Disentangling the failure of benefits realization in public institutional building projects: a paradoxical understanding of formalization

ABSTRACT

Benefits realization at the operation stage is a widely neglected aspect of sustainable development of construction projects. While it is one of the ultimate purposes of initiating projects, public projects often perform poorly in realizing benefits after being delivered. The purpose of this study is to investigate why public institutional building projects could not realize benefits as expected. Four barriers to benefits realization are identified, which mainly stem from the formalization of public institutional building project management. These are rigid administrative systems, non-autonomous decision-making, strong accountability, and lack of benefits evaluation scheme. This study presents a paradoxical understanding of the role of formalization in ensuring project production and benefits realization of public institutional building projects. While formalization ensures accountability and transparency in the project delivery and production, it undermines the long-run benefits realization after being delivered.

KEYWORDS:

• Benefits realization
• public institutional building project
• barriers
• paradox
• formalization

1. Introduction

Various strategies have been widely examined to achieve sustainable development of construction projects, such as sustainable design and construction (i.e. Chou and Le 2014), waste minimization (e.g. Wong and Yip 2004), and carbon emission reduction (e.g. Ji et al. 2020). These are all important aspects along the life-cycle of construction projects, namely front-end, construction, and operation phases. However, one of the significant aspects was neglected, which is the benefits realization in the operation stage given the purpose of initiating any projects is to deliver benefits to and meet the needs of project stakeholders. It is commensurate with the goal of sustainable development – continuously satisfy the needs of both current and future generations (Dyllick and Hockerts 2002). If the benefits realization could not be ensured, it is rarely meaningful to achieve sustainable development in the areas of low carbon emissions and green construction.

Benefits realization is one of the ultimate purposes of investing and delivering construction projects. Public projects are increasingly invested to deliver benefits to the public at the operation stage (Volden and Andersen 2018), and institutional building projects may be among the most significant public project investments (Cellini, Ferreira, and Rothstein 2010). In the US, over 70 USD billion are spent on public school construction and repairs each year (Hong and Zimmer 2016). China also invests heavily in institutional building projects. The fixed-asset investment (FAI) for education reached 1.11 trillion CNY in 2017, making up 6.31% of the total FAI for infrastructure (NBSC-National Bureau of Statistic of China, 2017).

To ensure the rational, efficient, and effective use of public investments, government sectors are heavily engaged with the way of formalization in the project management at the production stage (Kurland and Egan 1999; Rosacker and Rosacker 2010), and public institutional building projects are no exception. Formalization refers to the administrative rules and regulations and mandated management processes (Wirick 2009; Patanakul et al. 2016). It reflects the extent to which rules, regulations, policies, and procedures govern projects (Naveh 2007). However, there appears a paradox of formalization in managing public projects (Vlaar, Van Den Bosch, and Volberda 2016). On the one hand, it serves as a safeguard to ensure accountability and transparency of participants’ behaviors (Bozeman and Scott 1996; Tabish and Jha 2018). This is expected to facilitate the project to be delivered on time, within budget, and to the specification (“iron triangle” goals of project production). On the other hand, formalization may induce red tape, rigidity, and obsession with the “iron triangle,” which may hinder benefits realization in the long term. This study is more concerned with the often-neglected side of formalization – its adverse impacts on benefits realization.

In practice, public projects perform poorly in realizing target benefits (Chih and Zwikael 2015), and many of them are accused of failing to meet public needs and wasting taxpayers’ money (Patanakul et al. 2016; Volden and Andersen 2018). This may hinder the achievement of sustainable development in public projects. Institutional building projects, despite the huge investment, do not deliver expected benefits (i.e. improving student achievement) (Martorell, Stange, and McFarlin 2016). It is conjectured that the failure of benefits realization might be related to the formalization in public project management. It has been supported that the conventional project management driven by the “iron triangle” is incapable of ensuring benefits realization (Hjelmbrekke, Klakegg, and Lohne 2017; Svejvig, Geraldi, and Grex 2019). In other words, projects that are completed on time, within budget, and to the specification at the production stage do not necessarily imply that they could deliver expected benefits at the operation stage (Winter and Szczepanek 2008; Doherty, Ashurst, and Peppard 2012; Kerzner 2014; Laursen and Svejvig 2016).

Nevertheless, it remains unclear why public institutional building projects fail in realizing anticipated benefits and whether the formalization hampers benefits realization at the operation stage. Therefore, this study tends to address the research question of why public institutional building projects perform poorly in benefits realization at the operation stage. The specific research objective is to investigate whether formalization impedes benefits realization in public institutional building projects at the operation stage.

The findings show the inhibiting effects of formalization on benefits realization, which may further impede the sustainable development of institutional building projects. This study enriches the body of knowledge by presenting a paradoxical understanding of the role of formalization in ensuring effective project production and benefits realization. It is recommended to balance the role of formalization in achieving the “iron triangle” at the production stage and benefits realization at the operation stage in institutional building projects. Also, this study provides new insights into the relations between formalization, benefits realization, and sustainable development. The adverse impacts of formalization to some extent may account for the failure of project sustainable development, and the social aspect is in particular.

