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Human Factors and Ergonomics in Manufacturing, Vol. 19 (6) 582–600 (2009)C© 2009 Wiley Periodicals, Inc.Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/hfm.20185

Project Management: The Task of HolisticSystems Thinking

Heli Aramo-Immonen and Hannu VanharantaIndustrial Management and Engineering, Tampere Universityof Technology at Pori, Finland

ABSTRACT

Large national and international mega-projects are often structured around a hierarchy of a numberof interrelated projects and subprojects. This construction of a complicated and fragmented projectorganization forms a multiproject environment. The networked structure of a mega-project, such as inshipbuilding or in the offshore industry, with its significant amount of boundaries between subprojects,poses a demanding task for project management. The purpose of the method designed in this researchis to assist a company’s management in the process of forming a comprehensive view of projects ina multiproject environment. The holistic overview of the project is formed by looking at individualsubprojects from a variety of qualitative angles. This article introduces a method for the collectionand analysis of qualitative information from a project organization. The application used converts theresults of the operative project-level analysis into explicit system-level information for managementguidance purposes. The method of a new qualitative project analysis uses fuzzy logic and emulation.The conceptual part of this article discusses the theoretical framework behind the application. Next,the empirical results of the implementation of the new analysis method in a project-based enterpriseare illustrated. Finally, an example of revised project guidance proposals is presented. C© 2009 WileyPeriodicals, Inc.

1. INTRODUCTION

A current observation is that the execution of a multinational mega-project can run into se-rious problems due to lack of attention regarding qualitative management features, such ascultural differences. Typically, there is a lack of common understanding between stakehold-ers and a lack of common language in the mega-project environment. This can be one causeof a severe delay, for example, in the delivery of a nuclear power plant or of quality risks inshipbuilding. The result of this ignorance can be low productivity and a higher risk of poorquality in the project execution. Furthermore, partners to be selected for a mega-projectconsortium should be able, for example, to bear a complementary set of risks to balancethe total risk in a project (Archer & Ghasemzadeh, 1999; Ghasemzadeh & Archer, 2000).Therefore, the management of a project is far more than a purely quantitative managementtask; it is a challenge for the whole group of management teams involved in steering themega-project toward the common qualitative and quantitative predefined goals. As observedin this study, it is typical of project goals that they also evolve during the mega-project’s lifespan. This poses even more complex managerial challenges in the mega-project context.

Correspondence to: Heli Aramo-Immonen, Industrial Management and Engineering, Tampere University ofTechnology at Pori, Pohjoisranta 11, P.O. Box 300, 28101 Pori, Finland. E-mail: [email protected]

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PROJECT MANAGEMENT, HOLISTIC SYSTEMS THINKING 583

Project managers at the operative level are experts in project implementation and theyshould also possess knowledge about the external factors (environment, culture, local de-mands, etc.). These inputs from outside the project organization affect the success of projectexecution. However, this knowledge is often tacit and therefore difficult to capture andconvert into explicit knowledge for project management activities (Nonaka et al., 2000a).Therefore, a new method for the collection and analysis of this qualitative information isneeded. The object of this research is to categorize the most important qualitative featureson which project management should focus.

The main research question of this article is “Which are the most important qualitativemanagement features on which the project management should focus?” Therefore, thisarticle is composed as follows: First, the theoretical framework of the research is introduced;second, the research methodology is discussed, following the introduction of the methoddeveloped in this research; and, finally, some results of the study are introduced.

2. THEORETICAL FRAMEWORK

The research approach is transdisciplinary. Therefore, several supporting theories have beenused in this research. The practices of project management are based on general businessmanagement theories, such as business process management, supply chain management,value chain management, and different business models. It is difficult to identify one generalproject management theory. The theories discussed in this article, in contrast, have to beseen as a basis for the construction developed in this research. The organizational behav-ior theories introduced in this article–organizational learning, activity theory, knowledgemanagement, and systems thinking–are generally accepted and applicable in the projectcontext.

2.1. Project Learning as a Success Factor for ProfessionalProject Management

Project learning is a success factor for professional project management. In traditionalproject management literature, project learning is often regarded as a “lessons learned” typeretrospective study of the project. These debriefings are focused on information such ascosts, timelines, and other quantitative data. However, Nonaka et al. argue that most of theorganization’s knowledge lies in tacit knowledge carried by human beings in “know how”or “know why” forms (first as procedural or heuristic knowledge, and later as experiencesand an understanding of causality) (Nonaka et al., 2000a). Remarks on how knowledgeis captured or how knowledge is diffused within the organization are seldom found incontemporary literature (Schindler, 2003).

