TRUST IMPACT ON MEGA-PROJECTS 1

1 Introduction

1.1 Background

Megaprojects requires large investments and commitment, are complex in nature, and have long

term impact not only on the economy of the country but also the environment and society

(Locatelli et al., 2017; Brookes & Locatelli, 2015). From the perspective of the investment these

projects have budget over billion dollars and are complex and advance in nature (Locatelli et al.,

2014a; Van Wee, 2007; Brookes & Locatelli, 2015; Merrow, 2011; Flyvbjerg et al., 2003)

whereas considering the impact they result in better environment and leads to society building

(Brookes & Locatelli, 2015; Ren and Weinstein, 2013; Warrack, 1993; Orueta and Fainstein,

2008).

1.2 Problem Statement

Megaprojects success rate is very low due to lack of understanding of the variables that affect the

success. Megaprojects are very risky (Locatelli & Mancini 2010) and they are not only complex

but also inefficient in regard of cost, time and quality (Wang, Fang & Fu, 2019; Mišić &

Radujkovic, 2015). Therefore failure of such projects can be a setback for a country in terms of

economy (Mišić & Radujkovic, 2015; Merrow, 2011). Better governance and trust can be the

way to improve the performance and avoid failure of these projects.

1.3 Research Gap

Knowing the importance of these project and that the delivery performance of these projects is

still poor and not up to the mark (Merrow, 2011; van Marrewijk, Clegg, Pitsis, & Veenswijk,

2008; Kardes, Ozturk, & Cavusgil, 2013; Flyvbjerg, Bruzelius, & Rothengatter, 2003). Hence it

is important to work on the delivery performance of megaprojects (Love and Ahiaga-Dagbui,

2018; Flyvbjerg et al., 2018). Also keeping in view the seriousness of this issue researchers are
 TRUST IMPACT ON MEGA-PROJECTS 2

encouraging the in depth study of governance and trust and its impact on project objectives. Very

few studies are there which explain the impact of trust on megaprojects success (Vukomanović et

al., 2019). Therefore, it is crucial to work on the delivery performance of megaprojects (Love

and Ahiaga-Dagbui, 2018; Flyvbjerg et al., 2018).

1.4 Research Objective

Developing trust is not easy and it is a never-ending practice particularly for megaprojects Better

understanding of how trust influence the project performance is vital. The risks and complex

nature of megaprojects are catered by innovation, contractual flexibility, cooperation and most

importantly trust (Vukomanović et al., 2019). Therefore, the objective will be:

 To understand the impact of trust on megaprojects.

1.5 Research Question

In this research study we have only one IV (trust) and DV (megaproject success). So, we will

find the answer of only one research question. The research question will be:

 What will be the impact of trust on megaproject success?

1.6 Scope and significance

The scope of our study includes studying two variables that are trust and megaprojects success

and finding the impact of trust on megaprojects success. We are observing the trust and Project

success by questioning project managers, project team, stakeholders and clients of megaprojects

to understand the effect of each other.

There are very few studies that explain the impact of trust on megaprojects success. Therefore,

our study is significant in eliminating this research Gap. In future, the researchers will not have

to study these variables as we have already done that and they can put effort in studying other

variables that affect megaprojects success. The commercial significance of our study is that we
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are making project success more predictable and controllable to project managers of

megaprojects by finding out qualitative and quantitative effect of trust on project success.

PROJECT
TRUST SUCCESS

2 Literature Review

2.1 What is megaproject?

Gellert and Lynch (2003, p.16) Megaprojects are analytically divisible into four types: (i)

infrastructure (ii) extraction (iii) production and (iv) consumption. Marrewijk et al. (2008, p.591)

define the megaproject as multi-billions of dollars in mega infrastructure projects, usually built

by governments and offered by private companies; ambiguous, complex, politically sensitive and

with many partners. There is no accepted definition of a megaproject in the literature (Brookes &

Locatelli, 2015).

