three regions

Risk Code Developed RegionRisk Score

Developing RegionRisk Score

Middle EastRisk Score

Average Score

BES Medium 2 High 3 High 3 2.67

CDC Medium 2 High 3 High 3 2.67

CR Medium 2 High 3 Low 1 2.00

CU Low 1 Medium 2 Low 1 1.33

DI Medium 2 High 3 Low 1 2.00

DLR Medium 2 High 3 High 3 2.67

ENC High 3 Medium 2 High 3 2.67

LB Medium 2 High 3 High 3 2.67

LIF Low 1 High 3 Medium 2 2.00

LR High 3 High 3 High 3 3.00

ND High 3 Medium 2 Low 1 2.00

TA Medium 2 Medium 2 Low 1 1.67

WA Low 1 Medium 2 Low 1 1.33


ReferencesBing, L., Tiong, R.L.K., Fan, W.W., Chew, D.A. (1999)

“Risk management in international construction joint ventures.” Journal of Construction Engineer-ing and Management, 125(4), 277-284.

Dikmen, I. and Birgonul, M.T. (2006)“An analytic hierarchy process based model for risk and opportunity assessment of international construction projects.” Canadian Journal of Civil Engineering, 33(1), 58-68.

Dong, X.W., and Platner, J.W. (2004)“Occupational fatalities of Hispanic construction workers from 1992 to 2000.” American Journal of Industrial Medicine, 45, 45-54.

Escobar, J. (2006)“Managing Hispanic construction workers.” Mas-ter Thesis, the Univ. of Florida, Gainesville, FL, USA.

Fang, D.P., Li, M.E., Fong, P.S. and Shen, L.Y. (2004)“Risks in Chinese construction market-contractors’ perspective.” Journal of Construction Engineering and Management, 130(6), 853-861.

Gibb, A. (2006)“Construction health and safety in develop-ing countries.” European Construction Institute, Britain.

Han, S. H. and Diekmann, J. E. (2001)“Making a risk-based bid decision for overseas construction projects.” Construction Management and Economics, 19, 765-776.

Huang, X.Y. and Hinze, J. (2006)“Owner’s role in construction safety.” Journal of Construction Engineering and Management, 132(2), 164-173

Kartam, N.A., Flood, I. and Koushki, P. (2000)“Construction safety in Kuwait: issues, procedures, problems, and recommendations.” Safety Science, 36, 163-184.

Koehn, E., Kothari, R.K. and Pan, C.S. (1995)“Safety in developing countries: professional and bureaucratic problems.” Journal of Construction Engineering and Management, 121(3): 261-265.

Mahalingam, A. and Levitt, R.E. (2007)“Safety issues on global projects.” Journal of Con-struction Engineering and Management, 133(7), 506-516.

Reina, P. and Tulacz, G.J. (2008)“The top 225 international contractors.” Engineer-ing News Record, 261(5), 32-37.

Shen, L.Y., Wu, G.W.C. and Ng, C.S.K. (2001)“Risk assessment for construction joint ventures in China.” Journal of Construction Engineering and Management, 127(1), 76-81.

Sun, Y., Fang, D.P., Wang, S.Q., Dai, M.D., and Lv, X.Q. (2008). “Safety risk identifi cation and assessment for Beijing Olympics venues construction.” Journal of Management in Engineering, 24(1), 40-47.

Trajkovski, S. and Loosemore, M. (2006)“Safety implications of Low-English profi ciency among migrant construction site operatives.” International Journal of Project Management, 24, 446–452.

Wang, S.Q., Tiong, R.L.K., Ting, S.K. and Ashley, D. (2000a), “Evaluation and management of political risks in China's BOT projects.” Journal of Con-struction Engineering and Management, 126(3): 242-250.

Dongping Fang

Professor

Tsinghua University

Beijing, China

[email protected]

born in 1963, received his BSc and MSc degrees from Xi’an Jiaotong University in China. Furthermore he has received MEn degree from Iwate University and Ph.D from Kyushu University in Japan. His research interest includes structural safety, safety management and risk management.

Wang, S.Q., Tiong, R.L.K., Ting, S.K. and Ashley, D. (2000b). “Evaluation and management of foreign exchange and revenue risks in China's BOT proj-ects.” Construction Management and Economics, 18, 197-207.

Zou, P.X.W. and Zhang, G.M. (2009)“Comparative study on the perception of con-struction safety risks in China and Australia.” Journal of Construction Engineering and Manage-ment, 135(7), 620-627.

Zhu, D.F. (2007)“Risk Measurement for Construction Program: A Case Study on the Olympic Venue Construction.” Ph.D. Dissertation (in Chinese), Tsinghua Univ, Beijing, China.

26 www.pry.fi

Researchers and practitioners have drawn attention to the differences in thinking and acting between the project manag-ers and executives in project management. These differences - also called the gap in this paper - may negatively impact project results. However, knowledge about this gap is lacking in current research. This study aims to investigate this gap and quantifi es the different perceptions that project managers and executives have. The research consisted of a literature study followed by a survey among project managers and executives to gather the experiences, and to identify the size and the impact of this gap. The result made clear that the gap is caused by the differences in perspectives, in strategic insight and in understanding of each others behaviour. If the gap is present, it was perceived by both project managers and executives that it had a negative impact on the project results.

project managers and executives if both of them do not fully understand the other’s perception. In this research we investigate this gap.

Research on project management has extensively investigated the rela-tionships between project managers and their team, the project sponsors or the steering committee. Relatively few studies have focused on the relationship between project managers and execu-tives. Their relationship, differences in perceptions on project management, way of thinking and behaviour may impact not only the project success but also the overall organizational success.

In order to get a better understand-ing on the presence and perceptions of a gap between project managers and executives we formulated the following research questions: - To what extent project managers and

executives have different perceptions on the presence of a gap in project management?

- What are the causes for this gap according to project managers and executives?

- How do views between project man-agers and executives differ concern-ing the business case? The results of this study can be used

to improve the relationship between project managers and executives. They can improve their understanding of the views and perceptions they both have regarding project management.

The Gap Between

Project Managers and ExecutivesPeter Wijngaard, Atos ConsultingHerman Mooi, Delft University of Technology, The NetherlandsVictor Scholten, Delft University of Technology, The Netherlands

IntroductionIn today’s organizations the role of projects is evident. Many organiza-tions implement their innovations and re-organizations through projects. Projects are considered to have a strong contribution to the strategic goals of an organization, however, the benefi ts from a project for an organization may differ from one project compared to another project. This may be partly due to the different views that executives and proj-ect managers have on projects. On the one hand, executives tend to view a cer-tain project with respect to the strategic direction of the organization. On the other hand, project managers empha-size to focus on the success of a certain project. They are directly involved in the execution of the project and in that way they contribute to the overall strategic direction of the company.

Hence, both executives and project managers contribute to developing the strategy of the organization but their approach may differ. Executives have an overall view of the projects and make decisions based on high-level information of all the projects in the portfolio. Project managers focus on the performance of their project and try to give their project the best position in the organization. These different roles of executives and project managers can lead to different perceptions about the management of projects. Different perceptions can lead to a gap between

Recognizing the different perceptions towards project management may help to prevent the gap from occurring.

Literature ReviewTo identify and to bridge the gap be-tween project managers and executives, it is necessary to give a clear defi nition for this gap in this research. A differ-ence in thinking and acting between the project managers and executives may always be present. A large portion of this difference is most probably due to their different position in the organi-sation and their different roles in the organisation and in projects. But when this difference has a negative impact on results, we talk about a gap (Wijngaard et al., 2008):

A gap in project management is the distance between the project manager and the executive in the work process – as a result of the difference in perspective caused by their different roles – with a negative impact on project results and with that on the organization goals.

A gap between project managers and executives in project managementOpen culture and co-operation is ideal but in practice this does not always happen. Especially, in situations where executives delegate to the project man-ager the authority for taking decisions to execute the project. During the ex-


ecution of the project, the information that project managers and executives have can be a-symmetric. This might bring the executive in a state of insecu-rity. A reaction of the executive might be the introduction of many controls which factually decrease the decision-making authority of the project manager. In his turn, the project manager might inter-pret these controls as a lack of trust by which the gap is enlarged (Müller and Turner, 2005).

The research of Shenhar et al. (2001) clarified that project managers and executives are working according to a different timescale. The project manager leaves the project when it is fi nished but the executive is faced with the long-term results – both positive and negative – of this project. This differ-ence can result in a confl ict situation, and therefore enlarges the gap.

Impact on the project resultsVarious factors may infl uence the gap and have a positive or negative impact on the project results. An example of a positive impact is the fact that a certain tension is probably needed between the project manager and the executive to achieve an effi cient project execution. On the other hand, a negative example could be that if the project manager is unaware of the strategic relevance of a project. This could have been prevented by exchange of information about the strategic relevance from the executive to the project manager.

Interaction between the executive and project managerThe interaction between project man-agers and executives can be the source to the gap. We investigated three main areas of the interaction between project managers and executives.

Hierarchical differencesWith respect to the hierarchical dif-ferences it is important that there is mutual recognition and coaching. Both executive and project manager should value each others skills and personal-ity. If the executive judges the project manager in a positive way, this will result in rising support and confi dence towards the executive. This can improve the chance of success of the project. On the other hand, if the project manager has confi dence in the executive, he will have less reluctance to report bad news, and therefore give the executive a bet-ter possibility to steer. Based on this we expect that the gap can be narrowed.

CommunicationCommunication is an essential element for project success. Lack of communica-

tion can be an important factor infl u-encing the size of the gap. Shenhar et al. (2001) made clear that well-performing projects are characterized by close co-operation and less structure. Also the way of communicating is important; (only) written reports have a negative impact, personal communication a positive. Communication can both be formal (reports) or informal (day-to-day talks).

Specifi city of the business caseAs is well-known, the roles of the execu-tive and project manager are different per defi nition, which also explains the existence of the gap between them. The extent to which a project is translated into a clear business case can be deter-mined by how realistic project budget is, or its schedule. Discussion about this between the executive and the project manager will help decreasing the gap. As also the explicitness of the quality requirements and the possibilities to discuss issues related to the project. Therefore we expect that a more specifi c business case will diminish the existence of a gap in project management.

The Research ProjectTo get an actual view on the gap and to verify the different statements in literature, Atos Consulting and the Delft University of Technology initiated

Sector Project Managers

Executives

Consultancy 51% 30%

Financial Sector 15% 15%

Governmental auth. 15% 15%

Telecommunications 10% 12%

Industry 9% 28%

Size of Company Project Managers

Executives

> 250 employees 67% 70%

50-250 employees 15% 17%

< 50 employees 18% 13%

Years of Experience Project Managers

Executives

> 10 years 52% 15%

5-10 years 33% 30%

< 5 years 15% 40%

No experience 0% 15%

Table 1. Division respondents among sectors.

Table 2. Size of company.

Table 3. Experience in Project Management.

results of the questionnaire that were addressed to the project managers and the executives. We asked both project managers and executives the same ques-tions that allow for comparisons be-tween the two groups. Out of the 3032 questionnaires that were sent to the project managers we received 299 useful questionnaires in return, representing a response rate of about 10%. With re-spect to the response by the executives we received 56 useful questionnaires out of the 1134 that were sent, representing about 5% response rate. The distribution of the respondents among sectors, size of company, and experience are given in the following tables.

Following the descriptive data of our response, we analyzed the extent to which project managers and executives experienced a gap and the perceptions they have with respect to the causes of the gap. We furthermore focused on specific elements as hierarchical differences, the impact of skills and knowledge, the strategic alignment and the role of the business case.

Experiencing the gapIn Figure 1 we present the different views that project managers and executives have on the gap. The majority of project managers (66%) often experience that compared to their executives they have different views with respect to project

a practice-oriented research study. The practical approach allows to get a more realistic understanding of the presence of a gap between executives and project managers and moreover can help extracting managerial.

The research consisted of a literature research, a quantita-tive and qualitative analysis. For the quantitative analysis, a questionnaire was sent to 3032 project managers and 1134 executives. A regression analysis was applied to extract conclusions about which vari-ables infl uence the creation of problems within a project, and which can therefore explain the distance between project managers and executives.

The qualitative analysis con-sisted of an in-depth study of a few projects, and several interviews. Both executives as project managers were inter-viewed to get the two points of view regarding projects and possible distances.

Results of the ResearchIn this section we present the

28 www.pry.fi

indicate that they know the strategy of the company. Similarly a large number of executives (88.7%) agree and state that project managers are aware of the strategic goals of the organization and the role of project management to achieve the strategic goals. We also ran correlation analysis between strategic alignment and the perception of a gap for the project managers. We found that higher levels of strategic align-ment was associated with lower levels of gap experience (r= -0.161; p <0.05). The correlation was not signifi cant for the executives.

Perceived realistic budget, time and qualityWith respect to the different views on the expectations we analyzed the project criteria that were set by execu-tives for the project. It can be seen in Figure 4 that the expectations on the budgets, planning and quality level were perceived as quite realistic and on the same level by project managers and ex-ecutives. Time planning was perceived as the least realistic by both parties (68% and 65% only agreed to that). Also, the perceived necessity of and expectations met on the amount of discussions on project issues were (comparably) high between project managers and execu-tives. The agreement on these items is at least striking: from sounds heard in practice a much larger gap on these items was expected.

management. This experience of a gap is also perceived by approximately 62% of the executives. When it comes to the consequence of the gap they both have a strong feeling that it negatively affects the outcome of the project. About 90% of the project managers think this has a negative impact and about 82% of the executives agree on that. With respect to bridging the gap we found that approximately three-quarter of both the project managers (74.1%) and the executives (74.3%) claim a necessity to mitigate the gap.

Hierarchical differences We analyzed the role of hierarchical dif-ferences as causes to the gap, see Figure 2. This hierarchical difference between project managers and executives can manifest as political, managerial or organizational, or directly caused by executives or by lack of executive in-volvement. More than half of the project managers (55.1%) think that political aspects have an infl uence on the gap. Almost a similar amount of executives (47.1%) agree to that observation and say that political issues indeed affect the gap in project management. For the management and organization of project we found that only about 37% of the project managers and 27% of the executives indicate that it infl u-ences the gap. Even a smaller amount of project managers (27.9%) suggests that executives are responsible for the

Figure 1. Perceived different views on the gap by project managers and executives.

Figure 2. Perceived causes of the gap.

Figure 3. Alignment of executives and project managers.

Figure 4. Perceived realistic budget, time, quality and interaction.

gap. It is remarkable that, compared to project managers, about 35% of the executives think that they are respon-sible for the gap. Next we identifi ed the role of executive involvement as a cause to the gap. The results in Figure 2 show that more than two-third of the project managers (68.6%) agree to the statement that gap could be smaller if executives pay more attention to project management. Executives agree even more to the statement and almost three-quarter (73.5%) of the executives signify that their attention to project management could decrease the gap on project management.

