Competition between key project participants during project execution : a system dynamics approach

Abstract

Project management is one of the most important forms of management due to its versatility, demand and widespread use in almost every field and organisation. Yet, poor project performance continues to be commonplace. Existing literature highlighted conflict as one of the inevitable challenges encountered during project execution owing to the inherent interdependencies and interactions among project stakeholders, who often have different objectives and expectations, and take different decisions and control actions aimed at protecting their different and competing performance measures and targets. Though often intendedly rational, such different controls turn out to be mutually-exclusive, resulting in the use of competition (aimed at win-lose results) as a conflict-handling style. Indeed, some previous researchers highlighted the prevalence of such competition during project execution. However, project dynamics emanating from such competition are largely under-researched in the reviewed literature.

This research study sought to address this gap. Specifically, it investigated, using system dynamics: how competition develops between two key project participants (client and engineering consultant) during project execution; how the competition influence both project performance and the engineering consultant’s project business performance; and, how the competition can be improved to yield win-win long-term results. It followed a mixed methods research design, incorporating the system dynamics approach. Firstly, appropriate dynamic hypotheses and a system dynamics conceptual model of the competition were formulated from a combination of existing literature, an embedded multiple-case study, and systems thinking. Then, an appropriate system dynamics simulation model of the competition was formulated. Data gathered for 18 unique raw water infrastructure-related projects were used for model calibration, as well as simulation and optimisation experiments.

Simulations and impact analyses results were counterintuitive, highlighting the dynamic complexity of the competition. Firstly, client project cost controls (aimed at reducing project cost overrun) generated some unintended effects that increased the project cost overrun. Secondly, engineering consultant project revenue controls (aimed at reducing project revenue shortfall) generated some unintended effects that increased the project revenue shortfall. Thirdly, the competition (aimed at win-lose results) negatively influenced both project performance (client’s interest) and engineering consultant’s project business performance (lose-lose long-term results).

Policy optimisation results suggested key interventions that improved the competition, enhancing both project performance and engineering consultant’s project business performance (win-win long-term results). Firstly, the two key project participants need to adequately apply systems thinking, recognising that: they are interdependent subsystems of a bigger system (the project) whose emergent properties include project performance and engineering consultant’s project business performance, as neither participant can individually achieve his/her performance targets; and thus, they cannot afford to operate in ‘silos’, taking project controls aimed at win-lose results. Secondly, they need to fully align their individual performance targets, as this eliminates/minimises the performance gaps that trigger the competing project controls.

This research study made some novel contributions that expand knowledge in a number of areas. Firstly, the model calibrations, simulations, impact analyses and policy optimisations experiments were conducted separately for each set of unique projects (10 asset management planning and support-related, and 8 asset-renewal related), with subsequent comparison and discussion of the results aimed at enhancing the validity of the above-highlighted research results. This is a novel extension to the existing system dynamics model validation body of knowledge, currently limited to the use of only one project or multiple projects of the same type.

Secondly, the formulated system dynamics simulation model of the competition is unique as no appropriate system dynamics model could be identified, in the reviewed literature, that considered competition among project participants, with their different and competing performance measures and targets during project execution. It is a novel extension to the existing project dynamics models (that only focus on one project participant) and helps project managers to deepen their understanding of project dynamics. Thirdly, the finding that the competition (aimed at win-lose results) yields lose-lose long-term results provides an alternative explanation as to why poor project performance is common. This and the recommended interventions that yield win-win long-term results are novel contributions to conflict handling and project performance bodies of knowledge.

Lastly, the findings highlighted that the engineering consultant’s project business performance is another key emergent property of the project system, like project performance, essential to yield win-win long-term results. This is a novel contribution to the application of systems thinking to project management body of knowledge, currently narrowly focussed on only project performance.