The influence of the gap between project manager and executives on project results
H. G. Mooi, Technical University of Delft, The Netherlands
P. J.M. Wijngaard, Atos Consulting, The Netherlands
In today's world projects are often used for implementing strategy as they form the perfect means to introduce changes in an organization or to develop new products for the organization. This means that it is important for a company to make sure that the right projects are performed in the right way. In other words, a company (the executives) must make sure to know “why” a project is performed and that the project is delegated in a good way to the project manager, who is responsible for “what” has to be done and “how” this is done. In order to make this work the executives and project managers need to be (strategically) aligned and the collaboration needs to be good. This is known from literature. Unfortunately, it is well-known that oftentimes the alignment does not work as well, which negatively influences project (and company) results. This might be caused by too large of a distance between a project manager and the executives, which is called the gap in this study.
In this study the influence of the gap between project managers and company executives was investigated. The main research question was How does the (perception of the) gap influence the result of a project? For investigating this, the literature was studied, based on which a conceptual model was developed. The conceptual model posits relationships between four dependent variables (strategic alignment, collaboration, use of the business case, and alignment of project promises) and the dependent variable (project results). The influence of the gap was researched as a mediator variable. A survey was distributed to project managers in the Dutch chapter of the International Project Management Association (IPMA) network.
Through the survey, data was acquired from 208 project managers. This data was analyzed using descriptive statistics and regression analysis. The analysis concerned the identification of direct relationships as well as mediated relationships between the independent variables, the mediator variable “the perception of a gap” and the dependent variable “the result of a project.”
The results of the study show that the gap plays an important role for the results of a project. Also, the results give evidence for a direct relationship of strategic alignment, collaboration, and the use of the business case with the project results. The alignment of project promises is only related with the project results through the mediation of the perceived gap. Collaboration and the use of the business case are shown to have a partially mediated relationship with project results, through the perceived gap. A striking result is the effect of the use of the business case on project results, which is an important guiding tool in practice for project managers. In general, the results validated a large part of the proposed conceptual model.
The next step of this research will be to compare the view of the project managers from this study with the view of executives on the same topics. Future research should focus on acquiring further in-depth empirical material, to be able to specifically state what specific aspects of the independent variables could be improved in practice to further increase the chance of better project results.
The findings contribute to the importance of having common understanding of how projects should be organized. If project managers and executives have a strong consensus on the operational and strategic issues in project management it positively contributes to the overall performance of the project.
Keywords: management gap, project result, business case, strategic alignment, success factors
In today's organizations the role of projects is evident. Many organizations implement important parts of their company strategy through projects. This does not only concern projects that are directly related to organizational changes (such as innovations or re-organizations), but also the projects in the production core of the company also contribute—of course—to the development of the company. In that sense, projects are considered to be in the development core of an organization's strategic goals, and, therefore, fulfill an important role in the development of this company. The responsibility for this company development primarily lies with the executives of the company. This implies that the responsibility of the justification for and the choice of the projects (the “why” of the projects) in the company's project portfolio also lies with the executives. The responsibility for the execution of the projects (the “what” and the “how” of the projects) is delegated to the project manager. This “Separation of Powers” is characteristic and well-known for project management (Kerzner, 2006; Office of Government Commerce, 2009; Turner, 2008). In practice, however, this model might not work as well: both executives and project managers contribute to developing the strategy of the organization but their approach may differ. On one hand, this is related to the different roles that executives and the project manager (are supposed to) play. The justification of a project and the day-to-day execution ask for different approaches, per definition; executives have an overall view of the projects and make decisions based on high-level information of all the projects in the portfolio, but project managers focus on the performance of their own project. On the other hand, this delegation goes hand in hand with common transfer problems, like infrequent communication, miscommunication, lack of information, etc. The different roles of executives and project managers can lead to different perceptions about the management of projects, and this can lead to a gap between project managers and executives if both of them do not fully understand the other's perception. In this research we investigate this gap.
To identify and to bridge the gap between project managers and executives, it is necessary to give a clear definition for this gap in this research. A difference in thinking and acting between the project managers and executives may always be present. Also, the gap can affect project results both in positive and negative ways. An example of a positive effect on results is that tension between a project manager asking for more resources and a company director only prepared to make minor contributions might help to increase effectiveness of the realization. A negative example might be when a project manager delivers a project on time and within the budget, but without having realized the underlying strategic aim, or paying attention to its relevance as directed by the executive.
A large portion of this difference is most probably due to their different position in the organization and their different roles in the organization and in projects. But when this difference has a negative impact on results, we talk about a gap (Wijngaard, Mooi, & Scholten, 2009,2010):
A gap in project management is the distance between the project manager and the executive in the work process—as a result of the difference in perspective caused by their different roles—with a negative impact on project results and with that on the organization goals.
Research on project management has extensively investigated the relationships between project managers and their team, the project sponsors, or the steering committee. Relatively few studies have focused on the relationship between project managers and executives. However, there are some studies (Müller & Turner, 2005; Cooke-Davies, 2005; Hacker & Doolen, 2007; Artto, Kujala, Dietrich, & Martinsuo, 2008; Wijngaard, Mooi, & Scholten, 2009,2010), which we treat at length in the literature study of this paper.
