PROJECT MANAGEMENT AND ORGANIZATIONAL COMPETITIVE ADVANTAGE: A CASE OF TELECOMMUNICATION FIRMS IN KENYA

PROJECT MANAGEMENT AND ORGANIZATIONAL COMPETITIVE ADVANTAGE: A CASE OF TELECOMMUNICATION FIRMS IN KENYA

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ABSTRACT

Today’s competitive environment has pushed corporate firms, both in the private and public sector, to employ project management techniques in order to be successful as well as enhance efficiencies in their business processes.  The current study investigated the effect of project management on organizational competitive advantage by conducting a case study of telecommunication firms in Kenya. The study sought to establish the project management approaches used by

telecommunication firms in Kenya; the competitive positioning of telecommunication firms in Kenya and to determine the effect of project management approach on organizational competitive advantage in telecommunication firms in Kenya.

The study used a descriptive cross sectional survey. The target population consisted of three telecommunication companies in Kenya which included Telkom Kenya Limited, Safaricom Limited and Airtel Kenya Limited. The study conducted a census of all the three firms in Kenya by selecting 70 respondents working in project related tasks spread across different departments in the respective organizations. Primary data was used and was collected using questionnaires. Means were used to identify the project management approaches and competitive positioning of the firms. Standard deviation was also used to establish consistency of application of the project management approaches and the competitive positioning of these firms. Correlation analysis, regression analysis and analysis of variance (ANOVA) tests were used to establish the strength of the relationship between the study variables. 

The study established that all the three organizations employed project management approaches variously in their business process. The study also established that Safaricom Limited was leading in terms of competitiveness in the Kenyan market, Telkom Kenya Limited ranked second and Airtel Kenya Limited ranked third in terms of competitiveness. The study lastly established that there is a statistically significant

positive relationship between use of project management approaches and organizational competitive advantage. The results indicated that project management approaches were responsible for 64.3 % of organizational competitive advantage in the three telecommunication firms. 

The study recommended that firms in the telecommunications sector as well as in general business environment should consider using project management approaches to run and manage their project initiatives in order to improve their efficiencies and reduce operational costs. The study also recommended enhancement of project management capabilities for employees through training in order to improve on project management skills of the workforce which ultimately improves competitiveness of the organizations. The study recommended for financial development of the organizations’ project management cultures which improves the productivity, profitability and competitiveness of the organizations in the market place. The study lastly recommended for the documentation of key lessons, deliverables and challenges after successful implementation of project initiatives for future reference. 


CHAPTER ONE: INTRODUCTION

1.1 Background

Today’s competitive environment has pushed all corporate firms, both in the private and public sector, to look for superior ways to realize competitiveness. The deliberate search for success has led to some firms employing project management techniques in order to enhance efficiency and effectiveness in their business processes (Shwalbe, 2011). A cross section of scholars contend that progressive modern organizations have increasingly focused on executing a variety of  particular tasks such as development of new products and process re-organization by way of projects (Pinto, 2010; Rocha & Albergarias, 2012). The concept of project management is relatively new in its application to the general business processes and scholars agree that it can be applied in a variety of ways. For instance, Richardson (2010) opines that there is a proliferation of a variety of approaches to project management cues employed in work in organizations and no single approach has been broadly accepted as being distinctly better than the others. 

Larson & Gray (2011) identified three key project management approaches, that is, the traditional project management (TPM) approach; the adaptive project management (APM) approach and the extreme project management (xPM) as the most commonly used across different industries. They further assert that the three can be customized to fit any firms’ environment within its’ unique needs. Such fit would thus support the organization to realize benefits ranging from competitive market advantage, cut operational costs, satisfy compliance requirements, improve employee morale and help them achieve their strategic objectives. Pinto et al. (2010) and Rocha et al. (2012) posit that globally, organizations that use project management tools experienced better results than those that do not.  

The Kenyan telecommunications sector like in most parts of the globe continues to be a trend setter in many fronts (Omenye, 2013). The sector has exhibited an abrupt paradigm shift in market transition, bolstered by rapid development of ICT and high demand from customers. The telecommunication firms operate in a highly competitive environment which is complicated and clouded by a myriad of government regulations. The need for the sector to balance between careful compliance with the progressive government regulations and rapid network expansion to meet increasing customer demands has forced the sector to consider new

approaches for efficiency. 

Some of the firms have resulted to employing project management approaches to implement their new undertakings (Omenye, 2013). Some research work shows that about 80 per cent of top global executives believe that PM is a core competence which can help their organizations achieve and sustain competitiveness. The foregoing infers that an elaborate organizational commitment to PM can lead to better results and long term business value for organizations (Longman & Mullins, 2004; Shawlbe, 2011; Oliomogbe & Smith, 2013).  The Kenyan telecommunications industry therefore may benefit from the use of PM approaches.

1.1.1 Project management.

A project management approach is a set of guidelines or principles that can be tailored and applied to a specific business situation. Wysocki (2003) states that a PM approach involves adopting project execution at every level to deliver value at every stage within an organization as a collective single whole. There are three common project management approaches, which include: traditional project management approach (TPM); adaptive project management approach (APM); and extreme project management approach (xPM). Scholars posit that some organizations are reaping benefits from investing time, money and resources from building organizational PM expertise. 

Research links project management approaches to benefits like lower costs and improved productivity, greater efficiencies, improved customer and stake holder satisfaction, higher quality, increased reliability, higher profit margins, better internal co-ordination, realizing strategic goals and higher worker morale (Shwalbe, 2011; Project Management Institute-PMI, 2010). Wysocki (2003) posits that the

characteristics of different project initiatives can be used in choosing the PM approach that best suits particular organizational needs.

