Appendix 1.

The components
Factors Subs

Heuristics

Behavioral Finance

Perspective theory

Market factors

1
2
3
Atelier #5 – À remettre le 8 novembre : Rédaction préliminaire de vos hypothèses de recherche en lien
avec votre cadre conceptuel (5 pages excluant la page titre, la table des matières, la bibliographie et les
annexes) (5%).

Atelier #6 – À remettre le 15 novembre : Construction de l’opérationnalisation préliminaire de votre

cadre conceptuel (sous forme d’un tableau) excluant la page titre, la table des matières, la bibliographie
et les annexes) (5%).
Atelier #7 – À remettre le 29 novembre : Esquisse du devis de recherche préliminaire (unités et
niveaux
d’analyse, échantillonnage théorique, sources de données, choix des méthodes et des instruments de
collectes des données, plan de traitement des données recueillies, accès et confidentialité) (10 pages
excluant la page titre, la table des matières, la bibliographie et les annexes) (5%).

RAPPORT FINAL ET PRÉSENTATION D’AVANT-PROJET DE THÈSE (50%)

Vous devrez réaliser un projet de recherche au cours du séminaire. L'objectif de ce travail est de faire
avancer votre avant-projet de thèse. Le travail comportera notamment une justification de la recherche,
la problématique, les questions et les objectifs de recherche, la méthodologie, le cadre conceptuel, les
hypothèses, l’opérationnalisation de votre cadre conceptuel, les contributions théoriques et pratiques,
les limites de la recherche, la présentation d'un devis préliminaire et le plan de travail avec un
échéancier pour les différentes étapes futures. L'exercice donnera lieu à un rapport écrit d’une trentaine
de pages (excluant la page titre, la table des matières et la bibliographie) (40 %). Ensuite, vous devrez
faire une présentation de votre avant-projet de thèse lors de la dernière séance (10 %).

L’étudiant devra soumettre via le portail du cours le rapport final le 12 décembre avant 8h30 am.

4
4.2. Components of the research conceptual model

The main purpose of this section (chapter) is to highlight the general importance of project
management in the field of investment based on the financial behavior of the Canadian investors
and entrepreneurs with a focus on minority groups. Accordingly, this chapter concentrates on the
findings of existing literature in the field of financial behavior of investors, investment project
management, and the Canadian minorities, as the main concepts of the research, to identify the
basis for developing the research conceptual framework and hypotheses. To construct a
systematic review that attempts to identify all studies, the research concepts are broken down
into some keywords. Then, databases are selected with attention to coverage of the scientific
literature and level of overlaps. As Figure 1 indicates, using VOSviewer (version 1.6.15) makes
it possible to conduct content analysis of a vast number of resources and is subsequently
instrumental in identifying the connections among publications.

5
 Figure 1. General map of literature keywords relationships

The chapter begins with a literature review of the financial behavior of investors on which their
decisions, right or wrong, are made based on it. Behavioral finance theory, its concepts,
supporters, and criticisms are reviewed in this section. Then, investment projects and investment
project management will be introduced. In this part, in addition to discussing concepts, the role
of project management in investment will be justified. Finally, the chapter ends with a definition
of the Canada's minority groups. That is, it will be determined who are the minorities in Canada,
what are their demographic characteristics, and what is their role in investment and economy of
Canada.

2.2. Financial Decision-making Behavior

As mentioned, investment is an important part of countries' economy, so that national economic
indicators are affected by investment. In addition, investors are one of the main pillars of
investment. Their individual performance is effective in the investment market and ultimately in
the macro economy. In general, the performance of investors depends on the effectiveness of
their decisions, and it is also related to their investment behaviors (CAO, NGUYEN, & TRAN,
2021; Keswani, Dhingra, & Wadhwa, 2019). Therefore, a precise understanding of investment
decision-making behavior has positive consequences for two groups. Frist, for the investors

6
themselves; Investment decision-making behavior helps them to better understand the effective
factors in investment decisions and not to fall into traps rooted in their mind and psyche which
are formed due to cognitive and emotional errors. It also helps investors improve their reactions
to get better returns on investment. Second, governments that can develop better policies, goals,
laws and regulations, procedures, and guidelines to improve investment performance by knowing
the decision-making behavior of investors. Governments can also play a successful role in
controlling the investment and it can witness a better role of investment in the macro economy.
Accordingly, this section starts by a review of behavioral finance theory. It was developed based
on two fundamental aspects: Rationality and Irrationality. In other words, Standard finance, and
Behavioral finance. Standard finance has two aspects: Traditional finance and Modern (as Figure
2 shows) which they will be discussed in the following.

Figure 2: Evolutionary process of finance theory (Pimenta & Fama, 2014)

2.1.1. Traditional finance theory

The traditional financial theories have assumed that when investors take investment decisions,
they do not have difficulty because they are well informed, careful, and consistent (Areiqat, Abu-
Rumman, Al-Alani, & Alhorani, 2019). According to this theory, investors are assumed to be
rational when they are seeking for wealth-maximization, following basic financial rules, their
investment strategies and decisions are built on trading-off between risks and return (Baker,
Hargrove, & Haslem, 1977). Thus, it refers to using unbiased valid reasoning to buy or sell assets
and build portfolios (Chandra, 2008). The theory assumes that investors has well informed
systematic decisions, which are in their own self-interest, and acting in a world of complete
certainty and the risk is measured by the variance of the probability distribution of possible gains
and losses (March & Shapira, 1987). In traditional finance, the investor and the market are
rational. They gather or receive all the knowledge they have, and that data support their decisions
(Sharma, 2022). It states that investors do not make financial decisions on emotions. Therefore,
traditional finance includes the following beliefs 1) both the market and investors are perfectly

7
rational, 2) investors truly care about utilitarian characteristics, 3) information processing is
carried out impartially, 4) the market is efficient and represent the financial market’s actual
value, 5) investors have perfect self-control, and 6) they are not confused by cognitive errors or
information processing errors.

2.1.2. Modern finance theory

Sharing with neoclassical economics, methodological individualism and elegant mathematical
reductions on economic, social, and behavioural complexities, modern finance theory has been
built on two pillars (Tarim, 2022). It has dominated the area of financial economics for at least
four decades. Based on a set of strong but highly unrealistic assumptions its advocates have
produced a range of very influential theories and models. Having attributed price randomness to
a hypothetical ‘frictionless’ market that generated free information that was instantaneously and
unequivocally processed by rational individuals who could not know future information, finance
scholars started to test the ‘information efficiency’ of markets and confirmed close to zero serial
correlations in historical prices, and prices that quickly adjusted to information as they became
publicly available (Fama, 1970). Accordingly, in modern finance, the underlying concept was
maximizing the utility function of wealth based on informal efficiency of market (Nair &
Antony, 2015). According to experts (Mackenzie et al. 2007, Lockwood 2015, Braun 2016), due
to the widespread adoption of modern financial theory by professionals, this theory has had
operational effects on the design, performance and outcomes of financial markets.

2.1.3. Behavioural Finance Theory

Investing in financial markets such as the stock market or in real assets such as land, buildings,
gold, or other things is a risky activity, however, what most investors do not realize is that
choosing a position in that investment is influenced by behavioral finance. Investors’ behavior,
which originates from various factors, including their perception and sense, affects their
decision-making process (Adam & Shauki, 2014). In fact, behavioral finance examines the topics
of psychology and sociology that affect the decision-making process of individuals, groups, and
organizations (Ricciardi & Simon, 2000); So, the choice of investment, allocation of monetary
resources, price and yield is a function of investors' behavior. It focuses on explaining why
investors often appear to lack self-control, act against their own best interest, and make decisions
based on personal biases instead of facts. According to Olsen (1998), behavioral finance does not
try to define rational behavior or to label decision-making as distortions or mistakes but seeks to

8
understand and predict the financial market based on psychological decision processes. He
believes that most of the emphasis is on identifying characteristics of behavioral decisions that
are likely to have systematic effects on financial market behavior (Olsen, 1998). By showing
how, when, and why behavior deviates from rational expectations, it provides a blueprint to help
everyone make better, more rational decisions when it comes to their finances (Pompian, 2012).
It can be stated that behavioral finance: 1) It is the result of the integration of classical economics
and finance with psychology and decision-making sciences. 2) It is an attempt to explain the
reasons for the occurrence of unusual phenomena in the financial literature. 3) It studies how
investors make mental errors in their judgments. The theory typically includes six concepts:
1) Mental accounting: Mental accounting is the set of cognitive operations used by the
investors to organise, evaluate, and keep track of investment activities (Kannadhasan, 2006).
2) Herd behavior: It states that people tend to mimic the financial behaviors of the majority
of the herd (Hayes, 2022).
3) Emotional gap: It refers to decision making based on extreme emotions or emotional
strains such as anxiety, anger, fear, excitement etc. (Vinod, 2019).
4) Anchoring: It means to attach or prefix a spending level to a certain reference (Vinod,
2019).
5) Self-attribution: It refers to a tendency to make choices based on overconfidence in one's
own knowledge or skill (Hayes, 2022).
6) Gambler's Fallacy: When it comes to probability, misleading knowledge or lack of
awareness can lead to wrong assumptions and predictions about the onset of events (Vinod,
2019).
2.1.3.1. Driving Forces of Investor Behavior
Irrational behavior of investor builds the foundation for behavioral finance. Experts believe, hope
and fear are two factors which lead people to behave irrationally (Shefrin, 2002). As Figure 3
indicates, the fear ultimately leads to regret and hope ultimately to pride. These are the two
emotions that can often make investor irrational (Nair & Antony, 2015).

9
 Figure 2: Investors Emotion Timeline (Shefrin, 2002)
The field of investor behavior explains the psychological and sociological aspects of decision
making. The two key topic of investor behavior were: Behavioral Finance micro and Behavioral
Finance macro. The macro level explains the role of financial markets and anomalies in the
Efficient Market Hypothesis. The micro level recognizes the various biases affecting the
investment decision. Investor behavior examines the cognitive factors (mental processes) and
affective (emotional) issues during investment management process. In practice, individuals
make judgments and decisions that are based on past events, personal beliefs, and preferences.

2.1.3.2. Investing behavioral biases

Behavioral biases potentially affect the behaviors and decisions of financial market participants.
By understanding these biases, financial market participants may be able to moderate or adapt to
them and, as a result, improve upon economic outcomes. The common biases are:
 Anchoring or Confirmation Bias - Confirmation bias is the tendency to give greater
weight to data that support a preliminary diagnosis while failing to seek or dismissing
contradictory evidence (Elston, 2020).
 Regret aversion bias - Investors tend to avoid regret that will live in the future. However,
this tendency is damaging to their portfolio (Gazel, 2015).
 Disposition effect bias - It refers to a tendency to label investments as winners or losers
(Sherman, 2022).
 Hindsight bias – It occurs when people feel that they “knew it all along,” that is, when
they believe that an event is more predictable after it becomes known than it was before it
became known (Roese & Vohs, 2012).
 Familiarity bias - It occurs when investors have a preference for familiar or well-known
investments despite the seemingly obvious gains from diversification (Sherman, 2022).

10
  Self-attribution bias - It suggests that overconfidence plays a greater role in higher order
acquisition deals predicting lower wealth effects for higher order acquisition deals
(Doukas & Petmezas, 2007).
 Trend-chasing bias - It is the belief that what has happened will continue to do so (Fong,
2014).
 Worry - The act of worrying is a natural and common human emotion which alter an
investor’s judgment about personal finances (Sharman, 2022).

Other biases such as overconfidence bias, active trading, incentive-caused bias, over-
simplification tendency, bandwagon effect or groupthink, restraint bias, neglect of probability
etc., have also been proposed by researchers, which are not mentioned to avoid prolonging the
discussion.

2.1.3.3. Behavioral decision making

Behavioral decision making is the study of affective, cognitive, and social processes which
humans employ to identify and choose alternatives. These processes are guided by the values,
beliefs, and preferences of the decision maker, produce a final choice and sway behavior.
Behavioral decision-making captures and unites the diversity of contexts used to study human
judgment and choice. (UFA, 2022). According to this theory, man only acts based on what he
understands in a certain situation while such perceptions are often not true (Slovic, Fischhoff, &
Lichtenstein, 1977). In this situation, instead of facing a certain world, the decision maker is
encountered with information limitations and acts under conditions of uncertainty (Takemura,
2014). Today, the study of these processes is increasingly prevalent in a variety of disciplines,
including behavioral economics, marketing, management and organizational behavior,
behavioral finance, and management information systems. So, it is also considered in this
research.

11
2.3. Investment project

2.4. Project and project management

2.4.1. What is a Project?

12
It is reasonable to start the discussion of project management with the definition of project
because there are semantic and legal differences in languages about words such as plan, program,
operations, and project, however, some use them interchangeably. Missions and objectives set by
a country or an organization at the long-term or strategic level are called plans which are
qualitative in nature. The national road network development, solar power industry development,
developing public education and health, accelerating the process of global transformation
towards sustainable energy, manufacturing the best product, which does not cause any
unnecessary harm, expansion of ideas, organizing global information and making it accessible
and usable around the world, facilitating transportation for all people, to all places etc. are some
examples of strategic plans. Achieving these plans is possible in a long-term interval that is
usually between ten and twenty years. In the next step, each plan is divided into medium-term or
tactical levels. This level of plans, which is implemented by the first-level management or the
executive system of a country or organization, are called programs. They include a set of
temporary or executive decisions that must be implemented within the next five to ten years to
achieve the desired results. Each program at the short-term or executive level is transformed and
divided by the headquarters units or middle management levels of the countries or organizations’
executive system into a set of tasks and operations that are called projects. A proper
understanding of these concepts helps to provide an accurate and precise definition of the
project.

2.4.1.1. Project definition

Many people and organizations have defined what a project is, or should be, but probably the
most authoritative definitions can be find in the reliable sources of project management.
According to the BS 6079-1 ‘Guide to Project Management, project is “a unique set of co-
ordinated activities, with definite starting and finishing points, undertaken by an individual or
organization to meet specific objectives within defined schedule, cost and performance
parameters” (Lester, 2006). In the PMBOK Guide, a project has defined as “a temporary
endeavor undertaken to create a unique product, service, or result” (Guide, 2001). Also, based on
International Standard of ISO “a project consists of a unique set of processes consisting of
coordinated and controlled activities with start and end dates, performed to achieve project
objectives” (ISO 21500, 2012). APM Body of Knowledge defines a project as “a unique,

13
transient endeavour, undertaken to achieve planned objectives, which could be defined in terms
of outputs, outcomes or benefits” (Murray-Webster & Dalcher, 2019). In another definition,
Kerzner (1992) considers a project to be “any series of activities and tasks that have a specific
objective to be completed within certain specifications, have defined start and end dates, have
funding limits and further consume resources” (Kruger, 2013), and considering constraints (time,
quality, and cost) often introduces a change. Therefore, a project is a combination of interrelated
activities to achieve a specific objective within a schedule, budget, and quality. It involves the
coordination of group activity, wherein the manager plans, organizes, staffs, directs, and controls
to achieve an objective, with constraints on time, cost, and performance of the final product. A
project is usually deemed to be a success if it achieves the objectives according to their
acceptance criteria, within an agreed timescale and budget. Thus, “time, cost and quality are the
building blocks of every project” (APM Body of Knowledge, 2019).

Time: scheduling is a collection of techniques used to develop and present schedules that show
when work will be performed.

Cost: how are necessary funds acquired and finances managed?

Quality: how will fitness for purpose of the deliverables and management processes be assured?

Broadly these objectives, which are usually defined as part of the business case and set out in the
project brief, must meet three fundamental criteria:

1 The project must be completed on time;

2 The project must be accomplished within the budgeted cost;

3 The project must meet the prescribed quality requirements.

These criteria can be graphically represented by the well-known project triangle (Figure 1.2).

14
Some organizations like to substitute the word ‘quality’ with ‘performance’, but the principle is
the same – the operational requirements of the project must be met, and met safely. In certain
industries like airlines, railways and mining etc. the fourth criterion, safety, is considered to be
equally important, if not more so. In these organizations, the triangle can be replaced by a
diamond now showing the four important criteria (Figure 1.3).

Despite the unity of project definitions, some people have problems in distinguishing it from
operations while the correct classification of an activity as a project or operation is significant

15
because they require a defined structure, particular development procedures, special support
techniques and tools, specific resource allocation, and creates certain costs (Hurjui & Hurjui,
2008). Thus, the differences can be easily distinguished based on some indicators as Table 1
indicates.

