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CFSs in TURKISH CONSTRUCTION PROJECTSYıldız Y.GUZEY
International Trade and Finance Department, Izmir University, Turkey yildiz.guzey@izmir.edu.tr
Ozlem TASSEVEN
Department of Economics and Finance, Dogus University, Turkey otasseven@dogus.edu.tr
Hilmi ELIFOGLU
Department of Accounting & Taxation, St. Johns University, USA elifogli@stjohns.edu
Ahu GUZEL
Business Department, Izmir University, Turkey ahu.guzel@izmir.edu.tr
N.Can OKAY
University of Portsmouth, UK nejat.okay@myport.ac.uk
ABSTRACT
In this study, we have investigated the Critical Success Factors (CFSs) of the Turkish construction sector. The Turkish construction sector is one of the fastest growing sectors of the Turkish economy and it deserves a special attention to understand what determines success in this area.
CFSs are few key factors that ensure the success in an organization. To determine these factors we have inverviewed 102 executives in the Turkish construction sector. The results are anlayzed with the help of statistical tools, such as Chi_Square tests. The analysis of the data indicates that demographic variables associated with a project leader (such as age, and the years of education and the degree in engineering) are some of the important factors in this area.
Key words: Construction, Project Management, JEL Classification: M19
1. INTRODUCTION
Project management is a planned and organized effort to obtain a unique one-time objective, such as construction of a nuclear submarine or a building. The plan usually identifies tasks and resources needed to obtain various milestones in the implementation of the project. In the early stages of project plan a feasibility study evaluates the possibility of obtaining the objective in time with given resources (such as manpower and budget).
The Manhattan Project is the first well known project where most of the modern project management tools were employed. The development of project management as an academic field came to surface with NASA‘s Space Exploration projects in the United States. Today, there are various computer assisted tools to help the management of any type of project. Many universities offer courses and programs in the field.
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Today, almost any large project requires the usage of sophisticated project management tools and techniques. This certainly includes the construction projects in Turkey.
The following are some of the most common characteristics we observe in large projects: A well defined realistic achievable goal,
A project manager and project management team,
Individual tasks to be performed by each participant and major phases of the project, Resources (people, equipment, facilities, supplies, etc) to do the task,
A time schedule for the tasks (duration in terms of hours, days, months),
Relationships between the tasks and phases (for example, a new manufacturing process cannot start before the training of the people in the process),
Budget (the costs associated with people, equipment, facilities, supplies, etc).
Based on the above characteristics, the project management is defined as a one-time, non frequent and non-periodic effort (Lunabi and Qirjo (2002)) to obtain a relatively difficult goal. It is a collection of actions taken by one or more persons:
A results oriented, tangible, realistic attempt to obtain,
Directed towards the solution of a relatively difficult problem or issue, An action with determined goals and predictable results,
Limited by time, and resources like economic, technical and human resources, Planned in the beginning and assessed at the end.
In the final analysis, the project management will secure the completion of the project from beginning to the end, on time and within the limitations of monetary restraints described in the budget.
2. CONSTRUCTION PROJECTS
There are some specific factors that the construction projects differ from other projects. These factors are as below:
Most of the construction projects are one time projects: The construction projects are applied only once when compared to serial manufacturing projects of industrial systems. All construction projects differ according to their participants and the relative importance of the variables,
The duration of the projects: The project duration starts from the incentive to the completion of the project. The duration of the project may differ according to the cash flow and the size of the project. In the manufacturing projects the duration may be minutes or seconds whereas the construction projects may last years,
The relationships in the project process: The relationships are different in each project. The projects have their own customers, owners, users, etc.,
The difficulty of the feedback mechanism: The determination of the costs in the construction sector is difficult. Hellard (1993) states that the main reason of this issue is the variety of the inputs in each project and the change of the pre requisitions which are set at the beginning.
According to Hellard (1993), there are four elements in construction processes that conflict with each other. There elements are:
Function: Every technical and physical needs,
Aesthetics: The subjective requirements of the people,
Cost: The cost that a building will require throughout its life time, Time: The duration that is needed to complete the building.
