Project Management

A Strategic Planning Approach

by Paul D.  Gardiner

Chapter 1 material

References to the website in Chapter 1

Website reference from page 13
Project Management - An Historical Perspective provides a fuller discussion of the role of management thought and the development of modern project management, together with a timeline of significant events.

Supplement to Chapter 1: Project management - an historical perspective

Development of management thought

Project management is primarily about the management of people and complex relationships. The success of a project is more often attributable to good management and leadership skills than whether or not network analysis tools have been used. In this respect the development of management thought has had more influence on project management theory and practice than any other; although, these influences are often overlooked by commentators who limit their historical descriptions to the appearance of tools and techniques which, though important, are incorrectly regarded by many as the beginnings of project management.

The pre-classicists

Two early influential management thinkers were Robert Owen and Charles Babbage. Owen (1771-1858), a Scottish industrialist who owned a cotton mill in New Lanark, Scotland, recognised that people deserved more respect and dignity, and should not be considered as if they were simply machinery and equipment. Owen introduced improved working conditions, a higher minimum working wage for children, meals for employees, and reduced work hours. He is regarded as the forerunner of the modern human relations school of management. Many of the setbacks on the Sydney Opera House can be traced back to poor human relations (Hughes, 1993).

The main contributions of Charles Babbage (1792-1871) are recorded below under tools and techniques. However, it is appropriate to mention here his contribution of the development of a modern profit-sharing plan including an employee bonus for useful suggestions as well as a share of the company's profits. Motivation, rewards and recognition are key factors in project management today, and have resulted in many leadership and team working innovations, including the increased use of partnering and incentive contracts.

Classical management

The classical school of thought began around 1900 and continued into the 1920s. Traditional or classical management focuses on efficiency and includes bureaucratic, scientific and administrative management (also called classical organisation theory). Bureaucratic management relies on a rational set of structuring guidelines, such as rules and procedures, hierarchy, and a clear division of labour. Scientific management focuses on the 'one best way' to do a job. Administrative management emphasizes the flow of information in the organisation.

Scientific management is concerned with the management of work and workers. There are five key pioneers in this movement: Frederick W. Taylor (1856- 1915), husband and wife team Frank Gilbreth (1868-1924) and Lillian Gilbreth (1878-1972), Henry Gantt (1861-1919) and Harrington Emerson (1853-1931). Of these five Frederick Taylor played the dominant role. Scientific management brought with it simultaneously huge leaps in productivity but also boring and repetitive work carried out with clinical precision. Nevertheless, the improvements in productivity enjoyed during the scientific management era paved the way for mass production and the assembly line. Henry Ford (1863-1947) was an influential proponent of the assembly line, and used it to produce his famous Model T, a car for the people, available in black or black! Project management, which deals with one-off and unique products, has traditionally shunned mass production techniques. However, with the life cycle of many of today's projects spanning product development, production, operation, maintenance, and decommissioning, the techniques of standardisation and the use of repetition, both important concepts in mass production, are now becoming increasingly important.

Administrative management, a precursor to contemporary organisation and systems theory, focuses on managing the total organisation. The primary contributors to classical organisation theory were Henri Fayol (1841-1925), Lyndall Urwick (1891-1983), Max Weber (1864-1920) and Chester Barnard (1886-1961). Administrative management emphasises the manager and the functions of management. Henri Fayol, known as the Father of Modern Management, was a French industrialist who developed a framework for studying management. His five functions of management were:

  • plan;
  • organize;
  • command;
  • coordinate; and
  • control.

There is a striking resemblance between these functions and those used in project management to this day, although command is generally replaced with the broader term of leadership.

Fayol's fourteen principles of management are summarised in Table A1. Once again there is a clear resemblance between Fayol's ideas and the precepts of modern project management. For example, the concept of division of work (which dates back even further to Adam Smith and his studies of a pin factory published in 1776) can be compared to the work breakdown structure (WBS) and the concept of chunking, extensively used in modern project management. Unity of direction is acknowledged as one of the foremost characteristics of the best project management leaders. Esprit de corps is perhaps a latecomer to traditional project management (which tended to focus more on tools and techniques), but has now been recognised as a major determinant of project success.

