Survival and Sustainability as Challenges for Projects

Proceedings International Expert Seminar in Zurich on February 2010
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IPMA Expert Seminar 2010

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IPMA Expert Seminar 2010

Survival and Sustainability as Challenges for Projects
Proceedings of the International Expert Seminar in Zurich, Switzerland on 18th – 19th February 2010
Organized by the Swiss Project Management Association (spm) in cooperation with the International Project Management Association (IPMA)

Edited by Hans Knoepfel

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Organisation
Tom Taylor, Speaker and Chairman of the Seminar Mehran Sepehri, Speaker and Moderator of Stream 1 Gilbert Silvius, Speaker and Moderator of Stream 2 Rodney Turner, Speaker and Moderator of Stream 3 Daniel Scheifele, Speaker, Program Committee Chairman, Sponsoring Hans Knoepfel, Speaker, Relations, Papers, Project Manager Akeel Akbar, Speaker John-Paris Pantouvakis, Speaker Reem Khalid Alzamil, Contributor Spyridon Tsallas, Contributor Rui Wagner R. Sedor, Contributor Peter Taylor, Contributor Gilman Chi Keung Tam, Contributor Jesus Martinez Almela, Contributor Daniel Baumann, Project Team, Communication Beat Dietziker, Project Team Marcel Thoma, Project Team Rüdiger Geist, Seminar Reporter

ISBN xxxx © 2010 International Project Management Association (IPMA)
P.O. Box 1167, NL-3860 BD Nijkerk, The Netherlands, www.ipma.ch All rights reserved (including those of translation into other languages). No part of this publication may be reproduced in any form by print, photo print, microfilm or any other means without written permission by IPMA.

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Content
Page

General
Preface Markus Staeuble and Brigitte Schaden .........................................................................................9 Survival and Sustainability as Challenges for Projects Tom Taylor .................................................................................................................................11 Sustainability and Competence Elements Hans Knoepfel ............................................................................................................................20 Green.City.Zurich Daniel Scheifele ..........................................................................................................................29 Knowledge management in large project orientated organisations Akeel Akbar ................................................................................................................................43 The contribution of health and safety management to sustainable development John-Paris Pantouvakis and Antonios Panas .............................................................................52 How project managers increase the sustainability of their projects Reem Khalid Alzamil ................................................................................................................63

Role of the investor
Critical Success factors in construction projects: Owner/investor's perspective Mehran Sepehri...........................................................................................................................89 Sustainable governmental portfolio management in practice: Conflicts & bargaining Spyridon Tsallas........................................................................................................................103 Itaipu Binacional - Moving forward forward regional sustainability Rui Wagner R. Sedor ................................................................................................................113 Workshop report Group 1 .....................................................................................................................................126

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From expectations to results
The concept of sustainability and its application to project management AJ Gilbert Silvius, Jasper van den Brink and Adri Köhler.......................................................130 The Art of Productive Laziness Peter Taylor...............................................................................................................................145 Workshop report Group 2 .....................................................................................................................................155

Responsibility for sustainability
Responsibilities for Sustainable Development in Project and Program Management J Rodney Turner........................................................................................................................161 Sustainability Competence Requirements for Project Managers Gilman Chi Keung Tam............................................................................................................175 Agribusiness: Primary production, retail and distribution Jesus Martinez Almela..............................................................................................................186 Workshop report Group 3 .....................................................................................................................................222 Portraits of moderators, speakers and contributors .................................................................................229

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Authors index
Page Akbar, Akeel, United Kingdom ...............................................................................................43 Alzamil Khalid, Reem, Saudi Arabia ......................................................................................63 van den Brink, Jasper, Utrecht University of Applies Science, The Netherlands .................130 Knoepfel, Hans, Rosenthaler + Partners, Switzerland ............................................................20 Köhler, Adri, Utrecht University of Applies Science, The Netherlands ...............................130 Martinez Almela, Jesus, Bioagroprojects, Spain ..................................................................186 Panas, Antonios, National Technical University of Athens, Greece .......................................52 Pantouvakis, John Paris, National Technical University of Athens, Greece ...........................52 Schaden, Brigitte, IPMA President, Austria ..............................................................................9 Scheifele, Damiel, Losinger Construction Ltd. .......................................................................29 Sedor, Rui Wagner R., Parana State Technological University, Brazil.................................113 Sepehri, Mehran, Sharif University of Technology, Tehran, Iran ...........................................89 Silvius, AJ Gilbert, Utrecht University of Applies Science, The Netherlands ......................130 Stäuble, Markus, Credit Suisse, Switzerland .............................................................................9 Tam, Gilman Chi Keung, Singapore, SKEMA Business School, Lille, France....................175 Taylor, Peter, Siemens PLM Software, United Kingdom ....................................................145 Taylor, Tom, Buro Four, United Kingdom .............................................................................11 Tsallas Spyridon, Hellenic Republic, Greece .......................................................................103 Turner, J Rodney, SKEMA Business School, Lille, France .................................................161

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Preface
Markus Staeuble and Brigitte Schaden

The International Expert Seminars of IPMA started in the Seventies of the last century and were held every year in the Eighties at the Gottlieb Duttweiler Institute (GDI) near Zurich. With the IPMA Expert Seminar 2008, IPMA and spm had decided to revive this kind of competence development event for the project management experts. No other product including teleconferencing and collaborative work on a platform could replace the discussions in our groups. This opinion was confirmed by the participants during the IPMA Expert Seminar 2008. IPMA and spm appreciated the high quality of the participants, their contributions, interaction and exchange, as well as the organisation. They decided to hold this IPMA Expert Seminar in February 2009. A mayor advancement in project, programme and portfolio management during the recent years is to put a higher attention and assessment effort to the behavioural and contextual competences. Much more practical and theoretical work has to be done and more evaluations have to be made in these new fields of project, programme and portfolio management. The interest and quality of the Expert Seminar was growing again, this year. IPMA decided to hold the next IPMA Expert Seminar in February 2011.

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Survival and Sustainability as Challenges for Projects – Some Thoughts and Activities
Tom Taylor, Design by Rob Dee, Illustrations by Ed Rhodes

Introduction
I have been observing the survival of many organisations, projects and countries at first hand for many years but matters have been really serious in last few years. Throw in a world on the edge of environmental crisis and things become interesting. Here are some personal thoughts on situations and permutations.

Commentary on Slides
Project Managers have an interesting and complex mix of pressures and views – Slide 4. Recessions and economic crisis have been predominant global issues in the last years. Yet not everyone has the same perspectives or situations. The Boom : Gloom cycle – Slide 5 is a continuous process and everyone may be at different stages. In fact they are likely to be at several different stages at the same time – for their organisation, within their service / profession as a niche of location or specialism, across their sector, as a nation or community. Is it appropriate for managers of projects to have an understanding of these circumstances for their team members, supply chain and wider stakeholders? Within these Boom : Gloom cycles all these vehicles also have options of prosperity, survival, recovery or demise – Slide 7. In most projects and programmes the participants will be at different situations and have different outlooks. Outlooks will depend on whether the parties see themselves addressing Recession Survival or Recession Recovery – Slide 8 – or whether they have the foresight and courage to look “beyond.” There can be feelings of universal uncertainty, concern and foreboding. A range of such disruptive possibilities are scheduled – Slides 10 and 11 – with options on timings from now to 10 years to never. But have there not been such disruptions throughout human history? What is different these days? Could it be fast news, domino effects, collective difficulties / globalisation, democratic processes? – as Slide 12. Indicators are important for monitoring and managing. In these circumstances they include Customer Confidence, Business Confidence, Official Indicators and Interpretation – as Slide 13.

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For those who are in recessional financial difficulties recovery is often an Economic matter. But for a more holistic approach are there other aspects – such as cultural, environmental, moral, employment, business, etc. – as Slide 14. And specifically within Environmental aspects is this part of a range of Social Responsibilities which need to be balanced and prioritised – as Slide 16. Within projects and programmes Sustainability aspects can take many forms which may need to go back to Brundtland basics – as Slide 17. On achieving or maintaining raw survival there are a variety of project and programme options to contribute to sustainability – from specific attach projects through to citizen obligations – as Slide 18.

Conclusions
So my conclusions might include: • • • • • • The world is in cycle of Boom and Gloom rather than steady state. Different organisations are at different circumstances. Managers need to recognise and be sensitive of these matters. After survival a recovery is the next target but may be insufficient – “beyond” may be better target. Sustainability, the Environment and Green Issues are some of a number of key criteria – within recovery aims and within social responsibilities. Sustainability needs to be considered in context, within projects, across programmes.

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2.

C o n te n t s
In tro d u c tio n s B a c k g ro u n d F o re g ro u n d R e c o v e ry S u s ta in a b ility C o n c lu s io n s

w w w .d a s h d o t.c o .u k

4.

Introductions – target delegates
People interested in modern applications of Project and Programme Management Caring persons as managers, directors, employers, senior staff Conscientious employees, workers, students Concerned citizens of the world People in unique combinations of circumstances, with diverse interests and conflicting needs as:individual, organisation, services, niche, sector, nation and more.
www.dashdot.co.uk

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5.

Boom : Gloom Cycle

Organisation / Service / Niche / Sector / Nation
www.dashdot.co.uk

6.

Boom : Gloom Recovery Shapes

www.dashdot.co.uk

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7.

Boom : Gloom Cycle – Some Direction Options

Organisation / Service / Niche / Sector / Nation
www.dashdot.co.uk

8.
View
Choice Approach

Background : Recession Survival & Recovery … and Beyond
Recession Survival
“Forced” Expedient Reactionary Short Term Survival

Recession Recovery
Optional Focussed Proactive Medium & Long Term Prosperity Profitable Years Right Opportunities To Downturn

…and Beyond
Pivotal Balanced Holistic Misty Proportionality Partial Flexible Right Society Threshold recognition

Decision Making Horizon Priority

Financial Outlook Break Even Timescales Search for Next threshold Weeks/Months Any Opportunity To Upturn

www.dashdot.co.uk

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10.

Foreground: Further Crises and Influences – 1 of 2
Now! – 1y – 5y – 10y - Never! ongoing decline further financial/ busines catastrophes non-existent or weak economic growth major war or series of military encounters terrorist attacks, alarms, disruptions industrial toxic accidents accelerated consequences of global warming pandemics – people, animals, transport, food population explosions and corrections
www.dashdot.co.uk
Lo = 0 Hi = 9 N 1y 5y 10y N

11.

Foreground: Further Crises and Influences – 2 of 2
N 1y 5y 10y N

major social unrest, civil strife, disharmony collapse of primary business support – banking, insurance, investment markets, pensions, saving regimes, the internet raising of trade barriers failure of public sector services or utilities other? – regulation, tax, politics, fraud, fibs + non man made occurrences
– earthquakes, volcanoes, tsunami, extreme weather, forest fires, foot and mouth disease etc.

combinations or concerns of the above
www.dashdot.co.uk

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12.

Foreground: Feedback Collective views please : national outlook
Notes: Crisis has always been happening! What is the difference this time? Fast news / media / immediacy? Domino effect? – Difficult to be unaffected? Collective difficulties? – Globalisation! Democracy? – Public, private, third sectors?

Feedback please
www.dashdot.co.uk

13.

Foreground: Indicators – Confidence and Official Figures
Customer Confidence enquiries, orders, extensions, payments, official statements, less formal information. Business Confidence staffing, purchasing, remuneration, luxuries, secured work, bank balance. Official Indicators Bank of England, government statements, National Statistics, GNP, RPI, CPI, RPIX, BDI, Profit Warnings. Interpretation Media view, news, sensationalising, political, sound bites, spin, consumerism
www.dashdot.co.uk

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14.

What sort of Recovery? …and Beyond? – Agenda
An Economic Recovery? – focussed on growth and prosperity A Cultural Recovery? – including Social Respect and understanding An Environmental Recovery? – to avoid mankind forfeiting the tenancy A Moral Recovery? – where professionalism and ethical behaviour is the norm An Employment Recovery? – with suitable jobs for people who want to work. A Business Recovery? – when the prime focus is the customer Other

www.dashdot.co.uk

16.

Sustainability, the Environment and Green Issues – in context part of Social Responsibilities?
fight against poverty / debt, equal opportunities, health, safety and welfare – for all, local community contributions, security in society, worthy projects,
www.dashdot.co.uk

probity and fair trading, local sourcing, public relations, people, education and development, child labour and treatment, other

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17.

Sustainability, the Environment and Green Issues – Scope
climate change, global warming, extreme weather, pollution, bio-diversity eco-systems clean energy energy efficiency finite resources wastefulness recycling water shortages food shortages health regimes regulation compliance = sustainable development? = back to Brundtland?
www.dashdot.co.uk

18.

Sustainability, the Environment and Green Issues – PPM Options Projects to attach the issues – wind farms, electric cars Projects to deal with consequences – flood defences, artificial trees for carbon capture, Projects with contributions – all projects? Managing sustainability – how / not what? Organisational approach Individuals as citizens

www.dashdot.co.uk

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IPMA Expert Seminar 2010

Sustainability and Competence Elements
Hans Knoepfel

1. Introduction
Project management quality is defined as fulfilling the requirements agreed for the management of the project. The best condition of the project organisation for achieving this goal is that all individuals, teams and providers in this organisation are competent. Competence is "demonstrated ability to apply knowledge and/or skills, and where relevant demonstrated personal attributes" ( ISO/IEC 17'024, 2003) to be successful in a certain role and field of responsibility in practice. The principle goal of project management is to achieve the project quality agreed on.

Q
OR
required realised required

Q

realised

Figure 1: Quality agreed on: The principle goal for projects (Knoepfel, 2005) The requirements for an individual project are transposed to measurable project objectives.

Fitness for use

Social compatibility

Economic performance

Safety and security

sustainability

Environmental compatibility

Figure 2: Example for the components of the project objectives (urban transportation)

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The survival of the organisations that are engaged in a project is a condition for working on sustainable solutions. Project results may be excellent for the long range, but the project investments must also be undertaken in the short range and the exploitation must be carried on in the medium range. The purpose of the projects is to change the existing systems to become fit for the future. Are the projects the "enemies" of the sustainability? The sustainability is the survival in the long range. Best project results provide the opportunities for sustainability - for a limited future, as a rule.

2. Conceptual aspects
Both the survival and the sustainability relate to the TIME dimension. • • • • • • • • • The survival is related to urgency, short range survival. The sustainability is related to endurance, longer range "survival".

Often, three ranges are used to structure the TIME dimension for the management Short range (a few weeks to about one year) Medium range (a few years) Long range (many years, decades, centuries)

Both the survival and the sustainability relate to the TIME dimension. The survival is related to urgency, short range survival. The sustainability is related to endurance, longer range "survival". First years of usage (after the project finish, outcomes) Life span of the project results (usage, maintenance, changes, impacts)

The difference between medium and long range is that the system will be maintained and changed, as a consequence of changes of context and usage, again and again, while in the first years of the usage, normally, the maintenance is minimal and the adaptations are limited. Projects are undertaken to create or develop or change different kinds of systems, subsystems and components • • • • • Physical objects, substances Plants, animals Humans, people Data, information, knowledge Combinations (e.g. car with driver and passengers, organisation, planet)

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Each system, subsystem and component has a life time during which it lives, is managed, used, maintained and may be recycled or dissolved. Each project during the life time should be based on a strategy and business plan of the project owner (and to some extent also other project stakeholders). Different kinds of strategies can be observed: • Simple: Often simplified compared to a profound analysis, leading to a strategic decision quickly and focussing on quick wins (in unstable situations, for example), enforced directly and strongly Analytical: Using success parameters, prepared through discussion in and involvement of a core group, leading to medium time project objectives and assumed contextual conditions, controlled Evolving: Based on history and scenarios, prepared with a large involvement of different views, aiming for long time decisions, implemented with changes

These kinds of strategies have a tendency to focus on short, medium or long time project results.

Strategic management of permanent organisation Systems management of permanent organisation
Life cycle management of this system

Project for new system (no project) Project for maintenance Project for change Project for recycling

Use Operation and supervision of the system

Figure 3: Life span of project results (Knoepfel, 2005) The age of each system, subsystem and component may be limited by its • • Physical life Functional life

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• • • • • • • • •

Economic or valuable life Legal or valid life Combinations, e.g. useful life

The conceptual aspects can be summarized as follows Systems have a life time which is a subject of discussion in the related projects Sustainability is the capacity to endure There is also a capacity to change and to disappear The value of a system, subsystem or component varies during its life span Sustainability is not an end in itself, but a view for systems management The goal of project management is to achieve the project objectives agreed on, in the short, medium and long term

3. Applications
A key sustainability task is to design the estimated life time of all new systems, subsystems and components that are established with the project, for example • • • • • • • • New apartments: Structure, windows, kitchens, carpets, furniture New infrastructure: surface transportation: Bridges, dams, rails, electric supply, wagons, traffic control, passenger information New plants and animals: Nature, parks, gardens, crops, cattle, species New people: employees for different disciplines, managers New information basis: Knowledge in different areas New consumer goods: Food, fashion etc. New services: Supply packages of the organisation New markets Regions, products

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The life time of new products depends on • • • The availability and cost of inputs The appreciation and price of the product The efficiency and cost of producing the product with the system

The flexibility for use variation and adaptation to context changes increase the life time. Innovation determines the functional and economic life time, terminated the life of the preceding product. Sustainability beyond the useful life is not feasible. The second key sustainability task is to design the estimated cycle times for maintaining/ developing/ updating or replacing or extending (MRE, DRE, URE) the existing systems, subsystems and components that are changed with the project, for example • • Existing apartments: MRE times of structure, windows, kitchens, carpets, furniture Existing infrastructure: surface transportation: MRE times of bridges, dams, rails, electric supply, wagons, traffic control, passenger information Existing plants and animals: MRE times of nature, parks, gardens, crops, cattle, species Existing people: DRE times of employees for different disciplines, managers Existing information basis: URE times of knowledge in different areas Existing consumer goods: MRE times of meals, clothes etc. Existing services: MRE times of supply packages of the organisation Existing markets MRE times of regions, products

• • • • • •

The maintenance enlarges the technical life, the question is: How much maintenance is optimal? The adaptation enlarges the functional (and economic) life, the question is: How much adaptation is optimal? The third key sustainability task is to estimate the value of systems, subsystems and components during the life time, as a basis for decisions.

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Figure 4: Value variation of systems, subsystems and components over their life time The meaning of the curves is a) value decrease without changes (continuously or suddenly) b) value decrease and increase with maintenance (first part same as a) c) initial value increase due to increase of external recognition d) sustainable value increase in spite of or due to age (master piece) The life cycle planning and realisation can be summarized as follows • • • • Estimate of the useful life time of systems, subsystems and components Plan for adaptations, replacements, recycling and disposal Calculate the value and cost of alternative designs Manage the system: facility management, preservation of species etc.

One project rarely can change or destabilise the global systems. Project results can survive for a longer or shorter time. Sustainability conditions to projects are mainly related to the project context. Sustainability management in projects is done by including contextual conditions.

4. Competence
The IPMA ICB® Version 3.0 (IPMA Competence Baseline, 2006) contains basic terms, tasks, practices, skills, functions, management processes, methods, techniques and tools that are used in good project management theory and practice, as well as specialist knowledge and experience, where appropriate, of innovative and advanced practices used in more specific situations.

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1.01 1.02 1.03 1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20

Project management success Interested parties Project requirements & objectives Risk & opportunity Quality Project organisation Teamwork Problem resolution Project structures Scope & deliverables Time & project phases Resources Cost & finance Procurement & contract Changes Control & reports Information & documentation Communication Start-up Close-out

2.01 2.02 2.03 2.04 2.05 2.06 2.07 2.08 2.09 2.10 2.11 2.12 2.13 2.14 2.15

Leadership Engagement & motivation Self-control Assertiveness Relaxation Openness Creativity Results orientation Efficiency Consultation Negotiation Conflict & crisis Reliability Values appreciation Ethics

3.01 3.02 3.03 3.04 3.05 3.06 3.07 3.08 3.09 3.10 3.11

Project orientation Programme orientation Portfolio orientation Project, programme & portfolio implementation Permanent organisation Business Systems, products & technology Personnel management Health, security, safety & environment Finance Legal

Figure 5: ICB Competence elements (1 PM-technical, 2 PM-behavioural and 3 PM-contextual range)

The survival issue has to be addressed directly in the risk and opportunity management (element 1.04). Related competence elements are mainly 1.02 Interested parties (project owner in particular), 1.14 Procurement and contract, 2.12 Conflict and crisis and 2.13 Reliability and finally 3.05 Permanent organisation. The sustainability is considered in the following competence elements • • 3.07 Systems, products & technology (context): socio-bio-tech systems, input, operations, output, life time, innovation 3.09 Health, security, safety and environment (" Protection of the environment is increasingly important, with issues such as global warming, pollution, depletion of natural resources, energy efficiency and energy conservation, in the headlines on a daily basis. These factors need to be taken into account in all the project phases, in the use of the product and its decommissioning and disposal") 1.02 Interested parties and 1.06 Project organisation (responsibility) 1.03 Project requirements and objectives, impacts from/to context

• •

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• • • • • •

1.09 Project structures: multi-dimensional structures, structure of systems 1.10 Scope and deliverables 2.07 Creativity, 2.08 Results orientation, 2.13 Reliability 2.14 Values appreciation and 2.15 Ethics 3.05 Permanent organisations (context) 3.06 Business, 3.10 Finance and 3.11 Legal (context)

A specific, complex sustainability situation can be managed with the cluster of the following ICB competence elements: • • • • • • • • • What are the related requirements, objectives, risks, opportunities, feasibility, context conditions? Who is responsible for and interested in the sustainability (project organisation, interested parties)? What systems, subsystems and component should be distinguished (project structure)? What consulting services and deliverables should be mandated? How is the influence of the result orientation, value appreciation and ethics? What are the sustainability goals of the permanent organisations, and in particular the business and legal departments? How much sustainability will be financed? What are the sustainability conditions for the systems, products and technologies generated and used? What are the requirements concerning health and environment?

Both the sustainability management and the survival checking should be more explicitly treated in the next version of the ICB by • • • Continuous surveillance of survival issues as needed Involving the parties interested in the investment in, and use, operation and maintenance of the systems that are created and changed with the projects Delivering documents for sustainability management, related to project phases

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5. Possible questions
A. What • • survival conditions should be checked documents for defining the optimum sustainability and flexibility should be delivered in which project phase? B. What • terms, models and tools are useful in which situations, for the checking of the survival and adequate management of the sustainability in project? C. For the checking of the survival and the management of the sustainability, what does the ICB Version 3.0 provide: • • • help? obstacles or overemphasis? gaps? for which kinds of projects and phases?

6. References
Xue, Knoepfel (2008): "Bring the values to the Public", Proc. IPMA Expert Seminar 2008, page 58 ICB Version 3.0 (2006): IPMA Competence Baseline, International Project Management Association Knoepfel (2005): "Management der Projektqualität, Begriffliche und konzeptionelle Grundlagen", Projektmanagement aktuell, 3/2005 (pages 27-34) ISO/IEC 17'024 (2003): "General requirements for bodies operating certification of persons", CEN/CENELEC, April 2003

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Green.City.Zurich
Daniel Scheifele

GreenCity.Zurich
A Sustainable Project in a Sustainable Environment
February 18th, 2010
Dr. Daniel Scheifele Head Real Estate Developement Losinger Construction AG Zürich

• The Company • The City • The Site • The Project • The Project Management

2

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3

The seven aims of our Sustainable Development Approach
1. Foster a trusting relationship with our clients, based on consideration, transparency and innovation 2. Incorporate risk into the day-to-day management of the company 3. Lead our business sectors in terms of occupational health and safety 4. Develop our employees' skills and promote equal opportunity 5. Establish balanced, long-term relationships with our partners, suppliers and subcontractors 6. Ensure that our businesses respect the environment 7. Participate in the economic and social life of the regions where we operate

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Stakes
Our clients Civil society
Foster a trusting relationship based on consideration, transparency and innovation. Promote sustainable construction for their benefit.

Our shareholders
Ensure the company's growth and profitability into the long-term future through careful risk management.

Create jobs and help build a more harmonious society.

Local residents
Minimise the disturbance generated by our construction sites and take their expectations into account.

"Building solutions for a demanding world"
Our partners and suppliers
Establish balanced, longterm relationships and involve them in our approaches.

Our employees
Ensure their safety and promote their welfare and personal development. Enable them to exercise their rights as citizens.

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IPMA Expert Seminar 2010

Primary energy consumption Switzerland 8,700 Watt/pers. (incl. balance of imported goods)
INTERNAL AREA 4,400 Watt/pers = 70% CH Balance of imported goods CH to AREA Embodied Energy ca.1,900 Watt/pers +30% CH

Balance of imported goods - GLOBAL to SWITZERLAND Embodied Energy (a.k.a. grey energy) ca. 2,400 Watt/pers. +35% CH

INTERNAL SWITZERLAND 6,300 Watt/pers = 100% CH

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The 2000 W Society CO2 Production
2200 kg CO2/ person
Overseas air traffic 337 16% Freight traffic, goods transport 430 20% Residential Services 34 36 2% 1%

Embodied energy and goods 643 30%

Transport (non daily traffic ) 311 14%

Transport (daily traffic) 362 17%

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50 %

Quartier Leimbach 113 companies 477 Jobs

5 minutes 1'295 companies 10'365 Jobs

10 minutes 10'479 companies 151'473 Jobs

Total within 10 minutes 11'887 companies 162'315 jobs

Total Zürich Area 24'840 companies 329'014 Jobs

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IPMA Expert Seminar 2010

• former Industrial site: no use of „green“ land • lots of jobs in the area • high demand for appartments / living • existing hydro power plant on site • 100 % renewable energies • flagship project for Zurich and Losinger • urban district according to 2000 Watt society

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Noise protection wall

Noise > 60dBA

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Offices / Industry

ca 800 Appartements

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Wollishofen
Bus 7 0

< Zürich 8 Min HB

100% renewable energy

Central heating & cooling supply

Electricity supply

Total Energy: 9‘500 MWh per year

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Wood-pellet Ground- Groundwater heating 400 water heat cooling MWh pump 3‘900 800 MWh MWh

Hydropower plant 1‘700 MWh

Photovoltewz aic system naturpower 1‘000 MWh 2‘200 MWh

Central heating & cooling supply Motors, Pumps, etc. 1‘000 MWh

Electricity supply

Domestic Hot Water (DHW) 2‘300 MWh

Heating load Cooling load 2‘000 MWh 800 MWh

Ventilation 800 MWh

Small Power 1‘100 MWh

Lighting 2‘000 MWh

Mixed use
• 800 Appartements – 250 at low rents – Students – Multi - generation • 2500 jobs • Infrastructure: school, retail, restaurants, …

Path to 2000 Watt:
• Renewable energy • Lowest CO2 • 0.7 Parking per appartement, • 100 lots for low consumption cars • monitoring throughout life cycle

• Profit for landowner – investors - Losinger

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IPMA Expert Seminar 2010

Schedule:
2006 - 8
Agreements, feasabilities Designation of zone Designation general principles Designation design principles Design

2009

2010

2011

2012

2013

Building permit (procedure) Bulding permit Start of works Construction works Grand Opening of GreenCity

SR Stadtrat GR Gemeinderat BD Baudirektion VD Volkswirtschaftsdirektion

2007
1. GEV

2008
2. GEV 2. Entwurf Auflage (30 Tg.) Bereinigung

2009
Festsetzung SR
Rekursfrist (30 Tg.)

2010
Genehmigung BD Grundbuchl. Vollzug Projektierung, Ausschreibung

Quartierplan

1. Entwurf Kt. Vorprüfung

Projektfestsetzung Projektgenehmigung (VD) + Kredit (SR)

Allmendstrasse
(Verfahren nach Strassengesetz)

Vorstudie

Begehrensäusserun g Kanton

Bereinigung

Vorprojekt
Mitwirkung §13 (30 Tg.)

Bauprojekt
Planauflage §16 (30 Tg.) Ev. Rekursfrist (30 Tg.) falls Einsprachen

Projektierung, Ausschreibung

Kreditvorlage (GR) Festsetzung GR Genehmigung VD

Beschluss Stadtrat

Baulinien-Revision

Vorprüfung Ämtervern.

Beratung SK Verkehr Beschluss SR

öffentliche Auflage (30 Tg.) Festsetzung GR Beratung SK HBD Genehmigung BD Inkraftsetzung SR

Privater Gestaltungsplan mit UVP Ergänzender Gestaltungsplan Bauprojekte Private Bau Eisenbahnanlage

GP-Entwurf, UVBEntwurf

Vorprüfung Mitwirkung (60 Tg.)

Bereinigung

Ref.frist Rekursfrist (20 Tg.) (30 Tg.) Festsetzung SR Bereinigung Rekursfri st (30 Tg.)

Vorprüfung Ergänzender GP-Entwurf Mitwirkung (60 Tg.)

Genehmigung BD Inkraftsetzung SR

Projektentwicklung

Baubew.verf. i.R: 6. frühester Zeitpunkt Mt. Baugesuch

frühester Zeitpunkt Erteilung Baubewilligung (ohne erg. GP)

frühester Zeitpunkt Erteilung Baubewilligung (wenn erg. GP gefordert)

Für die notwendigen Anpassungen und Verschiebungen der Bahnübergänge genügt Zustimmung SZU (Nebenanlagen gemäss Eisenbahngesetz Art. 18m, es ist kein Verfahren nach EBG notwendig). Für den Bau der Anlage braucht es Bewilligung BAV (ca. 1 Jahr), nachfolgend für Bestellung ½ Jahr und Bau ½ Jahr

Fachtechnische Prüfung (1 Jahr)

Bestellung Anlagen Bewilligung BAV

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Baubeginn Allmendstrasse, Quartierplanstrassen, Bahnübergänge ca. Ende 2010

IPMA Expert Seminar 2010

• interested parties and politics • project objectives • problem resolution • communication • programme • business • technology • environment

• • • • • • • •

leadership (self) motivation openness creativity innovation negociation conflict and crises values

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IPMA Expert Seminar 2010

Knowledge management in large project oriented organisations
Akeel Akbar

In organisational environments where the creation, use, and re-use of intellectual capital is fundamental to success, the effective sharing of knowledge embodied in individuals or embedded in processes or practices, is crucial. Ensuring that the critical tacit and explicit knowledge is identified and shared – with the right people at the right time – can be a daunting prospect. There are vast amounts of literature available on knowledge management in the organisational sector. But not nearly enough in the project sector, although the same concepts, processes and technologies apply to projects too. This paper tries to shed light on the importance of knowledge management in a project scenario, and how in these extremely competitive and turbulent times, good knowledge management can be used to improve project success rates.

1. Defining Knowledge Management
There is no single definition of the term ‘knowledge management’. The concept itself was popularised by Ikujiro Nonaka in 1991 and since then many have defined the term ‘knowledge management’ as it has evolved, in a context that mattered most to them. One of the most cited definitions was put forward by a large multinational company: "The capabilities by which communities within an organisation capture the knowledge that is critical to them, constantly improve it and make it available in the most effective manner to those who need it, so that they can exploit it creatively to add value as a normal part of their work” Royal Dutch Shell Whilst this defines what knowledge management is, the value of good knowledge management to organisations was most clearly expressed by Lew Platt, ex-CEO of Hewlett Packard, who said: "If only HP knew what it knows it would make three times more profit tomorrow” HP These statements imply that organisations need to develop their own way of managing knowledge, based on a ‘common shared understanding’ of what it means to the organisation and everyone who forms a part of it. The same goes for projects, the only difference is that unlike organisations, a project has a set start and end, which makes knowledge management harder.

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2. Knowledge Management in Projects
As project management developed as a discipline, management of knowledge within project has also evolved; from a simple ad-hoc process to a more well defined set of methodologies, tools, techniques and competencies. But knowledge management in projects is still not as well developed as it is in non-project scenarios. Leseure and Brookes (2004) claimed that knowledge transfer is one of the largest issues facing project management. Brown (2008) built further on this, by claiming that one of the largest and most unrecognised reasons for project failure is the lack of proper knowledge management methodologies throughout the project management lifecycle. To improve the effectiveness of projects, incremental evolution of required project activities need to be facilitated; through action learning, identification of best practices, and dissemination of these best practices (Batra, 2008). This in other words is ‘good knowledge management’. By definition a project is “a temporary endeavour undertaken to create a unique product, service or result” (PMI 2003). Due to the nature of a project (being a temporary endeavour), the sharing of knowledge becomes even more challenging than it would be in a ‘business as usual’ environment. This issue is highlighted in the work by Disterer (2002) where it is claimed that as the knowledge needs of the future projects do not usually fall into the remit of the current project, knowledge management ends up being sidetracked by many of the project managers. This more often than not leads to ‘reinventing the wheel’ type of scenarios in future projects, which could have been avoided if certain knowledge had been made available and accessible. Although many of the typical concepts of knowledge management are integrated in the project strategy, it is done without it ever being referred to as knowledge management. Most project management methodologies concentrate on the delivery of the project, resulting in knowledge management falling in the order of priorities (Disterer, 2002). For example a review of PMI BOK or the APM BOK will not provide any clear guidance on managing knowledge through a typical project lifecycle. There are many reasons for this, but that is another discussion and is out of the scope of this paper. In the research carried out by Leseure and Brookes (2004), it was concluded that there are two areas that need attention if knowledge management in projects is to improve: collecting knowledge in projects; and managing tacit knowledge. Over the last decade there has been significant improvement in these areas, but as mentioned before they are still not explicitly included in a project strategy. Batra (2007) also concludes similarly, stating that for a project to be successful it is essential to elicit in-depth tacit knowledge of all stakeholders and utilise this knowledge in defining the project strategy.

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IPMA Expert Seminar 2010

Explicit and Tacit Knowledge Explicit Knowledge: academic knowledge or ‘ know-what’ that is described in formal language, print or electronic media, often based on established work processes • Knowledge can be articulated and codified to create explicit knowledge assets. Knowledge can be disseminated (using information technologies) in the form of documents, drawings, best practices, etc. Learning can be designed to remedy knowledge deficiencies through structured, managed, scientific processes. Tacit Knowledge: practical, action oriented knowledge or “know-how” based on practice, acquired be personal experience, seldom expressed openly, often resemble intuition • Knowledge is personal in nature and very difficult to extract from people. • Knowledge must be transferred by moving people within or between organizations. Learning must be encouraged by bringing the right people together under the right circumstances.

Figure 1: Definitions by Smith (2001) based on work carried out by Nonaka (1991) In general, a review of the current practices of knowledge management within projects seems to hint that while collection of explicit knowledge does take place, it’s not really put to any significant use. Tacit knowledge on the other hand is not even usually collected, and more often than not, is lost when the project comes to an end. This paper looks as some of the ways we can help improve the situation. It is based on case studies of practical work Harpum Consulting has carried out with major clients, and can help shed light on different strategies that can used in project scenarios, to maximise the knowledge sharing between project managers, different teams, separate projects and even across different organisations running similar projects. The aim of most of these assignments was to improve the project management competency of the organisation as a whole, with special emphasis on collection and transfer of tacit knowledge. The first case looks at how knowledge sharing activities and practices were implemented in a mid-size pharmaceutical company in the US. The company has many different projects running in parallel at any given time. It was already fairly competent at collecting and sharing explicit knowledge (technical / quantitative information, lessons learnt from past projects etc). With the majority of the KM work starting and ending only with ‘lessons learnt’, the work was carried out to enhance the organisation’s ability to allow the individuals involved in the projects to share tacit knowledge during the projects. The next case study looks into how Harpum Consulting assisted a very different organization with developing innovative knowledge management practices and processes for sharing vast amounts of specialist knowledge across a membership of over thousands of

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project professionals spread out globally. It focuses on how a project can improve its chances of being successful with the use of good knowledge management.

3. CASESTUDY A – Mid Size Pharmaceutical Company
Any organisation running multiple projects of a similar nature can improve its project success rate by improving its knowledge management practices. The organisation is question here has on average 10 large scale projects running at any time with over 1500 individuals involved in these projects. In their research Kasvi, Vartiainen, & Hailikari (2003), observed that a typical project orientated organisation has weak and unsystematic knowledge management practices, making documents and colleague interactions the most important sources of knowledge. This organisation fell well into this ‘typical project orientated organisation’. The project strategy did have elements of knowledge management scattered though out, but was never referred to as knowledge management. The point here is not that knowledge management did not have a title; it is the fact that knowledge management was not explicitly mentioned anywhere. It was seen as ‘just more paper work’ or a formality in the project life cycle. The culture in this typical organisation allowed the individuals involved to unconsciously devalue the importance of any knowledge management practice or activity. Organisational culture is a key player in knowledge transfer within projects (Karlsen & Gottschalk 2004). The first step towards implementing the changes was to shift the organisational culture away from viewing knowledge management as ‘having to do a pile of paper work’. New roles and responsibilities were created to champion different aspects of knowledge management, and plans were developed to assign these to various individuals throughout the project teams. Parallel to this, there was a drive to educate the individuals involved in the projects on the merits of good knowledge management. Workshops were organised and run with various stakeholders at all levels of the organisation, to help them understand what an improvement in knowledge management can do for them as individuals. After creating awareness throughout the organisation, various knowledge sharing tools and techniques were developed. These tools and techniques were based on industry best practices but were developed in a bespoke way for the organisation, keeping it’s specific needs in mind. A key area of focus was organisational culture. Research has shown that considering the organisational culture is extremely important, if the new tools and techniques being developed are to be successful. (Karlsen & Gottschalk, 2004). The knowledge transfer methodologies were designed to ensure that explicit and tacit knowledge, in all four subsets of knowledge within a project are captured and transferred or documented. These four subsets are defined as:

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IPMA Expert Seminar 2010

Process Knowledge: knowledge that project team members have regarding the project (tasks, methodologies, timelines, structure, etc) (Chan & Rosemann, 2001; Meehan & Richardson, 2002; Reich, 2007). Domain Knowledge: knowledge that a project team or member has about the industry, technology, processes, current situation, business and products (Chan & Rosemann, 2001; Reich, 2007). Institutional Knowledge: knowledge that a project team or member has about the organization (Reich, 2007). Cultural Knowledge: knowledge about the organizational culture as well as cultural backgrounds of the project team members (Reich, 2007).

• •

The tools and methodologies developed included training manuals for in-house knowledge coaches and facilitators. These coaches and facilitators were trained to run workshops that would allow individuals on the project teams to share knowledge, or allow two different teams who may hold tacit knowledge that can help each other to share this knowledge, or to covert the tacit knowledge from one individual into an explicit format for all others who may need it. Following the use of the tools and the training the organisation has slowly started to implement certain knowledge management practices into the project strategy. Activities like workshops to share tacit knowledge and the conversion of tacit knowledge into explicit knowledge have started to become a more integral part of the projects.

4. CASESTUDY B The Knowledge Management Challenge for Large Organisations
Many organisations face challenges related to knowledge, including how to create, use, and reuse knowledge in an effective manner. The knowledge can be spread over many geographical locations, stored in multiple central and local systems, and be held by various individuals who form the organisation. It can be tangible and explicit or indefinable and tacit. It can vary from knowledge of best practices and lessons learnt to research, or it could be the experience gained over decades by an employee retiring next year. The challenges related to knowledge management become even greater when the knowledge is spread not only throughout the organisation, but also amongst its customers or members. The organisation in this case study faced just such challenges. This organisation is an independent professional body with thousands of members working on many different projects. Its aim is to develop and promote the expertise in its subject area in all sectors of industry and beyond. It had been combining its members’ extensive experience in developing the science and art of the subject area it operates in for a long time. Its knowledge vision is to be the first place of reference for its members and wider stakeholder groups for its area of professional expertise.

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IPMA Expert Seminar 2010

To achieve this vision, the organisation needed well defined and extremely efficient knowledge management processes and systems. These had to be capable of collecting knowledge from all sources, organising and classifying this knowledge, and making it accessible to all who can benefit from it. This organisation wanted to bring its specialist professional knowledge to life by embracing the trend towards community-generated knowledge, and pioneering the use of social networking technologies to make knowledge development and sharing relevant, inclusive, and dynamic. Simultaneously it wanted to develop and promote authoritative, peerreviewed knowledge so that the membership community can have the benefit of all current knowledge verification approaches and is not exposed to unnecessary risks. To achieve the level of knowledge management required, a number of challenges had to be overcome. The first and foremost was ‘how do we know what we don’t know’, or in other words, how do we map out and access all the various sources that either hold knowledge, or have the ability to create new knowledge, without always knowing what these sources are. With much of the knowledge held by members, the task has been achieved with the design and implementation of an infrastructure that provides robust processes: to discover sources and the knowledge they hold; and also provide an effective method of capturing this knowledge. A system has been developed to present knowledge originally scattered over multiple locations in a user-friendly, easy to use, single point-of-access service. The work to develop the knowledge architecture required an in-depth understanding of what the organisation’s members value the most in relation to access to knowledge. It also required an organisation able to understand the type and content of the knowledge involved. Using the deep understanding of knowledge management in project scenarios, Harpum Consulting was able to engage with the members of the organisation, in a targeted and meaningful way. This engagement led to a real understanding of members’ needs, and allowed the creation of an efficient knowledge solution. The organisation now has a knowledge infrastructure design containing multiple sources of knowledge, which will be supported by a web portal with a single point of personalised access. It is designed to: • • • • • • • Track all existing sources of knowledge, while also making new sources visible Enable one person to manage collection of knowledge from countless sources Archive this knowledge and organise it in a meaning full way Enable content management and searching Streamline access to both explicit and tacit knowledge Allow experts to share expertise with others Enable highly effective collaboration between users, allowing wide spread contributions to new knowledge

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IPMA Expert Seminar 2010

The high level overview below shows how the knowledge portal has been designed to operate. Each piece of this infrastructure requires bespoke processes and systems to be developed and matched to the organisation’s operating model.

