You are on page 1of 11

Managing international

construction projects for


competence development
within local firms
E E Simkoko

economic sectors’. The relative importance of the


The paper presents two methods for competence develop-
construction industry suggests that changes within the
ment: the Institution Building Model and Technology
sector have direct significant effects on the development
Transfer packages. The latter analyses relationships
process. For the potential of construction to be utilized
between project-management teams, technology-
effectively, construction production resources, i.e.
acquisition strategies and project organizations. Twelve
capital (finance and technology), labour and managerial
projects executed in developing countries were used for
capability, are presumed to exist. The management
data collection. Chi-square tests and rank-correlation
element in the construction production process acts as a
coefficients were used to analyse the data. The results
synergistic catalyst. It facilitates the combination of
suggest that the composition of the project team impacts
capital and labour, which are interdependent’. Further,
on technology-acquisition strategies. Project organiza-
management characteristics are among the principal
tions are influenced by local firms’ participation and
factors that affect construction productivity, and they
funding. Clear formulation of clients’ objectives and the
are strongly related to project organizations, in that
establishment of control mechanisms are necessary.
they impact on organizational choices and project
Local involvement is a major factor in relation to
objectives4.
competence development.
Construction management is concerned with client
objectives, project characteristics and organizational
Key words: competence development, technology
forms. Its main task is to match management, design
transfer, construction project management, teams,
and construction strategies”. On the other hand,
organization forms, developing countries, strategies,
project performance in construction production is a
contingency tables, statistics
function of the interplay between the project-
management team, the project organization and the
client’s technology-acquisition objectives’.
The construction industry in developing countries is the Developing countries lack most of these construction
most important single constituent of investment pro- resources, particularly the technological and managerial
grammes. It accounts for about 5040% of the total capabilities to implement development programmes.
capital formation, and up to 8% of the gross domestic Compounded with the lack of managerial capability is
product in these countries’. In terms of backward and the fact that the knowhow in the management of
forward integration, i.e. intersectoral linkages, the international construction projects is still inadequate’.
sector has been ranked among the top four out of 20 This affects construction projects executed in the
environment of developing countries, which is
Department of Building Economics & Organization, Royal Institute characterized by reat uncertainty and limited access to
8
of Technology, S-100 44 Stockholm, Sweden scarce resources 3’. Local construction resources, i.e.

12 0263-7863/92/010012-11 @ 1992 Butterworth-Heinemann Ltd Int. J. Project Management


E E SIMKOKO

trained project-management personnel and other levels. De Wit asserts that the success of a project and
professionals, skilled human resources, construction project management may be determined by the
firms etc., are often insufficient and inconsistent in the evaluation of performance against success criteria or
developing countries. objectives, but that the problem lies in the identification
The management of international construction pro- of the success criteria or objectives to be measured.
jects entails the handling of several complex patterns of In international construction contracting, structural
managerial relationships between the client and con- changes, changing client expectations or requirements,
tractors, financiers, customers, insurers, the project- and the internationalization of the project team are
management team, designers and others. The project- regarded as new challenges that force firms to adopt
management team normally relies on contractual new strategic responses and management systems”. In
arrangements as the main vehicles for the formulation response to these challenges, international construction
and regulation of these relationships to achieve a high firms have adopted technology-transfer programmes,
level of integration. In this complex situation, the competitive financial packages, and innovative project-
I;eco_nciliation of the various parties’ objectives, and the delivery systems, to contain the new challenges. Thus,
identrfication and allocation of risks, are among the by implication, client technology-acquisition objectives
principal factors that facilitate the successful manage- and new project-management systems, among others,
ment of the relationshipss. constitute, at present, key success factors in inter-
According to the World Bank*, the development of national construction project management.
managerial capabilities is a central issue for construction The client’s technology-acquisition objectives have
industries in the developing countries. This task is previously been regarded as less important, or have
further accentuated by shortage of resources and been accorded secondary importance, in the overall
inadequacies in the local infrastructure on which international contracting activity’4*‘5. As a consequence,
construction relies. technology transfer has traditionally not been a task
that has been undertaken by construction project-
management teams”. However, recent studies”q’3.‘”
CLIENT OBJECTIVES suggest that the technology transfer and acquisition
The main aim of undertaking a construction project is packages are of primary importance for clients in the
the provision of physical goods and services to the developing countries.
satisfaction of the client. Although client satisfaction is
a subjective concept, it is basicaIry this concept that the
STRUCTURE OF CONSTRUCTION SECTOR
project-management team seeks to satisfy for the
project to be regarded as successful. Traditionally, The nature of construction projects, and the types of
project-success criteria or objectives include project design and construction technologies applied, are
cost, completion time, the functional performance among the factors that im act on the structure of the
of construction products, and safety and quality industry in a given country I: *‘. In particular, the choice
aspects”.“‘. Further, good project success in the tradi- of technology depends on the technological develop-
tional approach depends on sound project management ment, the availability or scarcity of capital and labour,
that is based on well conceived strategic plans and government policies and the level of economic develop-
effective project organizations”. ment’.
Project costs, time and functionality are all The construction industry has specific characteristics
descriptors of the project performance or outcome. that are valid for projects in both the developed and
These performance descriptors measure the degree of developing countries. The industry’s fragmentation and
attainment of the project and the client objectives. its heterogeneity are probably unparalleled by other
However, international construction projects are natur- industries. The size distributions of construction firms
ally large and complex, and they involve a multitude of and projects in both markets have specific and well
objectives. The number of stakeholders is considerably defined profiles (see Table 1). Table 1 shows that a
larger than in other types of project. This suggests that large number of small firms (about 70% of the total)
the traditional project-success criteria might not suffici- implement small-size projects, and a relatively small
ently and satisfactorily measure the project perform- number (about 8% of the total) of large firms carry out
ance. nearly all the large and complex projects. This arbitrary
In an attempt to illustrate the complexity involved in division of contractors into these two categories depends,
measuring project success, de Wit” suggests a ‘project- to a large extent, on the availability of technological
success framework’ for clarifying the relationships and and managerial competence within the firms?. Hence,
interdependencies of the objectives of the various as small firms cannot contract for large and complex
parties involved in any single construction project. The projects, and international or large domestic firms are
basic elements of the framework include the organiza- not interested in smaller projects, a gap develops
tion of the client, with three management levels between the two groups. Consequently, it may be that
(institutional, management and technical), the project the lack of competent medium-size local construction
lifecycle, the stakeholders, and the objectives, which firms, particularly in developing countries, impedes the
vary from phase to phase in the project lifecycle, the effective transfer and acquisition of technology in the
hierarchical relationships being included. In this frame- course of the implementation of construction projects.
work, the distinction between project objectives and The vertical fragmentation (i.e. between the project
‘client’ objectives fades at the higher management phases of planning, design and construction), and the