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Principle Meaning
1 Division of work Specialization produces more and better work with the same effort.
2 Authority & Responsibility Responsibility should be matched with resources and the right to make decisions related to use of the resources.
3 Discipline Essential for the smooth running of business. Without discipline no business can prosper. The best means for establishing discipline are: 1) good superiors at all levels, 2) agreements as clear and fair as possible, and 3) sanctions (penalties) judiciously applied.
4 Unity of command Each employee should report directly to only one supervisor. Dual command is a perpetual source of conflicts.
5 Unity of direction This is everybody in the organization going in the same direction.
6 Subordination of individual interests to the general interest In a business, the interest of one employee or group of employees should not prevail over that of the business.
7 Remuneration The price paid to an employee should be fair to both the employee and employer.
8 Centralization of decision making The degree of centralization needed must vary according to the circumstances encountered.
9 Scalar chain (line of authority) The scalar chain is the chain of superiors ranging from the ultimate authority to the lowest levels.
10 Order "A place for everything, and everything in its place." And the human corollary, "A place for everyone, and everyone in his/her place."
11 Equity Equity results from the combination of kindliness and justice. Equity excludes neither forcefulness nor sternness and the application of it requires much good sense, experience and good nature.
12 Stability of tenure of personnel Time is required for an employee to get used to new work and succeed in doing it well, always assuming that he/she possesses the requisite abilities.
13 Initiative The power of thinking out and executing is what is called initiative, and freedom to propose and to execute also belongs to initiative.
14 Esprit de corps "There is no merit in sowing dissension among subordinates; any beginner can do it."

Table A1.1: Fayol's fourteen principles of management

Another influential management thinker was Mary Parker Follett (1868-1933). Her concepts included the universal goal, the universal principle, and the law of the situation. The universal goal of organisations is an integration of individual effort into a synergistic whole. The universal principle is a circular or reciprocal response emphasising feedback to the sender (the concept of two-way communications), essential to effective communication in projects everywhere. The law of the situation (a precursor to the contingency theory of management) emphasises that there is no one best way to do anything, but that it all depends on the situation - reflecting the uniqueness and management of uncertainty in projects. Another key contribution was her analysis of how to deal with conflict. She believed that any conflict of interest could be resolved by (1) voluntary submission of one side, (2) struggle and victory of one side over the other, (3) compromise, or (4) integration (i.e. joint problem solving). Her preferred solution was the integration process, whereby everyone wins, as opposed to a win-lose situation, or a watered-down compromise by which neither side gets what it wants. These views form the basis of modern conflict resolution techniques in behavioural science and contract arbitration.

Contemporary theories of management

Contemporary theorists and approaches to management have resulted from a blending or synthesis of the scientific and behavioural approaches. The quantitative theorists of the scientific movement were predominantly engineers, whereas the behavioural theorists were mainly industrial psychologists. The engineers studied the work areas for more efficient production; the psychologists made studies of job satisfaction, morale, productivity, and conflict resolution.

Management science focuses on decision making. It originated during World War II as operations research (OR) and draws heavily from a number of disciplines, particularly mathematics, physics, and statistics. Network and scheduling techniques fall into this approach and underlie many of the technical tools discussed in the next section. As modern project management moves increasingly into the boardroom, the need to prioritise projects competing for the same limited resources has re-kindled the need for additional OR techniques in project management.

Peter Drucker is known as 'the father of modern management' for his pioneering work in the 1940s and 1950s, including the concept of management by objectives, which is fundamental to effective project management.

The systems approach

One of the great contemporary influences in project management is the systems approach. The systems approach integrates earlier approaches with the additional consideration of external factors. The leading pioneers in the development of the systems approach were Richard Johnson, Fremont Kast and James Rosenzweig. They define a system as an "organised or complex whole: an assemblage or combination of things, or parts forming a complete or unitary whole" (Johnson et al, 1963, p4). Project management lends itself to analysis using the systems approach. It is concerned with managing a complex system with many inputs, outputs and a host of management and other processes, required to move its participants through the full project life cycle. The systems approach to project management is covered in detail in chapter 2.

The contingency approach

Perhaps the last of the great management influences in project management is the contingency approach. While all the approaches discussed so far have some validity, they also have weaknesses and limitations. Many management commentators suggest that in the near future effective managers will use the contingency approach. This is an approach that is based on the assumption that different conditions and situations require the application of different management techniques. Contingency theories have been developed in such areas as organisation design, leadership, motivation, strategic planning, and group dynamics. Many of these are important to project management and will be looked at in later chapters.