Table 1. The differences between project and operations

Indicator Project Operations

Implementation time The project has a specific start and
end time and is a temporary and
specific activity.
How to behave in times To implement changes in the
of change organization, a mechanism in the
form of a project is used. This means
that the changes identified by the
operations team are implemented
through the project.
Risks and risk In the project, due to their special
management and new nature, there is inherent risk
and risk is constantly being created.
Time limitation Projects have a starting and an end
point, during which the PM works to
complete the project and after its
completion, the project is dissolved.
Capability to invest Normally, an investment is made in
the project and its profit or loss is
possible.
Functional groups Normally, in projects, there are
many expert teams that work
together according to the project's
plan and goal.
Operations include tasks that are
repeated in an organization.
Change detection usually happens in
the operations team. That is, mainly
the operational group identifies the
inappropriate operational processes
that need to be changed.
To properly perform repetitive
processes in an organization, it is
necessary to reduce risks.
The operation has never stopped and
will continue as long as it is useful
for the business.
Operations need maintenance and
the business profit and loss in its
operations clearly can be followed.
In the operation, there are functional
groups who are experts and know a
certain goal for their role in the
organization.

In general, every project faces constraints that limit, restrain or dominate the results of projects.
These factors which usually dictate the overall outcome or success of a project are time, cost,
scope, quality, risk, technical and other performance parameters, legal, environment, etc. (Guide,
2001). These constraints are completely dependent on one another. Change in one of the
constraints is very much likely to produce changes in others. The successful accomplishment of a
project generally requires recognizing the constraints, and a significant sensitivity to, and
appreciation of, the context in which it is based. Projects and their management both affect and
are affected by their environment, often significantly. The project environment comprises both
the internal and external environments in which the project is carried out. The project
environment can be of various kinds, such as political, environmental, economic, technological,
regulatory, organisational, etc. These environments, or contexts, shape the issues that project
management must deal with and may assist or restrict the attainment of the project objective.

16
‫‪Project management is the execution of processes, methods, skills, knowledge, and experience to‬‬
‫‪achieve specific project results within agreed parameters. Project management is what looks over‬‬
‫‪the complete lifecycle or all the phases of a project. This is what acts as a guiding hand of light‬‬
‫‪throughout a project and helps us in achieving desired outcomes‬‬

‫‪.‬در ه‪MMMMMMMMMMM‬ر س‪MMMMMMMMMMM‬ازمانی دو ن‪MMMMMMMMMMM‬وع ک‪MMMMMMMMMMM‬ار وج‪MMMMMMMMMMM‬ود دارد؛ عملیات‌ه‪MMMMMMMMMMM‬ای در ح‪MMMMMMMMMMM‬ال انج‪MMMMMMMMMMM‬ام و پروژه‌ه‪MMMMMMMMMMM‬ا‬
‫پروژه تالشی موقت‪ ،‬منحصربه‌فرد و با شروع و پایان مشخص تعریف شده اس‪MM‬ت‪ .‬در مقاب‪MM‬ل عملیات‌ه‪MM‬ا فعالیت‌ه‪MM‬ای در ح‪MM‬ال انج‪MM‬ام تک‪MM‬راری‬
‫سازمان مانند حسابداری یا تولید هستند‪ .‬از آنجایی که تمام کارها‪/‬تالش‌ها در سازمان به دو صورت عملیات یا پ‪M‬روژه هس‪M‬تند‪ ،‬تم‪MM‬ام هزینه‌ه‪MM‬ای‬
‫‪.‬س‪MMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMM‬ازمان بای‪MMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMM‬د بین این دو توزی‪MMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMM‬ع ش‪MMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMM‬وند‬

‫پروژه‌ها به علت‌های گوناگونی در سازمان تعریف می‌شوند؛ برای مثال جهت رسیدن یه نیاز‌های کسب‌و‌کار‪ ،‬دستیابی به اهداف استراتژیک یا‬
‫‪.‬در راس‪MM‬تای تقاض‪MM‬ای ب‪MM‬ازار‪ .‬تنه‪MM‬ا راه رس‪MM‬یدن ب‪MM‬ه هری‪MM‬ک از این اه‪MM‬داف تخص‪MM‬یص مناس‪MM‬ب من‪MM‬ابع س‪MM‬ازمان در زم‪MM‬ان و هزین‪MM‬ه درس‪MM‬ت اس‪MM‬ت‬

‫‪:‬پ‪MMMMMMMM‬روژه ه‪MMMMMMMM‬ا از فع‪MMMMMMMM‬الیت ه‪MMMMMMMM‬ای اس‪MMMMMMMM‬تاندارد عملی‪MMMMMMMM‬اتی س‪MMMMMMMM‬ازمان متم‪MMMMMMMM‬ایز هس‪MMMMMMMM‬تند؛ چراک‪MMMMMMMM‬ه پ‪MMMMMMMM‬روژه ه‪MMMMMMMM‬ا‬
‫•‬ ‫ماهیت منحصر بفردی دارند‪ .‬حاوی فرآیندهای تکراری نیستند‪ .‬هر پروژه از پروژۀ دیگر متمایز است‪ .‬در حالی که فعالیت های عملیاتی‪،‬‬
‫‪.‬معم‪MMMMMMMMMMMMMMMMMMMMMMMM‬وًال ح‪MMMMMMMMMMMMMMMMMMMMMMMM‬اوی فرآین‪MMMMMMMMMMMMMMMMMMMMMMMM‬دهای تک‪MMMMMMMMMMMMMMMMMMMMMMMM‬راری (مش‪MMMMMMMMMMMMMMMMMMMMMMMM‬ابه) هس‪MMMMMMMMMMMMMMMMMMMMMMMM‬تند‬
‫•‬ ‫پروژه یک زمانبندی مشخص و تعریف شده دارد؛ به این معنی که پروژه ها‪ ،‬تاریخ شروع و پایان مشخصی دارند ک‪M‬ه در این ت‪M‬اریخ بای‪M‬د‬
‫‪.‬خ‪MMMMMMMM‬روجی ه‪MMMMMMMM‬ای مشخص‪MMMMMMMM‬ی را تولی‪MMMMMMMM‬د ک‪MMMMMMMM‬رد؛ خ‪MMMMMMMM‬روجی ه‪MMMMMMMM‬ائی ک‪MMMMMMMM‬ه رض‪MMMMMMMM‬ایت مش‪MMMMMMMM‬تری را جلب نمای‪MMMMMMMM‬د‬
‫•‬ ‫‪.‬پ‪MMMMM‬روژه ه‪MMMMM‬ا‪ ،‬بودج‪MMMMM‬ه مص‪MMMMM‬وب دارن‪MMMMM‬د و ب‪MMMMM‬ه تم‪MMMMM‬ام پ‪MMMMM‬روژه ه‪MMMMM‬ا مق‪MMMMM‬دار مشخص‪MMMMM‬ی از بودج‪MMMMM‬ه تعل‪MMMMM‬ق می گ‪MMMMM‬یرد‬
‫•‬ ‫منابع پروژه ها (شامل نیروی انسانی‪ ،‬ماشین آالت و تجهییزات‪ ،‬مواد مصرفی‪ ،‬پول و روش و استانداردهای اجرای کار) محدود هس‪MM‬تند‪.‬‬
‫‪.‬این من‪MMMMMMMMMMMMMMMMMMMMM‬ابع در زمانبن‪MMMMMMMMMMMMMMMMMMMMM‬دی مشخص‪MMMMMMMMMMMMMMMMMMMMM‬ی از پ‪MMMMMMMMMMMMMMMMMMMMM‬روژه مص‪MMMMMMMMMMMMMMMMMMMMM‬رف می ش‪MMMMMMMMMMMMMMMMMMMMM‬وند‬
‫•‬ ‫پ‪MMMMMM‬روژه ه‪MMMMMM‬ا ریس‪MMMMMM‬ک دارن‪MMMMMM‬د‪ .‬این ریس‪MMMMMM‬ک ه‪MMMMMM‬ا ی‪MMMMMM‬ا مثبت هس‪MMMMMM‬تند (فرص‪MMMMMM‬ت) و ی‪MMMMMM‬ا منفی هس‪MMMMMM‬تند (تهدی‪MMMMMM‬د)‬
‫•‬ ‫و ی‪M‬ا از س‪M‬وی )‪ (Change Request‬تغییرات در پروژه ها اجتناب ناپذیر اس‪M‬ت‪ .‬این تغی‪M‬یرات ی‪M‬ا از س‪M‬وی پیمانک‪M‬ار پیش‪M‬نهاد می ش‪M‬وند‬
‫•‬ ‫مدیریت دست اندرکاران و ذی نفعان کلیدی و تاثیرگذار بر پروژه فرایند بسیار مهمی است و بسیاری از پروژه ها ب‪MM‬دلیل حم‪MM‬ایت ض‪MM‬عیف‬
‫دست اندرکاران و ذی نفعان کلیدی از پروژه‪ ،‬الزامات و انتظارات مبهم و یا تعریف نشده از سوی این ذینفع‪MM‬ان و دس‪MM‬ت ان‪MM‬درکاران و همچ‪MM‬نین‬
‫‪.‬ارتباط‪MMMMMMMMMMMMMMMMM‬ات نادرس‪MMMMMMMMMMMMMMMMM‬ت و ن‪MMMMMMMMMMMMMMMMM‬ادقیق بین ذینفع‪MMMMMMMMMMMMMMMMM‬ان پ‪MMMMMMMMMMMMMMMMM‬روژه شکس‪MMMMMMMMMMMMMMMMM‬ت می خورن‪MMMMMMMMMMMMMMMMM‬د‬
‫•‬ ‫پذیرش و اجرای یک متدولوژی مدیریت پروژه رسمی در ط‪MM‬ول چرخ‪M‬ه حی‪M‬ات پ‪M‬روژه موض‪M‬وع بس‪M‬یار مهمی اس‪M‬ت‪ .‬ب‪M‬دون انتخ‪M‬اب ی‪M‬ک‬
‫متدولوژی واضح یا چارچوب مشخص برای تحویل پروژه‪ ،‬اکثر تیم های پروژه‪ ،‬قب‪M‬ل از اینک‪M‬ه مح‪M‬دوده و اه‪M‬داف بص‪M‬ورت واض‪M‬ح و روش‪M‬ن‬
‫مشخص شده باشند‪ ،‬اقدام به تولید اقالم پروژه می نمایند‪ .‬این افراد‪ ،‬هیچ فرآیند سازمان یافته ای برای انجام فعالیت ها در نظر نمی گیرن‪MM‬د و از‬
‫این رو نمی توانند زمان‪ ،‬هزینه‪ ،‬کیفیت‪ ،‬ریسک ها‪ ،‬مسائل و تغییرات پروژه را مدیریت کنند‪ .‬پرواضح است که چنین پ‪MM‬روژه ه‪MM‬ایی منج‪MM‬ر ب‪MM‬ه‬
‫تأخیر در تحویل اقالم قابل تحویل و در نهایت‪ ،‬کیفیت پایین اقالم قابل تحویل و نارضایتی مشتری ‪ (Scope Creep)،‬خیزش یا لغزش محدوده‬
‫می شوند‪ .‬پاسخ به این مشکالت ایجاد شده ساده است‪ :‬استفاده از یک متدولوژی مدیریت پروژه با ساختار مشخص برای اج‪MM‬رای فراین‪MM‬دهای ‪5‬‬
‫‪.‬گانه مدیریت پروژه؛ یعنی فرایندهای آغازین‪ ،‬برنامه ریزی‪ ،‬اجرائی‪ ،‬کنترلی و اختتامی پروژه‬

‫‪17‬‬
https://www.webhouse.ir/blog/%D8%A8%D9%87%D9%85%D9%86-2020/%D9%BE
%D8%B1%D9%88%DA%98%D9%87-%DA%86%DB%8C%D8%B3%D8%AA%D8%9F

،‫ ساخت‬،‫ گروهی از افراد با کمک یکدیگر مراحل طراحی‬.‫ یک پروژه است‬،‫برای مثال طراحی خودرویی جدید‬
‫ این پروژه تمام شده‬،‫ وقتی این خودرو به مرحله تولید انبوه رسید‬.‫آزمایش و اصالح و بهبود را انجام می دهند‬
‫ مسئولیت تولید خودرو به بخش یا واحد کسب و کار دیگر سپرده می شود‬.‫است‬.

‫ مدیر این مرحله نیز می تواند از بسیاری از‬،‫ وقتی این پروژه به اتمام رسید و مرحله تولید آغاز شد‬: ‫توجه‬
‫مهارت های مدیریت پروژه برای پیشبرد فرایند تولید استفاده کند‬.

The term ‘project’ may be defined as a complex set of economic activities in which scarce
resources are committed in expectation of benefits that exceed the costs of resources consumed.
It refers to an investment activity in which resources are committed within a given time
framework, to create assets over an extended time in expectations of benefits which exceeds the
committed resources. Thus, Projects require resources. They are also expected to derive benefits.
Projects are said to be desirable if their benefits are greater than the costs incurred on them. A
project can also be referred to as a non-repetitive activity. A project is viewed as a conversion
process. This implies that a project involves a transformation of some form of inputs into an
output. (See the following diagram).

18
A project is a temporary endeavor undertaken to create a unique product, service, or result. The
temporary
nature of projects indicates that a project has a definite beginning and end. The end is reached when
the project’s
objectives have been achieved or when the project is terminated because its objectives will not or
cannot be met,
or when the need for the project no longer exists. A project may also be terminated if the client
(customer, sponsor,
or champion) wishes to terminate the project. Temporary does not necessarily mean the duration of
the project
is short. It refers to the project’s engagement and its longevity. Temporary does not typically apply to
the product,
service, or result created by the project; most projects are undertaken to create a lasting outcome. For
example, a
project to build a national monument will create a result expected to last for centuries. Projects can
also have social,
economic, and environmental impacts that far outlive the projects themselves.
Every project creates a unique product, service, or result. The outcome of the project may be tangible
or
intangible. Although repetitive elements may be present in some project deliverables and activities,
this repetition
does not change the fundamental, unique characteristics of the project work. For example, office
buildings can
be constructed with the same or similar materials and by the same or different teams. However, each
building
project remains unique with a different location, different design, different circumstances and
situations, different
stakeholders, and so on.
An ongoing work effort is generally a repetitive process that follows an organization’s existing
procedures.
In contrast, because of the unique nature of projects, there may be uncertainties or differences in the
products,
services, or results that the project creates. Project activities can be new to members of a project
team, which
may necessitate more dedicated planning than other routine work. In addition, projects are
undertaken at all

19
organizational levels. A project can involve a single individual or multiple individuals, a single
organizational unit, or
multiple organizational units from multiple organizations.
A project can create:
• A product that can be either a component of another item, an enhancement of an item, or an end
item
in itself;
• A service or a capability to perform a service (e.g., a business function that supports production or
distribution);
• An improvement in the existing product or service lines (e.g., A Six Sigma project undertaken to
reduce
defects); or
• A result, such as an outcome or document (e.g., a research project that develops knowledge that can
be
used to determine whether a trend exists or a new process will benefit society).

Examples of projects include, but are not limited to:

• Developing a new product, service, or result;
• Effecting a change in the structure, processes, staffing, or style of an organization;
• Developing or acquiring a new or modified information system (hardware or software);
• Conducting a research effort whose outcome will be aptly recorded;
• Constructing a building, industrial plant, or infrastructure; or
• Implementing, improving, or enhancing existing business processes and procedures.

1.2.1. The Relationships Among Portfolios, Programs, and Projects

The relationship among portfolios, programs, and projects is such that a portfolio refers to a
collection of projects,
programs, subportfolios, and operations managed as a group to achieve strategic objectives.
Programs are grouped
within a portfolio and are comprised of subprograms, projects, or other work that are managed in a
coordinated
fashion in support of the portfolio. Individual projects that are either within or outside of a program
are still considered
part of a portfolio. Although the projects or programs within the portfolio may not necessarily be
interdependent or
directly related, they are linked to the organization’s strategic plan by means of the organization’s
portfolio.
As Figure 1-1 illustrates, organizational strategies and priorities are linked and have relationships
between
portfolios and programs, and between programs and individual projects. Organizational planning
impacts
the projects by means of project prioritization based on risk, funding, and other considerations
relevant to the
organization’s strategic plan. Organizational planning can direct the management of resources, and
support for the

20
component projects on the basis of risk categories, specific lines of business, or general types of
projects, such as
infrastructure and process improvement.

ISO 21500 (Edition 2012)

A project consists of a unique set of processes consisting of coordinated and controlled activities
with start and end dates, performed to achieve project objectives. Achievement of the project
objectives requires the provision of deliverables conforming to specific requirements. A project
may be subject to multiple constraints, as described in 3.11.

Although many projects may be similar, each project is unique. Project differences may occur in
the following:

— deliverables provided

— stakeholders influencing

— resources used

— constraints

— the way processes are tailored to provide the deliverables.

