LUẬN văn THẠC sĩ (KINH tế) manufacturing engineers’ understanding on the value of risk management to project success in the pharmaceutical industry

DublinBusinessSchool/ LiverpoolJohnMoore’sUniversity Dissertationsubmitted inpartfulfilmentoftherequirementforthedegreeofMaster’si n BusinessAdministrationM BAatLiverpoolJohnMoore’sUnive

MANUFACTURINGE N G I N E ERS’ UNDERSTANDINGONTHEVALU EOFRISKMANAGEMENTTOPROJ ECTSUCCESSINTHEPHARMACE

UTICALINDUSTRY

JeanLivingston 1765620MBAProjectManagement

KMANAGEMENTTO PROJECTSUCCESSINTHEPHARMACEUTICALINDUSTRY OFIRELAND

Page1of157

Manufacturingengineer’sunderstanding onthevalueofriskmanagementtoprojectsuccessinthe

pharmaceuticalindustryofIreland.

DublinBusinessSchool/

LiverpoolJohnMoore’sUniversity

Dissertationsubmitted inpartfulfilmentoftherequirementforthedegreeofMaster’si n BusinessAdministration(M BA)atLiverpoolJohnMoore’sUniversityinconjunctionwithDublinBusinessSchool

JeanLivingston

Studentnumber:

1765620

16August2013

WordCount:20,920words

Declaration 9

Acknowledgement 10

Abstract 11

Chapter1 –Introduction 13

1.1 ResearchArea 15

1.2 ResearchObjectives 15

1.3 ResearchQuestions 17

1.4 ResearchHypothesis 19

1.5 ResearcherSuitability 21

1.6 RecipientofResearch 21

1.7 ResearchLimitations 22

1.8 OrganisationofDissertation 23

Chapter2 –LiteratureReview 26

BackgroundofLiteratureReview 26

2.1 PharmaceuticalIndustry 28

2.2 ProjectSuccess 32

2.3 RiskManagement 36

2.3.1 RiskIdentification 38

2.3.2 RiskAnalysis 43

2.3.3 Risk Response 48

Chapter3 –ResearchMethodology 54

3.1 Introduction 54

3.2 ResearchMethodology 55

3.3 ResearchPhilosophy 56

3.4 ResearchApproach 59

3.5 ResearchStrategy 61

3.6 ResearchChoice 63

3.7 TimeHorizons 65

3.8 DataCollection 66

3.8.1 PrimaryData Collection 68

3.8.2 SecondaryData Collection 68

3.8.3 TechniquesforData Analysis 68

3.9 Population and Sample 69

3.10 ResearchEthics 74

3.11 ResearchLimitations 74

Chapter4 –DataAnalysisandFindings 77

4.1 Overview 77

4.2 DemographicData 78

4.3 RiskIdentification 83

4.4 RiskAnalysis 91

4.6 RiskManagementandProjectSuccess 105

Chapter5 –Conclusions 107

5.1 Conclusions 107

5.1.1 RiskIdentification 108

5.1.2 RiskAnalysis 109

5.1.3 Risk Response 111

5.1.4 RiskManagementandProjectSuccess 113

5.2 Limitationsof theresearch 114

Chapter6 –Recommendations 118

Chapter7 –Self-Reflections 121

6.1 LearningStyles 121

6.1.1 Convergers 122

6.1.2 Accommodators 123

6.1.3 Divergers 123

6.1.4 Assimilators 124

6.2 Self-Assessment 124

6.3 FutureApplication 128

Chapter8 –Appendix 131

8.1 Appendix1: Survey 131

8.2 Appendix2:DissertationGanttChart 138

8.3 Appendix3:FrequencyTables 140

Chapter9 –Bibliography 151

Figure1:EuropeanPharmaceuticalGrowth(MarketLine,2012a) 29

Figure2:PharmaceuticalCompaniesEuropeanMarketShare(MarketLine,2012a).31Figur e3:ProjectSuccessFactors(PintoandSlevin, 1988) 34