Figure 2: Overview of the Knowledge Portal Process developed by Harpum Consulting: showing the flow & processing of knowledge from source to recipient

All organisations have challenges creating and embedding effective knowledge management processes and practices. The same applies to project, but even more so due to the often short duration of the projects. It is crucial to help the individuals involved in a project develop a deep understanding of the specific objectives they hope to meet through the introduction of formal knowledge management approaches. Once this understanding has been developed, change management expertise is required to help create step change improvements in the creation, use, and reuse of knowledge to maximise value. In both the examples above most important (and arguably, the hardest too) was introducing a change in the culture. While the knowledge management efforts in cases documented in this paper can take credit for the intangible improvements in the project success factors, no hard conclusions can be

Increasingly formal provenance Increasingly community generated knowledge

5. Conclusion

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made yet. The next step of research will entail extracting quantitative data from these cases over time. The results will be published in the future to help understand the impact this has had on project success. Work in the future will be aimed at quantifying which mechanisms provide better knowledge sharing and transfer in project based organisations. This can possibly lead to a framework that can be used to manage knowledge in a typical project. But before we can get to that, much more research is needed into what methodologies work in project scenarios, and what don’t.

6. References:
Batra, S. (2007). “Knowledge Management in Development Projects: A Case Study of HIDECOR Project in India”, Global Journal of Flexible Systems Management, 2007, Volume: 8, Issue: 1&2 Brown, E. (2008). Improving Knowledge in Projects. Chan, R., & Rosemann, M. (2001). Managing knowledge in enterprise systems. Proceedings of the Americas Conference of Information Systems. Disterer, G. (2002). Management of project knowledge and experiences. Journal of Knowledge Management, 6(5), 512. Ikujiro Nonaka, The knowledge-creating company, Harvard Business Review, 69 (6), 1991, pp96-104 Karlsen, J. T., & Gottschalk, P. (2004). Factors Affecting Knowledge Transfer in IT Projects. Engineering Management Journal, 16(1), 3. Kasvi, J. J. J., Vartiainen, M., & Hailikari, M. (2003). Managing knowledge and knowledge competences in projects and project organisations. International Journal of Project Management, 21(8), 571. Leseure, M. J., & Brookes, N. J. (2004). Knowledge management benchmarks for project management. Journal of Knowledge Management, 8(1), 103. Lew Platt as reported in: Charles G. Sieloff, If only HP knew what HP knows: the roots of knowledge management at Hewlett-Packard, Journal of Knowledge Management, 3 ( 1), 1999, pp 47 – 53 Meehan, B., & Richardson, I. (2002). Identification of Software Process Knowledge Management. Software Process: Improvement and Practice, 7(2), 47-55. PMI 2003: ‘A Guide to the Project Management Body of Knowledge (PMBOK Guide)’, Third Edition, Project Management Institute. Reich, B. H. (2007). Managing Knowledge and Learning in It Projects: A Conceptual Framework and Guidelines for Practice. Project Management Journal, 38(2), 5.

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Royal Dutch/Shell as reported in: Kelleher D, Levene S Knowledge management: a guide to good practice. London (UK): British Standards Institution, 2001. Smith, E. (2001), "The role of tacit and explicit knowledge in the workplace", Journal of Knowledge Management, Vol. 5 No.4, pp.311-21.

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IPMA Expert Seminar 2010

The contribution of health & safety management to sustainable development: A case study from the construction industry
John-Paris Pantouvakis and Antonios Panas

1. Introduction
The concept of sustainable development (SD) covers a broad spectrum of human activities. The Brundtland Report from the World Commission on Environment and Development (WCED) in 1987 defined sustainable development as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”. Sustainability should be based upon the three pillars of environmental, economical and social development (WCED, 1987). Within the project management context, an inherent characteristic of any sustainable strategy is the protection of the Health and Safety (H&S) of all stakeholders involved in the project process. The organisations must ensure that high standards of H&S are consistently achieved as an integral part of corporate and project activities (Pearce, 2007). It is very important to satisfy H&S criteria and comply with environmental regulations during the planning phase of the project, its execution, and during the delivered product’s lifecycle and its decommissioning and disposal (ICB, 2006). In traditional practice, the issues of H&S are addressed by the formulation of general guidelines, best-practice policies and operating procedures (Cameron and Hare, 2008). Although their importance cannot be diminished, quite often they do not belong to a formal H&S management system but rather express the project manager’s personal commitment to creating a H&S culture in the project. Therefore, this paper aims to explore the role of Health and Safety management in achieving sustainability for projects from a different perspective. We propose a conceptual framework allowing the integration of Health & Safety and sustainability under the prism of productivity. In the remainder of this paper basic concepts relating to developing a sustainable H&S management strategy are explained. Then, a brief comparative analysis of sustainability rating systems is presented followed by a discussion on the role of productivity as a key sustainability and H&S indicator. Then, the conceptual framework is presented and its applicability is evaluated within the construction paradigm. Finally, the research inferences are discussed and conclusions are formed.

2. Developing a sustainable health & safety management strategy
Apparently an unsafe or unhealthy work environment cannot be sustainable by definition. Therefore, the concepts of H&S and sustainability are closely linked and interrelated. Irrespective of the H&S and/or sustainability factors taken into account, the formulation of an H&S management strategy with sustainable characteristics must be based upon (i) a common structural framework and (ii) clear objectives. The structural framework is defined in relation to the project life-cycle and the process that is going to be followed for its

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IPMA Expert Seminar 2010

implementation. This research adopts a three-phase project life-cycle approach in an attempt to provide a generic framework of the life-cycle, which can be modified to reflect any special type of projects (Dawson, 2007): • Pre-project phase: It comprises the concept development stage which defines the project’s outcome and deliverables, the feasibility study stage where means to achieve the predetermined outputs are identified and the design stage where there is a detailed definition of the desired alternatives. Ultimately, one of them is selected for further development in the next phase. Project implementation phase: It relates to the completion of the work, so as to deliver the desired output and monitoring of performance. Post-project phase: Commissioning of the project and operation.

• •

Having defined the project life-cycle, the next step would be the definition of the implementation process. The research follows the suggestions of IPMA which implies that health, safety and environmental issues should be considered within a seven-step process, as shown in Figure 1 (ICB, 2006). This scheme can also be considered as a project management life-cycle for sustainability, since it contains the basic project management activities of planning, organising, implementing and controlling. In Figure 1, each step serves a specific purpose, while steps 3, 4, and 5 are particularly important, since they are a focal point of any sustainable strategy: they demand a critical appraisal of the project context and its interpretation within the sustainable development paradigm.

Figure 1: Seven-step process for sustainable H&S management (adapted from ICB, 2006) The second prerequisite for a successful strategy relates to the definition of clear objectives. The strategic goals of a sustainable H&S policy can be defined under different perspectives. Since this research’s focus is on the project management perspective, the strategic objectives of an H&S management model are defined based on the specifications of the ICB (2006). More specifically a qualitative content analysis of the competence elements revealed that a H&S strategy relates mainly to the contextual competence element “Health, security, safety & environment” (3.09) and its associated elements. As such, the set of objectives along with the respective competence elements are summarised in Figure 2

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IPMA Expert Seminar 2010

below. The first three goals illustrated on Figure 2 relate to Health issues regarding the project’s personnel. Health risks of the workforce (stress, overtiredness) should be identified and mitigated with suitable control actions. And of course, the provision of Personal Protective Equipment should never be neglected. The next three reflect the topics that have to be addressed so as to ensure a high Safety standard for the project. Foreseeable hazards should be identified in time, along with their sources and the parties that are most likely to be affected (project personnel, inhabitants etc.). Appropriate mitigation measures must be taken. The last three objectives are associated with the establishment of a Sustainable H&S culture in the project based on the three pillars: protecting the environment (using eco friendly resources), addressing the social aspects of sustainable H&S management (allocate responsibilities amongst the project actors) and satisfying economic criteria (measure / evaluate performance).

Figure 2: Seven-step process for sustainable H&S management (adapted from ICB, 2006) Every strategy is implemented through a specifically developed mechanism, like a plan, a policy or a model. In the case of sustainability there are well-established models that try to quantify the extent to which a sustainable strategy is successfully implemented. In that sense, there are issues that need to be further clarified such as: (1) How is H&S treated in regard to sustainability in well known models? (2) What are the specific characteristics of sustainability associated with H&S? (3) To what extent are H&S principles integrated in

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IPMA Expert Seminar 2010

sustainability models? The next paragraph attempts to scrutinize all these questions by analysing and comparing three sustainability rating systems developed for construction projects.

3. Sustainability modeling systems for construction
Sustainability is an overarching concept that affects, and may be affected by, every aspect of infrastructure development (Sev, 2009), including the delivery of sustainable construction projects. However, what is meant with sustainable construction (SC)? Is it just an interpretation of the general principles of sustainable development (SD) within the construction context? The literature indicates that it is more than that. First of all, a distinction should be made between the concepts of “sustainable construction” and “green construction”. “Green construction” is a term used to describe the design and construction practices that impact the environment (Rajendran et al., 2009). Therefore, it can be said that green construction is part of a sustainable construction development scheme, since the latter will include the economic and social aspects in addition to the environmental perspectives of green construction. Although there is much controversy regarding the content and definition of sustainable construction, there has been considerable progress in establishing metric systems for measuring construction projects’ adherence to sustainable principles. The root of most modern rating systems can be traced back to the Building Research Establishment’s Environmental Assessment Method (BREEAM, 2006) which stems from the UK. On the basis of BREEAM other systems have been developed such as the United States Green Building Council’s (USGBC) rating system called Leadership in Energy and Environmental Design (LEED, 2009) and the Green Rating for Integrated Habitat Assessment system (GRIHA, 2007) from India. A similar system has also been established in Germany by the German Sustainable Building Council (GSBC, 2008). The study is going to be focused on the American, the German and Indian system, so as to induce geographic variability in the analysis, in pursue of a more holistic view of SC principles within differing business contexts (e.g. America, Europe, Asia). The qualitative content analysis method has been deployed for comparing the rating systems according to the H&S elements contained in them and seven major categories have been identified: Air quality, noise reduction, technology innovation, waste management, low energy materials, efficient supervision and site organisation. A two-kind relationship is allocated to each category: Direct (grey boxes), in case H&S elements are directly associated with a specific category and indirect (white boxes), in case improvements in H&S result as a by-product of the principles’ application for a specific category. The analysis showed a consensus among the rating systems in that improving air quality, implementing high-level technological equipment and methods, adopting efficient waste management strategies and using low-energy or low-emitting materials may benefit the safety and health of construction workers (Figure 3). Moreover, GRIHA (2007) and GSBC (2008) suggest that noise should be limited to an acceptable limit to protect the well being

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IPMA Expert Seminar 2010

of the workforce. Both systems also suggest that H&S could improve by providing better site organisation, either through sanitation facilities (GRIHA, 2007) or by mapping all construction tasks on a project management handbook (GSBC, 2008). The German rating system adds upon that and states that accident risks should be taken into account during the planning stage and efficient supervision is the suggested means to mitigate them. The evaluation’s results are summarized below: • • • • The rating systems address the issues of H&S in a non-systematic and fragmented manner, in the form of guidelines or best-practice approaches. A direct relationship between H&S and sustainability is found mainly on environmental factors such as air quality, noise reduction etc. There is no linkage to operational or working practices, which are key determinants of the H&S status achieved in a construction site. No particular reference is made on how to measure the achievement of job-site H&S within the sustainability concept.

It seems that the existing systems neglect to define a specific procedure to quantify and evaluate the achievement of H&S criteria. This study suggests that the concept of productivity “bridges the gap” between the H&S paradigm and the sustainable development principles, as will be shown in the next section.

4. Productivity: Integrating H&S and sustainability in construction
Current approaches for assessing the benefits of sustainability are descriptive. Productivity is a key factor for quantifying the effect of sustainability on construction projects and a tool for estimating the financial benefits resulting from the implementation of a sustainable strategy. The productivity or units of output produced per man-hour of effort or input is very sensitive to many input factors such as the amount and quality of labour, equipment, materials, weather, expected working conditions, the quality of drawings and specifications, the work processes and the expected actions of the project manager (Park, 2006). Despite their importance, the current approach to construction safety ignores the role of productivity on the evaluating job-site H&S (Mitropoulos and Cupido, 2009). As such, coupling H&S strategies and productivity considerations create a platform for shifting current project management perceptions for the achievement of sustainability. The relationship of productivity to H&S can be three-fold: • Work methods: The working methods are defined by the sequencing of the construction tasks within a specific context. In that sense, they are directly associated with operational safety, since the anticipated production workload determines the behaviour of the construction crews. Resource management: Coordinating and managing the project resources with a particular focus on the site’s workforce is linked to the on-site production level and, inevitable, to occupational H&S. Injuries, accidents or fatalities of the workforce do

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not only cause a severe drop in productivity, but also affect the workers’ morale and willingness to perform. • Operational efficiency: Any H&S strategy should be suited for the particular context of the project in hand. Therefore, being able to plan for construction safety means that all necessary measures are taken to mitigate the possible hazards. However, such an approach should guarantee a satisfactory threshold of operational efficiency that, in terms of productivity, would cover the baseline standards.

Therefore, there is an incentive for further research to look for an interrelationship of sustainability, Health & Safety and productivity, as the latter is the key characteristic that enables the measurement of performance and the achievement of predetermined objectives. Following this brief review, the next paragraph integrates the concepts of sustainability, H&S and productivity within a seamless framework.

5. A framework for sustainable H&S management
The proposed methodological framework for the identification of selected H&S factors based on the three pillars of sustainability (economical, social, and environmental) and the respective productivity-oriented categories is shown on Figure 4.

Figure 3: Comparative analysis of the H&S perspective in green building rating systems

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Figure 4: Conceptual framework for sustainable H&S management The framework’s structure is based on three main concepts (sustainability, H&S concepts, productivity), which are further decomposed in three different aspects. The framework is formulated in a matrix form and all nine criteria are interrelated both horizontally and vertically. For example, if the engineer judges that workers’ health and safety is more important and wants to evaluate it under an environmental perspective, then he/she should look at issues relating to their comfort. In that sense, the model defines groups or “triads” of criteria depending on the viewpoint of the analyst. A brief description of the selected factors is presented below: • Flexibility: A given production process (e.g. concrete placing) can be “safe” or “unsafe” depending on how well it adapts to its environment. Therefore, when the method statement is formulated in a way that enables the deviation from normative processes, then operational safety and productivity are increased. Work safety: To accomplish good safety performance, it is important to examine work processes before they are implemented. The planned activities should be examined and dangerous work methods must be anticipated to protect the well being of all affected parties (e.g. workers, inhabitants etc.). Accident risk: A risk assessment is a prerequisite for identifying potential areas of serious injuries. The financial losses that can incur on a project in case of an injury can be direct (e.g. compensations from claims) or indirect (e.g. interruption of works) and can have a detrimental effect on the project’s progress. Comfort: The effect of the environmental conditions on workers’ output is of paramount importance. The level of comfort (e.g. thermal, visual) can lead to variations in productivity compared to the baseline estimates. As such, the impact of

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hot/cold temperatures, noise, lighting, wind and precipitation as key H&S factors must be carefully examined. • Work scheduling: The initial schedule is seldom adhered to. As such, when construction work is re-sequenced relative to the planned work sequencing, there can be a significant negative impact on productivity. In addition, schedule changes can lead to concurrent operations which cause congestion if more than one group of workers share the same workspace. Resource flow: Resources should enter and exit the project according to predetermined plans. Whether applicable to site personnel or material (e.g. equipment), work continuity must be ensured so as to achieve high resource utilization rates. Awareness: All project actors must be aware of the exact work content and be familiar with their working environment. Non-experienced crew members must be given additional attention since a potential inability to keep up with the pace of works affects their own as well as their colleagues’ safety and decreases operational efficiency. Supervision: The managerial attitude of the supervisor in directing the workforce and following the work schedule is a critical success factor for satisfying both safety and productivity criteria. Competent personnel can increase on site productivity, whereas, on the other hand, managerial inefficiencies have an impact on both labour- and equipment-intensive operations’ efficiency. Idleness: The operational delays or interruptions of work affect the project’s financial evolution. Furthermore, lost work time leads to schedule acceleration, in order to meet the project’s milestones, which has been reported as a major cause of accidents.

It is evident from the analysis that the main objective of the proposed framework is to delineate the taxonomy amongst the different factors and reveal the “hidden” relationships that govern the selected criteria. The applicability of the proposed approach needs to be examined, however the fact that both its structure as well as its content have been founded on well-established concepts, leads the authors to believe that it can be a practical and useful tool.

6. Applicability assessment: The case of the construction industry
Construction is one of Europe’s largest industries and well known for its low health and safety (H&S) performance. In fact, according to 2009 statistics construction workers report work-related health and safety problems (e.g. accidents, physical injuries, stress, anxiety, depression) more often than in any other European business sector (Eurostat, 2009). As such, there is no surprise why the need for a fundamental shift in the construction industry’s direction to improve H&S has been long acknowledged (Sawacha, et al., 1999). According to the International Council for Research and Innovation in Building and Construction

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(CIB), SC should result into healthier built environment and ecological systems, energy conservation, better comfort, waste reduction, resource conservation and better service life by integrating existing technical knowledge and new ideas within the construction context (CIB, 1998). In addition, there is a strong consensus that the main objective of SC is to deliver the SD’s intent to meet the needs of both the present and the future generations without compromising our and their living standards (Chong et al., 2009). However, all these features pose a great challenge upon construction professionals, especially in view of the fact that the construction industry is labour-intensive and H&S is a critical factor of the production process. This section will demonstrate the applicability of the proposed conceptual framework especially for construction projects. As stated in the beginning, a sustainable H&S strategy should cover all project phases (pre-project, project, post-project), which in the case of construction could be interpreted into the stages of design, construction and operation. Construction phases H&S criteria
Flexibility

Design
Plan all construction work and estimate productivity Specify risk exposure for given construction processes Analyze / assess foreseeable risks Evaluate expected on-site environmental conditions Plan activities beforehand and calculate workload Careful consideration of site-layout, material movement, site organisation etc. Identify stakeholders in the method statement Allocate personnel experienced in the specific type of work Mapping of construction processes and estimating of production capability

Construction
Re-consider work processes in case of H&S risk and update estimates Identify additional hazards while working on-site Take immediate action in case of injury Monitor weather conditions’ changes Monitor effect of workload on productivity / behaviour Provide for work continuity to ensure high resource utilization rates (equipment / crews) Conduct on-site “toolbox meetings” Monitor productivity levels in different shifts Monitoring crew’s work methods and compare against baseline values

Operation
Specify alternative maintenance policies during operation Develop work execution protocols for future reference Evaluate accident causes (“lessons learned”) Take measures for improving comfort (PPE) Create historical records of on-site performance Identify deficiencies and estimate the losses on productivity and the effect on cost Validate and maintain adopted practices Evaluate personnel and decide on corrective actions Minimise idle time by improving resource “matching”

Work safety

Accident risk Comfort Work scheduling

Resource flow

Awareness

Supervision

Idleness

Table 1: Applicability of the proposed framework within the construction paradigm

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The analysis demonstrates that the proposed framework highlights the importance of the meticulous consideration of the construction processes on a micro-level, namely in terms of tasks sequencing, work content specification and method statement definition. In addition, it is evident that resource management either in the form of pre-project planning (e.g. logistics) or on-site project management (e.g. material handling) is a key determinant of the H&S standard established during the project.

7. Conclusions
This study has demonstrated that Health and Safety is an inherent characteristic of the construction production process. The inclusion of sustainability concepts in construction Health & Safety helps in the formulation of a pluralistic conceptual model that addresses economical, environmental and social aspects. The latter supports the argument that construction should not be seen solely under the prism of technical competences, but also under the consideration of behavioural and contextual competences as denoted by IPMA. The productivity-oriented determination of the factors affecting the construction process enables the evaluation of the effect of H&S on productivity, while at the same time any improvements have a direct impact on the project in terms of achieving sustainability. The model’s matrix structure provides a clear template for shifting focus between different groups of criteria, thus supporting the differentiation of alternative operational strategies. A preliminary assessment of its applicability over the life-cycle of construction projects denotes that the approach is versatile and contains the key characteristics that enable the implementation of a sustainable H&S strategy in construction. It is believed that the integration H&S and productivity into a single model that supports sustainable construction creates an opportunity for the development of new directions in current construction practices.

8. References
BREEAM (2006), “Building Research Establishment Environmental Assessment Method”, Building Research Establishment, Garston, Watford, U.K. <http://www.breeam.org> (Jan. 18, 2010). Cameron, I. and Hare, B. (2008), “Planning tools for integrating health and safety in construction”, Construction Management and Economics, 26, 899-909. Chong, W.K.C., kumar, S., Haas, C.T., Beheiry, S.M.A., Coplen, L. and Oey, M. (2009), “Understanding and interpreting baseline perceptions of sustainability in construction among civil engineers in the United States”, Journal of Management in Engineering, 25(3), 143-154. CIB (1998), “Sustainable development and the future of construction: A comparison of visions from various countries”, In: Future studies in construction, CIB Working Commission W82 Report, Publication 225, London, England.

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Dawson, C.W. (2007), “The project life-cycle”, In: Gower Handbook of Project Management, Turner, J.R. (eds.), Gower Publishing, Aldershot, England. Eurostat (2009), “Eurostat – Statistics in Focus”, Report 63/2009, Eurostat: Statistical Office of the European Communities, Luxemburg. GRIHA (2007), “Green Rating for Integrated Habitat Assessment”, The energy and Resources Institute, New Delhi, India. <http://www.grihaindia.org> (Jan. 18, 2010). GSBC (2008), “German Guide of Excellence for Sustainable Building”, German Sustainable Building Council (Deutsche Gesellschaft für Nachhaltiges Bauen e.V.), Stuttgart, Germany. <http://dgnb.de> (Jan. 18, 2010). ICB (2006), “IPMA Competence Baseline – Version 3.0”, International Project Management Association, Nijkerk, The Netherlands. LEED (2009), “Leadership in Energy and Environmental Design”, United States Green Building Council, Washington, USA. <http://www.usgbc.org/LEED> (Jan. 18, 2010). Mitropoulos, P. and Cupido, G. (2009), “Safety as an emergent property: Investigation into the work practices of high-reliability framing crews”, Journal of Construction Engineering and Management, 135(5), 407-415. Park, H.S. (2006), “Conceptual framework for construction productivity estimation”, KSCE Journal of Civil Engineering, 10(5), 311-317. Pearce, (2007), “Managing Health and Safety”, In: Gower Handbook of Project Management, Turner, J.R. (eds.), Gower Publishing, Aldershot, England. Rajendran, S., Gambatese, J.A. and Behm, M.G. (2009), “Impact of green building design and construction on worker safety and health”, Journal of Construction Engineering and Management, 135(10), 1058-1066. Sawacha, E., Naoum, S. and Fong, D. (1999), “Factors affecting safety performance on construction sites”, International Journal of Project Management, 17(5), 309-315. Sev, A. (2009), “How can the construction industry contribute to sustainable development? A conceptual framework”, Sustainable Development, 17, 161-173. World Commission on Environment and Development (WCED) (1987), “Our common future”, Oxford University Press, London, England.

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How project managers increase the sustainability of their projects
Reem Khalid Alzamil

Key Words: Sustainability, Leadership, Project, Criteria, Role.

Introduction
Sustainable development is a dynamic concept with many dimensions and many interpretations. Some argue that there is no need for one agreed definition of sustainable development; instead, sustainable development should be seen as a process of change that is heavily reliant upon local contexts, needs, and priorities. Clearly, while there is no one definition, the global dimensions and impacts of the challenges facing the 21st Century require extensive international co-operation, political commitment and stewardship, and energy to move forward into a sustainable future. Sustainability is one of a growing and important collection of social and other responsibilities which are being addressed by projects and arise on projects in themselves or by the needs of clients, end users or the wider field of stakeholders. Such social needs and policies can include equal opportunities; health, safety and welfare; staff and people development; community contributions; charity and volunteer involvement; fair trading; partnering; supply chain management and local sourcing; stakeholder engagement; communication policies; dispute resolution and certainly not least sustainability, green issues, the environment, waste avoidance, energy conservation, etc.

Abstract
This paper will discuss sustainability for projects manager, because it is important for any project manager to understand the concept of "sustainability" from a capitalist perspective, it is business definition and what is sustainability for leadership. If you are a leader planning to apply sustainability at your projects this paper will help you to know the sustainable leadership model, its principles, and how to enhance your management decision. At the end of this paper there is a criteria to assess the sustainability of engineering projects and technologies in industry. Although this paper is full of advices and strategies for project manager to achieve sustainability, but it is not only project manager role, it is every one responsibility to do that.

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1. What is Sustainability?
Sustainability can be described as each of us doing our part to build the kind of world— economically, environmentally and socially—that we want to live in, and one that we want our children and grandchildren to inherit. It means becoming aware of all interconnections—visible and invisible—in which our day-to-day choices affect the intricate balance of social, economic and ecological systems. The United Nations’ World Commission on Environment and Development (Brundtland Commission) introduced the far-reaching implications of the term, “sustainable,” in their widely cited report, Our Common Future (1987): “Humanity has the ability to make development sustainable to ensure that it meets the needs of the present without compro-mising the ability of future generations to meet their needs.” (Sustainability Leadership Institute, 2009) Sustainable development focuses on improving the quality of life for all of the Earth's citizens without increasing the use of natural resources beyond the capacity of the environment to supply them indefinitely. It requires an understanding that inaction has consequences and that we must find innovative ways to change institutional structures and influence individual behavior. It is about taking action, changing policy and practice at all levels, from the individual to the international. (SD Gateway,2009).

How others have described sustainability?
• • • • • "No net per capita loss of natural or human capital" (Christopher Juniper and L. Hunter Lovins, Natural Capitalism, Inc. 2003). "Preservation of prosperity opportunity through investment in financial, built, natural and human capital" (Christopher Juniper, 2002). "Our commitment to sustainable development means balancing economic progress with environmental care and social responsibility" (Royal Dutch Shell, 2002). "Creating shareholder and social value while decreasing the environmental footprint along the value chains in which we operate" (Dupont Corp., 2001). "Managing for the 'Triple Bottom Line' of economy, society and environment" (John Elkington, SustainAbility,1999). (SD Gateway,2009).

2. Sustainability Dimensions
Although the definition of sustainable development (above), given by the Brundtland Commission, is frequently quoted, it is not universally accepted and has undergone various interpretations. (EurActiv,2009)&(iisd, 2009).

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Definitions of sustainability may be expressed as statements of fact, intent, or value with sustainability treated as either a "journey" or "destination". (Commonwealth of Australia, 2007). Where we are now, where we need to be going, and how we are to get there are all open to interpretation and will depend on the particular context under consideration. (UNESCO, 2009)

Figure 1: Sustainability Dimensions The dimensions of sustainability are often taken to be: environmental, social and economic, known as the "three pillars". These can be depicted as three overlapping circles (or ellipses), to show that they are not mutually exclusive and can be mutually reinforcing. (Euractiv, 2009). While this model initially improved the standing of environmental concerns, (Ott, Thapa, 2003) it has since been criticized for not adequately showing that societies and economies are fundamentally reliant on the natural world.

Economic dimension
Sustainability economics represents: "a broad interpretation of ecological economics where environmental and ecological variables and issues are basic but part of a multidimensional perspective. Social, cultural, health-related and monetary/financial aspects have to be integrated into the analysis". At present the average per capita consumption of people in the developing world is sustainable but population numbers are increasing and individuals are aspiring to high consumption Western lifestyles. The developed world population is only increasing slightly but consumption levels are unsustainable. The challenge for sustainability is to curb and manage Western consumption while raising the standard of living of the developing world without increasing its resource use and environmental impact. This must be done by using strategies and technology that break the link between economic growth, and environmental damage and resource depletion. (Kates, R., Parris, 2005)

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Social dimension
Sustainability issues are generally expressed in scientific and environmental terms, but implementing change is a social challenge that entails, among other things, international and national law, urban planning and transport, local and individual lifestyles and ethical consumerism. "The relationship between human rights and human development, corporate power and environmental justice, global poverty and citizen action, suggest that responsible global citizenship is an inescapable element of what may at first glance seem to be simply matters of personal consumer and moral choice."

Environmental dimension
Healthy ecosystems provide vital goods and services to humans and other organisms. There are two major ways of reducing negative human impact and enhancing ecosystem services: a) Environmental management. This direct approach is based largely on information gained from earth science, environmental science and conservation biology. However, this is management at the end of a long series of indirect causal factors that are initiated by human consumption, so a second approach is through demand management of human resource use. b) Management of human consumption of resources, an indirect approach based largely on information gained from economics. Herman Daly has suggested three broad criteria for ecological sustainability: renewable resources should provide a sustainable yield (the rate of harvest should not exceed the rate of regeneration); for non-renewable resources there should be equivalent development of renewable substitutes; waste generation should not exceed the assimilative capacity of the environment. (Ratner, B, 2004)

3. Sustainability from a Capitalist Perspective
“Capital” is a reserve of something we use to sustain life or make it better. Financial capital is money in the bank that we aren’t required to use to meet day-to-day needs. It is a “rainyday fund” for use when times are tougher, or when we wish to make a long-term investment beyond the limitations of our income stream, for example when we buy a house or vehicle. In our capitalist economy, we seek to build financial capital for ourselves and our families to sustain a desired level of financial security over the long haul, and to increase personal wealth. This often means engaging in the following kinds of responsible actions simultaneously: • • Reducing expenses (to build savings) Managing risk (so all eggs aren’t in one basket, and we aren’t wiped out by one company’s stock price tanking or a severe storm)

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Investing in capital that will grow in value (putting money where it grows faster than the inflation rate, real estate, well-managed enterprises, etc.)

When individuals, some of whom are leaders of a businesses as well as education, human service and government organizations, develop an expanded view of prosperity and security now and in the future, they begin to notice additional forms of “capital” required to live. They understand that in addition to financial capital, we also depend on social capital and natural capital to “sustain a desired level of long-term security and to increase personal ‘wealth’," which includes, but is not limited to, monetary wealth. They recognize that building and sustaining social capital and natural capital requires the same kind of vigilance and responsible action we assume when we focus our attention on building and sustaining financial capital—cutting expenses, managing risk, and investing in valuable assets. Holistic sustainability strategies aim to do just that in an integrated and synergistic way. Regardless of how we think about the term sustainability, translating the idea to action often requires a transformative shift in human behavior. We must first acknowledge the sustainability challenge, and then find meaningful ways to take responsibility for choosing a sustainable course of action.

4. Sustainable development: a business definition
The concept of sustainable development has received growing recognition, but it is a new idea for many business executives. For most, the concept remains abstract and theoretical. Protecting an organization’s capital base is a well-accepted business principle. Yet organizations do not generally recognize the possibility of extending this notion to the world’s natural and human resources. If sustainable development is to achieve its potential, it must be integrated into the planning and measurement systems of business enterprises. And for that to happen, the concept must be articulated in terms that are familiar to business leaders. The following definition is suggested: For the business enterprise, sustainable development means adopting business strategies and activities that meet the needs of the enterprise and its stakeholders today while protecting, sustaining and enhancing the human and natural resources that will be needed in the future. This definition captures the spirit of the concept as originally proposed by the World Commission on Environment and Development, and recognizes that economic development must meet the needs of a business enterprise and its stakeholders. The latter include shareholders, lenders, customers, employees, suppliers and communities who are affected by the organization’s activities. It also highlights business’s dependence on human and

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natural resources, in addition to physical and financial capital. It emphasizes that economic activity must not irreparably degrade or destroy these natural and human resources. This definition is intended to help business directors apply the concept of sustainable development to their own organizations. However, it is important to emphasize that sustainable development cannot be achieved by a single enterprise (or, for that matter, by the entire business community) in isolation. Sustainable development is a pervasive philosophy to which every participant in the global economy (including consumers and government) must subscribe, if we are to meet today’s needs without compromising the ability of future generations to meet their own. (Business strategies for sustainable development)

Sustainability Leadership
We describe “sustainability leadership” as Conscious engagement in individual and collective actions that nurture and sustain the economic, environmental and social well-being of organizations and communities. It means getting into the game, taking responsibility by tackling and understanding complex local and global issues that impact the lives of people today and in the future, and working side-by-side with others who are seeking to make a difference. A “sustainability leader” can be described as anyone who consciously chooses to engage in collaborative, transformative change aimed toward the goal of a sustainable future. The magnitude and complexity of sustainability challenges requires new thinking about the experience of leadership.

Leadership Model
Traditional Model Leaders inspire a shared vision, build consensus, provide direction, and initiate change to ensure successful outcomes. Leaders are the “wise ones”, have an enlightened view about what direction, outcomes, and ways of engaging are required for success. Often rely on leaders' charismatic ability to persuade followers to engage in actions that bring their visions to life. People look to their leaders for direction, guidance and answers. Sustainable Model Leaders focus on how members of the human community, individually and collectively, create changes that make sense for long-term prosperity and survivability. Developed from a deeper understanding of individual responsibility and conscious action/interaction within a network of individual who share a common identity. Everyday people seek to expand their understanding of the challenges they see and share with others and develop a shared view of a viable pathway to create the future they want.

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They often are willing to defer to “those in charge” rather than act from a position of courage and self-authority that honors their own views in relation to others. This perspective of leadership, and assumed follower response, is deeply engrained in Western culture. However, things are changing.

Leaders generate and enact reasonable solutions that can work for them—all within the context of their ongoing interactions with each other as a community of responsible, active individuals.

Sustainability leadership is not prescriptive; leadership actions and the outcomes they produce emerge in the context of continually changing dynamics. This notion of leadership requires paying attention to what is going on in each particular situation, and then figuring out what to do next in the context of a holistic picture that is shared by others. Leaders who operate from this frame of reference seek to build individual and collective capacity (human capital) for dealing with complex challenges. They continually uncover and nurture the leadership potential within themselves and others around them, which is necessary to move toward a sustainable future. (Sustainability Leadership Institute, 2009).

5. Sustainability Leadership Principles
• Empower themselves to take responsibility, and step into a leadership role. A “sustainable leader” is any one of us who cares enough to engage in the process of creating transformative change with others—aimed toward a sustainable future. Sustainability leadership is conscious, individual and collective actions that lead to outcomes intended to nurture, support, and sustain healthy economic, environmental and social systems. Making Sustainability Relevant. Articulating the ways in which sustainability challenges are real and sustainability solutions are relevant to the immediate and long-term success of our communities, businesses and organizations; to understand and make visible the ways in which sustainable solutions are often the best solutions for core challenges. Sustaining Personal Energy and Momentum. Finding ways to sustain one’s own and others’ energy, momentum and belief in what is possible in the face of daunting challenges; i.e., developing practitioner communities of reflection, learning and development. Convene authentic conversations with others which is needed to generate broader understanding and workable solutions. Meaning—and purposeful actions—are co-created in ongoing conversations and

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interactions with others. Each individual contributes to the meaning-making process from a unique perspective informed by his or her unique experiences of the past and unique anticipation of the future as it unfolds moment to moment. • Creating Spaces for, and Participating in, Constructive Conversations. Inviting inquiry that stimulates one’s own and others’ thinking as a matter of course; holding questions open long enough to explore and discover perspectives and connections that might otherwise be overlooked. Building Authentic Relationships. Building and expanding relationships for developing and implementing integrated solutions; for example, long-term partnerships, inter-generational engagement, learning relationships and supporting relationships. Engaging Experts as Collaborators. Engaging outside resource people willing to work as part of a team in ways that invite collaboration, collective discovery and the learning needed to broaden system capability Understand that the creative tension emerging from paradox and diverse perspectives holds potential for breakthrough thinking. Sustainability requires acknowledging the paradoxes and diversity inherent in all complex living networks, certainly among human beings in any context. This tension is the fodder for the emergence of dramatic shifts in thinking and the co-creation of innovative solutions. Leaders become adept holding a big enough space, first in their own minds and then with others, for dealing with seemingly contradictory or competing “truths” that must be understood and addressed openly to support a creative and productive social environment for change. Inviting Diverse Voices/Perspectives. Inviting and honoring conflicting points of view while simultaneously seeking common ground and figuring out solutions for the collective good; embracing tension as a source of energy for generating creative shifts in understanding and direction. Working Effectively with Relational Power Dynamics. Understanding the complex nuances of dynamic power relationships when working with others whose active support is critical for success. Look for interrelationships among people, organizations and the actions they take, noticing the impact they have on one another in addition to society, the economy and the environment as a whole. Effective sustainability action requires holistic thinking: being adept at connecting the dots needed to maximize the impact of actions taken in one area; while, simultaneously noticing, and minimizing, the potential for unintended negative outcomes in another area. Thinking Holistically: Being Mindful of Interdependent Connections. Building capacity for thinking holistically and recognizing relationships among seemingly

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independent entities or actions; producing sustainable solutions that build on one another; relate challenges and progress to what is happening within the whole. • Marshalling and Amplifying Resources for Optimal Impact. Exploring opportunities to acquire and leverage the impact of resources developed through strategic partnerships. Understand that outcomes unfold in the context of interactions with others in ever-changing circumstances in the absence of a predetermined plan. Sustainability leadership is not prescriptive; leadership actions and the outcomes they produce emerge in context of continually changing dynamics. This is not to say that sustainability leaders don’t establish goals and agreements, and hold themselves and others (as appropriate) accountable for what they say they will do. They help make things happen while paying attention to what is going on in each particular situation and then figuring out what to do next. Continually Assessing Opportunities and Risks. Considering advantages of sustainability strategies in light of possible adverse effects (which may not be immediately visible) as outcomes unfold over the course of time. Understanding and Working with Paradox and Ambiguity. Letting go of control, certainty and the need to predict outcomes; instead, engaging with others to find solutions in the face of uncertainty and contradictions. Making Things Happen. Achieving concrete results with and through others by cocreating and abiding by agreed-upon "rules of the game" within a flexible strategic framework. Structuring tangible processes and agreements for timely execution of actions and joint monitoring of accountability. Notice and attend to complex human dynamics of transformative change — whether in one individual, a group of people or a community. Human beings learn and grow through the natural processes of change. They choose to engage in change through their own work of discovery and experimentation, instead of accepting beliefs that are imposed upon them by others. Effective leaders become catalysts for change by exploring human development capacity, learning to work with it, and being open to what happens next. Continually experiment, reflect, learn, adjust and share their emerging findings with others. Sustainability leadership depends on informed participation. Active learning as a way of being is a fundamental component of leading the way to a sustainable future. Because we can’t possibly know the answers as we move into uncharted waters, we have to literally learn our way into the future by experimenting with possibilities. Experimenting and learning are adaptive, creative processes of leading. Adapting and Using Sustainability Frameworks that Make Sense in Your Context. Being aware of a variety of frameworks for engaging in meaningful

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sustainability conversations and practices. Examples include: The Natural Step System Conditions, Natural Capitalism, environmental and social management systems (e.g. ISO14001 environmental management systems), and SLI community planning and engagements frameworks.) • Learning through Experimenting. Stretching, being willing to learn in new ways; taking calculated risks to test emerging ideas; reflecting on and learning from experiences of all kinds; looking for unrealized potential through experimental thinking and doing with others. Sharing Information/Knowledge as it Unfolds. Telling others your story while it is happening in an effort to help others learn with you, and to strengthen the collective practice of experimentation, adaptation and learning. Ground themselves in their own personal ethic, maintaining conscious awareness of their actions in relation to others. Human beings have a central core that yearns for meaningful connection with other human beings and with the earth. We long for a world in which there is a sense of meaning behind all things, a world in which our respect for each other and the earth governs our sense of purpose from which we choose purposeful action. Grounding Conversations and Action in Personal Integrity. Being clear about one’s own identity, principles and intentions before engaging others in the work of change. Frequently reexamining personal integrity guides leadership action in complex and ever-changing circumstances. Personal Reflecting, Learning and Adjusting. Continually noticing self in relationship with others and the work; consciously choosing authentic words and actions in the present moment; encouraging collective reflection about what has happened, why and what it means for future thinking and action; and getting smarter through engaging with collaborators. (Sustainability Leadership Institute ,2009).

6. Sustainability Project Definitions
Many definitions can express project sustainability: • • To keep in existence; maintain (The American Heritage) The ability of a system of any kind to endure and be healthy over the long term. A “sustainable society” is one that is healthy, vital, resilient, and able to creatively adapt to changing conditions over time. (Top 10 by 2010, Southwest Louisiana) The ability of an organization to develop a strategy of growth and development that continues to function indefinitely. (Dorothy A. Johnson Center for Philanthropy & Leadership)

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Does and Does not
• What project sustainability means o Maintaining the outcomes, goals and products o Institutionalizing the process • What project sustainability doesn’t mean o Maintaining staff positions o Maintaining all activities o Depending on grant funding (AACPS Development Office, 2005)

Ask the right question
• • • • • • What are we doing? Do other people know what we’re doing? What outcomes do we want to sustain? Is there data to support our results? What are the fiscal needs? What are the management needs? Who champions this initiative? Who else do these outcomes affect? Whose interests do this support? (AACPS Development Office, 2005)

Strategies for Sustainability
• • • • • • • • • • Develop broad-based relationships/partnerships that foster collaboration. Involve all stakeholders: parents, students, business, politicians, community leaders, school administrations, funders. Nurture community involvement. Develop a core of supporters. Be visible. Develop an outreach plan. Link evaluation to project success and then to marketing. Be flexible. Modify the project based on evaluation and feedback. Communicate, communicate, and communicate. Share resources. Share expertise. Share successes. Develop a Sustainability Plan

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• • • •

Begin today and think broadly. Include partners and champions. Include short and long-term sustainability goals. Set priorities for sustainability. What are the most important outcomes that you want to maintain? (AACPS Development Office,2005)

Checklist for Project Manager
If you can answer yes to all of the following questions about your project, your project is likely to be on the road to sustainability. 1. Do you have a long-term vision and goals for the project and its partners? 2. Do you have written commitments describing the financial and intellectual contributions of and timelines for your collaborations? 3. Do you have a depth chart that lists individuals who can step in and contingency plans for key personnel and partnership changes? 4. Have you specified methods and a timeline to use to collect data about your project to use with project staff and collaborators? 5. Do you have a written plan for incorporating the project within the institution (including dates and administrator written commitments)? 6. Do you have strategies to obtain additional funding and support for the project beyond the time of the original grant? 7. Do you have a project promotion and marketing plan for raising awareness of the project and updating and disseminating its products? (Taylor, 2008)

7. Enhancing management systems
The concept of sustainable development needs to be incorporated into the policies and processes of a business if it is to follow sustainable development principles. This does not mean that new management methods need to be invented. Rather, it requires a new cultural orientation and extensive refinements to systems, practices and procedures. The two main areas of the management system that must be changed are those concerned with: • • A greater accountability to non-traditional stakeholders; Continuous improvement of reporting practices.

