A STUDY OF FACTORS INFLUENCING QUALITY PERFORMANCE OF MECHANICAL AND ELECTRICAL (M&E) CONSTRUCTION PROJECTS IN VIETNAM

by Do Ke Chi

A research study submitted in partial fulfillment of the requirements for the degree of Master of Business Administration

Examination Committee:

Dr. Do Ba Khang (Chairman) Prof. Himangshu Paul Dr. Fredric William Swierczek

Nationality: Previous Degree:

Vietnamese Bachelor of Engineering Kiev Polytechnic Institute Kiev, Ukraine The Government of Switzerland

Scholarship Donor:

Asian Institute of Technology School of Management Bangkok, Thailand April, 1999

ACKNOWLEDGEMENT

I would like to express my deepest gratitude to my research advisor, Dr. Do Ba Khang for his intensive support, valuable suggestions, guidance and encouragement during the course of my study. My sincere thanks are also due to Prof. Himangshu Paul and Dr. Fredric William Swierczek for their valuable time as the members of the examination committee. Their constructive suggestions were of great help for completing this study. I would like to express my sincere gratitude to all of my teachers at SOM-AIT and SAV program for their teaching and guidance during my course. I would like to express my deep appreciation to The Government of Switzerland for providing financial support for my study at AIT I would like to specially express my thanks to all of my friends at SOM for their support and encouragement.

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ABSTRACT

Quality of Mechanical and Electrical (M&E) construction works are one of the major concerns of Vietnamese contractors as the construction industry grows. This research aims to identify and validate the factors affecting projects quality performance and their relative contribution. Attempts were made to suggest practical recommendations from M&E contractor viewpoint. This study involved participation of key M&E professionals, who provided objective information and their perception about various aspects of project quality and its influencing factors. Multivariate statistical techniques-factor analysis and canonical correlation analysisare employed to account simultaneously for the multi-attribute nature of the projects quality performance and for the multitude of managerial factors. Among the identified factors, those found to be mostly affecting the quality performance, by order of importance, are: 1) Authority requirement and standard used in the projects; 2) Internal quality assurance system; 3) Project teams technical competence and communication among team members and 4) Parent organization reputation and past experience. Improvement in the aspects of activities specified in these factors make it possible to improve construction quality in Vietnam.

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TABLE OF CONTENT

Chapter

Title

Page

TITLE PAGE i ACKNOWLEDGEMENT..............................................................................................ii ABSTRACT..................................................................................................................iii TABLE OF CONTENT.................................................................................................iv LIST OF FIGURES.......................................................................................................vi Chapter 1 INTRODUCTION.......................................................................................................................1
1.1 Objectives of the Research..............................................................................................................................1 1.1.1 General objectives....................................................................................................................................1 1.1.2 Specific objectives ................................................................................................................................2 1.2 Scope and Limitations of the Research...........................................................................................................2 1.3 Organisation of the Research..........................................................................................................................2

Chapter 2 OVERVIEW ON CONSTRUCTION INDUSTRY IN VIETNAM............................................4

2.1 Construction Industry and Foreign Direct Investment...................................................................................4 2.2 Vietnamese Contractors and Construction Quality .......................................................................................6

Chapter 3 CONSTRUCTION PROJECT ACTIVITIES AND M&E WORK.............................................8

3.1 Mechanical and Electrical (M&E) Construction Work..................................................................................8 3.2 Relevance of this research.............................................................................................................................10 3.2.1 Different systems of standards for M&E work......................................................................................10 3.2.2 Development of local M&E contractors and their concerns for quality................................................11 3.2.3 M&E project performance and management issues. ................................................................11

Chapter 4 LITERATURE REVIEW..........................................................................................................13

4.1 Project quality performance..........................................................................................................................13 4.2 Critical success/failure factors in projects....................................................................................................15 4.3 Determining factors of construction project success....................................................................................18

Chapter 5 RESEARCH METHODOLOGY...............................................................................................22

5.1 Research framework......................................................................................................................................22 5.2 Term definitions and measures.....................................................................................................................22 5.2.1 Quality performance .............................................................................................................................22 5.2.2 Choice of success variables and measures.............................................................................................24

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5.3 Sample and procedure...................................................................................................................................28 5.4 Questionnaire design and pilot study............................................................................................................28 5.4.1 Questionnaire design..............................................................................................................................28 5.4.2 Pilot study..............................................................................................................................................28 5.5 Data analysis procedure...............................................................................................................................29 5.5.1 Basic concepts of Factor Analysis (FA) and Canonical Correlation Analysis (CCA)..........................30

Chapter 6 FINDINGS AND DISCUSSION...............................................................................................32

6.1 General statistics...........................................................................................................................................32 6.2 Sample descriptive statistics and preliminary analysis.................................................................................33 6.3 Data Reduction by FA...................................................................................................................................36 6.3.1 Data examining and assumptions in factor analysis..............................................................................36 6.3.2 Factor extraction....................................................................................................................................36 6.4 Data analysis with CCA................................................................................................................................40 6.4.1 Canonical model, assumption and data examining................................................................................40 6.4.2 Deriving the canonical functions and assess overall fit.........................................................................42 6.4.3 Interpreting the results...........................................................................................................................43

Chapter 7 CONCLUSIONS AND RECOMMENDATIONS....................................................................49

7.1 Conclusions...................................................................................................................................................49 7.2 Recommendations..........................................................................................................................................50

REFERENCE................................................................................................................52 APPENDIX...................................................................................................................55

LIST OF FIGURES
Figure 2.1. Foreign investment the construction industry in period 1989 -1998 ($US million).........................................................................................................................................4 Figure 5.2 Project quality and influencing factors...................................................23 Figure 6.3 Projects classification by value (a) and completion schedule (b).................35

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LIST OF TABLES
Table 2.1 Foreign investment the construction industry by countries and territories .....5 Table 4.2 List of critical success factors developed in the literature.............................16 Table 6.3 Means and standard deviations of the variables .........................................33

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Chapter 1 INTRODUCTION

The construction industry of Vietnam has contributed a great part to the national economic development during the last decade. Vietnam is in a state of transition from a centrally planned-command economy to a market-oriented economy. But, the country is in need of extensive rehabilitation and upgrading of its transportation, communications and utility systems. In addition, Vietnam certainly needs an appropriate system of social infrastructure, including housing, healthcare, and education facilities. Most of the construction projects with foreign investment capital have been designed and built by foreign firms but the actual subcontracting work have been performed by Vietnamese contractors. Local competitors are numerous, but are facing long-term difficulties concerning insufficient capital, technology and equipment, marketing and management expertise. Rivals from other countries like Japan, South Korea, Australia and France have solid positions in the Vietnamese market owing to their early arrival in the market, their technical and managerial excellence, and more importantly their home country contribution to the inflows of ODA and Foreign Direct Investment into the country. In the modern construction market, quality management is a major management function in a construction organization. Mechanical and electrical (M&E) works are an integral part of a construction project and their quality performance has been greatly affecting the overall project quality. The local M&E contractors face problems with different systems of standards being used and the shortcomings of project management skills. The quality of M&E projects therefore is one of major concerns for managers working in this field. Like many developing countries, Vietnam has been relying completely on the methods and techniques concerning quality that were initiated and developed from outside. These quality systems may not be well adapted to suit the economic, political, social and technological environment of Vietnam. Thus, determining the M&E construction industrys viewpoint on the factors that would improve construction quality performance is an essential step toward establishing methods for real improvement of construction quality in Vietnam. Understanding the main factors affecting quality of M&E projects will help M&E companies improve quality of their work and increase overall competitiveness.

1.1
1.1.1

Objectives of the Research

General objectives

The main objective of this research study is to identify and validate the major factors, which mostly affect the quality performance of M&E works and the relative importance of these factors in construction projects. The factors being identified would help to improve quality and the effectiveness of project management in M&E projects.

1.1.2

Specific objectives

The following research objectives are to be completed: Review of the construction development and FDI construction in Vietnam to have an overall picture about the industry Overview of a construction project and its activities; define the role of M&E work in construction projects and relevance of this research. Determining project quality performance, critical success factors definition and measures in projects and particularly for construction projects through extensive literature review Define the project quality and its measures, factors affecting project quality and their measures. Determining major factors and their relative importance by analyzing data from survey questionnaires. Derive practical implications of obtained results.

1.2

Scope and Limitations of the Research

This research focuses on the operational quality of M&E project management team and from the prospective of M&E contractors during the construction and maintenance phases of construction projects. The survey is conducted among project managers or project engineers of major M&E companies in Ho Chi Minh City but the projects mentioned in the responses may be from other provinces as well. Due to time and resources constraints, the limitations of this research are: Surveyed projects are limited to FDI or with projects with element of foreign funding. Relatively small list of variables might not account for all effects upon performance. M&E projects have specific features therefore the research results might not be applicable for other types of project. Local socio-economical conditions and technological level limit the expandability of the model to other countries. Performance success has to be considered together with cost and time in an overall context for project success assessment since they are inter-related.

1.3

Organisation of the Research

This research is organized into seven chapters as outlined below: 2

Chapter 1: Introduction This chapter explains the rationale, objectives, scope and limitation of the study Chapter 2: Overview of the Construction Industry in Vietnam Based on secondary data, this chapter presents an overview of construction industry in Vietnam and FDI construction, the need to bring international construction standards to Vietnam Chapter 3: Project Activities and M&E Work. This chapter gives description of typical activities and role, characteristics of M&E work in a construction project. The relevance of this research is also explained in details. Chapter 4: Literature Review This chapter presents a literature review of project quality definitions and measures, ways to assess critical success factors of a project in general and a construction project, in particular. Chapter 5: Research Methodology Based on literature review, a method will be developed to assess the factors that influence the quality performance of M&E construction projects. Basic concepts of statistical tools to be used are also explained in this chapter. Chapter 6: Findings of the Study This chapter presents the findings based on the results of a survey conducted in Ho Chi Minh City. Statistical analysis is applied to show the relative importance of various factors on project quality performance. Chapter 7: Conclusions and Recommendations Based on the findings, this chapter will present some conclusions and recommendations thought to be of importance to M&E project management tasks.

Chapter 2 OVERVIEW ON CONSTRUCTION INDUSTRY IN VIETNAM

2.1

Construction Industry and Foreign Direct Investment

Since the open door policy began in Vietnam in 1987, the flux of foreign investment has helped development of various sectors of Vietnam economy. According to the statistics from the Ministry of Planning and Investment (MPI), there have been 54 countries and territories investing in Vietnam with a total investment capital of US$ 35.4 billion, of which, 1,775 projects still remain active valued at US$ 32.2 billion. Figure 2.1 presents the capital investments by foreign investors in the construction sector alone.

4000 3500 3000

3775

Value in million $US

2500 2000 1500 1000 500 0 2.165 1989 16.334 1991 42.323 1993 1995 1996 1997 518.629 73.859 7/1/1998 930.212

Year

Figure 2.1. Foreign investment the construction industry in period 1989 -1998 ($US million) [Source: Ministry of Planning and Investment (1998)]

Table 2.1 shows the ten nations making the largest investment (in term of total investment capital) in the construction industry as the following: Table 2.1 Foreign investment the construction industry by countries and territories
Rank by total capital 1 2 3 4 5 6 7 8 9 10 11 Total Country/Territory Number of projects 22 8 15 14 2 11 10 14 5 7 43 151 Percentage (%) 14.57 5.30 9.93 9.27 1.32 7.28 6.62 9.27 3.31 4.64 28.48 100 Total capital (in million USD) 2,462.66 1,039.64 938.01 438.24 352.50 279.94 265.13 176.00 124.51 72.79 171.86 6,321.28 Percentage (%) 38.96 16.45 14.84 6.93 5.58 4.43 4.19 2.78 1.97 1.15 2.72 100

Singapore British Virgin Islands Taiwan Japan Switzerland South Korea Thailand Hong Kong France Malaysia Other countries

[Source: Ministry of Planning and Investment (1998)] According to Ministry of Construction summary report, Foreign Direct Investment (FDI) in the field of construction represents only a small part of total FDI capital as per MPI classification. However, FDI capital has cast a great impact on local construction industry development. Experiences by project administrators show that a large segment of FDI capital goes to construction activities (about 40-50%), including expenses for communications and public works constructions. The FDI in the construction industry has boosted the capabilities of Vietnamese constructors and consulting services, suppliers and contractors. The construction industry in Vietnam was booming during the period from 1990 to 1996, resulting in projects being completed for the next two years (1997-1998). However, the recent Asian financial crisis has brought the entire commercial construction industry to a virtual halt although through Official Development Assistance (ODA), infrastructure projects are

continuing. The total market size of the construction industry for 1997 was US$ 1.1 billion 1, which is expected to grow at a rate of 12.5% in the next three years. The market can be segmented into five market segments, which include residential buildings, commercial buildings, building conservation and maintenance, civil engineering, and industrial engineering. Ho Chi Minh City and Hanoi are the two locations that have attracted the most foreign investment in due to their strategic locality, relatively favorable investment climate, developed infrastructure and availability of skilled workers. Out of 151 FDI construction projects being approved until July 1, 1998, Hanoi accounted for 27 projects with total capital of 2,456.27 million $US and Ho Chi Minh City 45 projects totaled 1,696.56 million $US.

