PROFESSIONAL ETHICS AND CULTURE OF LIVING AND WORKING IN A PROJECT ENVIRONMENT

Nishan Weerarathne

108528N

Degree of Master of Science

Department of Building Economics University of Moratuwa Sri Lanka

May 2012

PROFESSIONAL ETHICS AND CULTURE OF LIVING AND WORKING IN A PROJECT ENVIRONMENT

Nishan Weerarathne

108528N

Set Paper submitted in partial fulfilment of the requirements for the degree Master of Science

Department of Building Economics University of Moratuwa Sri Lanka

May 2012

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ABSTRACT
For any country the project management has been a vital part for its development. Currently, the concept of success in projects is being widely discussed and because of that Project Managers are in a pressure which leads unethical behaviours. And also ethics is very important in gaining the support of project team which is paramount in achieving the success of specified project. This paper discusses the importance of practicing the professional ethics for a project manager. This study also focuses on examining the moderating effect of organizational culture. The culture of the construction industry at the project level is often associated with such attributes as fragmentation, antagonism, mistrust, poor communication, shortterm mentality. These will badly affect project performance. This paper discusses how a good organizational culture overcome those shortcomings and leads the project towards its goals.

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ACKNOWLEDGEMENT
I must thank to many people who helped and supported me while engaging in this report. I extend my heartfelt thank to all the Project Directors of the National Water Supply & Drainage Board for their comments given to my field survey. Lastly, I offer my best regards and sincere appreciation to all of those who supported me in any respect during the completion of the research.

Nishan Weerarathne

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TABLE OF CONTENTS

Abstract ........................................................................................................................ ii Acknowledgement....................................................................................................... iii Table of Contents ........................................................................................................ iv List of Abbreviations.................................................................................................... v 1. Summary .................................................................................................................. 6 2. Introduction .............................................................................................................. 6 3. Why Professional Ethics are Important for Project Managers? ............................... 7 3.1 Project Management........................................................................................... 7 3.2 Project Manager ................................................................................................. 7 3.3 Ethics .................................................................................................................. 8 3.4 Professionalism and Ethics ................................................................................ 8 3.5 Importance of Professional Ethics to the Project Managers .............................. 9 4. How Culture of Living and Working Affect the Project Performance? ................ 11 4.1 Organizational Culture ..................................................................................... 11 4.2 Performance ..................................................................................................... 11 4.3 Culture and Performance.................................................................................. 12 4.4 How Culture of Living and Working Affects the Project Performance? ......... 12 References .................................................................................................................. 15

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LIST OF ABBREVIATIONS

Abbreviation

Description

APM PM PMI PMP

Association for Project Management Project Management Project Management Institute Project Management Professional

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1. SUMMARY
Working in a tremendous pressure environment is not an easy task. Project Managers have to handle the pressure of the client to be within the budget and to complete the project in time, the pressure of the consultant to main the required quality and as well as the pressure of the political and the pressure of the society. There are certain laws that should be taken into the account while managing a project. But still the project managers are following certain ethics in addition to all the mentioned above. In return they will complete a project in time, within budget to the required quality. Professional ethics plays a vital role of project management and move the project towards success. Projects are always suffering from certain problems such as poor communication, poor relationship between superiors and subordinates, misunderstandings, mistrust. A good organizational culture will erase those conflicts and increase the performance of the project. The paper discusses how the professional ethics becomes important to the project managers. The paper also focuses the affect of the living and working culture to the project performance.

2. INTRODUCTION
Management is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively. Management comprises planning, organizing, staffing, leading or directing, and controlling an organization (a group of one or more people or entities) or effort for the purpose of accomplishing a goal.

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3. WHY PROFESSIONAL ETHICS ARE IMPORTANT FOR PROJECT MANAGERS?

