Debremarkos University

College of Business and Economics

Department of Economics

Assessment of Critical Success Factors of Project Implementation:

The Case of Banja Woreda Rural Road Construction

By

Banchiyigegn Fentahun
ID: GSS/648/08
Advisor: Addisu M. (PhD Fellow)

A Thesis Submitted to the Department of Economics in Partial Fulfillment of the

Requirements for M.Sc. Degree in Project Planning and Management

June 2022
 Debremarkos

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 Table of Contents

Content Page

Acknowledgements..................................................................................................................IV
Acronym....................................................................................................................................V
List of Tables...........................................................................................................................VI
LIST OF FIGURE..................................................................................................................VII
Abstract.................................................................................................................................VIII
CHAPTER ONE: INTRODUCTION
1.1. Background of the Study.............................................................................................1
1.1. Statement of the Problem............................................................................................3
1.2. Research Questions.....................................................................................................4
1.3. Objective of the Study.................................................................................................4
1.4. Hypothesis of the Study...............................................................................................5
1.5. Significance of the Study.............................................................................................5
1.6. Scope of the Study.......................................................................................................5
1.7. Limitation of the Study................................................................................................6
1.8. Organization of the Study............................................................................................6
CHAPTER TWO: LITERATURE REVIEW
2.1. Theoretical Literature..................................................................................................7
2.1.1. Definition of Construction.......................................................................................7
2.1.2. Organization.............................................................................................................7
2.1.3. Classical School.......................................................................................................8
2.1.4. Organizational Structure..........................................................................................8
2.1.5. Definition of Strategic Management........................................................................8
2.1.6. Critical Success Factors...........................................................................................9
2.2. Empirical Literature...................................................................................................10
2.2.1. Importance of Critical Success Factors.................................................................10
2.2.2. Sources of Critical Success Factors.......................................................................11
2.2.3. The Uses of Critical Success Factors.....................................................................12
2.2.4. Classification of Critical Success Factors..............................................................13
2.3. Conceptual Framework.............................................................................................13

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 CHAPTER THREE; METHODOLOGY OF THE STUDY
3.1. Description of the Study Area...................................................................................15
3.2. Research Design........................................................................................................15
3.3. Sample size and Sampling technique........................................................................15
3.3.1. Target population...............................................................................................15
3.3.2. Sample Size........................................................................................................16
3.4. Methods of Data Collection.........................................................................................2
3.5. Data Type and Source.................................................................................................2
3.6. Sample Design and procedure.....................................................................................2
3.7. Methods of Data Analysis...........................................................................................3
3.7.1. Creation of Composite Variables.........................................................................4
3.7.2. Principal Components Analysis...........................................................................4
CHAPTER FOUR: RESULT AND DISCUSSION
4.1. Background and Distribution of Participants..............................................................5
4.2. Description Statistic for Composite Variables............................................................6
4.3. Interview Analysis.......................................................................................................6
4.4. Questionnaire Analysis................................................................................................8
4.5. Factor Analysis..........................................................................................................13
CHAPTER FIVE: FINDINGS AND RECOMMENDATIONS
5.1. Conclusion.................................................................................................................19
5.2. Recommendation.......................................................................................................20
References................................................................................................................................22
APPENDIX I............................................................................................................................27

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 Acknowledgements
I am deeply indebted to my thesis advisor Mr. Addisu Mekonnen whose help as my academic
guidance has been valuable in finishing this particular research. I also have especial thanks
for my family members for their moral and material support and encouragement which
helped me stay inspired throughout the point of this study completion. Finally, I would like to
thank Economics Department for its kind cooperation to finalize this piece of work.

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 Acronym

ADLI: Agricultural Development Led Industrialization

ARA: Amhara Roads Authority

CSFs: Critical Success Factors

EPRDF: Ethiopian People’s Revolutionary Democratic Front

ERA: Ethiopian Roads Authority

FAO: Food and Agricultural Organization

FDRE: Federal Democratic Republic of Ethiopia

IHA: Imperial Highway Authority

ILO: International Labor Organization

MSA: Measure of Sampling Adequacy

PCA: Principal Component Analysis

PRS: Poverty Reduction Strategy

PSNP: Productive Safety Net Program

RRA: Rural Road Authority

RRC: Rural Road Construction

RSDP: Road Sector Development Program

SPSS: Statistical Package for the Social Sciences

UNs: United Nations

WB: World Bank

WFP: World Food Program

WRRO: Woreda Rural Road Offices

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 List of Tables

Tables……………….………………………………………………………………………….Page

Table 3.1: Total number of population………………………………………………………………..16

Table 4.1: Summary of Descriptive Statistics Analysis……………………………………………….21
Table 4.2: Reliability of Composite Variable Test…………………………………………...25
Table 4.3: Mahalanobis Distance Score……………………………………………….……..27
Table 4.4: Summary of KMO Measure of Sampling Adequacy and Bartlett’s Test of Sphericity
Analysis………………………………………………………………………………………………..30
Table 4.5: Guidelines for Identifying Significant Factor Loadings……………………….…31
Table 4.6: Summary of Factor Loading of Critical Success Factors………………………....31
Table 4.7: Rankings of the Critical Success Factors………………………………………....32

LIST OF FIGURE
Figure: 2.1. Conceptual framework ……………………………………………………..14

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 Abstract

The construction industry is a competitive business and its underperformance in Ethiopia has
been criticized for many years. During the last 30 years, rural road construction in Amhara
region in general and Awi zone in particular suffered from a reduction in accessibility and
unreliable rates of profitability. The aim of this study was to analyze the critical success
factors in Banja Woreda Rural Road Construction projects. To achieve this objective,
primary data were collected from 394 respondents using structured questionnaires and
analyzed using the technique of factor analysis. The results from the data analysis revealed
that eleven critical success factors were regarded as vital by most respondents. Those critical
success factors were ranked and the top three critical success factors identified were
strategic management, human resources, and relationship engineering. Based on these
results, there is a need to key performance indicators for road construction in Banja Woreda
that should be established in future.

Key words: Rural area, Organization, strategy, Construction, success factor, Performance.

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 CHAPTER ONE

1. INTRODUCTION

1.1. Background of the Study

Existence of ‘roads’ in Ethiopia was the result of constant flows of passengers, animals or
erosion rather than of planned construction activities (Ayele, 1987:1). Only with the creation
of the Imperial Highway Authority (IHA) in 1951 was a governmental body entrusted with
road construction. Since then, a domestic road sector has emerged through the interplay of
governmental and non-governmental institutions along with significant foreign support
in technical, professional, institutional and financial terms. The history of the road sector has
been characterized by an ever increasing professionalization with respect to capacity, skills,
construction techniques and approaches. After the takeover of the Ethiopian Peoples’
Revolutionary Democratic Front/EPRDF decentralization policy created a new context in
Ethiopia road sector development.

To this day, rural roads have been a major policy issue with significant consequences for
the country and its population. This study traces the critical success factors of rural road
project implementation in Ethiopia generally and Banja district in particular. It provides
insights into identifying the critical factors that determine project implementation within
commencement date. As such, the findings contribute to a better understanding of state-led
development in a decentralized setting and how development policies coincide with local
realities regarding to rural road development. An extensive network of 114,397 km of
different roads has been constructed, maintained and classified to date. While regimes and
policies changed, roads have remained important; the road network has continuously grown
and outlived its creators. Moreover, the EPRDF government emphasizes the importance of
roads for development and has defined road infrastructure as one of the main pillars of its
development policy as formulated in the Agricultural Development Led Industrialization (UN
2007b); Poverty Reduction Strategy, the Road Sector Development Program (RSDP) (FAO
2008; the UN 2007b). In Ethiopia’s development policy, roads – particularly rural roads – are
seen as one of the decisive factors that contribute to social and economic development in a
country where the majority of people live and depend on agriculture (ORSG, 2009).

Today, the road sector is organized in line with the decentralization policy of the EPRDF
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government. Rural road construction takes place in a decentralized setting in which federal,
regional and district governments hold the responsibility for maintaining and expanding the
road network within their territories. After the fall of the Derg regime in
1991, an ethnic-based federalism and a five-tiered administrative structure is established,
reaching from the federal and regional government, down to the zonal, district
(woreda) and sub-district (kebele) levels. Article 39 of the Constitution of the Federal
Democratic Republic of Ethiopia (FDRE) defines the power balance between the federal
and regional level, and guarantees “every Nation, Nationality and People in Ethiopia …
unconditional right to self-determination…” In line with the new political set-up,
responsibility for administering different roads became decentralized and the previously
classified road network is categorized into federal and regional roads (ERA, 2007:7;
2008b:24). While trunk and link roads fell under the administration of the federal Ethiopian
Roads Authority (ERA) (WB, 2001), Regional Rural Road Authorities (RRA) in five
regions was entrusted with the responsibility for rural roads in their newly established
regional states (ERA, 2008b:24). Since 2001, decentralization in Ethiopia has entered
a second phase that further transferred the responsibility for rural roads to the district
level (Tegegne & Kassahun 2007:10; Dessalegn, 2008b:244). In this phase, the
authority “…to examine and approve all plans, programs and initiatives concerning economic
development, social services, public administration and natural resource
management” (Dessalegn, 2008b:246) is transferred to the Woreda level.
As a result, Woreda Rural Road Offices (WRRO) was established at district level as
executive sector offices responsible for community roads (Tegegne & Kassahun, 2007:34).
This study aims at shedding light on the historical roots of state-led rural road
construction, which is an important development issue until recently in Ethiopia.
Kumera and Kanea (2007:118) conclude that in the rural road sector, it is “…not possible
to make comparisons of the state of affairs before and after decentralization owing to
lack of data”. Although these community roads account for nearly two-thirds of the
country’s total road network, virtually no work deals specifically with their construction. In
an attempt to address the lack of information about community roads, this proposed study
traces the various critical factors in implementing rural road projects successfully and the
governmental sector that has been in charge of its road construction.