Every project has a definite start and end, and is usually divided into phases, as described in
3.10. The project starts and ends as described in 4.3.1.

21
22
23
2.3. Investment Project
The investment project is formed from the combination of two very common and widely used
concepts in the field of organization and management – “project” and “investment”. Although
this combined word has the meanings of both investment and project, it provides it own
meaning. To make the “investment project” more precise, it is necessary to define the concepts
of investment and its’ classification, and, also, project and its’ components first.

2.3.1. Investment and project definitions

An investment is “an asset or item acquired with the goal of generating income or appreciation.
Appreciation refers to an increase in the value of an asset over time” (Hayes, 2022). Investing,
broadly, “is putting money to work for a period in some sort of project or undertaking to generate
positive returns. It is the act of allocating resources, usually capital (money), with the expectation
of generating an income, profit, or gains” (Picardo, 2022). Individuals or businesses can invest in
many types of endeavors (either directly or indirectly) such as using money to start a business, or
in assets such as purchasing real estate in hopes of generating rental income or reselling it later at
a higher price. Accordingly, investment can be classified into two general groups: financial
investment (stocks, bonds, funds, investment trusts, mutual funds, bank products, options etc.)
(Bodie, Drew, Basu, Kane, & Marcus, 2013; Mansor & Bhatti, 2011), and real assets (stating,
developing, and running a business, real estates -including buildings, offices, lands and farms-
commodities, gold and jewelry, cryptocurrency, collectibles, etc.) (Block, 2011; Schwartz,
2016). This research will focus on the second type of investment; real assets investments.

From the second word, i.e. project, various definitions have been provided, the most reliable of
which can be found in project management sources. A project is defined a set of interrelated
tasks that are performed over a period of time at a specific cost and with other constraints to
achieve a particular purpose. According to Project Management Body of Knowledge (PMBOK),
the term Project refers to any temporary endeavor with a definite beginning and end undertaken
to create a unique product or services (Guide, 2001). In another definition, Kerzner (1992)
considers a project to be any series of activities and tasks that have a specific objective to be
completed within certain specifications, have defined start and end dates, have funding limits and
further consume resources (Kruger, 2013), and considering constraints (time, quality, and cost)
often introduces a change. Thus, a project is a combination of interrelated activities to achieve a
specific objective within a schedule, budget, and quality. It involves the coordination of group

24
activity, wherein the manager plans, organizes, staffs, directs, and controls to achieve an
objective, with constraints on time, cost, and performance of the final product.

2.3.2. Investment project concept

In general, in order for businesses to be able continuing operations in the market continuously by
providing high quality products and services, they need to innovate in areas such as design and
development, processes, and products that lead to a comprehensive approach which includes
various investment projects. Nevertheless, many investment projects are done in terms of
creating new jobs. In these projects, the investments, which made by individuals and
organizations, are new. In other words, businesses did not exist from the beginning, but investors
defined new investment projects. Therefore, in these types of projects, investments are not
renovation and improvement, but they are new entities. Accordingly, it can be said that an
investment project means a set of proposals and actions for spending medium and long-term
capital in order to carry out an investment activity in a specific geographical area and in a certain
period of time, based on a project or sets of projects.

Literature review shows that although there are not many academic definitions of investment
project, experts in the field of project management and investment have defined it based on their
intuition and experience. According to a group of researchers, the investment project is a
planning tool that allows making decisions about the execution of capital resources, its use has
commonly been developed for to generate new businesses, but it is also applied in the
improvement of different areas (logistics, occupational security and health, production, among
others) of businesses in operation in order to satisfy both internal and external customers
(Valencia, Marín Chávez, & Lara Carhuancho, 2020). It is also a set of interdependent tasks and
activities, undertaken by company to achieve defined economic or financial goals (CEOpedia,
2019). Thus, the investment project should include information on the purpose of the planned
investment, the expenditure required for its implementation, funding, criteria and methods for
assessing the effectiveness and risks of participants of the investment process and desired effects
(results). In another definition, an investment project is a detailed proposal of an expenditure of
liquid resources, with the objective of taking actions that will lead to future profits. It begins
before the investment itself and continues until its exploitation (Economicpoint, 2022).
Therefore, an investment project requires careful planning (Grosheva, 2009; Olteanu, 2011) and
includes detailed descriptions of expenditures and incomes (sources and expected amounts).

25
Usually, investment projects also include a profitability evaluation with measures of capital
budget, like the Net Present Value (NPV) and the Internal Return Rate (IRR), along with a
description of the investment risks (Gurau, 2012).

2.3.3. Types of investment projects

Investment projects can be classified in many ways, either by the economic sector to which they
refer primary, secondary, tertiary, and quaternary (Kenessey, 1987), by the area of influence that
would have to be carried out (national, provincial, district or reginal, international etc.)
(Harpham, Burton, & Blue, 2001), or by the type of financial elements involved goods (tangible)
or services (intangible) (LeBlanc & Nguyen, 1996; McDonald, De Chernatony, & Harris, 2001).
Furthermore, investment projects are categorized based on the organization's concerns or aspects
that are important to its evaluators. Hence, they can be classified as profitable or unprofitable
investment projects (Brick & Weaver, 1984; Ueda, 2004) according to what the organization is
willing to invest and the return it wants to obtain from the project. Plus, CEOpedia (2019) has
classified investment projects into several types based to their goals and functions.

1) Expansive investment project -It is investment projects whose purpose is the entrance to
the hitherto unexplored markets or develop products in the current markets. Thus, it
requires strategic analysis of the demand and are associated with high marketing expenses.
They are among the riskiest. So, managers demand high minimum rate of return from it.
2) Investment projects to preserve or replace current leading activities or cost reduction-
It belongs to the most common investment decisions, since involve the consumption of
machinery and equipment used in the production. If a company decides that it will develop
current technology, managers perform evaluation of the bids submitted by suppliers of
machines and equipment. They also may find that the equipment used for the production is
outdated and its further exploitation may lead to a reduction in profits. In this case, the
company should make a detailed cost analysis.
3) Fine-tuning investment projects – It focuses on adapting the business to new legal
regulations relating to the protection of the environment. When deciding on adaptation social
constraints are of great importance. The investment project must meet established standards,
and this is the main purpose of the managers. Profit maximization for these projects is not a
priority of the company, it focuses on the fulfilment of certain requirements.

26
 4) Innovative investment projects - involve use of new technologies, and thus help
maintain the strong position of the company in the long run. These projects concern the
introduction of new products or services (product innovation), as well as the introduction of
new process, which aims to fulfill needs of new customers.

2.3.4. Stages of an investment project

Typically, an investment project goes through the following stages:

 Pre-feasibility . Project formulation and determination phase, which

includes setting general and specific goals , and gathering enough
information to submit the project to a prior evaluation. It is the
investigation and documentation stage, if you will.

 Design . Once the general investment plan is in place, a detailed design is

drawn up to carry it out. In other words, a second planning stage, but in
much greater detail, in which the concrete plan for each of the activities
that the investment project involves will be drawn up. At the end of this
stage there will surely be new controls and evaluations to ensure that the
design corresponds to what has been established.

 Operation and start-up . As its name implies, it is the stage in which the
team in charge of the project carries it out. This stage can be long or
short, depending on the case, and it can involve different feedback
mechanisms or feedback of information that will be useful in the next
stage.

 Evaluation or control . Whether or not the useful life of the project has
ended, it is normal for this cycle to close with an evaluation stage, in
which the information collected during the operation itself is used to
compare the results obtained with the initially proposed results, and thus
be able to take relevant decisions . In general, this stage will seek to
answer two questions:

o Were the initially proposed objectives achieved?

o How can the project design be improved for future

experiences?

https://whatdoesmean.net/what-is-an-investment-project/

27
An investment project is a detailed plan of activities for future economic action , that is, for a
possible investment of some kind. It is a common type of document in business administration
and project management , arising from the need of a public or private economic actor (say, a
company ) to increase the return on their capital .

The investments that this type of project contemplates do not necessarily have organized
objectives and trajectories, but rather aim to increase the available financial resources, that is,
they are committed to profitability .

In that sense, the planning is essential in its development , as it enables organizations to

maximize or preserve their resources through different strategies possible investment, many of
which involve the freezing of funds long term.

Since they involve the mobilization of resources, investment projects usually undergo evaluation
processes that determine their convenience: their profitability , their risk margin and other
possible aspects, such as the environmental and legal and administrative aspects. Thus, the
evaluation of projects can take place through very different tools and from very different points
of view.

Investment Project Management

Although these three concepts independently and sometimes together, like “project
management” and “investment management”, are among the common and widely used concepts
in the sources of organization and management, “investment project management” is rarely

28
found in the sources. Today, investment project management plays a critical role in business
development. In a highly competitive environment, it is used in order to effectively manage
investment, choosing the best projects, rationally using available resources. Investment projects
are managed at several levels, from the state level to individual companies.

If we talk about companies, the management of investment projects in the real economy can be
considered both from the perspective of an investor and from the perspective of potential
consumers. For an investor, the process of investment management consists in choosing the most
suitable investment object, assessing the state of this object, determining the possibility of
implementing the project, calculating the expected profitability of the investment project and
assessing the risks of its failure. For potential recipients of investments, project management
consists in developing documentation, attracting resources on favorable terms, assessing the real
possibilities of the investor, as well as developing the most appropriate action plan to achieve
investment goals (financing, engineering, operation, etc.) -
https://esfccompany.com/en/articles/economics-and-finance/investment-project-management/

Investment Project means an investment in qualified buildings or qualified machinery and

equipment, including labor and services rendered in the planning, installation, and construction
of the project.

29
Investment Project means a specific development project to be carried out by a Private Enterprise
(as hereinafter defined) under Part A of the Project utilizing the proceeds of a Sub-loan (as
hereinafter defined) or Investment;

Investment Project means a document corroborating the feasibility of the project from the financial
(economic), technical and social point of view, assessing the return on the investment (commercial
investment) and other indicators of efficiency, indicating funds required for project implementation
as well as sources and time limits of financing.

Investment Project means the substantiation of the economic feasibility, scope and term of a direct
foreign investment including design and cost-estimate documentation elaborated in compliance with
the standards provided in the legislation of the Russian Federation;

Investment Project means a specific development project in selected sub-sectors of the

infrastructure sector to be carried out by an Investment Enterprise utilizing the proceeds of a
Subloan;

Investment Project means an investment in either qualified

Investment Project means a specific export development project, which satisfies the criteria set
forth in Part A (4) (b) of Schedule 4 of this Agreement, and which is to be carried out by an
Investment Enterprise utilizing the proceeds of an Investment Sub-loan;

Investment Project means a specific development project under Part A of the Project to be carried
out by a Beneficiary utilizing the proceeds of a Sub-loan;

Investment Project means a collection of proposals for the expenditure of medium and long-term
capital in order to carry out an investment activity in a specific geographical area and for a specified
duration.

Investment Project means the project or set of projects in which the investment covered or under
consideration for coverage has been made or is to be made;

30
Investment Project means an intervention relating to acquisition or preservation, or to both
acquisition and preservation, of non-financial assets for meeting defined objectives and consisting of
a set of interrelated activities to be carried out within a specified budget and a time-schedule;

Investment Project means a capital investment of at least thirty million dollars in a qualified
building or buildings including tangible personal property and fixtures that will be incorporated as an
ingredient or component of such buildings during the course of their construction, and including
labor and services rendered in the planning, installation, and construction of the project.

Investment Project means a collection of proposal to make midterm or long-term capital investment
in business in a particular administrative division over a certain period of time.

Investment Project means an initial investment within the meaning of section 4 of the guidelines on
national regional aid. An investment project should not be artificially divided into sub-projects in
order to escape the provisions of this framework. For the purpose of this framework an investment
project includes all the fixed investments on a site, made by one or more undertakings, in a period of
three years. For the purpose of this framework, a production site is an economically indivisible series
of fixed capital items fulfilling a precise technical function, linked by a physical or functional link,
and which have clearly identified aims, such as the production of a defined

Investment Project means a specific Investment Project in the infrastructure sector to be carried out
by an Investment Enterprise utilizing the proceeds of an Investment Loan.

Investment Project means a specific development project to be carried out by an Investment

Enterprise utilizing a Sub-loan;

Investment Project means a specific development proj- ect to be carried out by a Sub-borrower
utilizing the proceeds of a Sub-loan;

Investment Project means an investment in qualified build ings or qualified machinery and
equipment, including labor and serv ices rendered in the planning, installation, and construction of

31
the project. When an application for sales and use tax deferral is timely submitted, costs incurred
before the application date are allowable, if they otherwise qualify.

Investment Project means a collection of proposals for the expenditure of mid-term or long- term
capital to carry out investment activities in a particular administrative division over a certain period
of time.

32
The investment project is formed from the combination of two very common and widely used
concepts in the field of organization and management - project and investment. The history of
the investment project is not very long. It has been proposed since about two decades ago in
order to prevent the failure of investments. It is clear that investing has always been a hazardous
undertaking.

The business environment is littered with remnants of investment ideas gone awry, project that is
mainly because some critical design factor was improperly assessed.

Experts believe that investment project approach can increase confidence in the investment
decisions for designing, analysing, and appraising projects in the contemporary investment
environment. They believe pre-investment study, using the investment project guidelines, vastly
improves chances for a successful outcome (………………).

The investment project approach includes the potential benefits of a more comprehensive view
of a project's business environment than the traditional approach. it also shows how the
economic perspective - a much broader view of the enterprise environment than is traditionally
considered by investors - reduces risk and enhances prospects for a successful enterprise, and

33
provides guidelines for steering along the hazardous road to success faced by investors and their
collaborators. It provides a framework of analysis for any project involving investment - larger
or small, in private and public sectors - and clears up a number of important misconceptions
about financial aspects of design and appraisal, and that aligns the project more compatibly with
features of its operating environment.

unanticipated impediments to the success of investment projects have included mismatches

between internal characteristics of the enterprise, its personnel, and other project needs, and
external aspects of the operational setting such as market dynamics, apply constraints, or
environmental impacts.

often there is a failure to consider alternatives that would constitute more profitable applications
of the time, energy, and other resources applied to the contemplated project.

maintenance and improvement of current material standards of living around the world requires
new investments.

in fact, at both macro (economy) and micro (enterprise) levels, new investment is needed just to
maintain the current level of production capacity, which is diminished by technological
obsolescence over time.

Capital is also needed to accommodate advances in technology and for improving efficiency of
existing production units.

the question of whether a project is worthy of investment takes on ever-greater significance as

capital accumulation for new projects is impeded by consumption demands of a growing
population and by reticence of prospective investors and lenders in the face of increasing global
uncertainties such as depletion of critical resources and political instability.

an investment project becomes part of the economic, social, and ecological system within which
it is intended to function and prosper. it affects the preexisting system of supply and demand and

34
thereby alters its characteristics. Project success depends upon the degree of satisfaction that it
provides to sponsors and collaborators, and also to the wider community that provides its market,
its workers, and those whose lives are affected by its presence. A useful analogy for analyzing
the relation between the project and its operational setting is the strategy of a biological organism
seeking to servive and grow in its habitat. The enterprise seeks to earn its living by forging a
useful link between resources and consumers, while at the same time fulfilling its own
objectives. it has internal characteristics that interact with components and systems in the
operational setting. Its health and well-being depend upon compatibility with friendly forces and
building defenses against those that are hostile.

It seems that investment project shifts the paradigm. It builds on traditional scope-cost-schedule
tools, adding a critical new focus on the expected value of projects and programs (…………..).

it designing to be compatible with operating milieu so that it is profitable and sustainable while
providing goods and services demanded by clients

This book shifts the paradigm. It builds on traditional scope-cost-schedule tools, adding a critical
new focus on the expected value of projects and programs. The enhancements in processes and
metrics allow senior management and PMOs to guide the entire organization on the basis of
business benefits, and to ensure that decisions ranging from project selection to resource
assignment facilitate those goals. The author shows how framing projects as investments enables
significant improvement in project performance. He provides metrics that allow you and your
team to track and maximize performance based on ROI.

35
Investment Project Management

Although these three concepts independently and sometimes together, like “project
management” and “investment management”, are among the common and widely used concepts
in the sources of organization and management, “investment project management” is rarely
found in the sources. Today, investment project management plays a critical role in business
development. In a highly competitive environment, it is used in order to effectively manage
investment, choosing the best projects, rationally using available resources. Investment projects
are managed at several levels, from the state level to individual companies.

