Key factors in the success of the management of building construction projects in ha noi the case of splendora

Lunghwa University of Science and Technology Department of Business Administration Dissertation for a Master’s Degree Key factors in the Success of the Management of Building construction projects in Ha Noi – the case of Splendora Researcher: Hoang DucHien Supervisor 1: WANG TSUNG – CHENG (Prof.) Supervisor 2: NGUYEN PHU HUNG (Ph.D.) Hanoi, August 2018 MINISTRY OF EDUCATION AND TRAINING INTERNATIONAL SCHOOL – VNU - MASTER THESIS OUTLINE Major: Business Administration Branch code: EMBA Key factors in the Success of the Management of Building construction projects in Ha Noi – the case of Splendora STUDENT: HOANG DUC HIEN INSTRUCTOR 1: WANG TSUNG – CHENG (Prof.) INSTRUCTOR 2: NGUYEN PHU HUNG (Ph.D.) Hanoi, August 2018 Lunghwa University of Science and Technology Approval Certificate of Master's Degree Examination Board This is to certify that the Master’s Degree Examinations Board has approved the thesis “Key factors in the Success of the Management of BuildingconstructionprojectsinHaNoi–thecaseofSplendora”published by Mr Hoang DucHien in the Master Program of Graduate School of Department of Business Administration Master’s Degree Examination Board Board Members: Prof.PhD Tsan Eric Assoc Prof PhD Nguyen Van Dinh Dr Doan Thu Trang Advisors： Dr Nguyen Phu Hung Prof.PhD Wang Tsung – Cheng Chair： Prof.PhD Tsan Eric Date：2018 ／11 ／24 Hanoi, August 2018 ABSTRACT Thesis Title: Key factors in the Success of the Management of Building construction projects in Ha Noi – the caseofSplendora Pages:78 University: Lunghwa University of Science and Technology Graduate School: Department of Business Administration Date:December,2018 Graduate Student: HoangDucHien Degree: Master Advisor: Nguyen Phu Hung (PhD)and Wang Tsung – Cheng (PhD) Keywords: Project management, Satisfaction, Driving factors This master project is about Splendora’s Master Construction Project Splendora project was conceived and planned in a context of quick growth in residential areas of Hanoi Our survey on the opinion of project managers about factors that may contribute to the success of the project reveals some important hints on project management policy for the company show key findings First is the performance of a project is highly dependent to the competency of the project manager, the competence of project management team Second is criteria relating to company’s organizational structure and culturaldohaveeffectstotheprojectsuccess.Thethirdisexternalenvironmentinfluence outcomes ofproject i the ACKNOWLEDGEMENT It is a great pleasure for me to work with this dissertation I would especially like to thank all teachers, professors for all knowledge, skills and information I received It is very wonderful chance to work with so excellent and enthusiastic professors I am also very grateful to my tutors, Professor Nguyen Phu Hung (PhD) and Wang Tsung – Cheng (PhD), for his support I appreciate all his time and efforts to encourage and guide me during my dissertation writing I would like to thank my colleagues, my customers for helping me to support me information to complete this dissertation and answer the questionnaire for my research This thesis cannot be done without their help Finally, I would like to thank and dedicate this dissertation to my family for the unconditional support, who consistency motivated me to complete the thesis Best regards, Thank you! Hoang DucHien ii TABLE OF CONTENTS ABSTRACT i ACKNOWLEDGEMENT ii TABLEOFCONTENTS LISTOFPROPOSITIONS LISTOFTABLES LISTOFFIGURES INTRODUCTION 1.1 Presentation of SplendoraConstruction Project 1.1.1 Introduction of Splendora Residential Building Construction Master Project8 1.1.2 Parties of the Splendora MasterConstruction Project 1.1.3 Context oftheproject 11 1.2 Objectives oftheresearch 13 1.3 Researchquestions 13 1.4 The context necessitatesthe research 13 1.5 Relevance and Interest ofthisresearch 14 1.6 Planofdissertation 14 LITERATUREREVIEW 16 2.1 Introduction 16 2.2 Project and Project Management conceptand definition 16 2.3 ProjectPerformanceMeasures 17 2.4 Project success and Factors leading to theProjectsuccess 18 2.5 2.4.1 Projectmanager factors 21 2.4.2 Organizationalfactors 21 2.4.3 External environment factors 22 The Overal ProjectSuccess index 23 METHODOLOGY 24 3.1 Variablesandindicator 24 3.2 Design of theSurveyQuestionnaire 25 3.3 Design of theSurveyQuestionnaire 25 3.4 Targetedsample 27 ANALYSIS RESULTSANDFINDINGS 28 4.1 Surveyresults 28 4.1.1 Profile oftheresponders 28 4.1.2 Position of responders intheproject 30 4.1.3 Performance of sub-projects of Splendora Master Construction Project31 4.1.4 Assessment on the Correlation Relationship and the Importance of