On economical dimension, Warrack (1985) states that a billion is not a constraint in defining

megaprojects, as a relative approach is sometimes necessary. Even a much smaller project in

some contexts (such as one with a $100 million budget), can create megaproject (Brookes &

Locatelli, 2015; G. Locatelli, 2018). Comparatively, (Hu et al. 2013) they argue that a

deterministic cost threshold is not appropriate for all countries and that a relative threshold, such

as the GDP, should be used instead (G. Locatelli, 2018).

2.2 Megaproject performance

Merrow (2011), analysis of the data collection of 318 industrial mega projects from different

sectors shows that 65% of them can be considered a failure. Oil and gas production is the worst
 TRUST IMPACT ON MEGA-PROJECTS 4

since 78% of megaprojects in this industrial sector are classified as unsuccessful (G. Locatelli,

2018). Mega projects are justified by budget overruns, delays in various phases of project

development and operational results (Fryberg et al. 2003; Brookes & Locatelli, 2015). When we

talk about the electricity sector, there are no exceptions. Ansar et al. (2014) analysis of a sample

of 245 large dams (including 26 large dams) constructed between 1934 and 2007 showed that

actual costs were 96% higher than the estimated costs on average and actual implementation

program was 44% (or 2.3 years) higher than estimated (Brookes & Locatelli, 2015). However,

Giezen [54] added that mega projects often face serious cost and time –out issues that hinder, the

success of mega projects. Good performance is resultantly a crucial criterion for the success of

megaprojects (Wang, Fang & Fu, 2019).

2.3 Hypothesis:

Impact of trust on megaprojects success:

Trust is well defined as state of psychology that has the intent to accept something risky based on

your positive expectations (Rousseau et al., 1998). Hence trust is defined by (becker, 1996) as

accepting risks. Trust is considered something that inherits risk but if the one is certain about

something then trust is not necessary. Risk is considered one of the characteristics of trust

(Mayer et al., 1995).)

Therefore, two conditions are required to have trust relationships. First, when trust is given the

other party, it is inevitable to take risks in the weakened position. The second condition is

interdependence, when one party’s interests cannot be achieved without the other’s resources

(Aubert and Kelsey, 2000). In this way, the degree of interdependence changes the way in which

confidence can be manifested. More dependency indicates that trust relationships are more

relevant to the other party.

 TRUST IMPACT ON MEGA-PROJECTS 5

As such, trust acts as an ideal lubricant for smooth and effective coordination, allows cooperative

behavior, promotes adaptive forms of organization, reduces harmful conflicts and transaction

costs, and delivers more effective responses to the crisis (Rose and Schlichter, 2013). Karlsen et

al. (2008) also state that trust is essential for problem-solving because it encourages the exchange

of relevant information and helps find if a team member is ready to allow others to influence

their decision. correlation shows that there is a strong relationship between project success and

stakeholder trust (Pinto et al., 2009). Therefore, by building trust level can lead to productive

working relationships, and to understand how various relationships among stakeholders are to be

sorted out which helps to efficiently balance issues that normally occur in projects. However, the

benefit can only be taken from trust when it is both sided (Aubert and Kelsey, 2000; Hartman,

2003; Karlsen, 2008; Karlsen et al., 2008). Hartman (2003) states that trust effects nearly every

characteristic of managing project.

Pinto et al. (2009) suggest there is a good deal of confidence in project management practices,

including improved customer relationships, market time, outsourcing risk reductions, and

therefore project costs, lower and more effective communication. Many, if not all are responsible

for the failure of the project.

H1: There is statistically significant impact of trust on megaproject success.

3 Research Methodology

3.1 Population Frame

Various types of projects are going on in Pakistan but for this study we focused on megaprojects

located in various cities of Pakistan only. These projects are managed by government and private

contractors in different cities. Megaprojects of various types were considered for this study to

ensure that all types of industries are represented.

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3.2 Sampling Strategy

Non probabilistic sampling was used as the target sample involved project managers and team

members of various megaprojects in different cities who filled out the questionnaires. Due to

time and cost constraint I use convenience sampling which is a type of non-probability sampling.