In order to get a better understanding on the presence and perceptions of a gap between project managers and executives we formulated the following research questions:
- How does the (perception of the) gap influence the result of a project?
- What are the perceived causes for this gap according to project managers?
- Are these causes also directly influencing the project results?
The results of this study can be used to improve the relationship between project managers and executives. They can improve their understanding of the views and perceptions they both have regarding project management. Recognizing the different perceptions toward the gap may help to prevent the gap from occurring.
This paper is structured as follows. First, a literature study is presented that revisits important aspects that might be related to the influence of the gap on project results and the possible factors that contribute to the existence of a gap. From this literature study a conceptual model is built that is consecutively tested by means of results of a survey that was sent out to members of the Dutch IPMA Chapter, which are mainly project managers. Then the results are discussed and conclusions are drawn.
In order to test a model, a literature search was performed with respect to the relation between the gap and project results as well as with respect to factors related to the existence of a gap that could influence the project results. First, project success is shortly treated followed by the relation between the gap and project results. The remainder of the literature survey is devoted to factors that might influence the gap. We limit the study to factors, that according to literature, are related to the gap and to the alignment of project management and strategy of a company, which is related to the gap. These factors are “strategic alignment” and “collaboration,” (Cooke-Davies, 2005; Hacken & Doolen, 2007; Müller & Turner, 2005). Besides that, a factor “use of the business case” is added, because the business case can be seen as an implementation tool for strategy (Srivannaboon & Milosevic, 2006). Then the factor “alignment of project promises” is added because this is hypothesized to be closely related to a gap between project managers and executives. The factors and the reason why this influences the gap according to literature are discussed in detail in the literature section.
In order to structure the relations, we propose a model, see Figure 1, where the perceived gap acts as a mediating variable between the independent variables strategic alignment, collaboration, the use of a business case, and the alignment of project promises on the dependent variable, which is project results. We propose this model because we expect that the independent variables are not only affecting the project results but also the level of gap perceived by project managers.
Figure 1: The Conceptual Model
Historically, there are many success criteria to judge the results of projects. Shenhar and Dvir possibly gave the widest definition of success in the sense that they distinguish four major distinct success dimensions: (1) project efficiency, (2) impact on the customer, (3) direct business and organizational success, and (4) preparing for the future (Shenhar, Dvir, Levy, & Maltz, 2001). Efficiency can be further broken down into effectiveness (achieving goals) and the efficiency itself (achieving goals on time and within the budget) (Cooke-Davies, 2005). In this study efficiency will be used as a measure for project result.
The Influence of the Gap on Project Results
The first gap between a project manager and higher management is the relationship that the project manager has with the project board or steering group of a project. The project board has the final responsibility for the project and represents the interests of the organization, the users, and the supplier. The project board makes the go/no-go decisions, gives the project (strategic) direction, and is the group to which the project manager must report. In general, the project board consists of parties with an interest in the project. If there is a project sponsor, he or she will also have a seat on the project board. The function of project sponsor is becoming increasingly more accepted within a project organization.
There are many studies that demonstrate a positive link between the competency of the project sponsor and the project results. In an older large-scale study numerous driving and inhibiting forces of project sponsorship were found that can affect the success of a project (Dugan, Thamhain, & Wilemon, 1977). Cooke-Davies (2005) researched the role of the project sponsor among 168 American and British project managers and project sponsors. He showed that the project sponsor can be seen as the hinge upon which organizational project management maturity turns. This study contends that the variance in success can largely be explained by differences in the competency of the project sponsor. It shows that the effectiveness of a project strongly relies on activities frequently undertaken by the project sponsor, such as considering the strategic options, providing sufficient resources, and assigning the necessary powers of authority to the project manager. These activities were shown to be able to enhance the effectiveness of a project by up to 50%. Another study supports the project board as a critical success factor in a project context (Jonker, Meijer, & Heemstra, 2008). These views are formulated into the first hypothesis:
H1: The larger the perceived gap the lower the project results.
It is generally assumed that if a company implements company strategy properly, this will have a positive effect on company results. This is mostly called strategic alignment. Projects are often the best way of implementing strategy as they form the perfect opportunity to introduce changes in or new products for the organization (Artto & Wikström, 2005; Cooke-Davies, 2005; Chenhall, 2005; Cleland, 1994; Englund & Graham, 1999; Hacker & Doolen, 2007; Johns, 1998; Merwe, 2002; Müller & Turner, 2005Turner, 2008;). This is what makes it so important to carry out the right projects, and to carry them out in the right way (Cooke-Davies, 2005).
The first part of achieving strategic alignment is portfolio management that works as a linking pin between strategy and projects. Using strategy as a guiding principle, the most promising projects and programs are selected from the pool of possibilities and assigned resources.
However, this is not always realized in practice (Blichfeldt & Eskerod, 2008). Blichfeldt and Eskerod showed that in many cases, only a subset of all projects actually come under portfolio management. These projects often revolve around product development. The consequences are two-fold. First, in the case of larger companies, many projects seem to fall outside the scope of the company director's radar thereby increasing the gap between him or her and the project managers. Secondly, this method makes it difficult to manage the pool of project resources, which increases the chance of having to transfer resources unexpectedly and can lead to delays and misunderstanding on both sides, again increasing the gap.
