The methodology to research of internal , external stakeholders in megaprojects

1. The methodology to research of internal, externalstakeholders in megaprojects Ivana Burcar Dunović Agnieszka Lukasiewicz Louis-Francois Pau

2. 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 .

3. Research concept

4. CONTEXTUAL & CULTURAL BASIS (L-F) • Method based on measures from established disciplines: A) culturallyaffected micro-behaviors (of individuals and teams within each stakeholder) B) physioeconomics C) synergy processes in organizationaltheory • 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 organizationalsense • Resulting in a toolbox to characterize and comparemegaprojects based on their contextual and cultural attributes

5. CONTEXTUAL & CULTURAL BASIS: GAP ANALYSIS MEASURES (I) Some measures are exogeneous, while others depend on user feedback • 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 • Endorsementprocesses in the project initiation phase • Bottom-up/ Democratic/ Criticsallowed - 1 • Top-down/ Authoritarian/ No criticsallowed – 5 • Project staffing • Few people / high skills – 1 • Plentifull / averageskills – 5 • Communications style aroundproject • No public communication - 1 • Wide public communication and feedback -5 • Governance • None / Minimal – 1 • Public scrutinity / Companywide - 5

6. GAP ANALYSIS MEASURES (II) • Organizational team culture • No synergy / Conflictprone - 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 • Decentralizedbetweenstakeholders – 1 • Centralized – 5 • Significant fines actuallylevied in case of delays • Nominal • Significant / Dissuasive • Riskview by Project owners (attitude) • Embracingrisk - 1 • Avoidingrisk - 5 • Willingness of Project owners to change contractors • Low - 1 • High - 5

7. GAP ANALYSIS MEASURES (III) • Values: Main contractor • PromoteSocial and public value of the project – 1 • Profitability – 5 • Values: Project funders • Promote Social and public value of the project – 1 • Profitability-5 • Politicalinterference • Weak - 1 • Strong - 5 • Project achievingGreen policygoals • None - 1 • Verysignificant - 5

8. ANALYSIS and OUTPUT OF CULTURAL MEASURES • Case data from a megaproject: e.g. Anholt Offshore Wind Farm (nowcompleted) : (Denmark, References, (3,1,2,5,4,2,4,4,5,4,4,2,2,3,2,5)) • Analysis of cultural measures • Clusteringinto groups of megaprojectsexposed to similarcontextual and cultural influences (across countries, or within a given country) • Comparison of extremes for a givenmeasure, and justification by cultural differences in behavioral, organizational or decision traditions OUTPUT for Stakeholder network analysis : • a) homogeneous clusters of similarmegaprojects (clustered by a)) • b) or megaprojectsgrouped by extreme values of a given cultural attribute, to better explainstakeholder relationsdue to thatattribute

9. ILLUSTRATION OF OUTPUT TO NEXT LEVEL Social network analysis of stakeholder relations Politically driven projects Projects with highloss risk on project manager (loss of contract, fines) Projects with lean management and high team synergies NB: The threebottom clusters are examples generated by clustering from data

10. INTERACTION FLOW Project values and user-stakeholderassessment Stakeholder behavior Culture and context Project execution Impact Performance Stakeholder interactions Exogenous Endogenous Output USERS are key; you dont do a project for stakeholders also and their feedback impacts selection of stakeholders !!!!!??????

11. 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 • Theconcept is based on 5P’s • Product/The deliverable- result • Process • People/Social • Planet/Environmental 3P’s • Profit/Economical

12. OMEGA Centre’s adaptation of the HalSTAR systems model ofsustainability

13. Examples of UK sustainability policy mapped onto the adaptedHalSTARwheel

14. How stakeholders influence the project? “The triangle – performance” Side-effects Sustainability Culture and context The project Internal Stakeholders Endogeneous External Stakeholders Exogeneous

15. Currentevaluationapproaches • Evaluating the total impact of stakeholders in relationtothe project requires more than identifying the impactlevel and probability of impact. (…..) • Project managers needto assess the stakeholder attributes and classes(Mitchell et al. , 1997), and their position towards theproject (Cleland, 1986; Winch and Bonke, 2002)—arethey opponents or proponents? • Stakeholderatributes(Olander): • value (A) = power x legitimacyxurgency • position value (Pos) • interest–impact index (ViII), • Evaluation - stakeholder impact index (SII) as a functionof A, Pos and ViII.

16. Stakeholder measurements

17. Externalstakeholder 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

18. Stakeholder’s interaction characteristics - attributes • Can be increased or decreased by themutualstakeholder 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 administrativeflaws • due to media influence • Informaniveness 2. Grade of Interest – willingness to engage (1 to 5)Likertscale 3. Attitude – positive or negative (-3 to-1 and+1 to+3) Stapelscale

19. ProposedStakeholder’s measurementcharacteristics - attributes • Power xAttitude – from -5 to 5 (it cannot be zero) 2. Proximity = 1/(Power x Grade of interest) • From 0,04 to 0,2 3. Attitude/PowerxGrade 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 closedform expressions, why not let non linearregressiondetermine the actual formulas??? OK, we could do that toobut we do not have all data values.

20. Interactions between external (?)stakeholders • Frequency of interaction /communication (1-5)NB: It has been shown that frequency alone is a poormeasure – yes, but this is whywewillcombineitwithothermeasures • Type of interactions – cooperation vs. Competition • For each stakeholder (this is specific to each stakeholder andassymmetric) - Yes, thatwastheintention(Modified Likert)

21. Exampleofthenetworkrepresentation Frequency S1 S1,3 S2,1 S3,1 S1,2 S3 S2 S4,3 S2,4 S3,4 S4,2 S4 Nature of relationship

22. How external stakeholders influenced the process, product and 3P(?-too general) – it is aggregated Answering the question how will lead to influence and impact cluster This is the framework to obtain the information based on slide 6

23. External stakeholders impact to time, cost and 3P(?-too general) – it is aggregated This is the framework to obtain the information based on slide 6

24. OMEGA - Adapted HalSTAR wheel

25. OMEGA - Adapted HalSTAR wheel

26. Social network metricsINTRODUCTION TOTHE FORMAL ANALYSISOF SOCIAL NETWORKSUSING MATHEMATICAbyLuis R. Izquierdo, Robert A. Hanneman • Network size – howlimited resourceseach 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

27. Social network metrics • Network conectivity • Clustering coeficijent of a node • to which the friends of myfriends are my friends • clustering coefficient for the entire network • the average of the clusteringcoefficients of all the nodes • Centrality of a node – measure of its structural importance based on • degree - havingmore ties means being more important • closeness, - who are able to reach other actors at shorter path lengths, or who aremore reachable by others • Betweenness - being in between many other actors what makes anactor central

28. 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

29. 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

30. RESULTS • How stakeholders impact the project? Project performance and impact How stakeholders impact the project? How to measure stakeholder involment? Stakeholder network How the stakeholders interact? How project context and cultureinfluence stakeholder’s behaviour? Groups of Megaprojects with consistent cultural & contextual attributes

31. 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). Sustainabilityin Action: Identifyingand Measuringthe KeyPerformance 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 inConstruction ProjectManagement. 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 externalstakeholder 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 theimplementationof constructionprojects.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, withKristian 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 ofSustainable Development within theDesign and Delivery of MajorProjects: An international study withparticular reference to MajorInfrastructure Projectsforthe Institution of Civil Engineers andthe Actuarial Profession, November 2010