MS thesis

in Project Management

Managing the unmanageable: Deviation in project success within the project life cycle in the Icelandic

construction industry

Svanborg María Guðmundsdóttir

Inga Minelgaite, Professor.

February 2021

Managing the unmanageable: Deviation in project success within the project life cycle in the Icelandic

construction industry

Svanborg María Guðmundsdóttir

MSc Thesis in Project Management

Supervisor: Inga Minelgaite

School of Business

School of Social Sciences, University of Iceland

February 2021

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Managing the unmanageable: Deviation in project success within the project life cycle in the Icelandic construction industry. This thesis corresponds to 30 ECTS credits and is the final thesis for an MS degree in Project Management at the School of Business in the School of Social Sciences at the University of Iceland. © 2021 Svanborg María Guðmundsdóttir The thesis may not be copied without prior permission from the author. Online publication Reykjavík, 2021

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Prologue

Ritgerðin er lokaverkefni til meistaraprófs í Verkefnastjórnun við Viðskiptafræðideild

Háskóla Íslands. Ritgerðin er metin til 30 ECTS eininga af 120 eininga námi. Rannsóknin

sem ritgerðin byggist á hófst í mars 2020 vegna útskriftar í febrúar 2021.

Leiðbeinandi minn var Inga Minelgaite og vil ég þakka henni kærlega fyrir góða

leiðsögn, stuðning og frjáls vinnubrögð. Fyrir að kenna mér frá fyrsta degi að í

Verkefnastjórnun er mikilvægt að practice what you preach. Takk. Sömuleiðis vil ég þakka

besta vini mínum og ástinni minni Ívari Erni Hákonarsyni fyrir að hafa óbilandi trú á mér,

fyrir mikla þolinmæði og gagnlegar ábendingar við framkvæmd rannsóknarinnar.

Foreldrum mínum, Guðmundi Smára og Ingveldi fyrir ómetanlegan stuðning í þessu

verkefni sem og öðru sem ég hef tekið mér fyrir hendur. Ömmum mínum sömuleiðis.

Vinum mínum og vinkonum fyrir orku, gleði, hlátur og gagnlega aðstoð við gerð

ritgerðirnar. Ég vil minnast sérstaklega á Írisi fyrir okkar daglegu símtöl á tímum Covid-19

og ritgerðarskrifa.

Að lokum uppáhalds manneskju minni, Hákoni Smára, fyrir alla þá gleði og hamingju

sem þú gefur okkur. Það er ekkert betra en að geta gleymt mér í lok dags með þér. Sem

og litla bumbubúanum, sem er von á í heiminn 2 mánuðum eftir að þessari ritgerð er

skilað.

Ég vona innilega að þessi ritgerð muni koma að góðum notum inn í fyrirtæki landsins sem

leggja áherslu á árangursrík verkefni.

Verk þetta tileinka ég góðum vini mínum Daníel Frey. Þú ert hjá okkur á þinn einstaka

hátt. Ég sakna þín þó alla daga.

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Abstract

Globally, the construction industry has a significantly low score regarding the number of

projects which attain their stated aims. Research shows that construction projects most

often overrun. Construction projects can be very complex, and many layers need to

synergize for them to be successful. The construction industry in Iceland is no exception,

and many construction projects are not completed according to schedule. It is extremely

costly when projects do not achieve their goals. Previous research shows there are

various reasons for this kind of deviation to occur in the construction industry. Examples

include poor project management and/or organization, lack of scope, poor use of labor,

clients whose budgets are insufficient, interference from the client, and also

uncontrollable factors such as the weather. The influence of the newest obstacle,

COVID19, is extremely unpredictable.

The purpose of this research was to investigate the Icelandic construction industry to

enquire and establish exactly where deviation occurs within project management, why it

does so, and how such deviations manifested during the project life cycle. To perform this

research, a qualitative research method was used. Eight semi-structured interviews were

conducted with experienced engineers, who have either been project managers or part

of a project management team. Based on these interviews, the research indicates that

deviation in projects mostly occurs due to four factors. Firstly, when the client is too

indefinite about their requirements. When the client is indefinite, it leads to an

undervaluation of the project’s actual scope in the deviation phase; the resulting lack of

planning then creates an extended executions phase, often with greatly increased costs.

Secondly, attitudes that are quite prevalent in Icelandic culture, an aspect that was not

unknown to previous researchers, appear to impact detrimentally on the project

outcome. This specifically relates to how comfortably people can live with uncertainty

whilst maintaining their optimism. In this context, the fact that the rules are frequently

applied in a fairly informal way is not helpful. Thirdly, there is a lack of standardization

regarding the operations of project managers, specifically. Finally, there are sometimes

unpredictable factors in the external environment that cannot be controlled.

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Table of Contents

Table of Figures .............................................................................................................. 8

Table of Tables ............................................................................................................... 8

1 Introduction .............................................................................................................. 9

1.1 The research problem ...................................................................................... 11

1.1.1 Research question ................................................................................ 13

1.1.2 Significance and originality of the research .......................................... 14

2 Literature review ..................................................................................................... 15

2.1 Project management ........................................................................................ 15 2.2 The project life cycle as a framework for project success analysis .................. 18

2.2.1 Defining phase ...................................................................................... 20

2.2.2 Planning ................................................................................................ 21

2.2.3 Execution .............................................................................................. 22

2.2.4 Closing stage ......................................................................................... 22

2.3 Project success ................................................................................................. 24

2.3.1 The project manager role in project success ........................................ 28

2.3.2 Project failure ....................................................................................... 30

2.4 The construction industry ................................................................................ 32 2.5 Construction project life cycle .......................................................................... 33 2.6 Deviation in construction projects ................................................................... 35 2.7 Icelandic culture ............................................................................................... 39

3 Research Methodology ........................................................................................... 43

3.1 Qualitative Research Methods ......................................................................... 43 3.2 Participant Selection ........................................................................................ 44 3.3 Data Collection ................................................................................................. 44 3.4 Data Analysis .................................................................................................... 46 3.5 Ethical Considerations ...................................................................................... 48 3.6 The company .................................................................................................... 49

4 The Results .............................................................................................................. 50

4.1 Icelandic culture: "it will sort itself out" ........................................................... 50 4.2 "The customer is always right” ........................................................................ 53 4.3 “The customer is constantly changing requirements” ..................................... 55 4.4 Lack of standardization with project managers ............................................... 57

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4.5 “The things we cannot control” ....................................................................... 60 4.6 The dilemma of a cost schedule ....................................................................... 61 4.7 Keeping the triangle in balance ........................................................................ 63 4.8 "In a perfect world” regarding the organization .............................................. 65 4.9 Summary of results .......................................................................................... 68

5 Discussion ................................................................................................................ 70

6 Conclusion ............................................................................................................... 81 Appendix 1 ................................................................................................................. 101

Appendix 2 ................................................................................................................. 103

Appendix 3 ................................................................................................................. 104

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Table of Figures

Figure 1: A visual picture of the research gap and the importance of this reseach ........ 13

Figure 2: The project life cycle phases and durations ...................................................... 22

Figure 3: The definition of project success, the iron triangle. ......................................... 25

Figure 4: The construction project life cycle according to Bennett (2003) ...................... 35

Figure 5: How project management deviations manifest during the project life

cycle and where it effects the iron triangle that is often used to define

project success (*scope and quality) ................................................................... 79

Figure 6: A visual answer to the overall question of this research. ................................. 80

Table of Tables

Table 1: The project life cycle in different industries (showing how the phases are

different) .............................................................................................................. 20

Table 2: The project life cycle tasks in every phase according to Larson and Gray

(2017). This table was used to structure the interview frame in this

research. .............................................................................................................. 20

Table 3: The participants, their level of experience and duration of interview.

(Level 1 experience: 0-10 years, Level 2 experience: 10-20 years, Level 3

experience: 20+ years) ......................................................................................... 45

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1 Introduction

More than $10 trillion is spent globally each year on the construction industry, making it

one of the largest sectors in the world economy. That is 13% of the world’s GDP, and this

percentage is predicted to grow. According to the McKinsey Global Institute, the value of

global construction projects is expected to increase to $14 trillion in 2025. The industry

employs 7% of the world’s working population (McKinsey & Company, 2017). There are

around 7 million employees within the sector in the United States alone, and each year

they construct buildings and structures with a collective value of more than $1.3 trillion

(Simonson, 2020). The Icelandic construction industry constituted around 21% of the

economy in 2019, contributing more than $1 billion to the Icelandic economy (Samtök

iðnaðarins, 2020). During the Icelandic banking crisis in 2008, the industry became even

more important. A lot of people lost their employment at that time and many projects

needed to be put on hold (Vinnumálastofnun, 2010). However, three major construction

projects helped to support the industry and the economy at that time. These were

Sæmundarskóli (a public grade school), the University of Reykjavík and Harpa (the world-

famous concert hall and event venue) (Jónsson, 2008). At the present time, in the midst

of the COVID-19 crisis, innovation is once again playing an extremely important role in

supporting the economy and getting it back on track. Now, as then, the construction

industry plays a big part when it comes to innovation (Samtök iðnaðarins, 2020).

Even though the construction industry contributes hugely to the world's economy, the

industry has a long history of poor productivity, and productivity has only grown by 1%

over the last 20 years (McKinsey & Company, 2017). Flyvberg et al. (2003) examined 258

large projects in over 20 countries and 9 out of 10 projects ran over schedule. According

to Ansah and Sorooshian (2017), overrunning is especially common in construction

projects. For example, the Boston Big Dig, otherwise known as the Central Artery/Tunnel

Project, went 275% or $11 billion over budget, Chunnel, the tunnel connecting the U.K.

and France went 80% over budget, and Denver’s International Airport came very close to

incurring costs that were 200% higher than estimated (Flyvbjerg, 2005). The Icelandic

construction industry is no exception, with multiple projects failing to adhere to their

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original plans and going over budget. For example, Harpa went over its time schedule and

cost estimate by 52%, and the Reykjavik City Hall project ran over schedule by 150%

(Jóhannesson, 2014). Reykjavík Energy (Orkuveita Reykjavíkur) is yet another example

and was the most expensive building ever built in Iceland, running 109% over the initial

plan (Marselíusarson, 2017). It has since been revealed that significant moisture damage

has taken place because the building was defective, and, unfortunately, the building is no

longer usable. An investigation revealed that construction work was poorly done, and one

contractor said that he was ordered to lay parquet flooring on wet concrete

(Guðmundsson, 2018), which is a clear sign that something had gone wrong during the

project life cycle.

Construction projects can also feature quite prominently in the news, especially when

the causes and explanations as to why projects have not gone according to plan are

striking. Establishing who is to blame seems to be an important stimulus for this kind of

journalism. The recent Braggi case (Braggamálið) is a good example. The rebuilding of this

former 2nd World War barrack building by Nauthólsvík in Reykjavík had been estimated

to cost 125 million ISK, according to the 2015 cost schedule, however, it actually cost

Reykjavík City Council 425 million ISK. That is an overrun of 240%. According to the

records, the project had a project manager, and weekly schedule meetings were taking

place during the period when the project went over its cost schedule (Reykjavíkurborg,

2018).

According to McKinsey Global Institute (2017), there is a $1.6 trillion productivity gap

in the construction sector, which means there is an opportunity to increase value by 16%.

This fact alone provides a good reason to investigate why this gap exists, and identifying

the causes is an important initial step towards reducing or even closing that gap. Another

important factor is that the productivity within the construction industry has risen very

slowly over the past 20 years, increasing by only 1% (McKinsey & Company, 2017). There

has been a lot of research on project success (Hsu et al., 2017), however, regardless of

this, researchers have not identified any solutions that have achieved a positive impact

on this issue. It can be argued, because of the economic size of the construction industry,

that it is extremely costly and time consuming when projects do not go according to plan

(Bennett, 2003).

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This research was implemented by employing a qualitative methodology, where eight

semi-structured interviews were taken with an engineering company in Iceland that has

a lot of experience in the construction industry. The company’s name and any other

identifying information will not be disclosed to ensure confidentiality.

The first important step to preventing failures in projects is to discover where they

occur. That is why the project life cycle is used in this study. The project life cycle is the

entire process of a project from when the idea was formed to its completion. The

methodological frame is built on the project life cycle to make it easier to identify exactly

where problems begin to manifest.

This research demonstrates that deviations in projects principally occur due to four

factors, and how these can manifest at different points in the project life cycle. Firstly,

the client can be too indefinite. When this occurs, it leads to an undervaluation of the

project’s actual scope in the deviation phase; the resulting lack of planning then brings

about an extended executions phase, often with greatly increased costs. Secondly,

certain Icelandic cultural attitudes, which were not unknown to previous researchers,

appear to impact detrimentally on the project outcome, specifically relating to how

readily people live with uncertainty, whilst usually remaining optimistic. Thirdly, there is

a lack of standardization regarding the operations of project managers, specifically.

Finally, there are things in the external environment that cannot be controlled.

1.1 The research problem

There is a need for a better understanding of the deviation that occurs in the construction

industry in Iceland, which prevents project success – this encompasses projects finishing

on time, together with their cost, quality, and scope. To the best of the author’s

knowledge, the Icelandic construction industry has not yet been examined through the

theoretical lens of the project life cycle, even though this is something applicable to all

projects, and it covers everything from the formation of the idea of the project to its

completion. The project life cycle referenced in this study has four phases and is inspired

by Larson and Gray (2017): Defining phase, planning phase, execution phase and closing

phase. It can be argued that it is important to know where a problem originated to

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prevent it from happening in ongoing or future projects. Therefore, the goal of this

research is to point out exactly where problems originated within the project life cycle of

an established firm in the construction industry. This research is important, impactful,

and valuable because it is extremely costly when a construction industry project fails to

go according to plan, given that the projects are often very large. Thus, the objective of

this research is to investigate where, why, and how deviation appears in project

management and prevents projects attaining success.

A qualitative methodology was chosen for this research. Eight semi-structured

interviews were undertaken taken with the participants, all of whom work at an

engineering company which manages construction projects in Iceland. The interviews had

a research frame that reflects the project life cycle framework, to facilitate spotting

exactly where failures manifested in the project life cycle.

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Figure 1: A visual picture of the research gap and the importance of this reseach

1.1.1 Research question

Ø Where do project management deviations originate in the construction industry in Iceland and how have they manifested during the project life cycle?

Defining phase

Planning phase

Execution phase

Closing phase

Project success Construction

projects

Deviation

Why is the project not

within time, budget,

quality and scope

estimates?

The industry

in Iceland

Where does

deviation occur in the

project life cycle?

9 of 10 construction projects overrun

This thesis is the first to use the

theoretical lens of the project life cycle in the

construction industry in Iceland

There is no lack of

research on why project

are successful

But still .. A need to investigate why

A need to

investigate

where

A need to

investigate

how

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1.1.2 Significance and originality of the research

This thesis seeks to advance knowledge within the construction industry in Iceland and

to gain a deep understanding of why, where and how deviation occurs in project

management, and how such deviation manifests during the project life cycle. Practical

advantages will derive from a better understanding of the following issues:

Ø Exactly where problems occur within the project life cycle

Ø The importance of project management, especially when a project is of high complexity

Ø The role of project managers in construction projects

Ø The ways in which the client can influence a project

Ø How Icelandic culture influences the way projects work in Iceland

Ø How the organizational culture effect the strategy of the project

Ø Gain an overview of how the Icelandic construction industry functions in relation to deviation

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2 Literature review

2.1 Project management

A project is not routine work or an everyday task like cleaning the house, which requires

little organizing, and which will probably not deliver any surprises along the way (Larson

& Gray, 2017). A project is somewhat more complicated (Archibald et al., 2012). Planning

a wedding or building a hotel are good examples of a project (Möller, 2019). A project can

be defined as follows: "A project is a sequence of unique, complex, and connected

activities that have one goal or purpose and that must be completed by a specific time,

within budget, and according to specification.” (Wysocki, 2019, p.4).

All projects go through several different phases that form the life cycle or life span

(Möller, 2019). The Project Management Institute (2004) states that a project is

temporary with a clearly defined beginning and a defined end. A project is also unique

and something that has not been done before, even though there have been many that

are similar, for example, a hotel has been built before, but each individual hotel building

is unique. There would also be different owners, designs, locations, contractors and so on

involved (PMI, 2004). A project may involve a single person or many thousands and can

take from one day or up to many years. A project may involve a single unit of one

organization or many organizations working together as partners in joint ventures.