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1.1. Statement of the Problem

The study of project success and critical success factors are usually considered as ways of
improving the efficiency and effectiveness of projects. Generally the concept of project
success has continuously remained ambiguous in the minds of professionals within the road
construction (Saqib, et al., 2008). The term “critical success factors” in the project
management parlance is first used by Rockart which implies those factors that are capable of
predicting the success of projects (Saqib, et al., 2008; Baccarini, 2009).

The resultant effects were incidences of schedule and cost overruns, low quality projects and
outright abandonment. Construction projects are embarked upon with a view to achieving the
key objectives of cost, schedule while meeting the quality standard initially set (Oyedele,
2013). If per adventure such a construction project is not delivered to meet the
aforementioned set objectives, then the project is said to be unsuccessful. The life span of
most construction projects in Nigeria is unpredictable as there are many abandoned projects
littering everywhere as a result of poor planning (Oyedele, 2013; Ubani and Ononuju, 2013;
Amade, 2014).

While Aibinu and Jagboro, (2002) opined that one of the key criticisms bedeviling the
Nigerian road construction is the growing trend in delays associated with project delivery.
The focus is on government institutions with the exclusive responsibility for road
construction, while rural road construction activities of others – for example those undertaken
by the Ministry of Agriculture and Rural Development or framed under the Productive Safety
Net Program (PSNP) are not considered. In addition, non-governmental and foreign actors
have played a role in the construction of roads in Ethiopia (ETCA 1986:3) but are not objects
of investigation in this study. Due to the scarce availability of academic literature on the road
sector in Ethiopia, this study is mainly based on governmental and non-governmental
documents. Although these sources shed light on what have recently become federal and
regional roads, they fail to describe rural road construction at community level. In order to
bridge this gap, the study would conducted field study on rural road construction in Banja
woreda, Awi zone, Amhara region, during the meher rainy season in 2012. Based on data
collection in Addis Ababa, this rural district was selected because of two particular state-led
activities of rural road construction: an ongoing regional road construction project of the
Amhara Roads Authority (ARA) and continuous community road construction activities of
the WRRO. This study is entirely based on quantitative and qualitative study methods, from
data collection to data analysis. This study mainly takes critical success factors in

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implementing projects successfully and brings together information about the emerging rural
road sector in Banja district, the road management policies formulated, as well as the
commitment of all actors in implementing projects successfully on the sector. Furthermore,
this study would generate a set of critical success factors and sub-factors for practical
application. This would provide important information to residents and rural road
construction (RRC) in Banja district.

And the study would inform stakeholders within Banja Woredaof the reoccurring critical
success factors for rural road construction project delivery and provide far reaching
recommendations on how best to ameliorate the incidence of poorly executed construction
projects littering the nooks and crannies of Banja, Awi zone. In Banja woreda, in particular,
most of the construction projects delivered for public use depict evidence that they are not
successfully executed because public road projects in the study is poorly conceived, badly
planned and executed unprofessionally. This could be as a result of lack of experience from
the contractors in executing the projects, poor design, lack of the knowledge in handling
specific type of projects and corruptible tendencies amongst others.

1.2. Research Questions

This study has been guided with the following research questions:
 What are the critical success factors for road construction in Banja woreda?
 What is the relative importance of the existing critical success factors in the study area?

1.3. Objective of the Study

The general objective of the study is to investigate the critical success factors of project
implementation and the performance of project success in Banja Woreda. To attain the
general objective, the following specific objectives are formulated.

 To assess the critical success factors in the road construction of Banja woreda.
 To analyze the order of importance of theses identified factors in influencing project
implementation.

1.4. Hypothesis of the Study

The following hypothesis would be tested;

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H1: Rules and procedures have a significant influence on the overall performance of RRC in
the Banja Woreda road construction.
H2: Management team has a significant influence on the overall performance of RRC in the
Banja Woredaroad construction.
H3: Adequacy of resource and support has a significant influence on the overall performance
of RRC in the Banja Woreda.
H4: Strategic management has a significant influence on the overall performance of RRC in
the Banja.
H5: Financial resources have a significant influence on the overall performance of RRC in
the study area.
H6: Marketing management has a significant influence on the overall performance of RRC in
the Banja.
H7: Human resources have a significant influence on the overall performance of RRC in the
Banja Woreda.

1.5. Significance of the Study

The study may provide a platform upon which the policy makers can reside to exploit the
potentialities of the performance of rural road construction in order to strengthen the
export, assist the industrial sector and accelerate the overall economic growth and
thence economic development with a higher level of technical and allocate efficiency.
Moreover, the findings of the study may be equally helpful to evaluate the factors that
are creating obstacles in expanding road to agriculture sector and focus on some of the policy
issues that can boost up such access of rural roads. In such a context, it would be beneficial
to ERA policy makers too for devising the appropriate policy tools and actions to
achieve the above mentioned goals.

1.6. Scope of the Study

The study covers only on the discussion of critical factors of successful rural road
implementation in Banja woreda, Awi Zone. The study area covers selected districts only.
Thus, the results from the study may not reflect the overall situation in Awi zone and the
whole Ethiopian rural road construction, only performance of rural road project
implementation have been taken into consideration while identifying critical factors that
determine the success of rural road in Banja district.

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1.7. Limitation of the Study

It is also important to mention some limitations in this study. For the identification of critical
success factors and their sub-factors, purposive sampling would have used to collect the
opinions and data from the respondents. Purposive sampling strategy is different to random
sampling strategy. Purposive sampling would lead to criticisms of quantity study based on
inadequate sampling designs and the results may not be able to represent the general
spectrum in the rural road construction projects in the study. The sample may be too small
due to the limitation of time and the lack of resources. The study results may only be applied
in public organizations (government departments) because practices in private organizations
are different. The study would carried out in a single industry that is road (rural) sector, so the
findings may not be applicable and appropriate to any other industries.

1.8. Organization of the Study

This study would have five major chapters. The first chapter deals with introductory part,
which consists of background of the study, statement of the problem, study objectives, scope
of the study, limitation of the study and significance of the study. The second chapter
contains review of related literatures on rural roads construction. Chapter three deals with
sample size, methods of sampling, data collection and analysis. The fourth chapter deals with
results and discussion that consists both quantitatively and qualitatively analyzed result.
Chapter five deals with conclusion and recommendation part of the study.

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CHAPTER TWO: LITERATURE REVIEW

2.1. Theoretical Literature

2.1.1. Definition of Construction

The Standard Industrial Classification of the United Kingdom (SIC, 1968, p.32) defined
construction as: Erecting and repairing buildings of all types. Constructing and repairing
roads and bridges; erecting steel and reinforced concrete structures: other civil engineering
work such as laying sewers, gas or water mains, and electricity cables, erecting overhead
lines and line supports and aerial masts, extracting coal from opencast workings, etc.
Construction is the integration of planning, designing, construction, repair, maintenance,
alteration and demolition of building and civil engineering works. In terms of product, it
includes buildings, airports, harbor’s, roads, bridges, railways, tunnel viaducts, reclamations,
sewers, dams, canals, pipelines, electrical, telecommunication and gas works.

2.1.2. Organization

Barnard (1938, p.73) defined an organization as, “a system of consciously activities or efforts
of two or more persons”. According to Robbins and Coulter (2007, p.47), “an organization is
a deliberate arrangement of people to accomplish some specific purpose”.

Organizational Theory: Organizational theory focuses on two kinds of studies in the

business discipline. The organizational structure describes how organizations are structured.
The studies in organizational design provide suggestions on how different types or
combinations of organization can improve their effectiveness (Robbins and Coulter, 2007).

Division of Labor: As stated by Adam Smith, efficiency can be increased through division
and specialization of labor because specialization leads to increased productivity. It involves
breaking one task into simpler tasks which are assigned to different specialists. The major
advantage of the division of labor is that it enhances human productivity by improving
labor’s technical efficiency (Foley, 1974).
Bureaucracy: Max Weber, a German sociologist, introduced his theory of bureaucratic
management and identified the functions of management and their characteristics. In a
bureaucracy, an organization follows a set of rules which control its functions. All decisions,
rules and actions are formulated and recorded by the organization. Decisions are made at high

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levels and executed by low levels. A hierarchy of authority commonly exists in an
organization. Under a chain of command, each level controls the level below. Officials are
hired based on qualifications and they are expected to contribute their full working capacity
to the organization. In a system of hierarchical authority and subordination, rules are clearly
communicated to all employees so that their roles and responsibilities are clearly defined, as
well as their power. Work is assigned to the specialists based on the experience and
competence of the individual (Sashkin, 2003).

