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Project management in the context of organizational change
Project management
The case of the Portuguese public sector Carlos F. Gomes
573
Faculdade de Economia da Universidade de Coimbra, Instituto de Sistemas e Robo´tica, Coimbra, Portugal
Mahmoud M. Yasin Department of Management and Marketing, East Tennessee State University, Johnson City, Tennessee, USA, and
Joa˜o V. Lisboa Faculdade de Economia da Universidade de Coimbra, Instituto de Sistemas e Robo´tica, Coimbra, Portugal Abstract Purpose – The purpose of this paper is to examine the Portuguese public sector organizations’ familiarity with, and willingness to utilize, project management tools, as these organizations attempt to enhance their operational performance through carefully crafted organizational change. Design/methodology/approach – Using a sample of 102 public officials, 30 project managers’ characteristics, 23 project management variables, and information availability on these variables are studied and classified. Findings – In general, the results clearly showed the familiarity of the participants with the important characteristics and variables of effective project management practices. Some exceptions were attributed to the specific nature of public sector operational systems. Research limitations/implications – The sample used in this study is specific in nature. It consisted of Portuguese public sector officials at the middle-level rank in the managerial hierarchy. Thus, the results should be interpreted accordingly. Practical implications – Based on the results of this study, some important organizational implications regarding training and systems development were advanced. Originality/value – This study empirically examines the public sector officials’ knowledge and attitude regarding project management practices. It offers significant implications to public sector organizations, as they pursue a more open system operational orientation to meet growing environmental pressures and citizens’ demands. Keywords Public sector organizations, Project management, Organizational change, Portugal Paper type Research paper
Introduction Through the years, public sector organizations have promoted the perception that their operational systems are too unique to be managed based on operational and organizational practices found in the private sector (Dorsch and Yasin, 1998; Yasin et al. 2004). As such, it was argued that public sector operational systems have distinct constraints which characterize their inputs, processes and outputs. These constraints included, among other factors, budgetary constraints, unmotivated employees, rigid operating procedures and the influence of internal and external politics (Ward and
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Mitchell, 2004; Brown, 2001). Due to these operational characteristics and constraints, organizational effectiveness in the public sector has been traditionally compromised in favor of operational efficiency. This operational view of public sector organizations was, very much, consistent with a closed organizational system orientation. In this context, the closed system operational orientation is characterized by an internal-focus, absence of a clear customer-orientation, and lack of organizational flexibility (Yasin et al., 2000b). Thus, the main concern of such system was, at best, the efficiency of its subsystems (input, process, and output). Therefore, organizational effectiveness was, often, mistakenly equated with the operational efficiency of the closed system. In the past, public service organizations were not alone in terms of the adoption of the closed system operational orientation. In this context, even private for-profit organizations adopted an efficiency-based, a closed system-oriented business strategies and operational philosophies (Gomes et al., 2006). In recent years, however, most for-profit organizations moved towards a more open system-orientation, which tends to foster organizational effectiveness, customer orientation, while not necessarily ignoring operational efficiency. The success associated with the movement of for-profit organizations toward a more open system-operational orientation encouraged students of management and organizational science to call for benchmarking the efforts of the private sector, in an effort to enhance the performance of public sector organizations. Some researchers referred to this benchmarking effort as “managerializm” (Uhr, 1990: cited in Yasin et al., 2004; Dixon et al., 1998). In this context, managerializm refers to the deployment of proven organizational and managerial philosophies and techniques, as utilized successfully by the private sector in public sector operational settings. The aim of this deployment is to make public sector organizations more effective and efficient open operational systems. For not-for-profit organizations to adopt the operational and strategic philosophies consistent with managerializm philosophy, they must utilize well-designed projects aimed at transforming the public sector organizations into open, responsive operational systems. However, for these transformation projects to yield the desired outcomes, public sector organizations must be familiar with project management tools and practice. As such, the officials and managers of these organizations must understand the different facets of the project management body of knowledge. In turn, this requires the promotion of organizational change through the fostering an organizational culture conducive to project management practices. Against this backdrop, the objective of this research is to shed some light