Dynamic and Ordinary Capabilities: A Project Management Perspective

Abstract

The project management literature has typically focused on project efficiency measures, such as time, cost, and quality, but rarely examined broader measures of project success, such as customer satisfaction and customer loyalty. In this article, we apply a resource-based theory framework and examine both ordinary and dynamic capabilities of the firm and their influence on customer satisfaction and repurchase intentions. We also include the firm's corporate reputation and explore its moderating influences on variables in the model. Data from 491 project managers indicate that one dynamic capability (relational) is three times stronger at predicting customer satisfaction than one of the ordinary capabilities (project). Another dynamic capability (product) is not a significant predictor of customer satisfaction. Customer satisfaction is the strongest determinant of repurchase intentions and fully mediate the impact of the firm's dynamic and ordinary capabilities on repurchase intentions. When the sample is split according to corporate reputation, for the group who saw the focal firm reputation ranked first in industry, the project (ordinary) capabilities and relational (dynamic) capabilities have similar influences on satisfaction. However, for the group who saw other firms’ reputation ranked first, relational capabilities are stronger than project capabilities at predicting satisfaction.