2.2

Vietnamese Contractors and Construction Quality

In the recent past, the construction industry in Vietnam was dominated by state-owned construction companies belonging to ministries such as Ministries of Construction, of Transport & Communications, of Industry, of Agricultural & Development, of Trade, and of Defense, etc. The main advantages of state-owned contractors are their scale, experience, access to bank finance, knowledge and contacts with public clients, an extremely important source of construction orders. Their disadvantages lay in the poor management, marketing activities, bureaucratic practices and procedures, under-utilized labor force, outdated equipment, limited know-how of construction technology, and lack of experience in contract tendering. Most large private construction companies have been established over the past five or six years, having annual turnover ranging from US$0.5 to 5 million. Construction work developed by these companies is widely distributed over many provinces, if not the whole country. In addition to difficulty in financing, insufficient equipment and technology is becoming a problem for this sector. Additionally, there is a general lack of management expertise. There is a need to improve management skills for the private and public local firms, both at the company and the site levels. Some construction companies have made great improvements but they are mainly big corporations in Hanoi and Ho Chi Minh City such as Song Da Construction Company, Hanoi Construction Company, Construction Company No 1(COFICO), Vietnam Construction Import and Export Corporation (VINACONEX) etc. But as reported by Thien Huong (1998), only 1520% of the 419 consulting companies doing construction survey, design and planning have a system for quality assurance and quality control (QA/QC). None of the local construction companies can meet the requirements of ISO 9000 certificate of quality control. Vietnamese construction technology is still far behind the world, acknowledged Nguyen Hong Quan, Deputy Minister of Construction [Source: Hai Nam, 1998].

Industry Sector Analysis: Vietnam-Architectural/Construction/Eng. US. Foreign Commercial Service and US Department of State Report, 1998.

The quality of construction projects can only be assured if the local standards are upgraded to international level. Yates J.K. and Aniftos S. (1997) showed the benefits that increasing cooperation with the international standard setting community would lead to as the following: Increase the efficiency of developing, adopting and maintaining international standards. Influence the standards that recognize the need for the local construction industry. Provide strategies for local construction companies to remain competitive or increase their competitiveness in the regional and global engineering and construction arena. Provide a service to assist in the more efficient delivery of international construction projects. Reduce barriers that cause conflicts, or misunderstanding on international projects

Recognizing the need to match Vietnams rapid development of construction industry with appropriate technical standards, the Ministry of Construction has consistently worked with the infrastructure committee of the American Chamber of Commerce on issue of construction management. The focus of this cooperation has been the areas of quality assurance and quality control (QA/QC) and several conferences have been hold in this direction. The purpose of these conferences were to discuss the idea of why construction industry should operate with a uniform standard system and introduce technical manuals from American Society of Testing and Material (ASTM). In another effort, French experts have been working with Electricity of Vietnam (EVN) for introduction and translation of recommendations from International Electrotechnical Commission (IEC) which is the international standards and conformity assessment body for all fields of electrotechnology. With Vietnams intention to join APEC and WTO, a uniform system of standards for construction industry is vital since they also represent the core of the World Trade Organizations Agreement on Technical Barriers to Trade (TBT), whose 100-plus central government members explicitly recognize that international standards play a critical role in improving industrial efficiency and developing world trade.

Chapter 3 CONSTRUCTION PROJECT ACTIVITIES AND M&E WORK

A typical construction project consists of various activities that are performed by different contractors. Mechanical and Electrical (M&E) work are an integral part of a construction project and normally carried out by separate contractors - M&E contractors- besides civil work. The major types of work of a construction project are: Earthwork. The major areas are site work, building excavation, backfilling and other related earthwork activities. Concrete construction. The main concrete-related items involve formwork, reinforcing steel, concrete (cast-in-place and precast), finishing, curing and protection. Masonry. Masonry includes a variety of relatively small building units assembled to form a larger building part such as walls. Elements of masonry consist of brick, block, mortar and accessories. Metals. These items include structural steel framing, plates and rods, connections, joints and miscellaneous items. Carpentry. Carpentry involves floor, ceiling, roof and wall framing, interior and exterior finish carpentry items. Specialties and furnishing. Included in this category are specialty items such as bathroom accessories, displays, lockers; architectural equipment such as appliances, kitchen equipment; furnishing like cabinets, seating, tables and special construction such as swimming pool, gardening, etc. Mechanical and plumbing. Mechanical work commonly known as heating, ventilating and air-conditioning (HVAC) services for a building project. Plumbing is the installation of all piping required to supply fresh water and remove wastewater from the building. Special piping systems for gas, steam may also required. Sometimes plumbing is covered under mechanical work. Electrical. Electrical work includes such items as conduits, wires, circuit breakers, lighting fixtures, transformers, telephones, telecommunications, computer networking and other special electrical systems.

3.1

Mechanical and Electrical (M&E) Construction Work

Detailed scope of M&E work is the following: 8

Mechanical: to install and commissioning the following systems: Basic mechanical materials and installation methods. Mechanical insulation. Pipe and fittings: brass, copper, steel pipes and accessories, valves, drains. Plumbing fixtures: baths, fountains, lavatories, various types of pumps etc. Fire protection system: auto-fire suppression system, fire pumps, fire extinguishers, and sprinkler systems. Heating: boiler, heat exchangers, solar energy, fans etc. Air conditioning and ventilating: cooling towers, fancoil units, duct work, ventilators, and water chillers. HVAC control systems.

Electrical: to install and commissioning the following systems Basic electrical materials and installation methods. Raceways: cable tray, conduits, underfloor duct, and electrical trench. Conductors and wiring devices: wire, cable, control cable, high voltage power cable, pull boxes, outlet boxes, cabinets. Protection and distribution systems: circuit breakers, control stations, panel boards, switchboards etc. Transformer and generator systems: transformer, generator set, uninterrupted power system (UPS). Lighting systems: interior lighting systems, exit lights, exterior fixtures. Special systems: telephone system, public address system, closed-circuit TV (CCTV) and detection system, sound system, computer and communication system.

There are overlapping areas like fire alarm systems where they can be either belong to mechanical or electrical scope of work according to initial contract. The M&E works major characteristics are: M&E works contract value varies in a wide range depending on type of contract. According to Asian Pacific Construction Costs Handbook (1994), M&E work accounted 9

for 5-15% total value of a construction project. However, with the more popular use of Building Automation System (BAS), which controls all the building functions from a central command computer, the M&E cost inclines to rise. In term of safety for buildings tenants, M&E work, especially electrical, have to follow many rigorous requirements laid down by authority to ensure the highest possible safety standards. The quality of a construction project after entering service is usually judged by the quality of M&E work. A survey has been performed of 400 office building tenants to assess building and management performance of a variety of functions ( Penz and Beard, 1988). The top five most satisfied functions were: 1) electric power needs; 2) building management responsiveness; 3) express mail pick-up/delivery; 4) office lighting level; and 5) courier service. Also in that survey, the five worst management, operation or design problems were identified as: 1) heating, ventilating and air-conditioning; 2) elevators; 3) building design; 4) loading docks and 5) indoor air quality. It is obvious that improvement in quality performance of M&E work will lead to more customer satisfaction. In the process of construction, M&E contractors normally have a constrained set of feasible tasks, which are highly dependent on the performance of other contractors. Therefore they have to be well coordinated with other contractors to ensure the smooth flow of construction tasks and successful completion of the project.

3.2
3.2.1

Relevance of this research

Different systems of standards for M&E work

Since the local construction industry has not a uniform standards system, most of foreign projects in Vietnam are designed and installed according to developers' own standards. M&E standards also reflect this trend. Generally, the current M&E practice can be divided into four groups as per owners original nationals. 1. Projects designed according to British Standards (BS): these are projects with investors from Britain or other countries from Commonwealth like Singapore, Hong Kong, Malaysia. The basic requirements for equipment and installation procedures are stipulated by BS and regulations like Institute of Electrical Engineers (IEE) Regulations for Electrical Installations, Code of Practice (CP) for Building Services etc. So far this is the most commonly used standard in Vietnam since the investors from this bloc form the largest part of FDI. 2. Projects that are from American investors usually are designed and installed according to American National Standard Institute (ANSI), National Electrical Code (NEC) and Institute of Electrical and Electronics Engineers (IEEE) recommendations. 3. Japanese-invested projects are design according to Japanese Industrial Standards (JIS). 10

4. Projects with investment capital from other countries like France, Switzerland etc. are designed according to that specific country standards but all claim to be compatible with European Committee for Electrotechnical Standardization (CENELEC) and IEC requirements. Although most of the countries listed above are IEC members and have committed themselves to IEC standards but their standards are far from similar to each other. The presence of these different standards makes the local contractors extremely difficult to adapt with and ensure that all of their requirements are met. Quality performance of a project also varies according to the extent that the contractors are familiar with the applied standards. 3.2.2 Development of local M&E contractors and their concerns for quality

Foreign contractors currently operating in Vietnam are generally working on major projects with at least some element of foreign funding. The emphasis to date has been on major building projects, i.e. office buildings, hotels, tourism developments and residential building complex. Foreign invested building projects, e.g. hotel and office developments, are mainly prepared by foreign consultants, often from neighboring Asian countries like Australia, Singapore, Japan or from Europe, e.g. France. Many of the industrial and commercial projects are still well beyond the capabilities of local companies like design and implementation of ventilation, air-conditioning, plumbing, drainage, lighting, and fire safety, automation systems etc. for high-rise buildings. The M&E local contractors used to be sub-contractors for foreign companies at the first stage but as they gained experience and expertise, Vietnamese M&E companies become more competitive in comparison with foreign counterparts. One distinctive feature is some successful domestic construction companies also have their own M&E divisions, which carry out the M&E work from the whole construction package. However, as the industry develops and requires more specialist service, separate and qualified M&E contractors gradually take place. Local companies like Refrigeration Engineering Corporation (REE), Saigon Engineering Company (SGE), or Seaprodex Refrigeration Electrical Company (SEAREE) already compete successfully against foreign or joint-venture M&E firms. Besides the advantage of lower labor cost, the quality of projects done and technical competence is the vital factors for winning a bid. Quality assurance and quality control become more critical in the period of economic crisis. 3.2.3 M&E project performance and management issues.

Project performance is one of the basic measures of the project objectives-the other two are cost and time. Many things can have their impacts on performance of an M&E projects such as quality of equipment used, technical skills of project teams or contractor/client/consultant communication etc. In a developing country like Vietnam, sometimes specifications written in foreign language, e.g. in English can create serious problems for those who carry out the

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fieldwork and can lead to substantial reduction of quality. Vietnamese project managers usually lack of experience in quality control management functions i.e. managing the implementation of the project with a certain level conforming to predetermined specifications. Project management techniques are one of the focus points, as most of the project managers have not received adequate training or education on project management issues. Self-learning and management by trial-and-error are still common things among local constructors. It is important for project managers to be aware of the factors affecting the quality of project and handle them in an effective manner. Therefore, determining the major factors influencing the project performance in specific conditions of Vietnam has managerial and research meaning.