Organizational learning is commonly recognized as a major factor contributing to anorganization’s capability to produce added value and maintain a competitive position inthe market. The creation of new information is based on shared views and mental modelswithin the organization. In the organizational process of learning, four primary processescan be discerned: the acquisition of knowledge and the interpretation, dissemination, andretention (storage) of information (Garvin, 1998 p. 40). These four constituent areas areclosely linked to communication and behavioral processes, important in the learning cycle(Nonaka et al., 2000). In a project organization, which changes from one project to another,the organization’s ability to learn deserves special attention. This idea can be formulatedneatly as how to prevent reoccurrence of errors in an organization that is in a state of flux.

Human Factors and Ergonomics in Manufacturing DOI: 10.1002/hfm

584 ARAMO-IMMONEN AND VANHARANTA

As to preventing errors, transferring tacit and empirical information from one project toanother constitutes an essential factor (Koskinen et al., 2002 p. 281).

Nonaka et al. introduce a learning cycle known as the SECI process. There are fourmodes of the conversion of knowledge: (S) socialization, conversion from tacit knowledgeto tacit knowledge (occurring mostly through shared experiences); (E) externalization,conversion from tacit knowledge to explicit knowledge (when tacit knowledge is articulatedinto an explicit form to be shared by others, it becomes the basis of new knowledge);(C) combination, the conversion of explicit knowledge into more complex and systematicsets of explicit knowledge (explicit knowledge is collected from an organization and thencombined or processed to form new knowledge); and (I) internalization, the conversionof explicit knowledge into tacit knowledge (through internalization, explicit knowledge isembodied to an organization by distributing it to individuals) (Nonaka et al., 2000).

Project learning enables a company to develop its project competencies and to sustain itscompetitive advantage. Mastering the project learning cycle could save a significant amountof costs incurred from redundant labor and the repetition of mistakes. In particular, in aproject with a long life cycle, such as shipbuilding or an offshore project, amnesia canalready exist during the project. According to Schindler (2003), factors that explain thisamnesia are related to four humanly typical elements, namely time, motivation, discipline,and skills. Due to the time pressure, project learning can be classified as a low priority task,and due to the myopia the organization can be blind to the importance of learning, and thiscan be ignored due to a lack of competence in the management of the project learning cycle.

To summarize, the learning capability of a project organization is one of the key issuesin building a company’s intellectual capital. Knowledge management (see Section 2.3)provides managerial tools to deal with knowledge creation and organizational memory(knowledge storage). Recent research results indicate that the metal industry is knowledgeintensive and that there is a relationship between the amount of intellectual capital andproductivity/profitability rate (Kujansivu, 2008).

2.2. Expansive Learning and the Activity Theory

The activity theory distinguishes between temporary goal-directed actions and durable,object-oriented activity systems (Engestrom, 2000). In the case of mega-project man-agement, the latter are discussed. The process of the organization’s creation and use ofknowledge as a productivity booster is not a spontaneous phenomenon. According to thesociocultural, historical activity theory, there has to be a triggering action, such as the con-flictual questioning of the existing standard practice in the system, to generate expansivelearning (Engestrom, 2000; Nonaka & Senoo, 1998). Expansive learning produces cultur-ally new patterns of activity. The object of expansive learning activity is the entire systemin which the learners (here, project members) are working (Engestrom, 2001). Figure 1illustrates the system structure of collective activity according to Engestrom.

This study adopts an idea that the problem with management decisions often lies inthe assumption that orders can be given from above to somebody to learn and createnew knowledge (Engestrom, 2000). The article suggests that the problem with conflictualquestioning, in contrast, is the lack of goal orientation, in general the lack of a strategicvision. The method introduced in this article is based on proactiveness. The focus is on theimprovement opportunities seen in the future. The project performers analyze the projectmanagement features from their personal point of view. The attitude is positive, and themethod focuses on the performers’ own motivations and orientations. This is a positive



I

Object

Rule

Subject

Community Division of labor

Outcome

Instruments

Figure 1 System of collective activity (Engestrom, 2000 p. 962).

trigger for performance development. The discussion about the results together in structuredworkshops creates a fruitful environment for the organization’s collective ability to evolveand to create a useful organizational memory.

