Project Management The Task of Holistic

Human Factors and Ergonomics in Manufacturing, Vol.
19 (6) 582–600 (2009)

C 2009 Wiley Periodicals, Inc.
Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/hfm.20185
Project Management: The Task of Holistic

Systems Thinking
Heli Aramo-Immonen and Hannu Vanharanta
Industrial Management and Engineering, Tampere University
of Technology at Pori, Finland
ABSTRACT
Large national and international mega-projects are often structured around a hierarchy of a number
of interrelated projects and subprojects. This construction of a complicated and fragmented project
organization forms a multiproject environment. The networked structure of a mega-project, such as in
shipbuilding or in the offshore industry, with its significant amount of boundaries between subprojects,
poses a demanding task for project management. The purpose of the method designed in this research
is to assist a company’s management in the process of forming a comprehensive view of projects in
a multiproject environment. The holistic overview of the project is formed by looking at individual
subprojects from a variety of qualitative angles. This article introduces a method for the collection
and analysis of qualitative information from a project organization. The application used converts the
results of the operative project-level analysis into explicit system-level information for management
guidance purposes. The method of a new qualitative project analysis uses fuzzy logic and emulation.
The conceptual part of this article discusses the theoretical framework behind the application. Next,
the empirical results of the implementation of the new analysis method in a project-based enterprise
are illustrated. Finally, an example of revised project guidance proposals is presented. C 2009 Wiley
Periodicals, Inc.
1. INTRODUCTION
A current observation is that the execution of a multinational mega-project can run into se-
rious problems due to lack of attention regarding qualitative management features, such as
cultural differences. Typically, there is a lack of common understanding between stakehold-
ers and a lack of common language in the mega-project environment. This can be one cause
of a severe delay, for example, in the delivery of a nuclear power plant or of quality risks in
shipbuilding. The result of this ignorance can be low productivity and a higher risk of poor
quality in the project execution. Furthermore, partners to be selected for a mega-project
consortium should be able, for example, to bear a complementary set of risks to balance
the total risk in a project (Archer & Ghasemzadeh, 1999; Ghasemzadeh & Archer, 2000).
Therefore, the management of a project is far more than a purely quantitative management
task; it is a challenge for the whole group of management teams involved in steering the
mega-project toward the common qualitative and quantitative predefined goals. As observed
in this study, it is typical of project goals that they also evolve during the mega-project’s life
span. This poses even more complex managerial challenges in the mega-project context.
Correspondence to: Heli Aramo-Immonen, Industrial Management and Engineering, Tampere University of
Technology at Pori, Pohjoisranta 11, P.O. Box 300, 28101 Pori, Finland. E-mail: heli.aramo-immonen@tut.fi
582
PROJECT MANAGEMENT, HOLISTIC SYSTEMS THINKING 583
Project managers at the operative level are experts in project implementation and they
should also possess knowledge about the external factors (environment, culture, local de-
mands, etc.). These inputs from outside the project organization affect the success of project
execution. However, this knowledge is often tacit and therefore difficult to capture and
convert into explicit knowledge for project management activities (Nonaka et al., 2000a).
Therefore, a new method for the collection and analysis of this qualitative information is
needed. The object of this research is to categorize the most important qualitative features
on which project management should focus.
The main research question of this article is “Which are the most important qualitative
management features on which the project management should focus?” Therefore, this
article is composed as follows: First, the theoretical framework of the research is introduced;
second, the research methodology is discussed, following the introduction of the method
developed in this research; and, finally, some results of the study are introduced.
2. THEORETICAL FRAMEWORK
The research approach is transdisciplinary. Therefore, several supporting theories have been
used in this research. The practices of project management are based on general business
management theories, such as business process management, supply chain management,
value chain management, and different business models. It is difficult to identify one general
project management theory. The theories discussed in this article, in contrast, have to be
seen as a basis for the construction developed in this research. The organizational behav-
ior theories introduced in this article–organizational learning, activity theory, knowledge
management, and systems thinking–are generally accepted and applicable in the project
context.
2.1. Project Learning as a Success Factor for Professional