The remaining of the paper is organized as follows. Section 2 presents a review of benefits realization and formalization of public project management. It is followed by a two-pronged research method in Section 3. The results are reported in Section 4. The final two sections present the discussion and conclusions.

2. Literature review

2.1. Benefits realization

Benefit is defined as “an outcome of change which is perceived as positive by a stakeholder” (Bradley 2007). This means that the benefits are outcomes of the change rather than the change itself (IPA-Infrastructure and Projects Authority, 2017). For instance, if erecting a building is viewed as a change, benefits are outcomes of erecting the building (e.g. the provision of accommodations) instead of the building itself. Also, benefits are measured in a relative manner rather than the absolute manner. This is because benefits may be perceived differently by different stakeholders based on their specific needs (Bradley 2007; Kerzner 2014; Laursen and Svejvig 2016). For example, project investors may appreciate the anticipated return on investment, while end-users might concern more about whether the project could meet their usage needs (Hjelmbrekke and Klakegg 2013; Kelly, Male, and Graham 2014). The term “benefit” is often used interchangeably with the concept of “value” (Laursen and Svejvig 2016; Svejvig, Geraldi, and Grex 2019).

Realization in the New Oxford Dictionary is defined as “the fulfillment or achievement of something desired or anticipated.” Thus, benefits realization is the achievement of anticipated positive outcomes of change (Sapountzis, Harris, and Kagioglou 2007).

Benefits realization in project contexts can be understood based on the Inputs–Transform–Outcomes (ITO) project model proposed by Zwikael and Smyrk (2011, 2012). The traditional view describes a project as a process that transforms inputs (e.g. labor, and money) into outputs (e.g. a building or a product) (Zwikael and Smyrk 2012). Accordingly, conventional project management focuses on the efficiency of output production and delivery. This is measured by the “iron triangle” indicators (i.e. time, cost, and quality) (Doherty, Ashurst, and Peppard 2012; Zwikael, Chih, and Meredith 2018).

However, the scope of benefits realization is far beyond the efficient output production and delivery (Svejvig, Geraldi, and Grex 2019). Besides the process of transforming inputs into outputs, it also includes the utilization of outputs which giving rise to target outcomes/benefits (Zwikael and Smyrk 2012). Zwikael and Smyrk (2012) take hospitals as examples to differentiate outputs from benefits. Outputs refer to specific deliverables (e.g. new medical processes), whereas realized benefits are positive effects of using such outputs by staff and patients, such as increased efficiency and reduced the waiting time (Zwikael and Smyrk 2012). While benefits realization spans the project lifecycle, it is the most prominent at the operation stage when the project is used by specific stakeholders (Farbey, Land, and Targett 1999; Vuorinen and Martinsuo 2019).

In project contexts, the notion of benefits realization is closely related to sustainable development (Keeys and Huemann 2017; Silvius and Schipper 2014). Sustainable development ultimately aims to continuously satisfy the needs of both current and future generations (Dyllick and Hockerts 2002). It is not limited to environmental and economic considerations (e.g. green construction and low carbon emission), and it should devote to improve human life quality regarding the social dimension (Vakili-Ardebili 2007). What the benefits realization pursues – delivering benefits to and meet the needs of project stakeholders – is consistent with the goal of sustainable development in the social dimension. Scholars are increasingly aware of the linkage between benefits realization and sustainable development. For instance, Keeys and Huemann (2017) emphasize the benefits focus of project sustainable development, advocating that sustainable development envisions projects to deliver benefits to wide stakeholders.

In this study, the benefits realization of a public institutional building project refers to the achievement of anticipated positive outcomes of erecting a public institutional building project. Benefits here concern the positive outcomes generated from the physical facility and the environment it creates, satisfying end-users’ spatial and functional needs to improve teaching and education activities. It is worth noting that the educational service provided by human capital is not the interest of this study as it does not directly depend on the institutional building project itself.

As the social demands for institutional buildings are determined by the end-users’ needs (Knoeri, Steinberger, and Roelich 2016), end-users who use the building can experience and evaluate the benefits realized by the project (Forsythe 2014). Benefits pursued by end-users are often non-financial and intangible (Patanakul et al. 2016). For example, students enjoy convenient facilities and a nice environment. Financial benefits are not taken into account because they fall outside of what end-users expected from the institutional building project. Also, public institutional building projects are non-operational projects that generally aim to provide educational services to satisfy public needs. They are not-for-profits. Benefits realization contributes to the sustainable development of institutional building projects by pursuing sustainability in the social dimension. It maximizes project benefits as the return of economic and environmental investments in institutional buildings.

2.2. Formalization of public project management

Formalization refers to “a system of rules covering rights and duties of incumbents and a system of procedures for dealing with work situations” (Hall 1963; Bozeman and Scott 1996). Common manifestations of formalization are rules, regulations, standards, policies, and procedures (Vlaar, Van Den Bosch, and Volberda 2016). Thus, formalization in project management involves defining and implementing standard tools, establishing standards, specifying procedures and processes, and performing tight control (Teller et al. 2012).

