ARV Drug Facility Project in Ethiopia 2013 -REPORT FOR CHALMCARE INTERNATIONAL PHARMACEUTICAL DEVELOPMENT CHRISTIAN LEGNEROT, ELLIE MUCHELENJE, ALI SHIGUTE SEFERA, CHARLET RIYACHINNAPPARAJ INTERNATIONAL PROJECT MANAGEMENT | BOM 055 1 Table of Contents 1.1 General information ...................................................................................................................... 4 1.2. History .......................................................................................................................................... 7 1.3 Political status ............................................................................................................................... 8 1.4 Economical developments ............................................................................................................ 9 1.5 Social development ....................................................................................................................... 9 1.6 Education ..................................................................................................................................... 10 1.7 Authority and hierarchy .............................................................................................................. 10 1.8 Indicators of the Ethiopian economy .......................................................................................... 11 1.9 Transportation ............................................................................................................................. 12 1.10 Location: Jima city, Oromia, Ethiopia ........................................................................................ 13 1.11 Pharmaceutical Services in Ethiopia .......................................................................................... 13 1.12 Challenges faced ........................................................................................................................ 14 2.1 Theoretical background ................................................................................................................... 15 2.1.1 Culture Defined ........................................................................................................................ 15 2.1.2 National and Organizational Culture ........................................................................................ 15 2.1.3 Hofstedes Dimensions of National Culture ............................................................................. 15 2.1.5 Lewis National Culture Categories .......................................................................................... 16 2.1.6 Managing Cultural Diversity ..................................................................................................... 18 2.2 Application of theoretical background ............................................................................................ 18 2.2.1 The Project Team ...................................................................................................................... 18 2.2.2 National Cultural Analysis......................................................................................................... 19 2.2.3 Ethiopian Culture ...................................................................................................................... 20 2.2.4 Lewis Cultural Analysis ............................................................................................................. 21 2.2.5 Recommendations on handling Cultural Challenges ............................................................... 21 3.1 Theoretical background of governance and organization .............................................................. 23 3.1.1 Introduction .............................................................................................................................. 23 3.1.2 Governance .............................................................................................................................. 23 3.1.3 Project governance ................................................................................................................... 25 3.1.4 Organization and organizational structure .............................................................................. 28 3.1.5 Stakeholders analysis / Power interest matrix ........................................................................ 31 3.1.6 Risks Management ................................................................................................................... 32 3.2Application of theoretical background ...................................................................................... 33 3.2.1 Language barriers ..................................................................................................................... 33 2 3.2.2 Time differences ....................................................................................................................... 33 3.2.3 Socio-economic ........................................................................................................................ 33 3.2.4 Political ..................................................................................................................................... 33 3.2.5 Religious diversity ..................................................................................................................... 34 3.2.6 Building permit process ............................................................................................................ 34 3.2.7 Governance .............................................................................................................................. 35 3.2.8 Organization ............................................................................................................................. 37 3.2.8.1 Stakeholders Analysis ........................................................................................................ 37 3.2.8.2 Key Identified risks ............................................................................................................ 39 3.9 Key Recommendations based on theory and key findings ......................................................... 39 [1] Good Governance .................................................................................................................... 39 [2] Corruption ................................................................................................................................ 40 [3] Project Governance .................................................................................................................. 40 [4] Proposed organization structure ............................................................................................. 41 4.1 Academic review ............................................................................................................................. 42 4.1.1. Project design .......................................................................................................................... 42 4.1.2. Define it ................................................................................................................................... 42 4.1.2.1. Scope management .......................................................................................................... 42 4.1.2.2. The planning process ........................................................................................................ 43 4.1.2.3. Project initiation document ............................................................................................. 43 4.1.2.4. Stage-gate model of projects ........................................................................................... 44 4.1.3. Design it ................................................................................................................................... 44 4.1.3.1. Scheduling tools ............................................................................................................... 44 4.1.3.2. Risk management ............................................................................................................. 44 4.1.3.3. Expected value ................................................................................................................. 45 4.1.3.4. Quality management ........................................................................................................ 45 4.1.4. Do it ......................................................................................................................................... 46 4.1.4.1. Team work ........................................................................................................................ 46 4.1.4.2. Quality, time and cost control .......................................................................................... 46 4.1.4. Develop it ................................................................................................................................ 47 4.1.4.1. Completion and handover ................................................................................................ 47 4.1.4.2. Documentation ................................................................................................................. 47 4.1.4.3. System close down ........................................................................................................... 47 4.1.4.4. Project review (Immediate and long term) ...................................................................... 47 3 4.1.4.5. Appraisal and relocation of staff and disposal of surplus assets ..................................... 47 4.1.4.6. Stakeholder satisfaction ................................................................................................... 48 4.2. Implementation of academic review: ............................................................................................ 49 4.2.1. Design ...................................................................................................................................... 49 4.2.2. Delivery .................................................................................................................................... 51 4.2.3. Commission and operation ..................................................................................................... 51 5.1 Theoretical background of communication .................................................................................... 52 5.1.1 Communication types .............................................................................................................. 52 5.1.2 Degree of virtual collaboration ................................................................................................ 52 5.1.3 Virtual teams ............................................................................................................................ 53 5.1.3.1 Degree of virtuality ............................................................................................................ 