Project management Style in China

Traditional Mangement Practices Project management in China dates back to ancient times, as evidenced by a number of well-known construction projects such as the Great Wall, the Great Canal and the Forbidden City. One of the earliest large projects in China was construction of the Great Wall, one of the greatest wonders of the world, built more than 2000 years ago. In addition to the Great Wall, numerous grand palaces, temples, and even canals were built in glorious history of China. Modern tools, techniques and methodologies for project management, such as the Critical Path Method (CPM), Programme Evaluation and Review Techniques (PERT), and Graphical Evaluation and Review Techniques (GERT) were brought to China in the 60s when China launched its nuclear weapon and missile/satellite programmes. The defense, aerospace, science and construction sectors were the first areas in China where modern project management techniques were applied.

Striding into the twenty-first century, globalization is the main trend in the world business. Global business growth has spurred many effective management disciplines, including project management, to go beyond the boundaries of nations. The 2003 annual report of the Project Management Institute (PMI) shows that PMI membership was more than 120,000 strong, with representation in 135 countriesa growth rate of 21.6 percent over 2002. This number appears to imply that the global application of project management is emerging, and its importance to economic development has been recognized increasingly worldwide. For China, the worlds leading destination for foreign investment since 2002, project management has shown its critical role in driving the fast economic development as a result of the massive inflow of foreign investment that has helped to set up of numerous international projects there. However, a survey of the current literature finds little systematic research on Chinas project management environment and practices against this background of fast-paced economic development that has been propelled by enormous foreign investment. How project management is practiced in China largely has remained unknown by Westerners.

China Geography The Peoples Republic of China (PRC), a country with a population that makes up approximately one-fifth of the worlds total population, has been in transition and developing rapidly since the end of 1970s. Over the past two decades, China has gone through a tremendous amount of economic reform with the adoption of a market economy and an open-door policy. The long established, centrally planned economic system has been replaced gradually; the influence of market forces on the economy has increased rapidly. The current socialist market economy, defined with Chinese characteristics, is turning China into one of the largest and fastest growing economies in the world. In past 10 years, the Chinese gross national product increased annually by nearly 9 percent on average. 4 At this amazing rate of growth, China could on paper surpass the United States within two decades to become the worlds largest economy. Chinas foreign direct investment (FDI) inflows surpassed those of the United States in 2002, making China the worlds leading destination for foreign funds. The FDI has contributed greatly to Chinas spectacular economic growth in past two decades, which brought not only the massive funds that China required but also a great number of modern management theories and technologies into China, including project management. Although China has been on its way to quick globalization since its accession into World Trade Organization (WTO) in 2001, from the point of view of Westerners, it is still a country that has a different culture, different management practices, and a different business environment than the developed countries. The other dominant culture model examined by Schwartz10 explicitly categorized Chinese culture as kind of relationship culture that mainly adopts conservative values and accommodates value tensions between hierarchy and harmony. It is distinctly different from the culture of the United States, which is categorized as a contractual culture that adopts autonomous values along with value tensions between mastery and egalitarian commitment/harmony.

The deep-rooted traditional Chinese culture has perpetuated its profound influence to almost every aspect of the society, including, of course, management practices, and has created a singular business environment. Chinese tend to be more hierarchical, collectivistic, and context oriented when compared with Westerners, which implies that differing communication styles are used in Chinese society. Another striking feature of the Chinese business environment one that is

likely to be apparent to Westerners, with different culture values is the importance of interpersonal relationships.

Management Beliefs and Practices in China

Many cross-cultural studies have shown that different cultures support different sets of management beliefs and practices, particularly when those cultures reflect fundamentally different conceptions of reality.1 Previous research has proved that Western project management theories do not translate easily into practice in the Middle East, which has a vastly different Arab culture from major Western countries.2 Similarly, can these project management theories and practices based on North American and primarily U.S. research and experience3 be translated into the practices in China with traditional dominant culture, Thus it is essential to recognize that national culture may affect project management practices and that one should take into account the implications of cultural differences when dealing with international projects involving project stakeholders from different cultures.

