CHAPTER 1 – INTRODUCTION
The fundamental question considered in this dissertation is, in the past, the success of project management was based on focusing on the objectives of the Project Triangle of cost, time and quality. Although this has lead to the success of many projects, there is an increasingly popular viewpoint that this focus is too limited. Analyse the importance of the other emerging success factors of projects such as customer focus and a move away from the traditional project end point towards aspects that act through the lifetime of the product or service created.
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Projects are temporary organisations with a clearly defined beginning and end with unique defined objectives and resources.
Project Management is a method for bringing change in a company (no-repetitive activity) e.g. banking systems; moving from paper based to computer based. It’s a socio-technical system (involvement of humans and technical tools). PM is not only for building a new system but also modifying an already existing system.
A project can be defined as an activity with a specific goal occupying a specific period of time. . (Ray Wild 1995 pg 353) Project is a limited activity, not only in time, but also in the use of resources. Project management, therefore is concerned with the pursuit of a specific goal, using given resources over a defined period of time. This will often require the planning and establishment of an operating system, acquisition of resources; the scheduling of activities and evaluation/review of completed activities. Project Management is all about managing these resources in order that the project is delivered
On time, and
Good project management starts with good planning – the objectives of a project should be clear and would conform to the SMART model:
Activities or groups of activates that contribute to risks of delays
Projects do not always go according to plan and it is generally the case that when this happens, work takes more, rather than less time, than expected. Good project management recognises the internal and external factors that might throw a project off schedule. Monitoring progress carefully will help identify the likely impact of any delays so that action can be taken to get the project back on track. This is explained further in chapter 2 under project environment and risk.
Contingency planning: Strategies that could bring the projects on time
The three key learning points
1. Identifying risks of the project: Once the risks are identified, it is easy to manage risks properly rather than trying to put out fires during the project.
2. Indentify the critical path using network diagrams
3. Gantt charts
The critical path
The critical path is the path through the network with the greatest total duration. (Andrew Greasley pg 375 2006) the critical path method was developed by Dupont during 1950s to manage plant construction. The PERT approach was developed by the US Navy during the development of the Polaris Submarine launched ballistic Missile System during the same decade.(Sapolsky,1972, Andrew Greasley pg 375 2006) A project can have more than one critical path, if several paths tie for the greatest duration. Activates on the path must be started and completed on time; otherwise the total project will not be completed on time.
Gantt charts are line diagrams, with lines representing both time and activates. They can be used to estimate the amount of resources required for a project. Where activates are continuous ‘chain’ with one activity able to follow immediately after the other, these can be drawn as a continuous line on the chart.
Project Scope Management
Project Scope Management includes the processes required to ensure that the project includes all the work required, and only the work required, to complete the project successfully (PMI 2004). In Project scope management the primary concern is to define and control the scope of work that should or should not be included within the constraints of Cost, Time and Quality.
This phase can be break down into 5 basic steps:
Create Work Breakdown (WBS),
Scope Verification and
Projects fail when they do not meet the following criteria for success:
It is delivered on time.
It is on or under budget.
The system works as required.
Only a few projects achieve all three. Many more are delivered which fail on one or more
of these criteria, and a substantial number are cancelled having failed badly.
Why things go wrong
Marsh (2000) proposed an analytical framework to categorize project failures.
The wrong problem is addressed – A primary cause of failure is that some projects are started with no clear idea of what exactly are the goals and strategy of the client organization.
Analysis is carried out incorrectly – Team is poorly skilled, or inappropriately resourced. Majority of projects fail as a result of poorly skilled and unqualified staff, resulting in poor project management.
Project undertaken for wrong reasons – Technology pull or political push. This was evident during the DOT.COM crash during the year 2000. Many companies were simply following a trend set by either their competitors or by internal personnel.
Users change their mind – Many projects have failed over the years as a result of change of requirements by users of the project. This has resulted in increasing costs and time constraints that many projects cannot handle.
External events change the environment – New legislation or political intervention can result in failure of projects. Natural environment hazards put projects at risk.
Implementation is not feasible – Many projects are over-ambitious and result in project failure.
