Research Hypotheses

In this section we derive the relationships between the model variables as proposed in Figure 1 in Chapter One. The guiding question of this study is the relationship between a project manager's PVM and the creation of project value. Our discussion of the potential TC-paradigm constraints is a good starting point. One of our main critiques of the TC-paradigm is that it is not constructed to deal effectively with uncertainty. It also does not support a maximization approach; instead, it encourages a satisficing attitude. The consequences are indicated by the relatively high failure rates of projects. Our main proposition is that uncertainty has to be managed effectively with a maximization approach in mind. This does not mean that we do not consider other sources of project failure, but for this analysis we focus on the TC-paradigm and its influence on the decision process of project managers.

Project Value Mindset – Project Value Opportunity Relationship

The relationship between PVM and project value opportunities is supported by the theoretical arguments of the entrepreneurship research field. In that discourse, opportunities have to be sought out, selected, and exploited to enable an entrepreneur or organization to generate entrepreneurial profit (Shane & Venkataraman, 2000). One major precondition is the alertness of entrepreneurs (Kirzner, 1997) to seek opportunities. The alertness, as Kirzner defined it, is reflected in our definition of the PVM construct. This leads to our first research hypothesis:

Hypothesis 1: PVM-PVO Relationship

The higher a Project Manager scores on the Project Value Mindset scale, the higher the number of Project Value Opportunities that were exploited during a project's implementation.

The hypothesis describes the relationship between the PVM and opportunity variables that are represented by specific measurement scales. The measurement scales are discussed below.

Project Value Opportunity – Project Value Relationship

Success requires mistakes. This might seem to be an odd comment, if not oxymoronic. To be successful one needs to make errors? Indeed, yes, but only if we can get management to understand and agree that the errors are “reasonable.” As noted, managers and others need to stretch goals to achieve more than the average, if not the minimum. The simply stated goal of producing 10,000 widgets an hour may just as well be the higher goal of raising the net income for the firm by 10%, because in the long run the concept would be the same. How to accomplish either goal is the responsibility of the manager, and for this, one often needs to take calculated risks. Some of these risks will result in rewards, while others will bring losses. It is the manager who is willing to take such risks and able to make the right choices that lead to improvements in the organization. Likewise, project managers, with the support of senior management, need this attitude to achieve greater success.

The second relationship in the research framework is the direct influence of a project manager's PVM on project value. As expressed in Hypothesis 1 (see Figure 1) the influence of PVM on project value is mediated by the exploitation of project value related opportunities. However, the recognition and exploitation of opportunities is not the only source for maximizing project value. The PVM could also be related to decisions and activities other than the recognition and exploitation of opportunities. Project managers are also exhibiting leadership behaviors that could be influenced by their PVM. Thus we also propose, besides the previously discussed, indirect relationship of PVM to project value, a direct relationship between PVM and project value (PV).

Hypothesis 2: PVM-PV Relationship

The higher a Project Manager scores on the Project Value Mindset scale the higher the created Project Value.

Exploited Project Value Opportunities – Project Value Relationship

The third relationship in the introduced research framework represents the impact of exploited project value opportunities on the created project value. The conceptual treatment of this hypothesis is straightforward. It builds on the assumption that the PVM represents the attitude of a project manager to create and seek project value opportunities. But the search alone would not necessarily lead to an increase in project value. It is the exploited opportunity that has the potential to increase a project's value.

Hypothesis 3: PVO-PV Relationship

The more Project Value Opportunities that are exploited the higher the created Project Value.

This relationship is a result of the underlying belief that exploited opportunities were chosen under the maximization premise.