Developing an effective management framework for sustainable development requires addressing both decision-making and governance. The concept of sustainable development

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must be integrated both into business planning and into management information and control systems. Senior management must provide reports that measure performance against these strategies. Governance is increasingly important because of the growing accountability of the corporation and its senior management. Information and reporting systems must support this need. Decision-making at all levels must become more responsive to the issues arising from sustainable development. Seven steps are required for managing an enterprise according to sustainable development principles. These are set out below.

Figure 2: Enhancing management systems

7.1. Perform a stakeholder analysis
A stakeholder analysis is required in order to identify all the parties that are directly or indirectly affected by the enterprise’s operations. It sets out the issues, concerns and

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information needs of the stakeholders with respect to the organization’s sustainable development activities. Today, business enterprises in developed countries operate in a more complicated, and more regulated, environment. Numerous laws and regulations govern their activities, and make their directors accountable to a broader range of stakeholders. Sustainable development extends the stakeholder group even further, by including future generations and natural resources. Identifying the parties that have a vested interest in a business enterprise is a central component of the sustainable development concept, and leads to greater corporate accountability. The stakeholder analysis begins by identifying the various groups affected by the business’s activities. These include shareholders, creditors, regulators, employees, customers, suppliers, and the community in which the enterprise operates. It must also include people who are affected, or who consider themselves affected, by the enterprise’s effect on the biosphere and on social capital. Companies that understand what their stakeholders want will be able to capitalize on the opportunities presented. They will benefit from a better informed and more active workforce, and better information in the capital markets. In identifying stakeholder groups, management should consider every business activity and operating location. Some stakeholders, such as shareholders, may be common to all activities or locations. After the stakeholders have been identified, management should prepare a description of the needs and expectations that these groups have. This should set out both current and future needs, in order to capture sustainable development concept. The key is to analyze how the organization’s activities affect each set of stakeholders, either positively or negatively. A stakeholder analysis can be a useful way to identify areas of potential conflict among stakeholder groups before they materialize.

7.2. Set sustainable development policies and objectives
The next objective is to articulate the basic values that the enterprise expects its employees to follow with respect to sustainable development, and to set targets for operating performance. Senior management is responsible for formulating a sustainable development policy for its organization, and for establishing specific objectives. Sustainable development means more than just ‘the environment’. It has social elements as well, such as the alleviation of poverty and distributional equity. It also takes into account economic considerations that may be absent from a strictly ‘environmental’ viewpoint. In particular, it emphasizes maintaining or enhancing the world’s capital endowment, and highlights limits to society’s ability to substitute manmade capital for natural capital. Management should incorporate stakeholder expectations into a broad policy statement that sets out the organization’s mission with respect to sustainable development. This policy statement

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would guide the planning process and put forward values towards which management, employees and other groups such as suppliers are expected to strive. There are many benefits in actively involving the board of directors in the development of a sustainable development policy. It is the board of directors that determines overall priorities and sets the tone for management and employees. By itself, the board’s commitment will not guarantee that a sustainable development policy will be effectively implemented. However, the absence of that commitment will certainly make it difficult to implement the policy. While statements of broad policy on sustainable development are important, senior management and directors should supplement their policy statement with a series of specific objectives. For example, Appendix (1) shows a statement of policy and objectives, developed by Northern Telecom, illustrates the desirable scope and level of specificity: It is important that sustainable development objectives be clear, concise and, wherever possible, expressed in measurable terms. Establishing measurable objectives is essential if management and others are to be able to assess whether their business activities have met the established objectives. After the sustainable development objectives have been established, management should compare its competitive and financial strategies against these targets. It is important to ensure that the sustainable development objectives that are established complement the enterprise’s existing competitive strategies. In other words, sustainable development should provide an additional dimension to business strategy. It provides senior management with an additional benchmark against which business strategies and performance should be assessed. An effective external monitoring system is necessary for directors and senior management, in order to ensure that sustainable development policies, objectives and management systems are appropriate for the complex and rapidly changing world in which their business operates. Information should be gathered on key subjects, including: • • • • • • New and proposed legislation; Industry practices and standards; Competitors’ strategies; Community and special interest group policies and activities; Trade union concerns; Technical developments, such as new process technologies.

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7.3. Design and execute an implementation plan
It is important to draw up a plan for the management system changes that are needed in order to achieve sustainable development objectives. Translating sustainable development policies into operational terms is a major undertaking that will affect the entire organization. It involves changing the corporate culture and employee attitudes, defining responsibilities and accountability, and establishing organizational structures, information reporting systems and operational practices. These changes are normally so substantial that a three-to-five-year plan with one year milestones will be needed. Managing this type of organizational change requires leadership from senior management. The board of directors, the chief executive officer and other senior executives must be actively involved in the process. They need to lead by example, and to set the tone for the rest of the organization. Some organizations incorporate statements of environmental responsibility into the job descriptions of managers and staff. Clearly defining accountability is essential to successful implementation. Cultural change and retraining should complement the new goals. Reward systems and incentives reflecting the new corporate values should also be considered. Marketing activities should consider customers’ needs regarding sustainability. This will require changes to the organization’s market research efforts. This feedback can affect the way products are designed, produced, packaged, marketed and promoted. In some cases, new markets may be added or existing markets redefined.

7.4. Develop a supportive corporate culture
In order to ensure that the organization and its people give their backing to the sustainable development policies, an appropriate corporate culture is essential. In the process of implementing sustainable development or environmental management policies, many companies have experienced a kind of organizational renewal. The increased participation of employees not only generates practical ideas, but also increases enthusiasm for the program itself. Most customers and employees enjoy being part of an organization that is committed to operating in a socially responsible manner. Implementing sustainable development objectives will probably require managers to change their attitudes. This may be accomplished only after retraining. For example, some executives may feel that their sole responsibility is to maximize the wealth of the enterprise’s owners. As a result, they may have difficulty understanding the sustainable development concept and in accepting it as a legitimate business objective. Meanwhile some managers may not be accustomed to identifying the need for ecoefficient practices such as energy efficiency and recycling. Some may never have explicitly considered the effect of their actions on any stakeholder group other than shareholders. Others may resist changing the way in which their

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performance is measured. Managers of multinational corporations may not think it appropriate to redesign their programs in order to ensure that contribute to sustainable development in poorer countries. Effective communication is essential. Internally, all levels of management, and all employees, must understand the policies and objectives that have been established. Employees can have a strong influence on corporate culture and on a company's environmental performance. The DRT International survey of European companies reports that: Just over half of the companies surveyed invite direct suggestions from employees on environmental issues. About 80% of the companies that invite suggestions have changed their products or processes as a result, while only 54% of all respondents have made such changes. This happens not only in environmentally advanced countries such as Switzerland and Norway, but also in Hungary, where employees are keen to tackle the country’s considerable environmental problems. The concept of sustainable development requires organizations to develop a culture that emphasizes employee participation, continuous learning and improvement. Internal reporting systems can have a significant effect on corporate culture. They must be designed to reinforce positive behavior with respect to sustainable development. They also need to be linked to the enterprise’s recognition and promotion systems, the active and visible involvement of senior executives and directors can be a powerful force in forming attitudes, and in creating a supportive culture in which sustainable business practices can flourish. Executives are the people who set the policies and the norms by which business is done. Equally, it is important that the board provide an oversight in the allocation of responsibilities for sustainable development objectives. This umbrella role should include ensuring that responsibilities are assigned in a manner that holds key executives accountable. It also means ensuring that reward and promotion systems recognize those people who achieve, or help to achieve, sustainable development objectives.

7.5. Develop measures and standards of performance
The implementation of sustainable development objectives, and the preparation of meaningful reports on performance, requires appropriate means of measuring performance. Management control, as well as external reporting, depends in part on the availability of timely information about company operations. This is needed in order to allow management to assess performance against external and internal performance standards, using appropriate performance measures. Information systems will therefore need to be reviewed, to enable the necessary reports to be provided to management. The measures used to assess and report on performance will be influenced by the company’s sustainable development

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objectives, and by standards that have been established by government and other public agencies. The information generated must be in the right units if actual performance is to be compared with the set targets. This might require new measuring procedures to be introduced. In many cases, companies are ahead of governments in establishing sustainable development performance criteria. However, as society becomes more aware of environmental issues and exerts more pressure for action, government can be expected to take on a more influential role. There is a significant opportunity for the business sector to work with governments in establishing performance measures and standards, and to help develop reporting and monitoring systems that are cost-effective and which meet the needs of both the public and business. While external standards, measures and reporting systems are needed, they take time to develop and implement, especially if consultation is required. Businesses should not wait for such standards to be developed before setting sustainable development objectives and measuring the sustainability of their activities.

7.6. Prepare reports
The next step in the process is to develop meaningful reports for internal management and stakeholders, outlining the enterprise’s sustainable development objectives and comparing performance against them. Directors and senior executives use internal reports to measure performance, make decisions and monitor the implementation of their policies and strategies. Shareholders, creditors, employees and customers, as well as the public at large, use external corporate reports to evaluate the performance of a corporation, and to hold the directors and senior executives accountable for achieving financial, social and environmental objectives. The system needs incentives, and reliable information, in order to ensure that there are rewards for positive actions. It is ironic that business activity which destroys habitats and pollutes air, land and water produces ‘income’ and contributes to gross national product. Decision-makers within businesses and governments need a more relevant reporting system. A system that provides a meaningful picture of a company’s sustainability achievements is essential for strengthening accountability. This is necessary if an effective relationship is to be maintained with stakeholder groups. Internally, several companies now ask their line managers to include in their regular reporting procedures a statement on whether they have achieved the environmental and sustainable development targets. Similarly, the board of directors should receive periodic reports from senior management on whether these objectives have been achieved. External reporting on sustainable development issues can take a number of different formats. Some

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organizations are experimenting with special reports for particular stakeholder groups, such as employees. Others provide a general-purpose report on environmental activities. Still others include the subject of environmental and social issues in a separate section of their annual reports. Every business enterprise should publish, at least once a year, an external ‘sustainable development report’. Ultimately, a universal format for such reports will be desirable. In the meantime, managers and boards of directors should decide on the organization and content of
reports.

7.7. Enhance internal monitoring processes
On an ongoing basis it will be important to develop mechanisms to help directors and senior managers ensure that the sustainable development policies are being implemented. Performance monitoring is well established as an important element of the management process. In many areas, it is directly linked to reporting. The key to any system’s effectiveness is whether the management monitors operations and outputs on an ongoing basis. Monitoring can take many forms, such as: • • • • Reviewing reports submitted by middle managers; Turing operating sites and observing employees performing their duties; Holding regular meetings with subordinates to review reports and to seek input on how the procedures and reporting systems might be improved; Implementing an environmental auditing program.

Organizing internal environmental audits is a practical way to monitor the implementation of management policies. For example, many organizations now perform internal audits to monitor compliance with environmental policies and legislation. These normally require multidisciplinary teams of experts (for example engineers, auditors and scientists) who possess the necessary knowledge and experience, both in auditing and in the areas being audited. The following definition of environmental auditing was developed in 1989 by the International Chamber of Commerce’s working party on environmental auditing: A management tool comprising a systematic, documented, periodic and objective evaluation of how well environmental organization, management and equipment are performing, with the aim of helping to safeguard the environment by: • • Facilitating management control of environmental practices; Assessing compliance with company policies, which would include meeting regulatory requirements.

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In Europe, the Commission of the European Community has adopted guidelines on environmental auditing of industrial activities. Such audits are voluntary but must follow EU guidelines, including the publication of a statement on the audit results by the company, verified by an accredited auditor. The objective is to give companies more control over their environmental performance, and to increase public awareness.

8. Management leadership
Establishing sustainable development objectives, systems and monitoring mechanisms requires leadership on the part of senior management, and a commitment to continuous improvement.

The role of the board
Without the active involvement of the board of directors, it will be difficult for an organization to implement sustainable business practices. Corporations are encouraged to establish a ‘social responsibility committee’, responsible for setting corporate policies on sustainable development and for dealing with issues such as health and safety, personnel policies, environmental protection, and codes of business conduct. This list is not allencompassing. The committee’s exact responsibilities should be dictated by individual business circumstances. Nevertheless, there may be a need to establish a ‘minimum’ set of responsibilities. It is important that corporate sustainable development policies be implemented consistently throughout an organization. Too many business enterprises observe variable levels of corporate ethics and integrity, depending on the country in which they are operating. This double standard is inconsistent with the concept of sustainable development, and ensuring that it does not prevail is an important role of the directors. The board also has a role in monitoring the implementation of its policies. It should receive regular reports on how the policies are implemented, and should be accountable to its stakeholders on the company’s performance against these policies.

Self-assessment
The first step for businesses in adopting sustainable development principles is to assess their current position. Management should know the degree to which the company’s activities line up with sustainable development principles. This requires evaluating the company’s overall strategy, the performance of specific operations, and the effect of particular activities. This process should compare the company’s current performance with the expectations of the stakeholders. Management philosophies and systems should be reviewed; the scope of public disclosures on sustainability topics should be analyzed; and the ability of current information systems to produce the required data should be evaluated.

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Various self-assessment devices are available to help this process, such as the GEMI and CERES questionnaires, as well as material tailored to specific industries – for example, the North American chemical industry’s ‘Responsible Care’ program.

Deciding on a strategy
Once managers have gained an understanding of how its own operations shape up, they should gauge the performance of other, comparable organizations. Comparisons against the standards set by other industries and environmental groups can be instructive. This task should be relatively easy if there is reasonable public disclosure, organized industry associations and co-operative sustainable development programs. However, if these structures do not exist, management could approach other businesses to discuss sharing information and possibly establishing an industry group. Management should then consider ways to narrow the gap between the current state of the corporation’s performance and its objectives for the future. A strategy will need to be developed, outlining where the company hopes to position itself relative to its competitors and its stakeholders’ expectations. A general plan is needed to describe how and when management expects to achieve that goal, together with the various milestones it will reach along the way. Senior management should review and approve the strategy and the plan before submitting them to the board of directors for final approval. Because of the pervasiveness of sustainable development, it is essential that members of the senior management team (representing all facets of the company's activities) ‘buy in’ to the project. Anything less than full commitment may doom the plan to failure.

Strategy implementation
Once the strategy and the general plan have been approved, detailed plans should be prepared indicating how the new strategy will affect operations, management systems, information systems and reporting. These should set out measurable goals to be achieved in each area, and explain how progress will be monitored. They should also specify spending and training requirements. These plans should be developed through consultation with employees throughout the organization, possibly with the assistance of outside specialists. It will be a time consuming and dynamic process, which will entail frequent modifications as input is obtained from several sources. Once finalized, the plans should be approved by senior management and, ideally, by the board of directors as well.

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9. A framework of criteria to assess the sustainability of engineering projects and technologies in industry
In order to assess sustainability performances in industry, a framework of appropriate criteria and associated indicators has to be defined. A number of current integrated frameworks, which are used to assess sustainability at an international, national, local or company level, have been reviewed to determine the relevant aspects (or criteria) that should be considered when assessing industry sustainability. The proposed framework of appropriate criteria to assess the sustainability performances of operational initiatives in industry is shown in Figure 3. The framework is divided into different levels to address the separate aspects of corporate responsibility strategy in terms of sustainability. From a business perspective, the inclusion or consideration of social aspects in sustainability practices is marginal compared to the environment and economic dimensions. It has further been stated that the current state of development of indicators or measurement procedures of the social performances of industry parallels that of environmental performances approximately 20 years ago. Therefore, the social criteria of the framework were verified by a set of case studies. For each of the three life cycle phases of assets, i.e. construction, operation (which includes the product life cycle) and decommissioning, four case studies were chosen that aimed to determine the significant social impacts that may occur during these life cycle phases: • • • The construction of four facilities in the process industry: a mine; an incinerator; petrol filling stations; and a gas pipe line across two countries. The operation of four chemical manufacturing facilities of which two are located in South Africa, one in Germany and one in the United States of America. The decommissioning of four process facilities: a cyanide manufacturing plant; a fibers manufacturing plant; a mine; and one unit within a process plant.

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Figure 3: Framework to assess the sustainability of engineering projects and technologies

10. Sustainable development indicators or assessment procedures
The identification of suitable indicators to measure the impacts of an operational initiative, i.e. an undertaken project or technological innovation, including the associated asset and product life cycles, on the three main sustainability dimensions is dependent on the following three important points: • The kind of information that is available at the point of assessing the sustainability performance of a specific operational initiative. For example, considering the life cycle of a technology development project in the process industry, detailed data may not exist in the early stages of the project on which to base an assessment, but may be available at later decision gates in the project appraisal process. Also, additional information gathering activities might have to be executed during individual phases in order to obtain the necessary sustainability data that is required by the indicators. The scientific methodology to translate the operational initiative information. There is currently no consensus on the exact procedure to assess the environmental performances of operational activities. However, work is ongoing in this field and

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methodologies have been proposed. With respect to the social dimension, there is little agreement on which criteria should be considered for social performances evaluations and methodologies are currently not practical for industry applications and business practices. In contrast, the methodologies for most of the sub-criteria of the economic dimension are reasonably well defined. • The preferences of the specific project appraisers. Two approaches are currently under debate. On the one hand all impacts could be translated into financial terms, which is often understandable by decision-makers. On the other hand, it is difficult, if not impossible, to place an economic value on all environmental and social impacts15, and a qualitative route with decision analysis techniques, e.g. MultiCriteria Decision Analysis (MCDA), could be used16. In some cases, a combination of these two approached have been proposed.

In terms of the latter, two approaches are discussed in more detail for the environmental and social dimensions of sustainable development, i.e. a pure monetary evaluation route and a combination of quantitative and qualitative indicators that may be used with decision analysis techniques.

11. Conclusion
Whether or not sustainability forms part of a project’s outlook or culture, or forms part of a job description and role, there are still opportunities for everyone to contribute as citizens of this small globe. The issues and choices are complex, more and more information is being added to the debate – but common sense is a good standby. “What is your carbon foot print? And for how you manage yourself?” – energy conservation, paper savings, green travel arrangements, avoiding waste, best use of resources, existing technology, eliminate dirty costs, etc. (Taylor, 2008)

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References
1. AACPS Development Office (2005) www.aacps.org/development/IntroToProjSustainability.ppt Retrieved: 2009-08-30 2. Commonwealth of Australia (2007). "Defining Sustainability." House Standing Committee on Environment and Heritage, Inquiry into a Sustainability Charter. Chapter 2. Retrieved on: 2009-02-16. 3. Deloitte & Touche (1992). Business strategies for sustainable development .Based on the book Business Strategy for Sustainable Development: Leadership and Accountability for the 90s, published in 1992 by the International Institute for Sustainable Development in conjunction with and the World Business Council for Sustainable Development. 4. Dunning, B. (2006). "Sustainable Sustainability." Skeptoid. Retrieved on: 2009-0216. 5. Eur Active (2009). Sustainable Development. "Introduction". http://www.euractiv.com/en/sustainability/sustainable-developmentintroduction/article-117539. Retrieved on: 2009-09-23. 6. International Institute for Sustainable Development (2009). "What is Sustainable Development?". http://www.iisd.org/sd/. Retrieved : 2009-09-19. 7. Kates, R., Parris, T. & Leiserowitz, A. (2005). "What is Sustainable Development?" Environment 47(3): 8–21. Retrieved on: 2009-04-14. 8. Ott, K. (2003). "The Case for Strong Sustainability." In: Ott, K. & P. Thapa (eds.) (2003).Greifswald’s Environmental Ethics. Greifswald: Steinbecker Verlag Ulrich Rose. ISBN 3931483320. Retrieved on: 2009-02-16. 9. Ott, K. and P. Thapa (2003). Greifswald's Environmental Ethics Steinbeckerverlag Rose ISBN 3931483320. Retrieved on: 2009-02-24. 10. Ratner, B.D. (2004). "Sustainability as a Dialogue of Values: Challenges to the Sociology of Development." Sociological Inquiry 74(1): 50–69. 11. SD Gateway (2009) .Introduction to Sustainable development."Definitions". http://sdgateway.net/introsd/definitions.htm. Retrieved on: 2009-09-25. 12. Sustainability Leadership Institute (2009). "What is Sustainability".http://www.sustainabilityleaders.org/whatis/ Retrieved on: 2009-0928 13. Taylor, T. (2008). A Sustainability Checklist for Managers of Projects. Published in PM World Today. (Vol. X, Issue I) 14. UNESCO "Sustainable Development an Evolving Concept" Retrieved o 2009-0810.

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Appendix
The following statement of policy and objectives, developed by Northern Telecom, illustrates the desirable scope and level of specificity: Recognizing the critical link between a healthy environment and sustained economic growth, we are committed to leading the telecommunications industry in protecting and enhancing the environment. Such stewardship is indispensable to our continued business success. Therefore, wherever we do business, we will take the initiative in developing innovative solutions to those environmental issues that affect our business. We will: • Integrate environmental considerations into our business planning and decision making processes, including product research and development, new manufacturing methods and acquisitions/divestitures; Identify, assess and manage environmental risks associated with our operations and products throughout their life cycle, to reduce or eliminate the likelihood of adverse consequences; Comply with all applicable legal and regulatory requirements and, to the extent we determine it appropriate, adopt more stringent standards for the protection of our employees and the communities in which we operate; Establish a formal Environmental Protection Program, and set specific, measurable goals; Establish assurance programs, including regular audits, to assess the success of the Environmental Protection Program in meeting regulatory requirements, program goals and good practices; To the extent that proven technology will allow, eliminate or reduce harmful discharges, hazardous materials and waste; Make reduction, reuse and recycling the guiding principles and means by which we achieve our goals; Prepare and make public an annual report summarizing our environmental activities; Work as advocates with our suppliers, customers and business partners to jointly achieve the highest possible environmental standards; Build relationships with other environmental stakeholders – including governments, the scientific community, educational institutions, public interest groups and the general public - to promote the development and communication of innovative solutions to industry environmental problems; Provide regular communications to, and training for, employees to heighten awareness of, and pride in, environmental issues.

• •

• • • • •

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Critical Success Factors in Construction Projects: Owner/Investor’s Perspective Case Studies: Municipality and Power Plant Projects in Iran
Mehran Sepehri

Abstract
A particular project is seen differently from the investor/owner’s versus the contractor’s perspectives, with different objectives and success factors. A project may be called successful by the contractors within the set operational goals, while the same project may be deemed a failure by the sponsor who may have wished to reach particular strategic goals. This research seeks to distinguish investors/owners from other project stakeholders in their priorities and objectives as well as critical success factors for the project. Many previous studies have identified critical success factors for projects from an internal or contractor’s perspective, which may be different from the sponsor’s or other stakeholders’, such as research by Pinto-Slevin (1986). Using a similar research approach, extracting and recognizing such critical success factors can guide the project investor/owner to strengthen and monitor a short list of specific factors to increase the likelihood of project success. No study has so far focused on the interest of project investor/owner. Construction industry in general, and civil projects at Tehran Municipality in particular, are chosen as the context for this research. Although the results may be generalized to other contexts, the problem emphasis is physical projects, particularly on public construction project, where the investor/owner is separated from the contractor. Results are tested, for validity, in MAPNA Corporation in Iran which is a general contractor for government power plants and in turn uses many small and large sub-contractors. Based on an initial set of in-depth interviews and the Pinto-Slevin model, a 10 factor model is considered for project success from the investor/owner’s perspective. Statistical results of questionnaire from senior managers and professionals at Tehran Municipality show that 6 of these factors are most significant in project success during the various life-cycle of the projects. As the model is tested further with a control set of data, further interviews help define in detail each critical success factor and outline its sub-criteria. In the initial phase of the projects, as the results show, development of a clear set of project objectives and contractor selection process are critical success factors. During the planning phase, close coordination between the owner and the contractors is a main factor. During execution and control phases, success depends on top management support and technical problem solving. In closing, resolving claim issues is critical. Consensus is reached for a general project success model from the owner/investor’s side.

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As future research, and as the focus of this Expert seminar, Sustainability may be considered as part of project success. Without comprehensive and long-term sustainability, conventional project success is only a temporary illusion, particularly from the investor/owner’s perspective. It is expected that such future research, using a similar research method, yield particular critical success factors for Sustainability. In fact, sustainability is a priority objective for project investor/owner, amongst all other stakeholders.

1. Introduction
In the current competitive business world, many firms are re-evaluating their work to focus on their core competencies by increasing outsourcing. The project-based construction industry seeks to identify the critical factors which help successful outsourcing decisions. These organizations primarily aim to finish their projects based on a defined scope of time, budget and quality, while accepted by the final customer. However, they also aim for other results related to success such as future work and stable workforce. As a single company is not capable of doing all work, thus using other organizations’ competencies and skills is a necessary. Organizations focus on professional work in special fields, where they are capable of providing products with higher quality or lower costs, to increase competitive power and agility or to improve the possibility of innovative potency and gaining competitive advantages. Outsourcing is defined as the decision of an organization in respect of offering and/or sale assets, human resources and services to a third party is called outsourcing in which the contractual party undertakes to provide and manage the required assets and services in the contract against defined income and in a certain time (Aalders, 2002). Widespread studies in respect of outsourcing literature have been conducted, yet a comprehensive procedure for outsourcing decisions is not developed (Vining and Globerman, 1999). Activities previously provided by organizations are performed by external subcontractors. Industrial and business managers in using outsourcing strategy encounter various challenges and problems, trying to identify these problems to use outsourcing in a more effective manner (Thomas and Fernandez, 2008). Many organizations do not employ specified scheme for making decision about outsourcing of their activities (Blaxill and Hout, 1991). Specific project objectives are assumed to be considered implicitly by those interviewed and deviations in results are supposed to be averaged out from their longer term experience. The model is context specific, although it can shed light on general set of criteria in securing a higher likelihood of project success by the project owners and sponsors. Success is an elusive and relative concept in the eye of the beholder. However, some particular factors seem to be commonly critical in realizing such conceptual success. Previous research examining quantitative aspects of this decision, i.e. cost, have not considered overall factors related to the strategic aspects of outsourcing decision, or development of a comprehensive and systematic approach for outsourcing could be

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effective in reducing risk. If set of factors most influencing on success of outsourcing of projects become demonstrated, both clients and contractors are able to effectively cope with the challenges in the projects and be influential on successful conduction of them. In this paper, a conceptual framework is defined based on an initial literature review and interview with experts. Critical success factors are evaluated and prioritized for outsourced project in a large project-based construction organization in Iran. The methodology is based on qualitative analysis using literature and interviews, and quantitative analysis using a questionnaire for recent construction projects. Results show that successful implementation of outsourcing strategy in construction projects is strongly influenced by critical success factors such as the level of coordination with the contractors, the methods and procedures for contractor selection, clear and comprehensive project mission and objectives, well defined technical tasks as well as commitment and support client's top management. This is designed and analyzed using data from the client, and therefore projects the client’s perspective.

2. Project Success Factors
Project success is an abstract and judgemental concept, and therefore the recognition of success or failure of a project is complicated (Chan, 1996,1997). Project success concept could be assessed by performance measurement defined with various factors in different contexts. However, the ultimate judgement rests with various stakeholders in their assessment of satisfaction of short-term and long-term needs. Critical success factors are defined as a set of factors that their presence ensures the survival and success of an organization or a project (Clarke, 1999). Critical success factors promote human and organizational aspects of projects (Fortune and White, 2006). Since 1960s, project management researchers have tried to identify the factors resulting in project success. Despite efforts for several decades, such factors have not emerged for interested parties, especially clients (Davies (2002), (Fortune and White, 2006). Since 1960s project management research tried to discover which factors lead to project success (Baker, 1988; Pinto & Slevin, 1988; Lechler 1998), some conclusions reflected in literature written for project management practitioners. In spite of well-known research results on project management (Kloppenborg, Opfer, 2000), decades of individual and collective experience of managing projects (Morris, 1994), rapid growth in membership of project management professional bodies and a dramatic increase in the amount of project working in industry, project results continue to disappoint stakeholders (O’Connor, 1992). Decade of research on project success factors shows that preparation of a comprehensive list of factors for all projects may be impossible. Because of unique features of each project, success factors differ from one project to another (Westerweld, 2003). In this regard, many researchers tried to identify factors in special contexts, for various stakeholders, and with various approaches. Fortune and White (2006) prepared a list of critical success factors, as below:

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• • • • • • • • • • • • • • • • • • •

Top manager's support Clear and actual objectives Adequate budget Actual schedule Risk identification and assessment Project sponsor/hero Organizational structure/ culture Appropriate performance of suppliers/contractors/consultants Training Involvement of consumer/ client Adequate resources/ allocated appropriately Effective change management Political stability Project size/ complexity/ period of project Competent project manager Skilled/ eligible team Selection of right method/ tools Environmental influences Appropriate leadership

Research on managing outsourcing relationships has focused mostly on legal contracts, with tight contractual mechanisms recommended to reduce opportunistic behaviors (Ang and Beath, 1993; Lacity and Hirschheim, 1993), or on advocating strategic partnerships for managing the relationship (Willcocks and Kern 1998). No particular work has so far focused on CSFs for outsourced projects. Belassi and Tukel (1996) reviewed major studies in the literature related to success/failure factors. Results are shown below. Theoretical and experimental studies are listed according to their time period.

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Experimental Study
Rubin and Seeling (1967) Baker, Murphy and Fisher(1983) Pinto and Slevin (1987) Morris and Hough (1987) Pinto and Prescott (1988) Magal, Carr and Watson (1988) Nutt (1989) Pinto and Slevin (1989)

Theoretical Study
Avots(1969) Jonason(1971) Archibald(1976) Martin (1976) Markus (1981) Hughes (1986) Schultz, Slevin and Pinto (1987)

Table 1: Theoretical and experimental studies in project success factors (Belassi and Tukel, 1996) Pinto and Slevin (1986) studied project success in several contexts, with their ten factor model of project success. Fig. 1 shows the framework of project performance on the basis of ten project success factors. Their proposed model considered success factors and their correlation with project success from project team perspective including project team members and project manager. This is a different approach from Belassi and Toukel and Chan that considered and assessed role of critical factors in environmental levels.

Figure 1: framework of ten-factor model of project performance (Pinto and Slevin, 1986)

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The models by Chan and Pinto & Slevin were developed in large construction projects environment. In Pinto and Slevin’s Model, seven factors: top manager support, project mission, planning, consultant with client, personnel, technical tasks, client’s acceptance are influential subsequently and procedurally on project success during life cycle of the project, and three factors of communication, problem solving and monitoring and feedback are simultaneously influential on success in all stage of project from the contractor’s sight. Table below defines the success factors:

1. Project Mission 2. Top Management Support 3. Project Planning 4. Consulting with Client 5. Personnel 6. Technical Tasks 7. Client Acceptance 8. Monitoring and Feedback 9. Communication 10. Problem Solving

Clearly defined objectives and general guidelines Willingness of top management to provide required resources and adequate authority/power for project success Elaboration of activities Communication, consultant and listening actively to all vital members Recruitment, selection & training of required personnel for project team Availability of required technology and expertise for performing all defined technical activities Act of selling the final project to final consumers Comprehensive control in each steps of execution process Providing adequate network and data for all critical parties in execution of the project Ability to manage unforeseen crisis situations and deviation from plan

Table 2: Factors definition (Pinto and Slevin, 1986) The ten-factor Model of Pinto and Slevin created a new approach in project success factors context which, since then, is known and utilized as a reference in research of this field (Anderson et al. (2006), Belout and Gauvreau, 2004). One of the research fields in project management is study of client and contractor relationship in outsourcing of construction projects that most researches in this field focused on feasibility, advantages and disadvantages of outsourcing (Bryde and Robinson, 2005). Currently there are few researches which clearly distinguish between clients and contractors’ role in outsourcing project success (Bryde and Robinson, 2005), and in the related literature, the necessity of systematic research has been mentioned (Chan et al, 2003) With regard to construction projects’ role in industrial developments of countries, successful conduction of these projects has a great role in economical growth of countries.

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Since the Pinto and Slevin’s Model has been developed in construction project environment, it is appropriate to be used in this research. The ten-factor model of Pinto and Slevin is considered as a primary model in conducting of this research and the endeavour is to study critical success factors in outsourcing of Construction projects from the client sight for MAPNA Group as case study.

3. Research
The research uses case study and applied research methods. For assessment of critical success factors in Construction projects, first factors from Pinto and Slevin’s Model were selected as initial model in semi-structured interview sessions with experienced experts, from the client perspective. The relation between factors obtained from interview with experienced experts and project success are examined through distribution of questionnaire. In this theoretical model, success means completion of a project in a defined time, quality and cost which finally being approved by client. Variables in this research are of two types: • Dependent Variables: Since the objective of this paper is to identify the critical success factors in outsourcing of construction projects, the dependent variable is success of outsourcing of construction projects. Independent Variables: With regard to dependent variable and result of interviews with experts, independent variables of this research are critical influential factors in success of outsourcing of construction projects:

Mission and objectives of project (M), support of client’s top manager (S), selection of contractor (C), technical and specialty tasks (T), communication management with client (R). Since MAPNA Group is uses outsourcing strategy in construction projects in Iran, the domain of this research is MAPNA Group. In this research critical success factors of outsourced construction projects are identified and assessed in MAPNA Group as a client of construction projects. Statistical population is project managers, supervisors, and technical experts of construction projects of MAPNA Group. The studied projects were ones which have been completed and were of the most recent experience of statistical population.

3.1 Research Method
In this research, sampling is done according to Snowball sampling, which is a method of random sampling. At first Business and Development deputy and three of MAPNA Group project managers have been selected for interview, and they were asked to introduce the other informed people. These interviews continued until saturation of information. The organization requested not to disclose the name of projects and their managers in the research. For quantitative research, the method is cluster sampling. Among all projects of MAPNA Group completed within last 3 years, five projects were selected and the questionnaires were distributed among all project managers, supervisors and experts of these selected

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projects. The total number of distributed questionnaire was 115 and 88 people of the statistical sample answered to questionnaire.

3.2 Data Collection Tools of Research
The data collection tools in this research are interviews with a related expert panel and also questionnaires. First, in order to make Pinto and Slevin’s model suitable for the clients of construction projects, semi-structured interviews with ten experts were conducted. Then, to evaluate the revised Pinto and Slevin’s model for introduction of critical success factors of outsourcing of construction projects from the perspective of the client obtained by interviews, the questionnaire was used. Since the most common method of measuring thinking is personal report method, in the research, statistical sample was requested to answer to thirty three unforced questions- with a choice of “I do not have any comments”- in which the five-step Likert Scale with extremely agree to extremely disagree interval was used.

3.3 Validity of Research Measurement Tools
Content Validity Content validity ensures that the scale is conclusive of sufficient series and sample things for use of the concept. To the extent that the indexes of the concept under measurement are more, its content validity will be more. In the other words, content validity shows that how the description of dimensions and components of concept is (Khaki, 2000). For designing of the questionnaire, with regard to strong history of models and also with consideration of main models’ variables, the endeavour was to apply element measurement indexes which are based on appropriate theoretical and their practical application in numerous researches and tests. The questionnaires were provided to expert panel’s opinion, its validity was evaluated by one of the common methods for measurement of the questionnaire's content validity, by Lawshe in 1995. Before distribution of questionnaires, its content validity was considered by ten of experts through mentioned method, and its content validity ratio (CVR) was calculated 0.74. Considering the number of experts (10), the calculated content validity ratio is more than the least content validity ratio (0.62) as in Table 3. Face Validity Face validity is a primary content validity, which shows those cases expected to measure a concept. They evaluate the appearance of a concept (Khaki (2000). In fact, the face validity considers whether the experts verify that the tools are measuring what is inferred from their name (Khaki (2000). For the face validity, the questionnaire and its content were considered by 10 experts. Their comments were applied.

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3.4 Reliability of Research Measurement Tool
Reliability test is a scaling test by which the degree of reliability to the test results is determined, a main method for estimation of reliability coefficient is the test–retest method (Bazargan et al., 2005). In this study, the test–retest method is used to estimate the reliability. Based on Cronbach’s Alpha coefficient was estimated equal to 0.819 which is above 0.7 and within the acceptable criteria. The Cronbach’s Alpha coefficient was estimated for various parts of the questionnaire which are presented in detail in Table 3:

Cronbach’s Alpha coefficient 0.819 0.816 0.798 0.818 0.785 0.777 0.746

Elements under Measurement All Elements (whole questionnaire) Project’s Mission and Objective Element Client’s Top Management Support Element Client’s Selection Element Technical and Specialty Tasks Communication Management with Client Element Project Success Element

Table 3: Reliability estimation based on test–retest method, Cronbach’s Alpha

4. Presentation of Results
Correlation matrix of variables in this study is shown in Table 4.

Variable P M S C T R

p 1 0.58 0.46 0.64 0.49 0.74

M

S

C

T

R

1 0.12 047 0.16 0.42 1 0.17 0.97 039 1 0.23 0.49 1 0.44 1

Table 4: Correlation matrix of variables According to above table, the relationship between all variables is positive. Based on multivariate linear regression, the direct effects of independent variables on dependent variable are presented in the form of Table 5 in this section of the research.

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t 6.89 4.76 7.58 5.19 10.47

Estimate of Standard’s Error 0.083 0.081 0.057 0.081 0.075

Estimate of Standard Parameter 0.59 0.45 0.63 0.49 0.75

Relation Direction From Project’s Mission and Objective to Project Success From Client’s Top Management Support to Project Success From Contractor Selection Method to Project Success From Technical and Specialty Tasks to Project Success From Communication Management with Contractor to Project Success

Table 5: Direct effect of independent variables on dependent variables

4.1 Result Interpretation: Direct effects of independent variables on dependent variable
Value of ‘t’ indicates that the assumed paths from independent variables in the model to the dependent variable is meaningful. This includes project’s mission and objective, client’s top management support, contractor selection method, technical and specialty tasks and communication management with contractor on project success Therefore, the correspondent assumptions regarding each path are verified. Total variance is 0.86, which explains the project success by leading variables of objectives of project, client's top management support, selection of contractors, technical tasks and communication with client.

4.2 Hypothesis' Test Results
Hypothesis I) Project Mission and Objective affects the Project Success. The result of statistical tests for hypothesis 1 is analyzed with regard to information of table 5 of this hypothesis. Coefficient of variable of mission of project on project success, 0.59, with value of "t" equivalent to 6.9 and error level of 0.05 or reliance of 0.95 is a statistical meaningful result. Therefore, the assumption of lack of relevant coefficient is rejected. The statistical result hypothesis indicates that the mission and objectives of the project has a positive and direct effect on project success. In fact, by clarifying mission and objectives of the project for contractor, the probability of project success will increase. The intention of mission and objectives of project structure is the circumstances in which the project objectives are not only clear for client, but also clear and understandable for the contractor. Project success is defined as performing a project within determined time, quality and cost that ultimately being approved by client (Pinto and Slevin, 1986).

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Comparison of test results of hypothesis using King and Cleland’s work (king and Cleland, 1983), Baker et al. (Baker et al., 1983), Pinto and Slevin (Pinto and Slevin, 1986, 1988) and Morris and Hough (Morris and Hough, 1987), which have accepted the direct and positive relationship between project's mission and project success, indicates that this hypothesis test results are consistent with previous research results. Hypothesis II) Client’s top management support affects the Project Success. The test result of hypothesis 2 is analyzed with regard to information of table 5 of this hypothesis. Coefficient of variable of client’s top management support on project success, 0.456, with value of "t" equivalent to 4.757 and error level of 0.05 or reliance of 0.95 is a statistical meaningful result. As a result, the assumption of lack of relevant coefficient is rejected. Client’s top management support structure means type and size of support which the contractor expects from client’s top management (Pinto and Slevin, 1986). The client’s top management support can comprised of cases like project finance (on time payment to contractor) or support and leadership of system in determining and allocating projects and solving substantial problems. Comparison of test results of hypothesis with Pinto and Slevin’s researches (Pinto and Slevin, 1986, 1988), which have accepted the direct and positive relationship between top management support and project success, indicates that this hypothesis test results are consistent with previous research results. Hypothesis III) Contractor selection affects the Project Success. The test result of hypothesis 3 is analyzed using information of table 5 of this hypothesis: coefficient of variable of contractor selection on project success is 0.63; value of "t" is 7.58; error level of 0.05; reliance of 0.95, shows a statistical meaningful result. The assumption of lack of relevant coefficient is rejected. Contractor selection, therefore, is important for outsourcing of projects. Comparison of test results of hypothesis with researches of King and Cleland (King and Cleland, 1983) and Pinto and Slevin (Pinto and Slevin, 1986, 1988), which have accepted the direct and positive relationship of recruitment, selection and training of personnel with project success, indicates that this hypothesis test results are consistent with previous research results, of course from Client's perspective. Hypothesis IV) Technical and specialty tasks affects the Project Success. The test result of hypothesis 3 is analyzed with regard to information of table 5. Coefficient of variable of technical and specialty tasks on project success, 0.48, with value of "t" equivalent to 5.19 and error level of 0.05 or reliance of 0.95 is a statistical meaningful result. The assumption of lack of relevant coefficient is rejected. Communication management with contractor means a reciprocal and continuous relation and communication with contractor (Pinto and Slevin, 1986).

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Comparison of test results of hypothesis with researches of King and Cleland (king and Cleland, 1983) and Pinto and Slevin (Pinto and Slevin, 1986, 1988), which have accepted the direct and positive relationship between communication management with contractor and project success, indicates that this hypothesis test results are consistent with previous research results. With regard to coefficients of independent variables in regression line equation, it could be concluded that by making this coefficient larger, the sensitivity of dependent variable (outsourcing project success) from independent variable (critical factors) is greater. Therefore, the coefficients of these five factors (independent variables) in regression line equation, as critical success factors presented in the final model of this study is shown according their importance in below table respectively.

t 10.47 7.58 6.89 5.19 4.76

Estimation of Standard Parameter (Independent Variable Coefficient) 0.75 0.63 0.59 0.49 0.46

Independent Variable Communication Management with Contractor Contractor Selection Method Project’s Mission and Objective Technical and Specialty Tasks Client’s Top Management Support

Row 1 2 3 4 5

Table 6: the critical success factors of outsourcing project according to their importance

5. Summary
This research aimed to identify the critical success factors on outsourcing of construction projects. It used a comprehensive model with five-factors in a theoretical framework. In addition to this causal model, the effects these factors on each other were determined. After semi-structured interviews with MAPNA Group construction master experts, a questionnaire was developed and sent to 150 other people in related divisions. A total of 88 usable questionnaires were received. The research was constrained since the ten factors model of Pinto and Slevin was the input of interviews. For the final model, after reviewing the existed literature and interviews with experts, the model variables were finalized. The result was that these five factors (communication with contractors, contractor selection, project objectives, technical and specialty tasks, and client’s top management support) affect outsourced projects’ success from client perspective requiring special continuous attention from client.

