EFFECT OF ORGANIZATIONAL CULTURE AND LEARNING ON PROJECT MANAGEMENT (A CASE STUDY OF ESKOM, SUNNINGHILL, SOUTH AFRICA)

CHAPTER ONE

INTRODUCTION

1. BACKGROUND OF THE STUDY

Over the years, the art of business has developed into a complex system which is not just interested in the earning of profit but doing so in an efficient manner. Businesses have therefore adopted different ways of achieving its goals and one if such ways is project management. In tough economic times and under global competition, management by projects is now regarded as a competitive way for managing organizations”, this option offers organizations the opportunities to decentralize its operations into projects thereby reducing the size of the institutions which has to be run into smaller units for better monitoring and controls. To a large extent, it is a consequence of mayor projects conducted during World War II, the best known being the Manhattan Project (Frame, 2012). Most authors agree that projects are unique endeavours [Andersen, 2014] with a finite duration, and that they involve the coordinated undertaking of interrelated activities in order to reach a defined goal (Frame, 2012). Turner and Müller (2009) argue that the traditional definition of project is incomplete, and propose the following definition: “A project is a temporary organization to which resources are assigned to undertake a unique, novel and transient endeavour managing the inherent uncertainty and need for integration in order to deliver beneficial objectives of change” (Turner and Müller, 2009). Turner (2012) defines a project as “an endeavour in which human, material and financial resources are organized in a novel way to undertake a unique scope of work, of given specification, within constraints of cost and time, so as to achieve beneficial change defined by quantitative and qualitative objectives”.

This definition in other words captures the different specializations within large corporate organizations which are run independently as if they were separate organizations. In recent times, the complexity of projects has increased drastically thus requiring a team of talented individuals who can be integrated into an effective group – project team. The success of the various stages of the project life cycle is hugely dependent on the effectiveness of the teamwork. Effective team building is one of the prime responsibilities of the project manager. The most generally accepted definition of project management is that proposed by the Project Management Institute (PMI, 2011) which defines the concept as “the application of knowledge, skills, tools and techniques to project activities to meet project requirements”. Putting this definition in simpler terms, it means achieving the project objectives with the resources available. There are however different aspects of project management and one of the most famous if the ‘iron triangle’ of cost, quality and time proposed by Atkinson (2015). Other authors have chosen to concentrate on other aspects of project management, but this article will be looking at the influence of culture on the project management process. This is because projects are implemented in societies, implemented by persons and these persons and societies have certain thoughts and mindsets which influence whatever it does; therefore any factor which might seem important in the project management process is ultimately influence by this concept of culture. The concept of organizational culture is not new. Indeed, culture influences organization as it shapes its decision patterns, leads its actions and impacts individual behaviour. Culture can be ambivalent as on one side it can provide stability but it can also erect barriers preventing the company to get the results expected and to remain competitive. And this is very challenging for project leaders who have to understand and adapt to different behaviours and norms across the organization.

They need to be flexible, effective and adaptable in order to run successful projects. Organizational culture has to do with set of shared values, beliefs, assumptions, habits, language, and other factors that guide people’s behaviours and decisions within an organization. All those factors of organizational culture influence how projects are performed and their success. The organization’s mission and vision shape the organization’s culture. Projects that support the company mission are likely to get more attention and resources. Leadership and authority are also a big part of organizational culture. If management defines clear goals and then delegate’s responsibility to employees that approach works equally well in your projects. On the other hand, if authority isn’t handed out often, you need to work with management to get things done and build their trust in you at the same time. Another aspect of culture is the organization’s work environment. For example, with a positive environment, people are motivated to get things done. And gathering lessons learned are easy because employees are used to providing input and striving to improve. On the other hand, in a negative environment, you’re probably going to have to spend a lot of time managing your team. Some cultures believe in following the rules no matter what. Culture is viewed as an essential determinant of management practice; thus, culture has recently been examined in the literature as a CSF of construction project (Kwan et al, 2014, Walker, 2009, Cheung et al, 2012). In addition, construction project organization is operated by multiple individuals with diversity of backgrounds, causing different human behaviour and different expectations for a project. Hence, those involved individuals who come with complicated behaviours and/or attitudes significantly influence the success of project. It is also believed that cultural differences can generate conflicts relating to individual communication, which decline capacity of construction organizations to achieve project objectives (Tijhuis, 2011, Ankrah et al, 2005). It could therefore be argued that culture plays a vital role in the success or failure of project management. Thus, in practice of project management, culture should be treated as a significant aspect in controlling conflicts, improving quality outcomes, and encouraging innovation. Although organizational culture is recognized as influencing performance, it is the least-studied area in the project management literature.

