The methodology to research of internal, external stakeholders in megaprojectsIvana Burcar DunovićAgnieszka LukasiewiczLouis-Francois Pau

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 .

Research concept

Culture and context

Stakeholders (eksternal)

Impact on the project

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

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

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

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

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 measuresa) 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

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

INTERACTION FLOW

Culture and context

Stakeholder behavior

Stakeholder interactions

Exogenous

Project execution

Endogenous

ImpactPerformance

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 !!!!! ??????

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/Environmental 3P’s• Profit/Economical

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

Examples of UK sustainability policy mapped onto the adapted HalSTAR wheel

Cultu

re a

nd c

onte

xt

Sust

aina

bilit

yThe project

How stakeholders influence the project?

1. P process

2.Pproduct

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”

Endo

gene

ous

Exogeneous

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.

Stakeholder measurements

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

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 administrative flaws• due to media influence• Informaniveness

2. Grade of Interest – willingness to engage (1 to 5) Likert scale3. Attitude – positive or negative (-3 to-1 and+1 to+3) Stapel scale

Proposed Stakeholder’s measurement characteristics - attributes1. 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.

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

+4 0 -4

Competition-5

Example of the network representation

S1 S2 S3 S4

S1 0 s1,2 s1,3 s1,4

S2 s2,1 0 s2,3 s2,4

S3 s3,1 s4,1 0 s3,4

S4 s4,1 s4,2 s4,3 0

S1

S2

S4

S3

S1,3

S3,1S2,1

S1,2

S3,4S4,3

S2,4S4,2

S1 S2 S3 S4

S1 0 s1,2 s1,3 s1,4

S2 s2,1 0 s2,3 s2,4

S3 s3,1 s4,1 0 s3,4

S4 s4,1 s4,2 s4,3 0

Frequency

Nature of relationship

How external stakeholders influenced the process, product and 3P (?-too general) – it is aggregated

Process Product Planet People Profit Institutional

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

External stakeholders impact to time, cost and 3P (?-too general) – it is aggregated

Exceeding Cost

Time delays

Scope Planet People Profit Institutional

Int. Ext. Int. Ext. Int. Ext. Int. Ext.

1-5 (%) 1-5 (%) 1-5 (%) 1-5+ how

1-5+ how

1-5+ how

1-5+ how

1-5+ how

1-5+ how

1-5+ how

1-5+ how

Stak 1

Stak 2

Stak 3

Stak 4

Stak 5

This is the framework to obtain the information based on slide 6

OMEGA - Adapted HalSTAR wheel

OMEGA - Adapted HalSTAR wheel

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

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

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

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

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?

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• Freeman, E. R. (1984). Strategic Management: A Stakeholder Approach. Boston: Pitman, p. 5-6, 12• 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. http://dx.doi.org/10.1080/01446190701821810 • 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 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1440687 • L-F Pau, Discovering the dynamics of smart business networks, Proc. 2008 Smart Business network conference, Beijing, May 2008,

www.sbni.com ; and: Computational Management Science, March 2013, DOI: 10.1007/s10287-013-0162-x• L-F Pau, P. Vervest, E. van Heck, K. Preiss, Smart business networks (Eds), Springer, Berlin, ISBN: 3-540-22840-3, 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