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Editorial: On the Path to Greater Trust While Going Through a Major Transformation

Victor GREU The Information Management – The Essence of Using Communications and Information Technologies to Develop the Knowledge Based Society

The Customer Interaction Process: Managing Customer Integration, the Service Encounter and Service Recovery

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The Supply of Project Information to External Stakeholders

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Why is the Risk Analysis Essential in the Project Management Process?

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Interactions between Organizational Culture, Leadership and Project Success


Editorial:

On the Path to Greater Trust While Going Through a Major Transformation

In December 2013, William George, Professor of management practice at Harvard Business School and former Medtronic CEO (a board member of ExxonMobil, Goldman Sachs, and the Mayo Clinic; previously he served on the boards of Novartis AG and Target etc.),1 highlighted three aspects: companies exist to create value for the customers, and by doing that they create value for society; we need global leadership in this current period when capitalism is going through a major transformation; we need to reorient our way of thinking concerning capitalism and the way we think about the investor’s role in capitalism. In his distinguished opinion, to put a strategy in place today, when the capital becomes global and the resources have to ten - year time frame) to get it done. Professor George also argued that there is a real need to rightly understand the shareholder value, and the right commitment to long-term value, to values, and to the customers, while going for the long term. Looking at the arguments of Professor William George, it came again to my mind the comments made two years ago by Gary Hamel: (starting from the growing consensus that rampant consumerism debases human values) the real threat to capitalism is the unwillingness of executives to confront the changing expectations of their stakeholders, considering that in the way of creating a conscientious, accountable and sustainable sort of capitalism is standing a matrix of deeply held beliefs about what business is for, whose interests it serves and how it creates value („Capitalism is Dead. Long Live Capitalism”, September 20102); inventing an innovative business model (“Who’s Really Innovative?”, November 20103) is often mostly a matter of 1 2 3

Kirkland, R. - Bill George on rethinking capitalism, December 2013, Video


ed a fundamental retooling of a company’s management processes (the way it plans, budgets, allocates resources, measures performance, hires and compensates), by re-engineering them so they facilitate rather than frustrate bold thinking and radical doing (training employees as business innovators; ensuring the access of their employees to the sort of customer and industry insights that can help spur innovation; adequately constructing the metrics for tracking ina proper way of comparing innovation performance across teams and divisions and so on). dation” of Gary Hamel (the author of the foreword) was to „dig deeper” into „The New Capitalist Manifesto: Building a Disruptively Better Business”, Harvard Business Press, Jan 4 2011, written by Umair Haque, let’s remember that just a month before the publication of the book,4 Umair Haque underlined that the fundamental challenge of 21st century economics is creating more value of higher quality, not just low quality value in greater quantity, next-level advantage being constructive (Constructive Capitalists redrawing the boundaries of disruptive outperformance, taking a quantum leap beyond industrial and not a cause, not the accomplishment – which are the stuff of purpose. And to create the „thick value” (considered as being the foundation of 21st century economics) we’ve got to do meaningful stuff that matters the most, to people, society, and the future. (loss advantage, responsiveness, resilience, creativity, and difference), the loss advantage is seen by Umair Haque as minimizing a deadweight loss, the sum total of potential gains that are foregone in a why, at the end of 2011, we were launching the question if we are really ready to create the „thick value” and to use this source of next-level advantage which is „loss advantage”? And this within the context of highlighting the conclusions of „2011 Edelman Trust Barometer Findings” 5: Business must align landscape plus increased skepticism requires multiple voices and channels; demand for authority and accountability set new expectations for corporate leadership; trust is a protective agent and leads to .

And, as we are now at the end of 2013, let us take a look at the 13th annual Edelman Trust Barometer, the largest exploration of trust in institutions, industries and leaders.6 The authors consider that this year Edelman Trust Barometer uncovers some universal truths that can be the path to greater trust, 16 trust building attributes trust performance clusters (engagement: listens to customer needs and feedback, treats employees well, frequently and honestly on the state of its business; integrity: has ethical business practices, takes responsible actions to address an issue or crisis, has transparent and open business practices; products and services: offers high quality products or services, is an innovator of new products, services and ideas; purpose: works to protect and improve the environment, addresses society’s needs in its everyday business, creates programs that positively impact the local community, partners with NGO’s, governments and 3rd parties to address societal needs; operations: highly-regarded and widely admired top leadership, ranks on a global list of top companies, delivers con7

As the capital becomes global and the reas we have seen at the beginning of this presentation, as globalization is no longer what it used to be, as unfair competition is considered to be one of the causes of distrust in the corporate sector, and business must meet (according to the last Edelman Trust Barometer) expectations on engagement and integrity, being on the way from the knowledge economy towards the conceptual economy we need better rules and people, by developing social virtues and responsibilities.8 We also need to become integrative thinkers, to produce knowledge for wisdom, maturing interdisciplinary dialogue, becoming architects of conversations generating responsible action, while travelling through time to the destination where our judges are the future generations.

Editor - in - Chief

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THE INFORMATION MANAGEMENT THE ESSENCE OF USING COMMUNICATIONS AND INFORMATION TECHNOLOGIES TO DEVELOP THE KNOWLEDGE BASED SOCIETY

Prof. Eng. Ph.D. Victor GREU


Abstract

The paper presents the role of information as the main „vehicle” communications and information technologies (CIT) use to leverage every activity fields and every individual life in the „information age” stage of the human being evolution. Then the information management (IM) is resulting as the logical approach for the systemic optimization of the complex processes humankind encounters in developing the information society (IS) toward knowledge based society (KBS). For optimizing the economical and social environment on Earth and face the fast evolutons of CIT, IM must carefully use, step by step, 3 basic ingredients: accurate data, then relevant information and tracting information and eventually using this information in a complex process, where people, in a The paper emphasizes that, as a solution for stable growing, „learn and go on” is the way the humankind have to chose in the complicated context of such complex forces of the progress like CIT, resulting that the education remains the main ingredient, the key factor of exploiting these forces. when the humakind is at the „information age”, every human being must be school educated, but, tous as the water and electricity”, people must learn every day to use them and their useful optimization principles, like IM. Finally it resulted that we need more and more IM every day, but it is important to notice that IM means much more that we already know about „information” and about „management”, even if we add as main ingredient CIT.

Keywords: information management, communications and information technologies, information society, knowledge based society, education, big data.