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Chapter 4 LITERATURE REVIEW

4.1

Project quality performance

One of the primary objectives of any building project will be to obtain a system of quality standards, which matches the client's expectations. An understanding of what constitutes quality appears the first logical criterion which needs to be satisfied before measures can be taken to achieve it. In the Manual of Professional Practice Quality in the Constructed Projects (1989), issued by the American Society of Civil Engineers, quality is defined as the totality of features, attributes, and characteristics of a facility, product, process, component, service, or workmanship that bear on its ability to satisfy a given needs, fitness for purpose. It is usually referenced to and measured by the degree of conformance to a predetermined standard of performance. Also according to this Manual, quality can be characterized as Meeting the requirement of the owner as to functional adequacy; completion on time and within budget; operation and maintenance. Meeting the requirements of the design professional as to provision of well-defined scope of work Meeting the requirements of the constructors as to provision of contract plans, specifications. Meeting the requirements of the regulatory agencies as to public safety and health, environment protection. The Manual mentioned nothing about customers satisfaction but gave a very clear-cut definition of what quality stands for. To a further clarification of specification term, Yatseen A.M and El-Marashly A.F (1989) identified three main parameters of project-quality management as system specification, quality control specifications and system quality control and introduced the "quality control cube" as elaboration of quality-control parameters. Specifications can be broken down into three types of specifications: functional specifications (FS) which indicates the objective or purpose of any system; structural specifications (SS) which describes the components of the systems and their relationships and technological specifications (TS) which details the methods and means of conducting the work

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System intended to be quality controlled is generally composed of three parts: input; process and output. Quality control is composed of three successive actions: measuring; comparing (with referring specifications) and correcting.

Various aspects of project quality management can be based on interaction of these parameters. Low Sui Pheng (1993) noted that there was no consensus on a single definition of quality of a construction project. Five different schools of thought was listed to mean quality as: 1. Fitness for purpose: the facility is constructed for intended purpose as living space, research institute etc. 2. Conformation to specifications: work is executed according to pre-determined requirements. 3. Fitness for purpose and conformation to specifications: the combination of both first and second perception. 4. System approach-technical rationality: objective approach when quality can be administered through distinct, formal and extensively documented procedures. 5. System approach- socio-technical rationality (Low,1987): quality is being seen in the context of socio-political effects and technical safeguards as well He proposed that two tendencies exist to represents the last two concepts. The first tendency adopts more objective approach and there is an inclination towards specifications, drawings and bills of quantities, etc. where checklists can be compiled and the quality is strictly within the boundaries of written rules. In contrast, the second tendency recognizes that most quality issues in construction are not as simple and definitive as the first tendency concerns. A complex socio-political cum technical perspective is postulated in the second tendency. The author acknowledged that in the long term, it would be strategic for the industry to move towards the first tendency where clear guidelines on construction quality may be obtained. Nevertheless, practitioners should also recognize the effects of other irrational and indeterministic factors of the second tendency when quality standards may be "negotiated" and its interpretation is a matter for judgement. Ledbetter W.B. (1994) addressed three key issues of the quality performance management system (QPMS) as quality, cost of quality and quality performance. According to him, quality has many meanings, however for project conformance to established requirements has relevance and clarity. The requirements are defined as contractually established characteristics of a product, process or service which otherwise can be termed as specifications. QPMS tracks cost in the three main categories: normal work, quality management work (prevention and appraisal) and rework (deviation correction).

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James D.S (1996) defines quality as meeting the requirements of all customers. It involves being proactive in helping customers articulate their requirements so their expectations are made. Quality measurements include traditional "hard" project success measures such as cost, schedule and safety and additional "soft" measures such as customer satisfaction, leadership, employee involvement, team work, training, flexibility, responsiveness and so forth that may be interpreted in unfamiliar ways. A "Blueprint"- a guideline was designed to facilitate and accelerate implementation of the measurement process. Most of the literature sources converge to the point that quality generally means meeting predetermined specifications. Perceived performance by customers is importance but in fact, from the point of view of M&E contractors, objective quality performance is more preferable and easier to manage. In a construction project, quality have to be tracked and controlled during construction phase and after hand-over, i.e. maintenance period.

4.2

Critical success/failure factors in projects

The literature on critical success factors reveals several definitions of project success and most of them encompass the importance quality performance. Thus, those factors affecting project success certainly affect project quality performance as well. Since identifying such factors is one of our objectives, we will make a brief review of critical success/failure factors in projects in general and then in construction projects, in particular. The success and failure factors were first introduced by Robin and Seeling in 1967. They investigated the impact of a project manager's experience on the project's success or failure. Technical performance was used as a measure of success. Avots (1969) identified reasons for project failure and concluded that the wrong choice of project managers, the unplanned project termination an unsuportive top management were the main reason for the project failure. In 1983, Baker, Murphy and Fisher suggested that instead of using time, cost and performance as measures for project success, perceived performance should be the measure. In this research, a project is considered successful if it meets the technical specification and/or mission to be performed, and if there is a high level of satisfaction concerning project outcome among key people in the parent company and key user or clientele of the project effort. This finding may be somewhat difficult for most project personnel to accept. Hughes (1986) conducted a survey to identify the factors that affect project performance. His conclusions were that projects fail because of improper basic managerial principles and the lack of communications of goals. Morris and Hough (1987) studied eight large complex projects, which had great potential economic impact but were poorly managed and generally failed. The identified the success and failure factors for each of them. Based on this experience, they suggested seven dimensions of project success (see Table 4.2). Although the analysis of success factors was aimed at large complex projects but they also relevant to project in general. One of the first efforts to classify critical factors was carried out by Schultz, Slevin and Pinto (1987). They classified factors as strategic or tactical. These two groups of factors affect

15

Table 4.2 List of critical success factors developed in the literature

Martin (1976) Define goals Locke (1984) Make project commitment known Project authority from top Cleland, King (1983) Project summary Project manager's competence Scheduling Clear goals Sayles, Chandler (1971) Baker, Murphy, Fisher (1983) Pinto, Slevin (1989) Top management support Client consultation Morris, Hough (1987) Project objectives Belassi, Tuckel (1996) Factors related to the project Factors related to the project manager and team members Factors related to the organization Factors related to the external environment

Select project organizational philosophy General management support Select team project

Operational concept

Goal commitment of project team

Technical uncertainty innovation Politics

Appoint competent project manager Set up communication and procedures Set up control mechanism Progress meeting

Top management support Financial support

Control systems and responsibilities Monitoring feedback Continuing involvement the project and

On-site manager

project

Personnel recruitment Technical tasks

Adequate funding to completion Adequate project team capability Accurate initial cost estimates Minimum startup difficulties Planning control techniques and

Community involvement Schedule duration urgency Financial contract legal problems Implement problems

Allocate sufficient resources Control information mechanism and

Logistics requirements Facility support

Client acceptance

in

Monitoring feedback

and

Require planning and review

Market intelligence Project schedule

Communication Trouble shooting

Executive development training Manpower organization Acquisition

and and

Tasks ( vs. Social orientation) Absence bureaucracy of

Characteristics of the project team leader Power politics Environment events Urgency and

Information and communication Project review

[Source: Adapted from Belassi and Tuckel (1996)]

17

project performance at different phases of implementation. The strategic group includes factors such as project mission, top management support, and project scheduling whereas the tactical group consists of factors such as client consultation, personnel selection and training. In their follow-up work, Pinto and Slevin (1989) identified success factors and their relative importance for each stage of a research and development project life cycle. Finally, in a similar study by Pinto and Prescott (1990), the relative importance of each group (tactical vs. Strategic) over the project life cycle was analyzed. It was found that the relative importance of success factors varies at different stages of the project's life cycle, depending on the success measures used. Belassi and Tuckel (1996) grouped the factors into four areas Factors related to the project Factors related to the project manager and team members Factors related to the organization and Factors related to the external environment Table 4.1 represents the list of critical success factors developed in the literature As mentioned in a study by Slevin and Pinto (1988), all of these lists are theoretically based, rather than empirically proved. And while some are general in scope, they address specific points of interest. Most of the research in the Table 4.1 include factors related to the project manager and the organization the project belongs to and it seems to ignore other factors. The framework proposed by Belassi and Tuckel gives additional considerations to characteristics of project, team members and factors external to the project while most of the others lists include factors related mainly to project manager and the organization the projects belong to. Therefore the Belassi and Tuckel framework is selected for tentative factors used in this research study and we will come into more details in the following parts.

4.3

Determining factors of construction project success

The factors listed in the previous section represent the critical success factors for projects in general, however examples of issues that not yet adequately resolved are: 1) What critical factors are valid for building construction since construction projects formed a minority of projects studied? 2) Are the same or different factors important for various types of buildings? 3) How do different parties consider if a project is success? In the literature, several authors identified, explained and discussed the factors that are critical to the success of a construction project. Success criteria or a persons definition of success as it relates to a construction project changes from project to project depending on participant

18

A list of success criteria for owner, designer and contractor is developed as below (Landin A.M. and Person M.H., 1998): Table 4.2 Success criteria for owner, designer and contractor Owner
On schedule; on budget; function for intended use; quality (workmanship, products); return on investment; building bust be marketable(image and finance); minimum aggravation on the building

Designer
Satisfied client (potential for repeat work); quality architectural product; met design fee and profit goal; professional fulfillment (skills, experience); meet project budget and schedule; marketable product/process (reputation); minimal construction problem (easy to operate, constructability); no liabilities claims (building functions as intended); socially accepted; well defined scope of work (contract and compensation match)

Contractor
Meet schedule (construction); profit; under budget (savings for owner/contractor); quality specification met or exceeded; no claim (owner/subcontractors); safety; client satisfaction; good subcontractor buyout; good direct communication (expectations of all parties clearly defined); minimal variation and surprise during project

Ireland (1985), in a research conducted among 21 proprietors, 8 contractors and 17 architects of high-rise commercial building identified variables and their effects on cost, time and quality as follows: Technological effects: complexity of form of construction, variations to the contracts etc. Structural effects: construction co-ordination, quality control on site, use of managers etc. Psychosocial effects: numbers of days lost through industrial disputes Managerial effects: competition at tender, construction planning during design etc. project

The multiple regression analysis showed the strength of relationships between variables, especially the relative effects of the particular managerial actions on the achievement of the following objectives: to reduce the cost of the building; to reduce the time of construction and to increase the architectural quality. The inhomogeneous background of respondents could lead to different answers depending on individual perception. Asley D.B et.al. (1987) provided insight into potential factors that influence construction project effectiveness. A list of approximately 2000 factors was compile largely supplied by construction project personnel. This long list of factors was subsequently reduced to 46 and grouped into five major areas 1) Management, organization and communication

19

2) Scope and planning 3) Controls 4) Environmental, economic, political and social 5) Technical Direct cause-effect relationships were found to exist between factors and success criteria and the strongest relationships are summarized below

Factors Planning efforts PM technical capabilities Technical uncertainty PM administrative capabilities Legal political environment

Success criteria Functionality End user satisfaction End user satisfaction Budget Follow-on work

Sanvidor V. et al. (1992) proposed the theoretical basis for the factors. A process model, the integrated building process model (IBPM) had been developed to identify all major functions required to provide a facility and information that produced and utilized by each function. The IBPM identifies elements of information and physical entities that must flow between the manage, plan, design, construct and operate functions. The results of the research indicated that there were seven success factors and four of them were found to be critical 1. A well-organized, cohesive facility team to manage, plan, design, construct and operate the facility 2. A series of contracts that allows and encourages various specialists to behave as a teams without conflicts 3. Experience in management, planning, design, construction and operation of facilities and similar

4. Timely, valuable optimization from the owner, designer, contractor and operator in the planning and design phases of the facilities. These factors have been examined from owners perspective so they have little meaning with other parties.

20

Abdel-Razek R.H (1998) studied factors affecting construction quality in Egypt and their relative importance by Delphi method among contractors and designers. The factors and their relative importance in term of percentage contribution from survey questionnaire are: improving design and planning during pre-construction phase (16.67%); developing and improving quality control and assurance system (10.52%); improving the financial level (9.2%); improving the accuracy of estimating and tendering( 8.38%) These findings considered the effect of factors separately emphasized on significant effect of economical and technological backgrounds in determining ways of improving construction quality.