For the determination of these criteria, the customer needs and the requirements are very important. Since every construction project is unique in its nature, the importance of these above factors will be different. Hellard (1993) argues that the customers play the most important role for the determination of the importance ranking of the criteria.
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3. CRITICAL SUCCESS FACTORS IN PROJECT MANAGEMENT
According to Kerzner (2004) CFSs are the factors that are critical to achieving succes, not a measure of performance—which is what Key Performance Indicator are. Factors (CFSs) are sometimes used synonymously with KPIs. CFSs are the factors that are critical to success. Identification of the CFSs for a project will mean that the project manager and project team know where to concentrate their attention in order to achieve the project objectives (Meredith&Mantel,2006). A number of studies have been conducted into the factors found to be critical to project success. Most of them are generic across all projects, but each project will also have its own very specific factors. Morris and Hough (1987) identified CFSs under the following general headings:
Project definition, Politics/social factors, Schedule urgency, Legal agreements, Human factors,
Planning, design and technology management, Schedule duration,
Finance project implementation.
The development of CFSs for the project (with involment of the project manager, project team, project sponsor and other senior stakeholders) is an important exercise in its own right, since all those associated with the project gain mutual understanding of what is critical to project success (Milosevic, 2003).
3.1. Key Performance Indicators:
Key Performance indicators (KPIs) are used to measure project progress toward achieving objectives, rather than the detail of progress of the work packages (Moris&Pinto, 2004).
They may be used to;
Measure project performance that is directly related to the change the project is delivering (which could be shareholders value, return on investment and market share, etc.),
Measure project specific performance-that is the performance of the project processes (e.g. effectiveness of project control mechanisms, degree of project cost reduction by using designated procurement practices, amount of change occuring in project etc.).
KPIs must be determined at the beginning of the project and provide direct progress in formation toward project objectives. The in formation these measures of performance provide can help the project manager make decisions on trade –offs between the various (usually conflicting) control actions needed (Meredith &Mantel,2006).
3.2. Success Factors
Shtub et al. (1994) identified 10 critical success factors in their book although they accepted that there are different issues regarding to different projects. The factors that affect the success of a project are defined by Shtub et al as in the following:
The mission of the project and the goals: Well determined project goals are the basis of the project planning and execution. Understanding the goals and the performance measures used in the evaluation is essential for an effective coordination of the efforts.
Top management support: The competition for the resources may lead to conflict and crisis in the project environment. The continuous involvement and support of the top management in the project life cycle helps the project team members to understand the mission. This awareness can be very valuable for solving
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the conflicts in the project team. As a result, the regular communication between the project leader and the top management determines the project success.
Project planning: The translation of the project mission, goals and the performance measures into feasible plan is the link between the conceptual design and production. A well designed project includes every aspect of the project.
Client discussion: The user of the project determines the success of the project. A project which is completed in predetermined time and budget according to the technical specifications can not be considered as a failure. In the project initiation stage, the client input is essential for determination of the mission and the goals. In the following stages, the client involvement can help to find out the errors and perform necessary enhancements.
Personal issues: The completion of a project with sustaining the technical requirements but not within the time and budget constraints can not be defined as a success. Therefore, the relationships among the team members and between the client and the project team are essential factors for the project success. If there are frequent morale problems, the success would be doubtful.
Technical issues: Understanding the technical requirements of a project is vital for the project success. Additionally, the project team members should be selected according to the technical requirement of the project in order to deliver the outcomes in a desired way.
Client acceptance: Continuous client involvement during the project life cycle increases the probability of success in the results.
Project Control: A continuous flow of information in terms of feedback helps the project leader to deal with the uncertainty in the projects. With the comparison between the project status and the project plan, the deviations can be easily recognized. Additionally, the project plans can be revised in order to keep the project in its schedule and the predefined targets.