Project Management
Project learning is a success factor for professional project management. In traditional
project management literature, project learning is often regarded as a “lessons learned” type
retrospective study of the project. These debriefings are focused on information such as
costs, timelines, and other quantitative data. However, Nonaka et al. argue that most of the
organization’s knowledge lies in tacit knowledge carried by human beings in “know how”
or “know why” forms (first as procedural or heuristic knowledge, and later as experiences
and an understanding of causality) (Nonaka et al., 2000a). Remarks on how knowledge
is captured or how knowledge is diffused within the organization are seldom found in
contemporary literature (Schindler, 2003).
Organizational learning is commonly recognized as a major factor contributing to an
organization’s capability to produce added value and maintain a competitive position in
the market. The creation of new information is based on shared views and mental models
within the organization. In the organizational process of learning, four primary processes
can be discerned: the acquisition of knowledge and the interpretation, dissemination, and
retention (storage) of information (Garvin, 1998 p. 40). These four constituent areas are
closely linked to communication and behavioral processes, important in the learning cycle
(Nonaka et al., 2000). In a project organization, which changes from one project to another,
the organization’s ability to learn deserves special attention. This idea can be formulated
neatly as how to prevent reoccurrence of errors in an organization that is in a state of flux.
Human Factors and Ergonomics in Manufacturing DOI: 10.1002/hfm
584 ARAMO-IMMONEN AND VANHARANTA
As to preventing errors, transferring tacit and empirical information from one project to
another constitutes an essential factor (Koskinen et al., 2002 p. 281).
Nonaka et al. introduce a learning cycle known as the SECI process. There are four
modes of the conversion of knowledge: (S) socialization, conversion from tacit knowledge
to tacit knowledge (occurring mostly through shared experiences); (E) externalization,
conversion from tacit knowledge to explicit knowledge (when tacit knowledge is articulated
into an explicit form to be shared by others, it becomes the basis of new knowledge);
(C) combination, the conversion of explicit knowledge into more complex and systematic
sets of explicit knowledge (explicit knowledge is collected from an organization and then
combined or processed to form new knowledge); and (I) internalization, the conversion
of explicit knowledge into tacit knowledge (through internalization, explicit knowledge is
embodied to an organization by distributing it to individuals) (Nonaka et al., 2000).
Project learning enables a company to develop its project competencies and to sustain its
competitive advantage. Mastering the project learning cycle could save a significant amount
of costs incurred from redundant labor and the repetition of mistakes. In particular, in a
project with a long life cycle, such as shipbuilding or an offshore project, amnesia can
already exist during the project. According to Schindler (2003), factors that explain this
amnesia are related to four humanly typical elements, namely time, motivation, discipline,
and skills. Due to the time pressure, project learning can be classified as a low priority task,
and due to the myopia the organization can be blind to the importance of learning, and this
can be ignored due to a lack of competence in the management of the project learning cycle.
To summarize, the learning capability of a project organization is one of the key issues
in building a company’s intellectual capital. Knowledge management (see Section 2.3)
provides managerial tools to deal with knowledge creation and organizational memory
(knowledge storage). Recent research results indicate that the metal industry is knowledge
intensive and that there is a relationship between the amount of intellectual capital and
productivity/profitability rate (Kujansivu, 2008).
2.2. Expansive Learning and the Activity Theory

The activity theory distinguishes between temporary goal-directed actions and durable,
object-oriented activity systems (Engeström, 2000). In the case of mega-project man-
agement, the latter are discussed. The process of the organization’s creation and use of
knowledge as a productivity booster is not a spontaneous phenomenon. According to the
sociocultural, historical activity theory, there has to be a triggering action, such as the con-
flictual questioning of the existing standard practice in the system, to generate expansive
learning (Engeström, 2000; Nonaka & Senoo, 1998). Expansive learning produces cultur-
ally new patterns of activity. The object of expansive learning activity is the entire system
in which the learners (here, project members) are working (Engeström, 2001). Figure 1
illustrates the system structure of collective activity according to Engeström.
This study adopts an idea that the problem with management decisions often lies in
the assumption that orders can be given from above to somebody to learn and create
new knowledge (Engeström, 2000). The article suggests that the problem with conflictual
questioning, in contrast, is the lack of goal orientation, in general the lack of a strategic
vision. The method introduced in this article is based on proactiveness. The focus is on the
improvement opportunities seen in the future. The project performers analyze the project
management features from their personal point of view. The attitude is positive, and the
method focuses on the performers’ own motivations and orientations. This is a positive
I
Instruments
Object Outcome
Subject
Rule Community Division of labor

Figure 1 System of collective activity (Engeström, 2000 p. 962).
trigger for performance development. The discussion about the results together in structured
workshops creates a fruitful environment for the organization’s collective ability to evolve
and to create a useful organizational memory.
2.3. Knowledge Management

