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Paper info: The role of presumed capabilities in influencing actors’ risk perception in different project industries

Title


The role of presumed capabilities in influencing actors’ risk perception in different project industries

Authors


Zoltan Veres, Laszlo Sajtos and Goetz Greve

Place of Publication


The paper was published at the 28th IMP-conference in Rome, Italy in 2012.

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Abstract


In the project industry some companies are more successful at closing a deal with buyers than others. We argue the answer lies in the presumed competence-based capabilities of actors. Some of these capabilities draw on the company’s past (epistemic), whereas others represent a promise for a successful outcome (heuristic). Utilization, promotion and “selling” of these capabilities in business-to-business contexts is of strategic importance for any project actor. This study aims to explore the project actors’ competence profile and its impact on their market and transaction uncertainty.Research method. First, qualitative data was collected in two phases. In the first phase we used expert mini focus group interviews with decision makers in various industrial contexts. The objective of these interviews was to explore general views of project buyers and suppliers on project characteristics and their expectations throughout the project. In the second phase structured in-depth interviews were undertaken. Construction were categorised as hard-type, whereas IT and other types of consulting, advertising, media and market research were considered as soft-type projects. The objective of this phase was to identify factors that make projects successful where respondents had to categorise capabilities. Second, we are currently conducting surveys from three countries in order to model the presumed capabilities of the suppliers and buyers and their impact on the actors’s value and risk perception as well as choice. After analysing our survey data we aim to validate our results by conducting a series of expert interviews (post-quantitative qualitative research) with respondents recruited according to the actors’ level of involvement (high-low) and the level of tangibility of the project (high-low).Research findings and further research. Our interviews revealed that (perceived) information asymmetry varies across contexts, which emphasizes the role of effective signalling and diagnostic cues. According to buyers, the actors need to demonstrate that they possess the ability (diagnostic cues) to be able to successfully cooperate and complete the project. From the second phase of qualitative research, both, buyers and sellers collectively agreed on three capabilities to be the most effective in influencing the risk perception of the other party, which are communication skills, expertise, and credibility. Processing quantitative data a four- and a seven-factor structure of expected project capabilities have been generated. In the last qualitative research stage these factor structures and their content will be interpreted and finetuned.Main contribution. The findings from our qualitative interviews helped us to understand the pattern of capabilities and activities that most likely to have an impact on bilateral risk perception of actors. The findings of this study enable us to enhance our knowledge on competence-based risk perception of actors and create general rules for selling of project-based capabilities and their impact on choice, risk and customer value across different project industries.