Project Management Theory and the Management of Large

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Project Management Theory and the Management of Large

Transcript Of Project Management Theory and the Management of Large

PM World Journal
Vol. IV, Issue VI – June 2015 www.pmworldjournal.net

Project Management Theory and the

Management of Large Complex Projects

Featured Paper

by Bob Prieto

Project Management Theory and the Management of Large Complex Projects
Bob Prieto

Abstract
The normal condition of a project is “failure” and this is no more true than in the world of large complex projects where two out of three projects “fail”. Current project management theory does not provide a framework for success. In this article, the current theoretical framework for management of large complex projects is considered in light of the continuing evolution of general management theory and the theories of management and projects explored. Characteristics of large complex projects are reviewed and changed management perspectives suggested.
The purpose of this article is to move beyond the author’s previous question of “Is it time to rethink project management theory” to suggesting some of the essential perspective and focal changes that such a rethink will likely include. Just as theory in physics moved from a purely classical view to a classical and relativistic (or neo-classical view) view, each with their own scalar domains, so too must the universe of large complex projects be better underpinned.
The large complex projects contemplated in this article are large, complex engineering and construction projects but others may judge its conclusions to apply equally in other domains.
Extensive footnoting is intended to both support the author’s views as well as provide readers with avenues for additional reading and insight.

© 2015 Bob Prieto

www.pmworldlibrary.net

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PM World Journal
Vol. IV, Issue VI – June 2015 www.pmworldjournal.net

Project Management Theory and the

Management of Large Complex Projects

Featured Paper

by Bob Prieto

1. Introduction
Those of you that have discussed with me my various writings over the years have heard me describe these writings as how I think. Writing drives a discipline of organizing thoughts and concepts and as a minimum positing premises that become refined as the result of comments, debate and even refutal. This paper has been a long time in the making, reflecting my continuing work on and thinking about large complex projects.
In this paper I continue to build on my questioning of the adequacy of current project management theory to serve the needs of large complex projects. This questioning is driven by a simple reality - large projects fail two thirds of the time1 2
This fundamentally must be the result of:
 Poor conceptualization of what the project really was  Inherent weaknesses in the plan or planning process  Weak or inadequate execution – processes, people, technology  Inadequate control recognizing the changing internal capabilities and constraints
and ever evolving externalities.
Underpinning our approach to the management of large projects are two central theoretical constructs3:
 Theory of Management  Theory of Projects
Results suggest that both may warrant examination and likely modification of their respective frameworks. As we examine each, we must remain cognizant of broader management thinking and the evolution of new theories of management.
2. Where the Theory of Management Stands Today
In order to assess the current state and adequacy of project management theory, especially as it relates to the universe of large engineering and construction projects, it is helpful to first review the evolution of broader management theory. The objective of such a review is to test whether current project management theory has evolved along
1 As large projects are increasingly a fundamental management technique in the management of large organizations, getting failure rates down to acceptable levels is essential for good organizational governance 2 Is it Time to Rethink Project Management Theory?; Bob Prieto; PM World Journal; 2015 provides a summary of project failure rates reported by others. 3 The Theory of Project management: Explanation to Novel Methods; Lauri Koskela, Greg Howell

© 2015 Bob Prieto

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PM World Journal
Vol. IV, Issue VI – June 2015 www.pmworldjournal.net

Project Management Theory and the

Management of Large Complex Projects

Featured Paper

by Bob Prieto

similar lines or whether there are insights that may yet be gleamed from the broader field of management.

In many instances large, semi-permanent project organizations have lifetimes longer than the organizations served by general management theory.

3. A Short History of Management Theory

The management of various endeavors ranging from the creation of ancient works to warfare has existed for thousands of years but it was only on the heels of Adam Smith’s4 magnus opus, The Wealth of Nations5, that attention shifted to how to best organize tasks and labor. In The Wealth of Nations, Smith highlights the importance of division of labor, breaking down of large jobs into many tiny components, a concept which has pervaded management theory since. In many ways this was the first identifiable management theory and one which was focused on the approach to execution of work.

The concept that the organization and coordination of labor of labor could be taught emerged with the transition from entrepreneurial capitalism of the 19th century, where
owners used their own money and were daily engaged in the business, to managerial capitalism in the 20th century, with larger organizations with capital provided by others
not directly engaged in the day to day business. This led to an explosion in
management thought that continues to today.