JEL Classification: L63, L86, M15, O13, O33

Learn and go on – a way the humankind have to chose for growing Perhaps one of the most important phases in the humankind evolution was when the human being began to „learn” from the colective experience and generally to act after „thinking” in a correlation with the (social) environment. Without analyzing the sophisticated branches of the transformation of the „homo sapiens”, we just notice the crucial implications of acting on a correlative thinking base. man Thinking”, from which it results that [3]: „Humans had to learn to see the world from multiple social perspectives, to draw socially recursive inferences, and to monitor their own thinking via the normative standards of the group”. Of course, there is a long way humankind made until the „information age”, but it seems the above truth is more actual than ever been. Why learning is today more important than ever? This is a question that could appear strange.


but we feel it is not so strange and on contrary, it makes sense. More than this, the development of IS towards Although those questions are not very complicated, the paper could not fully answer them, but we shall try at least to approach and analyze their main implications and some practical aspects. Learning today should be easier if we consider the progress brought by the technology in general and especially by the communications and information technologies (CIT). On the other hand we have to recall the challenges people have to face when living in the IS [6], where CIT Adding the whole tehnical and historical evolution could complete the picture of „heritage” knowledge, but to With other words we may simply, but a little „shocked”, observe that almost all humankind „history” in data volume is now replicated in the last 2 years! So could be less impressive that every day we create 2.5 quintillion (1018) bytes (2.5 exabytes) of data, actually reffered as „big data” process [5]. Of course, there is also a way from data to information and then to knowledge, but we shall approach this too, as the information management is just in the middle of these terms. the speed or the pace CIT create by the texponential evolution of their products, services and implications. We have to observe, for paper space reasons, that, as we advance in our analyze, things become more complicated, more complex correlated and so on. In spite of the appearence, the above observation is not necessary pessimistic, because we have just arrived to the main point of the paper: the information management (IM) is resulting as the logical and necessary approach for the systemic optimization of the complex processes humankind encounters in developing IS towards KBS. It is obvous that the generic IM concept does not bring the answers to the above complicated questions, but it clearly points the systemic way they must be approached, step by step, from simple to complex, taking into account the appropriate set of rules and criteria. As we already presented [12], these sets of rules and criteria, associated with IM, have an essential role in IS re-considered, as the evolutions in IS are quickly changing. This way we may observe that the biggest challenges, for optimizing the IM and then the models in the IS toward KBS, include the „big data”, exponential CIT pace and their impact on the complex processes of humankind evolution on Earth. tion on Earth: apogee or decline? tive, with the condition to carefully „manage” their pace and criteria of development and application, in order question, but some answers could come if we analyze concrete examples of how IM could be correlated with the processes generated when people are creating or using the CIT products and services in actual Earth’s environment.

From simple counting to leveraging refined knowledge and more Before analyzing some concrete aspects, it is important to point here the the CIT exponential progress and reffers to the relative lack of performant algorithms, software and


management solutions versus the explosion of very performant available technologies. With simpler words, we often hear: „getting better results is rather a problem of management, than of technology”. contribution and generaly IS evolution toward KBS. But the IM itself does not better solve the complex problems of the humankind at the Information Age. applyed in every context. Today more than ever, inspite of the fast evolutons of CIT, the economical and social environment on Earth is asking to carefully use, step by step, 3 basic ingredients of IM: accurate data, then relevant All 3 phases suppose complex processes when they are created, transmitted and eventually used, but it value of IM. These are the premises which lead to the important conclusion that now, more than ever, IM needs a deep approach of every step and generally „when innovating, go slow” [1]. which must balance the „explosion” of CIT and data deluge (called „Exa-data” or „Big data”), was already approached and analyzed in [6], [13]. Among the reasons for „slow” innovating, we may count the complexity of criteria which must be a base of KBS. If „slow” innovating seems not an appropriate strategy, just notice that in the middle of CIT explo-

These days we assist at the development of drones by USA (and recently agreed by EU military speAn interesting example, althogh not coming from CIT, perhaps the most relevant for the complexity of its implications is the bio-fuel, a promising inovation, having a future depending, among others, on the negative implications to Earth’s food reserves. One could say that „counting” (no matter what) is an application too simple for today CIT, but lets person?) levels. If we make the next step (the actual document management software systems do) on the ing or certifying documents and generally data, for time, space, money, energy and all other implied resources. advantages due to CIT, but it is worth to remark that some of them would not be necessary without the „problems” created by ... CIT (e-mail being only one!). nection with the top of CIT development, as in the top of most powerful supercomputers of the world, As a „strike back”, Intel is developing a hybrid supercomputer, with 32000 multicore CPU-s and 48000 ”coprocessors”, using its 22-nanometer technology, which is still a generation ahead competition (AMD) [4].


The challenges that link these apparent disparate aspects are the main purpose of the World supercomputers: forecast of climate changes, brain wiring diagram, data deluge (for example: Large Hadron Collider- Geneve, Human Genom Decoding and so on) [10]. Now things began to be more convergent as we have seen that IM is important for „wise” counting anything, but when huge and complex projects, as the above mentioned ones, are dealing with the future of humankind life on Earth, we may agree that there is nothing more important to optimize than when achieving these goals. some mechanisms which involve IM in these processes. In fact here we found the most important context and concrete areas where the above 3 basic ingrediis also the most relevant process for the paper’s point. IS towards KBS as whole on Earth, but there are some areas and phases where the IM impact is overwelming and we just pointed them: life on Earth survival (including the reduction of climate changes creating data, then extracting information and eventually using this information in a complex process, Although in the above process CIT products and services are ubiquitous and fully used, today with amazing performances (speed, memory, conectivity), the multi-criteria complex decisions and the poto have non-optimal solutions or development evolutions. Now we can understand why „learn and go on” is indeed the way the humankind have to chose for stable growing, as we have seen that, in the complicated context of such complex forces of the progress like CIT, the education remains the main ingredient, the key factor of exploiting these forces. edge, its new components and added value, by a multi-criteria optimization process, where „education” is fully included but from a large and dynamic perspective. In fact, here we are considering a logical approach of processes, where IM is the main rule, but the criteria and the algorithms are very diverse and dynamic, depending on the application area, the scale and generally the context of the process. „information age”, every human being must be school educated, but, beyond the already „old” term of „conand grow. With simpler words, people must understand to use IM every day as they use the air to breath, if they want to On a parallel plan, as CIT products and services became „ubiquitous as the water and electricity”, people must learn every day to use them and their useful optimization principles, like IM or „network centric” [12]. grow. point, has to learn from the past, from the nature. Here it is very interesting to observe that, in spite of CIT actual „apogee”, when we get to the edge, we have to learn from the „research” made in thousands of years by the mother nature. going to a „bottle neck” and the solution seems to be „the cognitive network” – a biologically inspired routing [2]. The last challenge is only the tip of the „iceberg” and the „information centric” (that sounds very close to IM!)


seems to be just another „lesson” we will learn from CIT, after „network centric” [14]. The „iceberg” is nearly predictable if we notice that a CISCO report made a forecast for 2020, when about 50 billions of devices will populate what we already call „Internet of things”, starting from the kitchen refrigera-

Conclusions After analyzing the role of information as the main „vehicle” communications and „information age” stage of the human being evolution, the information management (IM) is resulting as the logical necessary approach for the systemic optimization of the complex processes humankind encounters in developing IS towards KBS. In order to optimize the economical and social environment on Earth and face the fast evolutons of CIT, IM must carefully use, step by step, 3 basic ingredients: accurate data, then relevant information

