project management the task of holistic

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Human Factors and Ergonomics in Manufacturing, Vol. 19 (6) 582600 (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 Vanharanta

Industrial 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 companys 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 as

cultural 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 cause

of a severe delay, for example, in the delivery of a nuclear power plant or of quality risks in

shipbuilding. 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-project

consortium should be able, for example, to bear a complementary set of risks to balance

the total risk in a project (Archer & Ghasemzadeh, 1999; Ghasemzadeh & Archer, 2000).

Therefore, the management of a project is far more than a purely quantitative management

task; it is a challenge for the whole group of management teams involved in steering the

mega-project toward the common qualitative and quantitative predefined goals. As observed

in this study, it is typical of project goals that they also evolve during the mega-projects life

span. This poses even more complex managerial challenges in the mega-project context.

Correspondence to: Heli Aramo-Immonen, Industrial Management and Engineering, Tampere University of

Technology 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 they

should also possess knowledge about the external factors (environment, culture, local de-

mands, etc.). These inputs from outside the project organization affect the success of project

execution. However, this knowledge is often tacit and therefore difficult to capture and

convert 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 features

on which project management should focus.

The main research question of this article is Which are the most important qualitative

management features on which the project management should focus? Therefore, this

article is composed as follows: First, the theoretical framework of the research is introduced;

second, the research methodology is discussed, following the introduction of the method

developed 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 been

used in this research. The practices of project management are based on general business

management theories, such as business process management, supply chain management,

value chain management, and different business models. It is difficult to identify one general

project management theory. The theories discussed in this article, in contrast, have to be

seen as a basis for the construction developed in this research. The organizational behav-

ior theories introduced in this articleorganizational learning, activity theory, knowledge

management, and systems thinkingare generally accepted and applicable in the project

context.

2.1. Project Learning as a Success Factor for ProfessionalProject Management

Project learning is a success factor for professional project management. In traditional

project management literature, project learning is often regarded as a lessons learned type

retrospective study of the project. These debriefings are focused on information such as

costs, timelines, and other quantitative data. However, Nonaka et al. argue that most of the

organizations 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 experiences

and an understanding of causality) (Nonaka et al., 2000a). Remarks on how knowledge

is 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 an

organizations capability to produce added value and maintain a competitive position in

the market. The creation of new information is based on shared views and mental models

within the organization. In the organizational process of learning, four primary processes

can be discerned: the acquisition of knowledge and the interpretation, dissemination, and

retention (storage) of information (Garvin, 1998 p. 40). These four constituent areas are

closely 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 organizations ability to learn deserves special attention. This idea can be formulated

neatly 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


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584 ARAMO-IMMONEN AND VANHARANTA

As to preventing errors, transferring tacit and empirical information from one project to

another constitutes an essential factor (Koskinen et al., 2002 p. 281).

Nonaka et al. introduce a learning cycle known as the SECI process. There are four

modes of the conversion of knowledge: (S) socialization, conversion from tacit knowledge

to 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 systematic

sets of explicit knowledge (explicit knowledge is collected from an organization and then

combined or processed to form new knowledge); and (I) internalization, the conversion

of explicit knowledge into tacit knowledge (through internalization, explicit knowledge is

embodied 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 its

competitive advantage. Mastering the project learning cycle could save a significant amount

of costs incurred from redundant labor and the repetition of mistakes. In particular, in a

project 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 this

amnesia 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 this

can 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 issues

in building a companys 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 knowledge

intensive and that there is a relationship between the amount of intellectual capital and

productivity/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 organizations creation and use of

knowledge as a productivity booster is not a spontaneous phenomenon. According to the

sociocultural, 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 expansive

learning (Engestrom, 2000; Nonaka & Senoo, 1998). Expansive learning produces cultur-ally new patterns of activity. The object of expansive learning activity is the entire system

in which the learners (here, project members) are working (Engestrom, 2001). Figure 1

illustrates the system structure of collective activity according to Engestrom.

This study adopts an idea that the problem with management decisions often lies in

the assumption that orders can be given from above to somebody to learn and create

new knowledge (Engestrom, 2000). The article suggests that the problem with conflictual

questioning, in contrast, is the lack of goal orientation, in general the lack of a strategic

vision. The method introduced in this article is based on proactiveness. The focus is on the

improvement opportunities seen in the future. The project performers analyze the project

management features from their personal point of view. The attitude is positive, and the

method focuses on the performers own motivations and orientations. This is a positive



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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 made

by 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 introduce

some phenomena affecting the development of this method.

