The nature of risk in complex projects

© 2017 Project Management Institute, Inc. Risk analysis is important for complex projects; however, systemicity makes evaluating risk in real projects difficult. Looking at the causal structure of risks is a start, but causal chains need to include management actions, the motivations of project actors, and sociopolitical project complexities as well as intra-connectedness and feedback. Common practice based upon decomposition-type methods is often shown to point to the wrong risks. A complexity structure is used to identify systemicity and draws lessons about key risks. We describe how to analyze the systemic nature of risk and how the contractor and client can understand the ramifications of their actions

The nature of risk in complex projects

© 2017 Project Management Institute, Inc. Risk analysis is important for complex projects; however, systemicity makes evaluating risk in real projects difficult. Looking at the causal structure of risks is a start, but causal chains need to include management actions, the motivations of project actors, and sociopolitical project complexities as well as intra-connectedness and feedback. Common practice based upon decomposition-type methods is often shown to point to the wrong risks. A complexity structure is used to identify systemicity and draws lessons about key risks. We describe how to analyze the systemic nature of risk and how the contractor and client can understand the ramifications of their actions

Does Infrastructure Investment Lead to Economic Growth or Economic Fragility? Evidence from China

The prevalent view in the economics literature is that a high level of infrastructure investment is a precursor to economic growth. China is especially held up as a model to emulate. Based on the largest dataset of its kind, this paper punctures the twin myths that, first, infrastructure creates economic value, and, second, China has a distinct advantage in its delivery. Far from being an engine of economic growth, the typical infrastructure investment fails to deliver a positive risk adjusted return. Moreover, China's track record in delivering infrastructure is no better than that of rich democracies. Where investments are debt-financed, overinvesting in unproductive projects results in the buildup of debt, monetary expansion, instability in financial markets, and economic fragility, exactly as we see in China today. We conclude that poorly managed infrastructure investments are a main explanation of surfacing economic and financial problems in China. We predict that, unless China shifts to a lower level of higher-quality infrastructure investments, the country is headed for an infrastructure-led national financial and economic crisis, which is likely also to be a crisis for the international economy. China's infrastructure investment model is not one to follow for other countries but one to avoid

Social and Ethical Considerations of Nuclear Power Development

A new urgency is emerging around nuclear power development and this urgency is accentuated by the post-tsunami events at the Fukushima Daiichi nuclear power plant in Japan. This urgency extends beyond these dramatic events in Japan, however, to many other regions of the world and situations where nuclear power development is receiving renewed attention as an alternative to carbon-based energy sources. As a contribution to the growing public debate about nuclear power development, this paper offers a set of insights into the social and ethical aspects of nuclear power development by drawing from published literature in the humanities and social sciences. We offer insights into public risk perception of nuclear power at individual and national levels, the siting of nuclear waste repositories, the changing policy context for nuclear power development, social movements, and the challenges of risk management at the institutional level. We also pay special attention to the ethical aspects of nuclear power with attention to principles such as means and ends, use value and intrinsic value, private goods and public goods, harm, and equity considerations. Finally, we provide recommendations for institutional design and performance in nuclear power design and management.nuclear power, risk perception, social context, megaprojects, energy production, applied ethics, social values, social movements, complexity, hazards, disaster response, Environmental Economics and Policy, Resource /Energy Economics and Policy, Risk and Uncertainty, Q40, Z00,

The trickle-down effect of psycho-social constructs and knowledge deficiencies as organizational barriers to cost performance on highway projects

Purpose The study proffers a theoretical narrative explaining the poor financial performance of public highway agencies in Nigeria. This study critically spotlights seminal works in the literature offering theoretical narratives on the poor financial performance of public infrastructure projects, to discuss whether they adequately capture the relationship between psychological factors, project governance/leadership issues, and knowledge/skill deficiencies related to the cost performance of infrastructure projects in the developing world. The evaluation reveals the predominant contextual exclusivity of these theoretical narratives to the developed world, which tend to under-represent developing countries, such as those on the African continent. Design/methodology/approach Using a case study research strategy, longitudinal documentary/archival data for 61 highway projects were analyzed. Sixteen interviews were also conducted with highway officials from the three highway agencies responsible for the execution of the projects. A two-stage deductive-inductive thematic analysis of the collated data was carried out to identify barriers to the financial management of public highway projects, the result of which is cognitively mapped out. Findings The study showcases empirical insight on cost overruns experienced in Nigerian public projects, due to the trickle-down effect of human and organizational environment, as well as due to workers’ knowledge/skill deficiencies. Research limitations/implications The developed theory is contextual to Nigeria, as such there is scope for testing its generalisability to other developing nations. Originality/value The in-depth trajectory provided, uncovers an intricate web of technical and psycho-social, organizational and institutional issues, which have not been identified and explained by previous theoretical narratives

Exploring construction challenges of the public client: a dynamic capabilities approach