If we talk about companies, the management of investment projects in the real economy can be
considered both from the perspective of an investor and from the perspective of potential
consumers. For an investor, the process of investment management consists in choosing the most
suitable investment object, assessing the state of this object, determining the possibility of
implementing the project, calculating the expected profitability of the investment project and
assessing the risks of its failure. For potential recipients of investments, project management
consists in developing documentation, attracting resources on favorable terms, assessing the real
possibilities of the investor, as well as developing the most appropriate action plan to achieve
investment goals (financing, engineering, operation, etc.) -
https://esfccompany.com/en/articles/economics-and-finance/investment-project-management/

36
 2.3.1. The investment as projects

In the common and classical view, investment and project have specific definitions as two
independent concepts. Project is …………….

Investment …………………… .

In the new perspective, every project is an investment (De Piante, 2014), and each investment is
formed from different projects (Picardo, 2022) however, traditional project management
methodologies do not support assessment of the business value that enables senior management
to maximize decision making. So, the next evolution in PM is managing projects as investments
and, look at every investment as projects. Managing Projects as Investments earned Value to
Business Value and provides tools and metrics to enable planning, measuring, evaluating, and
optimizing projects (Devaux, 2014). On the other hand, all entrepreneurs and investors need
investments to start a business, maintain customers and clients, develop equipment and
machinery, and improve manpower to run and grow the businesses. However, many of them
only look at the hard business assets they invest in while investment success is largely dependent
on having a project-oriented perspective and effective project management processes (Anderson
& Merna, 2005). Based on this perspective, being project oriented, and managing investment as
projects are valuable capital and make the business successful.

This book shifts the paradigm. It builds on traditional scope-cost-

schedule tools, adding a critical new focus on the expected value of
projects and programs. The enhancements in processes and metrics
allow senior management and PMOs to guide the entire organization
on the basis of business benefits, and to ensure that decisions ranging
from project selection to resource assignment facilitate those goals.
The author shows how framing projects as investments enables

37
significant improvement in project performance. He provides metrics
that allow you and your team to track and maximize performance
based on ROI.

Demonstrating the importance of recognizing an enabler project in a

program, and why its value and cost of time are so great, the book
provides the tools to determine right-sized staffing levels for project-
driven organizations. It includes a comprehensive but easy-to-
understand explanation of both basic and advanced earned value
metrics, their shortcomings, and how they can be improved and shows
you how to optimize contract terms on projects in a way that can
avoid misaligned customer/contractor goals

Every project needs management for two reasons. The rst is to plan and manage the tasks of a
project and to coordinate getting the work done. The other is to optimize the value of a project as
an investment. Managing projects as investments is the new frontier of project management. This
book is focused on introducing the tools and methods for optimiz-ing projects as investments.

This book is for both the practitioners and for anyone in a project-driven organization who has
responsibility for or is affected by projects. This includes, but may not be limited to

• Executives in project-driven organizations, who sense that programs and projects are
investments and want to shift their focus to under-standing them as investments

• Sponsors/senior managers, whose limited budgets must fund projects

• Business area directors, whose portfolios may include multiple projects

• Program managers, whose responsibilities usually include generat-ing value from a

coordinated implementation of related project and nonproject efforts

• Customers of projects, especially those projects performed on a con-tractual basis

• Professionals in contracts departments, responsible for writing or amending requests for quotes
(RFQs), requests for proposals (RFPs), and performance contracts for project and subproject
ven-dors and customers

38
• Business analysis, nance, and accounting professionals, who should be responsible for
quantifying and tracking both project cost and project expected and generated value, as well as
revenue recognition

• Acquisition professionals, who must understand the signicance to project teams of delays in
obtaining resources needed on the criti-cal path

• Human resources, who must understand both the urgency of timely recruitment efforts as well
as the need for corporate staff-ing levels, procedures, and incentives that recognize and facilitate
critical path progress

The current edition of the Project Management Institute’s Guide to the Project Management
Body of Knowledge (PMBOK® Guide) has a new section, not included in previous editions, on
what it terms business value, and links it to portfolio, program, and project management. This is
recognition, in the most important and widely used project management book, of this new central
concept in project management. The major focus of this book is to explain how to use this
concept and apply it to plan, measure, track, and optimize the business value of a project. I do
that using methods that I have been developing and testing in consulting to project-driven organi-
zations in many industries for more than 25 years.

This book addresses the needs of project managers and team mem-bers by providing speci c
methods that allow them to manifest their value by seeking and nding opportunities to improve
project results. But, as important, it shows the executives and all senior managers how to change
current processes and metrics that generate inertia and a lack of initiative. Instead, they must
encourage processes where projects are mea-sured on the basis of the value they contribute, and
where team members have the incentive to seek and recognize value-adding opportunities that
increase the strength of the organization.

Because Total Project Control was intended for the practitioner, it not only introduced a new
approach supported by new techniques, but it delved deeply into each. It explored the different
techniques for develop-ing a value breakdown structure (VBS) and for computing critical path
drag in network schedules with complex dependencies and lags. Indeed, what was then the
brand-new concept of drag and how to compute it is probably the topic that gained that book the

39
most attention and it remains the metric with which I am most identi ed. In this book, we
mention the VBS and discuss critical path drag, but only explore it in simple networks,
sufcient to show the importance of the concept and explain its crucial investment corollaries of
drag cost and true cost. Anyone with questions about computing drag in complex networks
should refer to the previous book, Total Project Control This book focuses on the why and the
how: why we need to start managing projects in the same terms that we use for all other
investments and how the unique qualities of a project (work identi cation, schedule, critical
path, resources, cost, and project-specic risk and opportunity) can be analyzed in investment
terms.

We venture far beyond the basics into the whole reason why every project investment is made in
the rst place: because of the benet/value that the project work is expected to generate. We
show the negative effect of leaving project value (and other effects on value such as time) as
what in economics would be referred to as externalities: items that, because they are not
quantied, are measured as zero, even though we know that they can be very important! We
provide techniques for:

• Measuring expected value and the value/cost of time. (“Time is money!” wrote Ben Franklin in
1747, a valuable concept for project organizations more than 260 years later.)

• Showing how to plan, track, and analyze all key terms of the invest-ment to provide the best
results in the most important metric: value above cost.

• Demonstrating that current popular efforts in project-driven organi-zations, such as stabilizing

inhouse resources at lean stafng levels and emphasizing high utilization rates, are often
counterproductive and lead periodically beyond lean and all the way to emaciation in key skills
and functions unless such efforts are tempered by a wis-dom and exibility based in investment
data.

This book is particularly for those who have both the authority and the responsibility to improve
the current condition of project performance in organizations. It shows why ignoring key
investment aspects, tech-niques, and metrics have a deleterious impact on the project team and
overall project performance

40
Dr. Atul Gawande, creator of the presurgical checklist that has become standard procedure in
thousands of hospitals and perhaps saved millions of lives, wrote in his article, “Slow Ideas,”1
about why certain complex ideas, despite their obvious value, are often slow to take root: “We
want frictionless, ‘turnkey’ solutions to the major difculties of the world.” But as Dr. Gawande
points out, not all problems are subject to simple solutions.2002 Nobel Laureate in Economics
Daniel Kahneman2 notes that “effortful thinking” is painful! People are much more comfortable
mak-ing snap judgments than considered computations. Yet projects require investment
decisions, and these usually demand consideration and cal-culation of many variables. If
organizational processes that mandate the collection and analysis of the necessary investment
data are not standard-ized, “fast thinking” is likely to lead to bad decisions

At the end of every chapter, a list of specic takeaways provides:

• Simple metrics that allow the funding executive/sponsor or cus-tomer to determine, quickly
and easily, if the project is on course to provide the anticipated investment value in a timely and
cost- efcient manner.

• A procedural map that project management ofces (PMOs) can fol-low and that will lay out
for them an agenda of standardized proce-dures, processes, metrics, and documentation. The
implementation of these will both lead the project teams to maximize the investment return and
allow the PMO itself to generate and demonstrate the quantitative value it is adding to the
organization.• An array of new techniques for the project manager, the sched-uler, and each
member of the project team that will permit them to perform their jobs better and to provide
greater value to their organizations

These takeaways are also intended to provide the busy senior man-ager with a menu of metrics,
processes, and techniques that can build appropriate cost–bene t analysis into the
organizational culture. Many of these processes can be turned over to the PMO or the individual
proj-ect manager with instructions to “Make it so.” When the project manager believes that she
needs more resources, she will have techniques to ana-lyze and justify the expenses in an
investment-quantied manner. And when team members are told to “look for opportunities,”
they will under-stand where and how to look, and will be able to quantify the cost of the risk or
the value of the opportunity in clear monetary terms. This in turn will lead to an appreciation of
the value that their analytical and manage-ment skills as a team member are adding to the project

41
investment.Project management has been practiced for a long time, and it is dif- cult to suggest
a fundamental new approach to anything without seem-ing to criticize those who have previously
been doing things in a different way. I want to emphasize that I have the greatest respect for
those project management theorists who, decades ago, developed such techniques as the triple
constraint project model, work breakdown structures, critical path scheduling and metrics,
resource leveling, earned value metrics, and a host of other valuable methods. I am only too
aware that modern theo-rists such as myself “stand on the shoulders of giants,” and that my ideas
are merely enhancements of techniques and metrics that I inherited from them. Those who have
for years and for decades conscientiously applied the traditional toolkit have my greatest
respect.That said, I believe the new focus on investment and business value, when combined
with enhancements that are all rooted in the traditional tools (e.g., the value breakdown structure
or VBS, critical path drag, drag and true cost, the cost of leveling with unresolved bottlenecks
(orCLUB),and the Devaux’s Index of Project Performance (DIPP) prog-ress index or DPI)
can bring much greater efciency and value to those organizations that implement this agenda,
and perhaps save lives on those projects where the greatest human value is on the line.Finally,
there are many business leaders who blanch at the sight of mathematical formulas; that is
something they would rather delegate to the CFO and the nance department. Yes, there is a
mathematical com-ponent to project management; as an investment, every project is an
economic entity. Critical path scheduling and cost and earned value all require simple
calculations. But let me reassure the reader that all the for-mulas in this book are simple: there is
nothing that requires a background or love of arithmetic. And many of my clients and students
greatly enjoy the simple computations of critical path method (CPM) scheduling; they say it’s
like doing Sudokus!Nevertheless, if the calculations are an irritant, just skip over them. An
accountant or a software package can do those calculations. They are included only to illustrate
the underlying concepts, which is where the true value of this methodology lies.

1. Atul Gawande, “Slow Ideas.” The New Yorker, July 29, 2013, p. 4
http://www.newyorker.com/reporting/2013/07/29/130729fa_fact_gawande? currentPage=4

2. Daniel Kahneman, Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011, pp.
31–78

42
Acknowledge

In the 15 years since my rst book, Total Project Control: A Manager’s Guide to Integrated
Project Planning, Measuring, and Tracking, was published, many people have supported the new
techniques that it introduced. Many have applied them in their businesses and further advanced
many of the ideas.Critical path drag computation in a large and complex network can be time
consuming, but it is exactly the sort of problem that the computer is designed to solve. Russ
Iuliano of Sumatra Development, Inc., Vladimir Liberzon of Spider Project, and Bernard Ertl of
InterPlan Systems have included critical path drag calculation in their respective project manage-
ment software packages. This represents a huge step forward, and I know the day will arrive
when no company would dream of marketing project management software that did not compute
drag as part of the standard CPM metrics. The other investment techniques will follow.Over the
years, Joe Sopko, Jeff Parker, and Dr. Priscilla Glidden have all introduced the new techniques
within their companies. They, along with Denise Guerin, have also been teaching these
techniques now for many years in their graduate and executive courses. I sincerely thank them
for their missionary work.Dr. Tomoichi Sato of Japan Gas Company has advanced the
techniques of value estimation in a whole new direction with his work and publica-tions on risk-
based project value (RPV) analysis. I thank him sincerely both for this and for the graduate
classes he teaches at Tokyo University where he has incorporated many of my ideas into his
lectures.Leah Zimmerman has been responsible for expanding and moving some of my ideas into
the eld of cost engineering. I predict that her cre-ativity and efforts will provide fertile soil for
still newer ideas in this eld.Over the years, there have been many companies that have enlisted
my services in training and consulting. I trust that they have all found value in these new
techniques. But I would particularly like to men-tion the great pleasure I have received over the
dozen years that I have been teaching and consulting with the folks at BAE Systems. There have
been too many people to name everyone. But I would especially like to mention Tom Arsenault,
Ray Brousseau, John Bugeau, Cheryl Chaput, DrewConti, John Dilger, Jim Fasoli, Mark
Getty, John Gill, Mike Greene, Bob Korkuc, John Labrosse, Dan Murray, Melinda Norcross,
Frank Phillips, Ralph Titone, and Greg Zito. Your organization was one of the rst to recognize
the value in the new techniques, and I have greatly enjoyed the working relationship we have
shared over the years.I am most grateful to those who have provided me with platforms in

43
academia to teach the next generation of project managers. These include Karen von Sneidern of
the University of Massachusetts/Lowell, Dr. Hans Thamhain of Bentley University, Dr. Ken
Hung of Suffolk University, Tom Carter and Sybil Smith of Brandeis University, Dave Barrett
and Andrew Bennett of Olin College of Engineering, and of course once again, Dr. Priscilla
Glidden of the University of West Indies at Cave Hill, Barbados.Although I have always loved
teaching in any setting, my academic students have given me the greatest sense of ful llment.
All the names would be far too numerous to mention. But some that stand out in memory include
Ed Anderson, Mahesh Hegade, Dr. Timothy Hemesath, Takayuki Iida, Meena Jayaraman, Emily
Ramey, and Vernon Valero of Brandeis University; Jane Maine, Alison Sullivan, and Rich
Takvorian of UMass/Lowell; Hang Bui, Vasudevan Devarajan, Jason Edmunds, Anthony
Giuffrida, Andrew Masnyj, and Sukhpreet Rana of Suffolk University; and especially my
students from the University of the West Indies: Peter Alleyne, Neil Broome, Sharon Carter-
Burke, Sidney Cox, Octavia Gibson, Rey Moe, Adrian Sinkler, and Calvin Watson. I have
learned so much from those I have taught.I have always been aware of the value that these
techniques offer for those endeavors where human life is at stake. But it was Dr. Adedeji Badiru
and Major LeeAnn Racz of the Air Force Institute of Technology who recognized its importance
and invited me to contribute a chapter on computing critical path drag and drag cost in
emergency response planning to their invaluable publication from CRC Press, Handbook of
Emergency Response. I sincerely thank them for helping me to spread these techniques into this
most crucial area.The folks at CRC Press have been wonderfully supportive, and I thank Cindy
Carelli, Joselyn Banks-Kyle, and Michele Smith for all their help.Finally, I would like to thank
the person who has taught me more about the world than anyone else: my wife Deb, without
whom life itself would be impossible.

Stephen A. Devaux, PMP, MSPM, is president of Analytic Project Management (APM), a

training and consulting company he founded in 1992. APM is a Global R.E.P. of the Project
Management Institute(PMI). Their clients include BAE Systems, Siemens, Wells Fargo, Texas

44
Instruments, Wyeth Pharmaceuticals, iRobot, L-3 Communications, American Power
Conversion, Irving Oil, and Respironics.Devaux is the author of the book, Total Project Control:
A Manager’s Guide to Integrated Project Planning, Measuring, and Tracking (1999, Wiley). He
has worked to develop and use new approaches and metrics in project management with clients
in a wide range of industries. “When the DIPP Dips” was published in the Project Management
Journal in 1992 (an article that was reprinted in PMI’s Essentials of Project Control in 1999). He
has con-tributed chapters on his new scheduling metric, critical path drag, in two 2013 books:
Project Management in the Oil and Gas Industries and Handbook of Emergency Response. He
has authored numerous articles and PMI webi-nars, and is a frequent speaker at PMI chapter
meetings throughout the United States.He began his career at Fidelity Investments, Citicorp, and
the Federal Reserve Bank of Boston and then taught and consulted in project man-agement at
Project Software and Development, Inc. (PSDI). He has taught graduate project management
courses at Suffolk University, Brandeis University, and The University of the West
Indies/Barbados and in exec-utive education programs at Bentley University and the University
of Massachusetts/Lowell.

45
Introduction

The glossary of the fth edition of the PMBOK® Guide denes a project as “A temporary
endeavor to create a unique product, service or outcome.” The eld of project management is
then based on guring out: what kind of endeavor is it?

If we were to dene ice hockey to a visiting Martian as “an activity that takes place on frozen
water, with hooked sticks and a round disk of rubber,” would we expect the Martian to
understand what ice hockey really is? It would be crucial to explain what kind of “activity,” that
ice hockey is a game, a contest, a team sport. Why does someone want to watch ice hockey?
Why does someone want to play ice hockey? What is the value of ice hockey?