Poor project control – Inexperienced project manager, he/she is ultimately responsible for the completion of the project and therefore it can be argued that any project failure is also the failure of the project management.
Quality and productivity play an important part in the success of a project. Quality in terms of the purpose and measurement of what the project is intended for. Productivity relates to the potential rate of progress a project could have. This is in terms of both financial and time invested in a project and its potential return.
CHAPTER 2 – DEFINITIONS AND CHARACTERISTICS OF RISK MANAGEMENT & CRITICAL SUCCESS FACTORS
Project Risk Management
What is Risk?
“A risk is any uncertain event that, if occurs, could prevent the project realizing the expectations of the stakeholders as stated in the agreed business case, project brief or agreed definition. A risk that becomes a reality is treated as an issue.” (Young, 2007: 107)
Project environment and risk
Kathleen Schwalbe (2003): p6 suggests:
The project management environment directly affects a project
The environment affects HOW a project should be managed
Projects are influenced by stakeholders and issues
The Project environment has two main sections known as the Internal and External Business/Project environment.
There are a number of issues in the internal business environment that need to be considered when assessing the risks to the project.
The three main stakeholders of a project include the owner, the technical staff and the end-user. Their involvement will ultimately determine the success of the project.
In terms of end-users their participation will include the outputs of the system both directly and indirectly. Project managers’ view is that they are the ones that will produce and oversee the projects, finally those of whom will finance and commission the project (owners). Within this group it only requires one stakeholder to conflict with another for the project to fail.
All stakeholders will determine whether the project succeeds. End-users may not have enough input into the system and thus resulting in a poorly produced project. Developers/project members may feel that budget and time constraints may overshadow the completion of the project, while the owners may feel that the project has exceeded its budget or may be delivered too late leaving it irrelevant.
Factors such as technological advances and changes in the business environment all affect the success of a project.
When assessing the risks to the project there are a number of issues in respect of the business environment external to the organisation that need to be considered.
Is there likely to be any major governmental or political change , that may occur during the development of the project, which may affect the stability of the market place, the reason for the project and the scope or content of the project.
Is there likely to be any major change in the economic environment that might occur during the development of the project that may affect the financial aspects, the market place the project provides products or services for now.
The project environment is very important in regards to a project. By understanding factors both internally and externally, only then can a project manager plan a project effectively that will not affect the completion and performance of the project system.
All projects bring with them an element of Risk. In the best-planned projects there are uncertainties and unexpected events can always occur for example project staff might leave unexpectedly, the budget might suddenly be cut or a fire or theft might affect the project progress. The majority of risks are however related to the fact that a project manager’s plan is based on estimates and they are therefore manageable. Risk management is a mechanism that allows project managers to predict and deal with events that might prevent project outcomes being delivered on time.
When identifying a new project a Risk Assessment will have to be conducted in order to manage a project without the possible effects of disruption. In order for this to happen the following questions have to be asked:
What could possibly go wrong
What is the likelihood of this happening
How will it affect the projectand
What can we do about it
The sort of areas that risks are associated with includes:
The activities along the timeline and any threats to completion and to timescales.
The project components: stuff, equipment other resources.
Dealings with contractors and suppliers.
Other projects that might have an impact.
Organisational changes that might occur during the project.
Outside influences that might affect the project such as changes in financial support or government policy
The assessment of likelihood of the risk occurring and potential impact if it does occur will come from the experience and knowledge of project stakeholders and others consulted during the risk analysis process. You can think of risks in terms of a matrix (see figure 1)
Your greatest effort will be focused on addressing the risks that are most likely to occur and those that will have the biggest impact if they do occur.
In order to effectively manage risk it is important that each risk is allocated to an identified owner. This should be someone within the project team whose responsibility it is to keep an eye on the situation and ensure that the necessary mitigating actions are actually carried out. Responses to the initial risk assessment may include:
Risk Transfer – move the risk to someone more able to deal with it e.g. contract out the supply and support of the hardware infrastructure
Risk Deferral – alter the plan to move some activities to a later date when the risk might be lessened.