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References
Aalders, R. (2002), “The IT Outsourcing Guide” (2nd edition), John Wiley & Sons, Ltd. , England. Andersen, E. S., Birchall, D., Jessen, S.A. and Money, A.H. (2006), “Exploring project success”, Baltic Journal of Management, 1(2), 127-147. Ang, Soon, Cynthia M. Beath (1993), Hierarchical elements in software contracts. J. Organ. Comput. 3(3) 329–361. Baker, B.N., Murphy, D.C. and Fisher, D. (1983), “Factors affecting project success, Project Management Handbook”, Van Nostrad Reinhold, New York. Bazargan A., Sarmad, Z. and Hejazi, E. (2005), “Research Methods in Behavorial Science”, Agah Publication, Tehran. Belassi, W. and Tukel, O.I. (1996), “A new framework for determining critical success/failure factors in projects”, International Journal of Project Management, 14(3), 141-151. Belout, A. and Gauvreau, C. (2004), “Factors influencing project success: the impact of human resource management”, International Journal of Project Management, 22, 1–11. Blaxill, M.F. and Hout, T.M. (1991), “The fallacy of the overhead quick fix”, Harward Business Review, July-August, 93-101. Bryde, D. J. and Robinson, L. (2005), “Client versus contractor perspectives on project success criteria”, International Journal of Project Management, 23, 622–629. Chan, A.P.C (1996), Determinants of project success in the construction industry of Hong Kong, unpublished PhD thetsis, University of South Australia, Adelaide. Chan, A.P.C (1997), “Measuring success for a construction project”, The Australian Institute of Quantity Surveyors – Referred Journal, 1(2), 55-59. Chan, A.P.C., Chan, D.W.M. and Ho, K.S.K. (2003), “Partnering in construction: critical study of problems for implementation”, Journal of Manageant Eng., 19(3), 126–35. Clarke, A. (1999), “A practical use of critical success factors to improve the efectiveness of project management”, International Journal of Project Management, 17(3), 139-145. Currie, W. (2000), “The supply side of IT outsourcing: The trends toward mergers, acquisition and joint ventures”, International journal of physical distribution & logistics management, 30, 238-254. Davies, C.T. (2002), “The real success factors on projects”, International Journal of Project Management, 20, 185–190.

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Fortune, J. and White, D. (2006), “Framing of project critical success factors by a systems model”, International Journal of Project Management, 24, 53–65. Khaki Gh. (2000), “Research Method in Management”, Azad University publication, Tehran. King, W.R. and Cleland, D.I. (1983), “Life cycle management, in Project management handbook”, Van Nostrad Reinhold, New York. Kloppenborg TJ, Opfer WA (2000), Forty years of project management research: trends, interpretations and predictions. Proceedings of PMI research conference Paris project management institute. Paris: Project Management Institute. Lacity, Mary C., Rudy Hirschheim (1993), The information systems outsourcing bandwagon. Sloan Management Rev. 35(1) 73–86. Lechler T. (1998), When it comes to project management, it’s the people that matter: an empirical analysis of project management in Germany. University of Calgary. pp. 205– 15 Morris PWG, (1994), The management of projects, Thomas Telford, London. Morris, P.W. and Hough, G.H. (1987), “The anatomy of major project”, John Wiley and Sons, New York. O’Connor MM, Reinsborough L. (1992), Quality projects in the 1990s: a review of past projects and future trends. International Journal of Project Management;10(2):107–14 Pinto, J.K. and Slevin, D.P. (1986), “The project implementation profile : New tool for project managers”, Project Management Journal, 18(4), 57-71. Pinto, J.K. and Slevin, D.P. (1988), “Critical success factors across the project life cycle”, Project Management Journal, 19(3), 66-75. Thomas, G. and Fernandez, W. (2008), “Innovation risks of strategic outsourcing”, International Journal of Project Management, 26, 733–742 Vining A. and Globerman, S. (1999), “A conceptual framework for understanding the outsourcing decision”, European Management Journal, 17(6), 645-654. Westerweld, E. (2003), “The Project Excellence Model1: linking success criteria and critical success factors”, International Journal of Project Management, 2, 411–418. Willcocks, Leslie P., Thomas Kern (1998), IT outsourcing as strategic partnering: The case of the U.K. Inland Revenue. Eur. J. Inform. Systems 7(1) 29–45.

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Sustainable Governmental Portfolio Management in Practice: Conflicts & Bargaining
Spyridon Tsallas1234

1. Introduction
“A just act necessarily involves at least four terms: two persons for whom it is in fact just, and two shares in which its justice is exhibited. And there will be the same equality between the shares as between the persons, because the shares will be in the same ratio to one another as the persons; for if the persons are not equal, they will not have equal shares; and it is when equals have or are assigned unequal shares, or people who are not equal, equal shares, that quarrels and complaints break out” Aristotle, “The Nicomachean ethics”, 4th century B.C. Quite a long time ago, as it is obvious by the text above, it had been evident that economic instability, when treated as a market outcome or considered per se as such, results in both social instability and eventual systemic pathogenesis of the economy. From the viewpoint of the state, project survival and sustainability in times of being at the bottom of the economic cycle is at the centre of the problematic set by Aristotle. Sustainability is defined as the capacity to endure, primarily maintaining wellbeing in the long-term through remaining diverse and productive over time. Within the context of a government, sustainability is synonymous not only to sustaining the existing level of services but also to initiating, developing and applying efficient change management mechanisms. The former is dependent on several public finance issues not related to the topic addressed in this paper; they are quite important though, if we take into account that sustaining the existing level of services offered to citizens is not always feasible, particularly when debt and deficit problems prevent governments from securing the financial means to cover the (minimum required) inelastic expenses. Moreover, public project financing is highly dependent on public investment resources available; apart from public-private partnerships and external financing mechanisms (such as the European Community Support Frameworks, for instance), public portfolio management relies on national funding. Several other post-secondary effects, such as fluctuations on the cost of capital, are also excluded

Certified Expert Committee for Project Management, Secretariats General of Communication & Information, Hellenic Republic 2 Project Management Office, Hellenic National Audiovisual Archive 3 School of Electrical and Computer Engineering, National Technical University of Athens 4 {tsallas@minpress.gr}. All opinions expressed herein belong to the author and are not associated in any way to the institutions he is affiliated with. The author reserves all intellectual property rights and permits the publishing of the paper on the Internet and in the Expert Seminar documentation.

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from the discussion herein; nevertheless, they should not be considered of minor importance. The focus of this paper is on the sustainability achieved by public portfolio management, particularly when related to investment in aggregate-level techno-economic paradigm shift: a new national educational framework based on information technologies and a new national communications network infrastructure offering a substantially higher servicesfacilitation capability level are two characteristic examples. This aspect of approaching sustainability facilitates both project-related issues, such as project scope redefinition and project survival, and aggregate portfolio-related issues, such as portfolio adjustments, reorganization and evolutionary equilibrium. Building on these results, this paper indicates the tremendous importance of project survival and sustainability to the long-term reallocation of economic strength within the same population.

2. Public project portfolio management complexity unfolded
Public sector is based on a legal and administrative environment that is heavily more complex, by default, than the one of the private sector: in a nutshell, while private law defines the set of actions that firms are not allowed to perform, public law defines precisely the set of actions that have to be performed by each public administration unit. These fundamental differences have, among others, the following results:

Private Sector
Defines its own (non-illegal) functional rules for procedures Re-organization requires decision of the BoD; small risk of strike

Public Sector
Law for public administration procedural code specifying actions and matching them with corresponding units; high risk of strike if changed Re-organization requires long-lasting political procedures, decision of the Parliament and ratification by Supreme Court; high risk of political and legal conflict, high risk of strike Project management resources, either internal or external, are linked to administrative procedural rules; high risk of critical time mismatch Project resources are linked to the initial project definition; re-adjustment requires time and complex administrative procedures Project portfolio management linked to political strategy; high sensitivity to political, market and social fluctuations

Project management resources are linked to human resources (expertise, compensation, lay-offs) Project resources are linked to project needs Project portfolio management linked to company strategy; high sensitivity to market fluctuations

Table 1: Structural project management-related differences between the private and public sector as a result of the legal system

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These aggregate issues break down to a series of small but important everyday difficulties for the project manager, an important niche of which is mentioned below for illustrative purposes. The degree of information that has to be publicly available is minimal for a firm (for obvious reasons related to competition) but maximal for the state (for transparency and public accountability issues), imposing a huge administrative burden for project management, even if we assume ideal (i.e. content-complete and time-efficient) cooperation of project personnel with civil servants working in processes. When resources are cut down to minimum, this burden may compromise project survival. Given that the compensation of the latter is not related to project success (on the contrary, they would be better-off without it) and that, in times of financial hardship, their real – and usually their nominal – wage decreases (while, as their wage increase has not been historically linked to economic cycles, they would most probably consider a marginal increase as given), project survival and sustainability efforts confront additional challenges. Efficient public procurement is legally synonymous to “buying using the correct process”, ensuring transparency and accountability, and in prices not considered “out of the market” in terms of value for money: more attention is paid on the procurement process rather than the outcome. There is a reason for this structural problem: for every civil servant involved in project management, there is a very strict mechanism with severe administrative penalties and a high probability of spending quite a few years behind bars for a small mistake in applying the law throughout the entire process but there is absolutely no mechanism to control (and impose penalties) for poor project management result. Excluding procurement management, for which a law exists in most probably all countries, standardization of project management-related procedures, such as formal establishment of Project Management Offices outside the existing administrative chart (which corresponds to processes) and adoption of a manual for procedures with rules for quality control, is not usually the case. This has two major implications: (a) selection of appropriate personnel (project, program, and portfolio managers, project administration members, and so on) is made based on arbitrary, primarily political or personal, criteria, and (b) the criteria on which the stability of the employment relationship of PMO personnel is based are highly sensitive to the political person in charge of judging the PMO quality of work. Thus, beyond the subjective definition of project success, it is common to see most PMO personnel coming in and going out during project implementation. Being able to successfully cope up with procurement of the monthly supplies of toilet paper does not necessarily imply that you will have the same results when doing so for scientific and professional services within a complex restructuring project; while this might seem an obvious statement, the treatment of procurement management, aiming at ensuring the sustainability of public administration processes, as work of the same nature with project portfolio management, thus requiring the same specialization in terms of personnel and methodologies applied, is a usual wrong belief shared among public stakeholders – and,

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unfortunately, applied in practice. This phenomenon, combined with PMO personnel working status mentioned in the previous paragraph, has serious implications for project sustainability and highlights the critical role of project owner even further. The adoption of “flexible” means of managing projects is quite tricky: e-procurement, green procurement, and other similar means are not linked to procurement content design but to the way procurement is implemented; “agile” definition of project scope, in framework contracts or multistage/continuous negotiation contracts for example, involve high risk of sustaining a high cost-benefit ratio when the procurement is realised, particularly in rapidly evolving technology environments; and “legally flexible” could well be equal to “implementation-vague”, requiring the involvement of the staff involved in project design to be also somehow involved in controlling project execution. All these cases, and various similar others, point out that the result of agility in systemically weak environments is heavily dependent on the government due to the risk mitigation (from systemic design). Project management success is, therefore, directly dependent on the ability of political persons in charge; however, it is clear that weakening institutions by assuming (part of) the responsibility of their specialised job, both in good and particularly in bad – resource-wise – times, is doomed to fail. Public project portfolio management has to take into account the presence of corruption, not in the usual narrow but in the broader, institutional sense [Hodgson and Jiang (2007)]. Measures to prevent corruptive behaviour reduce the negative external effects associated with both direct (inferior quality and/or higher cost) and indirect (reduced levels of trust, reliance upon non-market economy ties with higher contract enforcement power) costs. Corruption, usually confined by definition to the public sector due to ideological prejudices of mainstream thinking – to say the least, is a systemic carcinoma requiring delicate handling and measures of surgical accuracy in order not to attribute these characteristics to the entire system: such a case would result in the collapse of systemic trust and the waiving of any – ethical or not – obstacle from the systemic components to behave as such. In the downturn of the economic cycle, the risk premium imposed on trust is usually so high that the share of formal economy shrinks even further. There are several issues involving internationally-sensitive matters, such as the procurement of military-related equipment or investing in energy-related projects, which could be potential sources of conflict and escalate during a – financial or other – crisis. The “total cost of ownership” and other similar criteria are not enough to grasp the extent of the complexity of aggregate – read national – project portfolio management, given that general equilibrium-type effects do not allow for ceteris paribus comparative static analyses. Complex criteria that account for externalities, national and regional development, social implications, national value added and other indicators, may exceed the frontiers of professional judgement. Finally, there are two other, somehow external to state functionality, aspects of sustainability that have to be taken into account in public project portfolio management: (a) the way that the suppliers, i.e. the private sector, and the customers, i.e. the voters, are

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affecting decision making, and (b) the effect of sustainability in the relative procurement ability, regardless of state level. The exact, in terms of reduced liquidity or other similar measure of hardship, covariance between the public and private sector is not as important as the corresponding one between local and international firms: in a globalised world trade, country-specific economic and legal measures to assist local firms, if feasible, would make the global problem even worse (read Kouvaritakis et al. results reversed). Thus the state cannot easily predict changes in the supply-side response functions. Moreover, the private sector will most probably go through intra-firm and intra-market restructurings in order to face the crisis [for internal organization and restructuring issues, see Hart and Holmstrom (2009)], the results of which it is rather impossible to predict. Changes in the bundle of products and services offered by the private sector, together with the new corresponding prices, is probably the only matrix of interest for the restructuring of public project portfolio management. Lower GDP per capital does not only imply changes in consumption levels due to the crisis; consumer patterns change too: luxury goods, still affordable by most of those who could afford them before the crisis, are now considered exaggerated despite the fact that their scarcity should have increased their value. How should project scope be changed in order to adapt to new citizens’ needs and preferences? Who is responsible to receive these messages and how does he transfer them to project stakeholders? Difficult questions that could be answered in a tough – systemic – or naive – individualised – way. The ability to consume (resources via projects) requires money (resources) or credit (future resources), both of which are getting more limited in crises: the procurement power of the state is related to the strength of the national economy and the state’s ability to get its share – and the share as such too. On the top of current resources becoming fewer, public project sustainability is challenged even further because the state becomes, in absolute terms, a less powerful buyer. For certain categories of procurement goods and services though, particularly those whose goods and services are at large the same or similar to the ones purchased for sustaining processes as well as those whose the state is the primary (or only) buyer, the relative purchasing power of the state remains relatively the same or could potentially increase. These changes in power alter the relative cost of projects in the same portfolio.

3. The emergence of conflicts
In order to illustrate the potential sources of conflict and the conflict generation mechanisms, we examine the role of project portfolio management in the mechanism of investing to introduce a different (i.e. more advanced) techno-economic paradigm. For a detailed review of literature on techno-economic paradigms see Baldwin and von Hippel (2009).

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Under the assumption that the technology-specific knowledge, based on which the technoeconomic paradigm will be established, is publicly available5, the following crucial data have to be taken into account in the process of mechanism design: • the public project portfolio is known, at least to a certain extent, to all stakeholders (published government 4-year plan or new idea formulated into a project through some kind of a public debate process); firms active in the market – as well as potential followers – define their strategy knowing government’s intentions; and compared to public decision-making processes, the ones within and among firms are both more time efficient and less publicly transparent.

• •

It is reasonable to assume that the state acts taking into account the response of the markets; when the aggregate level of investment in a market is not adequate to reach the socially desirable level, the state acts in favour of either providing the appropriate incentives to the firms in order to increase their investments (until reaching the level anticipated by the government) or the state does the dirty job alone. Given that creating public monopolies is not a popular policy nowadays, when the state provides most of the financing, it takes generously most of the risks – while this is not the case for the profit, usually enjoyed by the firms supplementing the given market. The exact role of the government is, therefore, of vital importance in this process: firms, regardless of their ability to finance investments to the desired level, could underinvest while anticipating government intervention. Strategic positioning is also a critical factor in determining firms’ response to public policies: when the outcome following the anticipated government intervention is worsening the position of a dominant firm, it is highly unlikely that the firm will not act proactively, trying to alter or prevent the implementation of this policy, regardless of the eventual impact on social welfare. In the same way, when financing eligibility is, for some external reason, highly sensitive on investment timing, it is likely that less welfare-efficient solutions might be chosen, rather than losing the chance to invest. An additional analytical component is political cycles. Project portfolio management for such investments is rarely within the life time of one elected government: designing what has to be done until delivering the product could well exceed five to eight years, which means that the project portfolio manager involved, if remains the same, will deal with at least two Ministers. The usual case is four to five, depending on the number of elections and the shuffles in the Cabinet. Although this paper is not discussing such purely politicallydependent aspects of the problem, they are indicated in order to show the immense complexity of this issue in practice.

In terms of aggregate government project portfolio management, issues related particularly to joint public-private R&D projects, usually found in the defence sector, have to be taken into account.

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It is therefore evident that, within this dynamic market environment, apart from values and general needs, interests of market participants will most likely conflict by default. This is the reason that project portfolio management should set conflict management in the centre of methodological analysis procedures. The aggregate investment required to reach, at the market level, the new paradigm, is highly dependent on (a) the development of new legal framework, taking into account all financial incentives and institutional transaction costs, and (b) the impact of conflicts arising from the initial stages of acquiring a common ground of understanding and vocabulary to reaching the target: people with completely different scientific and professional – as well as cultural, background. In terms of project portfolio scope, sector-specific national policy is synonymous to a political compromise among all different interest groups active, or potentially active, in the sector. However, the power and relative importance of each interest group constantly changes, thus different interests lead to conflicts. Conflict is actual or perceived opposition of needs, values and interests; in this case, • • all parties usually agree that it is, in general, better to have a different, more advanced technological paradigm; however, not all parties agree when and how to achieve this mutually agreed national strategic target.

Tracing the usual step-stones where conflict might occur, we could sum up the following: • • • • • • • • • • • Idea/proposal Political decision to explore its potential Initial feasibility study – needs assessment (public administration department responsible for this topic) Public procurement for external services Expert group feasibility study (external experts) Political decision to move on with the provided output/further explore/cancel Specific interest groups debate (usually based on part of the feasibility study) Political decision to incorporate proposals/suggestions of specific interest groups; may include the decision to proceed to a new feasibility study Regulatory framework review (public administration legal department) Production of a draft legal document (external experts) Public debate

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• • • •

Political decision to re-adjust the draft legal document, taking into account the results the public debate Final legal document to be voted (Parliament) Regulators (issues of competition and interpretation of the legal document in practice) Social interaction (criticism on the way all market players eventually cooperate)

Negotiations, usually in parallel for many projects with inter-related parties, require careful analysis of the opponents’ tactics (which also improves our capability to negotiate in the future) and contribute to the formulation of both our long-term strategy and our character; the definition of “losing” as a result of a priori expectations, for instance, affects the negotiation strategy of the next round – possibly to regain part of the losses – and the dynamic stability of the equilibrium reached (meta-conflict effects).

4. Bargaining and dynamic equilibrium
From the time Adam Smith’s “invisible hand” went missing, bargaining is the usual out-ofthe-court, non-lethal procedure used nowadays for negotiation in order to resolve a conflict when mediation, arbitration and diplomacy are not applicable. For a detailed literature review from a creative viewpoint see Nikolopoulos (2009). Direct negotiation, i.e. negotiate with other parties without the interference of an intermediary, is meaningful only when all parties are committed to reaching a (not their) solution to the problem6. However, it is difficult to identify this behaviour beforehand; a party not committed to reaching a solution has the incentive to participate in the negotiation process as if it was committed, in order not to show unwillingness to cooperate (which might affect future negotiations with the same party or other negotiations with associated parties): it will gain time to reconsider its position, it will find out the opponent’s position and it will eventually dry him out though this infertile process. When negotiating, for instance, with specific interest groups on the fruitfulness of the feasibility study, they would most probably have the behaviour mentioned above. Tacit bargaining (virtual negotiation) is applicable when direct bargaining is not possible, and when it is expected that, if applied, will lead negotiations to a dead end. However, time from making a tactical move to having a clear picture of the effect it had on the opponent (not able to correct/re-adjust) is substantially more than direct bargaining; and there is
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In terms of being committed to reach a solution, not necessarily one’s solution, it is likely that political parties could have fruitful direct negotiations, but it is unlikely that a firm active, or potentially active, in the sector of broadband wireless communications will contribute to reach any solution. Furthermore, the argument that favors direct negotiations between the government and the representative of the firms in the sector has to take into account that (a) the commitment of this institution to reaching a solution will depend on the proximity of this solution to the solution of the individual firms comprising this institution, thus there is a serious chance of default, and (b) this institution represents the firms currently active in the sector, not the ones potentially active, thus the direct bargaining solution will be sub-optimal.

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increased need for very delicate moves, which will take into account the involvement of all “intermediaries” transferring the signal7 in order to minimise distortion effects. How should we negotiate in public project portfolio management? Positional bargaining, where parties negotiate revealing their “wants”, process which usually ends up to a “winlose” or “lose-lose” outcome, leads to a problematic solution for at least one of the parties (i.e. there is room for Pareto improvement). On the other hand, in interest-based bargaining, while knowing that the solution to each party’s problem depends on the solution of the overall problem, parties should reveal their interests8 (on which their positions are based) without revealing their position because compatible interests are hidden behind incompatible positions and not all conflicting interests are equally important for all parties. Interest-based bargaining is a so-called “creating value approach” and is usually fruitful when (a) individual gain is practically considered to be linked to mutual gain, (b) there are multiple issues conflicting and under negotiation, therefore combinations between more and less important interests can be made, and (c) long-term relationships are (potentially) existing, preventing a party to create “excessive” losses to his opponent in order to save himself from facing the same attitude during the next conflict/round of negotiations of the same conflict9 (results of research on experimental economics & game theory, e.g. on the known repeated prisoner’s dilemma game theory problem, have the same considerations). In practice though, things are not so easy; benefits are not enough for all parties (“claiming value approach”), thus one’s gains are the opponent’s losses (a priori considered a zero-sum game). Positional bargaining is primarily focused on reducing opponent’s “wants” in order to maximize single party benefits. Consequently, the best chance to win is on the most powerful party, the party less dependent on the outcome and the party with the best alternative to a negotiated agreement (BATNA). In such a case, “winning” or “losing” depends on the expectations of each opponent of the final outcome, the difference between the initial position and the final outcome (“intensity of conflict”) and the difference between BATNA and the final outcome. An effective aggregate solution is measured based on the total amount of eventual benefits for all parties negotiating and the part of the additional

One should be careful with the signal transmission process of tacit bargaining for broadband wireless communications and other services produced by firms that also produce other complementary services and, therefore, are interested in profit maximization for their aggregate bundle of services: intermediaries could be subjective and in favor of some negotiation party – for various reasons, either relevant (i.e. corruptive) or irrelevant (e.g. social theory) to the issue under negotiation. 8 The government, committed to reaching a –profitable for the citizens– solution, may have a higher incentive to completely reveal its interest without revealing its position than a firm; however, given (a) that the maximization of the producer’s surplus of this market is not always a good guide for government’s negotiation strategy, and (b) that not all firms active, or potentially active, in this market agree on the specification of the producer’s surplus, a highly complex negotiation scheme usually forms for all negotiation parties. 9 Political cycles are not subject to this restriction: negotiations – their intensity, position, expected outcome, willingness to compromise, etc – are highly sensitive to political cycles and, thus, all negotiation parties have to re-align their strategies based on their evolution.

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value collected by each party. Increasing aggregate (mutual) value is not a good thing per se: it is a mean to increase the value of each individual party. When decision making process involves political issues, such as in public project portfolio management, cooperation is a crucial – and tricky – issue: conflict intensity increases when BATNA increases; on the other hand, the more information is revealed and the more time to elections runs out10, the more BATNA increases.

5. Conclusion
Due to the politically-driven changes in public project portfolio management, as the result of changes in long-term national strategy, the assignment of the public project portfolio owner and public project portfolio manager roles is a matter of institutional design. Consequently, project sustainability is not only dependent on the overall portfolio restructuring in times of financial difficulties, but also strongly related to evolutionary changes in the owner’s dynamic equilibrium of fundamental bargaining power.

6. References
Baldwin, C.Y. and von Hippel, E. (2009): “Modeling a Paradigm Shift: From Producer Innovation to User and Open Collaborative Innovation”, Harvard Business School Finance Working Paper No. 10-038 / MIT Sloan School Working Paper 4764-09 Hart, O. and Holmstrom, B.: “A Theory of Firm Scope”, forthcoming, Quarterly Journal of Economics Hodgson, G.M. and Jiang, S. (2007): The Economics of Corruption and the Corruption of Economics: An Institutionalist Perspective, Journal of Economic Issues, Vol. XLI No. 4, December Kouvaritakis, N., Stroblos, N., Paroussos, L. and Tsallas, S.: “Trade Policy”, in Böhringer, Christoph and Löschel, Andreas (2004) Climate Change Policy and Global Trade, ZEW Economic Studies 26, Physica-Verlag Nikolopoulos, A. (2009): One Against All: The Strategy of Negotiations, Patakis Publications (in Greek)

As a general equilibrium schemes, the relative importance of the issue under negotiation is crucial.

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Itaipu Binacional Moving Forward Toward Regional Sustainability
Rui Wagner R. Sedor

Abstract
Itaipu Binacional is the second largest operational hydroelectric power plan in the world with 14,000 MW of installed power and the first one in power output, generating in 2008 94,684,781 Megawatts-hour. It supplies 19.3% of the energy consumed in Brazil and 87.3% of the Paraguayan demand. In addition to the importance to generate clean energy for 2 different countries, since 2003 Itaipu added to his mission sustainability and social-environmental responsibility to foster sustainable economic, tourist, and technological development in Brazil and Paraguay. In 2009 Itaipu Binacional is achieving a new milestone to accomplish its mission to promote sustainability implementing a new program committed to develop its supply channel aligned with its mission. This Program, called “Supply Chain Development toward Sustainability and Social Responsibility”, has the following targets: develop Itaipu’s suppliers aligning them with Itaipu Binacional current mission, and supporting them to take care of sustainability and social-environmental initiatives.

Key words
Sustainability, Program Management, Project Management, Itaipu, Supply Chain Development

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1. Introduction
Itaipu Binacional is the second largest operational hydroelectric power plan in the world with 14,000 MW of installed power and the first one in power output, generating in 2008 94,684,781 Megawatts-hour. It supplies 19,3% of the energy consumed in Brazil and 87,3% of the Paraguayan demand (Itaipu Report, 2008). Since Itaipu’s building (it started generating hydro-electric power in 1984) until 2003 the company’s mission was providing clean electrical energy for their country owners, Brazil and Paraguay, sustaining the development of these countries. Since 2003, in addition to its original goal, Itaipu expanded its mission toward sustainability and social-environmental responsibility to foster sustainable economic, tourist, and technological development in Brazil and Paraguay. From this hallmark on, Itaipu’s project portfolio is been increased and diversified. It is not anymore just connected to Itaipu operation or maintenance, but also taking care of the rivers and springs that supply water to the power plant, protecting animals and plants, maintaining biological reserves and sanctuaries in addition to a biodiversity corridor, and promoting the conservation of native forests. Other projects are committed to social-environmental initiatives improving the quality of life in communities surrounding Itaipu’s lake with a special focus on the health of those populations. In this new reality, Itaipu’s yearly investment purchasing services and materials became larger, reaching in 2008 around 115 million US Dollars (81 million Euros) accordingly its annual report sheet (2008). In 2009 a second step forward was started in order to guarantee the accomplishment of the expanded Itaipu’s mission promoting sustainability and social-environmental responsibility: a program committed to spread out to the supply chain its expanded mission. The program established, was nominated “Supply Chain Development toward Sustainability and Social Responsibility”, and has two main targets: • develop and implement an evaluation system to measure Itaipu suppliers technical performance, sustainability and social responsibility attitudes connected to each acquisition; develop Itaipu suppliers aligning them with Itaipu Binacional new quality, sustainability and social responsibility standards implemented in the new evaluation system.

The main objective of this paper is presenting the Program “Supply Chain Development toward Sustainability and Social Responsibility”, its challenges, opportunities and expected results, short and long term impacts toward sustainable development for a region covered by 2 countries, Brazil and Paraguay, preventing wasting of resources, preserve the environment, recycling, and responsible and sustainable actitudes.

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2. Program Global Vision
The program Supply Chain Development toward Sustainability and Social Responsibility was established in April 2009 and is planned to be finished in December 2011. The program detailed targets are: i. Supplier Evaluation System: development and implementation of a Supplier Evaluation System to measure Itaipu providers technical performance, and also sustainability and social responsibility actions according to international well recognized standards; ii. ERP Integration: integration of the Supplier Evaluation System with Itaipu’s ERP (Enterprise Resource Planning); iii. Supplier Relationship Portal: development and implementation of a improved Supplier Relationship Portal interconnected to Itaipu’s ERP providing real time feedbacks to Itaipu’s providers based on the Supplier Evaluation System; iv. Supplier Performance Evaluation: evaluation of all current Itaipu providers using the developed Supplier Evaluation System; v. Supplier Development: development of selected providers in Brazil and Paraguay to improve their performance (global performance, including technical issues, sustainability and social responsive actions). The evaluation criteria to be used to appraise and develop the Suppliers are based on Itaipu current mission expanded in 2003, motivating and recognizing continuous improvement, technical excellence, economic, environmental, and social performance based on global and national guidelines like the Global Reporting Initiative Framework (GRI Reporting Framework), ISO 14.001, Dow Jones Sustainability Indexes (DJSI) and BOVESPA ISE (Enterprise Sustainability Index provided by the Brazilian Stock Exchange). Due to its complexity, this program is being carried out using an incremental approach divided in thirty-nine increments (steps) grouped into eight projects and two main subprograms (nominated Macro Action 1 – MA1 – and Macro Action 2 – MA2) as shown in Figure 1. The MA1 projects and increments are focused on Itaipu internal development (first main program target). MA2 projects are oriented to the development of the Itaipu’s Suppliers (second program target).

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Figure 1: Program global view with its projects and increments

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3. Macro Action 1 – Itaipu’s Purchase System Development
The Macro Action 1 (MA1) is composed by 3 projects organized in 27 different steps or increments. MA1 improves Itaipu’s current purchase system providing solutions to monitor and promote better acquisitions (service and materials) to all company areas in both countries (Brazil and Paraguay). The Macro Action 1 was divided in three different projects as detailed in Figure 1: • Project 1: MA1 Global Planning – committed to structure the MA1 projects and organize the setup of the entire program. It is divided in 8 different increments. • Project 2: Supplier Evaluation System – intent to development, implementation, user training, and first running of the new Supplier Evaluation System (one of the new solutions to be integrated in Itaipu’s Purchase System). It is divided in 10 different increments. • Project 3: Supplier Relationship Portal – focused on the development, implementation, user training (internal and external), first running and promotion of Itaipu Supplier Relationship Portal. It is divided in 9 different increments. In the next three chapters each one of these projects are detailed and explained.

4. Project 1 – MA1 global planning
The project 1 was responsible for the program global planning and overall structure, defining the necessary projects for MA1 and their corresponding increments (steps). This project was successfully concluded in Sept. 2009. Considering the huge diversity of items and the amount of money Itaipu expend every year in acquisitions (around USD 115 million in 2008), in order to conclude successfully this project, the senior project team members visited each area of the organization, collecting and analyzing in details each acquisition needs and particularities. It was visited a total of thirty four areas (seventeen from each country), collecting the particular requirements of each one, understanding the concerning Brazilian and Paraguayan legislation, analyzing in details Itaipu’s own Legal Entity for Acquisition, the so called General Bid Norm (NGL: Norma Geral de Licitações), nominating two representatives for the program from each Itaipu’s area (one from Brazil and other from Paraguay), performing a pilot supplier evaluation, defining the educational needs for the future users, and integrating all the definitions in a consistent program plan.

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Project 1 was divided in eight different steps or increments as indicated below: • Step 1: Initial Definitions – kick-off meeting, project team nomination, team building, detailed definition of the program targets, definition of the project steps and time schedule. • Step 2: Planning of the Supplier Evaluation System – global planning of the new Supplier Evaluation System defining its requirements. • Step 3: Piloting (Technical Services) – testing the Supplier Evaluation System for Technical Services in one Itaipu’s area. • Step 4: External Benchmarking – visiting and studying two different organizations analysing their Supplier Evaluation System. • Step 5: Legal Entity Study (NGL) – analyze Itaipu’s Legal Entity for Acquisition (NGL), detecting improvements that could be done after the implementation of the new Supplier Evaluation System. • Step 6: Evaluation of the current IT Systems – Evaluation of the current Itaipu purchasing system analyzing the possibility to integrate the new Supplier Evaluation System and the Supplier Relationship Portal inside the corporative ERP. • Step 7: Planning of Educational Necessities – evaluating and planning the future education needs for Supplier Evaluation System users. • Step 8: Planning Integration (MA1) – integration of all planning issues into a program plan approving it with the Financial Vice-Presidency (program sponsor). All the programmed targets was achieved by the end of the Project 1 and the program team was integrated and prepared for the coming challenges. MA1 execution was ready to be started.

5. Project 2 – Supplier Evaluation System
The project 2 is responsible for the development and implementation of Itaipu Supplier Evaluation System. This system will be integrated to the organizational ERP, becoming part of Itaipu Purchasing System. This project was started in Oct. 2009 and is currently being executed. At project start, Itaipu’s acquisitions were grouped in seven different clusters. For each one, it was determined a set of evaluation indexes taking in account technical excellence, social responsibility and sustainability issues. It was also defined that the Supplier Evaluation System will be implemented integrated to Itaipu ERP, involving complimentary ERP development.

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Project 2 was divided in ten different steps or increments as indicated below: • Step 1: Evaluation Criteria – definition of the supplier evaluation criteria, grouping Itaipu acquisitions in clusters based on similarities. It was also established that there would be no difference for the evaluation system for Brazil or Paraguay except the language (Portuguese and Spanish respectively). • Step 2: Indicators/Report Definition – definition of the evaluation indicators, rating indexes and report for the different acquisition clusters identified. • Step 3: Evaluation System Development, Implementation and Prototyping – development and implementation of the Supplier Evaluation System integrated to Itaipu’s corporate ERP. It includes also prototype tests of the supplier evaluation system in two steps: as an independent database and as a final solution, interconnected to Itaipu’s ERP (final implementation). • Step 4: Procedure Development and Testing – development and test of the internal procedure for the Supplier Evaluation System serving as a guide for the future users. • Step 5: Itaipu Legal Entity (NGL) Alignment – provide suggestions to align Itaipu Legal Entity (NGL) to the usage of the supplier evaluation results as a criterion for supplier selection. • Step 6: Internal Education for the New System – education of the Supplier Evaluation System users preparing for the correct system usage. It will be prepared Itaipu’s managers, first operational users and knowledge multipliers. • Step 7: Current Suppliers’ Evaluation – evaluation of the current supplies of each Itaipu supplier. It will show the current alignment of the suppliers to Itaipu technical needs, policies and attitudes toward sustainability and social development. Based on the results of this evaluation, it will be prepared report showing the current status of technical excellence and alignment of Itaipu’s suppliers to the expanded mission. This evaluation will define which supply chain areas need special attention and preliminary development. • Step 8: Suppliers Prize Development – development of a Prize recognizing Suppliers excellence and alignment with Itaipu expanded mission. • Step 9: System Monitoring, Evaluation and Adjustments – based on the results and experience build upon the previous steps of this program, perform adjustments and improvement in the Itaipu Evaluation System. • Step 10: Divulgation – divulgation of the new Itaipu Evaluation System internally and externally (Itaipu’s suppliers).

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After Project 2 conclusion, Itaipu will be ready to start the development of its suppliers based on concrete facts. Project 2 will deliver a concrete identification of priorities, gaps and points already fulfilled. We understand that the Supplier’s development will promote an exponential and continuous improvement to Itaipu and surrounding environment, identifying development opportunities connected to Itaipu’s mission, and recognizing suppliers acting according to its world recognized sustainability and social-environmental initiatives. It will also spread the pillars of Itaipu’s mission to several organizations bringing sustainability and social responsible attitude for an entire region in two countries. Project 2 and 3 will be developed in parallel by different project teams.

6. Project 3 – Supplier Relationship Portal
The project 3 is responsible for the development and implementation of the future Itaipu Supplier Relationship Portal. This Portal will administrate and allow controlled communications between Itaipu’s corporate ERP/Supplier Evaluation System data and its suppliers. Similarly to the Supplier Evaluation System the portal will be integrated with Itaipu’s ERP. This project will be executed in parallel to project 2 by another project team. It is currently being executed since Oct. 2009. The Supplier Relationship Portal will be available to Itaipu suppliers through Itaipu’s Internet Homepage using an individual Supplier ID and a password. Project 3 was divided in nine different steps or increments as indicated below: • Step 1: Portal Specification – portal specification with support of Itaipu IT department. • Step 2: Global Program Evaluation – based on the results of Program 1, 2 and 3 step 1, the entire program will be evaluated verifying eventual adaptation needs. • Step 3: Portal Development – development of the Supplier Evaluation Relationship Portal. • Step 4: Portal Implementation + ERP Parameterization – Portal implementation and parameterization integration it on Itaipu’s corporate ERP connecting both systems. • Step 5: Portal Testing – Portal and integrated IT solution test (Supplier Relationship Portal + ERP + Supplier Evaluation System). • Step 6: User Education (Internal + External) – Portal users education preparing them to take profit of the Supplier relationship Portal solution. It will be prepared e different education programs: Itaipu’s managers, first operational users and knowledge multipliers.

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• Step 7: Production – start Supplier Relationship Portal operation. • Step 8: Monitoring and System Evaluation – monitoring the Portal performance identifying necessity of adjustments and improvements. • Step 9: Divulgation – divulgation of the Relationship Portal to Itaipu employees and suppliers explaining also the consequences for Itaipu purchasing procedures internally and externally. After Project 3 conclusion, Itaipu will start the operation the new Acquisition System as a whole, allowing Itaipu to profit from the investment done in MA1 three projects starting a new operation stage to fulfil its mission.

7. The New Itaipu Purchase System after MA1 conclusion
The new system being implemented will provide a global purchase solution fully integrated with Itaipu’s corporate ERP already available, supporting every acquisition (services and materials) performed by any area and any of its three Offices located in Curitiba (Brazil), Asunción (Paraguay) and at Itaipu Power Dam (international zone on Brazilian-Paraguayan border). The new Itaipu Acquisition System is being based on best practices, solutions and techniques commonly used by Auto and the Electronic Industry. It will provide a fully integrated relationship between Itaipu and its suppliers, promoting fast and real time information sharing about global quality issues, including sustainability and social indexes over a bilingual Internet Portal (Portuguese and Spanish). After fully implementation, once a acquisition is started and registered in Itaipu’s ERP, Itaipu new Acquisition System will automatically select one of the several pre-developed evaluation criteria for quality, sustainability and social responsibility to be used in each new purchase evaluation. The valid evaluation criteria for the acquisition will be automatically loaded as a part of Itaipu Acquisition System. Some quality, sustainability and social indexes will be mandatory. Once it is not achieved the acquisition process will stop. Other indexes will be recommended, being used as performance decision criteria for bid processes involving the evaluated supply. A minimum score for each supply will be mandatory. Once an index (mandatory or recommended) is not fulfilled, the supplier will receive an automatic notification about that through the Relationship Portal requesting to act immediately to establish an improvement. This notification (email) allows the supplier to access Itaipu Acquisition System Database through an Internet link and a previous informed password. Each acquisition has its own particularities, determining the characteristics of the evaluation. Some evaluation indexes run automatically (like delivery time), others need management intervention to be evaluated (for example customer satisfaction). Some

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services needs periodic evaluation (permanent services like Security), others, just once (simple consuming materials). After a certain time running the new Acquisition System, Itaipu will establish a new performance culture and will have a database with a global performance of its suppliers, providing a unique opportunity for continuous improvements, future supplier’s selection and better use of the money from Brazilians and Paraguayan taxpayers. Considering Itaipu regional importance, the feedbacks provided to its suppliers will also create new quality standards and sustainable and social responsible attitudes in Itaipu surrounding regions, promoting a global regional development. Itaipu suppliers are mainly located in Brazil and Paraguay and are composed from big multinational organizations, but also by mid, small and micro local companies. Therefore Itaipu’s expanded mission will start to guide the entire region compelling Itaipu’s mission to a new dimension.

