The Management School, The University of Liverpool, UK
School of the Built Environment, Liverpool John Moores University, UK
Uchenna Ohaeri, PMP
The Management School, The University of Liverpool, UK
This research aims to understand the dimensions of sustainability in the oil and gas industry from a project management perspective within developing economies. This study sets the context and background and introduces a sustainability scoring index that has been derived from theory and had been piloted in a large oil and gas organization in Nigeria. Preliminary results are presented which highlight potential areas of improvement for achieving sustainability cohesion in a multi-stakeholder oil and gas supply chain in a developing economy. In answering its research questions through primary research, this study concludes that there are several enablers of sustainability within an organizational context. These enablers of sustainability comprise of organizational culture, knowledge transfer, management's commitment, experience of project managers, and the perceived success achieved through the implementation of sustainability. Likewise, this study also identifies that sustainable project management practices result in several project outcomes, such as easing future access to capital markets, high customer loyalty, supply chain improvements, development of capabilities, goodwill for organizations, positive employee morale and retention of knowledge workers, and reduced business risks, among others. It is concluded that there is a particular need to extend perspectives beyond the economic sustainability realm to include some key social and environmental targets, such as reducing unemployment, maximizing land use, maintaining biodiversity, managing wastage, fostering diversity, and enabling local community engagement. Aspects such as human capital development, dealing with environmental incidents, life cycle costing, supply chain improvement, health and safety, and water management is deemed satisfactory. The contribution of this research to theory and project management practice will be to further the understanding of sustainability impact across the whole supply chain in oil and gas projects in developing economies.
Keywords: sustainability; sustainable development; oil and gas supply chain
Over the last couple of decades, the concept of sustainability has gained widespread recognition and importance. There has been an increased pressure on business organizations to expand their performance criteria from economic performance for shareholders, to sustainability performance for all stakeholders (Visser, 2002). Indeed, Kennedy (2000) posits that strategies that solely focus on shareholder value are no longer viable. A growing change of mind set is needed, both in consumer behavior, as well as in corporate policies to answer “how can we develop prosperity without compromising the life of future generations?” (Silvius et al., 2012a, p.1). Over the past few years, business corporations have been looking for ways to integrate sustainability perspectives in their marketing, corporate communications, annual reports, and in their actions either proactively or reactively (Holliday, 2001). From an organizational viewpoint, sustainability implies “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” (Deloitte & Touche, 1992, p.3). The heightened stakeholders' expectations for organizations to embrace additional social responsibilities and improve their social performance has been reported by scholars (Ngai, Chau, Lo, & Fong Lei, 2013; Lindsey, 2011). In Ngai et al. (2013) it is acknowledged that a growing number of both customers and investors expect companies today to disclose their sustainability responsibility activities, for example their environmental protection efforts (Bayoud & Slaughter, 2012).
However, despite the growing academic interest, existing literature mainly focuses on the effect of corporate sustainability performance (CSP) and reporting and measurement of CSP (Wood, 2010) . In addition, most literature adopts a mono-organizational perspective of CSP, while the need for a multi-level, poly-perspective view of sustainability cohesion across project supply chains is only briefly mentioned. This paper seeks to understand the dimensions of sustainability beyond dyadic relationships while adopting a project management lens across the whole oil and gas supply chain in developing economies.
As expected, the professional bodies of project management have realized early on, the prominence that sustainability has in relation to projects (Gareis, Heumann, & Martinuzzi, 2009; Silvius, van der Brink, and Kohler, 2009). For instance, at the Project Management Institute's (PMI®) Global Congress 2008, Europe, Russell (2008) articulated extensively, the implications of Corporate Social Responsibility (CSR) for project managers. It was suggested that a project manager is in the frontline of new or changed activities within an organization and thereby is perfectly placed to impact and influence the organization's processes and operations towards more sustainability. In essence, the project manager role inherently demonstrates heightened responsibility (Russell, 2008). Similarly, the Association for Project Management (APM) states that “the planet earth is in a perilous position with a range of fundamental sustainability threats” and “project and program managers are significantly placed to make contributions to sustainable management practices” (APM, 2006, p. 1-7). Similarly, the International Project of Management Association (IPMA) stated that a key development in the project management profession is the responsibility for sustainability required from project managers (McKinlay, 2008).
Considering these positions, it is evident that project managers are prompted by professional bodies to broaden their role and to advance from 'doing things right' to 'doing the right things.' Project managers are required to take ownership of project outcomes, including the sustainability measures of projects. But exactly how the project manager is expected to do this is not clear from the statements of the professional project management bodies. There are subtle differences in the various statements of the professional bodies, but in essence, project managers are responsible for both sustainable project management as well as managing projects for sustainability. Sustainable project management or greening project management practices involves responsible use of resources, and managing projects for sustainability relates to use of projects to support future changes.