Evaluation of Modern Management

The concept of modern project management did not emerge in China until the 1960s when the well-known Chinese mathematician Hua Luogeng came back to young China from the United States. In 1964, Professor Hua Luogeng began devoting himself to advocating and promoting an overall planning method in China, a set of systematic methods of project management that were specially developed for Chinese practices. After nearly two decades of application and improvement, the methods have been applied successfully in the management of a few megaprojects since the beginning of 1980s. Meanwhile, since implementation of the open-door policy at the end of 1970s, the booming economy of China has been spurring an increasing number of projects in various industries. However, modern project management discipline was not officially introduced into China to meet the intensive management requirement of countless projects until 1980s with the help of the World Bank. The first successful project that was managed following international project management practices in China was construction of the Lubuge hydropower station in

Yunnan Province in 1984, which was funded by the World Bank. This project was widely considered a milestone of the application of modern project management in China. Then this project management experience was translated successfully to the Ertan hydropower station project, which also was funded by the World Bank and was the biggest hydropower dam before construction of the Three Gorges Dam. In the two decades since this turning point, the Chinese governments proactive financing policy has boosted domestic demand, stimulated economic development, and generated an annual project investment of RMB 1 trillion. Investment in the construction industry by the stateowned sector has increased from RMB 69.9 billion in 1979 to RMB 1700 billion in 1995,17 which represents a nearly 25-fold increase in 16 years.18 In addition, a large number of projects that were funded by foreign investors, including the World Bank and the Asia Development Bank, were required to be managed following international practices, and this has further promoted the development of project management in China. In the late 1990s, the Chinese government began attaching greater importance to the promotion of project management and published the Essentials of Chinas Project Management System and Standards of Qualification with the intent of adapting Chinas project management practices to international practices.19 In addition, more than 1000 leaders and project managers of large state-owned enterprises received relevant training on the international project management practices. Third Eye on project Management of China

Presenting a striking contrast to the rapid growth of project management in China over the past two decades, an abundant literature survey has ferreted out only few studies that specifically address the issues of project management in China. At the end of 1980s, two studies had uncovered part of the whole about project management practices in mainland China from a Western perspective. U.S. researchers Cogal and Ireland participated in two project management delegations to China and mainly received briefings and observed projects in China, and they concluded that modern project management practices that had originated from developed countries had met great challenges in the unique environment of China.29 They saw some distinct problems unique to the cultural requirements of Chinese society and human resources

that were not solved by tried and true practices. Two other scholars, Graham and Sun, through a survey in Shenyang, presented a better grasp of project management in China by exposing and commenting on its areas of weakness. 30 One of the weak areas they pointed out is the lack of sufficient skilled personnel, which they thought would be developed through project management training. The other critical problematic areas probably resulted from the existing economical and financial system, an immature infrastructure, and a deep-rooted traditional culture could not be easily resolved in a short term and was somewhat out of the control of Chinese project managers. Both studies seem to suggest that modern project management theories from developed countries have encountered difficulties in translation into the unique practices of China. Nearly 10 years later, despite widespread recognition and application of project management in China, research in one of most important economic development regions of China, Pudong, Shanghai, further revealed that project management in China was still in some ways behind that in the West, and this was shown empirically by the fact that more sophisticated project management techniques and computer-based tools are used rarely in China. In addition, the official press in China also has confirmed very recently that it still has some way to go in the development of project management in China compared with its industrialized counterparts.

Project Delivery Models

Most projects delivered in China do not have a well defined, structured delivery approach. A simple 3-stages delivery process was use in most projects, the initial Preparation Stage, the central Execution Stage, and the final Close-up Stage. The Execution Stage is a cycle of Analysis, Design, Construct, and Review, which make the Execution Stage a continuous Code and Fix cycle until project objectives are archived, or the original concept have to be modified to suit the end result, or perform the necessary patch up work to close the project. Project Delivery Model is the key factor for successful project management practice. Project failed if any one of the project delivery stage runs into a continuous cycle of repetitive activities. This 3-stages project delivery model always starts off with an ill-defined project objectives. It will not allow project managers to determine the project baseline. It will not be able to determine the overall project time-line because one will not know how many cycles are

needed to finalize the Execution Stage. As a result, the project cost, resources requirement, delivery efforts cannot be estimated, quality plan and milestones cannot be determined. Project Management knowledge cannot map the delivery model effectively to manage the project progress.

We are all used to a well defined, structured approach in project delivery which is known as Project Life Cycle. We planned and manage activities in each of the well defined delivery stages. This allows us to estimate efforts, estimate project investment and resources requirement. As a project manager, we have to define project scope and manage subsequent delivery stages. The project scope is the foundation of project success. Our estimates which formed the project base-line and our quality plan for the final deliverable all depends on the project scope. Scope deviation and change will drive us into the repetitive cycles of delivery model. That is why we have to manage the scope and the change requests so diligently during project delivery.

Successful project management depends on a well defined project delivery model. Harmonization of Management Methodology and Delivery Model is the key to successful project management. Most project managers failed to integrate his/her management process with the delivery model and find it difficult to plan and track.