Projects are often critical for organizational strategy and performance (PMI, 2000). Due

to the complexity of projects, there are often a lot of specialties necessary to complete

them (Larson & Gray, 2017). The same can be said concerning the timescale of a project,

since sometimes a project will take less than one week to complete and other times it will

be up to five years or longer. This also depends on different industries, for example, in

engineering the timescale can be from a couple of months to two years, while in the

construction industry it is more common for the intended timescale to be up to a couple

of years (Kerzner, 2009). Projects are thus used to achieve certain strategic goals but also

to gain a competitive advantage (Müller & Turner, 2010).

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Projects have been going on as long as mankind has existed. But project management

is a very new tool in comparison to the length of time projects have taken place, and it

was first instigated by the U.S. Navy in 1950 (Hussein & Seymour, 2014). The aim of

project management is to make the project process a lot smoother and more effective

(Kerzner, 2009). According to the Project Management PMBOK (2004), project

management can be defined as,

Project management is the application of knowledge, skills, tools and techniques to project activities to meet project requirements. Project management is accomplished through the application and integration of the project management processes of initiating, planning, executing, monitoring and controlling, and closing. (PMI, 2004, p.8).

It is important to realize that the success of a project within an organization does not

in itself mean that the company is successful in project management. Projects can

succeed despite no formal project management (Kerzner, 2009). However, it has been

shown that good project management is not only a successful way to succeed for

companies, it also promotes economic growth (Larson & Gray, 2017) and can be said to

be the basis for companies to succeed in the market. Kendra and Taplin (2004) say:

For organizations to be successful with the adoption of project management, they need to establish a shared set of values and beliefs (a project management culture) that aligns with the social and technical aspects of proj- ect management to achieve the organization’s business objectives (Kendra & Taplin, 2004, p. 43)

It is important to implement the project efficiently and effectively (Raymond &

Bergeron, 2008). Peter Drucker states that efficiency is "doing things right" or maximizing

output in relation to a given quantity of inputs or resources, and effectiveness is "doing

the right things" to attain the projects goal and objectives. Drucker claims that

effectiveness is more important than efficiency (El-Mashaleh et al., 2007). Completing

projects within the contract time is often considered to be an indicator of efficiency (Chan

& Kumaraswamy, 1997). The ways to improve effectiveness and efficiency are better

project planning, scheduling, monitoring, and controlling (Reymond & Bergeron, 2008).

There are several things which characterize a good project, among other things these are

managing strategy and stakeholders, and it is also argued that this is more important than

concentrating only on budget and scheduling (Bloch et al., 2012). Building strong

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teamwork with a common goal and motivation is also important. Those involved must

possess the right expertise, experience, and education to deliver the project. It is also

important that those with the right knowledge, experience and personalities work

together correctly in order to succeed as a team (Bloch et al., 2012; West, 2012). In

project management there is a project manager with overall responsibility for controlling

and leading the project. The project manager is responsible for keeping the project on

track and within its allotted time frame, on budget and completed according to

specification (Wright, 1997), it is also important that the project manager has good

communication flow and implements strict quality control checks (Block et al., 2012).

Larson and Gray (2017) set up several project management steps on and established

that defining the project scope is the first step, and the second step is to define the

project’s priorities in terms of cost, time and quality. Along with a work breakdown

structure that sets out the components of the project, for example, an engineering

project might be separated into the subprojects of tasks, subtasks and work packages

(Tausworthe, 1979). But firstly, it is necessary and very important that the project is

clearly defined (Larson & Gray, 2017). The scope refers to the guiding light of the project

and what the project should deliver. It is a guide to keep in mind whilst working on the

project because it should be reflected in the final outcome of the project. The scope

should also reflect the customer’s wishes and their expectations concerning the final

result (Larson & Gray, 2017; PMI, 2004). According to Larson and Gray (2011), it is

important that the scope is specific, tangible and described in measurable terms. Scope is

a tool to make the project less chaotic and it also helps to identify all the important details

(PMI, 2006). The more clearly the scope is defined before the actual work commences,

the more likely it is that the project will be successful (Brotherton et al., 2008). A study

involving 1400 project managers in the United States and Canada found that over 50

percent of planning problems were related to an unclear delineation of scope and

goals (Larson & Gray, 2017).

Secondly, there is the issue of cost and time that are inversely proportional to one

another. Cost is a huge consideration throughout the project management life cycle, and

sometimes the customer has a certain figure in mind and cannot deviate from it, and it is

then extremely important that the project manager organizes these resources very well.

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The downside to this is that sometimes the estimate has been rather optimistic, and thus,

the available resources of time and money do not correspond to reality. Sometimes the

project manager is able to request additional funds to reflect the real cost when this has

been established. The client also specifies a time frame within which the project must be

completed, but regardless of whether time is used wisely or not, this is often exceeded

(Wysocki, 2019). However, despite the above there is a strong need to prioritize the

project plan budget and time frame (Larson & Gray, 2017). Tasks may be scheduled to

stop because a specific item needs to be completed before another task can be started,

or resources or expertise are needed to complete or start a task. Therefore, there is a

strong need to plan and prioritize projects (Möller, 2019). Sometimes the client adds tasks

to the project along the way, and these must then be added to the plan and prioritizing

list (Larson & Gray, 2017).

2.2 The project life cycle as a framework for project success analysis

A project life cycle is the process that each project goes through, all the way from the

idea that spurned it until the completed project is delivered to the client (Guan et al.,

2020), and it also provides the basic framework for managing the project (Patanakul et

al., 2010). Because of the complexity and uncertainty that a project can have, it is

necessary to divide each project into phases to improve management control and to

make it easier for the project manager and the team to implement it (PMI, 2000).

The purposes of the project life cycle are to give the staff working with the project an

overview and an understanding of the processes that are to be followed throughout the

life of the project. It is important to capture and document the lessons learned from

previous and ongoing projects, so that these can be applied to the continual improvement

of future projects. All the project roles and responsibilities and every aspect of the

project’s planning, estimating, scheduling, together with the monitoring and control

methods and tools, should be appropriately related to the overall project life cycle

management process. Another useful benefit from the project life cycle is, if it is well

documented using appropriate computer software, all of the information about the

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project will be held in one place. This makes it far easier for other, similar projects to

schedule, control and manage in the future (Archibald et al., 2012).

In the early days of project management, it was common to treat each phase as a

single separate project, with each phase having a different project manager. Each phase

would be planned, scheduled, and managed from start to finish as a separate entity.

However, it was soon realized that this could easily lead to misunderstandings and

unnecessary complexity, and often it was also more expensive and took more time. A

new method then developed where the overall project would be treated as a single

phase, with the same project manager in charge of the whole project (Archibald et al.,

2012).

Project life cycles usually set out what technical work the project rescuers are

responsible for on each phase and who should be involved in the phases. Most life cycles

have three factors in common with regard to the PMI’s PMBOK Guide (2000). Firstly, it is

a priority to keep cost and staff levels low in the beginning, but as the project progresses

cost and staffing levels increase rapidly, but then these reduce very fast during the final

phase of the project. Secondly, the probability of successfully completing a project is

lowest at the beginning, mainly because the uncertainty and risk is highest at this stage.

The third point named in the book is that it is harder for the stakeholders to influence the

final characteristics of the project’s product, and the project costs are highest at the start

and get much lower as the project progresses (PMI, 2000).

Because of the complexity of projects, it is in reality hard to examine all projects using

the same life cycle model. Many life cycle models are uniquely suited to a certain

specialized industry. An engineering industry project may use a totally different life cycle

model to an art project. The art project may need a more flexible model for creative

processes, whilst it is important for an engineering project to be as specific as possible

from the beginning, so that the project will start off in the right way (Larson & Gray, 2017).

According to Larson and Gray (2017), the most common life cycle has four stages, but in

some cases, there are nine stages, and sometimes just one to two stages (PMI, 2000).

As already mentioned, there are many project life cycle models with many phases,

names and numbers of phases, but the most common project life cycle has four phases:

defining, planning, execution and termination (Larson and Gray, 2017). This is the project

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life cycle model that was utilized in this study. The need for a pre-project phase where

the idea is formulated, and a post-project phase in which the results of the project are

reviewed, both operationally and productively, has been subjected to some criticism

(Archibald et al., 2012).

Table 1: The project life cycle in different industries (showing how the phases are different)

Table 2: The project life cycle tasks in every phase according to Larson and Gray (2017). This table was

used to structure the interview frame in this research.

Defining phase Planning phase Executing phase Closing phase

Goals

Specification

Task

Responsibilities

Schedules

Budgets

Resources

Risks

Staffing

Status report

Changes

Quality

Forecasts

Train customer

Transfer document

Release resources

Evaluation

Lessons learned

2.2.1 Defining phase

The defining phase is the first phase in the project, which commences as soon as the

project begins to be formulated (Archibald et al., 2012). A need for something new has

arisen because a problem needs to be solved or there is an opportunity. The client is in

the central role and presents a desire to create a solution with regard to a certain project.

The client can be an individual, a project group or a contractor. Often an organization will

Software development Engineering Manufacturing Computer programming Construction

1. Definition 1. Start-up 1. Formation 1. Conceptual 1. pre-planning2. Design 2. Definition 2. Buildup 2. Planning 2. planning and

designing3. Code 3. Main 3. Production 3. Definition and design 3. Contractor selection

4. Integration/test 4. Termination (Kerzner, 2009)

4. Phase-out 4. Implementation 4. Project mobilization

5. Maintenance (Larson & Gray, 2017)

5. Final audit (Kerzner, 2009)

5. Conversion (Kerzner, 2009)

5. Project operation

6. Project closeout and termination (Benette, 2003)

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be specified within the industry most closely related to the project. The client produces

tender documents providing information about the project, including its goals,

specification, tasks and responsibilities. Often the client wishes to obtain cost and time

schedules from different organizations who can offer a deal to the client (Möller, 2014).

When the client has found suitable workers or companies for the project, it is important

that his needs are fully expressed (Patanakul et al., 2010). The necessary information is

collected and analyzed for the potential project. The greater the information that is

known, the greater the capacity to predict future progression (Archibald et al., 2012), In

addition, the decisions made in this phase seems to have a significant impact on the final

cost, and a higher level of definition within this phase is associated with less risk overall.

This is also the phase where the greatest uncertainty about the future will be

encountered (Uher & Toakley, 1999). The time required for this phase can range from a

few days to many months, depending on the size, timescale and cost, and also the

complexity, risks, skills required and other factors (Archibald et al., 2012).

2.2.2 Planning

Planning is the pre-execution phase and it determines how activities will be performed,

and a strong and decisive plan will lead to a more efficient execution stage. If there is an

absence of planning, or very poor planning, this is a strong sign for a project failure

(Westland, 2007). Planning is completed when the senior managers have given their

blessing to launching the project (Pinto & Slevin, 1988).

Westland discusses the importance of performing a plan which encompasses the

resource, financial, quality, risk, acceptance and communication aspects (Westland,

2007). Larson and Gray (2017) say it is most important to consider the scope, cost, time

and quality components, with the main focus being on resourcing, and this will be

explained later in the section discussing resources. At this stage, the most important

factors are goals and scope, cost, time and quality (Uher & Toakley, 1999) along with

responsibilities, tasks and specifications of the project (Larson & Gray, 2008).

22

2.2.3 Execution

Execution is the longest phase in the project, and this is when everything depends on the

planning and defining phase (Westman, 2007). This is the phase where the project is

actually performed, and all of the work is actioned. Time, cost, and specification plans are

used for controlling and oversight (Larson & Gray, 2008). It is important that the customer

is informed of the processes and their requirements are met, and the project manager

monitors and controls the actions (Westland, 2007). Projects are often high in complexity

and, thus, a lot of flexibility is required and other decision-making along in the execution

phase (Mian & Dai, 1999).

2.2.4 Closing stage

Larson and Gray (2017) argue that this phase includes three stages: delivering,

redeploying and post-project review. In other words, the project is delivered to the

customer, the use of resources in future projects, and the lessons learned (Larson & Gray,

2008).

Figure 2: The project life cycle phases and durations

Defining

Planning

Execution

Closing

23

Lessons learned

Lessons learned often materialize after the closing phase of the project life cycle (Kerzner,

2009), but they can manifest at any phase in the project life cycle when those things that

are progressing well or badly are reflected upon (Jugdev, 2012). According to researchers,

if lessons are learned during the project this can have a hugely positive affect on the

project, and deliver far better end results (Chirumalla, 2016). According to the PMI’s

PMBOK Guide (2010) lessons learned is the learning gained from the process of

performing the project. This is an efficient way to understand what to do better in the

next project, what was good and where there is a chance to improve (Jugdev, 2012). If

lessons learned are well documented and communication within the project team is

good, with knowledge being forwarded to other team members, this can deliver effective

results for future projects. Incorporating lessons learned into the process can lead to

improved competitive advantages because knowledge-based practices can be unique and

difficult for other organizations to copy, and often it is the case that expertise is difficult

to imitate (Jugdev, 2012). Another benefit from lessons learned is that they are a key

factor in enabling an organization to have an advantage on the market and make them

more valuable (Chirumalla, 2016). If the lessons learned are not implemented, then the

organization can be at risk of losing knowledge that is precious for the company and

others who are employed in similar projects. This is something that can lead to costly

mistakes. That undermines trust, good atmosphere within the company, and efficient

cooperation which is important for a more effective outcome (Judgev, 2012).

Sometimes the methods and habits within a company are not conducive to

promulgating lessons learned throughout an organization or company. This requires that

the employees communicate after the project and also that the lessons learned are

documented (Judgev, 2012). Employees and partner companies are often unwilling to put

their names to a mistake, or to face the truth behind work that should have been done

better (Kerzner, 2010). It is also often the case that employees don’t want to share their

knowledge, and the concept that "knowledge is power” is quite dominant, whilst other

times participants put up barriers against learning anything from others, taking a "this

doesn’t apply to me” attitude (Jugdev, 2012). Kotnour (1999) indicates that the culture

and structure of the organization are important and will often determine whether an

24

organization utilizes lessons learned or not. Holding to old ways and habits can lead to

poor outcomes for organizations, with deeply valuable information being missed

(Chirumalla, 2016).

There are different ways that companies can effectively capture and implement

lessons learned (Kerzner, 2010), and this depends upon the readiness and willingness of

the organization to question expectations, values, experiences, and actions and to include

their staff in the processes. Some use a centrally held in-built feedback document which

makes it is easy for the employees to document any lessons learned (Chirumalla, 2016).

Most companies prefer to hold meetings with the team after the project, when it is

important that a culture of trust prevails, so those present feel able to honestly discuss

what should have been done differently to obtain a better result, and also to learn from

what was positive for the project. Case study documentation can also be an effective way

for future employees to learn from previous employees (Kerzner, 2009). Another way to

teach lessons learned is to make a video, telling the story and creating drivers to creativity

(Chirumalla, 2016).

2.3 Project success

There is no one explanation on project success and how it is best defined (Shenhar et al.,

2001). Jugdev and Müller (2005) compare it to defining a piece of art, the merits of which

are often an individual’s preference. Before a project success is defined, it is important

not to confuse this process with project management success. Project management

success can be defined as how effective the project and its processes are. This amounts

to the success of the group that takes part in the project. Most authors and researchers

agree on the most common definition of project success, which is to define project

success according to the iron triangle and project managers generally refer to as “triple

constraint”. The iron triangle states that a project should be successful with respect to

time, cost, and scope, project quality is affected by balancing these three factors (PMI,

2004) along with delivering stakeholder satisfaction (Collyer & Warren, 2009; Ika, 2009;

Gardiner & Stewart, 2000; Kerzner, 2009; Larson & Gray, 2017; Munns & Bjeirmi, 2006;

PMI, 2013; Serrador & Turner, 2015). Larson and Gray (2017) argue that often the longer

a project takes, the more expensive it becomes. Often there is no balance between time,

25

cost and scope, and therefore sometimes it is necessary to use cheaper equipment or

labor to get the triangle into balance again.

Tukel and Rom (2001) claim that quality is the primary determinant of project success.

Other researchers say that most projects do not achieve success because of the lack of a

clear definition for the project scope (Mirza et al., 2013). Turner and Zolin (2012) say that

ultimate project success is best judged by the stakeholders. It is important to keep in mind

that even though a project does not follow the iron triangle, it can still be successful, and

the client can be very happy with the end result of the project (Collyer & Warren, 2009).

An example of this is the Oscar-winning movie, Titanic, which was the first movie to reach

$2.8 billion in sales. The stakeholders were happy with the outcome and the movie won

11 Oscars. However, at that time, it was the most expensive movie ever made and the

cost of $200 million went far over budget (Bronte-Stewart, 2015; Munns & Bjeirmi, 1996).