54 5.1.4 Requirements for successful virtual teams .............................................................................. 57 5.1.5 Communication plan ................................................................................................................ 57 5.1.6 Summary of theoretical background ........................................................................................ 58 5.2 Application of theoretical background ............................................................................................ 60 5.2.1 Problems detected ................................................................................................................... 60 5.2.2 Collaboration plan .................................................................................................................... 61 5.2.2.1 Language ........................................................................................................................... 62 5.2.2.2 Time ................................................................................................................................... 62 5.2.2.3 Culture ............................................................................................................................... 62 5.2.2.4 Technology used for communication ................................................................................ 62 5.2.2.5 Role of internal stakeholders ............................................................................................ 63 5.2.2.6 Stakeholder communication chart .................................................................................... 64 5.2.3 Summary of the application ..................................................................................................... 65 Critical success factors culture ...................................................................................................... 66 Critical success factors governance and organization ................................................................... 66 Critical success factors delivery ..................................................................................................... 67 Critical success factors communication ........................................................................................ 67 Conclusion ..................................................................................................................................... 68 References ............................................................................................................................................. 69 PERSONAL REPORT CHARLET SANDRA CHINNAPPARAJ ........................................................................ 72 Individual Report (Ali Shigute Sefera) ................................................................................................... 73 Individual Report Ellie Muchelenje ....................................................................................................... 74 Personal report Christian Legnerot .................................................................................................... 75 4 1. COUNTRY BRIEF 1.1 General information Unique among African countries, the ancient Ethiopian monarchy maintained its freedom from colonial rule, one exception being the Italian occupation of 1936-41. In 1974 a military junta, the Derg, deposed Emperor Haile SELASSIE (who had ruled since 1930) and established a socialist state. Its population is approximately 91,195,675 and the population, growth rate is 2.9% (2012 EST.). Ethiopia is landlocked since 1991 and Ethiopia has used the port of Djibouti for nearly all of its imports. Ethiopia has another record which is worthwhile; it is one of two countries of the world which never remained under the influence of any other country, the second one is Russia. Figure 1.1 Ethiopian regional states 5 Table 1.1 Ethnic groups Ethnic groups,population% Oromo41 000 00040% Amhara26 000 00028% Somalia6 000 0006, 5% Tigray5 500 0006% Sidama4 000 0004% Gurage2 300 0002,5% Other720 00013% Table 1.2 Ethnic groups Languages% Oromiffa (official regional)42% Amharic) (official)32 % Somaligna6,5% Tigrigna (official regional)5,9% Sidamigna4% Guaragigna2,5% Table 1.3 Useful information Geographic coordinates8 00 N, 38 00 E Currency1ETBirr = 100 cents , 17.8birr = $1USD Fiscal year8 July - 7 July Time zone UTC/GMT+3 Internet TLD.et Calling code+251 Drives onright Table 1.4 Religions Name% Orthodox43.5%, Muslim33.9%, Protestant18.6%, traditional2.6%, 6 Catholic0.7%, other0.7% Figure 1.2 Religions in percent by regional state 7 1.2. History Figure 1.3 Ethiopian map The name "Ethiopia" derives from the Greek ethio , meaning "burned" and pia , meaning "face": the land of burned-faced peoples. In March 1896, Italian troops attempted to enter Ethiopia forcibly and were routed by Emperor Menelik and his army. The battle of Adwa was the only victory of an African army over a European army during the partitioning of Africa which preserved the country's independence. In addition to the monarchy, the Ethiopian Orthodox Church was a major force in that, in combination with the political system, the combination of church and state was an indissoluble alliance that controlled the nation from King Ezanas adoption of Christianity in 333 until the overthrow of Haile Selessie in 1974. A socialist government (the Derge) governed the nation until 1991. The Ethiopian People's Revolutionary Democratic Front (EPRDF) defeated the Derge, established dictator rule, and currently governs Ethiopia. The last twenty-five years of the twentieth century have been a time of revolt and political unrest but represent only a small portion of the time during which Ethiopia has been a politically active entity. Unfortunately, however, the country's international standing has declined since the reign of Emperor Selassie, when it was the only African 8 member of the League of Nations and its capital, Addis Ababa, was home to a substantial international community. Ethiopia is the tenth largest country in Africa, covering 1,138,512 square kilometers and is the major constituent of the landmass known as the Horn of Africa. It is bordered on the north and northeast by Eritrea, on the east by Djibouti and Somalia, on the south by Kenya, and on the west by Sudan and southwest by south Sudan (see figure 0.1). The Great Rift Valley (known for discoveries of early hominids such as Lucy, whose bones reside in the Ethiopian National Museum) bisects the central plateau. The valley extends southwest through the country and includes the Danakil Depression, a desert containing the lowest dry point on the earth -127m below sea level. In the highlands is Lake Tana, the source of the Blue Nile, which supplies the great majority of water to the Nile River Valley in Egypt.1.3 Political status Figure 1.4 Prime minister of Ethiopia Chief of state: President Girma Woldegiorgis (since 8 October 2001)head of government: Prime Minister Hailemariam Desalegn see fig. 1.3 (sinceAugust 2012)cabinet: Council of Ministers as provided for in the December 1994 constitution; ministers are selected by the prime minister and approved by the House of People's Representativeselections: president elected by the House of People's Representatives for a six-year term; bicameral Parliament consists of the House of Federation or upper chamber (108 seats; members are chosen by state assemblies to serve five-year 9 terms) and the House of People's Representatives or lower chamber (548 seats; members are directly elected by popular vote from single-member districts to serve five-year terms) elections: last held 15 May 2010 , but it is formal. 1.4 Economical developments Figure 1.4 Arabic coffee, the Ethiopian economys backbone The government of Ethiopia has used a serious five-years plan to develop the economy and many state enterprises have been privatized. Central planning and governmental controlling are applied to make progress in economic. More than half of the development budget comes from the foreign aid accounts. The priority of the government over the years is to develop transportation and communication facilities, agriculture, and industry. Ethiopia's economy is based on agriculture, which accounts for 46% of GDP and 85% of total employment. Coffee has been a major export crop. The banking, insurance, and micro-credit industries are restricted to domestic investors, but Ethiopia has attracted significant foreign investment in textiles, leather, commercial agriculture and manufacturing. The five-year economic plan has achieved high single-digit growth rates through government-led infrastructure expansion and commercial agriculture development. Ethiopia in 2013 plans to continue construction of its Grand Renaissance Dam on the Nile-the controversial multi-billion dollar effort to develop electricity for domestic consumption and export. Natural resources: small reserves of gold, platinum, copper, potash, natural gas, hydropower. 1.5 Social development Ethiopia is a predominantly rural society. Most of Ethiopian people are living in Country side and making their life as subsistence farmers. Programs of the government, assisted by international donor agencies, try to maintain a countrywide village development service and improve the conditions of life for these rural people. 10 1.6 Education Education in Ethiopia has been dominated by the Ethiopian Orthodox Church for many centuries until secular education was adopted in the early 1900s after 1974 revolution, emphasis was placed on increasing literacy in rural areas. Practical subjects were stressed, as was the teaching of socialism. Education received roughly 13% of the national budget in 1992. By 1995 the rate of illiteracy had dropped substantially to 64.5%. Projected adult illiteracy rates for the year 2003 even lower at 61.3% (males, 56.1%; females, 66.6%). As of 2007, public expenditure on education was estimated at 5.5% of GDP. Figure 1.6 Figure 1.5 In 1997, free literacy education was launched in the Warada District 10 of Addis Ababa, the capital of Ethiopia, for children who could not afford to go to school despite being of school age. It was officially accredited by the government in 2001, as an elementary school.1.7 Authority and hierarchy As is the case in most Ethiopia, seniority and age are respected much. Ethiopian show great respect to the age, authority and rank in an organization and the decision comes from top to the bottom of the organizational pyramid. 11 1.8 Indicators of the Ethiopian economy Table 1.5 Ethiopian Economy Indicators, CIA-The world facts book website 2012 Population92 million (2013 est)GDP(purchasing power parity)$103.1 billion (2012 est.)GDP growth7% (2012 est.)GDP(official exchange rate)$41.89 billion (2012 est.)GDP- per capita PPP$1,200 (2012 est.)Inflation (CPI)21.7% (2012 est.)Investment (gross fixed)22.7% of GDP (2012 est.)Taxes and other revenues 14.5% of GDP (2012 est.)Literacy 42.7% Military Expenditures (% of GDP)1.2% Exchange Rate17.8 (2012 est.)