Figure4:ResearchOnion(Saunders,LewisandThornhill,2012, p.128) 56

Figure5:MethodologicalChoice(Saunders,Lewis andThornhill,2006, p.146) 64

Figure6: Gendergraph 78

Figure7: AgeRangeofRespondents 79

Figure8:LengthofTimeinPharmaceuticalIndustry 80

Figure9: Overseen aProject 81

Figure10:ProjectSuccess 82

Figure11:IdentificationofRisk 83

Figure12: UseofRiskIdentificationTechniques 85

Figure13: RiskIdentificationToolsFutureUsage 87

Figure14: RiskIdentificationToolsRanking 89

Figure15: RiskIdentificationPreventing Failure 90

Figure16: AnalysingRisks UsingStatistics 91

Figure17: AnalysingRisks 92

Figure18: RiskAnalysisTools Usage 94

Figure19: RiskAnalysisToolRankings 96

Figure20: RiskAnalysis&ProjectSuccess 97

Figure21: Developed RiskResponse 98

Figure22: Risk ResponseUsageFrequency 100

Figure23: Rankingof RiskResponse 102

Figure24: RiskStrategiesInvolvement 103 Figure25: RiskStrategiesandProjectOutcome 104 Figure26: RiskManagementandProjectSuccess 105 Figure2 7 : Kolb’sLearningStyles(Source:ConceptDavidKolb,a d a p t a t i o n anddesi gnAlanChapman(2006)) 122

Table1: FrequencyTableQuestion1 140

Table2: FrequencyTableQuestion2 140

Table3: FrequencyTableQuestion3 140

Table4: FrequencyTableQuestion4 141

Table5: FrequencyTableQuestion5 141

Table6: FrequencyTableQuestion6 141

Table7: FrequencyTableQuestion7 142

Table8: FrequencyTableQuestion8 143

Table9: FrequencyTableQuestion9 144

Table10: FrequencyTableQuestion10 144

Table11: FrequencyTableQuestion11 145

Table12: FrequencyTableQuestion12 145

Table13: FrequencyTableQuestion13 146

Table14: FrequencyTableQuestion14 147

Table15: FrequencyTableQuestion15 147

Table16: FrequencyTableQuestion16 148

Table17: FrequencyTableQuestion17 148

Table18: FrequencyTableQuestion18 149

Table19: FrequencyTableQuestion19 149

Table20: FrequencyTableQuestion20 149

Table21: FrequencyTableQuestion21 149

I,JeanLivingston,declarethatthisresearchreportismyown,unaidedwork,exceptasindi catedin theacknowledgments,thetext and thereferences

Thisreportisbeingsubmittedinpartialfulfilmentoftherequirementsforthedegreeo f ‘ MasterofBusinessAdministrationProjectManagement’atDublinBusinessSchool,Dublin

Ithasnotbeensubmittedbefore,inwhole,orinpartforanydegreeorexaminationata n y oth

er institution

JeanLivingston

Signed……….……… on thedayof16/08/2013

Thecompletiono f t h i s master’sdissertationo w e s m u c h help,u n d e r s t a n d i n g ands u p p o r t tomanypeople.FirstIwouldliketothankDublinBusinessSchoolandt heLiverpoolJohn MooreUniversityfor allowingmetoundertakethis master’sdegreeinProjectManagement.Thisyearwasextremely influentialandagreat le arningexperienceforme

Iwouldalsoliketogreatly thankmysupervisor,MrPatrickMongey.Patrickmade

h i s s u p p o r t availablei n a nu mb er of differenta n d insightfulways.H e pr ov id ed m e

w i t h adviceandguidancew i t h o u t whicht h i s dissertationw o u l d neverhavebeenco mpleted

Iwouldalsoliketothankmyfriendsandfamilyforhelpingmethroughthisstressfult i m e a ndbyh e l p i n g m e a n y waytheyc o u l d W i t h o u t t h e i r l o v e ands u p p o r t t h i s dissertationwouldneverhavebeencompleted

Thep r i m a r y o b j e c t i v e ofthisstudyw a s tocomprehendtheunderstandingmanuf acturingengineer’s hadofthevalueofriskmanagementtoprojectsuccessint h e phar maceuticali n d u s t r y inIreland.T h e a d o p t i o n o f manufacturingengineerstoleadproje ctsinsteadoftraditionalprojectmanagemershasincreasedduringtheeconomicdownturn.R

i s k managementhasbeendevelopedovert h e l a s t f i f t y yearsandhassignificantimpacton projectsuccess.Theobjectivewastodiscoverifmanufacturing engineersunderstood thisvalue