Formalization is integral to public project management at the production stage, and public institutional building projects are no exception. Public projects are initiated, funded, managed, and supervised by the government sectors in order to provide public services and satisfy public needs (Damoah and Akwei 2017). Governmental sectors rely heavily on rules, regulations, formalized job guidelines, and other processes in managing public projects (Kurland and Egan 1999). Formalization is advocated for two interrelated purposes: to ensure that activities of government sectors and officers are representative and accountable; and to ensure that public projects meet citizens’ needs (Bozeman 1993).

Although the intention of formalization is positive, a paradox of formalization – the simultaneous presence of its functions and dysfunctions – has been identified in practice (Clegg, da Cunha, and Cunha 2002; Vlaar, Van Den Bosch, and Volberda 2016). Formalization functions as a vital safeguard to ensure accountability, predictability, transparency, and fairness of participants’ decisions and behaviors (Bozeman and Scott 1996). Public projects are subject to the mandatory rules and regulations, procedural standardization, and hierarchical controls (Baldwin 1990; Rosacker and Rosacker 2010; Szentes and Eriksson 2016). The activities along the project lifecycle, for instance, decision-making, budget, planning, procurement, and execution, have to follow formal procedures and hierarchical approvals (Van der Waldt 2011; Patanakul et al. 2016). The strict accountability system is ubiquitous in public projects alongside the formal appraisal evaluation, audit, and review (Farbey, Land, and Targett 1999; Crawford and Helm 2009). Such formalization is viewed as a defender of public wills and rights (Kurland and Egan 1999). This could help to prevent the abuse of power, regulate participants’ activities, and ensure transparency, fairness, and efficiency (Baldwin 1990; Bozeman 1993; Pandey and Bretschneider 1997; Bozeman, Reed, and Scott 2016). Prior studies support that the formalization could contribute to the “iron triangle” performance (Teller et al. 2012).

However, the obsession with formalization may result in dysfunctions (Diefenbach 2009; Teller et al. 2012). Red tape is a common side-effect of the undue formalization (Bozeman and Scott 1996; Stazyk and Goerdel 2010). It emerges when government rules, regulations, and procedures are perceived as excessive, unwieldy, or pointless. This might further lead to inefficiency, delays, frustration, and vexation (Bozeman 1993; Bozeman and Scott 1996). Also, over-reliance on the formalization may lead to the rigidity (Bourgault, Drouin, and Hamel 2008). This may constrain participants’ autonomy and flexibility in coping with the changing circumstances (Vlaar, Van Den Bosch, and Volberda 2016) and different cases (Bozeman and Scott 1996).

Another adverse effect of formalization is inducing participants to focus on immediate and measurable results merely. This might reduce performance and aspirations to the minimum standards (Vlaar, Van Den Bosch, and Volberda 2016). For example, the project audit and review emphasize the compliance with rules and the “iron triangle” performance (Kassel 2008; Patanakul et al. 2016). As a result, accountability often rests on the immediate and measurable results (Ika 2012). There is a paradox of such short-term accountability – ensuring the legality of actions and inducing “buck-passing” behaviors (Dicke and Ott 1999; Ossege 2012). Participants may prioritize the accountability requirements over their responsibilities for long term, invisible goals that are not specified in their accountabilities (Van Thiel and Leeuw 2002; Diefenbach 2009). The short planning horizon is common in public projects (Wirick 2009; Van der Waldt 2011). Officers are concerned more about the immediate results within their accountability requirements and terms in office than the long-term benefits realization (Wirick 2009).

Overall, formalization is integral to public project management at the production stage, with the purpose of preventing misconducts and guaranteeing public interests (Baldwin 1990; Bozeman, Reed, and Scott 2016). It could essentially contribute to the efficiency of project delivery.

However, some dysfunctions may occur due to excessive formalization, such as red tape, rigidity, and shirking in long-term responsibilities. These adverse effects of formalization may intensify the difficulties of benefits realization at the operation stage. Yet, it is empirically not known that whether and how formalization impedes the benefits realization in public projects. This study tends to examine the often-neglected side, namely the adverse impacts of formalization in benefits realization.

3. Research methods

3.1. Empirical setting and research design

This study focuses on barriers to benefits realization. Institutional building projects in Jiangsu province, China were investigated as the empirical setting. Jiangsu province is a representative unit to investigate the benefits realization of institutional building projects. It has the largest construction market in China and is also well known for its reputation for education facilities. Institutional buildings in this study refer to education buildings, including level-1 and level-2 institutes (Arain and Low 2005). The former (primary school) is for children between 6 and 12 years of age, whereas the latter (secondary school) is built for students between 13 and 16 years of age (Arain and Low 2005).

This study adopted a two-pronged research design shown in Figure 1. This included both qualitative research approach and Q methodology. The qualitative research approach was suitable for the explanation purpose of this study (Lee, Mitchell, and Sablynski 1999). It was initially applied to elicit practitioners’ perspectives on why public institutional building projects fail in delivering target benefits. Q methodology was then undertaken to identify barriers to benefits realization in public institutional building projects. It is appropriate because it systematically examines respondents’ opinions (Brown and Good 2010), allowing researchers to cluster practitioners’ viewpoints on specific issues (e.g. barriers to benefits realization) (Yang 2018). In this study, clusters identified by Q methodology represent barriers to benefits realization recognized by participants.

Figure 1. Research design.