2.5.1. Alternative-Focused Thinking. By its very nature, decision making related to

a project portfolio is of the risk analysis type (Miller & Lessard, 2001). A decision

is affected by the strategy selected by the company, present competition, and available

resources (Gorog & Smith, 1999). Decision making is decentralized and influenced by the

needs reflected by the involved stakeholder groups. In such situations, decision making has

traditionally been facilitated first by short-listing the best options (i.e., those appearing to be

the 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 it

limits the selection to predefined alternatives before all options have been assessed. Thus,

the ensuing decision-making situation turns into forced problem solving, signifying a loss

of possibilities inherent in decision making. As a procedure, alternative-focused decision

making is a quick and dirty way of acting when facing difficult strategic questions and

being 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 proactive

process designed in line with value-focused-thinking (VFT). The value-focused decision-

making model emphasizes the assessment of alternatives before the decision is made. The

objective 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 decision

making are assessed in a logical and systematic way. (2) The decision must always be made

before measures affecting decision making are introduced. (3) The written outcome from

the 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 power

plant corporation, at a key stage in its decision-making process. BC Hydro had concluded

that, within a decentralized organizational model, the bare mission did not guarantee suffi-

cient coordination and scope for the decision-making process. The conversion of strategic

objectives 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 this

process, Keeney (1996) uses an example involving a procurement decision during which

a buyer may have a view of the criteria affecting the procurement which is completely

different from that of the engineer or the customer. Decision making can be facilitated, and

the differences between the involved views can be identified, by engaging a tool designed

for qualitative analysis.



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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 adapted

to the project organization decision-making process. Decision making should be proactively

focused and based on the assessment of alternatives before decision making.

To conclude Section 2, it can be said that the use of organizational learning, knowledge

management, 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 theories

support the managerial disciplines, steering, and management of a projects organization.

3. PROJECT STEERING THROUGH EMULATION

A project organization in a dynamic business environment has to have the ability to readjust

its goals and operations effectively. In other words, to learn through the process, otherwise

competitive 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 metaphor

of the human body can be used here (Miller, 1978) to describe a complicated mega-project

and its organization with various stakeholder groups. A human body can be seen as an open

system affected by environmental changes and, in contrast, as a closed system of human

organs. The idea is to analyze the anatomy of a mega-project based on the metaphor of

living systems (Miller, 1978). According to Miller, an organization as a system has several

levels 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 the

human brain. Studies in neurophilosophy demonstrate that, to give the human arm the

command to move toward a desired goal (e.g., toward a plum; Figure 2), the brain goes

through an emulation process. Neural emulation is one strategy that the brain uses to solve

the coordination and control problem. Emulation involves simulationinner models of the

body. 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 positionor to get the desired plum. The problem of transformations

of 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 have

used to get it? (Churchland, 2002).

3.2. The Emulator Model

This study proposes that the emulator system is used to steer the complicated function of

project organization. Figure 3 illustrates the way in which the combination of the emulator

and the inverse model can be transformed into part of the project management system.



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Get the plum Inverse modelBody

Emulator(Body and world model)

Goal

stage

Revised

command

Command

proposal

predicted consequences

Arm movement

Plum

If I manage to get the goal,

what command would I have

use to get it?

Get the plum Inverse modelBody

Emulator(Body and world model)

Goal

stage

Revised

command

Command

proposal

predicted consequences

Arm movement

Plum

If I manage to get the goal,

what command would I have

use 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 strategy

formation and strategy implementation in large, complex capital investmentengineering

projects (Gorog, 1999). Commonly known as mega-projects, these typically have a long

time span that allows the organization to learn during the projects life cycle. The application

discussed in this article has its core in the iterative organizational learning cycle. Nonaka

et al. (2000a) define it as the model of dynamic knowledge creation. Recently, the model

has been introduced into the learning and development (L&D) strategy perspective as a

vital, organizational success factor (Sadler-Smith, 2006). A generic L&D system model

introduces 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 stronger

commitment, 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 many

stakeholders as possible should have the opportunity to participate in the process. This is

one way to ensure objectivity in the decision-making process. Objectivity is seen here as



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VisionProject

Organization

Emulator(Model of the desired stage)

Goal stage

Systemlevel

impulse

Proactivevision

Revised

guidance

Currentstage

Achieving the goal

via new way of

functioning

DSS

Maintaining systems

-Control systems

-Working systems-Information systems

-Support systems

Maintaining ProcessesManagement systems

VisionProject

Organization


Goal stage

Systemlevel

impulse

Proactivevision

Revised

guidance

Currentstage

Achieving the goal

via new way of

functioning

DSS

VisionProject

Organization


Goal stage

Systemlevel

impulse

Proactivevision

Revised

guidance

Currentstage

Achieving the goal

via new way of

functioning

DSS

Maintaining systems

-Control systems

-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 among

the participants. Extensive participation also secures the benefit of the involvement of the

members of the organization in the process. When the stakeholders are involved, they begin

to understand their role in the organization. This will lead, if not to the creation of shared

perceptions, at least to accommodation between different viewpoints. This process can be

described as the generation of mutual insightsco-evolution. (Jackson, 2004).