Projectshavealwaysbeenacriticalpartofthepharmaceuticalindustryasthem a j o r i t y ofi t s researchanddevelopmenti s undertakeni n t h e f o r m o f researchanddevelopmentpr ojects.Thisresearchfoundthatitistruethatengineersaretakingonm o r e o f a project managementr o l e i n t h e s e pharmaceuticalprojects.T h e researchalsoprovedt h a t man ufacturingengineersunderstandt h a t r i s k managementi s importantt o projectsuccessand

t h e differentstageso f r i s k managementa r e i n d i v i d u a l l y andcollectivelyimpor tanttoprojectsuccess

Chapter 1 Introduction

“Pharmaceuticalprojectsarelikefreshfruit–

theydepreciateiftheyarenottendedto,andtheyd o p o o r l y i f s i t t i n g o n t h e s h e l f w i

t h l o n g p e r i o d s o f inactivity”(Burns,2013).AsthepharmaceuticalindustryinIreland growsandleanstowardsanincreasei n researchanddevelopmentprojects,theneedforg oodprojectmanagementforthepharmaceuticali n d u s t r y increases.T h e m a n u f a c

t u r i n g engineerst h a t a r e involvedw i t h theseprojectsareincreasinglybecoming projectleadersdespitehavingnoformalprojectmanagementexperience.Organisationsaree mployingm a n u f a c t u r i n g engineersasprojectmanagersasa c o s t savingmeasuredu ri n

g theeconomicdownturn.Organisationsarenot focusingon thecost ofprojectfailureintheirbudgetsattheearlystagesoftheprojects,whichiswhytheyaresavin gthecostofemployinga projectmanagerbyu s i n g ane x i s t i n g e n g i n e e r T h e m

a j o r i t y ofm a n u f a c t u r i n g engineersi n t h e pharmaceuticali n d u s t r y u n d e r s

t a n d t h e n e e d f o r properr i s k managementinordertoimprovethelikelihoodofprojects uccessbuttheyareunablet o implementcorrectr i s k managementp l a n s a n d procedures

d u e t o l a c k o f formalknowledge andtraining

Inresponset o t h i s g r o w i n g trendo f employingmanufacturingengineersasprojectmana gersf o r c o s t l y pharmaceuticalprojects,i t mightb e worthwhilef o r manufacturingengin eerstoundergoformalprojectmanagementtraining.Acorrectlyimplementedriskmana gementplancanincreaseprojectsuccess.Theimportanceofr i s k managementwill beexploredthroughoutthisresearchproject

Thisresearchprojectexploresthethreemainstagesoftheriskmanagementprocess,r i s k identification,r i s k analysisandr i s k response.T h e researcheralsoe x p l o r e s t h e t o o l

s andtechniquesusedforeachofthestagesofriskmanagementtohelpincreaset h e likel ihoodo f projectsuccess.T h i s researchprojectalsoexplorest h e preferencet h a t manufa cturingengineershavewiththecommontoolsandtechniquesusedinther i s k manageme ntprocess

Therei s a largea m o u n t o f literaturea v a i l a b l e o n projectsuccessandr i s k manage ment,includingthemodelsoftheriskmanagementprocessandthedebateont h e definitio nofprojectsuccess.Howeverthereisagapintheliteraturewhichcanbet h e differencebetw eenunderstandingriskmanagementandprojectsuccess.Them a j o r i t y o f t h e l i t e

r a t u r e focuseso n a projectmanagersu n d e r s t a n d i n g o n projectsuccesswhereast herei s n o literatureo f manufacturingengineer’si d e a s o f projectsuccess.Theliteratured oesnotexplorewhattoolsandtechniquesarethemostc o m m o n l y u s e d bym a n u f a c

t u r i n g engineersforeacho f t h e t h r e e s t a g e s

o f riskmanagement.T h e r e i s a l s o a literaturegapw h e n r i s k managementi s l o o k e d atf o r pharmaceuticalprojects,especially whenfocusingonthepharmaceuticalind ustryinIreland

1.1 Research Area

Howdoesproject riskmanagementaffectprojectsuccess?

Domanufacturingengineersundertaketheroleofprojectmanagerduringpharmaceuticalp rojects?

Whataretheriskmanagementtoolthataremostcommonlyu s e d inthepharmaceuticalindu stry?

