Project Management Institute

The program management maturity model for mega construction

a case study of a transportation hub

Abstract

Managing multiple projects by means of a program can contribute to consolidated benefits and help to achieve organizational goals and objectives. Therefore, it is of significance to recognize program management as an integral part of management practice in the construction engineering and management industry. The aim of this paper is to develop a program management maturity model (PmM3) for construction organizations in China. The paper describes the development process of PmM3, including its theory foundation, its framework and its applications. In the case study, which focuses on the Shanghai Hongqiao Integrated Transportation Hub development, the weakest attributes were found to be scope management and environment management areas, followed by stakeholder management and program governance. All of these require further attention to improve the effectiveness and capabilities of program management. It is concluded that the proposed PmM3 is suitable and useful for construction organizations when assessing their program management maturity levels to find ways for improvement.

Introduction

Researchers and industry practitioners have long endeavored to find ways of measuring and improving performance in the construction industry (Willis, 2011). Despite the wide adoption of project management practices by construction organizations and the growing recognition of the importance of project management since the 1980s, project practitioners have difficulties in structured project management processes and continuous project success. To be precise, factors such as the failure to make scientific decisions early and the absence of a rational feasibility study or a complete and mature program management plan may lead to many problems and conflicts during construction, which may reduce their expected project performance or even lead to social problems (Jia et al., 2011).To tackle this problem, the project management maturity model (PmM3), an essential tool for assessing organizations’ current capabilities and improvements in a structured manner, has been widely recognized and utilized by project-oriented organizations across a wide range of areas all over the world. PmM3 helps organizations to gain a broader understanding of their management levels and implement changes.

Furthermore, as the size and complexity of projects continuously increase, there can be multiple projects and non-project activities within a larger construction environment, which makes the project management knowledge available to project managers less efficient. In the construction industry, we call these multiple projects mega-construction programs (MCPs). MCPs are usually public infrastructures and utilities primarily invested and regulated by government, involving many different stakeholders by market-driven forces, which have significant social impacts. These projects play such an essential role in development strategies of national economy that it is of great importance to ensure the success of MCPs. MCPs usually involve transportation, municipal engineering, telecommunications, and comprehensive affiliations. Nowadays, increasing numbers of MCPs have emerged in the construction industry along with the economic prosperity, such as the world islands of Dubai, the Shanghai Hongqiao Integrated Transportation Hub (SHITH), and the 2010 Shanghai Expo venues in China. Managing multiple projects by means of a program can be a solution contributing to consolidated benefits and helping to achieve organizational goals and objectives, which has been exemplified by the numerous programs all over the world. The program management model can provide a means of aligning, coordinating, and managing a portfolio of construction projects to deliver benefits that are unachievable for independently managed projects (Zayyana & Akintola, 2009). In addition, economic pressure and the dynamic nature of clients’ requirements have triggered a demand for adopting and implementing program management.

Despite the increasing consensus on the value of effective implementation of program management, there appears to be an absence of acceptable program management tools which help direct how to improve program capabilities. Furthermore, in the construction industry, organizations confuse program management with schedule management or computer programming (Pellegrinelli, 1997) and there remains a lack of awareness and understanding of program management practices in MCPs (Zayyana & Akintola, 2009). Drawing on the project management maturity model to establish program management maturity in an organization can be the starting point when embarking on a review of project and program management practices, which is especially important for construction organizations due to the high-risk nature of their business. Considering all situations above, this paper introduces a program management maturity model (PmM3) in the construction industry.

The remainder of this paper is structured as follows. Section 2 makes a review of existing models. Section 3 briefly introduces research aims and approach. Afterward, the framework and application of the program management maturity model is proposed in Section 4. Section 5 shows a case study and discusses the results of the evaluation. Finally, Section 6 offers some concluding remarks.