21

Chapter 5 RESEARCH METHODOLOGY

5.1

Research framework

The research framework is presented in the Figure 5.1. This is adapted from Belassi and Tuckel (1996) work where project quality performance consists of three dimensions and factors affecting project quality performance are grouped into four major areas Factor related to the project Factor related to the project manager and team members Factor related to the organization and Factor related to the external environment In this research we focus on objective quality i.e. we try to get the objective answers. However certain subjective questions also take place. Subjective questions relate to personal experience or individual perception of the respondents while objective question relate to factual or tangible information that exist. The quality performance dimensions and tentative factors are also presented in Figure 5.1

5.2
5.2.1

Term definitions and measures

Quality performance

Definition: From literature review and taking into account M&E contractors perspective, a project is considered successful in quality performance when the following conditions exist: Installed system has met required specifications - Technical task Successful testing and commissioning - Functional task Smooth operation during warranty period (usually 12 months) - Maintenance task These capture the major definitions of quality performance and follow the timeflow of a construction project. Usually owner representative/consultant is satisfied once these conditions are met. Measures:

22

Project related factors Project characteristics: Completion schedule Design complexity Work variations Urgency of the project Uniqueness of the project

Team related factors PM technical competence PM managerial skills PM co-ordination and communication skills Team size Team members skills Team communication and commitment Internal quality control Resource utilization

Successful testing & commissioning

PROJECT QUALITY

Operation reliability

Conformance to specifications

Organization related factors Top management support Functional support Relative importance of project mentioned Resources availability Project initial estimates Organization reputation and past experience

External factors Foreign specification Sub contractors skills Consultant/owner acceptance Authority regulations Competition Industry state Socio-economic conditions

Figure 5.2 Project quality and influencing factors

23

Specifications conformance. M&E specifications usually give contractors a choice between specified equipment from recommended manufacturers or equivalent equipment that meet the same system standards but the later case requires written approval. For example, transformer from ABB is recommended but the contractor can propose a local manufacturer instead if there is cost saving. The percentage of installed equipment meeting original specifications (from 50 to 100%) can be the measure for specifications conformance.

Successful testing and commissioning. A system with equipment conformed to required specifications does not guarantee successful testing and commissioning. Other factors like workmanship, rigorous quality control during installation phase also contribute their part. Therefore, a system has to be reworked before it is accepted. We use the degree of rework (from major rework to no rework at all) to measure this aspect of quality Operation reliability. The maintenance period for M&E projects normally lasts 12 months. During this period, the contractors have to carry out all the correction work to ensure that the installed systems work properly. The degree of smooth operation (from system breakdown to no interruption) is a good measure for operation reliability. Choice of success variables and measures

5.2.2

One obvious advantage of Belassi and Tuckel framework is it helps to identify whether quality performance is related to project managers and/or to the project and/or external factors and then project managers would have a clear understanding of which aspects might be critical for their successful completion. A combination of literature review and conversation with M&E managers leads to selection of the critical variables listed below. Some of them reflect local specific conditions e.g. various standards and code of practice like British Standard (BS), National Electrical Code (NEC) or Singapore Code of Practice (CP) etc. have significantly affected quality of work done. Communication language, in particular English, might critically relate to performance as well. In addition, many variables are inter-related and being affected by other factors variables too. For example, urgency of project schedule may cause labor and material shortage and as a result, work performed in rush exposes a lot of defects. Factors related to the project

1) Project size. Project size defines the amount of resources to be managed. Large projects are more complex in term or technical and management issues than the small ones. Project size can be measured by the contract value (in million $US) 2) Completion schedule. The longer a project lasts, the more possible that the contractor have to mobilize resources to meet the demand and quality may be affected. Completion

24

schedule is measured the time stipulated in the contract from first site -inspection to completion (in months) 3) Design complexity. The extent of design complexity usually associates with more automation. Extensive use of Building Management System (BAS) with computer control will complicated the installation job and obviously affect the quality, especially postinstallation phase. The design complexity is measured by perceived assessment of respondents on a five point scale with constructed score(from very complex to not complex) 4) Work variations: The extent of deviation from original design is seriously affecting M&E work. For instance, in a building project, all the wiring must be concealed in the wall or cast-in concrete. Any change in structural and interior design, which frequently happens, will have electrical work change and result in inferior quality. Work variations are measured by cost of change order over original value ( in percent ) 5) Urgency of the project. This is the need to implement the project as soon as possible. In many cases, project performance can not be met because of the urgency of the project. The urgency of the project is measured by five point scale with constructed score (from very urgent to not urgent) 6) Uniqueness of the project. The more standard activities the project has, the easier it is for project managers to plan, schedule and manage their projects. In the M&E work, cable used to be the means of electricity transmission. Sometimes designers prefer busduct-solid insulated copper or aluminum duct- in lieu of normal cable and that need careful planing and execution. The uniqueness of the project is measured by five point scale with constructed score (from very unique to not unique at all) Factors related to the project team

1) Project manager technical skills. It is obvious that educational background, past experience of the project manager have much influence on performance of the project. This is measured by is measured by five point scale with constructed score (from very good to not good at all) 2) Project manager managerial skills: Ability to supervise, plan, lead and control the project team to achieve necessary performance. This is measured by is measured by five point scale with constructed score (from very good to not good at all). 3) Project manager co-ordination and communication skills. Well-established communication channels and proper coordination with owner representative, consultant, subcontractors or other contractors are extremely necessary to ensure the good outcome of the project. This is measured by is measured by five point scale with constructed score (from very good to not good at all). 4) Team size. The larger the size of the team, the more difficult to monitor the quality of small teams job. Unlike other contractors, M&E contractor(s) has to conduct various type of work at the same time. For example, piping work in parallel with equipment fixing or

25

cabling in one area and testing in another. Project team has to be broken down into smaller groups to carry out the jobs according to specialized background and skills. The number of staff working on a project varies greatly during construction period. Team size is measured by average manday over construction period. 5) Team members technical skills. The competence of the team members is found to be a critical factor. No matter how competent the project manager is, his subordinates is the key element to quality performance achievement. This factor is measured by five-point scale with constructed score (from very good to not good at all). 6) Team communication, motivation and commitment. Within the project team, there must be good interpersonal relations and open communication. Th motivation is also identified as having strong overall influence on project success. This factor is measured by five-point scale with constructed score (from very good to not good at all). 7) Internal quality control system. Each M&E contractor has its own quality assurance system and only a fraction of them have ISO 9000certificates. Many M&E contractors do not consider quality control as a process but mostly rely on after-installation testing to uncover defects. The quality can be seriously affected by this practice. Quality control system is measured by five-point scale with constructed score (from very good to not good at all). 8) Resources utilization. Extent of technology, tools and material used by the project team. Modern techniques like 3D-CAD shop-drawings help to improve coordination between different M&E services and lead to greater efficiency and less defects. Resources utilization is measured by five-point scale with constructed score (from very good to not good at all). Factors related to the organization

1) Top management support. Top management support was cited by almost all of the authors as one of the most important factors. Project management not only depends upon top management for authority, direction but also allocations of sufficient resources (financial, time, material, labor). Top management support is measured by five-point scale with constructed score (from very good to not good at all) 2) Functional support. The level of support provided by functional manager is usually determined by level of top management support. However, if the project belongs to one functional department, then the availability of resources will not be a problem, otherwise it can be a difficult job. Hence functional support is a factor has to be considered. Functional support is measured by five-point scale with constructed score (from very good to not good at all) 3) Relative importance of this project toward the whole organization . A M&E company usually has many projects at the same time. The importance of the project under study toward the whole organization will decide the level of support it will receive. It is measured by five-point scale with constructed score (from very important to not important at all).

26

4) Availability of resources. Material and labor resources availability is an important factor since M&E work has to keep up with project schedule while maintaining proper requirement. This does not completely depend on the organization itself but prompt expedition by parent company is critical. Availability of resources is measured by fivepoint scale with constructed score (from very good to not good at all) 5) Project preliminary estimates. Tendering and project execution teams are not necessarily the same therefore the accuracy of cost, schedule, scope of work is vital in the construction phase. The accuracy is measured by level of difference from estimates and actual work done (in percent) 6) Organization past experience and reputation . An well-known and successful M&E company is likely to ensure the strictest procedures for quality assurance. Organization past experience and reputation is measured by five-point scale with constructed score (from very good to not good at all) Factors related to the external environments

Project-environment 1) Unfamiliar foreign system of standards. As mentioned before, a project with totally different system of standard will strongly affect the quality performance. It is measured by the extent of difference of the system of standards being used and prevailing practice in Vietnam (TCVN) on five-point scale with constructed score (from very similar to not similar at all)
2) Sub-contractors skills. Quality of work carried out by subcontractor is dependant upon

both M&E supervision and sub contractor skills. Sub-contractors skill is measured by five-point scale with constructed score (from very good to not good at all)
3) Consultant/owner representative acceptance. The client final acceptance can be measured

by degree of strictness on five-point scale with constructed score (from very strict to not strict at all) Macro environment
4) Local authority requirement. Safety, environmental and technical requirements from local

authorities sometimes may have not been foreseen in the original design made by foreign designers. Mandatory adherence to environment and safety regulations can complicate M&E work and ultimately affects quality. Local authority requirement is measured by degree of strictness on five-point scale with constructed score (from very strict to not strict at all)
5) Level of competition. If the level of competition is high, it is more likely that the current

M&E contractor has to be aware of quality as a competitive weapon. Level of competition in the same industry requirement is on five-point scale with constructed score (from very high to not high at all)

27

6)

Industry development state. The construction industry development level will help foster quality though experience and expertise gained. It is measured on five-point scale with constructed score (from very good to not good at all) on five-point scale with constructed score (from very favorable to not favorable at all)

7) Socio-economic condition. The current situation development of the country is measured

5.3

Sample and procedure

Data are collected from a sample size consisting of about 100-120 questionnaires sent to key persons of project management team: either project managers or project engineers who have past experience or are currently involved in the M&E projects. This helps to ensure the homogeneity of the surveyed pool. A 5-point scale is developed to assess the perception of interviewees of each variable on objective quality, which is aggregately defined by its three success dimensions.

5.4
5.4.1

Questionnaire design and pilot study

Questionnaire design

A questionnaire consisting of five sections was designed and consists of six sections: Section A: General information Section B: Project quality dimensions. Section C: Factors related to the project. Section D: Factors related to the project manager and its team Section E: Factors related to the organization Section F: Factors related to the external environment The objective of Section A is to gather information on project name, location, type of project, companys role and type of contract. In the sections B, respondents are asked to give assessment of quality dimensions of completed projects. In the sections C to F, respondents indicate their perception on extent of factors being listed, usually from very good to not good at all. The sample of questionnaire is in Appendix A 5.4.2 Pilot study

Before planning for the survey a pilot study was carried out with two objectives. One was to explore and compare the theoretically compiled factors and practical opinions of site managers

28

and engineers. The second was to refine draft questionnaire and come up with final version and preparation for field survey. A draft questionnaire was designed and issued to key persons of five M& E companies in Ho Chi Minh City, namely Kurihara Thanglong Joint Venture, Phuong Nam Electrical Company (SEC), Refrigeration Electrical Engineering Corporation (REE), Saigon Engineering (SGE) and Rosaco Company. There were 9 respondents out of 14 questionnaires issued. Apart from questionnaire responses, follow-up interviews were conducted to clarify any vague questions in the survey forms and to obtain the realistic picture from on-site operation. Confusions aroused from translation into Vietnamese and certain terms that are not familiar to practitioners need to be clarified. Therefore, proper modifications were made into original draft and explanation was given to each factor to avoid confusion. Attention also was directed toward translation work. The results of pilot study were encouraging and supportive cooperation was promised for the upcoming survey.

5.5

Data analysis procedure

The objective is to identify and validate the set of managerial variables that have a significant effect on the quality performance of M&E projects. Twenty-seven original variables are used as input data. They are further being grouped to several factors, which form the set of multiple independent managerial variables. Quality performance, in its turn, is evaluated according to a set of three measures. Thus we want to find the largest possible overall correlation (connection) between the set of managerial variables and the set of quality performance measures and to identify such variables that contribute the most to this correlation. Muiltivariate statistical tools will be used for analyzing the multi-attribute nature of the performance success and for the multitude of the factor variables. The main statistical techniques are factor analysis and canonical correlation analysis. Factor analysis is to be used first to reduce the initial number of variables (27) to smaller groups which contribute for the majority of variance of original variables. The purpose of this exercise is instead of dealing with a large number of variables, we will deal with a smaller number of factors while ensuring the minimal loss of information. The underlying assumption of factor analysis is that there exists a number of unobserved latent variables (or "factors") that account for the correlations among observed variables. Canonical correlation analysis is the principal method that we use to identify critical variables that affect quality performance. CCA is an appropriate multivariate analysis tool to be used because unlike Multiple Regression that allows one to assess the relationship between a dependent variable and a set of independent variables, CCA allow us to investigate simultaneously the relationships between two sets of variables. We will use canonical analysis to test the relationship between the extracted factors as sets of predictors and the quality performance measures as a set of criterion variables.

