Re Perspectives 2010

Project Perspectives
The annual publication of International Project Management Association

Vol. XXXII
ISSN 1455-4178
€8.00

2010

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Editorial

The World of
Global Projects

W

hile businesses and companies are increasingly multinational we are more frequently facing projects with participants 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 competencies 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 ‘Workflow Management Systems’. 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 findings regarding global projects. Researchers have spotted the appearances and obvious significance of global projects
already several years ago and interesting research results have
been gained from their efforts. In Standford university a specific
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 effort that was finalised 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 field
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 possible the variety of efforts and
gained results in the field of
global projects.

Dr. Kalle Kähkönen
Chief Research Scientist
VTT - Technical Research Centre of Finland
Acknowledgement to the IPMA WC 2009 conference. Several papers
of this issue have been picked up from the Scientific 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.

Table of Contents
3

The World of Global Projects

4

A model of success factors for Global Project
Management
Jean Binder, Paul D. Gardiner, James M. Ritchie

12 The Collaboratory for Research on Global Projects
(CRGP) Structure, Philosophy and Activities
Raymond E. Levitt, Ryan J. Orr
15 International cooperation for development: Design
of a competence-based model for managing
programmes and projects
José R. Cobo, Isabel Ortiz, Carlos Mataix
20 Safety and Health Risks in International
Construction Projects
Dongping Fang
26 The Gap Between Project Managers and Executives
Peter Wijngaard, Herman Mooi, Victor Scholten
30 Managing Stakeholders in Large Engineering
Project: Harmonious Together-development
Between the Project Department and Peripheral
Community
Ma Liang, Le Yun, Li Yong kui
34 Communication and Trust in Distributed Project
Teams
Helgi Thor Ingason, Tomas Haflidason,
Haukur Ingi Jonasson
42 Overview of The Virtual Design Team (VDT): A
Computational Model of Project Teams
Raymond E. Levitt
48 Formal and informal risk management actions in
projects
Mervi Murtonen
54 Use Confucius to improve project leadership in
Chinese perspective
Weiping Jiang, Yun Le, Qinghua He

Published by
The 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
community
PMAF serves with
- Two project management journals (Finnish &
English)
- Yearly Project Day conference and frequent theme
events
- Project management certification
http://www.pry.fi/index_eng.htm
Editorial Board:
Kalle Kähkönen (Editor in chief)
Aki Latvanne

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

Intoduction
The 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 different 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 findings 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 efficiency and effectiveness
of managing such projects. The steps involved in
achieving the above objective and discussed here
are: (i) defining 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 Review
This 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
This is an updated version to the areas of knowledge that increase the
of a paper originally
likelihood of success during the management of
published in the “IPMA
global projects. The GPMF dimensions, challenges,
Scientific Research Paper benefits, knowledge areas and categories will be
Series: Human Side of
briefly explained in this section before undergoing
Projects in Modern
comparison against selected studies from other
Business” (IPMA, 2009)
authors in the following sections.
4

Virtual projects (also called ‘distributed’ projects)
involve team members in various locations (Ghosh
and Varghese, 2004; Guss, 1998). As defined 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 definition forms the basis of the
five 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), multicultural (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 five
GPMF dimensions.
The literature provides many examples on how
these five dimensions can be used to harvest
benefits from global projects. Geographical dispersion 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 flexibility and innovation (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 customers’ needs (Hofstede, 1991, p.425). Project team
members in multiple time zones can align their
times to the stakeholders’ office hours (roundthe-clock project execution) (Haywood, 1998, p.6;
www.pry.fi

Figure 1. The research project
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 defined 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 literature were classified according to organizational
change principles into five discrete knowledge
areas, namely: global teams, global communication, global organizations, collaborative tools and
collaborative techniques. Each knowledge area was
populated with five categories of success factors
giving a total of 25 GPMF categories (Binder et
al, 2009); these categories are listed later in this
paper (see figure 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 identified success factors through analytical 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 concept (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
Project Perspectives 2010

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 domains other than project management, e.g. coaching, 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 Methodology
The research used a structured approach to evaluate the existing literature (figure 1). The first step
involved the selection of articles in peer reviewed
academic journals; the Project Management Journal (PMJ) and the International Journal of Project
Management (IJPM) were selected since these
are considered the leading project managementspecific journals (Henrie and Sousa-Poza, 2005).
The second step was to eliminate book reviews
and editorials, in order to limit the study to peerreviewed articles (Henrie and Sousa-Poza, 2005).
During the third step, each abstract was read to
determine which papers provided success factors 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 figure 2. Most papers evaluated projects with
multicultural stakeholders in various countries
and organizations. However, the effects of multiple languages and time zones are not explored
5

Figure 2. Representation of GPMF dimensions in the 47 papers.
sufficiently. 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 fifth step, the full contents of the 47
remaining papers were analysed. The geographical dispersion of the subjects participating in the
empirical studies was also evaluated, and is represented in figure 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 MiddleEast. Therefore, the current conclusions and
generalizations of the findings within this paper
are limited to only a few geographical areas and
cultures. The table on figure 5 also shows the occurrence 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, defining 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 classified
into the following knowledge areas: global team
management; global communication; global organisations; collaborative tools and collaborative
techniques (Binder et al, 2009). Whenever a success 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 Impact
Paraphrasing 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 3. Geographical scope of the empirical studies.
6

www.pry.fi

factors and the suggested changes in the GPMF
structure.
Success Factors in the Literature
Figure 4 shows all the 28 GPMF success factors
identified during the literature analysis. The first
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 benefit to global projects.
Validated Success Factors
14 categories appear in more than 10% of the
studies, these are highlighted in amber. Typical
examples exist such as Cross-Cultural Collaboration (43%), Global Communication Techniques
(30%), Global Team Leadership (26%), Conflict
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 project management arena: coaching, PMO (Project
Management Office) and text-and-image tools,
e.g. chats, instant messaging and web-conferencing. 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 firm conclusion can be made on the remaining 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 Factors
Three new categories of success factors were
drawn from this analysis, namely: ‘Cross-Cultural
Negotiation’, ‘Global Teamwork and Team cohesion’ and ‘Workflow Management Systems’.
Cross-cultural negotiation techniques were part
of the conflict management steps of GPMF (Binder,
2007, p.64). However, other situations may exist
that require specific negotiation techniques across
cultures. “The Guide to the Project Management
Body of Knowledge (PMBOK® Guide)” (4th Edition) 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) identified that
‘Problems at the negotiation stage can be inevitable 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 deProject Perspectives 2010

Figure 4. Occurrence of the Success Factors in the literature.
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 flow
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 workflow management systems, Badir et al (2003, p.46)
recommend a model that monitors and controls the execution of multiple
workflows operating synchronously between organizations, coordinating
the information flow from creation to elimination and sharing project
information across team members. Some benefits of such model are the
immediate electronic updating of the project status, the efficient and easy
communication between all stakeholders, the immediate availability of
project information and minimized project risks.
Changes in the GPMF structure
Pheng and Leong (2000, p.314) suggest that the management of international 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 papers 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.
7

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 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%) confirms
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 suggests 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%) confirms this conclusion. As one example, projects having stakeholders in
various countries face a range of international threats identified in the

literature as political, legal, economical, sociocultural 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 figure 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, creativity, negotiation and conflict management. These
relationships are another potential area for future
research, as well as identifying global characteristics of other competences, such as self-control,
assertiveness, relaxation, openness, results orientation, efficiency, consultation, reliability, values
appreciation and ethics (IPMA, 2006).
Implementation and exploitation
This study suggests a novel structure to explain
the success factors associated with global project management, this is highlighted in figure 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 literature 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 recommendations that emerge. This structure can serve

Figure 6. New model of success factors in Global Project Management.
8

www.pry.fi

as a maturity model of the companies’ practices
in global project management which can be improved 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 challenges and what types of benefits can be achieved
by global projects as well as extending the model
where necessary.

Conclusions
There are an increasing number of academic studies suggesting success factors for global project
managers, covering different geographical areas
and using various methodologies. These studies validate the success factors proposed by the
Global Project Management Framework previously
defined by the authors and indicate the existence
of 3 new success factors and one new category.
A new model of success factors in Global Project
Management was developed from this.
The implementation of a new set of practices,
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 manner, according to organizational change principles.
The model presented in this study satisfies 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 definition; the geographical 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 implementation of success factors to meet the specific
requirements from every project configuration.
The model presented in this study satisfies this
need since each module provides an independent
set of success factors, grouped according to a
logical structure.
Global projects are intimately linked to technologies, 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 exploratory 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 satisfies 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 benefits. The model is also open to include new
categories, knowledge areas and success factors
that might be discovered in future studies.
Project Perspectives 2010

Jean Binder, PMP, MBA
Heriot-Watt University, School of
Engineering and Physical Sciences,
Edinburgh, Scotland
[email protected]
Jean
J
Bi
Binder
d iis an iinternational
t
ti
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).

