IMPACT OF PROJECT LEADERSHIP ON PROJECT SUCCESS IN OFFSHORE IT COMPANIES IN SRI LANKA By W S P De Silva The Dissertation was submitted to the Department of Computer Science & Engineering of the University of Moratuwa in partial fulfillment of the requirement for the Degree of Master of Business Administration in Information Technology. Department of Computer Science & Engineering University of Moratuwa December 2009 ii DECLARATION “I hereby certify that this dissertation does not incorporate, without acknowledgement, any material previously submitted for a Degree or Diploma in any University and to the best of my knowledge and belief, it does not contain any material previously published or written by another person or myself except where due reference is made in the text. I also hereby give consent for my dissertation, if accepted, to be made available for photocopying and for interlibrary loans, and for the title and summary to be made available to outside organizations.” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Signature of the Candidate Date To the best of my knowledge, the above particulars are correct. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Signature of the Supervisor Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Signature of the Supervisor Date iii ABSTRACT The study aims to examine how project leaders’ leadership styles and teams’ organizational commitment correlates with the success of the offshore information technology projects in Sri Lanka. The study mainly highlights the importance of leadership, by identifying the leadership styles and the relevant leadership characteristics and practice in Sri Lankan offshore IT companies to lead the IT projects effectively and efficiently. The findings of the project reveal that the suitable leadership styles to be practiced within Sri Lankan offshore IT companies are Transformational leadership styles that lead to characteristics of Idealized influence, Intellectual stimulation, Inspirational motivation and Individualized consideration. This identification helps IT project leaders to adopt these leadership styles and behaviors in order to enhance team members’ organizational commitment, improve work performance, and consequently induce a positive working atmosphere. Academically, the study aims to provide additional insights into the leadership field as well as IT project management by contributing to the future development of the study area. iv ACKNOWLEDGEMENT I wish to thank those who made this research publication possible: First my internal supervisor, Dr. Chandana Gamage, Department of Computer Science & Engineering, University of Moratuwa, whose advice and guidance was invaluable. My sincere gratitude and thanks go to Mr. Malinda Sirisena who is my external supervisor, Manager QA Navantis Sri Lanka, Mrs.Vishaka Nanayakkara Head of Department of Computer Science & Engineering for helping me out during my difficulties, Prof. Kennedy Gunawardena, Senior Lecturer, University of Sri Jayewardenepura who have given guidance to me to carry out this research successfully. I further extend my deep gratitude to all the staff members in the Department of Computer Science & Engineering, library and all non-academic staff in the respective departments, University of Moratuwa for their support in numerous ways. The management of Navantis Sri Lanka Including Mr.Indaka Raigama my CEO, my employer, for providing me guidance, encouragement to work on this research and the use of computing and Internet facilities. Lastly and most importantly, my husband Sanka Liyanage, without whose help and support this endeavor would not have been possible. v TABLE OF CONTENTS DECLARATION.......................................................................................................ii ABSTRACT .............................................................................................................iii ACKNOWLEDGEMENT ........................................................................................ iv LIST OF FIGURES ................................................................................................viii LIST OF TABLES...................................................................................................vii ABBREVIATIONS ..................................................................................................ix CHAPTER-1 INTRODUCTION..........................................................................1 1.1 RESEARCH BACKGROUND.................................................................................. 3 1.2 PROBLEM DOMAIN................................................................................................ 4 1.3 RESEARCH OBJECTIVES....................................................................................... 4 1.4 IMPORTANCE OF THE STUDY ............................................................................. 5 1.5 SUMMARY................................................................................................................ 6 CHAPTER 2 – LITERATURE REVIEW ..................................................................7 2.1 INTRODUCTION ...................................................................................................... 7 2.2 MEASURING SUCCESS OF AN IT PROJECT ...................................................... 8 2.3 LEADERSHIP AND PROJECT MANAGEMENT................................................. 13 2.4 LEADERSHIP AND TEAM PERFORMANCE ..................................................... 13 2.5 CULTURAL DIFFERENCES IN LEADERSHIP ................................................... 14 2. 6 DIFFERENT STYLES OF LEADERSHIP ............................................................. 15 2. 7 LEADERSHIP STYLES IN OFFSHORE IT INDUSTRY ..................................... 19 2.8 SUMMARY.............................................................................................................. 24 CHAPTER-3 METHODOLOGY .......................................................................26 3.1 INTRODUCTION .................................................................................................... 26 3.2 ELEMENTS OF RESEARCH DESIGN.................................................................. 27 3. 3 CONCEPTUAL FRAMEWORK............................................................................. 27 3. 4 METHODS OF DATA COLLECTION .................................................................. 36 3. 5 POPULATION, SAMPLE SELECTION AND SAMPLE SIZE............................. 38 3. 