Dening precisely what kind of “endeavor” a project is leads to being able to think about the
value for a project and utilize appropriate tech-niques for managing a particular type of effort.

46
Every project is an invest-ment, yet the tools that we use to plan, manage, and track projects are
different from those used on all other investments.

Merriam-Webster’s On-line Dictionary denes investment as “the out-lay of money usually for
income or prot: capital outlay; also: the sum invested or the property purchased.” Surely this
provides a perfect addi-tion to the denition of a project:

An investment in work to create a product, service or outcome that is expected to have greater
value than the capital outlay.

Every other investment one can think of—stocks, bonds, real estate, anything—starts with
consideration of expected benet: return-on -investment (ROI), pro t, net present value
(NPV), or expected monetary value (EMV), the term we use in this book. If a project is an
investment, then this value aspect of the project, by whatever name, should be its prime
operating metric: quantied, planned, tracked, and optimized through every management
decision.

Yet, unlike with every other type of investment, a project’s expected monetary value is not
viewed as a management metric: most project management software does not even permit input
of such data. The rare project management software packages that allow such input invariably
fail to perform adequate analysis and tracking of the data, analysis and tracking that is crucial
input for project decisions.

As mentioned in the preface, the current edition of the PMBOK Guide includes a new section
that is arguably the most important new section in the entire publication. It describes what it
terms business value: “(T)hrough the effective use of portfolio, program, and project
management, organi-zations will possess the ability to employ reliable, established processes to
meet strategic objectives and obtain greater business value from their project investments.” The
text goes on to say: “While not all organizations are business driven, all organizations conduct
business-related activities. Whether an organization is a government agency or a nonpro t
organiza-tion, all organizations focus on attaining business value for their activi-ties. “ In fact,
this business value is the entire purpose of every project and every program in every corporation,
government agency, or nonprot! Recognition of this is crucial.

47
The open question is precisely how to plan and measure and track and maximize this business
value. That’s what this book explores. It focuses on traditional and standard project management
techniques, such as criti-cal path scheduling, resource leveling, and, of course, earned value, but
always from the viewpoint of how to use them to increase business value (which I continue to
call expected monetary value to emphasize that it is subject to risk). All of the above must be
viewed through the new lens and in the language of investment management. We introduce the
reader to new techniques and metrics that guide risk and opportunity assessment and lead both
project manager and organizational decision making on the basis of maximized value generation
per invested dollar.

There is an important point here that we must make: although prac-tically all programs and
projects are investments that require money to obtain and support the necessary resources to do
the work, we are well aware that not all value is easily measured in monetary units. For exam-
ple, the Centers for Disease Control and Prevention (CDC) does not fund the development and
production of a u vaccine in hopes that they will be able to sell it at a pro t to the public.
Instead, the value of the CDC’s invest-ment will come in the form of what are sometimes termed
“intangibles”: fewer deaths, less suffering, and fewer days of lost labor productivity There are
many projects like this, where considerations of strictly monetary return may seem trivial or even
insulting. In the 2013 book by Dr. Adedeji Badiru and Major LeeAnn Racz titled Handbook of
Emergency Response: A Human Factors and Systems Engineering Approach (CRC Press), I
wrote Chapter 21, “Time Is a Murderer,” about critical path schedul-ing following a major
natural disaster. On such a project, it is crucial to recognize that hundreds of human lives may be
hanging in the balance as timeticks by. The resources needed to save time may be measured in
dollars, but the cost of time must be measured in the human lives at stake. If estimating each life
in monetary units (estimated by various US govern-ment agencies as being between $6 million
and $9.1 million each) helps justify the time necessary to plan, equip, and practice rapid
response, then such a monetization may be worthwhile. But what is all-important is the estimate
of the cost in lives lost in each different hour (growing numbers as trapped and injured victims
start to die), so that the emergency response timetable can be optimized to save the maximum
number of lives.

Where it is difcult to translate the value(s) to be generated into mon-etary units, making smart
“investment-based” project decisions usually requires analysis and estimation. In the u vaccine

48
example, spending an additional $100,000 on the correct critical path activity might allow the
CDC to start distributing u vaccines 3 days earlier. Is it worth the addi-tional investment?
Unless there is detailed analysis (with or without mon-etization) of the amount of death,
suffering, and sick days that would be avoided by nishing 3 days earlier, how can anyone ever
judge whether the project team should spend that extra money? Such decisions are made every
day; it would be nice if they were made on the basis of rigorous cost–benet analysis.

Such “business” decisions should not be the responsibility of the project team, but rather of the
customer/sponsor, whether governmen-tal or corporate. However, looking for such opportunities
is exactly what team members are qualied to do, as they are the subject matter experts who can
identify how to compress the schedule by 3 days for $100,000. This is precisely the sort of value-
added behavior in which the project’s customer/sponsor/organization should be pressing the
project team to engage. Unfortunately, not only is it not being done, but several aspects of the
way we dene, measure, and engage in projects can actively dis-courage such behavior, and
these often have negative impacts on business value generation.

In other disciplines, we do not judge investments simply as successes or failures. We recognize

that their results are relative, and that more value return is better and less is worse. This is the
approach we take, mov-ing beyond the ossifying xations with “deadline” and “budget” and the
binary qualications of projects as “successes” or “failures.” Through the consideration of
every project and program as an investment, all mem-bers of each organization will be provided
with the metrics and tools that allow decision making on the basis of greater or less return, thus
letting each associate identify those opportunities that will maximize his or her contribution to
the bottom line in a quantiable way.

Ultimately, this change in approach, to performing and evaluating projects based on business
value, is a radical departure from the traditional attitude: one of delivering the product as
dened in the requirements on

xxiIntroductionThe glossary of the fth edition of the PMBOK® Guide de nes a project as “A
temporary endeavor to create a unique product, service or outcome.” The eld of project

49
management is then based on guring out: what kind of endeavor is it?If we were to de ne ice
hockey to a visiting Martian as “an activity that takes place on frozen water, with hooked sticks
and a round disk of rubber,” would we expect the Martian to understand what ice hockey really
is? It would be crucial to explain what kind of “activity,” that ice hockey is a game, a contest, a
team sport. Why does someone want to watch ice hockey? Why does someone want to play ice
hockey? What is the value of ice hockey?Dening precisely what kind of “endeavor” a project
is leads to being able to think about the value for a project and utilize appropriate tech-niques for
managing a particular type of effort. Every project is an invest-ment, yet the tools that we use to
plan, manage, and track projects are different from those used on all other investments.Merriam-
Webster’s On-line Dictionary denes investment as “the out-lay of money usually for income
or prot: capital outlay; also: the sum invested or the property purchased.” Surely this provides
a perfect addi-tion to the denition of a project:An investment in work to create a product,
service or outcome that is expected to have greater value than the capital outlay. Every other
investment one can think of—stocks, bonds, real estate, anything—starts with consideration of
expected benet: return-on -investment (ROI), prot, net present value (NPV), or expected
monetary value (EMV), the term we use in this book. If a project is an investment, then this
value aspect of the project, by whatever name, should be its prime operating metric: quanti ed,
planned, tracked, and optimized through every management decision.Yet, unlike with every
other type of investment, a project’s expected monetary value is not viewed as a management
metric: most project

xxii Introductionmanagement software does not even permit input of such data. The rare project
management software packages that allow such input invariably fail to perform adequate analysis
and tracking of the data, analysis and tracking that is crucial input for project decisions.As
mentioned in the preface, the current edition of the PMBOK Guide includes a new section that is
arguably the most important new section in the entire publication. It describes what it terms
business value: “(T)hrough the effective use of portfolio, program, and project management,
organi-zations will possess the ability to employ reliable, established processes to meet strategic
objectives and obtain greater business value from their project investments.” The text goes on to
say: “While not all organizations are business driven, all organizations conduct business-related
activities. Whether an organization is a government agency or a nonpro t organiza-tion, all
organizations focus on attaining business value for their activi-ties. “ In fact, this business value

50
is the entire purpose of every project and every program in every corporation, government
agency, or nonprot! Recognition of this is crucial.The open question is precisely how to plan
and measure and track and maximize this business value. That’s what this book explores. It
focuses on traditional and standard project management techniques, such as criti-cal path
scheduling, resource leveling, and, of course, earned value, but always from the viewpoint of
how to use them to increase business value (which I continue to call expected monetary value to
emphasize that it is subject to risk). All of the above must be viewed through the new lens and in
the language of investment management. We introduce the reader to new techniques and metrics
that guide risk and opportunity assessment and lead both project manager and organizational
decision making on the basis of maximized value generation per invested dollar.There is an
important point here that we must make: although prac-tically all programs and projects are
investments that require money to obtain and support the necessary resources to do the work, we
are well aware that not all value is easily measured in monetary units. For exam-ple, the Centers
for Disease Control and Prevention (CDC) does not fund the development and production of a
u vaccine in hopes that they will be able to sell it at a pro t to the public. Instead, the value of
the CDC’s invest-ment will come in the form of what are sometimes termed “intangibles”: fewer
deaths, less suffering, and fewer days of lost labor productivity.There are many projects like this,
where considerations of strictly monetary return may seem trivial or even insulting. In the 2013
book by Dr. Adedeji Badiru and Major LeeAnn Racz titled Handbook of Emergency Response:
A Human Factors and Systems Engineering Approach (CRC Press), I  wrote Chapter 21,
“Time Is a Murderer,” about critical path schedul-ing following a major natural disaster. On such
a project, it is crucial to recognize that hundreds of human lives may be hanging in the balance

xxiiiIntroductionas timeticks by. The resources needed to save time may be measured in
dollars, but the cost of time must be measured in the human lives at stake. If estimating each life
in monetary units (estimated by various US govern-ment agencies as being between $6 million
and $9.1 million each) helps justify the time necessary to plan, equip, and practice rapid
response, then such a monetization may be worthwhile. But what is all-important is the estimate
of the cost in lives lost in each different hour (growing numbers as trapped and injured victims
start to die), so that the emergency response timetable can be optimized to save the maximum
number of lives.Where it is difcult to translate the value(s) to be generated into mon-etary
units, making smart “investment-based” project decisions usually requires analysis and

51
estimation. In the u vaccine example, spending an additional $100,000 on the correct critical
path activity might allow the CDC to start distributing u vaccines 3 days earlier. Is it worth the
addi-tional investment? Unless there is detailed analysis (with or without mon-etization) of the
amount of death, suffering, and sick days that would be avoided by nishing 3 days earlier, how
can anyone ever judge whether the project team should spend that extra money? Such decisions
are made every day; it would be nice if they were made on the basis of rigorous cost–bene t
analysis.Such “business” decisions should not be the responsibility of the project team, but rather
of the customer/sponsor, whether governmen-tal or corporate. However, looking for such
opportunities is exactly what team members are quali ed to do, as they are the subject matter
experts who can identify how to compress the schedule by 3 days for $100,000. This is precisely
the sort of value-added behavior in which the project’s customer/sponsor/organization should be
pressing the project team to engage. Unfortunately, not only is it not being done, but several
aspects of the way we dene, measure, and engage in projects can actively dis-courage such
behavior, and these often have negative impacts on business value generation.In other
disciplines, we do not judge investments simply as successes or failures. We recognize that their
results are relative, and that more value return is better and less is worse. This is the approach we
take, mov-ing beyond the ossifying xations with “deadline” and “budget” and the binary
qualications of projects as “successes” or “failures.” Through the consideration of every
project and program as an investment, all mem-bers of each organization will be provided with
the metrics and tools that allow decision making on the basis of greater or less return, thus letting
each associate identify those opportunities that will maximize his or her contribution to the
bottom line in a quantiable way.Ultimately, this change in approach, to performing and
evaluating projects based on business value, is a radical departure from the traditional attitude:
one of delivering the product as dened in the requirements on xxiv Introductiona certain date
for a certain cost. Ask any project manager who’s been in the business for a few years and she
will tell you that this denes her job. “Why should I look for opportunities to increase business
value through added scope, better quality, or faster or cheaper completion? That’s not my
department! If the sponsor/customer wants the project done differently, he should’ve said so.”
Even in situations where a simple change could obviously add value, the project team will rarely
even suggest such a modication. Stick to the knitting and don’t get fancy, is the attitude. And
the result is that vast amounts of potential business value are ignored on almost every project.

52
One can hardly blame the project manager or team. Completing the sponsor/customer’s
requirements on time and on budget is often a dif -cult goal, and requires a stressful effort. In
addition, both team members and project manager are typically assigned to the project for their
techni-cal skills. They may have been given some training on leadership or nego-tiation, and
some of the fundamental techniques of project management, but that training almost never
extends to nancial considerations more complex than the hourly cost of a resource.

With the acceptance that projects are investments undertaken for their business value must come
recognition that this factor is the central con-sideration for all projects. And this requires at least
an awareness of the economic aspects of a project. It is by formalizing the investment arithme-tic
into project metrics and documentation and reports, data to which the team has to pay attention,
that considerations of the project business value will become a part of the day-to-day culture.
And then improvements will ow because of what is being measured.

chapter one: Redening projects

“Why spend money if not to make money?”

You have just been made manager of a project that has a budget of $5  million. You are told
that we are doing this project under a xed price contract. The contract calls for our company
to be paid $4 million upon delivery.

What’s the matter? Why are you looking at me like that? You have a question, you say?

If you don’t, then you certainly should. Who in their right mind would ever pay more for a
project than the value they expect to get from it? Asophisticated project manager would
immediately ask what’s going on. Isthere some value other than the payment from this
particular customer that would make the project worthy of investment?

Value drivers

53
There are many, many other considerations that could cause an organi-zation to implement a
project whose initial revenue might be less than the cost of the project. Perhaps if we make this
customer happy, he will give us more, and more valuable, projects. Or perhaps the technology
we develop for this customer can be developed into a product that we can sell to other customers.
Or perhaps after the customer receives this product he will need to purchase other products or
services in order to keep the initial product operating ef ciently. Maybe there is what’s called
an avail-ability premium at work here: if we don’t accept this contract, we won’t have any work
for three experienced staff members and will have to lay them off, resulting in the loss of their
expertise.

The number of possible additional value drivers is large, but not in -nite. A list of some of the
more common ones can be found in Figure1.1, where the table sorts some common value
drivers of projects into those that add value through product scope (i.e., the components,
features, and requirements of the nal product, service, and result) and project scope, also
sometimes called work scope (i.e., the work that creates the product scope and ensures that the
requirements are met). There may some-times be value drivers that are not included in the table,
but it would be extremely rare for them to be adding signi cant value. This table, which I 
have utilized for years on consulting assignments, provides a very usable checklist to see what
factors may be adding value. Any that are adding signicant value on a particular project should
be specied as part of the project’s business case documentation, along with an estimate of the
amount of value.

54
Figure 1.1 Some common value drivers of scope

On projects such as the one described above, where the stated value seems less than the budget
of the project, this list may uncover the source of the $1 million plus of value needed to make
business sense of the project. And often, when it seems that the necessary additional value driver
does not exist, there may be other motives at work, such as an executive spon-sor who hopes the
project will raise her visibility enough to command a promotion, or a politician who believes the
project will increase his popularity by adding jobs in his district.

Some projects are said to be “mandatory,” perhaps in order to com-ply with governmental
corporate regulations, for example, installing wet scrubbers in a manufacturing plant to remove
pollutants from exhaust and thus comply with clean air regulations. In such projects, the value
comes from compliance, which thus avoids either nes or complete shut-down of the facility.

But when all is said and done, we always know that, barring igno-rance, insanity, or malice, the
total value expected to be generated by any project, from all factors, will always be expected to
be greater than the cost. Not that it always works out that way: we all can think of situations in
which a project costs much more than anticipated or never produced the value for which the
sponsors had hoped. Life does not always go as we anticipate, especially on projects that are, by
their very nature, risky endeavors. But we can say with con dence that, at the start of every
proj-ect, its total expected monetary value (EMV) or net present value (NPV) is forecast to be

55
greater than its cost (i.e., budget). So when presented with a new project such as the one above
that seems like a value loser, we understand that such a scenario is either improbable or
incomplete. That is because we intuitively understand that every project is an investment. We
recognize that investing $5 million in a project that is only expected to return $4 million in value
makes no sense. Instinctively, we understand that there must be other value drivers that add up to
more than the $1 million that this project would otherwise be destined to lose.

Planning and tracking projects as investments

The fact that all projects are investments should surely mean that the expected monetary value of
every project should be managed, planned, and tracked as with every other type of investment. It
also means that if the factors that drive that investment value are hidden from the proj-ect
manager or team, they cannot be planned properly and optimized for their value contribution. On
a project, such optimization should be the job of the project manager and leading team members
because they are the people who understand the details of the project work and can gener-ate and
analyze ideas that can lead to greater ef ciencies. But they need key items of project
information in order to be able to contribute in such ways and, unfortunately, all too often such
information is not provided by the sponsor/customer. The mandate is almost invariably
simplistic: provideXproduct on Y date for Z cost.