FactorsrelatingtoprojectmanagerstotheoverallProjectSuccessand4project successcriteria 33 4.1.5 Assessment on the Correlation Relationship and the Importance of Factors relating to project management team to overallProjectSuccess 37 4.1.6 Assessment on the Correlation Relationship and the Importance of Factors relating to organization to theProjectSuccess 39 4.1.7 Assessment on the Correlation relationship and the Importance of Factors relating to external environment to theProjectSuccess 42 4.2 4.3 Findings anddiscussion 46 4.2.1 Implications of findings of factors relating toprojectmanagers 46 4.2.2 Implications of findings of factor relating project management team49 4.2.3 Implications of findings of factors relatingtoorganization 50 4.2.4 Implications of findings of factors relating to external environment 52 Conclusion 52 CONCLUSIONS 53 5.1 Introduction 53 5.2 Summaryof findings 53 5.3 Proposalsfor Improvement 54 5.3.1 Overall recommendations to improvetheperformance 54 5.3.2 Manageprojectstakeholders 55 5.3.3 Enhance the competency ofproject managers 62 5.3.4 Enhancing the competency of projectmanagement team 64 5.3.5 Improvingorganization aspects 66 5.4 Contributions tothe theory 67 5.5 Limit ofthestudy 68 5.6 Direction of research inthedissertation 68 LISTOFREFERENCES 70 APPENDIX 72 LIST OF PROPOSITIONS Proposition1:Theperformanceofaprojectispositivelycorrelatedtocompetencyoftheproject manager 21 Proposition2:Theperformanceofaprojectispositivelycorrelatedtocompetencyoftheproject managementteam 21 Proposition 3: The performance of a project is positively correlated to support fromorganization 22 Proposition 4: The performance of a project is positively correlated to the stableness ofexternalenvironment 23 LIST OF TABLES Table 1: Descriptionofexperience 28 Table 2: Description of educational backgrounds ofpeoplessurveyed 29 Table 3: Description of number of time a project manager is trainedayear 29 Table 4: Position of responders intheproject 30 Table 5: Parties where the respondersbelongto 30 Table 6: Proportions of projects finished within thebudgetconstraint 31 Table 7: Proportions of projects finished withinplannedschedule 31 Table 8: ProjectQualityAssessment 32 Table 9: Stakeholders’ Satisfactory degrees withprojectresults 32 Table10:Testofcorrelationbetweeneachprojectmanager’scharacteristicsand4projectsucce sscriteria 33 Table 11: How importance is the Political and cultural awareness to the projectperformance 34 Table 12: How important is thedecision-makingability 34 Table 13: How importance is the Communication andnegotiationskill 34 Table 14: How importance is the Teambuildingskill 35 Table 15: How importance is the Conflict management and dispute handling ability 35Table 16: How importance is the ability of motivating subordinates to work and toperform 36 Table 17: How importance is theProfessionalcompetency 36 Table 18: Test of correlation between each factors relating to Project ManagementTeamto the Overall Project Success and projectsuccesscriteria 37 Table 19: How important is the willingness totakeaccountability 37 Table 20: How important is the Competitiveworkingstyle 38 Table 21: How important is the Ability towork independently 38 Table 22: How important is the Ability to workin team 39 Table 23: Test of correlation between each factors relating to organization to the OverallProject Success and projectsuccesscriteria 39 Table 24: How important is the Organizational culturesandStyle 40 Table 25: How important is the Organizationalinternalcommunication 40 (Source Weinstein, 2010, p 183) The corporate director should ensure that his project managers to acquire theneeded skill like those suggested in the table That requires a commitment by the company and its leaders to provide formal and informalopportunities Many large or established companies have comprehensive training programs that integrate practical experience with skills and knowledge, leading toward internal project managementcertification.Theseprogramsincludecorecourses,electives,andcontinuing education.Otherapproachesincludecontractingwithexternalvendorstoprovidetraining orcombininginformalinternaltrainingwithoutsideeducationalactivities.Forother 63 small firms that often not have a formal training or certification program, an informal approach to delivering training may be the best course to gain the executive support Weinstein proposes that ideas for building momentum in the development of an organization’s project management capabilities include the following areas (Weinstein, 2010, p 186): Figure 10: Development of project managers (Source Weinstein, 2010, p 186) This is a good example to follow for the company to develop its project management resources 5.3.4 Enhancing the competency of project managementteam There are three measures to enhance the quality of