Risk Reduction – Either reduce the probability of the risk occurring or lessen the impact e.g. increase staffing resource on the project.
Risk Acceptance – Sometimes there’s not a lot you can do other than accept the risk and ensure that contingency plans are in place.
Risk Avoidance – Eliminate the possibility of the risk occurring e.g. use alternative resources or technologies
Managing risk is an ongoing process. The nature of the risks that are faced will alter as the project progresses e.g. staff recruitment may be a big issue at the start of a project whereas staff retention is the issue as the project draws near to an end. At the very minimum project managers should review the risk assessment and management plan at each phase boundary before moving into a new phase of the project. This would allow the project to be managed effectively throughout the system development life cycle.
Critical Success Factors
Critical Success Factors are measures used to verify if a project is successful or not.
Traditionally the success factors have been those used by the Iron triangle(Time, Cost, Quality) to determine if the project has been a success I terms of; the project is completed on Time, on budget and as required/specified(good quality and performance). However, other factors have arisen for example; clients, stakeholders, contractors, etc. These are some of the CSF that is used to determine the success of a project.
“Research on project success further shows that it is impossible to generate a universal checklist of project success criteria suitable for all projects. Success criteria will differ from project to project depending on a number of issues, for example, size, uniqueness and complexity”,J. Wateridge, IJPM 16 (1998)
Success criteria are those benchmarks against which the success of the project will be measured.
Success factors are those factors that assist in the achieving of criteria.
CHAPTER 3 – LITERATURE REVIEW
a. Success of projects implemented in Africa
“The term ‘African countries’, refers to all those countries on the African continent including the Islands of Madagascar, Mauritius, Reunion and Seychelles. African countries are by no means homogeneous. They have different religion, social and economic conditions. Modern African states were constituted with no reference to ancient kingdoms, so that each new state includes rival ‘nations’ with nothing other than colonial institutions holding them together. Despite these differences, African countries are characterised by some or all of the following conditions” Ndiritu Muriithi, IJPM, Vol21, Issue5
African countries have different religions and economic conditions. There are some conditions that characterise African countries. It is important for organisations to go through these conditions and conclude if it’s a risk or gain for a project. These include:
· Political conditions: The political situation in countries e.g. Uganda and US is different. The political stability is very important for a company implementing a project because changes in political environment such as war or other factors may affect the overall strategy of the company. The government taxes and policies on a company can affect the project strategy for the company as certain new policies could affect the movement of capital and resources across countries.
·Social conditions: The social and cultural influences on the business vary from country to country. It is very important that such factors are considered. The company must consider the effect of working culture on the business. The cultural differences can lead to lack of communication and co-ordination, especially in a highly creative and rapidly changing industry such as china.
·Economic conditions: The effect globalisation encouraged many companies to outsource many of their projects to developing countries. This helped many companies to achieve a strategic advantage in terms of cost saving. For example, salaries of Ugandan workers are much less than for those in USA.
·Technology conditions: The technology is rapidly changing, this is led to increased competition and developing countries which have the low cost skilled labour could soon be a direct competition to developed countries. The companies must manage their resources efficiently in order to gain the first movers advantage and gain market leadership. However some African countries face power shortages which can have a great impact on a project. A company must be prepared for this by investing in Captive Power Plants (CPP) which is generator driven.
Some of the major problems African countries face that could affect the outcome of a project includes:
· Corruption: Corruption is like a disease that has spread all over Africa. If projects are not properly supervised or monitored, money can be diverted into other areas; be it personal gain or into other operations.
·Inflation: Inflation causes many distortions in the economy. When prices rise consumers cannot buy as much as they could previously. This discourages savings due to the fact that the money is worth more presently than in the future. This expectation reduces economic growth because the economy needs a certain level of savings to finance investments which boosts economic growth. Also, inflation makes it harder for projects to be planned for the future. It is very difficult to decide how much to produce, because businesses cannot predict the demand for their product/project at the higher prices they will have to charge in order to cover their costs.