2 Literature review

Maturity models have been an active research topic since the first maturity model, the Capability Maturity Model for Software (CMM), was proposed by the Software Engineering Institute (SEI) at Carnegie Mellon University to assess the capabilities of software engineering in 1991 (Paulk et al., 1993). With its specific identification of software processes’ capabilities and maturity, CMM provided software organizations with guidance on gaining control of their software development and maintenance processes. Since then, numerous maturity models based on CMM have extended from software engineering to other research areas, such as business processes, logistics service, knowledge management, administrative management, risk management and others. One of the most focused research areas is the project management maturity model, which can be exemplified by the globally-recognized generic project management maturity models: the Project Management Process Maturity Model (Kwak & Ibbs, 2002); the Organizational Project Management Maturity Model (OPM3, 2003); and the Portfolio, Program, and Project Management Maturity Model (P3M3, 2006).

Based on the Project Management Maturity Model, program management started to be associated with a maturity model. Celar (2007) developed a PMO maturity model to address program management and portfolio management. Huang and Ou (2008) proposed an evaluation system of aeronautic enterprise management capability constructed from project management, program management, project portfolio management and management by projects, which has established a platform for continuous development of aeronautic enterprise. Benefield and Ieee (2010) found that maturity mapped to Agile program management practices appears to provide a powerful model for improving efficiency and alignment of cross-organizational engineering teams.

As a project-oriented industry, maturity modeling has begun to extend to the construction Industry. Chinowsky (2007) has proposed a maturity model that provides construction organizations with a framework for developing a learning organization culture. Zou and Chen (2010) developed a risk management maturity assessment model for construction organizations and concluded that it is necessary to provide more training on qualitative and quantitative risk analysis to construction personnel and to develop and apply standardized enterprise risk management. Jia and Chen (2012) presented a program management maturity integrated model for mega construction programs in China to assess organizational performance in a structured repeatable process.

The review of existing maturity models concludes that the maturity model can be adopted to assess and improve capabilities. These models commonly develop the management ability of one primary organization based on that organization's strategy. However, MCP management is project-oriented, involving many different stakeholders, and MCPs are usually of such great impact on the society and national economy that it should be determined, managed and coordinated on the higher level of government, rather than the market-driven forces. Until now, no existing model corresponds to MCP management or can be easily adapted to suit the construction industry.

3 Research aims and approach

The aim of this paper is to explain the concept of program management as an approach to manage MCPs and develop a PmM3 that can be used by construction organizations to assess their program management maturity level and develop strategies to improve their program management practice. This paper follows the research approach: the theories and models from the PMBOK© Guide (2008), The Standard for Program Management (2008), CIOB (2010), OPM3, and P3M3, provide the scientific foundation for our research. Based on the theories mentioned above and associated with the characteristics construction industry and MCPs, we present the new, innovative PmM3. Finally, to serve the purpose of this research, the case study approach was adopted for its potential to provide a rich understanding of the practice and value of program management in Chinese construction organizations.

4 Model development

In this paper, we subdivide the program management for MCPs as project management for projects and integrated program management for MCPs. Accordingly, we subdivide the PmM3 into 2 sub-models: the Project Management Maturity Model for projects (PtM3, Figure 1) and the Integrated Program Management Maturity Model for MCPs (IPmM3, Figure 2). The reasons for this are: First, compared with normal construction projects, MCPs have other characteristics: multi-functionality, colossal size and scope, high investment, and considerable uncertainty (Bruzelius, et al., 2002; Priemus, et al., 2008). Moreover, MCPs are primarily invested, regulated and coordinated by government and partially invested and managed by market-driven force. Based on our experience in consultation services for many MCPs, we categorize the primary participants of MCPs as the coordinating subject that manages an entire MCP on the macro level and address interests conflicts administratively to ensure the overall success of MCPs, and the other three participants that manage one or a few projects in an MCP on the micro level: investment subject, management subject, and production subject. In addition, MCPs have significant social impacts and consist of multiple projects or programs that are often much more complicated to manage than a single construction project, which means the respective success of each project is beneficial to but cannot guarantee the whole success for MCPs.