on project management characteristics and effective practices from the perspective of public sector organizations. A sample of 102 Portuguese city council officials at the middle-level managerial rank is used to investigate the issues relevant to this study. The participants are surveyed in order to assess their familiarity with relevant project managers’ characteristics contributing to project effectiveness. The extent of information availability on some key project management related variables is also assessed. It is hoped that insights gained from this research will enhance the ability of public sector organizations to smooth the needed transition toward a more open system-operational orientation, through the implementations of projects aimed at smoothing the adoption of the managerializm philosophy. Organizations in the public sector can achieve effectiveness and efficiency through the utilization of different
operational philosophical approaches. Therefore, the philosophical operational approach advocated in this study is by no means the only one. Background In recent years, managers of for-profit private organizations have been under considerable market pressures to re-orient the strategies, operations and business models of their organizations. In a response to these pressures, the organizational structures of these organizations have been steadily re-engineered from mechanistic, rigid and closed system-oriented to a more organic, flexible and open system-oriented (Gomes et al., 2006). Cross-functional teams utilizing project management practices have been deployed effectively to smooth this re-engineering effort aimed at organizational changes. This unmistakable rapid pace of organizational re-engineering and the organizational changes associated with it has made project management tools and practices a subject of great practical interest to the management of private organizations. The proliferation of change-based projects made “management by projects” a practical phrase, rather than a slogan in today’s business environment (Partington, 1996; Smith and Dodds, 1997). The traditional project management approach is based on a closed system perspective of organizations. However, some organizations are still adhering to this approach, even in today’s organizational open system environment (Yasin et al., 2002). Perhaps this may explain the relatively high rate of projects failure. In the context of organizational change, project and change initiatives must be approached based on a well-designed and multifaceted strategy, which not only adhere to time and budgetary constraints, but seeks achieving a competitive organizational advantage (Dietrich and Lehtonen, 2005). Toward this end, a broader organizational effectiveness-oriented strategy is required. Such strategy call on project managers to utilize their technical competences, in planning for and controlling activities, with their leadership, communication, and other human resources management skills (Smith and Dodds, 1997; Zimmerer and Yasin, 1998; Muller, 2003). Although public sector organizations are not under the same market pressures as their private-sector counterparts, they have also been subjected to pressures advocating fundamental organizational changes. These pressures have mainly been ´ lafsson, 2004). exerted by western governments since 1980 percents (Wisniewski and O The motivation behind such pressures is to streamline the size of the public sector, eliminate non-value-added activities and promote organizational effectiveness (Brunetto and Farr-Wharton, 2003). With these pressures in mind, a broader emphasis has recently emerged toward the complete transformation of public sector management. This broad management transformation trend has been labeled “New Public Management” (NPM). This “New Public Management” philosophy has advocated the promotion of profound changes in the roles, management, staffing and delivery of public services (Lawton, 2005). As such the “New Public Management” philosophy can be viewed as an important element of the broader managerializm operational philosophy. In this context, the project management body of knowledge is viewed to have the tools, which might facilitate the organizational change associated with broader operational changes consistent with the managerializm philosophy. Politicians, financial institutions, the media, management consultants and scholars around the world have all played an important role in creating and maintaining the
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pressure for the complete transformation of public sector management. Organizations such World Bank, OECD-Organisation for Economic Co-operation and Development, and International Monetary Fund have been in the forefront of this transformation effort (Torres and Pina, 2004). The NPM reforms refer to the adoption of a market-based philosophies and practices within the public sector. These reforms involve the systematic use of strategic planning, program budgeting, risk management and increased use of accountability to achieve measurable outcomes (Brunetto and Farr-Wharton, 2003). Overall, the NPM philosophy promotes systematic changes in the delivery of public services (Hood, 1995). As such, NPM reforms have focused on the complete re-orienting of organizational thinking in the public sector from the input mode to the output mode (Emery and Giauque, 2003). The NPM culture has, in recent years, left its marks on the cultures of many public sectors in different countries. Due to the complexity and the multifaceted nature of stakeholders in public operational context, difficulties can arise when attempting to apply standard project management