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The methodology to research of internal, external stakeholders in megaprojects Ivana Burcar Dunović Agnieszka Lukasiewicz Louis-Francois Pau.

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Presentation on theme: "The methodology to research of internal, external stakeholders in megaprojects Ivana Burcar Dunović Agnieszka Lukasiewicz Louis-Francois Pau."— Presentation transcript:

1 The methodology to research of internal, external stakeholders in megaprojects Ivana Burcar Dunović Agnieszka Lukasiewicz Louis-Francois Pau

2 Research questions How project context and local cultures influence stakeholder’s behaviour? How do the stakeholders interact? How do stakeholders impact the project thorough their behaviour? How to measure stakeholder involvement? NB: how is involvement defined? - Project performance by classical metrics is only a CONSEQUENCE of the above Therefore data analysis of project performances alone is like looking at output variables, without considering exogeneous and endogenesous variables.

3 Research concept Culture and context Stakeholders (eksternal) Impact on the project

4 CONTEXTUAL & CULTURAL BASIS (L-F) Method based on measures from established disciplines: A) culturally affected micro-behaviors (of individuals and teams within each stakeholder) B) physioeconomics C) synergy processes in organizational theory Analysis of these measures by gap analysis is carried out In the gap analysis, an attribute value 3 corresponds to a normal situation, while 1 and 5 correspond to opposite extremes in the cultural and organizational sense Resulting in a toolbox to characterize and compare megaprojects based on their contextual and cultural attributes

5 CONTEXTUAL & CULTURAL BASIS: GAP ANALYSIS MEASURES (I) Leadership style Promoting equality/open to compromise – 1 Using hierarchy/authority – 5 Project concept incubation style Innovative – 1 Conformity or standard solution to a new situation – 5 Endorsement processes in the project initiation phase Bottom-up/ Democratic/ Critics allowed - 1 Top-down/ Authoritarian/ No critics allowed – 5 Project staffing Few people / high skills – 1 Plentifull / average skills – 5 Communications style around project No public communication - 1 Wide public communication and feedback -5 Governance None / Minimal – 1 Public scrutinity / Company wide - 5 Some measures are exogeneous, while others depend on user feedback

6 GAP ANALYSIS MEASURES (II) Organizational team culture No synergy / Conflict prone - 1 High synergy / Organizational Consensus – 5 Executing and controlling the project Formal /Rigid / Heavy forward planning and reviews – 1 Pragmatic / Tools as a support – 5 Accountability for success/failure Decentralized between stakeholders – 1 Centralized – 5 Significant fines actually levied in case of delays Nominal Significant / Dissuasive Risk view by Project owners (attitude) Embracing risk - 1 Avoiding risk - 5 Willingness of Project owners to change contractors Low - 1 High - 5

7 GAP ANALYSIS MEASURES (III) Values: Main contractor Promote Social and public value of the project – 1 Profitability – 5 Values: Project funders Promote Social and public value of the project – 1 Profitability-5 Political interference Weak - 1 Strong - 5 Project achieving Green policy goals None - 1 Very significant - 5

8 ANALYSIS and OUTPUT OF CULTURAL MEASURES Case data from a megaproject: e.g. Anholt Offshore Wind Farm (now completed) : (Denmark, References, (3,1,2,5,4,2,4,4,5,4,4,2,2,3,2,5)) Analysis of cultural measures a)Clustering into groups of megaprojects exposed to similar contextual and cultural influences (across countries, or within a given country) b)Comparison of extremes for a given measure, and justification by cultural differences in behavioral, organizational or decision traditions OUTPUT for Stakeholder network analysis : a) homogeneous clusters of similar megaprojects (clustered by a)) b) or megaprojects grouped by extreme values of a given cultural attribute, to better explain stakeholder relations due to that attribute

9 ILLUSTRATION OF OUTPUT TO NEXT LEVEL Social network analysis of stakeholder relations Politically driven projects Projects with lean management and high team synergies Projects with high loss risk on project manager (loss of contract, fines) NB: The three bottom clusters are examples generated by clustering from data

10 INTERACTION FLOW Culture and context Stakeholder behavior Stakeholder interactions Exogenous Project execution Endogenous Impact Perform ance Output Project values and user-stakeholder assessment USERS are key; you dont do a project for stakeholders also and their feedback impacts selection of stakeholders !!!!! ??????