Management theory at this stage can be described as classical theory comprising at least two major schools of thought:

 Scientific management  Administrative theories
Scientific management theory is underpinned by the work of Taylor6, an American engineer, focused on improving the efficiency of growing industrial production. Administrative theories can be segregated for this discussion into two subsets:

4 Adam Smith was a Scottish moral philosopher, pioneer of political economy, and key Scottish Enlightenment figure. Smith is best known for two classic works: The Theory of Moral Sentiments (1759), and An Inquiry into the Nature and Causes of the Wealth of Nations (1776). The latter, usually abbreviated as The Wealth of Nations, is considered his the first modern work of economics. Smith is cited as the "father of modern economics" and is still among the most influential thinkers in the field of economics today. 5 An Inquiry into the Nature and Causes of the Wealth of Nations, generally referred to as The Wealth of Nations, published in 1776 is a fundamental work in classical economics. The book touches upon such broad topics as the division of labor, productivity, and free markets. 6 Frederick Winslow Taylor was an American mechanical engineer who sought to improve industrial efficiency. He was one of the first management consultants. Taylor is regarded as the father of scientific management.

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PM World Journal
Vol. IV, Issue VI – June 2015 www.pmworldjournal.net

Project Management Theory and the

Management of Large Complex Projects

Featured Paper

by Bob Prieto

 Bureaucracy  Administration and management
Bureaucracy was based on a set of principles developed by Weber7, a founding father of modern social sciences, while administration and management theory was developed by Fayol8, a mining engineer.

Each of these theories focused on the approach to management of execution of work. The following table (Table 1) compares some of the key ideas of each of these classical management theories.

School Theory Thought Leaders Defining Work

Table 1 Classical Management Theories

Scientific Management Scientific Management

Administrative Theories

Bureaucracy

Administration

Frederick Winslow Taylor

Max Weber

Henri Fayol

The Principles of
Scientific Management9

Die Protestantische Ethik und der Geist des Kapitalismus10 (The Protestant Ethic and the Spirit of Capitalism)

"Administration industrielle et générale"11 (General and industrial administration)

7 Karl Emil Maximilian "Max" Weber was a German sociologist, philosopher, and political economist who has influenced social theory and research. Weber is often cited, with Émile Durkheim and Karl Marx, as among the three founders of sociology. Max Weber's Bureaucratic theory or model is sometimes also known as the "LegalRational" model. The model tries to explain bureaucracy from a rational point of view via nine principles. 8 Henri Fayol was a French mining engineer and director of mines who developed a general theory of business administration that is often called Fayolism. His theory was developed independently of scientific management but contemporaneously. He is acknowledged as a founder of modern management methods. 9 The Principles of Scientific Management; Frederick Winslow Taylor; Monograph; Harper & Brothers; 1911 10 Die protestantische Ethik und der Geist des Kapitalismus (The Protestant Ethic and the Spirit of Capitalism); Karl Emil Maximilian "Max" Weber; 1905 (German); 1930 (English) 11 "Administration Industrielle et Générale" (General and industrial administration); Henri Fayol; 1916 (French); 1930 (English)

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PM World Journal
Vol. IV, Issue VI – June 2015 www.pmworldjournal.net

Project Management Theory and the

Management of Large Complex Projects

Featured Paper

by Bob Prieto

Key Principles

Science for each element work, replaces rule-ofthumb method

Distinct/separate areas of competence, set out in law/regulation

Forecast and plan

Scientifically select, train, teach, and develop workers

Hierarchy of office

Organize

Cooperation to ensure work done in accordance with the science

Decisions based on written documents and written rules

Command/direct

Division of the work/responsibility between management and workers. Management undertakes work for which they are better trained than the workers

Relationships and decisions are impersonal

Coordinate

Officials have extensive education in area of competence

Control

Employment based on expertise and is full time

Fixed salaries

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PM World Journal
Vol. IV, Issue VI – June 2015 www.pmworldjournal.net

Project Management Theory and the

Management of Large Complex Projects

Featured Paper

by Bob Prieto

Classical theories of management were soon complemented by theories with basis in the human relations movement. Behavioral Theory focused on the people aspects of organizations and management, recognizing that management is an ongoing, dynamic process and that employees must be active participants, with “buy-in” of decisions. Early work by Follet12 and Barnard13, who she greatly influenced, was reinforced by Mayo’s14 Hawthorne15 studies. Follet might be regarded as the mother of modern management with her consideration of human aspects.
Their work was later extended by Maslow16 with his Theory of Motivation and McGregor17 with his perspectives on so-called Theory X and Theory Y managers. The manager’s toolbox was bigger but so was his job. The following table (Table 2) summarizes some of the elements of Behavioral Theory.