2.1.3. Classical School

According to the classical schools of management, there were two main streams in
organizational management. Taylor (1911) applied the scientific method to organizational
management to improve workers’ productivity. This scientific management method focused
at the lower levels of the organization. Skilled craftsmen are allowed to make their own
decisions to perform their jobs. Fayol (1917) developed the theory of management and
proposed functions and principles of management. He focused on the top management of an
organization and believed that managerial excellence is a technical ability that can be
acquired.

2.1.4. Organizational Structure

According to Robbins and Coulter (2007) and Hodge et al. (2003), organizational structure
defines the formal arrangement of jobs and which coordinates organizational tasks, divides
work into specific jobs and departments, and clusters jobs into units. The organizational
structure identifies responsibilities associated with individual jobs, establishes formal lines of
authority and relationships among individuals and departments, allocates and deploys
resources. Organizational design is engaged when executives want to develop or change the
arrangement of jobs.

2.1.5. Definition of Strategic Management

Strategic management enables an organization to achieve its objectives through strategy

formulation, implementation and evaluation. It focuses on accounting, finance, marketing,
production, operation, information systems, research and development. Organizational
strategies can be used to enhance the performance of an organization through planning,
organizing, leading and controlling (Hunger and Wheelen, 2011). Before going into the

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discussion of strategy, it is necessary to discuss the hierarchy of a firm and levels of
management.

2.1.6. Critical Success Factors

In an increasingly complex business environment, organizations face different challenges and

managers have been confronted with different problems. They need to manage their time
efficiently and complete their tasks effectively. A good management information system can
provide more precise information so that managers can take the necessary corrective actions
when problems arise. One of the methods for determining precise and important information
is the “critical success factors” method. Daniel (1961) firstly introduced the “success factor”
concept and suggested that companies needed to focus on their important information needs
relating to corporate success factors in order to achieve management effectiveness, especially
when the company is changing and growing. He also indicated that there is a lack of business
information for decision-making or performance measurement and this management
information problem could hamper businesses. There is a need for a company policy on the
design of the management planning and control system so that it can provide relevant
information for a particular job, and the industry as a whole (Anthony et al., 1972). The
critical success factors method is effective in the management of information systems as it
helps to define important information needs for executives and managers (Bullen and
Rockart, 1981). Ramaprasad and Wouldiams (1998) stated that the critical success factors
method made a great contribution to the literature on information systems. Critical success
factors method can enhance the performance of the design, development and implementation
of information systems. Before going into details, it is necessary to define what success and
critical success factors are.

Definitions of Success: Different companies have different definitions of success. In general,

if an organization achieves its goals and expectations at a specific period of time, it can be
considered a success. In the construction industry, RRC are heavily involved in construction
projects. Therefore, it is also important to define project success.

According to de Wit (1986, p.165), “a project is considered success if the project meets the
technical performance specifications, if the mission is performed and if there is a high level
of satisfaction concerning the project outcome among key people”. Apart from
technicalperformance, success should also be viewed from different aspects including
financial, social and educational. However, success cannot easily be measured and quantified.

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Definitions of Critical Success Factors: By definition (Bullen and Rockart 1981:7), “critical
success factors are the limited number of areas that the manager should focus on. They are
the areas where things must go right”. If the results are satisfactory, the relevant critical
success factors would bring the success to the manager, department and organization.
According to Ferguson and Dickinson (1982), critical success factors are areas that the
manager should pay special attention to. They may have positive and negative effects that
affect the internal and external environment of the organization and they can be identified by
assessing the organization’s strategy, environment, and operations. If the characteristics are
sustained, the conditions are maintained, or the variables are managed, it can enhance the
organization’s competiveness in its particular industry (Leidecker and Bruno, 1984). Boynton
and Zmud (1984) agreed that the manager must pay special and continual attention to those
managerial or enterprise areas to bring about high performance. Those areas are essential for
both the current activities and future success of an organization.

2.2. Empirical Literature

According to Grunert and Ellegaard (1992), critical success factors are related to four areas of
firms’ operations: (1) management information systems; (2) business characteristics; (3)
planning tools; and (4) market description. The first area is about the usage of critical success
factors in management information systems. In order to identify managers’ information
needs, critical success factors should be included in the management information system. It is
suggested that every business is unique and there are different reasons for them to be
successful. Therefore, the critical success factors should be used in training business
executives. Future-oriented planners aim at developing planning tools that could assist the
organizations to formulate their strategies. They emphasize that executives should identify a
list of critical success factors and focus on those limited areas that may lead to improved
strategy formation. The shared experience school believes that business success is governed
by causal relationships. It is believed that there are relationships between different types of
strategy and the success of critical businesses.

2.2.1. Importance of Critical Success Factors

Critical success factors provide important information for managers and allow them to focus
on a small number of areas in keeping with their limited resources. The value of the critical
success factors is to help the firm to plan its strategies, objectives and goals, to enhance the
effectiveness of communication within the different hierarchical levels in the firm, and to

XVI
help in developing the information system (Bullen and Rockart, 1981). Khandelwal and
Ferguson (1999) emphasized the importance of having a limited number of critical success
factors and stated that managers had to provide a continual focus on those vital areas until
aims in these areas were successfully achieved. In other words, if the results related to those
critical success factors are not adequate, the performance of the organization would not meet
expectations. Critical success factors are the vital areas that can lead to organizational success
as they provide the information needed for current operating processes and for future success.
If the identification of critical success factors is followed by a strategic assessment of the
particular industry or market, the critical success factors method can enable the organization
to distinguish itself from its competitors (Van and Wijn, 2002). When the activities identified
by the critical success factors perform particularly well, the organization would outperform
its competitors (Vasconcellos, 1998). In a complex business environment, there are different
factors that may affect the organization’s outcomes, and critical success factors research can
provide valuable information on practical recommendations to the organization (Lam, 2005).

2.2.2. Sources of Critical Success Factors

According to Bullen and Rockart (1981), there are five major sources of critical success
factors: (1) each industry has its own characteristics so that specific critical success factors
can be determined for that particular industry. For example, in the construction industry, they
are industrial demand, competition within the industry, labor environment and regulatory
environment. (2) Each organization has a unique position, history and competitive strategy.
Different situations would dictate different sets of critical success factors according to its
status. The organization would have different sets of critical success factors when it is stable,
growing or declining. (3) External environment has a certain kind of influence for an
organization and the environmental factors are those areas that the organization cannot
control. Examples of environmental factors are local economic performance, political
development, regulatory trends, social trends, and natural resources. (4) Each managerial
position would have different sets of critical success factors according to their level of
managerial position. These critical success factors can ensure the successful competitive
performance of the manager. (5) In a particular period of time, activities within an
organization may become crucial and these activities may not be regular or routine. As a
result, the temporal factors would usually not generate critical success factors.

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2.2.3. The Uses of Critical Success Factors

The primary use of the critical success factors concept is to help with respect to developing
the management information system. This information system is aimed at providing
information to understand the top management’s needs and to enhance communication
between the different hierarchical levels of the firm’s management. The critical success
factors are developed to help identify the vital areas of concern and provide measures that
would help in those vital areas (Boynton and Zmud, 1984).

The ultimate goal of using this method is to provide knowledge to improve the management
of organizations. The critical success factors concept provides information to help an
organization in planning its long-term strategy and for short-term purposes. Different levels
of critical success factors are used in different corporate planning processes. Ramaprasad and
Wouldiams (1998) indicated that the critical success factors provided information on criteria
related to project success by examining different aspects and measures in terms of time,
direction and connection. Another major use of the critical success factors concept is to
provide valuable information to an individual manager for his own needs. In order to
determine his own goals, the individual manager must pay attention to the critical success
factors which are related to his specific situation.

The critical success factors must be tailor-made for the particular industry, organization or
individual. The critical success factors are different from manager to manager according to
their position in the organization. In addition, the critical success factors would change when
the environment of the industry changes and the position of an organization changes, and
when the situation of manager changes. Therefore, the information should be accessible to all
management levels and performance should be continually measured. Krcmar et al. (2004)
studied the critical success factors and proved that they could lead to the success of an
organization or project.

Pinto and Slevin also (1987) agreed that critical success factors could improve project
implementation. The current research on critical success factors also considers the factors
from the different points of view of different stakeholders. For example, the specific critical
success factors of international development projects are taken into consideration in current
research, as well as the criteria from their different phases of the life-cycles (Diallo and
Thuillier, 2004, 2005). Alsadhan et al. (2008) believed that, to ensure successful
implementation of strategies, an organization should view the activities created by focusing

XVIII
on critical success factors as the practices. Numerous researchers tried to identify critical
success factors for intra-organizational systems, and critical success factors for managing
internal changes have been generated. However, not many studies focus on how managers
manage changes to the external environment and how to overcome resistance to change in the
public.

