1
MBA DISSERTATION
͞The role aŶd iŵportaŶce of Project MaŶageŵeŶt practices iŶ “MEs. To ǁhat
extent are Project Management practices applied within small and medium
superŵarket chaiŶs froŵ Moldoǀa?͟
Supervisor Name: John Lamont
Student Name: Belinschi Victor
Student ID Number: 10022233
Course Title: MBA in Business Management
Name of the Institution: Dublin Business School
23rd May 2014
2
Table of Contents
Table of Contents …………………………………………………………………………………………………………………… 2
List of Figures ………………………………………………………………………………………………………………………… 4
List of Tables …………………………………………………………………………………………………………………………. 4
Abbreviations ………………………………………………………………………………………………………………………… 4
Acknowledgements
………………………………………………………………………………………………………………… 5
Abstract ………………………………………………………………………………………………………………………………… 7
Introduction ………………………………………………………………………………………………………………………….. 8
Background ……………………………………………………………………………………………………………………….. 8
Research objectives ………………………………………………………………………………………………………….. 11
Research questions …………………………………………………………………………………………………………… 12
Research limitations
………………………………………………………………………………………………………….. 13
Research ethics ………………………………………………………………………………………………………………… 15
Personal biases…………………………………………………………………………………………………………………. 16
Chapter outline ………………………………………………………………………………………………………………… 18
Literature review
………………………………………………………………………………………………………………….. 19
Introduction to Project Management
………………………………………………………………………………….. 19
Definition of Project Management ………………………………………………………………………………….. 21
Integration of Project Management ………………………………………………………………………………… 22
Characteristics of a Project ………………………………………………………………………………………………… 23
Project Dimensions ……………………………………………………………………………………………………….. 23
Project Phases ………………………………………………………………………………………………………………. 24
Project managers ………………………………………………………………………………………………………….. 26
Project success or failure ……………………………………………………………………………………………….. 28
Project Management Success or failure …………………………………………………………………………… 29
Project Management Tools and Techniques …………………………………………………………………….. 31
Nature of Project Management in SMEs ……………………………………………………………………………… 34
Importance of SMEs ………………………………………………………………………………………………………. 34
SMEs vs. Large companies ……………………………………………………………………………………………… 35
Project Management in SMEs
…………………………………………………………………………………………. 39
Project Success factors
…………………………………………………………………………………………………… 44
Project Management Tools & Techniques used in SMEs
…………………………………………………….. 45
Methodology and methods …………………………………………………………………………………………………… 47
Proposed methodology
……………………………………………………………………………………………………… 47
3
Research philosophy …………………………………………………………………………………………………………. 48
Research approach …………………………………………………………………………………………………………… 48
Research strategy
……………………………………………………………………………………………………………… 49
Research choice ……………………………………………………………………………………………………………….. 49
Time horizon ……………………………………………………………………………………………………………………. 49
Data collection and analysis
……………………………………………………………………………………………….. 50
Sampling
………………………………………………………………………………………………………………………….. 50
Data analysis and findings
……………………………………………………………………………………………………… 51
Use of Projects …………………………………………………………………………………………………………………. 53
General use of Project Management
…………………………………………………………………………………… 54
Project Manager ………………………………………………………………………………………………………………. 55
Project Tools and Techniques …………………………………………………………………………………………….. 56
Essential tools and techniques
……………………………………………………………………………………………. 57
Conclusion
……………………………………………………………………………………………………………………….. 60
Recommendations ……………………………………………………………………………………………………………….. 62
Self-reflection on own learning………………………………………………………………………………………………. 63
Bilbiography ………………………………………………………………………………………………………………………… 69
Appendix …………………………………………………………………………………………………………………………….. 75
4
List of Figures
Figure 1 Project Dimensions ………………………………………………………………………………………………….. 19
Figure 2 Project Lifecycle vs. Level of Effort …………………………………………………………………………….. 20
Figure 3 Involvement of different project management roles in different project phases……………… 24
Figure 4 Research “Onion” and Research Methodology Structure ……………………………………………… 37
List of Tables
Table 1 The 70 tools in decreasing order of average use ………………………………………………..
25
Table 2 Characteristics of Large companies vs. Small and medium sized enterprises
…………
28
Table 3 Features of different size of companies
…………………………………………………………….