Communication and alignmentIn Figure 3 we present the findings from the different views that executives and project managers have on project managers. In the fi rst place this differ-ent view can manifest in disagreement between project managers and ex-ecutives on the management approach that is adopted in a certain project. Compared to project managers (53.8%) a slightly larger amount of executives (58.8%) indicate that they disagree with project managers on the management approach. Concerning the acceptance of criticism, a large amount of project managers (even 98%) think that they are open to it, however, executives thinks that project managers are less open to criticism (though still about 85%). Quite a lot of project managers (94.0%)


ConclusionsAlthough the results of the research do not give a completely new understand-ing and insight of the gap, it certainly contributes to our knowledge about the gap in project management and pro-vides a scientifi c base for this phenom-enon. Overall, the response from both executives and project managers were relatively comparable, which in its own right is already a remarkable result. The major fi ndings from our literature search and survey among project managers and executives reveals that:

- There is a difference in be-haviour between the project manager and the executive, and this causes a gap.

- The gap was shown to have a perceived impact on the project results (signifi cant for project managers).

- Understanding for each others behaviour and actions reduces the gap.

- Strategic understanding by the project managers improves the performance.

- Informal communication reduces the gap, as opposed to formal communication (reports).

Most striking survey results are:- The perceived cause of the gap

was according to most respon-dents (60-75%), not the organi-sation nor the executives. Ap-proximately half of the respon-dents blamed internal politics as a cause of the existence of the gap.

- On the other hand, a small majority of the respondents (68-74%) had the opinion that the gap could be decreased by an increased attention of the executives for project manage-ment.

- There was a remarkable align-ment in answering of both groups (project managers and executives).

By giving insights in the source of the existence of the gap, the fi ndings of this research can contribute to giv-ing handles to project managers and executives to optimize the use of project management in an organisation by bet-ter project results might be obtained.

ReferencesBergeron, Francois, Raymond, Louis and

Rivard, Suzanne (2003) ‘Ideal patterns of strategic alignment and business performance’, Information & Manage-ment, vol. 41, pp. 1003-1020.

Cleland, David I. (1994) Project manage-ment: strategic design and implemen-tation, 2nd edition, McGraw-Hill.

Cooke-Davies, Terence J. (2005) ‘The ex-ecutive sponsor - The hinge upon which organizational project maturity turns’, PMI Global Congress Proceedings.

Crawford, Lynn (2005) ‘Senior manage-ment perceptions of project manage-ment competence’, International Journal of Project Management, vol. 23, pp. 7-16.

Dinsmore, Paul C. (1999) Winning in busi-ness with enterprise project manage-ment, Amacom.

Englund, Randall L. and Graham, Robert J. (1999) ‘From experience: linking projects to strategy’, Journal of Product Innovation Management, vol. 16.

Johns, Thomas G. (1998) ‘On creating organizational support for the project management method’, International Journal of Project Management, vol. 17, pp. 47-53.

Dr. Peter Wijngaard studied Forestry at the Wagenin-gen University, the Netherlands, and did his PhD in Op-erations Research at the same university. After that he worked mainly in IT- and project management func-tions at the Corus Steelplant IJmuiden and Agricultural Research Institute. Since 13 years he is working as project and program manager for Atos Origin and - the latter 6 years - for Atos Consulting and has broad experience in (inter)national projects in industry. Peter has an IPMA-B certifi cation.

DgewtRpteh

Dr. Victor Scholten is Assistant Professor at the Delft University of Technology, the Netherlands, where he joined in 2007 the research group on Technology, Strategy and Entrepreneurship. His current research focuses on high-technology-based start-ups in aca-demic and corporate environments. His is particularly interested in high technology based entrepreneurship, new business projects and business networks. In 2006 he completed his PhD research on the early growth of Dutch academic spin-offs at the Wageningen Univer-sity, the Netherlands.

Dr. Herman Mooi studied and did his PhD in Mechani-cal Engineering at the University of Twente, The Neth-erlands. After that he worked for 10 years as project and line manager at TNO, a Dutch research institute, in the fi eld of Crash Safety. Since 3 years Herman is Director of the Delft Centre for Project Management and associate professor Project Management at the Technical Univeristy of Delft, The Netherlands.

Kerzner, Harold (2006) Project manage-ment best practices: achieving global excellence, John Wiley & Sons, Inc.

Kliem, Ralph L. and Ludin, Irwin S. (1992) The people side of project management, Gower Publishing.

Kloppenborg, Timothy J., Stubblebine, Pat-rick C. and Tesch, Debbie (2007) ‘Project manager vs. executive perceptions of sponsor behaviors’, Management Re-search News, vol. 30, pp. 803-815.

Müller, Ralf and Turner, J. Rodney (2005) ‘The impact of principal-agent relation-ship and contract type on communica-tion between project owner and man-ager’, International Journal of Project Management, vol. 23, pp. 398-403.

Morris, P.W.G., Patel, M.B. and Wearne, S.H. (2000) ‘Research into revising the APM project management body of knowl-edge’, International Journal of Project Management, vol. 18, pp. 155-164.

Shenhar, A.J., Dvir, D. and Levy, O. (2001) ‘Project success: a multidimensional strategic concept’, Long Range Plan-ning, vol. 34, pp. 699-725.

Wijngaard, P.J.M., Mooi, H. and Scholten, V. (2008) De kloof, Atos Consulting Trends Institute.


30 www.pry.fi

Managing stakeholders in large engineering project (LEP) is signifi cant because of the great infl uence to society. The paper analyses the social impact and interaction of LEP choosing construction project department (PD) and peripheral community (PC) as two study objects. The game theory model is used for process simulation of harmonious together-development (HTD) during construction stage. By the analysis of the dilemma may be occurred in the together-development process, the paper advises awards setting and guarantee funding system which improves earnings matrix for the harmonious together-development activity. Case study of Shanghai 2010 Expo China is applied including the evaluation mechanism for the “outstanding” project department and peripheral community.

of harmonious together-development (HTD) which is also the vivid refl ection of the theme of Shanghai 2010 Expo“better city, better life”during the preparation of the Expo. In the Expo project con-struction process, PD and PC may plays games on many confl icting problems for the self-interest, especially in the begin-ning, the two sides may encounter the challenge of “prisoner's dilemma”.

The “PRISONER’S DILEMMA” in the HTD ProcessWe hypothesize the game of HTD during the construction process between PD and PC can be analyzed by complete information source static game model.

The prerequisite for complete infor-mation source static game model1. PD and PC in the game are supposed

to be rational. 2. PD and PC in game each has suffi cient

information for itself and the other.3. In the above analysis, we don’t con-

sider other restriction in the initial stage.

The static game model for HTDThe HTD needs two sides’ action. On the one hand, PD must take measures to decrease bad effect on nearby residents and solve their problems actively, on the other hand, PC should put necessary human resource, material, and money into HTD activities including comforting migrant workers, giving medical service, books, movies and so on. PD and PC are keeping on bargaining for insurance of self-interest when interacting together, the process is suitable for static game model analysis.1. Game participants: i, making i equals

to 1or 2, 1 means PD, 2 means PC.2. Strategy set of both sides: Si,

i=(1,2).Treasures for decreasing bad effect

from construction to residents and providing convenience for them taken by PD actually are to maintain physi-


Harmonious Together-development Between the Project Department and Peripheral Community

Ma Liang, Le Yun, Li Yong kuiSchool of Economics and Management, Tongji University, Shanghai, ChinaBureau of Shanghai World Expo Coordination, Shanghai, China

Managing Stakeholders in Large Engineering Project:

IntroductionIn recent years, engineering project becomes more and more complicated and large-scale, the interaction to ex-ternal environment becomes stronger than before, and interaction between the stakeholders especially during con-struction stage is increasingly promi-nent. Therefore, one key factor to large engineering project (LEP) success is to make the stakeholders collaborate well with each other for effective project progress.

In PMBOK (2000), PMI considers stakeholders consist of people and organization which participate project actively or their interest will get positive or negative impact during the project implementation stage. Wang Yingluo (2008) considers that contemporary en-gineering concept refl ects new tendency of the cross fusion and coordinate con-struction between engineering science & technology and society, economic, culture and ecology, he proposes the concept of engineering society and theory of engineering philosophy. BENT B.(2003)considers LEP has the risk of society, economic and environment, so it should be mainly analyzed by more macro perspective.

Practically LEP is always concerning

many stakeholders during the construc-tion stage which is a gambling process by different interests groups. Not only LEP itself has a more and more infl uence on the peripheral community (PC), but also the people in PC have become a more important stakeholder to project construction, and the methods for this in the study and practice area are at-tracting more and more attention, which has become an important issue for LEP manager to deal with.

As a LEP, the construction project of Shanghai 2010 Expo China covers two main components of municipal & auxil-iary projects and pavilion facilities with 2 million square meters both in Pudong and Puxi area of Shanghai core city. They are sixteen styles of municipal & auxil-iary projects, and about forty new-built & rebuilt pavilions, and total investment including large municipal & supporting service projects and self-built pavilions is about 23 billion RMB yuan. Therefore, the project construction of Expo 2010 has a very large scale, and it concerns many construction PDs, and also many PCs nearby.

For the successful achievement of the project’s goal, it is necessary to maintain good relationship between the two stakeholders and realize a good state


cal and mental health of them. So we can do analysis easily by changing all treasures to paying health subsidies to fi t the game model’s need. From this way, there are two choices for PD, one is to take treasures actively which can be interpreted as paying timely health subsidies, the other take no treasures or take treasures inactively which can be interpreted as paying deferred health subsidies. Then the strategy set is S1= (timely payment, deferred payment). They are two kinds of strategies for PC, one is to do HTD actively, assuring quality and effect. The other one is to do HTD inactively. From the standpoint of PC, attending HTD actively, carrying out activities and putting into resource will raise cost, however, attending HTD inactively, decreasing human resource, material, and money will bring down corresponding cost. Then the strategy set is S2=(active attending, inactive attending).3. The earnings of two sides

The earnings of two sides can be ex-pressed as earnings matrix by table 1.

1. The project can obscure the harmony during construction stage or not is mainly decided by active extent of HTD activities and support extent by PC residents. If positive, the project can be recognized as harmonious one named H, otherwise, it will be recognized as disharmonious one named DH.

2. B1 means PD earnings by using money for due health subsidies to invest for other use, B2 means interest of health subsidies for PC. It is can be inter-preted like this: B1 means earnings by paying health subsidies delayed by PD, and B2 means earnings for PC by health subsidies.

3. C means cost saved under inactive attending HTD condition by PC, in-cluding expenses on human resource, money and material for kinds of activities and service. It is sure that there would be much adverse infer-ence for the normal carrying out of HTD and the goal achievement for harmonious project if PC has saved C, just like taking a indifferent attitude, doing HTD inactively and so on.

The Nash equilibrium of the game model for HTDIt is can be seen from earnings matrix that:

If there is no other restriction, PD will choose deferred payment as optimal strategy in no matter that PC do HTD actively or not. PC will choose inactive attending HTD strategy in the case of no other restriction in no matter that PD do timely payment or deferred payment.

So the Nash equilibrium of the game model is: (deferred payment, inactive attending).

The above game equilibrium is ana-lyzed from game earnings matrix. If PD doesn’t pay the health subsidies in good time, the PC surely will not do the HTD actively, and they will delay or cancel many kinds of HTD activities deliberately and force the PD to pay the health sub-sidies. If the PD pays the health subsidies in good time, the PC will control the devotion of human resource, material, and money to a certain extent for the best choice, and this will decrease many kinds of cost.

In the Nash equilibrium for this model, it is absolutely rational choice for each side, but fi nally the choices have brought on the worst result for the collectivity, that means PD and PC both have gone into “prisoner's dilemma”.

Going Out of the “PRISONER’S DILEMMA” in HTD During the Construction StageThere are no good for both PD and PC if they went into prisoner's dilemma. The main reason for occurrence of this is both sides not cooperating. The solution treasures are including non-mandatory positive incentive like awards setting and mandatory negative stimulus like

guarantee funding, these two treasures are as follows:1. Positive incentive treasures——awards

setting. the third-party awards the timely payment PD the title of “out-standing PD”, and award the active attending PC the title of “outstand-ing PC” ,and these titles can only be occurred when PD and PC both do good in HTD. These awards include money and reputation, which can bring about positive values for PD when bidding in the later and PC’s future development.

2. Negative stimulus treasures——guar-antee funding. Before the project beginning and HTD activities, PD and PC must have some guarantee fund, or security of the issue by relative fi nancial institution. PD and PC both need enough guarantee fund to force them to do HTD, including timely payment for PD and active attend-ing for PC. In a word, the security of performance bond for PD is assurance for payment of health subsidies, and security of performance bond for PC is assurance for active HTD activi-ties. If contract breach has occurred, the credit level of PD and PC will be decreased and they will be punished by severe sanctions in the following awards and undertaking follow-up project process.

Table1. Earnings matrix of both sides in the complete information source static game model

Active attendingPD PC

Timely payment

Deferred payment

Inactive attending

H HTD project;DH Disharmonious together-development project;M Health subsidies;B1 PD earnings by using health subsidies money to invest for other usage; B2 Interest of health subsidies for PC (the interest corresponds to the additional

earnings by the effective treasures);C Cost saved under inactive attending condition by PC.

H, M+B1 DH, M+B2+C

H+B1, M-B2 DH+B1, M-B2+C

Table 2. The earnings matrix after the adding of incentive awards and guarantee fund

Active attendingPD PC

Timely payment

Deferred payment

Inactive attending

A1 Incentive awards of outstanding PD;A2 Incentive awards of outstanding PC;I1 HTD guarantee fund of PD;I2 HTD guarantee fund of PC.

H+A1, M+B2+A2 UH, M+B2+C-I2

H+B1-I1, M-B2 UH+B1-I1, M-B2+C-I2

32 www.pry.fi

Thus, after adding and considering of HTD incentive awards and guarantee fund, the game matrix earnings will be changed into the following form of table 2.

It is can be seen from earnings matrix that PD earnings by using the money for due health subsidies to invest for other usage B1 minus the guarantee fund I1 is negative when we keep HTD guarantee fund on a reasonable level, and the incentive awards may be lost, in this case the action of deferred payment by PD will be more a loss than gain. By the same token, HTD guarantee fund of PC adjusts the interest for themselves , which makes earnings of active HTD become larger than the inactive HTD. In the above earnings case, the equilibrium of the game will be: (timely payment, active attending).