2.2.4. Classification of Critical Success Factors

According to Bullen and Rockart (1981, p.16), there are three dimensions for classifying
critical success factors: “(1) internal versus external, (2) monitoring versus building adapting,
and (3) all the five prime sources”. As mentioned in Section 2.4.3, the five prime sources are
(i) the industry, (ii) competitive strategy and industry position, (iii) environmental factors,
(iv) temporal factors, and (v) managerial position. Each organization has its own
organizational structure, design, and culture. Every manager would have internal critical
success factors related to the chain of command chain demand, corporate structure and
employee behavior. In contrast, the manager has little control over external critical success
factors. There are two kinds of managers, toward-oriented or future-oriented. The
monitoring-type manager focuses on short-term operating performance. Monitoring critical
success factors is used to examine the existing situations such as financial performance and
turnover rates. The other kind of manager would spend more time implementing changes in
the organization. Typical building/adapting critical success factors are education, training and
research and development. In general, an organization has a combination of both kinds of
manager.

2.3. Conceptual Framework

This conceptual framework illustrates the variables for project performance which were
applied to capture the relevance data. In the conceptual framework, the relationship between
variables for project performance (i.e. CSF) and the project outcome was used in this study.
Determining critical success factors will give organization/company a competitive edge and
is the bottom line of success in fulfilling the responsibility of a project management
companies. This in turn will give rise to satisfied investors, professional bodies and make the
project management company prosper. Drawing on literature of the project management,
project management practices, the objectives of project management, critical success factors
and the performance of the project, this study has been identified five variables of project

XIX
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performance as shown in Figure 1. There are Project Management Action, Project
Procedures, Human Factors, External Issues and Project Related Factors.

Figure: 2.1. Conceptual framework

Source: Chan et al. (2004)

XX
CHAPTER THREE: METHODOLOGY OF THE STUDY

3.1. Description of the Study Area

This study carried out in Banja district. It has 26 kebeles which is one of the seven districts of
Awi Administrative Zone of the Amhara Regional State, Ethiopia. It is located 120 km south
of regional capital city to Bahir Dar and about 436 km west of Addis Ababa along the main
road from Addis Ababa to Bahir Dar. It lies in the latitude range of 10 052’00” to 1102’ 44”N
and longitude 360 38’ 26” to 370 7’ 8” E and it is bordered in the south by Ankesha, Guagusa
and Guagusa Shikudad in the west by Guangua, in the north by Fagta Lakeoma, and in the
east by Sekela districts. Based on figures published by the Central Statistical Agency in 2005,
this Woreda has an estimated total population of 208,428of whom 105,491 are men and
102,937 are women; 17,074 or 8.19% of its population are urban dwellers, which is less than
the Zone average of 11.4%. With an estimated area of 832.51 square kilometers, Banja has an
estimated population density of 250.4 people per square kilometer, which is greater than the
Zone average of 155.

3.2. Research Design

This study used inferential research design. The research design and methodology entailed
collecting data useful in analysis and coming up with relevant recommendations and
conclusions. Mugenda (1999) noted that a survey research attempts to collect data from
members of a population and describes existing phenomena by asking individuals about their
perception, attitudes, behavior or values. Surveys enable collection of data from a sizeable
population in a highly economical way. The data obtained is standardized, to allow easy
comparison. Moreover, it explores the existing status of two or more variables at a given
point in time.

3.3. Sample size and Sampling technique

3.3.1. Target population

The total target population in the study was 28,557 persons which represent all stakeholders
that have been taken in the study area Banja woreda. The population for the study includes
stakeholders such as contractors, consultants, higher public officials at Woreda level,
influential old aged household heads who live in all kebeles of the study area.

XXI
Table 3.1: Total number of population

Stakeholders name Population

Contractors 1500
Consultants 2400
Higher public officials 5,500
Funders 600
Old aged households 18,557
Total 28,557
Source: own sampled survey, 2022

3.3.2. Sample Size

The samples of three kebeles studied are purposively selected to determine representative
sample size for the target population. After applying the sample determination formula, the
study has been used lottery method of sampling. “Lottery method is a type random sampling
method in which a sample would select in such a way that every item in the population has an
equal chance of being included” (Santoshet.al, 2007).Indeed, the researcher would use the
following sample size determination formula to determine the sample size of three sampled
branches. The formula was developed by Taro Yamane (1973). It is calculated as follows:

N 28,557
n= = Where; n= 394 = designates the sample size the study use,
1+ N e 1+28,557 ¿ ¿
2

N= 28,557= total number of stakeholders

The level of precision or sampling error = (0.05)2
Hence, the total numbers of respondents in the study would be 394. Total sample size 394,
are respondents taken from public officials (both at wereda and kebele level), contractors,
consultants, project owners, and funders.
The number of total samples in each stakeholder groups was not the same because
respondents were randomly selected.
Study Site Selection: The rationale for the choice of Banja district for the study is based on
its poor access of road construction in all kebeles of the study and access to the main road.

XXII
3.4. Methods of Data Collection

Field Observation: would conducted in the three study kebeles (KESSA CHEWSSA,
SURTA and AKENA JIFI) to observe the infrastructural facilities mainly road and this
helped the researcher to understanding the general situations and practical activities in the
study area.

Focus Group Discussion (FGD) and Key Informant Interview: Focus group
discussion is held to supplement and confirm information that is generated in the household
questionnaire and in depth interviews with key informants. In the study three kebeles 64
focus group members involved in separate groups of experts from public officials, contractors
and residents in Banja woreda having good knowledge of their locality and access of rural
road (which connect all 26kebelles together) would use for discussion and 27 key informant
members would also involve in interview.

Stakeholder’s Interview: To achieve the objectives of the study a structured questionnaire is

designed to include range of issues that could provide an insight into the performance of rural
road construction in Banja woreda. After setting the questionnaire, a formal pilot test is
carried out on 20 stakeholders to check the ease plot test with which respondents react to the
questions, to make sure that the questions are relevant and easily understood by the
interviewee and also to estimate the time it requires for completion. The questionnaires were
distributed to the actual samples, which would totally 394 respondents taken from public
officials (Woreda and Kebelle level), contractors, consults, project owners and funders.

3.5. Data Type and Source

The researcher utilized both primary and secondary data types. Primary data is collected
information through surveys, interviews, observations. Hence it is purely based on the field
research. While secondary data is sourced from various secondary documents such as RRC
website, news articles, research reports, blogs, academic journals and web articles.

3.6. Sample Design and procedure

A survey was conducted by employing structured questionnaire. In order to select sample, a

list of beneficiaries of the road constructed, Banja district was taken in to account. Then by

18
applying purposive non-probability sampling the sample was selected from three kebeles in
the study. The simple size is determined by taking resource availability, minimum error
margin permitted, percentage of response and non-response presupposed on questionnaire
and population size in to consideration and then after applying formula of sample size
determination through adjustment factor. Here probability sample would be applied in order
to decrease personal bias among users of rural road access.

3.7. Methods of Data Analysis

Data analysis is an important process which converts raw data into usable information. The
researcher employed a series of steps in data analysis to ensure the quality of the study. To
investigate research objectives stated under chapter one econometric analysis would employ.
Particularly, Principal component analysis (PCA) type of modeling has been used. PCA is a
model that is often used to reduce the dimensionality of large data sets, by transforming a
large set of variables into a smaller one that still contains most of the information in the large
set.

The data collected from household survey and success of rural road projects implemented
would checked, corrected, coded and encoded in to computer then analyses would be
conducted. For the collected quantitative and qualitative data, various analyzing techniques
were used. As the data from the questionnaire survey would be analyzed by the Statistical
Package for the Social Sciences (SPSS 23), it has to determine the scale of measurement of
each variable and to input the data into SPSS. In quantitative data analysis, data are classified
according to a hierarchy of measurement (Dancey and Reidy 2008). The qualitative data
collected from the key informant’s interview and focus group discussion was narrated and
summarized. Both diverging and converging issues on particular issues were identified and
used for analysis in line with the study objectives.

According to Slevin and Pinto (1987), to successfully implement a project is usually difficult
and complex. The project manager has to devote more time on human, financial, and
technical variables as the key to the realization of project implementation. From available
literature, it is apparent that the following determinants are capable of affecting project
implementation in the states in review if not handled with care. This in-exhaustive list
includes: organizational factors, strategic management, economic cycle, political stability,
external environment, human resource, legal system, financial resource (Kamal, 2006).

21
In order to identify CSFs, which have the greatest influence on successful project
implementation, a linear model is designed. The independent variables of the model are
critical success factors (CSFs) and the dependent variables are project success measures.

3.7.1. Creation of Composite Variables

In this study, the researcher aimed to identify the critical success factors of project
implementation in the study. In order to achieve this, composite variables needed to be
created for statistical analysis. For example, a composite variable labeled as ‘CSFs’ were
created as the means across the first six items which represented economic cycles, political
stability, social environment, the legal system, the financial market and globalization.