In view of developing corporate competitiveness, learning provides a crucial asset while
being one of the major elements in processes of change. Knowledge in itself is difficult to
measure. Nevertheless, it has a tangible effect on the achievement of results. A problem
faced by project-based companies is how to transform from material values to immaterial
ones, which tends to be difficult to measure. When examining the process of knowledge
management in corporate management, researchers encounter a common belief that can
be summarized as “if it can’t be measured, it can’t be managed.” Even if it is difficult to
measure knowledge, studies suggest that these properties can be measured indirectly (Soo
et al., 2002). Competitive edge depends on the ability to create, transfer, use, integrate,
and expand the knowledge capital. New knowledge can only be created by combining
information in some unique way, thus creating something new. This impedes the acquisition
and use of knowledge in decision making and its application to new products, services, and
processes (Soo et al., 2002).
First, a source of information and knowledge on which individual know-how is based
are required. These internal and external sources of an organization must be accessible to
the individual through a network. Even though personal notes and references are important,
a knowledge-sharing arena and organizational memory are necessary to create a shared
context (Koskinen & Aramo-Immonen, 2008; Nonaka et al., 2000a). This can be measured
by the degree of networking of the individual and the organization. Second, the individual
and the organization have to possess the capacity and ability to absorb information (Palonen,
2003 p. 11). The general capacity for adopting information refers to the ability to recognize,
absorb, and combine information. Third, the process of decision making has to be of a
high standard. The organization’s problem-solving ability promotes the creation of new
information. Information and knowledge have to be used comprehensively (for instance, by
analyzing greater numbers of alternatives), in consensus (e.g., a commonly shared opinion),
in a creative manner, and by creating new information (e.g., new ways of thinking, new ideas,
new processes). Accordingly, clear interdependence exists between knowledge management

and a company’s success (Soo et al., 2002).
To summarize, this feature of the inaccessibility of knowledge value creation forms a
classical problem of the black box (Ashby, 1957 p. 86). Thus a certain relationship between
knowledge management and a project’s success can be seen. It is difficult to identify the
causal linkage in reality. Therefore, this study introduces an isomorphic system (Ashby,
1957), which represents a method that emulates the reality. Instead of learning from the
past project experiences after the project, proactive evaluation of the project execution is
utilized during the project. This method is proactive and allows the project organization to
learn during a prolonged mega-project.
2.4. Maintaining Systems and Systems Theories

A system view to project management is a relevant approach for a scholar because a
networked mega-project structure with a significant amount of interfaces between different
subprojects can be seen as a multiproject system. The general system can be illustrated
as a chain of inputs, processes, and outputs. In the case of a project as a system, the
system input is the required resources (financial, labor, time, etc.). The system processes
are project management tasks and project execution. The system outputs are the results of
a project (products, services, etc.). With such an extremely simplified model, it is possible
to imagine that the results of a project occur as a consequence of the project activities
(steered by project management). The results of a project comply with the critical success
factors (system-critical parameters) established for the project (Gardiner, 2005; Jackson,
2004). The systems theory brings structure and order to an otherwise chaotic environment.
By using the systems theory, different layers, subsystems, processes, and activities may be
distinguished within a project. Samuelson (1978, 1981) has introduced a general concept
of organizational management to maintain the functioning system. Parts of the system are:
a control system (e.g., accounting, quality assurance), a working system (e.g., production,
distribution), an information system (e.g., information and communication technology), and
a support system (e.g., purchasing, logistics).
Traditional operational research (OR) is based on mathematical modeling involving
merely a few (measurable) variables in the linear relationship with each other (Checkland,
1981; Churchman et al., 1957). OR represents hard systems thinking. A mega-project can be
considered as a complex, multiple-loop, nonlinear system. It is also a social system with a
strong impact of human actors on decision making. In systems of this type, the OR is far too
simplistic thinking. It loses a genuine managerial touch and does not provide a holistic view
(Forrester, 1958, 1971; Jackson, 2004). Instead of the hard systems thinking, the soft systems
thinking methodology is appropriate to be used here. Peter Senge (1990) popularized the
system dynamics in his book The Fifth Discipline, and Jackson crystallizes the idea as below:
“According to the theory of system dynamics, the multitude of variables existing in complex systems
become causally related in feedback loops that themselves interact. The systemic interrelationships
between feedback loops constitute the structure of the system, and it is this structure that is the prime
determinant of system behaviour” (Jackson, 2004 p. 66).
For project management, the aim of system dynamics is to provide an understanding of

the structure of complex systems so that the guidance ensures behavior that corresponds with
the goals of a project. The idea is to reinforce positive feedback loops to boost productivity
and high quality.
2.5. The Decision-Making Process

