To Achieve Goal Alignment by Inter-Organizational Incentives: A Case Study of a Hydropower Project

Although the use of incentives has been widely recognized as an effective project management tool, its application still needs specific exploration. Existing research on incentives mainly focuses on intra-organizational incentives, lacking systematic research with empirical evidence from the perspective of the inter-organizational level. To fill this research gap, this study conducted an in-depth investigation into the application and impacts of inter-organizational incentives by studying a typical case of a hydropower project. In this case, a series of innovative inter-organizational incentives, involving a multiple contractual incentive scheme concerning schedule, quality, safety, as well as environmental performance, is applied. Using a mixed methodology that included a document review, a questionnaire survey, and interviews, this case study revealed that inter-organizational incentives could effectively help promote goal alignment, stimulate cooperative inter-organizational relationships, and improve project performance. This research developed a novel classification of inter-organizational incentives and emphasized the importance of non-contractual and informal incentives, which were ignored in previous research. The results further highlight that while incentivized organizations generally value incentives according to their monetary intensity, their prioritization of goals is determined by various factors. Therefore, to achieve project goal alignment, the optimization of incentive schemes should comprehensively consider a variety of influencing factors rather than merely focusing on monetary intensity. These findings will help both academic researchers and industrial practitioners design and execute effective inter-organizational incentives for superior project performance, especially for those projects that pursue high sustainable performance with safety and environmental performance included.

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