1. STATEMENT OF PROBLEM

The requirements for business growth, profitability and competitive advantage compel Eskom to invest in various projects. For projects to be successful they have to be completed on time, within the required budget and the project outcomes should fully address the business requirements. In the past seven years, 45% of the projects have failed and this can be attributed to lack of training and development, poor communication and team work, in addition to poor reward and recognition of its staff. These causes form the four dimensions of organizational culture which affect project management. Management felt that the failure rate is high and this was an obstacle towards achieving its vision. Since Eskom wants to go international, then it has to address the issue of diverse staff culture in the various countries that it seeks to operate in and merge them into a strong Eskom organizational culture that will guarantee better project management. Hence the study sought to establish the effect of corporate culture and learning on the management of projects at Eskom.

1. AIMS AND OBJECTIVES OF THE STUDY

The major aim of the study is to examine effect of organizational culture and learning on project management.  Other specific objectives of the study include;

1. To examine the effect of training and development on project management.
2. To examine the factors of organizational culture that influence project management.
3. To examine the role of organizational culture in the life cycle of projects.
4. To examine the impact of organizational culture and learning on project management.
5. To examine the relationship between organizational culture/learning and project management.
6. To examine practices that can contribute to the sustainability and success of projects in an organization.
   1. RESEARCH QUESTIONS
7. What are the effects of training and development on project management?
8. What are the factors of organizational culture that influence project management?
9. What is the role of organizational culture in the life cycle of projects?
10. What are the impacts of organizational culture and learning on project management?
11. What is the relationship between organizational culture/learning and project management?
12. What are the practices that can contribute to the sustainability and success of projects in an organization?
    1. RESEARCH HYPOTHESES

Hypothesis 1     

H₀: There is no significant impact of organizational culture and learning on project management.

H₁: There is a significant impact of organizational culture and learning on project management.

Hypothesis 2

H₀: There is no significant relationship between organizational culture/learning and project management.

H₁: There is a significant relationship between organizational culture/learning and project management.

1. SIGNIFICANCE OF THE STUDY

The study sought to determine the effect of organizational culture and learning on project management. The results from the study could benefit project management practitioners by providing specific constructs that can be applied towards improving the current approaches to project management. To the academicians, the study will form the basis for research into other areas of organizational culture, learning and project management. Project management is indispensable for business results, and thus the research will be able to create strategic dialogue on issues of project performance that reflect the realities of capital project management by the government. It will further aid in reducing failure of major and complex national projects.

1. SCOPE AND LIMITATION OF THE STUDY

The study is restricted to effect of organizational culture and learning on project management, a case study of ESKOM, Sunninghill, South Africa.

1. LIMITATION OF THE STUDY

Financial constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview)

Time constraint: The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

1. DEFINITION OF TERMS

Organizational Culture: Is defined as the underlying beliefs, assumptions, values and ways of interacting that contribute to the unique social and psychological environment of an organization. Organizational culture includes an organization’s expectations, experiences, philosophy, as well as the values that guide member behaviour, and is expressed in member self-image, inner workings, interactions with the outside world, and future expectations. Culture is based on shared attitudes, beliefs, customs, and written and unwritten rules that have been developed over time and are considered valid.

Learning: Learning is the process of acquiring new, or modifying existing, knowledge, behaviours, skills, values, or preferences. The ability to learn is possessed by humans, animals, and some machines.

Project Management: Is the practice of initiating, planning, executing, controlling, and closing the work of a team to achieve specific goals and meet specific success criteria at the specified time. The primary challenge of project management is to achieve all of the project goals within the given constraints.