32
Table 4 Importance given to success factors correlated with project success …………………..
33
Table 5 Project Management practices considered essential ………………………………………….
34
Table 6 Personal Information regarding about the interview respondents
……………………….
38
Table 7 Information about the companies interviewed
………………………………………………….
39
Table 8 Tools and techniques used by the companies ……………………………………………………
42
Abbreviations
PM – Project Management
PMI – Project Management Institute
PMP – Project Management Professional
PMBOK – Project Management Book of Knowledge
SME – Small and medium size enterprise
IPMA – International Project Management Association
ROI – Return on investment
5
Acknowledgements
Besides the work conducted by myself, the success of this project depended largely
additionally on other people. First, I express my deepest gratitude to my supervisor – John
Lamont, who has guided, supported, and motivated me during the entire process of the
research, the writing as well as for his lectures during the semester.
Secondly, I want to thank the representatives of the five companies who have
showed interest in the topic researched and to participate in this study.
I express my deepest gratitude to the DBS lecturers and generally DBS for the
knowledge and expertise they shared with men, and generally for the unforgettable
experience that I had during the entire learning process.
Last but not least, I would like to thank my family and friends for their moral support
during this Master course as well as during the research process.
6
Abstract
The paper analyzes Project Management as a managerial practice in SMEs in general
and in part in supermarket chains from Moldova. It aims to investigate to what extent
Project Management tools and techniques are generally used in SMEs and those used within
medium size supermarket chains from Moldova. It also provides recommendations that
would enhance the project capability and project performance within these companies
deriving from their size and organizational complexity. In order to do this, the literature
review discusses the findings of secondary to identify the generally accepted Project
management level used in SMEs. Secondly, the primary data, which was collected through
five interviews conducted with top managers performing the role of Project managers in
five supermarket chains from Moldova, was collected and analysed in order to be compared
with the findings in the literature review. The obtained results met the expectations and
have led to the conclusion that generally the extent of Project management used in
supermarket chains from Moldova is moderately less than the extent generally used in
SMEs. Specifically, it was identified that Project management tools and techniques used
within medium sized supermarket chains from Moldova moderately differ from the general
tools and techniques used in SMEs as identified by theorists (who conducted extensive
research on the extent of Project Management in SMEs). In order to enhance the Project
management practices within the investigated companies several recommendations were
made, among which was the improvement of professional Project management skills of
Project practitioners through specialized education, that would enhance the use of Project
tools and techniques and overall the Project management performance in supermarket
chains from Moldova.
7
Introduction
Background
The managerial practice of PM has evolved consistently over the last decades and
has confidently infiltrated in the managerial process of companies which recognize its
benefits. However, research conducted by theorists specializing in this field has showed that
the existing tools and techniques developed by the PMI are not suitable for every company
depending on a series of factors. Turner, Ledwith and Kelly (2009, 2010, 2012) argue that
the needs for PM of SMEs (Small and Medium sized Enterprises) are different from those in
large companies. There are a series of factors that influence the extent of PM used in an
SME including size, age and organizational complexity. In this context the researcher aims to
investigate the small and medium supermarket chains from Moldova and identify to what
extent they use PM for to innovate, improve their internal operations and generally grow.
The research of the secondary data will focus on identifying the general extent of Project
management as well as the tools and techniques used by SMEs and will compare the results
to the suggested results of the secondary data analysis. As a result, the researcher will be
able to establish a model for the small and medium supermarket chains from Moldova that
would best fit their organizational needs. Additionally, the research will point out which PM
tools and techniques bring the most value to project success and identify maybe ͞Ŷeǁ͟,
unknown to managers in medium size supermarket chains from Moldova, practices that
could bring additional value to their companies.
According to Floyd and McManus (2005), small and medium sized enterprises have
an important role in the economy in terms of employment, innovation and growth. In 2008
SMEs in the EU accounted for 60% of the GDP and employed 70% of private sector workers
(European Commission, 2008). Turner (2009) suggests that projects account approximately
for 20% of economic activity and again, according to Turner, Ledwith and Kelly (2012), on a
global scale $10 trillion is spent on projects let alone in SMEs each year. So, for example a
10% improvement in project performance through reduced costs, increased functionality
and shorter project duration the world could save $1 trillion each year (Turner, Ledwith and
Kelly, 2012). This research, however, will have a much narrower scale of investigation
because it is focused on one country – Moldova, and specifically one industry – Food Retail.
