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«Limitations of Sustainability Implementation amongst Project Managers Case study in an Icelandic energy company Master of Science Thesis in the ...»

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Limitations of Sustainability

Implementation amongst Project Managers

Case study in an Icelandic energy company

Master of Science Thesis in the Master’s Programme International Project

Management

ELKA HALLDÓRSDÓTTIR

Department of Civil and Environmental Engineering

Division of Construction Management

CHALMERS UNIVERSITY OF TECHNOLOGY

Göteborg, Sweden 2014

Master’s Thesis 2014:111

MASTER’S THESIS 2014:111 Limitations of Sustainability Implementation amongst Project Managers Case study in an Icelandic energy company Master of Science Thesis in the Master’s Programme International Project Management

ELKA HALLDÓRSDÓTTIR

Department of Civil and Environmental Engineering Division of Construction Management

CHALMERS UNIVERSITY OF TECHNOLOGY

Göteborg, Sweden 2014 Limitations of Sustainability Implementation amongst Project Managers Case study in an Icelandic energy company Master of Science Thesis in the Master’s Programme International Project Management

ELKA HALLDÓRSDÓTTIR

© HALLDÓRSDÓTTIR, ELKA 2014 Examensarbete / Institutionen för bygg- och miljöteknik, Chalmers tekniska högskola 2014:111 Department of Civil and Environmental Engineering Division of Construction Management Chalmers University of Technology SE-412 96 Göteborg Sweden Telephone: + 46 (0)31-772 1000 Chalmers University of Technology/Department of Civil and Environmental Engineering Göteborg, Sweden 2014 Limitations of Sustainability Implementation amongst Project Managers Case study in an Icelandic energy company Master of Science Thesis in the Master’s Programme International Project Management

ELKA HALLDÓRSDÓTTIR

Department of Civil and Environmental Engineering Division of Construction Management Chalmers University of Technology ABSTRACT Sustainability was defined in the Brundtland report as a “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (Brundtland, 1987, p.41). Because the definition has been hard to use in practice researchers have come up with many competing definitions (Toman, 2013; Holliday, Schmidheiny, & Watts, 2002). A case study was done in an Icelandic energy company where sustainability has recently been implemented into the company’s core strategy. Semi structured interviews were conducted with eight project managers in order to investigates how sustainability is used and perceived amongst them. As well as the company’s documents were reviewed to better understand how well the company’s sustainability strategy has been implemented.

The results were quite interesting and mirrored the theory regarding implementation of sustainability into organisations and projects. The company is performing well in some aspects of the implementations process but improvements can be done in many areas.

Key words: Project management, sustainable development, implementations of sustainability, corporate social responsibility.

–  –  –

CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2014:111 IV Preface This thesis is a part of the master program International Project Management at Chalmers University of Technology in Gothenburg, Sweden. The motivation for writing this thesis was the author’s great interest in sustainability and its progress within project management. After studying relevant literature it was clear that many aspects could be researched into details. In January 2014 the thesis process began and in June 2014 a final copy of the thesis was handed in.

A case study was conducted in Landsvirkjun, an Icelandic energy company, which aims at becoming a leader in sustainable use of renewable energy sources. Looking at sustainability in a company that has very sustainable yields was extremely interesting and gave this research an unique angle. The collaboration with Landsvirkjun was very successful and I would like to thank those who took part for their contribution and valuable time invested in this thesis.

Finally I would like to thank Martine Buser for her support and contribution to this thesis. She supervised the thesis process from initial steps to the very end and it was clear from the beginning that this work would not have been the same with out her valuable comments and directions.

Göteborg, June 2014 Elka Halldórsdóttir CHALMERS Civil and Environmental Engineering, Master’s Thesis 2014:111 V List of Figures Figure 1 Case study design

Figure 2 Landsvirkjun's structure

Figure 3 Landsvirkjun's social responsibility

Figure 4 Poster in Icelandic in Landsvirkjun

List of TablesTable 1 Sustainability blunders

CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2014:111 VI 1 Introduction Iceland is the second largest producer of electricity from renewable sources in Europe and the largest when calculated per capita. Due to its hydropower and geothermal activity it has a great advantages over other countries. It is the only country in Western Europe that still has large resources of competitively priced hydroelectric power and geothermal energy remaining to be harnessed (Iceland Trade Directory, 2014). The energy generated is from 99% renewable hydroelectric and geothermal sources as well as wind turbines are the newest addition (Landsvirkjun, 2012). This makes Iceland very unique and sustainable. It is therefore very interesting to look into Icelandic’s main energy provider Landsvirkjun, and see how well newly implemented sustainability strategy is recognized in a project based organisation where the yields are 99% sustainable. A qualitative case study investigated project managers’ perception of sustainability in the company. Data collection involved reviewing of official company documents as well interviewing eight project managers in Project Planning and Constructions division of the company. The results were analysed and match to current literature in order to get a deeper meaning and understanding.





Sustainable development has been defined by The World Commission on Environment and Development as a “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (Brundtland, 1987, p.41). Economic, environmental and social aspects are the three dimensions of sustainability that have been defined (Dyllick & Hockerts, 2002). It is important to foster all three dimensions in order to achieve long term sustainability and be aware that each aspects has its attributes that requires specific approaches (Weber, 2008; Dyllick and Hockerts, 2002). These three dimensions have also been called; the three pillars of sustainable development (Labuschagne & Brent, 2005), and the Triple bottom line, by Elkington (2004).

