THE EFFECT OF PROJECT MANAGEMENT PRACTICES ON BULDING PROJECT PERFORMANCE: THE CASE OF THREE ORGANIZATIONS

THE EFFECT OF PROJECT MANAGEMENT PRACTICES ON BULDING
PROJECT PERFORMANCE: THE CASE OF THREE ORGANIZATIONS

By:

Sarfo Mensah B. Sc (Hons.)



A Thesis submitted to the Department of Building Technology,
Kwame Nkrumah University of Science and Technology in partial fulfillment of the
requirements for the degree

of


MASTER OF SCIENCE
in
CONSTRUCTION MANAGEMENT


JUNE, 2007

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DECLARATION
I hereby declare that this submission is my own work towards the M Sc and that, to the
best of my knowledge, it contains no material previously published by another person nor
material which has been accepted for the award of any other degree of the University,
except where due acknowledgement has been made in the text.




























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ABSTRACT
Performance of building projects is affected by several factors. The focus here is on the
relationship between Project Management Practices carried out by Project Management
Organizations and project performance. Three organizations involved in the management
of projects were thus selected as project management organizations for the study. These
are ‘GETFund’ organization, ‘Common Fund’ organization and ‘SIF’ organization.

Three criteria for measuring project performance were identified for their widespread
application in project management definition and general understanding amongst
practitioners. These include: time, cost and quality criteria.

Semi-structured personal interviews have been carried out within the selected
organizations for identification of practices undertaken in the management of building
projects. Other significant project management practices were also captured in relevant
literature. A structured questionnaire was developed to gather information for
measurement of the project performance and determination of project management
practices significantly relating to project performance. Performance indices were
developed for measurement of the time, cost and quality performance. To test for
significant differences between the performance of the categories of projects, each
belonging to one organization, a pair-wise analysis, using independent t-tests, was used.
Multiple Regression Analysis has been used to determine the relationship between the
significant project management practices and project performance.

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Considerably, significant difference between the time performance of the categories of
projects was observed. There was significant cost performance difference of the
categories of projects across all the organizations whilst there was no significant
difference in quality performance across all the three pairs of categories of projects
analyzed. It was realized that as significant difference exists between the performance of
a given pair of categories of projects from organization to organization the corresponding
significant project management practices also vary from organization to organization and
vice versa.

(Keywords: building projects, project management organization, project management
practices, project performance)

























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TABLE OF CONTENTS

DECLARATION ................................................................................................................. i
ABSTRACT ....................................................................................................................... iii
TABLE OF CONTENTS .................................................................................................... v
LIST OF TABLES ............................................................................................................ vii
DEDICATION ................................................................................................................. viii
ACKNOWLEDGEMENT ................................................................................................. ix
CHAPTER ONE ................................................................................................................. 1
INTRODUCTION .............................................................................................................. 1
1.1 Background ............................................................................................................... 1
1.2 Statement of Problem ................................................................................................ 3
1.3 Aim ........................................................................................................................... 4
1.4 Objectives ................................................................................................................. 4
1.5 Hypothesis................................................................................................................. 5
1.6 Research Methods ..................................................................................................... 5
1.7 Justification of Research ........................................................................................... 7
1.8 Scope ......................................................................................................................... 8
1.9 Limitations to Study .................................................................................................. 8
1.10 Benefits of Study..................................................................................................... 9
References ..................................................................................................................... 10
CHAPTER TWO .............................................................................................................. 11
LITERATURE REVIEW ................................................................................................. 11
2.1 Project Management Practices ................................................................................ 11
2.1.1 Introduction ...................................................................................................... 11
2.1.2 The Differences in PM Practices ..................................................................... 13
2.1.3 Certain Organizational practices and attributes ............................................... 14
2.1.3.1 Practices in Management of Project Funding ............................................... 15
2.1.4 Project Management Functions as Practices .................................................... 17
2.1.4.1. The Function of Project Definition .............................................................. 17
2.1.4.2 The Function of Setting Organizational Matters .......................................... 18
2.1.4.3 The Function of Programming ...................................................................... 19
2.1.4.4 The Function of Quality Management .......................................................... 20
2.2 Project Performance ................................................................................................ 21
2.2.1 Dimensions of Project Performance ................................................................ 21
2.2.2 The Problem of Poor Project Performance ...................................................... 24
2.2.3 Managerial and Administrative Issues & Project Performance ....................... 25
2.2.4 Project Management Structure and Project Success ........................................ 27
2.2.5 Decision-making & Experience and Project Success ...................................... 28
2.3 Project Performance Measurement ......................................................................... 29
2.4 Construction Time and the Effect of Certain PM practices .................................... 34
2.5 Project Cost and the Effect of Certain PM practices .............................................. 36
2.6 Construction Quality and the Effect of Certain PM practices ................................ 38
References ..................................................................................................................... 40
CHAPTER THREE .......................................................................................................... 44
RESEARCH METHOD.................................................................................................... 44


