Abstract

The project selection criteria are required for an effective project lifecycle, and the selected projects should correspond with organizational aims and objectives; yet, the organization lacks severely in its ability to act decisively on the problem. Hence, this study aims to highlight the best project selection criteria that are related to organizational success. In this manner, a quantitative survey approach was used, with closed-ended questions distributed to employees in Pakistan’s construction industry. The relationship between project selection criteria and organizational performance was evaluated using structural equation modelling in SmartPLS through measurement and structural models. The findings reveal that a significant positive correlation was found for all the project selection criteria, except for the financial criteria. Furthermore, the results demonstrate that project selection criteria are critical for organizational success; hence, the findings will assist organizations in making better project selection decisions.

Introduction

Organizations choose projects based on the many potential prospects that is why it is regarded as one of the most difficult decisions to make [1] . There are various aspects associated with project selection, such as cost, financial, and time-based criteria [2] and any mistreatment may result in an outbreak of an obstacle [3] , [4] . An organization’s project selection problems develop when there are inadequate resources to take advantage of; hence, project selection criteria are devised to select the cost-effective projects [5] , [6] . A significant part of project management-related research revolves around organizational performance [7] which is critical for the success and survival of today’s numerous commercial and economic operations due to market rivalry for cash, consumers and inputs [8] . Organizational performance is central to today’s industrial activity [7] , [9] and is considered a collection of all the businesses accomplishments which are then committed towards a structural goal for organizations in a given period. The notion of organizational performance is linked with the persistence and achievements of a firm [8] , [10] where several constructs have been linked and studied afterwards [11] . Organizational performance measures comprise several financial measures including budgeting, cash flow cash flow, cost-cutting, and profitability [12] .

The criteria used to select projects can vary depending on the organization’s goals, industry, and available resources. The relationship between project selection criteria and organizational performance is complex and multidimensional [13] , [14] . The influence of project selection on organizational performance has been studied in various fields, including information technology, engineering, and construction. A few studies suggest that selecting projects based on strategic alignment and financial feasibility can improve project outcomes and overall organizational performance [15] , while other studies have found that selecting projects based on risk and organizational capability can lead to better project outcomes and performance [16] . Hsu [17] investigated the relationship between project selection and organizational performance in the construction industry and found that project selection criteria, such as financial viability, strategic fit, and technical feasibility, had a significant impact on project success. Similarly, Lind and Culler [18] investigated that the effect of project selection on the performance of information technology projects and found that effective project selection was positively associated with project success and organizational performance. Beldek, et al. [19] studied the financial, social, technical, and risk criteria in the context of Turkish industries, however, the study was limited to the number of selection factors. Hence, adding upon on their outcomes, the current research has added two more criteria namely environmental and management support criteria in the context of Pakistani industries as supported by Bhatti, et al. [11] .

Conclusion

The relationship between project selection criteria and organizational performance is complex and multidimensional. Few studies have investigated this relationship in service industries and identified institutional, financial, risk and technical criteria as key criteria for project selection, however, still, there is a gap in the body of knowledge that has been covered by this work. Hence, this research aimed to investigate the impact of project selection criteria on organizational performance through a quantitative analysis. Based on the assessment, the general significant finding is the positive relationship between project selection criteria and organizational performance, which confirms previous studies’ findings emphasizing the crucial role of project selection criteria for individual and organizational performance. Overall, the results support the constructs and validate the positive relationships between the five project selection criteria mentioned above and organizational performance. Only the relationship between financial criteria and organizational performance was insignificant in this study. The findings of this research can aid higher-ups in construction organizations in better project selection for their organizations. This research contributes to previous literature by adding two more criteria namely environmental and management support criteria in the context of the construction industry.