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International Journal of Project Management 27 (2009) 629637

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Impact of corporate strengths/weaknesses on project

management competencies
Zeynep Isik a, David Arditi a,*, Irem Dikmen b, M. Talat Birgonul b
a
Dept. of Civil, Architectural and Environmental Engineering, Illinois Institute of Technology, 3201 South Dearborn Street, Chicago, IL 60616, United States
b
Dept. of Civil Engineering, Middle East Technical Univ., 06531 Ankara, Turkey

Received 22 June 2008; received in revised form 27 September 2008; accepted 2 October 2008

Abstract

The project is at the core of the construction business. Project management can be used as a tool to maximize the success of projects
and ultimately the success of construction companies. It is therefore worthwhile to explore the factors that can enhance project manage-
ment competencies. In this study, it was hypothesized that project management competencies are inuenced by corporate strengths/
weaknesses. Corporate strengths/weaknesses was dened as a second-ordered construct composed of three latent variables including
the companys resources and capabilities, its strategic decisions, and the strength of its relationships with other parties. The data obtained
from a questionnaire survey administered to 73 contractors were analyzed using structural equation modeling (SEM). The results of the
study veried the hypothesis suggested.
2008 Elsevier Ltd and IPMA. All rights reserved.

Keywords: Corporate strengths/weaknesses; Project management competencies; Company resources and capabilities; Strategic decisions; Strength of
relationships

1. Introduction employees, and being open to innovations. The environ-

The construction industry is a project oriented indus-
try. Eective project management is key for the success-
ful accomplishment of sophisticated projects [1,2].
Jaselskis and Ashley [3] state that construction projects
commonly experience uncertainty because of shortages
in resources and the nature of the project. The factors
that are conducive to successful project management
are abundantly discussed in the literature. For example,
Munns and Bjeirmi [4] suggest that the factors of success
in project management include commitment to complete
the project, appointment of a skilled project manager,
adequate denition of the project, correctly planning
the activities in the project, adequate information ow,
accommodation of frequent changes, rewarding the
*
Corresponding author. Tel.: +1 312 5675751; fax: +1 312 5673519.
E-mail addresses: zisik1@iit.edu (Z. Isik), arditi@iit.edu (D. Arditi),
idikmen@metu.edu.tr (I. Dikmen), birgonul@metu.edu.tr (M.T. Birgonul).
ment in which the project takes place was also taken into
account by many researchers [57]. That the use of the
appropriate management techniques contributes to suc-
cessful project management is also stressed by many
researchers e.g., [4,8,9]. The literature appears to empha-
size project-related factors at the expense of company-
related factors such as a companys resources and capa-
bilities, its strategic decisions, and the strength of its rela-
tionships with other parties.
It should be kept in mind that a company is an organi-
zation that supports the many projects undertaken by the
company, generally in dierent geographical locations
and administered by quite autonomous project managers
but relying heavily on the support of the head oce. In that
sense, every project is somewhat inuenced by the policies
and culture of the central company organization. The
objective of the study reported in this paper is to explore
the impact of corporate strengths/weaknesses on project
management performance.

0263-7863/$34.00 2008 Elsevier Ltd and IPMA. All rights reserved.