According to the National Bureau of Statistics (2013) in 2012 Moldovan SMEs represented
8
97.5% of the total number of companies and generated 34.5% of the GDP, which means that
approximately one third of the GDP is partially dependent on how efficiently SMEs operate.
Following the same logic offered by Turner, Ledwith and Kelly (2009), this research will try
to identify the pitfalls that SMEs deal with in the process of innovation and growth in an
attempt to make the use of Project Management more efficient not only for companies
alone but for the food industry as a whole.
Until now no studies have been conducted regarding the extent to which PM is used
within SMEs from Moldova, and specifically supermarket chains. This research might be the
͞iĐe ďƌeakeƌ͟ that Đould diƌeĐt the atteŶtioŶ of loĐal ƌeseaƌĐheƌs aŶd theoƌists oǀeƌ this
issue and eventually lead to the development of theory specially designed for the
application of Project management in SMEs. The previous experience of the researcher,
accumulated while he was working as a Project Manager in a supermarket chain from
Moldova, will strengthen his ability to analyze the topic being discussed.
The results of this research can be used primarily by small and medium size
supermarket chains from Moldova but could also be applied within SMEs from other fields
where PM is an integrated managerial practice. Additionally, the findings of the research will
point out the causes of the low level of PM usage in Moldovan SMEs.
9
Research objectives
The aim of the research is to identify the existing gaps in the PM practice within
supermarket chains from Moldova and establish a viable model for increased managerial
efficiency.
The research objectives are the following:
1. To Identify the extent of Project management in SMEs
2. To identify the extent of Project management used in small and medium sized
supermarket chains from Moldova
3. Identify the existing gaps in Project Management in medium sized supermarket
chains from Moldova and give recommendations on how these can be improved
10
Research questions
The research aims to identify first the nature of Project management generally in
SMEs, and secondly the nature of Project management in supermarket chains as well as the
extent of Project management practices used within these companies. The proposed
research questions are as follows:
1. To what extent are projects and Project management used in SMES?
The aim of this question is to identify if SMEs use projects in their activity as well as the
extent of Project management compared to large companies.
2. To what extent do supermarket chains in Moldova use projects in their operations,
innovation and growth?
The aim of this question is to identify if supermarket chains in Moldova are generally aware
of Project management practices and if that is so, to what extent they apply Project
management to manage operations, innovation and growth.
3. What is the nature of Project management generally in SMEs and particularly in medium
sized supermarket chains from Moldova?
The first intent of this question is to identify what the nature of Project management is in
generally in SMEs compared to large companies. Secondly, it aims to identify if there are
differences in the nature of Project management between medium sized supermarket
chains from Moldova and SMEs in general.
4. What is the extent of Project Management used in medium sized supermarket chains
from Moldova compared to the extent of Project management in SMEs?
There are no studies conducted today that would give insight about the Project
management practices used in supermarket chains from Moldova, therefore, this question
will point out how knowledgeable managers within these companies are about Project
management, the tools and techniques, as well as show to what extent Project
management is used today in medium sized supermarket chains from Moldova compared to
the generally accepted extent in SMEs.
11
Research limitations
In order to access primary data some practical effort will be required. For example it
will be necessary to get in touch with the representatives of each of the companies that the
researcher plans to interview and try to explain the potential importance of the research to
the company and how it could improve the organizational management within their
company. However, there are specific limitations associated with the access to these
companies. Being an external researcher there is a lack of status recognition of the
researcher among these companies which might result in disinterest towards the research
and ultimately unwillingness to participate in the interviews.
According to Hughes adopted from Burns (2000) there are several limitations
associated with the qualitative research: 1) General validity or reliability of the research
provided the high degree of subjectivity implied in the interpretation of the data; 2) Time
required foƌ data ĐolleĐtioŶ aŶd iŶteƌpƌetatioŶ is liŵited; ϯͿ ‘eseaƌĐheƌ͛s peƌsoŶal opiŶioŶ
has a profound impact on the subjects of study; 4) Issues of anonymity and confidentiality
present problems when selecting the findings; 5) Viewpoints of both the participants and
researcher have to be clearly identified and elucidated because of potential bias issues.