So, not only has the project managers' remit expanded to add these responsibilities in their mono-organization and their own practice, but also to ensure sustainability cohesion across the multi-level supply chain involved in the project. Many scholars highlight projects as temporary organizations which bring about some kind of change to business organizations, their products, services, policies, or assets (Lundin & Soderholm, 1995; Turner & Muller, 2003). Subsequently, it can be stated that a sustainable society necessitates sustainable projects. Although this connection between sustainability and project management was clearly established by the World Commission on Environment and Development (WCED) a couple of decades ago (WCED, 1987), the standards for project management are still inadequately addressing the sustainability agenda (Eid, 2009). Thus, the association between sustainability and project management is still considered an emerging field of study in business management (Gareis et al., 2009).
Numerous factors affect a project's success and performance. It is often difficult for managers to choose those that are most vital in improving the success of a project (Schieg, 2009). As the business environment is highly competitive and complicated, success factors for a project are likely to be relative to the industry the project is aimed at and the objectives that the individual project is trying to achieve. Efficiency, cost, and time management are all vital within a project or any business, and managers are always aiming to reduce the cost and time allocated to each project, while also aiming to increase efficiency, productivity, and turnover (Shrivastava & Berger, 2010). Of course, other factors affecting project success have been highlighted; such as the involvement and decision power of leaders and managers, the skills of employees, the organizational culture practiced during the project, the level of teamwork shown by the team, and many others (Eid, 2009). This may also, in turn, have an impact on the budget and time of the project, which has been widely highlighted under the agenda of project management. However, it is generally considered that projects which are completed within budget and on time are successful. For instance, according to PMI (2008), performance measurement baseline for projects is defined as “an approved integrated scope-schedule-cost plan for the project work against which project execution is compared to measure and manage performance” (p. 440). It is evident from this definition that project management performance metrics or success factors are tangible, measurable, and centered on the idea of scope, time, budget, and quality; which have been the traditional focus of practice and success factors. So, how does sustainability fit in? Reconciling the conflicts of project performance success and the contemporary social, economic, and environmental business concerns of sustainability (Talbot & Venkataraman, 2011) presents an interesting evolution of project management. Adding to this is an inherent complexity of multiple projects, high-level programs, and portfolios; so a need to strategically evaluate whether project management methodologies have sustainability embedded in them and down to the individual project levels is evident.
There is no doubt that there is an increasing awareness of sustainability principles and social pressures upon businesses, especially in the manufacturing industry. In response, many companies such as Zara, Toyota, Nike, and many others, have changed their production processes in order to embrace sustainability as a principle and thus, these companies have increased their credibility in the consumer market (Artiach, Lee, Nelson, & Walker, 2010). With the quest to improve the environment and ensure businesses implement environmentally- friendly processes, society is becoming highly conscious of businesses performing unethically and harming the environment. A relatively recent study by Silvius, Schipper, and Nedeski, (2012b) found that organizations are increasing their emphasis upon sustainability and clearly articulating this emphasis in 25.9% of their project specifications. While this does demonstrate a positive trend, it is alleged that businesses may not be implementing sustainability in their project specifications as adopting a socially responsible approach, but rather as a “less unethical” approach.
Four different, but interlinked objectives of this research are:
- To define and elaborate the concept of sustainability from economic, social, and environmental perspectives
- To determine the importance of sustainability as an emerging critical success factor in project management
- To discuss the benefits of adopting socially responsible business practices
- To discuss the importance of knowledge transfer in supply chains implementing sustainability principles
The main contribution of this paper is the development of a theoretical evaluation framework, using a formal methodology and empirical research to score sustainability readiness (maturity) of suppliers in oil and gas supply chain projects in developing economies. Our interest in developing economies is due to the fact that these countries appear to be slower in adopting sustainability approaches due to the high cost of conformity and low level of interest at the local level (Gulger & Shi, 2009); Lund-Thomsen & Nadri, 2010). This paper is organized as follows: First, a brief introduction of sustainability as a business performance measure and within projects is provided. Subsequently, the study aims and objectives are stated and the research methodology approach used is described. Thereafter, a discussion on the findings is included and the theoretical and practical contributions of the proposed framework for scoring sustainability are considered. Finally, the paper concludes with suggestions for future research.
Political science and business management theories alike highlighted concerns toward balancing economic growth and social wellbeing (Dyllick & Hockerts, 2002). The WCED (1987) defines sustainability as an all encapsulating development and performance approach from a social, environmental, and economic perspective. From an environmental perspective, Ekins (2012, p.637) defines sustainability as “the maintenance of important environmental functions, and hence the maintenance of the capacity of the capital stock to provide those functions.” In the project environment, sustainability is seen as the management of change in policies, assets, or organizations, ensuring that the social, environmental, and economic impacts of the project are addressed for current and future generations (Silvius, Schipper, Planko, van der Brink, & Kohler, 2012a).