doi:10.1016/j.ijproman.2008.10.002
630 Z. Isik et al. / International Journal of Project Management 27 (2009) 629637
Corporate strengths/weaknesses are dened in the study
to reect three dimensions: the companys resources and
capabilities relative to nances, technical and human capi-
tal, research and development, receptiveness to innovation;
its strategic decisions relative to dierentiation, market/cli-
ent/partner selection, investment, organizational and pro-
ject management; and the strength of its relationships
with other parties such as clients, unions, and the govern-
ment. Project management competencies are dened by
the factors set forth by dierent researchers e.g., [2,4], the
Project Management Body of Knowledge (PMBoK) [10]
and the suggestions of construction professionals contacted
in a pilot study. All relevant factors are described in detail
in the next two sections. A questionnaire survey was
administered to a number of construction companies to
test the hypothesis that corporate strengths/weaknesses
have a signicant impact on project management compe-
tencies. The hypothesis was tested using structural equa-
tion modelling (SEM), a statistical tool described later in
the paper.
2. Corporate strengths/weaknesses
Construction companies should be cognizant of their
strengths and weaknesses in order to overcome the chal-
lenges of increased competition. However, the intangible
nature of corporate level characteristics makes it dicult
to assign them as strengths/weaknesses [11]. Based on a lit-
erature review and the responses of experts in a pilot sur-
vey, the corporate strengths/weaknesses were dened in
the study by three constructs including a companys
resources and capabilities, its strategic decisions, and the
strength of its relationships with other parties. These vari-
ables are described below.
2.1. Resources and capabilities
In the language of traditional strategic analysis, a com-
panys resources and capabilities are the strengths that
companies can use to conceive of and implement their
strategies [12,13]. A companys resources and capabilities
may be dened as its tangible and intangible assets. They
include the companys nancial resources, technical com-
petencies, leadership characteristics, experience, and image
in the industry, research and development capabilities, and
innovation tendencies.
Financial resources indicate a companys credibility and
reputation among clients and suppliers as well as its
strength in the market in terms of its capacity to carry
out projects [14]. Having strong nancial resources may
enable a company to get into more risky situations which
in turn have higher benets. The nancial strength of a
company is indicated by protability and turnover and
generally by the ratio of the companys liabilities to equi-
ties. The majority of construction projects are funded by
the owner who pays the contractor periodically, who in
turn pays the subcontractors, the suppliers and other par-
ties of the project for services rendered. The success of this
routine depends on the nancial strength of the owner as
well as of the contractor [15].
Technical competency refers to the physical assets of a
company such as machinery and equipment and the extent
of technical knowhow available that is necessary to under-
take specic projects. According to Shenhar and Dvirs [16]
project management theory, fullling technological speci-
cations is one of the major factors in the achievement of
success in a project [17,18]. According to Warszawski
[14], a companys technical competency can be assessed
by analyzing the companys preferred construction meth-
ods, the experience of its technical sta, the productivity
and speed of its construction activities and the quality of
the companys output.
Leadership involves developing and communicating mis-
sion, vision, and values to the members of an organization.
A successful leadership is expected to create an environ-
ment for empowerment, innovation, learning, and support
[7]. Researchers have examined the links between leader-
ship styles and performance [19,20]. Fiedler [21] has
emphasized the eectiveness of a leader as a major determi-
nant in success or failure of a group, organization, or even
an entire country. It is argued that the negative eects of
external factors in a project environment can be reduced
by the training end equipping of leaders with dierent skills
[2224]. Organizations require leadership for any of their
decisions or actions [25].
Experience can be achieved only if the lessons learned
from completed projects are kept in the organizational
memory and used in future projects [26]. Organizational
learning is dicult for companies because of the frag-
mented and project-based structure of the industry. This
diculty can be altered by knowledge management activi-
ties and a continuous organizational learning culture [27].
The image of the company provides an impression of the
products, services, strategies, and prospects compared to its
competitors [28]. Contractors in the construction industry
have to portray an image that addresses the expectation
and demand of the clients and users like in all other market
oriented industries. A positive image may enable higher
protability by attracting better clients and investors and
increasing the value of the product [29].
Research and development capability has a positive
impact on competitive advantage in response to the
increased requirements of the globalized industry. The
dynamic and rapid changing nature of the industry forces
construction companies to develop and adopt new technol-
ogies in order to survive in a competitive environment.
Innovation capability constitutes the link between the
company and the dynamic environment of the industry
[30]. The construction industry is not static and introverted
any more. Globalization and higher rates of competition
between companies force construction companies to
change. Innovation capability is an important factor in
achieving cost leadership, focus, and dierentiation, hence