Another issue is the translation of the questions from English to Romanian. Project
Management is a relatively new organizational management practice and there is lack of
Project management books translated in Romanian. This could lead to a loss of meaning
when translating the Project management concepts from English to Romanian.
As top managers are very busy, there is a risk that they will lack time to meet with
the researcher. This might cause potential extensions of the primary data collection process
which delay the overall research duration.
Accessibility to secondary data is also a limitation. It has been noticed that online
resources offered by the DBS website do not provide full access to journals specialized
specifically in Project Management. Therefore, it is very probable that the researcher might
have additional costs associated with accessing the sources requested for his research. All
these limitations could have a consistent impact on the results of the research, and
therefore, the researcher will try to do everything that he can in order to predict and
minimize the potential risk of appearance of the issues mentioned issues.
12
Research ethics
SauŶdeƌs, Leǁis aŶd ThoƌŶhill ;p. ϮϮϲ, ϮϬϭϮͿ state that ͞iŶ the ĐoŶtedžt of ƌeseaƌĐh,
ethics refer to the standards of behaviour that guide your conduct in relation to the rights of
those ǁho ďeĐoŵe the suďjeĐt of LJouƌ ǁoƌk, oƌ aƌe affeĐted ďLJ it.͟ GeŶeƌallLJ speaking the
ethical implications are a matter of common sense which describe how an individual ought
to behave towards another individual in a society. As for this research, which implies the use
of interviews as a primary data collection technique, Saunders, Lewis and Thornhill (2012)
state that there are several ethical implications, these are: 1) Confidentiality of
interviewees; 2) Respecting the integrity of the interviewees by not pressing for a response
if he/she doesŶ͛t ǁish to aŶsǁeƌ a speĐifiĐ Ƌuestion, in other words give the option to avoid
a ƋuestioŶ if it͛s too seŶsitiǀe or the respondent deems it inappropriate for the topic; 3) Let
the interviewee choose the time of the interview; 4) During the interview, when it is
apparent that the interviewee has other commitments to attend to, it is imperative not to
attempt to prolong the interview. A formal attitude and relation will be established with the
respondents in order to keep the collaboration as professional as possible. All these
principles will be taken into account by the researcher during the primary data collection
process.
All the collected data from the interviews will be stocked for academic purposes and
names of respondents will be undisclosed in order to obey the confidentiality clause.
In addition to these generally accepted ethical implications the researcher has to
remember that he will be in face-to-face contact with the interviewees, which places
additional responsibility on him. For this reason the researcher, being the interviewer, will
show rapport and respect to the interviewee in order to create a trustworthy and
responsible image of himself.
13
Personal biases
One of the concerns related to the reliability of the data within interviews is related
to personal bias of the interviewer (Saunders, Lewis, Thornhill, 2012). There are generally
four issues that could imply some type of bias during interviews: 1) Tone and non-verbal
behaviour – it can create bias in the way that interviewees answer the questions; 2) Wrong
interpretation of responses – the interpretation of answers can be biased by the
iŶteƌǀieǁeƌ͛s peƌsoŶal judgŵeŶt; aŶd lastlLJ ϯͿ LaĐk of ĐƌediďilitLJ fƌoŵ the iŶteƌǀieǁee Đould
raise doubts about the reliability of the answers – depending on the level of trustworthiness
of the interviewer, the responses could lack validity and credibility (Saunders, Lewis,
Thornhill, p. 381, 2012).
As a measure to avoid any potential bias the researcher will consider the earlier
mentioned recommendations when developing the interview questions; as well as he will
try to be as objective as possible and maintain a neutral position towards the overall
interpretation of the primary and secondary research findings in order to develop sound and
trustworthy conclusions.
14
Chapter outline
Chapter 1 is Literature Review and includes the following subheadings Introduction
to Project Management, Nature of Project Management in SMEs and Project Management
Tools and Techniques.
͞Introduction to Project Management͟ subheading will explain what are projects, the
project phases, the project constraints, the particularities of Project Management as well as
the reasons why it has become such an attractive and reputable managerial practice today
by describing and analyzing its key benefits and contribution to the performance of
companies in the context of a competitive, dynamic and globalized business environment.
