The Challenges of Managing Project Alliances in Mega Construction Projects in the United Arab Emirates - Research Proposal Example

RESEARCH PROPOSAL THE CHALLENGES OF MANAGING PROJECT ALLIANCES IN MEGA CONSTRUCTION PROJECTS IN THE UNITED ARAB EMIRATES Name: Institution: Contents 1.0Executive Summary 3 2.0 Study Aims and Objectives 4 3.0Problem Statement 6 3.1 Rationale and justification for the study 6 3.2Significance and Purpose of the Study 6 3.3Hypothesis 7 3.4Research Questions 8 4.0 Literature Review 8 4.1 State of UAE Construction Industry 9 4.2 Conceptualizing of UAE Project Alliances 10 4.3 Self-organization and Complexity 10 4.0Methodology 12 5.1 Data Collection 12 5.2 Research Population and sampling 12 5.3 Study Period 12 5.4 Research Instruments 12 5.5 Ethical Concerns 13 6.0 Findings 13 7.0 References 15 1.0 Executive Summary Strategic planning and formalized systematic approaches to managing alliances in mega construction projects has since the early 1980s piqued the interest of management scholars. Critics have questioned the fundamental theories of strategic planning, specifically the impracticality of prediction (Mintzberg, 1994b: 110). Indeed, the existing unpredictability and volatility of the business environment in the United Arabs Emirates (UAE) has made formalized strategic planning more unachievable. Such rapid changes demand strategies that are both innovative and flexible, which unfortunately are seldom associable with strategic planning and management of megaprojects (Hamel 1996). Strategic planning is predominantly a calendar-driven practice, which assumes that the present and the future will have minimal changes, among a vast majority of mega construction projects in the UAE, that are dominated by project alliances. This has caused uncertainties and complexities to bedevil strategic decision-making in the projects. Project alliances refer to the joint efforts essential for ensuring the success of projects. In the context of construction management, a mega project refers to the immense nature of the projects, in terms of scope or operation and size. Mega construction projects, also known as complex construction projects or major construction projects, comprise tremendous and large-scale investment in projects, that on average cost in excess of EUR 0.5 billion. They typically consist of extensive projects such as highways, nuclear plants, oil extraction plants, railways, power stations, skyscrapers, bridges and sports centers. These comprehensive projects are often unified by their intense complexity, in human, capital and technical, and by an enduring series of disastrous deliveries. For mega projects to be successfully designed and delivered, strategic planning and management is critical. For mega projects to be researched, it needs new theories that can contend with their complexity. There is also the need to investigating the weaknesses and the strengths or the planning and management strategies currently in use by these mega projects. The aim of this research is to highlight the challenges of applying strategic planning and managing project alliances in mega project construction in the UAE. It is expected that the research will enable a much clearer research agenda to investigate mega projects that will continue to emerge in the UAE. The study will examine the key features of strategic management and management of alliances in mage construction projects in UAE, while using Barakah Nuclear Power Plant as the case study. It will further explore the dynamic characteristics of the strategic planning processes within the power plant. Key Disciplines: Project management, strategic planning, project alliances, UAE mage projects 2.0 Study Aims and Objectives Construction project alliances in the UAE consist principally of immensely diverse management teams that are characterized by varied cultures, backgrounds and languages. The diversity has the potential to create huge challenges in the application of strategic planning. The study therefore aims to: Understand the critical drivers for the success of mega projects. Identify key criteria for selection of effective strategic planning and management of megaprojects. Identify the resource needs for effective management, planning and execution of megaprojects. To alleviate these challenges and the adverse effects they have the potential of imposing on the projects, the study will propose strategies towards their mitigation. Hence, the understanding of the complexity of the project alliances and strategic planning and management could help reconstitute feasible approaches towards ensuring the project alliances are run smoothly throughout their courses of implementation and completion. This contributes substantially to the premise of this research. The principle objective of this research is to discover the inherent challenges associated with management and planning of megaprojects by project alliances, as well as conceptualize the mitigation approaches. The research will analyse the challenges faced on application of the strategic planning and managing of the project alliances. In addition to establishing criteria for strategic project management, it will examine their implications and implementation. Along with focusing on the aforementioned key objectives, the study will also examine the complexity associated with the project alliances, how they are managed and why they have not been successful. Researchers acknowledge that a possible way of ensuring effective management of the projects is through the application of consistent and relevant theoretical structure for action. 