Theory Thought Leaders

Table 2 Behavioral Theory

Behavioral Theory Theory of Motivation Theory X/Theory Y

Follet; Barnard

Maslow

McGregor

12 Mary Parker Follett was an American social worker, management consultant and pioneer in the fields of organizational theory and organizational behavior. Mary Parker Follett was one of the great women management gurus in the early days of classical management theory 13 Chester Irving Barnard was an American business executive, public administrator, and the author of pioneering work in management theory and organizational studies. His work sets out a theory of organization and of the functions of executives in organizations. 14 George Elton Mayo (1880–1949) was an Australian born psychologist, industrial researcher, and organizational theorist. Mayo made significant contributions to business management, industrial sociology, philosophy, and social psychology. His field research in industry had a significant impact on industrial and organizational psychology and is known for scientific study of organizational behavior. His work helped to lay the foundation for the human relations movement which emphasized that along with the formal organization there exists an informal organizational structure as well. 15 Hawthorne Works (a Western Electric factory outside Chicago). The Hawthorne Works commissioned a study to see if workers became more productive in higher or lower levels of light. Productivity improved when changes were made, and slumped when the study ended. It was suggested that the productivity gain occurred as a result of the motivational effect on the workers of the interest being shown in them. 16 Abraham Harold Maslow was an American psychologist known for creating Maslow's hierarchy of needs, a theory predicated on fulfilling innate human needs in priority, culminating in self-actualization 17 Douglas Murray McGregor was a management professor at the MIT Sloan School of Management and president of Antioch College. He was a contemporary of Abraham Maslow and contributed to the development of the management and motivational theory. He is best known for his Theory X and Theory Y which proposed that manager’s individual assumptions about human nature and behavior determined how individual manages their employees.

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PM World Journal
Vol. IV, Issue VI – June 2015 www.pmworldjournal.net

Project Management Theory and the

Management of Large Complex Projects

Featured Paper

by Bob Prieto

Defining Work

The New State18 (Follett); The Functions of the Executive19 (Barnard)

A Theory of Human Motivation20

The Human Side of Enterprise21

Key Principles

Management is a dynamic process

Hierarchy of needs

Managers create situations where employees confirm manager’s expectations (selffulfilling prophecy)

Workers should be involved in decisions

Needs never completely satisfied

People work for inner satisfaction not materialistic rewards (drives performance)

Noncoercive power sharing (managers need buy-in of employees; “power with” vs. “power over”)

Behavior motivated by need for satisfaction

Employees motivated by social needs

Needs encompass physiological; safety; belonging; esteem; and selfactualization.

Reciprocal relationships (peer forces are strong)

18 The new state : group organization the solution of popular government; Mary Parker Follett ; Longmans; 1918 19 The Functions of the Executive; Chester I. Barnard; Harvard University Press; 1938 20 A Theory of Human Motivation; Abraham H. Maslow; Psychological Review, 50, 370-396; 1943 21 The Human Side of Enterprise; Douglas Murray McGregor; 1960

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PM World Journal
Vol. IV, Issue VI – June 2015 www.pmworldjournal.net

Project Management Theory and the

Management of Large Complex Projects

Featured Paper

by Bob Prieto

Win-win philosophy (employees respond to managers who help them satisfy needs)
Managers coordinate work fairly to improve efficiency
Authority of expertise (leads to matrix organization)
Conflict as opportunity to develop integrated solutions vs. compromising
Critical role of soft factors and informal processes
Relevance of theory is underpinned by the “scientific” Hawthorne studies

Post World War II we saw development of a concerted study of systems theory as it might be applied to each area of scientific endeavor. This surge in systems interests was driven by the recognition that recent advances in science called us to question all classical assumptions. Management theory was not spared this reexamination. The

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PM World Journal
Vol. IV, Issue VI – June 2015 www.pmworldjournal.net

