Abstract
Project complexity is usually considered as one of the main causes of cost overruns, resulting in poor performance and thus project failure. However, empirical studies focused on evaluating its effects on project cost remain lacking. Given this circumstance, this study attempts to develop the relationship between project cost and the multidimensional project complexity elements. The study assumes complexity as a multidimensional factor including the task, organization, market, legal, and environment complexities. And it adopts an empirical evidence-based structural model to account for the relationships between project cost and project complexity. By doing so, a quantitative assessment of multidimensional project complexity has been developed. The findings suggest that task and organization complexities have direct effects on project cost, while market, legal, and external environment complexities have indirect effects on project cost. The practical contribution is that the findings can improve the understanding of which dimension of complexity significantly influences project cost and the need to focus efforts on strategically addressing those complexities.
Highlights
Construction projects are undertaken in an uncertain and dynamic environment, which presents a raft of challenges for all the stakeholders involved. ese challenges are associated with uncertainty and complexity in construction projects [1, 2]
It requires considerable and extensive research to investigate the project complexity relevant to and influencing project cost. is study sheds some light on the puzzle. is study developed a model to evaluate the effects of project complexity on projects using structural equation modelling (SEM). e results identify a set of complexity elements or attributes that truly reflect project complexity. e results indicate that both task and organization complexity can significantly impact project cost, while legal complexity has a significantly indirect effect on project cost mediated by task complexity and organization complexity, respectively
Market complexity has a significantly indirect effect on project cost mediated by organization complexity
Summary
Construction projects are undertaken in an uncertain and dynamic environment, which presents a raft of challenges for all the stakeholders involved. ese challenges are associated with uncertainty and complexity in construction projects [1, 2]. Project complexity impacts the modelling and management of projects and the objectives of cost, time, quality, and safety [3,4,5]. Ese complexities stem from many sources, such as task, organization, and environment, imposing significant upward pressure on the project’s cost It is not uncommon for construction enterprises to suffer massive losses due to ineffective management or unidentified complexities. No previous studies provide a structural model for quantitively evaluating the effects of project complexity on project cost. Erefore, this study tends to develop a systematic model for evaluating the effects of project complexity on project cost, using structural equation modelling (SEM). A valid model that describes the relationship between project complexity and project cost is developed by considering New Zealand’s construction industry.
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