creating data, then extracting information and eventually using this information in a complex process, For stable growing, „learn and go on” is the way the humankind have to chose in the complicated context of such complex forces of the progress like CIT, resulting that the education remains the main ingredient, the key factor of exploiting these forces. „information age”, every human being must be school educated, but, beyond the already „old” term of to survive and grow. As CIT products and services became „ubiquitous as the water and electricity”, people must learn every day to use them and their useful optimization principles, like IM. Finally it seems that we need more and more IM every day, but it is fair to observe that IM means much more that we already know about „information” and about „management”, even if we add as main ingredient CIT. We feel that the best taste we can get (for the future life on Earth), although probably we do not know it yet, could be given by always adding something from the real world (from the context) – something that we will REFERENCES [1] G. Pascal Zachary, When innovating, Go slow, IEEE Spectrum, April 2013. [2] Antonio Liotta, The Cognitive Net, IEEE Spectrum, August 2013. [3] Michael Tomasello, A Natural History of Human Thinking, (to appear on HARVARD 2013. [4] Rachel Courtland, Intel strikes back, IEEE Spectrum, August 2013. [6] Victor Greu, Searching the right tracks of new technologies in the earth race for a balance between progress and survival, Romanian Distribution Committee Magazine, Volume 3, Issue1, Year 2012. [7] Abdulaziz S. Almazyad and Farooqui N.K., Towards Knowledge Based Society, [8] *** Towards a knowledge based Europe The European Union and the information society, European Commission Directorate General Press and Communication, October 2002. communications standards and beyond, Romanian Distribution Committee Magazine, Volume 4, Issue3, Year 2013. [10] Victor Greu, Evaluating the development steps based on life-inspired information and communications technologies, Romanian Distribution Committee Magazine, Volume 2, Issue4, Year 2011. [11] Sean Koehl, The Exa-scale Supercomputer of 2020, Intel European Research and Innovation Conference, September, 2010, (www.intel.com). [12] Victor Greu, The cognitive approaches of the communication and information technologies – a leverage for the progress of knowledge based society, Romanian Distribution Committee Magazine, Volume 3, Issue2, Year 2012. [13] Paul McFedries, The coming data deluge, IEEE Spectrum, feb.2011. [14] Victor Greu, The network centric and cloud - a new paradigm for the optimization of the technical and human information systems, Romanian Distribution Committee Magazine Volume 2, Issue 4, 2011.


The customer interaction process: Managing customer integration, the service ecounter and service recovery

Abstract Service interactions are – next to customer relationships – one of the primary value processes of a service provider. Due to the fact that in service situations value is created via the throughput of the customer through the service production process, and this throughput is realized in service interactions, these interactions are one of the major value drivers of ing the service interactions by integrating the customer, providing the service in the service encounter and a recovery service in case of service failures. These three main value-enhancing sub-processes contribute differently to a service service process, and secondly by preventing customer defections as a consequence of service failures. Keywords: Service Value, Customer Behaviour, External Factors, Relationships, Cost Effects

JEL Classification: L21, L22, L80, M21, M31


The interaction process can be divided into three sub-processes: customer integration, service production and service recovery. First, since a service can only be produced when the service provider and the customer meet, the interaction process needs to be initiated, the customer must bring the car to the garage, the mechanic has to put the car into the right position in order to start the inspection, or, the bank customer needs to come to the bank branch, to the ATM or visit the internet banking website of the bank. because of the simultaneity of service production and consumption during a service encounter, there is a high potential for failure. In contrast to goods manufacturing where requirements for a service encounter are very subjective and can change between customers or between provider and customer. For employee friendly or not. Because services are ambiguous, customers’ perceptions of service mistakes are less obvious than failures of tangible goods. Furthermore, in comparison to goods manufacturing, service failures are directly perceived by the customer in many cases, while failures in the production process of goods are often detected before the product is sold to the customer and before ence a customer’s behaviour more directly. When a customer perceives poor quality because of mistakes and does value will be affected by the service failures. Thus, when accepting that – to a certain extent – failures are inevitable for services, e.g. because of the human element in service production, then the reactions of a service provider to the failures are of major importance. These reactions are summarized under the concept of service recovery. Because of the relevance of failures in service production, service

hair, at a restaurant the customer directly perceives the processes of order taking, serving and billing. And during ‘production outcomes’ such as turbulence. Since customperceptions. value consequences regarding failures are twofold. First, failures themselves destroy value, because of lost revenues when customers defect because of the failures. Secondly, service recovery creates value by reacting to the failure, by compensation or – more indirectly – by using the information generated by the failure analysis to improve future interactions and thus improve value. While these impacts concern the revenue side of value, the cost side is also affected by service interactions. Due to the customers’ participation in service production, their behaviour who are experienced with a certain provider and its services, who tend to solve problems by themselves without asking too many questions or who are not that critical, are less cost-intensive than customers who use a service for the less attention from the service provider than the second. The latter demands more of the service employees’ time for answering the customer’s questions and redoing faulty activities. Since the working time of service employees is the most important cost component in many service industries, these examples illustrate that service interactions can

Customer integration

er’s throughput through the production process. Without the customer’s throughput, and therefore without integrating the external factor and thus, value cannot be created.

From a process-oriented view, customer integration is the process of integrating the external factor into the service process – a process that takes place prior to the actual service production. The service production process can only be conducted when the external factor has been integrated into the process. The integration process therefore encompasses all activities that provide the basis for the actual service production. In the case of ensuring that a language course student arrives at the language school, activities such as opening the school’s facilities, giving directions, letting the customer park their car; or a locksmith travelling to the home of a customer who has locked himself out. The prerequisites regarding the integration of the external factor necessary for service production vary depending on the following two dimensions.

many parts of the service production process. At the hairdresser, the customer can watch the stylist cutting their

i.e. the place where the service is produced and the customer is integrated. One can differentiate whether the service

Value Chain.

Value creation by service interactions The three processes - customer integration, service production and service recovery create value within a service process:


is produced at the customer’s place or the provider’s place. In the examples above, the language school’s services are provided at the provider’s place, while the locksmith’s service is produced at the customer’s place. The second dimension varies according to the type of external factor. whether the external factor is a human being or an object. According to these two dimensions, implications for services marketing can be drawn. the service is produced, has an impact on the requirements regarding the characteristics of the provider’s place. In cases where the service is produced at the provider’s premises the design of the provider’s premises determines how the external factor can be integrated into the service process. By providing elevaprovider ensures that disabled customers or clients with buggies can use all the services of the store. When the service encounter takes place at the customer’s place, such as repair services for washing machines, the distance of the provider’s place to the customer’s place determines the external factor’s integration by the time needed until a service can be produced and therefore the respective cost as well as the quality of the service delivered, especially in the case of an emergency.

Producing a service in the service encounter The service encounter is the heart of the service process. A service is produced during the service encounter where service resources and customers meet. The characteristics of a service encounter also affect the way these encounters are perceived by customers. As an encounter is a process, customers perceive it as a row of incidents resources of the service provider meet. In these situations, the actual service is produced. Service encounters can difcations for services marketing. Service encounters differ according to two dimensions, the type of service resource and the type of external factor that meet in the service encounter. type of service resource, indicates what kind of service resources are primarily utilised for service production. We differentiate between the two extreme forms: human resources, bank staff versus automated resources, the ATM at a bank. The type of

service provider. Automated resources are more standardized than human resources, and the challenges of ensurservice companies for human resources. Note that human resources and automated resources are extreme forms within these two extremes. Often, service encounters are divided into face-to-face, voice-to-voice and bit-to-bit encounters with voice-to-voice as a combined type with human parts (e.g. the telephonist) and automated parts (e.g. the telephone system). As with customer integration, the type of external factor is a valuable differentiator of service encounters. Human beings as external factors are often more heterogeneous and more active within the service process. They does an object as external factor. Therefore, when a human being is the external factor, the service process is much more dependent upon the external factor than in the case of objects as external factors. In addition, when human beings are integrated into the service process, the customer perceives the service process which results in there being more service dimensions that the service provider must address. This perception of the customer is also an important facet when understanding service encounters as a series of (critical) incidents. The external factor’s integration into the service process as a central service characteristic and the important role of the customer in the service production have already been stressed, although so far they have only been considered as a general notion. However, this ‘important role’ of the customer can have very different facets, and very different ‘customer roles’ in the service process can be distinguished. In order to consume the services of a cinema or theatre the customer has to go to the cinema complex or theatre. To have a car repaired, the customer has to take the car to the garage; at a hair salon, the customer attempts to articulate the desired hairstyle before and during the service process; and when parking a car in a car park, the customer ‘produces’ the service. The roles imply necessary activities of the service provider. Thus, the knowledge of the possible roles is important for services marketing.