Case Study: HTD between PD and PC in the Construction Stage of Shanghai 2010 EXPO China

PDs and PCs in Shanghai 2010 Expo ChinaThere are many contractors in Expo site, each of these contractors has several PDs in the site of Expo. And there are also several PCs near site. Totally, there are 27 PDs consists of 1.5 million work-ers and 6 PCs consists of more than 3 million residents. Because of strong in-terference by project construction to the environment nearby, especially much earthwork in foundation construction stage, the residents are angry about dust pollution, even some actions to prevent construction has been occurred by some PC residents, which is not good for social stability.

We can see the diagrammatic of the Shanghai 2010 Expo site and PCs with different colors in Figure 1.

Treasures taken in the process of HTDDuring the implementation of HTD process, the general Shanghai Expo organizer use evaluation mechanism to select “outstanding PD” and “outstand-ing PC”, which connects the positive in-centive and negative stimulus together to let the two sides see the prospect of cooperation and do HTD. The “outstand-ing PD” has three indexes: project objec-tive achievement, security and stability, civilization in construction, and the “outstanding PC” also has three indexes: amity and cordiality, publicity and edu-cation, service to Expo, each index has 3 sub-indexes. The evaluation exports are from there sides: the general Shanghai Expo organizer, PD and PC. PD and PC that gain a high score will get award of “outstanding PD” and “outstanding PC” which will play a active role for their later development both in money and reputation, and some PD and PC if gaining a lower score would be punished mainly by detaining guarantee fund.

The effectiveness of HTDUp to today, Expo practice has proved that under this kind of mechanism, PDs and PCs provide active service and mutual understanding during Expo construction, they have gone out the “prisoner's dilemma” in HTD during the Expo construction stage hands in hands. Take PD of Expo VIP village hotel and PC of South Wharf Street which both have been selected as one pairs of “outstand-ing PD” and “outstanding PC” in 2008 as an example, the two separated by a wall, so the infl uence of construction to PC residents’ daily life in the beginning is serious, and PD sometime confronted disturbance from residents. To realize win-win result, the two made agree-ment for HTD, did many activities for increase mutual understanding which

gradually built deep feelings. For ex-ample, PD invite PC residents always to visit construction site in Expo, and the PC provided medical service for PD workers in the weekend, such kind of actions do direct good to people in each side, and project construction could go on smoothly. Some activities organized by the two to enhance cooperation are showed in Figure 2 and 3.

DiscussionThe above study is just the consideration under onetime game model between PD and PC, and both stakeholders just focus on the best result in the onetime of the process game. If the game model becomes many-time type, both sides will consider more than short-time earnings, and the long-term earnings will be the important focus point. After the accomplishment of onetime game, the action, payment and earnings of each stakeholder will be understood by the other side, and this will become the reference to the next round game.

If the long-term earnings become more important, it will become decisive factor for the game decision, and in the following game, the action of the last time of one side will become reference in this game round. The side will be trusted in the following if it is honest and trustworthy and do HTD activities actively in the last time game round, and this will make it some receive allowances in the following; But if there was some action by one side of breach of HTD in the previous game round, it will be punished in the following. During this kind of rules, no matter PD or PC will always stick to credit strictly and choose wiser decision for future development to build harmonious Expo construction project together instead of considering the immediate interests.

ConclusionsThe LEPs are facing complex and changeable construction environ-ment, long-term, close relevance and strong interaction between stakehold-ers, which have signifi cant impact on society, environment, and budget, and these have been concerned by the public, and unsuitable treatment may bring about serious society problem. LEP like Expo has been obviously bear-ing the construction of harmonious society in current environment. Under great background of market economy, many sides having relationship with construction containing and inferring with each other should be analyzed as stakeholders, and it is necessary to convert contradictions and optimize solution plans to the problems using the game theory. The general Shanghai Figure 1. The construction site and PCs of Shanghai 2010 Expo China.


Expo organizer converts the “prisoner's dilemma” which may be occurred into harmonious development and win-win situation for PD and PC using awards setting and guarantee funding system. This exploration may vividly be one of the exhibits for Shanghai 2010 Expo China, and it’s one of the methods to managing the stakeholders in LEP which may be used for reference in other proj-ects or social events relating to different stakeholders.

ReferencesPMI Standards Committee (2000)

A guide to the project management body of knowledge, Project Manage-ment institute.

Bureau of Shanghai World Expo Coordina-tion, 2006, Summary of Registration Report for Shanghai 2010 Expo China, http://www.expo2010.gov.cn/zlzx/zcbg/new_zcbgzy.htm.

Wang Yingluo (2008)Contemporary Engineering Values and Engineering Education, Engineering Sci-ences, 10 (3),pp17-20.

BENT B. FLYVBJERG et al (2003)Megaprojects and Risk: An Anatomy of Ambition ,Cambridge: Cambridge University Press, pp1–5.

Xie Shiyu (2002)Economic game theory, Shanghai: Fudan University Press.

She Zhipeng, Ma Liang, Xu Huixuan (2008)Study on the Harmonious Together-de-velopment Manner Between the Build-ing Construction of World Expo 2010 Shanghai China and the Peripheral Community, One of granted project of the Harmonious Society Theory Study of Tongji University,pp88-97.

HE Qinghua, MA Liang, LU Yujie (2008)Study On The Construction Programme Management Of World Expo 2010 Shanghai China,iccrem2008, pp29-37.

Ma Liang

PHD candidate of Tongji University of China.

Assistant supervisor of The Con-struction Headquarters Offi ce of Shanghai World EXPO.

Expo 2010 construction manage-ment engineer in Bureau of Shang-hai World Expo Coordination.

Figure 2. Visiting the Expo site by the invitation of PD for PC residents.

Figure 3. Medical service provided by PC for PD workers.

Overall project management team for EXPO2010 construction of Tongji University (2007), The construction pro-gramme management plan of Shanghai 2010 Expo China.

Overall project management team for EXPO2010 construction of Tongji Uni-versity (2008), The project management administrative working handbook of Shanghai 2010 Expo China.

Guo Wen (2007)Establishing Engineering Ethics and Building the Harmonious Society, Journal of China University of Petro-leum (Edition of Social Sciences), 23(4), pp26–29.

Le YunHead of the Department of Economics and Management in Tongji University of China; Professor; Doctoral Advisor.

Leader of General Project Man-agement Team to Expo construc-tion Shanghai China 2010.

Li YongkuiLecturer of the Department of Economics and Management in Tongji University of China.

Vice Leader of General Project Management Team to Expo con-struction Shanghai China 2010.

34 www.pry.fi

Virtual teams are a part of modern globalized business environment. They have their own unique problems for managers when members meet rarely and communicate through computer mediated forums, across space, time, and many different cultures. This paper addresses communication and trust in virtual teams. A survey was done amongst the members of the social networking site of the Association for Information and Image Management (AIIM). Approximately 300 people from over 50 different countries participated in this survey.

Problems regarding trust in virtual teams are typically associated with the beginning of the project. Groups that meet face to face have fewer incidents where lack of trust becomes a problem. No cor-relation was found between the type of media used and lack of trust. Intense communication with different types of media seems to lead to reduced trust. A prediction model for risk factors in virtual teams was designed, based on the fi ndings.

IntroductionDuring the last 20 years, a tremendous technical evolution has taken place with increased access to high-speed internet connections, internet connected mobile phones and visual commu-nication through the internet. Communication technology has never developed as quickly and organizations have had to adjust themselves to this rapid development, amongst other means by using dispersed teams.. Dispersed teams they offer various opportunities but they are also fraught with danger. These teams are often put together without the members knowing each other. They need to break through a communication barrier often created by the fact that the team members rarely or never meet. They are often manned with individuals from many different countries and therefore with very varied cultural backgrounds, which can create considerable problems.

The aim of this research was on one hand to look into different communication media and what effect they have on the building of trust and cooperation within the project, and on the other hand to investigate how it is possible to evaluate possible problems distributed project teams may encounter, before the work starts. The idea is that by evaluating the risk beforehand, project manag-ers can systematically reduce it.

Literature ReviewDistributed project teamsIn the IPMA competence baseline ICB 3.0 (2006), a team is defi ned as a "group of people who work together to realize specific objectives." Many defi nitions exist for distributed teams. Most of these defi ne distributed teams as teams where the bulk of the communication is done with the aid of information technology. Lipnak and Stamps (1997) defi ne distributed teams as groups which work across space, time and organizations and

where communication is through information technology. Some defi ne distributed teams as those who never meet whilst others defi ne them as teams which meet very rarely (Maznevski and Chudoba, 2000). Some scholars also differentiate between globally distributed teams and those who work within the borders of one country. Typical problems in globally distributed teams may be different than in teams who work within the same borders; language problems, different cultural backgrounds and large distances (Jarvenpaa og Leidner, 1999, Binder, 2007).

The development of information technology and organizations’ needs for increased competi-tiveness has resulted in the use of distributed teams in various types of projects such as product development, design and software development, engineering and construction (Duarte and Snyder, 2001). Globalization is another reason for orga-nizations to use distributed teams (Cascio, 2000). Organizations constantly have to shorten product development time to stay competitive and one way to achieve this is by using distributed teams (Edwards and Wilson, 2004). Distributed teams can create an environment where the knowledge can be reached where it is needed, and it is possible to acquire knowledge which is not available within the organization or in proximity to the project execution. These individuals need not be a part of the organization (Lau, 2004, Edwards and Wilson, 2004). Working time can also be increased by moving a project from one area to another, thus gaining around-the-clock work on the project (Edwards og Wilson, 2004).

Niedeman and Beise (1999) categorize distrib-uted teams by their communication methods. Teams who rarely meet and have little electronic communication, are called inactive. Teams who meet regularly, but do not use much electronic communication, are called traditional. Jarvenpaa

Helgi Thor IngasonTomas Hafl idasonHaukur Ingi JonassonSchool of Engineering and Natural SciencesUniversity of IcelandIceland

Communication and Trust


in Distributed Project Teams


and Leidner (1999) categorized teams according to three variables; how long the team worked together, what sort of communication was used and whether the team members worked in prox-imity to one another - or dispersed. Kimble, Li and Barlow (2000) proposed another model to categorize distributed teams. Their model also categorizes teams according to three variables; whether all the team members work within the same time zone, whether they work in the same location or in several locations, and whether they all work for the same organizations or for various organizations.

Binder (2007) uses fi ve variables to compare teams - the number of locations, the number of organizations, the number of nationalities (cul-tures), the number of languages used in the teams and the differences in time zones. This information is then set up in a pentagram, yielding a graphical representation. Of the various ways to compare distributed teams, Binder’s model addresses the largest number of variables. On the other hand, it does not address communication media nor how long the teams work together. None of these models takes into account the team size, which can have considerable infl uence on the team com-munication (Stables, Wong and Cameron, 2003, Leenders, van Engelen and Kratzer, 2003).

Communication in distributed project teamsSuccessful distributed teams have to be ready to use diverse ways of real-time (synchronous) and delayed-time (asynchronous) communication through technology such as e-mail, chat rooms, data meetings and other technical communication modes, to achieve success (Pauleen and Corbitt, 2003). Distributed teams are more prone to com-munication trouble, compared to traditional teams, mostly due to the lack of unspoken com-munication. Teams that meet face to face build up stronger relationships than those who do not meet. This is particularly relevant when it comes to project kick-offs (Bélanger and Watson-Manheim, 2006, Hightower and Sayeed, 1995, Rocco, 1998, Behrend, Whelan and Thompson, 2008). Initial team building is more important in distributed teams than in traditional ones (Staggers, Garcia and Nagelhout, 2008). Handy (1995) stated that teams who do not meet face to face could not establish the necessary trust.

In project management, the Tuckman model (Tuckman, 1965 and Tuckman, Jensen, 1977) on team development is often quoted. Tuckman di-vides the team life cycle into four stages; forming, storming, norming, performing and adjourning. Johnson and his team (2002) found out that the Tuckman model described distributed teams quite well, but only in regard to three of the stages; forming, norming and performing.

Chidambaram (1996) showed that if distributed teams were given enough time to develop team relationships and to adapt to the communication method, they would communicate just as well as traditional teams. On the other hand it has been stated that distributed teams exchange informa-tion in a less effective manner than traditional teams, even if distributed teams communicate quantifi ably more than traditional ones (Galegher

and Kraut, 1994, Hightower and Sayeed, 1995, Handy, 1995).

Trust in distributed project teamsMayer, Davis and Schoorman (1995) defi ne trust in terms of the faith and belief in another indi-vidual or group that the relevant party will fulfi ll expectations in the future. Trust can depend on situations and have its limitations. In some rela-tionships, trust is only dependent on simple basic variables but as relationships mature and members get to know each other, individuals learn to trust or distrust the team members according to their characteristics (Lewicki, McAllister and Bie, 1998). According to this, it is possible both to trust and distrust the same individual.

Trust develops with understanding and knowl-edge of people who communicate, including real experiences with the people in question, and common opinions and values which unite a team (Blois, 1999, Iacono and Weisband, 1997). Building trust is not an easy task. It is probably the most complicated issue in forming a successful and ef-fective team (Zaheer, McEvily and Perrone, 1998). Trust and relationships between group members increases creativity and critical thinking, as well as creating a more positive environment (Reina and Reina,1999). Kramer (1999) points out that trust encourages members to devote time to projects, keep their focus on joint objectives, help each other, and work harder.

Communication and trust are connected. Most scholars believe that individuals need to meet in person (Handy, 1995) but others have point out that after a long time, trust in distributed teams becomes comparable to when individuals have direct communication (Chidambaram, 1996). Building trust takes time, but research has also shown that people start to trust those whom they meet regularly in person sooner than in an envi-ronment where communication is mainly through electronic methods. If language diffi culties and diverse backgrounds are added, it becomes even more diffi cult (Krebs, Hobman and Bordia, 2006, Duarte and Snyder, 2001). It has been pointed out that distributed teams which use many methods of social communication, manage to build more trust and achieve more success (Jarvenpaa og Leidner, 1999).

Creating solid relationships can be diffi cult when direct communication is not used (Stein-fi eld, 2002). Trough computer communication, the communication elements which individuals use to transfer trust, warmth, empathy and other affections can be lost, according to Duarte and Snyder (2001). Handy (1995) thinks that trust requires physical touch and is therefore diffi cult to establish through computers. However, others believe that it simply takes longer time for trust to develop but that in the end, comparable trust will be achieved to that in traditional teams (Bos, et al, 2002, Krebs, Hobman and Bordia, 2006, Greenberg, Greenberg and Antonucci, 2007). Platt (1999) points out that one way to build trust in distributed teams is to create a discussion arena in the beginning, where members can share their expectations of each other and discuss how they will work together.

36 www.pry.fi

MethodologyA survey questionnaire was sent to a large group of individuals around the world, to gather infor-mation on participants’ experience from working on multinational, distributed projects. The survey questionnaire was divided into fi ve parts. 1. Background information on participants was

gathered, such as age, education, gender, nationality and experience in multinational projects.

