Analyzing the role of social value in megaprojects: toward a new performance framework

Abstract

Purpose

Megaprojects stimulate and challenge public opinion across countries, generating extensive reactions from citizens. Given their ability to attract public attention, they may also influence public participation in collective choices and political decision-making. These issues are relevant for evaluating projects, but are unfortunately rarely discussed in the managerial literature. This study aims to open up a debate on social issues and how they could be taken into account within management studies.

Design/methodology/approach

This study carried out a systematic review of the literature on the social impact of megaprojects to identify different research areas related to the evaluation of megaprojects from a social perspective.

Findings

This study identified three different research areas related to the evaluation of megaprojects from a social perspective: the role of power and social issues; infrastructure and social space; and stakeholder engagement and endorsement.

Originality/value

This paper underlines the need to go beyond current understanding of the social impacts of megaprojects and calls for a more interdisciplinary research agenda.

Citation

De Nito, E., Caccialanza, A., Canonico, P. and Favari, E. (2024), "Analyzing the role of social value in megaprojects: toward a new performance framework", Measuring Business Excellence, Vol. 28 No. 2, pp. 243-254. https://doi.org/10.1108/MBE-09-2023-0138

1. Megaprojects and evaluation: the role of social issues

The diffusion of megaprojects worldwide is an interesting field for both researchers and practitioners. Megaprojects are usually large-scale interventions, such as infrastructure projects, and their evaluation requires both analysis of billions of dollars of investment (Brookes and Locatelli, 2015) and a long-term perspective (Flyvbjerg, 2014). The ability to meet constraints in terms of budget, time and benefit, known as the “iron law” (Flyvbjerg, 2017), has recently been associated with sustainability issues. However, researchers and practitioners have generally underestimated the environmental and the social dimensions of sustainability (Wang and Pitsis, 2020), focusing instead on economic issues. Given the emergence of the environmental dimension in the last few decades (Silvius and Tharp, 2013), there is now increased awareness of issues of social responsibility, collective interest and social value both for organizations and their local communities (Linzalone and Lerro, 2014; Babaei et al., 2023; Corazza et al., 2023). It is therefore crucial to have a better understanding of the interactions between megaprojects and social impact assessment disciplines (Esteves et al., 2012). Significant effort has been applied to understanding the possible causes of failure in megaprojects. Megaprojects often have an underestimated effect on local communities and residents, who may be affected by (temporary or permanent) changes in their livelihood conditions or life quality (Abdullah and Rahman, 2021; Zhang et al., 2022). Crises are more frequently related to project managers’ responsibilities and forecasting ability (Wang and Pitsis, 2020) than the effect on the livability of the local area, especially in cases of industrialization. Studies have noted that there are even cases where an environmental impact analysis has been carried out, but the overall project has not been effective because of the exclusion of other social dimensions from the analysis. Ho et al. (2020) highlighted disrespect of procedures or increased dissatisfaction of local participants as possible causes of failure. This is particularly evident for local residents in cases of “Not In My Back Yard” (NIMBY) infrastructure or facilities. Marcelino-Sádaba et al. (2015, p. 14) proposed a research agenda of “tools that we might call social-design, helping to include social aspects in the project”. This issue remains urgent and an important field for future work, particularly because of the heterogeneity of models used to assess performance (Linzalone and Schiuma, 2015; Głodziński, 2021) and therefore to the evolution of the concept of project manager. Recent studies have aimed to fill this gap, extending the analysis of project impact to the broader concept of stakeholders and local communities affected by the project, both internally (Olsson et al., 2008; Balasubramanian and Balaji, 2022) and externally (Bhatia et al., 2023). The aim of this paper is to review the literature related to the interactions between megaprojects and social evaluation and highlight the gaps between the somewhat fragmented existing studies. We therefore sought previous studies that have tried to map and systematize the social impact of mega-projects. Di Maddaloni and Davis (2017) reviewed the influence of local communities in major public infrastructure and construction projects. They suggested that the power of external stakeholders was frequently underestimated in managerial practices, and that project managers tended to focus on primary stakeholders able to control project resources. An efficient strategic planning capacity and the ability to deal with the complexity of the alliances involved in project execution may also be crucial for success (Cardoni et al., 2020). To deal with this complexity (Gil, 2023), we applied a mixed methodology that combined systematic and inductive approaches.

The systematic approach used the Scopus database to select studies on the social impact assessment of megaprojects. We then applied an inductive process that aimed to include relevant references and cross-references from the papers selected from Scopus. This stage was the most conservative and inclusive in terms of preservation of both classical and contemporary project management literature. This enabled us to identify different research areas related to the evaluation of megaprojects from a social perspective, including the role of power, the importance of the infrastructure and social space and the need for stakeholder engagement and endorsement.

