Dynamics of project selection and growth in project-based organizations

Abstract

Expected long-term growth of organizations is path dependent and hinged to a series of decisions. In project-based industries, this path is shaped by decisions such as project selection. In this paper, we aim to explore the hypothesis that decisions regarding project selection are dynamic in nature, and the sequential strategies of organizations can have a butterfly effect on their long-term growth. For this purpose, we explored different project selection strategies based on the payback period of projects and their profitability, and considering capacity of the organizations. A real case study based on a midsize construction company in the United States is then used to showcase the application of the model to develop strategies for the long-term growth of organizations. Theoretically and thematically, the proposed simulation suggests that the emergent long-term impact of project selection strategies can be added to considerations in portfolio management to develop more informed long-term strategies.

Keywords:

• Growth of organizations
• project selection
• portfolio management
• project size
• strategic planning
• bonding capacity
• simulation
• profitability

Disclosure statement

No potential conflict of interest was reported by the authors.