The purpose of the PtM3 is to help the primary participants for projects in MCPs improve their management abilities and the IPmM3 is used to evaluate the coordinating subject and make sure the whole MCP can be successful. The key components of the two proposed models include process management (Lifecycle Process Dimensions, Knowledge Area Dimensions and Process Improvement Cycle Dimensions) and organizational enablers which support the execution of process management.

4.1 Project Management Maturity Model for projects (PtM3)

4.1.1 Lifecycle process dimension

We divide a single construction project management process into eight stages. At each stage, the detailed management content is different for each subject. The range of activities in each stage is as follows:

  1. In the inception stage, the owner assesses the need for a construction project and makes decisions such as appointing a project manager or project management agency.
  2. In the feasibility stage, the management subject specifies the construction project's objectives and establishes the project execution plan.
  3. In the strategy stage, the owner, investor, general design contractor, and construction contractor establishes the project management organization.
  4. In the pre-construction stage, the owner or the investor finalizes the construction project brief, prepares the tender documents, and completes the tender process.
  5. In the construction stage, the management subject supervises and controls the project implementation, project scope, project schedule, project quality and safety, project cost, information collection and release, and project risk identification and response.
  6. In the engineering services commissioning stage, the management subject procures commissioning services, ensures that the engineering installation is correct and safe, and plans and executes the commissioning of the separate systems.
  7. The completion, handover and occupation stage entails reviewing the completion of the construction project and determining the occupation objectives and handover schedules.
  8. The post-completion review stage includes the project summary and post-completion evaluation, financial review and filing, and the construction project audit.

4.1.2 Knowledge area dimensions

Based on the PMBOK© Guide, 2008, we divide the construction project management tasks into nine knowledge areas:

  • Integration management entails the management organization's decision making regarding resource allocation, trade-offs among competing objectives and alternatives, and managing interdependencies among the knowledge areas;
  • Scope management defines whether a specific type of work is required and ultimately controls the construction project's scope;
  • Time management entails managing the timely completion of a construction project;
  • Quality management involves activities in which quality policies, objectives, and responsibilities are determined. Generally, the management organization uses a quality control system to complete this task;
  • Cost management involves estimating, budgeting, and controlling the project costs so that the project is completed within the approved budget;
  • Information management includes ensuring the timely and appropriate generation, collection, distribution, storage, and ultimate disposition of construction project information;
  • Procurement and contract management includes acquiring or purchasing goods and services from outside the project team as well as contract management;
  • Health, safety, and environment (HSE) management constitutes a unique knowledge area in construction projects. Construction activities are commonly outdoor activities and often greatly affect the environment and the health and safety of employees. The project's health and safety policies, objectives, and responsibilities must be determined;
  • Risk management includes establishing a framework or system to standardize construction project risk management. Construction project risk management should be reviewed and updated according to the circumstances of each stage of construction project management.

4.1.3 Process improvement cycle dimensions

The continuous improvement cycle has been a systematic and rigorous part of the maturity model since PMI introduced the OPM3. Our paper adheres to the OPM3 model, and its dimensions contain the following aspects: (1) Standardize: The project management team develops the standardized project management process, which benefits the implementation of project management; (2) Measure: The project management team quantitatively analyzes the project management performance and introduces measurement standards; (3) Control: The project management team establishes project management process control mechanisms for the stable implementation of project management; and (4) Continuously improve: The project management team successfully solves existing problems and identifies efficient methods to achieve continuous improvement.