Megaprojects are related to a logic of growth, development, competitiveness and prosperity and are shaped as public–private institutional arrangements involving elites and pro-growth coalitions (Del Cerro Santamaria, 2019). This is one reason why the long-term social outcomes of urban infrastructure development are rarely assessed (ex-ante) or evaluated (ex-post), especially in terms of how particular interests are or will be affected by the multi-scale spatial changes generated by the project. Megaprojects stimulate and challenge public opinion, generating a wide range of reactions from citizens. Their ability to attract public attention means they may also influence public participation in collective choices and political decision-making.

These issues are relevant for evaluating projects, but are rarely debated in the managerial literature. This is unfortunate, because the issues they raise of power and equality are coherent with the critical management agenda (Hodgson and Cimcil, 2006) from both a methodological and theoretical point of view. We therefore aimed to start a debate on social issues and how they can be considered in discussions more usually focused on the managerial perspective.

2. Methodology

We carried out a review of the existing literature on the social impact of megaprojects from 2017 to July 2023. We applied a mixed methodology combining systematic and inductive approaches. This filtering strategy allowed us to combine “the findings of qualitative and quantitative studies within a single systematic review to address the same overlapping or complementary review questions” (Harden, 2010, p. 7) and stimulate the debate within a multidisciplinary topic by finding new research gaps. Within the models proposed (Pearson et al., 2015) for a reproducible and comparable selecting process (Stern et al., 2020), we choose and adapted the method of Mok et al. (2015).

For the systematic approach, we used the Scopus database to select works whose title and abstract contained the terms (“social AND impact*” OR “social AND evaluat*” OR “social AND assess*”) AND (“megaproject*” OR “mega AND project*” OR “mega-project*”) as keywords (513). The filtering phase limited the research to articles, books, book chapters and reviews published in English and at final stage of publication. We then carried out an abstract and full text screening of those papers, leaving 69 papers in the final list considered for the analysis. The next stage, full text screening, aimed to identify elements in the codebook for content analysis adapted from the widely used model proposed by Laplume et al. (2008). Both quantitative and qualitative variables were analyzed [1]. Then we conducted a cross-reference analysis to include other previous important papers.

Finally, as the output of the inductive categorization step, we defined three research areas for analysis and discussion as homogeneous groups for the managerial perspective adopted:

1. Infrastructure and social space, in particular the different phases (study, construction, maintenance and decommissioning) of large infrastructure projects that have had positive and negative impacts on local communities.

2. People engagement and endorsement, covering the methodologies (listening, involvement and endorsement) that were used to limit the negative impacts of the megaproject, as well as reactions to the methods of involvement adopted.

3. The role of power and social issues, to collect contributions on the hierarchical relationships of exercise of power by listening to categories of stakeholders excluded from the process or penalized by the negative externalities of the megaproject.

Within each of these three areas, we filtered out papers that were not coherent with the megaproject literature and managerial practices. Decisions about each paper were made in parallel by two independent authors, to reduce the influence of subjective perception in the categorization. Differences of opinion were discussed and resolved collectively. Finally, we identified a sub-group of studies on energy transition for the category of infrastructure and social space alone. Given the importance of the pursuit of a socially equitable ecological transition, this peculiarity was considered carefully in discussing the results (Esteves et al., 2012; Sankaran et al., 2022). The next section provides descriptive results and categorizations.

3. Preliminary findings

This section describes the distribution of papers within the selected period. It also provides descriptive insights useful for the next section, which discusses the themes and contributions of the three inductive categories.

First, interest in the study of social impacts in mega-projects has intensified over time, reaching a peak in 2023 (20 papers). Second, the distribution of contributions by journal is highly differentiated. Several journals were on project management, such as the Project Management Journal (7), International Journal of Project Management (7), International Journal of Managing Projects in Business (4), and Impact Assessment and Project Appraisal (3), with others on management or policymaking. Third, the distribution was also not uniform by either methodology adopted or approach (excluding the five reviews). Table 1 shows that there were many more qualitative approaches (36) than quantitative (15) or mixed methods (12) studies. Similarly, there were more case studies (51) than discussions (8), reviews (8) or conceptual papers (2). This highlights that studies that have dealt with the topic of social impact have predominantly taken a qualitative approach geared towards the presentation of a (multiple-)case study (approximately 40%).