The decision-making aid developed in this study is designed to reduce the number of uncer-
tain factors in a decision-making process. The application compares the assessments made
by the decision makers of the current situation and the optimum vision they can imagine.
Even if the qualitative factors affecting decision making are inexact and/or suggestive, their
significance to the formation of the decision is undisputable. The next section will introduce
some phenomena affecting the development of this method.
2.5.1. Alternative-Focused Thinking. By its very nature, decision making related to

a project portfolio is of the “risk analysis” type (Miller & Lessard, 2001). A decision
is affected by the strategy selected by the company, present competition, and available
resources (Görög & Smith, 1999). Decision making is decentralized and influenced by the
needs reflected by the involved stakeholder groups. In such situations, decision making has
traditionally been facilitated first by short-listing the best options (i.e., those appearing to be
the best at face value) and, second, by selecting the most appropriate ones from among that
group. This mode of thinking tends to limit decision making to readily available alternatives
(alternative-focused thinking), which may not actually present the best possible options
(Keeney, 1996). This alternative-focused model of decision making is reactive, because it
limits the selection to predefined alternatives before all options have been assessed. Thus,
the ensuing decision-making situation turns into forced problem solving, signifying a loss
of possibilities inherent in decision making. As a procedure, alternative-focused decision
making is a “quick and dirty” way of acting when facing difficult strategic questions and
being indifferent to their repercussions (Brännback, 1996).
2.5.2. Value-Focused Thinking. Values provide the foundation for culture and for
almost everything we deal with. Therefore, decision making should also be a proactive
process designed in line with value-focused-thinking (VFT). The value-focused decision-
making model emphasizes the assessment of alternatives before the decision is made. The
objective is to identify the potential related to decision making. Keeney suggests a four-
stage model: (1) Values should be expressed in writing. Qualitative values affecting decision
making are assessed in a logical and systematic way. (2) The decision must always be made
before measures affecting decision making are introduced. (3) The written outcome from
the qualitative analysis will be used when formulating the options for available decisions.
(4) Decision-making options are used as new opportunities for development (Brännback,
1996; Keeney, 1996).
Keeney tested his VFT decision-making model at British Columbia (BC) Hydro, a power
plant corporation, at a key stage in its decision-making process. BC Hydro had concluded
that, within a decentralized organizational model, the bare mission did not guarantee suffi-
cient coordination and scope for the decision-making process. The conversion of strategic
objectives into options for decision making was supported by introducing the VFT process.
Decision making is a continuous process allowing options to be screened. To illustrate this
process, Keeney (1996) uses an example involving a procurement decision during which
a buyer may have a view of the criteria affecting the procurement which is completely
different from that of the engineer or the customer. Decision making can be facilitated, and
the differences between the involved views can be identified, by engaging a tool designed
for qualitative analysis.
In summary, the VFT decision-making aid developed in this study is designed for mega-
project management. The above-mentioned findings from BC Hydro also could be adapted
to the project organization decision-making process. Decision making should be proactively
focused and based on the assessment of alternatives before decision making.
To conclude Section 2, it can be said that the use of organizational learning, knowledge
management, and activity theories supports the targets of productivity and profit growth.
Project organizations’ capability to create, and use new knowledge maintains a sustain-
able competitive advantage. Systems thinking and value-focused decision-making theories
support the managerial disciplines, steering, and management of a project’s organization.
3. PROJECT STEERING THROUGH EMULATION

A project organization in a dynamic business environment has to have the ability to readjust
its goals and operations effectively. In other words, to learn through the process, otherwise
competitive markets will soon destroy the player acting too slowly. In the case of manag-
ing simple projects with clear organization, the steering solution is rather straightforward,
whereas with a large and complex project and a fragmented, network-based project organi-
zation, the problem of steering the project becomes much more complicated. The metaphor
of the human body can be used here (Miller, 1978) to describe a complicated mega-project
and its organization with various stakeholder groups. A human body can be seen as an open
system affected by environmental changes and, in contrast, as a closed system of human
organs. The idea is to analyze the anatomy of a mega-project based on the metaphor of
living systems (Miller, 1978). According to Miller, an organization as a system has several
levels and subsystems that are related to each other in the same way as in living organisms.
This metaphor is felicitous for illustrating fragmented and diversified mega-projects.
3.1. The Human Body Metaphor