4.2.4 Organizational enablers (OEs)

Organizational management abilities are required for program management and indicate the organization's enablers in the maturity model. Based on our engineering practices, MCPs’ organizational management abilities can be classified into four categories: decision-making and command; target management; benchmarking; and acquisition and allocation of resources. In this case, the OEs for the PtM3 and the IPmM3 are derived from the requirements of organizational management ability. These OEs, which exist in harmony with the OPM3, are entirely general and can be specifically divided:

  • Strategic vision and organizational structure requires the organization to possess the ability to identify the MCP‘s strategic vision and design the appropriate organizational structures.
  • Practice method and knowledge management requires the organization to adopt efficient management techniques and valuable methods to promote management practices. Furthermore, the organization should accumulate those methods and conduct knowledge management for future application.
  • Management metrics and benchmarking requires the organization to form a clear understanding of the actions to take given potential future and present circumstances.
  • Competency training and resource allocation requires the organization to gain resources, such as financial support, human resources, land resources as well as the ability to distribute these resources.
The 3D PtM3 structure

Figure 1 – The 3D PtM3 structure

4.2 Integrated Program Management Maturity Model for MCPs (IPmM3)

4.2.1 Lifecycle process dimensions

Although CIOB (2010) divides the construction project management process into eight lifecycle stages, we find it to be too detailed for a program. In accordance with PMBOK and the characteristics of MCPs, the lifecycle process should be divided into the following five stages:

  1. During pre-MCP preparation, the program management subject should make scientific decisions ahead of time, including those related the business justification and defining the program objectives.
  2. During MCP initiation, reinforcing the feasibility study, which includes demonstrating and analyzing the economic, technical, and environmental aspects of MCPs, is an important target.
  3. During MCP setup, the program management should establish an appointed and executable program management plan for the MCP, which is the basis of delivering the MCP‘s benefits. For example, during this process, the program management plan is developed.
  4. In delivery of MCP benefits, construction should be brought into accordance with capital construction procedures by initiating projects and coordinating all subjects to ensure that the component deliverables meet their requirements.
  5. MCP closure includes a post-evaluation, transferring real assets, completing all component work and beginning a trial operation phase.

4.2.2 Knowledge area dimensions

Other than the former nine knowledge areas (section 4.2.2), the IPmM3 includes two more items: stakeholder management and program governance. MCPs involve more stakeholders than single projects. First, diversifying investment subjects and financing channels increases the number of stakeholders. Moreover, MCPs affect related organizations and relocated residents during the construction process. Finally, MCPs have related benefits and social influences after completion. Project governance involves a set of relationships among a project's sponsor, its owner, and other stakeholders. Project governance provides a structure to establish the objectives of the project and to attain those objectives and monitor performance (Turner, 2006). Considering the characteristics of MCPs, achieving MCP goals by relying solely on optimizing project management methodology appears difficult.

 

The 3D IPmM3 structure

Figure 2 – The 3D IPmM3 structure

4.2.3 Process improvement cycle dimensions

The continuous improvement cycle has been a systematic and rigorous part of the maturity model since PMI introduced the OPM3. Our paper adheres to the OPM3 model, and its dimensions contain the following aspects: Standardize: The project management team develops the standardized project management process, which benefits the implementation of project management. Measure: The project management team quantitatively analyzes the project management performance and introduces measurement standards. Control: The project management team establishes project management process control mechanisms for the stable implementation of project management. Continuously improve: The project management team successfully solves existing problems and identifies efficient methods to achieve continuous improvement.

4.2.4 OEs

Organizational enablers (OEs) is more important for MCPs than normal projects, because it always takes at least a few years to finally accomplish the MCPs, during which time collaborative organizational culture can facilitate the program management process. In this paper, we consider the organizational enablers (OEs) to be similar between the PtM3 and the PmM3, which is described in section 5.1.4.

4.3 Model application

The primary evaluation processes are as follows: (1) Establish the evaluation team. (2) Select interviewees. (3) Prepare study materials and application training. This process involves designing a maturity questionnaire and sending the maturity model introduction, maturity questionnaire (Table 1) and any related documents addressing the principles and evaluation process to interviewees. (4) Complete the maturity questionnaire. Each question on the maturity questionnaire can be answered with the use of a five-point rating scale (0-4) ranging from “strongly disagree (0)” to “strongly agree (4)”. (5) Analyze the results.

Each question on the maturity questionnaire is assigned a score ranging from zero to four, and the assessment results were obtained using averaging statistical methods. We used the earned score (ES) to represent the sum of all the scores that the interviewees provided for each question and the total score (TS) to present the total maximum score for all these questions.