The second part of strategic alignment consists of carrying out the set of projects in the right way: i.e., in a way that ensures a maximum contribution to the strategy. This aspect is supported by program management, which involves managing a set of interrelated projects in a way that will ensure maximum strategic gain (Dinsmore, 1999; Partington, 2000). The contact with program management gives the project manager more insight into the company strategy and a better idea of interdependence with other projects. Alongside this, program management gives the company director a better overall view of the total set of projects within the company, and a better understanding of the project manager's situation.
Srivannaboon and Milosevic (2006) gave an overview of literature on the alignment between company strategy and project management and took strategic alignment one step further than portfolio and program management. They stated that traditional literature traditional literature on aligning project management with the business strategy is too much related to the project selection process only; whereas, it should focus more on the actual interaction between project management and the business process. In their paper, they related project management to the well-known strategy theory of Porter (1980). Srivannaboon et al. found that business strategy realizes its influence on project management through the competitive attributes of the business strategy (time-to-market, quality, and cost). Vice versa, they expected that the project management execution would impact the adaptation of business strategy.
Also, research was done to demonstrate the value of strategic alignment in general terms. For instance, in a study in which 80 managers of major Australian companies were interviewed. Chenhall (2005) showed that strategic alignment in production has a significant effect on the strategic aims of low costs, flexibility and good delivery and service. Research by Bergeron, Raymond, and Rivard (2004) among 110 Canadian companies demonstrated that companies with strong strategic alignment perform better than companies undergoing strategic conflict. Given the fact that strategic alignment occupies a prominent position in much project management literature, one could reasonably expect that strategic alignment would have the same effect on project results as it has on company results. This leads us to the second hypothesis.
H2: Better strategic alignment between the project manager and executives will positively affect project results.
Communication between the owner of the project (often the company director) and the project manager is generally recognized to be a critical success factor for the outcome of a project. A lack of communication in this area can be a significant cause of poor project results. This is a recurring theme in literature (Kerzner, 2006; Müller & Turner, 2005; Turner, 2008).
It is well-known that different parties have their own specific roles in a project, which might vary during a project the different phases of the project (Kerzner, 2006; Turner, 2008). In practice, the involvement of certain and different parties depends on the (strategic) importance of the project for the company. For apparent reasons, the board of a company will not be heavily involved in all smaller projects. On the other hand, for example, projects that result in new products and skills, which will strengthen the company's competitive position and projects in which the company is working with (new) external partners generally the executives of a company will be involved, and sometimes mainly only in those (Cleland, 1994). The company director, who is sometimes part of the project organization but apparently also of the organization as a whole, is also responsible for creating an environment that allows projects to be carried out as good as possible. Important aspects in this respect are the company culture, the organizational structure, and the rewards systems for project managers (Johns, 1998). Successful collaboration is an intrinsic part of the company culture.
Müller and Turner (2005) reported on a world-wide study of 200 projects, in which communication was divided into the dimensions “collaboration” and level of (bureaucratic) “structure” imposed on the project manager. The research showed that successful projects were characterized by a high level of collaboration and an average amount of structure. Projects that did less showed a random distribution within the two dimensions. Collaboration was shown to be a necessary, but not sufficient condition for good performance in projects. Another finding from this research relates to the manner of communicating. In general, it can be said that written reports have a negative effect on project results, while regular personal contact has a positive effect.
Hacker and Doolen (2007) summarized many success criteria for projects from literature. Other than strategic alignment, as discussed earlier, they showed that “team characteristics” are key success factors for project success. Under the umbrella of team characteristics, they placed various elements like skills, commitment, planning, communications, conflict resolution, feedback mechanisms, team culture, and authority clarity. These are all collaboration items. In this study it was also shown that a huge discrepancy can exist in how the collaboration is perceived, by means of a survey of 36 project managers and sponsors in an American government division. Clearly, collaboration cannot only be more or less successful but also generally will also be experienced in a different way.
Although a culture of openness and cooperation represents the ideal project management environment and is the basic assumption in many discussions about the subject, it is not always the way in practice. This is among others related to the principal agent theory (see, for example, Eisenhardt, 1989). The theory applies to situations in which the so-called principal (in this case the project sponsor or the company director) hires an agent (in this case the project manager) to perform a task on his or her behalf. The principal also delegates part of the decision-making to this agent.
A project generates an asymmetrical information situation: the project manager knows considerably more about the details of the project than the company director. The fact that the interests of the project manager do not necessarily correspond with those of the company director can be unsettling for the company director, by which the company directors might be inclined to build in control mechanisms to reduce the project manager's decision-making powers. This might lead to a misunderstanding if the project manager interprets these control mechanisms as a vote of no confidence, and if they also lead to large amounts of unnecessary paperwork. However, this may also boost the need for communication, thus ensuring that the two parties understand each other better and that the company director is in a better position to manage. Moreover, they can offer opportunities for better use of the authority of the company director and the expertise of the project manager (Müller & Turner, 2005). Summarizing, it can be said that collaboration is seen as a key contributor to project success by many authors. Therefore, we posit the third hypothesis:
H3: Better collaboration between the project manager and executives will positively affect project results.
Collaboration also is closely related to the perception of the gap, which will be another hypothesis for a mediated relationship between collaboration and project result through the gap.