Paul D. Gardiner
The 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
fifteen years in Heriot-Watt University teaching undergraduate and
postgraduate students in the areas of strategic project management 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, MSc
Heriot-Watt University, School of Engineering and Physical Sciences, Edinburgh, 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, especially 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.

9

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perceptions of African project coordinators', International Journal of Project
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Dikmen, I., Birgonul, M. T., Han, S. (2007)
'Using fuzzy risk assessment to rate
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B. (2008), 'Investigation of contextual
factors in shaping HR approaches and
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from the Canadian telecom industry',
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teams: Projects, protocols and processes. London: Idea Group Publishing.

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'A typology of project management:
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Project Perspectives 2010

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Project Management 24(5), 446 - 452.

11

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

Raymond E. Levitt
Stanford University
Ryan J. Orr
Stanford University

The Collaboratory for Research on Global Projects (CRGP) at Stanford University is a multidisciplinary 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 five continents—with expertise
in a broad range of academic disciplines and in the power, transportation, water, telecommunications and natural resource sectors. This brief overview summarizes the composition, philosophy
and recent activities of CRGP.

CRGP Structure
Collaboratory for Research on Global Projects was
set up as an interdisciplinary “Center” at Stanford
University. Centers at Stanford are virtual organizations overlaid across department and school
hierarchical structures that can facilitate collaborative research and engagement with a group of
industry and government affiliates to solve critical
societal problems. Centers do not directly employ
faculty, admit students or award degrees. Rather,
they act as “intellectual magnets” to attract interested faculty, postdoctoral fellows and students
from different departments to work together on
important and challenging societal problems.
The industry affiliates provide problem definition, access to real world projects and data,
critique of research results, and a vehicle for
implementing findings of centers. Unlike most
other centers at Stanford, the focus of CRGP was
on global projects and infrastructure development
and finance 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.
12

CRGP Academic partners
At 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 financing,
governance and development challenges of global
infrastructure projects. In addition the Collaboratory 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
first, and still most active, Collaboratory partner
network includes a group of scholars at the Helsinki 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 scholars 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 partners
CRGP maintains extensive relationships with
infrastructure experts at multilateral banks, infrastructure funds, transaction advisors, contractors,
engineering companies, law firms, investment
banks, commercial banks, insurance companies,
and pension consultants. Industry experts share
their knowledge and understanding of problems
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with CRGP scholars through participation in
research projects and regular roundtables that
focus on specific topics related to infrastructure
financing, governance and development. These
organizations also provide funding for CRGP seed
research and administration through annual affiliate contributions. CRGP regularly submits proposals to outside agencies for larger-scale funding
based on the findings of its most promising seed
research projects.
Visiting Scholar Program
The 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 professionals 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 office, participate in
Collaboratory seminars and meetings, audit University courses, publish research, and assist with
Collaboratory projects.

CRGP Philosophy
CRGP serves as Stanford University's primary forum for systemic studies of global projects. CRGP
defines "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 difficult to quantify and yet have
proven historically to have detrimental impact on
overall project efficiency.
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
conflicts over goals, values, cultural norms, work
practices, and technology.
CRGP researchers use multiple research frameworks—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 Affiliate Members
and Collaboratory Partners is engaged in a portfolio 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 activities include:
- Conducting surveys, case studies, other kinds
of field research, mini-internships, and Roundtables to understand the generalizable challenges that beset global projects;
Project Perspectives 2010

- 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 management practices on global projects;
- Creating formal curricula incorporating results
of CRGP research to teach principles, knowhow, and tools for designing global projects,
and disseminate them via the Stanford Center
for Professional Development's SU-Online elearning platform, 24/7, around the globe.

CRGP Activities in 2009-2009
During 2008-2009, CRGP researchers and industry
affiliates continued an active program of research,
education and outreach to industry and government. Significant activities from the most recent
year are listed below.
Research and Educational Activities
CRGP researchers in Stanford's law school, business 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 Strategy (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 Infrastructure Renewal in California (Author: Ryan
Orr; Gregory Keever, CRGP Industry Affiliate) 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 Infrastructure 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, Engineering and Project Development Companies
Capture and Share Knowledge and Best-Practice
Across their Organization and Supply Chain (
Student: Dr. Amy Javernick Will, Civil & Environmental Engineering) Published; three journal
papers in press.
13

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

- 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. (Student: 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 Expatriates 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 Managing Global initiatives as part of The Stanford
Advanced Project Management Program. (Available online through http://apm.stanford.edu )
CRGP Outreach Activities in 2008-2009
- Hosted a Roundtable for California Governor’s
Office
- Assisted Assembly Woman Anna Caballero in
preparing draft legislation for public-private
partnership center of excellence in California
- Assisted Los Angeles Metro in evaluating proposals from transaction advisors
- Testified 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 findings 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 appointed as Commissioners of the California
Infrastructure Advisory Commission (PIAC)
2009.

Conclusion
Through this portfolio of activities, CRGP provides
new knowledge about the financing, governance
and development of global infrastructure projects,
and creates a forum for the exchange of best
practices and for an efficient 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 activities, affiliate members, and downloadable publications is available on the CRGP website at http://
crgp.stanford.edu

Raymond E. Levitt is Professor of Civil & Environmental Engineering 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 program. 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 national 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 University. 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 organizations.

14

www.pry.fi

International cooperation for development

Design of a competencebased model for managing
programmes and projects
Managing international cooperation for development projects is a complex task that involves technical, 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, specific training programmes in this area, the coordination between players, and knowledge management, with the purpose of enhancing the impact of
development interventions.

Introduction
Public sector development projects or programs
specifically designed for economic and social
needs of developing countries, usually financed by
a donor are known as international development
projects. These projects are either implemented
by recipient governments under a bilateral agreement with the donor country, or through an
‘implementing partner’ of the donor – frequently
a nongovernmental organization or professional
contractor (Crawford and Bryce, 2003). International development projects differ from industrial
or commercial projects. The objectives of development projects by definition, 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
definition of objectives, goals and common indicators 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 DevelopProject Perspectives 2010

José R. Cobo
Isabel Ortiz
Carlos Mataix
Universidad Politécnica de Madrid
Departamento de Ingeniería de
Organización, Spain

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 international 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 beneficiary population take
part in planning, monitoring and evaluating interventions? 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 profile of effective managers 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.
This is an updated version
of a paper originally
published in the “IPMA
Scientific Research Paper
Series: Human Side of
The gradual introduction of results-oriented man- Projects in Modern
agement techniques has helped many public sector Business” (IPMA, 2009)

The evolution of project management
models for development and the new
framework

15

Internal Risks

Area of Control
Internal

Inputs
(resources)

External Risks

Outputs
Reach
Direct

Activities

Outputs

Project Delivery Partners
Efficiency

Area of Influence
External to the

Short Term
Outcomes

Direct
Beneficiaries

Med-Term
Outcomes
(indirect)

Indirect
Beneficiaries

Long Term
Impact

Society

Effectiveness

Figure. 1. Results chain for the Development Results Management Model.
and development agency managers to adopt a
more systematic approach to all aspects of project
and programme management.
Many institutions and agencies in both developed 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, resultsbased budgeting, risk management and resultsbased evaluation and monitoring (Fontaine, 2004).
Management in the public sector used planning,
programming and cost control models in the
1960s, placing an emphasis on financial planning and cost accounting. ‘Input’ management
(human resources, operating costs…) became
more important demonstrating control over the
management, distribution and use of financial
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 breakdown, 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 field 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 Development (USAID) and the Objective Oriented Project
Planning methods (GTZ).
The 2002 Monterrey Conference called for
creating a new partnership for development: the
16

developing countries reaffirmed their commitment 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 results. At the international round table on results
in Marrakech (February 2004), the development
agencies gave their backing to five central principles 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 specific 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 centred 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 finally 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 difficult 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,
www.pry.fi

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 improving the quality of participation of all the parties
interested in the life cycle of an intervention and
in making planning models more flexible so that
they better interact with their surroundings and
thereby re-guide activities and results according
to how the context evolves. This work takes account 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 international organisations plan, evaluate , and manage
development projects: UK Department for International Development (DFID), Japan International
Cooperation Agency (JICA), Deutsche Gesellschaft
für Technische Zusammenarbeit (GTZ), Canadian
International Development Agency (CIDA).