Fueled by the WCED (1987) and similarly, by the 1992 Rio Earth Summit, there is a widespread acknowledgement that none of these goals (economic growth, social wellbeing, and a smart use of earth's natural resources), can be achieved without impacting, and hence, considering the other two (Keating, 1993). With the general acknowledgement of this phenomenon, sustainable development has become one of the most critical challenges of modern times. Elkington (1997) identified sustainability as the “triple bottom line” or “Triple-P (People, Planet, Profit)” concept: proposing balance or harmony among the economic, social, and environmental sustainability elements. Based on these aforementioned conceptions and standards, different researchers have identified diverse key elements, or principles for sustainability, summarized in Table 1.
Silvius, Shipper, Planko, van der Brink and Kohler (2012a) went further, and suggested one way of achieving sustainability through trading off the negative impacts of doing business for a rather lower profit. For example, a company can compensate for CO2 emission by planting new trees or compensate unhealthy work overload by higher wages. However, a better proactive approach toward sustainability would see how organizations create an accord of social, environmental, and economic aspects in their operations. This approach towards sustainable business is not about compensating for the bad outcomes, but about making a positive impact (Silvius & Schipper, 2010).
These broad sustainability principles help us understand that the concept of sustainability is not just a standalone phenomenon that can be pursued by companies to fulfill some sort of moral obligation; instead, the concept of sustainability has a wide scope that encapsulates the basic ethos of good business practices. For instance, having a long-term and global orientation, consuming only the income and not the capital, ensuring transparency and accountability, and obliging to personal values and ethics; all of these are elements of good business practices which are also necessary for sustainability. Hence, the principles of sustainability are naturally integrated with mature business strategy. Sustainable development has become embedded in the mainstream businesses strategies today; these businesses strive to make it the foundation and pillar on which their business decisions, annual reports, strategies, policies, and communication are formulated (Holliday, 2001).
The key impact of sustainability in the business environment is its potential as a catalyst for business growth, and making business principles transparent to both internal and external stakeholders; while drawing the company or organization closer to the people, environment, and ultimately, more profit, stock position, and returns.
According to a study by Goldman Sachs (2007, p.8), cited in Natural Capitalism (2012, p. 2):
Some studies have suggested a pragmatic approach on how the concept of sustainability can be incorporated into the management of projects (Labuschagne & Brent, 2006).
Sustainability in Projects and Project Management
Although sustainability has been long under discussion, it is only recently linked to projects and project management (Gareis et al., 2009; Silvius et al., 2009). Researchers have highlighted that projects can be viewed as temporary organizations bringing changes to products and services, business processes, policies, or assets (Lundin & Soderholm, 1995; Turner & Muller, 2003). So, from a strategic management perspective, projects are change catalysts that lead to improved organizational performance. It follows therefore, that a more sustainable society can be realized through projects to realize sustainable change (Gareis et al., 2009; Silvius et al., 2009) . This connection between sustainability and projects was established by the World Commission on Environment and Development in 1987 (WCED, 1987). However, Silvius and van der Brink (2012) critique that the temporary nature of projects challenge sustainable development (Table 2).
Researchers have linked the elements of sustainable development to project life cycle management in some of the earliest works on sustainable project management (Labuschagne & Brent, 2006). It has been suggested that the future orientation of sustainability involves considering the full life cycle of a project, from conception to closure and disposal. Expanding on the concept of project life cycles, Labuschagne and Brent (2006) concluded that it is not just the life cycle of the project that should be considered for sustainable project management, which is the total life cycle of the project (i.e. its planning-development-implementation-testing-launch); but also the deliverables that the project produces should be taken into account, as the project brings a permanent change in assets, systems, behavior, etc. Assets created by the project are considered over the entire life cycle (i.e. design-develop-manufacture-operate-decommission- disposal). Furthermore, the life cycle of the product or service to be produced by the asset should be taken into account.
The overall insight acquired from this work is that the incorporation of sustainability in projects should not be mono-dimensionally constrained to project management processes. A holistic view of the entire project supply chain should be taken into account, including the life cycle of the results the project creates, along with the life cycle of the resources utilized in creating the result.
The process of integrating the concepts of sustainability in project management is at its very early stages (Gareis et al., 2009). According to Silvius et al., (2012) a majority of the research on sustainable project management is mostly interpretive, which means that these researches attempt to interpret the concepts of sustainability in the context of project management and are less prescriptive (i.e. they do not prescribe how sustainability should be practically integrated into project management).
