IPA Analysts, Industry Scholar Address Need for Chinese SOE Post-Project Appraisals in Published Journal Article

A new journal article lays out how China’s commercial-oriented state-owned enterprises (SOEs) can improve the effectiveness of their capital investments.

In the January-April 2019 issue of The Journal of Modern Project Management, IPA’s Senior Consultant Christina K. Yip, Advanced Associate Analyst Pei Hsing Seow, and Swinburne University of Technology’s Industry Fellow William Young write that Chinese government reforms are forcing Chinese SOE managers to pay greater attention to capital investment efficiency and competitiveness. According to the authors, “An essential approach to improving capital competitiveness is capturing learnings from capital investments to feed back into the project system. This forms the basis of continuous improvement, to enhance the system’s capability in asset creation and management.”

The tried-and-true practice of conducting lessons learned evaluations would go a long way toward strengthening the cost and schedule competitiveness of future projects, achieving the aims of the Chinese government reforms. But corporate framework and culture obstacles stand in the way of managers wanting their SOEs to benefit from retrospective reviews. Such reviews are not new to projects in China. In fact, they have been used before to evaluate national projects. “However, to date, Chinese SOEs do not appear to have actually gained benefits from lessons learned evaluations. Capital projects executed by Chinese SOEs are less predictable, incurring significant cost and schedule overruns compared to global industry competitors,” the article says.

The authors outline how Chinese SOE managers can leverage post-project appraisals to promote capital investment competitiveness. They go on to say: “If Chinese SOE managers are to improve, then they need to be supported by their leaders in developing a new business culture recognizing that change and improvement can actually occur without destroying or even eroding harmony, or other aspects of Chinese culture. In fact, thoughtfully implementing such improvement measures can align with Chinese cultural values.”

The article, “Post-Project Appraisals to Improve Capital Investment Performance of Chinese State-Owned Enterprises,” is available for purchase on The Journal of Modern Project Management website.

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