2.3. Knowledge Management

In view of developing corporate competitiveness, learning provides a crucial asset whilebeing one of the major elements in processes of change. Knowledge in itself is difficult tomeasure. Nevertheless, it has a tangible effect on the achievement of results. A problemfaced by project-based companies is how to transform from material values to immaterialones, which tends to be difficult to measure. When examining the process of knowledgemanagement in corporate management, researchers encounter a common belief that canbe summarized as “if it can’t be measured, it can’t be managed.” Even if it is difficult tomeasure knowledge, studies suggest that these properties can be measured indirectly (Sooet al., 2002). Competitive edge depends on the ability to create, transfer, use, integrate,and expand the knowledge capital. New knowledge can only be created by combininginformation in some unique way, thus creating something new. This impedes the acquisitionand use of knowledge in decision making and its application to new products, services, andprocesses (Soo et al., 2002).

First, a source of information and knowledge on which individual know-how is basedare required. These internal and external sources of an organization must be accessible tothe individual through a network. Even though personal notes and references are important,a knowledge-sharing arena and organizational memory are necessary to create a sharedcontext (Koskinen & Aramo-Immonen, 2008; Nonaka et al., 2000a). This can be measuredby the degree of networking of the individual and the organization. Second, the individualand the organization have to possess the capacity and ability to absorb information (Palonen,2003 p. 11). The general capacity for adopting information refers to the ability to recognize,absorb, and combine information. Third, the process of decision making has to be of ahigh standard. The organization’s problem-solving ability promotes the creation of newinformation. Information and knowledge have to be used comprehensively (for instance, byanalyzing greater numbers of alternatives), in consensus (e.g., a commonly shared opinion),in a creative manner, and by creating new information (e.g., new ways of thinking, new ideas,



new processes). Accordingly, clear interdependence exists between knowledge managementand a company’s success (Soo et al., 2002).

To summarize, this feature of the inaccessibility of knowledge value creation forms aclassical problem of the black box (Ashby, 1957 p. 86). Thus a certain relationship betweenknowledge management and a project’s success can be seen. It is difficult to identify thecausal linkage in reality. Therefore, this study introduces an isomorphic system (Ashby,1957), which represents a method that emulates the reality. Instead of learning from thepast project experiences after the project, proactive evaluation of the project execution isutilized during the project. This method is proactive and allows the project organization tolearn during a prolonged mega-project.

2.4. Maintaining Systems and Systems Theories

A system view to project management is a relevant approach for a scholar because anetworked mega-project structure with a significant amount of interfaces between differentsubprojects can be seen as a multiproject system. The general system can be illustratedas a chain of inputs, processes, and outputs. In the case of a project as a system, thesystem input is the required resources (financial, labor, time, etc.). The system processesare project management tasks and project execution. The system outputs are the results ofa project (products, services, etc.). With such an extremely simplified model, it is possibleto imagine that the results of a project occur as a consequence of the project activities(steered by project management). The results of a project comply with the critical successfactors (system-critical parameters) established for the project (Gardiner, 2005; Jackson,2004). The systems theory brings structure and order to an otherwise chaotic environment.By using the systems theory, different layers, subsystems, processes, and activities may bedistinguished within a project. Samuelson (1978, 1981) has introduced a general conceptof organizational management to maintain the functioning system. Parts of the system are:a control system (e.g., accounting, quality assurance), a working system (e.g., production,distribution), an information system (e.g., information and communication technology), anda support system (e.g., purchasing, logistics).

Traditional operational research (OR) is based on mathematical modeling involvingmerely a few (measurable) variables in the linear relationship with each other (Checkland,1981; Churchman et al., 1957). OR represents hard systems thinking. A mega-project can beconsidered as a complex, multiple-loop, nonlinear system. It is also a social system with astrong impact of human actors on decision making. In systems of this type, the OR is far toosimplistic thinking. It loses a genuine managerial touch and does not provide a holistic view(Forrester, 1958, 1971; Jackson, 2004). Instead of the hard systems thinking, the soft systemsthinking methodology is appropriate to be used here. Peter Senge (1990) popularized thesystem dynamics in his book The Fifth Discipline, and Jackson crystallizes the idea as below:

“According to the theory of system dynamics, the multitude of variables existing in complex systemsbecome causally related in feedback loops that themselves interact. The systemic interrelationshipsbetween feedback loops constitute the structure of the system, and it is this structure that is the primedeterminant of system behaviour” (Jackson, 2004 p. 66).