2. Information was gathered on the last project the participant had worked in, for example on role division in the team, the team’s size, project time, team language, number of organizations involved in the project, number of locations and the largest time zone difference between localities.

3. The frequency of communication was checked, what communication media was used and how regularly the different communication methods were used.

4. A list was compiled of the most likely problems to emerge in distributed teams and 14 different problems were chosen as a basis for questions. Furthermore, the project success was evalu-ated.

5. Participants’ general comments were solicited. This part had the role of giving participants the chance to express themselves on problems which had arisen, as well as looking for impor-tant information on how the project started and how the initial communication was handled.The research was made amongst the members

of the AIIM network (Association for Information and Image Management). The association is an international society, one of whose functions is to certify individuals in handling electronic infor-mation and document control. There were 1008 members on the social networking site when the survey was carried out. The questionnaires were sent out in the latter half of August 2008. Two weeks’ response time was given and at the end of that time, 290 answers had been collected, thereof 272 valid ones. Response was therefore 29% and valid answers 27%.

ResultsBackground informationOf 272 participants, 190 were male and 82 female. The age distribution was from 21 years to 61 years. The largest age group was 41-50 and the average age was 42. Educational level was high; an equal number of participants had B.Sc. degree as a master’s degree, or around 100 individuals in each group, and 7% of the participants had a PhD degree. The participants had great experience in working in multicultural projects with 77% hav-ing taken part in such projects six times or more and only 15% who had taken part in multicultural projects three times or less. Most participants had no multicultural training, or 62%, the others had either received some or extensive training. Nationalities were very diverse with participants from 52 countries, the largest groups being from the United States (103), the United Kingdom (24) and the Netherlands (21). Most participants were from North America and Europe; 77%.

Information on the projectsHalf of the participants were regular team mem-bers in their project, 16% were managers and 31% worked both as managers and team members. The average team size was around 10 members, with the most common size being 6-10 individuals. 11% of the projects had 21 or more members. Average project time was 11.2 months but the most common time was 3-6 months. Most of the projects had 3 languages and only 4% of projects had eight or more languages. The average number of organizations involved was 2.6. In most of the projects, only one organization was involved but in the case of 8% of the projects, eight or more organizations were involved. The average number of project locations was 3.2; most had two or three locations. On average, the largest time zone dif-ference was 5.2 hours, but just under one third of the projects had nine hours or more as the largest time zone difference.

Most of the teams had little direct communica-tion, with 60% never meeting or meeting less than once a month face to face. 16% of the participants communicated with other team members at least once a day. The teams had great amounts of e-mail communication, with most communicating once

Change Percentage

Confi rm understanding with repetition 83.3%

Avoid slang 68.9%

Avoid Jargon 57.2%

Speak slowly 55.6%

Avoid metaphors 47.9%

Keep sentences short 39.3%

Avoid humor 19.5%

Alter tone of voice 19.1%

Table 1. How members changed their expression form in multicultural communication.

Figure 1. Project success as measured in the survey.

Good results, 44%

Acceptable results, 23%

Very good results, 25%

Was not finished, 4%Was not succesful, 2%

Results below expectations, 2%


a day or more often, or 79%. Only 4% never had e-mail communication. Very few of the teams used chat software. In fact, the teams either became quite familiar with it and used it extensively, or they bypassed it entirely. Around half of the teams did not use project management systems, but 28% used them once a day or more often. Most teams used the telephone once a week, or 37%, and 43% used the telephone once a day or more often. Around 5.7% of the teams never used the telephone for communication. A large majority never used video conferencing, or 73%. The other 27% used it at some point or other in the project but only 1% used it once a day or more often.

Table 1 gives an overview of the main methods participants used to improve communication ef-fi ciency in multicultural communication.

Figure 1 shows how the participants evaluated project success on a simple 6 step scale. Most of the projects showed acceptable, good or very good results, or 92%. On the other hand, a very low percentage of the projects were not concluded or fi nished with results below expectations, or 8%. This implies that either the projects were simply very successful or that the members had kept successful projects in mind when answering the questionnaire.

Problems that occurred in the projectsFigure 2 shows the main problems encountered in the project teams. Language diffi culties and time zone differences were the most common problems by far, but cultural differences, technical problems and lack of managerial support also registered. Very few encountered problems due to the number of organizations involved, the team being too large or because of religious beliefs.

About 23% of participants had experienced different holidays in the distributed teams as a problem and as the number of participating countries increases, the odds of different holidays having an effect on the project increases. The survey showed some language problems; it was

diffi cult to speak to members who did not speak the project language well and there were delays due to translation of documents into languages that everyone could understand. It was evident that a large number of participants in the survey believed that cultural differences had created problems. However, some participants thought that this had more to do with individual differ-ences. A difference was still believed to exist in the way decisions are made in different cultures.

Table 2 shows the correlation between various background variables and some of the key vari-ables studied in the survey.

There is a slight correlation between gender and experienced lack of management on behalf of the participant, where a higher percentage of women have experienced this lack. Lack of management was not correlated to the number of locations until this number reached fi ve different project work locations, when the number of participants, who cited lack of management being a problem, increased rapidly. There is also a slight correlation

Sex Age Role Experience Success Education ContinentNumber of locations 0.07 0.17** 0.21** 0.14* 0.10 0.03 -0.10

Number of participants 0.10 0.23** 0.15* 0.06 0.05 0.10 -0.11

Number of languages 0.03 0.02 0.23** 0.07 0.04 0.09 -0.04

Number of organizations -0.01 0.15* 0.14* 0.02 0.03 0.02 -0.09

Project time 0.10 0.20** 0.10 0.10 0.09 0.07 -0.11

Frequency of communication -0.14* -0.15* 0.09 0.24** 0.18** 0.03 -0.05

Lack of trust -0.01 0.04 0.06 0.08 -0.08 0.06 0.12*

Too large project team 0.12 0.20** 0.15* 0.08 0.05 0.08 -0.10

Lack of interest 0.02 -0.13* 0.04 -0.03 -0.21** -0.13* 0.00

Cultural differences 0.01 -0.04 0.16* 0.10 0.08 0.06 -0.06

Holidays 0.08 0.04 0.15* 0.11 0.07 0.05 -0.06

Lack of management 0.17** -0.06 -0.03 -0.01 -0.19** 0.03 0.01

Disagreements 0.06 -0.15* 0.00 0.01 -0.02 0.03 0.10

Managerial support 0.01 -0.05 0.03 0.10 -0.17** -0.02 -0.03

Table 2. Correlation table by participant background variables (*p < 0,05 ** p <0,01).

Figure 2. Problems encountered in the project teams.

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38 www.pry.fi

between gender and perceived communication frequency within the team. Women perceive less communication within the teams than men.

There is a slight correlation between participants’ ages and their percep-tion for the project teams being too large and lacking in interest. Older participants also believed that different holidays between geographical locations had created problems. There is a slight correlation between experience and the number of locations, as well as the total amount of communication. Experienced members had more communication and worked in more locations than the inexperienced ones. Only 8% of the projects were not fi nished, were unsuccessful or not successful enough. This means that it is not possible to make a good statistical comparison between projects which were successful and the unsuccessful ones. Still, a slight correlation can be established. For instance there is a slight cor-relation between success and the frequency of communication within the team. As the team increases its communication, the success increases. This relation is however dependent on the type of communication, as shown later.

In the questionnaire, the frequency of the use of communication method was given a numeri-cal value. If a communication method was never used, it received the numerical value of 0, less than once a month received the value of 1, once a month received the numerical value of 2, once a week received the value of 3, once a day received the value of 4 and more than once a day received the numerical value of 5. The total frequency of communication was thereafter calculated from all the communication means evaluated, with the theoretically highest value being 30, encompassing direct communication, e-mail, web chat, project systems, telephone conversations and video con-ferencing. A slight correlation was found between gender and total frequency of communication, with women having less communication on aver-age than men. A slight correlation was also found between time differences and the frequency of the use of most communication means, with a nega-tive correlation between direct communication and increasing distances. The use of e-mail, web chat and project systems, was found to increase as time zone differences grew. There was no statisti-cally signifi cant relation between lack of trust and the means of communication.

The results showed that initial communica-tion had a strong effect on the building of trust. There was only lack of trust in 11% of incidences where project launch was carried out with direct communication, as opposed to 21% of the proj-ects where the members did not meet but used electronic media.

The possible context between lack of trust and the frequency of communication came under par-ticular scrutiny. Figure 3 shows the main results.

Lack of trust seemed to depend little on the fre-quency of communication except when there was a high frequency, with problems regarding lack of trust increasing very rapidly when communication was through a communication medium. Lack of trust seems to depend on project time. In shorter projects, lack of trust is less common than in longer projects. Lack of trust was greatest in projects with a duration of 12-24 months.

A prediction model for problems in distributed teamsBased on the information gathered in the ques-tionnaire, a prediction model was designed to predict possible problems in distributed teams. The model describes particular risk factors based on variables which can be measured beforehand. The model was depicted as shown in fi gure 4.

The fi gure shows how the model can represent a particular distributed team. The main groups of variables included in the model are the number of languages, the team size, the number of organiza-tions involved, number of geographical locations of the members, time zone differences and dif-ference in members’ cultural backgrounds. In that way, the model refl ects the variables which showed statistically signifi cant correlations to success and problems related to lack of trust. These variables can be measured for a particular distributed project team and then depicted as in fi gure 4. The outcome can be used to forsee possible problems and work out their solutions in advance.

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Total communicationDirect communicationThrough a medion

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Figure 3. Frequency of communication amount within teams, evaluated from none (0), little (1), and up to great (5).

Figure 4. Prediction model for problems in distributed teams.

Number of languages

Number of locations

Number of organizations

Size of groupCulturaldifferences

Maximum time zone differences


ConclusionsCertain problems are more likely to occur than others in distributed teams. Language diffi cul-ties are a potential problem, as well as problems caused by time zone and cultural differences. One of the benefi ts considered in employing distributed project management has been that it is possible to work on projects around the clock and around the year. The problem of different holidays in dis-tributed project teams is risk factor has not been given much attention in previous research.

Our results show that perceived lack of manage-ment increases when the number of work loca-tions reaches 5. This indicates that managers have diffi culty retaining overview on projects when the number of project locations reaches a threshold.

No statistically significant correlation was found between the communication means and trust, but fi ndings still indicated that there is more trust in teams who have considerable direct communication. It is however obvious that initial communication has a great deal of effect on the building of trust and direct communication in

the early stages is valuable for this purpose. This corresponds to previous research. Too frequent communication through a communication median can lead to a lack of trust in the distributed team. The reason is unclear but it might be a worthy task to assess weather confusion in a distributed team is increased when the frequency of communication through a median reaches a threshold.

It is our conclusion that a simple assessment of fi ve important variables can help to evaluate potential risk in the work of distributed project teams. Size of group, number of languages, num-ber of organizations behind the team, number of locations and the maximum time zone difference are variables that are correlated with lack of trust in the team. These variables can be assessed in the beginning, the results can be represented in a simple graphical tool and communicated to all relevant parties. Some actions can then be taken to reduce the risk and thus create more favourable conditions for the building up of trust within the distributed group.

Helgi Thor Ingason fi nished a degree PhD in process metallurgy from the Norwegian Institute of Technology, a MSc degree in mechanical and industrial engineering from the University of Iceland and SCPM degree from Stanford University. He is an associate professor at the at the School of Engineering and Natural Sciences at the University of Iceland and lectures in project management, quality management and facility planning. He is the head of the MPM - Master in Project Management - program at the university (www.mpm.is). Helgi Thor is a co-founder and senior consultant at the Nordica Consulting Group in Iceland and he is the co-founder and chairman of Alur, alvinnsla hf - a recycling company in the aluminum industry in Iceland. He is an IPMA Certifi ed Senior Project Manager.

Haukur Ingi Jónasson fi nished a cand. theol. degree from the Theo-logical Department of the University of Iceland in 1994. He holds a S.T.M., M.phil., and Ph.D. degrees from Union Theological Seminary (Columbia University) in New York and has full clinical certifi ca-tions in both pastoral counseling from Lennox Hill Hospital / The HealthCare Chaplaincy Inc. and in psychoanalysis from the Harlem Family Institute in New York. Haukur has pursued economic and business management education both at Indiana University School of Business and at the Hariot-Watts, Edinburg Business School in Scotland. He is the co-founder of the Nordica Consulting Group where he works as a senior consultant. Haukur is an assistant profes-sor in management and leadership at the School of Engineering and Natural Sciences at the University of Iceland and teaches in both the MPM (Master of Project Management) and the MBA programs of the university.

Tomas Hafl idason received his BSc and MSc in industrial engineer-ing from the University of Iceland. He is presently pursuing his PhD at the University of Iceland in industrial engineering.

40 www.pry.fi

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”IPMA certifi cation has given me self-knowledge, an extended network and verifi cation of my competence”

Per-Olof Sandberg Program Manager, Major Programs SEB Bank, Sweden

The world leader in project management certification

Put the power of IPMA Certification to work for youIPMA is a world leading project management organisation with over 40 000 members in 45 countries around the world. The IPMA certifi cation is recognised worldwide. Global corporations benefi t from IPMA’s international presence and recognition. It enables them to use the same certifi cation for the entire company in all countries.

For more information about the IPMA certifi cation and the IPMA Competence Baseline (ICB) please visit www.ipma.ch

42 www.pry.fi

Introduction The Virtual Design Team research was launched to enable managers to “Design Project Organizations as Engineers Design Bridges”—i.e., to model and simulate multiple alternative confi gurations to predict and evaluate their performance in advance of implementing them.

VDT was based on the notion fi rst articulated by Herbert Simon and refi ned by Jay Galbraith that the fi rst order determinant of an organization’s success is its ability to process all of the informa-tion associated with:

- Direct work, involved in competing as-signed tasks by individuals or groups;

- Coordination work, arising from the need to resolve task interdependencies and handle exceptions; and

- Institutional work, arising from the need to resolve differences in goals, values and cultural norms.

The “big idea” behind the VDT research pro-gram was that direct work, coordination work and institutional work could all be viewed as quantities of information to be processed serially by the workers and managers in an organization. Jay Galbraith had proposed this idea as early as the 1970s, but his formulation of the problem was descriptive and qualitative, and could thus not be used to make specifi c predictions. VDT has progressively quantifi ed, extended and validated Jay Galbraith's information processing view of organizations over the past 20 years to encompass a broad range of project-oriented work processes and organizations.