Research project
Adapting the system of International Cooperation
to MfDR, involves a profound change in methodology, 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 identified in this area.
Development programme/project managers work
in a rapidly changing context, with many parties
involved and external influencing factors. Projects 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 description 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 McClelland (1973). Over the last 30 years, a number
of studies have demonstrated the effectiveness
and validity of the McBer job competence assessment methodology which comprises: (i) The
identification of those criteria defining effective
performance; (ii) the identification of a criterion
sample group of performers; (iii) data collection
through behavioural event interviews; (iv) the
identification of core competences; (v) the validation 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 sanitation, environmental sustainability, technology and
innovation, culture, gender, migration and peacebuilding. A variety of data were collected from
the managers selected. Initially, they were asked
to describe their job tasks and key responsibilities
Project Perspectives 2010

Technical Competences

Importance
M
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 financing

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

Importance
M
SD

Leadership

3,21

0,89

Commitment and motivation

4,62

0,76

Creativity

1,74

0,64

Results-oriented

4,81

0,88

Efficiency

2,04

0,50

Consultation

2,15

1,25

Negotiation

3,47

1,31

Conflicts and crisis

3,65

0,87

Reliability

2,98

1,08

Ethics

4,71

0,71

Contextual Competences

Importance
M
SD

Project-oriented

4,01

1,31

Programme-oriented

4,04

1,08

Continuous improvement of projects and programmes

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.

17

in order to identify competence requirements of
their roles.
Next, behavioural event interviews were used
to assess the behaviours underlying effective performance 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 finally,
what they actually did and what they thought the
outcome was. Later a workshop was set up with the
participants so that experiences concerning Development 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 difficulties and the requirements needed to implement
this management model in the sector.

manager must be convinced that the project results 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 conflicts 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 strategic 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.

Conclusions
Results and discussion
Taking 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 profile is within
the new framework of international cooperation.
This study will enable specific training programmes
to be designed in this area, to coordinate players
and manage knowledge so as to enhance the impact 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 parties in this process. Having made a quantitative
assessment of risks and opportunities, they are
classified according to the importance, impact and
probability of their occurring. This classification 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
definition up to the processes of the project, its
team management, its deliverables and its completion. 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 information 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
18

The MfDR reform process must allow building on
existing foundations without this leading to unnecessary conflict. The effort put into planning in
recent years is noteworthy. The general, country,
thematic and sector documents produced are high
quality, in some cases reflecting the “state-of-theart” 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 management tools.
The most difficult change will undoubtedly be
cultural change. This involves MfDR development
strategy going hand-in-hand with a spirit to communicate and train that involves the persons and
groups that are most able to influence their peers
in the process.
The framework of competences presented in this
work clearly defines the parameters deemed to be
most important by experts in the area of international cooperation for development. The development 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 followup 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 field.

References
Abraham, S.E., Kams, L.A., Shaw, K. and Mena, M.A.
(2001). Managerial competencies and the managerial performance appraisal process. Journal of
Management Development, 20(10), 842-52.
Aune, J. (2000)
Logical framework approach and PRA – mutually
www.pry.fi

exclusive or complementary tools for project planning? 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 appraisal. World Devolopment, 22 (7), 953-969.
Coordination NGO for Development Spain (2008).
The NGO for Development Code of Conduct. www.
congde.org.
Crawford L, Bryce P. (2003)
Project monitoring and evaluation: a method for
enhancing the efficiency 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, Management 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 development 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 intelligence. 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:
reflections 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.

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 Organisation, Quality and the Environment (www.gocma.com) at this
university and his lines of research are focused on educational innovation 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 University. She is director of the Innovation Education Group (GIE ProjectUPM). 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 educational innovation in engineering, project management and quality in
cooperation for development.
E-mail: [email protected]

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.
E-mail: [email protected]

Project Perspectives 2010

19

Safety and Health Risks

in International Construction Projects

Dongping Fang
Tsinghua University
China

This paper has been first
published in the proceedings of the CIB W99
conference.
20

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, financial 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 identified 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 situations 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.

Introduction
The 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 represents 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 Birgonul (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 financial risks (Wang
et al 2000b). A few studies have focused on the
safety and health risks in international construction projects, including safety and health issues in
developing countries (Gibb 2006), the influence of
the different laws and regulations on safety and
health in international construction (Koehn et al
1995; Mahalingam and Levitt 2007), language barriers 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 construction 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 questionnaire 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.
www.pry.fi

Survey Description

Data Analysis and Findings
In this research, the risk criticality index was
used to prioritize the risk factors for the three
international construction regions. The risk criticality 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 investigate the differences between the risk criticality
indices of different risk factors. The major statistiProject Perspectives 2010

i
j

i
j

R =P I
n

i

i
j

R

n = number of people surveyed
i = evaluation of the criticality of the ith risk factor by the
j jth person surveyed
i = evaluation of risk occurrence level by the jth person
j surveyed
i = evaluation of risk impact level resulting from the ith risk
j factor by the jth person surveyed
i
= criticality index of the ith risk factor.

P
I
R

i

Rj
j=1

R= n
Category

Risk Factor

Code

War

WA

Civil Unrest

CU

Terror Attack

TA

Bad Economical Situation

BES

Crime

CR

Political & Economical Risk

Social Risk

Language Barrier

LB

Cultural Difference and Conflict

CDC

Difference in Laws & Regulations

DLR

Natural Disaster

ND

Disease

DI

Extreme Natural Condition

ENC

Lack of Infrastructure Facilities

LIF

Labor Risk

LR

Environmental
Risk
Project Risk

Table 1. Safety and health risks identified for
international construction

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 Definite

5

Very Severe

5

Table 2. Likert scale of risk occurrence and risk impact
30
28
25
Number of Responses

The survey was based on 13 safety and health risk
factors (Table 1) identified through a literature
review on construction risk management. The 13
risk factors were categorized into 4 groups, namely
political & economical risks, social risks, environmental 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. Similar 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 impact level (Table 2). The questionnaire survey was
distributed via email to three groups of targeted
respondents, consisting of 1) the top 225 international 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 insufficient 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 region 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 international construction. The amounts of responses
for above re-categorized three regions are shown
in Figure 1.

20
19
15

10

11

5

Developed

Developing
Region

Middle East

Figure 1. The amounts of responses for the three regions
21

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 prioritizations between the two compared risk factors, a
one-tail test was conducted. Because this research
was an exploratory study, a significance 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

Risk Factor

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
significant 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
significant difference between 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 low risk category;
4. If the parametric and non-parametric tests
showed the opposite results, which meant
one test showed there was a statistically

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 Conflict

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

Table 3. Risk criticality indices for the developed regions

Risk Factor

Mean

Median

Labor Risk

12.89

12

Risk Category
High

Lack of Infrastructure Facilities

11.54

9

High

Cultural Difference and Conflict

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 4. Risk criticality indices for the developing regions
22

www.pry.fi

significant 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 Regions
Risk 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 disaster) 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 attack, language barrier, bad economical situation,
crime, cultural difference and conflict, 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 Regions
The risk criticality indices of the 13 risk factors
for the international construction projects in developing regions were computed (Table 4). Eight
risk factors, e.g. labor risk, lack of infrastructure
facilities, cultural difference and conflict, 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 conducted 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 East
The 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 natural condition, labor risk, language barrier, cultural
difference and conflict, 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 infrastructure 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
Regions
The 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 efficient way. A score ranging from 1 to 3 was given to qualitatively explore
the critical risk factors of the three regions. For
a specific 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 conflicts, differences in laws & regulations,
extreme natural conditions and language barriers.
These five 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

Risk Factor

Mean

Median

Risk Category

Bad Economical Situation

12.95

12

High

Extreme Natural Condition

12.11

12

High

Labor Risk

10.42

9

High

Language Barrier

9.74

9

High

Cultural Difference and Conflict

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

Table 5. Risk criticality indices for the Middle East
Project Perspectives 2010

23

Risk Code

Developed Region
Risk
Score

Developing Region
Risk
Score

Middle East
Risk 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

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

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

Summary and Conclusions
The objective of this paper was to provide a better 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 construction 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 conflicts, 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.

