Relationship Management and the Management of Projects

Hedley Smyth

• Publisher: Routledge
• Year: 2014
• eBook ISBN: 9781134506682
• Topic: Business
• Subtopic: Business General
• Index: Business

Relationship Management and the Management of Projects is a guide to successfully building and managing relationships as a project manager and in the project business.

Relationship management is a core skill for any project business to develop capabilities and manage the interface with projects, providing guidance to project managers as they negotiate with business partners and coordinate between business functions. Whatever the structures and procedures an organization has and whatever the project management tools and techniques, they are only as good as the hands they are in. Yet relationship management, though a well-established discipline, is rarely applied to the process-driven world of project management.

This book is a much-needed guide to the process of enhancing these skills to boost firm performance, team performance and develop collaborative practices. Hedley Smyth guides you through the processes of relationship management examining the theory and practice. This book highlights the range of options available to further develop current practices to ensure a successful relationship management in all stages of a project's lifecycle.

Relationship Management and the Management of Projects is valuable reading for all students and specialists in project management, as well as project managers in business, management, the built environment, or indeed any industry.

1
In the Beginning There are Relationships

Introduction

This book is about relationships and their management. It is located in the social space of conduct for project businesses and projects. Therefore, it forms part of organizational behaviour, which is how the features of the organization affect the way people work. It also resides at the interface between organizational behaviour and systems integration, where systems are high-level processes drawing together activities to deliver value to customers profitably. Collaboration, integrated teams and forms of relational contracting, for example partnering and supply chain management, have all received a great deal of attention in the management of projects over the last two or more decades. Teamwork, learning, social and psychological contracts and other aspects of organizational behaviour have also received attention. The relationships between people, through which value is created, have been overlooked in comparison to their significance in the performance of projects and their benefits. Success in project management is based more on human factors than on tools and techniques (e.g. Slevin and Pinto, 1986; Pinto and Slevin, 1988; Morris and Pinto, 2004; Pryke and Smyth, 2006). It is the relationships that articulate project teams; the tools and techniques of project management are means. It is the relationships that articulate the interface with the project business, supported by systems with specific procedures. It is the relationships that articulate the interaction with customers and other network organizations.

Most project businesses are unaware of the totality stored in the capabilities of their staff. Directors will say ‘people are our biggest asset’ and then fail to support them and hardly invest in their collective development. Employers worry that the best staff will be enticed to another employer, hence the reticence to invest in their development. It has been found that only 3 per cent of companies effectively develop and progress their staff: Developing and exploiting creative capabilities calls for a systematic strategy (Robinson, 2001: 3). Managers leave much to individual responsibility, in ways that are unsupported and without authority or sufficient empowerment. Staff remain unaware of their full creative capacities, and taking initiatives can have adverse consequences that look risky to individuals. One of the most creative means is the interaction between people. Interactions are enriched by their frequency, how well these are organized and how well people get on working together. These serial interactions are called interpersonal relationships, and where groups of actors, especially key decision-makers, represent their employer, these form the basis of inter-organizational relationships. The management of interpersonal and inter-organizational relationships is relationship management. Relationship management is more than effective interpersonal relationships. Relationship management is the systematic approach to managing intra-organizational and inter-organizational relationships articulated by procedures and behavioural codes. It has gradually been becoming part of the management of projects (MoP) through systematic strategies and action, albeit largely partial at present.

The moves towards relationship management have been tentative and incremental in both research and practice. There are two main reasons. The first is that relationships are always located in context. People behave differently because individuals and groups are simply different, which is the human agency issue where will and choice lead to unpredictable action and behaviour (e.g. Hartshorn, 1997). Both behaviour and action are influenced by the organization of the project business, the project organization and its goals. They are influenced by the project content and task conduct. Relationships are also located in the broader context of market, regulatory, political and other institutional factors. Yet that is precisely why they need managing. The diversity of influences and forces render unmanaged relationships high risk (Nooteboom et al., 1997; Das and Teng, 2001), yet central to excellent performance of project businesses and the performance of projects for customers and other stakeholders (Pryke and Smyth, 2006). Thus, context does not exclude systematic guidance to relationship formation and behaviour.

Relationships cannot be structured in deterministic fashion by management. Human agency counters this outcome, but they can be guided. Systematic guidance and behavioural procedures exert some control and are designed to do just that, yet do not exclude human agency. They provide potential consistency through compliance and room for individuals and teams to shine and, in so doing, try to reinforce what is ‘good’ and squeeze out much of the ‘bad’. Hence, there is explicit or implicit structuring in relationships that guide relationship formation and development (cf. Giddens, 1979, 1981). There is a delicate balance between facilitation and control. Dictatorial measures to control behaviour and action are inefficient and ineffective, demotivating the people from whom management are trying to get the best. Draconian measures are also morally inappropriate. Yet, relationships cannot be left to individual responsibility alone. Facilitation is one of the management tasks in practice.