Another example is the Sydney Opera House, which cost five times more than planned

and took three times longer than predicted to construct (Shenhar et al., 2001), but it was

still regarded as highly successful and it is one of the main tourist attractions in Sydney

today. There are also examples of projects where, despite following the iron triangle, they

ended up being a flop. The second generation of Ford Taurus cars, that came out in 1995,

are a good example (Ika, 2009).

Figure 3: The definition of project success, the iron triangle.

Time

Cost

Stakeholders

Quality/scope

26

It is, however, a fact that as time has passed the definition of project success has

evolved into something that is slightly more complicated. The iron triangle and the

stakeholder’s satisfaction are possibly a great simplification of what constitutes the

modern definition of project success (Ika, 2009; Kerzner 2009). Westerveld (2003) adds

that a better definition of how project success should be measured is whether the project

actually achieves its project goal. Project success has been researched at least since the

late 1960s, and project managers have been trying to define critical factors for project

success ever since (Cooke-Davis, 2002). The success of projects has often been defined

by the final outcome of the project (Munns & Bjeirmni, 1996), such as the examples of

the movie Titanic and Sydney Opera House referenced above. It can also be said that

project success is a set of circumstances, facts, or influences which contribute to the

project outcome (Lim & Mohamed, 1999). Ika (2009) defines project success as the iron

triangle but adds the strategic objective of client organizations and business success.

Furthermore, he lists benefits to stakeholders, project personnel and symbolic and

rhetoric evaluations of success and failure to the list of success criteria along with end-

user’s satisfaction.

Even though there is no lack of articles, studies and discussion concerning project

success in project management, projects still seem to fail. Researchers in project

management claim that there is no such thing as a universal project success checklist that

will ensure project success. The criteria for success is different from project to project,

depending on their size, uniqueness and complexity (Westerveld, 2003). The goals for

projects are often high and unrealistic, and it is common that projects do not follow the

original plan and the iron triangle. About half of all construction projects do not progress

according to the original plan. Project sponsors say that it could be argued that 50%

should be added on top of the calculated time and cost estimate at the beginning of a

project (Gardiner & Stewart, 2000). Factors underpinning project success seem different

with respect to project types and industries. Certain success criteria and success factors

are common across different project types, whereas some are critical factors for project

success (Cserháti & Szabó, 2014).

Research on a sample of 448 projects supports the importance of planning and

particularly emphasizes the importance of quality of planning. The quality of planning has

27

a positive effect on both efficiency and customer satisfaction. However, if there is a need

to change the plan and the goal, although the planning was good, it will have a negative

effect. It is possible to change the plan, or the goal individually, and still have a quality

plan which leads to a positive outcome, but not both together (Dvir & Lechler, 2004). The

same can be said with regard to scope changes in a project, as these can have a very

negative effect on the project, and they must be kept to a minimum (Kerzner, 2009).

Research shows that there is a strong connection between a well-defined project scope

and the likelihood that the project will succeed (Larson & Gray, 2017). The complexity of

the project can also affect the success rate, along with technical uncertainty, demand

uncertainty, unexpected occurrences and geological features. Other root causes which

explain cost overruns and delays are pure bad luck, and either a too optimistic or a lack

of strategy (Flyvbjerg, 2013).

Pinto and Slevin (1987) argue that planning and goal setting is the most critical factor

for project success, along with other eight important factors. Firstly, the factor of the

project mission, which is similar to the project goal but wider. The project mission should

ensure that the goals are clear and understood by everyone in the team and other

departments in the organization. It is also key that the goals are in line with the

organizational structure and objectives. The second factor is top management support. It

can be very helpful for project success to have support from the top of the organization,

receiving direction and benefitting from their authority. This can also encompass financial

support, together with manpower and time issues. Factor three is classified as the project

schedule/plan, since it is important that the plan is well-detailed with respect to aspects

such as the time schedules, milestones, manpower and equipment requirements. The

fourth factor is labelled client consultation, and this helps the project manager to meet

the client’s expectations and give the team in the organization a better understanding of

what is required of them to deliver the best project result. The fifth factor is personnel

issues, including the training and selection of staff for each team that is needed to ensure

the project’s success. It is key that the project teams are committed to the project’s

success. The sixth factor is technical tasks, which enables the project team to deal with

technical issues and have the technical knowledge to be able to facilitate the project. The

seventh factor links closely to step four, which is client consultation and acceptance. A

common mistake is for project managers to think that the client will accept the final result

28

of a project without getting their acceptance first. The eighth factor is monitoring and

feedback. This applies not only to budget and time but also team performance. The ninth

factor is communication, and this is a very important factor. Lack of communication

between the client and the organization, or within the team, is a negative influence on

project success. When communication is effective, everyone knows about the problems

that are being faced and no one is hiding information. The tenth and final factor is

troubleshooting, which makes it easier not only to diagnose problems when they occur

but also make forecasts about possible issues that might emerge in the future. These ten

factors are not ranked from one to ten in terms of their importance to project success,

but rather they should be considered across all stages of the project, and it should be

noted that the factors can have a strong influence on each other (Pinto & Slevin, 1998)

Cooke-Davis (2002) conducted a detailed analysis of 136 projects from Europe

between 1994 and 2000, covering a total of 23 organizations. The main goal was to find

out what factors are critical to project management success, and the resulting 12 factors

were different to those of Plinto and Slevins (1987). They included risk management

factors and a lack of risk management education and maturity, and in addition, poor

project organization and inadequacy of documentation concerning organizational

responsibilities. The shorter the project, the greater the likelihood of project success, and

Cooke-Davis (2002) claimed that a duration of three years was too long for a project to

have a strong probability of success. The author advised allowing changes to scope only

through a mature scope change control process. In addition, organizational strategy

should be developed so as to deliver benefits to stakeholders and the portfolio and

enable learning from experience. To the author’s surprise it was found that there were

only limited links between cost and time when there were delays in project. Only a small

amount of extra cost was incurred when projects were delayed, out of the sampled

projects (Cooke-Davis, 2002).

2.3.1 The project manager role in project success

Early studies claim that one of the critical success factors of a project is how it is controlled

(Westerveld, 2003). The project manager is usually the one controlling and planning the

project. This does not mean the project cannot be successful if the project manager is not

29

doing so, because it can still meet overarching and long-term objectives. A successful

project manager needs to possess excellent planning skills covering all aspects of the

project and a strong commitment to completing the project. It is necessary for the project

manager to make sure that communication is good and there is information flow, and

that the personal goals for individuals are aligned with the overall goal of the project

(Munns & Bjeirmi, 1996).

Crawford (2005) pointed out that the role and capability of the project manager can

have a huge effect on the project outcome and organizational performance, which really

stands out in some projects. Thus, it is crucial for the success of a project that the right

project manager is chosen (Sadeghi et al., 2013), and the wrong project manager being

selected can be the main reason why a project does not work out (Avots, 1969). It is

important here to not only consider the capability of the project manager with regard to

the necessary hard skills (technical), but also to ensure they also possess good

communication skills and the rather imprecise soft skills needed to fill the role. Soft skills

also include social skills, adaptability and the willingness to work in a team (Carvalho &

Rabechini, 2015). It must be remembered that all projects are different, and they differ

between industries and it is to be expected that project managers will bring different

skillsets to the table (Takey & Carvalho, 2015). According to the Project Management

Institute (2013), the project manager is responsible for reaching the project goals.

Larson and Gray (2017) claim that that job of project manager is a little different from

a typical managerial job, because the project manager organizes everything, creates the

schedule, motivates and is in overall control. The project manager is not only responsible

for overseeing the whole project, but they are also in control of how and when the

aspects of the project should be operated. Another factor that is unusual about this role

is that they are in control of a project that is temporary but with a defined final

conclusion. It is also their job to build effective teams and plan how they will work

together on the project. The project manager is usually the one who is in communication

with the client and stakeholder, and thus, they must possess the capacity to deal with any

dissatisfaction that arises during the life of the project.

Research by El-Saba (2001) established six capabilities that are helpful for a project

manager to possess. These are communication, organization, team building, leadership,

30

technical, and adaptability skills. Posner (1987) argued that the biggest challenge for

future project managers are communication skills, together with management and

leadership skills, along with flexibility and creativity.

The most useful project manager competencies are experience and education,

whereas certification is only moderately important (Stevenson & Starkweather, 2010).

Project management education is a fairly new field of study (Thomas & Mengel, 2008).

Often the project manager has been trained on the job and has no formal project

management education (McHenry, 2008). In Ahsan et al., (2013) the research discussed

a job description for a project manager issued by a company in Australia and New-

Zealand. Out of 795 applicants, only around 20% held a project manager certification.

This provides ample evidence that project managers are not necessarily required to have

a project management education, even though they are in overall charge of the project.

In the construction industry, the project manager has the important role of controlling

the project, and this can often become quite complicated due to the many parties and

factors involved in a project. Experience of other construction projects can be very

advantageous. Another essential factor is that all team members and staff have the

required expertise to efficiently execute their part of the project. It is also important that

the project manager has good computer skills, because these are necessary to control

any complex project. Another extremely valuable project manager skill is the capacity to

take an overview, effectively ‘looking over the balcony’ to take a look at the overall plan

as it unfolds into the future. Looking out for issues that could arise unexpectedly, checking

material deliveries, determining manpower and training requirements, and identifying

potential future problems and possible changes to the work structure are all part of the

role (Bennett, 2003).

2.3.2 Project failure

Project failure can happen with big or small projects in any industry (Discenza & Forman,

2007). Few people agree on how to define project failure, but if the project success is

defined as a balance between time, cost, quality, scope and happy stakeholders, then we

are closer to determining what project failure is (Kerzner, 2009). Emam and Koru (2008)

31

claim that project failure is not always a bad thing. Sometimes it is an opportunity for

substantial learning or critical business decisions (Emam & Koru, 2008). The downside of

project failure is often a high sunk cost and the significant wastage of time that is

associated with it (Discenza & Forman, 2007).

According to research completed in 2005 and 2007, which focused on project failure

in software companies in the US, Australia, the UK and Canada, out of 232 responses from

the 2005 study, 15% of the projects were cancelled. In 2007, similar research was

undertaken with 150 responses being acquired, and 11% of these projects were

cancelled. 16 – 22% were considered unsuccessful on the basis of their performance

(Emam & Koru, 2008). McManus and Wood-Harper (2007) say that only 12.5% of

information technology projects can be considered truly successful, with failure being

described as those projects that do not meet the time, cost and quality standards that

were specified by the client and incorporated in the original goals of the project

(McManus & Wood-Harper, 2007). Meeting scheduled targets and goals was consistently

the most challenging aspect for delivered software projects (Emam & Koru, 2008). Emam

and Koru (2008) said that going over budget, lack of management commitment,

inappropriate management skills and bad project management could be one of the major

reasons why projects fail. More than one aspect usually goes wrong and a complex

situation combining several factors is usually responsible for such failures (Lehtinen et al.,

2014).

McManus claims that only a few organizations have the capability to lead a project to

success, and usually there is a need for better education, training, infrastructure, or it is

found that management skills were lacking. Research indicates that more than half of all

information technology projects become runaways – going over budget, timeline and

failing to meet their goals (McManus & Wood-Harper, 2007).

Articles on software engineering project failures specify that the causes of such failures

are often the project environment, tasks, methods and the people involved. Moløkken-

Østvold and Jørgensen (2005) claim that having too many people involved in a software

project is a huge risk factor when it comes to project failure. A survey based on the

responses of 300 software professionals found that the client’s impact on a project is

huge. This often leads to project failure due to the client changing requirements or even

32

having new wishes regarding the project (Grimstad et al., 2005). McManus found from

prior research that 65% of project failures arose from poor leadership in project delivery,

along with bad communication with stakeholders, together with poor risk management

and insufficient management support (McManus & Wood-Harper, 2007). Egorova et al.,

(2014) claim that the spirit within a team is crucial to whether a project will fail or be

successful.

2.4 The construction industry

As already stated in the introduction, the construction industry comprises a large part of

the world economy with many jobs relying on the industry and it is a big part of society

(Simonson, 2020). The industry is very dependent on public-sector demand (McKinsey &

Company, 2017). Construction projects, especially those commissioned by the

government, are usually put out to tender (Liu et al., 2020). Some research argues that

the bid price is very relevant to the actual cost of the project (Corazzini et al., 2019).

Sometimes there are other influencing factors apart from the best price, such as some

specific expertise or experience that is important to the project being tendered for

(Bennett, 2003). According to the Icelandic law relevant to public procurement (number

120/2016) day bills will be recorded in the contract if this is a requirement of the client

(Lög um opinber innkaup, 2016).

The scope of the construction industry is very wide, and it includes residential

construction, the construction of commercial facility buildings, and heavy engineering

construction including infrastructure construction and industrial construction that

requires specialist abilities (Puspasari, 2005). Construction projects can be put in three

categories determined by their unique features. 62% fall within the building and real

estate sector along with social infrastructure such as hospitals, schools and stadiums. 25%

is civil infrastructure, including transportation, power, water, and telecommunications

projects. The remainder, or 13%, is industrial construction, including structures for

manufacturing, oil, gas and mining (McKinsey & Company, 2017).

Bennett (2003) argued that construction projects can be separated into two broad

categories, general building construction and engineered construction. General building

33

construction is usually designed by architects or the owner and these are buildings for

human habitation, for example, houses and apartments. General building construction

can also include shopping centers, office buildings and school buildings. The second of

these broad categories is engineered construction. These are slightly more complicated

projects and usually the design will be prepared by engineers and these are normally

government projects requiring a high degree of mechanization and heavy equipment.

Examples include highway or tunnel construction.

Construction projects are in many ways different from projects in other industries due

to their long execution periods, complicated processes, the high sensitivity of

environmental influences, and the diverse interests of the different stakeholders

together with the dynamic structure of project teams, which often makes delivering a

project on time quite challenging (Zou et al., 2007).

For a construction project to achieve its mission, a compilation of many factors must

work together (Clough et al., 2000). Construction projects are usually particularly complex

because they are often large and many parties are involved in the project, with multiple

specialties and expertise sectors required, which is why it is very important to coordinate

the project correctly (Puspasari, 2006). Different areas involved can include electrical

work, concrete laying, excavation, plumbing, and roofing. It is crucial that a large

construction project is efficiently controlled (Clough et al., 2000).

Due to the size of these projects and the number of people involved in them, the flow

of information is often deficient with information getting lost, especially between

different phases in the project life cycle, and this can have a discouraging and detrimental

effect on the project. This also emphasizes the importance of the project manager who

manages such projects having a great deal of appropriate knowledge (Hu, 2008).

2.5 Construction project life cycle

A construction project is considered to be successful when it is completed on time, within

budget and all of the stakeholders are satisfied with its quality (Gündüz et al., 2013).

According to Bennett (2003) there are usually six project life cycle phases in the

construction industry. It is important that each phase is respected and that the next phase

is not rushed into if the previous one has not been fully completed, or if more scheduling

34

or research needs to be done. That can have a negative effect on the project, even though

it can be very tempting (Clough et al., 2000). Prior to commencement of the project, when

the idea for it is being considered, the project owner needs to decide which way the

project will be worked. Does the owner want to be included or to get external contractors

and subcontractors to do the work is an important question (Bennett, 2003). At this stage

there is a lot of uncertainty, and it will not amount to much more than an idea and maybe

some sketches. How high the level of uncertainty is will depend on the available data, and

also lessons learned from other projects, and to what extent it can be utilized together

with standardized components and solutions, and also what kind of technologies can be

used to resolve the challenges posed by the project. The further the project life cycle is

progressed the more uncertainty is reduced, because more information becomes

available (Clough et al., 2000).

The next step is the planning and design phase, and this phase is about planning,

defining the scope and deciding the budget. The more that is known about the project

and its design the better, and all project specifications must be put into place before the

next step, the contractor selection phase, can be entered into. When contractors are

selected, it is important to ensure they will be available to work when the they will be

required to, fitting around the complex demands of the project. In big projects there are

often many contractors and subcontractors, with each contributing their own specialist

skills.