24

3. The Middle East has the distinct feature
that differs from the developed and developing 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 conflicts, and differences in laws & regulations;
4. Six critical risk factors were identified
through further analysis, which were categorized 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, cultural differences and conflicts, differences
in laws & regulations, extreme natural
conditions and language barriers.

Acknowledgement
This research effort was a part of project 70772013
supported by the National Natural Science Foundation of China. The authors gratefully acknowledge 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 president 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.

www.pry.fi

Bing, L., Tiong, R.L.K., Fan, W.W., Chew, D.A. (1999)
“Risk management in international construction
joint ventures.” Journal of Construction Engineering and Management, 125(4), 277-284.

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 projects.” Construction Management and Economics,
18, 197-207.

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.

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

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.

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.

References

Escobar, J. (2006)
“Managing Hispanic construction workers.” Master 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 developing 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 Construction Engineering and Management, 133(7),
506-516.
Reina, P. and Tulacz, G.J. (2008)
“The top 225 international contractors.” Engineering 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 identification 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 proficiency
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 Construction Engineering and Management, 126(3):
242-250.
Project Perspectives 2010

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.

25

The Gap Between

Project Managers
and Executives
Peter Wijngaard, Atos Consulting
Herman Mooi, Delft University of Technology, The Netherlands
Victor Scholten, Delft University of Technology, The Netherlands

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

Introduction
In today’s organizations the role of
projects is evident. Many organizations 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 benefits 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 project managers have on projects. On the
one hand, executives tend to view a certain project with respect to the strategic
direction of the organization. On the
other hand, project managers emphasize 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
26

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 relationships 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 executives. 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 understanding 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 managers and executives differ concerning 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.

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

Literature Review
To identify and to bridge the gap between project managers and executives,
it is necessary to give a clear definition
for this gap in this research. A difference 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 organisation 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 management
Open culture and co-operation is ideal
but in practice this does not always
happen. Especially, in situations where
executives delegate to the project manager the authority for taking decisions
to execute the project. During the exwww.pry.fi

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 insecurity. 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 interpret 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 finished
but the executive is faced with the
long-term results – both positive and
negative – of this project. This difference can result in a conflict situation,
and therefore enlarges the gap.
Impact on the project results
Various factors may influence 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 efficient 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 manager
The interaction between project managers and executives can be the source
to the gap. We investigated three main
areas of the interaction between project
managers and executives.
Hierarchical differences
With respect to the hierarchical differences it is important that there is
mutual recognition and coaching. Both
executive and project manager should
value each others skills and personality. If the executive judges the project
manager in a positive way, this will
result in rising support and confidence
towards the executive. This can improve
the chance of success of the project. On
the other hand, if the project manager
has confidence in the executive, he will
have less reluctance to report bad news,
and therefore give the executive a better possibility to steer. Based on this we
expect that the gap can be narrowed.
Communication
Communication is an essential element
for project success. Lack of communicaProject Perspectives 2010

tion can be an important factor influencing the size of the gap. Shenhar et al.
(2001) made clear that well-performing
projects are characterized by close cooperation 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-today talks).
Specificity of the business case
As is well-known, the roles of the executive and project manager are different
per definition, 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 determined 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 specific
business case will diminish the existence
of a gap in project management.

The Research Project

results of the questionnaire that were
addressed to the project managers and
the executives. We asked both project
managers and executives the same questions that allow for comparisons between 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 respect 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 gap
In 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

To get an actual view on the gap and
to verify the different statements in
literature, Atos Consulting and the
Delft University of Technology initiated
a practice-oriented research
study. The practical approach Sector
Project Executives
allows to get a more realistic
Managers
understanding of the presence
51%
30%
of a gap between executives Consultancy
and project managers and Financial Sector
15%
15%
moreover can help extracting
Governmental auth.
15%
15%
managerial.
The research consisted of a Telecommunications
10%
12%
literature research, a quantita9%
28%
tive and qualitative analysis. Industry
For the quantitative analysis,
Table 1. Division respondents among sectors.
a questionnaire was sent to
3032 project managers and
Size of Company
Project Executives
1134 executives. A regression
Managers
analysis was applied to extract
conclusions about which vari- > 250 employees
67%
70%
ables influence the creation of
15%
17%
problems within a project, and 50-250 employees
which can therefore explain < 50 employees
18%
13%
the distance between project
managers and executives.
Table 2. Size of company.
The qualitative analysis consisted of an in-depth study Years of Experience
Project Executives
of a few projects, and several
Managers
interviews. Both executives as
52%
15%
project managers were inter- > 10 years
viewed to get the two points 5-10 years
33%
30%
of view regarding projects and
< 5 years
15%
40%
possible distances.

Results of the Research
In this section we present the

No experience

0%

15%

Table 3. Experience in Project Management.
27

Figure 1. Perceived different views on the gap by project
managers and executives.
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 differences 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 involvement. More than half of the project
managers (55.1%) think that political
aspects have an influence 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 influences the gap. Even a smaller amount
of project managers (27.9%) suggests
that executives are responsible for the

gap. It is remarkable that, compared to
project managers, about 35% of the
executives think that they are responsible for the gap. Next we identified
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.

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 alignment was associated with lower levels
of gap experience (r= -0.161; p <0.05).
The correlation was not significant for
the executives.

Communication and alignment
In Figure 3 we present the findings
from the different views that executives
and project managers have on project
managers. In the first place this different view can manifest in disagreement
between project managers and executives 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%)

Perceived realistic budget, time and
quality
With respect to the different views
on the expectations we analyzed the
project criteria that were set by executives 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 executives. 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 executives. The agreement on these items is
at least striking: from sounds heard in
practice a much larger gap on these
items was expected.

Figure 3. Alignment of executives and
project managers.
28

Figure 2. Perceived causes of the gap.

Figure 4. Perceived realistic budget, time, quality and
interaction.
www.pry.fi

Conclusions
Although the results of the research do
not give a completely new understanding and insight of the gap, it certainly
contributes to our knowledge about the
gap in project management and provides a scientific base for this phenomenon. Overall, the response from both
executives and project managers were
relatively comparable, which in its own
right is already a remarkable result. The
major findings from our literature search
and survey among project managers and
executives reveals that:
- There is a difference in behaviour 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 (significant 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 respondents (60-75%), not the organisation nor the executives. Approximately half of the respondents 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 management.
- There was a remarkable alignment in answering of both
groups (project managers and
executives).
By giving insights in the source of
the existence of the gap, the findings
of this research can contribute to giving handles to project managers and
executives to optimize the use of project
management in an organisation by better project results might be obtained.

This is an updated version of a paper originally
published in the “IPMA Scientific Research
Paper Series: Human Side of Projects in Modern
Business” (IPMA, 2009)
Project Perspectives 2010

D Peter Wijngaard studied Forestry at the WageninDr.
gen University, the Netherlands, and did his PhD in Opg
eerations Research at the same university. After that he
worked mainly in IT- and project management funcw
ttions at the Corus Steelplant IJmuiden and Agricultural
Research Institute. Since 13 years he is working as
R
project and program manager for Atos Origin and p
tthe latter 6 years - for Atos Consulting and has broad
eexperience in (inter)national projects in industry. Peter
has an IPMA-B certification.
h
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 academic 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 University, the Netherlands.
Dr. Herman Mooi studied and did his PhD in Mechanical Engineering at the University of Twente, The Netherlands. After that he worked for 10 years as project
and line manager at TNO, a Dutch research institute,
in the field 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.

References
Bergeron, Francois, Raymond, Louis and
Rivard, Suzanne (2003) ‘Ideal patterns
of strategic alignment and business
performance’, Information & Management, vol. 41, pp. 1003-1020.
Cleland, David I. (1994) Project management: strategic design and implementation, 2nd edition, McGraw-Hill.
Cooke-Davies, Terence J. (2005) ‘The executive sponsor - The hinge upon which
organizational project maturity turns’,
PMI Global Congress Proceedings.
Crawford, Lynn (2005) ‘Senior management perceptions of project management competence’, International
Journal of Project Management, vol. 23,
pp. 7-16.
Dinsmore, Paul C. (1999) Winning in business with enterprise project management, 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.