The second reason is that researchers and management seem to be somewhat uncomfortable addressing relationships directly. Context is one factor, the concern for being too dictatorial is rightly another concern, but the third is that it requires time, effort and investment from management. This is compounded by market factors that encourage project businesses to keep investment, overheads, indeed all transaction costs to a minimum (e.g. Linder, 1994; Gruneberg and Ive, 2000). This is effective short-term, but long-term, it adds to administrative and legal costs, reduces effective cash flow management and can render the project business a liability to the customer or client rather than an asset. Project businesses have been described as hollowed-out firms (Green et al., 2008) with insufficient attention being given to human issues (Leading Edge, 1994; cf. Bredin and Söderlund, 2006). Investment can lead to opportunities to develop capabilities to add value and save costs.

Relationships have been providing an increasing focus. Zou et al. state: A relatively new management approach – relationship management (RM) has gained increasing attention from both researchers and practitioners (2014: 266). Reliance upon contractual relations requires support from ‘established relationships’ prior to any project (Cheung et al., 2006); hence, a relationship management approach is expanding its field of application (e.g. Teicher et al., 2006; Cheung and Rowlinson, 2011; Zou et al., 2014; cf. Zineldin, 2004). There is a close link with other areas of management in project management research and practice. Governance especially through authority and trust, systems integration, teamworking and leadership are obvious examples. External ‘drivers’ arising from relational contracting initiatives such as partnering and supply chain management have advocated collaborative and cooperative working, where cooperation concerns coordination and integration, arising from interdependencies between organizations or their members (e.g. Lawrence and Lorsch, 1967a; 1967b) and collaboration develops out of cooperation at a more sophisticated level to integrate the contributions of differentiated functions under conditions of high complexity and uncertainty (e.g. Anvuur and Kumaraswamy, 2008). Systems draw together at a ‘high level’ activities from other functions and their subsystems internally and externally with the aim of integrating the totality. Integration comes about through sets of procedures, which are called coordinating mechanisms as mid-level procedures. They are defined as dynamic social practices comprising prescribed standards, defined processes, behavioural programmes and other procedures that are relatively stable and guide practice (Jarzabkowski et al., 2012: 907). Some procedures are routines, which can be lower level ‘how-to-do’ activities (Parmigiani and Howard-Grenville, 2011) that include specified actions, codes of conduct that induce and are defined as regular and predictable patterns of behaviour (Nelson and Winter, 1982: 14). Relationships feed into these systems and have both coordinating and routinized roles. To the extent that the systems, their coordinating mechanisms and routines are effective as inputs, they yield capabilities and support competencies as organizational outputs in project businesses and teams that can be decisive in the marketplace for delivering value and realizing profit.

Relationship management provides the focus for the book, and the evidence will be presented to support the case outlined. Relationships are therefore essentially practice based due to context, yet there are theories and concepts that can be mobilized to guide the structuring of relationships, giving room for manoeuvre for individuals and groups to develop their strengths in behaviour and action. Where effectively developed relationships are dynamic, whether initially driven by interpersonal behaviour, market drivers, internal initiative and supported by systems that cascade to the level of behavioural programmes and codes of conduct, meeting bottom-up influences of individual action, behavioural influences, norms and organizational culture as interactive and iterative forces of relationship development. Where there is will to develop effective relations and systems to support their development relationship management feeds project management functions and nurtures positive action. This gives rise to a consistent service delivery on a project and across projects via the programme management, which bundle projects together to expend resource on coordinated project management methodologies and capability development to improve performance, provide continuity and consistent service provision. It offers increased opportunity to add value for the customer or client and may yield higher job satisfaction for those involved, thus further enhancing motivation and performance.

Relationships are thus contingent upon what has gone before. There are organizational path dependencies in terms of context and in themselves; thus a contingent and recursive trajectory for development exists, which is far from mechanistic, yet limits the options. Therefore, relationship management put in place systems and procedures to favour certain sorts of options that suit the project business and the market in which it positioned.

Relationship management draws upon a disparate set of concepts within the management literature, for example from governance, systems integration, relationship marketing, group emotional intelligence and organizational culture, as well as being connected in ways to be examined later with relational contracting in transaction cost economics. It is closely related with other functional project management methods and tools as these implicitly embody relations in their operation. There is a conceptual management case for pulling these threads together. Effective relationship management requires investment to spread, embed and coordinate across the project business organization. Projects and their teams are frequently socially and spatially dislocated from the rest of the project business, hence the ‘corporate centre’, which means that relationship management cannot be assumed to be automatically transferred from the ‘corporate centre’ into the project and the temporary multi-organizational (TMO) project team (Cherns and Bryant, 1984). Projects are temporal, and their organization is temporary, and therefore, more enduring processes are needed to span projects at the corporate or programme management levels, that is, managed by the project business (cf. Jones and Lichenstein, 2008).

