Value-Based Approach on Project Management: Empirical Evidences on Indonesian Firms

Abstract

The issues surrounding project management have been studied rather extensively in many schools around the world. Though the most common perspective may have been encircled around operational management issues as the leverage to build-up necessary guidance in ensuring the success of the project, there are other perspectives to view and/or otherwise measure the actual performance of projects. The original birth process of any kinds of projects is often started individually, or group of individuals, who once have dreams to achieve improvements. The world of project management has to be filled with idea and lots of creative thinking. For this reason, project management contains both science and art elements built-in. Nevertheless, though project management is often regarded as an important field in management studies and management practices, with lots of available measuring tools, it is often wondered if, in fact, accounting perspective used in evaluating project management has conformed to the notion of value-based management.

The purpose of this study is to evaluate the value-based perspective on project management, by analyzing the impact toward value creation, as prescribed in the theory of value-based management. Qualitative and quantitative methods are incorporated in this study to understand underlying processes on project management, including project overrun. Primary and secondary data searches in this study would cover interview sessions and data attainment from numerous firms in Indonesia. The research attempts to formulate comparison between the actual and the planning of the project, including checking the conformation to the ingredients on value-based management. It is expected that the findings are able to support the notion on the organizational value creation through proper handling on the project management.

Keywords: project management, value-based management, value creation, performance measurements, Indonesian firms

JEL Classification: G30, L10, M10, L70, N60