Project based organizational structures are utilized in many industries. The firms engagedin these endeavors, project sponsor and contractor alike, risk both capital and reputationin the market-place with each new project. The relationship between project sponsor andcontractor influences the outcome of the project to a significant extent. Complex andchallenging projects are made more so by the adversarial relationships that frequentlyexist between the sponsor and contractor(s). This paper presents a model for examiningthe influence of the contractor/sponsor relationship on the execution of a project. Thefocus is on the effects of the relationship, as determined by the financial performance ofthe engaged firms and key project performance indicators (schedule, budget etc), on thedegree to which the firms engage with each other and the impact this has on projectperformance. Analysis of the model indicates the importance of appreciating the project’sneed for effective team integration in determining the financial arrangements.
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