11 Stakeholders impact cluster (I&A ) On what? From the external stakeholder’s point of view the most important is the sustainability personal /internal global/ external the PRiSM (Project Integrating Sustainable Method) or Green Project management allows us analyse interest and impact of stakeholders The concept is based on 5P’s Product/The deliverable- result Process People/Social Planet/Environmental3P’s Profit/Economical

12 OMEGA Centre’s adaptation of the HalSTAR systems model of sustainability

13 Examples of UK sustainability policy mapped onto the adapted HalSTAR wheel

14 Culture and context Sustainability The project How stakeholders influence the project? 1. P process 2.P product 3. P - People/Social – personal and/or global 4.P - Planet/Ecological - personal and/or global 5.P -Profit/Economical - personal and/or global Institutional - personal and/or global External Stakeholders Internal Stakeholders Side- effects “The triangle – performance” Endogeneous Exogeneous

15 Current evaluation approaches Evaluating the total impact of stakeholders in relation to the project requires more than identifying the impact level and probability of impact. (…..) Project managers need to assess the stakeholder attributes and classes (Mitchell et al., 1997), and their position towards the project (Cleland, 1986; Winch and Bonke, 2002)—are they opponents or proponents? Stakeholder atributes (Olander): value (A) = power x legitimacy x urgency position value (Pos) interest–impact index (ViII), Evaluation - stakeholder impact index (SII) as a function of A, Pos and ViII.

16 Stakeholder measurements

17 External stakeholder network Elements /Nodes/Constructs – external stakeholders Connections Internal – within the network External to 5P To context, culture and policy makers Possible tools : Causal/cognitive mapping Social Network analysis ANP – analytical network process

18 Stakeholder’s interaction characteristics - attributes Can be increased or decreased by the mutual stakeholder interactions 1. Power – the ability to change the process (1 to 5) What gives the power to the stakeholders Inherent Legal power Political power Social capital Business power/capital (money, hiring,….) Inherited Due to administra tive flaws due to media influence Informaniveness 2. Grade of Interest – willingness to engage (1 to 5) Likert scale 3. Attitude – positive or negative (-3 to-1 and+1 to+3) Stapel scale

19 Proposed Stakeholder’s measurement characteristics - attributes 1.Power x Attitude – from -5 to 5 (it cannot be zero) 2. Proximity = 1/(Power x Grade of interest) From 0,04 to 0,2 3. Attitude/Power x Grade of interest (???) = attitude x proximity = stakeholder value -0,2 to -0,04 or 0,04 to 0,2 NB: Are only 1 and 2 needed? Instead of fixing such closed form expressions, why not let non linear regression determine the actual formulas??? OK, we could do that too but we do not have all data values.

20 Interactions between external (?) stakeholders Frequency of interaction /communication (1-5) NB: It has been shown that frequency alone is a poor measure – yes, but this is why we will combine it with other measures Type of interactions – cooperation vs. Competition For each stakeholder (this is specific to each stakeholder and assymmetric) - Yes, that was the intention (Modified Likert ) Cooperation +5 Coopetition Competition -5

21 Example of the network representation S1S2S3S4 S10s1,2s1,3s1,4 S2s2,10s2,3s2,4 S3s3,1s4,10s3,4 S4s4,1s4,2s4,30 S1 S2 S4 S3 S1,3 S3,1 S2,1 S1,2 S3,4 S4,3 S2,4 S4,2 S1S2S3S4 S10s1,2s1,3s1,4 S2s2,10s2,3s2,4 S3s3,1s4,10s3,4 S4s4,1s4,2s4,30 Frequency Nature of relationship

22 How external stakeholders influenced the process, product and 3P (?-too general) – it is aggregated ProcessProductPlanetPeopleProfitInstitutional Int.Ext.Int.Ext.Int.Ext.Int.Ext. Stak 1 Stak 2 Stak 3 Stak 4 Stak 5 This is the framework to obtain the information based on slide 6 Answering the question how will lead to influence and impact cluster

23 External stakeholders impact to time, cost and 3P (?-too general) – it is aggregated Exceedin g Cost Time delays Scope PlanetPeopleProfitInstitutional Int.Ext.Int.Ext.Int.Ext.Int.Ext. 1-5 (%) how how how how how how how how Stak 1 Stak 2 Stak 3 Stak 4 Stak 5 This is the framework to obtain the information based on slide 6

24 OMEGA - Adapted HalSTAR wheel

25

26 Social network metrics INTRODUCTION TO THE FORMAL ANALYSIS OF SOCIAL NETWORKS USING MATHEMATICA by Luis R. Izquierdo, Robert A. Hanneman Network size – how limited resources each actor may have for building and maintaining ties Network density – speed of information, social capital/constrains, connectivity of the network Degree of actors – in-degree and out-degree (the influence) Social distance between actors (between two of them) Walks, cycles, trails and paths Eccentricity of actor – between diameter and radius