3.2. Qualitative research approaches

Semi-structured interviews were conducted to gather evidence from practitioners. Potential respondents should participate in at least one stage of the institutional project lifecycle and know well about other stages. Consequently, they may have relevant experience and knowledge of project benefits realization. In total, twelve participants of public institutional building projects were interviewed from October 2017 to January 2018 (Table 1). Among them, five were from educational sectors, four from design agencies, two from planning and development departments, and one from an agent construction company.

Table 1. Interviewee profiles

Respondent	Service Organization	Job Title	Service Years	Interview Duration (mins)
No. 1	Education Authorities	Middle Manager	>16	56
No. 2	Education Authorities	Middle Manager	>16	40
No. 3	Education Asset Management	Senior Manager	>16	90
No. 4	Agent Construction Company	Middle Manager	>16	52
No. 5	School (Users)	Senior Manager	>16	36
No. 6	School (Users)	Senior Manager	>16	36
No. 7	Design Institute	Senior Manager	11–15	35
No. 8	Planning Bureau	Middle Manager	6–10	62
No. 9	Design Institute	Middle Manager	>16	59
No. 10	Development and Reform Commission	Middle Manager	6–10	86
No. 11	Design Institute	Engineer	1–5	30
No. 12	Design Institute	Engineer	11–15	56

The semi-structured interviews were conducted with a list of questions to guide the interview process, such as project background information, end-users’ needs considered during the construction phase, measures and barriers to benefits realization in a specific project. The interviewees were also asked to share their opinions on why institutional projects cannot realize target benefits. Each interview lasted no less than 30 minutes and was recorded and transcribed for analysis. The qualitative data were processed by thematic analysis to identify factors that probably affect the benefits realization of public institutional building projects.

The semi-structured interviews were supplemented by the archive analysis of three institutional building projects (see details in Table 2). By visiting and analyzing relevant documents and archives, factors affecting benefits realization derived from semi-structured interviews were further validated, interpreted, and supplemented.

Table 2. Project archives

Project	Level	Cost (Million)	Construction Period (Month)	Archives
A	Level-2 institute	631	36	Feasibility study report, project proposal
B	Level-1 institute	200	15	Feasibility study report, project proposal, preliminary design specification
C	Level-1 & 2 institute	250	12	Feasibility study report, design specification, management regulation

3.3. Q methodology

Q methodology was adopted to identify barriers to benefits realization based on practitioners’ perspectives collected by the qualitative research approach (see Figure 1). Q methodology is a mixed-method proposed by William Stephenson in 1935, synthesizing the features of qualitative and quantitative methods (Newman and Ramlo 2010). Its qualitative features enable researchers to examine the opinions of respondents, and its quantitative features reflect in using statistical analysis to identify different patterns of respondents’ perspectives (Yang 2018). Thus, Q methodology can be used to identify barriers to benefits realization by clustering respondents’ opinions on why public institutional building projects fail in benefits realization.

Q methodology was conducted in five steps: (1) development of statements (Q sample); (2) selection of the participants (P set); (3) Q sorting; (4) Q analysis; and (5) factor interpretation (Cuppen et al. 2016; Yang 2018).

Step 1: Development of statements (Q sample)

The first step of Q methodology was to create Q sample–a subset of the statements selected from the concourse (Brown 1993; Brown and Good 2010; Cuppen et al. 2016; Yang 2018). Q sample reflected the opinions of respondents on barriers to benefits realization. The sources of Q sample in this study were hybrid, including both naturalistic and ready-made statements (Yang 2018) drawn from the semi-structured interviews and project archives, respectively (see Section 3.2).

A list of 36 statements was first produced, enumerating possible causes of failure of public institutional building projects in benefits realization. A smaller and manageable set was generated by integrating similar statements and removing statements that had a low frequency (less than two) or did not fit the institutional building project context. In other words, only high-frequency statements that closely related to the institutional building project were embraced in the Q sample. To validate the representativeness of these statements, some return interviews were conducted with part of the original participants in the qualitative research phase. Finally, a set of 14 statements remained (Q sample, see Table 3).

Table 3. List of Q statements

No.	Statement	Frequency
Q1	Inaccuracies of project orientation in function, scale, grade, target users.	5
Q2	Government sectors’ undue administrative intervention (e.g. the one-sided emphasis on time/budget).	10
Q3	Constraints of financial allocation.	2
Q4	Discrepant requirements of different projects are not fully considered in general standards, specifications, and rules.	3
Q5	Inconsistency and contradictoriness between different sectors’ (e.g. Fire Authority and Public Security Bureau) requirements.	3
Q6	Limited autonomy of project clients due to constraints of administrative systems (e.g. procurement system, review system).	3
Q7	The decision-making phase sticks to rigid standards with little autonomy.	5
Q8	Insufficient considerations of specific use functions of projects during the decision-making phase.	6
Q9	The designer merely adheres to mandatory norms with inadequate consideration of customized functional needs.	4
Q10	The construction phase merely adheres to plans and drawings without considering functional optimization.	2
Q11	A lack of objective evaluation criteria on the benefits of projects.	4
Q12	A lack of tracking and feedback mechanisms of the projects’ functional performance.	3
Q13	Project parties tend to fulfill accountability requirements separately rather than cooperate as a team to realize benefits.	8
Q14	Project parties are passive for enhancing benefits realization as their works are driven by the “iron triangle” objectives and regulatory requirements.	6