3.1 Project Management Project management is the process by which projects are defined, planned, monitored, controlled and delivered such that the agreed benefits are realised. Projects are unique, transient endeavours undertaken to achieve a desired outcome. Projects bring about change and project management is recognised as the most efficient way of managing such change (APM, Project Management, 2012). Breakdown Structures Earned Value Analysis, Resource Allocation Structures, Value Analysis and Integrated Logistics Support are new theories and tools emerged during the 1980s with a view to achieving greater integration and owner-level focus in construction projects. In addition, the concepts of Lean Production, Total Quality Management (TQM), Partnering and Teamwork were developed. Risk Management became a distinct Project Management discipline; and the so-called Fourth Generation Computing enabled cost schedule planning and other computer-based techniques to become increasingly effective for Project Management (Mishra, Dangayach, & Mittal, 2011). It is understandable that the Project Management becoming easier with the use of these tools and techniques arise with the development of the field.

3.2 Project Manager Project Manager is the individual responsible and accountable for the successful delivery of the project (APM, Project Manager, 2012). Project Managers are facing vital range of challenges in modern society. It is a panic to the Project Managers to face the challenges and at the same time move towards their project goals in time, within the budget and to the predefined quality.

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3.3 Ethics Ethics is a moral code, the inner voice that tells a person what is right or wrong. Ethics can come from religion, from the law, from internal values, from learned values, from public opinion or from any number of sources. Ethics are important because they allow society to continue to function, helping people to interact and live their daily lives in a functional way. They are important because they can govern a person's code of behaviour and prevent moral wrongs from occurring. Although it is easy to see why ethics are important, it is also easy to see problems. The major problem stems from determining what is ethical or what is morally right. In many ways ethics can be even more important than the law, since the law will only deter a person from bad behaviour if he fears penalty, while a person with a strong code of ethics will do the right thing just because it is the right thing. Business organizations often develop several different policies, rules and guidelines for governing their operations. The code of ethics policy usually sets the minimum standards for business owners, managers and employees to follow when completing various business functions.

3.4 Professionalism and Ethics Professionalism and ethics both relate to proper conduct. Professionalism is demonstrable awareness and application of qualities and competencies covering knowledge, appropriate skills and behaviours. Ethics covers the conduct and moral principles recognised as appropriate within the project management profession (APM, Professionalism and ethics, 2012). In todays business climate, acting and behaving ethically is more important than ever. Project professionals face unique challenges as they navigate political and

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social dynamics both inside and outside their organizations. It may not always be clear how you should act when faced with an ethical dilemma (PMI, 2011).

3.5 Importance of Professional Ethics to the Project Managers The entire economy is run on at least a basic level of trust. It is trusted trust that the money will be accepted. It is trusted that public corporations will have oversight and comply with the law. The stock market indicates the level of trust that investors have in the economy. When news is good, the stock market usually goes up. When the news is bad, the stock market usually goes down. Customer trust companies to provide the goods and services contracted and paid for. Companies trust customers to pay on time. Likewise, vendor trust companies to pay them on time and companies trust the vendor to deliver on time. Many times in the middle of these affairs will be a Project Manager. Projects are critical to the success of any organization. They are the activities that result in new or changed products, services, environments, processes and organizations (Harold, 2001). Ethics are important in project management for the same reason they are important in everything. The person who has the ability to assess cause and effect down to the ask level from an ethical standpoint is what separates a great project manager from a good project manager. Ethics are the cornerstone of any endeavour be it personal life or company policies. Without ethics, structures would eventually crumble. Selfishness is the root of ethical dysfunction. Hence, the service of an unethical professional lacks sincerity and his success would not endure. Ethical behaviour is absolutely important in project management, as with any human endeavour, because its pursuit makes better and more effective as leaders, employees and team-mates. If ethics in project management is the highest ideal, then learning how to prevent unethical behaviour in project manager (first) and the workplace (second) takes a sober look at the risks inherent in human behaviour that would lead to unethical behaviour.