project management team 5.3.4.1 Desgin team The project management team should be designed such that  Size is under 20 staffs Report of Splendora shows that extreme large projects (in terms of budget) still may not require more number of project management staffs (Splendora,2016) 64  Individual project management team member can work independently but is encouragedtoworkinteam.Thisisnecessarytosynchronizetasksandeffortsofdifferent groups, so that they will be ran more effectively andefficiently 5.3.4.2 Align teammembers Aligning interests and objectives of team members is a must This helps team members to go toward the same direction and at the same pace The operations will be conducted with less rigid The productivity will beenhanced with less transactions costs If the team to be aligned, the team members while must accept the personal differenceshastobuildupacommonvaluesystemfortheircommonjobs.Waystoalign interests often include establishing a Team Performance Index in which every member contribute a part This helps to linking one’s interest to those of others in same group Thiswillprovideincentivesformemberstoworktogethersothatcommonobjectivescan be achieve and the yields will be shared to all Other way that helps aligning team members easier is the manager deliberately select peoples having similar characteristics for theteam ProjectManagementInstitutecontendsthatmanaginginternalcommunicationisalso a way to align members This is to make people understand each other, and share expectations When understand the expectations from the system and from the other colleagues, a staff will have relevant adjustments for the best of the company This requires a plan specifically designed (Project Management Institute,2008) 5.3.4.3 Improve team buildingskill Tomaketeamaligned,skilltobuildteamisamust.Performance-basedmanagement is considered a tool to improve the team efforts to make members close up to eachother Performance-based management involves establishing, managing, measuring, and evaluatingperformancedata.Projectperformancemustlinkintotheoverallperformance 65 management program, and the organization must ensure that projects are able to be measured individually Team building also require the ability to handle conflicts The conflicts often arise fromthedifferencesinworkingstyles,educationalbackground,languages,positions,and even from gender Resolving fully conflicts is almost impossible, but Splendora can reducethemagnitudeofthem,orredirecttheirimpactstosomewhereelseratherthanthe tasks The manager has to play the role of a negotiator, a broker to bring members into a value balance agreed upon by majority, if not all, of themembers 5.3.5 Improving organizationaspects 5.3.5.1 Improve culturalenvironment Industrial development projects, like Splendora mega-building project, require the interactionofpeoplefromdifferentculturalbackgrounds.Aclashofculturescandevelop to the extent that project functions may be impaired Industrial culture deals with the business and management processes that are used to support industry operations,making sure that the practices culturally acceptable and legal Cultural integration may be achieved by many ways (Pinto, 2010), including the followingapproaches: i Identify the prevailing culturalbarriers ii Learn the culture of the projectorganization iii Take into account local cultural practices as they may affect laborpractices iv Show a willingness to adapt to the newculture 5.3.5.2 Laborrelations Labor relations are also of concerns when manage organizational environment It is believed that labor-management disputes are very common Labor relations determine the level of political easiness of a work environment Bad labor relations lead to strikes, quality crash, or declining industrial productivity These can create unanticipated chain 66 reactions Serious business problems that stem from the instability of the company and its inability to develop supportive corporate labor policies Managing labor relations concerns with the cooperation with Unions (Badiru, 1993, p 274) The project manager may manage the relationship with labor union by regular meeting with union representatives to exchange the view of each sides, trying to match the corporate interests with that of employees Both sides need to have compromises to close up In Vietnam, the management – labor union relationships have not been really an issue,assincetheestablishmentofnewVietnamaftertheindependencefromtheFrance, the labor unions are under control of Communism Party In many cases of state enterprises,theleadersofthelaborunionarealsocorporatemanagers,leadingtoconflicts of interest, thus the corporate Labor union fails to conduct its roles of protecting the interest of workers However, the influences of Communism party to labor unions are