Let us imagine the project as a human body and the project management systems as the
human brain. Studies in neurophilosophy demonstrate that, to give the human arm the
command to move toward a desired goal (e.g., toward a plum; Figure 2), the brain goes
through an emulation process. Neural emulation is one strategy that the brain uses to solve
the coordination and control problem. Emulation involves simulation–inner models of the
body. Emulators help us to move from the sense perception to the desired body movement.
An emulator allows us to imagine a possible solution to the problem we do not yet see.
Finally, the feedback from the emulator is much faster than from the entire sensory system.
Generally, the brain needs to be able to perform transformations of coordinates to get
the body in the right position–or to get the desired plum. The problem of transformations
of coordinates can be seen as a kinematic one. The solution to this problem offered by
“elegant” engineers is to construct an inverse model (see Figure 2). In the internal system,
this model represents the question “If I manage to get the goal, what command would I have
used to get it?” (Churchland, 2002).
3.2. The Emulator Model

This study proposes that the emulator system is used to steer the complicated function of
project organization. Figure 3 illustrates the way in which the combination of the emulator
and the inverse model can be transformed into part of the project management system.
Goal
stage Plum
Revised
command Arm movement
Get the plum Inverse model
Body
”If I manage to get the goal,

what command would I have
use to get it?”
Emulator
Command (Body and world model)
proposal
predicted consequences
Figure 2 “An inverse model is connected to the forward model (the emulator). The inverse model
gives a first pass answer to the question, what motor command will get my arm to the plum? The
inverse model proposes an answer and sends out a command proposal to the forward model, which
then calculates the error by running the command on the neural emulator. The inverse model then
responds to the error signal with an upgraded command” (Churchland, 2002, p. 81).
The emulator model, seen as an inherent part of the project cycle, supports the strategy
formation and strategy implementation in large, complex capital investment–engineering
projects (Görög, 1999). Commonly known as mega-projects, these typically have a long
time span that allows the organization to learn during the project’s life cycle. The application
discussed in this article has its core in the iterative organizational learning cycle. Nonaka
et al. (2000a) define it as the model of dynamic knowledge creation. Recently, the model
has been introduced into the learning and development (L&D) strategy perspective as a
vital, organizational success factor (Sadler-Smith, 2006). A generic L&D system model
introduces similar elements as the application introduced in this article. Collective outputs
to be gained from the application are shared mental models, knowledge assets, socialization,
and participation. Organizational outputs to be gained are performance change and stronger
commitment, and individual outputs are motivation and personal growth.
3.3. Co-evolution and Interactive Planning

Ackoff, an early developer of systems thinking, emphasizes three principles in his method-
ology of interactive planning, namely, the participative, continuity, and holistic principles
(Ackoff, 1986). The methodology used in this study supports the same principles. As many
stakeholders as possible should have the opportunity to participate in the process. This is
one way to ensure objectivity in the decision-making process. Objectivity is seen here as
Management systems Maintaining Processes

Goal stage
Achieving the goal
Revised via new way of
System guidance functioning
Vision level
impulse
Project
Organization
Proactive Current
vision stage
Maintaining systems
Emulator -Control systems
(Model of the desired stage) -Working systems
-Information systems
-Support systems
DSS
Figure 3 Management systems (as human brain functions) receive the command proposal and
revised guidance (upgraded command) through the emulator loop. The project organization (as a
human body) acts according to the novel command to achieve the new goals. The whole system aims
to be agile in dynamic situations in which the project is executed.
a result of the most multifaceted view about the problem leading to a consensus among
the participants. Extensive participation also secures the benefit of the involvement of the
members of the organization in the process. When the stakeholders are involved, they begin
to understand their role in the organization. This will lead, if not to the creation of shared
perceptions, at least to accommodation between different viewpoints. This process can be
described as the generation of mutual insights–co-evolution. (Jackson, 2004).
The method supports the idea of analysis as a continuous process. Because the evaluated
projects have evolving life cycles, values change, unexpected events occur, and the business
environment and public opinion are turbulent, there is a need for continuous reevaluation of
the situation. Managers trying to improve the project performance are concerned about the
present situation, but simultaneously they need a sensitive “antenna” to observe in which
direction the changes ought to be made. The process reinforces double-loop learning, which
is important in a unique project environment (Argyris, 1982; Argyris & Schon, 1978).
Single-loop learning solves the problem, but it will not change the thinking that produced
the problem in the first place (Senge, 1990). Douple-loop learning ensures a change in the
process.
4. RESEARCH METHODOLOGY AND PROCESS