The Use of the Business Case
As written under “Strategic alignment,” it is crucial important to carry out the right projects, and to carry them out in the right way (Cooke-Davies, 2005). One important instrument for determining whether the project is a right project in the project portfolio, and thus for strategic alignment, is the business case (Improvement and Development Agency, 2007; Kerzner, 2006; Office of Government Commerce, 2009; Srivannaboon & Milosevic, 2006). In general, the business case can be seen as the justification for doing a certain project. In that sense, the business case can be seen as a way of realizing strategic alignment. The word “business case” is not used by all authors; for example, Srivannaboon and Milosevic (2006) use project strategy instead and the Project Management Institute (PMI, 2004) uses “project charter.”. Artto et al. (2008) also introduced and used “project strategy,”, and defined it as “a direction in a project that contributes to success of the project in its environment.”
The business case as a document demonstrates how a project fits in the (company) strategy. Depending on the project, the phase of the project, and the organization carrying out the project, this document can vary from a short motivation to a whole book containing a detailed cost-benefit analysis, implementation planning, and an in-depth risk register. Basically, the business is responsible for the business case, but sometimes the writing of the business case is also delegated to the project manager. In case the project manager is not involved in writing the business case, the gap between executives and the project manager might be increased, because the business case might be too optimistic and the project manager might be blamed for that in the run of the project (Kerzner, 2006).
The process of creating, updating, and using the business case comprises various important decisions and consultation moments between the project manager and the executives, and provides the opportunity to get them all aligned (Improvement and Development Agency, 2007). If the company director or project sponsor is involved, this will reduce the mutual distance. This again relates back to the collaboration, as described earlier in this paper. Also, the business case should be used for making important trade-off decisions in the project; for example, if time-to-market or costs prevail in a certain project (Srivannaboon, 2006). Therefore, we formulated the fourth hypothesis:
H4: The proper use of a business case will positively affect project results.
Alignment of Project Promises
A specific and important contributor to the project result is the fact of whether the project manager is faced with realistic promises for his or her project toward the board of the project. Basically, these promises reflect the major functions of project management as given by Turner (2008): cost, time, quality, and scope, but there are of course many more, such as safety, environment, etc. As such, these promises are obviously a part of the business case and they are closely related to collaboration. Hacker and Doolen (2007) investigated the degree of unity of purpose between the sponsor, the company director, and the program manager. In their research they found that the responses from sponsors on average were 2.2 out of 6, while project managers had an average of 3.6 out of 6. Poor communication on the part of the sponsor toward the project manager is one possible explanation but this certainly indicates the existence of a gap in this area. This brings us to a fifth hypothesis:
H5: Better alignment of project promises will positively affect project results.
The Conceptual Model
The five hypotheses, as a result of the literature survey, can be summarized in the conceptual model in Figure 2.
Figure 2: The Conceptual Model, With Hypotheses
The hypotheses are:
H1: The larger the perceived gap the lower the project results.
H2: Better strategic alignment between project manager and executives will positively affect the project results.
H3: Better collaboration between the project manager and executives will positively affect project results.
H4: The proper use of a business case will positively affect project results.
H5: Better alignment of project promises will positively affect project results.
The Mediating Effect of Perceived Gap
The main aim of this research is directed toward the gap between project managers and executives. This difference is reflected in this paper by the gap that the project managers perceive. Other than the project results, the independent variables may influence the perceived gap as well. As such the perceived gap acts as a mediating variable between the independent variables and the dependent variable. Therefore, the influence of the mediating effect of the perceived gap between the independent variables and the project results was also investigated. For each of the independent variables we pose that the perceived gap may act as a mediator. This leads to four further hypotheses (see also Figure 2):
H6: Perceived gap plays a mediating role between strategic alignment and project results.
H7: Perceived gap plays a mediating role between collaboration and project results.
H8: Perceived gap plays a mediating role between the use of the business case and project results.
H9: Perceived gap plays a mediating role between alignment of project promises and project results.
Data and Methodology
To investigate the role of the perceived gap on project results we collected data using a survey study (Baarda & de Goede, 2006; Verschuren & Doorewaard, 1999). The content validity of the questionnaire was tested by information obtained from literature and a few semi-structured interviews with project managers. The interviews helped us refining the questions and the structure of the questionnaire. After reviewing the instruments with colleagues we sent out the questionnaire and collected data to the project managers.
The survey was sent to project managers that were members of the Dutch Chapter of the IPMA network. The project managers in this network are heterogeneous and assumed to be dealing with a variety of projects, hence, providing an interesting sample for the project management community. The survey was distributed through the database of the Dutch Chapter of the IPMA network by e-mail. In total about 3,000 IPMA NL members were reached. The survey was web-based and anonymous. Progress was saved on the participants' computer and measures were taken to prevent double submissions from one participant. In total 314 project managers started the survey of which 208 finished it entirely. With this an acceptable response rate of 6.8% was achieved. The unit under investigation was the interviewee's most recently completed project. Some general questions about personal and company data were also included for future analysis purposes. The survey was designed to verify the hypotheses, as well as investigate some general project characteristics. Other than this, executives were also approached. However, this paper only focuses on the project manager's perspective.