3.7.2. Principal Components Analysis

The main objective of this study is to identify the critical success factors and the sub-factors
of individual critical success factors of rural road project implementation in Banja district.
The study used principal component analysis (PCA) followed by a varimax rotation to
identify the sub-factors of individual critical success factors. Varimax rotation helps to
facilitate the interpretation of factors and make the output more understandable (Kaiser,
1958). Before applying PCA, it is important to check whether it is appropriate to use the
principal component analysis. First, the overall measures of inter correlation would examined
to check the appropriateness of application of factor analysis. Factor analysis is appropriate if
substantial number of correlations greater than 0.30 (Hair et al. 2010, p.103). Second, the
Kaiser Meyer Olkin Measure would have employed to check the appropriateness. For there to
be an acceptable level of correlation, the measure of sampling adequacy (MSA) value should
exceed 0.50 (Kaiser, 1970 and 1974). Third, the Bartlett test of sphericity was employed to
examine the entire correlation matrix and determine the significance of correlations among
the variables (Bartlett, 1950).

19
 CHAPTER FOUR: RESULT AND DISCUSSION

The findings from the interviews and questionnaires presented and summarized as follows.

4.1. Background and Distribution of Participants

As discussed in Chapters 1 and 3, expert sampling was used to collect the opinions of
professionals with knowledge and experience working for RRC in the Banja woreda
construction industry. In the web-based survey, 394 valid responses were received. The
questionnaire had two parts. The first part collected demographic information about the
respondents. It was used to ensure that the respondents had adequate experience in working
for RRC in the industry. In this section, percentage presentations are used to display the
demographic information of respondents. This information includes gender, approximate age,
education and professional background, position and length of experience.

This research collected 394 sets of responses from participants. 350 respondents were male
(88 per cent of total respondents) and 44 were female (12 per cent of total respondents),
meaning that males dominated the survey. The largest groups of the respondents were aged
between 41 and 50 years and it accounted for 38 per cent (140 respondents) of the total
respondents. They were followed by the respondents aged from 51 to 60 years (130
respondents or 36 per cent of the total). When combined, these age groups comprised more
than 74 per cent of the total. For most respondents, a bachelor’s degree was their highest
qualification. This group comprised 80 per cent of total respondents. Fifteen per cent of
respondents had master’s degrees as their highest qualification and small numbers of
respondents had postgraduate certificates, postgraduate diplomas or doctoral degrees. The
profile of respondents showed that 52 per cent were company owners or directors, 20 per cent
were mangers, 21 per cent were professional engineers or architects and the remaining 7 per
cent were other staff such as quantity surveyors and site agents. All of the respondents had a
relatively high level of knowledge and experience in the construction industry. Respondents
who had civil and structural engineering backgrounds ranked first (63 per cent), followed by
building engineering background (14 per cent), architectural background (13 per cent), and
quantity surveying background (10 per cent). By adding five groups of respondent, 58 per
cent of respondents had more than twenty years of experiences working with contractors in
Banja woreda. The respondents with 16 to 20 years of experiences were the largest group and
they made up 17 per cent of the total.

21
 4.2. Description Statistic for Composite Variables

For interval scale variables, the arithmetic mean and the standard deviation are commonly reported. In
general, approximately 68% of scores will be within ±1 standard error of the mean for normally
distributed scores (Hair et al., 2010).

Table: 4.1. Summary of Descriptive Statistics Analysis

CSF Mean Median Variance S.D Minimum Maximum

CSF1R 3.6694 3.8000 0.381 0.61763 2.20 5.00
CSF2R 3.6798 3.7500 0.369 0.60747 1.75 5.00
CSF3R 3.7741 3.6667 0.395 0.62809 1.67 5.00
CSF4R 3.7879 4.0000 0.320 0.64834 2.00 5.00
CSF5R 3.6768 3.6667 0.516 0.71823 1.67 5.00
CSF6R 3.7484 3.8333 0.410 0.64005 1.83 5.00
CSF7R 3.8158 3.8571 0.348 0.58952 2.14 5.00
CSF8R 3.7210 3.7143 0.327 0.57203 2.14 5.00
CSF9R 3.6612 3.6667 0.407 0.63794 2.00 5.00
CSF10R 3.6353 3.6000 0.395 0.62866 1.80 5.00
CSF11R 3.8474 3.8000 0.376 0.61326 2.40 5.00
Source: SPSS 23

As shown in Table 4.1, all of the variables (CSFR1 – CSF11) had a maximum score of 5.00
and the minimum scores of 2.20, 1.75, 1.67, 2.00, 1.67, 1.83, 2.14, 2.14, 2.00, 1.80, and 2.40.
Mean scores were calculated for all variables and they were 3.6694, 3.6798, 3.7741, 3.7879,
3.6768, 3.7484, 3.8158, 3.7210, 3.6612, 3.6353 and 3.8474, respectively. The standard
deviations were found to be 3.6694, 3.6798, 3.7741, 3.7879, 3.6768, 3.7484, 3.8158, 3.7210,
3.6612, 3.6353 and 3.8474.

4.3. Interview Analysis

The research began with a comprehensive review of literature including professional journal
articles, conference papers, research reports and publications, textbooks and internet
information in the areas of civil engineering, construction and management. It aimed to
provide a solid foundation that helped to establish the research model and to prepare for the
semi-structured interviews and empirical survey. A preliminary list of critical success factors
and their respective sub-factors had been prepared and discussed in face-to-face interviews

19
with a number of professionals and experts from contractors who had sufficient knowledge in
management and years of experience in the construction industry of Banja woreda. During
the interviews, the researcher was allowed to have better understanding of the practice of the
construction industry in Banja woreda, as well as the management of RRC. A total of 10
participants were invited and the interviews lasted for around one hour depending on their
availability and the level of detail of their responses. The details of analysis are not shown to
protection their privacy. However, it is worthwhile mentioning that the experts were owners,
directors, construction managers, senior managers, project managers and site agents of RRC
in Banjaworeda. The analysis shared their experiences in the management of their companies
and projects. They discussed recent issues in the construction industry and they had similar
opinions about the industry. The RRC had been facing difficulties since 1997. Thence,
profitability of contractors depended on the development of building projects in the private
sector and on maintenance projects. However, a few major issues arose and affected the
demand for buildings. Design is traditionally carried out by a consultant or a design office
and it causes an additional cost for client to hire the designer. The advantage of this
procurement method is that the RRC can save costs by hiring the consulting team and they
can directly control the quality of project. In the construction industry, there are different
types of procurement methods adopted by clients and contractors and this makes the
management of the project more complicated. Contractors have to develop a team of different
experts and recruit enough qualified staff in different roles.

Apart from obtaining an in-depth understanding of construction practices in Banja woreda,

another objective of conducting face-to-face interviews was to obtain comments and
suggestions for the refinement of the empirical questionnaire. As mentioned before, the pilot
questionnaire was reviewed by the analysis. Their suggestions were incorporated into the
final version of the questionnaire. As there was no major or adverse comment from the
analysis, the same set of questionnaire could be used in empirical survey. Apart from success
factors, analysis provided their opinions on failure of contractors and from their construction
projects. The findings obtained in interview sessions align with the results obtained from
questionnaire survey and the information acquired in literature review. Identification of
critical success factors and its details are presented and discussed in the next chapter. The
researcher would discuss on the results of questionnaire analysis and the detailed tables
showing the analytical results.

21
 4.4. Questionnaire Analysis

In preparation of data for analysis, it is necessary to determine the scale for measuring each
variable (Berman Brown and Saunders 2008; Dancey and Reidy 2008). It is fundamental to
understand different measurement scales, while the measurement scale for each variable must
be identified correctly. The correct use of multivariate techniques depends on the
measurement scale. When using SPSS 23, numbers are entered and codes are defined for
responses to items in the questionnaire. Therefore, the way in which the questionnaire items
(identification codes) were presented was specified in SPSS 23. This involved such details as
the labels of the variables, the number of decimal places, and the values and scales of
measurement. The data was organized in the SPSS 23 file so that the rows represented the
cases and the columns represented the variables from the questionnaire including the
demographic information and the sub-factors of individual critical success factors.

In the nominal scales (categorical scales), numbers were assigned to label the subjects
providing the frequency in each category of variable being used (Berman Brown and
Saunders 2008). For example, in question one of the questionnaire, 1 and 2 were assigned for
male and female, respectively. In the ordinal scales, numbers were assigned to indicate the
relative positions in an ordered series. For instance, the values of 1 to 5 were assigned to
indicate the length of experience of each respondent (1 for 1 -5 years, 2 for 6-10 years, 3 for
11-15 years, 4 for 16-20 years, 5 for 21 -25 years, 6 for 26-30 years, 7 for 31-35 years, 8 for
36-40 years and 9 for above 40 years). In this study, Likert-type scales were used to identify
the critical success factors and their respective sub-factors. Likert-type scales are interval
scales which are in same dimension of measurement and indicate the differences between two
adjacent points. The respondents were required to give a score in the range of 1 to 5 to
indicate the level of importance of each sub-factor of a critical success factor (1 for
negligible, 2 for unimportant, 3for neutral, 4 for important and 5 for extremely
important). Meaningful comparisons could be made between participants’ responses because
the increments along the scale were all of equal value. Raw responses for every item were
entered to SPSS 23 and identification codes were specified, as well as the levels of
measurement.