Communication: A successful transition between the stages and a good coordination between the team members can be achieved by the help of communication. If the authorities are well defines, the communication between the team members and the organization and among the team members become easier.
Troubleshooting: According to Shtub (1994) the control system is designed to identify problem areas and if possible trace their source through the organization.
In addition to the studies of Shtub et al. (1994), the success factors of project management are explained Gemuenden & Lechler in four categories:
People, Activities, Barriers, Success,
A number of variables affecting the success of project implementation were identified A careful study of previous literature suggests that Critical Success Factors can be grouped under five main categories. These include project-related factors, human-project-related factors, project procedures, project management actions and external environment (Moris&Pinto, 2004).
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3.3. Project-Related FactorsProject scope is a useful predictor for construction time. The importance of project scope factors is echoed by many researchers. The attributes used to measure this factor are type of project, nature of project, number of floors of the project, complexity of project and size of project (Meredith & Mantel, 2006).
3.4. Procurement-Related Factors
Many researchers identified the importance of procurement factors and defined the scope of procurement as the framework within which construction is brought about, acquired or obtained. Therefore, two attributes are used to measure this factor; they are (Milosevic, 2003):
Procurement method: selection of the organization for the design and construction of the project
Tendering method: procedures adopted for the selection of the project team and in particular the main contractor.
3.5. Project Management Factors
Project management action is a key for project success that by using the management tools, the project managers would be able to plan and execute their construction projects to maximize the project‘s chances of success. Then, the variables in project management include adequate communication, control mechanisms, feedback capabilities, troubleshooting, coordination effectiveness, decision making effectiveness, monitoring, project organization structure, plan and schedule followed, and related previous management experience (Kerzner, 2004). A number of attributes will affect this factor, including the communication system, control mechanism, feedback capabilities, planning effort, organization structure, safety and quality assurance program, control of subcontractors‘ works, and finally the overall managerial actions.
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Figure 1: Critical success factors for construction projects
3.6. Project Participants-Related Factors
Project participants are the key players, including project manager, client, contractor, consultants, subcontractor, supplier, and manufacturers. The influence of client and client‘s representative is a significant factor on construction time performance (Milosevic, 2003). The client-related factors concerned with client characteristics, client type and experience, knowledge of construction project organization, project financing, client confidence in the construction team, owner‘s construction sophistication, well-defined scope, owner‘s risk aversion, client project management.
Designers play a vital role as their work involves from inception to completion on a project as well. Design team-related factors consist of design team experience, project design complexity and mistakes/delays in producing design documents. The main contractor and subcontractors start their main duties when the project reaches the construction stage. The variables include contractor experience, site management, supervision and involvement of subcontracting, contractor‘s cash flow, effectiveness of cost control system and speed of information flow. The project manager is another key stakeholder in a construction project and his competence is a critical factor affecting project planning, scheduling and communication. Variables under this factor consist of the skills and characteristics of project managers, their commitment and competence.
A construction project requires team spirit; therefore team building is important among different parties. Team effort by all parties to a contract—owner, architect, construction manager, contractor, and subcontractors—is a crucial ingredient for the successful completion of a project. The attributes of this factor can be mainly divided into two categories: one is related to client, another is the project team. For the first group, it includes client‘s experience and ability, nature of client, size of client organization, client‘s emphasis on cost, time and quality, and client contribution to the project. For the second group, it includes project team leaders‘ experience and skills, project team leaders‘ commitment on time, cost and quality, project team leaders‘ involvement, project team
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leaders‘ adaptability and working relationship and the last one is support of the project team leaders‘ parent companies.
3.7. External Factors
Various researchers support ‗‗environment‘‘ as a factor affecting the project success. Environment can be defined as the whole external influences on the construction process, including social, political and technical systems. Chan (Scott & Chan (2004) state that the attributes used to measure this factor are economic environment, social environment, political environment, physical environment, industrial relation environment and level of technology advanced.
