Projects are value creation mechanisms for organizations. In this paper, we build on service-dominant logic theory to theorize how value is perceived and co-created by service providers and clients in professional service projects. From two studies, we found that for service providers to create their value, particularly non-monetary value (e.g., enhanced reputation), client values (e.g., solving a business problem) must first be generated. The results further highlight the importance of reciprocal interactions between service providers and their clients in co-creating value for both parties. Service providers’ professional knowledge and competence and their clients’ levels of professional knowledge and motivation to interact are critical to enable effective interactions. However, the influence of service providers’ professional ethics and clients’ trust in professionals on project value co-creation is more complex than theoretically predicted. This paper advances the project value creation literature by providing a more holistic view of what value means for different stakeholders, how it is created, and by whom.

Introduction

Projects are increasingly recognized as value creation mechanisms in organizations (Laursen and Svejvig, 2016). Consequently, significant research efforts have been devoted to understanding project value (or benefits) and value creation (Martinsuo et al., 2019). These prior studies can be broadly categorized into three themes. The first theme defines (or redefines) relevant concepts, such as benefits, value, and project success, used in project value-focused research (Chang et al., 2013; Green and Sergeeva, 2019; Zwikael and Smyrk, 2012). The second theme, which is arguably supported by the richest body of literature, investigates value creation processes (Matinheikki et al., 2016; Pargar et al., 2019) and stakeholders’ involvement in project lifecycles (Keeys and Huemann, 2017; Vuorinen and Martinsuo, 2019; Zwikael and Meredith, 2018). The third theme takes a broader perspective to investigate value creation at program, portfolio, and organizational levels (Martinsuo and Hoverfält, 2018; Riis et al., 2019).