Week06 slides

Mgt 610 Strategic Perspectives on Project Management

(c) 2013, Thomas Lechler. All rights reserved. For academic use only. 1

MGT610

Lecture 6

Project Stakeholder Management

Dr. Thomas Lechler Phone: (201) 216-8174

Morton Room 636 FAX: (201) 216-5385

email: [email protected]

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Project Stakeholders & Roles

• An individual, group, or organization who may affect,

be affected by, or perceive itself to be affected by

a decision, activity or outcome of a project (PMBOK,

2013)

• Examples

– Project manager

– Project sponsor: provide resources and support

for the project

– Project owner: initiates a project, finances

it, contracts it out, and benefits from its output(s)

Thomas Lechler, Ting Gao

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Project Stakeholders & Roles

– Client/customer: approve and use the project’s

product, service or results

– Vendors: provide components or services

necessary for the project also called contractors

– Functional managers: provide SME or services to

the project

– Organizational groups: internal stakeholders

affected by the activities of the project team

– Other stakeholders: financial institutions,

government regulators, consultants and others


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N=42

• Stakeholder capabilities and dynamics are the most frequent source of uncertainties!

Stakeholder Uncertainties

Uncertainty Categories Uncertainty Sources Frequencies

Stakeholder uncertainty Inexperience, change, contracts 20

Organizational uncertainty M&A, politics, unknown legacy system 10

Technological uncertainty Tech. issues, tight specs 8

Contextual turbulences Legal, market 6

Project characteristics Unknown complexity 3

Malpractice Self induced uncertainty 2

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Stakeholders Related Sources of Uncertainties

Uncertainty sources Frequencies

Customer induced changes/Contracts/Diverse

needs 3

Rejection from clients 1

Requirements changed by project owner 1

Opposition from external stakeholders 1

Inability of contractor or vendor 3

Inexperienced project manager 2

Inexperienced subcontractor 1

Contractor-client Relations 2

Change of key stakeholders 2

Unknown project ownership 1


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Project Owner Goals: Defined by Project

Contract

Fixed Price (without incentives and penalties): 21%

Fixed Price (with Incentives and penalties): 18%

Cost reimbursement (with and without incentives): 13 %

In House Work Order or Budget Allocation: 45%

Other: 3%

N=242 projects

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Managing Project Owner Perspective: Project

Mission

Project Mission:

Represents the project owner expectations and is expressed in the

business need and the project justification.

Business Need:

Expressed as a goal or as a problem derived from the corporate

strategy.

Project Justification:

States the reason for undertaking the project.

Explains why business need should be solved.

The justification should influence future decisions about what to do

in the project.

Problem:

Need and justification are often ill defined. The ultimate goal is to

maximize wealth.

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Explaining Project Success with Client

Expectation Alignment: An Empirical Study

Thomas Lechler Ting Gao

Stevens Institute of Technology

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Agenda

• Motivation

• Literature Review

• Model Development and Hypotheses

• Methodology

• Results

• Implications and Outlook


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Motivation

• Challenge for project managers to satisfy their clients

• Not unusual for clients to change their expectations

during project implementation

• Gap: Managing client expectations is recognized by

practitioners, but research lags behind practice

• Research Question: What are the effects

of managing client expectations?


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Literature Review

• Reasons for Dynamic Client Expectations

– Information asymmetry

• Creating potential mistrust (Turner &

Müller, 2004)

– Motivation to maximize value

• Self-perception theory (Bem,1972)

• Dissatisfaction with past choices (Huber,

1997)


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Literature Review

• Influence of Dynamic Client Expectations

– Project changes, especially goal changes

(Kreiner, 1995)

– Loss of client support


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Literature Review

• Client Expectation Alignment

– The processes to align client expectations

with project objectives

• Following relationship marketing literature

(Morgan & Hunt, 1994; Buttle, 2001)

– The processes reducing goal changes

– The processes increasing client support


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Model Development and

Hypotheses

• Conceptual Framework

Client

Competence

Team

Competence

Project

Manager

Authority

Client

Expectation

Alignment

Client

Support

Goal

Changes

Project

Success

H5a (+)

H5b(+)

H5c (+)

H3a (-)

H3b (+)

H3c (+)

H1 (-)

H2 (+)

