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Umair Abbas

This study examines how project management effort affects project profitability for engineer-to-order projects of varying complexity. The researchers hypothesized that (1) greater project management effort leads to higher profitability, but (2) this effect diminishes with increased effort, and (3) management effort is more impactful for complex projects. Analyzing 917 project reports, they found project management effort has a positive but declining impact on profitability. Complexity jeopardizes profitability, but management mitigates this more so as complexity rises, ultimately yielding higher returns for complex projects. The results provide insights into project management's economic value when accounting for complexity.

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Introduction An engineer-to-order (ETO) approach enables firms to offer their customers individually configured products tailored to each customer's specific needs. Increasing degrees of product customization, increases the complexity of ETO projects. This complexity can jeopardize an ETO project's profitability. DOES PROJECT MANAGEMENT MATTER? THE RELATIONSHIP BETWEEN PROJECT MANAGEMENT EFFORT, COMPLEXITY, AND PROFITABILITY
Conceptual background Research Article Project managements relationship with project success Project complexity challenges successful project execution
Hypothesis Development H1: Project management effort positively affects project profitability. H2: The marginal effect of project management effort on project profitability diminishes with increasing H3: Project management effort and project complexity interact to predict project profitability, such that project management effort results in higher project profitability for more complex projects than for less complex projects. g project management effort. (The higher the complexity, the more product design features need to be engineered and coordinated among the project staff)
Data and method A sample of 917 projects status reports of a large firm that offers ETO products coupled with a control function approach to empirically investigate the causal effect of project management effort on projects profitability. Furthermore, we investigate the marginal impact of project management effort and its effect for different degrees of project complexity.
Results Results reveal a positive but diminishing impact of project management effort on project profitability. Furthermore, find that higher project complexity jeopardizes project profitability. However, project managements marginal impact increases with increasing project complexity, ultimately leading to higher returns of more complex projects. The results offer unique insights into the economic benefits of project management while taking into account the complexity of the projects
Limitations and future research opportunities This study has certain limitations that open future research avenues. The analyzed sample originates in a single company, which specializes in ETO products.

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Paper 1.pptx

  • 1. Introduction An engineer-to-order (ETO) approach enables firms to offer their customers individually configured products tailored to each customer's specific needs. Increasing degrees of product customization, increases the complexity of ETO projects. This complexity can jeopardize an ETO project's profitability. DOES PROJECT MANAGEMENT MATTER? THE RELATIONSHIP BETWEEN PROJECT MANAGEMENT EFFORT, COMPLEXITY, AND PROFITABILITY
  • 2. Conceptual background Research Article Project managements relationship with project success Project complexity challenges successful project execution
  • 3. Hypothesis Development H1: Project management effort positively affects project profitability. H2: The marginal effect of project management effort on project profitability diminishes with increasing H3: Project management effort and project complexity interact to predict project profitability, such that project management effort results in higher project profitability for more complex projects than for less complex projects. g project management effort. (The higher the complexity, the more product design features need to be engineered and coordinated among the project staff)
  • 4. Data and method A sample of 917 projects status reports of a large firm that offers ETO products coupled with a control function approach to empirically investigate the causal effect of project management effort on projects profitability. Furthermore, we investigate the marginal impact of project management effort and its effect for different degrees of project complexity.
  • 5. Results Results reveal a positive but diminishing impact of project management effort on project profitability. Furthermore, find that higher project complexity jeopardizes project profitability. However, project managements marginal impact increases with increasing project complexity, ultimately leading to higher returns of more complex projects. The results offer unique insights into the economic benefits of project management while taking into account the complexity of the projects
  • 6. Limitations and future research opportunities This study has certain limitations that open future research avenues. The analyzed sample originates in a single company, which specializes in ETO products.
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