The ͞Natuƌe of PƌojeĐt MaŶageŵeŶt iŶ “MEs͟ suďheadiŶg edžplaiŶs the differences between
SMEs and large companies in order to show how and why Project Management practices in
SMEs differ from those in large companies as well as analyze the factors lying behind these
differences.
The last subheading – ͞PƌojeĐt MaŶageŵeŶt Tools aŶd TeĐhŶiƋues͟, pƌoǀides a descriptive
analysis of the most commonly used tools and techniques today in large companies as
identified in the existing literature, and will also give insight and describe the extent of the
tools and techniques that are used by SMEs.
The analysis of the secondary data will be used to create a comparative framework
to be compared with the results of the primary data findings.
Chapter 2 – Research Methodology – this chapter explains the selection of the
methods of design, data collection and analysis that were used to conduct the research.
Each subheading is discussed comprehensively and gives justifies the selected methodology.
Chapter 3 – Data Analysis and Findings – in the first part of this chapter the results of
the 5 interviews are presented and similarities and differences between the 5 companies
are discussed. This will lead to the identification general patterns regarding the extent of
Project Management used in small and medium sized supermarket chains from Moldova as
well as identify the most commonly used tools and techniques and the ones which are most
important for project success.
15
Chapter 4 – Conclusion – this chapter includes the conclusion of the research by
summarizing the findings and concepts raised in the literature review and the data analysis
section. The findings are critically and analytically evaluated after what it is concluded
whether the objectives of the research were achieved or not.
Chapter 5 – This chapter includes a series of recommendations to enhance the
Project management capabilities of the supermarket chains from Moldova developed on the
basis of the most used and important practices in SMEs as described in the literature review.
Chapter 6 – Self reflection and skill development – it includes an overview of how
the master programme and the dissertation has added value to the research capabilities of
the researcher.
16
Literature review
The following chapter will first give a general insight into the importance of Project
Management in order to introduce the reader with the particularities of this managerial
approach as well as provide for an understanding of Project Management. Afterwards it will
discuss and analyze the existing literature on the extent of Project Management used within
SMEs to provide for a framework to be compared against the collected primary data from
small and medium sized supermarket chains from Moldova.
Introduction to Project Management
In order to understand what project management is about it is important to
understand what a project is in the first place. In our daily lives we are all involved in
projects without even realizing it. Buying a home, enrolling on a ŵasteƌ͛s pƌogƌaŵ, paLJiŶg a
credit, preparing for an exam etc. are all projects that we engage in our day-to-day lives. The
scientific definition transposed to the business context offers multiple and straightforward
explanations about what a project is. The Bible of Project Management – Project
MaŶageŵeŶt Book of KŶoǁledge edžplaiŶs that a pƌojeĐt is ͞a teŵpoƌaƌLJ eŶdeaǀouƌ
uŶdeƌtakeŶ to Đƌeate a pƌoduĐt, seƌǀiĐe, oƌ ƌesult͟ ;PMBOK, p. ϯ, ϮϬϭϯͿ. The UK OffiĐe of
Government Commerce (2005) defines a project as ͞a teŵpoƌaƌLJ oƌgaŶisatioŶ that is
intended to produce a unique and pre-defined outcome or result at a pre-specified time
using pre-deteƌŵiŶed ƌesouƌĐes͟.
These definitions recognize that a project is temporary in nature, with a temporary
established project structure intended to achieve clearly defined outcomes. It is given the
necessary resources to achieve the objectives that are aligned with the strategic goals of the
organization. To be more precise, Kerzner (2013) and Larson and Gray (2011) identify five
fundamental characteristics of a project that differentiate it from the other endeavours
undertaken by a company:
Established objective
Defined timeframe with a beginning and an end
Specific cost and performance requirements
Use of financial and human resources like money, equipment and people to
achieve objectives
17
Involvement of specialized professionals from several departments
Depending on how successful a company is at implementing projects could be a defining
element in determining the level of their competitiveness in the marketplace. Ledwith
(2004) identified that in Ireland 25% of the turnover of a company is generated by new and
improved products which are delivered through the use of Project Management.