Disease: The most common diseases in Africa are transmitted by insects, contaminated food and water. Foreign employees need to be provided with information such as; protecting themselves from insect bites by wearing proper clothing, using mosquito nets, applying an insect repellent to exposed skin and clothing, and if possible, avoiding high risk situations. As well as getting vaccinations for diseases such as yellow fever. If employees are well informed and trained, they can be prepared and this will not affect their performance hence reducing on risk of project failure.
Civil war: Take the case of Libya where citizens are rioting in order to change the president however, the president of Libya; Muammar Gaddafi does not want to step down. This brings along a number of issues such as; business closing, foreigners leaving the country because of the risk of safety. The country is unstable and any operations or projects that have been implemented may have to be put on hold or shut down. “Saif al-Islam Gaddafi also hit out at those behind the violence. He said protests against his father’s rule, which have been concentrated in the east of the country, threatened to sink Libya into civil war and split the country up into several small states” Aljazeera
Projects in African countries:
China’s investments in Africa
In recent years, China’s rapid economic development, enhanced national strength, and the gradual opening to the outside world have attracted the attention of the world. African countries can learn from China’s successful experience from economic and trade exchanges with China, particularly in infrastructure facilities constructions and choosing an economic development model suitable for their domestic situations. For example, in Zambia, government learnt from China to establish export processing free trade zone, took a series of measure of facilitate investment and trade and exempted enterprises from import duties and value-added tax.
To sum up, a long history of friendly political relationship and continuous support of each other paved the way for the economic and trade boom between China and African countries in the recent years. The advantages in resources, capital, products and technology are highly complementary that makes the cooperation possible. China’s preferential policy towards the investment in Africa further encourages Chinese enterprises to enter into the African market. African countries also devoted themselves to reduce the deficit, control inflation, reform state-owned companies, adopt policies to attract foreign investment and actively improve the investment environment. It is estimated that the following 5 to 8 years will be the “Golden age” for the Sino-African relationship. Chinese corporations will continue to increase investment in Africa and the mutual trade and economic cooperation will have an optimistic prospect.
b. Leadership Success
Leadership has been exercised since the very start of civilization. The Chinese philosopher Lao Tze was writing about leadership 2,500 years ago and his work is still referred to (Crainer, 1996).
Quality of leadership is central to the survival and success of project groups and organizations. As The Art of War, the oldest known military text puts it as, ‘the leader of armies is the arbiter of the people’s fate, the man on whom it depends whether the nation shall be in peace or in peril’ (Sun, Undated).
The way a project is managed can either lead to its success or failure. Different Project Managers use different leadership styles. The types of Leadership styles are listed below:
Autocratic: autocratic leaders are authoritarian; they keep most of the authority to themselves; they do not delegate much or share information with employees.
Democratic: democratic leaders by comparison, like to involve their workers in decisions; they also take the views of their subordinates into account when making decision.
Laissez-Faire: laissez-Faire leaders encourage freedom of group or individual decisions with little leader participation. A leader would supply information about tasks but would take no further part in the discussion process. Finally no attempt to praise or criticise others would take no place apart from the occasional comment or remark.
Paternalistic: paternalistic leaders believe he or she knows what is best for the employees
Which style of leadership is most effective depends on the kind of situation the leader is dealing with. Assume that a consultant company with clear and structured tasks. Each consultant knows his own job. Under this circumstance, we can predict that the company will work more efficiently if the leader is relation-related than task-related. On the other hand, the assembly line, the leader comes under pressure of an urgent demand. Although the workers know exactly how to do their jobs, can you predict whether it will be fulfilled before lead time led by a task-related leader or a relationship-related leader. But in very favourable situations, task-related leaders can focus on cultivating good interpersonal relations because they know the job will get done.
Therefore, the most effective leadership style depends on; the organizations, the skills of their managers, the characteristics of employees, the nature of their tasks and their structures. No one style of leadership appears universally better, although a good deal research indicates that a considerate, participative or democratic style of leadership is generally (not always) more effective.
Furthermore, as there more and more MNCs, managers should be sure to consider national culture as an important variable in choosing a leadership style.
Factors which affects leadership style
Risk – when a decision has to be made urgently and involves a high degree of risk e.g. selling a football player. The leader is likely to be quite autocratic.