Previous efforts have been made with regard to the incorporation of sustainability into project management practice. For instance, the APM Chair proposed “A Sustainability Checklist for Managers of Projects” guideline including a list of proposed actions to be considered to integrate sustainability in projects (APM, 2006).
Despite the fact that this checklist does not have a systematic approach to the concepts of sustainability, it provided a foundation to the development of sustainability maturity models. Sustainability maturity models provide a way for translating the abstract and interpretive elements of sustainability to the daily tasks of a project manager. Silvius et al., (2012, p.904) defines maturity model as “a practical way to 'translate' complex concepts into organizational capabilities and to raise awareness for potential development.” They provide guidance for action plans and enable organizations to set a bench mark against which their progress can be assessed.
The sustainability maturity model developed by Silvius and Schipper (2012), illustrated in Figure 1, considers the concept of sustainability on different levels. The first sustainability level is the level of resources. It prescribes using alternate resources for projects that provide same functionality but with less adversarial impacts on society, environment, and economy. These actions are aimed to reduce less sustainable effects of business operations; however, they do not remove the causes of non-sustainability. The second level of sustainability is the level of business process in which these resources are consumed. It pertains to taking away the causes of non-sustainable effects of business processes instead of limiting or compensating them. The third level of sustainability deals with the way products and services are delivered (i.e. the business model) and how these delivery modes are made more sustainable. The fourth and final level takes into account not only the resources, business processes, and delivery modes, but also the actual products and services themselves. It deals with how products and services contribute to a more sustainable society (see Figure 1). The focus of this maturity model is to deal with the challenge of not just making “bad products” less bad, but to make them good.
The above sustainability maturity model can be adapted to produce a sustainable project management maturity model (SPMMM). The issues pertaining to sustainable project management within the social, environmental, and economic context can be elaborated at each of these maturity levels and used to assess the sustainability performance of project management.
This part of the literature helps us establish and understand the link between sustainability and project management. It clarifies that, as a catalyst of change within organizations, project managers are indeed at the forefront of driving ahead the sustainability agenda and applying its principles into the business processes and its deliverables. The concept of sustainability cannot be applied to a project in mere isolation, as sustainable development can only be achieved if the sustainable project management processes lead to the creation of sustainable assets (which in turn, produce sustainable results). This line of thinking broadens the fundamental scope of project management in that it encapsulates the entire life cycle of the projects, assets, and results and the entire supply chain of the organization. This necessitates an important element of knowledge transfer in achieving more sustainability since the current breed of project managers and business executives may not be well equipped or experienced to envision and implement sustainability from such a scope. This current study will measure the extent to which the business organization under study envisions and implements sustainability from such an angle.
Progressive business organizations have long realized the benefits of well-organized project management practices including “lower costs, greater efficiencies, improved customer and stakeholder satisfaction, and greater competitive advantage” (PMI, 2011). By infusing sustainability as a mandatory and measured part of project management, organizations define a structured way to achieve environmental, social, and economic benefits to the business.
According to Makower, “sustainability has become a component of business success, and project management is one of the ways to get there ... If it's going to be part of the way a company operates, it has to be integrated into the way projects are managed” (as cited in PMI, 2011, p. 1). Makower comments that the usual motivation of cost savings in projects impedes the application of sustainable practices and proposes that resisting the impulse of cutting corners in sustainability would produce concrete paybacks of a sustainability-driven organizational strategy. The work of Githens (as cited in PMI, 2011) supports this view. In his words “companies don't approach sustainability because it's nice to do, it's about making more money and identifying opportunities to do things better” (p. 1). He adds that in order to get the utmost benefit, sustainability should be recognized as an organizational goal by the top management and it should be applied through every project, program, and portfolio undertaken by a company. It is only then that sustainability reflects in the bottom line of a company (PMI, 2011) . Embedding sustainability goals into project management processes leads to greater market share and higher profits while adhering to the increasing demands of customers and governments to be more socially and environmentally responsible. According to Van Lennep (as cited in PMI, 2011), sustainability can only gain strong momentum in organizations if project managers and their teams define environmental and social targets in the same way as they define project scope, cost, and schedule goals. He adds that “the only way sustainability can be embedded in an organization is to make it the criteria against which all decisions are measured. It's not enough for a company to declare it will go green. Sustainability must be integrated into every aspect of project and program decision-making—from how materials are procured and risks are identified, to how oversight is conducted and milestones are reviewed” (as cited in PMI, 2011, p.1). The views of these practitioners indicate the critical need for sustainable project management. It implies that project management processes should have sustainability driven strategies wherein sustainability is considered as critical a factor as time, cost, and scope. Indeed, it should be the foremost criteria upon which all decisions should be made. This study will seek to measure the extent to which sustainability is considered critical in this context by project managers in developing economies.