enhancing competitiveness as stated by Porter [31].
 Z. Isik et al. / International Journal of Project Management 27 (2009) 629637
According to Arditi et al. [32], innovations are rather incre-
mental than radical in the construction industry. Also con-
struction is a supplier dominated industry. Construction
companies are dependent on other industries (e.g., con-
struction material, manufacturers, equipment manufac-
tures and others for technological innovations such as
new construction processes and methods). Alternative cor-
porate structures, nancing methods etc. can also be con-
sidered as potential innovation areas in the construction
industry [32].
2.2. Strategic decisions
The literature on strategic decision making is spread
over a wide range from an individual strategists perspec-
tive to strategic management techniques, to the implemen-
tation of these techniques in real situations [14,3335]. The
strategies selected for this study (see below) represent the
characteristics of the construction industry as a project-
based organization.
Dierentiation strategies refer to the dierentiation of
products or services that provides competitive advantage
and allows a company to deal eectively with the threat
of new entrants to the market [36]. Many new construction
companies enter the industry every year because starting a
new company does not require a large investment; conse-
quently the construction industry becomes more competi-
tive and forces existing companies to seek advantages
over competitors by means of dierentiation strategies that
allow them to undertake projects that the new entrants can-
not do.
Market, project, client, and partner selection strategies
are related to characteristics of such as market conditions,
the location and complexity of the project, the nancial sta-
bility of the client, and potential partners that have capabil-
ities that the company does not possess.
Project management strategies can be developed by
referring to the mission of the company and the companys
business environment. The managerial functions of a pro-
ject include activities such as planning, cost control, quality
control, risk management, safety management, to name
but a few. In order to achieve project goals, adequate strat-
egies have to be set up relative to these functions.
Investment strategies occur along several dimensions
such as capabilities of the company (resources), pricing
(nancial decisions), product (construction project-related
factors), and nally research and development [37].
Organizational management strategies involve decisions
pertaining to the companys reporting structure, planning,
controlling and coordinating systems, as well as the man-
agement of the informal relations among the dierent par-
ties within the company [12].
2.3. Strength of relationships with other parties
The strength of a companys relationships with other
parties constitutes a social dimension of project environ-
631
ment [38]. The strength of relationships with the parties
involved in typical construction projects such as public or
private clients, regulatory agencies, subcontractors, labor
unions, material dealers, surety companies, and nancial
institutions constitute an important aspect of a company.
The strength of these relationships is related to the mutual
satisfaction of the parties, i.e., the realization of the expec-
tations of the parties. The primary relationships that are of
more importance than others include relationships with
construction owners (both public and private), labor
unions, and regulatory agencies. But the subtle dierence
between favoritism and the strength of relations has to be
distinguished while assessing this criterion.
Relationships with clients rely on the communication and
negotiating skills of company executives. The diculty of
achieving strong relationships between clients and contrac-
tors has always been a matter of concern, but recently the
importance of cooperation and trust between clients and
contractors has been understood somewhat better [39].
The awareness of the inuence of good relationships on
performance encouraged contractors to recognize clients
basic expectations relative to cost, time and quality [40].
On the other hand, good relationships are characterized
by timely payments on the part of the owner, fewer claims
on the part of the contractor, and the absence of legal
disputes.
Relationships with labor unions relates to the human
resources management of the company. Contractors
should pay attention to formulating fair employment poli-
cies and to recognize labor rights. Labor unions have the
right to strike in case the company engages in serious labor
practices [41]. Smooth labor relations minimize disputes
and strikes, and prevent potential delays.
Relationships with the government depends on the com-
promise of the government policies and the implementa-
tions of regulatory agencies with the companies in the
construction industry. In general terms, bureaucratic
obstacles set by regulatory agencies to maintain standards
in companies day-to-day operations (e.g., codes, inspec-
tions, approvals, etc.), and companies diculties in
obtaining preferential nancial support are some of the
government-induced problems. On the other hand, tax
incentives, and relaxation of customs duties to allow the
import of some materials and to prevent shortages are
encouraging government actions [42].
3. Project management competencies
The project is at the core of the construction business
and project management can be used as a tool to maximize
the success of a project [3]. The implementation process is
normally uniform across all projects even though each pro-
ject is unique [10,43]. Nine project management knowledge
areas were identied based on a review of the literature and
a limited number of interviews with construction profes-
sionals during the pilot study of the research. The selection
of these factors was based on their potential to impact the
632 Z. Isik et al. / International Journal of Project Management 27 (2009) 629637