This sampling technique help in gathering responses from the targeted population that are easily

accessible.

3.3 Measures and Instruments

The questionnaire was constructed on the basis of existing literature that includes both trust and

megaproject success items. Because both items and scale for trust and project success had been

already validated in the previous studies. Quantitative method is used for measuring the trust and

megaproject success. The questionnaire used a 5-point Likert scale for data collection, with 1

representing “strongly disagree “and 5 representing “strongly agree.”

A 4-item scale adapted from Chow et al. (2012) and Pinto et al. (2009) was used to measure the

level of trust. A 5-item scale developed by Luo et al. (2016) was used to measure the

megaprojects success.

3.4 Data Collection Method

The questionnaires were distributed by personally visiting various sites of megaprojects and

online via social networks like email, WhatsApp, Facebook and LinkedIn with the consent of the

respondents. Cross sectional approach was use to gather data and it was a primary data.

3.5 Analysis of Data

105 questionnaires were distributed out of which 75 respondents answered and 70 questionnaires

were valid. The 71.4% of response rate was observed which seems to be high. I checked for the

missing data before analyzing it. spss software was used for the analysis of data. And I ran
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different test and analysis on the data like correlation and regression analysis was used to analyze

the data in the spss software.

4 Results

4.1 Descriptive

Table 4.1.1 GENDER

Cumulative

Frequency Percent Valid Percent Percent

Valid Male 60 85.7 85.7 85.7
Female 10 14.3 14.3 100.0
Total 70 100.0 100.0

Table 4.1.1 shows the percentage of both male and female respondents as data is collected from

both male and female. The percentage of the male respondents is 85.7% and it is higher then the

female.

Table 4.1.2 AGE

Valid Cumulative

Frequency Percent Percent Percent

Valid 20-30 years 39 55.7 55.7 55.7
30-40 years 18 25.7 25.7 81.4
40-50 years 12 17.1 17.1 98.6
above 50 years 1 1.4 1.4 100.0
Total 70 100.0 100.0

Table 4.1.2 shows the different age groups appeared in this research. Mostly respondents belong

to the age group 20-30 years and has the maximum percentage which is 55.7%. But the whole

data is collected from 4 different age groups.

Table 4.1.3 DESIGNATION

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Frequency Percent Valid Percent Cumulative Percent

Valid Engineer 1 1.4 1.4 1.4
Academics coordinator 1 1.4 1.4 2.9
AM 2 2.9 2.9 5.7
AP 1 1.4 1.4 7.1
As a Engineer 1 1.4 1.4 8.6
Assistant Accountant 1 1.4 1.4 10.0
Assistant Manager Electrical 1 1.4 1.4 11.4
Assistant Manager operation 1 1.4 1.4 12.9
Assistant Professor 2 2.9 2.9 15.7
Asst Director - CNS 1 1.4 1.4 17.1
BM 2 2.9 2.9 20.0
CEO 1 1.4 1.4 21.4
Civil Engineer 1 1.4 1.4 22.9
Cluster Owner 1 1.4 1.4 24.3
Coach at Pakistan Sailing 1 1.4 1.4 25.7
Construction Manager 1 1.4 1.4 27.1
Deputy Director R&D 1 1.4 1.4 28.6
Design Engineer 3 4.3 4.3 32.9
Director 1 1.4 1.4 34.3
Electrical Maintenance En 1 1.4 1.4 35.7
Engineer 4 5.7 5.7 41.4
Faculty 2 2.9 2.9 44.3
Faculty member 1 1.4 1.4 45.7
Field Engineer 1 1.4 1.4 47.1
HR Manager 1 1.4 1.4 48.6
Jr. Administration and fi 1 1.4 1.4 50.0
Jr. Instructor 1 1.4 1.4 51.4
Lecture 1 1.4 1.4 52.9
Lecturer 2 2.9 2.9 55.7
Manager 2 2.9 2.9 58.6
MM 1 1.4 1.4 60.0
Na 1 1.4 1.4 61.4
Null 1 1.4 1.4 62.9
OB 1 1.4 1.4 64.3
OM 1 1.4 1.4 65.7
Pem 1 1.4 1.4 67.1
PhD scholar 1 1.4 1.4 68.6
Procurement officer 1 1.4 1.4 70.0
Project Engineer 1 1.4 1.4 71.4
Project Manager 2 2.9 2.9 74.3
Quality incharge 1 1.4 1.4 75.7
SC 1 1.4 1.4 77.1
Senior Monitoring & Evalu 1 1.4 1.4 78.6
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Site engineer 1 1.4 1.4 80.0