Phase four is the project mobilization phase, and there are many tasks that that need

to be accomplished before construction work can commence. Various bonds, licenses and

insurance certificates must also be obtained during this phase. The workplace must be

set up to enable the labor force to have somewhere to rest during their breaks and also

in between providing services that are temporarily required. The budget and cost aspects

must be controlled and scheduled for the next phase, the project operations phase. This

is the phase when the construction work is actually done, and three factors are very

important in this phase, which is often the biggest phase. The first factor includes

monitoring and controlling, resource management, and documentation and

communication (Bennett, 2003). The second factor is knowing exactly where the project

stands at any moment regarding timing, budgeting and the required quality. Net present

35

value (NPV) is a useful tool to calculate this phase of a construction project, ensuring it is

easy to know exactly where the project stands according to its overall plan. It is very

important to monitor the work to evaluate the project performance and identify exactly

where it stands in relation to the schedule (Gardiner & Stewart, 2000). The final factor is

the project closeout and termination phase, and there are a few steps that need to be

completed before the project can be said to be concluded. The closing papers have to be

completed and all of the contractors must be paid. Various professional opinions and

certifications need to be obtained, as well as ensuring that the project has achieved the

goals that were initially intended (Bennett, 2003).

Figure 4: The construction project life cycle according to Bennett (2003)

2.6 Deviation in construction projects

Construction projects need to be delivered on time, within budget, fulfill the project

scope and deliver the required quality. In order to have the opportunity to succeed they

must be well controlled, organized, monitored and evaluated together with employing

the right people with the required specialist skills (Raymond & Bergeron, 2008). Project

delays and uncertainty often afflict projects and are very common, and there is a

Pre-project phase

Planning and designing

phase

Contractor selection

phase

Project mobilization

phase

Project operations

phase

Project closeout and termination

phase

36

significant delay rate in the construction industry (Ansah & Sorooshian, 2017). There are

indications that around 50-80% of construction projects experience cost overruns

(Flyvbjerg et al., 2003). Productively has only grown by 1% over the last twenty years,

which is less than in other industries, such as manufacturing where the growth rate has

been 3.6% per year (McKinsey & Company, 2017). This is despite the fact that there is no

lack of construction project research which argues that a lot improvements are necessary

in the industry regarding cost control, scheduling, design practices, labor training and

quality control (Arditi & Mochtar, 2000). It can also be argued that it is important to know

the factors that can cause a project to be delayed in order to prevent them (Gündüz et

al., 2013).

Many synergistic factors lead to deviation in projects and often there is no single

explanation, and instead a series of unrelated events caused deviations to occur in the

project (Munthe et al., 2014). There are only certain things that can be planned for in a

project, and others cannot be factored in. It is very hard to plan for the effect of the

external environment (Youker, 1992). Many construction projects have reported

deviations that were caused by the environment and there can be no control over such

things (Ansah & Sorooshian, 2017). Akinsola et al., (1997) argue that the external

environment is everything outside of the project and that includes, for example, a

product’s nature, customers and competitors, political situations, the economy,

geographical settings and even the climate. It can now be said that COVID-19 is the

newest external effect on projects (Hall et al., 2020).

Larson and Gray (2017) add that the external environment is hard to control and

manage. Because of the deviations that can occur in construction projects, it is important

to account for them in the project processes. Bennett (2003) advised construction

management to be aware of the external environment when scheduling the project so

that this kind of deviation would be less of a surprise when it occurs. Larson and Gray

(2017) say that constant scanning of the external environment is necessary to enable the

project to adapt to the external environment.

In the article, "Construction on plausible grounds" (Framkvæmdir á hæpnum

forsendum), Jóhannesson (2014) explores why such enormous underestimation is

common in projects in the construction industry. One explanation is based on the so-

37

called anchoring bias and this phenomenon has been confirmed in many experiments. It

is based on the fact that the criterion that are started with will affect the result. An

example that Jóhannesson (2014) uses in his article is that two groups were asked about

the age of death of Mahatma Gandhi. The first group were asked if he died before the

age of 9 and the second group were asked whether he died before he was 140 years old.

The group who got the question referencing the lower age guessed within a much lower

age than the group whose question referenced the higher age. Thus, the commencing

criteria has an influence on the result. Jóhannesson said another explanation could be an

overly optimistic attitude and excessive flexibility on the part of consultants, since if they

are bored or under pressure, they are less likely to object. Sometimes the cost estimate

is adapted to fit around an available construction idea, and such estimates are usually

unreliable.

In respect of 248 building projects that were researched in Australia, the client (41%)

and the consultant (25%) were responsible for more than half of the project variations,

which increased time and cost in these building projects (Chan & Kumaraswamy, 1997).

Chan and Kumaraswamy (1997) investigated the construction industry in Hong Kong,

where similar reasons for poor project productivity were found to exist using quantitative

research involving 137 construction companies. The most significant reasons for time and

cost overruns could mostly be traced to five factors: poor management and supervision,

unforeseen ground condition, slow speed of decision-making involving the whole project

team, client initiated variations, and necessary variations of works.

Al-Momani (2000) undertook an analysis of the construction delays within 130 public

building projects that were constructed in Jordan during the period 1990-1997, and the

findings pointed to seven factors which caused such delays. These major causes related

to designers, user changes, weather, site conditions, late deliveries, economic conditions,

and increases in quantities.

Gündüs et al., (2013) found 83 factors influencing deviations in the construction

industry in Turkey. The aim of this particular study was also to find which factors had the

greatest effect on deviations in projects. Firstly, it should be mentioned that contractors

need to have sufficient experience to be able to take on the project. This is of critical

importance because, as the study showed, the contractors having insufficient suitable

38

experience was the most often cited cause of deviation. Secondly, it should be mentioned

that contractors need to monitor the plan and organization of the project more

thoroughly. This study expounds the view that only projects that are prepared and

planned can graduate on time. It is also important to note that good managers consider

the overall project. Project owners may make changes to the project during its life, but

this should not happen if the changes would enter the project too late and thus jeopardize

the success of the project. It is important to keep in mind that changing the scope of the

project, adding or dropping parts of it unless absolutely necessary, can have major

consequences for the outcome of the project. It is essential that approval for any changes

is obtained from the project owners, as not doing so can cost more and also prolong the

project.

A study conducted by Assaf (1995) in Saudi Arabia identified 56 influences on deviation

in construction projects. This research found that the approval of shop drawings was

usually the most influential stage in a project, whilst other significant causes included the

contractors not being paid on time, design changes and errors, conflicts in subcontractor

work schedules, too slow decision-making, and deficient labor skills.

A study by Kaming et al., (1997) also addresses this aspect, finding 31 deviations which

hindered project success. The most influential factors were design changes, poor labor

productivity, inadequate planning and resource shortages.

Another study by Sweis et al., (2008) states that the biggest factor influencing

deviations is poor organization and preparation, financial difficulties and too many

changes made by the project owners when the project was already underway. At the

same time, it can be said that the workers did not have enough knowledge or were not

diligent enough.

The barrack (Braggamálið) conversion project in Iceland veered severely off-course in

multiple ways, finishing with a cost overrun of 240%. Reykjavik City Council formulated a

detailed report setting out what went wrong. According to this assessment, multiple

factors synergized, and it was this that lead to such a bad result. Examples included the

following: the design for the rebuilding of the barrack was formulated after the cost

schedule was completed; the project manager was the architect who designed the new

barrack building; weekly project meetings were held but these were badly monitored

39

with little follow up within the project. Lastly, there were no formal contracts in the

project, other than the rental contract, and no structure around the project

(Reykjavíkurborg, 2018).

The MGI Construction Productivity Survey (2017) confirms many reasons for poor

performance. The survey established that there was a general lack of relevant skills in the

project, something which was also evident in the project design. Project owners are often

inexperienced, and the project manager is often marginalized, with the execution stage

being poorly completed. Sometimes there can even be corruption within the industry and

little transparency, and contracts have been mismatched in risk allocations and rewards.

2.7 Icelandic culture

There is a need to talk about culture in this thesis, because this research indicated that

culture can possibly affect deviation in project management.

“Culture eats strategy at breakfast” was said by Peter Drucker, which is a reference to the

culture that is strongly ingrained in a society, a workplace, or anywhere else (Prado et al.,

2017). A country’s culture is the set of values, symbols, beliefs, languages and norms that

guide human behavior within that country. It is a learned behavior that grows from

childhood to adulthood (Mondy & Martocchio, 2016). Culture can be compared to an

iceberg, a portion that is visible and a part that is invisible. The culture that is visible is

only a fraction of it, comprising of rules, goals, behaviors, speech, work facilities, clothing,

the customer, and the organizational chart of an organization. Invisible culture includes

all of the unwritten rules that apply, and many underlying factors such as attitudes,

expectations, differences, skills, knowledge, opinions, values, feelings and

communication patterns within the organization (Mooij, 2004). National culture has been

extensively researched and this can also help us to understand the cultural differences

between organizations.

Iceland is an island in the North Atlantic Ocean and the nation is comprised of 350,000

people. The community culture is built on the history of the Icelandic people. The Saga

Age marks the first century of modern Icelandic history, and the narratives capture the

character of the people, exemplified by the qualities of determination, a strong mindset,

adaptability and a desire to expand and explore their horizons and the resources around

40

them (Minelgaite et al., 2018). It can be argued that these societal characteristics, in

tandem with challenging events, have shaped the core of Iceland's culture, and examining

this can help us to understand the underlying factors within Icelandic culture.

Guðmundsdóttir and Aðalsteinsson (2011) submitted a survey based on Hofstede's

questionnaire, which conducted a study of national cultures in more than 40 countries.

The purpose of the study was to study how the national culture of the Icelanders differs

from the national culture. 427 answers to the questionnaire were received, all from

students at the University of Iceland, and the results covered the 5 dimensions of

Hofstede which will be explained. PDI (power distance) refers to how power is distributed

within the institutions and the community. If there is a weak power distance, then

everyone is considered to be equally right, hierarchy is limited, and great emphasis is

placed on the responsibility of individuals. IDV (individualism) reflects the concept that

everyone is, first and foremost, responsible for themselves and their family. The

connection to others is weak and an individual's freedom of action is great. MAS

(masculinity) indicates how the roles of the sexes are different. If the masculine

dimension is high, the role of the sexes is very different. UAI (uncertainty - avoidance)

indicates how much individuals in society are threatened by uncertainty and unknown

circumstances. The members of the community work hard when needed and emphasis is

placed on accuracy and punctuality. Countries that rank high in this area are afraid of

vague circumstances and unknown risks. LTO (long-term orientation) covers the long-

term and short-term attitudes of individuals. The countries that espouse short-termism

have a greater respect for tradition, with a strong emphasis on the order and duty of

individuals. Long-term thinking places more emphasis on prudence and perseverance

(Hofstede, 2001).

According to the results, Icelandic national culture can be characterized by low power

distance (PDI), high individualism (IDV), low masculinity (MAS), high uncertainty-

avoidance (UAI) and average long-term orientation (LTO) (Aðalsteinsson &

Guðmundsdóttir, 2011). Even though Icelandic culture scores highly in individualism

(IDV), Iceland scores lowly in class deviation.

41

Icelandic leadership is characterized by being better at dealing with harshness or

difficulties than overheating, and thus it could be said that perseverance is one

characteristic (Minelgaite et al., 2018).

Icelandic culture has been described as a family culture, where everyone knows

everybody, people have easy access to people and all communication channels are short

(Aðalsteinsson & Guðlaugsson, 2007). Iceland scores high in uncertainty avoidance which

represents the degree to which people prefer to experience structured over unstructured

situations, with the rules of behavior being clear for any given circumstance. These rules

may be expressed, or they may be unwritten and merely exist as a matter of custom or

tradition. It should also be said that Icelanders often take risks, live with uncertainty and

make quick decisions (Minelgaite et al., 2018). Eyjólfsdóttir and Smith (1996) say that

Icelanders prefer to work in harmony with others, something that is, for example, due to

the location of the country, isolation, environmental instability, and economic insecurity.

Icelanders also prefer to rely on informal rules and feel comfortable in uncertain

situations. From the perspective of outside parties, Icelanders are considered to be rather

unorganized and inaccurate. At the same time, Eyjólfsdóttir and Smith (1996) express the

view that Icelanders are rather optimistic and happy, and that more often than not this

is a sign of carelessness, something that is reflected in the Icelandic saying “þetta

reddast”, which means “it will sort itself out” indicating everything will be okay in the end.

Organizational culture

Workplace culture is the basis of the whole organization. It is not just one piece of the

jigsaw puzzle that is additional to the organization, but the jigsaw puzzle itself

(Pacanowsky & O Donnel-Trujillo, 1982). It can therefore be argued that the workplace

culture is a key contributor to the success of the organization, and research indicates that

workplaces with a strong workplace culture achieve better results than others

(Aðalsteinsson et al., 2010). There are many definitions of workplace culture. According

to Drennan (1992), it is "how things are done around here". For Edgar Schein

organizational culture is “based on employees’ underlying assumptions, the beliefs,

attitudes and values espoused by the organization and the interactions and

42

communication patterns that have evolved within the organizations” (Aðalsteinsson et

al., 2007, p., 27).

However, it is important to keep in mind that workplace culture is complex and there

is no single definition of what a workplace culture is. Workplace culture is in fact the force

that prevails within the organization as a whole and what drives the organization as a

whole (Aðalsteinsson et al., 2010). Research indicates that Icelandic managers have

certain characteristics: are rather friendly; informal in their behavior; make decisions

quickly; they want to solve problems; getting the best out of people on the job; and think

little about hierarchy. In many ways, they behave like entrepreneurs, being risk averse

but encouraging innovation. Encouraging their staff to take action, they are often good

role models who thrive in a competitive environment and have a success-orientated

mindset. If some part of the system needs to be fixed it will simply be fixed, which is

usually done with a lot of hard work, and the results are celebrated with the heroic stories

of the managers (Aðalsteinsson et al., 2010).

Óladóttir and Jóhannesdóttir (2008) found that the Icelandic management style is very

similar to that used by other Nordic managers, but the Icelanders are characterized by

rather quick decision-making and a lot of work. Research on Icelandic workplace culture

indicates that the factor that scores the highest is a clear and purposeful policy, which

means that the future vision is clear for the organization as a whole and its employees.

This policy is likely to create a certain competitive advantage, but it is rather surprising

that the scores in respect of coordination and integration score are low. This means that

despite clear policies, the processes to implement them are poorly defined and poorly

run, and different units within the organization do not work well together (Aðalsteinsson

et al., 2010).

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3 Research Methodology

In this section, the research methodology will be presented. First, the qualitative research

will be explained, together with the grounded theory inspired process of data analysis,

along with participant selection, data collection processes and ethical considerations. The

researcher will also explain why this topic was chosen and what the researcher hopes it

will accomplish (see 3.2).

3.1 Qualitative Research Methods

Qualitative research methods are the most suitable approach to use in order to gain a

better understanding of the phenomenon researched, particularly when the existing

body of knowledge on the topic is limited (Merriam & Tisdell, 2015). As in this research,

the statistics behind the many construction projects which do not progress according to

schedule or go over budget (Flyvbjerg, 2005) are known. However, there is a lack of

understanding as to why and an absence of deep insight into the project manager

experience and mindset. That is why this method was chosen: to evaluate deviation in

the construction industry, with the project life cycle being used as a method. This has not

been investigated in Iceland before, to the best of the author’s knowledge. Qualitative

research is a good method when there is little or no existing knowledge of an area, or

there is a need to gain a new understanding on things or make sense of a complex

situation (Morse & Richards, 2012). Qualitative research gives us a better insight into the

root thinking of the project managers, exploring where they feel things go wrong and

what the main issues are in their opinion (Ragin & Amoroso, 2011). It can give us a better

understanding of their experiences, behaviors, feelings, culture, and communication

(Hennik et al., 2011).

When doing a qualitative research project, it is common that the researcher does not

want to form research questions beforehand, because doing so could close some

44

doorways that might happen to open up during the interviews. The research questions

should be influenced by the field and are modified over time (Tracy, 2019).

3.2 Participant Selection

The researcher contacted an engineering company and asked if there were some factors

that the company would find useful to analyze and get an improved insight into. The

frame of this project is one of the ideas that the engineering company suggested. It is

hoped that this research will not only be useful for the company, but also for other

construction companies, and that it will lead to greater efficiency and improved

outcomes in project management in the construction industry. Hopefully, this study will

fill an existing gap, and guidance from the research will provide construction companies

with a better understanding and insight into their work. The idea to contact this specific

engineering company came after a visit to their premises with my university, when one

of their main project managers welcomed us and talked to us about project management,

how it operated and their work.

Time has a monetary value, and the researcher is very grateful for the time that the

employees gave to this research, something that is highly appreciated. Their manager

selected the participants and motivated them to take part in this study, although they

could, of course, have decided not to participate. As Corbin and Strauss (2009) say, a

researcher can never be certain as to why people agree to become research participants.