Vol 10 No 1 February 1992 13


Managing international construction projects for competence development within local firms

Table 1. Distribution of construction firms’ activities in Tanzania regarded as one of the mechanisms for building up the
missing technological and managerial competence within
Class Contract Number of Total turnover (1982) firms in the developing countrie$‘.
size (MTAS) firms (MTAS) %
The understanding of the concept of technology
Privatecontractors: transfer and acquisition requires the understanding of
1 Unlimited 33 718 31
the constituent terms: technology and the transfer and
2 < 30 15 198 9 acquisition processes. In its widest meaning, technology
3 < 15 63 434 I9 includes physical elements, such as equipment, tools
4 < 10 74 343 I5 and machines, the methods applied in the utilization of
5 <6 101 242 10
6 <3 4
these physical elements, knowledge of these elements
101 97
7 <I 161 129 6 and methods, and documents that embody the know-
ledge (e.g. specifications, drawings and computer
Public contractors: programs). In construction, technology is generally
Corporation sole units 3 20 1 defined as a combination of materials and equipment
MECCO 1 80 3 resources, construction-applied resources, construction
NHC 1 44 2
ROB - - processes, and project requirements and constraints”‘.
1
Thus defined, a construction resource can either be
Totals 554 2315 100 materials and permanent equipment (e.g. steel beams,
elevators), construction-applied resources (e.g.
[Source: IL0 (1983).]
information, skills), or construction equipment. Con-
struction processes include the methods and tasks
needed to build a constructed product. On the other
horizontal fragmentation (i.e. between specialists within hand, client objectives and project characteristics are
a project phase), necessitate the creation of effective regarded as being major conditions of construction
integration mechanisms. Traditionally, the project- technology.
management team undertakes the task of integrating a It follows, then, that the technology transfer and
wide range of design and construction technologies and acquisition process takes place through various different
management knowhow and expertise from different mechanisms. The technology transfer and acquisition
independent firms and organizations. The selection of process is important in the ‘institution-building theory’.
appropriate mechanisms for the management and In this theory, technical-assistance projects in develop-
integration of interorganizational relationships is a ke ing nations are taken to constitute the base for
decisionproblemforclientsin theconstruction business x. capability or competence development within local
In commissioning construction projects, clients enter organizations. The institution-building theory is, in
into contractual arrangements with different organiza- turn, rooted in the classical, neoclassical and system-
tions for the supply of project designs, project manage- based approaches to the study of technical-assistance
ment, contractingorpurchasing, construction execution, projects in developing countries2’. While the main
construction coordination and contract administra- limitation of the classical model is that it ignores the
tion”. human aspect of organization (individuals play a
In an attempt to reduce the fragmentation character- significant role in leadership, communications and
istics of the construction industry (i.e. architecture, participation), the limitation of the neoclassical
engineering and construction), researchers, particularly approach is that it focuses almost exclusively on human
in the developed nations, are exploring the possibilities relationships and the behavioural aspects of the organ-
of synthetizing emerging and existing computer techno- ization, ignoring environmental factors and the influence
logies (artificial intelligence, expert systems, graphic of technology and culture, which are important to
and nongraphic databases, automation and robotics, organizations. In relation to this, Delage2’ states the
and technology management)‘s. The principal objective following.
of undertaking this type of research is the improvement
Although these aspects of the organization emphasized by the
of the productivity, quality and efficiency of the
two approaches are essential for any analysis of the impact of
construction industry. technical assistance on institutions in the developing countries,
they do not take into consideration relationships between the
organization and its environment which is equally important in
COMPETENCE-DEVELOPMENT studying technical assistance projects. While technical assist-
APPROACHES ance may be targeted primarily at improving organizational
efficiency and enhancing institutional capability, its success
Simkoko ” has sugge st e d that one of the principal also depends on several environmental variables.
objectives of the commissioning or undertaking of
construction projects, particularly for clients in On the other hand, although the system-based
developing countries, is that the projects might facilitate approaches take into account the limitations of the
the technology-acquisition process. The technology classical and neoclassical models, they are considered
transfer and acquisition process enables clients, firms to be excessively restricted to the analysis of environ-
and institutions in developing countries to master, mental variables, and theoretical. Therefore, it is most
adapt and further develop the acquired design and difficult to apply them to the study of technical-
construction technologies and management techniques. assistance projects in developing countries. However,
Consequently, the technology-acquisition process is the institution-building model deals with most of the