Step 2: Selection of the participants (P set)

In the second step, participants were selected to form the “P set.” The variables of Q methodology are participants instead of statements because it explores patterns within and across participants based on their opinions on a specific issue (Yang 2018). Thus, in most cases, Q methodology relies on nonrandom sampling, such as purposive sampling, to select participants who are expected to have insights and unique viewpoints on the given issue (Cuppen et al. 2016). Also, since participants are the variables while statements are the subjects, Q methodology requires a smaller number of participants compared to the number of statements (Cuppen et al. 2016; Byrne et al. 2017; Yang 2018). The Q study here involved 13 respondents, including four original interviewees in the first-round semi-structured interviews and nine additional respondents at this stage (see Table 4). Following the requirement of Q methodology, the number of variables (13 respondents) was smaller than the number of subjects (14 statements). This is psychometrically acceptable (Yang 2018).

Table 4. Respondents (P set) profile

No.	Service Organization	Service Years	Involved Projects	No.	Service Organization	Service Years	Involved Projects
P1	Construction company	3–5	2–4	P8	Design institute	>16	>10
P2	Construction company	6–10	2–4	P9	Education authorities	>16	>10
P3	Construction company	3–5	2–4	P10	Design institute	>16	>10
P4	Education authorities	3–5	2–4	P11	Design institute	11–15	>10
P5	Users (school)	6–10	2–4	P12	Government sector	6–10	>10
P6	Education authorities	>16	>10	P13	Development company	>16	5–10
P7	Education authorities	>16	2–4	–

Step 3: Q sorting

The step of “Q sorting” allowed participants to compare and ranked the Q sample statements based on the degree to which they agree or disagree with the statement (Brown 1993; Dziopa and Ahern 2011; Yang 2018). Each statement of the Q sample was printed on a separate card, and participants were instructed to place cards on a bell-shaped distribution with a continuum ranging from mostly disagree to mostly agree (Dziopa and Ahern 2011; Cuppen et al. 2016). To ensure a consistent response pattern, participants were required to categorize Q statements into three groups (i.e. disagree, neutral, and agree) first. The following step was to rank statements within the agree/disagree group based on the degree of agreement/disagreement. After that, participants distributed cards in the pre-defined pattern and rechecked the Q sort until no changes needed. The final distribution of Q statements is shown in Figure 2.

Figure 2. 7-point scale distribution for Q sorting.

Step 4: Q analysis

The completed Q sorts were then subject to factor analysis, which could cluster participants who sorted the Q sample in a similar way (Newman and Ramlo 2010; Cuppen et al. 2016). It should be noted that Q methodology is an inversion of conventional factor analysis that correlates participants instead of statements (Silvius et al. 2017). Given the small sample size of Q methodology (less than the number of Q statements), there are usually a small number of participants involved in Q analysis. For instance, Silvius et al. (2017) included 12 participants in Q analysis identifying four distinct perspectives on sustainability considerations in project management decision-making.

In terms of extraction and rotation methods, both principal components extraction with varimax rotation and centroid extraction with hand rotation have been widely used in Q analysis (Brown and Good 2010; Newman and Ramlo 2010), and there was a little statistical discrepancy between them (Yang 2018). This study used principal components extraction with varimax rotation as there was no predefined factor structure. Based on eigenvalue criteria, factors with an eigenvalue greater than one were considered significant (Hair et al. 1998). This step extracted four factors representing four barriers to benefits realization in public projects (see Table 5 in Section 4).

Table 5. Results of Q analysis (factors with an X indicating a defining sort)

Factor	Eigenvalue (% of Variance)	Loading	Participant	Factor	Eigenvalue (% of Variance)	Loading	Participant
F1	4.34 (33.39)	−0.85X	P7	F2	2.35 (18.04)	0.85X	P2
		−0.84X	P6			0.73X	P3
		0.66X	P4			−0.73X	P11
F3	1.74 (13.38)	0.89X	P10			−0.60X	P13
		0.71X	P9			−0.60X	P8
		0.63X	P5	F4	1.42 (10.93)	0.91X	P1
						0.70X	P12

Step 5: Factor interpretation

The interpretation of factors depended on the factor scores (i.e. z-scores) (Newman and Ramlo 2010). Z-score refers to the average score of a statement item given by all respondents on a particular factor (Newman and Ramlo 2010). As statements with extreme z-scores strongly define and interpret the factor (Newman and Ramlo 2010), Table 6 lists the top and bottom four statements for each factor. Factors were named based on Q statements with the extreme z-scores (see Section 4).