3.8. Performance Measurement in Construction Projects
According to Cooke-Davies (2002), performance predicts success and success factors affect performance. Cooke & Davis (2002) mention that in order to identify the ‗real‘ success factors of construction projects, the stakeholders are important in relation to the construction project performance. A project is only successful to the extent that it satisfies the needs of its proposed user. The element of success in a project refers to efficiency and effectiveness measures. Efficiency measures correspond to the strong management and internal organizational structures (adhere to schedule, budget and specification) and effectiveness measures refer to user satisfaction and the use of the project. In addition, efficiency would only be achieved through having standard, systems and methodology. As Takim & Akintoye (2002) interpret figure 2 shows the relationship between success factors, project performance and project success.
Research conducted by Atkinson, et al., (1997) reveals that clients will not be satisfied if the end product fails to meet their price, quality, time frame, functionality and delivery performance standard. In relation to that, the consultants will not develop the skill and knowledge, or make the effort to design and manage processes, unless the client meets their required employment conditions. The contractors and suppliers may not continue to deliver good products and resources to clients or to any company that fails to give them an opportunity to earn a reasonable return on the investment of their time and capital. As a result, end-users will not be happy if the end product does not meet their requirement in terms of functionality and quality of service. Atkinson, Waterhouse & Wells (1997) state that successful stakeholders‘ performance has to be measured and managed in order to ensure their continual participation and co-operation in a construction project.
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4. RESEARCH RESULTSThe research has been conducted in order to determine the critical success factors affected on construction projects, important aspects in project management theory and how much of these factors executed by project managers in the sector are examined. We will investigate the conceptual framework of projects, project management and specifically the construction projects in Turkey. And also, demography of participants of research or their companies was assessed in the coverage of the research in order to see whether it is effective or not in project stage steps. Project management steps in the coverage of research are given below:
4.1. Project Start Stage:
―Project‘s aims are defined clearly‖
―Strategies which will be used are determined in order to realize the project‘s aims‖ ―Functions which will be used in the project coverage are defined elaborately‖ ―Employees who will work in the project and their duties are determined‖ ―Relations between employees who will work in the project are defined‖
―Funds which will be used in the project are determined and project budget is occurred‖
―Factors (purveyors, rivals, other projects, funds etc.) which may affect the project and their probable effects are determined‖
―Functions which will be realized in the project process are put in order in terms of importance‖ ―Relation of each function with the other functions and the whole project are determined‖ ―Schedule estimate for every function is determined‖
―Start and finish time of every function is determined‖
―Functions affecting the project‘s total time and important functions are determined‖ ―Critical points in the project are determined‖
―Cost estimate for every function is determined‖
―Project programming techniques (Gantt Schema, CPM, PERT) are used‖ 4.2. Project Development Stage:
―Whether project continues exactly as it was determined in terms of time is checked periodically‖ ―Whether project continues exactly as it was determined in terms of budget is checked periodically‖ ―Measures are taken against determined problems‖
―Project manager gets situation report from the authority periodically‖ ―Department meetings are done periodically‖
―Inter-department meetings are done periodically‖
―Probable risks are determined beforehand and a B plan is prepared for these risks‖ 4.3. Project Final Stage:
―At the end of the project, project‘s end is declared to all units‖
―After the project, internal-department meetings are done for advices and critics‖ ―After the project, inter-department meetings are done for advices and critics‖ ―After the project, project performance evaluation is done‖
4.4. Universe and Sample
Persons who manage the building projects (architect, engineer etc.) construct the universe of the assignment. Wideness of the sector is as much as the building projects in the whole Turkey. Sample consists of 102 persons. Participants are project managers, architects and engineers. Sample method is executed as ―simple randomly‖. In theoretical framework, representative sample size is found in %95 confidence interval for this heterogeneous universe, with ± % 10 sampling errors necessary sample size as 96. Sample size is found as follows:
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n = N t2 p q / d2 (N-1) + t2pq1N: Individuals numbers of target population n: Individuals numbers of representative sample
p : Observed frequency of examined incident (realization probability) q :Unobserved frequency of examined incident(unrealisation probability) t :In a significance level, theoretical value found in accordance with t table d : Accepted sample errors in accordance with observed frequent of incident
In this framework, questionnaires are practiced on 102 randomly chosen project managers, architects and engineers. At the end, it can be expressed that research indications are generalized in %95 confidence interval, with ± % 10 sampling errors. Due to the fact that universe contains the building sector, it is assumed that sample has enough wideness and geographical distribution to represent Turkey.
