Management

1. Introduction
An engineer-to-order (ETO) approach enables firms to offer their customers
individually configured products tailored to each customer's specific needs.
Increasing degrees of product customization, increases the complexity of ETO
projects. This complexity can jeopardize an ETO project's profitability.
DOES PROJECT MANAGEMENT MATTER? THE RELATIONSHIP
BETWEEN PROJECT MANAGEMENT EFFORT, COMPLEXITY, AND
PROFITABILITY

2. Conceptual background Research Article
 Project management’s relationship with project success
 Project complexity challenges successful project execution

3. Hypothesis Development
 H1: Project management effort positively affects project profitability.
 H2: The marginal effect of project management effort on project profitability
diminishes with increasing
 H3: Project management effort and project complexity interact to predict project
profitability, such that project management effort results in higher project profitability
for more complex projects than for less complex projects. g project management effort.
(The higher the complexity, the more product design features need to be engineered and
coordinated among the project staff)

4. Data and method
 A sample of 917 projects’ status reports of a large firm that offers ETO products
coupled with a control function approach to empirically investigate the causal effect of
project management effort on projects’ profitability. Furthermore, we investigate the
marginal impact of project management effort and its effect for different degrees of
project complexity.

5. Results
 Results reveal a positive but diminishing impact of project management effort on
project profitability. Furthermore, find that higher project complexity jeopardizes
project profitability. However, project management’s marginal impact increases with
increasing project complexity, ultimately leading to higher returns of more complex
projects.
 The results offer unique insights into the economic benefits of project management
while taking into account the complexity of the projects

6. Limitations and future research opportunities
 This study has certain limitations that open future research avenues. The analyzed
sample originates in a single company, which specializes in ETO products.