Strategic Alignment and Value Optimization: Unveiling the Critical Role of Project Portfolio Management for a Flexible Environment

Project portfolio management has emerged as a critical determinant for the success of both organizations and their constituent projects, and the evolving nature of a project portfolio and their objectives creates a necessity for flexibility within organizations. Despite the burgeoning interest among scholars and practitioners in project management criteria, there remains a paucity of empirical research delineating the mechanisms through which project portfolio management influences the value accrued by such portfolios. Employing a sample of project management professionals, this study utilized Structural Equation Modelling with mediation analysis and Necessary Condition Analysis to empirically evaluate a theoretical framework. This framework posits organizational strategy as a facilitative mechanism for the interrelation between flexible portfolio management and value creation and identifies the requisite and critical levels of portfolio selection criteria, portfolio management, and organizational strategy necessary for realizing project value. The findings contribute to a nuanced understanding of project value creation through portfolio management and underscore the strategic imperative of organizational strategy to enhance companies’ adaptability and responsiveness. Additionally, the study delineates the essential roles of risk and change management, alongside portfolio management, from foundational levels of perceived value to advanced levels necessitated by impact criteria and resource management strategies.