The data obtained by the survey was analyzed using both descriptive and multivariate methods. Descriptive techniques were used to review the data concerning the separate variables of the research, while the relationships between them were tested using multivariate techniques. The majority of the questions were asked by means of 5-point Likert scale questions. Data obtained from such questions is generally assumed to be suitable for use in multivariate techniques as interval variables (Jaccard & Wan, 1996; Kim, 1975; Labovitz, 1967).
The Research Variables
The measurement instruments for the present study are based on existing scales and adapted to the context of project managers. Using in-depth interviews with project managers, we were able to pre-test the questionnaire.
Dependent Variable: Project Results
We adopted a multi-item scale for the project results as the dependent variable. The multi-item scales were constructed by four questions that measured, using a 5-point Likert scale, the extent to which the respondent agreed to the statement. The four statements addressed the extent to which projects were finished: (1) on time, (2) according to budget, (3) according to quality, and (4) according to the scope. This reflects project effectiveness as used more widely (Cooke-Davies, 2005).
The mediating variable in this research is the gap perceived by the project manager. For the perceived gap we measured, using a statement-based single-item score, the perception of the respondent on the existence of a gap between executives and the project manager. The scale for this item is a 5-point Likert scale addressing the extent the respondent agreed to the statement.
Strategic alignment measured the extent that the project manager was informed and involved in the alignment of a project with the (company) strategy. We measured the strategic alignment with four questions that dealt with (1) the knowledge the project manager has about the business strategy of the organization; (2) the understanding of how the project contributes to this organization's strategy; (3) the amount of communication between executives and project manager about the project's contribution to the (company) strategy; and (4) the influence that the project manager has on making the strategy explicit in the business case.
Collaboration between project managers and executives is measured with three questions that addressed: (1) sufficient executive's interest in the project, (2) the executive's appreciation for the project, and (3) good cooperation between executives and project managers.
The use of the business case was measured with five questions that asked about the executive's involvement in formulating the business case and the frequency of using the business case as guiding document in the project. There were questions on the use of the business case both during and at the end of the project.
The alignment of project promises is measured with three questions. These questions addressed: (1) the realistic budget requirements, (2) the realistic schedule requirements, and (3) the realistic quality requirements of the project.
All the independent variables answers given were ranked using a 5-point Likert scale that gauged the extent that the respondent agreed to the statements in the questions.
We included a number of project-level variables that in addition to our mediating and independent variable may influence project results as well. We controlled influences at the individual level, the project level, as well as organization level. At the individual level we measured the respondents experience with project management. We assumed that more experienced project managers may have a different view or may recognize a perceived gap between them and executives sooner. At the project level we measured the executive's involvement in the project by asking for the extent the executive was responsible for giving the assignment for the project. Also, we asked for the size of the organization and the number of projects that were performed at the organizations level. We could assume that larger organizations and organizations that have more projects are more experienced in running projects and therefore may affect the perceived gap between project managers and executives.
First, we ran preliminary analyses to check the viability of the constructs developed (the variables for project result and the independent variables). Also, we gave descriptive statistics and correlations on the variables included in the regression analysis.
To construct the variables, we made an assessment of the reliability and validity of the questions for that variable. The reliability explains the extent that the individual questions are addressing the underlying variable. With high scores (above 0.60) for reliability we can assume the individual items to be reliable in reflecting the underlying variable. The results for the reliability for each variable are presented in Table 1. The next step was to determine whether the individual questions supposed to address a specific variable were not related to other variables as well. If questions are more discriminating and load on a particular variable then for the multiple regression it becomes more clear what the contribution is of that particular variable on the dependent variable, project results. Therefore, we applied factor analyses using Principal Component Analysis and the Varimax rotation method. All independent questions were used to create the variables for strategic alignment, collaboration, use of business case, and realistic project promises. Table 1 shows the factor loadings above 0.4 of each question for each component (loadings lower than 0.4 are suppressed). It can be clearly seen that the supposed variables are independent from each other and that all questions of the variable contribute considerably to that variable.
Table 1. Factor Analysis: Rotated Component Matrix
We also checked for multicollinearity among the variables (see Table 2) and we found correlations smaller than 0.60. This indicates that the variables are discriminating and are not related to each other (Malhorta, 1999). In Table 2, the results of the variables are also given (mean and standard deviation). It can be seen that the perceived gap scores above average, and the use of the business case below average. Also, it is clear that the spread for the control variables is higher than for the variables in our model, which means that in spite of the difference in background (control variables), the opinions on the variables in our model are more aligned.
Table 2: Descriptives and Correlations
Test of Hypotheses
In Table 3 the estimated multiple regression models are presented. We employed a four-step approach by means of four models to test the conceptual model. We estimated the models using a multivariate linear regression. For each independent variable the standardized coefficient is shown in Table 3 as well as the R2, the adjusted R2, and the F. Both R2 and F ratios provide information on how well the estimated models fit with the empirical data.
Model 1 (column 1) assesses the effect of the independent and the control variables on the project results. These variables explain about 28% (adjusted R2) of the variance in the dependent variable. Model 1 shows that the strategic alignment between project managers and executives is statistically significant and positively related (p<0.05) with project results and confirms Hypothesis 2. Also, we found support for Hypothesis 3 (p<0.05), which stated that more collaboration between project managers and executives has a positive effect project results. Hypothesis 4 investigated the use of the business case on project results, and we found a statistically significant and positive (p<0.01) effect on project results, thereby confirming Hypothesis 4. For the effect of alignment of project promises we did not find a significant effect and could not confirm Hypothesis 5. In addition, for the control variables we found that the effect of larger organizations was negatively affecting (P<0.01) the project results.