29

5.5.1 (CCA)

Basic concepts of Factor Analysis (FA) and Canonical Correlation Analysis

Factor analysis Factor analysis is a generic term for a family of statistical techniques concerned with the reduction of a set of observable variables in terms of a small number of latent factors. It has been developed primarily for analyzing relationships among a number of measurable entities (such as survey items or test scores). Each observed variable (y) can be expressed as a weighted composite of a set of latent variables (f's) such that yi = ai1 f1 + ai2 f2 + ... + aik fk + ei where (yi) is the ith observed variable on the factors, and (e i) is the residual of (yi) on the factors. Given the assumption that the residuals are uncorrelated across the observed variables, the correlations among the observed variables are accounted for by the factors. In principal component FA, the objective is to account for the maximum portion of the variance present in the original set of variables with a minimum number of composite variables called principal components. There are several criteria for the number of factors to be extracted and analysts seldom use a single criterion to decide on the number of factors to extract. Some of the most commonly used guidelines are the Kaiser-Guttman rule, percentage of variance, the scree test. Once the number of factors to be extracted was decided, the next step is to determine the method of rotation. The meaning of the rotation is that factors inferred from the variables are significantly loaded on their factors. Once all significant loadings are identified, the analyst attempts to assign some meaning to the factors based on the patterns of the factor loadings. In general, the larger the absolute size of the factor loading for a variable, the more important the variable is in interpreting the factor. Canonical correlation analysis Suppose we wish to study the relationship between a set of variables x1, x2, , xP and another set y1 , y2,, yQ. The basic idea of canonical correlation analysis begins with finding one linear combination of the ys, say U1 = a1 y1 + a2 y2 + + aQ yQ and one linear combination of the xs, say V1 = b1 x1 + b2 x2 + + bP xP For any particular choice of the coefficients, the as and bs, we can compute values of U 1 and V1 for each individual in the sample. From the N individuals in the sample we can then

30

compute the simple correlation between the N pairs of U 1 and V1 values. The resulting correlation depends on the choice of the as and bs. In CCA, we select values of a and b coefficients so as to maximize the correlation between U 1 and V1. With this particular choice, the resulting linear combination U 1 is called the first canonical variable of the ys and V1 is called the first canonical variable of the xs. Both U1 and V1 have a mean of zero. The resulting correlation between U 1 and V1 is called the first canonical correlation and thus, represents the maximum linear correlation between the set of x variables and the set of y variables (Afifi A.A, 1984). The canonical correlations can be squared to compute the proportion of variance shared by the sum scores (canonical variates) in each set. Multiplying this proportion by the proportion of variance extracted, we will arrive at a measure of redundancy, that is, how redundant one set of variables is, given the other set of variables In equation form, the redundancy may be expressed as: Redundancy left = { (loadings left2)/P}*Rc2 Redundancy right = { (loadings right2)/Q}*Rc2 In these equations, P denotes the number of variables in the first set (left) of variables and Q the number of variables in the second (right) set of variables. Rc 2 is the respective squared canonical correlation. The subsequent stages of data analysis are mainly derived from Multivariate Data Analysis with Readings by Joseph F.H, Jr. et al (1994).

31

Chapter 6 FINDINGS AND DISCUSSION 6.1 General statistics

Questionnaires were mailed and directly handed to 120 potential respondents from 30 large M&E contractors or M&E departments of construction companies in the Ho Chi Minh City area. Sixty-seven usable questionnaires were returned for a response rate at 55.8%. From the 67 respondents, 21 were project managers, 45 were project engineers and one was assistance project manager assistant at the time projects were executed. The number of projects being quoted was 56 due to the fact that one project might be mentioned by several persons. From the general information, the distribution of project type in the sample is: Project type Commercial building Housing complex Infrastructure project Industrial plant Other Total Frequency 27 11 1 25 3 67 Percent (%) 40.3 16.4 1.5 37.3 4.5 100.0

The location of projects mentioned is distributed as follows: Project location HCMC Ha Noi Other provinces Total Frequency 44 6 17 67 Percent (%) 65.7 9 25.3 100.0

The most popular type of contract was lump-sum, followed by unit-price and a small fraction of others. Contract type Lump-sum Unit-price Other Total Frequency 47 17 3 67 Percent (%) 70.1 25.4 4.5 100.0

32

Most of projects are commercial buildings or industrial plants (combined to 77.63% of projects) in the form of lump-sum contract (70.1%) and located in HoChiMinh City (65.7%).

6.2

Sample descriptive statistics and preliminary analysis

Table 6.3 Means and standard deviations of the variables 2

N SPEC TESTING OPERATIO VALUE SCHEDULE COMPLEX VARIATIO URGENCY UNIQUE PMTECH PMMANAGE PMCOM TEAMSIZE TEAMTECH TEAMCOM QUALCTRL RESORUSE MSUPPORT FSUPPORT IMPORTAN RESAVAIL
2

Minimum 1.00 2.00 1.00 1.00 1.00 1.00 2.00 1.00 1.00 2.00 1.00 1.00 1.00 2.00 2.00 1.00 2.00 2.00 1.00 1.00 1.00

Maximum 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00

Mean 3.7612 3.7761 3.9552 2.3881 3.4925 2.7164 3.8209 3.5672 2.8507 3.8806 3.5672 3.7463 2.8358 3.6866 3.5224 3.4776 3.4328 4.0896 3.6866 3.5075 3.4776

Standard deviation .7994 .7552 .8779 .9685 .9750 1.0844 .9033 1.1312 1.0906 .6858 .9083 .8763 .9470 .7428 .8413 .8591 .7632 .8480 .9568 1.2232 .8766

67 67 67 67 67 67 67 67 67 67 67 67 67 67 67 67 67 67 67 67 67

See Appendix B for variable notation

33

ESTIMATE PASTEXPE STANDARD SUBCON REQRMENT AUTHORTY COMPETE INDUSTRY SOCIOECO Valid N (listwise)

67 67 67 67 67 67 67 67 67 67

2.00 2.00 1.00 2.00 2.00 1.00 2.00 1.00 2.00

5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00

3.7313 4.0000 3.1642 3.7313 4.2388 3.2687 3.8955 3.4478 3.3134

.7703 .7785 1.1494 .7897 .7196 1.0813 .9713 .8031 .8565

Table 6.1 shows means and standard deviations of the variables and Figure 6.1provides the details of project value and completion schedule. By examining the initial data, we can come to some quantitative findings as below: A typical M&E project has contract value between $US 0.5 to 5 million and completion schedule from 6 month to 2 years. The original design is of average complexity and does not change much during the course of installation process. Project team has from 10 to under 60 persons with good technical skills and open communication. Project manager is good in term of technical competence and communication skills but his management capability is just above average. Internal quality control system is at acceptable level though not the highest. The project is considered not very important toward parent organization as a whole but it still receive strong support of top management. However, functional support and subsequently material supply are not very good. Companys reputation and experience make initial estimations reasonably accurate. System of standards used in project design is moderately different from prevailing practice (TCVN). In a highly competitive market like M&E contracting, competent sub-contractors are needed to meet the strict requirements from consultant/owner representative. The industrial and socio-economic conditions fairly favorable

34

 Under above conditions, on average, surveyed projects show the level of specification conformance between 80-90%, minor rework or small adjustment needed before system was accepted and minor disruption of equipment operation during the first year of working.
More than 10 million $US 4.5% Less than 0.5 million $US 13.4%

5-10 million $US 7.5%

2-5 million $US 23.9%

0.5-2 million $US 50.7%

(a)
More than 2 years 17.9% Less than 0.5 million $US 13.4%

3-6 months 11.9%

1-2 years 28.4%

6-12 months 40.3%

(b) Figure 6.3 Projects classification by value (a) and completion schedule (b)

35

6.3
6.3.1

Data Reduction by FA
Data examining and assumptions in factor analysis

Factor analysis is used to reduce the number of managerial variables. Sample size of twentyseven variables resulted in a ratio of 2.48 observations per variable. This ratio is below the recommended guideline of minimum 5 observations per variable (Joseph F.H et al., 1992) but still acceptable in term of absolute number ( N>50 ). Correlation matrix (Appendix E) shows substantial number of correlations greater than .30 which ensures that factor analysis is appropriate. Further examination of anti-image correlation shows that partial correlations are low and the measure of sampling adequacy (MAS) are mostly in the range of .50 to .80. The reliability of the data is measured by Cronchbach alpha. In our case the overall reliability coefficients for all variables was 0.8126 and standardized item alpha was 0.8253 which were reasonably high above acceptable level. 6.3.2 Factor extraction

Eight independent factors with eigenvalues greater than one were extracted from the data. These factors accounted for over 70% (shaded cells in the Table 6.2) of the variation of the initial variables and are illustrated in the Table 5.2 and the scree plot is in Figure 6.2.

Eig en val ue

4 3

1 0 1 3 5 7 9 11 13 15 17 19 21 23 25 27

Component Number

Figure 6.2 Scree Plot of Factors Table 6.2 Total Variance Explained
Initial Eigenvalues Extraction Sums of Squared Rotation Sums of Squared

36

Loadings Com pone nt 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Total % of Cumul Variance ative % 22.789 13.022 8.119 6.839 6.118 4.999 4.660 3.916 3.642 3.273 2.840 2.644 2.149 1.955 1.772 1.696 1.473 1.377 1.294 1.137 .956 .848 22.789 35.811 43.930 50.769 56.887 61.886 66.545 70.461 74.103 77.376 80.216 82.860 85.009 86.964 88.736 90.432 91.905 93.281 94.575 95.713 96.668 97.517 Total % of Cumul Variance ative % 22.789 13.022 8.119 6.839 6.118 4.999 4.660 3.916 22.789 35.811 43.930 50.769 56.887 61.886 66.545 70.461

Loadings Total % of Cumulat Varian ive % ce 11.424 11.341 10.213 9.524 7.438 7.066 6.991 6.465 11.424 22.765 32.977 42.501 49.939 57.005 63.996 70.461

6.153 3.516 2.192 1.846 1.652 1.350 1.258 1.057 .983 .884 .767 .714 .580 .528 .478 .458 .398 .372 .349 .307 .258 .229

6.153 3.516 2.192 1.846 1.652 1.350 1.258 1.057

3.084 3.062 2.757 2.571 2.008 1.908 1.887 1.746

37

23 24 25 26 27

.185 .166 .119 .111 8.836 E-02

.687 .615 .442 .413 .327

98.203 98.818 99.260 99.673 100.00

Table 6.3 provides the results of an oblique rotation of the initial factor matrix and loadings of variables. As our sample size stands at 67 observations, a cut-off of .65 (as recommended by Computation made with SOLO Power Analysis, BMDP Statistical Software, Inc., 1993.) was used for item scale selection. Depending on factor loadings, eight factors are labeled as follows:

Table 6.3 Rotated Component Matrix

Component Loadings 1 2 3 4 5 6 7 8

Project size Compan Manage Project ys ment team experien support capability ce SCHEDULE TEAMSIZE VALUE ESTIMATE PASTEXPE VARIATIO SUBCON UNIQUE FSUPPORT 0.851 0.857 0.854 0.853 0.765 0.732 0.695

PM Quality Design Standard Manage control complexi and ment ty and Authority Skills Require Requirem ments ent

38

MSUPPORT PMCOM URGENCY RESAVAIL TEAMCOM COMPETE TEAMTECH SOCIOECO PMMANAGE PMTECH RESORUSE IMPORTAN QUALCTRL INDUSTRY COMPLEX REQRMENT STANDARD AUTHORTY

0.795

0.733 0.728 0.659

0.705

0.737 0.675

0.758 0.736 -0.741 0.682

Rotation converged in

1) Factor 1-The variables significantly loaded on the first factor are project value, completion schedule and team size. A large project (high value) normally takes longer time to complete and as the result, a large project team is required. Therefore, this factor may be named Project Size (PROJECT). 2) Factor 2-The three variables made most loading on the second factor are companys past experience, project initial estimates and work variation. An experienced company can do a