14 International Journal of Project Management


EESIMKOKO

inadequacies of the other approaches, in that it allows are contingent on the specific project character-
for the analysis of the internal structures and processes istics. Rondinelli et al. conclude that the effective
of the technical-assistance projects, and the relation- implementation of a project requires that the project
ships of the projects with their environment. Hence, organization is capable of creating management pro-
the institution-building model can be considered to be cesses and structures that are appropriate to the
suitable for the assessment of the contribution of the environmental uncertainty and the social and cultural
technical-assistance projects to competence develop- values of the project participants.
ment within local institutionsin thedevelopingcountries. On the other hand, the meaningful participation of
Delage’s paper2’ presents some views that agree, to a local institutions and firms requires that large and
large extent, with those discussed by Simkoko’. In complex development projects be unpackaged, i.e. that
Simkoko’s study’, the concept of technology-transfer complex programmes be decomposed into smaller and
programmes is presented. Simkoko asserts that a simpler projects, to allow effective local involvement’.
technology transfer or acquisition programme consists Further, the overall local participation in construction
of the training efforts designed for local personnel at projects calls for a ‘contractor-consulting’ type of
the operational, functional and management levels, the approach to organizational support, in which the
involvement of local construction firmsand construction- foreign contractor establishes a project-organization
related institutions, and the provision of employment structure on site that is similar to that of the local
to the local staff. As these efforts are directed at all contractor (subcontractor). In this arrangement, the
levels within a firm, he argues that this approach foreign contractor acts as a consultant, and provides
facilitates the acquisition of specific technologies and both technical assistance and knowhow transfer during
skills by a specific category of individuals within the the project implementation”. Hence, it is apparent that
firms and institutions. construction programmes and projects in the developing
In simple terms, the concept of technology-transfer countries could be used as sources for the creation of
programmes emphasizes the formation of ‘integrated indigenous construction capabilities.
project teams’ and temporary joint-venture organiza- The rest of this paper focuses on a study that
tions between local and foreign firms in the course of attempted to show how international construction
the implementation of international construction pro- projects facilitate the creation of technological and
jects. The integrated-project-team approach refers, in managerial capabilities.
turn, to the involvement of local professionals as
counterparts to the expatriates in the project execution.
Further, the participation of local construction firms as
STUDY
subcontractors to foreign firms is an important element The construction-project delivery process is character-
in the concept of technology-transfer programmes. As ized by a large number of factors that impact on its
host governments in developing countries are becoming performance 2,23. Hence, the project-delivery process is
more aware of the benefits of local participation in the best understood as a set of highly interdependent
project-execution process, the implementation of activities’(‘. Previous studies”.‘0*24 on various aspects of
technology-transfer programmes is crucial. In this the construction project-management process identify
respect, Navarre and Schaan’” noted that a key success some common variables. The variables include con-
factor in the winning of international contracts has tractual arrangements, client objectives, organizational
become the ability to structure proposals that involve structures and project characteristics.
local owners, suppliers, subcontractors, management In an attempt to analyse the relationships between
and engineering practices. Navarre and Schaan suggest, project-delivery systems, project-management teams
further, that the transfer of technology, supported with and technology-acquisition strategies, a model based
training packages for the local specialists, has, in some on the systems-approach concept was used (see Figure
cases, become more important than the price or the 1). As is evident from the discussions above, client
financial packages. objectives and competence-development approaches
The expansion of school systems and the improve- relate directly to the client characteristics and require-
ment of the quality of education are another set of ments, whereas the structure of the construction sector
mechanisms that is used by international development relates to the project characteristics. Figure 1 summar-
organizations to enhance the managerial capabilities of izes the main relationships between the variables
the developing countriesz2. Rondinelli et al. suggest a examined in this paper. Previous studies’0,z4 suggest
contingency approach to the planning of projects for that the choice of a project-organization structure is a
education reforms and human-development pro- function of, among other things, client and project
grammes in the developing countries. The contingency characteristics. These studies also suggest that project
approach to the planning of international development performance is a function of a set of variables. In
projects is based on aspects of the institution-building particular, project performance is considered to be a
model, the learning process, the management ap- function of project-management teams, project organ-
proaches, and other things, The relevance of the izations and client objectives5,‘, and the fact that the
contingency approach to competence development is construction project-management team strives to match
that it seeks to strengthen the capability of local management, design and construction strategies.
implementing agencies. The approach recognizes that It is postulated that, first, the project-organization
the proper design of tasks, organizational structures, structure is further influenced by design and con-
and management processes for project implementation struction technologies, and technology-acquisition

Vol 10 No 1 February 1992 15


Managing international construction projects for competence development within local firms

Methodology

pi+-& , I
As this study is exploratory,
used to investigate
a case-study
and test the relationships
approach is

the variables. The case-study approach is appropriate,


between

I1 II because it permits the collection of data that are used to


generate and test hypotheses. Data gathered from a

c
t t sample of 12 construction projects (see Table 2) that
were executed in developing countries are used to
Project examine relationships between variables. Operational
chorocteristics
perfwmance definitions were developed for each variable incorpor-
ated in the model, and a matrix of results was
constructed, as shown in Table 3. Contingency tables,
chi-square tests and rank-correlation coefficients are

-ll_Jsp progromnes
used to analyse the data.

