The impacts of project complexity, trust in leader, performance readiness and situational leadership on financial sustainability

Abstract

PurposeThis paper aims to examine the factors of financial sustainability of project management when they face complexities using the complexity theory. This research argues that to manage project complexities, the employees’ performance readiness, situational leadership style and trust in leaders increase financial sustainability.Design/methodology/approachThe study used a quantitative approach using a questionnaire survey with the Project Management Institute members in Indonesia. From the total population of 190 project managers, 91 questionnaires were valid and used for analysis. PLS-SEM is the statistical tool used to test the eight hypotheses formulated in this research. The survey was designed to analyze the factors influencing financial sustainability and how these variables are related to each other to overcome project complexity issues and deliver financial sustainability.FindingsThe research recommends that to overcome project complexities, the readiness of the employees to perform is important. These variables, which are supported by trust in the leader and situational leadership, have positively significant effects on financial sustainability. The findings strengthen the initial arguments of this research and confirm the existing studies.Research limitations/implicationsThis research, however, comes with several limitations. First, the situational leadership was chosen in this research because of the short project duration that requires the leader to be acting accordingly based on the employee’s abilities. The short project duration made it impossible for the leader to build any relationships with the team members. Therefore, this research might not be appropriate to explain the organizational long-term strategies. Thus, it is suggested that the future research should address this. Second, with the very limited studies regarding the performance readiness and maturity, where in this research are used interchangeably, there should be further research to explain both variables independently as it holds an important role in project management and to overcome project complexities. Hence, this research adds the various studies found on the project complexities and how performance readiness, trust in leaders and situational leadership interact to increase financial sustainability in projects.Originality/valueThis study contributes to the limited research on the financial sustainability of project management in developing countries. Moreover, the research on project complexities has not been related to financial sustainability and, therefore, promotes a high novelty. The findings of this study also provide substantial empirical evidence for future work in the project management area.