39

pretty good estimation based on Bill of Quantity (BQ) and deal effectively with design changes. Thus this factor can be named Companys Experience (EXPERIEC) 3) Factor 3- This factor is a combination of both top management and functional support and we name it under the name Management Support (SUPPORT). 4) Factor 4- Team communications, team technical skills and overall competition have high loadings on this factor. This factor can be named Project Team Capability (TEAMCAP) 5) Factor 5- Only project managers management skills has high loading on this factor so it is named project managers skills (PMSKILLS) 6) Factor 6- Quality control system and the importance of project are the two major variables. If a project is considered vital to the company (e.g. in view of future contracts) then the quality must be controlled at the highest level. We name this factor Quality Control System and Project Importance (QUALIM) 7) Factor 7- Design complexity and owner/consultant requirements reflect the role of project consultant who is the designer and answers for projects overall technical performance. This factor is labeled Consultants Role (CONSULT) 8) Factor 8- The last factor includes authority requirement and project standards. Noted that the latter variable has negative loading showing the adverse relations of the extent of difference between project standards from local ones (TCVN), with the factor itself. This factor is labeled Authority and Standards (AUTSTAND). The new data set is created for each factor in the final solution regression method and used as input data for further canonical analysis

6.4
6.4.1

Data analysis with CCA

Canonical model, assumption and data examining

The canonical analysis is a method that deals with a composite association between sets of multiple criterion and predictor variables. From the results of factor analysis, we can express the form of canonical analysis in this case as:

a1 SPEC+ a2TESTING+ a3OPERATIO <=> b1PROJECT + b2EXPERIEC + b3 SUPPORT + + b4TEAMCAP +b5PMSKILLS + b6QUALIM + + b7CONSULT + b8AUTSTAND

Composite of Dependent (Criterion) Variables

Canonical Correlation

Composite of Independent (Predictor) Variables

40

}Rc{ 3 dependent variables 8 independent variables

A brief examination of data is shown below: Sample size Sixty-seven observations with eight predictor variables gives us a ratio of 8.37 observations per variable. This ratio is below the recommended guideline of 10 observations per variable (Joseph F.H et al., 1992) but still acceptable as per another guideline 3, according to which strong canonical correlations in the data can be detected with small number of observations. Normality CCA can accommodate any metric variable without the strict assumption of normality (Joseph F.H et al., 1992). However, multivariate normality is desirable since it standardizes a distribution to allow for a higher correlation among variables. The statistical test for normality (the Kolmogorov-Smirnov Statistics) was performed and presented in Appendix C. The statistics reflecting the shape of the distribution (skewness and kurtosis) also showed good signs of normality. Linearity The assumption of linearity leads to two major points: 1. The correlation coefficient between any two variables is based on linear relationship. 2. The canonical correlation is the linear relationship between the variates (sets of variables). Common way to assess linearity is to examine the residuals. The residuals reflect the unexplained portion of the dependent variables; thus any nonlinear portion of the relationship will show up in the residuals. The plots of regression standardized residuals (see Appendix D) show linear relation of each dependent variables with dependent variables. Ouliers Outliers are observations with a unique combination of characteristics identifiable as distinctly from the other observations. The typical approach to identify outliers is to examine the distribution of observations in form of standardized scores which have a mean of zero and a standard deviation of one. The standardized scores (z scores) are computed as a part of SPSS Descriptive procedure and they are added to the data in the Data Editor and are available for SPSS charts, data listings, and analyses. As suggested by Joseph F.H et al., (1994), for small sample size (80 or fewer observations), those cases with standardized scores of 2.5 or greater are identified as outliers.
3

(Canonical Analysis, http://www.ic.polyu.edu.hk/posh97//Statistics_textbook/stcana.html, 1997).

41

Examining the data set shows that there are 3 cases with z scores exceeding 2.5 (-3.799, -2.813, -2.555) Therefore the outliers problem can be considered remedied. Reliability The reliability of the data is measured by Cronchbach alpha. In our case the overall reliability coefficients for all variables was 0.842. 6.4.2 Deriving the canonical functions and assess overall fit

The first step of CCA is to derive canonical functions. Each canonical function consists of a pair of variates, one representing the independent variables and the other representing the dependent variables. The canonical analysis is restricted to three canonical functions, because the dependent variable set contains three variables. Statistical and practical significance The results of derived canonical functions are achieved by running CANCORR macro of SPSS. As seen in the Table 6.4, only the first two canonical functions are statistically significant since canonical correlations are relatively high. Multivariate tests also show both functions, taken collectively, are significant at 0.1 level.

Table 6.4 Canonical Correlation Analysis of Canonical Functions

Canonical functions 1 Canonical Correlation Canonical R2 Wilk's Chi-SQ DF Sig. .620 .384 .493 42.455 24.000 .001 2 .410 .168 .801 13.316 14.000 .01333 3 .194 .038 .962 2.300 65.000 .608

Appendix F provides the results of redundancy index calculation for first two canonical functions and the summary is in the Table 6.5 Table 6.5 Redundancy Analysis of Dependant and Independent Variates for Both Canonical Functions Standardized Variance of the Dependent Variables Explained By

42

Canonical Functions

Their Own Canonical Variate (Shared Variance) Percentage Cumulative Percentage .579 .763

The Opposite Canonical Variate (Redundancy) Canonical R2 Percentage .384 .168 .223 .031 Cumulative Percentage .223 .254

F1 F2

.579 .184

Standardized Variance of the Independent Variables Explained By

Canonical Functions Their Own Canonical Variate (Shared Variance) Percentage F1 F2 .125 .125 Cumulative Percentage .125 .250 The Opposite Canonical Variate (Redundancy) Canonical R2 Percentage .384 .168 .048 .021 Cumulative Percentage .048 .069

As it can be seen from the Table 5.5, the first canonical function appears to have more practical significance than the second function. The redundancy index for the dependent variables is .223 while the independent variate has a substantially lower redundancy index of . 048. The low redundancy of independent variates results from the relatively low shared variance (.125), but not canonical R2. The second canonical function produces quite low values of redundancy indices. First, the canonical R2 is lower (.158) and both variable sets have low shared variance (.184 for dependent variate and .125 for independent variate). The combination with the canonical root produces redundancy index of .031 for the dependent and .021 for independent variate. Therefore, while the second function is statistically significant, it has little practical significance. 6.4.3 Interpreting the results

For the reasons stated in the previous part, only the first canonical function is used in the interpretation stage. Table 6.6 provides the computer-calculated canonical weights (standardized canonical coefficients), canonical loadings and canonical cross loadings for the first canonical function. The relative importance of variable (the strength of each independent variable toward canonical relationship) in each set of variables is indicated by the canonical weights extracted for the variable, their canonical loadings (within set, variable-variate correlations) and canonical cross-loadings (between set, variable-variate correlations).

43

Canonical Correlation and Canonical Weights Table 6.4 shows the results of correlating the eight independent variables-as set of predictor variables- with three dimension of quality-as set of criterion variables of M&E projects. Applying the canonical weights (coefficients) to each variable, we obtain the correlation function like below:

CriterionVariate/ Dependent Variables

{.121 SPEC + . 239 TESTING + . 898 OPERATIO}

Canonical correlation
<Rc=.6 20>

Predictor Variate /Independent Variables

{-.191 PROJECT + .297 EXPERIEC + .094 SUPPORT + .363 TEAMCAP + .012 PMSKILLS +.534 QUALIM + -.089 CONSULT + .665 AUTSTAND}

The canonical correlation stands at .620 and hence, justifying the initial argument that the project quality and predictor variate-which consists of eight independent variables- are highly inter-related. In light of this correlation, redundancy index of the canonical function shows that 58 % of the variance of the quality performance is accounted for by the variability of in the three of its dimensions, namely specification conformance, testing and commissioning success and operation reliability. This means that three quality dimensions chosen are essential measures and truly reflect contains of quality performance. On the other side, the variability of independent variables, which constitutes of eight factors, indeed has effect on quality performance judging from the fact that 22.3% of variance of the quality performance is accounted by them. Table 6.6 Canonical Weights, Canonical Structure and Cross Loadings of the First Canonical Function
Canonical Weighsa Dependent Variables SPEC TESTING OPERATIO Independent Variables PROJECT -.191 -.191 -.118 .121 .239 .898 .484 .732 .984 .300 .454 .610 Canonical Loadings b Canonical CrossLoadings c

44

EXPERIEC SUPPORT TEAMCAP PMSKILLS QUALIM CONSULT AUTSTAND

.297 .094 .363 .012 .534 -.089 .665

.297 .094 .363 .012 .534 -.089 .665

.184 .058 .225 .007 .331 -.055 .412

a. Standardized canonical coefficients for the independent and dependent variables b. Correlations between independent or dependent variables with their canonical variates. c. Correlations between independent variables with the dependent canonical variates or dependent variables with independent canonical variates. Canonical correlation = .620 Canonical root (eigenvalue) =.384 2= 42.455 d.f.= 24.000 P(2) = 0.001

45

INFLUENCING FACTORS

QUALITY DIMENSIONS

Figure 6.3 Helio Chart of Canonical Cross-Loadings

[Adapted from Shafto M.G et al. (1996)]

As discussed earlier, the magnitude of the weights represents their relative contribution to the variate. Based on the size of the weights, all the three dimensions of quality contribute positively to quality performance of a project. Operation reliability is ranked first (.898) followed by testing and commissioning (.239) and specification conformance (.121). The

46

meaning is that quality performance, as far as customer concerns, is largely determined by smooth operation during warranty period and successful testing and commissioning process. From the perspective of contractors, during the installation process, M& E contractors used to compromise on specification conformance in favor of cheaper equipment price and prompt delivery but the operation reliability is the ultimate measure of quality of work done. But it is unusual that the canonical weight for specification is quite low (.121), since the more the equipment being erected according to predetermined specification, the more possible that overall quality will be met. This may be explained by the fact that instead of strict adherence to original specifications, M&E contractors could propose alternatives solutions, as usually done in practice. Under these circumstances, they consider specification conformance is deviated from tender specifications although the new equipment has the same technical characteristics. In the set of independent variables, authority requirement and standard used have the highest positive canonical weight (.665). Thus, the strict safety and environmental regulations from government agency and more familiar technical standards will have high impact on correlation of two sets. The next three important sets of variables are quality control system (.534), project team capability (.363), and companys past experience. (.397). Quality assurance system and crosscheck practice play a vital role to ensure project quality. Project managers management skills and the extent of top management support do not show high contribution to the predictor variate. Correlation of project size (in term of value and completion time) and consultant role is small and negative. Canonical Loadings and Cross Loadings Canonical weights are typically unstable owing partially to their calculation solely to optimize canonical correlation. Canonical loadings and cross-loadings are considered more appropriate. Since we concern mostly the strength of independent factor toward quality performance, we will examine the canonical loadings for dependent variables and cross-loadings for the independent variables only. The Helio chart shown in Figure 6.3 is a visualized illustration of structure correlations. The direction of the bar extending toward the circumference shows the positive correlation and toward the center-negative. The relative length of the bar represents their loadings. The left side of the chart represents the correlation of eight factors on quality performance and the right side shows the correlation of quality dimensions toward quality performance itself. Interpretations of this chart are follows: Specification conformance, testing and commissioning, and operation reliability have positive contribution to project quality performance in the descending order. Specification conformance is one measure of quality but it can be flexible provided substitution equipment is of equivalent characteristics. Testing and commissioning process is vital to ensure that all the system are functioning properly. This is a rigorous process and there

47

could not be any compromise, otherwise the quality performance will be seriously affected. Smooth operation is considered the ultimate measure of quality by all parties concerned, not only M&E contractors. Project size is negatively correlated with quality in a small extent. Project size defines the amount of resources to be managed and frequently results in more complex technical and management issues for large project than for small projects. A large and prolonged project usually requires a bigger project team and problem of task co-ordination could have adverse effect on quality. However the size of project does not appear to have major impact on quality. Careful planning, better communication can help to overcome this obstacle and minimize its negative impact. Companys past experience is one of the factors that significantly affect quality. Experienced personnel will adapt better to site conditions and work variations. In the competitive M&E contracting market, reputation and experience are virtually an orderwinning criteria where quality is primary objective. Management support does not have high correlation with quality in our study (.094). This is in line with preliminary analysis, where mean of functional support is just above average. Management support for newly emerging local M&E contractors often limits to material and manpower supply which are not in the satisfactory manner. Project team with good technical skills and effective communication will contribute greatly to quality performance. Therefore, this factor has reasonable positive cross-loading (.225). Project managers management skills factor has almost no impact on project quality. This may reflect perception of respondents that project manager technical competence and communication skills are more important. (high mean scores in the preliminary analysis). Quality assurance/control system is the second most important in the set of eight factors. It is obvious that if the project team maintains a good QA/QC system, the overall quality will be improved. Consultants role has surprisingly low and negative correlation with quality. It contrasts with both literature and site practice where consultant is a prominent figure who is in charge of overall quality. In the context of our research, this can be explained as design consultant usually use specification of highest standard, whose conformance is difficult to follow given time and cost constraints facing M&E contractors. This is considered to have negative impact on quality. Authority requirement and standard used have the highest correlation of .412 with the quality variate. This factor has the highest relative importance toward quality performance. The stricter the requirements are, the higher quality will take place. The contractors will carry out the job with more confidence and convenience if they are well familiar with the system of standards used in the project. This also reflects concerns of a large number of managers being interviewed.