Service recovery and

Conclusion

attribution The strength of the impact on satisfaction differs strongly according to various criteria. One important factor is the attribution of the failure by the customer. There are three dimensions used in order to describe the attribution:

customer for the service failure. There are at least three important alternatives: either the customer blames themselves or the service provider as an entity or employees of the service provider. whether the failure will occur repeatedly. In case of afwill be stronger. Although service customers might tend to attribute service failures to the provider, it is also possible that the customer attributes a failure to themselves. For example, when a student in a language school is unhappy with personal learning success, they may blame themselves more than the lecturer, especially if they acknowledge the fact that they have not participated fully due to disinterest or laziness. could have been prevented by the responsible party, then they are blamed even more; for example when there are two cashier checkout points and one of the checkout points is closed for cleaning or the cashier has gone for a lunch break. Customers in the queue will blame the cashier who is not at the checkout point, as the closure of the checkout point has resulted in unanticipated delays for the shoppers. A study including 354 customers of hair stylists, discount department stores, that customers who

Cost effects of service interactions are caused by the different degrees of customers’ participation in the service process. While some customers are cost intensive due to their behaviour during interactions, others are not. Customer participation is inherent in the service production to a greater or lesser degree of intensity. Accordingly, integrating the customer into the service process is a major task for services marketing. In order to manage these incidents and thus serservice resources, employees, technology and other facilities, and on the other hand – and most important for service production – the customer’s behaviour. Generally, a customer can assume different roles in service encounters, namely specifying the service, transferring the external factor, co-producing the service, dispensing with time and for many services co-using the service with other customers. The nature of services implies that failures happen in service encounters. Because of the simultaneous production and consumption of services as well as the customer’s participation it is almost impossible to realize ‘zero defects’ in services delivery. Therefore, service recovery is the third primary value process within the service interaction process value chain. Interestingly, according to the a successful recovery than they are without experiencing manage service recovery, service providers therefore aim at identifying service failures in order to react to the service failures by correcting the failure or compensating the customer.

References 1. 2.

blamed the service provider for a mistake evaluated the service worse than customers who blamed themselves.

3. 4. 5. 6. 7.

Burgers, A., de Ruyter, K., Keen, C. and Streukens, S. (2000) ‘Customer expectation dimensions of voice-to-voice service encounters: A scale-development study’ International Journal of Service Industry Management 11 (2) pp. 142–61 Farrell, A.M., Souchon, A.L. and Durden, G.R. (2001) ‘Service encounter conceptualisation: Employees’ service behaviours and customers’ service quality perceptions’ Journal of Marketing Management 17 Bebko, C.P. (2001) ‘Service encounter problems: Which service providers are more likely to be blamed?’ Journal of Services Marketing 15 Bruhn, M. (2002b) Relationship Marketing: Managing Customer Relationships, Harlow: Pearson Education. Bruhn, M. and Frommeyer, A. (2005) ‘Conceptualising and measuring communication quality’, unpublished working paper, University of Basel. Bruhn, M. and Grund, M. (2000) ‘Theory, development and implementation of national customer satisfaction indices: The Swiss Index of Customer Satisfaction (SWICS)’ Total Quality Management 11 (7) pp. 1017–18. Harvard Business Review 68 (4) pp. 148–65.

8. Journal of Consumer Marketing 7


THE SUPPLY OF PROJECT INFORMATION TO EXTERNAL STAKEHOLDERS Gina WAGENER ESC RENNES SCHOOL OF BUSINESS

Abstract This paper is about the supply of information to stakeholders of mega projects. In Germany there are special because of two aspects. Firstly, they all had to face much higher costs than expected and a longer construction process than estimated at the beginning. Secondly, all the projects failed to inform their stakeholders, especially the public. Although there are multiple reasons do people refuse to give information to their stakeholders and which consequences could have been avoided? At the end there will be some recommendations for better usage of information that can lead to project success.

Keywords: Information, mega projects, stakeholder D84, O22


Introduction Today the access to information is better than it has ever been before. People from around the world have access to the same information at the same time without any delay caused by delivery. In relation to these Project Information Management Systems were developed because of the high importance of information. But even though people are aware of the importance there are just a few companies that have implemented an information system that also informs stakeholders outside the company. Moreover there are several cases showing people obviously avoiding the share of information. That consequently leads to problems that maybe could have been avoided. Currently there are several mega projects in progress in Germany that have already had to face enormous delays and enormous additional costs. This phenomenon aroused the question, whether there are special reasons that cause the mentioned problems. Next to many different multiple reasons that can be named, this paper shall communicating the right information, or giving new information at all. Moreover the consequences which have already occurred will be examined. This paper will begin with a short overview of the need of information that the most important stake-


holders have and how they could be informed. Afterwards, three current mega projects in Germany will be presented, to show how external stakeholders are actually informed and what results can occur. The focus will be on some examples and mainly on the public. Finally, some recommendations for a better communication will be given. Followed by a summary of the most important arguments.

In a project there are different stakeholders which all have different needs of information. One important stakeholder of a project is of course the customer (Biafore, 2006). They want to be informed about the progress that has been made, the money that was spent and the results that were archived. They have the

companies objectives and whether a project should be continued or not. The team members need to understand their work and what they want to achieve. Finally the project manager needs to know more than all the other stakeholders. Managers must care about the performance for the entire duration of the project and must compare the planned results with achieved results. Therefore, all stakeholders must be provided with the right information at the right time. In the case be improved, errors can be avoided, better decisions can be made, improvements can be seen and the project management is easier to handle (Biafore, 2006). Especially the communication with external stakeholders can improve the reputation and helps to discover new trends that may lead to new innovations. The com-


state that information is a source of power that leads to project’s success, when it is used in the right way (Biafore, 2006). To reach the aim of a good information distribution, several software solutions exist. For example SAP provides a software named SEM-SRM that focuses on the communication with stakeholders. stakeholder groups and to deliver each group with the needed information. Moreover one can receive information about your stakeholders. One can prepare a questionnaire and send it to special groups. Therefore, an overview is gained of the special needs of For example, investors focus on the shareholder valall stakeholders can accept (SAP, n.d.). But even though managers are aware of the importance of information and software solutions, there are just a few companies that use the potential the communication with customers, media and investors provide. Most of the companies are only concerned about the strategy and objectives within the company. Employees and managers have access to the same information but stakeholders outside the company are often disregarded. To inform them seems to be an unpleasant, only compulsory task. But as already mentioned there are several advantages the communication with external stakeholders can achieve (PWC, n.d.). In the following, the focus will be on three mega projects in Germany and the communication with external stakeholders, especially the public.