3.0 Problem Statement 3.1 Rationale and justification for the study The underlying principle of the research is to advance theoretical approaches towards the management of mega construction projects. Although it will not seek to formulate new theories for management and strategic planning of project alliances, it will focus on applying and suggesting the established management theories. The research will also serve as a guide for future researches that seek to explore empirical evidences of the UAE project management strategies and challenges. 3.2 Significance and Purpose of the Study UAE’s market for construction projects was hit by the downturn of the property crisis in 2008 during the global economic crisis, leading to price crash of around 60 percent of half of its projects, with over half of its projects put on hold. After years of recovery and restructuring, the nation has witnessed a dozen new megaprojects re-launched into the market. While some analysts have expressed concern on whether UAE can sustain the mega projects and whether the nation risked losing its footing and back to the real-estate bubble, the government of UAE has constantly reiterated that accepting some level of risk is the way to go if the nation’s development goals have to be achieved. Global financial crisis, climate change, high demand for quality infrastructure and demands for quality service delivery have presented the country’s business leaders and policy makers with critical decisions and trade-offs. Strategic response to these challenges has been investment in big solutions delivered through mega projects. It is estimated that globally, over US$40 trillion will be invested in megaprojects worldwide. However, a major challenge is that these major projects are often overwhelmed by major cost runs, delays in schedules of short fall of benefits. More disturbingly, there is a growing body of research showing that the performance of megaprojects worsens with time. The failures of the projects are often caused by application of poor planning and management strategies. There are substantial implications on the economies of the countries, as the economic scale of such complex projects may affect the economies of the entire nation, in the medium and long-term. There is hence a critical need to research on the challenges bedeviling application of planning and management of megaprojects, specifically in the UAE. A dominant perception on the strategic planning and management of project alliances in the UAE is that challenges bedeviling these practices is a major inhibitor to the success of such mega projects. As a consequence of this perception, this research seeks to conclude that there is need for research on the challenges subsequent recommendations of measures to address the challenges by reviewing the strategies and management structures of the project alliances. The study proposal further suggests that developing better forecast models, improved reality checks in planning, trained human resource, and high levels of accountability are critical elements that need extensive examination. 3.3 Hypothesis There is a growing interest by management scholars to research on the ways in which strategic planning and management of complex projects can be effective in order to realise successful projects. In relation to this, three hypotheses have been formulated for this study. They include Strategic planning methods used are irrelevant and narrow and fail to address complexities associated with mega construction projects; Mega projects are delicate and demand different strategies compared to the less complex projects; Most of the inefficiencies in project management are linked to the poor strategic planning and management criteria. 3.4 Research Questions The primary research questions identified for this research include: a) What are the key features of the strategic planning systems of the project alliances? b) Are the planning and management strategies comprehensive enough to integrate the complex nature of mega construction projects? c) Do the systematic and strategic planning of the project alliances relate with a formalized and rational management? 