Tools and techniques

For many people, project management is about the use of computerised tools and techniques to plan and control projects. In this sense, the development of project management owes its heritage to Charles Babbage (1792-1871), a noted English mathematician and credited as being the 'father of the modern computer'. His interest in management stemmed largely from his concerns with work specialization or the degree to which work is divided into its parts.

An early project management tool was developed by Henry Gantt (1861-1919) who in 1917 created the technique known after his name, the Gantt chart, now also commonly referred to as the bar chart. The Gantt chart was originally used in shipbuilding projects and successfully helped reduce the time to build cargo ships during World War I. The Gantt chart is still used by many project managers in its original form (or with dependency links and other resource planning information added). It remains an excellent manual technique for planning and control, though is more usually used today as a feature of project management software. The Gantt chart has stood the test of time - people find them easy to use and understand, a survey by Microsoft found that 80% of managers preferred the bar chart for planning and controlling their projects (Burke, 1999). However, others have suggested that the technique is too simple to use in complex projects (Moder, 1988, p424).

The rise of project management is strongly associated with the early post-war US defence and aerospace programmes. In 1955 the US Navy established its Special Projects office to oversee the Polaris programme, in response to the perceived threat of a 'missile gap' between the USA and Russia. Early project offices were essentially an organisational mechanism for achieving integration. The problem of managing large projects was partly solved in 1957 with the development of PERT (Program Evaluation and Review Technique) under the auspices of Admiral Raborn for the management of the time element of a project. PERT became the mandatory requirement of all US Navy projects. The Apollo programme and publications by NASA (National Aeronautics and Space Administration) refined these techniques and brought them to a wider public (Winch, 1996).

In the same time period, but independently from NASA and the US Navy projects, another project management technique, critical path method (CPM), was being developed. The critical path method is attributed to the work of DuPont, who wished to determine the optimum duration (i.e. minimum cost duration) for a large project where the activity durations could be calculated with some reliability. Similar developments were being made at ICI's Billingham plant in Teeside and by the Central Electricity Generating Board (CEGB) in the UK, though these works were never well publicised. The first published results using the CPM were not until the end of the decade, see Kelly (1959).

CPM and PERT are strikingly similar, however, they evolved from different perspectives on project management. CPM focused on known technologies, methods and durations. It was cost driven and from an early stage focused on resource and cost implications. PERT focused on the probability of an event happening around a future date. It was event driven, with very little consideration for cost control. Both techniques used the network technique and represented activities as arrows; the use of circles or boxes to represent activities with interconnecting lines or arrows was developed later, largely by John Fondahl, at Stanford University and published in 1961. This new technique was called precedence diagramming method (PDM), though it is now commonly referred to as activity on node (AoN) network technique. To this day, there remain wide variations of the terminology and usage.

Timeline of significant events

Some of the key events in the development of modern project management are described below. A more detailed account of the evolution of modern project management is given by Morris (1994).

Pre 1950s

1917 Henry Gantt created the Gantt chart
1930s US Air Corps' and Exxon's project engineering coordinating function
1937 Gulick's classic paper on the theory of organisation (including the matrix organisation)

The 1950s

1951 Joint project office was established by the US air force for the B47 project
1953-1954 US Air force Joint Projects Offices and Weapons System Project Offices
1955 US Navy's Special projects Office created to oversee the Polaris programme.
1957 US Navy's Special projects Office developed and implemented the Program Evaluation and Review Technique (PERT) for the management of the time element of the project
1959 DuPont created a method for determining a projects critical path called critical path method (CPM)

The 1960s

1962 PERT/Cost developed to track project cost; most notable for the introduction of the work breakdown structure (WBS).
1963 Polaris was the first British project on which the contractors were required contractually to use advanced project management systems
1964 Earned value analysis is developed
1968 Cost benefit analysis was developed within the World Bank as a project appraisal tool
1969 Project Management Institute (PMI) formed the first formal institute for project managers

In the 1970s, project management techniques conceived in the previous two decades continued to be refined and improved. Project management became widely adopted by other sectors and industries, e.g. banking, manufacturing, insurance. However, despite the new tools, project failures were common. Many of the problems experienced at this time remain important factors in the project success and failure literature today: poor project definition, poor management of stakeholder expectations, poorly defined organisation structure, failure to consider the impact of external factors, e.g. environmental issues.