The traditional organizational structures developed by Taylor and Ford are very
bureaucratic in essence (Daft, 2008) and cannot respond rapidly to the changing business
environment. Today the business environment is extremely competitive in the context of
increased globalization and technological improvement. To stay afloat and continue to
develop companies need to adopt managerial approaches that would allow for flexibility,
speed, innovation and continuous improvement. Jarocki (2011) recognizes that the
necessity to keep up with the changing business environment causes more and more
companies to shift from being operations driven towards project driven.
Definition of Project Management
While understanding what a project is undoubtedly important, understanding the
management of projects is of critical value (Kotter, 2011; Lewin, 1997). The Project
Management Institute (2000) offers a simplified definition of Project Management as being
the ͞appliĐatioŶ of kŶoǁledge, skills, tools, aŶd teĐhŶiƋues to pƌojeĐt aĐtiǀities to ŵeet the
requirements͟. PƌojeĐt MaŶageŵeŶt is aĐhieǀed thƌough the appliĐatioŶ of ĐoŵpeteŶĐies,
knowledge areas and integration of managerial processes – where a process consists of a
series of actions that generate a defined result (PMI, 2008).
Through time Project Management has developed as a discipline that has constantly
improved and allowed for expansion. Crawford (2005) notices that as a discipline project
ŵaŶageŵeŶt is ͞dLJŶaŵiĐ faĐiŶg Ŷeǁ ĐhalleŶges, as tools, ŵethods aŶd appƌoaĐhes to
management that comprise the discipline are applied to different areas, for different ends,
aŶd iŶ diffeƌeŶt Đultuƌes͟.
Baccarini (1999) recognizes that the emergence of modern Project management
owes to 3 three core stimuli:
18
Complexity – increasing complexity of tasks and a higher degree of
specialization
Change – dynamic global environment which constantly puts pressure on
organizations to implement change
Time – the need for tasks to be completed as quickly as possible
It has increasingly been recognized during the last 50 years that Project Management
is an efficient tool to manage novel and complex activities through the application of clearly
defined tools, techniques and practices (Munns, Bjeirmi, 1996). Because Project
Management has become so attractive to companies which seek to stay flexible and thus
competitive in a dynamic environment and meet the increasing needs of customers, today
about 30% of the global economy uses project-based management, which once again
emphasizes that projects are increasingly becoming more common in organizations (Parker,
Charlton, Ribeiro, Pathak, 2013).
Probably one of the most important challenges that Project Management can deal
with is concerned with the control over resources. Today resources are scarce and there is a
natural tendency from executive managers to require from line managers to do the same
amount of work but with reduced resources (Kerzner, 2013). As mentioned earlier, projects
are generally characterized by three main criteria for success – time, budget and scope,
therefore, the use of Project Management enhances the ability of executive managers to
efficiently control the use of resources.
Integration of Project Management
Project Management has evolved to such an extent as a managerial practice that
companies which understand its benefits and identify their business structure with it adopt
organizational structures entirely based on Project Management. The activity of so called
project driven companies, such as construction, IT and aerospace (Sarfraz, 2011), is focused
on achieving strategic objectives through the exclusive implementation of projects. For
these companies the most important is to effectively manage the portfolio of projects and
select those that are in alignment with the strategic objectives of the company (Larson and
Gray, 2011). These companies have a systematic approach to the implementation of
projects and, therefore, it allows them to constantly develop their Project management
19
Đapaďilities. Judgeǀ aŶd Thoŵas ;ϮϬϬϮͿ stated that these ͞Đapaďilities aƌe ĐoŵďiŶatioŶs of
proprietary resources, knowledge and skills that become institutionalised into operating
ƌoutiŶes aŶd taĐit kŶoǁledge͟. OŶ the otheƌ haŶd theƌe aƌe Đoŵpanies where projects have
a supporting role for a product/service or specific functional lines. In these companies
Project Management as a managerial practice is used in a project context and addresses
only to the process of project implementation. For these companies each project is most of
the times a unique endeavour in terms of the nature of project objectives, time and scope.
Characteristics of a Project
Project Dimensions
A project is characterized by three dimensions or constraints, which basically are the
criteria that serve as a standard for comparison of actual and planned throughout the life of
a project (Larson and Gray, 2011). The following describe these constraints (See Figure 1).