4.0 Literature Review 4.1 State of UAE Construction Industry Although great advances have been made in strategic management in the recent years, much remains to be achieved if managing complex and diverse construction projects in the future have to be accomplished. Accordingly, more attention should be given to how challenges that characterize the strategic planning and management of project alliances in the UAE can be mitigated (Research and Markets 2012). UAE is one of fastest growing economies in The Middle East. It has witnessed substantial investment in the construction industry in the last decade outpacing Saudi Arabia (McGinley 2013). In 2008, it became the biggest construction market in the region, accounting for around 20 percent of the overall Arab construction industry. In the face of the economic downturn in 2008/2009, the nation’s construction industry recorded a strong growth contributing some 8 percent to UAE’s GDP in 2009 (Research and Markets 2012). In 2011, UAE reported the largest construction project value estimated at US$319.1 billion (Dubai Chamber 2013). Despite the growth, a growing body of researches has called for the need to investigate the key drivers and challenges confronted by planning and managing the industry (McGinley 2013). Some studies have also linked UAE’s domestic economy to its construction industry (Research and Markets 2012). International Monetary Fund (IMF), estimates UAE’s population to reach 6 million by 2015, from 5.4 million in 2012, while expatriate population, which accounts for some 80 percent of the country’s population, will continue to form the chief drivers for high demand for commercial property units, particularly managed and executed by project alliances (Dubai Chamber 2013). 4.2 Conceptualizing of UAE Project Alliances Planning and management of projects alliances demand for different approaches. Hobbs and Andersen (2001) have pointed out that in development and implementation of projects, four generic configurations (quadrants) of alliance should be analyzed. The four include: Quadrant 1: traditional sponsorship; Quadrant 2: partners in ownership; Quadrant 3: partners in design and ownership; Quadrant 4: relational development and implementation From the above analysis of the ‘State of UAE Construction Industry’, it is arguable that most of UAE’s megaprojects fall under the fourth and the fifth quadrant, both of which are confronted with great planning and management challenges. 4.3 Self-organization and Complexity Realistically, despite the fact that the complexity and size could be relative, the term complex is derived to refer to the colossal number of activities, projects, items and contractors that the project alliances deal with. Mintzberge’s (1994a) justification of strategy planning as an unsystematic, organic and informal process has received theoretical backing from complexity theory. Approaches to complex adaptive systems designed for analysis of the evolution of projects or organizations (Anderson 1999). The models present motivating implications for organizational strategy. For instance, when complex projects are faced with continually changing landscape, to optimise their levels of survival, they have to constantly explore parallel efforts by different members of the organization as well as combine incremental steps with sporadic major leaps (Grant 2003). A major characteristic of strategic processing is the existence of semi structures that create standards, plans and responsibilities for specific processes while at the same time allowing for freedom in other processes. A major application of the semi-structure concept to the formulation of strategy concerned with the use of simple rules that allow for adaptation while creating boundaries that can protect complex structures from disintegrating (Grant 2007). Hass (2009) suggests that the complexity theory is concerned with the iterations, patterns, emergence and relationship. According to Bacarini (1996), if complex projects have to prosper and be sustainable in new external environments then they need new strategies that correspond with the particular environments, as each construction environment is often unique from the other. Weaver (2010) points out that a major challenge facing project management is the development of the right relationships, expectations and attitudes among the major stakeholders of complex projects. According to Orill (2010), when the stakeholders are poorly managed, the resulting scenario would be conflicts and controversies surrounding the execution of mega construction projects. 4.0 Methodology 5.1 Data Collection Data collection will set off with literature search of secondary sources of data such as reports on UAE’s construction industry, government white papers on the industry and government strategic development plans. Other secondary sources will include books and journals in the industry (Denzin & Lincoln 2000). 5.2 Research Population and sampling The population of the research will include civil engineers, project managers, structural engineers and surveyors at Barakah Nuclear Power Plant. Simple random sampling technique will be used in selecting the participants 5.3 Study Period The process of collecting data will take 6 weeks. 5.4 Research Instruments To address the aforementioned research questions, the research methods will include a case study of Barakah Nuclear Power Plant’s management strategies and policies. Case studies make use of diverse data collections methods such as interviews, observation, questionnaires, document analysis and observation. For this particular study, questionnaires will be used (Denzin & Lincoln 2000). The study will use a questionnaire focused on asking the participants at Barakah Nuclear Power Plant’s about the challenges faced by the mega construction project alliances, strategies used in planning and managing the projects, and ways applied in managing such challenges. 