/$USD Fiscal year8 July - 7 July 12 1.9 Transportation Ethiopia has spent over 600 billion Birr in infrastructure since 1990, according to the Ethiopian government. Total roads and highways 101, 359 km, paved roads are about 90336 km (89%) and unpaved about 11,023 km (11%) in 2009. Currently about 5,000 km railway is under construction in Ethiopia. Figure 1.7Road to Mega, Yabelo, Ethiopia to Kenya 13 1.10 Location: Jima city, Oromia, Ethiopia Jima is a city western Ethiopia is one of the largest cities in Oromia region, see figure 1.7. It is one of the region's so-called special zones and estimated to have 207,573 inhabitants in 2012 on an area of 50.52 km . Jima is about 350 km southwest of Addis Ababa, at 1750 meters above sea level. It is a market town with trade, including coffee. The city has an airport, call Aba Segud airport. It has one medical university and it has very good quality water and round with tropic forest. There are two big dams near Jima and another one is under construction. Figure 1.7 Jima location map 1.11 Pharmaceutical Services in Ethiopia Since the start of Health Sector Development Plans (HSDPs) I, the government was committed to ensuring communitys access to the essential medicines that are safe, effective and of assured quality including rational drug prescription and use. In order to introduce efficiency in the supply chain of pharmaceuticals and medical supplies management system, PHARMID has been transformed into Pharmaceutical Fund and Supply Agency (PFSA) with the several measures taken to strengthen the capacity of the new agency. 14 Table 1.6 The total number of available Human resource for health during the succesive HSPD phases 1.12 Challenges faced The challenges that are being expected to face during activities of the project in Ethiopia: 1. Cultural Challenges - How should the project leadership and team meet the cultural differences? 2. Governance and Organization Challenges - How should the project adapt with the local governance methods and rules? - How to manage the unexpected changes and risks.3. Project Design, Delivery, Commission and Operation Challenges - How can adopt a smart strategy to achieve project objectives, managing risks and touching the stakeholders satisfaction 4. Communication Challenges - How should efficient communications with the multinational project team members in a country like Ethiopia which suffers from financial and technical poverty be ensured? 15 2. Cultural issues and challenges 2.1 Theoretical background It is important to understand the cultures of the representatives of the six countries as well as Ethiopia the country in which the project will be established.Individuals from different cultural backgrounds communicateand makedecisionsdifferentlyTherefore,culturaldiversity may affectprojectteams effectiveness.Inaddition,Culturaldiversityincreasesthecomplexity,conflict,confusion,and ambiguity of communication; it sets higher challenges for project teams (Shachaf, 2007). Thedistinctnationalcultureswithinglobalprojectnetworksorteamsaredeeplyimbeddedinthe individuals and organizations that populate them. This means that the underlying attitudes, thought patterns,assumptionsandexpectationsofeachculturecanbesignificantlydifferentandwhen broughttogetherinaprofessionalenvironmentcanleadtoconflictsthataredifficulttoresolve (Dimarcoetal2011).Inordertomitigatetheabovechallengesthereisneedtounderstandthe different cultures of the project team and establish ways of managing the cultural diversity. 2.1.1 Culture Defined Tounderstandthe effectthatculturaldiversityhas onaprojectteamitisvital tounderstandwhat cultureis.GeertHofstededefinescultureasthecollectiveprogrammingofthemindwhich distinguishesthe members of one group or category of people from another. Hefurther states that themindstandsforthehead,heartandhands-thatisforthinking,feelingandactingwith consequences for beliefs, attitudes, and skills. Culture includes values, systems of values which are a core element of culture (Hofstede, 2001). 2.1.2 National and Organizational Culture There are two kinds of culture, organizational and national culture. Organizational cultures are holistic, historically influenced, socially constructed and relatively stable. It is operationalized in terms of core organizationalpractices.Nationalcultureontheotherhandisoperationalizedintermsofvalues (Hofstede, 2001). 2.1.3 Hofstedes Dimensions of National Culture Hofstede further identified the values that distinguish countries fromeach other and grouped them in four dimensions of national culture namely Power distance (PDI), Individualism versus Collectivism (IDV),MasculinityversusFemininity(MAS),UncertaintyAvoidance(UAI).ThefifthdimensionLong Term Orientation (LTO) was added based on research by Michael Bond (Geert Hofstede.com). The first dimension, PDI is defined as the extent to which the less powerful members of institutions and organizations accept and expect the power is distributed equally. The fundamental issue is how a society handles inequalities among people. A society with a large degree of power distance accepts a hierarchical order in which everybody has a place and which needs no further justification a society with a power distance, people strive to equalize the distribution of power and demand justification for equalities of power. Theseconddimension,IDVreflectsonthepositionofthecultureonabipolarcontinuum.Theone pole, individualism is defined as a situation in which people are supposed to look after themselves and their immediate family only. The opposite pole, collectivism is defined as a situation in which people 16 belong to in groups or collectivities which are supposed to look after them in exchange for loyalty. A societys position on this dimension is reflected in whether peoples self-image is defined in terms of I or we. Thethirddimension,MAScomprisesMasculinitywhichrepresentsapreferenceinsocietyfor achievement,heroism,assertivenessandmaterialrewardforsuccess.Societyatlargeismore competitive. It also comprises its opposite, femininity, which stands for a preference for cooperation, modesty, caring for the weak and quality of life. Society at large more consensus oriented. The fourth dimension UAI is defined as the extent people feel threatened by ambiguous situations and have created beliefs and institutions that try to avoid these. The fundamental issue is how a society deals with the fact that the future can never be known. Countries exhibiting high UAI maintain rigid codes of belief and behavior and are intolerant of unorthodox behavior and ideas. Weak UAI societies maintain a more relaxed attitude in which practice counts more than principles. The fifth dimension, LTO can be interpreted as dealing with societys search for virtue. Societies with a short term orientation generally have a strong concern with establishing the absolute truth. They are normative in their thinking. They exhibit great respect for traditions, a relatively small propensity to save for the future, and a focus on achieving quick results. In societies with a long term orientation, people believe the truth depends very much on a situation, context and time. They show an ability to adapttraditionstochangedconditions,astrongpropensitytosaveandinvest,thriftnessand perseverance in achieving results (Geert Hofstede.com). 2.1.5 Lewis National Culture Categories RichardD.LewisfurtherclassifiedtheworldsculturesintothreeroughcategoriesnamelyLinear-actives, multi-actives and Reactives.Linear-actives are those who plan, schedule, organize, pursue action chains, do one thing at a time, in thisway,theythinktheyaremoreefficientandget moredone.Theyarealso characterizedbythe following traits: introvert, patient, quiet, private methodical planners and punctual. Multi-actives are those lively, loquacious peoples who do many things at once, planning their priorities notaccordingtoatimeschedule,butaccordingtotherelativethrillorimportancethateach appointment brings with it. Multi actives are very flexible, extroverts, impatient, talkative, inquisitive and not punctual. Reactives are those cultures that prioritize courtesy and respect, listening quietly and calmly to their interlocutorsandreactingcarefullytotheothersidesproposals.Theylistenbeforetheyleap,are introverted; they are adept at non-verbal communication (by use of subtle body language).Figure2.1showsadiagrammaticdispositionoflinear-active,multi-activeandreactivevariations among major cultures, based on decades-long observation and thousands of assessments of cultural profiles with respondents of 68 nationalities. 17 Interaction Interaction Satisfactory Interaction Time consuming Figure 2.1: cultural Types, Richard D. Lewis when cultures collide, 2006 The diagram indicate the relative positioning of each culture in terms of its linear-active, multi-active or reactive nature. This assists in predicting a cultures behavior, clarify why individuals do what they do and avoiding giving offense as well as searching for some kind of unity in a cross-cultural team. When members of different cultural categories begin to interact, the differences far outnumber the commonalities (see Figure 2). Figure 2.2: levels of difficulty in LMR Interactions, Richard D. Lewis when cultures collide, 2000 Linear -Active Multi -Active Reactive Difficult 18 RichardD.Lewisillustratesinter-categoryrelationships.Itisobservedthatcommonalitiesexist between all types, but tend to be thin on the ground between linear-actives and multi-actives. 2.1.6 Managing Cultural Diversity Chevrier, 2003 conducted a study that identified three kinds of cross-cultural practices implemented by transnational project managers to manage cross cultural teams. These strategies were not exclusive as some leaders often resorted to several practices simultaneously, and within one project, leaders of cross-cultural at various levels often set up different strategies. Thefirststrategywasdrawinguponindividualtoleranceandself-control.Theleaderexplicitlyor implicitly relies on tolerance and self-control of team members to sort out difficulties. Each participant takesuponhim/herselftomakeconcessionsandenabletheteamtooperateproperly.Thesecond strategy for coping with cultural differences is to make team members become well acquainted with one another. When they know each other very well, they may empirically set up working arrangements moreeasily.Thethirdstrategyisresortingtootherinternationalculturessuchasprofessionalor corporate cultures to overcome culture barriers especially when team members share a common core of knowledge, know-how and representations (Chevrier, 2003). Cross culturaltrainingfollowedbyinternationalexperiencealsogoesalong waytowardfacilitating better relationships and reducing misunderstandings. This involves acquiring deeper insights into the target culture and adopting a cultural stance towards the colleague, designed to fit in suitably with the attitudesoftheother(Lewis,2000).ThisisalsoemphasizedbyOertigandBuergi,2006.They established the need to invest in intercultural communication training in new project teams to reduce potential distrust and allow teams to gel more quickly and work together efficiently.Richard D. Lewis further indicates how to achieve a relatively harmonious and integrated international team.Itisimportanttounderstandwhatmakesforeigncolleaguestick;thereisnosubstitutefor learningtheirlanguage,readingbooksproducedbythecultureandfamiliarizingwiththecountrys history. This means a sizeable investment, not so much in financial terms as in time. A reasonable study ofthecountrysbasichistory,geography,politicsandeconomyalongwiththemainculturaltraits within two or three weeks can be conducted. 