Sample and selection


A detailed study of the variables and factors was
Environment
performed with the selected sample of 12 international
construction projects. All the projects were executed in
Figure I. Relationships between variables developing countries: eight in Africa, one in South
America and three in Asia (see Table 2). The case
studies were investigated in two phases between
programmes. Second, the selection and staffing of August 1987 and July 1988. In Phase 1, non-Tanzania
project-management teams are influenced by project- projects were studied, and Phase 2 was devoted to
organization forms and acquisition programmes. Third, projects executed in Tanzania. The main selection
construction-project performance is impacted on by the criteria were that there had been some form of local
project-management teams, the technology-acquisition involvement, the technology-acquisition objective had
strategies, and the form of project organization. been explicitly or implicitly expressed by clients, and

Table 2. Description of sample projects

Case-study Description cost Construction Construction Duration, Project-delivery


location (MSEK) start completion years system

Group A:
Tanzania Rural development 200 1983 1988 6.00 Management
programme contracting
Tanzania Airport 400 1980 1984 4.00 General
project contracting
Tanzania Container 270 1985 1988 3.00 General contracting
terminal (in a JV)*
Tanzania Port 210 1987 1991 3.50 General contracting
rehabilitation (in a JV)*
Tanzania Road construction 318 1987 1989 2.50 General contracting
project (in a JV)*
Tanzania Building 300 1983 1990 7.00 General
project contracting

Group B:
Kenya Hydroelectric 1984 1988 4.50 General contracting
power project (in a JV)*
Bangladesh Rural development 1986 1989 3.00 Management
programme contracting
Colombia Harbour project 1985 1989 3.50 Turnkey
Sri Lanka Dam construction 1979 1984 5.25 General
project contracting
Mozambique Wood industrial 1981 1983 3.00 Turnkey
complex project
India Electrical-power 1984 1988 5.00 Turnkey
transmission

[* JV: joint venture between two foreign firms.]

16 International Journal of Project Management


E E SIMKOKO

the projects had been completed recently, or were staffing of the project-management teams, and (f) the
currently being executed, in a developing country. 35 project performance relative to the capabilities acquired
projects were preliminarily investigated against this and the training time and cost involved in the project
background, and only 12 were selected as further execution (see Table 3). The method of data analysis
detailed case studies. (the measurements, operational definitions and statist-
Data and information were gathered by the study of ical test techniques) is presented in the Appendix.
contract documents, drawings, specifications, bills of
quantities, project reports, tender correspondences and
RESULTS
the conducting of intensive semistructured interviews
with senior technical and management personnel of the This paper mainly focuses on the analysis of project-
firms involved. In Phase 2, additional data were management teams, technology-acquisition strategies,
gathered via site visits to projects. Interviews and project-organization forms and performance. The main
discussions were held with contractors, consultants and assumption is that, when project-management teams
construction professionals, clients and other public and project organizations are appropriate to technology-
authorities involved in the project implementation. The acquisition objectives, better project performance can
case studies were conducted so that specific information be achieved.
could be gathered about each project. This information
included (a) the client’s technology-acquisition strat-
Qualitative analysis
egies, the client organization’s involvement in the
project activities, and its experience and specialization Each of the 12 case projects (see Table 2) was
in the particular type of projects, (b) the project presented and discussed in detail, with the model
characteristics (the size, cost, duration, complexity and developed for this study (see Figure 1) being used. The
uncertainty), (c) the design and construction techno- objective was to attempt to find a provisional answer to
logies, (d) the project-organization methods, (e) the the question of whether the involvement of local firms

Table 3. Matrix of scoring results

Variableskubvariables Case-study numbers

1 2 3 4 5 6 7 8 9 10 11 12

Project-delivery system:
Organization method MC T r T T T T MC DC T DC DC

Project-management team:
Degree of integration H M H L H H L H H M L H

Transfer programmes:
Training cost H L H M M M L H H M L H
Training time H L H L H H L H M L L H
Involvement (local subcontractors) H M H M H H L H H M L H
Employment (technical staff) H H H M H H M H H H M H
Management/supervision H H H M M H H M H H H H

Client characteristics:
Specialization L M M M H H H H L H L H
Involvement H H M M H H L H H H M H
Objectives G G G NC G G NC G G NG NC G
Funding FF B B B B FF FF B FF FF FF FF

Project characteristics:
Construction cost 200 400 270 210 318 300 300 150 900 2000 90 500
Construction time 72 48 36 42 30 84 54 36 42 63 36 60
Construction rate 2.8 8.3 1.5 5.0 10.6 3.6 5.6 4.2 21.4 31.7 2.5 8.3
Complexity (managerial) H H M M L M H H H M L M
Uncertainty (technology) L M L L M M M L H H M H