The method supports the idea of analysis as a continuous process. Because the evaluated

projects have evolving life cycles, values change, unexpected events occur, and the business

environment and public opinion are turbulent, there is a need for continuous reevaluation of

the situation. Managers trying to improve the project performance are concerned about thepresent situation, but simultaneously they need a sensitive antenna to observe in which

direction the changes ought to be made. The process reinforces double-loop learning, which

is 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 produced

the problem in the first place (Senge, 1990). Douple-loop learning ensures a change in the

process.

4. RESEARCH METHODOLOGY AND PROCESS

The main research methodology is constructive. However, it also includes a conceptual

approach and a case study (Figure 4a). The concepts of learning cycle, expansive learning,



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System

emulator model

Linguistic method

Fuzzy logic

Project case 1

Empirical researchConstruction

Analyzing methodResearch results

Revised guidanceFeedback loop Knowledge sharing arena

Organizational learning (SECI)

Project managementdiscipline

priority matrix

Academic value

Managerial value

a)

b)

c)

Project case 2

System

emulator model

Linguistic method

Fuzzy logic

Project case 1

Empirical researchConstruction

Research results

Revised guidanceFeedback loop Knowledge sharing arena

Organizational learning (SECI)

Project managementdiscipline

priority matrix

Academic value

Managerial va ue

a)

b)

c)

Project case 2

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 study

method (Kasanen et al., 1991; Olkkonen, 1994) is applied to collect data in the empirical

part of the study. According to Olkkonen, the results obtained through the case study method

are often new hypotheses or theories, explanations of change or development processes,

even normative instructions (for the revised guidance proposed here, see Figure 4c). The

material and its processing are empirical, although the material is often formed of a small

number 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 project

case 1 from a multinational oil drilling rig project and project case 2 from a large cruise

ship building project. Altogether, 10 organizations were chosen for the research involving

48 members of project management. Empirical data collection contained a pattern of 158

statements 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 tier

partners, six companies, Figure 5);

(2) Cases that represent examples of different types, in their typical form, in accordance

with 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 factors

with 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 tier

partners, because typically these system suppliers have their own project management



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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 a

system 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 are

typically subsuppliers, which do not carry out project management disciplines.

4.2. The Method

Figure 6 systematizes the relationship between the method of qualitative linguistic analysis

and the structured workshop. In this process, tacit knowledge from a project organization

is collected with a software application. The chosen project managers and operative project

executors join the evaluation via the Internet. The user interface of an application is linguistic

Tacit

knowledge

System

emulator model

Linguistic method

Fuzzy logic

Method of analysis

Proactive

revised

guidance

Feedback loops

Knowledge

sharing arena

Structured

Workshop

Actions

Organisational

behaviour

Organisational learning

Expansive learning

Positive reenforcement loops

Positive trigger

E

CI

S

S

C

Tacit

knowledge

System

emulator model

Linguistic method

Fuzzy logic

Method of analysis

Proactive

revised

guidance

Feedback loops

Knowledge

sharing arena

Structured

Workshop

Actions

behaviour

Expansive learning

Positive reenforcement loops

Positive trigger

E

CI

S

S

C

Figure 6 The construction of the method of analyzing. Capital letters illustrate the modes of

knowledge conversion in the process.



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(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 knowledge

between conversions from a numeric to a linguistic domain. The application uses fuzzy

logic to make conversions (Berkan & Trubatch, 1997; Kantola et al., 2005; Zadeh, 1994). A

more detailed introduction of the software solution is not possible within the scope of this

article.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 combination

modes 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) affecting

organizational behavior.

In the method developed in this research, soft systems thinking is used in structured

workshops 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 discuss

them also using visual aids. This method generates development paths that focus on the

company strategy. It leads to collective learning, which is defined as the organizations

ability to learn from its own processes by means of testing and adopting new ways of

operation (Lampel, 2001).

5. EMPIRICAL RESULTS

The information from two large projects has been collected, with the help of the introduced

qualitative research approach, first from a multinational oil rig project (during 20042005)and second from a large cruise ship building project (during 20062007).