Airport

new German airport in Berlin-Brandenburg. The construction of a new, very big airport is still in progOctober 2011. One year before the opening date the date was rescheduled to June 2012. But even this date and then to October 2013. Today there is no opening date at all, just the expectation that it will last one they stopped informing the public in view of uncertain development (Diekmann et al., 2013). Now the airport costs 20 Mio. Euros every month, because of round-the-clock lightning and air-conditioning. The costs are even higher than those of the Berlin Tegel Airport, where more than 400 aircraft take off and land every day (Spiegel, 2013). Therefore currently one can expect costs of 4.7 billion euro instead of 2.4

are responsible for the mentioned delay, one of the main reasons is disregarded and undelivered information. The board members had no real sense for critical details, technical problems and cost estimation. They trusted the workers like a young couple trusts in the builders of their new house. In June 2010 they realized there were serious problems, they had to face. But instead of going public and presenting the problematic themes to their stakeholders, the supervisory board chairman decided to give the impression that there were no problems at all. He even focused on new pieces of art for the terminal. In January 2011 the serious remark of an expert that everything will be much more expensive and take much longer, was ignored. Instead the board trusted in the chief planner´s statement, that he had the situation under control (Berg at al., 2012). In consideration of the mentioned example Even though the major reason for the opening date’s

One bad example for a mega project that con- dealing with these problems much earlier and more tinues to deliver false information to the public is the effectively. Information was available, but people refused to take it seriously. Especially as the superviso-


ry board chairman was Wowereit, the mayor of Berlin, himself. Therefore, besides a mega project and all problems connected with this, there were many other objectives occupying his mind, such as the next election. But next to the refusal of information, the delivery of wrong information must be considered. One group of important stakeholders of an airport are of course airlines like Air Berlin. The second biggest airline in Germany already had to face serious problems in the last years and decided to focus on the new airport and turn it into their new hub. Due to the unexpected delay, the airline had to face the loss of millions of euros. For this reason, at the end of last year Air Berlin sued the new airport for compensation for damage (Reuters, 2012). In view of the current unpredictable situation of the new Berlin airport one can easily expect further claims in the future. Another important stakeholder of the airport is the German railway company: Die Deutsche Bahn. They built a new underground connection to the new airport in view of the coming opening. Till October 2012 this construction already incurred costs of 34 Million Euro and each further month two million Euros mounted additionally. Therefore, the company is eager to retain these losses (Reuters, 2012). Further one can name the public as stakeholder. As the Airport Berlin-Brandenburg will be one of the biggest airports in Germany, a big part of the population is interested in the complementation and utilization of the airport. But because of the constantly published bad news about the airport, this has already become more a joke than a reputable building. Even before the opening the reputation was very bad and there will have to be a lot of promotion and supportive publicity to change the current attitude of the public. Thus, in consideration of just three important stakeholders one can see the effect of hidden and

which would be even worse than the current situation. The transportation system must be connected, but in view of the uncertainty of the Airport Berlin-Brandenburg, no stakeholder is able to make future plans including the new airport. So it is more and more important to keep in touch with the most important stakeholders and deliver as much information as possible. And even when no opening date can be named for sure, there should be at least a reliable prediction. Thanks to continuously changing announcements and promises the reputation already suffered a lot.

Another example for a mega project that could not yet meet expectations, is the Elbphilharmonie in Hamburg. The plan for the orchestra house was presented in 2005 by the mayor with costs of about 77 Million Euros. This already seemed a lot for the innally made and the Elbphilharmonie was to be built for 241 Million Euros. The opening date was scheduled for 2010. But because of unexpected costs and security measures the construction process stopped one and a half years ago (Diekmann et al., 2013). Just this summer the construction continued and the esti-

So this is ten times higher than originally presented (Spiegel, 2013). The opening date is now scheduled ment (Diekmann et al., 2013). In comparison to the Airport Berlin-Brandenburg the costs in this case are even more important than the missed opening date. Many people claim the height of costs and cannot believe that the increase of costs was unexpected. Today only the mayor of Hamburg seems to know where all the money is invested of wrong information resulted in further considerable (Spiegel, 2013). losses. And apart from these mentioned losses, adMoving to one important stakeholder one can ditional problems can follow. For example Air Ber- see comparable problems to the airport project. The lin could decide to focus on another airport as a hub,


project. Moreover they are the potential visitors of project. Finally the success of the project depends on their willingness to accept and support the new institution. But today the reputation of the Elbphilharmonie is comparable to the one of the Berlin Airport. People make fun of it and do not trust in new announcements. But as a response to the public´s information need, a new law was implemented that forces more transparency. Thanks to the new law, 178 pages of contracts were published on the internet. This already was a major step to regain the trust of the public. But even though information is theoretically available, nearly nobody can judge the given information (Zeit, 2013). Moreover not all information is included. For example the architecture contract is not included, so people still don´t know about the whole cost structure (Pergande, 2013). But even though not all information is included and understandable for everybody, the taxpayers feel better about the project since important information is delivered. Therefore, there are always people that understand at least parts of the contracts and can share this understanding with others. Thus, one can see a development of the infor-

are apparently the reason for the increase of costs (Diekmann et al., 2013). Current reports even present cost estimations of 8.5 or even 10 billion euros (DPA, 2013). The opening date is also rescheduled. Like the name `Stuttgart 21´ already includes, the station should be in operation in 2021. The newest announcements reveal a delay and plan to open the station one year later (Böhmer, 2013). In comparison with the two other mentioned projects the delay does not seem to

conclusions. One of the main problems with the mega project Stuttgart 21 was the resistance of the population. They claimed information was incomplete, not given or even wrong (Brettschneider, 2011). The Deutsche Bahn is blamed to have presented higher costs long after they knew about them and especially after decisions were made (Durchdenwald, 2013). The protest was on the street, in Facebook and Twitter but also in the Mass Media. People claimed the politicians wouldn´t take the public seriously. In general the project is a good example for bad communication. First of all the different shareholders, the Deutsche Bahn, the city of Stuttgart, the state of Baden-Württemberg and the federal governbecause they can access important information even ment in Berlin presented different information. Secthough they do not take the time to examine them. Politicians must also care more about their decisions no proactive information. And people did not receive and contracts just because the information is more appreciation for their suggestions and arguments. available (Zeit, 2013). The third critical aspect is the focus of the communication. The politicians focused on technical issues point, the station was presented without any alternatives. It seemed inevitable – people were left without The third example of a mega project in Ger- a choice (Brettschneider, 2011). many that failed to inform its stakeholders is the mega So the major problem was the ignorance of the project `Stuttgart 21´ – the construction of a new rail- the politicians recognised that they had to act and sented and costs of 2.5 billion Euros were estimated. work against the resistance. So they initiated a TV In 2008 cost expectations were around 3.1 billion, show, live on different channels, on the internet and and since the end of last year there are now total costs in the town hall. A discussion between the two opof 6.8 billion euros. Budgeting and planning mistakes positions where all questions could be asked and all


answers were given. The aim was to provide the missed different information than consumer. Moreover one has to discussion, where expert jargon was translated into laymen cussion as positive because important aspects were mentioned and information were easy to understand. Moreover there was a survey before and after the TV show. Before only one quarter of people said there was enough information about the project. Afterwards nearly half of the people schneider, 2011). Therefore one can conclude that the politicians understood the problem and started to work with the people. But there is still a strong resistance. On the third anniversary of Stuttgart 21 last month, 4,000 people demonstrated again against the project. This is even more than the last time, when only around 1,500 to 1,800 people were on the street (DPA, 2013). It is comparable to the Elbphil-

in the decision process. They still do not believe in new announcements and the reliability of the current schedule and costs. Another problem is that the reaction towards the public sector was too late. People were already convinced in their opinion towards the new station and organizations against the project were already founded. So in most cases it is only possible to reduce the anger and resistance against the project. To turn opponents into supporters is schneider, 2011).