Construction technology:
Construction methods Lo F F Mx F Mx F Lo F F F Lo
Construction equipment Lo F F Mx F Mx F Lo F F F Lo
Construction materials Lo Mx Lo Mx Mx Mx Mx Lo Mx Ma Mx Mx
Management techniques F F F F F Mx F Mx F F F Mx

Project performance:
Percentage of local firms involved 75 50 75 0 33 75 33 80 62 33 0 56
Percentage of local employment 75 58 78 20 64 66 31 82 68 - 44 73

Vol 10 No 1 February 1992 17


Managing international construction projects for competence development within local firms

and personnel in the projects was a function of project- project-management team. Support functions (e.g.
organization form, the management team and con- procurement and accounting) are performed within the
struction technologies. As shown in Table 2, the 12 functional departments. For the project authority
projects were grouped in accordance with their location. structures mentioned above, there was no clearcut
The first group (Group A) consisted of six projects division of the 12 case projects into these structures.
executed in Tanzania, and the second group (Group B) However, five projects (the second, fourth, seventh,
consisted of six projects executed in other developing tenth and eleventh projects in Table 2) exhibited
countries. characteristics of partial projectization structures. A
The type of organization form used in any specific second group of five projects (the third, fifth, sixth,
project depends on, inter afia, the extent to which the ninth and twelfth projects in Table 2) tended to have
client can fully define his/her objectives, and the level pure project structures. All the projects in the second
of technological uncertainty. Table 2 shows that only group except one (the sixth project in Table 2) were
three project-delivery systems, narrowly defined as engineering/industrial. The remaining cases (the first
project-organization methods, were used in the course and eighth in Table 2) exhibited the characteristics of
of the implementations of the 12 projects. These pure functional structures.
systems were management contracting (two projects), In terms of local involvement, projects with near
general contracting (seven projects) and turnkey or pure project structures tended to include more local
design and construct (three projects). With respect to personnel in their project-management teams at quite
the project-organization forms, the cases exhibited high levels. They also tended to have more local firms
specific patterns. In projects where the client objectives participating in the project execution than did other
were well defined, and the technological uncertainty structures. An important observation concerning pro-
was low, management contracting was used. When the jects delivered by joint ventures between two or more
client objectives were not fully defined, the project foreign contractors is that, first, the project funding
environment was uncertain, and the dominant techno- may influence the formation of such joint ventures,
logy was industrial, a turnkey system was used. Finally, thereby limiting the chances for local firms and person-
general contracting was used when the client objectives nel to participate in the project execution. Second, as
were well defined, the technological uncertainty was all the major contracting firms aim at the reduction of
low, and some degree of client specialization was risks in foreign or overseas projects, the creation of
involved. joint ventures is, consequently, a strategy that is used
On the question of local participation, very high to increase the probability of achieving better project
ratios of local involvement were noted in the performance or outcome.
management-contracting cases. This was because local
firms were responsible for the physical execution of Statistical analysis
these projects. The two projects (see Table 2) were also
The previous section of the paper highlighted major
characterized by relatively unsophisticated design and
observations made in the case studies. On the basis of
construction technologies. High ratios of local involve-
these observations and other insights into the case
ment were also noted in the projects where the clients
studies, it has been possible to suggest a number of
clearly stated their intentions to acquire specific con-
functional relationships between major variables (see
struction and industrial-engineering technologies that
Figure 1). The case studies have, whenever possible,
were embodied in the projects (see the fifth, sixth,
allowed the quantification of certain key parameters.
ninth and twelfth projects in Table 2). On the other
This section of the paper draws some inferences on the
hand, low ratios of local participation were observed in
basis of the statistical tests on the data and information
cases in which the clients were relatively experienced or
gathered.
specialized in commissioning the type of projects in
To start with, the main variables (see Figure 1) were
question. The contracting of foreign firms in these cases
decomposed into subvariables (see Table 3). Detailed
was probably dictated by financial packages negotiated
hypotheses were presented” so that the main hypothesis
for project execution, and influenced by the fact that
could be examined. The detailed hypotheses were, in
the clients concerned possibly did not rate technology
turn, expressed in subhypotheses, so that the evidence
acquisition as a high priority, because they (probably)
of each of the hypotheses could be examined. The
rarely needed that kind of in-house expertise to design
subhypotheses were then stated in the null form for
and build such projects.
statistical tests of association. Contingency tables were
Project-management teams operate within specific
constructed, and chi-square analysis performed, to
authority structures to control, coordinate and integrate
examine relationships between project organizations,
the work of various specialized groups. These authority
management teams, technology-acquisition pro-
structures range from the purely functional to pure
grammes and performance. Correlation coefficients for
matrix structures and pure project structures. In the
these variables were calculated to determine the strength
pure functional structure, the project manager has little
of association.
or no authority over the project activities and resources,
while he/she has almost complete authority in the pure
Summary of results
project form. However, in construction projects, partial
projectization is most common. In this structure, l There is a strong positive relationship between the
functions of critical importance to the project (e.g. composition of the project-management team and
engineering and construction) are assigned to the the technology-acquisition objectives (see Table 4).