1.1.2 Organizational competitive advantage

Organizational competitive advantage is an advantage gained over competitors by offering consumers greater value, either by means of lower prices or by providing greater benefits and services that justify a higher price (Al-alak et al, 2011). Organizations focus on the elements involved in competitive advantage in their quest to identify sources of competitive advantage. Superior resources (tangible resources) and superior skills (intangible resources) have been identified as sources of competitiveness for most organizations. Further, resources that are rare, valuable, non-imitable and non- substitutable are touted to hold greater potential of developing competitiveness in organizations. Competitive advantage in this case is realized only when organizations combine an assortment of resources and skills in such a way that they achieve a unique competency or capability that is valued in the market place (Hoffman, 2000). 

Intangible assets are listed as major contributors to an organizations competitive advantage due to their ability to combine with other resources in unique and enduring ways that produce superior outcomes.  Project management is one best example of such combination of resources and skills in the current business environments. It can help organizations in meeting time and budget goals as well as in creating competitiveness and value for the organization (Crawford & Cooke-Davies, 2012).

1.1.3 Project management and organizational competitive advantage

Scholars acknowledge that use of PM approaches in organizations lead to improved organizational competitive advantage, achieved through improved operational processes and efficiency in the use of scarce organizational resources. The PM approaches also help organizations learn from their past successes and continually redesign their operational processes to optimize the organization’s project culture. Firms using PM approaches thus realize value through the tools ability to help the organization tweak the standard and tested approach in delivery of effectiveness and/or use most of it to fit their different project initiatives instead of thinking through a complete project plan each time they launch a new project initiative thus realizing efficiency (Richardson, 2010).

The two prospects positively reduce the time to market for the organizations’ products and services thus improving the competitive positioning of the organization in the market place. Alternately, the organization benefits from the particular tacit knowledge and collective learning drawn during the process of implementation and these can be used to enhance the processes for better outcomes (Turner, 1999; Richardson, 2010).

1.1.4 Telecommunications firms in Kenya

The telecommunication sector in Kenya is one of the key drivers of the country’s economy. The development of a large scale telecommunications infrastructure, capable of delivering efficient and affordable info-communication services has been touted as a critical prerequisite for the country’s economic growth. The Kenyan telecommunications business is exhibiting signs of an abrupt paradigm shift with symptoms of a market in transition, bolstered by rapid development of ICT and high demand from customers (Omenye, 2013). The firms in the sector are largely involved in the provision of fixed network voice services, mobile network services, mobile money transfer services, internet services as well as broadband services (Ngobia, 2014; Tyler, 1991; CCK annual report, 2013). 

The firms have had to deal with steady growth in subscriber numbers, thus resulting to the expansion of their networks. Besides the pressure of rapid expansion of the networks, the firms have also faced increased rivalry through value addition and demands by their subscribers to offer standard services hence the need to consider new approaches like the use of PM approaches to implement their new undertakings

(Omenye, 2013). This study used data from the big three telecommunication firms which include: Safaricom Limited, Airtel Kenya and Telkom Kenya Limited to establish the contribution project management has had to their competitive advantage.

1.2 Statement of problem

A substantial body of previous research points to project management as one of the key business solutions in realizing competitiveness and improving business results in modern firms. A cross section of scholars contend that modern organizations are increasingly focusing on executing a variety of particular tasks in the form of projects to develop new products as well as in re-organization (Pinto, 2010; Rocha & Albergarias, 2012). Researchers, among them Jugdev & Thomas (2002) explored the constructs of PM maturity models and noted that firms which used a PM approach as essential building blocks of business value enhanced their performance and outcomes. Despite this assertion, research focusing on project management and how it fully contributes to organizational competitive advantage though nascent, still remains scanty.  

A study done by the Economist Intelligence Unit (2009) showed that about 80 per cent of top global executives believed that PM is a core competency which could help their organizations remain competitive. This infers that an elaborate organizational commitment to PM can lead to better results and long term business value (Longman & Mullins, 2004; Shawlbe, 2011; Oliomogbe & Smith, 2013). Emmanuel (2013) evaluated the dynamics of project strategy in innovative enterprises in the banking sector and noted that project autonomy and stakeholder input enhanced the organizations competitive advantage. Mukhwana (2013) investigated the challenges facing implementation of Telehealth projects in Kenya and found that lack of use of a defined PM approach by telecommunication firms was one of the key issues that led to the failure of such projects. Olunga (2007)   identified use of PM cues as a response employed by Safaricom Limited to changes in the telecommunications industry. 

The foregoing studies fell short of directly linking PM approaches to the outcome of competitive advantage. This study therefore sought to bridge these gaps by directly linking PM to firm competitive advantage and mainstream business organizational environment away from its generic use in the non-governmental community based organizations. The study sought to answer the following broad question: what is the effect of applying project management approaches on organizational competitive advantage in the telecommunication firms in Kenya?  

1.3 Objectives of the study 

The overall objective of the study was to establish the effect of project management approaches on the competitive advantage of telecommunication firms in Kenya.

The specific objectives of the study were to:

i.        Establish the project management approaches used by telecommunication firms in

Kenya.

ii.      Establish the competitive positioning of telecommunication firms in Kenya.

iii.    Determine the effect of project management approach on organizational competitive advantage in telecommunication firms in Kenya.

1.4 Importance of study

The results of this study will be of value to the general telecommunications and IT managers who are tasked with implementing different projects for their organizations in light of competing organizational resources. The results of this study will be of value to managers in the three firms by providing information on the effectiveness and contribution of their PM initiatives to their overall competitive advantage. 

The results of this study will also serve as a source of information and reference to other organizations interested in applying project management approach in the delivery of their business goals and objectives.  

This study will be useful to researchers and academicians because they will be able to use this study as a basis and reference for further research. They may use this study to build on the project management knowledge in the business world. 


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