In addition, the ongoing progress of the project in terms of the value-above-cost that it’s
expected to generate should be the most important project management metric to be tracked
during project execution. Yet, because recognition of projects as investments has barely begun,
such tracking is routinely omitted. Instead, projects are tracked on the basis of three items:

1. How is the project doing in relation to the planned schedule?

2. How is the project doing in relation to the planned cost?

3. And (often almost as an afterthought) how is the project doing in terms of the requirements
and technical goals of the product scope?

The reason that the third item is often an afterthought is due to the fact that it is unquanti ed:
schedule and cost data are both measurable and comparable to the project plan in mathematical
ways, allowing for subtraction to show differences and percentages to show trends. These are the

56
essence of earned value (EV) metrics such as schedule vari-ance (SV), schedule performance
index (SPI), cost variance (CV), and cost performance index (CPI). These metrics are, or can be,
very use-ful tools, and we cover them, the good, the bad, and the ugly, in great depth in
Chapters8and 9. But notice that none of these metrics speaks to the raison d’être of the
project, the reason we are investing so much time and money: to generate the project’s product,
service, or result.

Traditional project tracking

57
 2.5. The Canadian minority groups

This research focuses specifically on Canadian minority investment. The first question that may
arise is, who are officially the Canadian minorities and what groups do they include? Until this
question is not clearly answered, there will be great ambiguity in the definition of the problem,
the scope of the study, and the research population. Therefore, in this part, based on the official
definitions, the Canadian minorities are generally introduced, and then the characteristics of the
minority group or groups that will be focused on in this research are presented and justified.

Statistics Canada (2021) has divided the Canadian minorities into two general groups: Visible
minority group, and not visible minority.

2.5.1. Visible minority population

The term “visible minority” was coined in 1975 by activist Kay Livingstone in discussing the
socio-political inequalities experienced by non-white minorities. The designation was officially
adopted in 1984 by the Commission on Equality in Employment, which led to the passage of the
Employment Equity Act (1986). The primary purpose of this legislation was to facilitate equal
access to employment for minorities being discriminated against. The term was formally adopted
by Statistics Canada in 1986. However, there is no consensus regarding the term “visible
minority.” Some, such as the United Nations, find it to be too homogenous, as it includes an
extremely wide variety of groups. The use of the word “minority” has also been criticized, as it
no longer reflects the reality in certain cities or regions where racialized people constitute the
majority of the population. The usefulness of the “visible minority” identifier is also fairly
limited. In the 2021 census, Statistics Canada has decided to continue using this term. Aware of
the relative shortcomings of its use, the agency is, however, seeking to develop new methods to
better represent the diversity of racialized groups.

Visible minority refers to whether a person is a visible minority or not, as defined by the
Employment Equity Act (Statistic Canada, 2021). The Employment Equity Act defines visible
minorities as “someone (other than an Aboriginal person) who is non-white in colour/race,
regardless of place of birth. The visible minority group includes: Black, Chinese, Filipino,
Japanese, Korean, South Asian-East Indian (including Indian from India; Bangladeshi;

58
Pakistani; East Indian from Guyana, Trinidad, East Africa; etc.), Southeast Asian (including
Burmese; Cambodian; Laotian; Thai; Vietnamese; etc.) non-white West Asian, North African or
Arab (including Egyptian; Libyan; Lebanese; etc.), non-white Latin American (including
indigenous persons from Central and South America, etc.), person of mixed origin (with one
parent in one of the visible minority groups listed above), other visible minority group”
(Government of Canada, 2021).
More specifically, visible minorities are derived based on responses to the population group and
ethnic group questions defined for federal employment equity purposes. They are classified
according to their responses to the Population group question, as follows (Statistic Canada,
2021).

 The "South Asian" category includes persons who gave a mark-in response of "South
Asian" only or "South Asian" and "White" only. This category also includes persons with
no mark-in responses who gave a write-in response classified as "South Asian".
 The "Chinese" category includes persons who gave a mark-in response of "Chinese" only
or "Chinese" and "White" only. This category also includes persons with no mark-in
responses who gave a write-in response classified as "Chinese".
 The "Black" category includes persons who gave a mark-in response of "Black" only or
"Black" and "White" only. This category also includes persons with no mark-in responses
who gave a write-in response classified as "Black".
 The "Filipino" category includes persons who gave a mark-in response of "Filipino" only
or "Filipino" and "White" only. This category also includes persons with no mark-in
responses who gave a write-in response classified as "Filipino".
 The "Latin American" category includes persons who gave a mark-in response of "Latin
American" only, as well as persons who gave a mark-in response of "Latin American"
only with a non-European write-in response. This category also includes persons with no
mark-in responses who gave a write-in response classified as "Latin American".
 The "Arab" category includes persons who gave a mark-in response of "Arab" only, as
well as persons who gave a mark-in response of "Arab" only with a non-European write-
in response. This category also includes persons with no mark-in responses who gave a
write-in response classified as "Arab".

59
  The "Southeast Asian" category includes persons who gave a mark-in response of
"Southeast Asian" only or "Southeast Asian" and "White" only. This category also
includes persons with no mark-in responses who gave a write-in response classified as
"Southeast Asian".
 The "West Asian" category includes persons who gave a mark-in response of "West
Asian" only, as well as persons who gave a mark-in response of "West Asian" only with a
non-European write-in response. This category also includes persons with no mark-in
responses who gave a write-in response classified as "West Asian".
 The "Korean" category includes persons who gave a mark-in response of "Korean" only
or "Korean" and "White" only. This category also includes persons with no mark-in
responses who gave a write-in response classified as "Korean".
 The "Japanese" category includes persons who gave a mark-in response of "Japanese"
only or "Japanese" and "White" only. This category also includes persons with no mark-
in responses who gave a write-in response classified as "Japanese".
 The "Visible minority, n.i.e." category includes persons with no mark-in response who
gave a write-in response that is classified as visible minority but cannot be classified with
a specific visible minority group. This includes responses such as "Guyanese," "West
Indian," "Tibetan," "Polynesian," and "Pacific Islander".
 The "Multiple visible minorities" category includes persons who gave more than one
visible minority mark-in response (e.g., "Black" and "South Asian") (Statistic Canada,
2021).

2.5.2. Not visible minority

The Canadian non-visible minority includes Aboriginal, and Whites (Statistic Canada, 2017).
This category includes persons who gave a mark-in response of "White" only; persons who gave
mark-in responses of "White and Latin American", "White and Arab" or "White and West
Asian" only; persons who gave a mark-in response of Latin American, Arab, or West Asian only,
along with a European write-in response; and persons with no mark-in response who gave a
write-in response that is not classified as a visible minority. As indicated previously, this
category also includes Aboriginal persons (Statistic Canada, 2021).

60
"Indigenous peoples" is a collective name for the original peoples of North America and their
descendants. Often, "Aboriginal peoples" is also used.

The Canadian Constitution recognizes 3 groups of Aboriginal peoples: Indians (more commonly
referred to as First Nations), Inuit and Métis. These are 3 distinct peoples with unique histories,
languages, cultural practices and spiritual beliefs.

These are the three groups defined as the Aboriginal peoples of Canada in the Constitution Act,
1982, Section 35 (2). A person may be in more than one of these three specific groups.
According to the 2016 Census, more than 1.67 million people in Canada identify themselves as
an Aboriginal person. Aboriginal peoples are:

 The fastest growing population in Canada – grew by 42.5% between 2006 and 2016
 The youngest population in Canada – about 44% were under the age of 25 in 2016
(Government Canada, 2022).

61
https://www23.statcan.gc.ca/imdb/p3VD.pl?Function=getVD&TVD=1323643

What is ethics?
https://www.canada.ca/en/treasury-board-secretariat/services/values-ethics/code/what-is-
ethics.html

62
63
64
65
66
Economic growth and sustainable development are the main economic goal in countries. The
most important criterion for measuring economic and GDP growth, and the main driver of
production is the amount of investment. Therefore, politicians and economists in all countries are
always looking for the conditions that lead economic factors to invest. As one of the ten largest
economies in the world and a member of the G7 group of leading industrialized countries

67
(Government of Canada, 2022), Canada also pursues various investment policies. In Canada, as
an investing country, both foreign and domestic investments are common and have an important
position. Foreign investment, for instance, accounted for 23.2 % of its Nominal GDP 1 in Jun
2022, compared with a ratio of 22.4 % in the previous quarter. Since Canada's nominal GDP
reached $550.9 US billion in June 2022, therefore, the amount of investment in Canada on this
date was $127.81 US billion which is a very significant amount. A review of the time series data
shows that over the period 1966 to 2022, investment in Canada reached its highest level of
32.9% in September 1966 and its lowest level of 15.9% in June 1996 (CEIC, 2022). According
to Invest Canada (2021), global companies invested $75.5 billion in Canada in 2021, bringing
foreign direct investment (FDI) to the highest annual total since 2007, a 41% increase over the
10-year average (Invest Canada, 2022; The Global and Mail, 2022). Meanwhile, the stock of
Canadian direct investment abroad rose by 4.5% to reach $1,555.6 billion at the end of 2021, on
the strength of cross-border mergers and acquisitions activity (Statistic Canada, 2022). Canada is
not only a suitable destination for foreign investment, but also with a stable economy in the
world, it is known as a suitable country for domestic investors. Thanks to its vast territory,
abundant resources, and social values, along with a remarkable quality of life and a highly
skilled workforce, Canada, as a multi-cultural country, is increasingly becoming a good place to
invest for individuals, entrepreneurs, and investors with different economic and social
backgrounds, and different motivations. Meanwhile, Canada's minority groups play an important
role in investing in start-ups and small businesses.

According to the 2016 census, visible minorities, including women, First Nations, Métis or Inuit
persons, and immigrants (Canada, 2018), represented nearly one-quarter (22.3%) of the
Canadian population. In 2017, 12.2% of SMEs were owned by visible minorities 2, a proportion
that has risen slightly over the past decade (Statistic Canada, 2022). Businesses majority-owned
by women accounted for 15.6% of all small and medium enterprises (SMEs) in 2017. Businesses
majority-owned by women were more prevalent in-service industries, such as retail trade,
accommodation and food services, and tourism. Furthermore, First Nations, Métis or Inuit people
made up 4.9% of Canada's population in 2016, and their population has reached 2,128,000 in
1
. GDP in Canada averaged 709.15 USD Billion from 1960 until 2021, reaching an all time high of 1990.76 USD
Billion in 2021 and a record low of 40.46 USD Billion in 1960 (Trading Economic, 2022).
2
. Visible minorities are defined as individuals, other than Indigenous persons, who self-identified as non-Caucasian in race or non-white in
colour, regardless of place of birth. So, therefore, by adding their investment data, the minority investment ratio increases.

68
2021 (Statistics Canada, 2022), but they owned 1.4% of the Canadian SMEs in 2017 (Statistic
Canada, 2021). On the other hand, immigrants, also, constituted over one-fifth (21.9%) of the
country’s population and are the primary decision makers for approximately 25.0% of SMEs in
Canada, a proportion that has been rising over the past decade. Bringing newcomers to Canada
remains a priority to drive economic growth and recovery (Office of the Prime Minister, 2021).
They arrive with the money, desire, skills and temperament to start a new business that will
employ local residents, generate tax revenue, increase economic activity and boost community
well being (Toughill, 2019).

Despite the important role of minorities in the Canadian economy, and the success they get in
investments, the failure rate is also significant. According to official data, 20% of Canadian
businesses fail in their first year and around 60% will go bust within their first three years
(Statistic Canada, 2020). Furthermore, based on Innovation, Science & Economic Development
Canada statistics, “thousands of businesses exit the marketplace every year in Canada” (Lussier,
1996). Business failure statistics show that “about 96 percent of small businesses that enter the
marketplace survive for one full year, 85 percent survive for three years, and 70 percent survive
for five years” (Ward, 2019). Other reports also provide similar statistics and information.

A review of related information and research indicate that the failures in Canadian start-ups and
small businesses in which a large number of minorities invest has different reasons. The result of
a survey by “CB Insights” (2020) which has analyzed the reasons for the failure of new
businesses, for instance, shows that the reasons for failure are different. According to the survey,
market needs for products and services (42%), ran out of cash (29%), have no right team running
the business (23%), were outcompeted (19%), pricing and cost issues (18%), poor product
offering (17%), lack of business model (17%), ignore the customers (14%) (Insights, 2020). In
addition, based on an Industry Canada Study, the main reason businesses fail is “poor planning”.
This research emphasizes that “managers of failed companies lack the experience, knowledge or
vision to manage their businesses" (Lussier, 1996). The results of other research conducted in
this area, in addition to similar cases, emphasize planning, strategy, and marketing (Hogarth‐
Scott, Watson, & Wilson, 1996), high operating costs at least 30% compared to other firms
(Chittenden, Kauser, & Poutziouris, 2002), poor quality of products and services (França, de
Aragão Gomes, Machado, & Russo, 2014), time consuming, over lengthening time, and
improper time management (Gupta, 1988), lack of human resources, and business skills (Arasti,

69
Zandi, & Talebi, 2012), unsuitable control of operations of the business (Beaver, 2003), poor
quality strategic decision making (Jennings & Beaver, 1995), misunderstanding of the business
complex environment (Moroni, Arruda, & Araujo, 2015), and so on.

Others have also found evidence that investors have a wide demographic diversity; Therefore,
they have different investment behaviors. “Men and women vary in many ways socially and
economically, from educational achievement to employment and earnings, to wealth and power,
to financial decision-making and investment behaviour” (Salem, 2017). In the investment sector,
men and women differ in their mentality and behaviour when it comes to financial risk taking
(Marinelli, Mazzoli, & Palmucci, 2017), level of investor confidence (Kansal & Singh, 2013),
level of investment literacy (Sabri, Reza, & Wijekoon, 2020). Many immigrants do not have a
good knowledge of the Canadian environment to start investing. It is also necessary to add the
challenges of the immigrants’ English and French languages, which they need for effective
communication in the businesses. These differences and challenges lead non-standard or non-
rational behaviors of the investors, business owners, entrepreneurs in managing the business
contribute to entrepreneurial failure (Ahmad & Seet, 2009). In a study of recent immigrants to
Canada, Neville, Orser, Riding, and Jung (2014) find that a lack of business knowledge and
being unable to hire skilled employees due to lack of finances are among the challenges
immigrant entrepreneurs face in Canada. They emphasise in the early start-up phase; immigrant
entrepreneurs may suffer from a low level of early investment due to bank barriers and being
unaware of essential business practices. They explain that as a result of low awareness of
business practices and the Canadian environment, immigrant businesses may grow slowly due to
a lack of knowledge and resources (Toughill, 2019). If there is also a lack of human and social
capital, “immigrant owned new firms may face liabilities of size, newness, and a limited resource
base, factors that may hamper the expected performance of their enterprises” and decrease
likelihood of funding (Neville, Orser, Riding, & Jung, 2014).

On the other hand, some experts do not consider the investment policy of minorities, especially
immigrants, successful. Their success is questionable based on the evidence of investor's
immigration failures designed to stimulate the Canadian economy. UBC geography professor
Daniel Hiebert, also, who has focused on international migration, has often described investor
immigration as a “policy failure.” He indicates in his book, the book Millionaire Migrants
(2010), which investor immigrants were seeing limited business success in Canada, and that they

70
were bringing heavy amounts of cash that could have a major impact on housing prices, even if
only a fraction of it were used on real estate (Ley, 2011).

Based on what has been said, part of the success or failure of investments and business
administration is related to the government policies, which is not the purpose of this research,
although it will be considered in the research process. The other part focuses on two important
aspects. First, the factors related to the investors themselves. These factors shape the decision-
making behavior of investors. Second, it concentrates on the managerial aspects that form the
investment management or business administration. Accordingly, behavioral finance theorists
have proposed the psychological aspects of investors to help rationalize investors' decision-
making behaviors. In the standard-financial paradigm, it is assumed that investors behave
rationally. That is, among the behavioral alternatives, they choose the option that has the highest
benefit and the lowest cost. On the other hand, investors seek to maximize their expected utility
based on the financial-standard perspective. That is, they organize their investment behavior
based on maximizing expected utility. Nevertheless, the emergence of numerous behavioral
conflicts in investors with regarding financial-standard assumptions has led to the emergence of
a new paradigm that not only solves the shortcomings of the previous one, but also provides a
better analysis of investors' behavior. This new paradigm, which is called financial-behavioral,
discusses the limitation of arbitrage and the effects of psychological factors on the behavior of
investors. According to experts, sometimes due to numerous restrictions, rational behavior and
decision-making in investment may not be completely possible. In this context, Herbert Simon
(….) proposed bounded rationality, which, according to Richard Deft (…..), is suitable for the
intuitive decision-making process. In the investment process, sometimes investors act intuitively
based on trial and error and previous experiences. Also, their behavior is sometimes in the form
of following from the group or a group with mass behavior, which is called herd behavior.