48

Chapter 7 CONCLUSIONS AND RECOMMENDATIONS

7.1

Conclusions

The purpose of this research study is to identify and validate the managerial variables and factors that are critical to quality performance of M&E projects. Projects quality performance itself is defined as a combination of three measures: specification conformance, successful testing and commissioning and operation reliability. The initial twenty-seven variables were developed from intensive literature review and site discussion with key M&E personnel and later were assorted into eight factors based on survey questionnaire analysis. Further multivariate analysis- canonical correlation- takes into account the mutual interaction of all managerial factors and quality measures at the same time. From the quality measures, the most important was operation reliability, followed by testing and commissioning, and specification conformance respectively. The factors found to be mostly affecting the quality performance, by order of importance, are: 1. Authority requirement and standard used in the projects : the extent of governmentstipulated regulations and requirements and level of familiarity of design standards. 2. Internal quality assurance system: the procedures and processes according to which M&E contractors have to ensure the required quality of the work. 3. Project team capability: teams technical competence and communication among team members 4. Parent organization reputation and past experience Some of these are well documented in the literature dealing with project management. It is well known that for project quality performance, a capable project team that is familiar with design standards and from an reputable company with vigorous quality control program (like ISO 9000) will certainly guarantee success. Nevertheless, our study reveals some factors that are unique for M&E project in the present conditions of Vietnam. M&E contractors are most worry about non-standardized project design brought in by foreign consultants. This is partly because of the current problems caused by Vietnams current lack of a national uniform M&E Code of Practice which should have the governing power over all aspects of M$E activities. This concern is reflected by the fact that the factor regarding authority and design standard is thought affecting quality most.

49

Other factors such as project size and schedule, management support, project manager management skill and consultant role did not have high impact on quality performance according to this study. The main weakness of our research is the small sample size. In Ho Chi Minh City alone, there are over 250 companies4 actively engaged in M&E work and our survey included only 30 of them. The small sample size (67) also raises the validity of using factor analysis to reduce the number of managerial variables. As a result, some factors like management support, project manager management skill and consultant role that are though to be critical for project success but have little or even negative effect in our study. It is also noted that not all the tests of assumptions underlying multivariate analysis like homoscedasticity, multicolinearity and so on have not been performed. The result of data analysis may be distorted. Finally, we have demonstrated the use of canonical analysis to investigate the relationship between quality performance measures and set of managerial factors. The interpretation is simple but the validity also depends much on sample size.

7.2

Recommendations

Some practical recommendations for quality improvement of M&E works from the contractors perspective are the following: The quality of a project consists of different aspects and the ultimate measure still is the operation reliability. The maintenance team should have excellent troubleshooting skills to ensure smooth operation. Getting operation staff (owner) involved in the early stage of installation project and providing them clear Maintenance and Operation Manuals (MOM) is of great importance since they are the one who run the facility. The degree of smooth operation relies in a large extent upon proper instructions. Specification conformance and testing and commissioning have a close relationship. Whenever possible, the contractors should try to get major equipment specified by design engineer from reputable manufacturers since their after-sales service is of great help in testing and commissioning. The contractors usually have little or no effect on design stage. However, unfamiliar foreign standards can be remedied through training. The contractor can prepare for the projects beforehand by nominating project manager and team members who are familiar with specific design standards (BS, NEC etc.). On-site close communication and consultation with consultant representatives also help to better understand the standard system and avoid unnecessary mistakes. Quality assurance system plays a significant role in M&E activities. It is of great important for local contractors to use appropriate methods in quality management. In most of cases, simple basic methods and techniques will give better results than currently fashionable methods. ISO 9000 is desirable but in this stage it is costly and not easy to apply for local

LEGRAND Company Market Study Report, 1998.

50

contractors. Our recommendation is close supervision, clear instructions, proper handling of data (drawings, change order etc.) and sufficient cross-check. Local governmental agency and consultants and also might help advise to select an appropriate quality management system. Project team capability can be improved by vocational training, in-house training. A capable team will carry out the job with professionalism and confidence. In practice, this is one of the weakest points of M&E contractors. Team members, except key personnel, usually have limited education and their learning of new technology is basically by trialand error or from peers. Open communication and coordination among team members also help boost quality performance. The final point is the parent organization that has accumulated vast experiences in M&E works should have a plan for knowledge sharing. It is not unusual that one project team has repeated the same mistakes made by other team. In-house training, typical project review are the measures to spread the best practice and limit the defect work. ISO 9000 quality management system has become an increasingly important criteria for M&E contractor. It not only formulates a set of standards concerning what a companys quality system should encompass but also brings the reputation for the company being accredited with ISO 9000 registration. Therefore, preparation for ISO 9000 registration is an important activity of M&E contractors.

51

REFERENCE

1. Benefits of Quality Design and Construction Manual of Professional Practice Quality in the Construction Projects issued by American Society of Civil Engineers (ASCE), pp1625, 1986. 2. Ten Years FDI in HCM City The Saigon Times. p16, June 20, 1998. 3. Vietnam Construction-Prospects and Policies published by HoChiMinh City Architecture and Construction Association, 365p, 1995. 4. Abdel-Razek R.H., Factors Affecting Construction Quality in Egypt: Identification and Relative Importance Engineering, Construction and Architectural Management Vo1. 5, No. 3, pp.220 -227, 1998. 5. Afifi, A.A., and Clark, V.A. Computer-Aided Multivariate Analysis. 2nd ed. London : Chapman & Hall, 1986. 6. Alfonso L. Dematteis, Solid Principles-Bringing Construction Standards to Vietnam The Vietnam Business Journal. p15, Aug/1998. 7. An M., FDI Construction Vietnam Economics News. No.1, pp24-25, 1999. 8. Baker B.N, Murphy D.C. and Fisher D., Factors Affecting Project Success in Project Management Handbook. D.J.Cleveland and W.R King, eds Van Nostrand Reidhold, New York, 1998. 9. Belassi W. and Tukel O.I., A New Framework for Determining Critical Success/Failure Factors in Projects International Journal of Project Management Vol.14, No.3, pp 141151, 1996. 10. Buttle F., SERVQUAL: Review, Critique, Research Agenda European Journal of Marketing Vol.30, No.1, pp8-32, 1996. 11. Clark D., Understanding Canonical Correlation Analysis. Geo Abstracts Ltd., University of East Anglia, Norwich, 1975. 12. Daniel W.M Chan and Mohan M Kumaraswamy A Comparative Study of Causes of Time Overruns in Hong Kong Construction Projects International Journal of Project Management Vol.15, No.1, pp55-63, 1997. 13. Duong M. and Minh T., Approaching International Standards Vietnam Economics News. No.30, p16, 1998.

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14. Greenaway.D.A., The Role of Maintenance and Performance Control in Keeping Buildings Healthy-Work-Shop Comments Healthy Building 88-Conclusions and Recommendations for Healthier Buildings. Vol 4, pp107-114, 1981. 15. Hayfield F., Project Successes and Failures Tools and Strategies for the 90s. Elsvier Science Publisher B.V.(North Holland), 329p, 1986. 16. Ireland V., The Role of Managerial Actions in the Cost, Time and Quality Performance of High-Rise Commercial Building Projects Construction Management and Economics No.3, pp59-87, 1985. 17. James D.S., Blueprint for Measuring Project Quality Journal of Management in Engineering. Vo1 1, No2, pp34-39, March/April1996. 18. Joseph H., Multivariate Data Analysis with Readings, Prentice Hall, 1995 19. Kerzner H., Project Management: A System Approach to Planning, Scheduling and Controlling. 3rd Edition, Van Nostrand Reinhdd, New York 1989. 20. Landin A.M. and Person M.T., Evaluation of Quality Systems for Specialist Contractors Engineering, Construction and Architectural Management Vo1. 5, No. 3, pp.210 -219, 1998. 21. Ledbetter W.B. Quality Performance on Successful Projects Journal of Construction Engineering and Management Vo120, No. 1 , pp34-46, March/1994. 22. Mustapha H.H. and Naoum S., Factors Influencing The Effectiveness of Construction Site Managers Projects International Journal of Project Management Vol.16, No.1, pp18, 1998. 23. Nam H., Building Targets Vietnam Economics News. No.30, p6, 1998. 24. Parasuraman A., Zeithaml A.V. SERVQUAL: A Multiple-Item Scale for Measuring Consumer Perception of Service Quality Journal of Retailing. Vol. 64, No.1, pp12-40, Spring/1988. 25. Pheng L.S, The Rationalization of Quality in The Construction Industry: Some Empirical Findings Construction Management and Economics No11, pp247-259, 1993. 26. Pinto J.K and Mantel S.J, Jr, The Cause of Project failure IEEE Transactions of Engineering Management Vol.37, No.4 pp 269-276, November/1990. 27. Pinto J.K and Prescott J.E., Planning and Tactical Factors in The Project Implementation Process Journal of Management Studies, Vol.27, No.3 pp 305-325, May/1990. 28. Pinto J.K and Slevin D.P., Critical Factors in Successful Project Implementation IEEE Transactions of Engineering Management, Vol.EM34, No.1 pp 22-27, February/1987.

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29. Sanvidor V., Grobler F., Parfitt K., Guvenis M. and Coyle M. Critical Success Factors for Construction Projects Journal of Construction Engineering and Management in Vo1. 18, No. 1, pp.94 -111, March/1992 30. Schul P.L., Pride M.W and Little T.L., The Impact of Channel Leadership Behavior on Intrachannel Conflict Journal of Marketing, Vol. 47 (Summer 1983), pp.21 34. 31. Senior A.B., Electrical Construction Foreman Task Scheduling Journal of Construction Engineering and Management. Vol. 122, No. 4 , pp363-369, Dec/1996. 32. Tishler A., Dvi D., Shenhar A. and Lipovesky S., Identifying Critical Factors in Defense Development Projects: A Multivariate Analysis Technological Forecasting and Social Change, No.51 pp 151-171, 1996. 33. Wit A., Measurements of Project Success International Journal of Project Management. Vol.6, No.3, pp164-170, 1988. 34. Yates J.K. and Aniftos S. International Standards and Construction Journal of Construction Engineering and Management in Vo123, No. 2 , pp127-137, June/1997. 35. Yatseen A.M and El-Marashly A.F., Project Quality-Control Management: A Conceptual Framework Project Management Vol.7, No.2, pp 84-90, 1989.