1.2 ResearchObjectives

Researchobjectsaretheclearandprecisestatementsthatidentifywhattheresearcherw i l l accomplishd u r i n g h i s o r h e r researchproject( S a u n d e r s , Lewisa n d Thornhill,2 0 1

2 , p.32).Researchobjectivesprovidethefocusandthedirectionfortheresearchert o ensur eaclearandconcentratedresearchproject

Thefollowingresearchobjectivesaretheobjectives thatareconcentrated ondurin

gt h i s researchproject:

 Todeterminethemostcommonriskidentificationtoolusedbymanufacturingengin eersandifthis tool, alongwiththe practiceof r is k identificationhelps impro

ve projectsuccess

 Todiscoverifthepracticeofriskanalysishelpsimproveoverallprojectsuccessandto discoverwhatisthemostcommonriskanalysistoolusedinthepharmaceuticalindust ry

 Touncoverwhatthemostcommonriskresponsestrategyu s e d bymanufacturinge ngineersinthepharmaceuticalindustryisandifthetechniqueo f riskresponsehelps improvesprojectsuccess

 Todetectt h e v a l u e o f r i s k managementt o projectsuccessasunderstoodbymanuf acturing engineersin thepharmaceuticalindustry

Theresearchfocusesonthe influenceriskmanagementhasonprojectsuccess.The objecti vesofthisresearcharecloselyrelatedtothescopeoftheresearchandthereforen o separated

i s c u s s i o n o n researchs c o p e is necessaryf o r t h i s researchproject

1.3 ResearchQuestions

Question

1:W h a t i s themostcommonriskidentificationtechniqueusedinpharmaceuticalpr ojects?

Rationale:T h e l i t e r a t u r e w o u l d suggestthate i t h e r checklistsorr i s k break

downstructurecreationarethemostpopulartechniquesintheidentificationofrisks(Hass aneinandAfify,2007)(Stosic,IsljamovicandMihic,2013)

(LarsonandGray,2 0 1 1 , p.214).Theseonly applytothe constructionandnewproductin novation andthereis no informationontechniquesusedin thepharmaceuticalindustry

Question2 : I s qualitativeriskanalysismorecommonlyusedt h a t quantitativeriskan alysis?

Rationale:According toKerzner( 20 13 , p 7 6 6 ) qualitativerisk analysisi s themost

c o m m o n l y usedmethod,howeverLarsonandGray(2011,p.216)statesthatthemost

c o m m o n l y usedtechniqueisscenarioanalysis,whichaccordingtoRezakhani(2012 )i s u s u a l l y aquantitativetechnique

Question3:Whatisthemostpopularriskstrategyusedinthepharmaceuticalindu stry?

Rationale:Accordingt o Tworek(2012),b u i l d i n g contractorsi n t h e U n i t e d Statesp

referredmethodofriskstrategyisriskretentionandinPolanditisriskavoidance.Ther eislittleevidenceonwhichriskstrategyismostcommonlyusedinIrelandorbyt h e pharmac euticalindustryinIreland

Question 4:Doesriskmanagementhaveany impact on thesuccessofaproject?

Rationale:AccordingtoPretorius,SteynandJordaan(2012)riskmanagementhasnoimpac

tonthe outcome of aproject.Conversely thePMI(2013,p.310) statesthata c o r r e

c t l y implementedriskmanagementpolicycangreatlyimprovethechancesthataprojectme etstheirobjectivesandsucceeds

1.4 ResearchHypothesis

Hypothesis1 : T h e mostcommonlyusedriskidentificationtechniqueusedb y manufa cturingengineersarechecklists.

Rationale:T he mo st c o m m o n l y usedt e c h n i q u e us ed bycontractorsandcivilengin

eersf o r r i s k identificationi s t h e checklist(HassaneinandAfify,2007),i t i s reasonablet

o assumethatmanufacturingengineersworkingi n t h e pharmaceuticali n d u s t r y wo uldalsousesimilartechniquesintheirriskidentification

Hypothesis2 : Manufacturingengineersu s e probabilityands t a t i s t i c a l a n a l y s i

s w h i c h wouldindicate that theywoulduseaquantitativemethodforrisk analysis.

Rationale:Accordingt o NicholasandSteyn( 2 0 0 8 , p 3 7 3 ) engineersu s e statisticaland

probabilitytechniquestoimplementtheriskanalysistechniqueofscenarioanalysisforthei rproject