success of a project through the implementation process.
Various project management success factors were identied
in the literature such as communication, control mecha-
nisms, feedback capabilities, troubleshooting, coordina-
tion, decision making, monitoring, project organization,
planning and scheduling, and management experience
[4446]. However, in this study, project management com-
petencies were investigated rather than the success factors.
Therefore the project management areas described briey
below were considered with their potential inuence on
project success.
Schedule management enables the project to complete on
time by the use of a series of processes, including activity
denition, sequencing, resource estimating, duration esti-
mating, schedule development and schedule control [10].
A project manager has to be familiar with the project envi-
ronment and the conditions that may be the cause of
potential delays.
Cost management activities include planning, estimating,
budgeting, and controlling the costs of the project [10]. All
these activities ensure the lowest possible overall project
cost consistent with the owners investment objectives.
Quality management refers to the activities that deter-
mine quality policies, objectives, and responsibilities. The
processes of a quality management system include quality
planning, quality assurance, and quality control [10]. Con-
struction companies are incrementally implementing total
quality management (TQM) for improving customer satis-
faction, obtaining better quality products and higher mar-
ket share. The main success of TQM depends on the
commitment of top management and willingness to change
the quality culture [47].
Human resources management is an inevitable dimension
of project management since it is people who deliver pro-
jects. People are the predominant resource in an organiza-
tion and there is a positive association between human
resources management practices and achievement of out-
standing success [48,49]. Organizing and managing the pro-
ject team are the main duties of human resources
management.
Risk management processes include identication, analy-
sis, responses, monitoring and control of risks. Considering
the complex, dynamic and challenging nature of construc-
tion projects, risk in a construction project is unavoidable
and aects productivity, performance, quality and budget
signicantly. However, risk can be transferred, accepted,
minimized, or shared [50]. Proper management of risk
has the potential to decrease the eects of unexpected
events [18,51].
Supply chain management is the network of dierent par-
ties, processes and activities that produce products or ser-
vices [52]. The owner, consultants, contractor,
subcontractors and suppliers constitute the supply chain
in construction. Higher success can be achieved by increas-
ing the quality of communication between dierent parties
and team operation among dierent parties [47]. A number
of public sector construction initiatives in the UK, includ-
ing the Latham Report [50] and the Egan Report [53]
emphasized the benets of improving supply chain
management.
Claims management is of particular importance because
the construction activity involves a large number of parties,
an environment conducive to conicts. Documentation,
processing, monitoring and management of claims are a
part of contract life cycle [10]. Claims and disputes between
construction owners, contractors and other participants
can be avoided by clearly stated contractual terms, early
nonadversarial communication, and a good understanding
of the causes of claims [54].
Knowledge management is dened as a vehicle fuelled by
the need for innovation and improved business perfor-
mance and client satisfaction [53,55,56]. The capability of
a company to cope with sophisticated projects is the result
of a successful knowledge management [14]. Therefore it is
essential to keep information on best practices in order to
learn lessons and not to duplicate the mistakes.
Health and safety management aims to reduce the num-
ber of accidents and accidents eects on project costs such
as the cost of insurance, inspection and conformance to
regulations [57]. Potential solutions to health and safety
problems include providing safety booklets, safety equip-
ment, and a safe environment; appointing a trained safety
representative on site; training workers and supervisors;
and using new technologies [57,58].
4. Research methodology
A questionnaire consisting of questions about the latent
variables and their constituent variables explained in the
preceding sections was designed to analyze the inuence
of corporate strengths/weaknesses on project manage-
ment competencies. The questions were designed to seek
the perceptions of the respondents relative to company
resources and capabilities, strategic decisions, the strength
of the companys relationships with other parties, and pro-
ject management competencies in the company. An exam-
ple question would read How successful do you think
your company is in schedule management? The respon-
dent would rate the answer on a scale of 15, where 1 rep-
resents not successful and 5 very successful.
The questionnaire was administered via e-mail and face-
to-face interviews to 185 construction companies estab-
lished in Turkey. The target construction companies were
all members of the Turkish Contractors Association
(TCA) and the Turkish Construction Employers Associa-
tion (TCEA). The 185 companies received an e-mail
describing the objective of the study, inquiring about their
willingness to participate in the study and requesting a
face-to-face interview with an executive of the company.
Forty seven questionnaires were completed, the majority
of which were administered by face-to-face interviews.
The rate of response was 25%. However, considering the
fact that there were other construction companies in the
industry which were not members of TCA or TCEA but
 Z. Isik et al. / International Journal of Project Management 27 (2009) 629637 633