Table 2 shows the distribution of studies by data source and concern. There was an extensive use of secondary data (22) in the analyses, as well as the combined use of several sources to provide a better representation of the observed phenomena. There are also increasing numbers of studies that combine an interest in both internal and external stakeholders; this emphasizes the holistic perspective required for the proper involvement and endorsement of different stakeholder categories (McLeod, 2023).

Table 3 shows the distribution of papers by deductive group and concern. This highlights that much of the analysis of impacts on local communities in megaprojects has been contextualized in infrastructure impact analysis (28), of which eight studies focused on energy transition.

Looking at the analysis perspectives, eight studies contributed to the project management literature, with others providing a combined contribution to project management and managerial practices (27) or policy making (6) literature in a broader sense. In this section, we have presented the distributions of the papers across the most significant categories of analysis. The next section covers each of the three inductive categories.

4. The role of social issues in the megaprojects literature

We identified three different research areas related to the evaluation of megaprojects from a social perspective:

1. the role of power and social issues;

2. infrastructure and social space; and

3. stakeholder engagement and endorsement.

This section discusses these areas and identifies possible inspirational new trends and research gaps that fit with a managerial perspective. A list of example articles for each of the three proposed research areas is set out in Table 4.

4.1 The role of power and social issues

The first issue here is the journals where papers appeared. There was considerable variety in research areas, including political science, economics and management. It is interesting that even in the managerial community, some scholars (Lee et al., 2017; Badi et al., 2020) face social and power issues. Not surprisingly, adopting different lenses also sometimes changes the object of study. For example, Hossain and Fuller (2021) looked at megaprojects characterized by political lobbying, privatization and institutional fragmentation. These processes can result in the marginalization of vulnerable communities as well as concerns about the transparency and accountability of the decision-making process. Scholars are therefore interested in understanding the power relationships among the actors involved in the megaproject and how they use their forces to achieve their goals. They seek to underline the unequal power distribution among project stakeholders.

Megaproject sponsors all have an interest in presenting the positive relevance of the project, giving a partial picture of the situation, emphasizing the short-term effects (especially the positive economic effects) and avoiding the less visible long-term social impacts. This uneven power distribution could imply a strong conflict between different players (in particular the project sponsor organizations, both private and public and the local community). A clear example of this kind of behavior was discussed by Hossain and Fuller (2021), who identified four variables influencing this relationship (and this conflict): choice/alternatives, transparency or access to information, integration of local knowledge and power sharing. They found different choices in official documents used to underline the positive effects of the megaproject, and hide the potential negative social consequences. The language adopted was always positive and offered a one-sided perspective, with no space for alternative choices. Another example was provided by Atkinson (2021), who reflected on hydropower projects, and suggested that the relationship between electricity provision and poverty reduction in rural areas is unclear. Atkinson also suggested that the benefit of mega-scale energy projects is limited to increases in energy export, with direct benefits being seen primarily by officials and elites.

From a more managerial perspective, it is possible to define very different research issues. At a network level, Rajput et al. (2022) investigated the risk from fragile and political regimes, and how political, social safety and legal risks affect megaproject performance. Lee et al. (2020) reflected on social conflicts, and how external stakeholders, such as non-governmental organizations or local residents, have become more critical. They found five types of conflict scenarios and suggested different strategies to manage these. Badi et al. (2020) reflected on a more individual level, identifying the role of social power in defining strategic project innovation implemented by the project manager. This stream of research also includes the political effects of resistance against megaprojects (Silva et al., 2018; Wang and Wu, 2019). It is really interesting to reflect (Silva et al., 2018) how social actors with various interests and power resources try to influence mega-development projects, and especially how megaprojects could negatively influence marginalization (Wang and Wu, 2019). Adopting a social power perspective within different research fields therefore reflects the complexity of this issue. To define the concept of evaluation in megaprojects from a managerial perspective, we need to expand the pathways used and look at different disciplines and journals.

4.2 Infrastructure and social space: the role of indicators

Perez-Sindin (2021) reflected on how labor needs change during a megaproject, leading to potential social and demographic change for local communities. He used innovative indicators on crime and social tensions to evaluate the social impact of megaprojects. Korytárová and Hromádka (2014) considered different social dimensions to evaluate megaprojects. For example, evaluating a transport infrastructure project might mean considering changes in time consumption, operational costs for vehicles, social costs connected with car accidents and new impacts on the environment. More generally, a stream of literature has focused the role of Social Impact Assessments (SIAs), and particularly how they can be integrated with Environmental Impact Assessments (EIA) into an Environmental and Social Impact Assessment (ESIA) (Mottee, 2022). Practically, there are many constraints meaning that SIAs are rarely adopted or effective. For example, projects and plans for urban development are conceived and made in silos. That is, “transport plans are made by engineers in planning departments separated from urban planners developing metropolitan plans for cities and the social planners considering social infra-structure needs” (Mottee, 2022; pp. 66–67).