Table 6. Z-scores of four factors

F1			F2
No.	Statements	z-Scores	No.	Statements	z-Scores
Q6	Limited autonomy of project clients due to constraints of administrative systems (e.g. procurement system, review system).	1.383	Q1	Inaccuracies of project orientation in function, scale, grade, target users.	1.553
Q2	Government sectors’ undue administrative intervention (e.g. the one-sided emphasis on time/budget).	1.310	Q7	The decision-making phase sticks to rigid standards with little autonomy.	1.360
Q10	The construction phase merely adheres to plans and drawings without considering functional optimization.	1.015	Q5	Inconsistency and contradictoriness between different sectors’ (e.g. Fire Authority and Public Security Bureau) requirements.	1.103
Q4	Discrepant requirements of different projects are not fully considered in general standards, specifications, and rules.	0.890	Q10	The construction phase merely adheres to plans and drawings without considering functional optimization.	0.742
Q13	Project parties tend to fulfill accountability requirements separately rather than cooperate as a team to realize benefits.	−0.840	Q14	Project parties are passive for enhancing benefits realization as their works are driven by the “iron triangle” objectives and regulatory requirements.	−0.741
Q8	Insufficient considerations of specific use functions of projects during the decision-making phase.	−1.234	Q4	Discrepant requirements of different projects are not fully considered in general standards, specifications, and rules.	−0.869
Q5	Inconsistency and contradictoriness between different sectors’ (e.g. Fire Authority and Public Security Bureau) requirements.	−1.282	Q2	Government sectors’ undue administrative intervention (e.g. the one-sided emphasis on time/budget).	−1.075
Q11	A lack of objective evaluation criteria on the benefits of projects.	−1.716	Q8	Insufficient considerations of specific use functions of projects during the decision-making phase.	−1.932
F3			F4
No.	Statements	z-Scores	No.	Statements	z-Scores
Q9	The designer merely adheres to mandatory norms with inadequate consideration of customized functional needs.	1.523	Q4	Discrepant requirements of different projects are not fully considered in general standards, specifications, and rules.	1.675
Q6	Limited autonomy of project clients due to constraints of administrative systems (e.g. public bidding system, review system).	1.325	Q1	Inaccuracies of project orientation in function, scale, grade, target users.	1.062
Q14	Project parties are passive for enhancing benefits realization as their works are driven by the “iron triangle” objectives and regulatory requirements.	0.730	Q9	The design merely adheres to mandatory norms with inadequate consideration of customized functional needs.	1.045
Q10	The construction phase merely adheres to plans and drawings without considering functional optimization.	0.714	Q11	A lack of objective evaluation criteria on the benefits of projects.	0.913
Q3	Constraints of financial allocation.	−0.698	Q3	Constraints of financial allocation.	−0.757
Q4	Discrepant requirements of different projects are not fully considered in general standards, specifications, and rules.	−0.783	Q13	Project parties tend to fulfill own obligations separately rather than cooperate as a team to realize benefits.	−0.956
Q2	Government sectors’ undue administrative intervention (e.g. the one-sided emphasis on time/budget).	−1.392	Q2	Government sectors’ undue administrative intervention (e.g. the one-sided emphasis on time/budget).	−1.535
Q1	Inaccuracies of project orientation in function, scale, grade, target users.	−1.987	Q5	Inconsistency and contradictoriness between different sectors’ (e.g. Fire Authority and Public Security Bureau) requirements.	−1.683

4. Results

Four factors were emerged from the Q methodology analysis (see Table 5). Each factor grouped a type of participants who had similar viewpoints. These four factors in total accounted for 100% of the P set.

These four factors are named based on Q statements with extreme z-scores (see Table 6). These are rigid administrative system (factor 1), non-autonomous decision-making (factor 2), strong accountability (factor 3), and lack of benefits evaluation scheme (factor 4). These factors are interpreted based on Q statements and interview quotes.

Factor 1: Rigid administrative systems

Participants (P7, P6, and P4) grouped within the first factor have a similar viewpoint that the rigid administrative systems might constraint the autonomy and flexibility of participants in enhancing benefits realization. They mostly agreed on the following phenomena, such as “limited autonomy of project clients due to constraints of the administrative systems (e.g. procurement system, review system)” (Q6, 1.383), “government sectors’ undue administrative intervention (e.g. the one-sided emphasis on time/budget)” (Q2, 1.310), and “the construction phase merely adheres to the plans and drawings without considering any functional optimization” (Q10, 1.105).

Owing to the mandated procurement process, public project clients have limited autonomy in the contractor/supplier selection. “Taking design tendering as an example, the selection of a design firm must adhere to the <Rules and Regulations for Construction Design Bidding>. The project clients do not have enough autonomy to determine which design proposal and design firm they prefer” (P4). Such tendering and bidding systems restrict the autonomy of project clients to contract the contractors/suppliers who have enough potentials to realize benefits.

Institutional building projects are usually administratively over-intervened. “School projects have to complete before the start of the school year” (P11). Worse still, “the project quality sometimes may have to concede to time targets, such as the start of the school year” (P13). Pursuing such administrative objectives, “contractors’ construction works tend to merely adhere to the plans and drawings without considering optimizing the function and utility of buildings” (P4).

In summary, the rigid administrative systems and undue administrative intervention may restrict project participants’ autonomy and flexibility. This might further curtail their potential for enhancing benefits realization.

Factor 2: Non-autonomous decision-making

The second standpoint is that the non-autonomous decision-making undermines the realization of anticipated benefits. Participants (P2, P3, P11, P13, and P8) feel strongly about “inaccuracies of project orientation in function, scale, grade, target users” (Q1, 1.553), “the decision-making phase sticks to rigid standards with little autonomy” (Q7, 1.360), and “insufficient considerations of specific use functions of projects during the decision-making phase” (Q8, −1.932).