The main research methodology is constructive. However, it also includes a conceptual
approach and a case study (Figure 4a). The concepts of learning cycle, expansive learning,
Academic value
a)
Construction
Empirical research Research results
Analyzing method
System
Project case 1 Project management
emulator model
b) discipline
Linguistic method
Project case 2 priority matrix
Fuzzy logic
Feedback loop Knowledge sharing arena Revised guidance

c) Organizational learning (SECI)
Managerial va
value
ue
Figure 4 Academic value of the research (a), research process (b), and managerial value of the
research (c).
and system dynamics are discussed in the conceptual part of this article. The case study
method (Kasanen et al., 1991; Olkkonen, 1994) is applied to collect data in the empirical
part of the study. According to Olkkonen, the results obtained through the case study method
are often new hypotheses or theories, explanations of change or development processes,
even normative instructions (for the revised guidance proposed here, see Figure 4c). The
material and its processing are empirical, although the material is often formed of a small
number of cases (here two cases, see Figure 4b).
The research material based on the cases should be chosen carefully to facilitate the un-
derstanding of the research problem. In this research, empirical information from two
large and relatively complex projects has been collected (Figure 4b), namely project
case 1 from a multinational oil drilling rig project and project case 2 from a large cruise
ship building project. Altogether, 10 organizations were chosen for the research involving
48 members of project management. Empirical data collection contained a pattern of 158
statements to be evaluated (construction in the middle of Figure 4b).
4.1. The Selection of Multiple-Cases

According to Olkkonen (1994), the following types cases should be chosen for examples:
(1) Cases that can be justifiably considered typical with regard to the basic set (1st tier
partners, six companies, Figure 5);
(2) Cases that represent examples of different types, in their typical form, in accordance
with the preceding conceptual analysis and type set (2nd tier partner, three companies,
Figure 5); and
(3) Special cases, in case it can be assumed that they reveal interesting and useful factors
with regard to the research (two different departments of one 1st tier case company,
Figure 5).
Multiple-case companies in two case projects were chosen from the 1st and 2nd tier
partners, because typically these “system suppliers” have their own project management
Contractor, system integrator
1st tier partner 1st tier partner 1st tier partner
2nd tier partner 2nd tier partner
3rd tier partner

4th tier partner
5th tier partner
6th tier partner
Figure 5 Illustration of the simplified model of the mega-project networked organization structure.
The contractor or system integrator is the owner of the main process. The 1st tier partner is typically a
system supplier for a large or complicated delivery unit (e.g., the whole cabin section to a vessel). The
2nd tier partner is typically a subsupplier, delivering project entities (e.g., cabin electrical equipment
or piping).
and project execution processes. Lower level network partners were not chosen as they are
typically subsuppliers, which do not carry out project management disciplines.
4.2. The Method

Figure 6 systematizes the relationship between the method of qualitative linguistic analysis
and the structured workshop. In this process, tacit knowledge from a project organization
is collected with a software application. The chosen project managers and operative project
executors join the evaluation via the Internet. The user interface of an application is linguistic
Positive reenforcement loops

Positive trigger
Method of analysis S
Tacit knowledge
I
System C
Proactive Actions
emulator model Structured revised Organisational
E
Linguistic method Workshop guidance behaviour
Fuzzy logic
S
Knowledge
C
sharing arena
Feedback loops
Organisational learning
Expansive learning
Figure 6 The construction of the method of analyzing. Capital letters illustrate the modes of
knowledge conversion in the process.
(meaning here a nonnumerical scale). Visual linguistic scales are preferred to numeric ones,
as the loss of tacit knowledge is minimized by using those. People tend to lose knowledge
between conversions from a numeric to a linguistic domain. The application uses fuzzy
logic to make conversions (Berkan & Trubatch, 1997; Kantola et al., 2005; Zadeh, 1994). A
more detailed introduction of the software solution is not possible within the scope of this
article.
The result of the analyses, a project management discipline priority matrix (Figure 4b),
is discussed and evaluated in the structured workshop. The more people from the organi-
zation who can attend this meeting, the more effective the socialization and combination
modes in this knowledge-sharing arena are. In the structured workshop knowledge is shared
(system-critical parameters), new knowledge created (revised guidance), and finally knowl-
edge is used in actions (or activity) (Bedny & Karwowski, 2004; Kuutti, 1995) affecting
organizational behavior.
In the method developed in this research, soft systems thinking is used in structured
workshops by generating a rich dialogue (Checkland & Holwell, 1998; Flood & Carson,
1988). There are workshop roles for each person attending the meeting. The dialogue is
guided by one person, and the others are given opportunities to generate ideas and discuss
them also using visual aids. This method generates development paths that focus on the
company strategy. It leads to collective learning, which is defined as the organization’s
ability to learn from its own processes by means of testing and adopting new ways of
operation (Lampel, 2001).
5. EMPIRICAL RESULTS
The information from two large projects has been collected, with the help of the introduced
qualitative research approach, first from a multinational oil rig project (during 2004–2005)
and second from a large cruise ship building project (during 2006–2007).
5.1. Results from the Oil Rig Project