For project management, the aim of system dynamics is to provide an understanding ofthe structure of complex systems so that the guidance ensures behavior that corresponds withthe goals of a project. The idea is to reinforce positive feedback loops to boost productivityand high quality.



2.5. The Decision-Making Process

The decision-making aid developed in this study is designed to reduce the number of uncer-tain factors in a decision-making process. The application compares the assessments madeby the decision makers of the current situation and the optimum vision they can imagine.Even if the qualitative factors affecting decision making are inexact and/or suggestive, theirsignificance to the formation of the decision is undisputable. The next section will introducesome phenomena affecting the development of this method.

2.5.1. Alternative-Focused Thinking. By its very nature, decision making related toa project portfolio is of the “risk analysis” type (Miller & Lessard, 2001). A decisionis affected by the strategy selected by the company, present competition, and availableresources (Gorog & Smith, 1999). Decision making is decentralized and influenced by theneeds reflected by the involved stakeholder groups. In such situations, decision making hastraditionally been facilitated first by short-listing the best options (i.e., those appearing to bethe best at face value) and, second, by selecting the most appropriate ones from among thatgroup. This mode of thinking tends to limit decision making to readily available alternatives(alternative-focused thinking), which may not actually present the best possible options(Keeney, 1996). This alternative-focused model of decision making is reactive, because itlimits the selection to predefined alternatives before all options have been assessed. Thus,the ensuing decision-making situation turns into forced problem solving, signifying a lossof possibilities inherent in decision making. As a procedure, alternative-focused decisionmaking is a “quick and dirty” way of acting when facing difficult strategic questions andbeing indifferent to their repercussions (Brannback, 1996).

2.5.2. Value-Focused Thinking. Values provide the foundation for culture and foralmost everything we deal with. Therefore, decision making should also be a proactiveprocess designed in line with value-focused-thinking (VFT). The value-focused decision-making model emphasizes the assessment of alternatives before the decision is made. Theobjective is to identify the potential related to decision making. Keeney suggests a four-stage model: (1) Values should be expressed in writing. Qualitative values affecting decisionmaking are assessed in a logical and systematic way. (2) The decision must always be madebefore measures affecting decision making are introduced. (3) The written outcome fromthe qualitative analysis will be used when formulating the options for available decisions.(4) Decision-making options are used as new opportunities for development (Brannback,1996; Keeney, 1996).

Keeney tested his VFT decision-making model at British Columbia (BC) Hydro, a powerplant corporation, at a key stage in its decision-making process. BC Hydro had concludedthat, within a decentralized organizational model, the bare mission did not guarantee suffi-cient coordination and scope for the decision-making process. The conversion of strategicobjectives into options for decision making was supported by introducing the VFT process.Decision making is a continuous process allowing options to be screened. To illustrate thisprocess, Keeney (1996) uses an example involving a procurement decision during whicha buyer may have a view of the criteria affecting the procurement which is completelydifferent from that of the engineer or the customer. Decision making can be facilitated, andthe differences between the involved views can be identified, by engaging a tool designedfor qualitative analysis.



In summary, the VFT decision-making aid developed in this study is designed for mega-project management. The above-mentioned findings from BC Hydro also could be adaptedto the project organization decision-making process. Decision making should be proactivelyfocused and based on the assessment of alternatives before decision making.

To conclude Section 2, it can be said that the use of organizational learning, knowledgemanagement, and activity theories supports the targets of productivity and profit growth.Project organizations’ capability to create, and use new knowledge maintains a sustain-able competitive advantage. Systems thinking and value-focused decision-making theoriessupport the managerial disciplines, steering, and management of a project’s organization.