8. Macro Action 2 – Supplier Development
MA2 is focused on developing Itaipu’s supply chain and is the main program target. The Macro Action 2 will act in 2 different ways: • track the improvements requested to be implemented the big multinational and national organizations based on MA1 evaluations; • provide development programs for mid, small and micro regional companies based on MA1 evaluation results fostering regional multi-country development. The most import MA2 deliverables are: development the entire supply chain toward technical excellence, sustainability and social-environmental initiatives establishing and promoting development goals connected to Itaipu’s mission; establish development programs for local micro/small/medium size organizations in the surrounding areas of Itaipu (Brazil and Paraguay) in order to permit them also to achieve technical excellence, sustainability and social-environmental initiatives and promoting overall regional development. The Macro Action 2 is currently divided in 5 projects organized in 12 steps or increments. The Macro-Action 2 five projects are detailed bellow and are also shown in Figure 1: • Project 4: MA2 Global Planning – based on MA1 results and the Suppliers Evaluation System Database, MA2 projects will be detailed planned. In this process MA2 steps could be increased (it will probably happen). This project has currently just one step. • Project 5: Supplier Development Priority Definition – based on evaluation database provided by the end of MA1, it will be established development priorities for the Brazilian Suppliers (commonly defined as Left Bank Suppliers) and for the

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Paraguayan Suppliers (Right Bank Suppliers). This project is currently divided in two different steps (one for each country) to be performed in parallel. Based on the MA1 results new steps will be designed and integrated to this project. • Project 6: Partnership for Supplier Development – this project intend to establish partnerships in Brazil and Paraguay able to develop the selected micro/small/medium size suppliers. Such partners should prepare and execute development programs based on MA1 Supplier Evaluation System Database improving the suppliers, promoting new quality standards, attitudes and professional management. Such partners should take special attention to develop transformation programs to improve technical excellence, management practices, social responsibility, respect to environment and sustainable management procedures as recommended by ISO 14001, Dow Jones/BOVESPA Sustainability indexes, and Itaipu current polices based on its expanded mission. This project is currently divided in two different steps (one for each country) to be performed in parallel. • Project 7: Supplier Development – development of selected micro/small/medium size suppliers in Brazil and Paraguay. The selected suppliers should implement as a counterpart for the development received technical excellence, social responsible management practices, respect to environment and sustainable management procedures as recommended by ISO 14001, Dow Jones/BOVESPA Sustainability indexes, and Itaipu current polices based on its expanded mission. This project is currently divided in two different steps (one for each country) to be performed in parallel. • Project 8: Program Closure – closes the entire program providing adjustments to the systems developed in MA1 and also to the suppliers development programs based on the experience collected. This project will also provide a final program report and lessons learned from the program execution that could be used by other Itaipu projects/programs and also by other State or Private owned organizations. This project is divided in five steps as indicated bellow: o Step 1: Program Final Adjustments – final adjustments of Itaipu Acquisition System developed in MA1 and/or in the supplier development programs from MA2 based on the global program experience. o Step 2: Approvals – final program acceptance by the program sponsors. o Step 3: Solution Official Release – release of all solutions and development programs starting official operation from the new Itaipu Acquisition System and the Supplier Development Programs. o Step 4: Final Program Report and Results Divulgation – preparing of a bilingual (Portuguese and Spanish) final program report to the program sponsors and the involved Itaipu areas (Brazil and Paraguay). This report

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will also serve as a final divulgation instrument from the program and its result to Itaipu internal and external environment. o Step 5: Lessons Learned – collect, store and share among the project stakeholders the program lessons learned.

9. Expected Program Results after Macro Action 2
MA2 will provide the main expected program result and feedbacks to improve MA1 deliverables. Its execution will multiply the organizations taking in account social responsible management and sustainable principles in Brazil and Paraguay, specially in the surroundings of Itaipu Lake. For Itaipu MA2 means suppliers fully connected to its current mission, technical excellence and the ability to provide even better results, products and services. Itaipu will have also acquisition systems with the world best current technologies and management principles becoming a global reference, not just for its position as the world biggest clean hydropower producer proved technical excellence, but also for its social, environmental and sustainable responsible management and a historical paper promoting consistent development for two countries.

10. Conclusion
This program is a hallmark for two different countries, Brazil and Paraguay, influencing deeply several organizations. We strongly believe that rarely a program or project had a chance to promote a huge positive transformation and regional improvements. To guarantee the expected results, this program is using world recognized project management strategies and techniques, and also counting with highly experienced consulting companies and proficient team members from Itaipu Binacional. With the new Acquisition System, Itaipu will have a database with a global performance of its suppliers, providing a unique opportunity for continuous improvements, supplier’s selection and better use of the money from Brazilians and Paraguayan taxpayers. Considering Itaipu Binacional importance, this program for sure will inspire similar approaches in other organizations in Brazil, Paraguay and even other countries.

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11. References
BMF/BOVESPA (2009): Enterprise Sustainability Index. Available at: http://www.bmfbovespa.com.br/Indices/ResumoIndice.aspx?Indice=ISE&Idioma=pt-br (Portuguese). Consulted from Dec. 01/2009 to Jan. 26/2010. Global Reporting Initiative (2009): Global Reporting Initiative Framework. Available at: http://www.globalreporting.org/ReportingFramework/ (English). Consulted from Dec. 01/2009 to Jan. 26/2010. Itaipu (2009): Itaipu’s Internet homepage. Available at: http://www.itaipu.gov.br/ (Portuguese) / http://www.itaipu.gov.br/index.php?q=es/node/1 (Spanish) or http://www.itaipu.gov.br/index.php?q=en/node/1 (English). Consulted from Dec. 01/2009 to Jan. 26 2010. Itaipu (2008A): Itaipu Balance sheet 2008. Available at: http://www.itaipu.gov.br/files/file/anual_fn/DemonstracoesdascontasdeResultado.pdf(E nglish). Consulted from Dec. 01/2009 to Jan. 26 2010. Itaipu (2008B): Itaipu Sustainabily Report 2008. Available at: http://www.itaipu.gov.br/files/ING_RS2008_novembro.pdf (English). Consulted from Dec. 01/2009 to Jan. 26 2010. Itaipu (2008C): Itaipu Environmental Policy. Available at: http://www.itaipu.gov.br/index.php?q=en/node/227 (English). Consulted from Dec. 01/2009 to Jan. 26 2010. NYSE (2009): Dow Jones Sustainability Indexes. Available at: http://www.sustainabilityindex.com/ (English). Consulted from Dec. 01/2009 to Jan. 26 2010. SEDOR, Rui Wagner R. (2009): Itaipu’s Interview Database – Researching a Bi-national and Bilingual Organization from Top to Bottom.

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Summary of Group Discussions – Stream 1
1. Workshop group
Moderator Mehran Sepehri Reporter Rui Wagner R. Sedor Paper Presentations Spyridon Tsallas, Rui Wagner R. Sedor Members Mark Langdon, Anders Sandberg, Michael Edwin Brefo, Spyridon Tsallas, Gunther Lauer, Anna Moraitou

2. Process
The papers were presented and discussed. About 2 hours of discussion and interactive work was done during the first day. The results of the day were presented and the plan for next day was decided. About 4 hours of interactive work was done during the second day. The end results were presented to the plenum.

3. Foreword
Traditionally, the project owner, sponsor and investors have been marginally involved in setting and prioritizing the project activities, delegating all major project decisions to the project management team, under the agreed upon project objectives. The recently highlighted object of Project Sustainability has also been left mostly to project planners and executors. This stream argues that the project owner and related stakeholders have potentially a primary role in setting directions and constraints for sustainability.

4. Background
Project stakeholders may be divided into several camps: owner/investors, project team, customers, and others. The first camp, depending on the type and nature of a project, may include several elements, listed below. They will not only provide the resources and

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approve the key project decisions, but also specify the output and the performance and set the requirements and the guidelines for project planning and execution. Unlike some other stakeholders, owner/investors also share the long-term benefits and the costs. Owner: Responsible for funds/resources and long-term owner of project output. Sponsors: Within/related to owner’s organization, direct supervision of work. Investor: Provides short-term/long-term funds for a return on investment. Government: Enforces legal requirements and guidelines. Protect the society. Consultant: Advice or participation in the project or supervision/quality control. Financing Bank: Providing loans with a timely return and an acceptable risk. Contractors: Providing resources, contributing services, or committing work. Society: Requiring general well-being and safety, employment, or value-add. A project lifecycle may be divided into 4 stages, which also corresponds the lifecycle stages in PMBOK, as follows: Initiation, Planning, Execution and Control, Closure or closing. Each stage has different characteristics and requirements. The role of each stakeholder also varies in different project stages, particularly for sustainability. The role and responsibility each stakeholder may cover project, product or both.

5. Results
The role of the Project owner is influenced by political cycles (elections, accounting cycles, etc.). This assumption is valid for public and also for private organizations. Therefore, the Portfolio Management decisions are taken by negotiations, conflicts and bargains outlined by the power of the affected groups and individuals. This power may vary accordingly to the area and structure of the portfolio. In this competitive scenario, building strategic and lasting advantages can be difficult and could result on positive or negative returns. A sustainable result could be achieved when sponsors with mutual and convergent interests are able to identify the right people to contribute for the desired goals and every stakeholder perceives a sustainable and positive result. Itaipu Binacional, a company that administrates the Power Dam of Itaipu, the world’s largest producer of clean and renewable energy, could illustrate a good example of a successful result toward sustainability and last results. Itaipu Binacional launched a program called “Cultivating Good Water” intended to take care of Itaipu’s reservoir, the unique source to produce hydroelectric power, in a plentiful way now and forever to provide win opportunities for the main stakeholders. The main purpose of this program is to decrease the entry of sediments and chemical products into its reservoir expanding its lifespan.

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To achieve this goal Itaipu has helped to preserve the aquatic biodiversity, supported conservation initiatives like the construction of large heaps on contour lines, adjustment of roads, maintenance of community supply stations, recycling of pesticide packages, and encouragement of direct planting, besides rural indoor plumbing systems with a plenty support from the community: in all, there are 1,247 partner institutions among universities, organizations from various governmental spheres, NGOs and associations. Itaipu wateroriented initiatives also aim to record the data obtained to create a scientific information bank and study the evolution of multiple parameters of scientific interest along the reservoir's working life. There is a great challenge to build up long term thinking in project management, i.e. combining longer payback and short-term results measured in several perception cycles. To achieve this combination (short and long term results), the sponsors have to use the right incentives, especially at the beginning of a new venture. The challenge here is combining in a positive matter a maximization of returns in terms of human, resources, and financial results in short and long term. We understand that sustainability should be an integrated part of every project, program and portfolio and being analyzed and evaluated as any other requirement or success criteria, even taking in account that is a great challenge to measure sustainability, especially as an integrated part of multiple project success criteria. In order to achieve it there is a special role for the project owners (sponsors, contractor, consultants, etc.) to identify improvement opportunities, surpass the challenges, involve future users and customers to improve the project parameters toward sustainability and create a shared vision around the project to produce equable consumption of natural and human resources. During the project lifecycle the role of the project stakeholders varies in order to establish a sustainable shared vision as presented below:

Stakeholder Owner Sponsors Investor Government Consultant Financing Banks Contractor Society

Initiation High Medium Medium High High Low/Medium Low Low/Medium

Planning Low/Medium Low Low Medium Medium Medium High Low

Execution and Control Low/Medium Low Low Medium Medium Medium High Low/Medium

Closure High High Medium Medium Medium Medium Low Medium/High

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All this stakeholders have the responsibility to improve long lasting project results and taking care of their common interests based on the period of influence. We strongly believe that the implementation of sustainable and longer last view could enhance project results and bring a better return of investments for the stakeholders that surpass in several ways the investment to surpass the challenges to achieve it.

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The concept of sustainability and its application to project management
A.J. Gilbert Silvius, Jasper van den Brink & Adri Köhler

Abstract
Sustainability is one of the most important challenges of our time. How can we develop prosperity, without compromising the life of future generations? Companies are integrating ideas of sustainability in their marketing, corporate communications, annual reports and in their actions. It is for that reason inevitable that ‘sustainability’ will find it’s way to project management methodologies and practices in the very near future .This paper explores the concept of sustainability and its application to project management. After a review of the relevant literature on sustainability, its leading elements are identified. Based on an analysis of the scarce literature on the application of these elements in project management, a working definition of ‘Sustainable Project Management’ and its concepts are derived. In the last section of the paper, the implications of these concepts on project management processes, reports and competencies are further are analyzed and related to the leading concepts and standards on project management.

1. Introduction
At the 22nd World Congress of the International Project Management Association (IPMA) in 2008, IPMA Vice-President Mary McKinlay stated in the opening keynote speech that “the further development of the project management profession requires project managers to take responsibility for sustainability” (McKinlay, 2008). Her plea summarized the development of project management as a profession as she foresees it. In this development project managers need to take a broad view of their role and to evolve from ‘doing things right’ to ‘doing the right things right’. This implies taking responsibility for the results by the project, including the sustainability aspects of that (McKinley, 2008). Sustainability is without doubt one of the most important challenges of our time and the immediate future. How can we develop prosperity without compromising the life of future generations? However, concerns about the balance between economic growth and social wellbeing have been around as a political and managerial challenge for over 150 years (Dyllick and Hockerts, 2002). Also the concern for the wise use of natural resources and our planet emerged already many decades ago, with Carson’s book “Silent Spring” (Carson, 1962) as a launching hallmark. It was however not until the 1992 Rio Earth Summit, that the opinion that none of these three problems can be tackled, without considering and effecting the other two, got widely accepted (Keating, 1993). With this widespread acceptance, sustainable development became one of the most important challenges of our time.

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The recent world crises may even imply, that a strategy focused solely on shareholder value, is not longer viable. Following the success of Al Gore’s ‘inconvenient truth’, awareness seems to be growing that a change of mindset is needed, both in consumer behaviour as in corporate policies. How can we develop prosperity without compromising the life of future generations? Proactively or reactively, companies are looking for ways to integrate ideas of sustainability in their marketing, corporate communications, annual reports and in their actions (Hedstrom et al., 1998; Holliday, 2001). But how does this increased attention for sustainability find its way to the shop floor? Is sustainability a point of concern there? Is sustainability for example integrated in projects and project management? If organizations ‘put their money where their mouth is’ on sustainabi-lity, it is inevitable that sustainability criteria and indicators will find its way to project mana-gement methodologies and practices in the very near future. The concept of sustainability has more recently also been linked to project management (Gareis et al., 2009; Silvius et al., 2009). Association for Project Management (past-) chairman Tom Taylor recognizes that “the planet earth is in a perilous position with a range of fundamental sustainability threats” and “Project and Programme Managers are significantly placed to make contributions to Sustainable Management practices” (Association for Project Management, 2006). Also in academic research, the relationship between project management and sustainability is explored (e.g. by Eid, 2009; Gareis et al., 2009; Labuschagne and Brent, 2006; Silvius et al., 2009) as one of the (future) developments in project management. This paper explores the concept of sustainability and its application to project management. After a review of the relevant literature we will develop a definition of ‘Sustainable Project Management’. We will then explore the most familiar concepts of project management to understand if and how sustainability is covered in these standards, and report a small-scale expert study to explore the understanding of sustainability in project management by both academics and practitioners.

2. The concept of sustainability
Sustainability in the context of sustainable development is defined by the World Commission on Environment and Development (1987) as "forms of progress that meet the needs of the present without compromising the ability of future generations to meet their needs". This broad definition emphasizes the aspect of future orientation as a basic element of sustainability. This care for the future implies, among others, a wise use of natural resources and other aspects regarding the environmental footprint. The ‘green’ aspect of sustainability is recognized in many other definitions of sustainability. For example the Organization for Economic Cooperation and Development (OECD) states that, “The sustainable development concept constitutes a further elaboration of the close links between economic activity and the conservation of environmental resources. It implies a partnership between the environment and the economy” (Organization for Economic Cooperation and Development, 1990). Other authors emphasize sustainability to the development of

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underdeveloped regions. For example, Barbier (1987) links sustainable development to “…increasing the material standard of living of the poor at the ‘grassroots’ level, which can be quantitatively measured in terms of increased food, real income, educational services, healthcare, sanitation and water supply, emergency stocks of food and cash, etc.”. The combination of both social and environmental perspectives can be found in the earlier mentioned report by the United Nations World Commission on Environment and Development (1987). The report states that, “In its broadest sense, sustainable development strategy aims at promoting harmony among human beings and between humanity and nature”. The International Institute for Sustainable Development elaborates on the generic definitions in a definition more focused on sustainable management of organizations: “Adopting business strategies and activities that meet the needs of the enterprise and its stakeholders today while protecting, sustaining and enhancing the human and natural resources that will be needed in the future.” Important in this definition is the mentioning of the “…needs of the enterprise and its stakeholders today…”. This aspect recognizes that without profitability today, care for the environment and humanity cannot be sustained. John Elkington, in his book ”Cannibals with Forks: the Triple Bottom Line of 21st Century Business”, identified this as the ‘triple bottom line’ or ‘Triple-P (People, Planet, Profit)’ concept: Sustainability is about the balance or harmony between economic sustainability, social sustainability and environmental sustainability (Elkington, 1997). From the literature and definitions mentioned above, three key elements of sustainability can be identified (Dyllick and Hockerts, 2002). Sustainability is about integrating economical, environmental and social aspects. This element refers to the triple bottom line or three-P concept as stated by Elkington (1997), and acknowledged by Adams (2006) as the ‘three pillars’ of sustainability: Social, Environmental and Economic (illustrated in Figure 1, see next page). The concept suggests that three dimensions are interrelated and therefore may influence each other in multiple ways. Sustainability is about integrating short-term and long-term aspects. This element focuses the attention to the full lifespan of the matter at hand. An important notion in this aspect is that the economical perspective, because of discount rates, tends to value short term effects more than long term effects, whereas social impacts or environmental degradation may not occur before the long-term. Sustainability is about consuming the income and not the capital. This aspect is a common realm in business from the economic perspective. From a social or environmental perspective, however, the impact may not be visible in the short-term, causing degradation of resources in the long run. Sustainability implies that “the natural capital remains intact. This means that the source and sink functions of the environment should not be degraded. Therefore, the extraction of

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renewable resources should not exceed the rate at which they are renewed, and the absorptive capacity of the environment to assimilate waste, should not be exceeded.” (Gilbert et al., 1996)

Figure 1. The Triple-P concept of sustainability: People, Planet, Profit

3. Sustainability in project management
When discussing sustainability in project management, it is of eminent importance to have a clear understanding of the elements of sustainability derived above. This may be a challenging exercise because the elements are conceptual, rather than practical (Moneva et al., 2006; Pope et al., 2004). The relationship between sustainability and project management is still an emerging field of study. Literature is scarce, but some first studies and ideas were published in recent years. An overview of publications is provided in Table 1.:
Author Concepts of sustainability Triple-P Integrating Consuming approach short term income, not and long capital term √ √ Implications for Project Management

Labuschagne and Brent (2006)

APM (2006)

Project Managers should take into account the triple-P aspects in the interacting life-cycles of the project, the asset and the product. Project and Programme Managers are significantly placed to make contributions to Sustainable Management practices at many levels on their projects.

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Author

Russell (2008)

Concepts of sustainability Triple-P Integrating Consuming approach short term income, not and long capital term √

Implications for Project Management

Taylor (2008) Eid (2009) √

√ √

Silvius (2009) Gareis (2009)

et

al.

et

al.

Corporate Social Responsibility will become increasingly important. Sustainability checklist for project managers. Project management processes provide leverage points to introduce sustainable development to project management standards. Concepts and framework for sustainability indicators in projects. Directions for further development of project management.

Table 1. Studies on sustainability in project management. Except for the study of Eid (2009), these studies all focus on the implications of sustainability in business strategy and policies on project management. More specific, they focus on the considerations that should be taken into account in defining or managing projects. The studies pay little attention to: • • • the implications of sustainability on project management processes; the implications of sustainability on the competencies of the project manager; the contribution of projects and project management to sustainability.

These less addressed fields provide several suggestions for further research. Based on the studies mentioned in table 1, the following insights on sustainability in project management can be derived. Sustainability in project management is about integrating economical, environmental and social aspects in the management of projects. This insight corresponds with the triple bottom line element of sustainability. Integrating sustainability in project management requires the inclusion of ‘People’ and ‘Planet’ performance indicators in the management systems, formats and governance of projects (Silvius et al., 2009). In the current project management methodologies, the management of projects is dominated by the ‘triple-constraint’ variables time, cost and quality (Project Management Institute, 2008). And although the success of projects is most often defined in a more holistic perspective (Thomas and Fernandéz, 2007), this broader set of criteria doesn’t reflect on the way projects are managed.

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The triple-constraint variables clearly put emphasis on the profit ‘P’. The social and environmental aspects may be included as aspects of the quality of the result, but they are bound to get less attention. Sustainability in project management is about considering the full life-cycle of the project. Given the future-orientation of sustainability, a logical implication is to consider the full life-cycle of a project, from its conception to its disposal. This view is further developed by Labuschagne and Brent (2006). In their work they argue, that when considering sustainability in project management, the total life cycle of the project (e.g. initiation-development-execution-testing-launch) should be taken into account. But not just the life-cycle of the project is relevant. The project will ‘produce’ a result, being a change in assets, systems, behaviour, etc. This result, in her words: the asset, should also be considered over its full life cycle. And even another level further, also the life cycle of the product or service that the asset produces should be considered. Figure 2 visualizes how these life cycles, ‘project life cycle’, ‘asset life cycle’ and ‘product life cycle’, interact and relate to each other. Including sustainability considerations in projects suggests that these three life cycles are taken into account. Because Labuschagne and Brent include the result of the project in their framework, it is sensitive to the context of the project. Their studies regarded the manufacturing sector in which projects generally realize assets that produce products. In other contexts, the result of a project may be not an asset, but an organizational change or a new policy. The general insight however is that sustainability in projects should be regarded on the level of the project, its result and its effect.

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Figure 2. Interrelating life-cycles (Based on Labuschagne & Brent, 2006). Combining the triple-P element of sustainability and the life-cycle views, the following definition of sustainable project management can be derived. Sustainable Project Management is the management of project-organized change in policies, assets or organizations, with consideration of the economical, social and environmental impact of the project, its result and its effect, for now and future generations.

4. Implications
The implications of integrating sustainability in project management can be grouped into a number of fields. We identify: • • • The impact of sustainability on project management processes; The impact of sustainability on measuring and reporting projects; The impact of sustainability on project management competencies.

The impact of sustainability on project management processes This section explores how sustainability is included in the familiar process standards of project management and what the impact could be. We will consider the inclusion of sustainability in the Project Management Institute’s (PMI) project management body of knowledge, ‘PMBOK’ Guide (4th edition). Since the ‘profit’ aspects of

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sustainability is traditionally addressed in the triple constraint of project management, cost, time and quality, we will focus this analysis on the social and environmental aspects of sustainability. For the purpose of this paper, the PMBOK Guide 4th edition (Project Management Institute, 2008) was studied for aspects of sustainability. Both the Index and the Glossary do not mention sustainability as a relevant word or term. Also in parts of the guide where a reference to sustainability aspects would be quite logical, this reference is not made. For example Paragraph 1.8, Enterprise Environmental Factors, mentions the organization’s human resources and Marketplace conditions as “internal or external environmental factors that surround or influence a project’s success”. But the paragraph fails to more explicitly identify potential social or environmental interest resulting from sustainability policies as factors of influence. Also in Paragraph 2.3, Stakeholders, or the definition of stakeholders in the Glossary, any reference to typical sustainability stakeholders as environmental protection pressure groups, human rights groups or non governmental organizations are lacking. In fact, chapter 10, Project Communications Management, also fails to recognize these potential stakeholders when it discusses stakeholder communication. In the introduction of chapter 3 Project Management Processes, the PMBOK Guide mentions a few criteria for a successful project. Here it is mentioned that the project manager should be able to “balance the competing demands of scope, time, cost, quality, resources and risk” (Project Management Institute, 2008). In this section the PMBOK Guide fails to recognize the social and environmental aspects as relevant factors in project success. Also in chapter 11, Project Risk Management, there is no mentioning of ecological and/or social risks. Does this mean that the PMBOK Guide has no eye for sustainability aspects at all? Well, we found two references to aspects of sustainability. One is surprisingly clear. Paragraph 4.1.1., Develop Project Charter, mentions “Ecological impacts” and “Social needs” as potential benefits of a project when it discussed the business case. The other reference is more hidden. The processes of the PMBOK are derived from the generic project life cycle. In fact, it also mentions the interaction between the project life cycle and a product life cycle in paragraph 2.1.2. Product vs. Project Life Cycle Relationships. Based on this analysis it can be concluded that the concepts of sustainability are not yet fully included in the project management processes in the PMBOK. Obvious areas of impact should be the identification of stakeholders, the criteria for project success and the business case.

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The impact of sustainability on measuring and reporting projects In considering the impact of sustainability on measuring and reporting projects, the conceptual concepts of sustainability should be translated into concrete indicators. An analysis of efforts to do so, reveals different approaches to this ‘translation’. Various discussions form the basis for these different approaches. One discussion is between monetary and physical indicators (Turnhout et al., 2007; Singh et al., 2009). Many economists argue that all the sustainable effects of the behavior of a company or a project can be translated into monetary consequences (Coase, 1960) The big advantage is that al different kind of indicators are expressed in the same way. Critics argue that this advantage leads to an oversimplification of reality. Another discussion is focusing on the difference between biotic and abiotic indicators (Turnhout et al., 2007). Biotic indicators describe direct, biological consequences, e.g. the concentration of plankton in seawater, or the number of birds of prey in a certain area. Abiotic indicators are indirect indicators like the concentration of Ozone or the level of pesticide pollution. Biotic indicators are often seen as the most valuable indicators. At the same time there numbers can fluctuate easily. Abiotic indicators are more stable but only measure whether the conditions for a good ecological system are present, not how this ecological system really ‘behaves’. On these discussions, there is an ongoing academic debate. This debate is fuelled by a lack of knowledge in many areas, specifically when it comes to discussions about the ‘planet’ indicators (Turnhout et al., 2007). Complex ecological systems are difficult to understand and even more difficult to capture in one or two indicators. According to various authors al these different approaches are not just signs of an intense scientific debate but also show the normative arguments that are part of the discussion. For example, what are the criteria to include or exclude certain indicators (Niemeijer et al., 2008)?
Direct Economic Performance Market Presence Indirect Economic Impact Materials Energy Water Biodiversity Emissions, effluents and waste Products and services Compliance Transport Overall

Economic Criteria

Environmental Criteria

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Social Criteria

Employment Labor / Management relations Labor Practices and Health and Safety Decent Work Training and Education Diversity and Equal opportunity Investment and Procurement practices Non-discrimination Freedom of association and collective bargaining Human Child labour Rights Forced and compulsory labor Disciplinary practices Security practices Indigenous rights Community Bribery and corruption Society Public policy Anti-competition behaviour Compliance core Customer health and safety Products and services labeling Product Market communication and Advertising Responsibility Customer privacy Compliance

Table 2. Overview of indicators in the Global Reporting Guidelines. The most well known set of sustainability indicators based on stakeholder participation is the Global Reporting Guidelines from the Global Reporting Initiative (GRI). The GRI is a set of criteria developed by a wide variety of different stakeholders. Table 2 shows an overview of the GRI criteria. The GRI is used by a 1000 (GRI, 2009) to 3000 organizations (Brown et al., 2009) and it is still growing. One third of all sustainability reports of the largest 100 companies in various countries in the world is explicitly inspired by the GRI (Brown et al., 2009). The implication of sustainability in project management would require that this set of indicators is matched with the indicators on which a project is managed. The total set of indicators is probably far to extensive to use in most projects, but a selection of relevant indicators can be very useful for project managers to get a better understand-ding of the sustainability aspects of their project. The impact of sustainability on project management competences This section explores how sustainability is included in the widely used standards for project management competences, the International Project Management Association’s (IPMA) Competence Baseline version 3 (ICB3). This ICB provides the official definition of the competences expected from project management personnel

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by the IPMA for certification using the universal IPMA certification system. It is the common framework document that all IPMA Member Associations and Certification Bodies abide by to ensure that consistent and harmonized standards are applied. In ICB3 IPMA added two new groups of competences to the baseline: behavioural and contextual. ICB3 now breaks professional project, programme and portfolio management down into 46 competence elements that cover the following categories (International Project Management Association, 2006): • • • technical competences for project management (20 competences); behavioural competences of project personnel (15 competences); contextual competences of projects, programs and portfolios (11 competences).
Behavioural competences 2.01 Leadership 2.02 Engagement & motivation 2.03 Self-control 2.04 Assertiveness 2.05 Relaxation 2.06 Openness 2.07 Creativity 2.08 Results orientation 2.09 Efficiency 2.10 Consultation 2.11 Negotiation 2.12 Conflict & crisis 2.13 Reliability 2.14 Values appreciation 2.15 Ethics Contextual competences 3.01 Project orientation 3.02 Program orientation 3.03 Portfolio orientation 3.04 Project, program & portfolio orientation 3.05 Permanent organization 3.06 Business 3.07 Systems, products & technology 3.08 Personnel management 3.09 Health, security, safety & environment 3.10 Finance 3.11 Legal

Technical competences 1.01 Project management success 1.02 Interested parties 1.03 Project requirements & objectives 1.04 Risk & opportunity 1.05 Quality 1.06 Project organization 1.07 Teamwork 1.08 Problem resolution 1.09 Project structures 1.10 Scope & deliverables 1.11 Time & project phases 1.12 Resources 1.13 Cost & finance 1.14 Procurement & contract 1.15 Changes

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Technical competences 1.16 Control & reports 1.17 Information & documentation 1.18 Communication 1.19 Start-up 1.20 Close-out

Behavioural competences

Contextual competences

Table 3. The project management competences from the ICB3. The explicit recognition of the categories behavioural competences and contextual fits expected impact of the concepts of sustainability. For example a reference to environmental aspects can be found explicitly in contextual competence element 3.09 Health, security, safety & environment. But also the elements 3.05 Permanent organization and 3.06 Business may include references to sustainable business in case the organization is adopting sustainability in her business strategy. Also the reference to ethics in element 2.15 implies that at least some social aspects are taken into consideration. Other references to the social aspects of sustainability can be found in element 3.08 Personnel management and 2.14 Values appreciation. But even given these promising references, which should raise the awareness of the project managers, the word sustainability is not explicitly mentioned in the ICB3. Integrating sustainability in project management competences therefore requires a further elaboration of the behavioural and contextual aspects of the ICB3, to include more specific competences on the social and environmental aspects of sustainability.

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5. Conclusion
Although some aspects of sustainability are found in the various standards of project management, it has to be concluded that the impact of sustainability is not really recognized yet. The way projects are managed, measured and reported doesn’t reflect the different aspects of sustainability that can be derived from the concepts of sustainable development. Based on the definition of Sustainable Project Management we developed, we suggest that a number of areas in which project management need to develop further in order to capture the impacts of sustainability. These areas are: • • • project management processes; project management performance indicators; project management competences.

These areas of impact also hold a recommendation for further research. To these recommendations we would also like to add the contribution of project management to sustainability. We suggest a framework is developed that can be used to identify the sustainability aspects and criteria of projects. In this framework the people-planet-profit concept of sustainability should be recognized in a way that projects can be considered on criteria on ‘social sustainabi-lity’, ‘environmental sustainability’ and economic sustainability’. These criteria or indicators should then be applied on the level of the project itself, its result (an asset, product or a change) and its effect (what is it that the asset delivers). It is clear that still a lot of work has to be done on the implications of Sustainable Project Management and that there is a growing need of expertise, criteria and concepts to practically implement the concept in the management of projects. The consequences are not at all clear yet and may even be underestimated. The definition we developed however provides a foundation for further development and operationalisation.

References
Adams, W.M. (2006), The Future of Sustainability: Re-thinking Environment and Development in the Twenty-first Century, Report IUCN. Available at http://cmsdata.iucn.org/downloads/iucn_future_of_sustanability.pdf Association for Project Management. (2006), APM supports sustainability outlooks, Available at http://www.apm.org.uk/page.asp?categoryID=4. Barbier, E. (1987), The Concept of Sustainable Economic Development, in Environmental Conservation, vol. 14 (no. 2).

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Brown, H. S., M de Jong and D.L. Levy (2009), Building institutions base don information disclosure: lessons from GRI’s sustainability reporting, in Journal of Cleaner production, vol 17, p. 571-580. Carson, R. (1962), Silent Spring, Houghton Mifflin, Boston. Coase, R.H. (1960), The problem of social cost, Journal of Law and Economics, vol 3, p. 144. Dyllick, T. and Hockerts, K. (2002), Beyond the business case for corporate sustainability, in Business Strategy and the Environment, 11, p. 130-141. Eid, M. (2009), Sustainable Development & Project Management, Lambert Academic Publishing, Köln. Elkington, J. (1997), Cannibals with Forks: the Triple Bottom Line of 21st Century Business, Capstone Publishing Ltc. Oxford. Gareis, R., Heumann, M. and Martinuzzi, A. (2009), Relating sustainable development and project management, IRNOP IX, Berlin. Gilbert, R., Stevenson, D., Girardet, H. and Stern, R. (Eds.), (1996), Making Cities Work: The Role of Local Authorities in the Urban Environment, Earthscan Publications Ltd.. Global Reporting Initiative (GRI) (2009), http://www.globalreporting.org/NewsEventsPress/PressResources/PressRelease_14_Jul y_2006_1000GRIReports.htm 21, retrieved September 2009. Hedstrom G, Poltorzycki S, Stroh P. (1998), Sustainable development: the next generation., in Sustainable Development: How Real, How Soon, and Who’s Doing What? Prism, 4: 5–19. Holliday C. (2001), Sustainable growth, the DuPont way, in Harvard Business Review, September: 129–134. International Project Management Association (2006), IPMA Competence Baseline version 3.0, ISBN 0-9553213-0-1, IPMA, Nijkerk, the Netherlands. Keating, M. (1993), The Earth Summit’s Agenda for Change, Centre for our Common Future, Geneva. Labuschagne, C. and Brent, A.C. (2006). Social indicators for sustainable project and technology life cycle management in the process industry, in International Journal of Life Cycle Assessment, vol. 11, no.1, pp.3-15. McKinlay, M. (2008), Where is project management running to..?, Key-note speech, International Project Management Association, World Congress, Rome, Italy. Moneva, J.M., P. Archel, C. Correa (2006), GRI and the camouflaging of corporate sustainability, Accounting Forum, vol. 30 p. 121-137.

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Niemeijer, D. and R.S. de Groot (2008),A conceptual framework for selecting environmental indicator sets, Ecological indicators, vol. 8 14-25 Organization for Economic Cooperation and Development (1990). Issues papers: On Integrating Environment and Economics, Paris. Pope, J., D. Annandale and A. Morris-Saunders (2004), Conceptualising sustainable assessment, Environmental Impact Assessment Review, vol 24 p. 595-616. Project Management Institute (2008), A Guide to Project Management Body of Knowledge (PMBOK Guide), Fourth edition, Project Management Institute, Newtown Square, PA USA. Russell, J. (2008) Corporate social responsibility: what it means for the project manager, in: Proceedings of PMI Europe Congress, Malta, Philadelphia, PA: Project Management Insitute Silvius, A.J.G., Brink, J. van der & Köhler, A. (2009), Views on Sustainable Project Management, in Human Side of Projects in Modern Business, Kalle Kähköhnen, Abdul Samad Kazi and Mirkka Rekola (Eds.), IPMA Scientific Research Paper Series, Helsinki, Finland. Singh, R. K., H.R. Murty, S.K. Gupta and A.K. Dikshit (2009), An overview of sustainability assessement methodologies, in Ecological Indicators, vol. 9, p. 189-212. Taylor, T. (2008), A sustainability checklist for managers of projects, Available at http://www.pmforum.org/library/papers/2008/PDFs/Taylor-1-08.pdf. Thomas, G. and Fernandez, W. (2007), The Elusive Target of IT Project Success, International Research Workshop on IT Project Management (IRWITPM), Association of Information Systems, Special Interest Group for Information Technology Project Management. Turnhout, E., M. Hisschemoller, H. Eijsackers (2007), Ecological indicators: between the two fires of science and policy, in Ecological indicators, vol 7, p 215-228. World Commission on Environment and Development (1987). Our Common Future. Oxford University Press, Great Britain.

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The Art of Productive Laziness
Peter Taylor

1. What is productive laziness?
'Progress isn't made by early risers. It's made by lazy men trying to find easier ways to do something.' Robert Heinlein (1907 - 1988) The latest Standish Group report shows more project failing and less successful projects. ‘This year's results show a marked decrease in project success rates, with 32% of all projects succeeding which are delivered on time, on budget, with required features and functions’ says Jim Johnson, chairman of The Standish Group, ‘44% were challenged which are late, over budget, and/or with less than the required features and functions and 24% failed which are cancelled prior to completion or delivered and never used.’ So what is going wrong out there? Why are your projects being challenged in this way? Are Project Managers perhaps working too hard to be successful? Is this a sustainable position for project managers?

Challenge: The whole world is challenged that is for sure!
On one hand we faced the Global Recession, with all the impact that this had on people and business, and on the other hand we are a dynamic, resourceful and ever evolving world that demands change as part of its survival. And change demands projects and projects demand project managers. On one hand we have a history littered with significant project failure, although there have been spectacular successes as well The Standish Report 2009 clearly shows that history may well be repeated in many cases. Now is the time that is even more critical to succeed, and succeed with a higher level of certainty than seen before since those projects that will be commissioned in the future, as well as the ones that are allowed to continue in the current climate, will be expected to deliver higher business impact, be under closer scrutiny from senior management and be under far more pressure. And guess what, who will be the one that is under the most pressure, you, as represented by your delegates - the project managers in your organisations. So surely now is the time that you both want the best project managers you can have and for these project managers to work in the most effective way possible. Now is the time for your project managers to be ‘lazy’!

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By advocating being a 'lazy' project manager I do not intend that we should all do absolutely nothing. I am not saying we should all sit around drinking coffee, reading a good book and engaging in idle gossip whilst watching the project hours go by and the nondelivered project milestones disappear over the horizon. That would obviously be plain stupid and would result in an extremely short career in project management, in fact probably a very short career full stop! Lazy does not mean Stupid. No I really mean that we should all adopt a more focused approach to project management and to exercise our efforts where it really matters, rather than rushing around like busy, busy bees involving ourselves in unimportant, non-critical activities that others can better address, or indeed that do not need addressing at all in some cases.

2. The Science behind the laziness
The Pareto principle (also known as the 80/20 rule) states that for many phenomena 80% of consequences stem from 20% of the causes. The idea has rule-of-thumb application in many places, but it's also commonly misused, for example, it is a misuse to state that a solution to a problem ‘fits the 80-20 rule’ just because it fits 80% of the cases; it must be implied that this solution requires only 20% of the resources needed to solve all cases. The principle was in fact suggested by management thinker Joseph M. Juran and it was named after the Italian economist Vilfredo Pareto, who observed that 80% of property in Italy was owned by 20% of the Italian population. The assumption is that most of the results in any situation are determined by a small number of causes. So ‘20% of clients may be responsible for 80% of sales volume’. This can be evaluated and is likely to be roughly right, and can be helpful in future decision making. The Pareto Principle also applies to a variety of more mundane matters: one might guess approximately that we wear our 20% most favoured clothes about 80% of the time, perhaps we spend 80% of the time with 20% of our acquaintances and so on. The Pareto Principle or 80/20 rule can and should be used by every smart but lazy person in their daily life. The value of the Pareto Principle for a project manager is that it reminds you to focus on the 20 percent that matters. Woody Allen once said ‘80% of success is showing up’, I’m not so sure about that, I have seen projects where there was a physical project manager around but you would never have believed that looking at the project progress, or lack of progress. No, better I believe to appreciate that of the things you do during your day, only 20 percent really matter. Those 20 percent produce 80 percent of your results. So, you should identify and focus on those things during your working day.

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3. The Intelligence behind the laziness
It’s no good just being lazy; you have to be better than lazy, you have to be lazy in a very smart way. Productive Laziness is not just about being lazy, it requires something more and that is a powerful and magical combination of laziness and intelligence. Smart lazy people have a real edge over others in society and are most suited to leadership roles in organizations. This theory has existed for many years and applied in a number of interesting ways. One of the most famous of these was in the Prussian Army. Helmuth Karl Bernhard Graf von Moltke (1800 – 1891) was a German Generalfeldmarschall. The chief of staff of the Prussian Army for thirty years, he is widely regarded as one of the great strategists of the latter half of the 1800s, and the creator of a new, more modern method, of directing armies in the field. In 1857 Helmuth Moltke was given the position Chief of the Prussian Großer Generalstab (military staff), a position he held for the next 30 years. As soon as he gained the position he went to work making changes to the strategic and tactical methods of the Prussian army; changes in armament and in means of communication; changes in the training of staff officers; and changes to the method for the mobilization of the army. He also instituted a formal study of European politics in connection with the plans for campaigns which might become necessary. In short, he rapidly put into place the features of a modern General Staff. Moltke had a particular insight to and approach to categorising his officer corps, something which lives on to this day within many armed forces, and something which can apply to all forms of leadership. If you consider the two ranges of individual characteristics, those that go from diligent through to lazy, and those that go from non-smart through to smart (yes I am being politically correct here) then you end up with the four character types in the diagram (Figure 1) next page. General von Moltke divided his officer corps into these four distinct types, depending on their mental and physical characteristics.

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Figure 1: Character Types He ended up with (and he never had to be politically correct being born in the 19th century and being chief of the Prussian army) type A: mentally dull and physically lazy, type B: mentally bright and physically energetic, type C: mentally dull and physically energetic, and type D: mentally bright and physically lazy. • Type ‘A’ officers, who were mentally dull and physically lazy, were given simple, repetitive, and unchallenging tasks to perform. They had reached their career peak in the army. That said, if you left them alone then they might just come up with a good idea one day, if not then they won’t cause you any problems either. Type ‘B’ officers who were mentally bright and physically energetic were considered to be obsessed with micromanagement and would, as a result, be poor leaders. Promotion was possible over a period of time but not to the status of commanding officer of the German General Staff. These officers were best at making sure orders were carried out and thoughtfully addressing all the detail. Type ‘C’ officers who were mentally dull but physically energetic were considered to be somewhat dangerous. To Moltke, they were officers who would require constant supervision, which was an unacceptable overhead and distraction, and

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because they would potentially create problems faster than could be managed, these officers were considered too much trouble and were dismissed. No career there then! • Which brings us to type ‘D’ officers; these were the mentally bright and yet physically lazy officers who Moltke felt could and should take the highest levels of command. This type of officer was both smart enough to see what needed to be done but was also motivated by inherent laziness to find the easiest, simplest way to achieve what was required. Put in a more positive way they would know how to be successful through the most efficient deployment of effort.