However this definition is vague when it comes to how to implement sustainability into organisations and projects. Sustainability goals deal with long term economical, social and environmental effects of an undertaking (Talbot & Venkataraman, 2011).

Projects on the other hand are defined as temporary organisations with a definite CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2014:111 beginning and an end, that have clear goals and objectives (Maylor, 2010). This contradiction makes the implementation of sustainability into project based organisations very challenging. Therefore it is also very interesting to find out if the sustainability concept has been used as a marketing boost and only recognised by the top management or if its implementation has acted as a real change affecting all departments, people and processes.

1.1 Aim, objectives and research question The aim of this thesis is to study how project managers in a project based Icelandic energy company, Landsvirkjun, perceive and use the sustainability concept. Reflect on how the concept relates to their role in the company as well as to investigate how successful the implementation of the sustainability strategy is amongst them. The research question is: Are barriers to sustainability implementation in project based organisations identified in the literature?

The objectives of this study are to;

Identify how the literature describes limitations to sustainability implementation in • project based organisations.

Identify the company’s sustainability strategy.

• Identify how the project managers perceive the sustainability concept in relation to • the company’s strategy.

1.2 Limitations The limitations of this study is first of all time limitation, the researcher has only limited amount of time to conduct the case study. The process of gathering and analysing the data, fitting it with the literature and constantly re-evaluating the purpose will take time. The researcher should be prepared for delays and difficulties along the way that might delay the process. Another limitation to this study is that the company studied is situated in Iceland, therefore the researcher does not have perfect access to the company due to being situated in Sweden. The Icelandic company has just recently implemented sustainability into their corporate strategy, and maybe not enough experience has been accumulated.

CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2014:111 The selection of participants was limited to project managers and they were from different hierarchy of the organisation. Some were supervising other project managers and others not. The researcher chose to focus only on project managers in this research and therefore the director of social responsibility was not interviewed. That person most likely took part in formulating the company’s strategy and is therefore probably very involved in it. Interviewing that person would give a bias view of the sustainability strategy.

1.3 Thesis structure overview

The structure of this dissertation will be as follows:

Section 2 covers the theoretical framework, where a short review of project based organisations is presented with sustainability as a red thread. Following comes a review of the sustainability concept and challenges related to its implementation.

Section 3 contains the methodology for this dissertation. The research strategy, design and method are presented as well as data collection and analysis is explained. At last the limitations and ethical concerns are listed.

Section 4 contains a description of the case company and empirical findings from the interviews and documents.

Section 5 analyses the empirical findings in relation to theory. A theoretical tool is used to analyse the findings and the section is structured according to the tool.

Section 6 gives conclusions from the analyses and provides recommendations and suggestions for further research.

CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2014:111 2 Theoretical Framework This section covers the theoretical framework, where a short review of project based organisations is presented with sustainability as a red thread. Following comes a review of the sustainability concept and challenges related to its implementation.

2.1 Project based organisations Project based organisation refers to a variety of organisational forms that have the goal of performing project tasks by creating temporary systems (Lundin & Söderholm, 1995). Project organisation can either be structured as functional organisation or matrix organisation. The latter has in many cases greater autonomy, which results in a greater opportunity to execute the project in a way that is best suited to the project’s goals. In project organisations the autonomy usually shifts from the individuals to the project team. That is generally seen as a positive thing because the project team makes a joint effort to solve unexpected problems as they come along (Hovmark & Nordqvist, 1996). A tension can be found between the organisation and the project group because they view the requirements to autonomy differently. The organisation wants the project activities to be within organisational command and control but in order for the project team’s success it needs to have decentralized team and a relatively autonomous project manager (Sydow, Lindkvist, & DeFillippi, 2004).

The integration between projects and the organisation may go through a steering group, which is responsible for coordination between the organisation and the project (Hovmark & Nordqvist, 1996). The optimal steering group should reflect the diversity of the society e.g. having people from different professional, cultural, and ethnic background. The more diverse the group is the more effective the steering group will be (Valentine & Spangenberg, 2000).

2.1.1 Governance in project organisations The purpose of governance structure is the alignment of the objectives at different management levels of the organisation (Müller, 2009). Corporate strategy has the main role of determining these objectives. By setting out a planned development of the company, a framework of reference is created which the company’s leaders can orientate themselves to (Grünig & Morschett, 2012). The corporate strategy is about CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2014:111 making long-term plans by considering risks and opportunities faced by the organization. A vision statement should refer to the long term objectives of the company as well as to shape and guide the future business practices by looking towards the unknown to define the future. It is important that the vision is understood and shared by all stakeholders of the organisation (Özdem, 2011) as well as to provide the employees with a purpose and a source of meaning in their work (Mirvis, Googins, & Kinnicutt, 2010). A vision can help the management to focus on the strategically relevant issues of the business. But when expressing the company vision there is also a risk of reducing it into a simple slogan that is only used for imaged boosting and public relations (Mirvis, Googins, & Kinnicutt, 2010). The company values communicate the principles the company emphasizes on. There has been some criticism on values and vision statements that they are too vague and too broad to actually deliver any benefits (Johnson, Whittington, & Scholes, 2011).



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