No. Knowledge area Level Lifecycle process Best practice Question Score  
1 Time management Standardize MCP
Setup
Organization has established the standardized programs schedule Has the organization established the standardized programs schedule? 0□ 1□ 2□ 3□ 4□   
2 Measure MCP
Setup
Organization has made the process of establishing the programs schedule measurable Has the organization made the process of establishing the programs schedule measurable? 0□ 1□ 2□ 3□ 4□   

Table 1 – Maturity questionnaire question examples

5 Case Study: Application in the SHITH Development Program

5.1 Program overview

The case we have chosen for this study is the SHITH in Shanghai, China. The SHITH is a major urban infrastructure project that integrates aviation, intercity rail, a high-speed railway, rail transit, long-distance passenger transport, city public transportation, and other transportation. The SHITH consists of the Hongqiao airport expansion projects, traffic center projects, and comprehensive affiliation projects. In addition to the sophisticated structure of the involved programs, the program's organizational structure is complex. Many investment subjects are involved in the SHITH. The Shanghai Rainbow Investment Corporation (SRIC), established by the government at the beginning of the program, is the primary investment company. The other investment subjects include the Metro Company, Maglev Company, Shanghai Airport Authority (SAA), and railway departments. To coordinate all the investment subjects and combine all the aspects of SHITH management, the government established the SHITH Construction Headquarters as the coordinating subject. The Shanghai Municipal Engineering Design Institute (SMEDI) is responsible for all SHITH design management. The East China Architecture Design and Research Institute (ECADI) undertake the design management of the traffic center. The Shanghai Construction Group (SCG) undertakes the construction management of the traffic center. Regarding the management subject, the SHITH program management is commissioned to the Shanghai Airport (SA) Construction Headquarters, which is primarily responsible for the airport expansion projects and the traffic center, and the Shanghai Construction Engineering Administration Co., Ltd. (SCEA), which manages the comprehensive affiliation. Figure 3 depicts part of the organizational structure of the SHITH program management.

Organizational structure of SHITH program management

Figure 3 – Organizational structure of SHITH program management

5.2 Evaluation process

We selected SRIC and SHITH Construction Headquarters as the assessment object. This evaluation occurred after the SHITH construction had begun. Our research team and primary SHITH project managers constituted the evaluation team. We chose 15 interviewees from SRIC and the SHITH Construction Headquarters. These interviewees were the leaders of all the departments in SRIC and the SHITH Construction Headquarters who are familiar with the comprehensive information on program implementation. Their departments include the Investment and Development Department, the Asset Management Department, the Planning and Finance Department, and the Construction Management Department.

According to construction project management standards and our experience with MCP management, we identified 29 primary management works for the SHITH Construction Headquarters and 26 primary management works associated with SRIC project management. Combining the primary task with the maturity levels (standardize, measure, control and continuously improve (SMCI)), we identified 116 (4 × 29) best practices for the SHITH Construction Headquarters and 104 (4×26) best practices for SRIC project management. On our maturity questionnaire, we proposed 116 and 104 questions for the SHITH Construction Headquarters and SRIC project management, respectively. In this case, the maturity questionnaire is completed in the form of a one-on-one interview to increase the depth of the interview and obtain more real information.

5.3 Evaluation results

The “—”symbol used in both Table 2 and Table 3 indicates that SRIC or the SHITH Construction Headquarters does not undertake this type of work. As shown in these two tables, some knowledge areas differ from those associated with the PtM3 and the IPmM3, because the knowledge area has been adjusted slightly to conform to the practice. Table 2 and Table 3 provide the distributions of the knowledge area management maturity score for SRIC project management and the SHITH Construction Headquarters. Specifically, the rows provide the maturity scores for the SMCI in every knowledge area, and the far right-hand column is the “Total” column, which presents the average of the SMCI maturity score. The total maturity scores for each maturity level can also be obtained using all the knowledge area management maturity scores after they are given various weights. Different organizations may assign unequal weights to the same knowledge area. Our research team also used the PtM3 to evaluate other stakeholders, and the project management maturity distribution tables for them have been omitted from this paper.