The only demand that I made was that those selected would all be experienced project

managers within the company. This is in line with the conclusions of Ritchie et al., (2013),

who asserted that the participants need to fit the requirements of the researcher, so that

a better understanding on the subject can be achieved.

3.3 Data Collection

The data collection took place in March 2020. As already stated, the company’s project

managers are highly educated specialists, and I was able to interview eight of them, all of

whom worked in the same department. Their length of experience with the company

45

varied from five to thirty-two years. They are all educated engineers and have a lot of

experience as project managers or within the project management teams. All of the

project managers that participated in the interviews have some kind of formal education

in project management, either in the form of project management courses or have IPMA

certification.

Their real names are not used in the research, but the participants have been accorded

aliases to make the research more personal. Those names are: Alex, Ari, Aron, Chris,

David, Sunny, Robert and Svali. One of them is the manager of the department. The

figures given for levels of experience and the length of the interviews are all authentic.

Table 3: The participants, their level of experience and duration of interview. (Level 1 experience: 0-10

years, Level 2 experience: 10-20 years, Level 3 experience: 20+ years)

Names: Experience Length of interview

Alex Level 1 1:06

Ari Level 2 1:01

Aron Level 3 57

Chris Level 3 1:22

David Level 3 1:02

Sunny Level 1 1:10

Robert Level 3 54

Svali Level 3 38

The gender balance is 25% women and 75% men. Measures have been taken to ensure

the confidentiality and anonymity of the respondents because confidentiality was

promised to the interviewees. The names allocated here do not reflect their gender.

Some names related to places and certain construction projects are not revealed to

make certain that no highly sensitive information will be revealed in this study. Again, this

is something that was promised to the participants when their interviews took place.

Due to COVID-19 all the interviews took place via Microsoft Teams, with both sound

and video recording taking place, and this happened with the participants’ express

46

agreement. It should be noted that two of the interviewees did not want to appear on

camera, and so the researcher was unable to see their facial expressions as they spoke,

making it harder to analyze their feelings about things. Qualitative research is about

getting a deep insight into the participants’ mind and feelings and trying to understand

what is behind the words (Ragin & Amoroso, 2011). It is valuable to note the emotions

expressed when doing the analysis, because incorporating the emotional aspects is part

of the process (Corbin & Strauss, 2009), however, that is much harder when you are

unable to see the face. Research shows that facial expression conveys a lot of emotion

(Ekman, 1970), and without it you can only perceive emotion via the words uttered and

the tone of voice. This may possibly have affected the outcome of the interviews, as may

the fact that the interviews took place via a computer screen. The recordings of the

interviews have since been deleted.

The interviews followed the structure of the project life cycle approach, as set out in

the book by Larson and Gray (2017). The interviews were semi-instructed interviews, and

the research frame was built beforehand (Esterberg, 2002). To facilitate a better flow and

gain a deeper understanding, other questions were asked in between the questions that

all interviewees were asked, and these differed from interview to interview because they

depended on the flow of the interview (May, 2011).

3.4 Data Analysis

Qualitative research is a combination of art and science. It requires analysis,

brainstorming, and trying out different approaches until a conclusion is arrived at. The

art aspect is being creative and thinking outside the box to tell the story that feels right

to the researcher. The science aspect stems from concepts that are grounded in data and

seeking those factors that the interviews have in common and attempting to discover

what is behind the words, and gaining a deeper understanding of the subject (Corbin &

Strauss, 2009). This research is inspired by grounded theory. Grounded theory (GT) is,

first and foremost, a research method that was first instigated in 1967 (Corbin & Strauss,

2007). Grounded theory is especially useful when processes are being investigated or

finding a new theory (Merriam & Tisdell, 2009). Qualitative research is concerned with

47

processes rather than simply with outcomes or products (Bogdan & Biklen 2007). The

data is viewed and analyzed in a structured way and information is added during the

research process (Corbin & Strauss, 2014).

The analysis began in the first interview, where open ended questions were used (see

appendix 1). The manner in which the researcher asks the questions and the words that

are used are important. It is not possible to convert the interview results into numbers or

a bar chart, and the way in which the questions are presented can influence the results

(Esterberg, 2002).

Sub-questions were asked to get a better understanding and great emphasis was

placed on listening to the unspoken meaning behind the words. When something stood

out, such as a facial expression or the tone of voice when a question or its reply triggered

sensitivity, this was carefully noted. A record was also kept of those occasions when there

was a longer silence than usual, or a laugh or something else punctuated the flow of

words. The researcher transcribed the interviews, which amounted to almost 90 pages

of text.

Following the method set out by Corbin & Strauss (2009), the next step was to open

code the interviews. Open coding is about breaking the data down into coding categories.

Every item has its own space according to its category, which is rather like the way

products are organized in a supermarket, for example, the yogurt will be in the dairy

department, the bananas with the fruits, and Coca-Cola with the soda products (Bogdan

& Biklen, 2007). Open coding is similar, but it is more complicated because there is often

a meaning behind the words and this must be closely monitored. The words and lines

that share the same or similar meanings, or a common characteristic, were grouped

together (Corbin & Strauss, 1998). After the data had been closely analyzed and sorted

into relevant groups and color coded, the groups that were related were given the same

color codes on the transcripts of the interviews (see appendix 3). This provided a good

oversight of the similarities and differences between interviews, which formed the frame

around which deviation in the Icelandic construction industry was evaluated, according

to the experience of the participating project managers.

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3.5 Ethical Considerations

It is essential to remember the importance of ethical considerations when undertaking

qualitative research. The participants must be informed about the level of confidentiality,

and any risk they could incur by taking part in the study. It is critical that the participants

disclose any partisanships, and that they are aware that they do not have to answer all of

the questions, and they can skip a question if they do not like it. They were also assured

that there would be no risk of negative consequences. To give the fullest protection to

the participants, they were allocated fake names, which do not relate to the gender of

each individual, and also other data, such as place names related to the interview

discussions, have been concealed, or simply not mentioned. All interviewees gave their

verbal consent to participating via Microsoft Teams and they, likewise, agreed that the

interviews could be recorded.

Gaining the trust of the participants is key to ensuring the interviews will flow

smoothly and yield a high volume of pertinent information for the research (Esterberg,

2002). The researcher understands the responsibility that accessing such valuable

information brings, together with the need to make certain that it is handled with the

highest regard to confidentiality requirements.

Sensitivity

As already stated, the researcher was very careful to mention in each of the interviews

that the participant could opt out of answering any question that they did not like. The

researcher was hoping to obtain maximum information, but it was observed that some

subjects, especially those related to their clients, were very sensitive. This created a sense

that asking some things that were strongly desired would have been too invasive or

uncomfortable. So some questions that the researcher thought about asking were not

asked because it was understood that some things are highly sensitive. Some of the

interviewees shared some information and then went on to say "please don’t put that in

the paper" .. and another said "no I am not going to talk about that". Often it was very

hard to get to the root of why a project went wrong and what actually happened because

the interviewees felt it was their responsibility not to say anything. They were staying

49

loyal to their clients, and these were very often cases that have featured in the media.

One example of this occurred when David was asked a sensitive question:

No, I don’t think I can come with any examples or I don’t want to come with any examples, I think it is beginning to be too much information, I think we just have to talk more broadly about it instead of so specifically. I can’t start talking about some things, but you know the conversation that is going on.

3.6 The company

The participants in the study all work in the same department within an engineering

company operating in Iceland. The company specializes in energy, industry and

infrastructure projects, and provides engineering advice, prepares tender documents,

participates in contracting, design reviews and countless other aspects of project related

construction work. An email from one of the project managers stated:

There are around 2/3 building construction projects, others are industry and energy. They are mainly an engineering company that do design but also monitor projects in construction and are project managers of construction projects.

The company also has offices abroad and operates on four continents. The company

describes itself as an international consulting company with engineering as the basis of

many of its projects, and engineers, scientists and technically educated staff are

employed. The company's goal is to ensure the profitability of projects and pay close

attention to customers’ requirement, with an emphasis on safety, the environment and

professionalism. According to the company’s website, they have undertaken numerous

large and small projects. It is important to note that the company is certified in

accordance with international quality management standard ISO 9001, the

environmental management standard ISO 14001, and the safety management standard

OHSAS 18001.

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4 The Results

This chapter will discuss the results of the qualitative study on the information obtained

from the eight semi-structured interviews, which was conducted in accordance with a

methodology inspired by grounded theory. The themes that emerged from the data

were: Icelandic culture: “it will sort itself out”, “the customer is always right”, a lack of

standardization with project managers, “the things we cannot control”, the dilemma of

cost scheduling, “keeping the triangle in balance”, and “in a perfect world”. The goal of

the interviews was to create flow and get valuable information to provide an in-depth

understanding of the factors behind project management in the construction industry in

Iceland. The aim was to find answers to the research question:

Ø Where do project management deviations originate in the construction industry in Iceland and how have they manifested during the project life cycle?

4.1 Icelandic culture: "it will sort itself out"

The Icelandic saying “þetta reddast”, meaning "it will sort itself out”, was strongly

reflected across the interviews, with it being indicated that the projects would all work

out in the end. Despite projects not going exactly to plan, they were finished, and the end

results were good enough. That the necessary preparation for a project was often not

completed was something that shone through the interviews. Instead, they tended to

place trust in the diligence and perseverance that had enabled the Icelanders to survive

and prosper since the settlement age.

The motivation the interviewees felt for their projects, together with their willingness

to do what it takes and belief that it would all work out, was apparent. David described

how he had studied abroad. When he had talked to his colleagues from Germany, they

had been surprised that Icelanders sometimes just went ahead with projects, even

though the plan for the project had not yet been completed.

Ben had experience of working with a client from the USA who had some construction

projects in Iceland. He says the difference between working with them and Icelanders are

black and white, even to the point where he laughed at the Americans and said "it is so

weird.” He was referring to the laws and regulations associated with projects they were

51

completing (it was for a very strict organization). The client in the USA put all the

responsibility on the contractor and wanted to receive a single offer with everything

included. American companies have certain standards that they must follow, and they

just will not go anywhere near uncertainty, and the contractor bears all of the

responsibility.

Alex said working with clients from Denmark was totally different to working with

Icelandic clients. In Denmark, nothing is done before everything has been planned and

thought out. If a task is added or an extension is requested, they have formal processes

that, accordingly, update the project cost. They simply say: "it will take x length of time

and x amount of money”. You cannot negotiate with a Danish company to get them to

change the time and budget frameworks, without proper scheduling. Icelanders are

different and a little more impulsive, and they just want to start the job right away. As

David said, "we need to start shoveling right away”, and thus there is a need to see

evidence of activity straight away. David further explained, "it is some kind of seasonal

fishing element in us”.

David said they rush into decisions that he called "shortcuts”, however, afterwards

they can see that they should have approached the project in a completely different way.

Svali agreed and said that Icelandic people are always in a hurry, so they rush to start

projects before the plan or the design is ready, and neither do they wait for the right

conditions to arise before starting a project. That is maybe the main reason why projects

do not keep to the cost and time schedule on the plan. Pressure from the client to start

projects right away was also a commonly occurring factor throughout the interviews. The

participants described how they feel on this, that they give in to pressure from the client,

because otherwise the project will be given to some other company instead. David

described how the culture in Iceland, and unwillingness to stand against pressure from

the client amplify one another.

…national characteristics, we lose focus and want to please the buyer or the environment which leads to something being rushed. Too often I have been a part of a project that I knew would not go well... But if you do not give in to the customer demands, someone else will. There needs to be two to lie, you know, lying is my job, you know, I am in some project, there is a plan, and it is all a lie because you just know it will not go according to plan, there need

52

to be two to lie, one that lies and another who wants to be lied to, you know about the due date and cost plan.

Alex explained there is often pressure from the client to start the project right away,

even before a plan is created. Often there is a lot to do in the organization, so they are

very busy, and they just have to get things started. When this happens, there is no

coordination in the project, i.e., “someone could be working with the load capacity and

others with the pipes, which makes no sense”. Alex followed up with: "… we are going to

start something, and everything is happening you know, and no one just sits down and

just asks how are we going to do this, so we might often be starting too early”. It also

happens that there are changes made to the project, but there is no structured process

regarding signing off the changes.

Ari described the Icelanders as too optimistic, and said it seems there is a national

optimism when it comes to planning and the sufficiency of funds and time to complete

projects.

…it is just how we are made here in Iceland, it is different in other countries where the darkest forecast is always presented first instead of the most optimistic. Then you go with your plan to the buyer and he always wants to lower the cost and have it done in sooner. Then it is tempting to say "yes ok, we can probably do that”.

Ari laughed a little bit when talking about this and he put in a light joke when he

described the culture in Iceland, and it was said with maybe a little pride. It was the same

with the other interviewees. They do not speak about this with a sense of shame, but

rather in a light and humorous way.

Chris says that project management is still a new product in Iceland, and that the best

colleges offering project management qualifications are in the USA, Australia and the UK.

When an aluminum plant was developed in 1997, the Icelanders were not trusted with a

project of that size because they did not have the structure, project management tools

or experience. The project managers in charge understood that there was a need for good

53

preparation and the client understood that it was best not to try to influence the project

and just to allow the specialists to do their job.

4.2 "The customer is always right”

As has been evidenced, the client often makes high demands on the construction

company and yet prefers to get everything for next to nothing.

A client demands to start a road project immediately and finish everything before Christmas for a fixed cost, yet he does not want any accidents on the road, he does not want to exceed costs or time, he does not want any quality problems and he doesn’t want anyone to die.

This is how Chris described things when asked what are the demands that clients make

before a project is started, and it is something that the other interviewees seem to agree

upon. However, success is obviously a rather likely outcome without proper planning and

preparation. It can be interpreted from almost all the interviews that the participants do

not feel like the client is sufficiently educated concerning what is required to make a

project successful. The client has quite a lot to say about the project and can make

demands as to which professionals at the company will be involved in the project. They

often even obtain Curriculum Vitaes in respect of prospective project managers within

the company, before choosing which project manager will be assigned to their project.

Naturally, this will depend on the strict the client is, and whether they have very high

demands regarding experienced people, the technical knowledge of those involved, or

exactly what kind of specialist they want for the project. Sometimes a client brings their

own project manager who does not work for the company, which is done to protect the

interests of the buyer and ensure that the customer's interests will be paramount. Alex

emphasizes that it is very important to update the client as soon as possible about time

and cost changes and delays. It is worse to update the client afterwards or put the

problem on ice.

If you have 100 hours to work in a project and you have worked 80 hours, but you know you have to work at least 50 more hours […] it is best to update the client and the team right away.

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When you update immediately, you can have a conversation about what to do concerning

the delay, and also find out why the delay happened and what you can learn from it. Aron

said that they must inform the client if there are any unexpected events in the project

that might cause its delay. It is very bad if the costs were supposed to be 100 million and

then this figure suddenly rises to 120 million, and such rises can be hard to justify if the

client was not involved right away. Sunny was the only interviewee who thought that

clients were usually fairly flexible, and it was not a big problem to notify them that their

project was behind schedule. A good explanation would be given and then they could

agree on a new project end date. Financial penalties are, however, often involved for

every day that a project goes beyond the agreed upon deadline. Alex said that sometimes

the company forgot to let clients know that changes in the project would impact upon

the deadline, which caused frustration. Some situations with clients were very

complicated, and Ari explained that these cases were quite often determined by the

court. The disputed amounts were often well into the millions, and as Ari mentioned, the

question of “who is to pay” is a difficult one to answer.

Chris mentioned an example where a project went terribly wrong. The client had not

wanted to take the company’s advice regarding the cost schedule. The company had had

this drawn up by specialists for the client, but they did not want to use it, and produced

their own cost schedule instead. The project overran the schedule in too many ways, and

the organization had known beforehand that the client’s own cost schedule was wrong

(as the client probably did too), but they had just wanted to get the project approved so

they could take it on. Svali said that often the clients have very unrealistic demands:

They just want the house ready in three months and there is no digging started and then we say this is not possible and it will not work out, the concrete has to dry and this will not work out in three months. Then the client says, yes, this is how it is supposed to be and it is your job to make sure of it.

These are often the most difficult issues as the company places a large emphasis on

maintaining a good relationship with their customers, "the customer is always right", so

there needs to be a certain balance where this is concerned. Svali says that often the

client does not want to know the realistic numbers involved, and neither do they request

any advice regarding the cost and time schedule. In the contract, it is simply stated how

long the project should take, together with the cost figure the client has requested and

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the different cost figure that the company has in mind, which is more realistic. Both cost

figures appear in the contract, just to document the fact that the company did not

necessarily agree with the client’s figure. This is so, even though the company applies its

best efforts to following their client’s wishes, and the organization emphasizes the

importance of maintaining good relationships with their clients.