2.2 Application of theoretical background 2.2.1 The Project Team The project team comprises membersfrom Sweden, China, Spain, Greece, Japan and Germany. The culturaldiversityisquiteconsiderableassixdifferentculturesareinvolved.Ananalysisbasedon Hofstedes theory was first done to give an indication on how the national cultures differ. Therefore there is need for the project team in having an awareness of the different cultures. 19 2.2.2 National Cultural Analysis An analysis of the cultural differences was done using Hofstedes theory. A comparison of the countries based on the five different dimensions is shown below. Figure 2.3: Hofstede Comparison of National Cultures The chart clearly shows that there will be cultural challenges that will be faced. China, Ethiopia, Greece, Spain and Japan have high PDIs therefore they will accept hierarchical order in a project team and will require justification. However, Sweden and Germany have low PDIs meaning theywillstriveforequaldistributionofpoweranddemandjustificationofpowerinequalities.The countrieswithahighPDIwillfindthecollectiveformofdecisionmakingbySweden(theproject coordinator and chair) strange as they expect the chair to make all the decisions. All cultures have high IDVs with exception of china, Greece, Japan and Ethiopia which could also lead tochallengesintheteam.ThecountrieswithlowIDVswillhaveatendencyofputtingharmonyof group above the expression of individual opinions whereas countries with high IDVs will express their individual opinions whereas countries with high IDVs will have a tendency of putting harmony of group above the expression of individual opinions. Sweden has the lowest MAS since it is a feminine society. In feminine countries it is important to keep the life/work balance and make sure that all are included. An effective manager is supportive to his/her peopleanddecisionmakingisachievedthroughinvolvement.Managersstriveforconsensusand peoplevalueequality,solidarityandequalityintheirworkinglives.Conflictsareresolvedby compromiseandnegotiationandSwedesareknownfortheirlongdiscussionsuntilconsensushas been reached. Countries with higher MAS are more competitive. Sweden and China have a low preference for avoiding uncertainty. Low UAI societies maintain a more relaxed attitude in which practice counts more than principles and deviance from thenorm is more 020406080100120140PDI IDV MAS UAI LTOSwedenChinaSpainGreeceJapanGermanyEthiopia20 easilytolerated.InsocietiesexhibitinglowUAIpeoplebelievethereshouldnomorerulesthanare necessary and if they are ambiguous or do not work they should be abandoned or changed. Schedules areflexible,hardworkisundertakenwhennecessarybutnotforitsownsake,precisionand punctualitydonotcomenaturally,innovationisnotseenasthreatening.HighUAIfindambiguous situations uncomfortable therefore bureaucracy, laws and rules are very important to make the world a safer place to live in. Ethiopia and Greece have no values for LTOs as research is yet to be done in this area. China is a highly longtermorientedsocietyinwhichpersistenceandperseverancearenormal.Sweden,Spainand Germany haveshort term societies with a small propensity to saveand an impatiencefor achieving quick results and strong concern for establishing the truth. 2.2.3 Ethiopian Culture It is important to critically look at the Ethiopian national culture since the project will be based in Ethiopia. Hofstedes theory was applied once again utilizing the five dimensions of national culture. Ethiopia has a very high score of 70 in the power distance dimension, which means that people accept a hierarchical order in which everybody has a place and which needs no further justification. Hierarchy in an organization is seen as reflecting inherent inequalities, centralization is popular, subordinates expect to be told what to do and the ideal boss is a benevolent autocrat. Ethiopia, with a score of 20 in the Individualism versus Collectivism dimension, is considered a collectivistic society. This is manifest in a close long-term commitment to the member 'group', be that a family, extended family, or extended relationships. Loyalty in a collectivist culture is paramount, and over-rides most other societal rules and regulations. The society fosters strong relationships where everyone takes responsibility for fellow members of their group. In collectivist societies offence leads to shame and loss of face, employer/employee relationships are perceived in moral terms (like a family link); hiring and promotion decisions take account of the employees in-group, management is the management of groups. A low score (feminine) on the Masculinity versus Femininity dimension, means that the dominant values in society are caring for others and quality of life. A feminine society is one where quality of life is the sign of success and standing out from the crowd is not admirable. Ethiopia scores 65 on this dimension and is thus a masculine society. In masculine countries people live in order to work, managers are expected to be decisive and assertive, the emphasis is on equity, competition and performance and conflicts are resolved by fighting them out. Ethiopia scores 55 on Uncertainty Avoidance dimension and thus has a high preference for avoiding uncertainty. Countries exhibiting high uncertainty avoidance maintain rigid codes of belief and behavior and are intolerant of unorthodox behavior and ideas. In these cultures there is an emotional need for rules (even if the rules never seem to work) time is money, people have an inner urge to be busy and work hard, precision and punctuality are the norm, innovation may be resisted, security is an important element in individual motivation ( Hofstede, 2013). 21 2.2.4 Lewis Cultural Analysis Figure 2.4 The Lewis model It is evident that the project team has all the three cultural categories. Germany and Sweden are the linear active members. They will beable to interact satisfactorily with theReactive members, Japan andChina.Thisisduetothefactthatreactivesreactthaninitiateandhaveminimalproblemsin adapting to either of the two categories characteristics.The major challenge will be with the multi active members interacting with the linear active members. Toacertainextentthelinearandmultiactiveculturesareopposites.Forinstance,Swedenand Germany are more concerned about punctuality and schedules. Greece and Spain may not necessarily be interested in schedules and punctuality. Furthermore,theinteractionbetweenthereactiveandmultiactivememberswillbequitetime consuming. The multi actives are extroverts and will dominate the conversations. On the other hand thereactivesareintrovertsandlistenersandtogetresponseson keyissuesmaytakeconsiderable time. 2.2.5 Recommendations on handling Cultural Challenges Common ground has to be reached to manage the different cultures. A workshop must be conducted at the beginning of the project. The main aim of the workshop is to give a cultural appreciation and awareness to the project team. A cultural toolkit for the team can be prepared in order to mitigate any differences that may occur during the implementation of the project. The toolkit can be prepared by the team by coming up with a list of dos and donts for each of the cultures represented. Compromises can be reached for the smooth interaction among the members. 22 OneofChevrier2003strategiescanalsobeadoptedwheretheprojectteammemberscanbe encouraged to acquaint themselves with the cultural differences of all the members by having social events as often as possible. This will give the members opportunities to know each other very well and empiricallysetupworkingarrangements moreeasilyinarelaxedenvironment.Thesesocial events can also contribute to develop acquaintance, complicity or even friendship among team members.Team building activities can also be done at the workshop. This maybe a problem solving activity where team members role play and display their skills in the various activities. Based on the cultural analysis, there is need to change the proposed key roles and responsibilities in the project. It is recommended that Germany take up the responsibility of Project management and China to take up Project Information management.Appelbaum et al 1998 stated that to manage multicultural teams requires a change in management styles.Managementshouldmakeuseoftheadvantagesofculturaldiversityratherthanseeitasa negativeimpediment.TheyalsomaderecommendationsbasedonAbbassiandHollman(1991) research for managers of multicultural teams that: Managersshouldrecognizeandacknowledgethatpeoplefromvariousbackgroundsandethnic groups with different values and unorthodox attitudes make up corporate life. Managers should communicate and show respect for the culture and values of others. They should listen to the views of minority team members and make sure that they are included in their formal and informal networks. Managers should avoid stereotyping anyone from any culture. Provideteammemberswithasenseofpsychologicalsafety;assistthemwhenneededinthe acculturation process. Managersshouldbeempathetic,butbethemselves,theyshouldnottrytobeoneofthem.In addition, they should avoid projecting or imposing their own culture and value system onto others. Furthermore the above mentioned recommendations for managers can be applied to individual team members as well. This will establish common ground where cultural backgrounds are acknowledged, clearcommunicationamongtheteammembersestablished,therebyimprovingtheprojectteam interaction and dynamics. 23 3 Governance and organization 3.1 Theoretical background of governance and organization 3.1.1 Introduction Many of the socio-economic challenges confronting Africa are associated with bad governance and lack of a broad-based and inclusive national development vision (UNECA, 2009). Recently the term governance and good governance are being increasingly used in development literatures. Bad governance is associated as the source of all evil in societies. Moreover, major donors and international financial institutions are increasingly basing their aid and loans on the condition that reforms that ensure "good governance" are undertaken. Effective governance is vital for sustainable development, poverty eradication and socio-economic transformation. It is, however, a challenge that can only be realized by all stakeholders working together, [The United Nations Economic and Social Commission for Africa (UNESCA), 2012] Governance perspective of projects is the fundamental factor which determines successful delivery of any project at any context. Therefore we conclude that bad project governance is the major source of project failure. With this regard, project management is not sufficient for successful delivery of projects. Project management is established everywhere in modern society, but still governments and organizations waste billions of dollar every year on failed projects. We have explored key issues under Governance and organization of this project to be built in Ethiopia provided recommendations which will foster successful delivery and overcome all cultural challenges in the region. 