We began this research in the late 1980s and directed our initial focus on project organiza-tions engaged in semi-custom engineering work under tight time constraints. For such organiza-tions, we could assume a relatively high level of congruency of goals culture and values, so that institutional costs were negligible and could be ignored. However, performing highly interdepen-dent work under tight time constraints creates high coordination costs as interdependent ac-tivities increasingly overlap one another in time. Primary emphasis was on modeling the sources of interdependence in project workfl ow and the

Raymond E. LevittDepartment of Civil & Environmental EngineeringStanford UniversityUSA

Overview of The Virtual Design Team (VDT):

A Computational Model of Project Teams

way in which exception handling in coordination took place within organizations assigned to do such project work.

Since then, we have extended the representa-tion and reasoning in VDT step-by-step, to address the modeling requirements of less routine work performed by increasingly fl exible and dynamic organizations—non-routine product develop-ment, service and maintenance work (including healthcare delivery), and highly non-routine work performed in communities of practice—but still assuming negligible institutional cost. Since 2002, we have extended VDT to model multicul-tural project teams engaged in global projects to develop infrastructure, for which institutional costs are signifi cant. Also, VDT has been extended as “POWER” to model highly non-routine work in extremely decentralized “Power to the Edge” organizations.

This white paper provides an overview of the VDT research program and its evolution over the past 20 years, describes the current status of VDT, and describes our ongoing research in this area.

VDT in a Nutshell The Virtual Design Team simulation system is a computational discrete event simulation model of project organizations. VDT analyzes how task interdependencies generate coordination needs and how individual team members' skills and experience, organization design parameters and communication tools change team information processing capacity, and hence project perfor-mance. VDT explicitly models actors, activities, communication tools and organizations. VDT simu-lates actors working on their assigned tasks and the interactions between actors aimed at resolving interdependencies between their interdependent tasks, and interactions aimed at handling technical or interface “exceptions” between subordinates and their supervisors.

The “information processing” view of organi-zations was fi rst articulated by Herbert Simon and James March in the 1950s, and elaborated by Jay Galbraith during the 1970s. It asserts that the fi rst-order determinant of an organization’s success is its ability to process and communicate


all of the information required to carry out and coordinate its work processes. Galbraith’s infor-mation processing model of project teams was descriptive and qualitative, not quantitative; it could not make specifi c predictions about par-ticular organizations. Over the past two decades, Levitt’s ongoing VDT research and its subsequent commercial implementation have extended, quantifi ed and validated Jay Galbraith's (1974) information processing view of organizations to model and simulate team members’ behavior and resulting team performance outcomes quantita-tively, with ever-increasing accuracy, for a broad range of project-oriented work processes and organizations.

VDT builds on and quantifi es Jay Galbraith’s theories of information processing in project teams, and views both the direct work and result-ing coordination work that must be performed by actors on a project as quanta of information to be processed by responsible actors with fi nite information processing capacity—i.e., “boundedly rational” actors (March & Simon 1956). It simulates the project team executing tasks and coordinating to resolve exceptions and interdependencies. The VDT simulation of a project organization executing its tasks generates a range of outputs that predict the emergent performance of the organization at both the individual actor/task level and the overall project level: duration; production costs, coordina-tion costs (communication, rework and waiting); and several measures of process quality.

VDT takes into consideration the relative match between the complexity of each task versus the skills/experience of the assigned actor to deter-mine the time it would take for the actor to per-form the task, and the probability of exceptions in the execution of the task by the assigned actor. Actors are more likely to generate exceptions when confronted with a task for which they do not pos-sess the requisite skills or experience. VDT models exception handling processes to deal with any exceptions that have been generated. Exceptions take time to resolve and result in coordination costs. Actors may be required to partially or com-pletely rework activities that generate exceptions. Further, actors need to attend to communica-tions from other actors and may need to attend scheduled meetings. These communications and meetings generate coordination work and thus increase the amount of total work that must be done to complete a project. Failure to attend to communications or go to meetings increases the probability of errors, thus leading to the possibil-ity of increased downstream coordination and rework costs.

VDT has been calibrated to make accurate predictions of participant backlogs arising from the combination of direct Production Work and emergent Coordination Work, and of the result-ing schedule and quality risks for a given project organization. After being validated in multiple real world scenarios, SimVision®, a commercial implementation of VDT, has been used commer-cially in dozens of real world projects for Fortune 500 companies and governmental organizations to highlight organizational risks and guide interven-tions aimed at mitigating them.

Evolution of The Virtual Design Team (VDT) Research Program The Virtual Design Team (VDT) research was initi-ated in the late 1980s with the goal of developing new micro-organization theory and embedding it in software tools that could be used to design organizations in the same way that engineers design bridges, semiconductors or space stations—by modeling, analyzing and evaluating multiple virtual prototypes of the system to be designed in a computer.

We recognized from the outset that this was a signifi cant challenge. Micro-theory and analysis tools for designing bridges and airplanes rest on well-understood principles of physics, and involve continuous numerical variables, describing materi-als whose properties are relatively uniform, and are straightforward to measure and calibrate. Thus analysis of these physical systems yielded easily to solution via sets of differential equations, and subsequently numerical computing. The ap-proach used to develop this engineering science and technology was to embed well-understood micro-theory into the models, and then attempt to refl ect the interactions between elemental parts of a model through constraints (such as constraints that maintain consistency between the defl ected positions of shared element edges in a fi nite ele-ment model). The result was increasingly accurate predictions of both micro and macro-behavior of many kinds of engineered systems. For many kinds of buildings and bridges, stresses, strains and de-fl ections under a variety of loading conditions can now be predicted to fi ner tolerances than those to which the facility can be constructed!

In contrast, theories describing the behavior of organizations are characterized by nominal and ordinal variables, with poor measurement repro-ducibility. Verbal theories incorporating nominal and ordinal variables create a signifi cant degree of linguistic ambiguity, so that experimental results cannot be reliably replicated and contrasting or competing theories are diffi cult to reconcile or disprove. In the late 1980s, our research group concluded that attempts to model organizations computationally could benefi t greatly from the use of non-numerical or "symbolic" representation and reasoning techniques emerging from computer science research on artifi cial intelligence. Early experiments convinced us —along with many other researchers (e.g,. Masuch & Lapotin, 89)— that this was a fruitful modeling approach. However, VDT took this modeling approach to the next step, which was to combine the symbolic reasoning with numerical, discrete event simulation. VDT used symbolic reasoning about variables like skill levels to set parameters for numerical variables like task processing speeds in a discrete event simulation.

In selecting the kinds of organizations that we would initially model, we picked project teams performing routine design or product development work. For this class of organizations, all work is knowledge work so that we could fruitfully use an information processing abstraction (Galbraith 74) of the work. For routine product development, goals and means are both clear and relatively un-contested, so that we could fi nesse many of the

44 www.pry.fi

most diffi cult "organizational chemis-try" modeling problems inherent in the kinds of organizations that sociologists have often studied—e.g., mental health, educational and governmental organi-zations.

Our quantification and computer implementation of Galbraith's "informa-tion demand, capacity and throughput" model can be viewed as an analog to Newton's Laws in physics—a simple, and immensely useful, fi rst order ap-proximation. By operationalizing and extending Galbraith's information pro-cessing abstraction in the Virtual Design Team (VDT) computational model, and focusing in an “easy corner” of the space of organizations, we developed several versions of VDT (Cohen, Chris-tiansen, Thomsen,) and validated the representation, reasoning and useful-ness of our computational “emulation” models following the rigorous validation trajectory shown in Figure 1 (Thomsen et al,1999; Levitt et al,1994,1999; Kunz et al.,1998).

Advancing through these validation steps, we were able to develop suffi cient confi dence in the predictions of our the-ory and tools that managers in several companies and governmental agencies are now redesigning their project work processes and organizations prospec-tively, based on the predictions of Sim-Vision™, a commercial implementation of VDT-2 developed by Vité Corporation and subsequently licensed by ePM, LLC < www.epm.cc >. Our VDT theory and analysis tools for project organizations have thus enabled true "organizational engineering" of project teams with congruent goals and relatively routine—albeit complex and fast-paced—design or product development work.

Our intention was always to start with the "organizational information fl ow physics" and then progressively add elements of "organizational chemistry" to the modeling framework to extend its applicability to less routine tasks and more dynamic organizations. We have executed several steps of this re-search vision over the past two decades. Completed and ongoing versions of VDT that progressively addressed additional aspects of task and organizational com-plexity are shown in Figure 2.

The (Cohen, 91) (Christiansen, 99) VDT-1,2 framework has been fully vali-dated through all of the steps shown in Figure 1. VDT-2 is a reasonable model of project work for which: (1) All activities in the project can be predefi ned; (2) the organization is static, and all activities are pre-assigned to actors in the static organization; (3) exceptions to activi-ties are resolved through the hierarchy and generate extra work volume for

activities indicate needed repair activi-ties, and any unplanned side effects that arise must be diagnosed and treated contingently. To model this indetermi-nacy, we had to relax the constraint that all activities and assignments are rigidly prespecifi ed. This required several exten-sions to the VDT-3 framework. Douglas Fridsma (98) extended the information processing micro-theory in VDT-3 to include a variety of more complex exceptions that can cause activities to be added, resequenced, deleted or reas-signed, and actors to be dynamically added to the organization and assigned activities as needed. This extended framework has been implemented and internally validated on toy problems (See Fig 1). Carol Cheng Cain (Cheng 01) then extended Fridsma’s work to model context-dependent decision making (e.g., medical decision aing in intensive units where organization structure and staffi ng changes as a function of time of day or day of week) and retrospectively validated VDT-4 predictions against em-pirical data in several clinical settings.

A longer-range goal of our work was to begin modeling even more fl exible organizations that could be viewed as dynamically shifting “communities of practice,” in which actors can commu-nicate with anyone they choose, either inside or outside their local “organiza-tion.” Software development teams and some consulting organizations currently approximate this organizational form. Theories based on concepts such as public goods, homophily or reciprocity can be used to describe how these links form and persist or dissolve in cyber-space. We received a NSF KDI research grant to work with colleagues from USC, Carnegie Mellon and the University of Illinois in this exciting new area, and made signifi cant progress in implement-

the predefi ned activities to be carried out by the pre-assigned actors; and (4) actors are assumed to have congruent goals, values and cultural norms. These conditions fi t many kinds of design and product development work. VDT-2 was commercialized as SimVision™, by Vité Corporation through Stanford’s Offi ce of Technology Licensing, and is in use by companies in a variety of industries, and governmental organizations including the US Navy, NASA, and The European Bank for Redevelopment and Construc-tion [ http://.epm.cc ].

VDT-3 (Thomsen, 97) extended the range of work processes that could be modeled, to encompass less routine design or product development work, in which tasks are still predefi ned, but there can be fl exibility in how they are executed. Actors can have the same set of goals, but incongruent goal prefer-ences (i.e., a moderate degree of goal incongruency), causing them to disagree about how best to execute activities in the project plan. Following concepts from economic “Agency Theory”, goal incongruency levels between pairs of ac-tors affect both their vertical and hori-zontal communication patterns. VDT-3 has been validated through "gedanken" experiments—thought experiments, in which the model's predictions are compared to managers' predictions of results. Its prospective predictions have not yet been tested against subsequent real project performance data.

VDT-4 was the goal of a subsequent NSF Grant. VDT-4 extended the applica-bility of VDT beyond its previous limits on work process routineness and static organizational structure. VDT-4 has been applied to non-routine work involved in health care delivery for bone marrow transplants and similar complex, multi-specialty medical protocols. Diagnosis

Figure 1. Validation Trajectory for Computational Emulation Models, showing how we move successively from validation of reasoning, through validation of

representation and, fi nally, of usefulness. (Source: Thomsen et al, 1999).


ing these extensions. VDT-5 was released as POW-ER 3.3 (Ramsey et al 05), and is in use by the US Navy, US Air Force Research Laboratory, NASA and other governmental organizations.

Ongoing Research on Effects of Institutional Differences Research by Geert Hofstede and his col-leagues (Hofstede 84). Provides one clear point of departure for modeling how differences in values and cultural norms can affect the behavior of participants in project teams. Hofstede identifi ed fi ve dimensions of culture that vary systematically between workers from different countries, and which affect individual and team behaviors in global, knowledge-intensive, dynami, global projects: Power Distance (the difference in relative power across levels of the or-ganization); Collectivism vs. Individu-alism (the degree to which individuals pursue self-interest vs. the interests of a larger group); Masculinity vs. Feminin-

emergence of “institutional difference exception” processing costs in global projects within VDT. The PhD research of Mahalingam (2005) and Orr (2005) found that viewing national differences in terms of Scott’s (2001) conception of “Institutions”, a concept broader than cultures and values, was far more pro-ductive in understanding and predicting cross-national exceptions in projects.

A global project contending with significant institutional differences needs to be realistic about the costs that will be incurred in proceeding with the project, and the length of time it will take to begin to reduce these costs. Forewarned with this kind of predic-tion, planners of global projects can set realistic goals, and can begin to initiate effective institutional interventions, with a clear notion of how long they will take to implement.

Our approach was to model institu-tional work in the same way that we modeled coordination work— that is, as additional quantities of information to be processed by actors in a project team. However institutional work may also have the side effect of undermin-ing the motivation of actors who fi nd themselves engaged in continual misun-derstandings, confl ict and even sabotage by project team members whose goals, beliefs and values, cultural norms and legal/regulative systems are signifi-cantly different than their own. Figure 3 shows conceptually how we overlaid institutional work on the production work and coordination work that we had modeled to date.

Tamaki Horii (2005) designed and conducted an initial set of computa-tional experiments in which he modeled US and Japanese institutions (practices and values) and simulated the perfor-mance of joint venture teams consisting of US and/or Japanese managers and workers in US- vs. Japanese-style project organizations working on projects with different levels of complexity. His path breaking work won the best paper award at CASOS 2005. This line of work has continued since 2005 at the Collabora-tory for Research on Global Projects http://crgp.stanford.edu

Research to Develop Postprocessors for VDT Organizational design is a complex global optimization problem involving continuous and discrete variables. For example, an organizational designer must size functional capabilities, assign staff to tasks, and set communication and control policies. Our extended VDT system is an analysis tool that can pre-dict schedule cost and process quality performance for a baseline confi gura-

ity (the extent to which work and social roles are gender-stereotyped and differ-ent; Uncertainty Avoidance (the degree to which members of a culture can cope with risk and ambiguity in work and social relations; and Time Horizon (short-term vs. long-term orientation in decisions and relationships). Hofstede has collected large data sets based on IBM employees in > 50 countries indi-cating that differences along one or more of these cultural dimensions lead to predictable kinds of misunderstand-ings, confl ict and loss of motivation in global work teams.

