Project Governance: Getting Investments Right

308 Pages·2012·2.292 MB·English

by  Terry M. Williams, Knut Samset (eds.)

Project Governance
Also by Terry M. Williams
MAKING ESSENTIAL CHOICES WITH SCANT INFORMATION
MANAGING AND MODELLING COMPLEX PROJECTS
MODELLING COMPLEX PROJECTS
MANAGEMENT SCIENCE IN PRACTICE
Also by Knut Samset
EARLY PROJECT APPRAISAL: Making the Initial Choices
PROJECT EVALUATION, MAKING PROJECTS SUCCEED
MAKING ESSENTIAL CHOICES WITH SCANT INFORMATION
Project Governance
Getting Investments Right
Edited by
Terry M. Williams
Hull University Business School, UK
and
Knut Samset
Norwegian University of Science and Technology, Norway
Selection and editorial content © Terry M. Williams and Knut Samset 2012
Individual chapters © the contributors 2012
All rights reserved. No reproduction, copy or transmission of this
publication may be made without written permission.
No portion of this publication may be reproduced, copied or transmitted
save with written permission or in accordance with the provisions of the
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permitting limited copying issued by the Copyright Licensing Agency,
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Any person who does any unauthorized act in relation to this publication
may be liable to criminal prosecution and civil claims for damages.
The authors have asserted their rights to be identified as the authors of this work
in accordance with the Copyright, Designs and Patents Act 1988.
First published 2012 by
PALGRAVE MACMILLAN
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registered in England, company number 785998, of Houndmills, Basingstoke,
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Palgrave® and Macmillan® are registered trademarks in the United States,
the United Kingdom, Europe and other countries.
ISBN 978-1-349-34897-8 ISBN 978-1-137-27461-8 (eBook)
DOI 10.1057/9781137274618
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10 9 8 7 6 5 4 3 2 1
21 20 19 18 17 16 15 14 13 12
Contents
List of Tables and Figures vi
Acknowledgements viii
Notes on Contributors ix
Introduction 1
Terry Williams and Knut Samset
1 The Influence of Strategic Context on Project Management
Systems: A Senior Management Perspective 3
V. K. Narayanan and Robert DeFillippi
2 The Proposal 46
Knut Samset and Gro Holst Volden
3 Assessing the Proposal 81
Chris Chapman
4 Designing the Project 135
Andrew Edkins and Alan Smith
5 Decision-Making in Organisations 175
Tim O’Leary
6 Fading Glory? Decision-Making around the Project – How and
Why ‘Glory’ Projects Fail 221
Svetlana Cicmil and Derek Braddon
7 Decision-Making in the Political Environment 256
Tom Christensen
Concluding Note 277
Terry Williams
Index 282
v
List of Tables and Figures
Tables
1.1 A comparative summary of the stages of project management
systems 23
1.2 Competencies and maturity of PM system 38
2.1 Five widely applied success measures 48
3.1 A traditional four-stage view of the asset lifecycle and dominant
management aspects 83
3.2 V (£) as a function of n for the insulation example 119
3.3 V (£ millions) as a function of r = the real discount rate
(% per annum) 120
5.1 A stage gate approval process 178
5.2 Comparing the social trajectory and systems control models 197
5.3 Approaches to managing complex and uncertain projects 202
5.4 The structure of conversations for action (based on Winograd
and Flores, 1987) 209
Figures
1.1 A framework for analysis 18
1.2 Choice of project management system 37
2.1 Successful projects 49
2.2 An investment case is implemented as a project after prior
assessment of alternative concepts 59
2.3 Trade-off between the amount/quality of information and the
acquisition cost 65
2.4 Early underestimation relative to what is the finally approved
budget is often far greater than the cost overrun 67
2.5 Strategic overestimation of benefits 69
2.6 Costs and benefits over the project’s life cycle 70
2.7 Deterring effects of user fees 72
2.8 Inelastic demand 73
2.9 Pricing of congestion 73
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List of Tables and Figures vii
3.1 Simple interval estimate example 86
3.2 An illustration of the approximation involved 86
3.3 Sensitivity diagram: Highways Agency (HA) example 89
3.4 The role of the performance lens and the knowledge lens to
visualise uncertainty 93
3.5 Decision diagram: One risk efficient choice example 95
3.6 Decision diagram: Two risk efficient choices example 97
3.7 Decision diagram: Comparison of approaches A, B and C 100
3.8 Efficient options in an ‘efficient frontier’ portrayal 104
3.9 The basic project definition process – the seven Ws 105
4.1 A two dimensional view of novelty within projects – with
illustrative examples 146
5.1 The project trajectory and the ‘alignment-seeking’ process 198
5.2 The operation of the ‘alignment-seeking’ process 199
Acknowledgements
This book is a result of research funded by the Concept Research Programme
on front-end management of public investment projects. More information
on the programme is given on www.concept.ntnu.no.
The editors and author would like to thank John Wiley and Sons for per-
mission to use selected parts of ‘How to Manage Project Opportunity and
Risk’ (Chapman and Ward, 2011) as a basis for drafting the text of Chapter 3,
as well as for permission to reuse figures and tables.
viii
Notes on Contributors
Derek Braddon is Emeritus Professor of Economics at the Bristol Business
School, University of the West of England, Bristol. His principal research
interests include the economics of defence, peace and conflict and also the
economics of international business, the new industrial economics and
the governance of large-scale international projects. Professor Braddon has
published seven books and many papers in these areas and has made over
200 TV, radio and news media contributions on related themes. He has been
Director of the University’s Defence Economics Research Group since 1984
and is also Visiting Professor at the United Nations University’s European
Centre for Peace and Development in Belgrade, Serbia.
Chris Chapman is Emeritus Professor of Management Science, University
of Southampton, UK, and a senior associate of The Nichols Group, London,
UK. He is a former director of the School of Management, University of
Southampton. He is a past president of the Operational Research Society,
and he was Founding Chair of the APM Project Risk Management Specific
Interest Group. Consultancy and research grounded on consultancy experi-
ence addressing risk, opportunity and uncertainty in project, operations and
corporate contexts has been a central concern of his since the 1970s, with
an international client set and a range of publications.
Tom Christensen is Professor of Public Administration and Public Policy at
the Department of Political Science, University of Oslo. He is also Adjunct
Professor at University of Bergen and City University of Hong Kong. His
main research interest is in the field of comparative public reform and his
theory basis is organisation theory. He has published internationally about
80 articles and books. He belongs to several international research networks
and projects.
Svetlana Cicmilis Director of Postgraduate Research and Associate Professor
in Global Operations, Faculty of Business and Law, University of the West of
England, UK. A civil engineer by training, she worked in the construction
industry before starting an academic career as a researcher and executive
management educator internationally. Svetlana’s research focuses on the
critical study of project-based work and management as economic, social
and political phenomena and on the pursuit of advanced understandings of
complexity in organisations, risk, crisis and sustainability. She has published
widely in academic and professional journals and co-edited an influential
book Making Projects Critical (Palgrave Macmillan, 2005). Her research has
been supported by national and intentional grants.
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