practices to promote organizational change (Crawford et al., 2003). In general, the literature tends to emphasize the role of the project manager in overcoming difficulties. However, such literature is not specific to the public sector operational environments. Project managers in the public sector may have to deal with more difficulties relative to their counterparts in the private sector. These added difficulties are attributed to dealing with the non-responsive employees and non-traditional operating constraints. Thus, the task of handling difficulties and complexities may pose more serious challenges to project managers in the public sector, when compared to their counterparts in the private sector. In the public sector operational context, politics and political decisions tends to shape the organizational culture. As such, the political context of organizations tends to significantly interact with its strategic and operational decisions. This, in turn, tends to create operational constraints which are not typically found in private sector operational settings. Methods Instrument The research instrument used in this study was based on the works of Zimmerer and Yasin (1998) and Yasin et al. (2000a). The instrument utilized forced-answer questions that applied a traditional five point-Likert scale. The instrument included four sections. In the first section, the respondents were asked to classify the relevance of 30 project manager’s characteristics/behaviors. In the second section, the importance level and the information availability of project management-related variables were assessed. In the third section, the respondents were asked to classify the sources of influence on the successful completion of a project. In the fourth section, the respondents were asked to specify the relationship between the project manager’s leadership and the project effectiveness. The research instrument also collected description information related to the respondents. Sample and procedure The research instrument was distributed during several seminars conducted by the first author regarding strategy, performance measurement, and project management in the public sector of Portugal. The participants were public sector officials at the
middle-level management rank. They represented 60 different local public institutions, mainly city halls. The participants represented 14 of the 20 main administrative Portuguese regions (Districts). The research instrument was distributed to 120 participants at four seminars conducted in three cities in Portugal. However, 102 participants completed the research instrument. Thus, resulting in a response rate of 85 percent. In addition to the relatively high response rate, the sample is considered representative of the populations studied. Based on the obtained responses, about 73 percent (72.5 percent) of the respondents worked in the public sector for more than five years. On the other hand, 33 percent of the respondents (33.3 percent) were involved in more than ten projects, while only about 6 percent (5.9 percent) of the participants never served as a project leader. See Table I. Almost 57 percent (56,8 percent) of the undertakes projects were classified as routines projects, while almost 20 percent (20 percent) were classified as innovative projects. For the purpose of this study, innovative projects were defined to include projects which utilize technology and/or new processes aimed at altering certain operational practices, and/or relations between the operational system and the customer (citizen). Such projects include technology-based projects designed to improve the different aspects of operations with emphasis on the effective delivery of services to citizens. Results Characteristics of project managers In order to identify the most relevant project managers’ characteristics/behaviors, the participants were asked to classify (1 – less relevant; 5 – most relevant) 30 behavior-related characteristics of project managers. The overall average for the 30 project manager’s characteristics/behaviors studied was calculated. The characteristic with an average of 0.25 standard deviation above the overall average was classified as part of the most relevant group. On the other hand, a characteristic with an average of 0.25 standard deviation below the overall average was classified as part of the less relevant group. The average category included the rest of the characteristics. Table II shows the results. The most relevant group includes characteristics/behaviors which have to do with motivation, loyalty, and ability to deal with others. The average category includes characteristics/behaviors which relates to technical expertise and strategic thinking. The least relevant category includes characteristics such as, desire need for power, individualistic and have high self-esteem. These characteristics are personality-specific, rather than task-related. Project management variables and information availability To shed some light on the relative importance of some key project management related-variables, the participants were presented with 23 variables. The methodology utilized in the previous section was applied to classify these variables into three categories. The first category includes the most important variables. As can be seen from Table III, this category includes some key variables. These variables include technical competencies, leadership and communication. The average category includes variables, such as, project management chart, risk management, and environmental regulations. The least important category includes variables related to organizational politics and the international dimension.
