The Contingent Effects of Value Creation Processes on Project Value–An Empirical Analysis from Project Managers’ Perspective

Abstract

Projects are seen as platforms for bringing changes that may create value for stakeholders. There are two main schools of thought on the value creation processes; one based on transactional exchange theories and the other on relations-based theories. The former focus on value creation through reduction of transactional costs, while the latter emphasises addressing project stakeholder’s needs through establishing close interactions with involved parties. Accordingly, this research examines effects on project value of the two value creation processes for project delivery: independent value creation– where the firm relies on its capabilities and expertise to deliver the project, without the need for seeking collaboration from other firms; and value co-creation– where the firm and key stakeholders collaborate to deliver the project based on close relationships. Extant studies have conceptually identified the effects on project value of both value creation processes. Nevertheless, there is a little empirical investigation of these effects. Hence, the main objective of this research is to investigate how both processes of value creation affect project value and the moderating effects of two critical contingent variables –requirements uncertainty and project complexity– on the relationship between value creation processes and project value. The study employs a deductive approach to fulfil this aim, and applies a cross-sectional survey to collect data; 168 valid responses from Chilean project managers were returned. A multivariate analysis using PLS-SEM was conducted to validate the conceptual framework and to test the hypotheses. Contributing to literature, the findings demonstrate that both value creation processes impact jointly on project value, and these impacts are moderated by the current level of requirements uncertainty and project complexity. The theoretical and practical implications of the findings are discussed. Directions for future research are elaborated.