3. PROJECT STEERING THROUGH EMULATION

A project organization in a dynamic business environment has to have the ability to readjustits goals and operations effectively. In other words, to learn through the process, otherwisecompetitive markets will soon destroy the player acting too slowly. In the case of manag-ing simple projects with clear organization, the steering solution is rather straightforward,whereas with a large and complex project and a fragmented, network-based project organi-zation, the problem of steering the project becomes much more complicated. The metaphorof the human body can be used here (Miller, 1978) to describe a complicated mega-projectand its organization with various stakeholder groups. A human body can be seen as an opensystem affected by environmental changes and, in contrast, as a closed system of humanorgans. The idea is to analyze the anatomy of a mega-project based on the metaphor ofliving systems (Miller, 1978). According to Miller, an organization as a system has severallevels and subsystems that are related to each other in the same way as in living organisms.This metaphor is felicitous for illustrating fragmented and diversified mega-projects.

3.1. The Human Body Metaphor

Let us imagine the project as a human body and the project management systems as thehuman brain. Studies in neurophilosophy demonstrate that, to give the human arm thecommand to move toward a desired goal (e.g., toward a plum; Figure 2), the brain goesthrough an emulation process. Neural emulation is one strategy that the brain uses to solvethe coordination and control problem. Emulation involves simulation–inner models of thebody. Emulators help us to move from the sense perception to the desired body movement.An emulator allows us to imagine a possible solution to the problem we do not yet see.Finally, the feedback from the emulator is much faster than from the entire sensory system.

Generally, the brain needs to be able to perform transformations of coordinates to getthe body in the right position–or to get the desired plum. The problem of transformationsof coordinates can be seen as a kinematic one. The solution to this problem offered by“elegant” engineers is to construct an inverse model (see Figure 2). In the internal system,this model represents the question “If I manage to get the goal, what command would I haveused to get it?” (Churchland, 2002).

3.2. The Emulator Model

This study proposes that the emulator system is used to steer the complicated function ofproject organization. Figure 3 illustrates the way in which the combination of the emulatorand the inverse model can be transformed into part of the project management system.



Get the plum Inverse modelBody

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what command would I haveuse to get it?”

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what command would I haveuse to get it?”

Figure 2 “An inverse model is connected to the forward model (the emulator). The inverse modelgives a first pass answer to the question, what motor command will get my arm to the plum? Theinverse model proposes an answer and sends out a command proposal to the forward model, whichthen calculates the error by running the command on the neural emulator. The inverse model thenresponds to the error signal with an upgraded command” (Churchland, 2002, p. 81).

The emulator model, seen as an inherent part of the project cycle, supports the strategyformation and strategy implementation in large, complex capital investment–engineeringprojects (Gorog, 1999). Commonly known as mega-projects, these typically have a longtime span that allows the organization to learn during the project’s life cycle. The applicationdiscussed in this article has its core in the iterative organizational learning cycle. Nonakaet al. (2000a) define it as the model of dynamic knowledge creation. Recently, the modelhas been introduced into the learning and development (L&D) strategy perspective as avital, organizational success factor (Sadler-Smith, 2006). A generic L&D system modelintroduces similar elements as the application introduced in this article. Collective outputsto be gained from the application are shared mental models, knowledge assets, socialization,and participation. Organizational outputs to be gained are performance change and strongercommitment, and individual outputs are motivation and personal growth.

3.3. Co-evolution and Interactive Planning

Ackoff, an early developer of systems thinking, emphasizes three principles in his method-ology of interactive planning, namely, the participative, continuity, and holistic principles(Ackoff, 1986). The methodology used in this study supports the same principles. As manystakeholders as possible should have the opportunity to participate in the process. This isone way to ensure objectivity in the decision-making process. Objectivity is seen here as



Vision ProjectOrganization

Emulator(Model of the desired stage)

Goal stage

Systemlevelimpulse

Proactivevision

Revisedguidance

Currentstage

Achieving the goalvia new way offunctioning

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Maintaining systems-Control systems

-Working systems-Information systems

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Maintaining ProcessesManagement systems



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Goal stage

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-Working systems-Information systems

-Support systems

Maintaining ProcessesManagement systems

Figure 3 Management systems (as human brain functions) receive the command proposal andrevised guidance (upgraded command) through the emulator loop. The project organization (as ahuman body) acts according to the novel command to achieve the new goals. The whole system aimsto be agile in dynamic situations in which the project is executed.

a result of the most multifaceted view about the problem leading to a consensus amongthe participants. Extensive participation also secures the benefit of the involvement of themembers of the organization in the process. When the stakeholders are involved, they beginto understand their role in the organization. This will lead, if not to the creation of sharedperceptions, at least to accommodation between different viewpoints. This process can bedescribed as the generation of mutual insights–co-evolution. (Jackson, 2004).