The decision-making of institutional building projects sticks to the codes and standards blindly with little regard for target benefits. For example, the project scale is determined by the official estimating method instead of the actual demands. “The formal method for estimating project scale, for instance, estimating the school scale based on the permanent resident population, cannot accurately reflect the real demand. This leads to an imbalance between the supply and demand” (P1).

The decision-making typically involves multiple government sectors at different administrative levels. Their approvals of a project adhere to mandated process and regulations with little benefits realization taken into account. “The government sectors approve school projects, such as project proposal, the feasibility research report, based on <Education Norms and Standards for Compulsive Education> and <Code for Design of School>. They seldom consider varying education concepts, teaching modes, and students’ learning habit and routine” (P3).

The front-end phase of a project, when potential benefits are identified and planned, has a great opportunity for benefits realization. However, the decision-making of institutional building projects is administration-oriented and non-autonomous. This might inhibit the delivery of anticipated benefits.

Factor 3: Strong accountability

This factor illustrates that strong accountability diminishes the chance of benefits optimization. Participants (P10, P9, and P5) recognize the adverse effects of strong accountability on project benefits realization. These are “the designer merely adheres to mandatory norms with inadequate consideration of customized functional needs” (Q9, 1.523), “project parties are passive for enhancing benefits realization as their works are driven by the ‘iron triangle’ objectives and regulatory requirements.” (Q14, 0.730), and “discrepant requirements of different projects are not fully considered in the general standards, specifications, and rules” (Q4, −0.783).

Strong accountability undermines benefits realization as it might inhibit project participants’ spontaneity on benefits optimization. For instance, designers tend to merely stick to the regulatory requirements rather than pursue benefits realization. “Designers have the greatest opportunity for optimizing the project functionality. It is right for them to be compliance with the standards and regulations. It ensures that design alternatives can meet basic requirements, such as structure safety. Even so, they should consider more about the real needs of end-users and so do decision-makers” (P10). However, “designers rarely consider the project functional optimization as long as it in line with norms because it may take more time and money” (P7).

The discrepant requirements of different projects receive little attention if participants heavily emphasize the specifications. Standards and specifications are appropriate for the majority of projects to guarantee the minimum requirements. However, “a project satisfying standards does not equal to a good project” (P8). “The use of standards and regulations should be contingent and flexible because they are not always appropriate for all kinds of projects” (P9).

Overall, strong accountability induces project participants to merely follow regulations and fulfill minimum requirements. It may inhibit their aspiration to pursue benefits realization.

Factor 4: Lack of benefits evaluation scheme

An exclusive Q statement of this factor is “a lack of objective evaluation criteria on the benefits of projects” (Q11, 0.913), showing that participants (P1 and P12) deem that the absence of evaluation criteria impedes the realization of anticipated benefits.

There is a lack of evaluation criteria for assessing projects’ benefits realization as non-financial and intangible benefits are less measurable. “Existing evaluation criteria mainly focus on the building itself, such as its quality. But good quality does not equate to a satisfactory utility … … It is unclear about how to assess the functional performance of a building. We even don’t know the manifestation of benefits realization and under what circumstance we can say that the benefits have been realized” (P2). The subjectivity nature of project benefits may also hamper the evaluation of project benefits realization. “Everyone has different perceptions of the use of a building, such as a school. Someone feels good and someone may not. Thus, it is difficult to assess the functional performance objectively” (P7).

Project benefits are not explicitly measured in practice. The absence of evaluation criteria of benefits gives project parties an excuse that benefits realization is not their responsibility as they prefer to do what gets measured (e.g. the “iron triangle”).

5. Discussion

Public institutional building projects perform poorly in realizing anticipated benefits and satisfying users’ needs during the operation stage. This to some extent may impede the sustainable development of institutional building projects. This study identifies four formalization-related barriers to benefits realization, namely rigid administrative systems, non-autonomous decision-making, strong accountability, and lack of benefits evaluation scheme.

The inhibiting effects of these factors on benefits realization reflect a paradoxical role of formalization in ensuring project production and benefit realization. Formalization tools, such as administrative systems, formal decision-making processes, and accountability systems, could ensure transparency, accountability, and efficiency at the production stage. However, the empirical results show that the formalization is dysfunctional in enhancing benefits realization at the operation stage. Its rigidity and shortsightedness discourage project participants from pursuing benefits optimization in the long run. This finding empirically presents a paradoxical understanding of formalization for project production and benefits realization.

The results show that rigid administrative systems and non-autonomous decision-making hamper benefits realization. They highlight the compliance with rules and regulations rather than the project benefits. Adhering to rules and regulations, albeit playing a role in minimizing activity deviations, may limit project participants’ autonomy and flexibility on pursuing benefits realization (Vlaar, Van Den Bosch, and Volberda 2016). Participants have great motivation to fulfill administrative requirements instead of optimizing project benefits. Also, the “one-size-fits-all” rules and regulations fail to embrace the unique requirements of a specific project (Bozeman and Scott 1996). Consequently, the unique benefits pursuits of projects may be out of project participants’ consideration.