The most critical stage within a project life cycle is the Concept stage, which formed the basis of project scope definition. We are no longer in the Automation age where IT projects are simply turning a business process into a computer application. Most projects nowadays are concept oriented, to achieve the final deliverable from vision instead of a business process. Therefore most project managers find it difficult to define project scope all over the world and projects runs into repetitive cycle along our delivery processes.

Managing Project Scope

To determine Project Scope through Statements of Work (SOW), sometimes known as Requirement Statements inside the Project Charter. Most Project Managers also conduct Requirement Gathering to finalize project scope. Unfortunately few Project Charters, or Fact Finding exercise, can identify all requirements that allow us to form a well defined project scope that enable us to deliver the Project Objective Statement. The completeness of these SOW, RS, and our interpretation of the Requirements may vary, and technology subsequently deploy in

creating the solution, may produce different result causing in-consistent deliverables. A slight misinterpretation of the requirement may land us miles away from the original project goal. We are trying to produce solution that formed the final deliverable based on these uncompleted or misinterpreted RS while project sign-off based on deliverable. Often look at information given to us by Stake-holders as requirement. It is in fact far from truth. May define the so called project scope at the start of a project based on Project Charter or project SOW, are continuously refining our requirement during fact finding and analysis stages. These refinements can and will become part of the Do and Fix cycle causing scope change and affect our project base line. Thus managing Project Scope converted from these RS cannot effectively manage project deliverable expected in Conceptual Stage.

Managing Project Base Line

The Code and Fix Execution Stage will not allow project manager to develop realistic project baseline. Without knowing the construction process of stage end deliverable, any number representing timeline, effort, cost, resources, and quality are baseless. It cannot be used to measure against progresses and determine variances. Most of the so called project baseline in China is the end result of a snap of the fingers. Either it is based on past experience, or gut feel, the number is there as a financial guide. Instead of managing project baseline, we are managing project guidelines instead.

Managing Progress and Budget

This financial guide management approach will affect the way of manage progress in a Code and Fix environment. They can no longer manage progress by what they achieved because we never know when the project will reach its goal and close we have to manage by what need to do within available financial guide. To do this, we have to truncate project work into small interim deliverable (work package with a clear identifiable interim deliverable) and estimate the effort and cost for the Work package. When the interim deliverable is completed, reduce of cost of delivering the Work package and re-calculate the cost of what work need to do to close the project. If the end-result of the Work package is not meeting delivery requirement, then maintain

the management focus on the Work package until it meet its goal. All Fix Work (time and cost) will be reduced from the original guide and calculate the balance available.

This will force the technical team to spend more time thinking about Work package delivery instead of project deliverable. The weekly progress report should emphasis works remain to complete instead what is done. This will enable Project Manager to identify, at anytime of the project life cycle, remaining work, available budget, and effort remaining.

Managing Planned and Un planned Activities

At the beginning of each work package, the project manager should identify tasks to complete the work package deliverable. Team members should report the planned tasks, as well as the un Planned task. Project manager should review each un-planned task and determine if it is necessary for the completion of the interim deliverable. If it is not necessary, all work on the unplanned task should be halted immediately. If the un-planned task is a must for the interim deliverable for the assigned work package, then the project manager should update the project plan and re-adjust the project schedule for the remaining Work Packages of the project to meet its original goal.

Managing Solution rather than Problem Reporting

When the project encounters a technical difficulty that holds up project progress, instead of simply reporting the problem, project team members should consider how to solve the problem and the estimated time it will take to overcome the technical difficulty. They should also report who can help resolve the problem, or where solution can be found and how he/she intends to resolve the problem, report on the new completion date so that project manager can adjust project plans accordingly, and estimate project impact based on the revised completion date for the Work Package.

EMPIRICAL STUDY OF PROJECT MANAGEMENT IN CHINA

The preceding anecdotal descriptions have provided the basis to outline a profile of the project management environment and practices in China. We now turn to academic research to find out how project management is practiced in China. Unfortunately, a survey of the literature on project management finds no empirical effort to expose the real practices of current project management in the unique environment of the mainland China. In an effort to close this gap, the authors and a research team from Fudan University in Shanghai and supervised by Professor Zhai Li launched a large-scale empirical study to explore the project management practices of information systems (IS) in China from the perspective of critical success factors (CSFs). This three-year study was designed in two parts and was accompanied by two large-scale questionnaire surveys in mainland of China. The first questionnaire survey that accompanied stage one of the study was designed to collect empirical evidence to support a set of proposed CSFs relevant to contemporary Chinas IS projects. Grounded on the CSF findings of the first survey, the main focus of the second questionnaire survey in stage two of the study was to reveal real practices of Chinese project management by exploring how well these CSFs are performed in Chinese IS projects.