In the 1980s, the influence of external stakeholders played a greater role in projects. The importance of the project environment continued to increase. The views of pressure groups and other public organisations, e.g. Greenpeace, CND and community action groups begin to play a more significant role in project planning activities. Wider consultation and involvement are seen as important factors in reducing hostility and conflict later in a project's life cycle.

By the 1990s there is a major shift in attention in project management. Whereas early projects focused on techniques to plan and schedule activities and people, modern techniques emphasise the front end issues of strategic fit and what value the project will bring. The following questions occupy the project manager's time in projects today: who are all the stakeholders? how do they each define project success? have all the design considerations been costed out for the entire project life cycle? can we add more value now at a small cost compared to higher cost during implementation or operation?

More recently, critical chain project management, based on the concepts of theory of constraints offers a new approach for the management of projects. The technique, originally applied to manufacturing has been used in project management since the publication of Critical Chain in 1997 by Eli Goldratt. Critical chain project management is considered in more detail in chapter 9.

References

Adam Smith (1776). The Wealth of Nations, Books I to III. Republished by Penguin, Harmondsworth, 1982.
Burke, R. (1999). Project Management: Planning & Control Techniques, 3rd edition, Wiley, Chichester.
Goldratt, E.M. (1997). Critical Chain, North River Press, Great Barringtom.
Hughes, D. (1993) 'The Tantrum of the Opera', The Weekend Australian Review, October 23-24.
Johnson, R.A., Kast, F.E and Rosenzweig, J.E. (1963). The Theory and Management of Systems, McGraw Hill, New York.
Kelly, J.E. (1959). 'The origins of CPM', PM Network, 3, 2, 7-22.
Moder, J.J. (1988). 'Network techniques in project management' in Project Management Handbook, 2nd edition, p424, edited by Cleland, D.I. and King, W.R., Van Nostrand Reinhold, New York.
Morris, P.W.G. (1994). The Management of Projects, Thomas Telford, London.
Winch, Graham (1996). 'Thirty years of project management: what have we learned?', Proceedings of the British Academy of Management, Aston.

· Website reference from page 16: Details of project management discussion groups and other information resources on the Internet.


Chapter 1 material - Discussion groups and other information resources on the Internet, Chapter 1

An excellent way to augment your learning and to get questions answered is by participating in a news or discussion group. It is worth trying a few to find one that suits what you are looking for.

www.planningplanet.com
A discussion board for practicing project managers. Boasts a new member every 7.8 hours.

www.gantthead.com
Contains articles and an active discussion board, with many project-related topics.

www.pmforum.org/warindex.htm
PM Forum discussion board. Join one or more of several communities and engage in discussion of issues relating to project management.
www.allpm.com
Website containing various information and topics for discussion. Can also be used as an email discussion list if preferred. Seems fairly active.

PM-forum list
An email discussion list. To subscribe send an email tomajordomo@synapse.net and in the first line of the message body type: subscribe pmforum-list youremailaddress

Other information resources on the Internet, Chapter 1
There are many excellent sources of project management information on the Internet which complement quality refereed journal publications and other well researched literature. However, be warned that some information on the Internet is aimed at promoting products and services and so may be rather biased.

Comparative Glossary of Common Project Management Terms
http://www.pmforum.org/library/glossary/index.htm
A useful glossary, compiled by Max Wideman and available free, that is both comparative and linked. Successful project management depends on clear communication.

Spottydog's Project Management Website
http://www.spottydog.u-net.com/
Look around this site to find practical and pragmatic advice, including a useful questions and answers page. Suitable for the new project manager.

The Project Management Forum
http://www.pmforum.org/warindex.htm
A non-profit project management portal for information on international project management affairs dedicated to the development, international cooperation, promotion and support of a professional and world-wide project management discipline. An excellent resource. Well worth a look.

Welcom Project Management Links
http://www.wst.com/library/pmlinks.html
A comprehensive directory of links to informative project management resources available on the Internet, including associations, publications, universities and software.

The Project Management Control Tower
http://www.4pm.com/index.html
A wealth of resources, articles, books, training, and other helpful aids to do with managing projects.

http://www.cheetahlearning.com
This site offers a free Exam Preparation Toolkit, useful for anyone wishing to sit the PMI's Project Management Professional (PMP) exam.

Self-assessment review questions and answers for Chapter 1

Please click here to start the quiz.