Missing Values: When the respondents are giving their opinions in a questionnaire survey,
they may skip some questions or refuse to answer certain questions. They may make mistakes
or they may not know the answers. Therefore, their responses may not be suitable for analysis

19
(Saunders et al. 2009). The direct effect is that it lowers the availability of sample for data
analysis. When there are many missing pieces data, the sample may become inadequate. If
this happens, the researcher must either collect additional samples or find a way to deal with
the problem of missing data. If there are many non-randomly distributed missing values, they
can be a problem and distort the results. Hair et al. (2010, p.45) suggested that “a four-step
process for identifying missing data and applying remedies: (1) determine the type of missing
data, (2) determine the extent of missing data, (3) diagnose the randomness of the missing
data and (4) select the imputation method”. Tabachnick and Fidell (1966) provided
suggestions for dealing with the missing items. If there are few missing values and they
appear to be randomly distributed, it is suggested to delete those cases from the analysis.
Another method is to replace the missing value with an estimate. For interval or ratio scales,
the most conservative approach is to calculate the mean for the variable and use it to replace
the missing values. In this study, the researcher simply deleted the missing values from the
analysis.

Quality of Data: Multivariate analysis techniques enable researchers to present knowledge in

a meaning form. Managers can use analysis techniques to monitor individual items or objects
in order to improve their decision making. In multivariate techniques, it is assumed that a
certain degree of measurement error exists. In order to reduce measurement error,
multivariate measurements, known as summated scales, are developed to enhance the quality
of data. Summated scales are a recent development in academic research and are increasingly
being used in applied and managerial research. According to Hair et al. (2010, p. 142), “a
summated scale is a composite value for a set of variables”. The composite variable is used as
a replacement variable to combine all the variable loadings and average the score for the
variables. The use of summated scales has several advantages. It helps to reduce the level of
error in the measurement of variables and it can reduce the difficulty in the estimation of
multivariate models and improve the determination of relationships between variables.
Another advantage is that multiple aspects of a concept can be combined and represented by
a single measure (Sullivan and Feldman 1979). In order to form a summated scale or
composite variable, the researcher simply calculates a summation of the items and takes the
average.

Cronbach’s Alpha: Split-half reliability was used to determine reliability and the Cronbach’s
alpha was calculated for each CSF. The results are presented in Table 4.2.

21
Table 4.2: Reliability of Composite Variable Test

CSF Cronbach's Alpha CSF Cronbach's Alpha

CSF1R 0.747 CSF7R 0.822
CSF2R 0.653 CSF8R 0.774
CSF3R 0.617 CSF9R 0.625
CSF4R 0.790 CSF10R 0.794
CSF5R 0.685 CSF11R 0.795
CSF6R 0.830

The composite variables CSF6R and CSF7 were found to have good levels of reliability (α =
0.830 and 0.822). The composite variables CSF1R, CSF4, CSF8, CSF10R and CSF11
were found to have acceptable levels of reliability (α = 0.747, 0.790, 0.774, 0.794 and 0.795).
The index of the internal consistency of the composite variables CSF2R, CSF3R,
CSF5R and CSF9 were found to be lower than the criterion of 0.70 (α = 0.653, 0.617, 0.685
and 0.625). However, Robinson et al. (1991a and 1991b) stated that a lower limit in
exploratory research could be applied and 0.60 was used as a minimum criterion. Based on
these criteria, it is judged that eleven composite variables displayed acceptable levels of
internal consistency and homogeneity. As a result, the composite variables CSF1R, CSF2R,
CSF3R, CSF4, CSF5R, CSF6R, CSF7, CSF8, CSF9, CSF10R and CSF11 were used as the
measures for external environment, organizational structure, organizational culture, strategic
management, financial resources, marketing management, human resources, project
management, innovative approaches, procurement management, relationship engineering in
the analyses presented in this part.

Assumption Testing: For all statistical tests, a set of assumptions are made embedded. One
of these is that the respondents are all sampled from the same population. Another common
assumption is that the scores are normally distributed. An outlier is an individual that has
been sampled from another population and it may not belong in the analysis. Inclusion of
these individuals in the sample will distort the overall results.

Outliers for Dichotomous Variables: Outliers may exist for dichotomous variables and
variables on ratio and interval scales. Tabachnick and Fidell (1996) suggested that when one
of the two categories is less than 10% of the sample (for example, male and female), the

19
variable should be removed from analysis. By examining the results, it was concluded that
there were no outliers on dichotomous variables.

Univariate Outliers on Ratio Variables: Outliers are individuals that have extreme scores on
an individual variable or individuals that present an unusual pattern across a set of variables.
According to Hair et al. (2010, p. 66), there are two types of outliers, univariate and
multivariate outliers. A univariate outlier consists of an extreme value on one variable and a
multivariate outlier consists of unusual scores on different variables. The identification of
univariate outliers involves examining the distribution of observations for each variable and
selecting the outliers that are different from the other observations. As discussed in Section
3.5, histograms, boxplots and standard (z) scores are used to identify univariate outliers for
the composite variables. Hair et al. (2010, p.65) indicated that “outliers cannot be
categorically characterized as either beneficial or problematic. Beneficial outliers may be
indicative of characteristics of the population that would not be discovered in the normal
course of analysis. Problematic outliers are not representative of the population, are counter
to the objectives of the analysis, and can seriously distort statistical tests”. In this study, the
researcher follows the suggestions of Tabachnick and Fidell (1996), and cases will be deleted
for the analysis in this research if there are any problematic outliers identified.

Multivariate Outliers on Ratio Variables: Sometimes, individuals will have standardized (z)
scores within the expected range of ± 3.29 for each of the variables when they are examined
separately but they have an unusual pattern. These are called multivariate outliers. They can
be detected by calculating the Mahalanobis distance for each variable (Manning and Munro,
2007). According to Hair et al. (2010, p.66), the Mahalanobis distance measure is “a
multivariate assessment of each observation across a set of variables and provides a single
value for each observation”. High distance value indicates that observation farther removed
from the general distribution of observations in the multidimensional space so that the
Mahalanobis distance has statistical properties that allow for significance testing. The D2
measure divided by the number of variables involved (D2/df) is approximately distributed as
a t-value. Observations having a D2/dfvalue exceeding 2.5 in small samples and 3 or 4 in
large samples can be identified as possible outliers in conservative levels of significance
(0.005 or 0.001) (Hair et al. 2010). The calculation of the critical value as a χ2 (chi-square)
statistic is a common method used to identify outliers. Manning and Munro (2007) made the
suggestions on the Mahalanobis distance score to identify the multivariate outliers.
21
Table 4.3: Mahalanobis Distance Score

D.F. χ2 D.F. χ2
1 10.828 9 27.877
2 13.816 10 29.588
3 16.266 11 31.264
4 18.467 12 32.909
5 20.515 13 34.528
6 22.458 14 36.123
7 24.322 15 37.697
8 26.125 16 39.252
Source: SPSS version 23

A new variable, Mahalanobis distance, is created for each respondent to identify the
multivariate outliers. If the value is small, the respondent is not a multivariate outlier; the
respondent is a multivariate outlier when the Mahalanobis distance is large. The critical
value χ2 is calculated and then used for comparison. In this case, eleven independent
variables (11 CSFs) were entered and their maximum Mahalanobis distances were 16.520
(case 118; < 20.515), 17.353 (case 209; < 18.467), 14.486 (case 88; < 16.266), 15.183 (case
86; 18.467), 15.697 (case 198; < 16.266), 21.273 (cases 63 and 208; < 22.458), 22.641 (case
36; < 24.322), 23.782 (case 51; < 24.322), 14.815 (cases 63 and 208; < 16.266), 18.740 (case
118; < 20.5150) and 19.989 (case 51; < 20.515). As a result, there were no multivariate
outliers and no case was excluded from further analysis.

Normality: The basic assumption in statistical methods is normality. If the shape of the
distribution is abnormal, the result should be considered invalid. Both univariate and
multivariate statistical methods assume that the data distribution is normal. In order to test the
normality, the shape can be examined by skewness and kurtosis. Skewness is used to describe
the balance of the distribution and to check whether the shape is centered and symmetrical. If
a distribution shifts to the left, it is classified as positively skewed and if it is shifts to the
right, it is classified as negatively skewed. The statistical value (z) for skewness is calculated
by dividing skewness by its standard error. If the calculated z value exceeds the specified
critical value, the distribution is non-normal. The skewness is regarded as significant when
the critical value exceeds 2.58 for samples less than 300 and 3.29 for samples more 300
(Tabachnick and Fidell 1996, p.73). Kurtosis is used to describe the peakedness of the

19
distribution and to check whether the shape is tall of flat. Leptokurtic distribution refers to a
distribution which is taller than the normal distribution. Platykurtic distribution refers to a
flatter distribution. Similarly, the statistical value (z) for kurtosis is calculated by dividing the
kurtosis value by the standard error of kurtosis. By the same criteria, the kurtosis is
significant when the critical value is 2.58 for samples less than 300 and 3.29 for samples
more 300 (Tabachnick and Fidell, 1996, p.73). To follow the criterion proposed by
(Tabachnick and Fidell, 1996), the critical value 3.29 is used to assess normality in this
research.