Furthermore, since the investment behavior of individual investors, which is focused on

Canadian minorities in this research, is different (Salem, 2017), the output and performance of
investments of these groups are also highly volatile. In this context, failure rates for new
Canadian firms (Baldwin, Dupuy, & Richard Gellatly, 2000) in a short period after starting up is
significant (Statistic Canada, 2022).

71
On the other hand, the experts have recently turned to project-based investment to solve
problems and challenges in this area (Anderson & Merna, 2005; Hubert & Louvel, 2012; Junkes,
Tereso, & Afonso, 2015). They consider project management as a suitable solution to increase
the success rate of investment. Since the success criteria of an investment is earning profit,
project management is a suitable tool for its realization because according to PM experts, value
creation or value-oriented is an important feature of project management. Value creation is
considered not only in the short term, but also in the whole steps of the project life cycle;
Something that is also essential for investment. On the other hand, studies show that despite
proper plans, most investments fail in the exploitation phase; Something that is highly considered
in project management. In other words, the project success is considered both in the planning and
construction stages, as well as in the exploitation stage. Thus, the using PM increases the success
of the investment in all stages of its life cycle. Accordingly, project management provides a
macro and forward-looking perspective for investment management and with an integrated view
and away from partiality, it helps to realize the investment goals.

Some researcher has gone even further. Although investment and project have two separate
definitions as independent concepts, they consider them to be identical in content. This similarity
has been emphasized in specialized project management journals such as Project Management
Institute (PMI) so that De Piante (2014) believes, “projects must be understood as investments”.
Based on this view, “It’s not enough to say that a project is like an investment, but a project is an
investment, strictly speaking” (De Piante, 2014). The identicality of the project and investment
are reinforced by their features such as return, risk, safety, and liquidity (Avadhani, 2009; Singh,
2012). These characteristics of investments can understand in the project context too (Chapman
& Ward, 2003; Deckro & Hebert, 2003; Minetti, 2007; Rechenthin, 2004). In other words, these
features have the same meanings in both the field of investment and the project.

Another feature that emphasizes the equivalence of projects and investments is their roles in
increasing production in society, which ultimately leads to development in countries. Increasing
investment in countries which made in the form of various projects and are known “investment
projects” can have a positive impact on economic growth, employment, per capita income, Gross
domestic product (GDP), the value of the national currency (Curtis & Irvine, 2017; Kahn, 1931;
Khan & Kumar, 1993; Li & Liu, 2005) as well as reduce inflation and recession (Guess &
Koford, 1986; Kaldor, 1976) and solves economic problems in society by improving the

72
components of macroeconomics. Accordingly, governments have always provided opportunities
for the development and implementation of investment projects in both the private and public
sectors to improve the economic situation. Thus, investment which often done in the form of
project, are the engine of the economy and one of the most important macroeconomic variables
which affects all policies in the society. Accordingly, “investment projects” and “investment
project management” are concepts that have been emphasized in this field.

To increase the likelihood of achieving investments goals, most of them are done in the form of
projects, and thus the investment projects management is raised. The investment project is “a
planning tool that allows making decisions about the execution of capital resources, its use has
commonly been developed for to generate new businesses, but it is also applied in the
improvement of different areas (logistics, occupational security and health, production, among
others) of businesses in operation in order to satisfy both internal and external customers”
(Valencia, Marín Chávez, & Lara Carhuancho, 2020). Hence, it should include information on
the purpose of the planned investment, the expenditure required for its implementation, funding,
criteria, and methods for assessing the effectiveness and risks of participants of the investment
process and desired effects (results). Accordingly, the identification and selection of good
investment projects is a key element in developing a sustainable successful future.

Given the importance of this issue, the current research examines investment project
management focusing on minority groups in Canada, including women, First Nations, Métis or
Inuit persons, and immigrants. In this study, the investment criteria of these groups are identified
based on abductive reasoning, and according to the indicators, components and themes extracted
in the research process, the Canadian Minority Group investment project management model are
developed to assist them in making optimal decisions.

Considering the role of these groups in the country's economy and the challenges they face,
conducting scientific studies in this field is of great importance. The importance of these studies
is due to the dual roles they play in the economy. On the one hand, investment includes a large
portion of total expenditures, and therefore its changes have significant effects on demand
(Romer, 2012; Williamson, 2018). On the other hand, it plays an important role in supply and

73
production because investment shows an increase in capital stock (M. Feldstein, 1995; Mold,
2003).

Furthermore, since the investment behavior of individual investors, which is focused on

Canadian minorities in this research, is different (Salem, 2017), the output and performance of
investments of these groups are also highly volatile. In this context, failure rates for new
Canadian firms (Baldwin, Dupuy, & Richard Gellatly, 2000) in a short period after starting up is
significant (Statistic Canada, 2022). Accordingly, the purpose of this research is, first,
identifying the reasons for the failure and success of Canadian minority group investments.
Then, recognizing the investment behavior of minorities as well as the effective factors in their
decision making. Finally, with an emphasis on project-based investment, developing a
comprehensive model of investment project management.

Statistic Canada. 2022. Foreign direct investment, 2021. Online. Available in:
https://www150.statcan.gc.ca/n1/daily-quotidien/220429/dq220429b-eng.htm

Invest in Canada. 2022. FDI REPORT 2021. Online. Available in:

https://fdi2021.investcanada.ca/

The Global and Mail. 2022. Foreign direct investment makes gains in Canada — and that’s good
for the country. Online. Available in: https://www.theglobeandmail.com/business/adv/article-
foreign-direct-investment-makes-gains-in-canada-and-thats-good-for-the/

74
Office of the Prime Minister. 2021. ARCHIVED - Minister of Immigration, Refugees and
Citizenship Supplementary Mandate Letter. Online. Available in: https://pm.gc.ca/en/mandate-
letters/2021/01/15/archived-minister-immigration-refugees-and-citizenship-supplementary

2. Problematization

75
Capital and investment are the most important concepts in the fields of finance and Economic.
Although the theory of capital is one of the most difficult and contentious areas of economic
theory (Hulten, 1991), It has a clearer definition in the financial field. Economically, capital is
the right of the owners of an institution to its assets. Economists have variously defined capital as
congealed labor, as deferred consumption, as the “degree of round-a-boutness,” as a stock of
durable commodities, or as a flow of factor services (Hulten, 1991). Thus, economic capital is
the estimated amount of money needed to cover possible losses from unexpected risk. A firm's
economic capital number can also be seen as a measurement of solvency while financial capital
most commonly refers to assets needed by a company to provide goods or services, as measured
in terms of money value (Rooz, 2019). It represents the sources of formation of assets of an
economic entity (Butkova, 2020). Financially, capital is the assets used to generate more wealth
or to create and develop a new business (Tuovila, 2020). Thus, there must be capital in the form
of cash and other assets and even credit for debt in order to invest.

76
Investing means allocating money (capital) for something with the expectation of making a profit
in the future. More precisely, an investment is an asset or item that is purchased with the hope
that it will generate income or appreciate in value at some point in the future (Ahmet &
Traykovska, 2015). So, investment is commitment of money or capital to purchase other assets
expect to earn income, turn a profit, or create some other positive benefit. Although investment is
presented from different perspectives, including human, legal, etc., but most of its economic and
financial aspects are considered.

Economically, investing means purchasing goods or assets, such as buildings, offices,

machinery, etc., that are not consumed now but will be needed by the individual or institution in
the future and will be profitable. Hence, an investment is an asset or item acquired with the goal
of generating income or appreciation. Appreciation refers to an increase in the value of an asset
over time. When an individual purchases a good as an investment, the intent is not to consume
the good but rather to use it in the future to create wealth (Hayes, 2021). According to this view,
buying or renting a new or used house, building a factory, return to studies, training manpower,
and practice gaining more skills for the jobs, etc. are consider investments for the institution. In
finance, investing is a financial product like a stock or securities that is bought with the goal of
making money (Conde, 2021). In other words, it means that an individual or institute buys a
financial asset, such as a company stock, and predicts that it will be profitable in the future and
its price will rise. From this perspective, investment is made indirectly through the purchase
companies’ stocks in the capital markets. Therefor, a stock (also known as equity) as a type of
investment is a security that represents the ownership of a fraction of a corporation (Hayes,
2022).

Given the different approaches, there are some various types of investments such as 1) the
business fixed investment, 2) Housing investment, 3) Investing in stockpiles includes goods that
firms and manufacturers keep in stock, such as materials, supplies, goods under construction, and
manufactured goods, 4) Public sector investment that often done for political and social reasons,
in which economic logic is of secondary importance; 5) Foreign indirect investment which is
reflected in securities, 6) Foreign direct investment in which the foreign investor has a physical
presence and by accepting financial responsibility and accepting risk, directly controls and
manages the business and has an effective role in the implementation of its activities. Although
types of investments are considered depending on the circumstances and have their own

77
performance in macroeconomics, foreign direct investment (FDI) in countries has been
emphasized in recent decades. Itis one of the most important and efficient ways for investment
financing in the host countries. Extensive impact on micro and macro economic indicators, and
positive effects at the level of Investable firms, such as access to new export markets, improving
competitiveness, transfer of technical and managerial knowledge, creating economic security,
job creation, etc. is evidence to the effectiveness. Accordingly, for several decades, most
countries in the world, with special attention to the investment, have developed and implemented
policies and programs to encourage, support and attract foreign capitals. Therefore, governments
are constantly striving to create a competitive advantage in order to attract foreign investors to
their countries. Studies indicate that the trend of foreign direct investment has been increasing
since the 1980s, so that it inflow in 2007 reached its highest amount, about $ 2 trillion
(UNCTAD, 2021). Although global financial and economic crises, such as the 2008 financial
crisis and the Pandemic Covid-19, have had a negative impact on the flow of foreign direct
investment in the world and have experienced a sharp decline, the data show that its trend has
improved compared to the crisis period. The Global foreign direct investment, for instance, has
improved dramatically in 2021, from $ 929 billion in 2020 to $ 1.65 trillion in the recent year
(UNCTAD, 2022).

Canada, as one of the most stable economies in the world, in addition domestic investments, is
the main target of many global investors. The Canadians with different amounts of capital have
good opportunities to invest directly and indirectly in businesses, given the different advantages
of this country. On the other hand, thanks to its vast territory, abundant resources, and social
values, along with its remarkable quality of life and highly skilled workforce, Canada
increasingly becomes a destination for foreign direct investment in the global economy.
Increasingly, global investors look not only to invest, but to put down roots in Canadian
communities. Hence, foreign direct investment (FDI) is a key strategic lever for Canada’s
economic development, helping to spur innovation and creating highly skilled and well-paying
jobs in communities across the country (Invest in Canada, 2022). Overall, 2019 was the best year
for foreign dollars invested in Canada since 2013. According to Statistics Canada, total foreign
direct investment (FDI) in Canada reached $67.2 billion, a 19.3% increase over the previous
year. Based on the data and information, these investments have been made in hundreds of

78
different projects, so that in 2019, more than 22,600 new jobs were created through foreign direct
investment projects (FDI Report, 2019; Statistic Canada, 2022).

Meanwhile, minority groups in Canada, including women, First Nations, Métis or Inuit persons,
and immigrants, are implementing a significant portion of investment projects. According to the
2016 census, visible minorities represented nearly one-quarter (22.3%) of the Canadian
population. In 2017, 12.2% of SMEs were owned by visible minorities 3, a proportion that has
risen slightly over the past decade (Statistic Canada, 2022). Businesses majority-owned by
women accounted for 15.6% of all small and medium enterprises (SMEs) in 2017. Businesses
majority-owned by women were more prevalent in-service industries, such as retail trade,
accommodation and food services, and tourism. Furthermore, First Nations, Métis, or Inuit
persons represented 4.9% of the Canadian population in 2016, but they owned 1.4% of the
Canadian SMEs in 2017. Immigrants to Canada, also, constituted over one-fifth (21.9%) of the
country’s population and are the primary decision makers for approximately 25.0% of SMEs in
Canada, a proportion that has been rising over the past decade. Bringing newcomers to Canada
remains a priority to drive economic growth and recovery. This section presents results on
individuals who were born outside of Canada and are majority-owners of businesses in Canada
(………………………………………).

Despite some the minority groups successes in investment projects in Canada, the failure rate is
high. ………………………..

In addition, some experts do not consider the investment policy of minorities, especially
immigrants, successful. Their success is questionable based on the evidence of investor's
immigration failures designed to stimulate the Canadian economy. UBC geography professor
Daniel Hiebert, also, who has focused on international migration, has often described investor
immigration as a “policy failure.” He indicates in his book, the book Millionaire Migrants
(2010), which investor immigrants were seeing limited business success in Canada, and that they
were bringing heavy amounts of cash that could have a major impact on housing prices, even if
only a fraction of it were used on real estate (Ley, 2011).

Here it is better discuss a little about the research problem, the minority investments failures.

3
. Visible minorities are defined as individuals, other than Indigenous persons, who self-identified as non-Caucasian in race or non-white in
colour, regardless of place of birth. So, therefore, by adding their investment data, the minority investment ratio increases.

79
To increase the likelihood of achieving investments goals, most of them are done in the form of
projects, and thus the investment projects management is raised. The investment project is “a
planning tool that allows making decisions about the execution of capital resources, its use has
commonly been developed for to generate new businesses, but it is also applied in the
improvement of different areas (logistics, occupational security and health, production, among
others) of businesses in operation in order to satisfy both internal and external customers”
(Valencia, Marín Chávez, & Lara Carhuancho, 2020). Hence, it should include information on
the purpose of the planned investment, the expenditure required for its implementation, funding,
criteria, and methods for assessing the effectiveness and risks of participants of the investment
process and desired effects (results). Accordingly, the identification and selection of good
investment projects is a key element in developing a sustainable successful future.

Based on what has been said, especially the research problem, the main questions and objectives
of the research will be as follows:

The main questions

What can you do with your money? Spend it, save some of it, or invest it? If you choose the latter, where are you going to invest
it? There are many investment alternatives (like stocks and bonds), and the amount of information on each one of them is
staggering. What is your goal in investing? What are your constraints and risks? Once you have defined these, what is the next
step? Are you going to do the investing on your own or are you going to hire a professional money manager? These are some of
the questions that you need to address as a (novice) investor, and we will deal with them in this part of this textbook. In the
remaining chapters, we will have more to say about the field of investments in general, the strategies that you can apply to
achieve your goals, and the risks involved in investing.

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 The main objectives

3. The literature review

Given the research problems, the main questions, and the objectives, the concepts that shape the
structure of the literature are presented in this section. Accordingly, concepts, theories, and
models related to the research topic are addressed. This section also introduces the elements of

81
the Canadian Minority Investment Project Management Model, and finally it summarizes in the
form of a conceptual framework.

3.1. Investment Project Management

This concept is composed of two independent words "project" and "investment" so that many
definitions are provided. However, some experts equate the nature of "project" and "investment".
According to them, the project is a kind of investment and, also, the investment is made in the
form of a project or projects. De Piante (2014), for instance, in an article in PMI believes
“projects must be understood as investments”. According to them, “it’s not enough to say that a
project is like an investment. A project is an investment, strictly speaking” (De Piante, 2014).
The argument of this group of experts is based on the common features that exists between the
“project” and the “investment”. This research assumes the acceptance of the argument that the
content of the “project” and the “investment” are the same, or at least the investments are made
in the form of different projects, although the importance of “Investment Projects Management”
is inevitable given any assumptions.

3.1.1. Investment

In a broad sense, investment is the sacrifice of resources (time, money, and effort) today for the
expectation of earning more resources tomorrow. First, the investor is spending time and money
(or resources in general). The resources are scarce and thus valuable. Investments deal with the
efficient management of the money (or financial wealth) today in hopes of receiving more
money (or returns) in the future (Laopodis, 2020). Understanding this, emphasizes the next
element of investment: uncertainty of the future (Nickell, 1977). In other words, the fact that the
investor can only have an expectation for higher returns in the future means that he / she is faced
with risk. In addition, it must be answered the question, why do people invest their money
instead of keeping it in cash? The answer is related to the opportunity cost (Ma, Zhao, & Xi,
2016), which is emphasized in economics. Opportunity costs represent the potential benefits that
an individual, investor, or business misses out on when choosing one alternative over another.
Because opportunity costs are unseen, they can be easily overlooked. Understanding the potential
missed opportunities when a business or individual chooses one investment over another allows
for better decision making (Fernando, 2021).