Scope – is the definition of the mission or the objectives that need to be achieved by the
completion of an internal project if the project implies the improvement of internal
processes like operations, sales and marketing, or an external project that is intended to
satisfy the end customer through the delivery of a new or improved product or service or
both. A study conducted by Gobeli and Larson (1990) involving 1400 project management
practitioners from Canada and the US identified that approximately 50% of the problems
during the planning phase of the project relate to confusing definition of project scope and
goals. It is important to understand that the activities that are to be performed in the
project directly derive from the scope. Therefore, it is imperative that the scope of any
project is clearly defined.
Time –after the scope has been defined the adequate time constraints are established. A
start and end date is set in accordance with estimates made about the time necessary to
finish the project activities. In projects involving deliverables associated with previous
experience estimates are made deriving from past projects. When projects imply new
unique activities then top-down and down-up communication occurs. In other words the
estimates done by senior management are checked with the estimates made by the people
who will actually deliver and consensus is achieved (Larson and Gray, 2011).
20
Budget – the budget of a project comprises all the costs associated with the completion of
the project activities. These costs usually consist of human, equipment and technological
expenses depending on the type of business. Olsen (2004) recognizes that the
establishment of unrealistic budgets is one of the main reasons of project failure and
therefore, accurate analysis of the costs should be conducted in the planning stage of the
project.
Projects are efficient because they allow for flexibility during the execution of the
activities. For example a Project Manager might need to finish the project earlier than
planned and could decide to allocate additional financial and human resources to complete
the deliverables before deadline; or, for example, costs can be reduced by using cheaper
and less efficient equipment and/or human resources. Therefore, depending on the
performance of a project a project manager can change one of the criteria and trade off for
example the execution in time of a project at the expense of full scope achievement. In
other words, these trade-offs offer space for manoeuvre to the manager of a project as the
scope, time and budget are most of the time interdependent.
Figure 1 Project Dimensions
Project Phases
Deriving from the concept that a project is a temporary endeavour to accomplish
specific objectives and tasks (PMBOK, 2013) a project has a lifecycle. The PMBOK Guide
21
(2013) identifies five phases of a project each having its own significance and role in the
completion of project (See Figure 2).
Project Initiation – is the initial phase of a project that implies selecting the most attractive
project in terms of strategic business contribution to the company. The benefits of the
project are identified and discussed, the objectives are established, a Project Manager is
assigned, teams are formed and responsibilities are assigned.
Project Planning – this stage is probably the most important because according to Besner
and Hobbs (2006) at this stage all project participants: team members, project managers
and the program director, are gathered together to make decisions regarding the most
important things in a project: establish the schedules, establish budgets, identify the
resources, and evaluate the risks associated and the establishment of contingency plans
(Larson and Gray, 2011).
Project Execution – at this stage team members are engaged in delivering the tasks they
were assigned while the project manager needs to make sure that the direction of the
overall project activities is directed towards achieving the objectives within set budget, time
and scope and quality standards. This stage implies lots of corrections and adjustments of
the ongoing project processes that are meant to get the project back on track in terms of
budget, time or/and client requirements.
Project Controlling and monitoring – during this stage the performance of the project is
monitored and evaluated against the Project criteria. By using different evaluation tools like
EVM (Earned Value Management) and KPIs (Key Performance Indicator) the project
manager is able to analyze the project performance to identify if it is on track with schedule
and budget.
Project Closure – the closing stage incorporates several activities like the delivery of the
project product to the customer, redeployment of resources, and review of project
activities. One of the most important activities at this stage is the lessons learned database.
Besner and Hobbs (2006) revealed that registering and analyzing the mistakes during a
project are among the activities of a project that have the greatest potential to improve
project success but are not always appreciated by companies as important.
22
Figure 2 Project Lifecycle vs. Level of Effort
(Source: Larson and Gray (2011). Project Management. The Managerial Process 5th Edition)
Having defined what a project is, the dimensions of a project and its phases, it is possible to
start to distinguish between project success and failure.