4.5. Factor Analysis

Factor analysis is commonly used to define the underlying relationships between variables.
According to Hair et al. (2010, p.16), “principal component analysis and common factor
analysis are two common statistical approaches to analyse the interrelationships among
variables and explain the underlying dimensions of the variables”. In factor analysis,
information can be reduced from a large quantity of variables into a smaller set. In addition,
the information would not significantly lose in the analytical process.

Principal Components: is used to identify representative variables and create a new set of
variables through the process of data reduction. The original set of variables is replaced
partially or completely by a new set of variables and it can be used in the subsequent
multivariate analysis (Gorsuch, 1983; Rummel, 1970). Therefore, principal components
analysis followed by a varimax rotation was employed to identify the sub-factors of each
individual critical success factor in this research. The highly inter-correlated variables were
also assumed to represent the same dimension (Kaiser, 1958).

Overall Measures of Inter-correlation: An examination of correlations of data matrix is one

method to justify the application of factor analysis. If the correlation is not sufficient, factor
analysis should not be used. It is appropriate to apply factor analysis when the partial
correlations among variables exceed 0.30. Therefore, the value of 0.30 was selected in this
research and any variable with a value below 0.30 would be removed (Hair et al. 2010).

1) Kaiser Meyer Olkin Measure of Sampling Adequacy

Kaiser Meyer Olkin measure can be used to check the correlations among variables and to
decide whether it is appropriate to use the principal components analysis (Kaiser 1970; 1974).
The Kaiser Meyer Olkin statistic is a summary of how small the partial correlations are,

21
relative to the original correlations. If the value of measure is 1, this indicates that the degree
of correlation among the variables is perfectly predicted and there is no error. High values
(between 0.5 and 1.0) indicate that principal component analysis is appropriate. Kaiser Meyer
Olkin values are greater than 0.8 can be regarded as meritorious; 0.7 or above is middling;
0.6 or above is satisfactory; 0.5 or above is acceptable. Value below 0.5 is unacceptable and it
implies that principal component analysis may not be appropriate (Kaiser, 1974; Dziuban and
Shirkey, 1974; Cerny and Kaiser, 1977; Fabrigar et al. 1999; Tabachnick and Fidell, 2007;
George and Mallery, 2007). Therefore, the variable specific measure value for sampling
adequacy should exceed 0.50 and the value below 0.50 can be identified for deletion.

2) Bartlett’s Test of Sphericity

Bartlett's test of sphericity tests the hypothesis that the correlation matrix is an identified
matrix. If the p-value (Sig value) for this test is less than the probability level (alpha level),
the null hypothesis should be rejected It implies that there are correlations in the data set and
it is appropriate to use principal components analysis. In this study, the researcher took a 95%
level of significance (p = 0.05). Under this criterion, the result can be interpreted to be
significant as p is smaller than 0.05 (p < 0.05) and it is appropriate for principal components
analysis (Bartlett 1950; Child 2006; Manning and Muro 2007; Bhakar and Mehta 2011).
Therefore, Bartlett’s test of sphericity was employed to test the entire correlation matrix and
determine the significance of correlations among the variables.

In order to find the correlations of the data matrix, a principal components analysis followed by a
varimax rotation was conducted on the questionnaire items for all the critical success factors. Most of
the partial correlations among variables were greater than 0.30 (Hair et al. 2010, p.103); therefore, it
was decided to be appropriate for application of principal components analysis. The Kaiser Meyer
Olkin measure of sampling adequacy was computed to determine the suitability of employing
principal components analysis, and the results are presented in Table 4.4. The values of Kaiser Meyer
Olkin measures of sampling adequacy of the composite variables were 0.768, 0.680, 0.588, 0.770,
0.580, 0.834, 0.867, 0.801, 0.608, 0.800 and 0.775. From the pattern of the above results, the values
for the Kaiser Meyer Olkin measure of sampling adequacy of all composite variables were greater
than 0.5. Based on the results of this test (Kaiser 1974; Dziuban and Shirkey 1974; Cerny and Kaiser
1977; Fabrigar et al. 1999; Tabachnick and Fidell2007; George and Mallery 2007), it was deemed
appropriate to apply principal components analysis to all datasets. As shown in Table 4.7, the
observed significance level is 0.000 (p < 0.05) and it should reject the hypothesis. It is concluded that

19
the strength of the relationship among variables is strong and it is appropriate to proceed the principal
components analysis for the data.

Table 4.4: Summary of KMO Measure of Sampling Adequacy and Bartlett’s Test of Sphericity
Analysis

CSF Kaiser-Meyer-Olkin measure Bartlett’s test of sphericity

of sampling adequacy Significance level
CSF1R 0.768 0.000
CSF2R 0.680 0.000
CSF3R 0.588 0.000
CSF4R 0.770 0.000
CSF5R 0.580 0.000
CSF6R 0.834 0.000
CSF7R 0.867 0.000
CSF8R 0.801 0.000
CSF9R 0.608 0.000
CSF10R 0.800 0.000
CSF11R 0.775 0.000
Source: SPSS 23 output

Factor loadings: In the final process of the principal components analysis, factor loadings
were evaluated. Factor loading is the correlation between the variable and the factor so that
the high loading variable can be interpreted as the representative of the factor. Unrotated
solutions achieve the objective of data reduction; however, it is better to employ a rotational
method to obtain more meaningful factor solutions by the orthogonal rotational approach,
namely, varimax. The objective of the rotational method is to simplify the factor structure
(Kaiser, 1970 and 1974). Hair et al. (2010, p. 115) indicated that “the varimax method
maximizes the sum of variances of required loadings of the factor matrix”. When the
correlation between the variable and the factor is close to + 1, there is a positive association
between them. In contrast, it is negative when the correlation between the variable and the
factor is close to – 1. If the value is close to 0, there is no relationship. There is a guideline for
interpreting factors. The loading with the larger absolute size is regarded as the most
important. According to Hair et al. (2010, p.118), factor loading in the range of 0.30 to 0.4, is
considered minimally acceptable. If the value is greater than 0.5, it is considered practically
significant. If the value is greater than 0.7, it is considered to be a well-defined structure. The

21
concept of statistical power can also be used to specify factor loadings that are considered
significant for different sample sizes. Table 4.5 contains the sample sizes for each factor
loading values that are considered significant. Factor loadings of 0.30 and above are
considered significant in a sample size of 350.

Table 4.5: Guidelines for Identifying Significant Factor Loadings

Factor loading Sample size needed for significance

0.30 394
0.35 250
0.40 200
0.45 150
0.50 120
0.55 100
0.60 85
0.65 70
0.70 60
0.75 50
Source: SPSS 23

Table 4.6: Summary of Factor Loading of Critical Success Factors

CSF Factor loading CSF Factor loading

CSF1R 0.590-0.785 CSF7R 0.628-0.734
CSF2R 0.609-0.774 CSF8R 0.602-0.698
CSF3R 0.635-0.837 CSF9R 0.659-0.829
CSF4R 0.764-0.822 CSF10R 0.568-0.816
CSF5R 0.706-0.876 CSF11R 0.648-0.800
CSF6R 0.661-0.804
Source: SPSS version 23

From the criteria suggested by Hair et al. (2010), it is judged that eleven composite
variables display acceptable levels of factor loadings. Therefore, it was concluded that only
the first components were interpretable and it was decided to label those eleven components.
As discussed, eleven new composite variables were generated on the basis of principal
components analysis. In other words, eleven new independent constructs, rather than
individual questionnaire items, were created to decide the sub-factors of each individual
19
critical success factor. In order to identify the critical success factors for RRC in Banja
wereda, the mean score ranking technique was adopted. Therefore, the mean scores of those
eleven new composite variables were calculated. For example, the mean score of CSF1R was
calculated from the variables M1 to M5 to represent the concept, the external environment.
Remaining mean scores were calculated in the same manner and the rankings of critical
success factors are shown below.

Table 4.7: Rankings of the Critical Success Factors

Rank CSF Mean Score

1 CSF11 Relationship Engineering 3.8474
2 CSF7 Human Resources 3.8158
3 CSF4 Strategic Management 3.7879
4 CSF3R Organizational Culture 3.7741
5 CSF6R Marketing Management 3.7484
6 CSF8 Project Management 3.7210
7 CSF2R Organizational Structure 3.6798
8 CSF5R Financial Resources 3.6768
9 CSF1R External Environment 3.6694
10 CSF9 Innovative Approaches 3.6612
11 CSF10R Procurement Management 3.6353
Source: SPSS version 23

The ranking of critical success factors was determined by their arithmetic mean scores (Chan
and Kumaraswamy 1996; Ng et al. 2009; Ng and Tang 2010; Yang et al. 2010; Cheung et al.
2012). The larger arithmetic mean score was, the higher the rank would be. As discussed in
Section 3.5, a factor with an arithmetic mean score more than 3 would be regarded as a
critical success factor. The arithmetic mean scores of all critical success factors ranged from
3.63 to 3.84 on a maximum score of 5. The arithmetic mean score of CSF1R, CSF2R,
CSF5R, CSF9 and CSF10R fell into the range from 3.60 – 3.70. The arithmetic mean scores
of CSF3R, CSF4, CSF6R and CSF8 fell into the range from 3.70 – 3.80. The arithmetic mean
scores of CSF7 and CSF11 were more than 3.80. Through the examination of the arithmetical
mean, it was found that all the scores were larger than 3.0 and indicated that all these CSFs
were regarded as critical for the success of RRC in Banja. As shown in Table 4.7, CSF11
relationship engineering was ranked highest among all critical success factors. It implied that

21
most respondents regarded the relationship engineering as the most important factor that
would lead the RRC in Banja Woreda to be successful. CSF7 human resources and CSF4
strategic management were ranked subsequently in descending order and, together with
CSF11 relationship engineering, they were the top three critical success factors identified.