Site Inspector Civil High 1 1.4 1.4 81.4
SM 1 1.4 1.4 82.9
Software engineer 1 1.4 1.4 84.3
Software Engineer 2 2.9 2.9 87.1
supervisor 1 1.4 1.4 88.6
Team Lead 1 1.4 1.4 90.0
Team Lead Operations 1 1.4 1.4 91.4
Technical advisor 1 1.4 1.4 92.9
Technical Advisor 1 1.4 1.4 94.3
Technical Advisor
1 1.4 1.4 95.7
Management
Technical Sale Engineer 1 1.4 1.4 97.1
TM 1 1.4 1.4 98.6
Web developer 1 1.4 1.4 100.0
Total 70 100.0 100.0

Table 4.1.3 shows the designation of the respondents. Data is collected from people working on

different positions. so that the responses best support my hypothesis.

Table 4.1.4 EXPERINCE

Valid Cumulative

Frequency Percent Percent Percent

Valid .00 1 1.4 1.4 1.4
1.00 8 11.4 11.4 12.9
1.42 1 1.4 1.4 14.3
1.50 1 1.4 1.4 15.7
2.00 10 14.3 14.3 30.0
3.00 11 15.7 15.7 45.7
4.00 5 7.1 7.1 52.9
5.00 6 8.6 8.6 61.4
6.00 1 1.4 1.4 62.9
8.00 1 1.4 1.4 64.3
9.00 4 5.7 5.7 70.0
10.00 7 10.0 10.0 80.0
12.00 2 2.9 2.9 82.9
13.00 1 1.4 1.4 84.3
15.00 4 5.7 5.7 90.0
16.00 2 2.9 2.9 92.9
17.60 1 1.4 1.4 94.3
18.00 3 4.3 4.3 98.6
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26.00 1 1.4 1.4 100.0

Total 70 100.0 100.0

Table 4.1.4 shows the experience in years of the respondents. In experience wise maximum

respondents has 3 years of experience which is 15.73%. And the 10% respondents are those who

having 10 years of experience.

Table 4.1.5 NORMALITY

Skewness Kurtosis
Statistic Std. Error Statistic Std. Error
Trust_1 -.553 .287 -.286 .566
Trust_2 -.110 .287 -.466 .566
Trust_3 -.463 .287 -.136 .566
Trust_4 -1.116 .287 2.315 .566
PS_1 -.609 .287 -.674 .566
PS_2 -.792 .287 -.669 .566
PS_3 -.774 .287 -.197 .566
PS_4 -.658 .287 .342 .566
PS_5 -1.083 .287 1.097 .566
Valid N

(listwise)

Table 4.1.5 shows the normality of the data. The threshold values for the skewness and the

kurtosis is -3 and +3. The above table shows that the values of Skewness and Kurtosis for each

item lies between the threshold values. This mean that data is normally distributed. Normally

distributed means the sample size we choose represents the population.

4.2 Reliability Analysis

TABLE 4.2.1 RELIABILTY ANALYSIS

Variable Cronbach's N of Items

Alpha
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Trust .703 4

Project .835 5

success

Table 4.2.1 shows the reliability analysis which is basically inter item consistency if α value is

above 0.7 then the scale is reliable otherwise it’s not. The reliability analysis of Trust and Project

success yielded Cronbach’s alpha of .703 and .835 which is above the threshold value. Hence our

scale is reliable.