showing similar characteristics with the member companies
of these two associations in terms of size and type of work
undertaken, a decision was made to expand the survey by
including 26 additional similar companies selected individ-
ually through personal contacts. At the end of the extended
survey, there were 26 more completed questionnaires,
bringing the total number of respondents to 73. The vari-
ables associated with the survey questions were described
in the preceding sections and are presented in Fig. 1.
5. Data analysis
The data collected from 73 respondents were analyzed
using a software package called EQS 6.1, a structural equa-
tion modeling (SEM) tool. SEM is a statistical technique
that combines a measurement model (conrmatory factor
analysis) and a structural model (regression or path analy-
sis) in a single statistical test [5961].
The rst step in SEM is the validation of the measure-
ment model through conrmatory factor analysis (CFA).
While conducting CFA, construct validity should be satis-
ed by using content validity and empirical validity tests.
Once the measurement model is validated, the structural
relationships between latent variables are estimated [61,62].
Content validity tests rate the extent to which a constit-
uent variable belongs to its corresponding construct. Since
content validity cannot be tested by using statistical tools,
an in-depth literature survey is necessary to keep the
researchers judgment on the right track [63]. An extensive
literature survey was conducted to specify the variables
that dene latent variables. The model was tested in a pilot
study administered to industry professionals and academ-
ics. Based on the input of these subjects, the model was
restructured, eliminating some of the variables and adding
recommended ones. Content validity was thus achieved. In
the proposed model, corporate strengths/weaknesses is
considered to be a three-dimensional and 2nd order con-
struct composed of company resources and capabilities,
strategic decisions, and strength of relationships with
other parties; its eect on project management compe-
tencies is tested. In other words, the structure of the model
involves a second order construct whereby a latent variable
(corporate strengths/weaknesses) is represented by three
latent variables (company resources and capabilities, stra-
tegic decisions, strength of relationships with other parties)
(Fig. 1). The second order approach is recommended by
Hair et al. [64] as it maximizes the interpretability of both
the measurement and the structural models. The heavy