4.3 “The customer is constantly changing requirements”

Chris described the buyer as sometimes being "inconvenient" or "naughty” because, as

he explains, a lot of inconvenience can be caused when the client acts as though they are

in overall charge. It is bad for any project to effectively have two managers leading it. The

client is especially "naughty” when they decide to add new things into a project after it

has commenced. Most often, such additions consist of things that are not necessary, but

they are rather "nice to have”. This can have a huge effect on the drawings, designs,

calculations and the cost of the project, and the client does not always realize this. This

interviewee put forward the example of a roof bar that the buyer in a certain project

decided should be incorporated after the project had started. This altered the load-

bearing capacity of the project and dealing with this impacted in a significant and negative

manner upon the calculations of time and cost for the project.

Chris says that it is best when the client does request additional requirements and they

are not constantly meddling in the project. Aron had a similar story to tell and mentioned

an example regarding the windows to be installed in a house. The owner visited the

construction site and said that they had all of a sudden changed their mind and wanted

to select different windows. Apparently, they had just seen another beautiful house with

more fabulous windows, and this had given them different ideas. Aron said it with a light

tone, but the researcher really got the feeling that he was actually making fun of how

these things often are. Ari explained that it is important to use change management and

to make sure that everything is signed off by the customer regarding all changes, and that

this must take place before work on the project continues.

Chris said that if these dilemmas were addressed in advance at the beginning of a

project, it would probably add just 2% to the overall time and cost that the client would

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need to invest. Proper planning and preparation would ensure smoother and more

predictable progress, which would in turn probably lower the overall cost of the project

and deliver a better end result for both the client and the organization.

What is often complicated for people who are deciding if they should go on with a project or not is spending money in the beginning, because if you decide to not go on with the project it is lost money.

The more that is known about a project and the more the scope is defined the fewer

the surprises along the way. However, the client usually does not understand this and

would rather proceed having accepted 50% in unanticipated costs and this involves taking

on a high level of risk from the beginning. David says that they try to talk sensibly and

realistically with clients but very often the client just does not want to hear this. Chris

stated, without any real expectation that client behavior would change, that the project

will be cheaper if the client uses money for schedule making and organization at the

beginning, "because it’s cheaper to change some design than to break down walls and

build new ones”.

Svali agreed with this and said that clients rarely want to invest any time or money in

preparation. Alex often said that client do not understand the need to properly organize

the projects. The client does not understand that this will actually save the money and

time, so they see no benefit to taking time in the beginning to prepare the project from

start to finish, and this tone was echoed throughout the interviews. Alex also explained

that sometimes the client does not understand that time delay must also cause an

increase in cost, "that is probably the most common argument we have with our clients,

to bring them down to earth in regards to this..” and Chris added:

When a client has made up his mind, he tends to simply want to proceed and doesn’t realize that he is taking a huge risk without proper planning. It is like competing in a 100km race without any practice.

Ari agreed and said that too often project management is not carried out as it should

have been, and that this really comes down to the project manager. Sometimes the client

does not want to pay for risk management and there can be conflicts between the needs

of the company and those of the client. The clients often do not want to pay for a monthly

report updating them on how their project is going, and "it all cost a lot of money’ is an

often heard refrain. That it is often difficult to handle the situation when a client needs

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to be informed that their demands concerning time and cost might not be realistic, was

something that Chris mentioned.

In general, the interviewees agreed that project management is still new to Icelanders,

saying "it is still a new product on the market" that the client does not necessarily want

to buy. When it comes to the quality of the project, this is perceived differently because

the client understands that the quality needs to be high and that accidents must be

prevented. "… it (the importance of quality) is more in our (Icelanders/clients) DNA…”

says Chris. He explained that where this is concerned, the organization was very good at

following up and that is because the client understands that quality needs preparation

and work. But the client does not understand that cost and time also needs preparation,

time and budget, and this is the underlying reason why the client does not understand

the processes and needs imposed by project management.

4.4 Lack of standardization with project managers

Chris says that the best and most experienced project managers are selected for the

biggest and most complicated projects. The organization has a system which determines

how they are chosen. The project managers are categorized as level A, B or C according

to how capable they are in the job. The project manager is responsible for the project but

others are involved in preparing the tasks. The project manager has to source the right

people for each part of the project, and this will often depend on who is available at each

time. The project manager is the boss and “the king in the ship”, as Chris described it.

Sometimes a project can be so big and take up so much time and energy (up to 5 years)

that there is a need to involve two to three project managers over its lifespan. "They (the

project managers) burn out or people get tired… and sometimes it is sensible to change".

Chris is a very experienced project manager and at one time he was in control of a project

which took 5 years and cost $700 million to complete, which he said was pretty

demanding. Sunny mentioned that sometimes a project manager will be changed

because they are not capable enough to control the project, something that can have a

huge effect on a project, including time and consulting. When this happens, there can be

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a large impact on the cost, and therefore "sometimes it gets very bad so there is a change

of project managers", as Chris described.

Alex explained that project managers vary in how diligent they are in following up the

project and keeping the people involved up to date with information. The project

managers are different, and some can be quite soft, which can also influence the outcome

of the project. It can happen that they secretly allow changes to be added to a project to

keep the client happy. Chris says:

It often depends. Maybe the project manager was not in the mood for signing the papers that day, you know if it is a small change, but when it is all put together the changes get bigger and the project manager forgets to follow change management.

Alex said that there is often a lack of information flow between different sectors

working on the project, and that it often depends on the project manager and how strict

they are about keeping everyone informed regarding the project. He laughed when he

was telling this, as though he was tired of lack of standardization with project managers.

Chris further explained that it can have negative consequences when the project

manager does not follow up with the project or negotiating earned value. Chris says there

is an example of a project going 2 billion ISK over schedule and no one had even noticed.

Chris says it is very important that the project manager is on top of things and analyzes

the project at least once a month, or even better once a week. The project manager needs

to realize the earned value at each stage and to see how far the project has gone. It is

very bad for the project manager or the project owner to realize that they are 6 months

behind after 2 years of work. Svali said the same, that it is the project manager’s

responsibility to keep the project and all of the teams involved on track. Alex agreed with

this and reiterated that the project manager is responsible for calling everyone to a

meeting to go over the schedule and provide any updates relating to earned value and

how far the project has come.

Sunny agreed that project managers work very differently and added that some are

more educated in project management methodology than others. Ari agreed and said

that it is different when project managers are well educated, and who the manager of

the project is and how much knowledge they possess can make an enormous difference

to how the project progresses. He said that often the project managers were engineers

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who were not educated in project management, or they do not know project

management theory. It is often the project manager who sets the tone for the project,

and often it just depends on the manager whether there is a goal for the project or not.

In all the interviews when the researcher asked about the project goal, the answer was

that the project should complete within the time and budget schedule. It is also important

that the quality is good and there are no accidents. Robert said that the goals could be

better documented, but he sounded a little unsure when he said that, maybe because

the goals are usually not documented specifically. Alex said it is the project manager who

decided if there should be a clear goal or not.

Ari voiced that sometimes when the client brings their own project manager to the

project, they often lack education about project management and the project is not as

strictly run as the organization would have wanted it. Ari explains what went wrong in a

specific project that their organization controlled. The project manager was a guy from

the old school, who didn’t know any professional project management, "...he did it the

way it has always been done, and it has always been built in the end.” The project went

terribly wrong and way beyond the cost and time schedule. But it is also true that the

project was finished in the end.

Alex said he thinks that project managers should be more involved but that the

problem can arise in the organization. They may, for example, often have a project

manager who is a civil engineer and they will know best when it comes to load capacity.

However, while he is very focused on load capacity, other important things are often

neglected in the project. Project managers often put too much focus on the area of their

own expertise knowledge, but they forget other important factors that they must

consider now that they are project managers. Alex said that sometimes the success of a

project depends as much on good organizational skills as it does on good project

management. For example, when the organization places a bid on a project that is too

low so that they can acquire the project. The reason for doing so can often be that they

need the project to expand the experience of the company, by, say, taking on a project

to build a bridge. The company then needs make sure they have a very experienced

project manager who is very conscious of the consequences if the schedule is not adhered

to. When this is the case, the project manager needs to closely follow all the extra work

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that the client adds into the project, updating and charging for it accordingly, as well as

being extremely organized so the project will keep to the tightly laid plan.

4.5 “The things we cannot control”

There are so many things that happen unexpectedly in a project and this is something

that it is important to keep in mind when starting a new project, as was explained by

Chris. There was common agreement amongst all of the interviewees that there is always

something unexpected in each project, and this must be considered when creating the

schedule. Thomas said there is no one explanation as to why projects fail to go according

to plan, and Dora mentioned that unexpected environmental factors that can have an

impact on the project and should also be taken account of. Aron explained that when he

managed a swimming pool project in Iceland, everything was ready to begin with, then

suddenly the authorities arrived and stopped the project, which was totally unexpected

and a very unpleasant surprise for both the company and their client. Aron also

mentioned another example of an unexpected delay:

All of a sudden when we were digging to make the foundation for a new factory we had to stop because of some ancient artifacts that had been dug up. We had to get some men shoveling with teaspoons because we had found some antiquities, all of a sudden, I mean, that is why it is totally unexpected and it can be bizarre.

David said that the newest influence from the external environment is COVID-19 and

that is something that no one could have foreseen. Svali voiced that when the external

environment is interrupting projects, it is important to inform all of the people involved

in the project, because many different components of the work will be upset. The project

manager must sit down with the client and the employees and/or contractors and discuss

things to arrive at some kind of solution. Some external problems can be hard to

anticipate, such as the large number of factories around the world that have closed,

creating supply problems for projects. However, especially if the issue is COVID-19, then

everyone has a good understanding of the circumstances affecting the project. The

monthly report to the client should always explain how any situation is affecting the

project and what solutions are seen to be possible. Thomas said that, for example, hotel

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constructions are currently subject to many kinds of delay that are happening because of

COVID-19, people can’t come to work, and there are also issues with manufacturing and

importing materials. In these kinds of situations, the whole plan will need to be

reconstructed. Thomas also referred to an example from the banking crises in 2008 when

the wages of employees could not be paid. There were so many things that could happen

then that we just had to “sit down and try to find a solution, you know, the external

environment it is something we can't control”. Alex said that now is an exciting time for

project management and there is a lot that we can learn from the extreme external

factors that arose due to COVID-19. There are a lot of manufacturers that have closed

their factories, and it is easy to say "we didn’t expect this and we have to predict the risk

factors that exist”.

Dora said that some projects need to stop for a certain time and then to minimize the

damage as best they can in the circumstances. Unexpected environmental issues can also

be unpredicted extra cost, and Chris said it was hard to get unexpected cost down to less

than 15% because there are so many things that we cannot know beforehand. Chris

provided the example of a contractor who suffered bankruptcy in the middle of a project,

which necessitated sudden changes to the project plan. Ari voiced that when a project is

delayed, costs will be added. Although there can be many reasons for delays, projects

must always be pushed forwards.

Like in the X case where we had organized all the imports in the project, and we were ready to order it all in June. But we didn’t get the green light to order it […]. If we had got permission to order it 3 months before it would all have gone beautifully. Then there was this COVID this winter and crazy weather that all affected the time on the imports.

4.6 The dilemma of a cost schedule

Ari opined that it is very hard to produce a cost schedule because you are setting a range

of prices for something that does not yet exist and it has not been done before, "it is not

as though you can buy it in a store, it is often something that has never been made”. Dora

said that the work involved in producing the cost schedule depends on what stage it is on

each time. David brought up a very interesting point of view about the cost schedule,

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saying "you can say that the last version of the cost schedule is right, it has just been

changing all the time [...] it depends on what edition you are looking at”. Aron voiced that

it depends on what stage the design is at how the cost schedule is made and how specific

it can be. It is possible to take the average cost of ten similar buildings to give the client

an idea of how much their building will cost. Dora mentioned that they have a special

computer system that helps them to work out the cost schedule and they can also see

older project schedules in the system. But it is important to keep in mind that a 10,000m2

building is not the same as another 10,000 m2 building. The cost and design can be very

different. Ari, who is has a great deal of experience with cost schedules, said that the way

in which cost schedules are prepared can be quite different in different projects, and this

depends on what stage the project is at each time. Ari produced an example of a project

where there was no design done in the project plan, so there was no reliable way to

create a cost schedule. However, the cost schedule was produced, leaving Ari with many

queries:

There is maybe a design from an architect, but there is no load capacity, and there is nothing about how thick the walls should be and how many retaining walls are necessary. Then you just try to predict something out of the information that you have and put a certain uncertainty over that price.

Ari was very passionate when he was discussing cost schedules, and he seemed a little

annoyed about what the researcher thought. Chris said that cost schedules are very

uncertain and they go way out of hand and fail to follow what was expected at the start.

Aron added that it was rare for a cost schedule to hold according to the original plan:

…especially on projects controlled by the government, they maybe go ahead with a project just to get the project through even though they know it will cost a lot more, and when the project is started it is too late to stop it and then they need more money.

Ari explained that the client often misunderstands the figure that is given by the

organization, and they sometimes think that the quoted figure is what the project will

cost overall, but very often this is just the cost before the design, capacity and other

factors have been included. Often, when a project that has overrun its cost estimate is

featured on the news, the fact that the referenced planned cost had an uncertainty of

plus 100% minus 50% will not be mentioned. Ari and Aron both said that 20-30% should

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be added to every cost schedule to factor in uncertainty. David expressed the point of

view that the news media will usually mention a cost figure that is often 2 years old, and

that estimate was made when just 10% of the project was designed:

The cost schedule was right at that time with the knowledge we had, […] but when the politics comes into it and when the media just throw something out there, because someone wants to make it look a certain way, I just shake my head, it is not relevant […]

When talking to the client about the price, it is very hard to name a figure, and it is

much better to reference a ballpark price range which gives a good idea of the cost, and

also to be very clear about the uncertainty. Svali added that very often when the project

cost schedule is calculated, the client can be very indecisive about what they want. For

example, the client intends to build an apartment building but does not know how large

it should be, or whether there will be a basement, but they still want to know the price.

In these circumstances, the organization will do its best, extrapolating the figures

involved in other, similar apartment buildings projects that have been completed.

However, as has already been said, it is very hard to produce a reliable cost schedule

when there is no design, and the client is very unspecific about the requirements. Clients

often do not understand that the cost schedule is just a rather unspecific predicted figure,

and they should always add at least 10% to it, which was something that Svali

emphasized. Of course, when something goes wrong, the client will quote the original

figure to the media, and will not mention that this figure was established on very weak

evidence. David said that it is much better to have a well-organized cost schedule, and he

wished that would happen more often because "… that is much better than a bad surprise

in the end”.

4.7 Keeping the triangle in balance

Chris says that many projects overrun the original plan, but we also have examples of

projects that went according to plan, with the triangle in balance. That happens when

there is sufficient time to prepare the project and the client understands that they need

to invest both money and time in the preparation. Chris named an example in which the

project went 100% according to plan, after a preparation stage which lasted 10 months.

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They had plenty of time and organized everything in the project down to the last screw,

and this was important because just one ship delivered to project destination each year,

with a year to wait until the next ship the extremely detailed plan had to adhere to. This

project required a balance between cost, time, and quality.

You just couldn’t go to the store, so this had to be planned very well from A to B, we had to plan all the stuff that should be sent to the ship and the time schedule needed to be perfect, we had to organize each little step of the way. The project went perfectly according to plan.

Chris said it is much cheaper in the end if a project is planned effectively at the

beginning. There are then far fewer things that can surprise you. It will cost more money

at the start of the project to plan it well, but this produces benefits along the way and the

client will get a better result. Chris said that he did not even want to think about how the

project referenced above would have gone if they had not had 10 months to plan it before

it got underway. He laughed a little at the thought that it would probably still be going on

because of the need to catch that one ship per year with all of supplies. Chris then

mentioned another example, this time of a project that failed to go according to plan,

which had not been prepared at the start. This project ended up costing 300 million ISK ,

when it probably did not need to cost more than 100 million ISK. There was no plan or

balance between budget or time in that project. They just went ahead and sent the bill

to the client who had no idea how far the project had progressed or when it would

complete.