Sustainable Project Management in Oil and Gas Supply Chains
The oil and gas industry is one of the largest industries in the world. The International Energy Agency estimates that in the next 25 years, an overall US$3 trillion globally worth of investment is likely to be made in this industry. Astonishingly, this large investment accounts for only 6% or lesser of the expected revenues during the next 25 years from this industry (McPherson & MacSearraigh, 2007). The gross oil and gas sales revenue are estimated to be US$1.5 trillion per year. Moreover, since the oil and gas commodities are sold multifold within a supply chain, the volume of worldwide oil and gas trade is even much bigger. Due to the large volume of oil and gas revenues, this industry is often directly linked to the economic and social wellbeing of nations.
The global demand for oil and gas continues to increase due to the rising population and income level in most of the developing countries. Due to the rising demand of oil and gas commodity, the control over oil and gas resources can be a concrete source of enrichment and a driver for development. However, the very reasons that make oil and gas such a high value industry also makes it prone to controversies, bad governance, corruption, and conflict. Many oil and gas-rich countries including Nigeria, Indonesia, Sudan, Liberia, and Bolivia, among many others, are obvious examples of this contention. It is further reflected through the fact that throughout the 20th century and most of the 21st century, most of the developing nations of the world rich in oil and gas were marred by high levels of economic and social impoverishment, as well as environmental degradation (Karl, 1997; Ross, 2001; Eifert, Gelb, & Tallroth, 2002). The dominance of foreign oil and gas companies operating in these regions are often viewed as part of these problems. The oil and gas supply chains in developing economies demonstrate diverse organizational actors from different backgrounds with diverging motivations and interests. In addition, the governance patterns of these supply chains are often inhibiting attainment of social sustainability goals. Thus, it is crucial that the oil and gas firms operating within developing regions of the world have sustainability-driven project management approaches to avert these problems.
A meta-view of the supply chain in the oil and gas industry is shown in Figure 2 below. There are owner companies, which own (hold concessions on) the oil/gas fields, produce investment plans, and fields to start production. Engineering contractors are service companies which specialize in designing process systems and other systems. Some specialize in project management. The other type of service companies are the construction contractors, who are specialized in the fabrications and construction of the systems and petrochemical plants. These companies usually take the projects as a lump sum contract. In order to produce oil and gas, the owners usually award projects to engineering companies and then award the project to construction companies. So, there are a number of potential scenarios: 1) Company (A) awards project to the companies, based on the nature of the project itself, either a construction nature or engineering nature (B & C), 2) Company (B) is conducting an engineering work either preliminary or detailed for owners (A), as well as for construction contractors (C), 3) Company C is a construction contractor, executing and constructing projects for owners (A).
The International Institute of Environment and Development (IIED) has identified several unique characteristics of the oil and gas industry supply chain (Wilson & Kuszewski, 2011) that make it more prone to unsustainable project management practices. Some of these are:
- Lack of a sense of shared responsibility
- Weak collaboration between oil and gas firms and subcontractors
- Lower visibility of contractors and subcontractors than operators
- Inadequate advance planning
- Insufficient attention to standards during procurement processes
- Failure of contracts to incentivize good environmental and social performance
- Highly dispersed contracting/supply chains
- Limited public engagement and reporting
- Limited understanding of local culture and practices
To add to this complexity, the oil and gas industry, a process supply chain industry, faces a further challenge according to Harland, Knight and Sutton (2001), in that it is characterized by minor suppliers having low influence in the supply network and a low degree of dynamics. It is indicative of the lack of sufficient in-depth, sector-focused study of process industry supply chains compared with depth of work undertaken within automotive, telecommunications, or electronics sectors.
As an indication, some of the companies in the Nigeria oil and gas industry supply chain include:
- Large local companies operating across the supply chain from exploration and production to refining and marketing
- Large, multinational companies mostly focusing on exploration and production
- Companies concentrating on exploring for new reserves
- Public companies which have an exploration arm that is active within the industry, such as Nigerian Petroleum Investment Company and the Nigerian Liquid Gas company
- Engineering contractors designing process systems
- Construction contractors, fabricating and constructing petrochemical plants
Considering these industry-specific issues in a developing economy, it is evident that there is a call for greater focus towards sustainability in project management to enhance transparency, comparability, and objectivity. From the extensive literature review, key themes were derived that have led to the following research questions:
RQ1- Is sustainability considered a critical success factor in project management in the contemporary business environment?
RQ2 - How does the implementation of sustainability affect the project outcome?
RQ3- How does sustainability affect a business's credibility and image of being socially responsible? Is this beneficial for the business?