The application was introduced in an actual mega-project environment during 2005. The
subject of the study was a large, complex capital investment–engineering project of the
offshore industry. The mega-project evaluated was the construction and engineering of two
oil rig bases. The construction site was contracted and managed by a Finnish company,
and it was situated in extreme conditions on the east coast of Russia. The project was
executed mainly with local workmanship. The engineering companies were from Finland
and Norway. At the time of the evaluation, the project’s life cycle was at its implementation
phase (Figure 7).
The evaluation was carried out by 15 managerial persons from two different organizations.
These organizations participated in both the planning and mastering of the project and in
the project’s implementation at the site in Russia.
The results gained from the application’s practical level were discussed in a work-
shop with the same personnel. This workshop functioned as an expansive learning arena
for the project management. In the case of offshore projects, the commercial dimension
(Figures 8–10) has the lowest potential, which might result from the fact that, in the oil-
drilling business, money is not the issue. Payments are up front whereas in ship building
payment usually follows the delivery of each contracted section.
SAKHALIN II
Phase 1 Phase 2
Phase 3
(concept) (Developement)
(Implementation)
Conduct situation Plan resource
fully mobilize: Phase 4
survey, utilization:
•organization (Termination)
Do alternative •people
•communication Finish work
studies, •materials
network Turn over operations
Fix Goals, •machines
Direct and Negotiate settlements
Establish overall •money
monitor work. Evaluate and
criteria, Detail plans:
Pursue plans and review.
Outline strategies •Scope
adjust. Finalize permanent
Make preliminary •Time
Motivate and lead. record
costing and •Costs
Problem-solve.
scheduling •Quality
Figure 7 Project life cycle. The maturity stage of the project at the moment of evaluation, shown
by the arrow (Koskinen et al., 2002).
An example of revised guidance is Figure 8, which shows that time management has a
potential for development. To be precise, capacity and quality systems could be improved,
whereas the timing of the project and operative execution have less need for improvement.
In summary: Time management could be improved by focusing on the quality systems. This
action could reduce overlapping work and failures in work processes. As a result, capacity
problems will be reduced.
An example of revised guidance in the case of an offshore-project was the result of
the analysis of management capabilities (Figure 8). The results can be seen as a finger
pointing toward the managers themselves. The workshop session provided revised guidance
for this feature. The question was not about management’s competencies, but the fact that
the organizational culture was not supporting an independent way of working in the large,
fragmented mega-project. Actually, the revised guidance required by the actors was not
orders and strict command and control, but support in decision making and in their initiative
and autonomous role at work.
5.2. Results from the Ship-building Project