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Table I. Sample profile
Item Years in public organizations 0-2 3-5 6-10 11-15 16-20 .20 Did not answer Total Type of projects undertaken by the public organizations At the routine type Structured but not routine Innovative projects Substitution projects Did not answer Number of projects in which each respondent involved 0 1-5 6-10 11-15 16-20 21-25 .25 Several Did not answer Total Number of projects each respondent served as project leader 0 1-5 6-10 11-15 16-20 21-25 .25 Several Did not answer Total
Frequency
%
1 20 33 13 15 13 7 102
0.98 19.61 32.35 12.75 14.70 12.75 6.86 100.00
58 37 20 21 5
56.86 36.27 19.61 20.59 4.90
0 20 16 7 7 2 18 7 25 102
0.00 19.61 15.69 6.86 6.86 1.96 17.65 6.86 24.51 100.00
6 33 10 2 1 2 13 6 29 102
5.87 32.35 9.79 1.96 0.98 1.96 12.75 5.88 28.43 100.00
To gain a better understanding of the relative practical importance of these project management related variables, participants were asked to classify these variables based on their availability of information. The results in Table IV appear to shadow the results in the Table III pertaining to the level of importance. Thus, the availability of information, or lack off may explain the relative importance of these variables as perceived by the participants. To further shed some light on this issue, the relationship between the level of importance and information availability for each of the 23 variables studied is examined utilizing the GAP indicator, as: GAP i ¼ ðLI i 2 AI i ÞLI i
Relevance
Characteristics
Most relevance
High levels of personal motivation Open to new ideas/innovative behaviour Effective resources allocator Loyalty to the organization Demonstration of trust Accept responsibility Goal setter Loyalty to subordinates Inter-disciplinary teams builder Long-term orientation Effective organizational politician Manages priorities Consensus builder Honest in all dealings Risk taker Strategic thinker Objectives-focused Empowers subordinates Broad organizational knowledge Visionary Utilizes a network of contacts Effective delegator Driven by values Charismatic personality Highly self-esteem Intuitive Accept flaws of others High level of administrative skills Desires power Individualistic
Least relevance
Mean
SD
4.59 4.59 4.57 4.51 4.49 4.47 4.47 4.43 4.43 4.39 4.38 4.36 4.34 4.30 4.24 4.19 4.15 4.13 4.06 4.04 4.03 3.85 3.78 3.72 3.72 3.70 3.52 3.44 2.68 1.77
0.60 0.60 0.65 0.61 0.71 0.66 0.64 0.74 0.68 0.81 0.68 0.61 0.71 0.87 0.76 0.75 0.83 0.83 0.77 1.05 0.81 0.95 0.99 0.85 1.02 0.90 0.77 0.96 1.27 1.00
where: LI
¼ Level of importance.
AI ¼ Availability of information. The higher the value of this indicator, the greater is the disparity between the importance of the variable and its information availability (Foster and Gupta, 1994; Dempsey et al., 1997; Gomes et al., 2004). Based on the results shown in Table V, the five most important variables are found in a group of six variables with relative high information deficit. Thus, indicating the lowest availability of important information. Effectiveness and leadership In order to understand the factors which the participants associate with project effectiveness, a set of variables were utilized to assess the factors influencing the success of a project. Utilizing the classification methodology used in the previous sections, Table VI reports the results. The participants select, in the first place, the decisions by the project team. In second place, they select the desire to excel on the project, which reflects the motivation of the team members. The next two most
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Table II. The relevance of characteristics of project manager
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Importance
Variables
Mean
SD
Most importance
Technical competence Leadership ability Communication Cost management Quality management Time management Standard/codes (quality, safety, etc.) Top management support Scope management Technical requirements Cultural sensitivity Integration management Organizational skills Project organization chart Risk management Environmental regulations Organizational policies Organizational constraints International law/regulations Leadership by example International economics International finance International marketing
4.46 4.45 4.35 4.32 4.31 4.27 4.21 4.10 4.05 4.04 4.03 4.01 4.01 3.87 3.85 3.84 3.66 3.61 3.26 3.26 2.77 2.47 2.44
0.69 0.77 0.87 0.83 0.91 0.92 0.94 1.02 0.92 1.01 0.87 1.04 0.88 1.12 1.10 0.92 1.03 0.92 1.19 1.11 1.20 1.23 1.22
Availability
Variables
Mean
SD
Most availability
Technical competence Environmental regulations Communication Technical requirements Standard/codes (quality, safety, etc.) Scope management Time management Cost management Quality management Leadership ability Organizational skills Cultural sensitivity Top management support Project organization chart Integration management Organizational constraints Risk management Organizational policies International law/regulations Leadership by example International economics International finance International marketing
3.51 3.43 3.38 3.38 3.37 3.36 3.29 3.27 3.20 3.18 3.15 3.06 3.02 3.01 2.96 2.84 2.81 2.71 2.66 2.66 2.45 2.02 1.97
0.97 0.99 1.03 1.03 1.04 1.04 1.04 1.04 1.07 0.97 0.95 1.03 1.02 1.11 1.00 0.97 1.02 0.95 1.23 1.05 1.04 1.03 0.94