The results show that benefits realization is also hindered by strong accountabilities and the lack of benefits evaluation scheme. Accountability emphasizes the immediate and measurable results (e.g. the “iron triangle” performance), which may induce project participants to fulfill measurable accountability requirements. Benefits evaluation scheme, however, is absent in public projects that pursue non-financial and intangible benefits (Patanakul et al. 2016). It might give participants an illusion that benefits realization is not their responsibility. In their opinions, “they do not have a role in this regard, and it is someone else job to ensure benefits realization” (Mossalam and Arafa 2016). This is consistent with the finding of Ashurst et al. (2008) in IT development projects where project teams work effectively in facilitating the timely delivery rather than benefits realization. Strong accountability and a lack of benefits evaluation scheme discourage participants from benefits realization that are beyond accountability obligations (Ossege 2012).

The unsatisfactory benefits realization may further prohibit public institutional building projects from achieving sustainable development. Benefits realization addresses issues of sustainable development in the social dimension. Once institutional building projects perform poorly in benefits realization, it is rarely meaningful to accomplish good environmental and economic performance. Thus, the side-effects of formalization on benefits realization also provide an explanation for the failure of project sustainable development, and the social dimension is in particular. Formalization embraces and underlines measurable performance indicators at the production stage, whereas, the sustainable development goals in the social dimension are often excluded from formalization as these are generally intangible and inexplicit (Vifell and Soneryd 2012). As a result, obsessing with formalization would inevitably lead to the neglect of the social dimension and even the failure of sustainable development.

The inhibiting impacts of formalization on benefits realization should be interpreted in the research context (Jiangsu province, China). The results of Q methodology fit the exploratory purpose of this study and usually should not be required a universal generalization. The reason is that they are drawn from the viewpoints of purposively selected participants on the given issues in a specific context (Dziopa and Ahern 2011). Nevertheless, this study provides valuable insights into the paradoxical understanding of formalization for project production and benefits realization. This should be concerned in a wider context (at least in developing countries). One side, benefits realization is a common issue for global institutional building projects. Both developing and developed countries are eager to facilitate the benefits realization of public institutional building projects (Black 1998; Cellini, Ferreira, and Rothstein 2010). The other side, formalization is not unique to Chinese public institutional building projects, and the impacts of formalization on public construction projects have been discussed in other developing countries (e.g. Indian perspective of Tabish and Jha (2018)). It means that practitioners in the wider contexts (i.e. developing countries) should be aware of the paradoxical role of formalization in ensuring project production and benefits realization. They should balance the use of formalization on efficient delivery and benefits realization to facilitate sustainable development in light of the findings in the Chinese context.

6. Conclusions

Public institutional building projects are government-funded with the purpose of providing educational services and delivering benefits to the populace. However, institutional building projects perform unsatisfactorily in realizing target benefits at the operation stage. This impedes institutional building projects to achieve sustainable development. This study disentangles why public institutional building projects fail to achieve the benefits realization. Through qualitative research approaches and Q methodology, four formalization-related barriers to benefits realization were identified. These are rigid administrative systems, non-autonomous decision-making, strong accountability, and lack of benefits evaluation scheme.

The results contribute to the extant literature by presenting a paradoxical understanding of the everyday practice of formalization in project production and benefits realization. On the one hand, the formalization could ensure accountability and transparency, thereby ensuring the efficiency of project delivery at the production stage. On the other hand, such formalization might induce participants to prioritize accountable criteria, especially those that could be measured quantitatively, over the benefits realization stemming from the utilization of project outputs at the operation stage.

This study enriches the body of knowledge by relating benefits realization to sustainable development in project contexts. It concerns the social aspect of sustainable development and emphasizes its benefits focus, and it provides new insights into the linkage between formalization, benefits realization, and sustainable development. The inhibiting role of formalization in benefits realization offers a new explanation for the failure of sustainable development. The achievement of sustainable development is far beyond technical issues, and it also relies on the balance between formalization in project management and benefits realization.

One practical implication is that practitioners should be aware of and attempt to overcome the inhibiting effects of four barriers on benefits realization. They are encouraged to go beyond regulatory and accountability requirements and pursue benefits realization in public institutional building projects. Another recommendation is to embed the benefits evaluation scheme into formal systems. A benefits evaluation scheme should be devised by identifying, evaluating, and reviewing the benefits along with the project life cycle. In this way, benefits realization can be embraced in project audits and reviews, and benefits realized by a project can be explicitly measured. These implications are not exclusive to Chinese institutional building projects considering the universality of benefits realization and sustainable development issues worldwide and concerns about the paradox of formalization in developing countries.

One of the limitations of this study is that it only takes institutional building projects as an empirical setting. Future studies are recommended to undertake the investigation of different types of public projects (e.g. hospital, railway projects). Another limitation is a possible bias in the responses. Both semi-structured interviews and Q methodology rely on nonrandom sampling to capture the participants’ subjective viewpoints on the given issue. Biased responses thus are hard to be excluded in such exploratory research.

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

This work was supported by the National Natural Science Foundation of China [71872039, 71502032]; Fundamental Research Funds for the Central Universities; Zhishan Young Scholar Program; Priority Academic Program Development of Jiangsu Higher Education Institutions.