During 2006 and 2007, a second, more extensive empirical study was carried out. The
mega-project as an object of the study was the largest building project of a luxury liner in
the world so far, the vessel being 339 meters long with the capacity for 3,600 passengers.
The study was carried out at the end of the project’s life cycle, at the stage when the vessel
was nearly finished. The analysis was carried out by 33 members of project management
from eight case companies participating in the ship-building project. These companies were
first- or second-tier partners in the supply network. The companies presented a sample of the
largest subproject executors in the mega-project. This building site was situated in Finland,
and the companies were Finnish. The results of the analysis are presented in Figures 11, 12,
and 13.
Figure 8 The practical level results from the analysis of the oil rig project. The blue (top) bar
illustrates the present stage, and the red (bottom) bar illustrates the desired stage of the project
performance. The bigger the gap between the two bars, the bigger the existing development potential
in that particular feature.
Figure 9 System-level results from the analysis of the oil rig project.
Figure 10 Three main categories of the analysis.
An example of revised guidance is Figure 12, which shows that the product integration
management has a potential for development. The enterprise resource planning system
(ERP), and project management (Figure 11) in particular, could be improved, but project
complexity has not been perceived as such an important issue. Project complexity has been
Figure 11 The practical level results from the analysis of the ship-building project. The blue (top)
bar illustrates the present stage, and the red (bottom) bar illustrates the desired stage of the project
performance. The bigger the gap between the two bars, the bigger the existing development potential
in that particular feature.
Figure 12 System-level results from the analysis of the ship-building project.
Figure 13 Three main categories of the ship-building project analysis results.
seen as a boundary factor that the company cannot affect. As a conclusion: In complex project
execution the product integration management is a salient factor. It could be improved in
this case by developing the ERP system and focusing on project management improvement.
Another example of revised guidance in Figure 12 shows that communication manage-
ment has a potential for development. Understanding of cultural diversity, language skills, in-
formation technology, and information management are all developable (Figure 11). Hence,
when it comes to the execution of an international project, it can be concluded as follows:
Pay attention to the requisite variety of expertise within working teams. Moreover, the orga-
nization should establish groups with people representing various skills of expertise, ages,
and cultural backgrounds to ensure the diffusion of knowledge to all levels of the organiza-
tion. Information systems should support the knowledge channels of the organization, and
knowledge management should focus on using human capital such as knowledge activists
inside the organization.
6. CONCLUSIONS
First, in the conceptual part of this article, the theories vital for the holistic understanding
of mega-project management (i.e., knowledge management, organizational learning, and
a new perspective to project management), namely, the activity theory were discussed.
Second, new project management ideas through the metaphor of human brain functions
were introduced. Third, research methodology was introduced, and a method of qualitative
analysis developed in this research was presented. Finally, some empirical results gained
through the method were illustrated.
To conclude, the two mega-projects discussed here resemble each other, but there are also
many differences. Both cases were from the marine industry, the organization structure was
fragmented, and the projects were structured as a network of subprojects. Furthermore, the
executing personnel were from culturally different backgrounds, and there was a large body
of professionals from several branches working together. Differences were seen, among
other things, in contracting, payment terms, competition, duration of the project, and in
conditions on the execution site.
The multiple-case study was carried out in 10 network companies, included in the two
mega-project cases. Altogether 48 project team members participated in the analysis of
158 statements to be reacted. The database of more than 15,000 responses was collected.
The multiple-case study indicates that the method was effective. On the basis of the results
of multiple-case research, revised guidance instructions (proposals) can be generated for
the use of project management. The sample of cases and the amount of the empirical data
collected verify the validity and reliability of the research. However, it is always reasonable
to question the generalizability of case research. The research should be evaluated as
a whole and respect the understanding gained concerning the importance of qualitative
features affecting the project’s success in general. This research extends existing research
by providing new knowledge about the relevance of qualitative (in addition to quantitative)
assessment of project execution and management.
On the basis of the research results, it can be concluded that the qualitative key factors
affecting project system steering, in general, were the features related to human resources
management, product integration management, and cooperation with partners. The results
also indicate that prevailing issues, such as environmental impacts of the project, were well
observed in the oil-drilling industry but regarded as a less relevant issue in the ship-building
project. However, the management features that were seen important varied depending on
which level of the networked project organization the firm performs. These results of the
analysis generated practical information on the project execution managers to be used by
the company’s project managers and line management. The practical implication consisted
of several internal and external project development tasks and knowledge sharing leading
to organizational learning in the participating companies. The main practical implication of
this method is the striving toward a sustainable improvement in the performance of a mega-
project organization. This can be, for example, the prevention of errors and unnecessary
changes in the downstream of the supply chain or an improved cost–benefit ratio. Contri-
bution to further academic research is, among other things, the database, which provides an
opportunity for statistical assessments in the future.
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Human Factors and Ergonomics in Manufacturing, Vol.

19 (6) 582–600 (2009)

Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/hfm.20185

Project Management: The Task of Holistic

2.1. Project Learning as a Success Factor for Professional

2.2. Expansive Learning and the Activity Theory

Rule Community Division of labor

2.3. Knowledge Management

new processes). Accordingly, clear interdependence exists between knowledge management

2.4. Maintaining Systems and Systems Theories

For project management, the aim of system dynamics is to provide an understanding of

2.5. The Decision-Making Process

2.5.1. Alternative-Focused Thinking. By its very nature, decision making related to

3. PROJECT STEERING THROUGH EMULATION

3.1. The Human Body Metaphor

3.2. The Emulator Model

”If I manage to get the goal,

3.3. Co-evolution and Interactive Planning

Management systems Maintaining Processes

4. RESEARCH METHODOLOGY AND PROCESS

Feedback loop Knowledge sharing arena Revised guidance

4.1. The Selection of Multiple-Cases

Contractor, system integrator

1st tier partner 1st tier partner 1st tier partner

2nd tier partner 2nd tier partner

3rd tier partner

4.2. The Method

Positive reenforcement loops

5.1. Results from the Oil Rig Project

5.2. Results from the Ship-building Project

Figure 10 Three main categories of the analysis.

Figure 12 System-level results from the analysis of the ship-building project.

Figure 13 Three main categories of the ship-building project analysis results.

Human Factors and Ergonomics in Manufacturing DOI: 10.1002/hfm

Human Factors and Ergonomics in Manufacturing DOI: 10.1002/hfm

Samuelson, K. (1981). InformationCom and multiway video communication as a cybernetic design

Human Factors and Ergonomics in Manufacturing DOI: 10.1002/hfm

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