Time constraint – if there is plenty of time to discuss matters and only a low chance of it going wrong (low risk) the style may well be more democratic.
Skills of manager and workforce – The leaders are expected to be backed up by a well-trained support staff of experts in a range of relevant fields. However workforce has to be well skilled and trained in the following:
Teams depend on the culture of the company in which the team exists. When I say culture, I mean watch how people act and interact. Do people do things for one another If a project team is supportive and trusting then likewise there is a good chance that teams will be successful. Also, it is important that members of teams have realistic expectations. The unrealistic expectation that is usually assumed by leaders is that team members are expected to put aside their own personal goals and work strictly for the team. The best teams have leaders who do not make these unrealistic expectations.
A team can also become stronger through bonds that are created over time. When there are certain situations that the team has encountered before, then how much easier is it to go into that situation again and perform better.
Leadership style will depend on factors such as the task, the people involved and the amount of risk.
Effective management training could be a useful way to persuade leaders to be flexible.
The best style of management at any moment will depend on an enormous range of factors such as personalities and abilities of the manager and the worker and the nature of the task.
The way in which a leader deals with his or her colleagues can have a real impact on their motivation and how effectively they work.
Leader who always involves discussion with his or her workers will gain better ideas and a more highly motivated workforce.
Leadership is a process through which a person tries to get organizational members to do something the person desires. The leader’s influence extends beyond supervisory responsibility and formal authority.
Leadership is very important. The reason is because they provide vision and direction and are therefore a key element of business success. As a result, any successful project shows that it has strong leadership. When autocratic leadership is used at the beginning of a leadership it helps to show how people will think that you are serious when leading them. But I prefer when democratic leadership is being used because it helps the employees to feel responsible of what they do; they get a chance to make opinions and decisions.
c. International projects and culture
Organisational climate and project success can be linked to international projects.
More and more projects are being done abroad. The culture of an international organisation can affect the performance of a foreign employee.
“Few managers would dispute that the climate or atmosphere of an organisation — loosely, what it feels like to work there — is likely to have some impact on its performance. There is less agreement about what is an ideal climate for optimum performance, and the influence managers can have in creating and maintaining it” Organisational climate and project success, Roderic J. Gray
To ensure implementation of successful international project, emphasis on planning and management tools should be placed for Project Managers to use to ensure control of time, cost, resources and quality of performance. However, risk or most problems arise because of the environment itself and not from the control of the project manager. In this case the environment refers to the culture of a new country and the difficulties employees face in adjusting or working in these new business environments and how this can an affect on a project’s success or failure.
A method that can be used to decide whether a country is risky or not to implement a project is the Hofstede Cultural Dimensions Framework. Hofstede is a Dutch researcher most famous for his theory of cultural dimensions framework.
Hofstede’s (1980) dimensions of culture have become the most widely used model for explaining various effects across cultures (Yoo and Donthu, 1998). Stedham and Yamamura (2004) describe culture as stable and enduring but also somewhat changeable due to external forces.
Hofstede’s five dimensions include the following.
a) Power Distance. The power distance dimension has to do with inequality in a society. In a high power distance environment there would be greater tolerance for, and expectation of, inequality in prestige, wealth and power.
b) Uncertainty Avoidance. Hofstede focuses on uncertainty at the organizational level looking at the use of rules and strategies to reduce exposure to an unsure future.
c) Individualism and Collectivism. This dimension has to do with the relationship the individual has with the group and more generally with society. Hofstede points out that the nature of this relationship determines not only how people think about themselves and their immediate group but the “structure and functioning of many institutions aside from the family” (p210)
d) Masculinity and Femininity. There seem to be two elements to this dimension. One deals with the values held and the other with role expectations. Hofstede (1980) notes that in a work setting, males value “advancement, earnings, training, up-to-dateness” while females value “friendly atmosphere, position security, physical conditions and manager cooperation” (p281). The second aspect of this dimension has to do with what people in a culture expect of sex roles. In a very masculine culture, sex roles would be differentiated while in a feminine culture sex roles would be more similar.
e) Long Term Orientation (LTO). This is a recent addition to the Hofstede model, added as a new dimension to the model in the second edition (2001). It is based on the philosophy of Confucius and has to do with “persistence, thrift, personal stability and respect for tradition” (p351). It describes a longer term, higher level view of life.