In Model 2, we estimated the influence of all independent variables on the mediating variable, the perceived gap. The findings show that the use of business case is statistically significant and negatively related (p<0.01) with the perceived gap. Similarly, we found that also collaboration and alignment of the project promises are statistically significant and negatively related (p<0.05) to the perceived gap. Strategic alignment is not related to the gap, according to our results. For the control variable that captured the amount of experience in project management we found a small significant and positive effect on the perceived gap. This may indicate that more experienced managers are better in recognizing a gap with executives or are more likely to have a different view on how projects should be executed.
Table 3: Regression Results
Model 3 estimated the influence of the mediating variable on the dependent variable. The model shows a significant and negative effect (p<0.01) of the perceived gap on project results and confirms Hypothesis 1.
Finally, Model 4 investigated the role of all independent variables and the mediating variable on the level of project results. The model is significant and explains 34% of the variance in project results. The F ratio has increased compared to the first model, indicating that the additional variable for the perceived gap adds to the fit of the estimated model. A moderate significant and negative effect (p<.10) of a perceived gap on project results is found. For the independent variable that measured the use of the business case, we see a significant and positive (p<.05) on project results. There is not a direct effect of alignment of project promises on project results and collaboration has a moderately significant and positive effect (p<.10) on project results. The effect of strategic alignment has a strongly significant and positive effect (p<.01) on project results.
For analyzing the mediating role of perceived gap in the conceptual model we followed the procedure and conditions for testing mediation suggested by Baron and Kenny (1986). They showed that mediation of a variable is present when three conditions are met:
1) The independents influence the dependent variable.
2) The mediating variable is associated with the dependent variable.
3) The mediating variable has a significant effect on the dependent, while the independent-dependent relationships estimated in the same equation are still significant but less strong than found in the first model.
Because the models that were estimated in Table 3 only provide us with significance of the relations between independent, mediator, and dependent variables and not the full path from independent through mediator on dependent, we ran some post hoc analyses using the Sobel test (Sobel, 1982) to investigate the significance of the partial and full mediating effects.
Regarding the first condition, the independents must affect the dependent variable. In Model 1 we found that strategic alignment, collaboration, and the use of the business case were significantly affecting the project results. For the alignment of project promises we could not find a significant effect. The second condition states that the mediating variable is associated with the dependent variable. In the third model we found a strong and negative effect of perceived gap on project results. The third condition is based on the fourth model and claims that the mediator has a significant effect on the dependent, while the independent-dependent relationships estimated in the same equation are still significant but less strong than found in the first model.
For the strategic alignment we did not find a mediating effect of perceived gap. There is only a direct effect of strategic alignment on project results and Hypothesis 6 could not be confirmed. For the collaboration between project managers and executives we found partial mediation. Collaboration has a significant direct effect on project results and an indirect effect through the perceived gap. In the final model the direct effect decreases in significance (from p=.044 to p=.089 and beta reduces from b=.155 to b=.131). Hypothesis 7, which predicted this mediating effect, is confirmed. Estimating the significance of the partial mediation we calculated the Sobel test statistic which was (p=0.022).
Similarly we found partial mediation for the use of the business case. The direct effect of the business case remains significant in the final model but is slightly less (from p=.006 to p=.012 and beta reduces from b=.200 to b=.185) under the condition of the perceived gap. Again we calculated the Sobel test statistic for this partial mediation that was measured (p=0.018).
Finally, we found no direct effect of alignment of project promises on project results but we did find a direct significant effect on the perceived indicating full mediation by the perceived gap for the relationship between alignment of project promises and project results. Calculating the significance of this full mediation using the Sobel test indicated a test statistic of (p=0.032). Hypothesis 9 that posited the mediating effect of perceived gap was supported as well.
We can conclude from these findings that with respect to collaboration and the use of business case we found partial mediation through perceived gap and we found full mediation of perceived gap for the alignment in project promises.
Together with the direct influences, the validated model is given in Figure 3.
Figure 3: The Validated Model (‘+’ means increasing effect, ‘-/-’ means decreasing effect) (Dotted lines indicate partial mediation)
Discussion and Concluding Remarks
The findings of this study broaden our knowledge of the role of the perceived gap between project managers and executives on the project results. Also, the findings give us further validation of four important success factors for projects: strategic alignment, collaboration, the use of the business case, and the alignment of project promises. This is in line with results of many other studies (Cooke-Davies, 2005; Hacker & Doolen, 2007; Müller & Turner, 2005), but also builds further on it. One of the major results is the fact that the results show a clear and relatively strong effect of the use of the business case with project results both direct and as a partial mediating variable through the gap. As far as is known to the authors, this clear effect is not shown as such in recent literature. As such, our results validate the claim that is often made in practice and by modern project management streams like Prince2 or the PMBOK®, that the business case is or should be an important guiding document to make trade-offs in projects (Office of Government Commerce, 2009; Project Management Institute, 2004). Also, the results give a direction for developing more knowledge on project strategy research (Artto, Kujala, Dietrich, & Martinsuo, 2008). The strong effect of strategic alignment clearly shows the relevance of aiming for common understanding between project managers and executives of the strategic intend of projects.