After considering three examples for bad stakeholder relations one can give some recommendations for the future. The most important point is to give easy access to the information. One can use a software program like the one from SAP and divide the different stakeholder groups, so that it is easy to offer the right information to the different groups. In case the purchase of a program is too expensive one can simply share information via the internet and the press. But people need more than just the access to important information. They need the right information at the right time in a comprehensive way. Shareholders ask for

avoid an information overload. Simply to provide a hundred pages of contracts is not suitable for many stakeholders. Information have to be adapted according to the different groups. Moreover information must be presented as opchoice. They want to decide. The material has to be neutral, even though they have to be prepared for the different groups of interest, so that everyone can understand and follow the discussion. One must provide transparency as much as possible (Brettschneider, 2011). Another important point is to mention and explain the objectives of the project. All the positive and negative aspects should be presented. In most of the cases there will be no agreement between all stakeholder groups and there will always be people against a project, but it is important that their arguments were taken into consideration. Opponents have to receive an explanation so that they feel appreciated (PWC, n.d.).

Finally it is obvious that there can be many negathe three mega projects had to face increasing costs that were in one case even ten times higher than estimated. In fact all projects are still in progress and we still do not with a delay. In many cases problems were considered much too late so that the schedule had to change and deadlines could not be met. Further, some projects had to deal with accusations and as a result of this, really bad reputation. All the projects are now famous for political failure and arrogance. The mentioned problems were all caused by difgard of information. People tend to avoid bad news and try to focus on good news. In a project with many different managers and executives there are always optimists and pessimists. If you follow the optimistic reports you can team no one feels responsible for news. But sometimes information is simply not given. Project managers assume everything will work out till the next deadline and they prefer not to inform others. Espe-


cially politicians hide information to avoid resistance in the public. But in the three considered cases the bad news will always come to light. Another problem is that people do not understand the information. As mentioned at the beginning it is easy to share information and access it. But often the board members are not able to interpret all the information. They do not have enough experience with mega projects, so they need the judgement of the technic people, who are often not included in the decision process. The problem of understanding information is also valid for the public. The Elbphilharmonie in Hamburg simply provided all information on the internet. But only a small amount of people really can cope with the numbers and understand the jargon of the contracts. Therefore it would really be necessary to add a document which only contains the important numbers and explanations. But even without explanation people feel better about a project when all numbers are published. Politicians have to be careful then. When everyone has free access to the numbers, executives will certainly act more responsibly to avoid possible resistance. It is important simply to pay attention to the stakeholders because they want to be heard. It is more important to appreciate contra arguments than to have the perfect arguments against. Nonetheless there has to be good So an airport, a train station and especially the Elbphilharmonie will certainly increase welfare, but this has to be promoted. The Elbphilharmonie seemed more like an exorbitant building that politicians built for their own reputation. When a mega project is presented to the public

their expectations. The Scientist Rothengatter found out, rather than present reliable information. So it is common to present cost estimations much too optimistically. Risks are faded out. Many projects would have never been accepted and implemented after a realistic presentation. Moreover executives never feel responsible as long they do not have to pay for increasing costs on their own. They only receive (Diekmann et al., 2013). Ultimately, one can state that it is of high importance to deliver information about mega projects. Even

for all the delays and cost increases, it is an easy task to improve the information management within a project and to improve project success.

References Berg, S., Deggerich, M., Hornig, F., Wassermann, A., 2012, Project Megalomania: How the New Berlin Airport Project Fell Apart, Spiegel, 22 how-the-new-berlin-airport-project-fell-apart-a-868283.html Biafore, Bonnie, 2006, Improve project performance by sharing information,

Böhmer, Reinhold, 2013, Eröffnung von Stuttgart 21 erst Ende 2022, Wirtschaftswoche, 2 Mar, available at: interne-risikokalkulation-der-bahn-eroeffnung-von-stuttgart-21-erst-enBrettschneider, Frank, 2011, Kommunikation und Meinungsbildung bei Großprojekten, Bundeszentrale für politische Bildung – BPB, 26 Oct, available at: Diekmann, F., Kröger, M., Reimann, A., 2013, Desaster bei öffentlichen available at: und-co-so-teuer-werden-a-876311.html DPA, 2013, Tausende demonstrieren am Jahrestag, Stuttgarter Zeitung, 30 Sep, available at: -

DPA, 2013, Termin für Berliner Flughafen bleibt offen, Frankfurter Allgemeine Zeitung, 3 Aug, available at: html Durchdenwald, T., Nauke, J., 2013, Kritiker werfen der Bahn Vertuschung vor, Stuttgarter Zeitung, 2 Aug, available at: stuttgart-21-kritiker-werfen-der-bahn-vertuschung-vor.8641fcd7-a53e-4d60Pergande, Frank, 2013, Koste Sie, was sie wolle, Frankfurter Allgemeine Zeitung, 30 May, available at:

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PWC, (n.d.), Zielgerichteter Dialog mit Stakeholdern wirkt in die Unternehmen hinein, available at: log-mit-stakeholdern-wirkt-in-die-unternehmen-hinein.jhtml SAP, (n.d.), Stakeholder Relationship Management (SEM-SRM), available at:

Spiegel, 2013, Einigung mit Hochtief: Bauarbeiten an der Elbphilharmonie können wieder losgehen, 20 Jun, available at:

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Reuters, 2012, Air Berlin verklagt Berliner Flughafengesellschaft, Die Welt, 6 Nov, available at: fengesellschaft.html Reuters, 2012, Pannenserie: Air Berlin verklagt Flughafenbetreiber, Spiegel, 6 Nov, available at: Zeit, 2013, Transparenz-Aktivisten ringen mit Juristendeutsch, 17 Jan, available at: burg-transparenzgesetz

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WHY IS THE RISK ANALYSIS ESSENTIAL

IN THE PROJECT MANAGEMENT

PROCESS?

Mylène RUBIN ESC RENNES SCHOOL OF BUSINESS

Abstract: According to some experts, the risk analysis is a complex and compulsory step in the project management

Key words: JEL Code:


Figure 1: Fishbone Diagram Source: Work cited

As we can see this diagram helps project managers to more easily approach and understand the


Figure 2: Risk Matrix – January Press Conference Source: Work cited Regarding this risk matrix we can conclude that project managers has to focus on the attractiveness three points are the three most dangerous risks concerning the lack of spectators, a negative outcome because we consider the audience as one of the press conference successful factor. Thanks to the qualitative those which can be ignored. Once the qualitative analysis is done, the project manager can do a quantitative one in order to be always more accurate and reassure the stakeholders. One of the most famous quantitative tools is the 6 steps Failure Mode and Effect Analysis (FMEA) (Stamatis, 2003). The project manager impact with a 10 points scale from “no effect” to “very severe”. This evaluation is associated with the letter “S”. Then the project manager evaluates in the same way the likelihood with the letter “L” and last the abilNumber: RPN = S X L X D the “S”, the “L” or the “D” for each risk to be more able to avoid it in time and raise the potential success of his project (Stamatis, 2003).


during my internship that this approach was the

enhance and accept.

know and understand this measure to quickly

shared with the team or really implemented in the totally useless.


Conclusion


, Vol.15,

projects, Management 6ème édition Business Review PM Network

PM Network PM Network ., 2003

PM Network , Vol. 25, pp.