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Least importance Table III. Importance of management-related variables
Least availability Table IV. Information availability on key management-related variable
Variable
GAP value
Leadership ability Quality management Cost management Top management support Technical competence Communication Integration Management Time management Risk management Cultural sensitivity Standard/codes (quality, safety, etc.) Organizational policies Organizational skills Project organization chart Scope management Organizational constraints Technical requirements International law/regulations Leadership by example Environmental regulations International marketing International finance International economics
Influence
Factor
Most influential
Decisions by the project team Desire to excel on the project Decision made by upper manager Internal politics Decisions by the client Responding to changing client request External politics Pressure from inside the project Unforeseen technical problems on the project Pressures from outside the project Existence of bad luck
Least influential
5.65 4.78 4.54 4.43 4.24 4.22 4.21 4.18 4.00 3.91 3.54 3.48 3.45 3.33 2.79 2.78 2.67 1.96 1.96 1.57 1.15 1.11 0.89
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Table V. Gap analysis results of importance and information availability on management-related variables
Mean
SD
4.21 4.06 3.99 3.97 3.67 3.56 3.48 3.46 3.44 3.22 2.44
0.75 0.88 0.86 0.86 0.99 0.94 0.91 0.92 1.08 0.98 1.31
influential project success factors are decisions made by upper manager and internal politics. The existence of bad luck is selected by the participants as the least influential project success factor. It is to be noted here that the values for the mean and standard deviation for this variable (2.44; 1.31) tend to indicate that this choice was not a consensual choice. The next three less influential factors selected were pressures from inside the project, unforeseen technical problems on the project and pressures from outside the project. To shed some light on the impact of the project manager’s leadership on project success, participants were asked to quantify the relationship between the project
Table VI. Key factors influencing project success
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manager’s leadership and project effectiveness. Based on the results, the participants tended to believe that sixty-nine percent (69 percent) of project success can be attributed to a good leadership from the project manager. On the other hand, participants tended to believe that fifty-seven percent (57 percent) of all projects fail due to poor or bad leadership of the project manager.
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Discussion Based on the results in Table II, it is interesting to note that characteristics pertaining to technical expertise are absent from the most relevant group. It appears that leadership skills and people-related skills of the project manager are more relevant to the participants than personality-specific characteristics or technical skills. It is also very important to note that accepting the flaws of others was not considered as relevant characteristic of a project manager. This perhaps reflects the rigidity of the public sector operational environment, where people are expected to confirm to pre-determined pattern of behavior. Thus, there is very little tolerance for deviations and flaws. Perhaps this is an organizational culture, where one acts as expected, rather that run the risk of being penalized for thinking. Relating project management variables it is interesting to note that while the participants tend to believe that leadership ability is important, they did not think that leadership-by-example is important. Perhaps the participants do not believe in leadership-by-example, since it is not practiced by senior administrators in their organizations. Thus, this facet of leadership appears to be ignored as a facet of public sector leadership practices. Another words, managers are not expected to act in the same way as they demand their subordinates to act. The results derived from the GAP analysis tend to explain the relative low importance associated with the international management variables. The interesting question here is: are these variables given low importance due to the lack of information, or is it the other way around? Regardless of the direction of this relationship, public organizations may need to make information on these variables readily available and encourage the use of such information. Following this course of action will help these organizations cope with projects which have global aspects. Relating project effectiveness, the participants appear to think that the most important source of project success is the decisions by the project team. They also selected as important the decisions made by upper manager and internal politics, reflecting the strong influence of bureaucracy and organizational constraints on project success. Finally, as far as the participants are concerned, the impact of the project manager leadership on the success of the project appears to be significant. The above interpretations of the results represent the authors’ perspective. Other perspectives are equally valid and relevant. Conclusion and implications Based on the results of this study which utilized a sample of 102 Portuguese public officials at the middle-level managerial rank, the following conclusions and implications are in order. First, it appears that the participants, for the most part, are familiar with the variables, tools and characteristics relevant to project management know-how. Thus,