RQ4- What is the importance of knowledge transfer in the implementation of sustainability?
RQ5- To what extent is sustainability considered a fourth constraint in project management besides time, cost, and scope?
Recognizing a research philosophy is important in order to devise a feasible research method as it is the underlying research philosophy which decides the manner in which information regarding a research question is collected, examined, and implemented. There are primarily three research philosophies, namely positivist, interpretivist, and realist (Galliers, 1991).
This current study adopts a realist research philosophy (Boyd, 2010) in that it aims to assess the extent to which sustainability is considered an important success factor in project management. This study collects data regarding the current practices of project managers and their approach towards project management to assess the prevalence of sustainable practices.
The study is devised as an exploratory research as it investigates the notion of sustainability in business today.
For this exploratory research, the researcher has options of selecting between quantitative and/or qualitative research methods. Positivism encourages the quantitative method because of its objective nature, while interpretivism promotes the qualitative method of data collection. As the research philosophy being utilized in this study is realism, it will use quantitative methods to collect data and answer its research questions.
Yin (1994) proposes five ways of gathering primary data including questionnaires, case studies, experimental, gathering of historical data as well as analyzing archives. Choosing one of them relies on the case and nature of study being conducted and what it handles. In this study, the survey strategy has being applied. Kelley, Clark, Brown, and Sitzia, (2003) suggest that “the survey strategy refers to the selection of a relatively large sample of people from a predetermined population, followed by the collection of data from those individuals. The researcher therefore uses information from a sample of individuals to make some inference about the wider population” (p. 261). In this study, a survey has been developed, reviewed, and distributed to a group of sample employees. Survey was selected as a data gathering strategy because it enables one to collect data from numerous employees in a short time span and with minimum efforts and costs. Additionally, the survey is quite easy to disperse, manage, and analyze, providing that it offers high degree of flexibility and reliability (Malhotra, Agarwal, & Peterson, 1996). By utilizing and administrating questionnaires rather than structured or semi-structured interviews, the reliability and validity of survey technique is improved significantly. This is because a questionnaire lists a standardized set of questions to be asked to all the participants and also addresses the poor recall of the surveyor. According to Conway, Jako, and Goodman (1995), the reliability and validity of questionnaires is twice as much as the unstructured interviews. Thus, a questionnaire was used to gather primary data.
To ensure survey validity, the questions were built around the well-established theoretical sustainability maturity model developed by Silvius and Schipper (2010), seen in Figure 1. Individual questions were developed to gather primary data pertaining to sustainable project management with social, environmental, and economic factors elaborated at each of the stated maturity levels.
The questionnaire was dispersed to the largest state-owned and project-based natural gas organization in Nigeria and their suppliers to survey opinions and practices of sustainability as a criterion for success in project management. The questionnaire was dispersed to approximately 40 project management practitioners in the organization and this sample size was adequate as a preliminary pilot for researcher convenience, access, and appropriateness in attaining sufficient information. The results of the questionnaire were used to validate the theoretical propositions of the literature review.
The sample included project managers, business analysts/program managers, and engineers, along with senior executives. The survey was both paper-based, but also was web-based as well. The survey results were analyzed using SPSS Statistics to determine frequency distribution and using regression analysis.
Findings and Analysis
The first section of the questionnaire collected demographic information such as age, qualifications, position, and project management experience from the respondents. The majority of the respondents are aged between 25-44 years, with more than 53% of the sample holding postgraduate degrees and with 34.4% having a bachelor's degree. It is straightforward to conclude that the project management profession attracts mostly qualified employees. Not surprisingly in the oil and gas industry, our sample consisted of 63% engineering project managers. The respondents had between 5-10 years of project management experience.
While collecting the perceived value of sustainability, and rating its importance in project management as expected, 26 of the 30 respondents agree or strongly agree that sustainability is an equally important success factor in project management as time, cost, and scope. This confirms the assertions of the literature that today, there is a widespread realization regarding the relevance of sustainability to project management and its importance as a critical success factor.
Interestingly, when respondents were questioned as to the existence of specifically articulated sustainability policies pertaining to several economic, environment, and social issues specific to Nigeria, it appears that (despite the general realization regarding the importance of sustainability in project management), there are some areas where the company does not have a rigorous plan to implement sustainability pragmatically. For instance, project management personnel were not aware of any specific policies for sustainable practices in land use change, land degradation due to oil and gas extraction operations, or biodiversity loss. Unemployment, corruption, and energy consumption were also issues to which the company lacked specific policies. The implication is that while this major oil and gas company in Nigeria was able to demonstrate sensitivity and awareness to some sustainability issues (such as ethical governance, health and safety, water pollution, and environmental incidents), it was unable to show the desired levels of sustainability maturity in all areas and to evidence (at policy level) formally articulated procedures.
