The impact of project risk management maturity on performance: Complexity as a moderating variable

Abstract

This study examines the utility of project risk management maturity (PRMM) for project-based organizations across different domains. The relationship between organization-level PRMM and firm’s performance is studied. Two alternatives of theoretical model are developed on the basis of an extensive literature review. The first model (i.e. traditional model) posits a direct positive relationship between PRMM and organizational performance. The second model suggests that the relation between the two key variables is positively moderated by the average level of “complexity” of projects which are typically performed by respective organizations. A cross-sectional, self-administrated survey is carried out with targeted respondents of senior members representing their respective organizations in construction, ICT, and telco industries in Indonesia (distributed = 651, response rate = 21.5%, final sample size = 100). The result suggests that, in general, the utility of PRMM is observable across organizations—but its efficacy diminishes for organizations with lower level of “project complexity.” This study provides an empirical support to the moderation model. The finding contributes to theoretical refinement on studies pertinent to project risk maturity. From a practical perspective, the result highlights the importance of contextual variables (in this case, project complexity) when designing organizational maturity.