19
CHAPTER FIVE: FINDINGS AND RECOMMENDATIONS

5.1. Conclusion

The following findings are based on context-sensitive interpretation of the questions built
around each factor.

 Adequate supports of stakeholders: All dataanalysis described ‘support of stakeholders’

as ‘good to have’, however it was mentioned that most projects are not supported by
stakeholders during the implementation phase. In order to have a support from the
stakeholders, i.e. governmental offices, population, businesses etc., the project goals and
objectives should be seen as a clear and address up-to-date issues in society.
 The result and discussionshows the following regarding the issue: ‘Not many projects get
proper publicity, sometimes I don’t even know what the other department is working
on.’Accordingly, data analysistold uswithout proper information management it is
difficult to get attention of stakeholders, however ‘the budget does not cover such
expenses’. Also ‘when you have tight schedule and tight budget, just closing the project
as fast as possible becomes your personal goal’. This implies that better information
management is desirable in Banjaworeda. However,better information management often
have budgetary and schedule constraints which create obstacles for proper awareness
campaigns. Such issues are often stemming from inadequate planning, for example if
environmental changes were not taken into consideration. One way to approach such
problems can be by outsourcing some of the project activities to partner organizations.
Outsourcing some of the initial activities can reduce work load, which will allow project
manager and team to re-estimate the tactics for further activities and address stakeholders
for support. The majority of analysis referred to one particular project implemented in
partnership with governmental office and Banjaworeda schools that has received strong
support of stakeholders. Attracting stakeholder support starts with political and legal
issues ‘Language policy has great influence on the political situation and on a course of
socio-economic transformations in the country, which attracts media interest, as well as,
population support.

21
 5.2. Recommendation

Based on the research findings, the study recommendexternal stakeholders in which they are
obligatory to do;

 High commitment to project goals/objectives: Results on this question varied according to

the project, for the following reasons: goals and objectives of the project played a role.
Hardtypes of projects have clearer goals and objectives compared with soft projects;
therefore the team has more commitment to hard projects. This can be explained as the
outcome and importance of hard projects are easy to imagine being more tangible. In
addition, tactics and activities are straightforward and ‘it is easier to make people commit
to building a business incubator which will provide people in the region with new jobs
rather than causes such as anti-corruption’. The study mentioned that soft project goals
usually result in debates about the necessity of such projects, the readiness of society and
the correctness of the tactics. One more reason is that objectives and tactics of soft-
projects are not very clear. Therefore disagreement among project team and stakeholders
on how to best achieve occurs frequently. Such situations often leads to a decrease of
commitment to goals and overall motivation of the project team, however out of a total
eleven projects discussed by analysis as successful all were soft-type of projects.
 Competent project management team: As discussed in chapter four a long project in
which the implementation phase was delayed for over six months and the original team
was transferred to other projects. Thus when the delayed implementation phase finally
began a new team was urgently formed which resulted in inclusion of more volunteers
and interns than planned. So, experienced managers have more line duties and can
allocate less time than specialists [less experienced managers]. All analysis have
mentioned that line duties should be taken in consideration when selecting a team,
interviewee 4 adds that on field projects having a proportion of ‘one competent manager
to five volunteers or interns’ is enough to provide proper guidance towards reaching the
project objectives. Interestingly, all analysis have mentioned that the competency of the
project manager/leader is critical to the success of the project implementation phase,
especially for soft-types of projects where sensitive issues are concerned.
 Adequate resources and support: Scarce resources are a common threat to international
development projects implemented by organization at national level. All analysis have
mentioned that since the organization has a functional structure and employee numbers
are small, it is difficultto allocate, motivate and focus people on the project activities
19
 during project implementation. The study find out that this factor is critical, stating that
‘allocating several projects at a time to a one team or project manager is the biggest
mistake one can make in this field’. This view is supported by other analysis as
overloading employees often leads to delays and decrease in enthusiasm and motivation.
Conflicts may arise between project and functional managers as well as among two
project managers who compete for a team member’s time. Approaching external
stakeholder for support and resources is not an easy task however it is viewed positively
by the analysis. All analysis have agreed that having adequate resources and support is
critical to success of the project.
 Compatible rules and procedures: This factor was unanimously agreed to be critical to the
project success. International development projects often involve other organizations
which have different procedures, rules and policies. This leads to excess bureaucratic
work, complex reporting system and consequently to delays in project implementation.
Analysis stated that different rules and procedures, languages and legislative systems
have affected as activities and schedules so the working environment during the
implementation phase.
 Effective consultations with all stakeholders: This factor raised extensive discussion with
each interviewee. Semi-structural analysis all have mentioned that there are activities in
the organization that include extensive training and consultations with government and
public stakeholders. However, when describing the projects they have implemented,
analysis stated that there is little or no communication with stakeholders during
implementation phase unless they are directly involved in project activities. First, during
execution of the project it is more critical to get feedback or support from stakeholders
when required rather than effective consultation. Secondly, it takes a long time to receive
feedback especially from government, offices which make consultation less effective.
However, it was noted that projects should be consulted with stakeholders during the
planning phase as it is one of the steps to ensure sustainability of the project. Whereas
during execution, extensive consultation can delay project activities or distract the team
from performing outlined activities.

21
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APPENDIX I: Questionnaire

General information

The main objective of this research is to obtain the professional opinions about the critical
success factors of rural road project implementation in Banjaworeda. The specific objectives
of this research are:

1. To identify the critical success factors for road construction in the construction industry in
Banjaworeda.

2. To determine the sub –factors for all individual critical success factors.

Questionnaire item: instruction

Please mark across in the appropriate box. If you are using the soft copy for your reply,
please follow the instructions. To cross the appropriate box, double click on the square box.

Q1. What is your gender?

Male female

Section A: Demographic information

Q1. What is your gender?

Male female

Q.2 what is your approximate age

21-30/ 31-40/ 41-50/ 51-60/ Above 60

Q.3 what is the highest degree of education you are studying or have completed?

Bachelor/ postgraduate certificate/ postgraduate Diploma/ master/ Doctor/

Other, please specify:

Q.4 what is your position in the company?

Engineer / Architect / manager/ Director/ Executive/ other,please specify:

21
Q5.what is your main professional background?

Civil and structural Engineering/ Building Engineering/ Architecture/

Quantity surveying /other, please specify:

Q.6what is your length of experience (year) in road construction?

1-5/ 6-10 / 11-15/ 16-20/ 21-25/ 26-30/

31-35/ 36-40/ Above 40/

Section B: critical success factors

Please indicate the level of importance with each measure by crossing a score in the range of
1 to 5 based on your knowledge or experience

Critical success factors level of importance

1 2 3 4 5

CSFL: External Environment

Ml Economic cycles

The definition of the scores is as follows: Rating: 1 for negligible, 2 for unimportant, 3 for
neutral, 4 for important 5 for extremely important

Critical success factors level of importance

1 2 3 4 5

CSFI: External Environment

M1 Economic cyclic

M2 Political stability

M3 social environment

M4 legal system

M5 financial market

19
M6 globalization

CSF2: organizational structure

M7 type of organization

M8 member of housing company

M9 stability of organization structure

M10 flexible and organic structuring

M11 lean/flat structuring

CSF3: organizational culture

M12 vision and mission

M13objectives and goals

M14 motivation and job satisfaction

M15 employee commitment

CSF4: strategic management

M16 formulate strategies

M17 implement strategies

M18 performance measurement

M19 continuous improvement

CSF5: financial resources

M20 financial stability

M21 cost of finance

21
M22 financial sources

M23 stock market listing

CSF 6: marketing management

M24 market research and planning

M25 customer relationship

M26 business coverage

M27 market share

M28 market segments

M29 local competitiveness

M30 international competitiveness

cSF 7 Human Resources

M31 managerial expertise

M32Yroduction expertise

M33 Design expertise

M34 Finance expertise

M35 legal expertise

M36 skilled workers

M37 education and training

CSF 8: project management

M38 cost management

19
M39 time management

M40 Quality management

M41 Enviromental management

M42 safety and health management

M43 contract management

M44 Dispute resolution skills

CSF 9: Innovative approaches

M45 technology innovation

M46 Design innovation

M47 management

CSF10: procurement management

M48 selection of sub -road construction

M49selectiob of suppliers

M50 Build -operate- transfer (BoT) project

M51 joint venture (Jv) project

M52 design and build (D&B) project

M53 partnering project

CSF11: Relationship Engineering

M54 with government departments

M55 with clients or owners

M56with consultants and designers

M57 with sub road construction or suppliers

21
M58 with public

Feedback

Please add any factors not already mentioned that you believe as significant influence for
rural road construction in Banjaworeda.

19