Innovation Stimulants, Innovation Capacity, and the Performance of Capital Projects

Abstract

Abstract. Identifying the critical determinants of innovation performance is crucial. However, few studies explore and quantify systematically the relationships between innovation factors and the performance of capital projects. This study of 121 capital projects shows that the relationships among project innovation stimulants, innovation capacity, and project performance are indeed significant. Hierarchical robust regression analyses using a maximum R-square improvement procedure show that technology management has the highest effect on the variation in our project performance data. Validating out-of-sample data demonstrates that our optimal model explains 34.42% of the variation in the performance of capital projects. Ultimately, our findings suggest that project human factors are essential stimulants in innovation performance, which in turn affect the performance of capital projects. Our findings also reveal that the stimulant factors do not have a direct impact on capital project performance, but rather have an indirect impact via project innovation capacity.

Performance measurement and the prediction of capital project failure

“…Despite the panoply of studies that use a wide variety of measures to describe project-management performance and the input characteristics that affect project outcomes, most studies concentrate on the perspective of the overall project life cycle (e.g., Chen, 2014;El-Sayegh, 2008;Oke and Idiagbon-Oke, 2010;Scott-Young and Samson, 2008;Wallace et al, 2004). For example, Scott-Young and Samson (2008) analyze 56 capital projects in 15 process-industry companies using factor analysis and regression analysis and reveal that organizational context, team leadership, team design, and team process factors 1 Capital projects have several important characteristics.…”

“…Based on the perspective of the overall project life cycle, Chen (2014) analyzes 121 capital projects using hierarchical robust regression analyses. He shows that the relationships among project innovation stimulants, innovation capacity, and project performance are indeed significant.…”

“…Although project-management performance is well-researched and extensively reviewed, most studies are based on the perspective of the overall project life cycle (e.g., Chen, 2014;El-Sayegh, 2008;Oke and Idiagbon-Oke, 2010;Scott-Young and Samson, 2008). Relatively few focus on the perspective of the project execution phase.…”

“…Relatively few focus on the perspective of the project execution phase. Some existing studies analyze how project-management performance in the project execution phase affects project outcomes (e.g., Chen, 2014;Hoegl and Parboteeah, 2007;Tabassi and Bakar, 2009), their treatment, however, is contemporaneous in nature. Moreover, little of the focus of these studies' analyses has been on how changes in project-management performance in the execution phase affect project outcomes.…”

“…A central task in the study of project management is to identify the critical determinants of project management performance. Not surprisingly, researchers and practitioners examine and identify a wide variety of measures to describe project-management performance and the input characteristics that affect project outcomes (e.g., Chen, 2014;El-Sayegh, 2008;Hoegl and Parboteeah, 2007;Oke and Idiagbon-Oke, 2010;Scott-Young and Samson, 2008).…”