So, smart lazy people have a real edge over others and are most suited to leadership roles in organizations. The Lazy Project Manager, and the Art of Productive Laziness, is all about applying these principles in the delivery and management of projects. It is assumed that you are not stupid so you are already on the right hand side of the diagram (Figure 1), what you now need to do is hone your lazy skills in order to rise to the top right hand side of the diagram. Do this and not only will your projects be more successful, you will also be seen as successful and a safe pair of hands for future leadership roles. ‘Whenever there is a hard job to be done I assign it to a lazy man; he is sure to find an easy way of doing it.’ - Walter Chrysler

4. How to apply the theory to become really lazy (and really productive)
Well let’s start with how you might view a project. The Lazy Project Manager’s Theory of Projects, from a Productive Laziness aspect, is: 'All projects are thick at one end, much, much thinner in the middle and then thick again at the far end.’ This is completely the opposite to the Theory by Miss Anne Elk in a Monty Python sketch: 'All brontosauruses are thin at one end, much, much thicker in the middle, and then thin again at the far end. That is the theory that I have and which is mine, and what it is too.' (Monty Python11)

"Anne Elk's Theory on Brontosauruses" is a sketch from the thirty-first Monty Python's Flying Circus episode. This skit features Graham Chapman as a television interviewer and John Cleese in drag as the palaeontologist, Anne Elk, appearing in a television talk show titled 'Thrust'. The plot of the skit is that the interviewee, Anne Elk, cannot bring herself to describe the actual basis of her supposed new palaeontological theory on dinosaurs, specifically Brontosauruses. Ms. Elk spends most of the interview circuitously leading up to the "theory of dinosaurs by Anne Elk", making assertions like "My theory, which belongs to me, is mine." It turns out that in the end Miss Elk's new theory on brontosauruses is rather shallow: "All brontosauruses are thin at one end, much, much thicker in the middle, and then thin again at the far end."

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Figure 2: Dinosaur theory for projects The point here is that, working by the productive lazy rule, a smart project manager should apply time and effort at the critical stages of a project, i.e. the start and the finish, and less time in the middle or the less critical stage (Figure 2). At this stage there are others in the project who should be doing most of the hard work and you probably deserve a bit of a rest anyway. The Lazy Project Manager’s Second Theory of Projects, again from a Productive Laziness aspect, states: ‘If you want to get a project from ‘start’ to ‘finish’ then you hitch a ride as much as you can – you don’t carry it!’

Figure 3: 2nd Dinosaur theory for projects

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And the point this time is that as a smart project manager you should be directing the project and not trying to pick it up and carry its heavy, heavy load on your back all the way to the delivery gate (Figure 3). That way only failure, backache and heartache lie. It should also be remembered that it is as much to do about what you don’t ‘do’ as to what you do ‘do’. Do the things that will contribute to the ‘80%’ and avoid doing the things that won’t. Where do you begin and with what, and after that what next? So what is it that a ‘lazy’ project manager should focus on during this initial ‘thick’ front end to their projects? And by front end, if you happen to be following this is real project management terminology, then I am referring to initiation of the project. Well the back end of initiation anyway. There is a project, you are the project manager, and the project is kicking off. So what is it that should get you out of the ‘comfy chair’ and rushing in to action? Well firstly getting ahead, and then staying ahead, of the ‘game’. Then planning a strategy for managing the two critical ‘players’ in any project – the project sponsor, who should be known at this point, and the project creep, who will be unknown but could be anyone or everyone, including, if you are really unlucky, the project sponsor, or , if you are really stupid, you. And finally, the project manager needs to be planning for zero communication breakdowns, a singularly significant activity since general guidance suggests that some 70 percent of your time as a project manager should be spent in some form of communication or other. Three areas to focus on to ensure the project, that is your project, starts off in the right way, in the right direction, and at the right momentum, and with the right processes and controls in place. There is a well known project maxim that says ‘Projects don't fail at the end. They fail at the beginning.’ Failure at the beginning is just harder to spot and hurts a lot less, for a while at least. ‘A bad beginning makes a bad ending. ‘Euripides (484 BC - 406 BC) Driving the project on auto-pilot, from the comfy chair We are now in the ‘much, much thinner in the middle’ part now, so what should the smart but lazy person be concentrating on now? The ‘lazy’ project manager now oversees the project work with as light a touch as possible. The planning was done at the ‘thick’ front-end of the project, now it is all about execution and control.

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A number of aspects work well in the world of productive laziness – firstly ensuring that the project is conducted in a fun and enjoyable manner, and secondly being prepared to throw that newspaper down, leap off of the comfy chair and deal with problems as and when they occur but in a controlled and productive manner. In addition it is always good to spread a little love across your project team to engender good spirits and a confident air of potential success. Such love is a good thing but you do need to avoid the trap of being swamped with attention, you need to learn how to operate an ‘open door’ policy but avoid getting dragged in to every little project detail. ‘A whole is that which has beginning, middle and end’ Aristotle (384 BC - 322 BC) Time for one last effort, to make life easier in the future Finally we arrive at the ‘thick again at the far end’ part. Now is not the time to declare the project a success and rush off for a Bloody Mary12 at the bar, welcome though that may be. No, now is the time that you can apply a small and final amount of effort but gain enormous amounts of knowledge so that future projects are likely to be even more successful and potentially with even less effort. And by less effort we know that means so much more time in the ‘comfy chair’ being lazy but in a productive way. ‘The world is round and the place which may seem like the end may also be only the beginning.’ Ivy Baker Priest

5. Top tips for success the lazy way
1. It is important for your to stay ahead of the game, start confidently, dress appropriately, get the upper hand and anticipate – keep your eye on the end game 2. Manage your sponsor, understand them and what they want from you and the project – make sure you know what’s in it for them 3. And manage the project creep, which is inevitable but manageable with a good and proven change process linked to an appreciative use of the ‘parking lot’ 4. Avoid a communication breakdown through an open and honest, effective communication process that suits each individual

I am not advocating that project managers need to drink alcohol, an alternative recipe to a Bloody Mary (my favourite cocktail) is a Virgin Mary: 4 ounces Tomato Juice, one teaspoon Worcestershire Sauce, one dash Lemon Juice, two drops Tabasco Sauce, Pepper and Salt. Stir with ice in a large wine glass. Garnish with a wedge of lime.

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5. Have fun, it will help the project but be careful in your use of ‘fun’ – encourage a good level of humour amongst the project team 6. Breathe normally and stay calm, plan for project challenges and when they do happen make sure you filter problems, delegate what you can and prioritise what is left over in order to keep the project on track 7. Make your project attractive, get the best team and keep them feeling ‘loved’ by using others on the team together with yourself – know what ‘love’ individuals want 8. Avoid swamping yourself with communication and demands for your time, by all means have an open door, but be a good manager and close it some of the time for the greater good of the project 9. Always be open to learning more, from the project knowledge and history, by talking openly to project team members so that you can learn the lessons that are there to be learned and share everything by telling others what you now know Projects are difficult, I am not suggesting that they aren’t, but there is a better way to approach these vehicles of change.

6. One final Word of Caution
Success is really defined by what you are looking for. A project manager was out walking in the countryside one day when a frog called out to them. They bent down, picked up the frog and put it in their pocket. The frog called out again, saying, "If you kiss me I shall turn me back into a beautiful princess, and I'll stay with you for a week as your mistress." The project manager took the frog out of their pocket, smiled at it, and put it back into their pocket. The frog called out once more, "If you kiss me and turn me back into a princess, I'll stay with you for as long as you wish and do absolutely anything that you want. Again the Project manager took the frog out of their pocket, smiled at it and put it back. Finally, the frog demanded, "What's the matter? You can turn me back into a beautiful princess, and I'll stay with you forever and do anything you want. Why won't you kiss me?" to which the project manager replied, "Understand, I'm a project manager. I simply don't have time for a girlfriend, but a talking frog ....... that's cool." And the moral of the story is: if you decide to not become ‘Productively Lazy’, and that is entirely your choice, then you will probably still think a talking frog is cool! And you won’t have a need for a nice comfy chair since you will be far too busy.

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7. References
Various extracts from: Taylor, P B (2009) The Lazy Project Manager. UK: Infinite Ideas Limited Extract from: Johnson, J (2009) The Standish Report 2009. USA: The Standish Group

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Workshop report Group 2
1. Workshop group
The papers were discussed About 2 hours of interactive work were done during the first day The results of the first day were presented to the plenum About 4 hours of interactive work were done during the second day The end results were presented to the plenum Members of Stream 2 Workshop included The Stream 2 moderator and reporter was A.J.Gilbert Silvius Paper presentation was made by Peter Taylor Akeel Akbar, Dimitri Antzoulides, Gunter Gruhser, Heikki Lonka, André Moustopoulos, John Paris Pantouvakis, Francesco Porretti, Aleksandra Stojanovic The goals to achieve and the purpose of the Stream 2 are defined in the introduction paper.

2. Report From expectations to results
Sustainability Considering social, environmental and economic aspects (People – Planet – Profit) Considering short term + long term Consuming capital, not income (respecting resources)

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Orientation
• • • • • Project Management Process Project Process Project Deliverable Project Result Effect of the Project Result

Impact of Sustainability

Considering sustainability requires considering the role of the project in the system of doing projects

But ... The strength of project management was its focus How to keep this strength? What’s a realistic scope (time, …) to consider?

Intermediate conclusions Sustainable working practices are everyone’s duty Sustainability is outside project management, but the PM has a moral duty for sustainability Considering sustainability requires considering the role of the project in the system of doing projects But what to consider? Which criteria?

People, Planet, Profit Adopt the Triple-P concept of sustainability as a basis for the criteria of sustainability.

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Sustainability criteria
Economic Sustainability Return on Investment Business Agility Transport Environmental Sustainability Energy Waste Materials and resources
- Direct financial benefits - Net Present Value - Flexibility / Optionality in the project - Increased business flexibility - local procurement - digital communication - traveling - Emission / CO2 from energy used - incorporated energy -… - Recycling / disposal - …. - reusability - incorporated energy -… - Employment - Labor / Management relations - Health and Safety - Training and Education - Organisational learning - Diversity and Equal opportunity - Non-discrimination - Freedom of association - Child labour - Forced and compulsory labor - Disciplinary or Security practices - Community support - Public policy - Customer health and safety - Products and services labeling - Market communication and Advertising - Customer privacy - Compliance - Investment and Procurement practices - Bribery and corruption - Anti-competition behaviour

Labor Practices and Decent Work

Social Sustainability

Human Rights

Society and Customers Ethical behaviour

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Sustainability and Project Management processes

design
Return on Investment - Direct financial benefits - Net Present Value Business Agility - Flexibility / Optionality in the project - Increased business flexibility Transport - local procurement - digital comm unication - traveling

plan

execute

close

Economic Sustainability

high

Environmental Sustainability

Energy - Emission / CO2 from energy used - incorporated energy -… Waste - Recycling / disposal - …. Materials and resources - reusability - incorporated energy Labor Practices and Decent Work - Employment - Labor / Management relations - Health and Safety - Training and Education - Organisational learning - Diversity and Equal opportunity Hum an Rights - Non-discrimination - Freedom of association - Child labour - Forced and compulsory labor - Disciplinary or Security practices Society and Customers - Community support - Public policy - Custom er health and safety - Products and services labeling - Market com munication and Advertising - Custom er privacy - Compliance Ethical behaviour - Investm ent and Procurem ent practices - Bribery and corruption - Anti-com petition behaviour

high high high keep local sourcing in mind priortise local high energy consumption built medium in high high plan waste design for reuse management high high

medium high options approach, agile

low

medium evaluate the ROI

low

low

medium

low

high optimise high optimise WM plan medium

low medium Lessons learnt low

medium

high

high

low

Social Sustainability

medium

medium

medium

low

medium

medium

low

low

high

low

low

low

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Sustainability and Project Management Competences

Return on Investment - Direct financial benefits - Net Present Value Economic Sustainability

Contextual Competences 3.10 Finance 3.06 Business 3.05 Permanent Organisation 3.03 Portfolio Orientation

Technical Competences Behavioural Competences 1.13 Cost & Finance 2.15 Ethics ? 1.05 Quality 1.01 Project management Sucess

3.06 Business 3.07 Systems, products & technology

Business Agility - Flexibility / Optionality in the project - Increased business flexibility Transport - local procurement - digital communication - traveling Energy - Emission / CO2 from energy used - incorporated energy Environmental -… Sustainability Waste - Recycling / disposal - …. Materials and resources - reusability - incorporated energy Labor Practices and Decent Work - Employment - Labor / Management relations - Health and Safety - Training and Education Human Rights - Non-discrimination - Freedom of association - Child labour Social - Forced and compulsory labor Sustainability Society and Customers - Community support - Public policy - Customer health and safety - Products and services labeling - Market communication and Ethical behaviour - Investment and Procurement practices

1.02 Interested Parties 1.03 requirements & objectives 1.08 problem resolution 1.10 scope and deliverables 1.11 time and phases 1.14 Procurement contract 1.15 Changes

2.01 Leadership 2.06 Openeness 2.07 Creativity 2.14 Values aprreceation

3.09 Health, safety, security & environment 1.03 requirements & objectives 1.10 scope and deliverables 1.14 Procurement & contract 1.18 Communication 3.09 Health, safety, security & 1.03 requirements & objectives environment 1.10 scope and deliverables 3.07 Systems, products & 1.14 Procurement & contract technology 3.09 Health, safety, security & environment 3.07 Systems, products & technology 3.09 Health, safety, security & environment 3.07 Systems, products & technology 3.08 Personel Management 3.09 Health, safety, security & environment 3.11 Legal 3.08 Personel Management 3.09 Health, safety, security & environment 3.11 Legal 3.09 Health, safety, security & environment 3.11 Legal 1.03 requirements & objectives 1.10 scope and deliverables 1.14 Procurement & contract 1.03 requirements & objectives 1.10 scope and deliverables 1.14 Procurement & contract 1.06 Project organisation

2.04 Assertiveness 2.09 Efficiency 2.14 Values appreceation 2.15 Ethics 2.04 Assertiveness 2.14 Values appreceation 2.15 Ethics

2.04 Assertiveness 2.14 Values appreceation 2.15 Ethics 2.04 Assertiveness 2.14 Values appreceation 2.15 Ethics all

1.06 Project organisation 1.14 Procurement & contract

2.14 Values appreceation 2.15 Ethics

1.02 Interested Parties 1.14 Procurement & contract

2.14 Values appreceation 2.15 Ethics

3.05 Permanent organisation 3.11 Legal

1.02 Interested Parties 1.14 Procurement & contract

2.14 Values appreceation 2.15 Ethics

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Sustainability and Project roles
sponsor portfolio manager program manager 2=responsible, 1=can influence, 0=no influence
Return on Investment - Direct financial benefits - Net Present Value Business Agility - Flexibility / Optionality in the project - Increased business flexibility Transport - local procurement - digital communication - traveling Energy - Emission / CO2 from energy used - incorporated energy -… Waste - Recycling / disposal - …. Materials and resources - reusability - incorporated energy Labor Practices and Decent Work - Employment - Labor / Management relations - Health and Safety - Training and Education - Organisational learning - Diversity and Equal opportunity Human Rights - Non-discrimination - Freedom of association - Child labour - Forced and compulsory labor - Disciplinary or Security practices Society and Customers - Community support - Public policy - Customer health and safety - Products and services labeling - Market communication and Advertising - Customer privacy - Compliance Ethical behaviour - Investment and Procurement practices - Bribery and corruption - Anti-competition behaviour

senior user or senior supplier

project manager

designer constructi exploitati on on manager manager
remarks

Economic Sustainability

2 1 1 or 2 1 or 2 0

1 1 1 1 0

1 1 1 1 0 0

1 1 1 1 0 0

1 2 1 or 2

1 2 1

1 1 0 1 2 2

1 0 0 1 1 1
who decides the place?

Environmental Sustainability

1 or 2 1 or 2 2 2 2 2

0 or 1 or 2 0

1 or 2

1

1

1

2

1

2

2

all who make desicions of hiring resources

Social Sustainability

1 or 2

1

1

1

2

1

2

2

all who make desicions of hiring resources

1 or 2 1 or 2

1 1

1 1

1 1

2 2

1 1

1 2

1 2

all who make desicions of hiring resources

all who make desicions of hiring resources

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Responsibilities for Sustainable Development in Project and Program Management
J Rodney Turner

Abstract
We investigate the responsibility of key players on projects, programs and project portfolios for the implementation of sustainability initiatives. Reviewing the literature of sustainability on projects we identify ten themes and six principles of sustainability. Based on a model of results-based monitoring and control we also identify six levels of results on projects at which we can aim to achieve sustainability. We then introduce a model of project, program and portfolio governance, and suggest that different players will have responsibility for different areas of sustainability on projects. We suggest the responsibility of some of the key players for the six principles of sustainability, but suggest further research is required to identify the roles of all the players for the ten themes, the six principles and the six levels of project results.

Key words
principles of sustainability; a process approach, governance, owner, sponsor, program manager, project manager.

1. Sustainability
The concept of sustainable development has a history going back a quarter of a century, to a report produced by the World Commission for Environment and Development (1987), the so-called Bruntland Report. During the early 1990s it was offered as a political concept (Jacobs 1995, Lafferty 1995), and as such was a normative concept. Recently, it has become a corporate, societal concept (Gareis et al, 2010), of interest to companies who aim to achieve competitive advantage through demonstrating corporate social responsibility (CSR) including concern for the environment, (Steurer and Martinuzzi 2005). Companies are increasingly seen as social actors with responsibilities towards a broader group of societal actors other than just the company’s shareholders or its subcontractors or employees, including communities as a whole, regulators, interest groups and others. The tension between societal demands and shareholder demands is reflected in the Triple Bottom Line approach to performance measurement (Henrique and Richardson 2004), which focuses on economic, environmental and social performance, and social and economic accounting and reporting. In the field of project management, sustainable development is a relatively new concept (Gareis et al, 2010). In project management, sustainability can be gained in the product of the project and in the process of delivering the product, (Gareis and Frank, 2010), but also

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in the operation of the product and the long term development goals they help achieve, (Turner, 2009). We can ask on projects, and the programs and portfolios of which they are a part, who is responsible for settings standards of sustainability, and who is responsible for ensuring they are met. In this paper, we describe a model of sustainability on projects consisting of ten themes and six principals of sustainability. We then describe levels of project, program and portfolio management and introduce a governance model for projects, programs and portfolios. We then consider which of these key players are responsible for sustainability on projects, programs and portfolios.

2. Sustainability in Projects
Gareis et al (2010) differentiates between a content related and process related view of sustainable development. The renewed EU sustainable development-strategy contains an example of a content related definition. A content related definition suggests indicators of sustainable development. One suggested by the SDI (in 2008) contains 122 indicators grouped into 10 themes: • • • • • • • • • • Socioeconomic development Climate change and energy Sustainable transport Sustainable consumption and production Natural resources Public health Social inclusion Demographic change Global partnership Good governance

Gareis et al (2010) suggest that the content related view can linked to the contents of projects and their results, but that they are not relevant when discussing the integration of sustainable development with project management. To do that they suggests we need to take a process related view of sustainable development. They suggest six guiding principles as a basis of the process related view (Hopwood et al. 2005; Fergus and Rowney 2005): • • • • Values and ethical considerations Holistic approach Long-term orientation Large spatial and institutional scale

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• •

Risk reducing Participation and capacity building

Based on the view of a project as a temporary organization and a business process, Gareis et al (2010) suggests five objects of consideration as relevant to a view of project management: • • • • • • project objectives project scope and schedule project resources, costs, income and risk project organization project context design of the project management process

They derive Table 1 to show the relationship between the seven guiding principles of sustainable development and these five objects of consideration.
Project management Sustainability Principles Holistic approach Long term view Large scale Risk reduction Values and ethics Participation Project Objectives Hi Lo Hi Lo Hi Hi Scope & Schedule Hi Lo Lo Lo Lo Lo Resources & Income Hi Hi Lo Hi Lo Lo Organization Hi Hi Lo Lo Hi Hi Context Design of the Process Hi Lo Lo Hi Hi Hi

Hi Hi Hi Hi Hi Hi

Table 1: Sustainable development and project management (after Gareis et al, 2010).

3. Projects, Programs and Portfolios
Turner (2009) defines a project as (Figure 1): A temporary organization to which resources are assigned to do work to deliver beneficial change Based on the work of Xue (2009), he derived the results-based view of projects shown in Figure 1.

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Figure 1: Results based view of projects Figure 1 shows that during the implementation phase of the project, resources are assigned to the project to do work to deliver a new asset, the project’s output. We can consider that we may aim for sustainable use of resources, sustainable work processes and a sustainable new asset, as suggested by Gareis et al (2010). However, during the exploitation phase, the new asset will be operated to give the project owner new capabilities, the project’s outcomes, which will provide the owner with benefit, and over time those capabilities may enable the owner to achieve higher level goals. We can also consider that we may aim for sustainable operation of the new asset, sustainable benefits and sustainable long-term goals. Thus expanding on the work of Gareis et al (2010), we see that on a project there is responsibility for sustainability on six levels: • • • • • • use of resources project work project output project outcome project benefit long-term goals

Figure 2 shows that a project many be part of a program or portfolio of projects. A company’s investment portfolio is made up of large projects and programs, and miscellaneous portfolios of medium sized and small projects and programs. A program comprises several projects. Thus we have responsibility not just for the different levels of results on projects, but also different levels of programs and portfolios.

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Figure 2: Portfolios and programs of project Figure 3 shows governance roles associated with project, program and portfolio management. This is an enhancement of a concept developed by Turner (2009) based on the work of the Office of Government Commerce (2007). The central column shows responsibility for portfolio, program and project management. The right hand column shows responsibility for the business, for defining the desired asset, the new capabilities it should provide, the expected benefit and long-term goals, and then responsibility for embedding the change to commission the new asset, operate it to achieve the new capabilities, the desired benefit and long-term goals. The left hand column shows management support provided by the portfolio, program or project office, P3MO, (Office of Government Commerce, 2009). At the bottom are four roles reporting to the project manager.

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Figure 3: Governance structure for projects, programs and portfolios Figure 4 shows that there may be different levels of project, program or portfolio office, P3MO: • there may be a strategic office responding to the board, setting policies and standards for the organization and providing training and consultancy to project professionals in the firm there may be one or more portfolio offices managing the portfolio of projects in business units there may be project or program offices supporting individual, large projects or programs – these latter two are temporary structures which exist for the duration of the project or program

• •

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Figure 4: Four types of PM office

4. Responsibility for Sustainability in Projects
To our knowledge no research has been done as yet on responsibility for sustainability on projects. Therefore we pose several questions rather than offer solution. Who from Figures 3 and 4 has responsibility for: • • • • the ten themes of sustainability the six principles of sustainability sustainability for the six levels of projects results, Figure 1 sustainability of projects, programs and portfolios

The governance roles with responsibility need to set policy for sustainability, ensure the policy is implemented and the desired results attained. Table 2 shows possible responsibility of some of the governance roles for the six principles of sustainability identified by Gareis et al (2010).

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Project governance roles Sustainability Principles Values and ethics Holistic approach Long term view Large scale Risk reduction Participation Client Owner Hi Hi Hi Hi Lo Lo Program Manager Med Med Hi Hi Hi Med Sponsor Med Med Med Med Med Med Project Manager Med Lo Lo Med Hi Hi Senior User Med Lo Lo Lo Hi Hi Senior Supplier Med Lo Lo Lo Hi Hi

Table 2: Responsibility for the six principles of sustainability. Values and ethics What are the corporate values of both the client organization and delivery organization, what is their attitude to corporate social responsibility, and what is their ethical position on preserving the environment for our grandchildren? We have shown the owner as high and the other medium, because ultimately the owner has to set the overall standard. If the owner organization wants the cheapest product the delivery organization has to do the minimum within environmental legislation of they want to win the work. Of course if they think the owner’s values are too low they can walk away from the job, but someone else will do it at the level demanded by the client. It might be ethically better to win the work at low profit and produce a more sustainable outcome to protect the environment overall. Holistic approach Again we have shown the owner ultimately responsible for the holistic approach. The program manager and the sponsor have a responsibility for instructing and guiding the project manager and project team in the holistic approach. Long term view Again the client should set the policy for the long term view, but it is the role of the program manager to ensure it is implemented. The sponsor needs to explain to the project manager its impact on the project. Large spatial and international scale It is the role of the owner to set the strategy for large spatial and international scale, and for the program manager to implement it. The role of the sponsor and project manager is the implementation of tactics contributing to that strategy.

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Risk reduction The program manager, project manager and project team members are responsible for risk reduction. The sponsor will have a watching brief. The program manager will be responsible for program risks impacting on the environment and the project manager for project risks. Participation The project manager and project team members will be primarily responsible for participation on sustainability. The program manager and sponsor will set the boundaries and provide guidance. In the appendix we have included four tables showing where all the governance roles may be responsible for: • • • • the ten themes of sustainability the six principles of sustainability sustainability for the six levels of projects results, Figure 1 sustainability of projects, programs and portfolios

Further research is required to complete these tables.

5. Conclusion
To our knowledge no work has been done on the responsibility for different participants on projects and programs for the implementation of sustainability initiatives. However, using the six principals of sustainability, coupled with a governance model for projects and programs, we have suggested what may be the responsibility for some of the key players. We do not offer this as a solution, but as a suggested model to generate discussion.

References
Fergus, A.H.T. and Rowney, J.I.A., 2005, Sustainable development: lost meaning and opportunity? Journal of Business Ethics, 60, 17-27. Gareis, R., 2005, Happy Projects! Manz, Vienna. Gareis, R. and Frank, A., 2010, ABS International: sustainable project management, in Turner, J.R., Huemann, M., Anbari. F.T., and Bredillet, C.N., Perspectives on Projects, Routledge, London. Gareis, R., Huemann, M. and Martinuzzi, A., 2010, Relating sustainable development and project management: a conceptual model, in Proceedings of the PMI Research & Education Conference, July 2010, Project Management Institute, Newtown Square, PA. Gareis, R., Stummer, M., 2008, Projects & Processes, Manz, Vienna.

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Henriques, A. and Richardson, J. (Eds.), 2004. The triple bottom line: does it all add up? Earthscan, London. Hopwood W., Mellor, M., O’Brien, G., 2005, Sustainable development: mapping different approaches, Sustainable Development, 13, 38-52. Jacobs, M., 1995, Sustainable development, capital substitution and economic humility: a response to Beckerman. Environmental Values, 4, 57-68. Kates R.W. et al., 2005, Do Global Attitudes and Behaviors Support Sustainable Development? Environment: Science and Policy for Sustainable Development, 47(9), 22-38. Lafferty, W.M., 1995. The implementation of sustainable development in the European Union, in Lovenduski J. and Stanyer J. (Eds.), Contemporary Political Studies. Proceedings of the Political Studies Association. Political Studies Association, Belfast. Office of Government Commerce, 2007, Managing Successful Programs, 2nd edition, The Stationery Office, London. Office of Government Commerce, 2009, P3O: Protfolio, Programme and Project Office, The Stationery Office, London. Steurer, R., Martinuzzi, A., 2005, Towards a new pattern of strategy formation in the public sector: first experiences with national strategies for sustainable development in Europe. Environment and Planning C: Government and Policy, 23, 455-472. Turner, J.R., 2009, The Handbook of Projewct-based management, 3rd edition, McGrawHill, New York. World Commission on Environment and Development (WCED), 1987. Our Common Future, Oxford University Press, Oxford Xue, Y., 2009, Realizing Maximum Results for Key Infrastructure Projects in China, PhD Thesis, Lille School of Management, Lille.

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Appendix: Possible responsibilities for sustainability on projects, programs and project portfolios
The content of these tables were discussed during the expert seminar. Table A1: Responsibility for the ten themes of sustainability
Role

Clim Change

Demo Change

Owner Portfolio Mgr Sen Bus Mgr Progra m Dir Bus Ch Mgr Progra m Mgr P3MO Project Exec Senior User Senior Supp Project Mgr Feas Mgr Design Mgr Const Mgr Com Mgr

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Good Govern

Soc-Ec Dvpt

Natural Resour

Pub Health

Soc Inclus

Sust Trans

Sust Cons

Glob Partn

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Table A2: Responsibility for the six principles of sustainability
Role Owner Portfolio Mgr Sen Bus Mgr Program Dir Bus Ch Mgr Program Mgr P3MO Project Exec Senior User Senior Supp Project Mgr Feas Mgr Design Mgr Const Mgr Com Mgr Values & Ethics Holistic Approach Long-term View Large Scale Risk Reduce Partic & Capacity

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Table A3: Responsibility for the six levels of project results
Role Owner Portfolio Mgr Sen Bus Mgr Program Dir Bus Ch Mgr Program Mgr P3MO Project Exec Senior User Senior Supp Project Mgr Feas Mgr Design Mgr Const Mgr Com Mgr Use of Resources Work Processes Project Outputs Project Outcomes Desired Benefits Long-term Goals

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Table A4: Responsibility for the three levels of P3MO
Role Owner Portfolio Mgr Sen Bus Mgr Program Dir Bus Ch Mgr Program Mgr P3MO Project Exec Senior User Senior Supp Project Mgr Feas Mgr Design Mgr Const Mgr Com Mgr Projects Programs Project Portfolios

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Sustainability Competence Requirements for Project Manager
Gilman Chi Keung Tam

“Apart from the threat of hostilities and terrorism, it seems certain that climate change and the exhaustion of natural fossil fuel resources will provide the biggest challenges in the future. We shall need effective project managers to deal with these challenges if humankind is to survive”. (Lock, 2007)

1. Introduction
Project management as an evolving academic discipline and professional practice was developing in response to the needs of society. Large scale military and defense cargo ship building projects in the World War I and the Manhattan Project to build the first Atomic Bomb in the World War II have been establishing a foundation to the advancement of modern project management in the second half of 20th century and beyond (Cleland & Ireland, 2006) (p. 1-16). Dr. Martin Barnes in his course “Time and Money in Contract Control” developed for UK clients in 1969 has first described the 'iron triangle' of time, cost and output (Weaver, 2007). It focused on efficiency of managing projects. In the late 1980’s, Gareis developed an important concept of “Management by Projects” as a distinct and substantial form of general management (Gareis, 1989). The user focus was on effective implementation of corporate strategy and effecting organizational change (Baccarini, 1999a). Shenhar & Dvir described the central concept of project management since 2000 as adaptation (one size does not fit all); strategic alignment (connect project management to business); and globalization (off-shore projects) (Shenhar & Dvir, 2004). External environmental influences including economic, political, community, and ecological impacts started to become essential dimensions on assessing policy, program, plan, and project after the Earth Summit in 1992. Public opposition to construction of nuclear power station due to safety reason was one manifestation (Baccarini, 1999, pp.5-6). The increasing emphasis of handling external environmental factors in practice has set the tone for project management being an active driver towards sustainability. It creates a window of opportunity for project management to drive for a sustainable society by delivering projects which are well structured for sustainability.

2. The Definition of Sustainability in Project Management
Brundtland put down the definition of sustainable development as “the development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (Brundtland, 1987). Her basic emphasizes were on long-term aspect of the concept of sustainability and equity between the present and future generations. Essentially sustainability is not a methodology but a thinking dimension (Jaafari, 2007). It is linked to what people perceive for a change in behavior, attitudes, and consumption

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patterns, etc. towards sustainability and equity, and how society perceives and values the environment. The context in which Brundtland’s definition is embedded indicates that ‘needs’ include a sound environment, a just society and a healthy economy (Diesendorf, 2000). In the eyes of Diesendorf, ‘Development’ covers social and economic improvement in a broad sense and which may or may not involve economic growth. The emphasis is on ‘qualitative improvement in human-being’ or ‘unfolding of human potential’ as discussed by the ecological economist, Herman Daly (Diesendorf, 2000). Being sustainable, it involves the commitment to: “Economic sustainability – increasing profitability through efficient use of resources (human, materials, financial), effective design and good management, planning and control; Environmental sustainability – preventing harmful and irreversible effects on the environment by efficient use of natural resources, encouraging renewable resources, protecting the soil, water, air from contaminations and others; and Social sustainability – responding to the needs of society including users, neighbours, community, workers and other project stakeholders“ (Zainul Abidin & Pasquire, 2007). The APM Body of Knowledge (5th edition) defines “Project management is the process by which projects are defined, planned, monitored, controlled and delivered such that the agreed benefits are realized”. For purpose of this paper, I define the definition of “Sustainability in Project Management” with reference to the APM’s definition on project management as: “The promoting of positive and minimizing of negative sustainability impacts (economic; environmental; and social) within the process by which projects are defined, planned, monitored, controlled and delivered such that the agreed benefits are realized and contributing to a sustainable society.” Two key components are included in this definition reflecting the attributes of sustainability in project management: a) promoting positive impacts and minimizing negative impacts on economic sustainability; environmental sustainability; and social sustainability within the project development process; and b) the recognition of such project benefits realized is contributing to a sustainable society.

3. From Policy Undertaking to Project Implementation
The Agenda 21, which is a comprehensive blueprint of action as adopted by more than 178 governments at the United Nations in the 1992 Earth Summit in Rio de Janeiro, Brazil, called for global partnership and drove governments, business and industry for sustainable development. While most discussions on sustainability and sustainable development focus on political or policy level issues and global concerns, a research supported by the U.S. Agency for International Development (USAID), the United Nations Environment Programme (UNEP) and the University of Minnesota addressed the equally important focus at the project level – how to conduct project for better performing sustainable development. Gregersen, Lundgren and White (1994) in their policy brief suggested changing the project approach to assure more sustainable benefit flows through project activities for the sake of improving the contribution of projects to sustainable development and avoiding

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unsustainability (Gregersen, Lundgren, & White, 1994). Gregersen et al. in Table 1 below suggested a list to improve projects for sustainable development.

1 2 3 4 5 6 7 8 9

Internalize and become accountable for key external impacts of projects. Become concerned with diffusion of positive project ideas and impacts beyond the project boundaries. Consider how the project impacts different groups of stakeholders. Monitor and assess the indicators of potential unsustainable developments within a broad context. Treat uncertainty in an appropriate fashion, recognizing that sometimes early warning signs of un-sustainability fail. Improve training opportunities for personnel and encourage application of results. Improve incentives for project personnel to innovate and adapt to local conditions. Reward personnel for building institutional and individual capacity to innovate and survive beyond project boundaries. Organize activities so that project benefits can continue after the project ends.

Table 1: To Improve Projects for Sustainable Development (Gregersen et al., 1994) Chen, Li and Turner (2007, p.483) referred the opinion of the US National Academy of Sciences (NAS) that it is becoming important to adopt quantitative in addition to qualitative environmental management to understand the influences of environmental considerations in business decisions, especially throughout the project lifecycle (Chen, Li, & Turner, 2007; NAS, 2005). Mohamed Eid (2002) in his paper at the PMI Research Conference 2002 brought in an example of construction industry in the U.K. that construction companies have to face challenges to integrate the vital environmental and social considerations into their daily management. According to Eid (2002, p.206), “The goal of sustainability is the process of systematically and effectively integrating vital environmental and social concerns into economic development, financial planning, and project management”. In his opinion, the integration of project management, sustainability and industry competitiveness (for example, quality, markets, equitable market conditions, etc.) would deliver a clearer business case for sustainable construction (Eid, 2002). Not only construction industry concerns about project sustainability impacts, other sectors such as banking industry has been working to address the environmental and social risks on top of economics for projects seeking financing. For example, the “Equator Principles” (Appendix A) are a voluntary set of social and environmental guidelines for project finance lending (IFC, 2007, p.45). The Principles help to screen social and environmental risks of investment projects and that apply to all new project financing globally with total project capital costs of US$ 10 million or more, and across all industry sectors. The Equator banks

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commit to put in place internal policies and process consistent with the principles. At a project level, this means the following: • • • The bank screens the level of social and environmental risks and assigns a risk category; The borrower completes an Environmental Assessment; The borrower prepares an Action Plan that describes and prioritizes the actions needed to implement mitigation measures or corrective actions, and monitoring measures; The borrower discloses impacts and consults with affected groups; The borrower covenants to comply with the Action Plan and report on compliance (IFC, 2007).

• •

Apart from industry sectors, many professional institutions have recognized the importance of considering sustainability in their members’ daily activities (project and process work). Not until recently, the project management community has seriously been considering the impacts of sustainability on project management. A comparison of the past and recent project management research conference agenda would demonstrate this statement. Even though many project managers are practicing environmental and social risk assessments and management for their infrastructure projects or otherwise, however, the meaning of sustainability in project management; its area of concern; and project manager competence requirements; etc. are not well understood.

4. The Sustainability Framework
Griffiths (2007) opined that a sustainability management framework present shall ensure that project is managed to include environmentally sustainable practices in the design, construction and operational phases of the project and also taking into account the social and economic aspects of the project performance. Raising awareness and developing mindsets within the project team and establishing a culture of care to environment, people (stakeholders); and to ensure the project meets the needs of the communities involved in, and those affected by project are important. Understanding of what sustainability means at a big picture level as well as what it means at a tangible day-to-day level is part of the challenge (Griffiths, 2007). A mechanism is required to ensure that social and environmental considerations receive the same attention as economic factors at the project decision gates. The procedure for the analysis of environmental and social impacts must ensure that any future environmental liabilities and costs, as well as social impacts resulting from the implementation of the project are taken into consideration during project appraisal (Labuschagne, Brent, & Claasen, 2005). A prerequisite for aligning project management frameworks with the principles of sustainable development is a clear understanding of the various life cycles

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involved in a project and the interactions between these life cycles, and the external environment and society (Labuschagne & Brent, 2004). Zainul Abidin (2005, p.52) put up a table as shown in Table 2 below on sustainability issues (economic; environmental; and social) related to construction projects. He suggested that sustainability needs to be treated as part of project visions. The commitment for it needs to be planted as early as possible to ensure smooth flow of process and acceptability among the project participants (Zainul Abidin, 2005).

Environmental issues • • • • • • • • Land utilisation Material selection Energy conservation Water efficiency Waste minimisation Pollution control Biodiversity and ecology Transport • • • • • • •

Social issues Health and welfare Safety issues User comfort / satisfaction Accessibility Aesthetics / visual Nuisance to neighbours Social involvement • • • • • •

Economic Issues Whole life cost Image / business enhancement Legislation compliance Cost efficiency Profitability Risk assessment

Table 2: The issues of sustainability in construction projects (Zainul Abidin, 2005) Many authors use pillar approach to assess sustainability. For example, Zainul Abidin (2005) mentioned above use three pillars approach (economic, social and environmental), others use two intersecting pillars (the ecological and the human) or five pillars approach (ecological, economic, political, social and cultural). Gibson (2006) took a non-pillar approach to present a set of general sustainability requirements that sustainability-oriented decision makers should consider the identified core obligations. These core generic criteria (Appendix B) include: 1) socio-ecological system integrity; 2) livelihood sufficiency and opportunity; 3) intragenerational equity; 4) intergenerational equity; 5) resource maintenance and efficiency; 6) socio-ecological civility and democratic governance; 7) precaution and adaptation; and 8) immediate and long term integration (Gibson, 2006). Gibson (2006) pointed out that specific of each item and the package as a whole for the core generic criteria must be defined in context (define what and how) by the relevant communities of interest and concern, and that it is no less important than the general requirements to be respected.

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5. The People That Matters
Mui and Sankaran (2004) suggested that sustainability development (e.g. urban renewal project) requires project managers adopt a holistic perspective and a cradle-to-grave approach in managing projects. They have identified from current project management body of knowledge that it ignores the professional knowledge on sustainability issues and the suitability of generalizing specialists (project management specialist with general sustainability knowledge) or specializing generalists (sustainability manager with general project management knowledge) in the role of project leader. Mui and Sankaran (2004) commented that project participants should possess sustainability knowledge and the infrastructure project team leader should have experience as generalizing specialist rather than specializing generalist. Furthermore, they found that sustainability is a contemporary issue considered by many global nations as an essential task for maintaining the future prosperity of human beings. To accomplish such a task, these nations adopt a multidisciplinary and integrated project team approach to implement the change. Hence, Mui et al. suggested that the project management body of knowledge should include this essential knowledge area and should emphasize the importance of a multi-disciplinary and integrated approach (Mui & Sankaran, 2004). The lack of literature covering sustainability in the realm of project management needs to be remedied to gain competitive advantages in today’s world. In particular, project management is becoming a common way of managing business (Turner, 2009) under the imperative climate change environment in the new millennium shall contribute to sustainable development. Nurturing sustainability competence as a managerial competency in professional people alongside other core competences resulting in outcomes that are financially sound, environmentally sustainable and socially responsible is important (Jaafari, 2007). Jaafari (2007) recommended teaching sustainability through project-based learning to professionals rather than discipline-based learning, as it provides a paradigm for creativity and achievement of balanced solutions through engagement in realistic assignments under mentoring with special focus on the sustainability dimension.

6. Project Manager Sustainability Competence
I have demonstrated above that there is no universal sustainability assessment approach. There is also no right or wrong on decision made about choosing which sustainability approach. The sustainability requirements are subject to the context of policy, programme, plan and project. In other words, to be able to assess sustainability requirements with the aim of promoting positive impacts and minimizing negative impacts, project managers shall be able to develop competence in understanding various sustainability issues, identifying impacts due to the project, develop mitigation plan within the project life cycle process to which project manager shall make a balance or even trade-off on chosen solutions with a target to maximize overall positive sustainability effects. Since project sustainability is context dependent, project managers working on nuclear power station project, for instance, would have focused on certain sustainability

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competence requirements that others project managers (e.g. new product development project) may have chosen to develop a different set of competence. However, the basic needs of a sound environment, a just society and a healthy economy (Brundtland, 1987; Diesendorf, 2000) in project development are the same. These basic needs would drive project managers in identifying sustainability requirements during project reviews and that project managers shall exercise their sustainability competence in promoting positive impacts and minimizing negative impacts overall whether adopting pillars approach or core generic criteria for assessing sustainability. To facilitate project manager assessing sustainability impacts and devising mitigation plans during various stages of project life cycle, I propose an evaluation framework as shown in Figure 1 below.

Concept

Definition

Implementation

Handover & Closeout

Project Review

Economic Sustainability
Employ whole life cycle costing; Cost efficiency; Profitability; Build up project capability; Invest in social and human made capital for future generations; Legislation compliance

Environmental Sustainability
Preferential use of renewable over non-renewable resource; Minimize energy, water and material consumption, and land utilization; Minimize greenhouse gas emissions, land and water pollution; Minimize irreversible damages to Landscape (historical, scenic, etc.); Maximize resource re-use and/or recycling; Maintain and restore ecological diversity; Choose environmentally responsible partner/supplier/contractor

Social Sustainability
Healthy and safe working environment; Employ local labor; Employ disadvantaged people; Skill training for work force; Provision of cultural diversity; Equitable distribution of social benefits and costs due to project; Social involvement; Avoid nuisance to neighbors

Project Context Figure 1: Evaluation Framework for Sustainability in Project Management It is based on the APM Body of Knowledge (5th edition) defined project life cycle (APM, 2006) and the adopted three pillars approach. It shows that project economic sustainability; environmental sustainability; and social sustainability are part of the project review process where it has to be reviewed during various stages of project life cycle. Project managers shall make reference to previous project experience including the nature of the project and its context to identify appropriate potential impacts for review. The list under various sustainability dimensions is non exhaustive, nevertheless, it can be taken as a starting point

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for sustainability competence development towards project manager as a generalizing specialist (Mui et al., 2004) for infrastructure projects.