The method supports the idea of analysis as a continuous process. Because the evaluatedprojects have evolving life cycles, values change, unexpected events occur, and the businessenvironment and public opinion are turbulent, there is a need for continuous reevaluation ofthe situation. Managers trying to improve the project performance are concerned about thepresent situation, but simultaneously they need a sensitive “antenna” to observe in whichdirection the changes ought to be made. The process reinforces double-loop learning, whichis important in a unique project environment (Argyris, 1982; Argyris & Schon, 1978).Single-loop learning solves the problem, but it will not change the thinking that producedthe problem in the first place (Senge, 1990). Douple-loop learning ensures a change in theprocess.

4. RESEARCH METHODOLOGY AND PROCESS

The main research methodology is constructive. However, it also includes a conceptualapproach and a case study (Figure 4a). The concepts of learning cycle, expansive learning,



System

emulator modelLinguistic method

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Analyzing methodResearch results

Revised guidanceFeedback loop Knowledge sharing arena

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Figure 4 Academic value of the research (a), research process (b), and managerial value of theresearch (c).

and system dynamics are discussed in the conceptual part of this article. The case studymethod (Kasanen et al., 1991; Olkkonen, 1994) is applied to collect data in the empiricalpart of the study. According to Olkkonen, the results obtained through the case study methodare often new hypotheses or theories, explanations of change or development processes,even normative instructions (for the revised guidance proposed here, see Figure 4c). Thematerial and its processing are empirical, although the material is often formed of a smallnumber of cases (here two cases, see Figure 4b).

The research material based on the cases should be chosen carefully to facilitate the un-derstanding of the research problem. In this research, empirical information from twolarge and relatively complex projects has been collected (Figure 4b), namely projectcase 1 from a multinational oil drilling rig project and project case 2 from a large cruiseship building project. Altogether, 10 organizations were chosen for the research involving48 members of project management. Empirical data collection contained a pattern of 158statements to be evaluated (construction in the middle of Figure 4b).

4.1. The Selection of Multiple-Cases

According to Olkkonen (1994), the following types cases should be chosen for examples:

(1) Cases that can be justifiably considered typical with regard to the basic set (1st tierpartners, six companies, Figure 5);

(2) Cases that represent examples of different types, in their typical form, in accordancewith the preceding conceptual analysis and type set (2nd tier partner, three companies,Figure 5); and

(3) Special cases, in case it can be assumed that they reveal interesting and useful factorswith regard to the research (two different departments of one 1st tier case company,Figure 5).

Multiple-case companies in two case projects were chosen from the 1st and 2nd tierpartners, because typically these “system suppliers” have their own project management



Contractor, system integrator

1st tier partner

2nd tier partner

3rd tier partner

1st tier partner 1st tier partner

2nd tier partner

4th tier partner

5th tier partner6th tier partner

Contractor, system integrator

1st tier partner

2nd tier partner

3rd tier partner

1st tier partner 1st tier partner

2nd tier partner

4th tier partner

5th tier partner6th tier partner

Figure 5 Illustration of the simplified model of the mega-project networked organization structure.The contractor or system integrator is the owner of the main process. The 1st tier partner is typically asystem supplier for a large or complicated delivery unit (e.g., the whole cabin section to a vessel). The2nd tier partner is typically a subsupplier, delivering project entities (e.g., cabin electrical equipmentor piping).

and project execution processes. Lower level network partners were not chosen as they aretypically subsuppliers, which do not carry out project management disciplines.

4.2. The Method

Figure 6 systematizes the relationship between the method of qualitative linguistic analysisand the structured workshop. In this process, tacit knowledge from a project organizationis collected with a software application. The chosen project managers and operative projectexecutors join the evaluation via the Internet. The user interface of an application is linguistic

Taci

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Figure 6 The construction of the method of analyzing. Capital letters illustrate the modes ofknowledge conversion in the process.



(meaning here a nonnumerical scale). Visual linguistic scales are preferred to numeric ones,as the loss of tacit knowledge is minimized by using those. People tend to lose knowledgebetween conversions from a numeric to a linguistic domain. The application uses fuzzylogic to make conversions (Berkan & Trubatch, 1997; Kantola et al., 2005; Zadeh, 1994). Amore detailed introduction of the software solution is not possible within the scope of thisarticle.