4.5. Data Collection and Analysis
Survey design and questionnaire were prepared in accordance with information which were gained with literature review. Target which was to interview with 102 persons was realized. Participants of research were chosen coincidentally. Data was analyzed by descriptive statistic and inferential statistic techniques. Demographic indicators of participants and project stages were defined as descriptive. Moreover, analysis was done by crossing up the demographic indicators with each step of project management stages. Appropriate one from Chi-Square alternative tests was used for these analyses. For data analysis, SPSS 10.0 program was used.
For validity of Pearson Chi-Square analysis results in cross tables, at least 5 observations are needed to exist in every cell. Existence of less than 5 observations in every cell must not exceed the %20 of total observations. Due to the fact that gained results are not appropriate for this rule, tables were reconstructed and combined results of tables were assessed. Table and analysis results for each case are given below. In Chi-Square analysis tables which were assessed, (consubstantiate) expression exists. While combining, answer choices were decreased to 2 choices. Demographical variables were divided according to an appropriate refraction. In the scale with 5 points which was used for project stages, ―All of the time‖, ―Often‖, ―Some of the time‖ choices were combined as ―Practiced‖; ―Rarely‖, ―None of the time‖ choices were combined as ―No Practiced‖.
If second Chi-Square test which will express a significant result can‘t be done with gained new tables, ―No statistics are computed because the topic (consubstantiate) is a constant‖ is written there. Second Chi-Square Test which will express a significant result was assessed in accordance with Chi-square Test which is statistically valid according to 2*2 table analysis rules (Pearson Chi-Square or Fisher's Exact Test or Yates Chi-Square).
When demographical indicators are examined, it is seen that most of the participants are young. It is determined that education level is mostly university graduate and degree is mostly engineering. Due to the fact that most of the participants are young, project management experience is between 1-10 years. It is found that average (mean) number of employee working the projects is 118, mostly seen value (mode) is 100, and center value (median) is 50. Mostly seen value as average project budget is 200.000 YTL, general average is around 7.000.000 YTL. Projects are usually done successfully. Descriptive demographic indicators are given below.
Table 1. Research Site Distributions
Statistics Age/ Year of Birth Education Level Education Type Average Employee Numbers Project Management Experience Average Project Budget Percent of Project Achievement N 102 102 102 102 102 92 102 0 0 0 0 0 10 0 Mean 1971,588 2,088 1,882 118,931 2,039 7067141,3 2,264
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Median 1976 2 2 50 2 775000 2 Mode 1983 2 2 100 1 200000 2 Std. Deviation 11,916 0,285 0,323 180,465 1,168 17335917 0,866 Minimum 1942 2 1 2 1 7000 1 Maximum 1986 3 2 1000 4 100000000 5 Sum 201102 213 192 12131 208 650177000 231 AgeCategories Frequency Percent Valid Percent Cumulative Percent
Valid 20-30 years old 43 42,156 42,156 42,156
31-40 years old 26 25,490 25,490 67,647 41-50 years old 15 14,705 14,705 82,352 51-60 years old 15 14,705 14,705 97,058 61 + years old 3 2,941 2,941 100 Total 102 100 100 Education
Level Frequency Percent Valid Percent Cumulative Percent
Valid University 93 91,176 91,176 91,176
Master and Plus
Degree 9 8,823 8,823 100
Total 102 100 100
Experience Frequency Percent Valid Percent Cumulative Percent
Valid 1-5 Years 48 47,058 47,058 47,058
6-10 Years 21 20,588 20,588 67,647
11-15 Years 14 13,725 13,725 81,372
16 and Plus Years 19 18,627 18,627 100
Total 102 100 100
Employee Frequency Percent Valitd Percent Cumulative Percent