7. Conclusions
Project management as an academic discipline and professional practice is evolving. In the new millennium, infrastructure project development or otherwise has no choice but to observe the principles of sustainable development, in particular for those seeking project financing. According to Diesendorf, ‘Development’ shall improve the quality of life for human being rather than merely on ‘Growth’ quantitatively. ‘Sustainable’ has the meaning of resource and life support system continuity with intragenerational and intergenerational equity. In this paper, I have put down the definition of sustainability in project management to facilitate our understanding of the subject. Two key components are included in the definition, which are overall positive sustainability impacts (economic; environmental; and social) within the project development process; and the benefits derived from the project shall make contribution to a sustainable society. A review of literature has shown that sustainability, being a thinking dimension rather than methodology, has been extending from policy undertaking to programme, plan and project implementation. Project managers working on infrastructure projects within the construction industry have been practising impact assessments for satisfying environmental and social sustainability requirements. However, related knowledge is being ignored in the project management body of knowledge. To help project managers analysing these imperative impacts, a sustainability framework is required. Zainul Abidin used three pillars approach as a tool and Gibson used core generic criteria (non-pillar approach) to assess sustainability. Mui and Sankaran pointed out the importance of sustainability knowledge to project manager. Infrastructure project team leader should possess such knowledge and experience as generalizing specialist rather than specializing generalist. Nurturing sustainability competence as a managerial competency is best conducted by project-based learning. Project manager sustainability competence requirement is project context dependent. A project sustainability evaluation framework is proposed to help project manager in understanding various sustainability issues, identifying impacts due to the project, develop mitigation plan within the project life cycle process. Moreover, this framework forms a basic structure for project manager sustainability competency development although the requirements are project context dependent.

8. References
APM (2006): “The APM Body of Knowledge’’ 5th Edition: The Association for Project Management. Baccarini, D. (1999a): “History of project management’’ Curtin University of Technology. Brundtland, G. H. (1987): “Our Common Future’’ Oxford University Press.

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Chen, Z., Li, H., & Turner, R. (2007): “Managing the environment’’ In J. R. Turner (Ed.), Gower Handbook of Project Management (4 ed.). Aldershot, England: Gower Publishing Limited. Cleland, D. I., & Ireland, L. R. (2006): “The evolution of project management’’ In D. I. Cleland & R. Gareis (Eds.), Global Project Management Handbook: Planning, Organizing, and Controlling International Projects (2 ed.): McGraw-Hill. Diesendorf, M. (2000): “Sustainability and sustainable development’’ In D. Dunphy, J. Benveniste, A. Griffiths & P. Sutton (Eds.), Sustainability: The Corporate Challenge of the 21st Century (pp. 19-37). Sydney: Allen & Unwin. Eid, M. (2002): “A sustainable approach to the project management odyssey’’ Paper presented at the PMI Research Conference 2002: Frontiers of Project Management Research and Application. EPFI (2006): “The Equator Principles: A financial industry benchmark for determining, assessing and managing social & environmental risk in project financing” Equator Principles Financial Institution (EPFI) http://www.equatorprinciples.com/documents/Equator_Principles.pdf. Retrieved 10 January, 2010 Gareis, R. (1989): “Management by projects: the management approach for the future’’ International Journal of Project Management, 7(4), 243-249. Gibson, R. B. (2006): “Sustainability assessment: basic components of a practical approach’’ Impact Assessment and Project Appraisal, 24(3), 170-182. Gregersen, H. M., Lundgren, A. L., & White, T. A. (1994): “Improving project management for sustainable development’’ Midwest Universities Consortium for International Activities, Inc. (MUCIA). Griffiths, K. (2007): “Project sustainability management in infrastructure projects’’ Paper presented at the 2nd International Conference on Sustainability Engineering and Science, 20-23 February 2007, Auckland, New Zealand. IFC (2007): “Banking on Sustainability: Financing Environmental and Social Opportunities in Emerging Markets’’ Washington, D.C.: International Finance Corporation, World Bank Group. Jaafari, A. (2007): “Thinking of sustainability as a dimension of managerial competency’’ PM World Today, IX(IX). Labuschagne, C., & Brent, A. C. (2004): “Sustainable project life cycle management: aligning project management methodologies with the principles of sustainable development’’ Paper presented at the 2004 PMSA International Conference, 10-12 May 2004, Johannesburg, South Africa. Labuschagne, C., Brent, A. C., & Claasen, S. J. (2005): “Environmental and social impact considerations for sustainable project life cycle management in the process industry’’ Corporate Social Responsibility and Environmental Management, 2005(12), 38-54.

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Lock, D. (2007): “Project Management’’ (9th ed.): Gower Publishing Limited. Mui, D. H. F., & Sankaran, S. (2004): “An effective project management-based application model for sustainable urban renewal in Hong Kong’’ Project Management Journal, 35(4), 15-34. NAS (2005): “Decision Making for the Environment: Social and Behavioral Science Research Priorities’’ Washington, DC: National Academy of Sciences (NAS). Shenhar, A. J., & Dvir, D. (2004): “Project management evolution: past history and future research directions’’ In D. P. Slevin, D. I. Cleland & J. K. Pinto (Eds.), Innovations: Project Management Research 2004 (pp. 57 - 64): Project Management Institute. Turner, J. R. (Ed.). (2009): “The Handbook of Project-Based Management: Leading Strategic Change in Organizations’’ (3 ed.): McGraw-Hill. Weaver, P. (2007): “Trends in modern project management, past, present & future’’ Paper presented at the PM OZ, 28-31 August 2007, Gold Coast, Queensland. Zainul Abidin, N. (2005): “Using Value Management to Improve the Consideration of Sustainability within Construction’’ Unpublished PhD Thesis, Loughborough University, United Kingdom. Zainul Abidin, N., & Pasquire, C. L. (2007): “Revolutionize value management: A mode towards sustainability’’ International Journal of Project Management, 2007(25), 275282.
Appendix A – Equator Principles (EPFI, 2006) Principle 1 Principle 2 Principle 3 Review and Categorisation Social and Environmental Assessment Applicable Social and Environmental Standards Action Plan and Management System Consultation and Disclosure Grievance Mechanism Independent Review Covenants Independent Monitoring and Reporting EPFI Reporting

Principle 4 Principle 5 Principle 6 Principle 7 Principle 8 Principle 9 Principle 10

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Appendix B - Core Generic Criteria for Sustainability Assessment (Gibson, 2006) Core Generic Criteria Requirements Build human-ecological relations to establish and maintain the long-term integrity of socio-biophysical systems and protect the irreplaceable life support functions upon which human and ecological well-being depends. Ensure that everyone and every community has enough for a decent life and that everyone has opportunities to seek improvements in ways that do not compromise future generations’ possibilities for sufficiency and opportunity. Ensure that sufficiency and effective choices for all are pursued in ways that reduce dangerous gaps in sufficiency and opportunity (and health, security, social recognition, political influence, and so on) between the rich and the poor. Favor present options and actions that are most likely to preserve or enhance the opportunities and capabilities of future generations to live sustainability. Provide a larger base for ensuring sustainable livelihoods for all, while reducing threats to the long-term integrity of socioecological systems by reducing extractive damage, avoiding waste and cutting overall material and energy use per unit of benefit. Build the capacity, motivation and habitual inclination of individuals, communities and other collective decision-making bodies to apply sustainability requirements through more open and better informed deliberations, greater attention to fostering reciprocal awareness and collective responsibility, and more integrated use of administrative, market, customary and personal decision-making practices. Respect uncertainty, avoid even poorly understood risks of serious or irreversible damage to the foundations for sustainability, plan to learn, design for surprise, and manage for adaptation. Apply all principles of sustainability at once, seeking mutually supportive benefits and multiple gains.

1

Socio-ecological system integrity

2

Livelihood sufficiency and opportunity

3

Intragenerational equity

4

Intergenerational equity

5

Resource maintenance and efficiency

6

Socio-ecological civility and democratic governance

7

Precaution and adaptation

8

Immediate and long term integration

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Agribusiness: Primary production, retail and distribution
Jesus Martinez Almela

Executive Summary
The livestock sector emerges as one of the top two or three most significant contributors to the most serious environmental problems, at every scale from local to global. The findings of this report suggest that it should be a major policy focus when dealing with problems of land degradation, climate change and air pollution, water shortage and water pollution and loss of biodiversity. Livestock’s contribution to environmental problems is on a massive scale and its potential contribution to their solution is equally large. The impact is so significant that it needs to be addressed with urgency. Major reductions in impact could be achieved at reasonable cost.

1. Introduction
Global importance of the Agribusiness like primary production sector Although economically not a major global player, the livestock sector is socially and politically very significant. It accounts for 40 percent of agricultural gross domestic product (GDP). It employs 1.3 billion people and creates livelihoods for one billion of the world’s poor. Livestock products provide one-third of humanity’s protein intake, and are a contributing cause of obesity and a potential remedy for undernourishment (LEAD FAO 2006-2007). Growing populations and incomes, along with changing food preferences, are rapidly increasing demand for livestock products, while globalization is boosting trade in livestock inputs and products. Global production of meat is projected to more than double from 229 million tonnes in 1999/01 to 465 million tonnes in 2050, and that of milk to grow from 580 to 1043 million tonnes. The environmental impact per unit of livestock production must be cut by half, just to avoid increasing the level of damage beyond its present level. Structural changes and their impact The livestock sector is undergoing a complex process of technical and geographical change, which is shifting the balance of environmental problems caused by the sector. Extensive grazing still occupies and degrades vast areas of land; though there is an increasing trend towards intensification and industrialization. Livestock production is shifting geographically, first from rural areas to urban and peri-urban, to get closer to consumers, then towards the sources of feedstuff, whether these are feedcrop areas, or transport and trade hubs where feed is imported. There is also a shift of species, with production of monogastric species (pigs and poultry, mostly produced in industrial units)

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growing rapidly, while the growth of ruminant production (cattle, sheep and goats, often raised extensively) slows. Through these shifts, the livestock sector enters into more and direct competition for scarce land, water and other natural resources. These changes are pushing towards improved efficiency, thus reducing the land area required for livestock production. At the same time, they are marginalizing smallholders and pastoralists, increasing inputs and wastes and increasing and concentrating the pollution created. Widely dispersed non-point sources of pollution are ceding importance to point sources that create more local damage but are more easily regulated. Land degradation The livestock sector is by far the single largest anthropogenic user of land. The total area occupied by grazing is equivalent to 26 percent of the ice-free terrestrial surface of the planet. In addition, the total area dedicated to feedcrop production amounts to 33 percent of total arable land. In all, livestock production accounts for 70 percent of all agricultural land and 30 percent of the land surface of the planet. Expansion of livestock production is a key factor in deforestation, especially in Latin America where the greatest amount of deforestation is occurring – 70 percent of previous forested land in the Amazon is occupied by pastures, and feedcrops cover a large part of the remainder. About 20 percent of the world’s pastures and rangelands, with 73 percent of rangelands in dry areas, have been degraded to some extent, mostly through overgrazing, compaction and erosion created by livestock action. The dry lands in particular are affected by these trends, as livestock are often the only source of livelihoods for the people living in these areas. Overgrazing can be reduced by grazing fees and by removing obstacles to mobility on common property pastures. Land degradation can be limited and reversed through soil conservation methods, silvopastoralism, better management of grazing systems, limits to uncontrolled burning by pastoralists and controlled exclusion from sensitive areas. Atmosphere and climate With rising temperatures, rising sea levels, melting icecaps and glaciers, shifting ocean currents and weather patterns, climate change is the most serious challenge facing the human race. The livestock sector is a major player, responsible for 18 percent of greenhouse gas emissions measured in CO2 equivalent. This is a higher share than transport. The livestock sector accounts for 9 percent of anthropogenic CO2 emissions. The largest share of this derives from land-use changes – especially deforestation – caused by expansion of pastures and arable land for feedcrops. Livestock are responsible for much larger shares of some gases with far higher potential to warm the atmosphere. The sector emits 37 percent of anthropogenic methane (with 23 times the global warming potential (GWP) of CO2) most of that from enteric fermentation by ruminants. It emits 65 percent of anthropogenic nitrous oxide (with 296 times the GWP of CO2), the great majority from

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manure. Livestock are also responsible for almost two-thirds (64 percent) of anthropogenic ammonia emissions, which contribute significantly to acid rain and acidification of ecosystems. This high level of emissions opens up large opportunities for climate change mitigation through livestock actions. Intensification – in terms of increased productivity both in livestock production and in feedcrop agriculture – can reduce greenhouse gas emissions from deforestation and pasture degradation. In addition, restoring historical losses of soil carbon through conservation tillage, cover crops, agroforestry and other measures could sequester up to 1.3 tonnes of carbon per hectare per year, with additional amounts available through restoration of desertified pastures. Methane emissions can be reduced through improved diets to reduce enteric fermentation, improved manure management and biogas – which also provide renewable energy. Nitrogen emissions can be reduced through improved diets and manure management. Water The world is moving towards increasing problems of freshwater shortage, scarcity and depletion, with 64 percent of the world’s population expected to live in water-stressed basins by 2025. The livestock sector is a key player in increasing water use, accounting for over 8 percent of global human water use, mostly for the irrigation of feed crops. It is probably the largest sectoral source of water pollution, contributing to eutrophication, “dead” zones in coastal areas, degradation of coral reefs, human health problems, emergence of antibiotic resistance and many others. The major sources of pollution are from animal wastes, antibiotics and hormones, chemicals from tanneries, fertilizers and pesticides used for feed crops, and sediments from eroded pastures. Global figures are not available but in the United States, with the world’s fourth largest land area, livestock are responsible for an estimated 55 percent of erosion and sediment, 37 percent of pesticide use, 50 percent of antibiotic use, and a third of the loads of nitrogen and phosphorus into freshwater resources. Livestock also affect the replenishment of freshwater by compacting soil, reducing infiltration, degrading the banks of watercourses, drying up floodplains and lowering water tables. Livestock’s contribution to deforestation also increases runoff and reduces dry season flows. Water use can be reduced through improving the efficiency of irrigation systems. Livestock’s impact on erosion, sedimentation and water regulation can be addressed by measures against land degradation. Pollution can be tackled through better management of animal waste in industrial production units, better diets to improve nutrient absorption, improved manure management (including biogas) and better use of processed manure on croplands. Industrial livestock production should be decentralized to accessible croplands where wastes can be recycled without overloading soils and freshwater. Policy measures that would help in reducing water use and pollution include full cost pricing of water (to cover supply costs, as well as economic and environmental externa-

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lities), regulatory frameworks for limiting inputs and scale, specifying required equipment and discharge levels, zoning regulations and taxes to discourage large-scale concentrations close to cities, as well as the development of secure water rights and water markets, and participatory management of watersheds.

2. Biodiversity
We are in an era of unprecedented threats to biodiversity. The loss of species is estimated to be running 50 to 500 times higher than background rates found in the fossil record. Fifteen out of 24 important ecosystem services are assessed to be in decline. Livestock now account for about 20 percent of the total terrestrial animal biomass, and the 30 percent of the earth’s land surface that they now pre-empt was once habitat for wildlife. Indeed, the livestock sector may well be the leading player in the reduction of biodiversity, since it is the major driver of deforestation, as well as one of the leading drivers of land degradation, pollution, climate change, overfishing, sedimentation of coastal areas and facilitation of invasions by alien species. In addition, resource conflicts with pastoralists threaten species of wild predators and also protected areas close to pastures. Meanwhile in developed regions, especially Europe, pastures had become a location of diverse long-established types of ecosystem, many of which are now threatened by pasture abandonment. Some 306 of the 825 terrestrial ecoregions identified by the Worldwide Fund for Nature (WWF) – ranged across all biomes and all biogeographical realms, reported livestock as one of the current threats. Conservation International has identified 35 global hotspots for biodiversity, characterized by exceptional levels of plant endemism and serious levels of habitat loss. Of these, 23 are reported to be affected by livestock production. An analysis of the authoritative World Conservation Union (IUCN) Red List of Threatened Species shows that most of the world’s threatened species are suffering habitat loss where livestock are a factor.

3. Cross-cutting policy frameworks
Certain general policy approaches cut across all the above fields. A general conclusion is that improving the resource use efficiency of livestock production can reduce environmental impacts. While regulating about scale, inputs, wastes and so on can help, a crucial element in achieving greater efficiency is the correct pricing of natural resources such as land, water and use of waste sinks. Most frequently natural resources are free or underpriced, which leads to overexploitation and pollution. Often perverse subsidies directly encourage livestock producers to engage in environmentally damaging activities. A top priority is to achieve prices and fees that reflect the full economic and environmental costs, including all externalities. One requirement for prices to influence behaviour is that

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there should be secure and if possible tradable rights to water, land, use of common land and waste sinks. Damaging subsidies should be removed, and economic and environmental externalities should be built into prices by selective taxing of and/or fees for resource use, inputs and wastes. In some cases direct incentives may be needed. Payment for environmental services is an important framework, especially in relation to extensive grazing systems: herders, producers and landowners can be paid for specific environmental services such as regulation of water flows, soil conservation, conservation of natural landscape and wildlife habitats, or carbon sequestration. Provision of environmental services may emerge as a major purpose of extensive grassland-based production systems. An important general lesson is that the livestock sector has such deep and wide-ranging environmental impacts that it should rank as one of the leading focuses for environmental policy: efforts here can produce large and multiple payoffs. Indeed, as societies develop, it is likely that environmental considerations, along with human health issues, will become the dominant policy considerations for the sector. Finally, there is an urgent need to develop suitable institutional and policy frameworks, at local, national and international levels, for the suggested changes to occur. This will require strong political commitment, and increased knowledge and awareness of the environmental risks of continuing “business as usual” and the environmental benefits of actions in the livestock sector.

4. Responsibility for Sustainability
Livestock activities have significant impact on virtually all aspects of the environment, including air and climate change, land and soil, water and biodiversity. The impact may be direct, through grazing for example, or indirect, such as the expansion of soybean production for feed replacing forests in South America. Livestock’s impact on the environment is already huge, and it is growing and rapidly changing. Global demand for meat, milk and eggs is fast increasing, driven by rising incomes, growing populations and urbanization. As an economic activity, livestock production is technically extremely diverse. In countries or areas where there is no strong demand for food products of animal origin, subsistence and low input production prevails, mainly for subsistence rather than for commercial purposes. This contrasts with commercial, high-input production in areas serving a growing or established high demand. Such diverse production systems make extremely diverse claims on resources. The diversity of production systems and interactions makes the analysis of the livestock– environment interface complex and sometimes controversial. The livestock sector affects a vast range of natural resources, and must be carefully managed given the increasing scarcity of these resources and the opportunities that they represent for other sectors and activities.

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While intensive livestock production is booming in large emerging countries, there are still vast areas where extensive livestock production and its associated livelihoods persist. Both intensive and extensive production requires attention and intervention so that the livestock sector can have fewer negative and more positive impacts on national and global public goods. A major motivation for this assessment is that the environmental issues linked to livestock have not generally received an adequate institutional response – neither in developing nor in developed countries. Livestock sector growth in some places, and stagnation with poverty in others, go largely uncontrolled. Although usually considered part of agriculture, in many places livestock production has grown in the same way as industry, and is no longer directly tied to land or to specific locations. As the environment around the animals is increasingly modified and standardized, environmental impacts swiftly change. Public policies, in developed and developing countries alike, barely keep pace with rapid transformations in production technology and structural shifts in the sector. Environmental laws and programmes are usually put in place only after significant damage has already occurred. The focus continues to be placed on protection and restoration, rather than on the more cost-effective approaches of prevention and mitigation. In the varied contexts of the livestock sector, environmental issues require an integrated approach, combining policy measures and technology changes, within a framework of multiple objectives. The livelihood concerns of hundreds of millions of poor livestock holders, who often engage in livestock production because they have no alternative, must be taken into account. The demands of the emerging middle class, who are consuming growing amounts of meat, milk and eggs, cannot be ignored either. Attempts to curb the booming demand for these products have generally proved ineffective. Better policies in the livestock sector are an environmental requirement, and a social and health necessity. Animal foods are susceptible to pathogens and often carry chemical residues. Food safety requirements must be met, and are generally a prerequisite in formal markets. The main information and data collection reported in the present document it provides from the LEAD-FAO Initiative for assessments of the Livestock Environment and DevelopmentLEAD (de Haan, Steinfeld and Blackburn, 1997; Steinfeld, de Haan and Blackburn, 1997) emphasized the livestock sector perspective and analysed livestock-environment interactions from the perspective of a livestock production system. This updated LED-FAO assessment inverts this approach and starts from an environmental perspective. It attempts to provide an objective assessment of the many diverse livestock– environment interactions. Economic, social and public health objectives are of course taken into account so as to reach realistic conclusions. This assessment then outlines a series of potential solutions that can effectively address the negative consequences of livestock

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production if the involved interested parties recognize and applies competences for planning and managing projects, programs and portfolio in the Global Earth Agribusiness in a complex system and with many multicontext in rural areas in developed and nondeveloped countries (see on tables 2.1, 2.2. and 2.3.).

4.1 Livestock as a major player in global environmental issues
Livestock have a substantial impact on the world’s water, land and biodiversity resources and contribute significantly to climate change. Directly and indirectly, through grazing and through feed crop production, the livestock sector occupies about 30 percent of the ice-free terrestrial surface on the planet. In many situations, livestock are a major source of land based pollution, emitting nutrients and organic matter, pathogens and drug residues into rivers, lakes and coastal seas. Animals and their wastes emit gases, some of which contribute to climate change, as do land-use changes caused by demand for feed grains and grazing land. Livestock shape entire landscapes and their demands on land for pasture and feed crop production modify and reduce natural habitats. Using animals for food and other products and services is only one of many human activities that depend on natural resources. Humans are using the world’s renewable natural resources at rates that increasingly exceed their natural abilities to renew themselves (Westing, Foxand Renner, 2001). Humans introduce growing amounts of pollutants into the air, water and soil, at rates ever higher than the capacity of the environment to dissipate or decompose these pollutants. Humans are encroaching on what remains of relatively undisturbed environments, putting biodiversity at risk of mass extinction. Anthropogenic land-use changes have accelerated over the last decades, most dramatically in developing countries. Urbanization and expansion of cropping have led to an unprecedented loss and fragmentation of habitats, including valuable ones such as forests and wetlands. Water availability is becoming a serious constraint to the expansion of agriculture and to meeting other growing human needs. Agriculture is the largest user of water, accounting for 70 percent of total freshwater use. While there are different views on the extent of climate change and its effect on the environment, it is now firmly established that anthropogenic climate change is indeed occurring. The most important gas associated with climate change is carbon dioxide (CO2) while other greenhouse gases, including methane, nitrous oxide, ozone and sulphur hexafluoride also contribute. Carbon dioxide levels have increased by over 40 percent over the past 200 years, from 270 parts per million (ppm) to 382 ppm (NOAA, 2006). Today, CO2 concentrations are higher than at any time during the last 650 000 years (Siegenthaler et al., 2005). Methane concentrations today are more than twice the pre-industrial level (Spahni et al., 2005). Average temperatures have increased by 0.8°C over the past century (NASA, 2005). Combustion of fossil fuels is a major contributor to these changes.

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Climate change means an increase in average temperature and seems to be associated with an increased frequency of extreme weather events. FAO warns that food distribution systems and their infrastructure will be disrupted, and this may greatly increase the number of hungry people, most severely in sub-Saharan Africa (FAO, 2005a). According to FAO, developing countries may lose about 280 million tonnes of potential cereal production as a result of climate change. Because of habitat losses, unsustainable forms of exploitation and climate change, the loss of biodiversity continues to accelerate. The Millennium Ecosystem Assessment (MEA, 2005a), in a comprehensive assessment of the environmental health of the planet, estimates that species are disappearing at 100 to 1000 times the background levels seen in fossil records. The MEA gauged that one-third of all amphibians, a fifth of mammals and an eighth of all birds are now threatened by extinction. This assessment is based on known species and it is estimated that 90 percent or more of all existing species have not been catalogued yet. While some species provide obvious services such as food, timber or clothing, most species’ services are more difficult to see and, therefore, less appreciated. They include recycling of nutrients, pollination and seed dispersal, climate control and purification of air and water. Additional land available for cultivation is limited. Therefore, most of the increase in agricultural production has come, and will come, from intensification of land that is already cropped or grazed. As a large user of crops and other plant material, the livestock sector must continue to improve the conversion of these materials into edible products. The overall impact of livestock activities on the environment is enormous. Part of the damage can be offset by applying scientific knowledge and technological capability for dealing with these problems. Meanwhile, the vast legacy of damage leaves future generations with a debt. Ultimately, environmental issues are social issues: environmental costs created by some groups and nations are carried by others, or by the planet as a whole. The health of the environment and the availability of resources affect the welfare of future generations, and overuse of resources and excess environmental pollution by current generations are to their detriment. Environmental degradation is often associated with war and other forms of conflict. Throughout history, peoples and nations have fought over natural resources such as land and water. By increasing the scarcity of these resources, environmental degradation increases the likelihood of violent conflict, particularly when there is a lack of governing institutions. In recent years, public attention has been drawn to the prospect that future wars will be fought over increasingly scarce natural resources (see, for example, Klare, 2001, or Renner, 2002). A Pentagon report (Schwartz and Randall, 2003) suggested that global warming could prove a greater risk to the world than terrorism and could lead to catastrophic droughts, famines and riots.

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At the local or regional level, the Southern African Millennium Ecosystem Assessment (SAfMA) (Biggs et al., 2004) reveals a striking connection between ecological stress and social conflict. This SAfMA study suggests causal links in both directions; conflict may cause environmental degradation but the latter may also trigger conflict. The study quotes political violence in South Africa’s KwaZulu Natal Province as an example where faction fighting over scarce land for cattle has led to a series of killings. Water scarcity, land degradation from overgrazing or wood fuel shortages can also lead to conflict. The same study points to Burundi, Rwanda and eastern Congo as areas where major ecological problems have marched hand in hand with recent histories of violent conflict. Environmental degradation significantly affects human health, both directly and indirectly. Direct effects on human health include contact with pollutants. Indirect effects include increased exposure of humans and of animals to infectious diseases because of climate change. The geographic range and seasonality of a number of important diseases, including malaria and dengue fever, are very sensitive to changes in climatic conditions (UNEP 2005a). Schistosomiasis or bilharzia, carried by water snails, is associated with changing water flows. The World Resources Report (1999) underlines how the burden of these preventable and environment-related diseases is borne disproportionately by the poor, both in developing and developed countries. Environmental degradation at its current scale and pace is clearly a serious threat for the sustainability of natural resources. The functioning of ecosystems, both at local and global levels, is already seriously compromised. Ultimately, if left unchecked, environmental degradation may threaten not only economic growth and stability but the very survival of humans on the planet (LEAD-2006, 2007).

4.2 The setting: factors shaping the livestock sector
The livestock sector, along with food and agriculture in general, is undergoing far-reaching change, much of it driven by factors outside the sector. Growing populations and other demographic factors such as age structure and urbanization determine food demand and have driven the intensification of agriculture for centuries. Growing economies and individual incomes have also contributed to growing demand and a shift in diets. These trends have accelerated over the last two decades in large parts of Asia, Latin America and the Near East, spurring a rapid increase in demand for animal products and other high value foodstuffs such as fish, vegetables and oils. The agriculture sector has responded to the increased and diversified demands for food items with innovations in biology, chemistry and machinery. It has done so mainly through intensification rather than expansion. Land use has changed correspondingly. These secular changes of population, economies, diets, technology and land use drive changes in the global livestock sector while, to some extent, the sector itself shapes these

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forces. Sketching these broad developments helps to understand the context within which the livestock sector operates.

5. The demographic transition
Growing populations and cities boost and change food demand Population and population growth are major determinants of the demand for food and other agricultural products. World population is currently 6.5 billion, growing at the rate of 76 million annually (UN, 2005). The UN’s medium projection forecasts that world population will reach 9.1 billion by 2050, peaking at around 9.5 billion by the year 2070 (UN, 2005). While populations in the developed countries as a whole are close to stagnant, 95 percent of the population increase is occurring in developing countries. The fastest population growth rates (averaging 2.4 percent annually) are occurring in the group of 50 least developed countries (UN, 2005). Population growth rates are slowing because of decreased fertility rates, and are below replacement levels in most developed countries and decreasing rapidly in emerging countries, although they remain high in least developed countries. Fertility decline, in conjunction with increases in life expectancy, is leading to population ageing globally. The proportion of older people (aged 60 and over) is projected to double to more than 20 percent from today’s level (UN, 2005). Age groups differ in their dietary and consumption patterns, with adults and older people typically consuming larger amounts of animal protein than children. Another important factor determining demand for food is urbanization. In 2005 (the latest year for which statistics are available) 49 percent of the world population were living in cities (FAO, 2006b). This global figure masks important differences among the world regions: sub- Saharan Africa and South Asia are still only moderately urbanized – with 37 and 29 percent urbanization, respectively – whereas urbanization rates are around 70 to 80 percent in developed countries and in Latin America (FAO, 2006a; 2006b) (see Table 1.1).

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Urbanization continues in all regions of the world, with growth rates highest where current urbanization is low, particularly in South Asia and sub-Saharan Africa. Virtually all population growth between 2000 and 2030 will be urban (FAO, 2003a) (see Figure 1.1).

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Urbanization usually implies higher levels of participation in the workforce and has an impact on patterns of food consumption, In cities, people typically consume more food away from home, and consume higher amounts of precooked, fast and convenience foods, and snacks (Schmidhuber and Shetty, 2005; Rae, 1998; King, Tietyen and Vickner, 2000). Therefore, urbanization influences the position and the shape of the consumption functions for animal products (Rae, 1998) – this function measures the way in which consumption of a given item responds to changes in total expenditure. For China, a given increase in urbanization has a positive effect on per capita consumption levels of animal products (Rae, 1998) (Figure 1.2). Between 1981 and 2001, human consumption of grains dropped by 7 percent in rural areas of China and 45 percent in urban areas. Meanwhile, meat and egg consumption increased by 85 percent and 278 percent respectively in rural areas and by 29 percent and 113 percent in urban areas (Zhou, Wu and Tian, 2003).

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6. Economic growth
Growing incomes boost demand for livestock products Over recent decades, the global economy has experienced an unparalleled expansion. Population growth, technological and science breakthroughs, political changes, and economic and trade liberalization have all contributed to economic growth. In developing countries, this growth has translated into rising per capita incomes, and an emerging middle class that has purchasing power beyond their basic needs. Over the decade 1991 to 2001, per capita GDP grew at more than 1.4 percent a year for the world as a whole. Developing countries grew at 2.3 percent on average compared to 1.8 percent for developed countries (World Bank, 2006). Growth has been particularly pronounced in East Asia with an annual growth rate of close to seven percent, led by China, followed by South Asia with 3.6 percent. The World Bank (2006) projects that GDP growth in developing countries will accelerate in coming decades (Figure 1.3). There is a high income elasticity of demand for meat and other livestock products (Delgado tal., 1999) – that is, as incomes grow, expenditure on livestock products grows rapidly. Therefore growing per capita incomes will translate into growing demand for these products. This will close much of the gap in average consumption figures of meat, milk and eggs that currently exists between developed and developing countries.

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As Figure 1.4 shows, the effect of increased income on diets is greatest among lower- and middle-income populations. This observation is true at individual level as well as at the national level (Devine, 2003).

7. The nutrition transition
Worldwide shifts in dietary preferences The advent of agriculture and the sedentarization of hunter/gatherers enabled increasing populations to be fed – but it also led to a narrowing of the human diet. Prior to agriculture, animal products played a much larger role in human nutrition, and intake levels were similar to, if not higher than, current consumption levels in developed countries. Increases in income and advances in agriculture enabled developed countries to enrich and diversify their diets over the last 150 years. Developing countries are currently engaged in a catchingup process, which has been termed the “nutrition transition” by Popkins, Horton and Kim, (2001). The transition is characterized by an accelerated shift from widespread undernourishment to richer and more varied diets and often to overnutrition. In contrast to the more secular nutrition transition that occurred in developed countries, this shift now occurs within a single generation in rapidly growing developing countries.

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With higher disposable incomes and urbanization, people move away from relatively monotonous diets of varying nutritional quality (based on indigenous staple grains or starchy roots, locally grown vegetables, other vegetables and fruits, and limited foods of animal origin) towards more varied diets that include more pre-processed food, more foods of animal origin, more added sugar and fat, and often more alcohol (Table 1.2 and Figure 1.5). This shift is accompanied by reduced physical activity, leading to a rapid increase in overweight and obesity (Popkin, Horton and Kim, 2001). Worldwide the number of overweight people (about 1 billion) has now surpassed the number of malnourished people (about 800 million). And a significant part of the growth in obesity occurs in the developing world. For example, the World Health Organization (WHO) estimates that there are 300 million obese adults and 115 million suffering from obesity- related conditions in the developing world.1 A rapid increase in diet-related chronic diseases, including heart disease, diabetes, hypertension and certain cancers is associated with the rapid nutrition transition. In a number of developing countries, diet-related chronic diseases have become a priority in national food and agricultural policies, which now promote healthy eating habits, exercise and school-based nutrition programmes (Popkin, Horton and Kim, 2001).

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The nutrition transition is driven by rising incomes and by the continuing trend to lower relative prices for food. Prices have been declining in real terms since the 1950s. Currently they allow much higher consumption levels of high value food items than was the case for developed countries at comparable levels of income in the past (Schmidhuber and Shetty, 2005). While purchasing power and urbanization explain the greater part of the per capita consumption pattern, other social and cultural factors can have a large influence locally. For example, Brazil and Thailand have similar income per capita and urbanization rates but animal product consumption in Brazil is roughly twice as high as in Thailand. The Russian Federation and Japan have similar consumption levels for animal-derived foods, yet income levels in Japan are about 13 times higher than in Russia (see figure 1.4). Natural resource endowment is one of the additional factors determining consumption, as it shapes the relative costs of different food commodities. Access to marine resources, on the one hand, and to natural resources for livestock production, on the other, have drawn consumption trends in opposite directions. Lactose intolerance, found particularly in East Asia, has limited milk consumption. Cultural reasons have further influenced consumption habits. This, for example, is the case in South Asia, where consumption per capita of meat is lower than income alone would explain. Other examples are the exclusion of pork from the diet by Muslims. Sociocultural patterns have created a rich diversity of consumer preferences, but have also influenced consumers’ views about the quality of animal products (Krystallis and Arvanitoyannis, 2006). More recently, consumption patterns are increasingly influenced by growing concerns about health, the environment, ethical, animal welfare and development issues. In countries of the Organisation for Economic Co-operation and Development (OECD) a class of “concerned consumers” has emerged, who (Harrington, 1994) tend to reduce their consumption of

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livestock food products or opt for certified products, such as free range or organic foods (Krystallis and Arvanitoyannis, 2006; King, et al., 2000). The growing trend towards vegetarianism, albeit still at a very low level in most societies, is another manifestation of this trend. Government promotion campaigns are also identified as potential drivers of consumption trends (Morrison et al., 2003).

8. Technological change
Growing productivity The livestock sector has been affected by profound technological change on three different fronts: • • • In livestock production, the widespread application of advanced breeding and feeding technology has spurred impressive productivity growth in most parts of the world. In crop agriculture, irrigation and fertilization techniques, combined with the use of improved varieties and mechanization, continue to translate into growing yields and improved nutrient composition in pasture and major crops used for feed. The application of modern information technology and other technical changes are improving post-harvest, distribution and marketing of animal products.

In animal production, technological development has been most rapid in those subsectors that have experienced the fastest growth: broiler and egg production, pork and dairy. Productivity growth, and the underlying spread of advanced technologies, has been less pronounced for beef and meat from small ruminants. However, certain key technological changes have occurred in the production of all livestock commodities – a growing production intensity, characterized by increasing use of feed cereals, use of advanced genetics and feeding systems, animal health protection and enclosure of animals. Advances in these areas go hand in hand, and it is difficult to separate out the effect of individual factors on overall productivity increases. Increased grain feeding Traditionally, livestock production was based on locally available feed resources such as crop wastes and browse that had no value as food. However, as livestock production grows and intensifies, it depends less and less on locally available feed resources, and increasingly on feed concentrates that are traded domestically and internationally. In 2002, a total of 670 million tonnes of cereals were fed to livestock, representing roughly one-third of the global cereal harvest (see Table 1.3). Another 350 million tonnes of protein-rich processing byproducts are used as feed (mainly brans, oilcakes and fishmeal). Monogastric species that can most efficiently make use of concentrate feeds, i.e. pigs, poultry and dairy cattle, have an advantage over beef cattle, sheep and goats. Among the monogastrics, poultry has shown the highest growth rates and lowest prices, mainly because of favourable feed conversion rates. The use of feed concentrate for ruminants is limited to countries where meat prices are high relative to grain prices. Where grain prices are high relative to meat prices – typically in food-deficit developing countries – grain feeding to ruminants is not profitable.

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What is driving the increasing use of feed grains? Most importantly, there is a long-term decline of grain prices; a trend that has persisted since the 1950s. Supply has kept up with growing demand: total supply of grains increased by 43 percent over the last 24 years (1980 to 2004). In real terms (constant US$), international prices for grains have halved since 1961. Expanding supply at declining prices has been achieved by area expansion and by intensification of crop production.

Intensification accounts for the bulk of supply expansion over the past 25 years, and is a result of technological advances and higher input use in crop production – notably plant breeding, the application of fertilizers and mechanization. Area expansion has been an important contributor to growing supplies in many developing countries, especially in Latin America (where the cropped area expanded by 15 percent between 1980 and 2003) and subSaharan Africa (22 percent). Land-scarce Asia (developing) has seen a modest 12 percent expansion of the cropped area. Some countries have seen a particularly strong expansion of area cropped, most of it at the expense of forest (Brazil and other Latin American countries). Much of this area expansion has been for the production of concentrate feeds for livestock, notably soybeans and maize. Feed conversion and growth rates have been greatly improved by use of linear programming to develop least-cost feed rations, phased feeding and the use of enzymes and synthetic aminoacids, together with a much extended use of feed concentrates (grains and oilcakes). In future, feed concentrate use is projected to grow more slowly than livestock production, despite the fact that the latter is becoming increasingly cereal-based. This is because improved technologies in feeding, breeding and animal health are producing even greater efficiency gains.

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More productive breeds In animal genetics and breeding, the use of hybridization and artificial insemination hassped up the process of genetic improvement. In poultry, for example, these techniques have greatly expanded the number of animals that can be bred from a superior parent stock, creating animals with uniform characteristics (Fuglie et al., 2000). Traditionally, the only means of genetic improvement was selection based on the phenotype. Starting from the beginning of the twentieth century, technologies such as controlled management of reproduction and of pedigrees were developed. These were initially limited to purebred stock (Arthur and Albers, 2003). Around mid-century, line specialization and crossbreeding were initiated, first in North America, then in Europe and other OECD countries. Artificial insemination was first introduced in the 1960s and is now commonplace in all intensive livestock production systems. Around the same time, breeding value evaluation technologies were introduced in developed countries. More recent innovations include the use of DNA markers to identify specific traits. Breeding goals have changed considerably over time, but the speed and precision with which these goals can be achieved has increased considerably over recent decades. Shortcycle species, such as poultry and pigs, have a distinct advantage over species having a longer generation interval. Among all species, feed conversion and related parameters such as growth rate, milk yield and reproductive efficiency are paramount factors for breeding (Arthur and Albers, 2003). Fat content and other features that correspond best to consumer demands are increasing in importance. These changes have brought about impressive results. For example, Arthur and Albers (2003) report that in the United States, feed conversion ratios for eggs have been reduced from 2.96 grams of feed per gram of egg in 1960 to 2.01 grams in 2001. The breeding industry has been less successful in developing breeds of dairy cows, pigs and poultry that perform well in non-modified tropical low-input environments. Highly intensive livestock enterprises in the tropics usually control the climatic and health environment around the animals, so as to utilize the efficiencies of modern breeds developed for temperate regions. Animal health improvements have further contributed to raising productivity, including the use of antibiotics (now banned for use in growth enhancement in areas such as the European Union (EU) in special pathogen-free production environments. In developing countries, these technologies have spread widely in recent years, particularly in industrial production systems close to major consumption centres. The continuous increase in scales of production has also led to important productivity gains in developing countries. These have allowed animal products to be supplied to growing populations at decreasing real prices (Delgado et al., 2006). Cheaper feed grains In crop production, similar improvements have improved supply and reduced prices of feed grains, with important productivity increases occurring earlier (in the 1960s and 1970s) than for livestock (FAO, 2003a). For developing countries, about 80 percent of the projected growth in crop production to 2030 will come from intensification, mostly in the form of yield increases, and also through higher cropping intensities. Irrigation is a major factor in

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land intensification: the irrigated area in developing countries doubled between 1961–63 and 1997–99 and is expected to increase by another 20 percent by 2030 (FAO, 2003a). Widespread application of fertilizer and improved fertilizer composition and forms of application are other important factors in crop intensification, along with improvements in plant protection.