increasingly reduced, as most of former state-owned enterprises have been transformed to private hands However, due to the high unemployment rate, most of workers tend to obey managers rather to challenge them in order to keep job, thus dealing with workers at this period of time may be not troublesome for projectmanagers 5.4 Contributions to thetheory Critical success factors are elements necessary for an organization to get its projects achieve its expected mission and results This research studies success factors of a big construction project in Vietnam The research is expected to contribute to the management body of knowledge in the project management areas In terms of theory, the research synthesize and analyze literature on project management to find out, among many thing, a potential framework for project managers to monitor the project performance that is relevant for the case of mega building construction project in Vietnam The research then test the effectiveness of this potential analytical framework with empirical data collected from construction sites to determine if it is applicable in case of Vietnam 67 In terms of practice, after verifying the applicability of the analytical framework for monitoring project success, the research discuses and identify some potential measures that help project managers to deal with their issues, against, in case of Vietnam The output of this research would be a tools for project managers to enhance their project management policy 5.5 Limit of thestudy The limitation of the study lay with its low sample size A total of 87 responses returned out of 120 questionnaires sent out may not be sufficient to represent the whole spectrum of developers In addition, as the questionnaires were sent out only to local peopleinvolvedtotheSplendoraproject,thefindingsofthisthesismaynotbeapplicable to other geographicallocations Nevertheless, the contribution of this paper should not be nullified as it is able to provide a general outlook for the industry on this subject 5.6 Direction of research in thedissertation The conceptual model of the paper is based on a comprehensive literature review Thesurveyresultssupportconceptualmodeltosomedegrees,showingtheimportanceof manyfactorstothesuccessofaproject.However,thecurrentsurveyisonlyabletoshow how people perceive about the factors, rather than show how in fact these factors contribute to the project success This is the gap between facts andperceptions Knowing the missing above, in the next stage of this research should lunch another survey that asks the responders to  rate the actual performance of the project he is in charge (left side of performance equation, dependentvariable)  rate the actual characteristics of project managers and project management teams of the project as well as other factors (right side of the equation, independentvariables) 68 The responses of this new survey will be used to evaluate the actual correlation between the project performance and its driving factors If the findings are statistically meaningful, it would provide evidence supporting conceptual model that has been discussed about in the literature review of this paper 69 LIST OF REFERENCES Anton, D W (1988) Measurement of project success 164-170 Badiru, A B (1993) Managing industrial development projects : project management approach London, England: International Thomson Publishing Berkshire House BeloutAdnane, G C (2003) Factors influencing project success: the impact of human resource management International Journal of Project Management, 22, Cooke-Davies, T (2002) The 'real' success factors on projects" International Journal of Project Management, 20(3), 185-190 D., C F (1984) Cause of delays and overuns of construction Projects in developinng countries CIB Proceeding s Flavell, M D (1988) Project appraisal-a framework to assess non-financial aspects of projects during the project life cycle 223-233 Hanafinzade, P R (2007) Critical success factor in Enterprise Strategic Planning for Information Systems (Tâ ̣p Vol.7 No26) Iran Economic Bullentin Mark Winter, C S (2006) Directions for future research in project management: the main findings of a UK government-funded research network 638-649 Mohamed, C S (1999) Criteria of project success :an exploratory re-examination 243248 Nguyen Duy Long (2004) A study on project success factors in large construction project in Viet Nam 11, 404-413 Pinto, J K (2010) Project management: Achieving competitive advantage (2nd ed.) Upper Saddle River, NJ: Prentice Hall Project Management Institute (2008) Project Management Body of Knowledge New Town Square, Pennsylvania: Project Management Institute Rom, &Tuke (1995) Analysis of the characteristics of project in diverse industries working paper Ohio: Cleverland State University Shenhar (1997) Mapping the dimensions of project success 5-13 Splendora (2016) 2016 Annual Report Splendora Weinstein, J (2010) Achieving project management success in the federal government Management Concepts, Inc 70 Wells, J (1986) The Construction Industry in Developing countries:Alternative strategies for Development London: Croom Helm Ltd 71 APPENDIX QUESTIONNAIRE  To answer the questions below, consider about the projects which you are really involvingto I PERSONAL INFORMATION Fullname Gender Male Female Age Company II INFORMATION OF PROJECT WHICH YOU ARE PARTICIPATINGIN What is your position in the project?