Just as there are differences seen in the dimensions between countries, it could be expected that there would be differences expected between groups of individuals within countries. Differences between attitudes and behaviours of males and females are extensively studied and well documented in Western culture. Similarly, individuals have been observed to change in their attitudes and behaviour as they age. Variations in Hofstede’s cultural dimensions across age and gender have been studied by some researchers. Stedham and Yamamura (2004), for example, examined the cultural differences between Americans and Japanese with a focus on sex and age differences. They found no differences due to age and differences between males and females on the power distance dimension in Japan (m>f), individualism (m>f) in both countries.
Effects of globalization: Hofstede notes changes in measured levels of his dimension between 1968 and 1972. It seems very likely that changes between 1972 and now would be much more profound with globalization of business and telecommunication and the shift of China to more free-market economy. While there has been some debate on whether there is convergence of world culture, Inglehart and Baker (2000) concludes that while cultural differences will persist there is a trend to more common cultural values as countries industrialize. Perhaps China’s values are beginning to change and that change is seen especially in its cohort of young people.
Hofstede regarded both national and organisational culture as phenomena at different levels. However he felt that they were both linked. “Organisational cultures are supported by employees’ societal values, while national cultural differences reside in practices at organisational level” (Huczynski & Buchanan, 2001). Hofstede argued that peoples` behaviour in the work place is largely influenced by societal cultural values as careers are a trade off between risk, security, success and family life. “One could expect that societal power distance norms between countries would impact differently” (Huczynski & Buchanan, 2001). However for the success of an Organisation it is important to keep in mind the national culture and adhere to it.
Let’s take the example of the HSBC bank whose catchphrase all over the world is “your local bank”. As the world’s local bank, their employees need to reflect the diversity of the communities they serve. Their commitment to diversity starts at the top. Their Board is one of the most ethnically diverse among leading international companies, so is their employee base: half are women, three in 10 are Asian, one in seven is Latin American; Caucasians are a minority. As a result they are able to easily adapt to the national culture in which they are based. Their organisational goal consists of adapting to the national cultures in which the bank is based, among other missions. They employ local employees to help in building the bank with the norms and beliefs in keeping with the society and its culture (www.hsbc.com). As a whole they are extremely success, accepted and recognised Organisation worldwide.
How to measure success
[[International Journal of Project Management, A new framework for determining critical success/failure factors in projects, Volume 14, Issue 3, June 1996, Pages 141-151]
CHAPTER 4 – LIMITATIONS
When looking at the options available for conducting research I looked at the three aims that need to be met when collecting information. The research must be reliable and valid, the validity gives a true picture of what’s being measured and the results are reliable if another person can conduct the same method and achieve the same results.
CHAPTER 5 – CONCLUSION
Projects exist in every sphere of business, markets, segment, and industry. Projects would come in a myriad types, sizes, and complexity- from small initiatives, medium-size initiatives to mega-projects. Nowadays, project management is no longer special-need management. It is rapidly becoming a standard way of doing business.
Project managers need to communicate with everyone in the company who’s responsible for implementing and reviewing projects. To work effectively, it must enable communicating about a project’s progress, goals, costs, and availability of personnel. In addition, the effective project manager should have skills and a good working knowledge of project management process, and pay attention on risk management plan, which will enhance a project success and a long-term benefit to a corporation.
It is important to adapt the organisational/project culture and get the correct mix between the organisational culture and the national culture in order to come up with the sufficient mix for the smooth running of the project, especially in regard to its employees. Therefore it is important to keep up to organisational cultural values but it is essential to adapt these organisational cultures in order to keep in line with the national culture. By this the organisation will be accepted by the population in that country without them feeling that it was changing their lifestyles in some way. Therefore with increasing Globalisation, Organisational culture should be taken into account but should not be considered be more important than National cultures. In this way, projects can run smoothly.
CHAPTER 6 – BIBLIOGRAPHY
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