The governance of projects

Abstract

Many transactions between buyers and suppliers are executed through temporary organizations or so-called projects. Projects are one form of organization which consist of a set of diversely skilled firms working together on a complex task over a limited time period who will then disband upon completion. Projects are inherently appealing because of their ability to harness the skills and resources of a set of specialists while minimizing fixed costs and long-term commitments. Projects are used as the preferred form of organization across a broad range of industries, such as construction, IT, and movie making. Despite their popularity, projects are not panacea, as projects have unique characteristics that pose challenges with regard to the delivery of focal outcomes. In this dissertation, we examine two dimensions of project outcome; project cost overrun (i.e., the actual cost of a project is higher than the contracted cost of the project) and project innovation. This dissertation, consisting of two empirical essays, uses secondary data and econometric methods to understand 1) why project cost overruns happen and how these overruns can be mitigated (essay 1), and 2) how the organizational structure of projects can help or hinder the innovation outcome (essay 2).