research work for my masters on PROJECT PORTFOLIO MANAGEMENT PRACTICES AND PERFORMANCE OF WATER SERVICE BOARDS IN KENYA PDF

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PROJECT PORTFOLIO MANAGEMENT PRACTICES AND PERFORMANCE OFWATER SERVICE BOARDS IN KENYANDUKO FRED NYASETIAA THESIS SUBMITTED TO THE DEPARTMENT OF ENTREPRENEURSHIP,TECHNOLOGY, LEADERSHIP MANAGEMENT AND PROCUREMENT IN THESCHOOL OF ENTREPRENEURSHIP DEVELOPMENT AND PROCUREMENT, INPARTIAL FULFILMENT OF TH...

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PROJECT PORTFOLIO MANAGEMENT PRACTICES AND PERFORMANCE OF WATER SERVICE BOARDS IN KENYA

NDUKO FRED NYASETIA

A THESIS SUBMITTED TO THE DEPARTMENT OF ENTREPRENEURSHIP, TECHNOLOGY, LEADERSHIP MANAGEMENT AND PROCUREMENT IN THE SCHOOL OF ENTREPRENEURSHIP DEVELOPMENT AND PROCUREMENT, IN PARTIAL FULFILMENT OF THE REQUIREMENTS OF THE AWARD OF DOCTORATE DEGREE IN PROJECT MANAGEMENT OF JOMO KENYATTA UNIVERSITY OF AGRICULTURE AND TECHNOLOGY

2021

DECLARATION This thesis is my original work and has not been presented in any university and institutions of higher learning for any award.

Signature ……………............

Date 12/11/2021

Nduko Fred Nyasetia HD414-C010-4771/2016

This thesis has been submitted for examination with our approvals as the university supervisors

Signature

Date 12/11/2021

Prof. Mike Amuhaya Iravo JKUAT.

Signature

Date 12/11/2021

Dr. Muchelule Yusuf Wanjala JKUAT.

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DEDICATION To the Almighty God, and my entire family.

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ACKNOWLEDGEMENT I sincerely acknowledge my supervisors, Prof. Mike Iravo and Dr. Muchelule Yusuf for their immense support and guidance. I thank the University administration for providing serene environment for my studies. I’m greatly indebted to all my friends who contributed to this academic document both directly and indirectly though their moral support.

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TABLE OF CONTENTS DECLARATION.....................................................................................................................ii DEDICATION........................................................................................................................iii ACKNOWLEDGEMENT.....................................................................................................iv LIST OF FIGURES..............................................................................................................viii LIST OF TABLES..................................................................................................................ix LIST OF ABBREVIATIONS AND ACRONYMS................................................................x DEFINITION OF TERMS....................................................................................................xi ABSTRACT...........................................................................................................................xii CHAPTER ONE......................................................................................................................1 INTRODUCTION...................................................................................................................1 1.1 Background of the Study..................................................................................................1 1.2 Statement of the Problem.................................................................................................8 1.3 Objectives of the Study..................................................................................................10 1.4 Research Hypothesis......................................................................................................10 1.5 Significance of the study................................................................................................11 1.6 Scope of the Study.........................................................................................................12 CHAPTER TWO...................................................................................................................14 LITERATURE REVIEW.....................................................................................................14 2.1 Introduction....................................................................................................................14 2.2 Theoretical Framework..................................................................................................14 2.3 Conceptual Framework..................................................................................................22 2.4 Project Portfolio Management Practices........................................................................23

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2.5 Water service boards Portfolio Performance..................................................................30 2.6 Empirical Review...........................................................................................................32 2.7 Critique of existing literature relevant to the study........................................................35 2.8 Research Gaps................................................................................................................37 2.9 Summary........................................................................................................................38 CHAPTER THREE...............................................................................................................39 RESEARCH METHODOLOGY.........................................................................................39 3.1 Introduction....................................................................................................................39 3.2 Research Design.............................................................................................................39 3.3 Research Philosophy......................................................................................................40 3.4 Target Population...........................................................................................................41 3.5 Sampling Frame.............................................................................................................41 3.6 Sample size and Sampling Technique............................................................................41 3.7 Data Collection Instruments...........................................................................................42 3.8 Data Collection Procedure.............................................................................................42 3.9 Pilot Test Study..............................................................................................................43 3.10 Data Analysis and Presentation....................................................................................45 3.11 Diagnostics...................................................................................................................50 3.12 Operationalization of Variables....................................................................................52 CHAPTER FOUR.................................................................................................................55 RESEARCH FINDINGS AND DISCUSSIONS.................................................................55 4.1 Introduction....................................................................................................................55 4.2 Response Rate................................................................................................................55 4.3 Reliability Analysis........................................................................................................56 vi