Second, the results show a significant effect of the gap on project results. This answers the main research question of this paper and is in line with claims by Cooke-Davies (2005) and Jonker et al. (2008). It was also clearly shown that by introducing the perceived gap in the model the explained variance in the project results increases with 6% (adjusted R-square increased from 28.1 to 33.8%).
Third, the findings provide strong support for the direct effect of strategic alignment on project results. This further validates results from earlier research (Artto & Wikström, 2005; Chenhall, 2005; Cleland, 1994; Cooke-Davies, 2005; Englund & Graham, 1999; Hacker & Doolen, 2007; Merwe, 2002; Müller & Turner, 2005). It is remarkable that the strategic alignment is only directly related to the project results, not through the mediation of the gap. This is due to the fact that strategic alignment and the gap are not related according to our results. This is probably related to the fact that strategic alignment was operationalised as the alignment of the project managers themselves with the strategy, whereas the gap is related to both parties (executives and project managers).
Fourth, the results do not show a direct relation of the alignment of project promises with the project results. This is an unexpected result. On the other hand, our results show that the alignment of project promises does contribute to the perceived gap and it was shown that the perceived gap plays a mediating role between alignment of project promises and project results. It seems that the alignment of project promises between executives and project managers is an important explanatory part of the influence of the gap on project results (alongside the relationships of collaboration and the use of the business case, that have partially mediated relationships with the project results). It could be said that this adds to the results by Hacker and Doolen (2007), where they reported on different views on “the degree of unity of purpose,” by showing the effect of a higher degree of unity of purpose. In practice, this might mean that alignment of project promises, and communicating these clearly without ambiguity, is an effective way of decreasing the gap with a view on better project results.
The present study opens new avenues for further research. First, this research has investigated the role of perceived gap on project results from a project manager perspective. It would contribute to our understanding if we could extend this line of research by investigating the differences in perspectives on project manager from an executive point of view. For apparent reasons, the perspectives are determining for better insight in the perception of the gap. In earlier works, the authors gave some descriptive statistics on the differences in perspectives (Bosch-Rekveldt, Jongkind, Mooi, Verbraeck, & Bakker, 2010; Wijngaard, Mooi, & Scholten, 2009), but these differences should also be investigated by means of the model presented in this paper. Also, it could be checked if other important factors can be found that explain the gap and/or project results, beyond the four factors that we investigated.
In future research it is necessary to further investigate in detail what aspects specifically contribute to the existence of a gap between executives and project managers and how this gap could be decreased or even eliminated (remember—the gap was defined as that part of the distance that contributed in an negative sense to the project results). This also holds for further contributing to the research of the effect of strategic alignment, collaboration, the use of the business case, and alignment of project promises on project results, by deepening the empirical knowledge of the specifics of these effects. In future research we propose to also link more to the issue of complexity of project, including whether the projects are innovative or not (Bosch-Rekveldt et al, 2010; Filippov & Mooi 2009; Remington, Zolin, & Turner, 2009;), because these are important factors for project success (Bosch-Rekveldt, Hermanides, Mooi, Bakker, & Verbraeck, 2010).
Implications for Project Management
This paper shows some results that have direct implications for project management in practice. It clearly shows the negative influence of the gap between executives and project managers and the importance of strategic alignment, collaboration, the use of a business case, and alignment for project success (the independent variables in this research). It was shown that the gap does play a role, but that this role is closely related with direct influences of the independent variables. Having the understanding of the factors that cause the perceived gap and subsequently negatively influence project results we may be better of mitigating these factors and improving project results. The effect of using a business case cannot be found in literature, as far as known to the authors. The findings also contribute to the importance of having common understanding of how projects should be organized. If project managers and executives have a strong consensus on the operational and strategic issues in project management it positively contributes to the overall performance of the project. This can immediately be used in practice, by devoting project meetings between executives and project managers (including the kick-off) to the above topics. Furthermore, it sheds light on the way that the independent variables influence the project results by means of a validated model.
The authors want to thank Antal van Kolck and Bart Giethoorn for their large and very inspiring contributions to the initial phase of the research in the framework of a summer assignment.
Artto, Karlos A., & Wikström, Kim. (2005). What is project business? International Journal of Project Management, 23(5), 343-353.
Artto, Karlos, Kujala, Jaakko, Dietrich, Perttu, & Martinsuo, Miia. (2008). What is project strategy? International Journal of Project Management, 26(1), 4-12.
Baarda, D. B., & de Goede, M. P. M. (2006). Basisboek methoden en technieken. Groningen: Wolters-Noordhoff.
Baron, R. M., & Kenny, D. A. (1986). The moderator-mediator variable distinction in social-psychological research: Conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology, 51, 1173-1182.
Bergeron, Francois, Raymond, Louis, & Rivard, Suzanne. (2004). Ideal patterns of strategic alignment and business performance. Information & Management, 41(8), 1003-1020.
Blichfeldt, Bodil Stilling, & Eskerod, Pernille. (2008). Project portfolio management—There's more to it than what management enacts. International Journal of Project Management, 26, 357-365.