3.1.2 Governance Governance is the process of decision-making and the process by which decisions are implemented (or not implemented). Governance can be used in several contexts such as corporate governance, international governance, national governance and local governance. Since governance is the process of decision-making and the process by which decisions are implemented, an analysis of governance focuses on the formal and informal actors involved in decision-making and implementing the decisions made and the formal and informal structures that have been set in place to arrive at and implement the decision. [UNECA 2012] Government is one of the actors in governance. Other actors along with the government may include, associations, cooperatives, NGOs, research institutes, religious leaders, finance institutions, political parties, military etc. Good governance is the exercise of political Authority and the use of institutional resources to manage societys problems and affairs (World Bank). Good governance stands on 8 major characteristics, Participatory, Transparence, 24 Accountability, Rule of law, Responsive, equitable and inclusive, effective and efficient and Consensus oriented (See figure 3.1 below) Figure.3.1 Characteristics of good governance, UNESCA, 2012 To mention few characteristics; 3.1.3. a)Accountability Accountabilityisakeyrequirementofgoodgovernance.Organizationsmustbeaccountabletothe publicandtotheirinstitutionalstakeholders.Ingeneral,anorganizationoraninstitutionis accountable to those who will be affected by its decisions or actions. Accountability cannot be enforced without transparency and the rule of law. 3.1.3.b)Responsiveness Goodgovernancerequiresthatinstitutionsandprocessestrytoserveallstakeholderswithina reasonable timeframe, 3.1.3.c)Transparency Transparency meansthat decisionstakenand their enforcementaredoneinamannerthatfollows rules and regulations. It also means that information is freely available and directly accessible to those who will be affected by such decisions and their enforcement. It also means that enough information is provided and that it is provided in easily understandable forms and media. Good Governance is the cornerstone for the any project success because projects do not have value in itself. Moreover project management cannot succeed to provide value without good governance. Most of project owners are not aware of good governance. Governance and management are interdependent. (UNESCA, 2012) 25 3.1.3 Project governance Intodaysliterature,governanceisoftendefinedascorporategovernance,orasystembywhich businesscorporationsaredirectedandcontrolled(Westphal&Zajac,1997;Meyer,2000).More specifically,corporategovernanceisunderstoodintermsofaboardofdirectorswhorepresent shareholders.Thedirectorsroleistoattractfinancialandhumancapitalandperpetuateitselfby generatinglong-termeconomicvalueforitsshareholders,whilerespectingtheinterestof stakeholders and society as a whole (Krakovsky, 2002). Corporate governance is also defined as a set of internal rules that indicates the distribution of rights and responsibilities among the management, the board the shareholders, and other stakeholders (petrovic-Lazarevic, 2003). Project governance is the management framework within which project decisions are made. Project governanceisacriticalelementofanyprojectsincewhiletheaccountabilitiesandresponsibilities associatedwithanorganizationsbusinessasusualactivitiesarelaiddownintheirorganizational governance arrangements. Projectgovernanceconcernsthoseareasofgovernance(publicorcorporate)thatarespecifically relatedtoprojectsactivities.Goodprojectgovernanceensuresrelevantalternativesarechosen, delivered efficiently with sustainable effects. Moreover project governance defines accountability and responsibilitiesforstrategicdecisionmakingacrosstheproject.Projectgovernanceisthe management,oversightandcontrolframeworkestablishedtomitigaterisks(Deloittedevelopment LLC,2007).Projectgovernanceleveloftheregulatorycontextconsiderthreemainaspects;the Conception, construction and control of projects. (Winch and campagnac, 1995) see figure 3.2 below Figure.3.2 The national construction business system; a conceptual framework (Winch, 1995) 26 According to Wikipedia website, Project governance frameworks should be based around a number of core principles in order to ensure their effectiveness. Ensure a single point of accountability for the success of the project The most fundamental project accountability is accountability for the success of the project. A project without a clear understanding of who assumes accountability for its success has no clear leadership. With no clear accountability for project success, there is no one person driving the solution of the difficult issues that beset all projects at some point in their life. It also slows the project during the crucial project initiation phase since there is no one person to take the important decisions necessary to place the project on a firm footing. The concept of a single point of accountability is the first principle of effective project governance. The only proven mechanism for ensuring projects meet customer and stakeholder needs, while optimizing value for money, is to allocate Project ownership to specialist party, that otherwise would not be a stakeholder to the project. This is principle No. 2 of project governance. Projects have many stakeholders and an effective project governance framework must address their needs. Ensure separation of stakeholder management and project decision making activities The decision making effectiveness of a committee can be thought of as being inversely proportional to its size. Not only can large committees fail to make timely decisions, those it does make are often ill considered because of the particular group dynamics at play. As project decision making forums grow in size, they tend to morph into stakeholder management groups. When numbers increase, the detailed understanding of each attendee of the critical project issues reduces. Many of those present attend not to make decisions but as a way of finding out what is happening on the project Ensure separation of project governance and organizational governance structures Project governance structures are established precisely because it is recognized that organization structures do not provide the necessary framework to deliver a project. Projects require flexibility and speed of decision making and the hierarchical mechanisms associated with organization charts do not enable this. Project governance structures overcome this by drawing the key decision makers out of the organization structure and placing them in a forum thereby avoiding the serial decision making process associated with hierarchies. 27 Additional principles exist where projects are multi-owned Multi-owned is defined as being a project where the board shares ultimate control with other parties. The principles are; there should be formally agreed governance arrangements;There should be a single point of decision making for the project - refer to Principle 2 There should be a clear and unambiguous allocation of authority for representing the project in contacts with owners, stakeholders and third parties.The project business case should include agreed, and current, definitions of project objectives, the role of each owner, their incentives, inputs, authority and responsibility. Each owner should assure itself that the legal competence and obligations and internal governance arrangements of co-owners, are compatible with its acceptable standards of governance for the project, There should be project authorization points and limiting constraints to give owners the necessary degree of control over the project. Many African countries are dealing with governmental issues such as basic democratically and human rights. The six composite WGI measures are useful as a tool for broad cross-country comparisons and for evaluating broad trends over time. These six measures can be used to compare differences in governance between countries see table 3.1. Table 3.1 Measurable factors of governance according to the WGI and TI 1Voice and Accountability (%) perceptions of the extent to which a country's citizens are able to participate in selecting their government, as well as freedom of expression, freedom of association, and a free media. 2Political Stability and Absence of Violence (%) Perceptions of the likelihood that the government will be destabilized or overthrown by unconstitutional or violent means, including politically-motivated violence and terrorism. 3Government Effectiveness (%) perceptions of the quality of public services, the quality ofthe civil service and the degree of its independence from political pressures, the quality of policyformulation and implementation, and the credibility of the government's commitment to such policies. 4Regulatory Quality (%) Perceptions of the ability of the government to formulate and implement sound policies and regulations that permits and promotes private sector development. 5Rule of Law (%)Captures perceptions of the extent to which agents have confidence in and abide by the rules of society, and in particular the quality of contract enforcement, property rights, the police, and the courts, as well as the likelihood of crime and violence. 28 6Control of Corruption (%) Perceptions of the extent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as "capture" of the state by elites and private interests. 7Corruption perception index (SCORE: 0-10) Perceptions of how corrupt the public sectors are seen to be. 8Corruption perception (RANK : from 200) A country's rank indicates its position relative to the other countries/territories included in the index. 