From a broader perspective, Lee et al. (2020), in line with other scholars (Geurs and van Wee, 2004; Vecchio et al., 2020), used the concept of social space as a key construct to evaluate the development of urban infrastructure, at both a macro (i.e. change in spatial structure of a city) and micro scale (i.e. change in physical environment in a local area). They showed the need for an integrated and broader approach to urban transport infrastructure development. This should address the social consequences of multi-scale spatial changes induced by projects, including those that are unexpected or unintended. One emerging issue is the need of a specific set of indicators to evaluate social value or megaproject social responsibility (MSR) (Yang et al., 2022). Yang et al. (2022) selected 24 indicators using a qualitative approach and then adopted a fuzzy analytic hierarchy process to calculate the weight of each one.

4.3 Stakeholder engagement and endorsement

Megaprojects are typically criticized for their significant impact on communities and society as a whole. It is therefore not surprising that they stimulate and challenge public opinion and generate a wide range of reactions from citizens. They have a growing capacity to capture public interest and could therefore affect public engagement in collective decisions and the formulation of political choices. The proliferation of social media has undoubtedly amplified this trend. Questions about involvement become paramount in light of the so-called “NIMBY” mentality, or adverse societal reactions to undesirable facilities or megaprojects, increasingly facilitated by social media. Social media have ushered in fresh complexities in disseminating information on a broad scale, amplifying the magnitude of traditional communication channels. Wang et al. (2019) noted that when examining how information on megaprojects circulates and evolves, it is possible to propose a range of socio-economic implications derived from framing of the phenomenon, including the project evaluation phase. Government authorities need insight into the potential social conflicts that the project might incite. They should therefore adopt an evolving approach that encompasses both the human and economic repercussions of the effort and the subsequent framing of the event, including the outcomes of project evaluations. The interactions between megaproject(s) and engaged citizens may give rise to significant challenges. Wang et al. (2019) suggested that government bodies should increase their online influence through microblog operations, engaging with key stakeholders who play pivotal roles in communication and directly contribute to the emergence of heightened public concerns. This strategy aims to steer online discussions in a positive direction. In a broader context, particularly for megaprojects, social media can serve as a potent communication channel for amplifying public voices and facilitating greater integration of public participation (Tumasjan et al., 2010).

In addition to issues related to social engagement, a number of other contributions (e.g. Aaltonen et al., 2008; Aaltonen and Sivonen, 2009; Davis, 2014; Eskerod and Huemann, 2013) have also broadly dealt with stakeholder salience, considering the engagement of people as potential stakeholders. The main reference here is to the framework put forward by Mitchell et al. (1997, p. 854), where stakeholder salience is defined as “the degree to which managers give priority to competing stakeholder claims”, i.e. how much and which type of attention stakeholders receive from management. A very recent contribution addressed a theoretical issue: the need for a new stakeholder theory (Gil, 2023). Consistent with other scholars (Jourdan et al., 2021; McGahan, 2023), Gil (2023, p. 3) found that “pressure to broaden the purpose of a capital investment towards the production of a socially valuable outcome transforms these social tools into instruments of ‘value distribution’”. This means that looking at megaprojects simply in terms of return on investment for the legal entity in charge of managing the project is a short-term and problematic perspective. Looking for collaboration and engagement of local communities is a way of creating multiple forms of value and opportunities, to obtain a better result. This implies a new and different strategy and behavior for the project team (and the focal organization): “From a stakeholder perspective, however, value capture by the controlling entity is subordinate to value creation in organizational-stakeholder networks” (Gil, 2023, p. 4).

5. Conclusion and further research directions

Far from being an exhaustive literature review, this paper has explored insights and research areas in the managerial domain. Starting from a simple keyword search, we found three interesting areas to develop from a managerial perspective. The first is related to the issue of power and equality, which is coherent with the critical management agenda (Hodgson and Cimcil, 2006) from both a methodological and theoretical point of view. The second is related to the concept of social space as a construct, used to expand the range of alternatives in the evaluation process. Finally, the third area is connected with the role of stakeholders and considering a different strategy to engage local communities.