Kerzner, Harold (2006) Project management 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, Patrick C. and Tesch, Debbie (2007) ‘Project
manager vs. executive perceptions of
sponsor behaviors’, Management Research News, vol. 30, pp. 803-815.
Müller, Ralf and Turner, J. Rodney (2005)
‘The impact of principal-agent relationship and contract type on communication between project owner and manager’, 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 knowledge’, 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 Planning, vol. 34, pp. 699-725.
Wijngaard, P.J.M., Mooi, H. and Scholten,
V. (2008) De kloof, Atos Consulting
Trends Institute.
29

Managing Stakeholders in Large Engineering Project:

Harmonious Together-development
Between the Project Department
and Peripheral Community
Ma Liang, Le Yun, Li Yong kui
School of Economics and Management, Tongji University, Shanghai, China
Bureau of Shanghai World Expo Coordination, Shanghai, China
This is an updated version of a paper originally published in the “IPMA Scientific Research Paper
Series: Human Side of Projects in Modern Business” (IPMA, 2009)

Managing stakeholders in large engineering project (LEP) is significant because of
the great influence 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.

Introduction
In recent years, engineering project
becomes more and more complicated
and large-scale, the interaction to external environment becomes stronger
than before, and interaction between
the stakeholders especially during construction stage is increasingly prominent. 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 engineering concept reflects new tendency
of the cross fusion and coordinate construction 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
30

many stakeholders during the construction stage which is a gambling process
by different interests groups. Not only
LEP itself has a more and more influence
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 attracting 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 & auxiliary 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 & auxiliary 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

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

The “PRISONER’S DILEMMA” in
the HTD Process
We 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 information source static game model
1. PD and PC in the game are supposed
to be rational.
2. PD and PC in game each has sufficient
information for itself and the other.
3. In the above analysis, we don’t consider other restriction in the initial
stage.
The static game model for HTD
The 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: S i ,
i=(1,2).
Treasures for decreasing bad effect
from construction to residents and
providing convenience for them taken
by PD actually are to maintain physiwww.pry.fi

cal and mental health of them. So we
can do analysis easily by changing all
treasures to paying health subsidies to
fit 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 expressed 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 interpreted 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, including expenses on human resource,
money and material for kinds of
activities and service. It is sure that
there would be much adverse inference 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 HTD
It 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.
Project Perspectives 2010

PD

PC

Timely payment
Deferred payment
H
DH
M
B1
B2
C

Active attending

Inactive attending

H, M+B1

DH, M+B2+C

H+B1, M-B2

DH+B1, M-B2+C

HTD project;
Disharmonious together-development project;
Health subsidies;
PD earnings by using health subsidies money to invest for other usage;
Interest of health subsidies for PC (the interest corresponds to the additional
earnings by the effective treasures);
Cost saved under inactive attending condition by PC.
Table1. Earnings matrix of both sides in the complete information
source static game model

So the Nash equilibrium of the game
model is: (deferred payment, inactive
attending).
The above game equilibrium is analyzed 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 subsidies. 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 finally 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 Stage
There 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

PD

PC

Timely payment
Deferred payment
A1
A2
I1
I2

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 “outstanding PD”, and award the active
attending PC the title of “outstanding 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——guarantee funding. Before the project
beginning and HTD activities, PD and
PC must have some guarantee fund,
or security of the issue by relative
financial institution. PD and PC both
need enough guarantee fund to force
them to do HTD, including timely
payment for PD and active attending 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 activities. 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.

Active attending

Inactive attending

H+A1, M+B2+A2

UH, M+B2+C-I2

H+B1-I1, M-B2

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

Incentive awards of outstanding PD;
Incentive awards of outstanding PC;
HTD guarantee fund of PD;
HTD guarantee fund of PC.
Table 2. The earnings matrix after the adding of incentive
awards and guarantee fund
31

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

Treasures taken in the process of HTD
During the implementation of HTD
process, the general Shanghai Expo
organizer use evaluation mechanism to
select “outstanding PD” and “outstanding PC”, which connects the positive incentive and negative stimulus together
to let the two sides see the prospect of
cooperation and do HTD. The “outstanding PD” has three indexes: project objective achievement, security and stability,
civilization in construction, and the
“outstanding PC” also has three indexes:
amity and cordiality, publicity and education, 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.

PDs and PCs in Shanghai 2010 Expo
China
There 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 workers and 6 PCs consists of more than 3
million residents. Because of strong interference 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.

The effectiveness of HTD
Up 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 “outstanding PD” and “outstanding PC” in 2008
as an example, the two separated by a
wall, so the influence 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 agreement for HTD, did many activities for
increase mutual understanding which

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).

gradually built deep feelings. For example, 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.

Discussion
The 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.

Conclusions

Figure 1. The construction site and PCs of Shanghai 2010 Expo China.
32

The LEPs are facing complex and
changeable construction environment, long-term, close relevance and
strong interaction between stakeholders, which have significant impact on
society, environment, and budget, and
these have been concerned by the
public, and unsuitable treatment may
bring about serious society problem.
LEP like Expo has been obviously bearing 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
www.pry.fi

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

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 projects or social events relating to different
stakeholders.

References
PMI Standards Committee (2000)
A guide to the project management
body of knowledge, Project Management institute.
Bureau of Shanghai World Expo Coordination, 2006, Summary of Registration
Report for Shanghai 2010 Expo China,
http://www.expo2010.gov.cn/zlzx/zcbg/
new_zcbgzy.htm.

Ma Liang
PHD candidate of Tongji University
of China.
Assistant supervisor of The Construction Headquarters Office of
Shanghai World EXPO.
Expo 2010 construction management engineer in Bureau of Shanghai World Expo Coordination.
Project Perspectives 2010

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

Wang Yingluo (2008)
Contemporary Engineering Values and
Engineering Education, Engineering Sciences, 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-development Manner Between the Building 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.

Overall project management team for
EXPO2010 construction of Tongji
University (2007), The construction programme management plan of Shanghai
2010 Expo China.
Overall project management team for
EXPO2010 construction of Tongji University (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 Petroleum (Edition of Social Sciences), 23(4),
pp26–29.

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

Le Yun
Head of the Department of
Economics and Management
in Tongji University of China;
Professor; Doctoral Advisor.
Leader of General Project Management Team to Expo construction Shanghai China 2010.

Li Yongkui
Lecturer of the Department of
Economics and Management in
Tongji University of China.
Vice Leader of General Project
Management Team to Expo construction Shanghai China 2010.

33

Communication and Trust
in Distributed Project Teams
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 correlation was found between the type of media used and lack of trust. Intense communication with
different types of media seems to lead to reduced trust. A prediction model for risk factors in virtual
teams was designed, based on the findings.
Helgi Thor Ingason
Tomas Haflidason
Haukur Ingi Jonasson
School of Engineering and
Natural Sciences
University of Iceland
Iceland

Introduction
During 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 communication 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 managers can systematically reduce it.

Literature Review
Distributed project teams
In the IPMA competence baseline ICB 3.0 (2006),
a team is defined as a "group of people who work
This is an updated version together to realize specific objectives." Many
of a paper originally
definitions exist for distributed teams. Most of
published in the “IPMA
these define distributed teams as teams where
Scientific Research Paper the bulk of the communication is done with the
Series: Human Side of
aid of information technology. Lipnak and Stamps
Projects in Modern
(1997) define distributed teams as groups which
Business” (IPMA, 2009)
work across space, time and organizations and
34

where communication is through information
technology. Some define distributed teams as
those who never meet whilst others define 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 competitiveness 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 organizations 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 distributed 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
www.pry.fi

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 proximity 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 five variables to compare
teams - the number of locations, the number of
organizations, the number of nationalities (cultures), 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 influence on the team communication (Stables, Wong and Cameron, 2003,
Leenders, van Engelen and Kratzer, 2003).
Communication in distributed project teams
Successful 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 communication trouble, compared to traditional
teams, mostly due to the lack of unspoken communication. 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 divides 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 information in a less effective manner than traditional
teams, even if distributed teams communicate
quantifiably more than traditional ones (Galegher
Project Perspectives 2010

and Kraut, 1994, Hightower and Sayeed, 1995,
Handy, 1995).
Trust in distributed project teams
Mayer, Davis and Schoorman (1995) define trust
in terms of the faith and belief in another individual or group that the relevant party will fulfill
expectations in the future. Trust can depend on
situations and have its limitations. In some relationships, 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 knowledge 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 effective 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 environment where communication is mainly through
electronic methods. If language difficulties and
diverse backgrounds are added, it becomes even
more difficult (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 difficult
when direct communication is not used (Steinfield, 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 difficult
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.
35

Change

Percentage

Confirm 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.