Financial resources
0.54

Technical competency
0.51

Leadership
0.70 COMPANY
RESOURCES
Experience AND
0.63
CAPABILITIES
Company image
0.71

R&D capability
0.75

Innovation capability
0.75 0.67 Schedule management

0.94
0.70 Cost management
Differentiation strategies 0.68
0.70 Quality management
Market selection strategies 0.65
0.80
Human resources management
Project selection strategies 0.73 STRATEGIC 0.65
DECISIONS 0.93
CORPORATE PROJECT Risk management
Client selection strategies 0.70 0.93 STRENGTHS/ MANAGEMENT 0.66
WEAKNESSES COMPETENCIES
Supply chain management
Partner selection strategies 0.73 0.66

Claims management
Project management strategies 0.71 0.77
Knowledge management
Investment strategies 0.68 0.72
0.91
0.65 Health and safety management
Org. management strategies

Relations with clients 0.61

STRENGTH
OF RELATIONSHIPS
Relations with government 0.59 WITH OTHER
PARTIES

Relations with labor unions 0.79

Fig. 1. Structural equation model.

634 Z. Isik et al. / International Journal of Project Management 27 (2009) 629637
arrow in Fig. 1 denes the direction of the inuence
between two constructs, while light arrows dene the
dimensions of latent variables. Empirical validity tests fol-
low content validity.
Scale reliability is the internal consistency of a latent
variable and is measured most commonly with a coecient
called Cronbachs alpha. The purpose of testing the reli-
ability of a construct is to understand how each observed
indicator represents its correspondent latent variable. A
higher Cronbachs alpha coecient indicates higher reli-
ability of the scale used to measure the latent variable
[65]. According to the EQS analysis results, Cronbachs
alpha values were, 0.84 for company resources and capa-
bilities, 0.88 for strategic decisions, 0.71 for strength
of relationships with other parties, 0.93 for project man-
agement competencies, and 0.95 for the overall model,
all well beyond the threshold of 0.70 recommended by
Nunally [66] indicating that scale reliability has been
achieved. The reliability of the corporate strengths/weak-
nesses construct was also observed to be 0.93, which jus-
ties the use of a three-dimensional construct with a two-
step approach.
Unidimensionality refers to the degree to which constit-
uent variables represent one underlying latent variable.
CFA was used to test for unidimensionality. Initially,
CFA was conducted independently for each construct.
Once each construct in the model was deemed unidimen-
sional by itself, then unidimensionality was tested for all
possible pairs as recommended by Garver and Mentzer
[61] and Dunn et al. [63].
Convergent validity is the extent to which the latent var-
iable correlates to corresponding items designed to measure
the same latent variable. If the factor loadings are statisti-
cally signicant, then convergent validity exists. Fig. 1
shows the factor loadings marked next to light arrows cor-
responding to the ve constructs of the model; note that all
of the factor loadings are signicant at a = 0.05.
Another way of assessing construct validity is the good-
ness-of-t of the model. A number of t indices are avail-
able, but Marsh et al. [67] propose that ideal t indices
should have: (1) relative independence of sample size; (2)
accuracy and consistency to assess dierent models; and
(3) ease of interpretation aided by a well dened continuum
or pre-set range. Many t indices do not meet these criteria,
because they are adversely aected by sample size [68]. The
non-normed t index (NNFI) considers a correlation for
model complexity [59]. The comparative t index (CFI) is
interpreted in the same way as the NNFI and represents
the relative improvement in t of the hypothesized model
over the null model. The root mean squared error of
approximation (RMSEA) is an estimate of the discrepancy
between the observed and estimated covariance matrices in
the population [64]. The v2 compares the observed covari-
ance matrix to the one estimated on the assumption that
the model being tested is true. But, when the sample size
is small, it is dicult to obtain a v2 that is not statistically
signicant; in such situations, the ratio of v2 to degree of
Table 1
Reliability value and goodness of t indices of the overall model.
Fit indices Recommended Overall
value model
Cronbachs alpha >0.7 0.95
Non-normed t index (NNFI) 0 (No t)-1 0.87
(perfect t)
Comparative t index (CFI) 0 (No t)-1 0.86
(perfect t)
Root mean-square error of <0.1 0.08
approximation (RMSEA)
v2/Degree of freedom <3 450/
315 = 1.43
freedom (dof) is to be examined. Based on the stated crite-
ria and the suggestions made by Garver and Mentzer [61],
Bentler and Yuan [68], and Jackson [69], (1) the non-
normed t index (NNFI); (2) the comparative t index
(CFI); (3) the root mean squared error of approximation
(RMSEA) and (4) the ratio of v2 to dof were selected in this