We hope that these preliminary findings will inspire further and deeper research on these topics. We would like to see an integrated approach that includes all three in a cohesive framework for managing the social pillar in megaprojects. It would be particularly useful to adopt a more interdisciplinary approach and perspective, where, for example, stakeholder engagement means adopting the point of view of other groups (and not just that of the focal organization).

Another important issue to underline is the need to encompass the normative and rationalistic approach and use a more complex and sophisticated perspective that could lead to a more consistent value-creation process. This partly means adopting a new stakeholder theory, but also has more practical implications, such as the use of tools like Social Impact Assessments (Vanclay, 2020). These observations for the integrated development of future research should encourage “cross-fertilization” in future studies, especially across the disciplines of business and management, in line with a recent manifesto for project management research (Locatelli et al., 2023).

This paper should therefore foster debate on social impact evaluation across both the management and project management literature. It makes a theorical contribution both by its proposed systematization of the current approaches, and its attempt to group existing contributions in three innovative logically grounded categories:

1. the role of power and social issues;

2. infrastructure and social space; and

3. stakeholder engagement and endorsement.

The paper also has practical implications for both policymakers and practitioners. It may help regulators, suggesting a stronger interest in the implementation of norms to focus attention on the social impact of mega-infrastructures or events. It also aims to provide useful suggestions for project managers facing difficulties in identifying themes and tools to estimate the (social) impact of their (mega-)interventions.

This paper is a first attempt to open up a discussion on a variety of issues. These include new frameworks that emphasize the social pillar in sustainable project management, the marginalized role of local communities in a context of increasing capital and political concentration, and the development of a common and comparable set of indicators that may increase understanding of value distribution among local communities. With a few exceptions such as Gil (2023) and Babaei et al. (2023), these are still under-represented in the megaproject literature.

Table 1

Distribution of the number of papers by methodology and approach applied

Methodology/Approach	Case study	Discussion	Review	Conceptual	Total by rows
Qualitative	29	6	1		36
Quantitative	15				15
Mixed methods	7	2	1	2	12
ND			6		6
Total by columns	51	8	8	2	69

Source: Authors’ own work

Table 2

Distribution of the number of papers by data source and concern

Deductive group / methodology	Internal stakeholders	Local community	Both	Total by rows
Secondary data	1	10	11	22
Others	1	5	8	14
Interviews	1	6	7	14
Survey	2	4	6	12
Interviews and secondary data		2	1	3
Surveys and secondary data		2		2
Survey and interviews	1		1	2
Total by columns	6	29	34	69

Source: Authors’ own work

Table 3

Distribution of the number of papers by deductive group and concern

Deductive group / concern	Both	Internal stakeholders	Local community	Total by rows
Infrastructure and social space	13	3	12	28
People engagement and endorsement	14	3	7	24
The role of power and social issues	5		10	15
ND	2			2
Total by columns	34	6	29	69

Source: Authors’ own work

Table 4

Examples article by research area involved

Research area	Example articles
1. The role of power and social issues	Lee et al. (2017), Silva et al. (2018), Wang and Wu (2019), Atkinson (2020), Badi et al. (2020), Hossain and Fuller (2021), Norese et al. (2021), Rajput et al. (2022), Thounaojam et al. (2022), Corazza et al. (2023)
2. Infrastructure and social space	Geurs and van Wee (2004), Korytárová and Hromádka (2014), Invernizzi et al. (2017), Lee et al. (2020), Vecchio et al. (2020), Perez-Sindin (2021), Mottee (2022), Yang et al. (2022), Nourelfath et al. (2022), Jing et al. (2023)
3. Stakeholder engagement and endorsement	Mitchell et al. (1997), Aaltonen et al. (2008), Aaltonen and Sivonen (2009), Tumasjan et al. (2010), Davis (2014), Eskerod and Huemann (2013), Wang et al. (2019), Jourdan et al. (2021), McGahan (2023), Gil (2023)

Source: Authors’ own work

Note

1. From a quantitative point of view we included: Year: intended as year of publication; Author(s): all author(s); Article title: title of the article; Journal: publication in which the article was published; Methodology: qualitative, quantitative, mixed methods; Approach: conceptual, case study, discussion, review; Data source, list of sources: survey, interview, secondary data, others (not excluding combinations); Concern, focus: local community, internal stakeholders or both; Perspective: project management, managerial practices, sociology or engineering (not excluding combinations); and Geography: country from which the data were collected. From a qualitative perspective we included: Research question(s): Research question(s) explicitly stated in the article; Contribution(s): contribution explicitly stated in the article; and Finding(s): major finding(s) explicitly stated in the article.