The project management literature argues that most projects fail, and yet, paradoxically, increasing numbers of proposals for new initiatives attract funds. In order to resolve an apparent 'investment-in-failure' paradox, this paper questions the methodology used in the literature to judge project performance and to decide on funding new projects. Using results from a field study, the authors describe a project performance framework that both expands and extends traditional approaches. They argue that the conventional test of project performance is not only fundamentally flawed, but also irrelevant to decision-makers. In response, drawing on 'principal-agent', 'regret' and 'contingency' theories, the authors propose a new methodology to assess projects based on the concept of 'worth'. According to this approach, performance is judged at three separate levels: project management, project ownership and project investment. These three tests allow distinct judgements to be made about the respective performances of the project manager, the project owner and the investment represented by the original funding decision. To the extent that financial crises are associated with project failure, such a framework may prove useful, because it would support better investment decision-making.
Organizational performance can be enhanced by effective project benefit generation. Although it identifies the project owner as the single point of accountability for the realization of project benefits, the literature does not comprehensively discuss this role in the project governance model, nor the management approaches that can support this role. Based on principal-agent theory and a control-trust-risk approach, we have conducted an empirical study across various managerial contexts. Results suggest that trust of the project owner in the project manager is more effective in a turbulent environment, whereas more control by the project owner of the project management process is a superior management approach in a more stable project setting. Finally, a project governance model is introduced and the management role of the project owner is discussed.
Purpose Recent research has proposed the position of a project owner as the individual accountable for realizing target benefits. However, there is a lack of understanding in the literature of this role – in particular, the specific responsibilities of the project owner that can enhance benefits realization and operations performance. The paper aims to discuss this issue. Design/methodology/approach The paper identifies these responsibilities in practice through two studies – a qualitative study, which includes interviews with senior executives who fund projects, and an in-depth longitudinal case study, which describes a company that continuously realizes the benefits from its projects. Findings The results suggest that a project owner should have 22 key responsibilities across four project phases and that an operations manager is often the most suitable candidate to fulfill this role in operations improvement projects. When performing these project responsibilities effectively, operations managers enhance benefits realization and operations improvement. Finally, the paper proposes five hypotheses for future research. Originality/value Based on agency theory, the paper increases our knowledge of the role of the project owner in practice. This new knowledge can enhance the realization of target benefits from projects and ensure a smooth transition from the project to the operations environment.
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