18 International Journal of Project Management


E E SIMKOKO

Table 4. Contingency-table chi-square results for relationships Table 5. Contingency-table chi-square results for relationships between
between acquisition subvariables, project organization and project- project performance and technology acquisition, project organization
management team and project-management teams

Technology-acquisition Project Project- Variables Project performance


subvariables organization management team
Percentage of local Percentage of local
Involvement of local firms 1.655 12.000* firms involved employment
Local employment 0.110 4.6889
Training costs 5.1825 6.1221 Technology acquisition:
Training duration 0.343 8.571 t Involvement of local firms 8.571t 12.000*
Foreign management 0.110 0.114 Local employment 4.1140 5.600$
Training costs 8.571t 1.714
[* Significant at alpha 0.001 and one degree of freedom. t Significant Training duration 5.3338 8.571t
at alpha 0.01 and one degree of freedom. $ Significant at alpha 0.02 Foreign management 0.444 0.114
and one degree of freedom. I Significant at alpha 0.05 and one
degree of freedom.] Project organization:
Traditional/nontraditional 1.185 1.656

There is a significant positive relationship between Project-management teams:


the project-organization structure and the training Integrated/nonintegrated 2.8571 5.600$
cost.
[* Significant at alpha 0.001 and one degree of freedom. t Significant
The employment of local personnel in the projects is
at alpha 0.01 and one degree of freedom. $ Significant at alpha 0.02
associated with the participation of local firms, and one degree of freedom. 8 Significant at alpha 0.05 and one
training durations and costs (see Table 5). degree of freedom. 1 Significant at alpha 0.10 and one degree of
Project-organization design depends on whether freedom.]
local firms and personnel are participating in the
project execution, as well as on the provision of
Table 6. Correlation coefficients for technology-acquisition sub-
funds for training purposes (see Table 5). variables and project-management team integration
There is high correlation between technology-
acquisition strategies and the integration of the local Technology-acquisition Project-management team
personnel into the project-management team. The subvariables integration
participation of local staff in the project team
Involvement of local firms .98*
appears to be influenced by the successful accomplish-
Local employment 0.85$
ment of the acquisition strategies. Training costs 0.80§
There is a significant positive correlation between the Training duration 0.927
participation of local firms in the project execution Foreign management - 0.03
and the integration of local personnel into the project
[* Chi-square: 12.000: p < 0.001. t Chi-square: 8.571: p < 0.01.
team (see Table 6). f Chi-square: 6.122: p < 0.02. fi Chi-square: 4.688: p < O.OS.]
There are strong positive correlations between
performance criteria/measures and the composition
of the project-management team. As much as 70% Table 7. Correlation coefficients for project performance and project-
(R = 0.84) of the variation in performance measures management team integration
can be attributed to the successful accomplishment of
Project performance Project-management
technology-acquisition programmes (see Tables 7
team integration
and 8).
Percentage of local firms involved 0.81*
The significant and positive correlation between the Percentage of local employment 0.83t
participation of local firms in the project execution and
[* Chi-square: 2.857: p -C 0.10. t Chi-square: 5.600: p < 0.02.1
the high ratio of integration of local personnel is a
logical consequence. This situation tends to facilitate
easy communication and coordination between local Table 8. Correlation coefticients for project performance and
members of the project team. It follows, then, that technology-transfer programmes
technology acquisition is directly dependent on the
Technology-transfer Project performance
appropriate selection and staffing of the project-
programmes
management team. Further, the integration of the local
staff into the project team also depends on the type of Percentage of local Percentage of local
project-organization form used. The results of this firms involved employment

study indicate that there were slightly more projects


Involvement of local firms 0.77* 0.81*
with high ratios of local integration in the nontraditional Local employment 0.71t 0.59*
project-delivery systems than in the traditional system. Training costs 0.71* 0.78$
This may suggest that modern project procurement Training duration 0.76t 0.84:
systems or methods are more conducive to the Foreign management 0.11 - 0.03

accomplishment of technology-acquisition objectives.


[* Significant at alpha 0.01 and one degree of freedom. t Significant
On the other hand, the results suggest that a project at alpha 0.02 and one degree of freedom. $ Significant at alpha 0.20
team that has a lower ratio of local participation does and one degree of freedom.]

Vol 10 No 1 February 1992 19


Managing international construction projects for competence development within local firms