study since they are less aected by sample size compared
to other goodness-of-t indices. Bentler [70] also recom-
mends using robust methodology in EQS to handle non-
normality and to avoid the limitations of small sample size.
Robust analysis leads to corrected v2 statistics and t indi-
ces. In this study, robust analysis is performed and robust
statistics are presented in Table 1. According to the values
presented in Table 1, the v2 to dof ratio was satisfactory as
it was smaller than 3, the threshold suggested by Kline [59].
The CFI and NNFI values of 0.87 and 0.86 also demon-
strate a good t of the model to the data. Moreover, the
RMSEA value was found to be satisfactory as it was below
the recommended value of 0.10 [59]. All in all, the measure-
ment model shows a good t to the data.
In the second step of the analysis, SEM tests the hypoth-
esized relationships between the validated constructs. The
relationship between the latent variables was hypothesized
with a heavy arrow in Fig. 1 which represents the direction
of the inuence. The path coecient marked on this heavy
arrow is calculated for a 95% condence level and can be
interpreted similar to a regression coecient that describe
the linear relationship between two latent variables [70].
According to the model, corporate strength/weaknesses
has a signicant impact on project management compe-
tencies with a path coecient of 0.93.
6. Discussion of the ndings
All criteria including Cronbachs alpha values, factor
loadings, path coecients and goodness of t indices which
were used to measure the reliability and t of the model
were found to be highly satisfactory as shown in Table 1
and Fig. 1. The hypothesis set in the study that corporate
strength/weaknesses which is dened by company
resources and capabilities, strategic decisions and
strength of relationships with other parties is a key factor
in the development of project management competencies
 Z. Isik et al. / International Journal of Project Management 27 (2009) 629637
is therefore veried by the ndings. The inuence of the
determinants that take a project to success or failure has
been investigated by several researchers e.g., [2,45,7173],
the majority of whom pointed out the importance of pro-
ject management competencies among other criteria.
Based on the ndings, it can be stated that corporate
strengths/weaknesses plays an important role on the suc-
cess of projects since it has a direct and signicant inuence
on project management competencies. The positive inu-
ence of company wide characteristics on project manage-
ment competencies is also supported by other studies.
According to the strategic management literature, compa-
nywide characteristics are dened as the strengths of a
company and the strengths of a company have the poten-
tial to be translated into an opportunity for the company
as well [12,13].
Company resources and capabilities which is one of
the determinants of corporate strengths/weaknesses with
a factor loading of 0.94 (Fig. 1), depends on the size of the
company and the competitive environment in which the
company operates. In order to have a positive impact on
project success, company resources and capabilities should
be valuable, rare, inimitable, and should lack of substitutes
[12,74]. Based on their higher factor loadings in Fig. 1, it
can be stated that leadership, company image,
research and development capability and innovation
capability are important resources and capabilities. While
leadership is of importance in the execution of all project
management activities, company image, research and
development capability, and receptiveness to innova-
tion can be considered as sources of competitive advan-
tage. Leadership in developing and using innovative
management techniques is expected to aect at least some
project management competencies.
Strategic decisions, with a factor loading of 0.93 is
a major indicator of corporate strengths/weaknesses,
and in turn impacts project management competencies
signicantly. Emphasizing the importance of strategic
decisions, Child [75] states that companies can achieve
higher organizational success by adopting dierent com-
petitive positioning alternatives based on strategic deci-
sions. The strategic decisions construct in the study was
represented by eight constituent variables, all closely
related to competition. All have the power to manipulate
the course of action in a project. Market/project/client/
partner selection strategies conducted along with dieren-
tiation, investment and organizational management strat-
egies can constitute important corporate strengths (or
weaknesses), which in turn can impact project manage-
ment competencies. For example, dierentiation strate-
gies that add uniqueness and value to a companys
competitive arsenal [76] can have an impact on almost