Drawing on Hofstede’s work and on the results of a series of workshops con-ducted with Professor Douglass North (a Nobel Laureate in Institutional Econom-ics at Stanford’s Hoover Institute) and Professor Merlin Donald (an eminent Canadian cognitive psychologist) at the Institute for International Studies at Stanford, we developed a set of initial hypotheses about how to model the

Figure 2. VDT Research Trajectory

Figure 3. Direct Costs for Projects, and Additional Costs from Two kinds of Hidden Work: Coordination Work and Institutional Work.

46 www.pry.fi

tion of an organization and work process, and help to isolate the most severe risks in these three areas. However, VDT cannot suggest how to change the work process or organization to mitigate any risks that have been identifi ed; the user must experi-ment with alternatives to fi nd better solutions. Searching the solution space manually to fi nd confi gurations that address schedule, quality, or cost risks for a baseline case is thus a daunting task. It relies on the expertise of the human user and offers no guarantee of optimality or even near-optimality. Because the VDT solution space is so large, and the interaction between its variables is subtle and sometimes counter-intuitive, even expert users can fail to discover many potentially superior solutions.

Task scheduling and resource assignment is an important sub-problem of organizational design. Search and optimization problems have been studied extensively in the artifi cial intelligence and operations research communities. Global op-timization techniques include operations research methods such as linear, nonlinear, and integer programming; artifi cial intelligence methods such as constraint propagation; and local search. OR techniques typically achieve high scalability, ro-bust performance, and optimal solutions, but place restrictions on problem formulation. In contrast, constraint propagation offers the ability to model problems more realistically (Baptiste 2001: 8), but good performance requires discovering clever heu-ristics to guide the search. Local search techniques can rapidly produce good results, but with no guarantee of optimality. OR, AI, and local search techniques have all been successfully applied in-dividually to task scheduling and resource assign-ment problems (Klein 00, Smith 93, Zweben 94). However, classic task scheduling problem formula-tions were developed for capital-intensive physical work operations rather than for global knowledge work. The classic formulations ignore the greater fl exibility of assignments when performing global work and the options for developing alternative organizations to perform the work.

During the last decade, researchers began combining AI and OR techniques to solve several, similarly complex, kinds of optimization problems (Hooker 2002). Working in collaboration with Prof. John Koza, a pioneer in the development of Genetic Programming, Bijan KHosraviani (KHosra-viani et al, 2004a and 2004b) developed a system based on Genetic Programming that was able to evolve VDT models that met a required set of scope, schedule and cost objectives more optimally than multiple teams of human users had been able to do over almost a decade. His work won a silver medal at the GECCO conference in 2004.

Ongoing Research on Power to the Edge OrganizationsThe POWER research has continued since 2005. This research was aimed to develop versions of our simulation framework that could be used to model some of the most decentralized and fl exible orga-nizations existing anywhere —so-called Power to the Edge organizations Alberts & Hayes, 2000).

POWER has now evolved through multiple versions. As of 2009, Version 3.8 incorporates the

Dr. Raymond Levitt is Profes-sor of Civil & Environmental Engineering and a Senior Fellow at Stanford’s Woods Institute for the Environ-ment. He directs Stanford’s Collaboratory for Research

on Global Projects and Advanced Project Management executive program. Dr. Levitt’s early research showed how con-struction owners and top managers could improve their safety performance. In 1988, he co-founded Stanford’s Center for Integrated Facility Engineering. He devel-oped organization modeling and simula-tion theory and tools to reduce schedule and quality risk for fast-track projects and project-based companies. His current re-search explores how national cultural and institutional differences affect governance and performance of multinational project teams. ASCE awarded Levitt its 2000 Com-puting Award; 2006 Peurifoy Construction Research Award; and elected him ASCE Distinguished Member in 2008. Dr. Levitt was co-founder and has served as a Direc-tor of: Design Power, Inc., Vité Corpora-tion, and Visual Network Design, Inc.

DLsEEaaWfmSCf

on Global Projects and Adv

ability to model: institutional differences between participants from different nationalities (Horii 2005), learning and forgetting of skills by project team members over the course of an extended project (MacKinnon et al 2007); the development of trust between members of a project team who may or may not be co-located (Zolin 2004); and fl exible knowledge sharing through networks of human experts and computational support tools such as databases, expert systems and other com-puter knowledge archives (Buettner 2002).

A new version of POWER, which we call POW-ID is under development in collaboration with the US Air Force Research Laboratory to model command-and-control work and other kinds of work that is event-driven rather than task-driven as in our earlier versions of POWER or VDT. We expect to begin validating POW-ID in the latter part of 2009.

This overview of a 20 year research project has attempted to explain how a team of research-ers was able to begin modeling well specifi ed, routine project tasks completed by homogeneous team members, and then progressively extend the representation and reasoning of the initial theory and tools to address less fl exible tasks, more het-erogeneous project team membership and fi nally more dynamic and decentralized organization structures, as shown in fi gure 2. It has been a de-light to participate in this scientifi c exercise with a remarkable team of colleagues and collaborators in industry and government.


References Alberts

Arquilla, J. and D.F. Ronfeldt, 1996. The Advent of Netwar, Santa Monica, California: Rand.

Baptiste, P., Le Pape, C., Nuijten, W. 2001. Constraint-Based Scheduling: Applying Constraint Programming to Scheduling Problems. Norwell, MA: Kluwer Academic Publishers.

Cheng, Carol H.F., and Levitt, R.E."Contextually changing behavior in medical organizations" Proceedings of the 2001 Annual Symposium of the American Medical Informatics Association, Washington, DC, Nov 3-7, 2001

Christiansen, T.R., Christensen, L., Jin, Y., Kunz, J.C. & Levitt, R.E., 1999. “Modeling and Simulating Coordination in Projects,” IEEE Journal of Organi-zational Computing, 9.(1), pp.33-56.

Cohen, G. P., and R. E. Levitt, 1991. “The Virtual Design Team: An Object-oriented Model of Information-sharing in Project Design Teams,” ASCE Construction Congress, Expert Sys-tems Symposium in Computer-integrated Design and Construction, Cambridge, Massachusetts, April.

Galbraith, Jay R., 1974. "Organizational Design: An Information Processing View," Interfaces, Vol. 4, May 1974, pp. 28-36.

Hofstede, G., 1997. Cultures and organizations: Software of the mind. New York: McGraw Hill.

Hooker, J. 2002. Logic, Optimization, and Constraint Programming. INFORMS Journal on Computing. 14(4) (to appear) Available online at http://ba.gsia.cmu.edu/jnh/papers.html.

Horii, Tamaki, Yan Jin, and Raymond E. Levitt. "Modeling and Analyzing Cultural Infl uences On Project Team Performance." Computational and Mathematical Organization Theory, Vol 10-No.4, Feb. 2005, pp.305-321.

Joint Staff, 1998. Joint Doctrine for Information Operations, Gov-ernment Printing Offi ce, Washington D.C.

KHosraviani, Bijan and Raymond E. Levitt.Organization Design Using Genetic Programming, Proceedings of North American Association for Computational Social and Organizational Science (NAACSOS) Conference, Pittsburgh, PA, June 27-29, 2004a.

KHosraviani, Bijan, Raymond E. Levitt and John. R. Koza, Organization Design Optimization Using Genetic Programming. In Keijzer, Maarten (edi-tor). Late-Breaking Papers at the 2004 Genetic and Evolutionary Computation Conference (GECCO-2004). Seattle, WA International Society of Genetic and Evolutionary Computation; July, 2004b.

Klein, R. 2000. Scheduling of Resource-Constrained Projects. Norwell, MA: Kluwer Academic Publishers.

Kunz, John C., Tore R. Christiansen, Geoff P. Cohen, Yan Jin, Raymond E. Levitt, 1998. “The Virtual Design Team: A Computational Simulation Model of Project Organizations,” Communications of the Association for Computing Machinery (CACM) 41 (11), November, pp. 84-91.

Levitt, R.E., G.P. Cohen, J.C. Kunz, C.I. Nass, T. Chris-tiansen, and Y. Jin, 1994. "The 'Virtual Design Team': Simulating How Organization Structure and Information Processing Tools Affect Team Perfor-mance," in Carley, K.M. and M.J. Prietula, editors, Computational Organization Theory, Lawrence Erlbaum Associates, Publishers, Hillsdale, NJ.

Levitt, R.E., G.P. Cohen, J.C. Kunz, C.I. Nass, T. Chris-tiansen, and Y. Jin, 1994. "The 'Virtual Design Team': Simulating How Organization Structure and Information Processing Tools Affect Team Perfor-mance," in Carley, K.M. and M.J. Prietula, editors, Computational Organization Theory, Lawrence Erlbaum Associates, Publishers, Hillsdale, NJ.

Mahalingam, Ashwin. "Understanding and Mitigating Institutional Costs on Global Projects." Doctoral dissertation, D#014, Stanford University, 2005.

March, J. and H. Simon.Organizations.

Masuch, M. and P. LaPotin, 1989. Beyond Garbage Cans: An AI Model of Organiza-tional Choice. In: Administrative Science Quarterly, March pages 38-67.

North, Douglass C., 1990. Institutions, Institutional Change, and Economic Performance, Cambridge: Cambridge University Press.

Orr, Ryan J. "Unforeseen Conditions and Costs on Global Projects: Learning to Cope with Unfamiliar Institu-tions, Embeddedness and Emergent Uncertainty." Doctoral dissertation, D#010, Stanford University, 2005.

Scott, W. Richard.Institutions and Organizations, 2nd Ed., Sage Publications, 2001.

Thomsen, J., Kwon, Y., Kunz, J. C., and R.E. Levitt, 1997. “Simulating the Effects of Goal Incongruen-cy on Project Team Performance.” Fourth Congress on Computing in Civil Engineering, ASCE, June 17-19, Washington DC, pp. 643-650.

Thomsen, J., R.E. Levitt, J. C. Kunz, C.I. Nass, D.B. Fridsma, (1999). “A Trajectory for Validating Com-putational Emulation Models of Organizations” Journal of Computational and Mathematical Organization Theory, 5, (4): 385-401.

Zweben, M., Daun B., Davis E., and Deale, M. 1994. Scheduling and Rescheduling with Iterative Repair. In Zweben, M. and Fox, M. (editors). Intelligent Scheduling. San Francisco, CA: Morgan Kaufmann. Pages 241-256.

48 www.pry.fi

This paper presents the current risk management activities in projects. The fi ndings are based on a 3-year GPSII research project that was conducted in co-operation with VTT, Helsinki University of Technology and Helsinki School of Economics. The purpose of the GPSII research project was to identify and analyse interactions between cultural processes, network connections and risk man-agement practices in global delivery projects. This paper discusses the project risk management activities from two perspectives: Firstly, the current risk management procedures in projects are briefl y summarized. Secondly, the view is broadened to include more informal risk management actions outside the formal risk management process. It is discussed whether these informal actions are actually being used to cover the areas where formal risk management lacks the fl exibility and agility required. It is argued that the informal processes and mechanisms are often hidden and their signifi cance both to the project risk management process and to the risk level of the project is not well understood. It is concluded that the effi ciency in project risk management arises from developing both the formal risk management processes and the informal activities in parallel to creating new fl exible and more interactive risk management tools.

Mervi Murtonen, M.Sc.VTT Technical Research Centre of FinlandTampere, Finland

Formal and informal risk management actions in projects

LiteratureProject risk management is typically presented as a repetitious process that consists of a generic framework (a list of tasks to be completed) and the supporting tools and techniques (checklists, risk grids, risk reviews, risk registers etc). Several risk management processes for projects are described in standards (PMI, 2004; APM, 2006) and in litera-ture (Chapman & Ward, 2003; Meredith & Mantel, 1989; Kliem & Ludin, 1997). Traditionally, a risk is referred to as a combination of a probability and a negative outcome. Research and development in project risk management has focused on methods to quantify risk and on how to manage the risk after it has been quantifi ed.

In risk management, formal procedures have become a symbol for effi cient information use, rational decision-making and a willingness to act (Langley, 1989). Formal procedures are seen as a routine that helps focus attention and decrease uncertainty in decision-making (Becker & Knud-sen, 2005). According to Susilo et al. (1991) the formal controls (specifi c rules and procedures to be followed and specifi c outcomes to be produced) are dominant at project planning and initiation, but become less dominant over the project dura-tion. Instead, the project managers rely on more informal control elements (unwritten practice codes, social values, common beliefs and tradi-tions) as the project progresses. Also, when facing a new challenge, project managers approach the challenge informally.

Informal risk management refers to all informal and intuitive actions that are taken to mitigate risks in order to reduce the uncertainties in a project, intentionally or not. A low formality level in risk assessment implies a less explicit structure, no separate phases in timely order, informal docu-mentation, and less clearly defi ned objectives and deliverables for the process (Ward, 2006). In order to be able to analyze risk management formality and informality, we need to differentiate the for-mal risk management practices from the informal ones. According to Li (2007) the distinguishing elements of formality and informality are: 1) codifi cation, 2) formation, 3) enforcement, 4) power, and 5) personalization (Table 1). Formality refers to an objective, cognitive, task-oriented and instrumental process, whereas informality refers to more subjective affective, people-oriented and sentimental processes (Li, 2007).

Dimensions Formal InformalCodifi cation Explicit Implicit

Formation Exogenous Endogenous

Enforcement Tight Loose

Power Hierarchical Horizontal

Personalization Depersonalized Personalized

Table 1. Formality – informality dimensions. (Li, 2007)


In recent project management studies, unex-pected events in projects have drawn increasing research attention. Making these unexpected and surprising events, their occurrence, and manage-ment more visible within projects, is seen to con-tribute to our understanding of uncertainty man-agement in projects (Hällgren, 2007; Söderholm, 2008). Project uncertainties can not be categorized and handled as risks (Atkinson et al., 2006), and the current formal risk management practices do not adequately address many particular features of project uncertainties (Ward & Chapman, 2003; Chapman, 2006; Pender, 2001). Instead, several researchers agree that the formal procedures need to be complemented by more informal and fl exible ways, such as continuous interaction, communica-tion and refl ection (Hällgren & Maaninen-Olsson, 2005; Perminova et al., 2008).

MethodsThe research data was collected in the GPSII re-search project by studying altogether 21 different project cases that varied in the degree of success, network structures and cultural diversity. Both turnkey and system delivery projects were studied. The studied project cases were geographically distributed and involved projects from 17 coun-tries – including former Soviet Union countries, China and South American countries. The data collection followed the principles of systematic combining (Dubois & Gadde, 2002). This approach is based on a principle of continuous back-and-forth movement between theory and practice, between theoretical frameworks and empirical observations, each informing the other as the research process evolves.

