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.
After myriad studies into the main causes of project failure, almost every project manager can list the main factors that distinguish between project failure and project success. These factors are usually called Critical Success Factors (CSF). However, despite the fact that CSF are well-known, the rate of failed projects still remains very high. This may be due to the fact that current CSF are too general and don't contain specific enough know-how, to better support project managers' decision making. This paper analyzes the impact of 16 specific planning processes on project success and identifies critical success processes (CSP) that project success is most vulnerable to. Results are based on a field study, which involved 282 project managers. It was found that the most critical planning processes, which have the greatest impact on project success, are "definition of activities to be performed in the project", "schedule development", "organizational planning", "staff acquisition", "communications planning" and "developing a project plan". It was also found that project managers usually do not divide their time effectively among the different processes, following their influence on project success.
This article examines the effectiveness of current risk management practices to reduce project risk using a multinational, multi-industry study across different scenarios and cultures. A survey was administered to 701 project managers, and their supervisors, in seven industries and three diverse countries (New Zealand, Israel, and Japan), in multiple languages during the 2002-2007 period. Results of this study show that project context--industry and country where a project is executed--significantly impacts perceived levels of project risk, and the intensity of risk management processes. Our findings also suggest that risk management moderates the relationship between risk level and project success. Specifically, we found that even moderate levels of risk management planning are sufficient to reduce the negative effect risk levels have on project success.
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.
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