Relationships are founded upon trust. Good relationships build commitment, which provides a key relationship indicator (Wilson, 1995; Jones et al., 2011). Strong relationships, sometimes referred to in terms of relationship ties and bonds, help solicit personal and social identification with a goal, purpose and with an organization. Much of the significant content of relationships and their management falls between the interpersonal level in socio-psychology and organizational behaviour in management research, and it is this middle ground that has received scant attention in research and a great deal of practice. In research, Kreiner (1976, 1995) probably comes closer than anyone, but then backs off as others seem to do. Pryke (2012) looks at relationships, including those between people, but not relationship dynamics and how they function.

The long-term trend in practice has been towards flatter organizational structures, and decentralized management creates scope for relationship development linked directly to performance (Mayer et al., 1995; Jones and George, 1998), implying a greater reliance upon relationships and their management. The long-term trend is towards increased outsourcing to specialist providers emphasizing the need for effective internal relationships to help coordinate and integrate inter-organizational working. Outsourcing links forward to supply chains, their management and industrial networks, which are considered during the book. The increasing complexity of projects brings relationship management increasingly into focus as project management tools and techniques need subtle application and articulation, especially from the perspective of the project business occupying the role of systems integrator (Davies et al., 2007; Smyth, 2015). Techniques predicated upon simple cause-effect outcomes and linear models for managing projects are insufficient for purpose and relationships provide important mediation, enabling and leverage of appropriate outcomes. Effective relationship management at the project level requires management at the level of the project business to achieve these ends.

Relationships provide a basis of social coordination mechanisms (Jones et al., 1997; Martinsuo and Ahola, 2010). Kumaraswamy et al. (2005) identified the most important relational project team building factors as the capabilities and competencies the project business has built, the learning and training policy, considerable care taken in the selection of project partners and responsibility delegation, previous interactions and trust building, and finally compatible organizational culture and long term focus. All five factors have been shown to have beneficial relational outcomes. As relationships are central to value creation, it would be expected that all five factors are indirectly influenced through relationships, but the last three are dependent upon firm and inter-organizational relational inputs. This echoes the work of Davies with others (Davies and Brady, 2000; Hartmann et al., 2010; Artto et al., 2011). In inter-organizational relationships, three stages of bonding have been proposed: cooperation, collaboration and coalescence (Thompson and Sanders, 1998). Other stages have been proposed (e.g. Boddy et al., 2000; Donaldson and O’Toole, 2001). Dwyer et al. (1987) point to the iterative nature and therefore development is not mechanistic, nor linear. Relationships are contingent, iterative and recursive in development. Consistent effectiveness can lead to depth of relationship development and maintenance to the extent these become embedded, but this is typically not automatic, management intervention needed to achieve embeddedness. Nor is the embedded nature of relationships necessarily ‘good’ as biased and corrupt practices can become embedded and managed accordingly. Generally management seeks to enhance what is seen as ‘good’ as there is a business case where short-term and individualistic agendas are not too dominant or where the firm is used to bestow individual power in a broader social domain.

Inter-organizational bonds in the form of economic exchanges or governance structures are embedded in interpersonal and social relationships (Heide and John, 1990; Young-Ybarra and Wiersma, 1999). Schakett et al. (2011) found social bonds or ties account for 44 per cent of service quality variance, whereas governance accounts for 36 per cent and economic bonds account for 27 per cent of service quality variance. Relationships are about performance as a factor and facilitator of effective and efficient performance. An important driver is the alignment between internal relational capabilities (Ritter et al., 2004) in order to help achieve successful outcomes (Meyer et al., 1993; Miller, 1996). Yet scarce resources limit investment and there is no single way to manage relationships. Focus is a management matter, drawing from different theoretical and applied approaches. Project governance is said to structure relationships in project management (Müller, 2011). This view lends a great deal of influence to governance as a structuring mechanism of coordination. How actor relationships are conducted on the ground may be misaligned in practice with structuring from the ‘corporate centre’ of the project business. It lacks sufficient detailed management of relationships to configure project services and performance. Relationships are interactive and the actions of one affect others who act back to moderate relationship development across a group, team or network. The evolution can lead to inconsistent behaviour. While behaviour cannot be standardized, it can be regularized to a degree. Relationship management across departmental boundaries and teams, and especially organizational boundaries and in networks are subject to emergent behaviour and instability, yet need relatively stability and consistency for effective performance. Relationship management practices and systems established at the corporate level and applied in projec...

Table of contents

• Cover
• Title
• Copyright
• Dedication
• CONTENTS
• List of figures
• List of tables
• List of fact boxes
• Preface
• Acknowledgements
• List of abbreviations
• 1 In the beginning there are relationships
• 2 Relational contracting
• 3 The market, marketing and relationship management
• 4 Emotional intelligence and relationship management
• 5 Trust and relationship management
• 6 Organizational culture
• 7 Organizational behaviour and systems integration
• 8 Project business and project decision-making
• 9 Technical and technological task management and service provision
• 10 Moral matters and project business
• 11 Project pervasiveness in society and the management of projects
• 12 The social space of project conduct
• References
• Index