3.1.4 Organization and organizational structure An organization is a collection of people working together under a defined structure for the purpose ofachievingpredeterminedoutcomesthroughtheuseoffinancial,human,andmaterialresources. Organizationimpliesstructuringandintegratingactivities,thatis,peopleworkingtogetherin interdependent relationships. According to Fremonte E. and James E. (1985) organization consist of 1) goal-orientedarrangements,peoplewithpurpose;2)psychosocialsystems,peopleinteractingin groups;3)technologicalsystems,peopleusingknowledgeandtechniques;and4)anintegrationof structured activities, people working together in patterned relations. The organization structure was designed for the most efficient allocation and coordination of activities. The position in the structure, not the people, had the authority and responsibility for getting tasks accomplished. The structure was emphasizedasthemostimportantandenduringcharacteristicoftheorganization.Projectbased organization is the one that will allow project management to work best. It should be an organization thatcanquicklybringtheproperskillstogetheronatemporarybasisforthedurationofaproject. Resources in this organization are shared. See figure 3.3 below 29 Figure 3.3 project-based organizations Project based organizations are structured just the opposite of functional organizations. If you're a project manager in this type of organization, you probably report directly to a vice president of project managers or perhaps to the CEO. See figure 3.4 below Figure 3.4 Project organization chart 30 Theorist argues that organizations need different kinds of structure to control their activities that will allow their companies to adapt and react to changes and uncertainties in the environment. Changes in the environment can be analyzed through a PESTEL analysis, whereby changes in the factors found in the PESTEL analysis can either stabilize or destabilize the environment of a given company. See Ethiopia PESTEL analysis below. Table 3.2: Pestel analysis PESTEL Analysis PoliticalEconomical -Political instability -Bureaucracy -Corruption -Political repression -Population below poverty line: 29.2% (2010 EST.) -The average worker earns $300/year -Inflation rate (consumer prices): -21.7% - 33% (2012 EST.)SocialTechnological -Unequal distribution of wealth -Different cultures and languages -Rural society under severe poverty -Literacy rate for male 50.3% and 35.1% for female (2003 EST) -Poor technical skills of construction labour force -Lack of ICT -Secure internet servers (per 1 million people) Rounded 2011:0 Environmental Legal-Natural disasters are common -Drought struck again late in 2002, leading to a 2% decline in GDP in 2003 -Environmental protection laws. -Waste management -Forest area (%of land area) rounded 2010: 12% -Employment regulation-Anti-corruption police usage -Health and safety issues - Procurement policies and transparency regulation 31 3.1.5 Stakeholders analysis / Power interest matrix A stakeholder is any party with an interest in the project process or outcome. Stakeholder management is critical to the success of every project. By engaging the right people in the right way in the project, organizations can make a big difference to its success. Stakeholder Management is an important disciplines that successful project manager use to win support from others. It helps them ensure that their projects succeed where others fail. The benefits of analyzing stakeholders are many. The following are few benefits; Identifying key stakeholders and their power on project can help to involve them at an early stage, and use their opinion. Their input can ultimately improve the quality of the project Gaining support from powerful stakeholders can help the organization to win more resources this makes it more likely that the projects will be successful By communicating with key stakeholders early and frequently, the organization can ensure that they fully understand the project goals and understand the benefits of the project which ultimately can trigger their motivation to support the project. It is also possible to anticipate what are peoples reactions to the project may be, and build up plans to meet their expectations to win their support Identifying stakeholders/ power Interest matrix: One of the major tools to manage the complexity of managing stakeholders one approach is to consider the nature of the power or influence of stakeholders on the particular project and the interest or impact of the project on that stakeholder. ( Maylor, 2010) Power in this context in this context can be in the form of direct authority, through indirect authority, or having an important relationship with the project team. Interest is the measure of how much that stakeholder knows about the project; impact is how much that stakeholder will be affected by the process or outcome ( Maylor, 2010) Figure 3.5. Power-Interest stakeholders map (Maylor, 2010) 32 Mapping stakeholders on Power interest matrix High power and high interested stakeholders: These are the key stakeholders that must be fully engaged with greatest efforts to make them satisfied High power, less interested stakeholders: put enough work in with these people to keep them satisfied, but not so much that they become bored with a lot of communication. Low power, interested stakeholders: keep these stakeholders adequately informed, and talk to them to ensure that no major issues are arising. These people can often be very helpful with the detail of your project. Low power, less interested stakeholders: Have to be monitored but should not be overloaded with communication. (Maylor, 2010) 3.1.6 Risks ManagementRisk management covers all the processes involved in identifying, assessing and judging risks, assigning ownership, taking actions to mitigate or anticipate them, and monitoring and reviewing progress. Risk is a major factor to be considered during the management of a project. Project management must control and contain risks if a project is to stand a chance of being successful. All of managements value is derived from managing uncertainty.Risk management is another critical discipline, yet is hardly ever performed across an entire organization. Patrick Leach (2006), Management responsibility for dealing with each specified risk and ensuring effective treatment plans are developed and implemented should be assigned and recorded. The responsible manager is sometimes called the risk owner. The Project Risk Management processes include the following:1. Risk Management Planning - deciding how to approach, plan, and execute the risk management activities for a project.2. Risk Identification - determining which risks might affect the project and documenting their characteristics.3. Qualitative Risk Analysis - prioritizing risks for subsequent further analysis or action by assessing and combining their probability of occurrence and impact.4. Quantitative Risk Analysis - numerically analyzing the effect on overall project objectives of identified risks.5. Risk Response Planning - developing options and actions to enhance opportunities, and to reduce threats to project objectives.33 6 Risk Monitoring and Control - tracking identified risks, monitoring residual risks, identifying new risks, executing risk response plans, and evaluating their effectiveness throughout the project life cycle. These processes interact with each other and with the processes in the other Knowledge Areas as well. (PMBOK, 2004) 3.2 Application of theoretical backgroundFive key findings on Generic Cultural issues that my affect Governance and Organization 3.2.1 Language barriers Ethiopia possesses over 75 ethnic groups and over 85 languages spoken. Amharic is the official (national) language and oromiffa is official regional in Oromia regional state. However English language is used in Ethiopia as 2nd official or work language. And we consider that English will be used for all kinds of communication in the construction of this Pharmaceutical development project in Ethiopia. 3.2.2 Time differences One of the major challenge in thevirtual collaboration is the difference in time zones.Among the six team members and the country in which the antiretroviral drug production is going to take place Spain, Sweden and Germany are said to be in same time zone (UTC/GMT +1 hour).Greece and Ethiopia are in same time zone(UTC/GMT +2 hours).china in (UTC/GMT +8 hours) and Japan in (UTC/GMT +9 hours). 3.2.3 Socio-economic About 29% of Ethiopian lives below the international poverty line of $ 1.25 a day and about 37 million of workforces suffer from severe shortage of skilled labor. Furthermore, the educated personals, the growth in hospitality industry and tourism which represent the resources to the economy of Ethiopia have been stifled by the potential political situations. All these reasons cause the country dependence on foreign aids and hinder the growth of GDP of the country. That led to the corruption in the country which affects the team members performance and then the implementation of the project on time and budget. 3.2.4 Political Ethiopia, from 1991 under rule of one party, Ethiopian people revolutionary democratic front (EPRDF), political situation in Ethiopia, remains complicated and unstable; there are unresolved territorial issues, religious and ethnic crisis situations have complicated rapid development in Ethiopia. 34 3.2.5 Religious diversity Ethiopian Muslims have not been active participants in the affairs of the country. The last two years were a big religious crisis situation in Ethiopia. The religious issue cause clashes affecting the international project success if it is not being considered. Key findings on Governance of project delivery in Ethiopia based on theoretical background 3.2.6 Building permit process Good construction regulation matters for public safety. It also matters for the health of the building sectorandtheeconomyasawhole.Thosetablesbelowsummarizedoingbusiness2013datafor Ethiopia. The first table lists the overall "Ease of Doing Business" rank (out of 185 economies) and the rankingsbyeachtopic.Therestofthetablessummarizethekeyindicatorsforeachtopicand benchmark against regional and high-income economy (OECD) averages. Table 3.3 doing business in Ethiopia 35 Table 3.4 Procedure EASE OF DOING BUSINESS IN ETHIOPIA Theeaseofdoingbusinessindexrankseconomiesfrom1to185.Foreacheconomytherankingis calculated as the simple averageof thepercentilerankings on each of the10 topics included in the index in Doing Business 2013: starting a business, dealing with construction permits, getting electricity, registeringproperty,gettingcredit,protectinginvestors,payingtaxes,tradingacrossborders, enforcing contracts and resolving insolvency. Theemployingworkersindicatorsarenotincludedinthisyearsaggregateeaseofdoingbusiness ranking. (doingbusiness.org) 3.2.7 Governance Governance consists of the traditions and institutions by which authority in a country is exercised. This includes the process by which governments are selected, monitored and replaced; the capacity of the government to effectively formulate and implement sound policies; and the respect of citizens and the state for the institutions that govern economic and social interactions among them (WGI, 2011). The Corruption Perceptions Index ranks countries/territories based on how corrupt their public sector is perceived to be. A country/territorys score indicates the perceived level of public sector corruption on a scale of 0 - 10, where 0 means that a country is perceived as highly corrupt and 10 means that a country is perceived as very clean. A country's rank indicates its position relative to the other countries/territories included in the index.