ABSTRACT: a key part in understanding the

ABSTRACT: Project management is a problem solving activity that is
centred on control and certainty. The delivery of contemporary projects is
faced with significant challenges. This essay examines the relationship between
the ‘current’ project management methods and the issues that prevail in
contemporary project management.  This
paper looks at these issues and how they are connected as well as their impact
on project performance. The paper concludes there is disconnect between what is
perceived to be required to manage projects and what might actually be required
in reality.

 

 

INTRODUCTION:

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The development and delivery of projects
across all types of industries is constantly confronted with issues and difficulties
that result in its delays, under performance, and in some cases completion failures
(Cooke, 2002). This
belief can be supported by the NAO audits of Public Sector Projects, showing
that 34% of projects in the year 2016 were at significant risk of failing to
respond to requirements and expectations of successful delivery (NAO, 2016). In order to
comprehend why projects fail, it might be important to thoroughly examine the
contemporary issues they face, and evaluate their potential influences on
project performance. Bredillet
(2005) believed that the poor performance exhibited might be primarily
attributed to the very complex and uncertain nature of projects, therefore
defining projects and project management might play a key part in understanding
the contemporary issues faced and grasping what impacts the success and failure
of projects.

·        
Defining a project:

There are several varying proposed definitions
of projects in literature; this lack of consensus might present a limitation to
the research. Turner
(2014) defined a project as an endeavour to take on a scope of work with
set requirements, where resources of human, material and financial nature are
structured in a planned manner, within a specific time frame and cost, in order
to accomplish beneficial change distinct by quantifiable and quantitative
outcomes. The project management institute indentified projects as temporary,
planned actions that are constrained by limited funds, a set start and ending
dates. The tasks are either undertaken by an organization or under joint
partnerships with multiples parties, in order to produce a unique product or
service as part of the specific goals and objectives of the organization’s
business strategy (PMI,
2013).While the Association of project management’s definition is mostly
in agreement with the later, it adds that valued outcomes and benefit must be
embedded within project objectives (APM, 2012). Tuman
(1983) argued that projects are high risk activities therefore they must
proceed from clearly defined goals and adequate resources in order for all the
necessary tasks to be carried out. It can be proposed that a project is a “goal
focused system” that is based on rational decision making within a team, however
still bears a degree of risk (Heathcote,
2017).

·        
Defining project management:

With Project management being a new and still
developing discipline; a conclusive definition to it has not yet been reached (Pellegrinelli, 2011). Kerzner
(2003) defined project management as the careful planning, and directing
of an organization’s resources, for the completion of a short term objective
with pre-established outcomes. He argued that methodical employment of skills
and techniques as well as knowledge application is necessary in order to meet
project requirements. While (Hamilton,
200, pp?) suggested that it is “form
of management that can respond to dynamic change in the environment of today
and the foreseeable future”.

LITTERATURE REVIEW:

PROJECT SUCCESS: BETWEEN PM THEORY’S IRON TRIANGLE & VALUE /
STAKEHOLDER APPOACH.

When it comes to project success, it
appears that there is an absence of consensus in the project management literature
on what determines success or failure of projects (Thomas & Fernandez, 2008). Cooke-Davis (2002)
suggested that suitable measures that are aligned with project’s outcomes inside
the authorized business case should be put in place by organizations, in order
to act as success parameters. However, Heathcote (2017) argues that the notion
of performance measurement is an issue itself, because projects differ in
nature, scale, and goals.

It can be observed that two opposing views
exist when it comes to defining project success, for some like Kloppenborg & Opfer (2002),
the criteria of success is rooted within the hard paradigm approach of “the
iron triangle”, it is believed that a successful project is one that has completed
its given scope objectives within the budget and time allocated to it. Pinto
& Slevin (1987) conceded to this point and further stated that planning considerably contributes
to project success.

This way of measuring success is founded on
the current
theory and practices of project management that lean towards ‘control’ and
‘monitoring’. The project management theory text books insist on the employment
of planning techniques, scheduling and calculated budgeting in the effort to fully execute
projects according to the hard paradigm “scope, cost, time” (Padalkar & Gopinath, 2016).
However, it
can be argued that this need for control
and certainty is founded on the idea of ‘determinism’ (Padalkar & Gopinath, 2016). Determinism
in the management of projects tends to ignore the very uncertain nature of ‘projects’,
and instead promotes the inaccurate assumption that the future can be predicted
and planned for (Heathcote, 2017). Determinism leads to project managers
overlooking the uncertain aspects of projects such as (project complexity,
fluctuating markets, alterations of scopes, adversarial stakeholder interests
and unexpected technological advances),a number of practitioners even blamed
the risks associated with uncertainty for projects underperforming (Flybjerg, 2011).

On the contrary, another way of measuring
project success seems to be drifting away from the previous outputs based
evaluation of performance discussed, Muller &
Jugdev (2012) suggest that achieving Value based outcomes and benefits,
reaching stakeholder interests and expectations,  are the key factors on which success or
failure of projects should be based. Turner and Zolin (2012) further propose that it is stakeholders
who deem a project as a failure or not. The APM (2013) elaborated on these two opposing
views, by stating that some successfully delivered projects (on time, on
budget) have failed to deliver their anticipated benefits, while some projects
delivered considerable benefits however, overrun on time and cost.   Nevertheless,
with all the planning performed using the hard paradigm, projects still run over
time and cost, and many of them don’t deliver any benefits (NAO, 2016). Flyvbjerg, Garbuio, and Lovallo
(2009) propose that It maybe that the problem is not only related to
illiteracy of risk inside deterministic project planning, but rather, might be related
to cognitive human behaviours influencing flawed poor decision making. This thinking
leads to the contemporary issue is referred to as “The planning fallacy”. While
the lack of benefits delivered might be concluded to be in connection
the business case’s lack of focus or non inclusion of value and benefit
realisation as well as stakeholder management as key contemporary issues
within the management of projects.