all project management competencies. Market, project,
client, partner selection is likely to impact project man-
agement competencies such as knowledge management,
risk management, claims management and cost manage-
ment. The inuence of investment strategies on cost
635
management is obvious. Similarly, the eect of organiza-
tional management strategies on the human resources
and knowledge management competencies of project
management is well established.
Strength of relationships with other parties was also
found to be loading signicantly on project management
competencies. The positive inuence of strong relation-
ships with other parties was also discussed and conrmed
in the literature e.g., [7780]. The strength of the relation-
ships between the contractor and the client facilitates the
operations and helps to achieve better performance.
According to Pinto and Mantel [78] and Dissanayaka
and Kumaraswamy [79], good relationships between a con-
struction management rm and the clients representatives
expedite the operations and help to achieve success. Con-
sidering the sophisticated nature of the industry and the
cultural values of the society, the relationship of a con-
struction company were assessed not only with the client,
but also with government agencies and labor unions. On
this account, the communication and negotiation skills of
company executives have to be stressed. The strength of
a companys relationships with other parties is expected
to impact project management competencies such as qual-
ity management, claims management, human resources
management.
7. Conclusion
The impact of corporate strength/weaknesses on project
management competencies was investigated in this study.
According to the model presented in Fig. 1, corporate
strengths/weaknesses are dened by the latent variables
company resources and capabilities, strategic deci-
sions and strength of relationships with other parties.
It was hypothesized that corporate strengths/weak-
nesses, so dened, impacts project management compe-
tencies. In order to test this hypothesis, a questionnaire
survey was administered to 73 Turkish construction com-
panies. A two-step SEM model was set up to measure the
ve latent variables (project management competencies,
company resources and capabilities, strategic decisions,
strength of relationships with other parties, and corporate
strengths/weaknesses) through their constituent variables
and to see if the hypothesized relationship holds (Fig. 1).
According to the ndings of the SEM analysis (Fig. 1
and Table 1), Cronbachs alpha coecients of all the latent
variables were well over the 0.70 min set by Nunally [66]
which indicated that the internal reliability of the individ-
ual constructs was quite high. The internal reliability of
the overall model was also found to be 0.95 which is an
excellent result. CFA showed that all factor loadings pre-
sented in Fig. 1 were signicant at a = 0.05. Limitations
due to the small sample size are overcome by using robust
methodology and the goodness of t indices presented in
Table 1. The indices consistently indicated a good t, con-
sidering the recommended values. As a result, it can be
concluded that the hypothesis set at the beginning of the
636 Z. Isik et al. / International Journal of Project Management 27 (2009) 629637
study was veried by the statistically signicant (a = 0.05)
and very strong path coecient (0.93) shown in Fig. 1.
Beyond the success criteria commonly mentioned in pre-
vious research on project management e.g., [2,4,45,
72,73,81], the considerable inuence of corporate
strengths/weaknesses was conrmed by the nding of this
study. This nding adds a dierent perspective to success
criteria in project management, and is particularly impor-
tant since construction is largely project-based. Based on
the ndings of the study, it can be stated that companies
should adjust their resources and capabilities, their long-
term strategies and their relationships with other parties
to better serve the needs of the individual projects. Indeed,
in the dynamic environment of the construction industry,
companies have to behave farsighted in order to survive.
Ample leadership qualities should be acquired in addition
to being open to innovation and fostering research and
development. Tactical considerations which are short-term
have to be complemented by long-term and strategic deci-
sions. Finally, strong relationships (may be exploring part-
nering relationships) should be developed with prospective
clients, unions, and government.
Further research that incorporates a more detailed view
of project management competencies such as the IPMA
Competence Baseline [82] could reveal new insights into
technical, behavioral, as well as contextual competencies.
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