4.3 Factor Analysis

TABLE 4.3.1 FACTOR ANALYSIS

Variable Extraction

Trust_1 .640
Trust_2 .730
Trust_3 .393
Trust_4 .326
PS_1 .545
PS_2 .637
PS_3 .708
PS_4 .615
PS_5 .731

Table 4.3.1 shows the factor analysis. It is used to check the validity of the questionnaire.

Threshold value is 0.6 and above any item having value less than 0.6 will be removed from the

questionnaire when carrying analysis such as correlation and regression. Rejected items for

correlation and regression analysis are (Trust_3, Trust_4 and PS_1). We will run correlation and

regression analysis on remaining items.

4.4 Correlation

Table 4.4.1 CORRELATION

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project

Trust success
trust Pearson
1 .554**
Correlation
Sig. (2-tailed) .000
N 70 70
project success Pearson
.554** 1
Correlation
Sig. (2-tailed) .000
N 70 70

Table 4.4.1 shows the correlation of trust and project success. Correlation is used to tell us the

direction and the strength of the relationship. +1 and -1 values indicate the very strong

relationship between two variables and the value near to zero tells no relationship between both

variables. The value .554 shows that there is positive and moderately strong relationship between

trust and project success.

4.5 Regression

Table 4.5.1 shows the effect of trust on project success

path beta t R2 P

Trust Project_success .554 5.491 .307 .000

Table 4.5.1 shows the regression analysis. Beta and p-value from the tables shows that the

relationship between both trust and project success is significant and my hypothesis is true and

accepted because p-value is less than 0.05. β is the unit change in DV due to IV in this study β
 TRUST IMPACT ON MEGA-PROJECTS 13

is .554.t- value should be greater than 2 in my case it is 5.491 and R2 is represented in percentage.

For trust and project success variables it is 30.7%.

5 Discussion

5.1 Discussion on Results

Results shows that my hypothesis is accepted because the significance value is less than 0.05 in

this research study it is 0.000. Correlation coefficient shows there is moderately strong

relationship between trust and project success. On the basis of results, we can say that trust has

positive impact on project success and there is a positive linear relationship exists between trust

and project success.

On the basis of R2 value we can say that if trust increases or change in trust occurs there will be

30.7% change in project success because of trust.

5.2 Conclusion

Our research concludes that there is a positive impact of trust on megaproject success. If we

improve the trust level among the stakeholders, project team and project managers it will help

achieving the project objectives efficiently. So, there is need of building trust among

stakeholders, project managers and team members.

5.3 Implications

5.3.1 Managerial Implications

As the importance of megaprojects of any industry that how it is crucial for the growth and

development of any society or nation was discussed in the introduction part of this study, with

the help of this research, the stakeholders of the megaprojects will be now aware of the

importance of trust factors among the stakeholders of the megaprojects. The project managers

and project team now understands that trust has a positive impact on the success of the
 TRUST IMPACT ON MEGA-PROJECTS 14

megaprojects of any industry and if they want to improve the performance of these projects they

should work on building the trust level among the members of the team which will eventually

result in the growth and development of that nation or society.

5.3.2 Academic Implications

As this research work was suggested by the “International Journal of Project Management” and

was in their requirement list and also keeping in view that the criticality of the megaprojects was

in the interest of researchers knowing that how it can impact the economy of any country, thus

with the help of this research that research gap is covered. Also, it has a significant part in

understanding the relationship between trust and project success.

5.4 Limitations

The research was the requirement of our course work, for that reason we were time bond and

only had few months to complete this research. Because of our busy schedule and less time, the

sample size of this research couldn’t be increased. We also had financing constraint during the

research and we believe that with proper finances this research can be improved. We also

couldn’t use various means for collecting information from the respondents only questionnaires

were used to gather responses.

5.5 Future Research Direction

I used only trust to investigate the impact on megaproject success. But there are other factors as

well. As the result of the study discussed above, I suggest the researchers to use the multiple

variables in the future study. Transparency and job satisfaction can be used as independent

variables along with the trust to enhance the impact and social norms can be considered for

moderating role as well.