Methodology
A survey questionnaire was sent to a large group
of individuals around the world, to gather information on participants’ experience from working
on multinational, distributed projects. The survey
questionnaire was divided into five 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 evaluated.
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 important 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 information 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%.
36

Results
Background information
Of 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% having 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 projects
Half of the participants were regular team members 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 difference 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 communication, 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
Was not finished, 4%
Was not succesful, 2%
Results below
expectations, 2%
Very good
results, 25%
Acceptable
results, 23%

Good results, 44%

Figure 1. Project success as measured
in the survey.
www.pry.fi

Problems that occurred in the projects
Figure 2 shows the main problems encountered in
the project teams. Language difficulties 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

Sex

40
35
30

Religious beliefs

Teams too large

Too many organizations

Conflict

Lack of commitment

Lack of trust

Lack of management

0

Distance

5

Different public holidays

10

Technical problems

15

Cultural differences

20

Inadequate managerial support

25

Time differences

%

Language difficulties

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 efficiency 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
finished 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.

Figure 2. Problems encountered in the project teams.

difficult 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 differences. 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 variables 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 five 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

Age

Role

Experience Success

Education Continent

Number 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

-0.01

0.15*

0.14*

0.02

0.03

0.02

-0.09

0.10

0.20**

0.10

0.10

0.09

0.07

-0.11

-0.14*

-0.15*

0.09

0.24**

0.18**

0.03

-0.05

-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

Number of organizations
Project time
Frequency of communication
Lack of trust

Holidays

0.08

0.04

0.15*

0.11

0.07

0.05

-0.06

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

Lack of management

Table 2. Correlation table by participant background variables (*p < 0,05 ** p <0,01).
Project Perspectives 2010

37

Lack of trust was a problem

35
30
25
20
15
10
5
0
Total communication
Direct communication
Through a medion

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

Number of languages

In the questionnaire, the frequency of the use
of communication method was given a numerical 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 conferencing. A slight correlation was found between
gender and total frequency of communication,
with women having less communication on average than men. A slight correlation was also found
between time differences and the frequency of the
use of most communication means, with a negative 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 statistically significant relation between lack of trust and
the means of communication.
The results showed that initial communication 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 projects where the members did not meet but used
electronic media.
The possible context between lack of trust and
the frequency of communication came under particular scrutiny. Figure 3 shows the main results.
Lack of trust seemed to depend little on the frequency 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
teams
Cultural
Size of group
Based on the information gathered in the quesdifferences
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 figure 4.
The figure 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 organizations involved, number of geographical locations
of the members, time zone differences and difMaximum time
Number of
ference in members’ cultural backgrounds. In that
zone differences
organizations
way, the model reflects the variables which showed
statistically significant 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 figure 4. The
Number of locations
outcome can be used to forsee possible problems
and work out their solutions in advance.
Figure 4. Prediction model for problems in distributed teams.
38

www.pry.fi

Conclusions
Certain problems are more likely to occur than
others in distributed teams. Language difficulties are a potential problem, as well as problems
caused by time zone and cultural differences. One
of the benefits 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 distributed project teams is risk factor has not been
given much attention in previous research.
Our results show that perceived lack of management increases when the number of work locations reaches 5. This indicates that managers have
difficulty 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 findings 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 five important variables can help to evaluate
potential risk in the work of distributed project
teams. Size of group, number of languages, number 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 finished 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 Certified Senior Project Manager.
Haukur Ingi Jónasson finished a cand. theol. degree from the Theological 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 certifications 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 professor in management and leadership at the School of Engineering and
Natural Sciences at the University of Iceland and teaches in both the
MPM (Master of Project Management) and the MBA programs of
the university.
Tomas Haflidason received his BSc and MSc in industrial engineering from the University of Iceland. He is presently pursuing his PhD
at the University of Iceland in industrial engineering.

Project Perspectives 2010

39

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www.pry.fi

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Project Perspectives 2010

41

Overview of The Virtual Design Team (VDT):

A Computational Model
of Project Teams
Raymond E. Levitt
Department of Civil &
Environmental Engineering
Stanford University
USA

42

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 configurations to
predict and evaluate their performance in advance
of implementing them.
VDT was based on the notion first articulated by
Herbert Simon and refined by Jay Galbraith that
the first order determinant of an organization’s
success is its ability to process all of the information associated with:
- Direct work, involved in competing assigned 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 program 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 specific predictions. VDT has
progressively quantified, 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 organizations engaged in semi-custom engineering work
under tight time constraints. For such organizations, 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 interdependent work under tight time constraints creates
high coordination costs as interdependent activities increasingly overlap one another in time.
Primary emphasis was on modeling the sources
of interdependence in project workflow and the

way in which exception handling in coordination
took place within organizations assigned to do
such project work.
Since then, we have extended the representation and reasoning in VDT step-by-step, to address
the modeling requirements of less routine work
performed by increasingly flexible and dynamic
organizations—non-routine product development, 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 multicultural project teams engaged in global projects to
develop infrastructure, for which institutional
costs are significant. 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 performance. VDT explicitly models actors, activities,
communication tools and organizations. VDT simulates 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 organizations was first articulated by Herbert Simon
and James March in the 1950s, and elaborated
by Jay Galbraith during the 1970s. It asserts that
the first-order determinant of an organization’s
success is its ability to process and communicate
www.pry.fi

all of the information required to carry out and
coordinate its work processes. Galbraith’s information processing model of project teams was
descriptive and qualitative, not quantitative; it
could not make specific predictions about particular organizations. Over the past two decades,
Levitt’s ongoing VDT research and its subsequent
commercial implementation have extended,
quantified and validated Jay Galbraith's (1974)
information processing view of organizations to
model and simulate team members’ behavior and
resulting team performance outcomes quantitatively, with ever-increasing accuracy, for a broad
range of project-oriented work processes and
organizations.
VDT builds on and quantifies Jay Galbraith’s
theories of information processing in project
teams, and views both the direct work and resulting coordination work that must be performed
by actors on a project as quanta of information
to be processed by responsible actors with finite
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, coordination 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 determine the time it would take for the actor to perform 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 possess 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 completely rework activities that generate exceptions.
Further, actors need to attend to communications 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 possibility 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 resulting 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 commercially in dozens of real world projects for Fortune
500 companies and governmental organizations to
highlight organizational risks and guide interventions aimed at mitigating them.
Project Perspectives 2010

Evolution of The Virtual Design Team
(VDT) Research Program
The Virtual Design Team (VDT) research was initiated 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
significant challenge. Micro-theory and analysis
tools for designing bridges and airplanes rest on
well-understood principles of physics, and involve
continuous numerical variables, describing materials 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 approach used to develop this engineering science
and technology was to embed well-understood
micro-theory into the models, and then attempt
to reflect the interactions between elemental parts
of a model through constraints (such as constraints
that maintain consistency between the deflected
positions of shared element edges in a finite element 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 deflections under a variety of loading conditions can
now be predicted to finer 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 reproducibility. Verbal theories incorporating nominal
and ordinal variables create a significant degree of
linguistic ambiguity, so that experimental results
cannot be reliably replicated and contrasting or
competing theories are difficult to reconcile or
disprove. In the late 1980s, our research group
concluded that attempts to model organizations
computationally could benefit greatly from the use
of non-numerical or "symbolic" representation and
reasoning techniques emerging from computer
science research on artificial 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 uncontested, so that we could finesse many of the
43

most difficult "organizational chemistry" modeling problems inherent in the
kinds of organizations that sociologists
have often studied—e.g., mental health,
educational and governmental organizations.
Our quantification and computer
implementation of Galbraith's "information demand, capacity and throughput"
model can be viewed as an analog to
Newton's Laws in physics—a simple,
and immensely useful, first order approximation. By operationalizing and
extending Galbraith's information processing 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, Christiansen, Thomsen,) and validated the
representation, reasoning and usefulness 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 sufficient
confidence in the predictions of our theory and tools that managers in several
companies and governmental agencies
are now redesigning their project work
processes and organizations prospectively, based on the predictions of SimVision™, 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
flow 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 research vision over the past two decades.
Completed and ongoing versions of VDT
that progressively addressed additional
aspects of task and organizational complexity are shown in Figure 2.
The (Cohen, 91) (Christiansen, 99)
VDT-1,2 framework has been fully validated 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 predefined; (2) the
organization is static, and all activities
are pre-assigned to actors in the static
organization; (3) exceptions to activities are resolved through the hierarchy
and generate extra work volume for
44