The collected data consists mainly of interviews (92 interviews) with the project managers and other project-specifi c key personnel, as well as of project-related documentation (e.g. process descriptions, project plans, risk analyses, lessons learned reports). The interviews have been con-

ducted in four companies both in Finland and in various project host countries. In addition to project-specifi c interviews, thematic interviews focusing on each company’s risk sources, risk man-agement practices and processes in general have been conducted. All the interviews were conducted by at least two researchers – they were recorded, transcribed verbatim, and the contents analyzed. In addition to collecting research data by inter-views, researchers participated in case companies' lessons learned sessions in order to analyze the practices of effi cient risk knowledge transfer and utilization within and across projects.

FindingsIn project risk management following the formal identify–analyze–mitigate process, the preliminary risk analysis typically takes place early in the sales and bidding or at the latest at the beginning of the project execution phase (Figure 1). At this point, the possibilities to implement proactive measures against the identifi ed risks are not only the highest, but when also the level of uncertainty is at its peak. The analysis is mainly based on a predefi ned risk list and the assessment of the pre-specifi ed, generic risk factors. In the sales and bidding phase, the project manager's task in risk analysis is to assist sales in technical and operational issues, especially in risk quantifi cation and pricing. At the begin-ning of the execution phase, the project manager usually updates the preliminary risk analysis or, if that has not been done, is the main person re-sponsible in carrying out the risk analysis for the project. The further along the project proceeds, the more uncertainties typically are resolved and the smaller the need for any formal and proactive analysis becomes. At the end of the project, the post-project lessons learned sessions are used to summarize and share the experiences from critical events. In lessons learned sessions the preliminary risk analyses can be reviewed and the realized risks can be analyzed.

Figure 1. Risk management actions and actors in a project.

Project sales and marketing

Project execution Service

Preliminary risk

assessment

Risk checklist reviews Excel-based

tools

Risk review monthly and

project meetings

Changes

Risk committee/

management

New risks

Lessonslearned

meetings

Risk log Intranet documents

Upper management and business control

CM CM, PM, TE, BC, E PT, BC PT, CM, E

CM=Commercial manager PM=Project manager

TE=Technical engineer BC=Business control

PT=Project team E=Expert

PM, BC

E, PM

PT, E

Kick-off meeting

Risk handover

CM, PT

50 www.pry.fi

In most of the studied companies, there were many different practices for carrying out risk management in projects and also many different tools were used. Several tailored applications, risk analysis methods and reporting systems had been developed and were used across the entire organization, but also more fragmented practices, where project managers had their own personal ways to handle risk information in their projects, were found. The fi ndings indicate that the written form of the risk management process as such is not extensively used in practice and the agreed-upon formal process breaks up into several different action patterns. These differences in risk management actions are dependent on the project manager's own interest, the way the risk management was organized and written, the extent of the internal risk management expertise (i.e. risk managers and risk management process developers), the uniformity of the organization's management practices, and the contingency fac-tors of the project.

Project managers are expected to use both their managerial skills and competencies and the for-mal risk management practices to respond to the project's risks and unexpected events. The formal risk management procedures are predefi ned be-havior models for project managers: what they are expected to do in project risk management, with which tools and methods. Project milestones (e.g. deadlines, formal reviews, product deliveries) de-mand that the project manager articulates the ac-tions taken to manage the risks and decide on how to manage the residual risks. In this study, it was noticed that if the formal procedures are absent or inadequate, informal controls will be adopted prior to developing more formal procedures.

In this study, the close follow-up of the case projects revealed that the interest towards the

formal risk management process decreases as the project progresses (Figure 2). This can also be seen in the use of risk registers: in the sales phase and even in the early project execution phase the risk analyses are actively documented into risk fi les and risk registers in risk reviews, but the further the project proceeds the less risk registers are used and less risk reviews are arranged. As one of the interviewed project managers said: “After the project starts, I have no intentions to go back to the risk documents.”

A risk register, that is used to tabulate informa-tion about identifi ed risks, their likely impacts, and proposed and completed actions to be taken, is the most visible part of the formal risk management procedure in projects: It lists known risks, follows the linear indentify–analyze–mitigate process, and aims at collective information sharing and learn-ing from previous experiences. However, as Ward (1999) stated, adequate supporting procedures, including training and audit controls are desir-able to ensure that risk registers operate as an effective tool. It is argued, that the effectiveness of the risk register is dependent on the project manager's interest to search for information about previous risks, their intuition to perceive possible risk events, and their activity in documenting their own risk remarks. In addition the project supervision and control affect on the use of the risk registers. Risk register can not only be used as a risk archive but also as a basis for evaluating and developing the risk management process and practices in projects.

In the studied case projects where the risk management process is mostly centered on the preliminary risk analysis, the emerged risks and unexpected events in the project execution phase are not included in the risk management process. Instead, the project managers use other methods,

Figure 2. Formal and informal risk management actions in a project.

Project phases: Initiating Sales and bidding Execution Warranty Closing

Projectrisk analysis

Inte

nsity

of

act

iviti

es

Time

Formal risk management process

Supporting processes

Informal actions

Lessons LearnedFinal reviewArchives

Riskreviews

Interpersonalrelations

Preliminaryrisk analysis


their own experiences and skills and project man-agement practices, to identify and analyze these situations and to solve them in an appropriate way. This may be due to practical reasons: the project managers do not analytically separate and docu-ment all the different events or situations that come their way, but simply tackle them all as a part of their work.

Currently, the main purpose of the risk analyses is to make sure that all possible issues and probable risks are taken into the consideration as early as possible, typically before the project execution. After the project contract is sealed, risk analyses have only a subsidiary role. Also, updating the risk analyses seems to be diffi cult, and in most cases, the original risk analysis documents are neither referred to nor updated during the project. If the risk documentation is not updated during the project it does not contain the full risk informa-tion and fails to notice all the unforeseen events that have occurred during the project. Therefore, the post-project evaluation based only on risk documentation gives a wrong picture of the risk spectrum of the project. Consequently, the com-

mon habit to use the risk documentation from the previous projects as a reference to the risk analyses in forthcoming projects may be misleading.

In our research data, in projects that have adopted a more informal approach to the risk management, the cooperation, communication and personal relationships as well as situational awareness and personal insights are emphasized. The ability to make decisions about the risk miti-gation actions quickly and spontaneously is seen important, discounting the fact that the ad hoc decisions and deviations from predefi ned risk management procedures can sometimes be fatal. The informal risk management actions (e.g. re-scheduling, arranging a crisis meeting or replacing a critical technical component) may be valuable in a hectic project work and may save the project from severe consequences. However, if these ac-tions remain undocumented and unanalyzed it is diffi cult the transfer the knowledge to other projects. Additionally, informal actions are more personalized and less codifi ed by defi nition, which increases the risks involved.

GPS II – research projectGPS II (Global Project Strategies II) was a multidisciplinary research collaboration aimed at creating and developing new knowledge on risk management processes in global projects. GPS II was a continuation of research co-operation between Finnish based international companies, researchers from VTT Technical Research Centre of Finland, the Helsinki University of Technol-ogy (HUT), and the Helsinki School of Economics (HSE). The collaboration dates back to 2003 when The Collaboratory for Research on Global Projects (CRGP) was launched at Stanford Uni-versity. VTT was CRGP's fi rst affi liate and conducted a pilot research project in Finland together with HSE during 2003-2004. At the beginning of 2005, HUT joined the research group and GPS I was launched. In GPS I the focus was on institutional complexities and cultural dynamics in global projects. During GPS I, it was widely recognized that risk management in global projects is an area that would benefi t from high quality academic research. Both the researchers and the industry partners of GPS I identifi ed project risk management as an important area for development, and subsequently, the basic idea of GPS II emerged.

The vision of the GPSII is to develop new ways to manage effectively and innovatively global projects that are implemented in complex institutional and business envirinments with several

participating organizations.

Project networks: “Management of global

project networks”

How can project networks be effectively managed in different institutional and business environments?

What are the novel and effective risk manage-

ment practices in global project networks with

several actors?

How should a global project be organized for

the effective management of cultural variety and

diversity?

Risk management: “Risk management in

large and complex global projects”

Culture & diversity: “Management of

project organizations with cultural variety

and diversity”

Vision

ResearchAreas

ResearchQuestions

The research work in GPS II was jointly conducted by HUT, HSE and VTT and the project was ex-ecuted during the period 1.4.2007-31.3.2009. While the main fi nancier was TEKES, the follow-ing organizations have participated in and also fi nanced the project: Nokia Siemens Networks, Wärtsilä Finland Oy, Foster Wheeler Energia Oy, Outotec Oyj, Ramboll Finland, and Synocus Oy.

52 www.pry.fi

ConclusionsIn spite of all the detailed project plans, expe-rienced project managers and well-planned risk management activities, surprises will still occur. One can never fully plan for the future, and no risk analysis is perfect. Unexpected events emerge, evolve and evaporate during the project, what makes their early identifi cation and proactive control very diffi cult. All non-controlled turns, unstructured problems and unexpected circum-stances can not be taken into account in project risk analyses, but the formal analyses and shared work procedures are still valuable in creating a common basis for understanding all these foresee-able situations in projects.

Research has revealed that unexpected events are only seldom managed according to formal project management procedures and guidelines. It is more a question of the ability to quickly gather relevant data about the situation, to make and provide sense about the situation, and to correctly respond to it. Especially for the global projects, we need more fl exible and agile approaches to risk management that take into account the complex project networks, cultural diversities and high level of uncertainties. In this study, the following frame-work, representing the formal risk management process supported by other business processes and informal actions, was developed (Figure 3). The framework illustrates how the decisions and actions to manage risks in projects originate from many different sources and how the formal risk management process cover and document only a small part of all the risk management actions taken. Informal actions are always needed to give the project more versatile action repertoire especially in complex social contexts with neither predetermined action plans nor specifi ed response strategies available.

Also conceptual understanding is argued: Un-derstanding both the variance in risk perceptions and the varieties in unexpected events, their occurrences and management within projects, is seen to contribute to more proactive uncertainty management in projects. At best, the informal practices and formal practices in risk management are congruent, and informal actions support the formal systems and reinforce the project man-agers' behaviors that are aligned with formally stated goals. It is important to become aware of the informal part of the project risk management. We need to identify the informal actions that are used in projects to be able to analyze their role and value in project risk management. Then, new ways to make the informal actions more visible and more transformable are required.

It is realistic to say that no matter how good risk management practices, processes or tools we have, not all projects will use them anyway, or at least the procedures need to be modifi ed according to both the project's needs and to the project man-ager's preferences. Nevertheless, using informal risk management actions can never be used as an excuse not to use the formal procedures available. The formal procedures need to be supported by the informal ones and vice versa. Finally, this paper has touched on the diverse approaches that projects actually have to risk management. Broadening the view beyond the formal risk management process will bring new perspectives to project risk man-agement, especially in uncertain environments. The essence of project risk management lies in the way in which the tacit and the explicit – the formal and the informal – risk management is woven together.

Project context

Project network

Cultural features: - Organization cultures

- Risk management cultures

- National cultures

Project m

anagement

Strategy

Quality

Business control

Finance

HR

Safety and Security

Businessprocesses

Formal riskrisk management as partof project management Informal actions

Decisions and actions to manage project risks

Roles and responsibilities

Interpersonal relations

Communication and consulting

Coordination and co-operation

Sensemaking and sensegiving

PLAN

MONITOR

IDENTIFY

ESTIMATE

EVALUATE

TREAT

Figure 3. The risk management framework.


ReferencesAPM. (2006)

APM Body of Knowledge, 5th ed. Association of Project Management (UK).

Atkinson, R., Crawford, L. & Ward, S. (2006) Fundamental uncertainties in projects and the scope of project management. International Jour-nal of Project Management 24, 687-698.

Becker, M. & Knudsen, T. (2005) The role of routines in reducing pervasive uncer-tainty. Journal of Business Research 58, 746-757.

Chapman, C. & Ward, S. (2003) Project risk management. Processes, Techniques and Insights. John Wiley & Sons Ltd.

Chapman, C. (2006) Key points of contention in framing assump-tions for risk and uncertainty management. International Journal of Project Management 24, 303-313.

Dubois, A. & Gadde, L. (2002) Systematic combining: An abductive approach to case research. Journal of Business Research 55 (7), 553-560.

Hällgren, M. & Maaninen-Olsson, E. (2005) Deviations, ambiguity and uncertainty manage-ment in a project-intensive organization. Project Management Journal 36 (3), 17-26.

Hällgren, M. (2007) Beyond the point of no return: On the manage-ment of deviations. International Journal of Project Management 25, 773-780.

Kliem, R. & Ludin, I. (1997) Reducing Project Risk. Gover, Hampshire.

Meredith, J.R. & Mantel, S.J. (1989) Project Management. A managerial approach. 2nd edition. New York: John Wiley & Sons.

Langley, A. (1989) In search of rationality: The purposes behind the use of formal analysis in organisations. Adminis-trative Science Quarterly 34 (4), 590-631.

Li, P. P. (2007) Social tie, social capital, and social behaviour: Toward an integrative model of information exchange. Asia Pacifi c Journal of Management 24, 227-246.

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Perminova, O., Gustafsson, M. & Wikström, K. (2008) Defi ning uncertainty in projects – a new perspec-tive. International Journal of Project Management 26, 73-79.

PMI. (2004) A guide to the project management body of knowledge. Project Management Institute, USA.

Susilo, A., Heales, J. & Rohde, F. (1991) Project management effectiveness: The choice – formal or informal controls. Australasian Journal of Information Systems 15 (1), 153-167.

Söderholm, A. (2008) Project management of unexpected events. International Journal of Project Management 26, 80-86.

Ward, S. (1999) Requirements for an effective project risk man-agement process. Project Management Journal 30 (3), 37-43.

Ward, S. & Chapman, C. (2003) Transforming project risk management into project uncertainty management. International Journal of Project Management 21, 97-105.

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Mervi Murtonen, M. Sc. (Tech.)VTT Technical Research Centre of FinlandP.O. Box 1300, FI-33101 Tampere, [email protected]

54 www.pry.fi

China has been deeply infl uenced by Confucius for thousands of years. The Analects of Con-fucius is the most important book among all books of Confucius. It advocates philosophies of a gentleman who is benevolent, righteous, courteous, wise, sincere and brave. A gentleman is almost an ideal that people are pursuing in China and other Asian countries. The six quali-ties of a gentleman can be very useful to project managers to improve their project leadership in China, especially foreign project managers who are unfamiliar with China’s local culture.

Use Confucius to improve project leadership in Chinese perspective

Weiping JiangYun LeQinghua HeSchool of Economics and Management Tongji UniversityShanghaiPeople’s Republic of China

IntroductionProject management is mainly based on system approach. Its tools also refl ect this characteristic such as WBS, PERT, CPM (Moder etal., 1964; Harold Kerzner, 1995). So project management doesn’t involve the soft things much.