The result of the analyses, a project management discipline priority matrix (Figure 4b),is discussed and evaluated in the structured workshop. The more people from the organi-zation who can attend this meeting, the more effective the socialization and combinationmodes in this knowledge-sharing arena are. In the structured workshop knowledge is shared(system-critical parameters), new knowledge created (revised guidance), and finally knowl-edge is used in actions (or activity) (Bedny & Karwowski, 2004; Kuutti, 1995) affectingorganizational behavior.

In the method developed in this research, soft systems thinking is used in structuredworkshops by generating a rich dialogue (Checkland & Holwell, 1998; Flood & Carson,1988). There are workshop roles for each person attending the meeting. The dialogue isguided by one person, and the others are given opportunities to generate ideas and discussthem also using visual aids. This method generates development paths that focus on thecompany strategy. It leads to collective learning, which is defined as the organization’sability to learn from its own processes by means of testing and adopting new ways ofoperation (Lampel, 2001).

5. EMPIRICAL RESULTS

The information from two large projects has been collected, with the help of the introducedqualitative research approach, first from a multinational oil rig project (during 2004–2005)and second from a large cruise ship building project (during 2006–2007).

5.1. Results from the Oil Rig Project

The application was introduced in an actual mega-project environment during 2005. Thesubject of the study was a large, complex capital investment–engineering project of theoffshore industry. The mega-project evaluated was the construction and engineering of twooil rig bases. The construction site was contracted and managed by a Finnish company,and it was situated in extreme conditions on the east coast of Russia. The project wasexecuted mainly with local workmanship. The engineering companies were from Finlandand Norway. At the time of the evaluation, the project’s life cycle was at its implementationphase (Figure 7).

The evaluation was carried out by 15 managerial persons from two different organizations.These organizations participated in both the planning and mastering of the project and inthe project’s implementation at the site in Russia.

The results gained from the application’s practical level were discussed in a work-shop with the same personnel. This workshop functioned as an expansive learning arenafor the project management. In the case of offshore projects, the commercial dimension(Figures 8–10) has the lowest potential, which might result from the fact that, in the oil-drilling business, money is not the issue. Payments are up front whereas in ship buildingpayment usually follows the delivery of each contracted section.



Phase 1(concept)Conduct situationsurvey,Do alternativestudies,Fix Goals,Establish overallcriteria,Outline strategiesMake preliminarycosting andscheduling

Phase 2(Developement)Plan resourceutilization:•people•materials•machines•moneyDetail plans:•Scope•Time•Costs•Quality

Phase 3(Implementation)fully mobilize:•organization•communicationnetworkDirect andmonitor work.Pursue plans andadjust.Motivate and lead.Problem-solve.

Phase 4(Termination)Finish workTurn over operationsNegotiate settlementsEvaluate andreview.Finalize permanentrecord

SAKHALIN II









SAKHALIN II

Figure 7 Project life cycle. The maturity stage of the project at the moment of evaluation, shownby the arrow (Koskinen et al., 2002).

An example of revised guidance is Figure 8, which shows that time management has apotential for development. To be precise, capacity and quality systems could be improved,whereas the timing of the project and operative execution have less need for improvement.In summary: Time management could be improved by focusing on the quality systems. Thisaction could reduce overlapping work and failures in work processes. As a result, capacityproblems will be reduced.

An example of revised guidance in the case of an offshore-project was the result ofthe analysis of management capabilities (Figure 8). The results can be seen as a fingerpointing toward the managers themselves. The workshop session provided revised guidancefor this feature. The question was not about management’s competencies, but the fact thatthe organizational culture was not supporting an independent way of working in the large,fragmented mega-project. Actually, the revised guidance required by the actors was notorders and strict command and control, but support in decision making and in their initiativeand autonomous role at work.

5.2. Results from the Ship-building Project

During 2006 and 2007, a second, more extensive empirical study was carried out. Themega-project as an object of the study was the largest building project of a luxury liner inthe world so far, the vessel being 339 meters long with the capacity for 3,600 passengers.The study was carried out at the end of the project’s life cycle, at the stage when the vesselwas nearly finished. The analysis was carried out by 33 members of project managementfrom eight case companies participating in the ship-building project. These companies werefirst- or second-tier partners in the supply network. The companies presented a sample of thelargest subproject executors in the mega-project. This building site was situated in Finland,and the companies were Finnish. The results of the analysis are presented in Figures 11, 12,and 13.