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APPENDIX

Appendix A Sample of survey questionnaire QUESTIONNAIRE FOR THE STUDY OF FACTORS INFLUENCING QUALITY PERFORMANCE OF M&E CONSTRUCTION PROJECTS IN VIETNAM This questionnaire is developed solely for the above study and its data remain strictly confidential. Please check the box or circle the number/criteria on the scale provided using the facts from the completed project mentioned by you. Your cooperation is helpful and highly appreciated Name (may not be provided if you prefer anonimous): _________________________ Designation: Project Manager Project Engineer Other (please specify) ______ A. GENERAL INFORMATION Project name _________________________ Location: Ho Chi Minh City Ha Noi Other province (please specify) ________ Type of project : Commercial building Housing complex Infrastructure project Industrial plant Other (please specify) ______ Your companys role: M&E Main contractor M&E Sub-contractor Type of contract: Lump-sum (a single lump sum for the complete structure) Unit-price (contract based on agreed upon unit price for actual work done) Cost-plus ( based on actual cost plus agreed upon rate for overhead and profit) Other (please specify) ______

B. PROJECT QUALITY DIMENSIONS

1.Specification conformance - percentage of installed equipment meeting original specification <50% 70% 80% 90% 100%

2. Successful testing and commissioning - Extent of rework before the system was accepted

55

Reject Major rework Minor rework Small adjustment

No rework required

3. Operation reliability - Degree of smooth operation during warranty period System breakdown/Large interruption/Medium interruption/ Minor interruption/ No interruption

C. FACTORS RELATED TO PROJECT

1. Project value - estimation in million US dollars < 0.5 0.5-2 2-5 5-10 2. Completion schedule - in years as contract required < 3 months 3-6 months 6-12 months 1-2 years >10 >2 years

3. Design complexity - indicate your assessment of design complexity Not complex at all 4. Work variation - Degree of variation from original design Totally new design Unchanged Very complex

5. Urgency of the project - need to implement the project as soon as possible Not urgent at all Very urgent

7. Uniqueness of project activities - number of standard activities involved Very standard Very unique

D. FACTORS RELATED TO PROJECT TEAM

1. Project manager's technical competence and skills - indicate your assessment Not strong at all Very strong

2. Project managers managerial skills - indicate your assessment on leading, motivation, control, planning capabilities of PM Not strong at all Very strong

56

3. Project managers coordination and communication skills - indicate your assessment on effectiveness of PMs communication and coordination skills (both internal and external) Not effective at all 4. Project team size - average man/day during project time < 10 10-30 30-60 60-100 >100 Very effective

5. Team members technical skills - average technical, troubleshooting skills Not strong at all 6. Team's communication and commitment Not good at all Very good Very strong

7. Internal quality control system: extent of quality cross-check, supervision of work Not good at all Very good

8. Team resources utilization: extent of technology employed, proper tool and material used Not good at all Very good

E. FACTORS RELATED TO PARENT ORGANIZATION

1. Top management support - indicate level of top management support for the project Not strong at all Very strong

2. Functional support - indicate level of functional (financial, logistics) support for the project Not strong at all Very strong

3. Relative importance of this project - as of its value toward the whole organization Not important at all Very important

4. Availability of resources indicate the extent of resources available upon request Not important at all Very important

5. Projects preliminary estimates - accuracy of cost, schedule, scope of work as per BQ

57

Not good at all 6. Parent company's reputation and past experience Not good at all

Very good

Very good

E. FACTORS RELATED EXTERNAL ENVIRONMENT 1. Unfamiliar foreign standards - indicate the extent of difference between the project standard (NEC, BS, AS etc.) and local standard or prevailing practice (TCVN) Not different at all Very different

2. Sub-contractors competence - technical skills, competence to carry out the job Not good at all Very good

3. Consultant/Owner representative requirement - how strict were their requirement Not strict at all Very strict

4. Local authority requirement - how strict were the environmental, safety regulations Not strict at all 5. Level of competition - from other competitors of the same No competition at all 6. Industry state - the level of construction development Not favorable at all Highly favorable Very strong Very strict

7. Socio-economic conditions - the extent of socio-economic conditions preferableness Not favorable at all Highly favorable

Appendix B: Quality dimensions and factors notation

58

Notation Quality performance QP

Dimensions Specification conformance Testing and commissioning Operation reliability

Notation SPEC TESTING OPERATIO Notation VALUE SCHEDULE COMPLEX VARIATIO URGENCY UNIQUE PMTECH PMMANAGE PMCOM TEAMSIZE TEAMTECH TEAMCOM QUALCTRL RESORUSE MSUPPORT FSUPPORT IMPORTAN RESAVAIL ESTIMATE PASTEXPE STANDARD SUBCON REQRMENT AUTHORTY COMPETE INDUSTRY SOCIOECO

Notation Project related factors PROJECT

Variables Project size Completion schedule Design complexity Work variation Urgency of the project Uniqueness of activities

Project PMTEAM manager and project team

Project manager technical skills Project manager managerial skills Project manager communication skills Team size. Teams technical skills. Team communication and commitment. Internal quality control Resources utilization

Parent organization

PARORG

Top management support Functional support. Relative importance Availability of resources. Project preliminary estimates Organization past experience

External factors

EXTERNAL

Foreign system of standards Sub-contractors skills Consultant/owner requirement Local authority requirement Level of competition Industry development state Socio-economic condition

Appendix C: Test of normality a

59

KolmogorovSmirnov Statistic SPEC TESTING OPERATIO PROJECT EXPERIEC SUPPORT TEAMCAP PMSKILLS QUALIM CONSULT AUTSTAND .289 .288 .210 .229 .230 .263 .196 .164 .249 .234 .282

Df 67 67 67 67 67 67 67 67 67 67 67

Sig. .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000

a. Lilliefors Significance Correction

60

Appendix D. Residuals Plots of Regression Standardized Residuals

Normal P-P Plot of Regression Standardized Residual Dependent Variable: OPERATIO

1.00

.75

Expected Cum Prob

.50

.25

0.00 0.00 .25 .50 .75 1.00

Observed Cum Prob

Normal P-P Plot of Regression Standardized Residual Dependent Variable: TESTING

1.00

.75

Expected Cum Prob

.50

.25

0.00 0.00 .25 .50 .75 1.00

Observed Cum Prob

61

APPENDIX E: Correlation matrix and reliability coefficient (alpha) R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A) Correlation Matrix VALUE VALUE 1.0000 1.0000 .1914 -.1908 -.0373 .0417 .1119 -.1833 -.2948 .7124 -.1811 -.1706 -.2489 -.1687 .0741 .0218 .3589 -.2262 -.1439 -.0399 1.0000 -.3001 .0837 .3096 -.0462 -.1727 .0029 .0130 -.0932 -.1175 .0663 .0407 .0280 .1321 .0416 .0171 -.1470 .0897 1.0000 .0120 .0340 .1117 .3288 .2863 .0360 .1409 .0452 .1900 .2240 .1795 .1269 .0149 .3010 .5831 .3663 1.0000 .1433 -.0090 .1836 .3002 -.0391 .2328 .1775 .2004 .0623 .3095 .4747 .1831 .1505 -.0485 .0344 SCHEDULE COMPLEX VARIATIO URGENCY

SCHEDULE .7091 COMPLEX VARIATIO URGENCY UNIQUE PMTECH .2651 -.2138 .0450 .704 .0024

PMMANAGE -.1851 PMCOM TEAMSIZE -.2928 .5991

TEAMTECH -.2285 TEAMCOM -.0852 QUALCTRL -.2625 RESORUSE -.1282 MSUPPORT .0862 FSUPPORT .0678

IMPORTAN .3684 RESAVAIL ESTIMATE PASTEXPE -.1502 -.2237 .0804

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STANDARD .2686 SUBCON -.2974

.2512 -.2978 -.0190 -.0699 .0392 .1398 .1571 PMTECH

.1716 -.1080 .3405 .1435 -.1868 -.0956 .0319

-.2923 .2926 -.1430 .0035 -.1425 .2167 .2107

.0788 .0205 .2964 .1213 .2478 .3834 .2985 TEAMSIZE

REQRMENT .1042 AUTHORTY .1738 COMPETE .0760

INDUSTRY .2018 SOCIOECO .1251 UNIQUE UNIQUE PMTECH 1.0000 .2999

PMMANAGE PMCOM

1.0000 .3779 .0497 .1793 .1634 -.0478 .1754 .1581 .0708 -.0348 .1275 .1719 .3112 .3122 .0252 .2196 1.0000 .6404 -.0839 .4022 .1616 .2301 .3836 .3462 .2251 -.0175 .5681 .4809 .3857 -.1921 .4902 1.0000 -.2518 .5277 .3469 .2841 .4385 .3572 .5181 .0230 .6335 .2790 .3553 -.2889 .5130 1.0000 -.1173 -.1379 -.1443 -.0260 .1318 .0594 .2692 .0046 .0009 .1028 .0808 -.2219

PMMANAGE .3162 PMCOM TEAMSIZE .1659 .2693

TEAMTECH .2967 TEAMCOM .2184 QUALCTRL .1419 RESORUSE .3154 MSUPPORT .2604 FSUPPORT .2449

IMPORTAN .0804 RESAVAIL ESTIMATE PASTEXPE .3926 .2401 .3212

STANDARD .1891 SUBCON .1638

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REQRMENT .2391 AUTHORTY COMPETE .1281 .3557

.0893 .1461 -.0418 .2361 .1936

.1374 .1819 .1369 .1866 .2355

.2177 .2169 .2176 .1208 .2489

-.0750 .1029 .1128 .1380 .0457

INDUSTRY .2677 SOCIOECO .2293

TEAMTECH TEAMCOM QUALCTRL RESORUSE MSUPPORT TEAMTECH 1.0000 TEAMCOM .5084 QUALCTRL .2856 RESORUSE .3498 MSUPPORT .0693 FSUPPORT .1581 1.0000 .1527 .3504 .1246 .2253 .0035 .2524 .1497 .0694 -.0744 .2828 .1412 .2762 .3109 .3459 .2540 .3581 .2598 .0607 .2343 .2053 1.0000 .2576 .1484 .2402 .3138 .2357 .1510 .0453 -.2034 .1473 .2538 .1860 .0006 .1487 .2529 ESTIMATE 1.0000 .3606 .3961 .0695 .4563 .2523 .2040 -.0995 .4472 .1952 .3159 .0483 .2072 .0651 PASTEXPE 1.0000 .6327 .3791 .3696 .1534 .1607 -.1086 .3080 .1879 .1221

IMPORTAN .1110 RESAVAIL ESTIMATE PASTEXPE .3265 .2478 .1834

STANDARD -.0985 SUBCON .4741

REQRMENT .2272 AUTHORTY COMPETE

INDUSTRY .3404 SOCIOECO .4425 FSUPPORT FSUPPORT 1.0000

IMPORTAN RESAVAIL

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IMPORTAN .2674 RESAVAIL ESTIMATE PASTEXPE .4702 .0485 .0610

1.0000 -.0458 -.0300 -.0159 .1015 -.0606 .2561 .2734 .0963 .4130 .2942 1.0000 .2826 .2886 -.3948 .4508 .0326 .3581 -.0295 .1436 .0599 1.0000 .3790 -.0692 .4773 .0082 -.0576 -.0381 .2464 .2673 1.0000 -.1693 .4189 .2975 .3060 .0801 .2908 .2954

STANDARD -.1178 SUBCON .2278

REQRMENT .2204 AUTHORTY .1851 COMPETE .2577

INDUSTRY .3234 SOCIOECO .2511

STANDARD SUBCON STANDARD 1.0000 SUBCON -.2511 1.0000 .2212 -.2189 .1106 .0419 .1925 .3504 .2455

REQRMENT AUTHORTY COMPETE

REQRMENT .1167 AUTHORTY COMPETE

1.0000 .2668 .2747 .2054 .2700 -.0017 .2083 .3003 1.0000 1.0000 .2163 .2767

INDUSTRY .0833 SOCIOECO .0239

INDUSTRY SOCIOECO INDUSTRY 1.0000 SOCIOECO .6519 1.0000

N of Cases = 67.0 Tukey estimate of power to which observations must be raised to achieve additivity .6679 Hotelling's T-Squared = 659.7122 F = 15.7624 Prob. = .0000 Degrees of Freedom: Numerator = 26 Denominator = 41 Reliability Coefficients 27 items Alpha = .8110 Standardized item alpha = .8250

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Appendix F Calculation of the Redundancy Indices for First and Second canonical Functions Variate/ Variable Canonical Loading F1 Depende nt SPEC Variable TESTIN G OPERA TIO Depende nt Independent Variate Variables PROJECT EXPERI EC SUPPOR T TEAMC AP PMSKIL LS QUALI M CONSU LT AUTST AND Independ ent -.191 -.565 .297 .094 .363 .012 .534 -.215 -.406 -.402 -.524 -.142 F2 Canonical Loading2 F1 F2 Average Loading2 F1 F2 Canonical R2 F1 F2 Redundancy Index F1 F2

.484 .732 .984

-.704 .187 -.145

.234 .536 .968

.496 .035 .021

1.738 .552

.579

.184

.384

.168

.223

.031

.036 .088 .009 .132 .000 .285 .008 .442

.319 .046 .165 .162 .275 .020 .003 .010

-.089 -.056 .665 .098

1.001 0.999 0.125 0.125 0.384 0.168 0.048 0.021

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