not facilitate the technology-acquisition process. How- l Higher ratios of local involvement presuppose that
ever, international construction projects inevitably the project-organization structure is designed to
involve foreign management personnel, whether there accommodate the technology-acquisition objectives.
are demands for technology transfer or not. What l Control and monitoring mechanisms should be estab-
appears to be an important factor is a high ratio of local lished to effect the technology-acquisition strategies
participants in the project execution. successfully.
In summary, project-performance criteria are highly
influenced by the integration of local personnel into the Client involvement, the participation of local firms and
project-management team, technology-acquisition the employment of local professionals are major factors
strategies, and the form of project organization, in in the facilitation of the acquisition of technological and
descending importance. The project-organization managerial competence and capabilities within con-
method is, in turn, a function of client and project struction firms in the developing countries.
characteristics, among other factors. In particular,
client involvement and client technology-acquisition
objectives, and project complexity, have a large impact
REFERENCES
on the project outcome. In other words, technology
acquisition requires that the project organization should 1 Wells, J ‘Expansion of public sector construction in
be designed so that it reflects these aspects. Essentially, Tanzania’ National Construction Council, Tanzania
this means that more client personnel and local firms (1984)
must be involved in the project-organization structure 2 ‘The construction industry: issues and strategies in
to undertake the project activities at various levels. developing countries’ World Bank, Washington
This implies that funds must be allocated to effect these DC, USA (1984)
strategies. 3 Epling, J A ‘Management: a synergistic catalyst in
construction production’ Int. J. Project Manage.
Vol 6 No 3 (1988) pp 148151
4 Siizen, Z and Giritli, H ‘Factors affecting con-
CONCLUSIONS
struction productivity - a survey’ Int. J. Construct.
This paper has presented a clear motivation for the Manage. & Tech. Vol 2 No 1 (1987) pp 49-61
undertaking of studies on the development of techno- 5 Bennett, J ‘Project management in construction’
logical and management capabilities via technology- Construct. Manage. & Econ. Vol 1 No 3 (1988) pp
transfer programmes during the implementation of 183-197
international construction projects. The paper has 6 Simkoko, E E ‘Analysis of factors impacting techno-
suggested that the systems-approach concept and the logy transfer in construction projects: case studies
institution-building models are useful tools for studying from developing countries’ D15: IYN Swedish
and implementing effective technology-acquisition pro- Council for Building Research, Sweden (1989)
grammes in construction projects. Further, the study 7 Jaafari, A ‘Construction management know-how
has suggested a framework for the assessment of for transnational projects’ Int. J. Project Manage.
construction-industry policies with respect to Vol 2 No 4 (1984) pp 198-206
technology-acquisition strategies in developing coun- 8 Jaafari, A ‘Strategic issues in formulation and
tries. Qualitative analysis has led to the hypothesis that management of macroprojects in Australia’ Int. J.
project performance is a function of the interplay Project Manage. Vol 4 No 2 (1986) pp 97-108
between project-management teams, technology- 9 Ashley, B D and Jaselskis, E J ‘Achieving con-
acquisition programmes, and the form of project struction success through predictive discrete Logit
organization. Statistical analysis has supported this model’ Working Paper University of Texas at
relationship. Austin, USA (25 Feb 1988)
12 case studies were conducted. Nonparametric 10 Nahapiet, J and Nahapiet, H ‘The management of
statistical methods were applied so that associations, construction projects: case studies from the USA
and the strength of these associations between the and UK’ Chartered Institute of Building, UK (1985)
variables, could be examined. The results suggested the 11 Duffy, P J and Thomas, R D ‘Project performance
following: auditing’ Int. J. Project Manage. Vol 7 No 2 (1989)
pp 101-104
l The project outcome is a function of the selection 12 de Wit, A ‘Measurement of project success’ Int. J.
and staffing of the project-management team, the Project Manage. Vol 6 No 3 (1988) pp 164-170
technology-acquisition objectives, and the form of 13 Navarre, C and Schaan, J-L ‘International engin-
project organization. eering project management: key success factors in a
l The effective acquisition of technological and changing industry’ Int. J. Project Manage. Vol 5 No
managerial capabilities presupposes the existence of 4 (1987) pp 238-245
clearly formulated technology-acquisition strategies 14 Perry, J G ‘Development of contract strategies for
and policies. construction projects’ PhD Thesis University of
l The effective implementation of technology- Manchester Institute of Science and Technology,
acquisition programmes presupposes the full USA (1985)
participation of local professionals in the project- 15 Neo, R B International Construction Contracting
execution process at high levels. Gower Press, UK (1976)