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It is believed that the credibility and reputation of the project management profession is shaped by the collective conduct of individual practitioners. An ethical Project Manager is a successful Project Manager. The Project Management Institute (PMI) has established a Professional Code of Ethics that all Project Management Professionals (PMP) must adhere to. These ethics are meant to ensure that all Project Management Professionals abide by a set of values, and they live up to those values in pursuit of their careers (PMI, 2011). One of the potential benefits of codes is the uniformity they offer in providing clear standards or clear decision support systems where there are conflicting interests and values (Summers, 1996). As stated in the PMI Code of conduct, the most important ethical behaviour, a project manager must accept responsibility for his or her actions. This means admitting to all the stakeholders when Project Manager is wrong, learning from the mistakes, and putting actions into place that will help to avoid making the same mistake twice. There is evidence that consumers are becoming increasing concerned about social issues, and the impact of corporations on people and the environment, and that these concerns are manifesting themselves in buying and investment decisions, thus directly influencing a corporations bottom line (Mishra, Dangayach, & Mittal, 2011). Since concerning about social, environmental issues are directly incorporate with the ethics of a professional; the importance of the professional ethics is confirmed for the Project Management Profession. The project manager should make sure to complete the project while keeping the ethical standards and social impacts in mind. Project Managers are the selectors of the projects as well. As key agents of the selection process, selectors partake in the discretionary power to make it possible for projects to happen. They have the power to affect the use of resources, to orient peoples activities, and to shape the future. This power implies a corresponding

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responsibility (Corvellec & Macheridis, 2010). This responsibility is not simply legal and economic; it is also ethical because they are the decision makers of the process.

4. HOW CULTURE OF LIVING AND WORKING AFFECT THE PROJECT PERFORMANCE?

It is a truism that two organisations using the same project management practices and structures will have different levels of success with them. Clearly, theres a lot more to project success than project management (Ankrah, 2007). Organizational Culture is among the top of the list as one of the key elements that affect the success of a project. Organizational Culture is considered to be an important factor that influences the performance of an organization, and the relationships between the performance and Organizational Culture have often been analyzed in the past decades.

4.1 Organizational Culture Organizational Culture is the attitudes and values that inform those involved in an organization (APM, Project Culture, 2012). Culture in the organizational context can be described as the collective behaviours or styles of people, their attitude towards various constituents of business such as customers, co-workers, shareholders and so on and so forth and the common values that they share among themselves, which in fact acts like a binding force between them.

4.2 Performance Performance can be considered as an evaluation of how well individuals, groups of individuals or organisations have done in pursuit of a specific objective (Ankrah & Proverbs, 2005).

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4.3 Culture and Performance It has long been recognised that organisational culture plays a significant role in performance outcomes (Ankrah N. A., 2007). Corporate the world over agree that culture and performance are intricately interwoven and yet the relationship is so complicated and not so obvious for executives to decisively act on this important aspect of business. Culture and performance have mutually reciprocating relationship. If strong culture helps building high performance company, the past performance and successes shape influence people behaviours which with time become part of the culture.

4.4 How Culture of Living and Working Affects the Project Performance? There is a common belief that the culture of the construction industry is one of the factors that has an impact on its performance (Kim, 2006). Culture enables people to see the goal alignment and motivates them to higher levels of performance, as shared values make people feel good about the organization and commit their capability and potential sincerely for the company. Defining variables and quantifying relationships can give us a sense for which organisational culture variables are the most significant determinants of project success. Working conditions, such as dress codes and hours spent in the office, are both part of a company's culture. When these expectations become clear and acceptable to employees, confidence and certainty are the result, and management can more likely optimize performance. Of course, executive teams consider these motivations prior to introducing new personnel as they look for employees who are most likely to adapt to a corporate culture. One is actually observing the culture of an organization, when he or she is using words such as hardworking, friendly, professional, ethical etc. to describe the general behaviour of the people. The culture decisively influences the priorities set by the organization, as it is the underlying value system in the organization that emphasizes