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3.1 – General Approach for Research ........................................................................... 44
3.2 – Identification of PM practices .............................................................................. 44
3.3 – Design of Questionnaire ...................................................................................... 45
3.4 – Measurement of Projects Performance ................................................................ 48
3.4.1 Use of Project performance Indices ................................................................. 48
3.4.2 Differences in Performance of Projects ........................................................... 49
3.5 – Determining PM practices affecting project performance ................................... 50
References ..................................................................................................................... 52
CHAPTER FOUR ............................................................................................................. 54
DATA ANALYSIS AND DISCUSSION ........................................................................ 54
4.1 Introduction ............................................................................................................. 54
4.2 PM Practices identified ........................................................................................... 54
4.3 Measurement of Time, Cost, and Quality Performance ......................................... 60
4.4 Response to Data collection .................................................................................... 61
4.5 Overall Trend of Performance of the Projects ........................................................ 62
4.6 Determination of Differences in Performance of the Projects from Organization to
Organization .................................................................................................................. 65
4.7 Determination of Significant PM practices ............................................................. 74
CHAPTER FIVE .............................................................................................................. 83
CONCLUSIONS AND RECOMMENDATIONS ........................................................... 83
5.1 Introduction ............................................................................................................. 83
5.2 Identified PM practices ........................................................................................... 83
5.3 Measured project performance ............................................................................... 84
5.4 Comparison of Performance of the Projects between the Organizations ............... 84
5.4.1 Difference in Time Performance of the Projects ............................................. 85
5.4.2 Difference in Cost Performance of the Projects .............................................. 85
5.4.3 Difference in Quality Performance of the Projects .......................................... 85
5.5 Significant PM Practices affecting Project Performance ........................................ 86
5.5.1 Significant PM Practices relating to Time Performance of the Projects ......... 86
5.5.2 Significant PM Practices relating to Cost Performance of the Projects........... 87
5.5.3 Significant PM Practices relating to Quality Performance of the Projects ...... 87
5.6 Summary ................................................................................................................. 88
5.7 Recommendations ................................................................................................... 88
5.7.1 Specific Recommendations .............................................................................. 88
5.7.2 Recommendation for Further Studies .............................................................. 90
APPENDICES .................................................................................................................. 91
APPENDIX I - THE PM PRACTICES AS INDEPENDENT VARIABLES ............. 91
APPENDIX II - PERFORMANCE INDICES AND POINTS INDICATING PM
PRACTICE EFFECT OBTAINED PROJECT BY PROJECT FOR REGRESSION
ANALYSIS ................................................................................................................... 94
APPENDIX III - QUESTIONNAIRE TO PROJECT COSULTANTS ..................... 100






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LIST OF TABLES
Table









Page

2.1
-
Project Performance Formulae adopted by Chan & Chan (2004) - 30

2.2
-
Project Performance Formulae adopted by Ling et al. (2002) ----- 31
4.1
-
Major Identified PM Practices ----------------------------------------- 56
4.2 (a) -
Time Performance (Y1) Index ------------------------------------------ 60

4.2 (b) -
Cost Performance (Y2) Index ------------------------------------------- 60

4.2 (c) -
Quality Performance (Y3) Index --------------------------------------- 61

4.3 (i) -
Time performance trend of projects ----------------------------------- 63
4.3 (ii) -
Cost performance trend of projects -----------------------------------
63
4.3 (iii)-
Quality performance trend of projects -------------------------------
64
4.4
-
Independent samples t-test with Time Performance as Test
Variable ------------------------------------------------------------------- 67
4.5
-
Independent samples t-test with Cost Performance as Test
Variable ------------------------------------------------------------------- 69
4.6
-
Independent samples t-test with Quality Performance as Test
Variable ------------------------------------------------------------------- 72
4.7(a) -
Regression analysis of Time performance (Y1) on
PM Practices – Summary --------------------------------------------- 75
4.7(b) -
Regression analysis of Cost performance (Y2) on
PM Practices – Summary --------------------------------------------- 78
4.7(c) -
Regression analysis of Quality performance (Y3) on
PM Practices – Summary --------------------------------------------- 80



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DEDICATION















To my loving family for their consistent encouragement


























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ACKNOWLEDGEMENT

The first thanks goes to the Mighty God for his unwavering assurance of victory in the
production of this Research.

I owe a lot of gratitude to my Supervisors, Mr. Ayirebi Dansoh and Mr. Peter Amoah.
I sincerely appreciate the invaluable research guidance, a sense of academic
purposefulness and the highest level of cooperation a student can get from his supervisor
throughout every part of the research process, which has resulted in a mutually beneficial
relationship.

I owe Mrs. Rebecca Sarfo Mensah the most heartfelt commendation for her immense
support. My sincerest gratitude goes to Mr. Samuel Laryea for his uplifting
encouragement. My next thanks go to Mr. Francis Agyekum, Lecturer at the Valley
View University, for providing me not only with the computer software, SPSS, for
analyzing my data but also assisting in the use of it. I also thank the entire staff of the
Building Technology department for their readiness to always provide the necessary
assistance. Their help has been unfailing.

All examiners deserve sincere commendation for their input in making the entire exercise
a success.

God bless you all.

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CHAPTER ONE
INTRODUCTION
1.1 Background
Execution of building projects is undertaken through management practices carried out
by various project managers daily. Specific project objectives are set to be achieved at the
end of the project. The objectives may vary from one project to the other. Time, cost and
quality objectives are however basic and common to almost all projects; they are
discussed in the success subject matter of most projects. [Belassi and Tukel, 1996;
Walker, 1995, 1996].

In order to achieve set project objectives, specific Project Management (PM) practices
are carried out daily by project managers. It has been argued that the PM practices may
vary from organization to organization. Other project managers however argue that since
professional practice within the construction industry is required to follow set down
guidelines and ethics, PM practices may not necessarily vary from organization to
organization; the purpose of adopting a particular practice may therefore be due to
peculiar environmental and social demands of the project at hand. Highly satisfactory
performance cannot be compromised on and so is the need for optimum practices. As
asserted by [Ramabadron et al., 1997], the high performance achieved by a project is
what makes a practice adopted optimum.

The factors that affect the individual set project objectives are the ones that confront or
promote the project success, outcome or performance. Although project performance is


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