Abstract for:Value Creation Dynamics in Project Alliance

Project alliance as a project procurement form requires all parties to work together in good faith, share project risks, and making unanimous best-for-project decisions. One of the key features for a successful implementation of project alliance is the focus on value creation and knowledge integration to support innovative outcomes and behaviors. The purpose of this research is to determine key factors, mechanisms and processes that influence value creation in the alliance project context and explore how they emerge, change and unfold over time. A system dynamics model is proposed to elucidate complex feedback relationships in alliance implementation phase which eventually influence or are influenced by the dynamic level of created value. Based on the literature review and discussion reports on alliancing, motivation and capability to make the best-for-project decisions together with the speed of decision making are the main factors to ensure that the projectís value creation goals are met. The paper also presents and integrates three distinct, but interrelated processes which lead to cost-effective and high-quality implementation of the project: namely rescheduling process, rework process and innovation process. We analyze the impact of the identified factors, mechanisms and processes to investigate how value creation in alliance projects takes place.