Identifying key Factors Affecting Project Portfolio Management Effectiveness Model Aimed at Reducing Environmental Hazards in Iranian Construction Projects

Document Type : Research Article


1 PhD Student, Department of Architecture, University of Tehran, Tehran, Iran

2 Professor, Department of Architecture, University of Tehran, Tehran, Iran


The construction industry holds a major potential of hazards for the environment, and may impact it at different levels. Despite its potential threats to the environment, the construction industry plays a positive role in society as well. It is still necessary to find ways to conciliate industry development, especially active organizations in this industry, with environmental protection. Today, to survive in the global competition and acquire the competitive advantage, organizations and project-centered economic agents recognize their long-term and strategic goals in the true selection, full execution, and effective management of projects. Therefore, if the project portfolio management is based on an appropriate framework capable of planning, assessing, prioritizing, and selecting projects, it can carry out this mission as a proper approach and enhance the efficacy and effectiveness of the organizational projects. Furthermore, the establishment of a proper platform, in which an organization can better and more soundly manage a set of projects, can be reckoned as that organization’s factor of success. Project portfolio by the literature, is defined as a set of projects that are executed in an economic unit, under similar strategic goals, and common resources. The rate of physical and financial resources of these projects is often limited. Thus, the projects under the same management compete to attract these scarce and limited resources.
     Project portfolio management is a method for implementing the strategy the organization. Indeed, it is collaborative management of projects and more advantageous compared to the separated management of every project in traditional approaches. It is because portfolio management is a symbol operating as a communicational bridge between organizational strategies and projects. Indeed, the project portfolio management is an approach through which the organizational projects are adjusted and coordinated for the realization of prospects and missions. Moreover, it optimizes the time and costs of the projects’ execution and accelerates the achievement of respected goals and interests. Diverse attributes influence the accomplishment of project portfolio management. This paper endeavors to determine and measure the key attributes affecting project portfolio management so that organizations can take maximum advantage of their executed projects.
Though in the literature that are many studies which have been focused on project portfolio management, limited studies have examined the attributes affecting PPM, and there are still many challenges to understanding the essential factors which affect the effectiveness of PPM in an construction organization, company or group. This paper focuses on attributes, which affects effectiveness of project portfolio management, from both theoretical and empirical viewpoints. We provide an integrative conceptual framework for organizing the literature on effectiveness of project portfolio management. Most of effective attributes are identified from the questionnaires filled out by 159 experts from Iranian construction companies. The obtained results reveal that strategic factors, operational factors and organizational structure have the most significant influence on effectiveness of PPM. Besides, we provided effective solutions for the organizations to improve their performance. Our findings can help practitioners develop a more focused approach in dealing with the most significant attributes.
Materials and methods
Regarding the lack of theoretical point of views, complete and better frameworks are essential to summery and conduct all attributes which are most effective project portfolio management. In this research, it would be realized by answering the following research question.
Research Question: What are the most important attributes on effectiveness of project portfolio management within projects?
The paper develops a conceptual framework for the analysis of effectiveness of PPM in projects. Based on this theoretical framework, the paper proposes research hypotheses and builds a causal model that links the constructs of the model. The factors regarding effectiveness of PPM in general are summed up from literature and then the issue is studied by conducting a survey in companies. Participants of the study included well-known and successful construction companies. Using in-depth data from Iranian construction Company, we study the attributes of effectiveness of PPM.
After the data collection process, data were categorized using the Excel software and analyzed using the LISREL software package. The statistical methods involved descriptive and inferential parts, in which the frequency tables were used in the descriptive part, and confirmatory factor analysis was used in the inferential part.
Discussion and Results
Based on a systematic investigation of effective attributes in PPM currently available in the literature, a common frame of reference for effectiveness of PPM development is developed. This frame of reference consists of seven main factors. Besides, it will provide a good departure point for future work in ppm, both academically and practically. These factors including strategic factors, operational factors, stakeholders, quality, risk management, control and organizational structure. These factors have investigated in construction projects and it has been identified that these items are effective on ppm and there is a direct relationship between them. Organizations should attempt to maximize the effect of these attributes in order to increase effectiveness of ppm.
In the structural equation modeling, the relationships between the latent variables, which are extracted by the theory, are examined based on the data. In this research, there are 37 observed variables (including items of the questionnaire) and seven latent variables. The significance model is used to test the significance, and the standard model is used to inspect the nature and intensity of the effects among the factors. Since the hypothesis testing is performed in the 95% confidence level, the results are significant when the absolute value of their respective t-value is greater than 1.96. Indeed, the values inside the interval (-1.96, 1.96) are considered as insignificance. Before the hypothesis testing, the model fitting should be confirmed. For this purpose, the confirmatory factor analysis was used.
After investigating the standard estimation model, the results of the t-value obtained indicate that all the relationships between the constructs exist because they all have a significance coefficient larger than 1.96, showing the significance of the relationships between the constructs. Indeed, the results indicate that the questionnaire, as the research instrument, has realized the research purpose. A positive factor loading (path coefficient) indicates the strength of the relationship. A path coefficient below 0.3 shows a weak impact, and the values between 0.3 and 0.6 represent an acceptable impact. Finally, factor loadings larger than 0.6 imply a very desirable intensity of variable impact on the effectiveness of project portfolio management. Moreover, the minimum acceptable value for the t-value is 1.96. Table 7 represents the values obtained by the software for the factor loadings and t-value for seven concepts of the research.
A review of the studies in the area of project portfolio management showed that various researchers focused on the impact of a special factor on the success and effectiveness of project portfolio management. In this research, all the key factors were extracted, defined, and categorized into seven groups and 37 effective factors using the meta-synthesis approach and interviews with the experts. These factors were examined in Iran’s construction industry using structural equation modeling in order to reduce environmental hazards in construction projects. It was observed that all the factors directly affected the success of project portfolio management. The factors can be ranked based on the intensity of their impact as follows: (1) strategic factors, (2) operational factors, (3) factors related to organizational structure, (4) control factors (5), risk management factors, (6) quality factors, and (7) factors related to the stakeholders. Also, among the 37 observed variables, 21 factors have a very desirable impact, 12 factors have an acceptable impact, and four factors have a weak impact on the project portfolio management effectiveness in project-oriented organizations of Iran’s construction industry.


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