20 International Journal of Project Management


E E SIMKOKO

16 Mansfield, N ‘Assessment of strengths in the UK terms of the construction rateT4. This is because project
international construction sector’ Int. J. Project complexity is normally taken to include the complexity
Manage. Vol 6 No 3 (1988) pp 141-146 in the initial client’s brief, the complexity in the design
17 Haltenhoff, C E ‘Construction management solution (the design technology), and the complexity
performance under dual services agreements’ 1. related to construction operations (the construction
Construct. Eng. & Munage. Vol 113 No 4 (1987) pp technology). As such, the construction rate essentially
640-647 measures the three kinds of project complexity, because
18 Howard, H C, Paulson, B C, Pohl, J G and Tatum, it relates the total project time (for predesign, design
C B ‘Computer-integration: reducing fragmentation and construction) to the total project cost. On the other
in AEC industry’ J. Comput. Civil Eng. Vol 3 hand, project complexity is defined as a management
(1989) pp 18-32 problem that results from the coordination of various
19 Simkoko, E E ‘Technology transfer - an instrument organizational units that are involved in the project
for competence development in construction firms’ execution2’.
Pres. NCCISIDA Joint Sem. Evaluation of Foreign In the study described in this paper, the project
Support to the Tanzanian Construction Sector Dar- complexity was expressed in terms of managerial
es-Salaam, Tanzania (Apr 1990) complexity, technological uncertainty and the con-
20 Tatum, C B ‘Classification system for construction struction rate. The managerial complexity was perceived
technology’ J. Construct. Eng. & Manage. Vol 114 as resulting from the problems of coordinating different
No 3 (1988) pp 344-363 organizations and project activities. So that the level of
21 Delage, P B ‘In search of a synthesis: from organiza- managerial complexity for each project could be
tional theories to the institutional building model determined, each interviewee was asked to rate the
for the analysis of technical assistance projects’ Int. degree of complexity relative to the number of organ-
J. Project Manage. Vol 7 No 2 (1989) pp 92-100 izational units involved, and the degree of coordination
22 Rondinelli, D A, Middleton, J and Verspoor, A M and communication required. Within each of these two
Contingency planning for innovative projects: dimensions, the degree of complexity was rated as
designing education reforms in developing countries’ simple (L), relatively complex (M), and complex (H).
J. Amer. Planning Assoc. Vol 55 No 1 (1989) pp The technological uncertainty was similarly rated as
45-56 (a) low (L) for common, locally used and standard
23 Simkoko, E E ‘Factors impacting technology transfer construction methods, equipment and materials, (b)
in construction projects’ Paper Royal Institute of relatively uncertain (M) for known, but rarely applied,
Technology, Stockholm, Sweden (1990) methods, and (c) uncertain (H) for relatively new
24 Sidwell, A C A critical study of project organiza- construction technologies that were introduced for the
tional forms within the building process’ PhD Thesis first time in the project concerned. The perceived level
University of Aston, UK (1982) of uncertainty was determined by asking interviewees
25 Bu-Bushait, A K ‘Relationships between the applica- to rate the degree of uncertainty relative to the
tion of project management techniques and project construction methods, equipment and materials used.
characteristics’ Int. J. Project Manage. Vol 6 No 4 The project-management team was scored on the
(1988) pp 235-240 degree of integration of the local professionals. It was
26 Arditi, D, Akan, G T and Gurdamar, S ‘Reasons rated with three levels: integrated, relatively integrated
for delays in public construction projects in Turkey’ and nonintegrated. An integrated project team (H) was
Construct. Manage. & Econ. Vol 3 No 2 (1985) pp one in which the local professionals were involved in
171-181 nearly all project departments as counterparts to
27 Gibbons, J D Nonparametric Methods for Quantitat- expatriates. The team was relatively integrated (M)
ive Analysis Holt, Rinehart and Winston, USA if the local professionals were employed in some
( 1976) departments, and it was nonintegrated if few local
28 Siegel, S Nonparametric Statistics for the Behavioural professionals were employed on the project. The
Sciences McGraw-Hill, USA (1956) interviewees were asked to rate their projects according
to these definitions of the degree of integration.
Technology acquisition was expressed as the degree of
the involvement of local firms in the project execution,
APPENDIX the local employment, the extent of the foreign
management and supervision provided, and the time
Method of data analysis
and money spent for training purposes. These dimen-
Measurements sions were rated as high (H), relatively high (M) and
Operational definitions were developed for the variables low (L).
shown in Figure 1. Three different types of project- The client’s involvement in the project activities was
organization method were identified in the sample: rated high (H) if his/her staff were seconded to more
general-contracting (denoted by T) methods, than one organizational unit, relatively high (M) if the
management-contracting (MC) methods, and turnkey staff were seconded to one organizational unit. and low
or design-construct (DC) methods. The projects were (L) if no staff were seconded to the project.
scored on the managerial complexity and technological The project performance was considered in terms of
uncertainty subvariables. Previous studies suggest that technology-acquisition objectives. Thus, project
the project complexity can reasonably be expressed in performance was expressed as a ratio of the local firms

Vol 10 No 1 February 1992 21


Managing international construction projects for competence development within local firms

involved to the total number of firms involved in the gency tables illustrate the sample characteristics and
projects, and the ratio of the local professionals the permitted use of the chi-square tests. The Spearman
involved to the total employment. A matrix of the rank-correlation coefficients were calculated by the
scoring results for each case study against each sub- computer for the entire matrix of scoring results. The
variable was then constructed, as shown in Table 3. For rank-correlation coefficients express the strength of
analysis, the scores for the ordinal subvariables were association between the subvariables. Correlation
ranked as H = 3, M = 2, L = 1, F (foreign) = 3, Mx squared indicates the proportion of the variance in one
(mixed) = 2 and Lo (local) = 1. The scores for the variable that is explained by variation in the other.
nominal subvariables were ranked as T (traditional) =
0, MC and DC (nontraditional) = 1, G (given) = 0, NG
(not given) = 1, B ( mixed funding) = 0 and FF (foreign Dr Emmanuel Simkoko gained an
funding) = 1. MSc in building and civil engin-
eering in 1981, and a PhD in
construction management in 1989
Analysis of data from the Royal Institute of Techno-
As the data on the subvariables were measured on logy (KTH) in Stockholm, Sweden.
ordinal and nominal or categorical scales. non- He worked as a research engineer,
and, later, as a senior research
parametric statistical techniques were required to
fellow at the KTH Department of
analyse the data. The rating and scoring procedures for Building Economics and Organ-
applying the contingency theory of project management ization between 1985 and 1989. Dr
had previously been used by several researchers4.75-Zh. Simkoko has extensive knowledge
Further, and experience of the Tanzanian
nonparametric statistical techniques are
and Swedish construction indus-
particularly suitable for small samples, and when the tries. His interests include con-
measurement scales are weaker than interval or ratio struction project management,
scales’7.‘8. building economics, competence
The nonparametric techniques applied were contin- development in local firms, and technology transfer tn construction
projects. He is currently working as a principal civil engineer at the
gency tables, chi-square test statistics, and Spearman’s
Directorate of Quantity Surveying and Development at the
rank-correlation coefficients. A series of 2 X 2 contin- Mwananchi Engineering and Contracting Corporation, the largest
gency tables were constructed, and used to investigate local engineering and contractingfirm in Dar-es-Salaam, Tanzania.
the association between the subvariables. The contin-

22 International Journal of Project Management

You might also like