  SMCI
Knowledge area
(management type)
Standardize Measure Control Continuously improve Total
Integration 81% 81% 81% 88% 83%
Scope
Time
Quality and safety
Investment 100% 88% 100% 100% 97%
Information 63% 50% 75% 75% 66%
Procurement 38% 38% 25% 38% 35%
Risk 38% 25% 38% 50% 38%
Environment

Table 2 – SRIC project management maturity distribution table

  SMCI
Knowledge area
(management type)
Standardize Measure Control Continuously
improve
Total
Integration 67% 63% 67% 83% 70%
Scope 50% 38% 38% 75% 50%
Time 100% 75% 75% 100% 88%
Quality and safety 75% 75% 75% 100% 81%
Investment
Information
Procurement
Stakeholder 50% 38% 75% 88% 63%
Program governance 50% 38% 75% 88% 63%
Risk 75% 63% 63% 88% 72%
Environment 63% 38% 38% 75% 54%

Table 3 − SHITH Construction Headquarters program management maturity distribution table

5.4 Results analysis

Tables 2 and 3 indicate that the “Control” level and the “Continuously Improve” level are high, whereas the “Measure” level is low, which contrasts with the principle of the maturity model. This result is due to the strong willingness of the project/program management subjects in China to control and improve MCPs’ project/program management processes; they regard “controlling” and “improving” as important project/program management work. However, the management subjects are sometimes short-sighted regarding the control and improvement of management processes and pay little attention to the “Measure” process.

As shown in Table 2, SRIC exhibits high project management maturity in the areas of integration management and investment management, while the maturity of its procurement management and risk management is low. This result demonstrates that SRIC lacks project management abilities regarding procurement management and risk management. Table 3 demonstrates that the SHITH Construction Headquarters exhibits higher program management maturity regarding time management and quality and safety management than the other knowledge areas; its maturity in the scope management, stakeholder management, program governance, and environment management areas is relatively low. This is because the government invests in MCPs and always imposes high demands on construction headquarters in the areas of time target, quality, and safety.

Regarding scope management, stakeholder management, and program governance, the construction headquarters appears powerless, not performing well because of its complex structure, management interfaces of MCPs, and lack of management experience. Regarding environmental management, the environmental problem is a long-term chronic illness within China's construction industry; this issue has not been resolved because environmental protection awareness is weak, and construction technologies are not well-developed.

In general, the results are consistent with reality in China. Therefore, the model established in this paper is feasible in practice. Furthermore, in addition to the organization management maturity level, the assessment results reflect the knowledge areas in which MCPs’ management maturity is slightly weak. Thus, these results can guide further improvement in organization management capability levels (we call this process the “improvement path”).

6 Conclusions and future work

Based on the concept of MCPs, this paper applied the maturity model in relation to construction project management, developed a systematic theoretical framework for managing MCPs and established the PmM3for MCP management from micro and macro levels. To an extent, the assessment results for all the knowledge areas reflect the reality of MCP management in this case study. Based on the research findings, the PmM3 developed in this paper is practical and useful for assessing construction management organizations’ capabilities. This work continues our research regarding project management maturity model.

In conclusion, we introduce the concept of the program management maturity model in construction industry and develop anPmM3 that integrates project with program management issues relevant to MCPs. This work can also contribute to the scientific community identifying topic areas where research is lacking, such as improvement paths and strategies for construction organizations’ program management capability level.

Acknowledgments

This research is supported by the National Natural Science Foundation of China (project No.70472062) and PMI, with many thanks for the hard work contributed by Di Yin, Jianguo Chen and Patrick X.W.Zou.

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This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

© 2013, GuangsheJia
Originally published as a part of 2013 PMI Global Congress Proceedings, New Orleans, Louisiana

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