The Mediating Effect Of Project Management Mechanism On The Relationship Between Business Strategy And Corporate Performance

The theory of implementing strategy through project has caught attention due to the facts that the ability of the strategy implementation rather than strategy formulation is widely questioned in practice and that the effectiveness of project management has been widely recognized. Turner and other researchers offer a new perspective to strategy implementation research by stating that strategies can be implemented through project management mechanisms such as project management office (PMO), programme management (PgM) and gate review (GR) etc. However, few in-depth theoretical and empirical studies have ever been carried out on how project management mechanisms act as mediators between business strategy and corporate performance.While all the project management mechanisms under current studies such as project management office (PMO), programme management (PgM) and gate review (GR) aim at individual organizational objectives, seldom have current studies considered strategy implementation on the part of organizations that lie in the value network by ways of project management mechanisms. Based on a three-phase Stackelberg dynamic game model, this study proposes project stakeholder relationship management (PSRM) as an additional project management mechanism to implement strategies for organizations in value network. And then it takes Xiamen PX project as a case to analyze the game among the stakeholders and evaluates the underlying reasons why it failed in site selection in Xiamen. With the game model and the case analysis, it suggests that organizations in the value network should take PSRM as a way to implement strategies. Thus it expands the research framework by suggesting that strategies be implemented through PMO, PgM, GR and PSRM.Based on the expanded framework and data from Ji'nan enterprises, this study tests the mediating effects of the four project management mechanisms on the relationship between business strategies and the performance. The results show that project management mechanisms, in varying degrees, can be ways to implement strategies; In addition, different project management mechanisms act as mediators between low-cost strategy, differentiation strategy, respectively, and corporate performance in different ways. Therefore, different business strategies should focus on the development of different project management mechanisms.