Another pertinent finding suggests that project management experience is positively correlated with awareness of sustainability policies confirming that the more experienced project managers are able to evidence capabilities, skills, and willingness to drive sustainability into their projects.
This analysis answers the fourth research question regarding the extent to which sustainability is considered as the fourth constraint in project management; besides those of time, cost, and scope. The specific natural gas company in Nigeria does consider sustainability as a fourth constraint in project management. However, further analysis reveals that this commitment towards sustainable practices in project management is not equally dispersed in all the relevant sustainability areas. The responses for having environmental and social sustainability parameters to measure project success are almost similar to the first contention. However, when it comes to economical sustainability, the deviation is significantly reduced wherein a majority of the employees agree about the existence of success parameters. This reveals that, although there is a positive organizational culture recognizing the importance of sustainability, there exists an imbalance among elements of the triple bottom line (economic, social, and environmental sustainability). Economic sustainability clearly is at the forefront of the company targets. This is supported by the finding that there is a positive correlation between neutral responses for having environmental and social sustainability success parameters and the project management experience. So, in relation to theoretical propositions (those that assert sustainability can only be achieved if there are clear critical success criteria against which all decisions are made; and when project managers and their teams define environmental and social targets and policies in the same way as they define project scope, cost, and schedule goals), the company was found somewhat lacking.
Another interesting finding indicates that the company utilizes various communication means to convey sustainability policies to its project management personnel. Most of the respondents (90%) had been mentored and/or trained for sustainability practices and nearly half of the employees agree that they have attended a general staff meeting and/or received literature and/or emails regarding sustainable project management practices. The implication is that, overall, there is a positive and proactive organizational culture regarding sustainable project management practices.
A significant number of project managers (80-95%) believe that sustainability emphasis in projects significantly enhances operational performance and efficiency in the long term; improves recruitment and retention of talented employees; reduces business risks and improves safety; improves employee morale and productivity; advances future access to capital; improves the entire supply chain management; adds value for the stakeholders; and ensures loyalty from customers and stakeholders.
Thus, the findings of these responses answer the first research question that there is a strong positive relationship between sustainable project management practices and project outcomes.
It also confirms a strong positive relationship between sustainable project management practices and the overall positive image of a business, thus answering the second research question. However, no correlation between project management experience and the support for the positive impact of sustainability on project outcomes and business image is found (see Appendix A).
The significance of knowledge transfer in implementing sustainability in project management was also explored through the survey. The questions were grounded on theoretical findings that project management processes are lacking in terms of formally committing to a sustainable approach. The findings indicate that most practitioners surveyed (almost 90%) consider knowledge transfer (through internal or external expertise) as the key vehicle towards implementation of sustainability in project management. Mapping sustainable development onto project management processes and particular knowledge areas was overwhelmingly cited as the best strategy for introducing sustainability guidelines into all project management processes. This is quite conclusive in answering the third research question regarding the importance of knowledge transfer in the implementation of sustainability. The responses indicate that knowledge transfer (in terms of seeking internal or external expertise for implementing sustainability) is most effectively utilized in delivering social, environmental, and economic benefits (73% support this view), followed by increasing process efficiency (60% support this view). These two are followed by enhancing safety and reliability and reducing carbon emission. These findings reveal that despite the sweeping support for the importance of knowledge transfer in the implementation of sustainability (more than 90%), fewer people agree that this significance is translated into practice (73% agree that the company seeks expertise in delivering social, environmental, and economic benefits). This agreement is further reduced when the economic (process efficiency), social (safety and reliability), and environmental (carbon emission) issues are isolated. It adds to our findings for the third research question that despite a strong agreement regarding the importance of knowledge transfer in the implementation of sustainability, it is not equally reflected in practice.
Also in the survey, a number of questions focused on sustainable project management practices of the whole supply chain, specifically looking at aspects of: waste management; diversity and equal opportunities; human capital development; life-cycle costing; sustainable supply chain; enhancing social and cultural values; and taking responsibility for negative project outcomes (Table 3). All these questions affirmed the principles of sustainability defined in the literature review. For instance, the principle that sustainability encapsulates the entire supply chain beyond the dyadic aspect is tested in this survey to ascertain whether this assumption is accurate and also to look at the project processes across the entire life cycle. To ascertain sustainability and cohesion across the whole oil and gas supply chain, a scoring index was developed. The scale allots a numerical point to each type of response for these questions (1 point for the least favorable answer where there is no specific sustainability practice for a particular issue, up to 5 points for the best sustainability practice). The highest possible score for any question is 150. A higher sustainability score for any of these questions would indicate a higher extent to which sustainability is deemed critical in project management at the Nigerian Natural Gas supply chain and vice versa. The scores and responses are presented in Appendix C, with Table 3 showing an overview of the sustainability scores achieved by the study company.