Figure 1. Validation Trajectory for Computational Emulation Models, showing
how we move successively from validation of reasoning, through validation of
representation and, finally, of usefulness. (Source: Thomsen et al, 1999).
the predefined 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 fit many kinds of design and
product development work. VDT-2 was
commercialized as SimVision™, by Vité
Corporation through Stanford’s Office
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 Construction [ 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 predefined, but
there can be flexibility in how they are
executed. Actors can have the same set
of goals, but incongruent goal preferences (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 actors affect both their vertical and horizontal 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 applicability 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, multispecialty medical protocols. Diagnosis

activities indicate needed repair activities, and any unplanned side effects that
arise must be diagnosed and treated
contingently. To model this indeterminacy, we had to relax the constraint that
all activities and assignments are rigidly
prespecified. This required several extensions 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 reassigned, 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
staffing changes as a function of time of
day or day of week) and retrospectively
validated VDT-4 predictions against empirical data in several clinical settings.
A longer-range goal of our work was
to begin modeling even more flexible
organizations that could be viewed as
dynamically shifting “communities of
practice,” in which actors can communicate with anyone they choose, either
inside or outside their local “organization.” 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 cyberspace. 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 significant progress in implementwww.pry.fi

Figure 2. VDT Research Trajectory

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 colleagues (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 identified
five 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 organization); Collectivism vs. Individualism (the degree to which individuals
pursue self-interest vs. the interests of a
larger group); Masculinity vs. Feminin-

ity (the extent to which work and social
roles are gender-stereotyped and different; 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 indicating that differences along one or
more of these cultural dimensions lead
to predictable kinds of misunderstandings, conflict and loss of motivation in
global work teams.
Drawing on Hofstede’s work and on
the results of a series of workshops conducted with Professor Douglass North (a
Nobel Laureate in Institutional Economics 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

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 productive 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 prediction, 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 institutional 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 undermining the motivation of actors who find
themselves engaged in continual misunderstandings, conflict and even sabotage
by project team members whose goals,
beliefs and values, cultural norms and
legal/regulative systems are significantly 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 computational experiments in which he modeled
US and Japanese institutions (practices
and values) and simulated the performance 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 Collaboratory for Research on Global Projects
http://crgp.stanford.edu

Research to Develop
Postprocessors for VDT

Figure 3. Direct Costs for Projects, and Additional Costs from Two kinds of Hidden
Work: Coordination Work and Institutional Work.
Project Perspectives 2010

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 predict schedule cost and process quality
performance for a baseline configura45

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 identified; the user must experiment with alternatives to find better solutions.
Searching the solution space manually to find
configurations 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 artificial intelligence
and operations research communities. Global optimization techniques include operations research
methods such as linear, nonlinear, and integer
programming; artificial intelligence methods such
as constraint propagation; and local search. OR
techniques typically achieve high scalability, robust 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 heuristics 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 individually to task scheduling and resource assignment problems (Klein 00, Smith 93, Zweben 94).
However, classic task scheduling problem formulations were developed for capital-intensive physical
work operations rather than for global knowledge
work. The classic formulations ignore the greater
flexibility 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 (KHosraviani 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
Organizations
The 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 flexible organizations 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
46

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
flexible knowledge sharing through networks of
human experts and computational support tools
such as databases, expert systems and other computer knowledge archives (Buettner 2002).
A new version of POWER, which we call POWID 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 researchers was able to begin modeling well specified,
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 flexible tasks, more heterogeneous project team membership and finally
more dynamic and decentralized organization
structures, as shown in figure 2. It has been a delight to participate in this scientific exercise with
a remarkable team of colleagues and collaborators
in industry and government.
D Raymond
Dr.
LLevitt is Professsor of Civil &
EEnvironmental
EEngineering and
a Senior Fellow
aat Stanford’s
Woods Institute
W
ffor the Environment. He directs
m
SStanford’s
Collaboratory
C
ffor Research
on Global Projects and Adv
Advanced Project
Management executive program. 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 national 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.
www.pry.fi

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 Organizational 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 Systems 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.

Levitt, R.E., G.P. Cohen, J.C. Kunz, C.I. Nass, T. Christiansen, and Y. Jin, 1994. "The 'Virtual Design
Team': Simulating How Organization Structure and
Information Processing Tools Affect Team Performance," 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. Christiansen, and Y. Jin, 1994. "The 'Virtual Design
Team': Simulating How Organization Structure and
Information Processing Tools Affect Team Performance," 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 Organizational 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 Institutions, Embeddedness and Emergent Uncertainty."
Doctoral dissertation, D#010, Stanford University,
2005.
Scott, W. Richard.
Institutions and Organizations, 2nd Ed., Sage
Publications, 2001.

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

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

Joint Staff, 1998.
Joint Doctrine for Information Operations, Government Printing Office, Washington D.C.

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

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 2729, 2004a.
KHosraviani, Bijan, Raymond E. Levitt and John. R.
Koza, Organization Design Optimization Using
Genetic Programming. In Keijzer, Maarten (editor). Late-Breaking Papers at the 2004 Genetic
and Evolutionary Computation Conference
(GECCO-2004). Seattle, WA International Society
of Genetic and Evolutionary Computation; July,
2004b.

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.

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.
Project Perspectives 2010

47

Formal and informal risk
management actions in projects

This paper presents the current risk management activities in projects. The findings are based on
a 3-year GPSII research project that was conducted in co-operation with VTT, Helsinki University
of Technology and Helsinki School of Economics. The purpose of the GPSII research project was to
identify and analyse interactions between cultural processes, network connections and risk management practices in global delivery projects. This paper discusses the project risk management
activities from two perspectives: Firstly, the current risk management procedures in projects are
briefly summarized. Secondly, the view is broadened to include more informal risk management
actions outside the formal risk management process. It is discussed whether these informal actions
are actually being used to cover the areas where formal risk management lacks the flexibility and
agility required. It is argued that the informal processes and mechanisms are often hidden and
their significance both to the project risk management process and to the risk level of the project
is not well understood. It is concluded that the efficiency in project risk management arises from
developing both the formal risk management processes and the informal activities in parallel to
creating new flexible and more interactive risk management tools.
Mervi Murtonen, M.Sc.
VTT Technical Research
Centre of Finland
Tampere, Finland

48

Literature
Project 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 literature (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 quantified.
In risk management, formal procedures have
become a symbol for efficient 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 & Knudsen, 2005). According to Susilo et al. (1991) the
formal controls (specific rules and procedures to
be followed and specific outcomes to be produced)
are dominant at project planning and initiation,
but become less dominant over the project duration. Instead, the project managers rely on more
informal control elements (unwritten practice
codes, social values, common beliefs and traditions) 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 documentation, and less clearly defined 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 formal risk management practices from the informal
ones. According to Li (2007) the distinguishing
elements of formality and informality are: 1)
codification, 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

Informal

Codification

Explicit

Implicit

Formation

Exogenous

Endogenous

Enforcement

Tight

Loose

Power

Hierarchical

Horizontal

Personalization Depersonalized Personalized
Table 1. Formality – informality dimensions.
(Li, 2007)
www.pry.fi

In recent project management studies, unexpected events in projects have drawn increasing
research attention. Making these unexpected and
surprising events, their occurrence, and management more visible within projects, is seen to contribute to our understanding of uncertainty management 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 flexible
ways, such as continuous interaction, communication and reflection (Hällgren & Maaninen-Olsson,
2005; Perminova et al., 2008).

Methods
The research data was collected in the GPSII research 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 countries – 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-andforth 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-specific 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-specific interviews, thematic interviews
focusing on each company’s risk sources, risk management 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 interviews, researchers participated in case companies'
lessons learned sessions in order to analyze the
practices of efficient risk knowledge transfer and
utilization within and across projects.

Findings
In 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 identified risks are not only the highest,
but when also the level of uncertainty is at its peak.
The analysis is mainly based on a predefined risk list
and the assessment of the pre-specified, 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 quantification and pricing. At the beginning of the execution phase, the project manager
usually updates the preliminary risk analysis or, if
that has not been done, is the main person responsible 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.