4.4 Demographic Information..............................................................................................56 4.5 Descriptive Statistics......................................................................................................60 4.6 Inferential Statistics........................................................................................................79 CHAPTER FIVE...................................................................................................................99 SUMMARY, CONCLUSION AND RECOMMENDATIONS..........................................99 5.1 Introduction....................................................................................................................99 5.2 Summary of Findings.....................................................................................................99 5.3 Conclusions..................................................................................................................105 5.4 Recommendations........................................................................................................107 5.5 Suggestions for Further Studies...................................................................................108 APPENDICES......................................................................................................................119

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LIST OF APPENDICES APPENDIX I: INTRODUCTORY LETTER APPENDIX II: QUESTIONNAIRE APPENDIX III: LIST OF WATER SERVICE BOARDS

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LIST OF FIGUR Figure 2.1: Conceptual Framework........................................................................................23 YFigure 4.1: Respondents Position in the Organization........................................................57 Figure 4.2: Length of Service in the Organization.................................................................58 Figure 4.3: Gender of Respondents........................................................................................59 Figure 4.4: Age Brackets of Respondents..............................................................................59 Figure 4.5: Respondents Level of Education..........................................................................60 Figure 4.6: Whether Project Selection and Prioritization Influence Organizational Performance.............................................................................................................................64 Figure 4.7: Whether Resource Allocation Influences Organizational Performance...............66 Figure 4.8: Whether Portfolio Control Influences Organizational Performance....................69 Figure 4.9: Whether Portfolio Project Evaluation Influence Organizational Performance....72

LIST OF TABL ix

Table 3.1: Hypothesis testing of variables..............................................................................48 Table 3.2: Operationalization of variables..............................................................................53 YTable 4.1: Response Rate.....................................................................................................55 Table 4.2: Organization performance......................................................................................56 Table 4.3: Descriptive Statistics for Project Selection and Prioritization...............................62 Table 4.4: Descriptive statistics on Resource Allocation........................................................65 Table 4.5: Descriptive Statistics on Portfolio Control............................................................67 Table 4.6: Descriptive Statistics for Project Evaluation.........................................................71 Table 4.7: Descriptive Statistics on Moderating Effect of Portfolio Risk Management.........74 Table 4.8: Descriptive Statistics on Performance Indicators..................................................75 Table 4.9: Organization Project Portfolio Management Success............................................77 Table 4.10: Respondents Perception on Organization’s Project Portfolio Management........79 Table 4.11: Correlation Analysis.............................................................................................80 Table 4.12: Tests of Normality................................................................................................82 Table 4.13: Multicollinearity Test Statistics...........................................................................83 Table 4.14: Breusch-Pagan / Cook-Weisberg test for heteroscedasticity...............................84 Table 4.15: Autocorrelation Test.............................................................................................84 Table 4.16: Regression Analysis for Project Prioritization on Organizational Performance..85 Table 4.17: Regression Analysis for Resource Allocation on Organizational Performance...87 Table 4.18: Regression Analysis for Portfolio Control on Organizational Performance........89 Table 4.19: Regression Analysis for Project Evaluation on Organizational Performance......92 Table 4.20: Model Summary for Moderated Regression Analysis.........................................93 Table 4.21: ANOVA for Moderated Regression Analysis......................................................94 x

Table 4.22: Coefficients for Moderated Regression Analysis.................................................96

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LIST OF ABBREVIATIONS AND ACRONYMS CBK:

Central Bank of Kenya

IRR:

Internal Rate of Return

NACOSTI:

National Commission for Science, Technology and Innovation

KES:

Kenya shillings

KNBS:

Kenya National Bureau of Statistics

KPDA:

Kenya Property Developers Association (KPDA)

MCUT:

Multi Criteria Utility Theory

MPT:

Modern Portfolio Theory

PMI:

Project Management Institute

PPM:

Project Portfolio Management

REITS:

Real Estate Investment Trust

ROA:

Return on Assets

ROI:

Return on Investment

SPSS:

Statistical Package for Social Sciences

VIF:

Variance Inflation Factor

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DEFINITION OF TERMS Project – This is a unique process, consisting of a set of coordinated and controlled activities with start and finish dates, undertaken to achieve an objective conforming to specific requirements, including the constraints of time, cost and resources (Cooper, 2011). Project Management – This is a process whereby each project is managed independently. The focus is on a single project separate from other projects (Rad & Levin, 2008). Project Portfolio – This is a set of projects that are coordinated and managed in a certain way to bring benefits to the company, which would not have been possible if the projects were managed individually. (Project Management Institute, 2013) Project Portfolio Management – This is a dynamic decision process, whereby a business´s list of active new-product (and development) projects is constantly updated and revised. In this process, new projects are evaluated, selected, and prioritized; existing projects may be accelerated, killed, or de-prioritized; and resources are allocated and reallocated to active projects (Beringer, Jonas and Kock, 2013). Project Portfolio Management Practices – These are activities whereby new projects are evaluated, selected, and prioritized; existing projects may be accelerated, killed, or deprioritized through controlling and resources are allocated and reallocated to active projects (Beringer, Jonas and Kock, 2013). Performance – This is measuring the results of a firm's policies and operations in monetary and non-monetary terms (Rubambey, 2002). These results are reflected in the firm's profitability, market share, return on investment, return on assets, value added etc.

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ABSTRACT Majority of water service boards are investing millions of money in different portfolios with objective of profit maximization. However, delays in projects are a global phenomenon and have become a typical part of the project manager’s concern. Therefore, the purpose of this study was to determine the influence of project portfolio management practices on the performance of water service boards in Kenya. The specific objectives of the study were; to determine the effect of project evaluation, project selection and prioritization, resource allocation, portfolio control and to establish the moderating effect of contextual factors on the relationship between project portfolio management practices and performance of water service boards in Kenya. The study was based on Modern Portfolio theory, Multi-Criteria Utility theory, control theory, Systems theory and Complexity theory. A conceptual model helped the researcher to relate the theories to objectives and variables of the study. The study adopted a cross-sectional survey research design. The population of this study targeted the employees of water boards in Kenya which include coast water service board (CWSB), Rift valley water service board (RVSB), Lake Victoria North(LVNSB), Tana water, TanaAthi water service board, Athi water service board. These water boards are selected for the study because most of the water projects have been financed and implemented in these boards. The unit target constituted Engineers, senior management, middle management, and project team. The study targeted a population of 280 people. Statistical Package for the Social Science (SPSS) version 24.0 was used to process and analyze the collected data. Descriptive and Inferential data analysis were used to analyze the objectives. Multiple regression analysis were also used to test the relationship between project portfolio management practices and organizational performance. Continuous variables were analyzed by Chi-square tests and pvalues < 0.05 at 95% confidence level were considered significant. Frequency responses were calculated and results presented in tables, bar graphs and pie charts. The output of this study assists in contributing to improved performance of water service boards using project portfolio management practices. The study found that project selection and prioritization as a project portfolio management practice on the performance of water service boards in Kenya; there is significant influence of resource allocation as a project portfolio management practice on the performance of water service boards in Kenya; that a unit increase in portfolio control results to an increase in performance of water service boards in Kenya; and that there is significant influence of project evaluation as a project portfolio management practice on the performance of water service boards in Kenya. The study also found that portfolio risk management does moderate the relationships between project portfolio management practice and performance of water service boards in Kenya. The study thus concludes that companies should consider adopting various project prioritization methods. This includes the ranking method, scoring model, Analytic Hierarchy Process (AHP) Technique. Also, project prioritization should instead be an on-going process where project scores are reviewed and updated during project development and at designated stage gates. xiv

CHAPTER ONE INTRODUCTION 1.1 Background of the Study According to Project Management Institute (2006, 2008, 2013) project portfolio management (PPM) is defined as the centralized or coordinated management of one or more portfolios, which included identifying, prioritizing, authorizing, managing, and controlling projects, programmes, and other related work, to achieve specific strategic business objectives. They recognized that “portfolio management produces valuable information to support or alter organizational strategies and investment decisions” (Project Management Institute, 2013) and allowed decision-making that controlled the direction of portfolio components as they achieved specific outcomes. In PPM resources are allocated according to organizational priorities and are managed to achieve the identified benefits. They further elaborated that: “the organizational strategy is a result of the strategic planning cycle, where the vision and mission are translated into a strategic plan” (Project Management Institute, 2008) and that: Portfolio Management, through the alignment of the strategic planning establishes the portfolios required to achieve organizational strategy and objectives and performance goals. Management of authorized programs and projects and management of ongoing operations are required to execute portfolios consi...