(see figure 3.2.1 below Ethiopias percentile rank) 36 Figure 3.2.1 (WGI) Ethiopia s percentile rank Table 3.5 Combined WGI and CPI index for the CIPD countries and Ethiopia. Data from 1) World Governance Indicators (2011) and 2) Transparency international (2011) No.IndicatorSwedenGermanyJapanSpainGreeceChinaEthiopia 1Voice and Accountability (%) 99.192.9788473.54.710.1 2Political Stability and Absence of Violence (%) 88.274.1805140.1256 3Government Effectiveness (%) 98.691.98882.568.46140.3 4Regulatory Quality (%) 96.793.878.58373.7478 37 5Rule of Law (%) 99.592.48787.366.841.630 6Control of Corruption (%) 99.193.3908655.530.128 7Corruption perception index (SCORE: 0-10) 9.3886.23.43.62.7 8Corruption perception (RANK : from 200) 11414318075120 The six composite WGI measures are useful as a first tool for broad cross-country comparisons and for evaluating broad trends over time. We therefore view the WGI as complementary to a large number of other efforts to construct more detailed measures of governance, often just for a single country.We also encourage users to consult the disaggregated individual indicators underlying the composite WGI scores to gain more insights into the particular areas of strengths and weaknesses identified by the data. 3.2.8 Organization 3.2.8.1 Stakeholders Analysis We have identified key stakeholders, who are involved in this pharmaceutical development project, Table 3.6 Pharmaceutical development project stakeholders during Construction Stage StakeholderL i k e / Dislike Need/Expe ctations Effect on Project PowerInterestAction WHOLikeHighoutput StrongHighHighManage Closely CIPDLikeHighoutput StrongHighHighManage Closely EthiopianLikeStrongHighHighManage 38 GoverenmentregulationsClosely Local AuthorityLikeregulationsStrongHighHighManage Closely Local Professionals/ LikelabourStrongLowHighKeep informed Local community LikeInvolvedStrongLowHighKeep informed Local suppliers/contra ctors LikeBusinessStrongLowstrongKeep informed MediaLikeinformationlowLowLowKeep informed Figure 3.2.2 Power/Interest chart for key stakeholders 39 3.2.8.2 Key Identified risks We have identified five key risks that need to be managed closely. Consider the table below. Table 3.7 key risks Risk factorEffectProbabilityImpactPxI Corruption Misuse offund, leading to project failure 5315 Political instabilityCause immediate project closure 4520 Lack of skilled construction labour force Poor productivity High cost of hiring external labour force 339 Poor ICT Delay of project duration 5420 Culture, e.g. Different in language Training take time236 3.9 Key Recommendations based on theory and key findings [1] Good Governance The issue of good governance and capacity-building is what we believe lies at the core of all Africas problems Commission for Africa, 2005. Good governance is integral to economic growth, the eradication of poverty and hunger, and sustainable development. Governance remains a very sensitive issue, in Ethiopia and in Africa at all. We are advising CIPD to adopt good governance mechanism, which will suit prevailing working condition in Ethiopia.Transparency and accountability should be key approach to exercise good governance. 40 Ensure implementation of the African Charter on Democracy, Elections and Governance including continued strong zero-tolerance for corruption. Improve other indicators of governance including checks and balances, accountability, the rule of law, civil liberties and human rights;[2] Corruption Corruption remains a major challenge in Ethiopia. The corruption control index declined 1 percentage points (from 29% in 2010 to 28% in 2011 see figure 3.3.1 below). Ethiopian government need to improve their efforts to fight corruption.Step up efforts to counter bribery and corruption through implementation of the AU and UN Convention. Figure 3.3.1 Governance indicators We recommend the CIPD board to establish financial control measures at every stage of the project. [3] Project Governance Project governance is the management, oversight and control framework established to mitigate risks (Deloitte development LLC, 2007).We are advice CIPD board should control all processes, avoiding cost overrun and delays; Exercising transparency and accountability in all stages of the project. 41 [4] Proposed organization structure Figure 3.3.2 Organizational structure 42 4. Project design, delivery, commission, and operation 4.1 Academic review 4.1.1. Project design In management literature, several different models and techniques for project development are mentioned. One of the most common is the 4-D model, which divides the project in four different phases (Maylor, 2010): Define it Design it Do it Develop it This academic review will follow the 4-D model, and describe the key parts of each phase that are needed in order to ensure successful project design, delivery, commission and operation. 4.1.2. Define it 4.1.2.1. Scope management According to most literature (Maylor, 2010), dedication of significant quantities of effort to scope management at the beginning and throughout the project is recommended. Management of the scope is also needed for making sure that all parties in the project agree what is to be done in the project. Once the project is defined a scope statement should be agreed as a basis for the planning and managing processes that will follow in the project. (Pic 5.4) There are three parts to Scope management: the initiation, the scope plan, and the scope change control. Initiation includes the reasons why the project is being built and how it fits in the organization's strategy. The scope plan includes a work breakdown structure to generate the process scope, and a product breakdown to generate a product scope statement. The combination of these specifies clearly both what is included in the project and what is excluded. One of the most important parts of the scope generation is to obtain acceptance for example by a sign-off process where the client is involved, or by a simple meeting where everyone involved agrees to the written scope statement. In general, it is critical to ask and answer the following questions in order to define the scope (Palmer 1987): Why is the project being designed? What are the reasons for the project? What is the project expected to solve if completed successfully and to time? Who will benefit from the project? 43 4.1.2.2. The planning processIn the planning process it is vital to balance costs and benefits, and the planner should spend time reflecting on the potential benefits of the actual planning activity. In larger project, studies show that investments made at this stage generates significant benefits once the project is in the delivery phase. It is also important to consider whether the output of the planning process remains a working tool or becomes a form of an organizational straitjacket. Working tools help decision-making and guide future activities. It is also important in this stage to focus on accuracy (Maylor 2010). 4.1.2.3. Project initiation document The PID is a common format in industries where projects are carried out for external clients. It usually involves the client providing a brief or terms of reference, which the project manager replies to with the PID. The PID can be seen as the output of the overview planning process (Maylor, 2010). PRINCE provides the following requirements for a PID: 1.The Project brief stating the requirements of the project 2.Project team management structure describing who is involved and the governance arrangements proposed 3.Job descriptions of the roles each team member will take 4.The project approach which is an outline description of how the requirements will be delivered 5.The project quality plan which gives an outline of the steps to make sure that the requirements are delivered, including process checks 6.The project plan which shows the major activities and their sequence and duration 7.The business case which is an attempt to evaluate the costs and benefits of the project 8.A risk log where the major risks in the project are identified with the respective actions to minimize them 9.Project controls that show how you will know that the project is going as planned (time, cost, safety etc.) 10.A communication plan which is a statement of what needs to be communicated to the stakeholders and when. 44 4.1.2.4. Stage-gate model of projects The stage-gate model is basically a model of using checkpoints or gates between the important phases in the project in order to get an easy opportunity to review the progress of the project. Criteria for passing to the next stage should be set in advance (Maylor).4.1.3. Design it 4.1.3.1. Scheduling tools In project management, there are several tools meant to help the manager identify and manage the activities related to time. A few of the most common are work breakdown structures, time plans, critical path analyses, and Gantt charts. As there are many sources of uncertainty in projects that might cause delays in the project, proper use of these tools is often essential in order to deliver the project on time and within the budget. As a matter of fact, the knowledge of how to create Gantt charts was for many years seen as the definition for project management (Maylor, 2010). The work breakdown structure (WBS) is described as an approach of systematically breaking down the large activities into smaller and more manageable units (Maylor, 2010). Once this is done, individuals can be given responsibility for different manageable parts of the project. The main role of the WBS is to create linked and hierarchical series of activities that are independent, but still parts of the whole. Estimating the time and resources for each activity in projects is a key part of project planning (Maylor, 2010). The most common tool for doing this is the activity-on-node technique, which represents the activities from the WBS as tasks on a relatively simple diagram which indicates the expected way the project is going to work. Once the sequence of activities and their respective expected duration is known, a critical path analysis may be used. This tool helps identify the critical activities that are most likely to cause delays in the project if the duration of these activities increase. The critical path itself is the longest sequence of dependent activities in the project that need to be completed in order for the project as a whole to finish. The Gantt chart is the most widely used scheduling tool and is basically a time-scaled graphical planning tool which describes the relationship between activities and their respective duration. 4.1.3.2. Risk managementRisk management theory considers the fundamental that it in each future-looking activity such as planning processes there exists uncertainty. Often this cannot be totally eliminating, and the goal is instead to manage it. Risk management is often divided into three main areas; identification, quantification and response control. Where identification is of course connected to finding the risks involved in the project, quantification means to calculate how likely they are to occur and their possible impact, and response control to the mitigating or managing activities connected to the risks. One of the most commonly used risk management tools is the probability impact chart, presented in figure 4.1. This chart is based on a qualitative approach, where the assessment of how likely the risk is to occur and its possible impact determine the risk rating. If the risk has both a high likelihood of occurring as well as a high impact, it will very likely require response controls. 