Upper management and business control
Project sales and
marketing
CM
Preliminary
risk
assessment

CM, PM, TE, BC, E
Risk checklist reviews
Excel-based
tools

Project execution
CM, PT

PT, BC

Kick-off
meeting
Risk handover

Risk review
monthly and
project
meetings

Service
PT, CM, E

PM, BC

Lessons
learned
meetings
PT, E

Changes
Risk log
Intranet documents

CM=Commercial manager
PM=Project manager
TE=Technical engineer
BC=Business control
PT=Project team
E=Expert

E, PM

Risk
committee/
management

New
risks

Figure 1. Risk management actions and actors in a project.
Project Perspectives 2010

49

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 findings 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 factors of the project.
Project managers are expected to use both their
managerial skills and competencies and the formal risk management practices to respond to the
project's risks and unexpected events. The formal
risk management procedures are predefined behavior 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) demand that the project manager articulates the actions 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

Initiating

Sales and bidding

Execution

Warranty

Closing

Intensity
of activities

Project phases:

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 files
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 information about identified 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 learning from previous experiences. However, as Ward
(1999) stated, adequate supporting procedures,
including training and audit controls are desirable 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,

Supporting
processes
Project
risk analysis

Formal risk
management
process

Preliminary
risk analysis

Interpersonal
relations

Risk
reviews

Lessons Learned
Final review
Archives

Informal
actions
Time

Figure 2. Formal and informal risk management actions in a project.
50

www.pry.fi

their own experiences and skills and project management 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 document 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 difficult, 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 information 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 mitigation actions quickly and spontaneously is seen
important, discounting the fact that the ad hoc
decisions and deviations from predefined risk
management procedures can sometimes be fatal.
The informal risk management actions (e.g. rescheduling, 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 actions remain undocumented and unanalyzed it
is difficult the transfer the knowledge to other
projects. Additionally, informal actions are more
personalized and less codified by definition, which
increases the risks involved.

GPS II – research project
GPS 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 Technology (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 University. VTT was CRGP's first affiliate 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 benefit from high quality academic research. Both the researchers and
the industry partners of GPS I identified project risk management as an important area for
development, and subsequently, the basic idea of GPS II emerged.

Vision

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.

Research
Areas

Project networks:
“Management of global
project networks”

Research
Questions

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

Risk management:
“Risk management in
large and complex
global projects”

Culture & diversity:
“Management of
project organizations
with cultural variety
and diversity”

What are the novel and
effective risk management practices in global
project networks with
several actors?

How should a global
project be organized for
the effective management
of cultural variety and
diversity?

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

Project Perspectives 2010

51

Business
processes

Formal risk
risk management as part
of project management

Cultural features:
- Organization cultures
- National cultures

PLAN
Strategy
Quality
Business
control

Project network

Finance
HR

Project context

Safety and
Security

Project management

- Risk management cultures

Informal actions

IDENTIFY

Roles and
responsibilities

ESTIMATE

Interpersonal
relations

EVALUATE

Communication
and consulting

TREAT

Coordination
and co-operation

MONITOR

Sensemaking and
sensegiving

Decisions and actions to manage project risks

Figure 3. The risk management framework.

Conclusions
In spite of all the detailed project plans, experienced 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 identification and proactive
control very difficult. All non-controlled turns,
unstructured problems and unexpected circumstances 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 foreseeable 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 flexible 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 framework, 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 specified response
strategies available.
52

Also conceptual understanding is argued: Understanding 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 managers' 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 modified according to
both the project's needs and to the project manager'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 management, 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.

www.pry.fi

References
APM. (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 Journal of Project Management 24, 687-698.
Becker, M. & Knudsen, T. (2005)
The role of routines in reducing pervasive uncertainty. 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 assumptions 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 management in a project-intensive organization. Project
Management Journal 36 (3), 17-26.
Hällgren, M. (2007)
Beyond the point of no return: On the management 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.

Li, P. P. (2007)
Social tie, social capital, and social behaviour:
Toward an integrative model of information
exchange. Asia Pacific Journal of Management 24,
227-246.
Pender, S. (2001)
Managing incomplete knowledge: Why risk management is not enough? International Journal of
Project Management 19, 79-87.
Perminova, O., Gustafsson, M. & Wikström, K. (2008)
Defining uncertainty in projects – a new perspective. 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 management 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.
Ward, S. (2006)
Project risk management. In: Hillson, D. (ed.) The
risk management universe. A guided tour. Business
Information.

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

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

Project Perspectives 2010

53

Use Confucius to improve
project leadership in Chinese
perspective

Weiping Jiang
Yun Le
Qinghua He
School of Economics and
Management
Tongji University
Shanghai
People’s Republic of China

China has been deeply influenced by Confucius
for thousands of years. The Analects of Confucius 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 qualities 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.

This is an updated version of a paper originally published in
the “IPMA Scientific Research Paper Series: Human Side of
Projects in Modern Business” (IPMA, 2009)
54

Introduction
Project management is mainly based on system
approach. Its tools also reflect 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 management 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
specified time, cost, quality and environmental
requirements (Low Sui Pheng, 1995).
Studying and learning management with Chinese specialty can benefit management practice
in China, and also benefit 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 influenced 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 especially “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 influence 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 Confucius.
www.pry.fi

Wise
Precondition

Righteous

Courteous

Brave

Cincere

Foundation

Benevolent
Figure 1. Inherent relationships of the six qualities

The Analects of Confucius
The 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 gentleman should be benevolent, righteous, courteous,
wise, sincere, and brave. Benevolence is the fundament of the other five 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 figure 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 classical 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 English 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
governance
People-oriented thinking is the foundation of
Confucianism’s management by moral, rich
Project Perspectives 2010

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 governance
Moderation in all things is the best of rules. There is
much use of moderation in enterprise governance
(Gong Qiyao, 2000).Moderation means appropriation and objectivity. Systems of a company should
be flexible, the employees should be self-disciplined and heteronomous, a company should also
combine decentralization of authority and centralization 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 practice. 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 Results
Human beings’ knowledge grows basing on
heritage from ancestors. The principles of Con55

fucius’ philosophies can be adopted and mapped
into the business environment. The Analects of
Confucius is mainly reflecting 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 management 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 influence 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 leadership. 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 better (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. According 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 industry, 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 members. 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
final result. Then we calculated performance of
project control from the final 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.

Conclusions
Gentleman 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 application 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 five 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 five qualities, and wisdom
is the precondition of the others. In the aspect of
being wise, several methods of learning provided
56

by Confucius are efficient for project managers to
learn information in their limited time. The other
five 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 benefit 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
insufficient 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 verified with the new times. Now Confucianism has strong influence on management
in China and Asia. And how to find 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.

References
Harold 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 fit
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 education, Journal of Jianghan PetroleumL Institute
(social science edition), 3 (1), pp 54-56.
Wang Liming (2004)
Confucius' scientific spirit, Journal of Henan Mechanical 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.
www.pry.fi

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 Virtue, 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 strategy, 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 enterprise 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 between benevolence and love. Beijing: China Social
Sciences Publishing House.
Zhang Yun (2005)
The viewpoint of Lin Yutang about Confucianism, Journal of Inner Mongolia Normal University
(Philosophy &Social Science Edition), 34(3), pp102106.
Sun Wenjuan (2005)
Benevolence of Confucianism and love of Christianity, 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)
Pacifism of Confucianism, Theory Horizon, (9),
pp180-181.
Dong Ren (2002)
The nature of "courteous" and its modern meaning, Foreign Sociology, (4), pp19-28.
Wu Bofan (2008)
Confucianism’s moral principals and spirit-Japanese enterprises’ “courteous” and harmony, 21
Century Business Review, (7), 130-132.
Li Wen (2002)
The re-evaluation of the historical role of Confucian 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.

Project Perspectives 2010

W i i Ji
Weiping
Jiang iis a Ph
Ph.D
D student
t
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 recommanded to study as a Ph.D student in the major
of project management in construction in
September of 2007.

Yun Le is a professor at School of Economics and Management, Tongji University
of China. He received his Bachelor, Masters
and Doctoral degrees from Tongji University. He is a member of the board of director 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 Bachelor, Masters and Doctoral degrees from
Tongji University. He has published more
than 30 papers in construction project
management.
57

Quality of Gentlemen

Score (0,1,2,3)

1. Benevolent
1.1 the first to deal with problems and the last to enjoy the happiness of success
1.2 shares success with project team members
1.3 distinguishes gentlemen from flunkies
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 profits and takes the profits 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 find 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 continuously
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 find out the reasons for mistakes and reflect 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
58

www.pry.fi

Item

Performance

Schedule
Cost
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.

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

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

Project Perspectives 2010

59

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