Ari said it is always possible to mess up a project within a defined time frame or cost

frame, but this will always impact on other things in the project. Cost, time, and quality

all operate hand in hand. If one of these falls out of line then it will affect the other two.

If a project is time driven because it must be ready by a specific date, then it is possible

to have it ready by that time if you put more people and money in the project, "if we use

3 men instead of 1, we are 3 times as fast with the project”. David agreed with this and

added that it is all about a cooperation between the environment, facilities, supplies, and

manpower. Alex mentioned that sometimes a project will run out of money, and then the

strategies will center around making savings where possible, often using cheaper

manpower, or using employees who are known to be capable of finishing the work in

fewer hours. When this happens, it is really important to bring the right people together

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on the team and to try to establish a way to finish the project within the budget that is

available. Aron explained that when this happens the client will usually say “I don’t have

a lot of money, so the uncertainty must be only 5%, it is then really important to drop any

unnecessary or extra work and to have a clear goal”.

Svali mentioned that he was once working with a client and they overran the budget.

They then had to restructure the project, and to cancel certain parts of it. However, they

could only do that to a certain extent because the architect did not want them to change

the design too much.

David said that it is very important that everyone involved in a project knows where

the project stands, which is especially so within the organization and a meeting should

always be scheduled to examine the likelihood of further delays and cost increases.

People must be motivated according to where the project stands, and this is so in both

large and small projects. Sometimes there is are additional reasons to inform everyone

in the project teams where the project currently stands. It is then important to utilize the

right measuring instruments to locate the source of the delay, since it can be that the

production is not right or something has been incorrectly calculated, bad weather

conditions, or something else. David added, "we must break the project down to small

pieces to find the source of the problem and resolve it quickly, to make the project time

shorter”. Ari thought that the biggest influence on costs and why projects overrun their

cost schedules and budgets is that projects take longer than expected.

4.8 "In a perfect world” regarding the organization

Before the project is started there is a kick-off meeting. The project manager is

responsible for the meeting and all the right people are present at the meeting. The

owner and the contractors must all attend the meeting. The scope is agreed and set at

the meeting, the tasks to be accomplished are set out, together with who will be

responsible for different parts of the operation, and the schedule will be set in place. A

significant amount of prior preparation is required before the kick-off meeting, and it is

important the right people are included at this stage. As explained by Chris, “in the big

projects there is maybe someone who produces the schedule, and another who does the

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timeline and maybe a third person who creates the work structure, so he (the project

manager) will have a whole team around him“. Alex says the prior preparation and the

kick-off meeting seems to be something that should be done properly, but they are not.

"In a perfect world we would all be on the same page after a meeting like this (kick-off

meeting), […] everyone would be very conscious about what is and what is not extra

work.. […].”

Chris used the example of a project that was ongoing for 5 years and he was the project

manager over it, they had 3 months to prepare the job and 5-6 people were working full-

time on it.

We organized the cost schedule, scope, procurement strategy, execution strategy, you know, so many things, risk analysis, you name it. And also, defined the roles, what people and staff we need in the project, how the matrix is going to be. There are so many things we need to plan for big project, who can talk to whom and so on.

Alex said if it concerns design work, then the project manager should ask the designer

to come to the kick-off meeting, or if it is a building then someone with load capacity

knowledge should be in attendance. Representatives should also attend from the

electrical installation team, the air conditioning team and acoustic design, and so on. All

teams and work areas relevant to the project should have representatives at the meeting.

Alex also stated that they should produce a draft of the time schedule because it is usually

the case that when an organization produces a time schedule at this stage, it is not

realistic. It is important to obtain feedback from all of the staff working on the project.

Svali said that often a project is commenced far too early, before any plan has been

established and without a kick-off meeting. This effectively means that although there is

a project manager, there is no real control over the project. However, a kick-off meeting

does not seem usual for Icelandic construction projects, according to the interviewees.

Svali mentioned that the information processes are not always very good and a strong

need to compromise often arises. Svali gave the example of someone who was designing

load capacity who needed information from the teams completing the air conditioning

and the electrical work. They then just sent this request out into the cosmos and then

nothing happened, and thus no decision was made on this issue. Svali thinks there should

be better collaboration and consistency between the various departments. Of course, it

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is the project manager who should be responsible for holding meetings with the teams,

and sharing the information that is needed by each department at the relevant stage of

the project. Chris added that if they have subcontractors to do the work, they usually

design the project and then offer the work to the subcontractors. Chris says that the

organization should do all the follow up work and know exactly where the project stands.

We want to have all the threads in our hand, we want to know exactly how the project stands at each time and know where the project stands according to the schedule, if the project is not going according to schedule they want to know why, sometimes the schedule was very unrealistic and sometimes it is other things.

Alex said that prior to a kick-off meeting they receive a checklist that reflects everything

they need to think of when planning a project, and this will be part of the meeting.

It is to help both the project manager and also those who are starting to get some kind of feeling for how the project usually goes and what to think of when organizing a project and it happens that something is forgotten or done too late in the possess.

Alex mentioned that there is also a progress document as well as a special document

for roles and responsibility, and document control. The main goal for all of these

documents is to ensure the processes are followed. The checklist is only used in medium

and big projects, not the small ones. Most of the projects the organization is undertaking

these days are small ones, and so Alex has not used a checklist much, but he knows how

it works and thinks its use is a positive development. The researcher asked why the

checklist was implemented in the company and Alex responded that there was some kind

of enlightenment amongst the project managers and other team members. As the

construction industry is a tough business, the management thought there was a need for

the projects to be better organized from the beginning, since there were a lot of projects

that were going over schedule. Alex opined that there was a need for better project

management tools with the larger, medium-sized, and even the smaller projects, because

they are often very complicated.

Goals are usually set for all projects and there is agreement within the feedback

provided that aims to ensure that projects would be delivered within their time, cost and

quality schedules. Chris mentioned that another common goal was to have no accidents

and they wanted everyone to return home safely after their day’s work. Chris added that

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risk assessment is only done for big projects. Often the client thinks it is too expensive

and sometimes it can be used too little. It depends on the project how it is officially

finished. Sometimes the company will only do the design part of the work, and other

times the client will ask them to take care of the entire process, so then the organization

will know exactly where the project stands.

When the project is finished, it is registered in a project database, with all of the

knowledge that has accumulated and all the steps that were taken being entered. If the

company contracts a similar project in the future, they should be able to learn lessons

from previous mistakes, Chris explained. Dora said it would be helpful if there was a

meeting after a project has been delivered, where the project managers and the team

would go over the pros and cons of the project. This would incorporate a lessons learned

approach, where everyone would learn from the experience of everyone else within the

project. Svali contributed that there is usually only a lessons learned document after

larger and more complex projects. But this is not a rule, it sometimes happens and

sometimes it does not: “otherwise this will just be the experience of the staff and it may

be passed on that way”

4.9 Summary of results

Throughout the interviews, the ‘song’ of Icelandic culture could be heard; optimism,

perseverance and a flexible mindset. The national culture can be characterized as a little

impulsive, with an inclination to get on and start things right away, without making the

necessary preparation for the project. The participants were very aware of the

importance of organizing and scheduling, but project management is still a new concept

in the Icelandic construction industry. Often the client does not appreciate the

importance of the necessary preparations for a project, and they often do not want to

pay for project management, and they prefer to commence the project immediately.

However, most of the interviewees wished that things were more organized, with

projects being more structured as they would be in “the perfect world” (see section 4.8).

This also came across in discussions with the project managers about their work. They

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have a different background and knowledge, but it is apparent there is a lack of formal

structure concerning how a project manager should work.

Cost planning is one of the major factors that needs to be prepared especially well for

each project, but it is very common for projects to stray off schedule. Sometimes an

informal cost schedule is created before the client has decided exactly what is required,

and/or a design has been established. This will lead to a cost figure being estimated that

can only be a provisional guide. However, when projects which commence in this way

finish up as news stories, as they all too often do, it is that figure which will be quoted. It

has also been said that this initial figure is the number that the client wants to believe in,

even though the specialists from the organization have told them otherwise. If projects

do not stay on schedule, it is possible to add staff or to invest additional finance into the

project to keep it in balance. Unexpected environmental events are very difficult to

control, and these have an undeniable effect on the outcome of the projects, but it is

important to take these factors into account when planning a project.

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5 Discussion

The overall purpose of this study was to gain an understanding of the project

management deviations that occur in construction projects in Iceland. There is a gap in

the existing knowledge, and it is the objective of this research to investigate where, why

and how deviation manifests in project management, preventing projects from attaining

a successful outcome. The research question is:

Ø Where do project management deviations originate in the construction industry in Iceland and how have they manifested during the project life cycle?

In order to answer this question, a couple of sub-questions were formulated, and

these will be discussed and reflected upon in relation to previous research that is also

discussed below. The research was also used to formulate suggestions for achieving an

improved level of success in project management in the future.

In order to ensure the results would be applicable to the research goal, themes which

emerged from interviews have been placed within the project life cycle. In this way,

specific deviations were identified within the project life cycle frame and the analysis was

guided by the project life cycle framework.

1. Where do project management deviations originate in the construction industry

in Iceland?

The results of the project indicate four main factors that affect deviation within the

construction industry, which are: culture and organizational culture, the client, project

manager, and unexpected events that are hard to control.

Culture

The Icelandic culture undeniably affects every organization that operates within Iceland.

The saying "culture eats strategy at breakfast” truly applies in Iceland, as the culture from

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the age of settlement is still strongly imprinted within the Icelandic people to this day,

and this affects organizations and the projects they operate. It can be said that Icelandic

culture is characterized by the nation’s history, and that, accordingly, the Icelander’s do

better in hard times than when they are ‘sailing on a calm sea’. The Icelanders are also

known for working hard, ranking highly with regards to perseverance (Minelgate at al.,

2018). As one interviewee said, there is a ‘fishing culture’ deeply ingrained within the

Icelandic people, and in the same way that one must pursue a shoal of fish when it is

sighted, the Icelanders are inclined to start work right away, and they want to see

immediate results. Such inclinations and ambitions were plain to witness in the

interviews, but equally the goals of project management were clearly articulated, these

being to set up the project so that it can operate within the agreed time and cost

framework.

Previous research states that Icelanders are ready to take risks and they feel

comfortable living in times of uncertainty and with rules that are informal (Minelgaite et

al., 2018). This is reflected in an interview where the project manager gave the green light

for a project, even though that project manager knew that the client had unrealistic goals

and expectations in mind. This is in line with how the Icelandic phrase “þetta reddast",

meaning “it will sort itself out", operated in Icelandic life.

Perhaps that is why the Icelandic project managers’ colleagues in Denmark and

Germany were surprised by what they perceived as their chaotic ways and lack of

preparation before the commencement of a project. If the Danish and German culture is

compared to that of the Icelanders, the Icelandic people measured 50% in uncertainty

acceptability compared to just 23% for Danes (Hofstede Insight, n.d. -a). This is a sign that

Icelanders deal with uncertainty much better. But if Germany and Iceland are compared,

the German people achieved a measure of 83% in respect of long-term orientation, which

was 28% among the Icelanders, and this is a sign that Germans place a much greater

emphasis on rules and structure than Icelanders do (Hofstede Insight, n.d.-b).

The researcher advocates setting a clear framework and defined structures

determining how project managers should operate to promote best practice. To give an

example from another field of endeavor, the Icelandic national handball team achieved

world-class success around 1990, which was after they had hired coaches from Eastern

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Europe who emphasized the benefits of discipline and structure. When the perseverance,

hard work and diligence of the Icelanders was augmented by the structure and discipline

that characterized the Eastern European coaches, the results were excellent (Minelgaite

et al., 2018).

It can be argued that a sense of carelessness in the Icelanders is not necessarily a bad

thing, but a strength, and it should be remembered that the Icelanders have succeeded

in many fields. For example, the Icelandic male national football team became, in 2016,

the smallest nation to ever play in UEFA’s European Football Championships (FIFA.com,

2016). One may wonder whether a certain carelessness that characterizes the Icelanders,

coupled with the perseverance and diligence of the nation that has nurtured them since

the age of the Sagas, has helped them to achieve goals, despite carelessness when it

comes to structure.

It is worth noting, however, that the researcher found no existing research which

showed the results of Icelanders versus foreigners with regards to the success of project

management in the construction industry. It is therefore difficult to predict how

influential the Icelandic culture has been on the success or failure of projects, although

this study certainly indicates it has contributed to project deviations.

Organizational culture

The Icelandic culture has an undeniable effect on organizational culture. There is a clear

vision, but it doesn’t seem to actualize in all of the projects. Research shows that there is

often a clear vision around projects in Iceland, but the structure is poorly defined

(Aðalsteinsson et al., 2010). That is reflected “in a perfect world summary” in section 4.8,

whereby the interviewees gave the impression that they wished the structure were more

defined and formal.

Research shows that Icelandic managers are informal in their behavior, friendly, they

make decisions quickly and want to solve problems (Aðalsteinsson et al., 2010). This is

reflected in the interviews when the project managers want to relate to their customers

in a friendly and solution focused way.

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The client

As indicated by previous research, the client is often an influencer in the project and this

can impact negatively on its efficiency, for example, it is difficult when a customer

changes their mind about the design when the project is already underway, or when their

budget is insufficient (Chan & Kumaraswamy, 1997). This research indicated that when

the client wants to have an influence on the project, this can sometimes lead to there

being two managers in charge of one project. Having two people in overall charge can

have a negative effect on the project outcome, according to previous research (Yousaf et

al., 2011).

It was clear from the interviews that the interviewees were not happy about a client

bringing their own project manager to a project. The reason why this was so is that the

client’s own project manager would not necessarily use the same project management

structure as the organization. According to Westerveld (2003), how the project is

controlled is a critical success factor, and the use of project management tools can give

an organization a significant advantage in the market (Larson & Gray, 2017).

This research indicates that if the client often changes their requirements or is

uncertain on the details of the project, this has a negative effect on the project schedule

and plan. It is much more expensive to break down walls than it is to change design. If the

client could be more precise about their design requirements earlier on it would be very

helpful. Munns and Bjeirmi (1996) say it is important to have a strict plan and schedule

before the execution stage of the project, because by doing so the project is more likely

to succeed.

All eight interviewees agreed that projects would have a better outcome if they were

better organized, but the client often does not want to fund the kind of project

management that is necessary. Kerzner (2009) says that project management tools make

a very effective contribution to controlling a project and increasing the likelihood that it

will be successful. This is especially so with very complicated projects, where there are a

lot of specialists who need to be included in the project and a lot of money is at stake.

Research shows that organizations that use project management tools can get a

competitive advantage in the market (Müller & Turner, 2010). One of the interviewees

said that the clients do not understand the importance of project management because

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it is still a new product for Icelanders, and it takes time to sell a new product. The clients

also do not understand the importance of project management and they want to

commence the project right away.

That the cost schedule was often misread or misunderstood by the client, and also that

clients are not inclined to listen to specialist advice regarding the cost schedule, shone

through in the interviews. It is extremely hard to predict a price and a timeline for a

project if the client has not yet decided what is required and the design has not been

created. The cost schedule often takes time to prepare and the costs are set out within a

range.

The client can require day fines if the project is not finished on a certain date according

to Icelandic law 120/2016 (Lög um opinber innkaup, 2016), and the construction industry

has frequently been covered in the news. Perhaps this is so because it is often

government funds that are at stake. These factors could be one of the reasons why the

organization allows the client to have so much control, and the organization also places

great emphasis on maintaining a good relationship with the client. The market in Iceland

is small, and if the organization is not willing to take the project, and the client

expectation that goes along with it, then another company will do so. Research by Munns

& Bjeimi (1996) stresses the importance of good communication between the

construction company and the client and the interviews reflect good relationships with

the clients. But sometimes the researcher wonders if the organization could possibly

benefit if they were to have stricter standards regarding the client.

The inspiration for solutions to this problem might be found in the analogy of good

parenthood, namely, the senior authority refusing to provide the desired reward in

consideration of the longer-term benefits.

If the client wishes to engage the construction company for their project, then they

have to pay for the project management process and in return their project will be far

more likely to be delivered on time and on budget. In the long run, project management

pays off, and who does not want to be do business with a company that is known for

achieving its goals and saving its customers both cost and time? The interviews showed

that it is possible to achieve project success when the project is well prepared from the

outset. For example, when there was only one ship each year to the project destination,

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the project was planned in great detail, and everything was organized when the execution

phase began. That project was successful and within schedule. The interviewees said that

if the client is ready to pay for the project management, then this will almost always

provide a better outcome for the project.