Bosch-Rekveldt, M. B. R., Hermanides, S., Mooi, H. G., Bakker, H. L. M., & Verbraeck, A. (2010). The influence of project front end management and project complexity on project success. PMI research Conference 2010, Washington, USA.
Bosch-Rekveldt, M. B. R., Jongkind, Y., Mooi, H. G., Verbraeck, A., & Bakker, H. L. M. (2010). Grasping project complexity in large engineering projects: The TOE (Technical, Organizational and Environmental) framework. International Journal of Project Management, submitted.
Chenhall, Robert H. (2005). Integrative strategic performance measurement systems, strategic alignment of manufacturing, learning and strategic outcomes: An exploratory study. Accounting, Organizations and Society, 30(5), 395-422.
Cleland, David I. (1994). Project management: strategic design and implementation, 2nd ed. McGraw-Hill, UK.
Cooke-Davies, Terence J. (2005). The executive sponsor - The hinge upon which organizational project maturity turns. In: PMI Global Congress Proceedings, Edinburgh, Scotland.
Dinsmore, Paul C. (1999). Winning in business with enterprise project management. New York: Amacom.
Dugan, H. S., Thamhain, H. J., & Wilemon, D. L. (1977). Managing change in project management. Proceedings of the Ninth Annual International Seminar/Symposium on Project Management, Washington, USA.
Eisenhardt, K. (1989). Agency theory: An assessment and review. Academy of Management Review, 14 (1), 57-74.
Englund, Randall L., & Graham, Robert J. (1999). From experience: Linking projects to strategy. Journal of Product Innovation Management, 16(1), 52-64.
Filippov, S., & Mooi, H. G. (2009). Innovation project management: A research agenda. Proceedings of the 6th International Conference On Innovation And Management -ICIM Sao Paulo, Brasil.
Hacker, Marla, & Doolen, Toni. (2007). Alignment at the top: A case study investigating this critical factor in project implementation. Engineering Management Journal, 19(1), 38-42.
Improvement and Development Agency (IDeA). (2007). Impact the adaptation of business strategy, version 4. London, UK.
Jaccard, J., & Wan, C. K. (1996). LISREL approaches to interaction effects in multiple regressions. Thousand Oaks: Sage.
Johns, Thomas G. (1998). On creating organizational support for the project management method. International Journal of Project Management, 17(1), 47-53.
Jonker, Arjan, Meijer, Gerard & Heemstra, Fred. (2008). Van kritieke succesfactoren naar kritieke succesactoren. Tiem, 23, 17-21.
Kerzner, H. (2006). Project management – A System approach to planning, scheduling and controlling. Hoboken, NJ: John Wiley & Sons.
Kim, J. O. (1975). Multivariate analysis of ordinal variables. American Journal of Sociology, 81, 261-298.
Labovitz, S. (1967). Some observations on measurement and statistics. Social forces, 46, 151-160.
Malhorta, N. K. (1999). Marketing research: An applied orientation. Upper Saddle River, NY: Prentice Hall.
Merwe, A. P. Van Der. (2002). Project management and business development: integrating strategy, structure, processes and projects. International Journal of Project Management, 20(5), 401-411.
Müller, Ralf, & Turner, J. Rodney. (2005). The impact of principal-agent relationship and contract type on communication between project owner and manager. International Journal of Project Management, 23(6), 398-403.
Office of Government Commerce. (2009). Managing successful projects with PRINCE2. London: The Stationery Office.
Partington, D. (2000). Implementing strategy through programmes of projects. In J. R. Turner & S. J. Simister (Eds.), Gower handbook of project management (pp. 33–46). Hampshire, UK: Gower Publishing Ltd.
Porter, M.E. (1980). Competitive strategy. New York: Free Press.
Project Management Institute (PMI). (2004). A guide to the project management body of knowledge (PMBOK guide), 3rd edition. Newtown Square, PA: Project Management Institute.
Remington, K., Zolin, R., & Turner, J. R. (2009). A model of project complexity: Distinguishing dimensions of complexity from severity. Proceedings of IRNOP IX, Berlin.
Shenhar, A., Dvir, D., Levy, O., & Maltz, A. (2001). Project success: A multidimensional strategic concept. Long Range Planning, 34, 699-725.
Shenhar, A. J., & Dvir, D. (1996). Toward a typological theory of project management. Research policy, 25(4), 607-632.
Sobel, M. E. (1982). Asymptotic confidence intervals for indirect effects in structural equation models. Sociological Methodology, 13 (2), 290–312.
Srivannaboon, Sabin, & Milosevic, Dragan Z. (2006). A two-way influence between business strategy and project management. International Journal of Project Management, 24(6), 493-505.
Turner, J. R. (2008). The Handbook of Project-based Management. London: MacGraw and Hill.
Verschuren, P., & Doorewaard, H. (1999). Designing a research project. Utrecht: Lemma.
Wijngaard, P. J. M., Mooi, H. G., & Scholten, V. E. (2010). The gap - Research into the gap between project manager and executives. Delft: Technical University of Delft.
Wijngaard, P. J. M., Mooi, H. G., & Scholten, V. E. (2009). The gap between project managers and executives. In K. Kähkönen, A. S. Kazi, & M. Rekola (Eds.), The Human Side of Projects in Modern Business (pp. 3-16). Helsinki: Project Management Association Finland (PMAF).
© 2010 Project Management Institute