The following paragraphs will focus on the
discussion of the planning fallacy, its origin, and its implications on the
successful delivery of projects. As well as attempt to elaborate on stakeholder
issues and their impact on value and project success.

 

OPTIMISM BIAS, PLANNING FALLACY& TACTICAL EXAGERATION     :

It was previously discussed that the
management of projects requires rational decision making (Heathcote, 2017). However,
when faced with taking a decision under risk and uncertainty (such as the
environment where projects exist), human beings tend to make irrational judgments
(Simon, 1957).  A clear example of the implication this
bounded rationality has on the management of projects is, the systematic optimistic
planning of project timescales, underestimation of risk and costs, and the
overestimation of benefits. Flyvbjerg
et al (2009) identified this tendency as “optimism bias”. This
cognitive bias is believed to be the root cause of poor estimation and planning
that hinders project success. Meyer (2014) further explains that this optimistic error does
not only take place in the conception and development phases of projects, but
is present during the whole project life cycle; he referred to this as “in-project
optimism bias”.

McCray (2002) believes that of the majority of the miscalculations
that result to the overspending and overruns on projects happen during the
planning phase.   As a result of optimism
bias inside the project management context, project managers make decisions
related to the planning from an ‘inside view’ perspective, meaning they ignore
risk, which often leads to the failure of plans. This cognitive thinking bias
translates to the phenomenon identified by Kanehman & Teversky (1979) as the “Planning
Fallacy”. Buehler et al (1994,
pp366) described this issue as “confident belief that one’s own project
will proceed as planned even while knowing that the vast majority of similar
projects have run late”.

The view on failure caused by “optimism
bias” and “planning fallacy” solely was challenged in literature by Flybjerg
(2011), who argued that project
managers intentionally downplay risk and exaggerate benefits in order to gain funding
and authorization, and deal with the issue of “Governance”.

Flybjerg (2011) referred to this
as “tactical exaggeration”, he explained that this misrepresentation of
business cases, compromises the decision making integrity, resulting in wrong
estimation of project feasibility and its value, consequently leading to the
wrong projects receiving approval as well say time and funding overspend. A
supporting argument of was proposed by Gray (2010), who viewed that there is a
“conspiracy of optimism” used to cover up “tactical exaggeration” within the
management of projects. However, Heathcote (2017) argued that tactical
exaggeration may not be conclusively based on deception, but rather it could be
that it is itself a result of human’s tendency to think optimistically. He also
suggested a link between tactical exaggeration and the issue of “Methodology”.
Heathcote (2017) speculated that methodology inside organisations makes project
managers go to “Business Case” preparations before enough time was spent
doing the project research. He hypothesized: methodology inside organisations
gives project managers the set project brief to be executed; there is not much
room to go back and challenge it.

Stingl & Geraldi (2017) advocated that
although “optimism bias” results in many issues within projects, a healthy
level of optimism might be beneficial in order to spot innovative opportunities
and motivate project teams. From the previous analysis It maybe concluded that
“optimism bias”, “planning fallacy” and “tactical exaggeration of the “business
case” all have a major impact on project performance and its ability to deliver
value and realize its benefits.

 

THE ISSUE WITH STAKEHOLDER
MANAGEMENT:

APM
BoK (2005) suggested that “the value of a project is the ratio of
stakeholder satisfaction divided by resources required to deliver it”. With the
new perceived need for projects to shift from
“product-centric” outcomes to “value-centric” ones, it was suggested
that the focus should be placed on exploring the importance of “stakeholder
management” in more detail (Winter & Szczepanek, 2008).

Karlsen
(2002) defined stakeholders as: “individuals and organizations who are
actively involved in the project, or whose interests may be positively or
negatively affected as a result of project execution or successful project
completion”. Therefore it might be concluded that stakeholder’s interests have
a lot of influence and power inside projects (Mitchell et al,
1997). Clarkson (1995,
quoted in Mitchell at al, 1997) , argued  that besides power and influence stakeholders
also tend to introduce risk and uncertainty to projects, he elaborated on this
point by categorising stakeholders into: voluntary risk bearers (in terms of
human or financial investments), and involuntary risk-bearer (participants who
are effected by risk inside the organisation’s activity). Clarkson then concluded
that the management of stakeholders is fundamentally connected to risk
management.

Newcombe
(2003) while quoting Morris (1994), further articulated the key role of stakeholder
inside the complex changing environment of projects, he stated that “it is
important that the project’s objectives mesh with its “stakeholders”, and that
they continue to fit stakeholders interests” .Thus it can be noted that Stakeholder
interests place heavy pressure on the selection and identification of the business
case, the definition of the strategic objectives and risk
management inside projects. The Ability to identify stakeholder interests
and meet their expectations (stakeholder satisfaction), can ultimately
determine failure/success of projects (APM, 2012).  However, Newcombe (2003) also pointed that it can be hard
to satisfy these expectations due to possible conflicting interests, resulting
from changing conditions, and evolving stakeholder objectives.

Contrary to the APM’s view, (Heathcote,
2017) argued that while stakeholder interests are important to the project, placing
too much importance on satisfying them might compromise the project. He
explains that because of their vested interest might be inclined towards “tactical
exaggeration” of the business case, (this can also be linked to issues with
securing Contracting at low expenses), and their risk perception
may lead to the misidentification strategic risk, and thus distract from
project’s valued outcomes.