H4a

H4b


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Methodology

• Data Collection

– From project manager, two project team members,

and one senior manager

– 600 surveys from 249 projects in the USA

• Research Sample

– 39% NPD

– 34% IT/IS projects

– 8% Construction projects

– 11% Others


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Methodology

• Research Measures

– Applying multiple items

– 7-point rating scales from “strongly

disagree” to “strongly agree”

– Cronbach’s alpha from 0.83 to 0.95 for the

five constructs


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Methodology

Scale Alpha Number of items

Project success 0.85 – 0.95 13

Client expectation

alignment

0.89 9

Goal changes 0.85 2

Team competence 0.83 3

Project manager

authority

0.84 4

Client support N/A 1

Client competence N/A 1

• Research Measures


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Variable Measurements

Scale Measures

Efficiency 1. The project was completed on schedule

2. The project was completed within budget

Effectiveness

1. The project met all technical specifications.

2. The project does what it is supposed to do.

3. The results of this project represent an improvement in client

performance.

4. The project is used by its intended clients.

5. The project has a positive impact on those who make use of it.

6. Important clients, directly affected by the project, make use of it.

7. Clients using this project will experience more effective decision

making and / or improved performance.

Customer

satisfaction

1. The clients were satisfied with the process by which this project was

completed

2. The clients are satisfied with the results of the project

Economic

success

1. The project was an economic success for the organization that

completed it.

2. All things considered, the project is a success.

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Scale Measures

Client expectation

alignment

1. Potential clients had been contacted about the usefulness of the

project output.

2. The clients had been given the opportunity to provide input early in

the project development stage.

3. The limitations of the project had been discussed with the client.

4. The clients were told whether or not their input was adopted into the

project plan.

5. Clients know whom to contact when problems or questions arose.

6. The clients were kept informed about the project’s progress.

7. Adequate advanced preparation had been done to determine how

best to “sell” the project to the clients.

8. There was adequate documentation of the project to permit easy use

by the clients (instructions, manuals, etc).

9. An adequate presentation of the project had been developed for the

clients.

Client support 1.In case of difficulties, the clients supported the project team.

Goal changes 1. Project goals were often changed.

2. At least one major project goal was changed considerably.

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Scale Measures

Client competence 1. During the negotiation process, the client appeared knowledgeable

regarding the technical aspects of the project.

Team competence 1. The project team was sufficiently trained.

2. The project team was technically competent.

3. The people implementing the project understood it.

Project manager’s

authority

1. The authority allocated to the position of project manager was

sufficient.

2. The project manager had enough authority to negotiate agreements

with project clients (internal or external) regarding the terms, conditions,

and or deliverables of the project.

3. The project manager had sufficient authority to make all the

necessary decisions to achieve the project goals.

4. The project manager had the authority to change objectives in order

to achieve the project goal.

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Methodology

• Data Analysis

– Within unit agreement index (rwg) to justify

aggregation: deleted 43 projects

– Structural Equation Modeling: LISREL

– Stepwise Regression Model


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Results

• Influence of Client Expectation Alignment (SEM)

Direct Indirect Total

Client expectation alignment +0.24 +0.38 +0.62

Goal changes -0.14 -- -0.14

Client support +0.59 -- +0.59

+0.24

Client

Expectation

Alignment

Client

Support

Goal

Changes

Project

Success

-0.32

+0.56

-0.14

+0.59


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Model Development and

Hypotheses

• Conceptual Framework

Client

Competence

Team

Competence

Project

Manager

Authority

Client

Expectation

Alignment

Client

Support

Goal

Changes

Project

Success

H5a (+)

H5b(+)

H5c (+)

H3a (-)

H3b (+)

H3c (+)

H1 (-)

H2 (+)

H4a

H4b


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Results

• Determinants of Client Expectation Alignment

(Stepwise Regression Model)

** p<0.01

• All hypotheses are supported

Variables Final Step

Project team competence 0.43**

Client competence 0.32**

PM authority 0.17**

F value 64.30**

R2 0.50


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Implications and Outlook

• For Stakeholder Theory

– Significance of stakeholder expectations

– The influence path of changing expectations on

project performance

• For Practice

– Communicating to adjust clients’ expectations

– Managing project changes by managing

stakeholder expectations


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Implications and Outlook

• Outlook

– Alternative measurement model for client

expectation alignment

– Internal and external stakeholder expectations

– Project uncertainty as a moderator

– More mediators to explain the effect of client

expectation alignment on project success


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