5.5 Ethical Concerns Since complex projects are characterised by diverse values, traditions, principles and cultures, the research will commit to respect them. First, the permission of Barakah Nuclear Power Plant’s will have to be requested for to include its employees in the study. Permission of the participants will be first requested before including them in the study (Denzin & Lincoln 2000). The participant’s will as well be accorded the right of consent, where before they are issued the questionnaires, they will have to be informed of the extent the research, of their freedom to withdraw from the research and the intent of the research. Participants will as well be protected from emotional harm. For instance, the questionnaires will not use difficult or sensitive questions that the participants view as embarrassing. Further, the research will aim to be very objective, avoiding all personal prejudices, biases and opinions. In addition, the study will be conducted under the condition that the participant’s responses or reactions are kept anonymous (Denzin and Lincoln, 2000) 6.0 Findings the close of the study, the findings will attempt to fill the gap in literature by answering the question: “in spite of the extensive debates over the advantages of strategic planning and studies in strategic decision processes in UAE construction projects, there is limited knowledge about the formalized systems through which the strategic plans are formulated. It is however critical to understand that the frameworks and strategies this research would propose, would call for further research. In this case, the findings would provide information for further researches in the areas of adopting the suggested frameworks and strategies. The research would be of great significance to project management professionals since it will provide a means of examining the under-researched theoretical subset of management of project alliances in UAE. Further, the findings will contribute to strategic management knowledge by providing descriptive information of the strategic planning practices of UAE’s most complex construction projects. Most importantly, the findings will help conceptualize empirical development of the projects managements. In conclusion, the research is significant as given the state of UAE’s construction industry there is need for study into the effective planning and management strategies that can ensure the success of the megaprojects. The theoretical interventions are expected to advance the interpretation of the challenges, nature, and purposes inherent in the mega construction project alliances within the Middle East context. Lastly, the research will seek to add to the ongoing debate between the process and design schools of strategic management and lastly, it will seek to clarify the coordination and control in the large construction projects. 7.0 References Anderson P. 1999. “Complexity theory and organizational science. Organization Science” Vol 10, 216-232. Baccaraini, D. 1996. The Concept of Project Complexity- A Review. International Journal of Project Management, 14(4), Pp. 201-204 Crotty, M. 1998. The Foundations of Social Research: Meaning and Perspective in the Research Process. London: SAGE Publications Ltd. Denzin, N. & Lincoln, Y. 2000. Handbook of Qualitative Research. London: Sage Publication Inc. Grant, J. 2007. "Advances and Challenges in Strategic Management." International Journal of Business, Vol 12 No 2, 12-21 Grant, M. 2003. "Strategic Planning in a Turbulent Environment: Evidence from the Oil Majors." Strategic Management Journal, Vol. 24, No. 6, pp. 491-517 Hass, K. B. (2009). Managing Complex Projects: A New Model. Vienna: Management Concepts Inc. Hamel G. 1996. Strategy as revolution. Harvard Business Review 74(4): 69-76. McGinley. 12 Feb 2013. Dubai will carry on with mega projects - ruler. Construction Week Online. (Online) Retrieved from: [http://www.constructionweekonline.com/article-20893-dubai-will-carry-on-with-mega-projects--ruler/#.UblF3ueSA3w] Accessed 12 June 2013 Mintzberg H. 1994a. The Rise and Fall of Strategic Planning. Free Press: New York. Mintzberg H. 1994b. The fall and rise of strategic planning. Harvard Business Review 72(1): 107-114. Orill, A.2010. Challenges On Culturally Diverse Construction Projects And Strategies To Overcome Them: A Study Of Multicultural Project Management Teams In The UAE. (Online) Retrieved from: [http://crgp.stanford.edu/publications/working_papers/orrill.pdf] Accessed 12 June 2013 Research and Markets. 2012. UAE Construction Industry. (ONline) Retrieved from: [http://www.researchandmarkets.com/reports/686968/uae_construction_industry_outlook_to_2012] Accessed 12 June 2013 Weaver, P., (2008). Dynamic scheduling. [Online] Available: http://www.mosaicprojects.com.au/PDF/Dynamic_Scheduling.pdf [Accessed 12 June 2013]. Read More