Valid 1-10 Employees 24 23,529 23,526 23,529 11-25 Employees 11 10,784 10,784 34,313 26-50 Employees 19 18,627 18,627 52,941 51-100 Employees 24 23,529 23,529 76,470 101-250 Empl. 10 9,8039 9,8039 86,274 251-500 Empl. 9 8,8235 8,8235 95,098 501-1000 Empl. 5 4,9019 4,9019 100 Total 102 100 100 Average Budget Frequenc y Percen t Valid Percent Cumulative Percent Valid 1-100.000 YTL 18 17,647 19,148 19,148 100.001-500.000 YTL 24 23,529 25,531 44,680 500.001-1.000.000 YTL 9 8,8235 9,5744 54,255 1.000.001-5.000.000 YTL 24 23,529 25,531 79,787 5.000.001-10.000.000 YTL 6 5,8823 6,3829 86,170 10.000.001 and plus YTL 13 12,745 13,829 100
Total 94 92,156 100
Missing System 8 7,8431
Total 102 100
Achievement Frequency Percent Valid Percent Cumulative Percent
Valid 100% 18 17,647 17,647 17,647
90-99% 48 47,058 47,058 64,705
80-89% 28 27,450 27,450 92,156
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60-69% 1 0,9803 0,9803 100
Total 102 100 100
Table 2. Results of Hypothesis
FACTOR &ASSESED DATA RELATIONSHIP D.F Test Value
Project Aims &Age Not Significant 8 Person Chi-Square
0,315 Project's Aims Are Defined Clearly&Education Type Not Significant 2 Person
Chi-Square
0,935 Project's Aims &Project Management Experience Not Significant 6 Person
Chi-Square
0,660 Project's Aims & Categories of Average Employee
Numbers
Not Significant 12 Person Chi-Square
0,166 Project's Aims & Categories of Project's Average
Budget
Not Significant 10 Person Chi-Square
0,319 Project Time Mangement& Age Not Significant 8 Person
Chi-Square
0,253 Geting Situation Report Perodically & Project
Management Experience
Significant X Fisher‘s Exact Test
0,037
Main results of the hypothesis related with this study are given above. All project stages are realized and according to demographic differences, there is no difference. There were 93 detailed hypotheses tests. Only in ―Project manager gets situation report from the authority periodically‖ step, ―Project Management Experience‖ seems as distinctive. There is a statistically significant relationship between the two variables. Having different demographical features in ―Project Management Experience‖ topic is effective in realizing ―Project manager gets situation report from the authority periodically‖ step.
5. CONCLUSION
According to results gained from primary research, generally all project stages are realized and according to demographic differences, there is no difference. Only in ―Project manager gets situation report from the authority periodically‖ step, ―Project Management Experience‖ seems as distinctive. There is a statistically significant relationship between two variables. Having different demographical features in ―Project Management Experience‖ topic is effective in realizing ―Project manager gets situation report from the authority periodically‖ step. When demographical indicators are examined; most of the participants are young. It is determined that education level is mostly university graduate and the degree is mostly engineering. Due to the fact that most of the participants are young, project management experience is between 1-10 years. It is found that average (mean) number of employee working the projects is 118, mostly seen value (mode) is 100, and center value (median) is 50. Mostly seen value as average project budget is 200.000 TL, general average is around 7.000.000 TL. Projects are usually done successfully.
These results show that sector is not affected much from demographic variables. Results demonstrate that there are other variables which affect the executing of project stages. For future research, testing variables other than demography is advised to see whether it will affect or not.
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Chan, A.P. Scott, D. & Chan A.P.L.(2004), ―Factors Affecting the Success of a Construction Project‖, J. Constr. Engrg. and Mgmt. 130(1): 153-155
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