Facts of project management are similar to the description above. The concept of project manage-ment has been introduced into China for more than twenty years (Shizhao Ding, 2004). Unfortunately, management in the construction industry is often reduced simply to the use of bar charts, networks and resource allocation programmes. Many of the projects are not completed satisfactorily to meet specifi ed time, cost, quality and environmental requirements (Low Sui Pheng, 1995).

Studying and learning management with Chi-nese specialty can benefi t management practice in China, and also benefi t the development of management science in the world. In the long history of China, there have been many deep thinkers in philosophies of management. Lao Tzu and Confucius are the famous thinkers in China’s history, and their thinking has infl uenced China for thousands of years (Sui Pheng Low, 1998). Their works mainly concentrate on ideal behaviors of people in the society. Most of their works espe-cially “The Analects of Confucius” have become norm of behavior for which people are pursuing in China (Wai-Hung Ng etal. 2003). They also have great infl uence on behaviors of leaders and managers in China. It was felt that conventional wisdom remains relevant in today's competitive business environment (Sui Pheng Low, 1998). In particular, the application of age-old, time-tested wisdom in commerce as posited by ancient sages can be revived.

This paper is intended to explore lessons for improving today’s project managers’ leadership in China from Confucius’s The Analects of Con-fucius.



The Analects of ConfuciusThe Analects of Confucius is a book recording Confucius and his pupils’ words and deeds, and compiled by the disciples of the disciples of him (Chen Yu, Zheng Yi, 2007). It is a crucial book of Confucianism composed of 20 chapters, describing the criteria for a gentleman. The word “gentleman” has occurred in the book for 108 times. A gentle-man should be benevolent, righteous, courteous, wise, sincere, and brave. Benevolence is the fun-dament of the other fi ve qualities. And wisdom is the precondition of the others. These six qualities interact to each other. For example, a brave man will do things according to rightness even he may offend dignitaries. Likewise, a righteous man will become brave to help people inferior to him at the cost of his own interests. The inherent relationships of the six qualities are shown in fi gure 1.

It has been said for more than a thousand year in China that you can governance the world after you have read half of The Analects of Confucius. The Analects of Confucius has been seen as a clas-sical works about management in China. In the modern society, easterners and occidental are both studying Confucianism more and more. According to rough statistics, there are 64300 papers in Eng-lish relevant to Confucianism and 181000 papers in Chinese relevant to Confucianism. But there are big difference in understanding of Confucianism between the west and the east. Maybe it is the reason of language difference that the west can hardly research deeply in Confucianism. So most of papers in English advocate Confucianism but few put it into practice. Chinese put this thinking into practice more frequently. All of the papers can be concluded as two kinds:

1. Confucianism’s enlightenment for national governancePeople-oriented thinking is the foundation of Confucianism’s management by moral, rich

people and strong country is the main objective of management by moral, and gentlemen are the direction of education (Cai Yubo, 2002). Zhao Jiuyun (1996) holds that the potentate should manage the people by moral not the law. A moral potentate can impress the people with a perfect image and gets invisible power. Guo Changhua (2000) considers that the government should make the people working according to objective law and seasons, levy less tax and make the people rich; cherish the people and never encroach on their interests; select and use the best talents; make a clear distinction between reward and penalty.

2. Confucianism’s enlightenment for enterprise governanceModeration in all things is the best of rules. There is much use of moderation in enterprise governance (Gong Qiyao, 2000).Moderation means appropria-tion and objectivity. Systems of a company should be fl exible, the employees should be self-disci-plined and heteronomous, a company should also combine decentralization of authority and central-ization of power (Qiu Zhengchang, 2005). Moral is the standard of selecting talents, and words and deeds are also important factors. In Japan, many large companies have put Confucianism into prac-tice. In Hitachi Chemical, lifetime employment is put into use. And in Mitsubishi Heavy Industries Limited Corporation, the highest ethical standard is moderation (Wang Chunhong, 2004).

In a word, the Analects of Confucius mainly is applied in national governance and enterprise governance. And few scholars make research in how to improve leaders’ qualities. And this paper intends to make endeavors in the perspective.

Learning from the Analects of Confucius and Research ResultsHuman beings’ knowledge grows basing on heritage from ancestors. The principles of Con-

Figure 1. Inherent relationships of the six qualities

BraveCourteous

Righteous

Wise

Cincere

Benevolent

Precondition

Foundation

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fucius’ philosophies can be adopted and mapped into the business environment. The Analects of Confucius is mainly refl ecting Confucius’ wisdom and philosophies; it can not only improve project managers’ ability but also qualities of the people being managed and at last advance the manage-ment results. The paper is intended to focus on lessons for improving project leadership from The Analects of Confucius which is advocating how to be a gentleman. The authors have found out 25 important references specially describing the six qualities of a gentleman, and fully use them to improve understanding about a gentleman.

For testing the qualities of a gentleman‘s infl u-ence on project leadership, we investigated ten projects which had been completed lately. Just as shown in Table 1 which is designed according to the 25 important references, the six qualities of a gentleman in the project manager are scored by other project members. And Table 2 investigates the project manager’s performance (the results of schedule control and cost control). There is a important hypothesis that the better the project is controlled, the project manager has more lead-ership. Table 3 is summary of the results. In Table 3, the project manager who has higher score in qualities of a gentleman controls the project bet-ter (for two exceptions, project managers have relative high score in qualities of a gentleman but don’t control projects well). Therefore, there is a conclusion that the qualities of a gentleman have positive correlation with project performance. Ac-cording to the hypothesis, the more the project manager has qualities of a gentleman the better he controls the project.

In the ten projects, three in construction indus-try, three in software industry and four in other industries. All the projects are large, and each has more than 20 project members. Table 1 was printed and distributed among members of the projects. In every project, we investigate 15 project mem-bers. So 150 copies were sent out, and 130 were received. We computed the average score for each project manager and took the average score as the fi nal result. Then we calculated performance of project control from the fi nal documents of the projects. What’s more, we also interviewed the ten project managers, and found out an interesting phenomenon that project managers with high score usually were modest and courteous. There were some defects in the methodology, such as project members’ subjective judgements.

ConclusionsGentleman is a high standard for people in China and some other Asian countries. The Analects of Confucius describes the philosophies of being a gentleman. It still has important effects in applica-tion of project management in modern society.

A gentleman should be benevolent, righteous, courteous, wise, sincere, and brave. Wise is relevant to professional ability, and other fi ve qualities are relevant to personality. This also accords with modern research results that personality plays an important role in leadership. Benevolence is the fundament of the other fi ve qualities, and wisdom is the precondition of the others. In the aspect of being wise, several methods of learning provided

by Confucius are effi cient for project managers to learn information in their limited time. The other fi ve aspects are important factors to increase project managers’ personal charm and eventually increase project leadership.

A gentleman may not necessarily be a leader, but a leader has more or less the qualities of a gentleman. Being a gentleman will improve project managers’ leadership greatly, I hope this paper will benefi t project managers in China, especially foreign project managers who are not familiar with Chinese culture.

It is proved that the qualities of a gentleman are positive correlated to the project leadership. But there may be some deviation from the truth. For example, an excellent project manager with insuffi cient resources and obsolete equipments can’t control the project well. The conclusion need to be further tested, because the sample space is small. Moreover, some thoughts of Confucianism need to be verifi ed with the new times. Now Con-fucianism has strong infl uence on management in China and Asia. And how to fi nd out the new truth of management from Confucianism that can be applied in both the east and the west, it is the further research of great importance.

ReferencesHarold Kerzner (1995)

Project management: a system approach to planning, scheduling and controlling. New York: International Thomson Publishing Inc,.

House, R. S. (1988)The human side of project management. Reading: Addison-Wesley.

Shizhao Ding (2004)Project management for construction. Beijing: China Building Industry Press.

Low Sui Pheng (1995)Lao Tzu's Tao Te Ching and its relevance for project leadership in construction, International Journal of Project Management, 13(5), pp295-302.

Sui Pheng Low (1998)Back to the basics: biblical wisdom for effective construction project management, International Journal of Project Management, 16(5), pp209-214.

Wai-Hung Ng, S.F. Lee, Elias Siores (2003)8C plus 6C management model for multi-national corporation: a locally compatible and globally fi t culture model, Journal of Materials Processing Technology, (139), pp44-50.

Chen Yu, Zheng Yi (2007)The Analects of Confucius. Changchun: Jilin People Press.

Zhang Yan (2003)Confucius image detailed analyse, Juornal of Liaoning University(philosophy and social science edition), 31(6), pp34-38.

Zhang Peiguo (2002)A discussion of confucian thought of rule by virtue, Guan Zi Journal, (3), 65-69.

Zhang Dachun (2001)Exploration on confucian's initiation of mass edu-cation, Journal of Jianghan PetroleumL Institute (social science edition), 3 (1), pp 54-56.

Wang Liming (2004)Confucius' scientifi c spirit, Journal of Henan Me-chanical and Electrical College, (6), pp105-106.

Huang Xingen, Zhang Songhui (2005)On Confucius' learning rites from Lao Zi, Journal of Hunan University(social sciences), (4), pp6-10.


Weiping Jiang is a Ph.D student at School of Economics and Management, Tongji University of China. He received his Bachelor degree from Wuhan University of Technology, China. He studyied at as a postgraduate at Tongji University since September of 2005, and was recommand-ed to study as a Ph.D student in the major of project management in construction in September of 2007.

Tang Hao (2003)On Confucian Gentleman, Journal of Jianghan Petroleum Institute(social science edition), (1), pp68-71.

Cai Yubo (2002)The Characteristic of Confucianism’s Rule by Vir-tue, Social Science Research, (1), pp62-65.

Zhao Jiuyun (1996)The thoughts in management of Kongzi-new discussion of The Analects of Confucius, Gansu Social Science, (3), pp1-4.

Guo Changhua (2000)Discussion on kung Foo-tsz’ s management strat-egy, Jiangxi Social Science, (9), pp173-175.

Gong Qiyao (2000)Discussion on moderation thoughts’ application in enterprise management, Journal of Shanxi Finance and Economics University, 22(6), pp61-63.

Qiu Zhengchang (2005)Absorbing Confucianism and relating it to enter-prise culture, Li Lun Xue Xi, (1), 44-45.

Wang Chunhong (2004)Discussion on transition of Confucianism culture in Japan, Journal of Yuncheng University, 22(3), pp23-24.

Yao Xinzhong, Zhao Yanxia (2002)Confucianism and Christianity: comparisons be-tween benevolence and love. Beijing: China Social Sciences Publishing House.

Zhang Yun (2005)The viewpoint of Lin Yutang about Confucian-ism, Journal of Inner Mongolia Normal University (Philosophy &Social Science Edition), 34(3), pp102-106.

Sun Wenjuan (2005)Benevolence of Confucianism and love of Christi-anity, Journal of Suihua University, 25(3), pp24-27.

Zhang Zhixiong (2002)Religions and Confucianism, Religions in Fujian, (5), pp34-35.

Cui Zhiying (2003)The culture of Confucianism and modern Korea society, Journal of Tongji University(Philosophy &Social Science Edition), 14(4), pp97-102.

Wu Xianfang (2007)Pacifi sm of Confucianism, Theory Horizon, (9), pp180-181.

Dong Ren (2002)The nature of "courteous" and its modern mean-ing, Foreign Sociology, (4), pp19-28.

Wu Bofan (2008)Confucianism’s moral principals and spirit-Jap-anese enterprises’ “courteous” and harmony, 21 Century Business Review, (7), 130-132.

Li Wen (2002)The re-evaluation of the historical role of Con-fucian culture in East Asia, Studies in World Religions, (2), 24-30.

Wang Wenyuan (2004)Confucianism is not a religion-discussion with Professor Li Shen, Journal of Nanchang University(Philosophy &Social Science Edition), 35(1), pp1-12.

Li Shen (2007)Theoretical meaning of research on Confucianism, Confucius Studies, (1), pp4-6.

Lian Yong, Li Baoshan (2005)Cross culture management in Chinese and Korea enterprises, Journal of Hunan Business University, 12(1), 15-19.

W i i Ji i Ph D t

Yun Le is a professor at School of Eco-nomics and Management, Tongji University of China. He received his Bachelor, Masters and Doctoral degrees from Tongji Univer-sity. He is a member of the board of direc-tor of China association of engineering consultants. He has published more than 50 papers and six books in construction project management.

Qinghua He is a vice professor at School of Economics and Management, Tongji University of China. He received his Bach-elor, Masters and Doctoral degrees from Tongji University. He has published more than 30 papers in construction project management.

58 www.pry.fi

Quality of Gentlemen Score (0,1,2,3)

1. Benevolent

1.1 the fi rst to deal with problems and the last to enjoy the happiness of suc-cess

1.2 shares success with project team members

1.3 distinguishes gentlemen from fl unkies

1.4 shares his achievements with others

1.5 loves and hates distinctly

2. Righteous

2.1 care about his project team members

2.2 calm in front of profi ts and takes the profi ts should belong to him

2.3 select subordinates with excellent talents and appoint them in important positions or be generous to introduce them to his superiors

2.4 always ready to fi nd out unjust phenomenon and remedy it

2.5 loyal to the organization he is in

3. Courteous

3.1 show respect to his team members and gives them opportunities to use their talents

3.2 make exact rules of his team and let everyone including himself obey the rules

3.3 obey the rules consciously at any time

3.4 execute the rules strictly

4. Wise

4.1 learn something and practise it immediately

should not make decisions with extreme views

4.2 combine learning and thinking effectively, and improve his capability con-tinuously

4.3 to acknowledge what is known as known, and what is not known as not known

4.4 from what have been known to deduce things haven’t been known before

4.5 be modest and learn from everyone

4.6 arrange works’ sequence according to their importance.

4.7 fi nd out the reasons for mistakes and refl ect yourself thoroughly

4.8 look before you leap

5. Sincere

5.1 keep his words

5.2 trust others especially his subordinates fully and appoint them in a important position according their talents

5.3 never lie or make a misleading statement

6. Brave

6.1 be brave to reform abuses, and propel the organization development with outer environment

6.2 be brave to take responsibilities and earn trusts from both his superiors and subordinates

6.3 be brave to innovate and don’t fear failures

6.4 be brave to face problems and dig opportunities from them to extend the organization’s capabilities

Total score

Table 1. Qualities of a gentleman in the project manager


Table 2. Performance of project control. Note: if the schedule or cost overruns 15%, the performance will be called bad;

if the overrun is between15% and 5%, the performance will be called well; otherwise the performance will be called good.

Table 3. The results of qualities of a gentleman and project performance

Item Performance

Schedule

Cost

Project Score of qualities of gentlemen

Performance of project control

1 60 Good

2 66 Good

3 61 Good

4 52 Bad

5 65 Good

6 59 Well

7 61 Well

8 56 Well

9 45 Bad

10 46 Bad

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Project Perspectives 2010

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