Considering the highest possible sustainability score is 150, any score (which is less than 66% or 100 points) can be deemed as weak. Thus, out of these seven sustainability areas, the relevant supplier company needs to improve significantly in waste management, fostering diversity, and enhancing local social and civic capabilities. The average rating of the sustainability score for the case company is 99.4 out of 150, which is nearly three-fifths of the optimal level. This score can be interpreted in terms of maturity for sustainable project management. If we were to assign 30 points for each level of maturity (with the first level being 'no sustainability policy'), the case company stands nearly at the third maturity level for sustainable project management.
This paper set out to study sustainability in project management using a multi-level supply chain perspective and to present some preliminary findings on a pilot study used to develop a sustainability scoring framework across oil and gas supply chains in developing economies. The pilot study was undertaken in a large Nigerian oil and gas production company with a view to answer five research questions. An important contribution of this study is the focus on developing economies, as many of the existing studies on sustainability across supply chains focus on developed countries-where sustainability adoption challenges clearly differ (Muller & Kolk, 2009). In addition, this study adopts a novel differentiation when linking sustainability with project management by having two distinctive perspectives: one looking at practices involved in greening project management practices (through responsible use of resources), and the other looking at project management for sustainability.
This paper posits that the project manager role has expanded to include responsibilities of ensuring greening project management practices are adopted within their projects, programs, and portfolios, as well as managing their projects to ensure future sustainability. In an oil and gas supply chain, the project manager responsibility becomes even further convoluted in an effort to ensure sustainability cohesion across the multi-stakeholder set-up. This study concludes that implementation of sustainability positively affects the project management outcomes in terms of:
- Easing future access to capital in managing projects
- Improving customer loyalty
- Improving employee morale and productivity
- Supply chain improvements
- Development of capabilities
- Improving operational performance and efficiencies in the long term
- Adding value for the stakeholders
- Reducing business risks
- Improving recruitment and retention of talented employees
The findings reveal that implementation of sustainability positively impacts upon a business's credibility and image of being socially responsible.
The findings also indicate that within the context of developing countries, knowledge transfer (KT) is essential in increasing awareness and developing the competencies needed to ensure sustainable project management practices. Furthermore, this study also concludes that KT, organizational culture (as in management commitment towards sustainability practices and their approach toward communicating this commitment within the organization), and project managers' level of experience are all key enablers of sustainable project management practices.
Pertaining to the findings of the first three research questions, this study proposes a conceptual sustainable project management model (SPMM). Figure 3 identifies the enablers of sustainable project management and the outcomes achieved through sustainable project management practices.
As for the fourth research question, the study affirms theoretical findings that project managers at the case study company consider sustainability as equally important as the constraints of time, cost, and scope for the success of project management. This is particularly pertinent as we are proposing that within projects the ontological separation between current rigorous performance metrics and social sustainable manifestations encourages the continuation of “productivitism,” which is dominant within project management practice. Seeking to understand the social and environmental character of sustainability across a supply chain does not involve isolating a discreet stage within project management practice to undertake “social” or “environmental” activities. It is more about embedding project managers' awareness within their situated practices that involves skill and judgment.
This study provides a useful insight on project management in a developing economy and reveals the diverse socio-sustainable practices, aptitudes, and incentives evident in oil and gas supply chain projects. For example, project managers at the case study company demonstrated adequate regard for sustainability in some instances such as life cycle costing, human capital development, internalizing negatives outcomes of business operations, and sustainable supply chain management. However, they failed to embed their awareness of sustainability practices to develop policies for land use, fostering diversity, waste management and biodiversity, positively impacting social and cultural values of local communities, and addressing unemployment.
This research assesses the prevalence of sustainable project management practices in a particular industry (oil and gas extraction industry) and in a particular region (Western Africa). Therefore, the conclusions drawn from this research should be applied within this particular context as they may not stand valid for generalization.
Moreover, the questionnaire technique for data collection within the survey method may be prone to researcher bias as the wording of the questionnaire items can influence a response, which can limit the credibility of the conclusions drawn. However, by gathering numerous responses rather than relying on just a few, the validity and accuracy of the insights into the sustainability trends in project management is significantly increased. A major ethical risk of this study is ensuring that confidentiality is maintained while conducting the survey of the project- based company and ensuring that no information is dispersed openly, which may negatively affect reputation.
The authors would like to thank Mr. Solace Akade, PMP; Fellow, The Nigerian Society of Engineers (NSE); Head of Plant Projects, for facilitating and enabling access to the project leaders in the case-company organization.