5.1. Results from the Oil Rig Project

The application was introduced in an actual mega-project environment during 2005. The

subject of the study was a large, complex capital investmentengineering project of the

offshore industry. The mega-project evaluated was the construction and engineering of two

oil 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 was

executed mainly with local workmanship. The engineering companies were from Finlandand Norway. At the time of the evaluation, the projects life cycle was at its implementation

phase (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 in

the projects implementation at the site in Russia.

The results gained from the applications practical level were discussed in a work-

shop with the same personnel. This workshop functioned as an expansive learning arena

for the project management. In the case of offshore projects, the commercial dimension

(Figures 810) 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 building

payment usually follows the delivery of each contracted section.



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Phase 1(concept)

Conduct situationsurvey,Do alternativestudies,Fix Goals,Establish overallcriteria,Outline strategiesMake preliminarycosting andscheduling

Phase 2(Developement)

Plan resourceutilization:peoplematerialsmachinesmoneyDetail plans:ScopeTimeCostsQuality

Phase 3

(Implementation)fully mobilize:organizationcommunicationnetworkDirect andmonitor work.Pursue plans andadjust.Motivate and lead.Problem-solve.

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

SAKHALIN II

Phase 1(concept)




Phase 3



Phase 1(concept)




Phase 3



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 a

potential 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. This

action could reduce overlapping work and failures in work processes. As a result, capacity

problems will be reduced.An example of revised guidance in the case of an offshore-project was the result of

the analysis of management capabilities (Figure 8). The results can be seen as a finger

pointing toward the managers themselves. The workshop session provided revised guidance

for this feature. The question was not about managements competencies, but the fact that

the 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 not

orders and strict command and control, but support in decision making and in their initiative

and 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. The

mega-project as an object of the study was the largest building project of a luxury liner in

the 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 projects life cycle, at the stage when the vessel

was nearly finished. The analysis was carried out by 33 members of project management

from eight case companies participating in the ship-building project. These companies were

first- or second-tier partners in the supply network. The companies presented a sample of the

largest 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.



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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.



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Figure 10 Three main categories of the analysis.

An example of revised guidance is Figure 12, which shows that the product integration

management has a potential for development. The enterprise resource planning system

(ERP), and project management (Figure 11) in particular, could be improved, but project

complexity 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 potential

in that particular feature.



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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 project

execution the product integration management is a salient factor. It could be improved in

this 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, and

knowledge management should focus on using human capital such as knowledge activists

inside the organization.

6. CONCLUSIONS

First, in the conceptual part of this article, the theories vital for the holistic understanding

of mega-project management (i.e., knowledge management, organizational learning, and

a new perspective to project management), namely, the activity theory were discussed.

Second, new project management ideas through the metaphor of human brain functions

were introduced. Third, research methodology was introduced, and a method of qualitative

analysis developed in this research was presented. Finally, some empirical results gained

through the method were illustrated.

To conclude, the two mega-projects discussed here resemble each other, but there are also

many differences. Both cases were from the marine industry, the organization structure was

fragmented, and the projects were structured as a network of subprojects. Furthermore, the

executing personnel were from culturally different backgrounds, and there was a large body



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of professionals from several branches working together. Differences were seen, among

other things, in contracting, payment terms, competition, duration of the project, and in

conditions on the execution site.

The multiple-case study was carried out in 10 network companies, included in the two

mega-project cases. Altogether 48 project team members participated in the analysis of

158 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 results

of multiple-case research, revised guidance instructions (proposals) can be generated for

the use of project management. The sample of cases and the amount of the empirical data

collected verify the validity and reliability of the research. However, it is always reasonable

to question the generalizability of case research. The research should be evaluated as

a whole and respect the understanding gained concerning the importance of qualitative

features affecting the projects success in general. This research extends existing research

by 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 resources

management, product integration management, and cooperation with partners. The results

also indicate that prevailing issues, such as environmental impacts of the project, were well

observed in the oil-drilling industry but regarded as a less relevant issue in the ship-building

project. However, the management features that were seen important varied depending on

which level of the networked project organization the firm performs. These results of the

analysis generated practical information on the project execution managers to be used by

the companys project managers and line management. The practical implication consisted

of several internal and external project development tasks and knowledge sharing leading

to organizational learning in the participating companies. The main practical implication of

this 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 unnecessary

changes in the downstream of the supply chain or an improved costbenefit ratio. Contri-

bution to further academic research is, among other things, the database, which provides an

opportunity for statistical assessments in the future.

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