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things like customer focus, innovation, cost reduction, strong alliances, empowerment and control in response to the various business stimuli. Strong culture acts like intrinsic motivator. Empowerment, decisiveness, learning attitude, and team working are some of the attributes of strong organizational culture. Culture at this level is the real driver for superior performance and a definite source of competitive advantage that is very difficult for competitors to emulate. Many Project Managers tried to copy anothers management practices but none could do it with the same effectiveness. The reason is Project Managers could copy the management systems in place but not the underlying cultural strength rooted deep in the business philosophy of the management. Eventually strong culture tends a project to be a success. The experience of the Project Managers, Project Directors and other superiors in the management hierarchy suggests disagreement with regard to the nature of the relationship between organizational culture and project performance. The strong performance perspective suggests that project success drives changes to the organizational culture and also strong organizational culture drives project success. So the culture of the organization is changing with the experience gained by the project team and the management team. Organizational culture establishes the way things are done in an organization. Typically those strategies that have worked in the past are repeated. Successes are celebrated in the myths and stories of the organization reinforcing their apparent correctness. In this way organizational culture can drive project performance by ensuring that successful strategies are repeated. Those repeating strategies become the part of the organizational culture with the time. Organizational culture can also be a barrier to change when environmental factors require new strategies. In some instances, previous strategies are no longer relevant, or even harmful. Organizational culture would drive members to continue doing things in the same old ways, rather than encouraging members to adapt new behaviours. That could affect a project badly.

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It's possible for an organizational culture to directly impact the bottom line, or profits, at the project. If the overall tone of a corporation is to reduce expenses, for instance, this should have a direct impact on the way that employees treat different scenarios. It could lead to decisions that avoid travel and attending conferences, for instance, but it could inspire creative ideas for ways to collaborate with other professionals in other locations. Management needs to communicate with the staff in order for the culture to be thoroughly understood. Through meetings, electronic mail, or conference calls, executives relay the project goals, which could be financial or service related. The culture of the organization must be conducive to promoting creativity, encouraging productivity on the part of those involved with the organization, and provide logical and reasonable policies and procedures to aid people in achieving the stated project or personal goals. At the same time, unless the efforts of those involved are generating the desired results, the organizational culture will of necessity have to change, either to adjust to new realities or in an effort to provide increased incentive to work toward those stated goals. To achieve optimal project performance and organization has to focus both on the organizational culture, and the technical systems that define the way work is done. It should be optimized why the work is done in a certain way (organizational culture) and how the work is done (technical systems).

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REFERENCES

Ankrah, N. A. (2007). An Investigation into the Impact of Culture on Construction Project Performance. Ankrah, N. A., & Proverbs, D. (2005). A framework for measuring construction project performance: overcoming key challenges of performance measurement. Proceedings of the 21st Annual ARCOM Conference. London: ARCOM. APM. (2012). Professionalism and ethics. Retrieved 5 10, 2012, from Association for Project Management: http://www.apm.org.uk/content/professionalism-and-ethics0 APM. (2012). Project Culture. Retrieved 5 10, 2012, from Association for Project Management: http://www.apm.org.uk/content/culture APM. (2012). Project Management. Retrieved 5 10, 2012, from Association for Project Management: http://www.apm.org.uk/content/project-management APM. (2012). Project Manager. Retrieved 5 10, 2012, from Association for Project Management: http://www.apm.org.uk/content/project-manager Belassi, W., Kondra, A. Z., & Tukel, O. I. (2007, 12 4). New product development projects: The effects of organizational culture. Project Management Journal , pp. 1224. Corvellec, H., & Macheridis, N. (2010). The moral responsibility of project selectors. International Journal on Project Management , pp. 212219. Harold, K. (2001). Strategic Planning for Project Management using a Project Management Maturity Model. New York: John Wiley & Sons, Inc. IESL. Code of Ethics for Engineers. Kim, J. (2006). The Effect of Organizational Culture on New Product Development Management. Proceedings of the 11th Annual Conference of Asia Pacific Decision

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Sciences Institute (pp. 226-229). Hong Kong: Asia Pacific Decision Sciences Institute. Mishra, P., Dangayach, G. S., & Mittal, M. L. (2011). An Ethical approach towards sustainable project Success. Procedia - Social and Behavioral Sciences (25), pp. 338 - 344. PMI. (2011). Code of Ethics and Professional Conduct. Project Management Institute. Summers, C. (1996). Realities of decision-making and social issues: Implecation for developing and implementing ethics guidelines. The Science of the Total Environment , pp. 17-23.

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