Project managers
The Project manager is the central figure in a project that has the main responsibility
to coordinate the work of the Project team. Therefore, employing the right person for this
job is a one of the keys to successful Project implementation. As identified by the PMBOK
(2013) for a Project manager to be effective it is important to have the following
competencies:
Knowledge – is referred to the extent of Project management knowledge possessed
Performance – consists the ability to accomplish through the application of his/her
Project management knowledge
Personal – is referred to the ability to manage people by using interpersonal skills to
motivate and encourage team members, as well as referred to the extent of the
technical capabilities of individuals to apply Project management practices
The Project manager is involved in all the project phases to assure efficient planning of
activities; monitor the performance of the Project activities delivery in terms of cost and
time; assist team members in the problems that occur during the Project; use tools and
techniques like CPM, EVM and KPIs to measure Project performance etc. The importance of
the role of the Project manager is reinforced by Besner and Hobbs (2006) who identified
23
that the involvement of the Project manager in each of the Project phases is higher than
that of other Project participants (See Figure 4).
Figure 3 Involvement of different project management roles in different project phases
;“ouƌĐe: BesŶeƌ, C. aŶd Hoďďs, J.B. ;ϮϬϬϲͿ, ͞The peƌĐeiǀed ǀalue aŶd poteŶtial ĐoŶtƌiďutioŶ
of pƌojeĐt ŵaŶageŵeŶt pƌaĐtiĐes to pƌojeĐt suĐĐess͟Ϳ.
Larson and Gray (2011) stress the importance of the Project manager personal skills for
efficient Project implementation. They identify 8 core traits that describe an effective
Project manager:
System thinker – Project managers are expected to think in terms of systems,
meaning that instead of having a focused approach on a specific piece of a project
they need to have a holistic understanding of the project pieces in order to be able
to manage the interaction between the different parts but not the parts themselves.
Personal integrity – refers to the ability to create an image of a credible person who
is perceived by the project client and the team members as a trustworthy person
capable to achieve the objectives of the Project.
Proactive – managers tend to take action regarding encountered problems before
they become too complex and expensive to handle.
24
High emotional intelligence – Project managers have to be emotionally balanced
when things get out of control and act constructively.
General business perspective – it is important for a Project manager to have an
understanding of the basics of business management and how the discipline of
Project management contributes to successful business.
Effective time management – time is scarce and managers need to plan the time
within Projects wisely and adjust their priorities along the project as project dictates.
Skilful politician – Project managers need to win support and acceptance of the
Project by selling the virtues of the project.
Optimist – like any other manager it is important for Project managers as well to be
able to emit optimism in order to inspire and keep people positive.
Project success or failure
Defining whether a project is successful or not is a relative matter because despite
the fact that there are three main project success criteria established in academic literature
– scope, time and budget (Kerzner, 2009; Larson 2011) literature suggests that these are not
enough to categorize a project as successful and that success criteria are complex and
multifaceted (Besner and Hobbs, 2006). Cooke and Davis (2004) proposed a distinction
between three levels of project success factors that speak for themselves:
1. Doing projects right
2. Doing the right projects
3. Doing the right projects right time after time
Clearly these are some general characteristics that give a simple idealistic explanation of
project success. In essence these criteria hide concrete variables and factors that eventually
are used to measure the success of a project. The analysis of literature suggests that there
are different variables and factors affecting the ability to achieve project success. The
following list was derived from the analysis of Cash and Fox (1992), Baker (1974), Kerzner
(2009), Wit (1998) and Kumar (1989).
Objectives
Project administration
Third parties (contractors)
25
Client relations
Contracting
Human interaction
Legal agreements
Politics
Conflicts
Efficiency
Profit
Morris and Hugh (1986) provide the same factors but adapted to the business context.
1. Have a realistic goal
2. Clearly defined goal
3. Competition
4. Level of client satisfaction
5. Profitability of the product/service developed by the project (ROI – return on
investment)
6. Third parties – contractors, legal entities etc.
7. Market availability
8. Efficient project implementation process
9. Perceived value of the project
From analyzing these variables it is noticeable that to categorize a project as a success is not
solely dependent on how efficiently Project Management and its techniques are applied.
This indicates that project management is only a subset of the wider context of a project
(Munns and Bjeirmi, 1996). Therefore, Project Management plays a role in the success of a
project; however, this role is influenced by other factors outside the control range of a
company and the direct control of a project manager. This clearly explains why some
projects succeed and others fail independently of how efficiently Project Management
processes are conducted.
Project Management Success or failure
In contrast to the factors influencing project success, which are more global and out
of the control range of a company, Project Management success or failure is easier to