Portuguese public sector organizations should be ready to deploy project management practice, as they attempt to improve organizational performance. In this context, the excuse of lack of organizational expertise in project management on the part of these organizations appears to be unjustified. Second, the participants appear be fully aware of the leadership, people and technical facets of effective project management practices. The lack of importance of leadership-by-example is noted. The organizational culture of the public sector in Portugal stands to benefit from a well-designed top-down approach to effective leadership, which stressed the impact of leaders’ behavior. Also, educational and training efforts are called for to make decision-makers in the Portuguese public sector aware of the importance of the international aspects of their current and future projects. Third, Portuguese public sector organizations appear to be in need of investing toward re-inventing and modernizing their information systems. Such investment is needed in order to make critical information on key aspects of project management and organizational change readily and systematically available to project managers and other decision-makers. Fourth, the participants’ familiarity and awareness of the key facets of project management practices is encouraging. Perhaps this familiarity will smooth the required transition of public sector organizations from efficiency-based, closed operational systems to effectiveness-oriented open operational systems, where current anticipated needs of citizens are the driving force of such system. The framework depicted in Figure 1 attempts to conceptually outline the needed transition of public sector organizations from closed to more open systems through the effective utilization of management and project management know-how. In this context, the importance of benchmarking the success of the private sector is
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Figure 1. The effective transition to an open operational system for public sector organizations
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emphasized. This framework capitalizes on results and conclusions derived from this investigation. Due to the exploratory nature of this investigation, no specific hypotheses were tested. Future practical research is called for to test the utility of the proposed framework. Such research will be essential to test the practical utility of conceptually based framework.
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Smith, B. and Dodds, B. (1997), “Developing managers in the project-oriented organization”, Journal of European Industrial Training, Vol. 21 No. 5, pp. 165-70. Torres, L. and Pina, V. (2004), “Reshaping public administration: the Spanish experience compared to the UK”, Public Administration, Vol. 82 No. 2, pp. 445-64. Uhr, J. (1990), “Ethics and the Australian public services: making managerializm work”, Current Affairs Bulletin, Vol. 66 No. 11, pp. 22-9. Yasin, M.M., Czuchry, A.J. and Wafa, M.A. (2002), “Project management practices: then and now”, Thunderbird International Business Review, Vol. 44 No. 2, pp. 253-62. Yasin, M.M., Martin, J. and Czuchey, A. (2000a), “An empirical investigation of international project management practices – the role of international experience”, Project Management Journal, Vol. 31 No. 2, pp. 20-9. Yasin, M.M., Wafa, M.A. and Small, M.H. (2004), “Benchmarking JIT: Na analysis of JIT implementation in the manufacturing service and public sectors”, International Journal of Public Sector Management, Vol. 11 No. 1, pp. 74-92. Yasin, M., Czuchry, A., Martin, J. and Feagins, R. (2000b), “An open system approach to higher learning: the role of joint ventures with business”, Industrial Management & Data Systems, Vol. 100 No. 5, pp. 224-33. Ward, M.A. and Mitchell, S. (2004), “A comparison of the strategic priorities of public and private sector information resource management executives”, Government Information Quarterly, Vol. 21 No. 3, pp. 284-304. Wisniewski, M. and O´lafsson, S. (2004), “Developing balanced scorecards in local authorities: a comparison of experience”, International Journal of Productivity and Performance Management, Vol. 53 No. 7, pp. 602-10. Zimmerer, T.W. and Yasin, M.M. (1998), “A leadership profile of American managers”, Project Management Journal, Vol. 29 No. 1, pp. 31-8. Further reading Arau´jo, J. (2001), “Improving public service delivery: the crossroads between NPM and traditional bureaucracy”, Public Administration, Vol. 79 No. 4, pp. 915-32. Torres, L. and Pina, V. (2002), “Changes in public service delivery in the EU countries”, Public Money & Management, Vol. 22 No. 4, pp. 41-8. Yasin, M.M., Zimmerer, T.W. and Wafa, M.A. (1998), “Leadership characteristics impact on business organizations: a cross-cultural empirical investigation”, Journal of Global Business, Vol. 10 No. 1, pp. 13-24. Corresponding author Mahmoud M. Yasin can be contacted at:
[email protected]
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