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Re-thinking megaproject governance through a cultural political economic perspective: using governmentality theory to critique client decision-making

STUDENT PAPER

By Jessica Siva

REMIT University

Melbourne, Australia
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Abstract

This paper develops an analytical model based upon cultural political economy theory and the concept of governmentality to re-examine megaproject client governance. Results of a case study client involved with the finance, design, build and operation of a megaproject in Singapore are presented. The findings indicate that although formalised structures and protocols were established decision-making was deeply influenced by informal communication embedded in multi-level networks. A typology of instruments of power is developed through a narrative analysis of stories of resistance and compliance to provide insights into how stakeholders realise their aims on megaprojects through the exercise of power.

Introduction

More than ever before, architectural, engineering and construction (AEC) firms are working on megaprojects composed of multiple key partners from various countries. The megaproject environment offers a range of opportunities for both clients and project teams. However, it is also characterised by a high level of risk, technological and social complexity, strategic behaviour and cost overruns (Priemus et al,2008). While the past decade has seen a sharp increase in the magnitude and frequency of megaprojects built it is becoming clear that many of these projects have strikingly poor performance records (Flyvbjerg et al, 2003). A global surge of megaprojects in the 1990s set the agenda for developments in the AEC internationalisation discourse, which have typically sought to describe market entry strategies (Crosthwaite, 1998), barriers to international construction (Gunhan and Arditi, 2005) and success factors for international firms (Mawhinney, 2001; London and Siva, 2010).

Project success is significantly impacted by the internal workings of clients and its relationship with decision-making which is often beyond the control of project teams (Crawford et al, 2008). Yet the focus of past research has tended to be on the industry’s role instead of the client’s (Siva and London, 2012; Crawford et al, 2008). In their role as project initiators and financiers, clients are considered to be the driving force on projects. Clients establish a unique culture that project team members work within by setting the boundaries within which decisions affecting budgets, design and procurement come to be made. The values that clients ascribe to their everyday practices inevitably condition how they act economically, which in turn impacts upon megaproject decision-making. Past research has shown that high cost overruns and disappointing operating results can be linked to clients’ political economic decisions (Flyvbjerg et al, 2003).

The client’s centrality within a project network has long been recognised. Since 1944 there has been a continued trend in the quest for improved construction industry performance through client-driven strategies but with little evidence that the issues have been resolved (Simon, 1944; Egan, 1998). The various investigations and policy directions reflect a preoccupation with the development of prescriptive government standards, and best practice guidelines which assume that the economy can be structured and controlled with little reference to the social networks and cultural norms which influence project decision-making (Siva and London, 2010). A scenario is painted where project issues derive from incompetent planning and administration and that the achievement of positive change is related to the implementation of comprehensive plans and policies based on rational and democratic argument. Although recent studies have demonstrated that large complex projects tend not to conform to the rational model, the ideal lives on (Miler and Lessard, 2008).

The overall aim of this research is to describe the structure and nature of power relations underpinning client decision-making on megaprojects. There has been little recognition within the megaproject discourse of the power structure and social networks which affect client decision-making and the influence clients have in shaping the political economy of megaproject collaborative practice. Decision-making on construction projects is not wholly predetermined by contracts but instead often emerge from the use of power. Client decision-making on megaprojects is deeply embedded in networks comprising formal and informal practices, rituals and culture whereby power is constantly exercised and exchanged.

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Editor’s note: This paper won the 1st prize Student Paper Award – PhD level at the happy projects ’13 conference in Vienna in April 2013; it is republished here with approval of the author and happy projects conference organizers, PROJECT MANAGEMENT GROUP at the Vienna University of Economics and Business Administration and ROLAND GAREIS CONSULTING.  Learn about the happy projects events at http://www.happyprojects.at/ 

About the author

flag-australiajessica-sivaJessica Siva

Jessica Siva, BAppSc.(Arch), BArch(Hons), MPhil., is an Australian Postgraduate Award PhD scholarship holder at RMIT, Australia in the School of Property, Construction and Project Management. She previously obtained a Masters of Philosophy from the University of Newcastle where she was awarded the 2007 Postgraduate Research Prize. She has tutored and supervised students in the programs of Masters of Architecture and Masters of Construction Management. She has worked on various nationally-funded research projects and has over 50 research publications in design management, innovation, internationalisation, megaprojects, government supply chain management, human capital, sustainable urban development and client management. Jessica has jointly won three Emerald Publishing Group Best Paper Awards in 2009, 2011 and 2012. She also won a ProSPER.Net United Nations University Young Researchers’ School Scholarship in 2011. More recently she was awarded the RMIT European Union Centre Grant for Academic Excellence where she will be undertaking a research visit to Aalto University to collaborate with a group of researchers working in the area of megaprojects. Jessica is the founding President of the International Council for Research and Innovation in Building and Construction (CIB) RMIT Student Chapter. She is the Publications Officer of the Chartered Institute of Building (Australasia) and the editor of the Contact professional journal/magazine.

RMIT University

RMIT University is one of Australia’s leading tertiary institutions and the School of Property, Construction and Project Management is one of the highest performers in built environment research and is internationally renowned. In the most recent 2012 Excellence in Research Australia (ERA) rankings in the Field of Research category 1202 (Building), RMIT was ranked at four star out of a possible five which indicates research at “above world standard“. This was equal highest with another Australian university which means RMIT are the equal top ranked research program in building nationally. RMIT University is one of Australia’s longest established educational institutions. It is a global university of technology with its heart in the city of Melbourne. RMIT creates and disseminates knowledge that meets the needs of industry and community and fosters in students the skills and passion to contribute to and engage in the world. More at http://www.rmit.com/