Construction clients in the public sector face a large number of challenges in designing, procuring and managing construction projects in a manner that is conducive to the organization’s overall goals. In particular, clients have faced challenges in delivering projects that satisfied the projects’ goals with respect to cost and time overruns. The role of the client in managing these challenges has more recently been emphasized, with a growing number of studies and governmental reports calling for the development of the client’s capabilities with respect to delivering projects.This thesis examines the capabilities of the construction client with respect to the dynamic capabilities concept. The two research questions that guided this research are, RQ1: What are the underlying mechanisms of dynamic capabilities? and RQ2: How can dynamic capabilities be understood and used by public clients to address construction-specific challenges? The viability of the dynamic capabilities approach is also discussed, particularly with respect to construction-related challenges faced by the client, focusing on the aforementioned cost and time overruns.The main beneficiaries of this thesis, to which the contributions of the thesis are most relevant, are construction client organizations that operate in the public sphere. Most notably, the type of clients that are targeted are those that undertake the commissioning and managing of construction projects that require organizations that possess the capabilities needed to deliver cost and time efficient projects. Objectives crucial to all projects but especially to publicly funded and publicly scrutinized projects. The secondary beneficiaries of this thesis are researchers who study and develop the dynamic capabilities concept, a concept which has constituted the theoretical frame of reference that has been used in this thesis. The thesis is based primarily on a case study of a large public construction client located in Sweden (PubClient) and a study of an association made up of 16 client organizations/divisions from the Swedish counties. Findings are presented in four appended papers. The thesis concludes with a discussion on the viability of using a dynamic capabilities framework in the specific cases described in this thesis and what implications this have for practice and further research.It is argued that the concept of dynamic capabilities needs to be contextualized to capture the specific environment in which public client organizations operate. Suggestions for alternative approaches to understanding the management and development of capabilities are then discussed. Findings indicate the need for a segmented approach for understanding how dynamic capabilities are managed in client organizations, based not only on the level of stability in the environment but also taking into account the resources that are utilized. The thesis explores alternative frameworks of dynamic capabilities, beginning with the general framework proposed by Teece et al. (1997) which examined the activities of dynamic capabilities, and Zollo and Winter (2002) that examined the learning mechanisms of dynamic capabilities. Additionally, more recent frameworks of dynamic capabilities that are tailored to the context of the construction client are explored, particularly, Davies and Brady (2016) who introduced the concept of ‘project capabilities’ to conceptualize dynamic capabilities in a project-based context. It is further argued that there is a need for a more granular research approach for studying the development of dynamic capabilities in a case-based setting. This would imply an approach that more specifically links the development of dynamic capabilities with the precise antecedent actions that preceded them, or, put more straightforward, which action in an organization develop which specific dynamic capability

Forecasting Project's evolution. A step forward from the EVMS.

The goal of this work is to define a framework for project forecasting activities as well as to set up proposals regarding improvement for some of the tools involved in these processes. In particular attention will be payed to Earned Value Management System (EVMS) tool as it is a well known instrument for project monitoring and, in some cases, for project forecasting too. Main inn ovation in this work is the proposal for estimation SPI and CPI indexes on the next future of the project in accordance to their previous values as well as to the impact in the project of non technical factor slike team construction, common vision for the project and other managerial aspects related to it. Anew model is provided in this paper allowing to process surveys based information from the project team in order to adjust the estimation for next values of already mentioned EVMS indexes, in order to produce a more consistent forecasting for the project evolution

"It's all up here": adaptation and improvisation within the modern project

This paper considers organisational improvisation, and in particular, adaptation as a specific component of improvisational work(Miner et al., 2001), and how it may assist in resolving or assisting with some of the challenges surrounding recent shifts in our understanding of project-based management. Examples focus on the use of adaptation to cope with ambiguity and uncertainty, caused by execution in problematic and turbulent organisational environments. The literature on improvisation suggests that adapting previously successful interventions reduces and manages the risk of improvising by engaging with the 'adaptation component of organisational improvisation. This practice assists in ensuring that the additional risk of completely novel activity is avoided. This paper explores adaptation within the project domain, and also unpicks the rhetoric from the reality of adaptation within projects, confirming its benefits, setting out the circumstances where experience informs the practice, and offering readily usable and applicable insights

Identifying Success Factors in Construction Projects: A Case Study

© 2015 by the Project Management Institute. Published online in Wiley Online Library. Defining "project success" has been of interest for many years, and recent developments combine multiple measurable and psychosocial factors that add to this definition. There has also been research into success factors, but little research into the causal chains through which success emerges. Following the multi-dimensionality of "success," this article shows how success factors combine in complex interactions; it describes factors contributing to project performance by a company working on two major construction programs and shows how to map and analyze paths from root causes to success criteria. The study also identifies some specific factors - some generic, some context-dependent - none of these is uncommon but here they come together synergistically