The project manager

The interviewees indicated that project managers are very important for projects and the

company was very aware of the importance of the project manager role. For example,

they have set up their own hierarchy when it comes to project managers and how capable

they are of handling projects. Research indicates the project manager can have a huge

impact on the outcome of projects (Crawford, 2005). Throughout the interviews it

became quite clear that there was some kind of structure that a project manager should

follow, but this would also depend on the project manager and how he approaches the

work, and also how strictly he follows the structure.

It does seem to depend somewhat on what mood the project manager is in, for

example, it was stated in one of the interviews that the project manager was unwilling to

sign the necessary papers in a project because he simply was not in the mood for signing

papers. Munns & Bjeirmi (1996) indicated that being a successful project manager

requires careful planning and a commitment to completing the project, and it is

important to adequately plan all of the activities of the project.

The participants said in the interviews that they wished that the company would place

more emphasis on the lessons learned part of the project. It would be very helpful to have

just one meeting after a project has been executed. Lessons learned is mainly completed

after big projects, and if not, the lessons learned from the projects simply become a part

of employees’ own experience. Previous research shows that lessons learned can have a

huge effect on the company’s success and even give them a competitive advantage

(Jugdev, 2012). As has been stated in the interviews, different project managers work in

different ways and they often have different backgrounds. Often, they are not educated

in project management, but they are specialists in other specific fields. This is in line with

previous research that revealed that very often project managers have not been

educated in that field at all (Ahsan et al., 2013). According to Stevenson and Starkweather

76

(2010), the most effective project managers have the required education and experience.

The participants in the interviews agreed with that view and said that often the projects

progress better if the project manager knows about and uses project management tools.

The researcher advises the company to introduce a more structured process and

require their project managers to follow it. The researcher also suggested that the

organization imposes a strict framework as to how their projects are controlled and

managed. As other research indicates, there is a great need for stricter structure, and this

need increases with the complexity of the project (Neil & Rose, 2006).

Unexpected events that are hard to control

Unexpected events that are hard to control and which affect the project in a negative way

can have a huge effect on project success. Uncertainty is common in all projects (Ansah

& Sorooshian, 2017) and there is only so much that can be planned beforehand to

mitigate this (Youker, 1992). The company was very aware of this and the researcher

sensed humbleness regarding the unexpected events that are hard to control. The client

is also aware that unexpected things can happen, such as COVID-19. Weather conditions

are also a factor, and these often impact projects in Iceland. Bad weather and COVID-19

are also relevant in other counties where they also impact negatively on projects (Hall et

al., 2020). According to the Project Management Institute, unexpected environmental

situations or issues within the company should be factored into the project schedule.

When the interviewees were asked what they did when unexpected situations arose,

they said they would try to rebuild the schedule according to the new situation and they

would inform the client and work together with them to resolve the issues.

2. How have deviations manifested during the project life cycle?

There are mainly two phases of the project life cycle that stand out in this research

because they affect project success the most. These are the defining and the planning

phases. If those two phases are built on weak ground that manifests to the execution

phase, which leads to more time and money being spent on the project. This also affects

the quality and scope of the project. First the defining phase will be explained:

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Firstly, this research indicated that the client is often very indecisive and tends to

present constantly changing requirements. The client has a dominant role during the

defining phase, and research shows that it is important that the customer knows what he

wants and is clear about his wishes (Patanakul et al., 2010). When the client is indefinite,

it leads to lack of scope and that then manifests as a lack of planning in the planning

phase. Turkel and Rom (2001) claim that scope is the primary determinant of project

success. Other research agrees with this and states that most projects do not achieve

much success because of a poorly defined project scope (Mirza et al., 2013).

Secondly, the project goal is set in the defining phase of the project. Often the project

is considered successful when it is delivered on time and within the required budget,

quality and scope, and reaches appropriate performance and the customers are happy

with the end product (Collyer & Warren, 2009; Gardiner, 2000; Larson and Gray, 2017;

Kerzner, 2009; Munns & Bjeirmi, 2006; Serrador & Turner, 2015; Usoro, 2015). This

research also indicates that this is usually the goal for the projects of the company,

according to the interviews. However, I wonder if the goals are too unspecific and they

are not SMART goals (specific, measurable, achievable, realistic, time-bound) (Macleod et

al., 2012). Latham & Locke (1990) claim that goal setting is an effective and often critical

part of success. Pinto and Slevin (1987) argue that planning and goal setting is the most

critical factor for project success. It is important that the goals are clear and understood

by everyone in the team, and also other departments in the organization. A clue that a

goal is not in accordance with SMART goals can be found in the aftermath of the kick-off

meeting held by the company before the execution stage. The interviews indicate that

after that meeting, there is sometimes a little chaos, although it sounded as though the

interviewees wished that all of the people in the meeting would be on the same page

following it, and the schedule would be clearer. Projects that are well scheduled and

planned are more likely to be successful (Reymond & Bergeron, 2008).

The problem within the planning phase can also be separated into two aspects:

Firstly, the cost schedule is usually made in the planning phase, but often it seems the

budget is decided in the defining phase, as happened in the Barracks conversion case,

where a cost schedule was created before a design had been formulated

(Reykjavíkurborg, 2018). The researcher wonders if the cost schedule is made in the

78

defining phase just to get the project approved by the government in such cases, even

though the cost schedule was made without any design, and thus it must be unreliable.

In the Barracks conversion project, the mayor of Reykjavik, Dagur B. Eggertsson, signed

the project on behalf of the city (Reykjavíkurborg, 2018), enabling work to start. The

researcher argues that the mayor should have insisted upon a proper design being

produced to give him a better idea of exactly what he was signing for, and also to enable

a more precise cost schedule. This research indicates that when things are done this way,

the cost schedule is based on very weak ground. Sometimes the cost schedule is made

when the design is ready, but without engineers being included to calculate the load

capacity and how thick the walls should be. Without this information, it is impossible to

produce a precise cost schedule.

Secondly, issues can arise in the planning phase when the structure and project

schedule are planned, and these kinds of issues will undeniably manifest in the execution

phase and determine how the project will progress. A badly defined structure can lead to

chaos, and too much money and time being required to complete the project in the

execution phase. It was hinted in the interviews that sometimes the planning phase is

skipped, and the execution phase being commenced without any planning. This research

indicated that this happens due to clients wishing to start work on the project

immediately, however, it is the company’s role to bring the client and their ideas back

down to earth.

In the closing stage, the lessons learned document will be completed and there will be

a meeting for the larger projects in the organization which provided the interviewees for

this research. I would advise the organization to complete a lessons learned document

after every project, because the information that is yielded can lead to better results for

all projects throughout the project life cycle.

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Figure 5: How project management deviations manifest during the project life cycle and where it effects

the iron triangle that is often used to define project success (*scope and quality)

Scope*

Time

Cost

Defining

phase

Planning

phase

Execution

phase

Closing

stage

Time Time Time

Cost Cost Cost Scope* Scope* Scope*

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Figure 6: A visual answer to the overall question of this research.

• Optemistic• Live in uncertanty• Perseverance• Goals to unspecific

Culture

• Does not want to pay for project management

• PressureClient

• Informal rules• Lack of PM

education

Project manager

Deviation

Defining

phase

Planning

phase

Execution

phase

The client

is indecisive

Lack of

scope Lack of planning

The client does not want to pay

for the project management

The organization

lacks structure, the

rules are too informal

Lack of lessons

learned

The project life cycle

Closing

phase

Lack of structure

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6 Conclusion

Conclusions from the literature part of the research:

More than $10 trillion is spent globally each year on the construction industry, making it

one of the largest sectors in the world economy. That equates to 13% of the world’s GDP,

a percentage that is only predicted to get bigger, but the productivity has only grown by

1% in the last 20 years (McKinsey & Company, 2017). Prior research shows that 9 out of

10 construction projects overrun and there is no one explanation as to why, rather there

are many different factors that come into play. Projects in Iceland are no exception, Harpa

went 52% over the time and cost schedule, and Reykjavik City Hall ended up running

150% over schedule (Jóhannesson, 2014). Yet another example is the Reykjavík Energy

building, which ended up going 109% over what was initially planned and is not in use

today because of poor quality (Marselíusarson, 2017). It can be argued that it is extremely

costly when projects do not hold according to plan. A project is considered successful

when it is within time, cost, scope and quality and the client is happy with the outcome.

In order for construction projects to succeed they must be well controlled, organized,

monitored and evaluated together with employing the right people with the required

specialist skills (Raymond & Bergeron, 2008). Research has shown that factors that can

affect project deviation are poor organization, lack of scope, the client changing

requirements, financial troubles, weather, or world pandemics, such as COVID-19.

Each project goes through a process that is often called a project life cycle. This life

cycle refers to the entire project process, from when the idea for a project is formed to

the very end when the lessons learned from the project have been acquired. A project

can often be complicated because it can be a product that has not been created before

and to make the cost, time, quality and scope schedule there is need for good preparation

and the use of project management tools and skills to increase the likelihood of success

(Larson and Gray, 2017). It is also more likely to succeed if the project manager has the

required education and experience (Stevenson & Starkweather, 2010).

As previously stated, there is no one explanation as to why project deviation occurs,

but previous research has not examined how culture affects the outcome of projects. The

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national culture undeniably affects the organizational culture. The Icelandic culture is

characterized by perseverance, hard work, informal rules, uncertainty, and the slogan

“þetta reddast”, which means “it will sort itself out” and has often acted as a guiding light,

indicating it will all work out in the end. Research shows that Icelandic supervisors often

set high goals but there is a lack of structure when it comes to reaching those goals

(Aðalsteinsson et al., 2010; Minelgaite et al., 2018).

Conclusion from the qualitative part of the research:

1. Deviation in project management occurs mainly due to four factors. Firstly, the

Icelandic culture affects the project efficiency and the Icelandic culture

undeniably impacts the organizational structure. There is no lack of optimism or

having high goals for projects regarding finishing them within time, budget,

quality and scope. But often there is a lack of structure.

2. Secondly, the client has too much power regarding projects and sometimes the

client even brings their own project manager to the project, which can lead to

there being two managers in a project, and this can lead to chaos. The client is

often indecisive about what is required in the project, and does not understand

the importance of project management or want to listen to specialist advice.

3. Thirdly, the project manager plays a big role in project success, but there is a lack

of structure on how he should work. Often the project manager is not educated

enough which can affect the project outcome. Sometimes there is a need to

change project managers after a project has started, which can also affect the

project result and outcome.

4. Fourthly, unexpected events from the environment that are hard to control will

undeniably affect a project, such as COVID-19 and bad weather events. There

seems to be a general understanding from the clients, contractors, and others

who are influential in the project regarding this issue.

5. Deviations in projects manifest through the project life cycle, starting from the

defining phase where the client plays a big part. If the client does not define what

he wants clearly enough, there will be a lack of scope and that translates into a

lack of planning. There can also be a lack of goal setting in the defining phase, and

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the researcher wonders if the goals are too unspecific. In the execution phase it

sometimes happens that clients suddenly want to add, for instance, a roof top

bar, and that changes the entire design of the building. Such unplanned changes

lead to delays, which in turn leads to more cost and time in the project. In the

closing phase there is a clear lack of lessons learned to gain valuable insights into

how to improve future projects.

6. The results of this research indicate that the participants wished there would be

more structure around project management within the organization and that the

customers would understand the importance of their work and be more willing to

invest in proper project management.

Limitations

The main limitation of this study is that the sample is rather small and does not necessarily

reflect other engineering companies or project managers in the construction industry.

Qualitative research is also known for indicating experience rather that plain facts, so it

is hard to make pure statements on what works and what affects deviation in project

management. Another limitation is that the researcher did not choose the participants

and their boss advised them to participate. So, it is not known if they would have

participated if the circumstances were different. Some information was clearly not

expressed to the fullest as indicated in section 3.5, which does not give the

comprehensive oversight that is necessary to make this research as accurate as possible.

Also, the participants needed to fit the requirement that they were experienced project

manager or part of a project management team.

The interview frame was semi-structured so the sub-questions were not the same for

the participants (it depended on the flow), and therefore only a certain quantity of the

interview data can be compared between the participants.

Another limitation is that the interviews were recorded with video and voice (except

for two of the interviews which were voice only). This could lead to the participants being

more conscious of themselves and the information they were sharing. The researcher

also did not meet the interviewees face to face because of COVID-19. It can be argued

that meeting online and meeting in person is not the same and possibly some information

84

that only a human reaction can bring out was not obtained. To elaborate, possibly some

things are not expressed well via the computer, for example, body language, and it is also

possible to hide certain parts of the face during an online meeting.

Future research

Future research could focus on:

Ø Research another engineering construction company in Iceland and explore how much the organizational culture affects their project outcomes, structure and efficiency.

Ø How culture affects project management in the constructing industry and whether there is a causal relationship between culture and the effectiveness of project managers in the construction industry.

Ø Project managers in construction industry and the effect on the project if the project managers are changed during the project. Is there a possible delay because of this change? How does it affect the project?

Ø Compare a project which the organization is in sole control of from the start to the end, with a project in which the client is also trying to influence the project in some way, for example, by bringing his own project manager to the project.

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Appendix 1

Viðtalsrammi:

1. Kynning á mér og verkefni.

2. Mikilvægt að fá samþykki fyrir upptöku, minna á trúnaðinn fyrir starfsmanninn og

fyrirtækið.

Inngangsspurningar:

Hvað gerir þú hjá X?

Hver er þinn bakgrunnur?

Defining

• Hvernig fáið þið verkefnið til ykkar?

• Hvernig undirbúið þið ykkur áður en verkefni er hafið?

• Hvernig eru verkefnin afmörkuð?

• Eru gerð sérstök markmið fyrir hvert verkefni? Ef já – Hvernig? Ef nei – afhverju?

• Hvenig ákveðið þið hvaða hlutverk þurfa að koma að verkefnum?

• Hvaða kröfur gerir viðskiptavinurinn til ykkar áður en að verkefni er hafið?

Planning

• Getur þú lýst fyrir mér hvernig áætlanagerð fer fram?

• Hvernig vinnið þið kostnaðaráætlun?

• Hvernig tryggið þið gæði verkefnis?

• Er áhættumat framkvæmt fyrir verkefni? Ef já, hvernig? Er það framkvæmt fyrir

öll verkefni?

• Hvernig áætlið þið upphaf og endi verkefnis?

• Hvenig ákveðið þið hverjir koma að verkefnum?

• Hvernig ákveðið þið hlutverk hvers og eins í verkefnunum?

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Executing

• Hvernig er verkefninu fylgt eftir?

• Hvernig bregðist þið við ef verkefni er á eftir áætlun?

o Kostnaði?

o Gæði ekki í lagi?

o Vantar aðföng?

• Hverning bregðist þið við óvæntum uppákomum/breytingum frá ytra

umhverfinu? Enn innra umhverfi?

• Hvernig spáið þið fyrir um framvindu verkefnisins?

Closing

• Getur þú lýst fyrir mér hvernig ferlið er þegar þið afhendið viðskiptavininum

verkefnið?

• Eru verkefni almennt að fylgja upphaflegri tímaáætlun?

o Kostnaðaráætlun?

o Gæðaáætlun?

o Markmiðum fylgt eftir?

• Hvernig dragið þið helst lærdóm úr fyrri verkefnum?

• Hvar er þekkinging geymd (er til miðlægt kerfi?) og hvernig er hún notuð við

úrlausn mála til framtíðar?

• Er verið að fylgja því eftir því að starfsmenn nýti sér þessa miðlægu þekkingu sem

dregin er af fyrrum verkefnum almennt?

• Þau verkefni sem fylgja áæltun eftir, hvað einkennir þau frekar en önnur?

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Appendix 2

Coding categories (1st draft)

National culture (regarding PM)

• Doing it our way

• Communication with the client

o The client is “naughty”

§ Where is the structure? (a small market in Iceland?)

§ Why are there no formal rules? (there are formal rules!)

• Is the client the boss? (will they loose their clients?)

• Different project managers

o No formal rules! (but still there are formal rules, but it depends on pm how

they use them)

§ How many are educated? (is there a casual relationship between?)

• Lessons learned

Organizational culture (regarding PM)

• Cost schedule, taking much space in the interviews (why? – the most important

issue?)

• Unexpected cost

o Day bills

• Quality

o Why does the client understand that better?

§ Is it always this good? No.

• How the company obtains projects

o Networking??

§ Established customers

• The project processes

• Unexpected events

o COVID-19, weather, imputes missing, mistakes that needs to be fixed

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Appendix 3

An example of the thematizing process