Project Management Theory and the

Management of Large Complex Projects

Featured Paper

by Bob Prieto

early work of Bertalanffy22 was foundational and an agreed to ontology for systems theory is lacking but could be thought to be more biological. The suggested systems ontology in this paper is for convenience and may be described as follows:

 Static – highly encapsulated with limited or no exchange with its environment (more akin to what Taylor envisioned)

 Dynamic – exchange of information with environment can be reasonably well characterized with behaviors that may be either: o Deterministic – exchanges with environment can be modeled (system is more closed in nature) and sensitivity to initial conditions will support either:  Stable systems – inputs well known or limited sensitivity (This is the realm of Systems Theory in management)  Chaotic systems – high sensitivity to initial conditions (This special case of systems theory is often characterized as Chaos Theory) o Non-deterministic – exchanges with environment cannot be reasonably modeled and the potential for “global cascade”23 exists as various agents in the system interact with and adapt to each other over time24. This more evolutionary description is best associated with:  Complex systems – that can be further characterized by their resilience25 or sensitivity of complex systems to catastrophic failure from a minor change in input (fragile or resilient); or their antifragility or ability to grow stronger with disorder26. We will characterize this as Complexity Theory.
Attributes of these various systems theories are described in the following table (Table 3).

22 Karl Ludwig von Bertalanffy was an Austrian-born biologist known as one of the founders of general systems theory. General systems theory describes systems with interacting components, applicable to biology, cybernetics, and other fields. Bertalanffy proposed that the classical laws of thermodynamics applied to closed systems, but not necessarily to "open systems," such as living things. 23 Network wide domino effect in a dynamic network 24 Social systems are acted upon and influenced by interventions by various agents whose behavior is not readily predictable at the individual level. Human agents alter the very structures and associated parameters of social systems present both within organizations and in interactions and interface with external stakeholders. 25 Characterized by their flexibility, adaptability and responsiveness. Strong self-organization (delegation of relevant decision-making to lower organizational levels closer to the workface) is a feature of resilient systems. 26 Antifragile: Things That Gain from Disorder; Nassim Taleb

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PM World Journal
Vol. IV, Issue VI – June 2015 www.pmworldjournal.net

Project Management Theory and the

Management of Large Complex Projects

Featured Paper

by Bob Prieto

Table 3 System Theory

Theory
Thought Leaders

Static
Systems Theory (special case more similar to industrial setting envisioned by Taylor)

Dynamic Deterministic Systems Theory Chaos Theory

Bertalanffy

Bertalanffy

Wheatley27

Non-deterministic Complexity Theory
Kauffman28; Morin29; Cilliers30 (others)

Defining Work

General System Theory: Foundations, Development, Applications31

General System Theory: Foundations, Development, Applications

Leadership and the New Science32

‘The Origins of Order: Selforganization and Selection in Evolution (Kauffman)33; From the concept of system to the

27 Margaret J. Wheatley (Meg Wheatley) is an American management consultant who studies organizational behavior. Her approach includes systems thinking, theories of change, chaos theory, leadership and the learning organization: particularly its capacity to self-organize. She describes her work as opposing "highly controlled mechanistic systems that only create robotic behaviors." 28 Stuart Alan Kauffman (born September 28, 1939) is an American medical doctor, theoretical biologist, and complex systems researcher who studies the origin of life on Earth. Kauffman rose to prominence through his association with the Santa Fe Institute (a non-profit research institute dedicated to the study of complex systems). Kauffman is best known for arguing that the complexity of biological systems and organisms might result from selforganization and far-from-equilibrium dynamics 29 Edgar Morin is a French philosopher and sociologist known for the transdisciplinarity of his works. Edgar Morin has concentrated on developing a method that can meet the challenge of the complexity. 30 Friedrich Paul Cilliers was a South-African philosopher, complexity researcher, and Professor in Complexity and Philosophy at the Stellenbosch University known for his contributions in the field of complex systems 31 General System Theory: Foundations, Development, Applications; Ludwig Von Bertalanffy; George Braziller; 1968 32 Leadership and the New Science: Discovering Order in a Chaotic World; Margaret J. Wheatley; Berrett-Koehler Publishers, Inc.; 1996 33 Kauffman, S (1993), ‘The Origins of Order: Self-organisation and Selection in Evolution’, Oxford University Press, Oxford.

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