Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 1MGT610Lecture 6Project Stakeholder ManagementDr. Thomas Lechler Phone: (201) 216-8174Morton Room 636 FAX: (201) 216-5385email: email@example.com
22Project Stakeholders & Roles• An individual, group, or organization who may affect,be affected by, or perceive itself to be affected bya decision, activity or outcome of a project (PMBOK,2013)• Examples– Project manager– Project sponsor: provide resources and supportfor the project– Project owner: initiates a project, financesit, contracts it out, and benefits from its output(s)Thomas Lechler, Ting Gao
33Project Stakeholders & Roles– Client/customer: approve and use the project’sproduct, service or results– Vendors: provide components or servicesnecessary for the project also called contractors– Functional managers: provide SME or services tothe project– Organizational groups: internal stakeholdersaffected by the activities of the project team– Other stakeholders: financial institutions,government regulators, consultants and othersThomas Lechler, Ting Gao
44N=42• Stakeholder capabilities and dynamics are the mostfrequent source of uncertainties!Stakeholder UncertaintiesUncertainty Categories Uncertainty Sources FrequenciesStakeholder uncertainty Inexperience, change, contracts 20Organizational uncertainty M&A, politics, unknown legacy system 10Technological uncertainty Tech. issues, tight specs 8Contextual turbulences Legal, market 6Project characteristics Unknown complexity 3Malpractice Self induced uncertainty 2
55Stakeholders Related Sources of UncertaintiesUncertainty sources FrequenciesCustomer induced changes/Contracts/Diverseneeds3Rejection from clients 1Requirements changed by project owner 1Opposition from external stakeholders 1Inability of contractor or vendor 3Inexperienced project manager 2Inexperienced subcontractor 1Contractor-client Relations 2Change of key stakeholders 2Unknown project ownership 1Thomas Lechler, Ting Gao
66Project Owner Goals: Defined by ProjectContractFixed 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
77Managing Project Owner Perspective: ProjectMissionProject Mission:Represents the project owner expectations and is expressed in thebusiness need and the project justification.Business Need:Expressed as a goal or as a problem derived from the corporatestrategy.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 doin the project.Problem:Need and justification are often ill defined. The ultimate goal is tomaximize wealth.
8Explaining Project Success with ClientExpectation Alignment: An Empirical StudyThomas Lechler Ting GaoStevens Institute of Technology
99Agenda• Motivation• Literature Review• Model Development and Hypotheses• Methodology• Results• Implications and OutlookThomas Lechler, Ting Gao
1010Motivation• Challenge for project managers to satisfy their clients• Not unusual for clients to change their expectationsduring project implementation• Gap: Managing client expectations is recognized bypractitioners, but research lags behind practice• Research Question: What are the effectsof managing client expectations?Thomas Lechler, Ting Gao
1111Literature 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)Thomas Lechler, Ting Gao
1212Literature Review• Influence of Dynamic Client Expectations– Project changes, especially goal changes(Kreiner, 1995)– Loss of client supportThomas Lechler, Ting Gao
1313Literature Review• Client Expectation Alignment– The processes to align client expectationswith project objectives• Following relationship marketing literature(Morgan & Hunt, 1994; Buttle, 2001)– The processes reducing goal changes– The processes increasing client supportThomas Lechler, Ting Gao
1515Methodology• 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% OthersThomas Lechler, Ting Gao
1616Methodology• Research Measures– Applying multiple items– 7-point rating scales from “stronglydisagree” to “strongly agree”– Cronbach’s alpha from 0.83 to 0.95 for thefive constructsThomas Lechler, Ting Gao
1717MethodologyScale Alpha Number of itemsProject success 0.85 – 0.95 13Client expectationalignment0.89 9Goal changes 0.85 2Team competence 0.83 3Project managerauthority0.84 4Client support N/A 1Client competence N/A 1• Research MeasuresThomas Lechler, Ting Gao
1818Variable MeasurementsScale MeasuresEfficiency 1. The project was completed on schedule2. The project was completed within budgetEffectiveness 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 clientperformance.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 decisionmaking and / or improved performance.Customersatisfaction1. The clients were satisfied with the process by which this project wascompleted2. The clients are satisfied with the results of the projectEconomicsuccess1. The project was an economic success for the organization thatcompleted it.2. All things considered, the project is a success.
1919Variable MeasurementsScale MeasuresClient expectationalignment1. Potential clients had been contacted about the usefulness of theproject output.2. The clients had been given the opportunity to provide input early inthe 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 theproject 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 howbest to “sell” the project to the clients.8. There was adequate documentation of the project to permit easy useby the clients (instructions, manuals, etc).9. An adequate presentation of the project had been developed for theclients.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.
2020Variable MeasurementsScale MeasuresClient competence 1. During the negotiation process, the client appeared knowledgeableregarding 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’sauthority1. The authority allocated to the position of project manager wassufficient.2. The project manager had enough authority to negotiate agreementswith 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 thenecessary decisions to achieve the project goals.4. The project manager had the authority to change objectives in orderto achieve the project goal.
2121Methodology• Data Analysis– Within unit agreement index (rwg) to justifyaggregation: deleted 43 projects– Structural Equation Modeling: LISREL– Stepwise Regression ModelThomas Lechler, Ting Gao
2424Results• Determinants of Client Expectation Alignment(Stepwise Regression Model)** p<0.01• All hypotheses are supportedVariables Final StepProject team competence 0.43**Client competence 0.32**PM authority 0.17**F value 64.30**R2 0.50Thomas Lechler, Ting Gao
2525Implications and Outlook• For Stakeholder Theory– Significance of stakeholder expectations– The influence path of changing expectations onproject performance• For Practice– Communicating to adjust clients’ expectations– Managing project changes by managingstakeholder expectationsThomas Lechler, Ting Gao
2626Implications and Outlook• Outlook– Alternative measurement model for clientexpectation alignment– Internal and external stakeholder expectations– Project uncertainty as a moderator– More mediators to explain the effect of clientexpectation alignment on project successThomas Lechler, Ting Gao