Frederic Cordel, Échecs


INTERACTIONS BETWEEN ORGANIZATIONAL CULTURE, LEADERSHIP AND PROJECT SUCCESS Pauline BEBIN

ESC RENNES SCHOOL OF BUSINESS

ABSTRACT Due to the current globalization and the competition involved, companies are looking for being even more competitive and successful. In such a context, projects take on a particular and crucial importance in corporate beliefs and values. It provides the general rules and norms as well as the interaction patterns: some cultures can be more performance-oriented while others can harm the project proceedings. In addition, it matters that employees know and understand their organizational culture. From then on, project leaders assume greater a crucial element: they have to communicate regularly on the project progress, ask for feedback in order to implement corrective actions as soon as possible. A good communication ensures team members understand what they have to do, when and why they need to do it. They also should reward and recognize the work being done by their teams. By doing so, the leader makes sure the working environment is favorable to cooperation and enhances team performance and effectiveness. They hence need to build and strengthen mutual objectives of such cooperation – by fostering collaboration between team members to make them impact on project outcomes. Both leaders’ attributes and personality as well as corporate culture are decisive in running a successful project.

Key words: Project management, Organizational culture, Leadership JEL Classification: D21, M12, M14, M16 INTRODUCTION


impact on the success of the group’s culture and The concept of organizational culture is not new.

role since formal, rigid and control structures – for its decision patterns, leads its actions and impacts instance – can favor the promotion of functional individual behaviour. Culture can be ambivalent as on one side it can provide stability but it can also erect Finally, as we will more deeply stress it in the next barriers preventing the company to get the results part, leadership actions are decisive because they expected and to remain competitive. And this is very communicate what really matters for the company, challenging for project leaders who have to understand such as values, beliefs and assumptions. And all of and adapt to different behaviours and norms across these elements affect the employees’ perception of the organizational and how they behave. (Suda, 2007) Organizational culture thus plays a crucial role in and adaptable in order to run successful projects. the success of a project. Indeed, it is more likely to The purpose of this paper is to understand the links meet expectations when the company rewards change between organizational culture, leadership and and innovation, makes sure the project is not too big project success. In other words, how does culture and remains manageable, selects a dedicated project team, supports the project from the start to the end, and communicates on project progress. As well, is and its implications on project success. Then we corporate culture has to recognize team members’ will focus on leadership style and on their role in work and treat them fairly in order to make them understand what they need to do to make the project link between strategy, culture and leaders. successful. Besides, a strong pervaded culture creates 1.ORGANIZATIONAL CULTURE

generates commitment to the values of the company. (Suda, 2007). Hence, strong organizational cultures can enable the enterprise to strengthen its performance and to adapt to changing environments. In addition, it is crucial to understand the organizational culture to run successful

Corporate culture is about the enterprise way of operating and its behavior norms. According to Thompson and Mc. Hugh, culture as a management instrument “mobilizes combinations of values, language, rituals and myths, is seen as the key factor in unlocking commitment and enthusiasm of the way people perform and relate to each other. employees” (Choueke and Armstrong, 2000). 1.2 Organizational culture : a missing perspective 1.1. Organizational cultures that enhance performance Organizational culture is shaped by powerful internal – the vision, mission and strategy of the company – and external – environmental concerns, political trends, religion forces – which also impact projects. For instance, Southwest Airline’s employees know precisely their company’s strategy which greatly

Choueke and Armstrong (2000) make a distinction between the formal culture – which is managed and recognized by the senior management – and the informal one – which is a result of both job-related and social interaction. Culture is an organic process since workers learn about and adapt to the senior management’s view of business, but at the same time they combine their work experience with it to


make informal and formal cultures of work-group evolve. Their study reveals that people in organization are rather aware of the interactions between the culture and the project success. For them culture is driven by the managers who run the business and set the norms, standards and behavior patterns. Moreover, the more organizational culture favors learning cycles (learn from the mistakes made, continuous development and training), the more successful the project is likely to be. Work atmosphere also matters: culture should foster cooperation among team project. So workers seem to have a clear understanding of what the corporate culture is and they recognize its uniqueness. Hence, a challenge for the project managers is to move to a collaborative approach in order to put workers aspirations at the heart of the company preoccupations and to provide a positive work environment. And as we will see in the next part, this role can gear business growth and make project more successful. 1.3 Knowing your organizational culture: a way to create an effective project team culture Assessing and understanding the company’s culture can create the difference between failure and success in our current changing economic environment. And they are leaders who have the responsibility to provide this managers pay attention to and reward: it gives an insight into the true organizational culture and it underlies its real beliefs and values. Indeed, what a company wants to be can be totally different from the values and norms expressed in its daily practices. Moreover, William Schneider created a model – the four core cultures – to identify systematic processes that project leaders use to make sense of their environment. He underlines for each of the four cultures on what they focus on and how they make decisions (see Exhibit 1).

Source: Extracted from: Suda, L. (2007). Linking strategy, leadership and organization culture for project success. Available at “Linking strategy, leadership and organization culture for porject success”. PM World Today, Volume 9, Issue 9, September, p. 5 We obtain the four core cultures by combining the two axes with one another. The horizontal axis stresses the decision-making process of the company while the vertical one focuses on what it pays attention to. First, the Control Core Culture can be compared to militaristic model as it aims at ensuring predictability, certainty, safety and accuracy. Secondly, the Competence one concentrates on gaining distinction and achievement and


for synergy. It deals with ensuring close connections and unity and pays a particular attention to tangible and concrete reality, actual experience and utility. Yet, it adopts a people driven and informal decision-making process. Finally the Cultivation Core Culture is about enrichment through meaningfulness, religion and selfactualization. It is concerned about potential, beliefs, creativity and aspirations by applying an open-minded, people driven and subjective decision-making method. (Suda, 2007) In more than transmitting the organizational beliefs and values to the team members, the project leader creates

about the organizational values and expectations and developing strategies to overcome potential issues. For instance, when a project manager is leading a high competence core culture team whereas the organizational

by making sure the team understands the strengths and nature of the corporate culture. In addition, to favor and relate to each other as well as their manager’s particular leadership style and their view of success. The same goes for the leaders who have to appreciate the company’s beliefs and values to be able to adapt their behavior and to develop more effective strategy to make their projects successful. 2. LEADERSHIP Management literature has usually emphasized on a strong connection and interaction between culture and

of which they are members” (House et al., 2003) 2.1 Implement an harmonious environment Project leaders need to pay a particular attention to the people involved in the projects since fostering harmonious teamwork positively impacts the enterprise performance. Dr. Parviz F. Rad, PE CCE, and Dr. and productive learning. So the role of the manager is to create cohesion which is more dependent on the corporate culture than on the project. In other words, team culture is minimally affected by the missions as the organizational culture is more pervasive. As a result leaders must determine how team members should management, communication) and performance (duties) norms. They also have to select the people with the desirable attributes to favor performance such as dedication, trust, commitment etc. In addition, project managers can create a charter to describe how team members should participate in the decision making process as well as how they should perform to meet project expectations. This team charter needs to include guidelines and processes of communicative procedures and patterns of cooperative in order to will enable these projects to succeed. So leaders should take into account these topics – of attitudinal and performance attributes – when it comes to hire new people.