6 METHODS OF DATA ANALYSIS........................................................................ 41 3. 7 CHAPTER SUMMARY.......................................................................................... 41 CHAPTER-4 DATA ANALYSIS ......................................................................42 4.1 INTRODUCTION .................................................................................................... 42 vi 4.2 RELIABILITY ANALYSIS .................................................................................... 44 4.3 DESCRIPTIVE STATISTICS ANALYSIS ............................................................ 45 4.5 INFERENTIAL ANALYSIS.................................................................................... 62 4.6 CORRELATIONS ANALYSIS............................................................................... 64 5.7 OVERALL RESULT OF THE STUDY .................................................................. 66 5.8 SUMMARY.............................................................................................................. 67 CHAPTER-5 CONCLUSION AND RECOMMENDATIONS ................................68 5.1 THE RESEARCH FINDINGS................................................................................. 68 5. 2 THE APPLICATION OF RESEARCH FINDINGS ............................................... 69 5. 3 LIMITATIONS OF THE STUDY.......................................................................... 70 REFERENCES ........................................................................................................72 APPENDIX .............................................................................................................76 vii LIST OF TABLES Table 3.1: Parameter Identification Table................................................................. 31 Table 4-1: Reliability Statistics ................................................................................ 44 Table 4-2: Case Processing Summary ...................................................................... 44 Table 4-3: Descriptive statistics with grouped variables ........................................... 46 Table 4-4: Descriptive statistics before grouping the variables ................................ 47 Table 4-5: Variable statistics - Frequency analysis ................................................... 49 Table 4-6: Frequency analysis table – Idealized Influence........................................ 50 Table 4-7: Frequency analysis table – Inspirational Motivation ................................ 51 Table 4-8: Frequency analysis table – Individualized Consideration ........................ 52 Table 4-9: Frequency analysis table – Intellectual Simulation .................................. 53 Table 4-10: Frequency analysis table – Contingent Reward...................................... 54 Table 4-11: Frequency analysis table – Active Management .................................... 55 Table 4-12: Frequency analysis table – Passive Management ................................... 56 Table 4-13 Frequency analysis table – Laissez Faire ................................................ 57 Table 4-14: Frequency analysis table – Budget ....................................................... 58 Table 4-15: Frequency analysis table – Time ........................................................... 59 Table 4-16: Frequency analysis table – Scope .......................................................... 60 Table 4-17: Frequency analysis table – Quality ....................................................... 61 Table 4-18: Formulated Hypotheses Table ............................................................... 63 Table 4-19 Descriptive Correlations Analysis ......................................................... 64 Table 4-20: Pearson Cross Correlations Analysis ..................................................... 64 Table 4-21: Kendall tau Cross Correlations Analysis ............................................... 65 Table 4-22: Spearman rank Correlations Analysis.................................................. .65 viii LIST OF FIGURES Figure 2.1: Project management success - extended traditional view .......................... 9 Figure 2.2: Extended the DeLone and McLean’s IS Success Model ......................... 11 Figure 2.3: Adding project management successes to the DeLone and McLean success model...................................................................................................................... 12 Figure 3.1: Elements of research design.......................................................................27 Figure 3.2: Conceptual framework for the analysis…………………………………..29 Figure 3.3: IT workforce by level of experience ....................................................... 38 Figure 4.1: Responses by positions of leaders .......................................................... 43 Figure 4.2: Responses by Experiences Categories .................................................... 44 Figure 4.3: Descriptive grouped variables mean analysis.......................................... 46 Figure 4.4: Frequency analysis graph – Idealized Influence ..................................... 50 Figure 4.5: Frequency analysis graph - Inspirational Motivation .............................. 51 Figure 4.6: Frequency analysis graph - Individualized Consideration ....................... 52 Figure 4.7: Frequency analysis graph – Intellectual Simulation ............................... 53 Figure 4.8: Frequency analysis graph – Contingent Reward ..................................... 54 Figure 4.9: Frequency analysis graph – Active Management .................................... 55 Figure 4.10: Frequency analysis graph – Passive Management................................. 56 Figure 4.11: Frequency analysis graph – Laissez Faire ............................................. 57 Figure 4.12: Frequency analysis graph – Budget ...................................................... 58 Figure 4.13: Frequency analysis graph – Time ......................................................... 59 Figure 4.14: Frequency analysis graph – Scope........................................................ 60 Figure 4.15: Frequency analysis graph – Quality ..................................................... 61 ix ABBREVIATIONS MLQ - Multifactor Leadership Questionnaire SME – Small and Medium Enterprises SPSS - Statistical Software Package for Social Sciences SLICTA - Sri Lanka Information Communication Technology Association