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The government can have multiple and diverse impacts on a business project, and this fact needs to be taken into account at every stage of its development. Project evaluation can be regarded as such a stage. Project evaluation can be carried out for different reasons and according to various models (for example, the quality/cost/time framework). It has been noted that nowadays the emphasis is often put on the outcomes, and the aim of such a PE consists in defining the successfulness of the project (Lenfle, 2012).
Still, the evaluation of the inputs, processes, and outcomes is an equally rapidly developing type of PE that is used to optimize the processes (Lenfle, 2012; Mathur, Jugdev, & Shing Fung, 2013). For this paper, it is assumed that a comprehensive project evaluation is being carried out. The type of the project is not taken into account, and the paper is devoted to the general ideas concerning the importance of government influence for project evaluation that are illustrated with specific examples.
Assets and Capabilities: Constraints and Opportunities
Assets can be described as the multiple resources of a company that include but are not limited to “financial, human, organizational, physical, social, technological” ones (Mathur et al., 2013, p. 113). Capabilities (strategic assets) “involve complex patterns of interaction and coordination between resources (including capital assets and people), processes and knowledge, in order to effectively transform inputs into outputs” (Parker, Parsons, & Isharyanto, 2015, p. 555). In other words, they are a type of resources that provide the company with a competitive advantage.
Assets and especially capabilities are of extreme importance for the project, and an evaluator needs to take into account the opportunities and restrictions that the government poses in this respect (Parker et al., 2015). With regard to human resources, the most significant governmental influence is probably the labor law. It should be pointed out that the law exists to protect both the employer and the employee; therefore, it can be viewed as both an opportunity and a constraint. An example is the workplace safety that needs to be maintained to respect the rights of the employees (Chan-Mok, Caponecchia, & Winder, 2014). This aspect is often related to the constraint of equipment and procedures standards that also need to be considered during project evaluation.
Concerning budgeting, the government can also offer opportunities and impose limitations. For example, taxation is likely to have an effect on a project, but the government is often willing to offer support and subsidies to the projects and organizations that are developing the fields of interest. For example, Seppo, Rõigas, and Varblane (2014) mention projects of cooperation between industries and universities that are supported by the government (mostly financially). Through project evaluation, an opportunity for using the governmental support can be found.
The legal system of a government may have impacts on a project without affecting its resources and the access to them. For example, the projects that have a chance of harming the environment need to adhere to environmental laws: the recent Volkswagen emissions scandal testifies to it.
The patent laws impact the outcomes of projects: for example, drug patents define the amount of time during which the developer has the exclusive right for the realization of the product (Greenbaum, 2012). Also, the international policy of a government can affect an international project, and political conflicts like the recent sanctions imposed on Russia are the examples of governmental actions having significant impacts on the economic life of several countries if not the entire world (Nelson, 2015).
Reverse Logistics can be defined as the “reverse” movement of the goods from the customer to the manufacturer: for example, the return of the products or their refurbishment as well as recycling and disposal of waste (Shi, Li, Yang, Li, & Choi, 2012, p. 220). Depending on the nature of a project (for example, it can be a reverse logistics one) the following governmental influences can be of consequence. The consumer rights protection defines a company’s policy on returns and refurbishments, and a project evaluator will need to take into account this constraint. Also, the environmental law is likely to provide directives for the specific strategies of recycling and waste management. To sum up, the government is expected to have an influence on the project’s reverse logistics (Mariana & Irina, 2014).
The government tends to affect projects primarily through the laws and regulations that result either in restrictions or possibilities. It should be pointed out that the restrictions can be concerned with standards, and the latter should be used as an impetus for development. In the end, both positive and negative influences must be taken into account during project evaluation to consider and minimize the impact of constraints or to use the opportunities and transform resources into capabilities. This general rule is true for reverse logistics as well. It can be concluded that the government appears to be a very significant force that needs to be taken into account when evaluating a project.
Chan-Mok, J. O., Caponecchia, C., & Winder, C. (2014). The concept of workplace bullying: Implications from Australian workplace health and safety law. Psychiatry, Psychology & Law, 21(3), 442-456. doi:10.1080/13218719.2013.829399
Greenbaum, D. (2012). Patents and drug shortages: Will the new congressional efforts save Us from impending drug shortages?. American Journal Of Bioethics, 12(1), 18-20 3p. doi:10.1080/15265161.2011.635835
Lenfle, S. (2012). Exploration, project evaluation and design theory: a rereading of the Manhattan case. International Journal Of Managing Projects In Business, 5(3), 486-507. doi:10.1108/17538371211235335
Mariana, C. L., & Irina, T. (2014). A green marketing vision of the Romanian companies promoted a business sustainable development. Annales Universitatis Apulensis : Series Oeconomica, 16(2), 1-12.
Mathur, G., Jugdev, K., & Shing Fung, T. (2013). Project management assets and project management performance outcomes. Management Research Review, 36(2), 112-135. doi:/10.1108/01409171311292234
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Nelson, R. M. (2015). UU sanctions on Russia: Economic implications. Current Politics and Economics of Russia, Eastern and Central Europe, 30(1), 187-205.
Parker, D., Parsons, N., & Isharyanto, F. (2015). Inclusion of strategic management theories to project management. International Journal Of Managing Projects In Business, 8(3), 552-573. doi:10.1108/ijmpb-11-2014-0079
Seppo, M., Rõigas, K., & Varblane, U. (2014). Governmental Support Measures for University–Industry Cooperation—Comparative View in Europe. Journal Of The Knowledge Economy, 5(2), 388-408. doi:10.1007/s13132-014-0193-8
Shi, X., Li, L., Yang, L., Li, Z., & Choi, J. (2012). Information flow in reverse logistics: an industrial information integration study. Information Technology and Management, 13(4), 217-232. doi:10.1007/s10799-012-0116-y