2.2 Communicate to enhance project effectiveness Effective leaders articulate clear messages by ensuring a good and frequent two-way communication – topdown and down-to-top – with their team about schedule, costs and scopes of the project. They also should favor direct communication style such as faceto-face or voice-to-voice to be sure everything is clear and to get direct feedback on what is said. It is a way to enhance free exchanges on progress, concerns and opinions of the team and it will result in an even more cooperative and synergistic work climate. Indeed, such a communication can foster intellectual diversity and thus the team project will be able to capitalize

it stresses leaders need to match environmental – authority system, task structures, work group – and contingency – experience, locus of control, perceived

task structure (clearness of the instructions), managermember relations (the leader should be liked and trust), and position of power. Finally the Visionary School distinguishes the transactional – the manager rewards workers for meeting performance targets and manages by exception – and the transformational – the manager needs to have charisma, to convey a vision and to motivate workers through high expectations – leaders. Keegan and Den Hartog (2004) conclude that

commitment and manager leadership style. In solutions. It is also a way to create a sense of mutual addition, Dulewicz and Higgs (2003) identify three purpose (Ryan, 2008). Therefore, the better quality competences that explain managerial performance: and anticipated through negotiation and compromise. performance – managerial competence – counts for Spending time listening and speaking to employees convey a meaningful message. In addition some leaders provide rewards and incentives, foster group and individual competition and favor synergic and collaborative relationships in order to make the project they run succeed. 2.3 Leadership style as a success factor in projects

Muller, 2005) impact on the success of a project; as a consequence the project manager has an important leadership role in fusing and developing characteristics of the the organization performance. Indeed the results of

leaders is the most important factor for business, and Six main schools about leadership theory were thus project success (House et al., 2004). established over the last seventy years. Here we will only focus on three theories. The Behavioral 3.IMPACT ON PROJECT SUCCESS – LINK BETWEEN CULTURE, STRATEGY AND LEADERSHIP not born but can be made since they can acquire behaviors favorable to project management. Indeed a good leader must be concerned for production and We saw that organizational culture and leadership making and taking processes. The Contingency by the other. Now we will discuss the impact of such trends added to the previous theory that leader a relationship on project success. 3.1 How to measure a project success effectiveness depends also on the situation. The pathgoal theory stands this view: the manager must help Over time the ways project managers measure


continuous feedback since real time information can were focused on measuring time, implementation, enable managers to remedy shortfalls in execution and functionality and cost improvements, delivery (project completed on time). reward their staff to motivate and involve them. Therefore, it seems that the more leaders turn their over and the planning prevailed over technical aspects. projects into great performance, the more they During this period, stakeholder and organizational perspectives were also considered as Critical Success they are to commit themselves: a virtuous circle is Factors (CSF). More recently, success in project seems to be more stakeholder-dependent and to consider staff 3.3 Implications for the project leaders development and growth as well as the environment issue. Scholars estimate that in a closed future, CSF As we have shown, projects can have profound impacts on the organization and people within it since project leaders’ perception of success, their leadership they can transform some parts of the organization. style and their competences. Indeed, project managers Therefore, project managers must be able to interact have to be competent and chosen rather on their with numerous sub-cultural elements: they need to be managerial skills than on their technical skills since aware of cultural differences (in values, assumptions they must make sure things are well done. So people, etc.) in order to avoid misunderstanding and including management and leadership, do appear as success factors. (Turner and Muller, 2005). an effort to listen and speak in ways that take these 3.2 Make the project more effective succeed, it thus seems to matter to see the company To realize more of their project potential, companies as a living social system, to assess its core culture, to have to create links between planning and execution link the project with the organization strategy, to be in order to objectively evaluate any performance aware of the main culture as well as sub-cultures. shortfalls and to determine where it stems from (the As well, the project leader is in charge of implementing execution, the plan, the strategy, capabilities) which a trustful working environment to enable team

make it concrete by explaining the goals of the project and why it is headed by making the link between the company strategy and performance. Barclays uses this approach to keep every employee in the same direction. By communicating the objectives of the project, the top managers can build trust between effective and fast execution. In addition, they must forecast well in advance the resources they need to run and execute the project as well as clearly identify the priorities to enable the team members to know where to direct their efforts. The next step is to monitor the team performance by using

factor of economic success. Indeed, building trust within workers enhances cooperation and information sharing which affect task performance and enable to save time – as Jarvenpaa et al. (Schilcher et al., 2011) underline it – and thus it optimizes the success of the project. Project leaders must manage trust in cooperation projects since a high level of trust can speed up the processes development while reducing costs. Schewe (2008) and Sprenger (2007) think mutual trust can cut transaction costs and limit extensive processes of regulation and controlling and at the same time it fosters creativity. Besides, in their empirical study, Schilcher et al. (2011) showed the main challenge in


building such cooperation “lies in the coordination on the failure or success of a project. of interests among […] partners”. So it is up to the project manager to face potential problems concerning References loyalties and to enhance every member’s commitment by focusing all the team on common objectives and House R., Javidan M., Hanges P. and Dorfman P., Gupta V. (2004). from such a team work. Therefore project leaders need to meet their colleagues in person in order to better know them at the beginning of the project, they also have to communicate the strategies and the perspectives of the project. They can organize workshops for instance to enlighten the So to build and strengthen trustful relationships, they

of such cooperation. Then they should foster collaboration between team members to make them gain experience.

CONCLUSION It seems obvious that managers’ leadership style and competences are key to successful performance in projects. In addition, organizational culture strongly impacts on leaders’ behaviors and attributes which

and successfully. Besides, the transformational leadership theory popularity is growing: it states that managers who dispose of high authority can change their organizations by inspiring a new vision. They succeed in implementing projects thanks to their ability to foster positive relationships between team members and to a regular communication on the process and purposes of the project. As a result the more project managers succeed in communicating, the more tem members follow their visions and leadership style and vice versa which strongly impact

Culture, leadership, and organization the GLOBE study of 62 societies, California, London: SAGE Weaver P. (2004). Success in your project, Prentice-hall Choueke R., Armstrong R., (2000) “Culture: a missing perspective on small- and medium-sized enterprise development?”, International Journal of Entrepreneurial Behaviour & Research, Volume 6, Issue 4, pp.227 – 238 House R., Javidan M., Hanges P. and Dorfman P. (2002). “Understanding cultures and implicit leadership theories across the globe: an introduction to project GLOBE”. Journal of World Business, Issue 37, pp. 3-10. House R.J., Hanges P.J., Ruiz-Quintanilla S.A., Dorfman P.W., Javidan M., Dickson M.. (2000). organizations: Project Globe, Available at Lauring J. and Selmer J. (2011). “Frequent knowledge sharing in multicultural organizations”. Personnel Review, Volume 40, Issue 3, Available at:

organization”. Hadvard Business Review, May, pp64-72 Morrison M., Brown C.J. and Smit E.v.d.M. (2008). “The impact of organizational culture on project management in matrix organizations”. South African Journal of Business Management. December, p. 27-36. project team”. AACE International Transactions Rodney Turner J, Muller R. (2005). “The project manager’s leadership style as a success factor on projects: a literature review. Project Management Journal” Ryan N, Williams T, Charles M and Waterhouse J. (2008). “Top-down organizational change initiatives”. The International Journal of Public Sector Management, Volume 21 Number 1, Available at IIVm2. Schilcher C., Poth A.K., Sauer S., Stiefel K.P. And Will-Zocholl Organizational issues”. International Journal of Business Research, Smith M.E., (2003) “Changing an organisation’s culture: correlates of success and failure”, Leadership & Organization Development Journal,

Suda L. (2007). “Linking strategy, leadership and organization culture for porject success”. PM World Today,


Romanian Distribution Committe Magazine Volume 4 Issue 4  

Romanian Distribution Committee Magazine

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