27 Social network metrics Network conectivity Clustering coeficijent of a node to which the friends of my friends are my friends clustering coefficient for the entire network the average of the clustering coefficients of all the nodes Centrality of a node – measure of its structural importance based on degree - having more ties means being more important closeness, - who are able to reach other actors at shorter path lengths, or who are more reachable by others Betweenness - being in between many other actors what makes an actor central

28 Megaproject stakeholder network metrics New network metrics will be developed combining these network metrics with values of actors atributes and types of relationships for: Network characteristics The role in the network - importance Communication and Clustering patterns for C-C clustres Impact on the project with respect to the stakeholder metrics

29 Stakeholder’s involvement Are external stakeholder’s representatives involved in regular meetings Are external stakeholders engaged in plannig stage of the project Is there a modification of the project introduced under the remarks of stakeholder Actions taken to support the project by external stakeholders Actions taken against the project external stakeholders Media attitude Legal framework and practice of public consultations Is there a continuous commuinication with external stakeholders

30 RESULTS How stakeholders impact the project? Groups of Megaprojects with consistent cultural & contextual attributes Project performance and impact Stakeholder network How project context and culture influence stakeholder’s behaviour? How the stakeholders interact? How stakeholders impact the project? How to measure stakeholder involment?

31 References on sustainability and stakeholders Commission Communication of 15 May 2001 ‘A Sustainable Europe for a Better World: A European Union Strategy for Sustainable Development’ This strategy provides an EU-wide policy framework to deliver sustainable development, i.e. to meet the needs of the present without compromising the ability of future generations to meet their own needs. It rests on four separate pillars – economic, social, environmental and global governance – which need to reinforce one another. Chinyo, E., Olomolaiye, P. (2010). Construction Stakeholder Management. Wiley-Blackwell, p. 17, 68 Epstein, M.J., Roy, M-J. (2001). Sustainability in Action: Identifying and Measuring the Key Performance Drivers, Long Range Planning 34 (2001) 585–604, p. 588 Epstein, M.J., Roy, M-J. (2001). Sustainability in Action: Identifying and Measuring the Key Performance Drivers Freeman, E. R. (1984). Strategic Management: A Stakeholder Approach. Boston: Pitman, p. 5-6, 12 Freeman, E. R. (1984). Strategic Management: A Stakeholder Approach. Boston: Pitman Freeman, R. E., Harrison, J. S., Wicks, A. C., Parmar, B. L. i de Colle, S. (2010). Stakeholder Theory; The State of the Art. Cambridge: Cambridge University Press. Friedman, A. L. i Miles, S. (2006). Stakeholders: theory and practice. Oxford: Oxford University Press. Olander, S. (2006). External Stakeholder Analysis in Construction Project Management. Lund University. Olander, S. (2007). Stakeholder impact analysis in construction project management. Construction Management and Economics (March 2007) 25, 277–287 Olander, S., Landin, A. (2008) A comparative study of factors affecting the external stakeholder management process. Construction Management and Economics. Olander, S., Atkin, B. Stakeholder Management – The Gains and Pains. In Chinyo, E., Olomolaiye, P. (2010). Construction Stakeholder Management. Wiley-Blackwell, Olander, S., Landin, A. (2005). Evaluation of stakeholder influence in the implementation of construction projects. International Journal of Project Management 23 (2005) 321–328. L.S. Smutko, S.H. Klimek, C.A. Perrin, and L.E. Danielson, Involving Watershed Stakeholders: An Issue-Attribute Approach to Determine Willingness and Need (willingness – attached) L-F Pau, with Kristian Jääskeläinen, “ERP project’s Internal Stakeholder network and how it influences the project’s outcome”, Working paper, SSRN, July 2009, under publication L-F Pau, Discovering the dynamics of smart business networks, Proc Smart Business network conference, Beijing, May 2008, ; and: Computational Management Science, March 2013, DOI: /s x L-F Pau, P. Vervest, E. van Heck, K. Preiss, Smart business networks (Eds), Springer, Berlin, ISBN: , 2005,442 p. UCLA- Omega centre, Centre for Mega Projects in Transport and Development, Incorporating Principles of Sustainable Development within the Design and Delivery of Major Projects: An international study with particular reference to Major Infrastructure Projects for the Institution of Civil Engineers and the Actuarial Profession, November 2010


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