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The post-harvest sector, distribution and marketing have seen profound structural changes. These are associated with the emergence of large retailers, with a tendency towards vertical integration and coordination along the food chain. This trend has been brought about by liberalization of markets and widespread application of new technologies in logistics and organizational management transport. All of these help to bring prices down for consumers – but at the same time they raise entry barriers for small producers (Costales, Gerber and Steinfeld, 2006). Trends within the livestock sector Until about the early 1980s, diets that included daily consumption of milk and meat were largely the privilege of OECD country citizens and a small wealthy class elsewhere. At that time, most developing countries, with the exception of Latin America and some West Asian countries had an annual per capita meat consumption of substantially less than 20 kg. For most people in Africa and Asia, meat, milk and eggs were an unaffordable luxury, consumed only on rare occasions. A high proportion of the larger livestock in developing countries was not primarily kept for food, but for other important functions, such as providing draught power and manure and serving as an insurance policy and a capital asset, usually disposed of only in times of communal feasting or emergency. This is changing rapidly. The livestock sector is currently growing faster than the rest of agriculture in almost all countries. Typically, its share in agricultural GDP rises with income and level of development and is above 50 percent for most OECD countries. The nature of livestock production is also changing rapidly in many emerging economies, as well as in developed countries. Most of this change can be summarized under the term “industrialization”. Through industrialization, livestock escape most of the environmental constraints that have shaped livestock production diversely in the wide range of environments in which they occur. Livestock production and consumption booms in the south, stagnates in the north Driven by population growth and rising income in many developing countries, the global livestock sector has seen a dramatic expansion over the past decades, though with considerable differences between developing and developed countries. In the developing countries, annual per capita consumption of meat has doubled since 1980, from 14 kg to 28 kg in 2002 (Table 1.5). Total meat supply tripled from 47 million tonnes to 137 million tonnes over the same period. Developments have been most dynamic in countries that have seen rapid economic growth, notably East Asia, led by China. China alone accounted for 57 percent of the increase in total meat production in developing countries. For milk, developments are less spectacular but still remarkable: total milk production in developing countries expanded by 118 percent between 1980 and 2002, with 23 percent of that increase coming from one country, India.

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This dramatic increase in demand for livestock products (a transition called the “livestock revolution” by Delgado et al., 1999), is poised to continue for another 10 to 20 years before slowing down (Delgado et al., 1999). A few developing countries, notably Brazil, China and India are emerging as world players as their strength as trading partners is growing rapidly (Steinfeld and Chilonda, 2005). These three countries account for almost two-thirds of total meat production in developing countries and for more than half of the milk (Table 1.6). They also account for close to three–quarters of the growth in milk and meat production in all developing countries.

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There is a great deal of variation in the extent and character of livestock sector growth. China and East Asia have experienced the most impressive growth in consumption and production, first in meat and more recently also in dairy. The region will need to import increasing amounts of feed, and perhaps also livestock products, to meet future consumption growth. In contrast, India’s livestock sector continues to be dairy oriented, using traditional feed resources and crop residues. This picture is likely to change, as the booming poultry industry will pose feed demands that will far exceed current supplies. In contrast, Argentina, Brazil and other Latin American countries have successfully expanded their domestic feed base, taking advantage of low production costs and abundance of land (Steinfeld and Chilonda, 2006). They have moved to adding value to feed, rather than exporting it. They are poised to become the major meat exporting region supplying developed and East Asian countries. In the developing countries, livestock production is rapidly shifting towards monogastrics In fact, poultry and pigs account for 77 percent of the expansion in production. While total meat production in developing countries more than tripled between 1980 and 2004, the growth in ruminant production (cattle, sheep and goats) was only 111 percent, that of monogastrics expanded more than fourfold over the same period. These dramatic developments in rapidly growing developing countries are in stark contrast with trends in developed countries, where consumption of livestock products is growing only slowly or stagnating. With low or no population growth, markets are saturated in most developed countries. Consumers are concerned about the health effects of high intake levels of livestock products, in particular red meat and animal fats. Continuous high-level consumption of these products is associated with a series of cardio-vascular diseases and certain types of cancer. Other perceived health problems associated with animal products sporadically and sometimes permanently suppress demand for animal products. These include the presence of residues (of antibiotics, pesticides, dioxins) and of pathogens (Escherichia coli, salmonella, mad cow disease). In developed countries, total livestock production increased by only 22 percent between 1980 and 2004. Ruminant meat production actually declined by 7 percent while that of poultry and pigs increased by 42 percent. As a result, the share of production of poultry and pigs has gone up from 59 to 69 percent of total meat production. Among the monogastrics, poultry is the commodity with the highest growth rates across all regions. A main reason for this, apart from very favourable feed conversion, is the fact that poultry is a meat type acceptable to all major religious and cultural groups. A few general observations can be made. The trend towards rapidly increasing livestock production in the tropics poses a series of technical problems, such as those related to climate and disease. Countries do not appear to be readily prepared for some of these, as has been demonstrated by the outbreaks of avian influenza in the last two years. The surge in production also entails an expansion of feed supplies and, particularly in Asia, an increasing amount will need to come from imports. Some countries will be faced with the question whether to meet this demand by importing feed for domestic livestock production or to opt for imports of livestock products. Production is also moving away from established production areas that have high environmental standards. This potentially creates opportunities for evading environmental controls.

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On the consumption side, there is a trend towards global convergence of diets. Cultural peculiarities, though still strong in some areas, become increasingly blurred as demonstrated by the surge of poultry consumption in South and East Asia. This convergence is further driven by the fact that similar eating habits, such as fast and convenience food, are catching hold almost everywhere. Most of the expansion in the supply of livestock products in developing countries comes from increased production, and only a relatively small part from imports. For developing countries as a whole, net imports account for only about 0.5 percent of total supply for meat, and 14.5 percent for milk (FAO, 2006b). However, trade in livestock products has increased much faster than trade in feed. For feed grains, the traded share of total production has remained fairly stable in the range of 20 to 25 percent over the last decade. The share for meat increased from 6 percent in 1980 to 10 percent in 2002, and for milk from 9 to 12 percent over the same period. Growth in trade in livestock products is also outpacing that of growth in production, facilitated by declining tariff barriers within the context of the General Agreement on Tariffs and Trade (GATT). This indicates a gradual trend towards producing livestock in locations where feed is available, rather than close to consumption centres a trend made possible by infrastructure development and the establishment of refrigerated supply chains (“cold chains”) in major producing countries.

9. Structural change
The large increases in supply of livestock products have been facilitated by structural adjustments in the sector, including growing intensities (discussed above), increasing scales of production, vertical integration and geographical shifts. Units scale up in size, while smallholders are marginalized There has been a rapid growth in the average size of primary production units, accompanied by a substantial decline in the numbers of livestock producers in many parts of the world. The major driver of this process is the cost reduction that can be realized through the expansion of scale of operations at various stages of the production process. Smallholders may stay in the livestock business by selling their products at prices that value their own labour input below the market rate. However, this occurs mostly in countries with limited employment opportunities in other sectors. As soon as employment opportunities in other sectors arise, many smallholder producers opt out of livestock production. Different commodities and different steps of the production process offer different potential for economies of scale. The potential tends to be high in post-harvest sectors (slaughterhouse, dairy plants). Poultry production is most easily mechanized, and industrial forms of production emerge even in least developed countries. In contrast, dairy production shows fewer economies of scale because of the typically high labour input. As a result, dairy production continues to be dominated by family-based production. For dairy and small ruminant production, farm-level production costs at the smallholder level are often comparable with those of large scale enterprises, usually because of the cost advantages of providing family labour below the level of the minimum wage. However, the

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expansion of smallholder production beyond a semisubsistence level is constrained by a number of barriers, lack of competitiveness and risk factors (see below). Access to land and credit is an increasing problem. Recent LEAD studies (Delgado and Narrod, 2006) show the substantial impact of hidden and overt subsidies that facilitate the supply of cheap animal products to the cities, to the disadvantage of small-scale rural producers. There is often no public support to adapt or disseminate new technologies for small-scale use. Production costs are higher at the smallholder level because of both market and production risks. Market risks include price fluctuations for both inputs and products. These are often amplified for smallholders because of their weak negotiating position. Some small-scale producers evolved from subsistence farming with sound risk coping mechanisms, but lack the assets or strategies to sustain full exposure to market risks. The absence of safety nets in the face of economic shocks, invariably present in such markets, restricts the participation of smallholders. Production risks relate to resource degradation, control of assets such as land and water, climatic variations such as droughts and floods, and infectious diseases. Smallholders face additional problems because of the transaction costs involved in product marketing. These are often prohibitively high because of the small quantities of marketable product produced and the absence of adequate physical and market infrastructures in remote areas. Transaction costs are also increased where producers lack negotiating power or access to market information, and remain dependent on intermediaries. Moreover, the frequent absence of producers’ associations or other partnership arrangements makes it more difficult for smallholder producers to reduce transaction costs through economies of scale. The desire to reduce transaction costs is a main force promoting vertical integration in developed and developing countries alike. In developing countries, it is found particularly in poultry and pork, but also in dairy production. These economic forces are sometimes further strengthened if governments tax market transactions, for example for feed, as described by Delgado and Narrod (2002) in the case of poultry producers in Andhra Pradesh (India). The combined effect of economic gains from lowering transaction costs by vertical integration, and more favourable tax regimes for larger enterprises, tends to disadvantage independent and small-scale producers severely.

10. Geographic shifts
Production grows more concentrated Traditionally, livestock production was based on locally available feed resources, particularly those having limited or no alternative use value, such as natural pasture and crop residues. The distribution of ruminants was almost completely determined by the availability of such resources. The distribution of pigs and poultry followed closely that of humans, because of their role as waste converters. For example, a LEAD study in Viet Nam (a country in its early stages of industrialization) found that 90 percent of the poultry distribution pattern could be explained by the distribution of the human population (Tran Thi Dan et al., 2003). In the course of development, the livestock sector strives to free itself from local natural resource constraints – but becomes subject to a different set of factors that shape its

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geographical distribution and concentration. The importance of agro-ecological conditions as a determinant of location is replaced by factors such as opportunity cost of land and access to output and input markets. As soon as urbanization and economic growth translate rising incomes into “bulk” demand for animal source food products, large-scale operators emerge. At the initial stage, these are located close to towns and cities. Livestock products are among the most perishable food products, and their conservation without chilling and processing poses serious quality and human health problems. Therefore, livestock have to be produced close to the location of demand, unless there is adequate infrastructure and technology to permit livestock to be kept farther away. At a later stage, livestock production shifts even further from demand centres, driven by factors such as lower land and labour prices, access to feed, lower environmental standards, tax incentives or locations with fewer disease problems. The LEAD study found that the poultry density in areas closer than 100 km to Bangkok decreased between 1992 and 2000, with the largest decrease (40 percent) in the areas close to the city (less than 50 km). Density increased in all areas further away than 100 km (Gerber et al., 2005). The LEAD study found that for all countries analysed (Brazil, France, Mexico, Thailand, Viet Nam), despite the variety of factors that determine optimal location, there is a continuing process of concentration for all species covered by the analysis (cattle, chicken and pigs). Even in developed economies, the trend of concentration and increasing scale is continuing.

11.Vertical integration and the rise of supermarkets
Large multinational firms are becoming dominant in the meat and dairy trade, both in the developed world and in many developing countries experiencing fast livestock sector growth. Their strength is linked to achieving economies of size and scope, and to sourcing supplies at different levels and across national boundaries. Vertical integration allows not only for gains from economies of scale. It also secures benefits from market ownership and from control over product quality and safety, by controlling the technical inputs and processes at all levels. The rapid expansion of supermarkets and fast food outlets in developing countries started in the 1990s and has already large segments of the market in Latin America, East Asia and West Asia; this process has now also started in South Asia and sub-Saharan Africa. This expansion has been accompanied by a relative decline of traditional “wet” and local markets. For example, in China the number of supermarket outlets rose from 2 500 in 1994 to 32 000 in 2000 (Hu and Reardon, 2003). The supermarket share of total retail turnover is estimated to have reached about 20 percent of the total packaged and processed food retailing (Reardon et al., 2003). According to the same authors, the share of supermarkets in the retailing of fresh foods is about 15 to 20 percent in Southeast Asia. India still has a comparatively low supermarket share of only 5 percent. As is already the case in developed countries, the large-scale retail sector is becoming the dominant actor in the agrifood system.

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The rise of supermarkets has been facilitated by innovations in retail procurement logistics, technology and inventory management in the 1990s, with the use of the Internet and information management technology. This has enabled centralized procurement and consolidated distribution. The technological change, led by global chains, is now diffusing around the world through knowledge transfer, and imitation by domestic supermarket chains. The substantial savings from efficiency gains, economies of scale and coordination cost reduction provide profits for investment in new stores, and, through intense competition, reduce prices to consumers. The requirements of these integrated food chains, in terms of volume, quality, safety, etc. are becoming pervasive throughout the livestock sector. In summary, the trends in the global livestock sector can be described as follows: • • • Demand and production of livestock products are increasing rapidly in developing countries that have outpaced developed countries. A few large countries are taking centre stage. Poultry has the highest growth rate. This increasing demand is associated with important structural changes in countries’ livestock sectors, such as intensification of production, vertical integration, geographic concentration and up-scaling of production units. There are concomitant shifts towards poultry and pig meat relative to ruminant meat, and towards grain- or concentrate-based diets relative to low-value feed.

These trends indicate a growing impact on the environment, as will be shown in more detail in the following chapters. Growth in itself may be regarded as a problem as it is not offset by concomitant productivity gains. Although these are important, the expanding livestock sector lays hands on additional feed and land resources that come at significant environmental costs. Structural change also modifies the nature of damage. In addition to issues associated with extensive production, such as overgrazing, there is a steep increase in those connected to intensive and industrial forms, such as concentration of pollutants, expansion of arable land for feed and environmental health problems. Further, the shift to traded and processed feeds spreads the environmental problems to other sectors, e.g. feed crop production, fisheries, and to other parts of the world, which often obscures the real nature and extent of environmental impact. Primary, secondary and optional Projects and sustainability in a rural multi-context See on tables 2.1, 2.2 and 2.3.

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AGRIBUSINESS: primary production, retail & distribution
Table.2.1.

Project Multicontext : Rural vs Urban
Public project

Developed Areas vs Not Develop.Areas
Private

Public-Private Partnership Primary Projects Economic Sustainability New paradigm: from farmers to entrepreneur mind Legislation: • • Traceability feed & vet cost Animal wealthfare Environmental Sustainability Reactive N accumulated Earth (120 Ttm3 since 2007) limit Earth biosystems 100 Ttm3. “Black Hole”: • • • Energy Nutrients Water Social Sustainability No expectatives for the new generations in the rural areas

Neighbors Impacts: • • • Offensive odors PM’s Biosecurity

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AGRIBUSINESS: primary production, retail & distribution

Table.2.2.

Project Multicontext: Rural vs Urban
Public

Developet Areas vs Not Develop.Areas
Private

project Public-Private Partnership Secondary Projects Economic Sustainability Slaughtering, transforming, packing: • New techs • Better Mgmnt Environmental Sustainability Save scarce resources & improve & restore: • Virtual N world trade • Water world foodprint • Air quality • Energy recovery Social Sustainability Two scenarios: st a. 1 World: Nutrition & health b. Rest World: Eating, feeding, basic need

Legislation: • Traceability • Food safety

“Black Hole”: • Energy • Nutrients • Water

Integrating healthy and working: • New jobs • Integrating primary & secondary projects

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Table.2.3.

Project Multicontext: Rural vs Urban
Public project

Developet Areas vs Not Develop.Areas
Private

Public-Private Partnership Optional Projects Economic Sustainability World global vision are needed: • WTC • Next Doha R. • Agrifood • Agrienergy Environmental Sustainability World trade food foodprint reduction: • Waste to Energy • Agribiotech Social Sustainability Two scenarios: • GMO • Genetics • Omic nutrition (OFA-PAF heath )

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AGRIBUSINESS: primary production, retail & distribution

Project Multicontext: Rural vs Urban Developet Areas vs Not Develop.Areas
Public project Public-Private Partnership Engagement Projects Economic Sustainability More, more and more education & training are needed: • Rural Development • Farming • Packing & Retail • Distribution • Consumer Environmental Sustainability • • • • Improving the restoration Reducing the env. Impact More and better use of energy Landscape Restoration • • • • Social Sustainability Stabilizing population in the rural areas Woman role in the rural areas New jobs: news value spaces in primary proyects context Bridging Bridges: rural areas with urban areas Private

Focusing in Agribiotechnologies: • Research (basic) • Applied • Innovation

Issue starts

The time is coming

12. References
Ackerman, F., Wise T.A., Gallagher, K.P., Ney, L. & Flores, R. 2003. Free trade, corn and the environment: Environmental impacts of US–Mexico corn trade under NAFTA. Global Development and Environment Institute, Working Paper No. 03-06. Allan, J.A. 2001. Virtual Water – economically invisible and politically silent – a way to solve strategic water problems, International Water and Irrigation, 21(4):39–41. Altieri, M. & Pengue, W. 2006. GM soybean: Latin America’s new coloniser. Article in Grain (Available at http://www.grain.org/front/).

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Amon, B., Moitzi, G., Schimpl, M., Kryvoruchko, V. & Wagner-alt, C. 2002. Methane, nitrous oxide and ammonia emissions from management of liquid manures, Final Report 2002. On behalf of Federal Ministry of Agriculture, Forestry, Environmental and Water Management and the Federal Ministry ofEducation, Science and Culture Research Project No.1107, BMLF GZ 24.002/24-IIA1a/98 and Extension GZ24.002/33IIA1a/00. Anderson, D.M., Galloway, S.B. & Joseph, J.D. 1993.Marine biotoxins and harmful algae: a national plan. Technical Report, Woods Hole, Massachusetts,USA, Woods Hole Oceanographic. Arthur, J.A. & Albers, G.A.A. 2003. Industrial perspective on problems and issues associated with poultry breeding. In W.M. Muir, Poultry genetics, breeding and biotechnology. Burton, C.H. & Turner, C. 2003. Manure management– treatment strategies for sustainable agriculture.2nd Edition. Wrest Park, Silsoe, Bedford, UK. Silsoe Research Institute, p. 451. Castel, V. 2005. Synthèse des débats du Thème No.1 «Valeurs et Valorisation des ressources de la biodiversité: Quel Bilan? Quelles perspectives pour les éleveurs?» de la 2ème Conférence électronique de la Plateforme francophone LEAD (FAO): Cohabitation ou compétition entre la faune sauvageet les éleveurs... Où en est-on aujourd’hui? Faut-il changer d’approche? Organized by LEAD and CIRAD, 2005. Chapagain, A.K. & Hoekstra, A.Y. 2004. Water footprints of nations. Volume 1: Main Report. Value of Water Research Report Series No. 16. UNESCO-IHE. p. 76. (Available at http://www.waterfootprint.org). Costales, A., Gerber, P. & Steinfeld, H. 2006. Underneath the livestock revolution. Livestock Report, 2006. Rome, FAO. De la Rosa, D., Moreno, J. A., Mayol, F. & Bonson,T. 2000. Assessment of soil erosion vulnerability in western Europe and potential impact on crop productivity due to loss of soil depth using the ImpelERO model. Agriculture, Ecosystems and Environment, 1590: 1–12. De Wit, J., van Keulen, H., van der Meer, H.G. & Nell,A.J. 1997. Animal manure: asset or liability? World Animal Review 88-1997/1, (Available at www.fao.org/docrep/w5256t/W5256t05.htm). Delgado, C. and Narrod, C. 2002. Impact of changing market forces and policies on structural change in the livestock industries of selected fast-growingdeveloping countries. Final research report of phaseI – project on livestock industrialization, trade and social-health-environment impacts in developing countries.

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Delgado, C., Narrod, C.A. and Tiongco, M.M. 2003. Policy, technical, and environmental determinants and implications of the growing scale of livestock farms in four fast– growing developing countries. International Food Policy Research Institute Washington, DC. Delgado, C., Rosegrant, M., Steinfeld, H., Ehui, S. & Courbois, C. 1999. Livestock to 2020: The next food revolution. Food, Agriculture, and the Environment Discussion Paper 28. Washington, DC, IFPRI/FAO/ILRI (International Food Policy Research Institute/FAO/International Livestock Research Institute). De Haan, C.H., Steinfeld, H. & Blackburn, H. 1997. Livestock and the environment: Finding a balance. Suffolk, UK, WRENmedia. De Haan, C.H., Schillhorn van Veen, T. W., Brandenburg, B., Gauthier, J., Le Gall, F., Mearns, R. & Siméon, M. 2001. Livestock development, implications for rural poverty, the environment, and global food security. Washington, DC, World Bank. FAO. 1999c. Livestock and environment toolbox, Livestock, Environment and Development (LEAD) Initiative. Rome. (Available at www.virtualcentre.org/en/dec/toolbox/homepage.htm). Galloway, J.N., Aber, J.D., Erisman, J.W., Seitzinger,S.P., Howarth, R.W., Cowling, E.B. & Cosby, B.J. 2003. The nitrogen cascade. Bioscience, 53(4): 341–356. Galloway, J., Burke, M., Bradford, E., Falcon, W.,Gaskell, J., McCullough, E., Mooney, H., Naylor, R.,Oleson, K., Smil, V., Steinfeld, H. & Wassenaar, T. 2006. International trade in Meat: The tip of the pork chop. Congress Proceedings. Gerber, P. 2006. Putting pigs in their place, environmental policies for intensive livestock production in rapidly growing economies, with reference to pig farming in Central Thailand. Doctoral Thesis in Agricultural Economics, Swiss Federal Institute of Technology, Zurich, 130 pp. Hu, Dinghuan, Reardon, T.A., Rozelle, S., Timmer, P. & Wang, H. 2004. The emergence of supermarketswith Chinese characteristics: challenges andopportunities for China‘s agricultural development. Development Policy Review, 22(5): 557–586. King, B.S., Tietyen, J.L. & Vickner, S.S. 2000. Consumer trends and opportunities. Lexington, USA, University of Kentucky. Krystallis, A. & Arvanitoyannis, I.S. 2006. Investigating the concept of meat quality from the consumers perspective: the case of Greece. Meat Science, 72:164–176. LEAD. 2002. AWI Nutrient balance, (Available at
http://www.virtualcentre.org/en/dec/nutrientb/default.htm).

LPES. 2005. Livestock and Poultry Environmental Stewardship Curriculum: A national educationalprogram.(Available at http://www.lpes.org/Lessons/Lesson01/1_Environmental_Stewardship.html).

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Morrison, J.A., Balcombe, K., Bailey, A., Klonaris, S.& Rapsomanikis, G. 2003. Expenditure on different categories of meat in Greece: the influence of changing tastes. Agricultural Economics, 28: 139–150. OECD. 2006. Agricultural policies in OECD countries– at a glance. Paris. 2006. Popkins, B., Horton, S. & Kim, S. 2001. The nutrition transition and prevention of dietrelated chronic diseases in Asia and the Pacific. Food and Nutrition Bulletin, 22 (4: Suppl.). Tokyo, United Nations University Press. RAE, A. 1998. The effects of expenditure growth and urbanisation on food consumption in East Asia: a note on animal products, Agricultural Economics, 18(3): 291–299. Steinfeld, H. & Chilonda, P. 2006. Old players, newplayers. Livestock Report 2006. Rome, FAO. Tran Thi Dan, Thai Anh Hoa, Le Quang Hung, BuiMinh Tri, Ho Thi Kim Hoa, Le Thanh Hien & Nguyen Ngoc Tri. 2003. LEAD pilot project on the Area-wideintegration (AWI) of specialized crop and livestock activities in Vietnam. C. Narrod & P. Gerber, eds. UN. 2005. World Population Prospects. The 2004 Revision. UN Department of Economic and Social Affairs. New York, USA, (Available at http://www.un.org/esa/population/publications/sixbillion/sixbilpart1.pdf). Webster, R.G., Naeve, C.W. & Krauss, S. 2006. The evolution of influenza viruses in wild birds. FAO/ OIE International Scientific Conference on Avian Influenza and Wild Birds. World Bank. 2006. World development indicators. Washington, DC. World Bank. 1997. Water pricing experiences An international perspective. World Bank Technical Paper No. 386, Washington, DC, World Bank. Zhou, Z.Y., Wu, Y.R. & Tian, W.M. 2003. Food consumption in rural China: preliminary results from household survey data. Proceedings of the 15th Annual Conference of the Association from Chinese Economics Studies, Australia. Martinez-Almela J, Barrera K, Martinez C. 2000 “The possibilities of stockbreeding effluent and excrement. Available technologies for animal residuals treatment, use and disposal”. FAO. European Cooperative Research. RAMIRAN 9th Workshop: Technology transfer. Universitá Politecnica di Milano, FAO. Gargnano (BS) Italia. Martinez-Almela. J, Vanotti MB 2001 “Viruses in Animal Waste Task e-Force in Workshop on emerging infections disease agents and issues associated with animal manures, biosolids and other similar by-products”. Workshop USEPA-USDA Vernon Manor H. Cincinnati. Ohio. USA.

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Martínez-Almela J, Barrera J, Lorenzo M. 2002 Advanced in swine Manure treatment in Europe and by product utilization”. 2002 ASA-CSSA-SSSA Annual meetings. Indianapolis, Indiana, USA. November 10-14th. Martinez-Almela J, Barrera J, 2003. “Selco-Ecopurín® separation technology for conversion of animal waste into added value products and energy”. ISAAFPW 2003. Raleigh NC, USA. October 11-14th. Martinez-Almlea J, 2003. “Proyecto "Visión Global": La integración ambiental de la producción ganadera intensiva y el reto de los residuos”. Revista de Proyectos de Ingeniería: La ciencia de la creación de lo artificial, Ingeniería, Diseño, Innovación. Dpto. de Proyectos de Ingeniería. Universidad Politécnica de Valencia. Spain Martinez-Almela J, Muñoz A, Barrera J. 2003 “Management, Manure & Treatment plant: present and future. The farm school of Murcia’s University’s Veterinary Sciente Faculty”. IX World Conference on Animal Production. WCAP 2003. Plenary Sesion, Porto Alegre (Brazil). Martinez-Almela J, 2006 “Nova Orden Zootécnica: desafios para produzir alimentos diferenciados destinados ao mercado internacional”. Pork Expo 2006: Mitos e realidades na gestão meio ambiental de subprodutos (dejetos e cadaveres) procedentes da exploraçaos de suínos. Foz do Iguaçu (PR) Brasil. Martinez-Almela J. 2008 Certificate in Project Management: a tool for the future. Portfolio and project schedule management in the Agribussines Sector” Escuela de Ingenieros Superiores Industriales. INSISOC: Universidad de Valladolid. I Workshop in Engineering and Construction Project Management. October 2nd Valladolid, Spain.

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Workshop report Group 3
1. Workshop group
The papers were discussed About 2 hours of interactive work were done during the first day The results of the first day were presented to the plenum About 4 hours of interactive work were done during the second day The end results were presented to the plenum Members of Stream 3 Workshop included The Stream 3 moderator and reporter was Rodney J. Turner and Rüdiger Geist (whole seminar) Paper presentations were made by Gilman Chi Cheung Tam Giudo Aregger, Rüdiger Geist, Ibrahim Al-Hammad, Robert Herbacek, Jesus Martinez Almela, Sven Ringmar, Markus Stäuble, Gilman Tam, Tom Taylor The goals to achieve and the purpose of the Stream 3 are defined in the introduction paper.

2. Report Responsibility in projects for sustainability
Considering social, environmental and economic aspects (People – Planet – Profit) Is it possible to find a general definition what sustainability means in terms of project management? Responsibilities in projects and for project managers have to be concrete Project appraisal should be based on sustainability issues Sustainability issues are specific for the economic sector and should be part of the requirements Where is the right place for sustainability: Governance or processes? Does the role of the project manager include decision making about sustainability? Project life cycle sets the basis for sustainability including measurement after the end of the project The whole team including the client (project owner) is responsible for the sustainability

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The level of sustainability competence of the project managers depends strongly on the context Sustainability is managed top-down in companies and projects Portfolio managers have to take care for the sustainability of their projects (for example via the project management office)

Sustainability tasks in the projects of various sectors of the economy
The main question was if the sustainability tasks are specific to different kinds of projects. For each sector of the economy were described The primary projects The secondary projects The operational projects The engagement Starting from the experience of the workshop team, the following sectors of the economy were considered Airline industries Electrical generation and distribution ICT industries New building design and construction Vehicle design and manufacturing Retail and distribution Hotels

Sustainability in the Airline industry
Primary projects Reduce fuel usage (airplane design, engine design, fuel type, ……) Noise pollution (……………..) Air pollution Secondary projects Accommodation (front and back), Waste (reduce and recycle)

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Operational projects Route planning Speeds, heights Rosters Engine maintenance Extend life and usage Engagement Passenger involvement (luggage loads etc.) Travel to/from airport (public transportation?) Green credentials

Sustainability in Electric Power Generation and Distribution
Primary projects Mixed sources of energy, renewable, non-renewable Improve calorific transfer (burning) New technology research, development, prototypes, trials Economic sustainability Life cycle cost optimization Economic risk assessment Customer affordability Long time profitability Environmental sustainability Preferential usage of renewable resources Minimise energy consumption whether renewable or not Minimise usage of water, materials and land resources Minimise greenhouse gas emissions as well as water, air and noise pollution Minimise damages to landscape and biodiversity Optimise site selection

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Social sustainability Worker and neighbourhood health and safety Employment and training of local labour Community consultation Evaluation of social capital gain and social cost pay Fitness for local consumers Operational projects Economic efficiency improvement Compliance to legislation Benefit and problem driven rather than technology driven

Sustainability in ICT projects
Primary projects Green hardware (energy consumption, noise, space, heat) Mean time between failures Recycling Green production Child labour usage TCO Secondary projects Green software Disposal Installation BCP Data protection and safety Operational projects Re-engineering Quick start-up and close down Battery efficiency Power management

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Engagement Re-use of hardware? Change personnel attitude

Sustainability in Software projects
Primary projects Green software with power management, screen safe etc. Time to market (stop outdated projects) Fit for use (long term) Reuse of components Simulation of Software Secondary projects Green software Green supporting software BCP Resource saving investment Operational projects Power setting forced Engagement Re-use of Re-use of components? Change attitude of personnel

Sustainability in Infrastructure projects
Primary projects New transportation lines (capacity, travel time) with tunnels, cuttings, bridges New stations (mixed usage, interoperability, businesses Rolling stock (comfort, wagons, locomotives)

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Freight terminals Ecological impacts Secondary projects Real Estate development International compatibility EU regulations Software for communication etc. Operational projects Maintenance projects Recycling of materials and components Minimise infrastructure Click and ride Engagement Passenger information Staff involvement Information for the public

Conclusions
Project Manager and owner have choices - even within narrow economic framework Project manager can work at 3 pillars (social, environmental, economic) & ask questions & raise awareness Project managers & domain knowledge: help & hindrance Sustainability issues is very domain specific -> couldn‘t find commonality The project manager is expected to understand the project specific sustainability as a project deliverable.

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Details of Tom Taylor
Principal of dashdot Joint founder of Buro four Vice President of APM TTAYLOR@burofour.co.uk

Details of Rodney Turner
Professor J Rodney Turner Wildwood, Manor Close East Horsley Surrey, UK, KT24 6SA Tel: +44-1483-282 344 Fax: +44-1483-282 344 E-mail:rodneyturner@europrojex.co.uk

Portrait of Jesus Martinez Almela
Name Titel Date of birth Address : : : : Jesús Martínez-Almela Certified Projects Director Agricultural and Biosystems Engineer 1961, January 10th Plaza de Tetuan, 16 E-12001 Castellón Spain Principal Bioagroprojects Biotech Program & Portfolio Management PMO-Program Management Office Director Intercoop Foundation PMO-Program Management Office Director Corporacion Campos Electricas jma@bioagroprojects.com; jma@intercoop.es, jma.almela@camposelectricas.es

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In 1987, after a change in duties and a period of residence in the United States, returned to Spain and founded SELCO MC Advanced Engineering Services, with headquarters in Castellón (Spain) and offices in Italy, Portugal, Chile and the United States. In 2009 creates

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a new Company Bioagroprojects Biotech Programs & Portofolio Management and its integrates the services like PMO in Intercoop Foundation (Spain) and Corporacion Campos Electricas (Spain). Developer of 7 patents for the treatment and valorization of animal wastes in Spain, Italy and the United States.1987-present day: designed, managed and directed over 500 Projects and Programs in various sectors (environment, agriculture, food products and other manufacturing industries). Currently Project Director for 6 R+D projects in collaboration with various universities and research centres throughout Spain, Europe, Japan and the United States. Projects focus on the optimisation of stage separation, the development of new NDN systems, anaerobic digestion for fuel cells, and the gasification of animal by-products. 2005-present day: coordinates the LabGem Molecular Biology Laboratory in the Veterinary Medicine Faculty at the University of Murcia, which is dedicated to the development of new genetic markers in livestock breeding and other applied bioengineering projects. 1993-present day: author of more than 150 technical and scientific documents and co-author of 5 books, systems and models of cattle waste management, animal by-products treatment and valorization, and new processes for sustainable farming production and Projects and Programs Management. Jesus was a reviser of the ICB3 with Francisco Perez Polo and was the person in charge of adapting and to translate like NCB3 to the Spanish (2006). From 1999 certified in all the levels of the IPMA 4LC universal model of competences against the versions ICB1(D), ICB2(C, B) and ICB3 (A), from 2007 it is the first certificate in level A in Spain. Has lectured honours courses in the following universities: Polytechnic University of Valencia, Polytechnic University of Madrid, Polytechnic University of Zaragoza, School of Engineering University of Valladolid, Jaume I University of Castellón and the University of Burgos. Scientific Collaborator and Visiting Lecturer at the Department of Animal Production, University of Murcia Faculty for Veterinary Medicine and also in some Universities in Chile, Peru and Mexico. Chairman of AEIPRO OCDP (Organismo Certificador de la Dirección de Proyectos de la Asociación Española de Ingeniería de Proyectos – Spanish IPMA CB’ Certifying Body for the Spanish Association for Project Management Engineering). Board Member First VicePresident of the Spanish Association for Project Engineering (AEIPRO). Assesor for C, B and A levels in Spain and LACC. During her Presidency of the OCDP, Jesus adapt the ICRG3 as NCRG3 (2007) and it obtained the Accreditation of the OCDP against the ISO17024 and international procedures of the IAF (2009). IPMA Member on EU Task Force in the European Commission Brussels, and IPMA TAP/LACC Project Manager.

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Portrait John-Paris Pantouvakis and Antonios Panas
John-Paris Pantouvakis, M.Eng., M.Sc., PhD, is an Associate Professor of Construction Management, Director of the Department of Construction Engineering and Management, Director of the Laboratory for Project Management & Construction Equipment, Director of the Centre for Construction Innovation at the Faculty of Civil Engineering, National University of Athens. He is also an Adjunct Lecturer at Aristotle University of Thessaloniki and also cooperates with the Hellenic Open University where he teaches and coordinates a module on project organization and management. One of the leading advocates of professional project management in Greece, Professor Pantouvakis is Founder and President of the Network of Project Managers in Greece (PM-Greece), the National Member of the International Project Management Association (IPMA) and the International Cost Engineering Council (ICEC). His areas of specialization include project planning and control methods, construction information systems, construction cost estimating, and construction management processes and procedures. John-Paris has published nine books and many papers in international journals and conferences. He is also member of the editorial committee and reviewer in various international journals. He has also served as Chair in six international conferences on project management organized in Greece since 2001. Additional information is available at http://paris.pantouvakis.gr. Antonios Panas, M.Eng., M.Sc. is currently a Ph.D. student at the Centre for Construction Innovation, Department of Construction Engineering and Management, National Technical University of Athens. He is also the Quality Manager of the Centre for Construction Innovation. He has been IPMA Level D certified and also serves as the coordinator of the PM-Greece’s Young Crew. His research interests include construction productivity, operations analysis, simulation modeling and construction automation technologies. He has worked on various research projects and has published papers in international journals, conference proceedings, journals and professional magazines. Additional information is available at http://panas.view.gr.

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Portrait Rui Wagner Ribeiro Sedor
email: rui@sedor.com.br - Cell: +55-41-9972 8494 – skype: rui.sedor – twitter: RuiSedor Certified Project Executive and Consultant, CEO of Sedor Treinamento Profissional

Manager of complex and highly customized programs and projects in national and international scenario. Managed projects in more than 26 countries from Americas, Europe and Asia at Sedor Treinamento Profissional, Siemens and Nokia Siemens Networks. Program Manager in the planning phase of the Program Itaipu Binacional - Moving Forward Toward Regional Sustainability. Associate Professor at Getulio Vargas Foundation (FGV), Catholic University – Paraná (PUC-PR), Positivo University (UP), Paraná State University (UFPR), Paraná State Technological University (UTFPR) MBA at Positivo University (Brazil) and Lille University (France). BSCE at Paraná State Technological University (Brazil). Professional Work Experience: Consultant and Project Executive, CEO and Founder of Sedor, Treinamento Profissional. International Project Executive since 25 years working in Project Management Education, Portfolio Management, PMO, Project Management introduction, organizational transformation, and management of complex programs/projects at Sedor Treinamentos Profissional, and previously, at Siemens and Nokia Siemens Networks. Education: Master Degree in Management by Projects (Management per Projects) at Lille University (France) and Administration (MBA) at Positivo University (Brazil). Post-Graduation in Management by Projects at Getulio Vargas Foundation (FGV Management). Graduated in Electric Engineer at Parana Technological University; PMP Certified since 2002. Alumnus at Stanford University, USA (Stanford Advanced Project Management Certification Program). Member of Harvard Business School professor community.

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Portrait A.J. Gilbert Silvius, Jasper van den Brink and Adri Köhler
A.J.Gilbert Silvius (1963) is Professor of Business, IT and Innovation at Utrecht University of Applied Sciences. Gilbert has over 20 years experience as a consultant and project manager in the area of business and information technology (IT). He joined Utrecht University of Applied Sciences in 2003 and has since published on IT business value, Business IT Alignment and Project Management. Gilbert is initiator and program director of the Master of Project Management program at Utrecht University of Applied Sciences. The theme of the program is ‘Sustainability in Project Management’. Contact information: E mail: gilbert.silvius@hu.nl.

Jasper van den Brink is working as a researcher, trainer and coach at Utrecht University of Applied Sciences. He joined the university in 2008 after a career as a project manager. His research interest is the behavioural aspect of project management. He is integrating modern evidence based psychological methods and insights in project management practice. Jasper’s research is mainly focused on the application of scientific knowledge about positive psychology to questions regarding teamwork and leadership. He translates his research in this field in practical training for project managers. Jasper has published, both national and international, in project management and scientific magazines. He is involved in the Master of Project Management of Utrecht University of Applied Sciences. Contact information: E mail: jasper.vandenbrink@hu.nl.

Adri Köhler is senior consultant / project leader at Utrecht University of Applied Sciences. He has been involved in several projects and initiatives in the area of IT and business management. He is responsible for the management of the minor program on project management and was project leader of the development of the Master of Project Management program at Utrecht University of Applied Sciences. Recently he was appointed course director of this study. Adri’s research interests range from Sustainability in projects to Program & Portfolio Management. Contact information: E mail: adri.kohler@hu.nl.

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Portrait Gilman Chi Keung Tam
Gilman C. K. Tam is a PhD candidate at SKEMA Business School (Lille, France). He has gained extensive project and operation experience in electrical plant construction, commissioning, and maintenance within power station environment both in Hong Kong and China. He has also built a good track record in the development of coal-fired power plant and other energy saving projects in China. Gilman is a member of The Institution of Engineering and Technology (IET) in the U.K.; member of The American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE); and member of Project Management Institute (PMI) in the United States. He is a PMP (Project Management Professional from PMI) and PRINCE2 Practitioner (from APM Group, U.K.). He holds MSc degree with distinction in Energy from the Heriot-Watt University in the U.K. and MBA degree from the Newport University in the U.S. His major research interests include sustainability in project management and related competence.

Portrait Peter Taylor
Peter Taylor (PMP) is a dynamic and commercially astute professional who has achieved notable success in Project Management; currently as head of a PMO at Siemens PLM Software supplier of global product lifecycle management solutions. He is also very interested in maintaining a good work/life balance. His background is in project management across three major business areas over the last 25 years, MRP/ERP systems with various software houses and culminating in a role with KPMG, Business Intelligence with Cognos, and now within product lifecycle management (PLM) with Siemens. He has spent the last 6 years leading PMOs and developing project managers. He is also an accomplished communicator and leader and is a professional speaker, as well as the author of ‘The Lazy Project Manager’ www.thelazyprojectmanager.com You can also subscribe to his free project management podcasts on iTunes.

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Portrait Spyridon Tsallas
Spyridon Tsallas is an economist. His experience includes heading an international firm’s project portfolio management for complex public projects financed by EuropeAid, the EBRD, the World Bank, and USAID in 12 Central and Eastern Europe countries, and working for projects financed by European Commissions’ Directorates General EMPL, ENV, RTD and TREN on economic, employment, energy and environmental issues using industrial relations’ mediation and arbitration models, large-scale deterministic general equilibrium models and stochastic partial equilibrium models. Mr. Tsallas presents on several project management issues at expert seminars and conferences, publishes on project portfolio management and advises public and private institutions on project portfolio and change management. In the context of these appointments, he is heading the Certified Project Management Committee of the Secretariats General of Communication and Information of the Hellenic Republic and advises the Hellenic National Audiovisual Archive on project portfolio management.

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Survival and Sustainability – as Challenges for Projects
Proceedings of the IPMA Expert Seminar 2010 in Zurich

On 18th to 19th February 2010, spm (Swiss Project Management Association) organised an IPMA International Expert Seminar in Zurich. This event followed a tradition of the 1970’s and 1980’s, when an annual Expert Seminar on Project Management took place in Zurich. In February 2008, the revival with the theme "Values and ethics in Project Management" was successful. In February 2009 followed the Expert Seminar with the theme "Behavioural and Contextual Competences for Project Success". The IPMA Expert Seminar 2010 aimed at understanding 1 Role of the investor What is the role of the investor (project owner, sponsor, etc.) in a project, programme and portfolio? Can the project manager contribute to the viability and risk management of the project? When and how should a project be changed, suspended or deleted? 2 From expectations to results What are the results of the project in the short and long time (outputs, outcomes, impacts)? How can the project manager contribute to the elaboration of expectations, objectives and plans, and to achieving the project results in the short and long time? 3 Responsibility for sustainability What means sustainability (economic, financial, environmental, societal etc.) in projects? Who is responsible for which sustainable project results? How can these parties be engaged during the project life cycle, for achieving better project results after the project end? This IPMA International Expert Seminar made a contribution to understanding the survival and sustainability of projects, as well as the role of the investor, in a changing project context. Sustainability does not help, if the organisation does not survive. An organisation is not likely to survive, if it does not invest in projects that lead to good short and long time results.

ISBN xxxx

www.ipma.ch
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