* Project manager Chief supervisor Team leader Supervisor Site Engineer Other: How long have you been working in area of project management? Less than year From year to years From years to years From years to 10 years More than 10 years What is your education level? * Doctor 72 Master Bachelor Other: How often you attend a professional training course on project management? Not at all 1– times/year – times/year > times/year Who owns the project?* The State Privateinvestors A Joint Venture/Join Stock Foreign investors Other: The total planned budget of your project is:* Less than 300,000 USD 300,000 USD to million USD million USD to 10 million USD 10 million USD to 100 million USD More than 100 million USD How many people are working in your project management office?* Bellow people 06 - 20people 21 - 50people 51- 100people More than100 III ASSESSMENT OF PROJECT SUCCESSCRITERIA Cost, time, quality and stakeholders’ satisfaction are four project performance criteria For each of the following, please point out the level to which your project has been completed by ticking the most appropriate circle Your project finishes within the budgetconstraint Totally Disagree Totally Agree Your project meets the plannedschedules 73 Totally Disagree Totally Agree Your project meets the qualityrequirements? Totally Disagree Totally Agree The degree to which your stakeholders satisfy with the projectresults? Less satisfied Absolute satisfied IV ASSESSMENT OF CRITICAL FACTORS THAT MAKE PROJECT SUCCESS A Factors relating to ProjectManager Please point out the level of importance of each factor as you assess the project manager's abilities by ticking the most appropriate circle Political and culturalawareness Not important Very important Decision-makingability Doesn’t matter Critically important Communication and negotiationskill Doesn’t matter Critically important Team buildingskill Doesn’t matter Critically important Conflict management and dispute handling ability Doesn’t matter Critically important Motivating subordinates to work and toperform 74 Not important Very important B Factor relating to the Project managementteams Please point out the level of importance of each factor as you assess the project team member's properties by ticking the most appropriate circle Professionalcompetency Not important Very important The willingness to takeaccountability Not important Very important Competitive workingstyle Not important Very important Working dynamically andcreatively Not important Very important Ability to workindependently Not important Very important Ability to work inteam Not important Very important C Factors relating to theOrganization Please point out the level of importance of each factor as you assess support from organization by ticking the most appropriate circle Organizational cultures andstyle 75 Not important Very important Organizational internalcommunication Not important Very important Organizational Structure Not important Very important Organizational ProcessAssets Not important Very important Organization’s environmentalFactors Not important Very important D Factors relating to the Externalenvironment Please point out the level of importance of each factor as you assess external factor by ticking the most appropriate circle Governmental policies on construction and infrastructuresectors Not important Very important Business environment Not important Very important Social Communities Not important Very important Legislation 76 Not important Natural conditions andevents Very important Not important Very important 77 ... the Success of the Management of BuildingconstructionprojectsinHaNoi–thecaseofSplendora”published by Mr Hoang DucHien in the Master Program of Graduate School of Department of Business Administration... Tsan Eric Date：2018 ／11 ／24 Hanoi, August 2018 ABSTRACT Thesis Title: Key factors in the Success of the Management of Building construction projects in Ha Noi – the caseofSplendora Pages:78 University:...MINISTRY OF EDUCATION AND TRAINING INTERNATIONAL SCHOOL – VNU - MASTER THESIS OUTLINE Major: Business Administration Branch code: EMBA Key factors in the Success of the Management of Building