45 Figure 4.1 Probability Impact chart 4.1.3.3. Expected value The expected value method provides a basic tool for evaluating different options in decision-making processes. The expected value is the possible outcome of the option times the probability of its occurrence.4.1.3.4. Quality management There is no single definition of quality, and as such, the first step should be to recognize this and determine the appropriate definition for the considered project before it starts. One of the more recognized models for quality management is the bridge model of project quality management described in figure 4.2. As can be seen, the model includes both internal (of the project team) and external management (of the communication channels between the project team and the stakeholders). If these two parts are managed in a good way, Maylor (2010) argues that the likelihood for satisfied stakeholders increases. He further states that their satisfaction is determined by the difference in how they perceive the outcome of the project and how they expected it to perform from the beginning. 46 Figure 4.2 Bridge model of project quality management 4.1.4. Do it 4.1.4.1. Team work Functioning teams are essential to the outcome of the project (Clegg et al. 2008). Large teams are usually managed in the same way as large projects, broken down in smaller parts as they are more manageable. It is also important that the organizational breakdown structure has proper coordination mechanisms between the different teams. In order for the team work to be as effective as possible, Maylor (2010) argues that a common sensed of goal and a result-driven structure should be used. Furthermore he argues that the organization should foster a collaborative climate with competent team members, and support from the project manager.4.1.4.2. Quality, time and cost control Cost, time and quality are often considered to be two of the most important factors for a project to be successful.In management and control of quality, the project manager has two roles. These are the conformance of the product and process to agreements, and the performance of the delivery. According to Maylor (2010), the organization should have a quality control system that: provides a formalized system within the project system which ensures that the needs of the customer or the stated objectives of the system are continually being met Another reason for having a formalized quality system is that it can protect the organization from legal liability, negligence, and product liability claims. 47 The organization should also be sure to measure expectations and perceptions from the stakeholders and understand their importance, which is vital for control.Time and cost management requires significant effort in the project processes. Control systems must be set up, which ensures that costs are allocated properly, and to make sure that the costs are incurred in the genuine pursuit of the project activities. One method of measuring the time and cost in a more meaningful way is the earned value management. This method brings together time and cost performance into a monetary quantity that is easily understood. Garret (2006) argues that the value of using earned value is that it provides early-warning systems in the project, uses index-based methods to forecast final costs and schedule performance, and that it supports fact-based timely decision-making. 4.1.4. Develop it 4.1.4.1. Completion and handover Many projects around the world are left unfinished which could be due to many different reasons. Maylor (2010) argues that this may happen because the project executions is already done, or due to financial reasons. In either case, the premature termination of the project usually leaves no provision for reviews, which are essential in order to avoid making the same mistakes. In order to ensure proper completion of the projects, Maylor (2010) describes five key elements that should be used in the completion. 4.1.4.2. Documentation The purpose of documentation is to provide evidence that the project has been completed in a proper manner, assist litigation avoidance, and provide a starting point for the project review. Furthermore, it should give the customer guidance on operation and maintenance, as well as provide a starting point for similar future projects in the organization. 4.1.4.3. System close down Once the project is nearing its completion, and the level of activity falls off, its the project managers responsibility to make sure that all systems are closed down, such as the accounting and quality systems in order to avoid unauthorized expenses to the accounts. 4.1.4.4. Project review (Immediate and long term) According to Maylor (2010), the report systems contains four key elements: immediate post mortem on the activities; immediate remedial and improvement action; long-term audit and review; strategic and procedural changes. A formal long-term review focuses on the strategies and procedures used in the projects, whereas the immediate short-term review provides rapid feedback on the performance of individuals, teams, systems, and the project as a whole. Maylor argues that organizations should use project reviews in order to know what aspects of the performance that should be repeated, identify training or educational requirements, and make assessments on the use of individuals to future teams. 4.1.4.5. Appraisal and relocation of staff and disposal of surplus assets Staff appraisals is a vital part of nurturing the human capital of project organizations. Once the appraisals have been carried out, the project manager helps relocate the staff that were involved in the project. This is seen as a good way of building networks of skilled people who can be used in 48 future activities. Assets that are left behind after the project need to be disposed of. Valuable assets may for example be sold or used in other projects. 4.1.4.6. Stakeholder satisfaction Stakeholder satisfaction is naturally one of the most important aspects of a project (Johnson et.al. 2011). If the customers perception of the project organization is good, it will probably increase the probability of receiving another in the future. Furthermore, the review data from successful projects may be used as a way of enhancing the future customers perceptions by for example trade journals and newspapers. 49 4.2. Implementation of academic review: CIPD has encountered several problems in their previous projects, including both time delays and poor operation. As such, a major review of the processes involved in the project may be beneficial, and we propose the following recommendations for the project design, delivery, validation, commission, and operation for the new ARV drug facility in Ethiopia. 4.2.1. Design In the first stage of the design phase, it is vital that CIPD and the government of Ethiopia agree on an initial project concept note that includes the proposed project objectives and analyses of the stakeholders and risks that are involved in the project. Furthermore, alternative scenarios should be analyzed, and a proper time schedule should be made for the project approval process. Once this is done, a project initiation document should be sent to the client, which basically describes the overall planning process. Furthermore, if there are likely environmental or social impacts from the project that are included in the CIPDs Safeguard policies, an environmental assessment report should be made with analyses of the issues. Proper preparation of the project will be essential for a proper project delivery. It must be ensured that all activities and processes are under control and ready before the project is implemented. As CIPD is responsible for both the feasibility study and the design preparations, adequate staff and time resources should be given. Another solution is to bring in the expertise of consultants for some of these tasks, or to give advice. Furthermore, the major stakeholders should be contacted, both for gaining their opinions on the project and for gaining their support. It is also important to have close contact with the Ethiopian government. All internal stakeholders must also agree on how the project management, financial systems, control and reporting systems should be executed during the project. As earlier mentioned, proper stakeholder analyses are most often beneficial for the project, and it is important to continuously provide and manage communication channels with them. If satisfied with the updates and the information they are provided, they are more likely to give their support (Winch, 2010). A power/interest chart presenting the main stakeholders identified in the project can be seen in figure 4.1. Figure 4.1 Identified main stakeholders in the project in a power interest chart All risks involved in the project should be identified and quantified, along with action plans for how to manage them if the risks occur. The major risk factors and their quantification is presented in table 50 4.1. Obviously, there are many risk factors to consider in the project if it is to be made. Ethiopia suffers from both political instability and extreme levels of corruption, which may cause the project to proceed very slowly or even cause project closure. Hence, these factors are among the most important to consider, and if possible try to eliminate or reduce as much as possible. To do this, cooperation with the government and making sure that they see the benefits of the project being built is extremely important. Furthermore, it may be beneficial to involve locals or people from the authorities in the project teams as they are the most knowledgeable in how the proceedings are in Ethiopia. Another risk factors are that there is a large lack of skilled labor forces in the country, which may force usage of external labor forces, or high costs of training the locals. Table 4.1 Risk factors and their probability and impact Risk factorEffectProbabilityImpactPxI Corruption Misuse offund, leading to project failure 5315 Political instabilityCause immediate project closure 4520 Lack of skilled construction labour force Poor productivity High cost of hiring external labour force 339 Poor ICT Delay of project duration 5420 Culture, e.g. Different in language Training take time236 As in all project, safety regulations on site must be agreed upon. In order to ensure that the project does not affect the local environment or society, an environmental assessment report should be made along with an environmental action plan for how to deal with the problems identified, as well as an indigenous peoples plan that identifies and manages issues from the social point of view. The risk analysis and its connected activities should also be continuously updated throughout the project, as more information is gained and new problems may arise. A project of this complexity and size will obviously require a lot of time for both planning processes and the construction, and during the whole project proper time schedules should be used, such as Gantt charts and work breakdown schedules. Once the project designs are finished, a project appraisal docume