Figure 8 The practical level results from the analysis of the oil rig project. The blue (top) barillustrates the present stage, and the red (bottom) bar illustrates the desired stage of the projectperformance. The bigger the gap between the two bars, the bigger the existing development potentialin that particular feature.

Figure 9 System-level results from the analysis of the oil rig project.



Figure 10 Three main categories of the analysis.

An example of revised guidance is Figure 12, which shows that the product integrationmanagement has a potential for development. The enterprise resource planning system(ERP), and project management (Figure 11) in particular, could be improved, but projectcomplexity has not been perceived as such an important issue. Project complexity has been

Figure 11 The practical level results from the analysis of the ship-building project. The blue (top)bar illustrates the present stage, and the red (bottom) bar illustrates the desired stage of the projectperformance. The bigger the gap between the two bars, the bigger the existing development potentialin that particular feature.



Figure 12 System-level results from the analysis of the ship-building project.

Figure 13 Three main categories of the ship-building project analysis results.

seen as a boundary factor that the company cannot affect. As a conclusion: In complex projectexecution the product integration management is a salient factor. It could be improved inthis case by developing the ERP system and focusing on project management improvement.

Another example of revised guidance in Figure 12 shows that communication manage-ment has a potential for development. Understanding of cultural diversity, language skills, in-formation technology, and information management are all developable (Figure 11). Hence,when it comes to the execution of an international project, it can be concluded as follows:Pay attention to the requisite variety of expertise within working teams. Moreover, the orga-nization should establish groups with people representing various skills of expertise, ages,and cultural backgrounds to ensure the diffusion of knowledge to all levels of the organiza-tion. Information systems should support the knowledge channels of the organization, andknowledge management should focus on using human capital such as knowledge activistsinside the organization.

6. CONCLUSIONS

First, in the conceptual part of this article, the theories vital for the holistic understandingof mega-project management (i.e., knowledge management, organizational learning, anda new perspective to project management), namely, the activity theory were discussed.Second, new project management ideas through the metaphor of human brain functionswere introduced. Third, research methodology was introduced, and a method of qualitativeanalysis developed in this research was presented. Finally, some empirical results gainedthrough the method were illustrated.

To conclude, the two mega-projects discussed here resemble each other, but there are alsomany differences. Both cases were from the marine industry, the organization structure wasfragmented, and the projects were structured as a network of subprojects. Furthermore, theexecuting personnel were from culturally different backgrounds, and there was a large body



of professionals from several branches working together. Differences were seen, amongother things, in contracting, payment terms, competition, duration of the project, and inconditions on the execution site.

The multiple-case study was carried out in 10 network companies, included in the twomega-project cases. Altogether 48 project team members participated in the analysis of158 statements to be reacted. The database of more than 15,000 responses was collected.The multiple-case study indicates that the method was effective. On the basis of the resultsof multiple-case research, revised guidance instructions (proposals) can be generated forthe use of project management. The sample of cases and the amount of the empirical datacollected verify the validity and reliability of the research. However, it is always reasonableto question the generalizability of case research. The research should be evaluated asa whole and respect the understanding gained concerning the importance of qualitativefeatures affecting the project’s success in general. This research extends existing researchby providing new knowledge about the relevance of qualitative (in addition to quantitative)assessment of project execution and management.

On the basis of the research results, it can be concluded that the qualitative key factorsaffecting project system steering, in general, were the features related to human resourcesmanagement, product integration management, and cooperation with partners. The resultsalso indicate that prevailing issues, such as environmental impacts of the project, were wellobserved in the oil-drilling industry but regarded as a less relevant issue in the ship-buildingproject. However, the management features that were seen important varied depending onwhich level of the networked project organization the firm performs. These results of theanalysis generated practical information on the project execution managers to be used bythe company’s project managers and line management. The practical implication consistedof several internal and external project development tasks and knowledge sharing leadingto organizational learning in the participating companies. The main practical implication ofthis method is the striving toward a sustainable improvement in the performance of a mega-project organization. This can be, for example, the prevention of errors and unnecessarychanges in the downstream of the supply chain or an improved cost–benefit ratio. Contri-bution to further academic research is, among other things, the database, which provides anopportunity for statistical assessments in the future.

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