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Another insight from economics is that (disposable) income is either consumed, saved or both.
Saving means sacrificing consumption today for (the expectation of) greater consumption in the
future. Thus, there is a fundamental difference between saving and investment (Laopodis, 2020).
Saving does not entail risk, but investment is a risky activity. A person, for instance, who saves
money in a bank account such as a deposit certificate has no risk (losing his money) because the
savings are often insured by governments but investing in a company's stock may result in the
loss of all or part of the investor's capital. However, economically, savings are the main source of
investment, and investment is one of the main components of the macroeconomic equation,
(GDP= C + I + G + NX). Accordingly, investment (I) is anything that remains after deducting
total consumption (C), government expenditures, and net exports from Gross Domestic Product
(GDP). That is: I = GDP-C-G-NX (Mankiw, 2020; Romer, 2012; Williamson, 2018). Net
investment is the net worth of capital reserves each year at the macro level, which is obtained
from the total capital reserves of all institutions or businesses in a country. Net investment is
mentioned as one of the strong levers to achieve development in economic and social fields. The
experts believe that without net investment, economic and social growth and development is not
possible, and neglecting it can lead to macroeconomic decline and put it in a downward and
negative direction (Molano, 2000; Olesiński, Opala, Rozkrut, & Torój, 2014; Ross, 2020; Serven
& Solimano, 1992). Therefore, it can be said that economic growth and development and
increasing public welfare in the long run is not possible without considering investment.

In general, there are two types of investments, although each different has sub-types: real and
financial investments. Real investments generally involve some kind of tangible (physical) assets
that help a company to generate revenue, such as land, buildings, offices, machinery, factories,
etc. They carry an intrinsic value of their own unlike financial assets, and thus, are important to a
business. Their intrinsic value is because of their substance and properties. They are more
popular with investors for several reasons like tax benefits, less correlation with equity, attractive
return, and inflation protection (……………….). Financial investments involve contracts in
paper or electronic form such as stocks, bonds, etc. which are non-physical assets. One can
quickly convert them into cash. A point to note is that such assets represent a claim on the
underlying value of another asset. One unique feature of financial assets is they carry some
monetary value (monetary assets) but, one can’t realize that value unless it is exchanged for cash.

83
So, basically these assets do not have any intrinsic value of their own
(……………………………). (Levišauskait, 2010)

Basically, financial investment differs from real investment because:

 Financial assets are divisible, whereas most physical assets are not. An asset is divisible if
investor can trade a small portion of it. In case of financial assets, it means, that investor, for
example, can buy or sell a small section of the whole company as an investment object by buying
or selling some common stocks.
 Financial assets have more liquidity compared to real assets. Marketability (or liquidity)
is the feasibility of converting of the asset into cash quickly and without significantly affecting
its price. Most of financial assets are easy to buy or to sell in the financial markets.
 The planned holding period of financial assets can be much shorter than the holding
period of most physical assets. Holding period is the time between signing a purchasing order for
asset and selling the asset. Investors acquiring physical asset usually plan to hold it for a long
period, financial assets can be held, even for some months or even a year. Holding period for
investing in financial assets vary very widely and depends on the investor’s goals and investment
strategy.
Isaac Thuku. 2013. Differences between Real and Financial Investments. Online.
Available in: https://www.tuwaze.com/Member/Articles.php?ID=103

Real vs Financial Assets – Differences

Here we can draw an analogy with the investments. Because the
differences between both these types of assets are the same as what
could be between the real and financial investment. Knowing this,
hopefully, will make it easy for us to realize the differences between
real and financial assets. Let us now elaborate on the differences
between real and financial assets:

84
 Valuation
All real assets carry an intrinsic value. While the value of the financial
assets has a relation to the underlying asset. The underlying asset
may be tangible or intangible.

Liquidity
As said above, the financial assets are liquid, and one can easily and
quickly convert them into cash. Also, financial assets have a proper
marketplace, facilitating quick conversion into cash.

Real assets, however, are not as liquid as financial assets. Since they
are usually of high value, it takes time to find a buyer and convert
them into cash. Moreover, they also lack any proper marketplace.

Tangible
Financial assets may not necessarily have a physical form. Real assets,
in contrast, are present in physical form.

Growth
The growth in real assets could be very slow. Moreover, depreciation
and other expenses may make real assets less attractive in the long
term. In contrast, financial assets offer unlimited potential for growth.
They have a low carrying cost as well. However, they are usually
riskier than real assets.

Purpose
The primary objective of holding real assets is to generate revenue.
Such assets basically help a business to produce goods and services.
In contrast, financial assets, help investors to generate income. Or, we
can say one buys financial assets for investment purposes.

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 Accounting
One can measure the financial assets at amortized cost and fair value
depending on the nature of the assets. In the accounts, one shows real
assets at their historical value less depreciation. While financial assets
are usually valued based on their prevailing market prices, if that
exists. Otherwise, these are valued as per the likely converted value in
the opinion of the management considering the strength of the
individual financial asset.

Inflation Hedging
Real assets offer more protection against inflation as the value of such
assets and the income they help generate grow with inflation. On the
other hand, financial assets may or may not offer protection against
inflation risk.

Balance Sheet
Real assets are shown on the asset side of the balance sheet. Financial
assets could come on either side depending on their value.

Trade
Since financial assets are liquid and list on the exchange and have a
marketplace, they are very easy to trade. Real assets, on the other
hand, lack a proper marketplace and thus, are difficult to trade.

Examples
Some popular examples of financial assets are Stocks, bonds, cash
reserves, bank deposits, trade receivables, and more. Buildings, land,
machinery, inventory, real estate, and more are popular examples of
real assets.

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 Classification
Financial assets have a further classification – equities and fixed
income securities. There is no such classification for real assets.

More Reliable
At the time of financial crises, the real assets are more reliable. This is
because they usually don’t lose their value much in comparison to the
financial assets. Financial assets, on the other hand, can get more
volatile during financial distress.

Tax Benefits
Real assets offer tax benefits in the form of depreciation. There are no
such tax benefits with the financial assets.

87
https://efinancemanagement.com/financial-accounting/real-vs-financial-assets

https://www.citeman.com/5481-real-versus-financial-investments.html#:~:text=Financial%20Investment%3A%20it
%20involves%20investment,%2C%20building%2C%20gold%20and%20silver.

88
Considering real and financial investments, they can be divided into some various types: 1) the
business fixed investment, which includes the firm costs in durable machinery, equipment, and
constructs such as factories (……………………); 2) Housing investment, which mainly
includes investment in residential houses (…………………..); 3) Investing in stockpiles includes
goods that firms and manufacturers keep in stock, such as materials, supplies, goods under
construction, and manufactured goods (………………..); 4) Public sector investment that often
done for political and social reasons, in which economic logic is of secondary importance; 5)
Foreign indirect investment which is reflected in securities. Lending, purchasing bonds and
stocks of companies in financial markets are included of this type of investment. In this case, the
foreign investors have no role in the management of the production units and do not have
financial responsibility; 6) Foreign direct investment in which the foreign investor has a physical
presence and by accepting financial responsibility and accepting risk, directly controls and
manages the business and has an effective role in the implementation of its activities (…………).
In all these types of investments, the investors play key roles.

There are two types of investors: individual and institutional investors. The first are individuals
who are investing on their own. Sometimes individual investors are called retail investors.
Institutional investors are entities such as investment companies, commercial banks, insurance
companies, pension funds and other financial institutions. In recent years the process of
institutionalization of investors can be observed. As the main reasons for this can be mentioned
the fact, that institutional investors can achieve economies of scale, demographic pressure on
social security, the changing role of banks. One of important preconditions for successful
investing both for individual and institutional investors is the favorable investment environment
which it will be discussed in the next sections. This study concentrates on the management of
individual investors’ portfolios, but the basic principles of investment management are
applicable both for individual and institutional investors (Levišauskait, 2010).

Investors can use direct or indirect type of investing. Direct investing is realized using financial
markets and indirect investing involves financial intermediaries. The primary difference between
these two types of investing is that applying direct investing investors buy and sell financial
assets and manage individual investment portfolio themselves. Consequently, investing directly
through financial markets investors take all the risk and their successful investing depends on

89
their understanding of financial markets, its fluctuations and on their abilities to analyze and to
evaluate the investments and to manage their investment portfolio.

Contrary, using indirect type of investing investors are buying or selling financial instruments of
financial intermediaries (financial institutions) which invest large pools of funds in the financial
markets and hold portfolios. Indirect investing relieves investors from making decisions about
their portfolio. As shareholders with the ownership interest in the portfolios managed by
financial institutions (investment companies, pension funds, insurance companies, commercial
banks) the investors are entitled to their share of dividends, interest and capital gains generated
and pay their share of the institution’s expenses and portfolio management fee. The risk for
investor using indirect investing is related more with the credibility of chosen institution and the
professionalism of portfolio managers. In general, indirect investing is more related with the
financial institutions which are primarily in the business of investing in and managing a portfolio
of securities (various types of investment funds or investment companies, private pension funds).
By pooling the funds of thousands of investors, those companies can offer them a variety of
services, in addition to diversification, including professional management of their financial
assets and liquidity.

Investors can “employ” their funds by performing direct transactions, bypassing both financial
institutions and financial markets (for example, direct lending). But such transactions are very
risky, if a large amount of money is transferred only to one’s hands, following the well-known
American proverb “don't put all your eggs in one basket” (Cambridge Idioms Dictionary, 2nd ed.
Cambridge University Press 2006). That turns to the necessity to diversify your investments.
From the other side, direct transactions in the businesses are strictly limited by laws avoiding
possibility of money laundering. All types of investing discussed above and their relationship
with the alternatives of financing are presented in Table 1.1

Table 1.1. Types of investing and alternatives for financing (Levišauskait, 2010)

90
Companies can obtain necessary funds directly from the general public (those who have excess
money to invest) by the use of the financial market, issuing and selling their securities.
Alternatively, they can obtain funds indirectly from the general public by using financial
intermediaries. And the intermediaries acquire funds by allowing the general public to maintain
such investments as savings accounts, Certificates of deposit accounts and other similar vehicles.

3.1.2. Project

A project is defined a set of interrelated tasks that are performed over a period of time at a
specific cost and with other constraints to achieve a particular purpose. According to Project
Management Body of Knowledge (PMBOK), the term Project refers to any temporary endeavor
with a definite beginning and end undertaken to create a unique product or services (Guide,
2001). In another definition, Kerzner (1992) considers a project to be any series of activities and
tasks that have a specific objective to be completed within certain specifications, have defined
start and end dates, have funding limits and further consume resources (Kruger, 2013), and
considering constraints (time, quality, and cost) often introduces a change. Accordingly, a project
is a combination of interrelated activities to achieve a specific objective within a schedule,
budget, and quality. It involves the coordination of group activity, wherein the manager plans,
organizes, staffs, directs, and controls to achieve an objective, with constraints on time, cost, and
performance of the final product.

Projects come in a wide range of shapes and sizes. So, a project can Be big, small, Involve many
people, and just yourself.

Projects can be diverse in the ways in which they are implemented. Here are some
examples of projects:
 Traditional projects: These are run sequentially in phases. These phases are
typically initiation, planning, execution, monitoring, and closure. Most high-cost
infrastructure projects make use of traditional project management.
 Agile projects: These are used mainly in software development. They are people-
focused and adaptive. They also typically have short turnaround times.

91
  Remote projects: Remote project management is usually used by distributed teams
that seldom meet in person. Handling freelance contributors is an example of a
remote project.
 Agency projects: Agency projects are outsourced to an agency that is likely to
have projects with multiple clients. Marketing and design projects are commonly
outsourced to agencies.
https://kissflow.com/project/what-is-a-project/

Projects have characteristics that distinguish them from other phenomena. These features
include:

1. Objectives –
Every project is started with some objective or goal viz. time, budget,
quality, and quantity, when objectives are fulfilled project cause
existing. You can initially define the objectives of the project what
actually need to achieve. Objectives are the key characteristics of the
project where you will see the progress of the project and time to time
analysis will show you the result of how much you have achieved.

2. Single entity –
A project is one whole thing. This means that in a project although
different people contribute still is recognized as a single entity. The
teams are often specifically assembled for a single project.

3. Life Span –
No project can be ceaseless and indefinite. It must have one and
beyond which it cannot proceed. Every project is invariably time-
bound. At the time of planning, you will see the time phase of the
project where the team can work independently on the project
modules. Let’s consider an example project that is divided into three
modules let’s say A, B, and C. If the total time span of a project is 5
months then you can set the time span for modules independently like
A can complete in 2 months and also B can complete in 2 months and
C can complete in 1 month as per requirement.

4. Require funds –
Every project needs funds to reach the endpoint. Without adequate
funds, no project can be successfully implemented. Cost estimation is
one of the essential factors for any organization. So, calculating in

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 advance the required funds for the project will be very impactful.

5. Life Cycle –
Each project has a life cycle with different stages like start, growth,
maturity, and decay. A project has to pass through different stages to
get itself completed. Let’s consider an example where the project is
related to software development then you can say SDLC (Software
Development lifecycle) will be the life cycle of the project where you
will see many stages like planning, defining, designing, building,
testing, and deployment, etc.

6. Team Spirit –
Team spirit is required to get the project completed because the
project constitutes different members having different characteristics
and from various disciplines. But to achieve common goal harmony,
missionary zeal, team spirit is necessary.

7. Risk and Uncertainty –

The project is generally based on forecasting. So risk and uncertainty
are always associated with projects. There will be a high degree of risk
in those project which are not properly defined. Only the degree of
control over risk and uncertainty varies with the project being
conceived based on information available.

8. Directions –
Project is always performed according to the directions given by the
customers with regard to time, quality and quantity, etc. The
convenience of the supply sides of economics such as labor
availability ore resources and managerial talent etc. are all secondary
concerns, primary being the customer requirement.

9. Uniqueness –
Each project is unique in itself, and it’s having own features. No two
projects are similar even if the type of organization is the same. The
uniqueness of the project can measure by considering the many
factors like objectives, features of the project, application of the
project, etc.

10. Flexibility –
Change and project are synonymous. A project sees many changes
throughout its life span. These changes can make projects more
dynamic and flexible.

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 11. Sub-Contracting –
Sub-contracting is a subset of every project and without which no
project can be completed unless it is a proprietary firm or tiny in
nature. The more complexity of a project the more will be the extent of
contracting. Every project needs the help of an outsider consultant,
engineer, or expert in that field.

12. Cost –
If the quality of the project is to be changed there could be an impact
on the cost of the project. The cost could increase if more resources
are required to complete the project quicker

https://www.geeksforgeeks.org/project-management-characteristics-of-project/

Project life cycle – 5 stages

Often, projects are divided into five project phases each of which comes

with a distinct set of tasks, objectives, and a particular deadline. Dividing

a project into different phases enables teams to stay on track throughout

their entire life cycle.

1. Initiation
The first phase in a project’s life cycle is called project initiation . Here, a

project officially launches. It is named, and a broad plan is defined. Goals

are identified, along with the project’s constraints, risks, and

shareholders. At this point, shareholders decide if they want to commit to

the project.

Depending on the project, studies may be conducted to identify its

feasibility. For IT projects, requirements are usually gathered and

analyzed during the initiation phase.

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 2. Planning
A roadmap that will guide teams from creating a project plan throughout

the project’s execution and closure phases is developed comprehensively

during the planning stage. Deadlines must be set, and resources must be

allotted. Breaking down tasks into smaller, manageable activities makes it

easier to manage project risks , costs, quality, time, and so on.

Learn more about how to implement an effective project roadmap .

At the same time, breaking down tasks into digestible pieces will empower

everyone involved to accomplish the project on time and stay within

budget.

3. Execution
The project plan is implemented during the project execution phase . At

this point, teams will work on the deliverables to ensure that the project

meets the necessary requirements.

Everyone usually gathers for a meeting to mark the official start of the

project, where teams can get acquainted with each other and discuss

their roles in the success of the project. Modes of communication

and project management tools are identified before the project plan is

executed.

Learn how kickoff meetings can help you steer your projects toward

success right from the start.

95
In addition, team members familiarize themselves with the necessary

status meetings and reports that will be conducted throughout this phase

to collect project metrics. The project execution phase is a critical point in

a project’s life cycle as it will help everyone determine if their efforts will

ultimately be fruitful or not.

4. Monitoring and Controlling

The project monitoring and controlling phase happen at the same time as
the execution phase. It’s the job of the project manager to oversee

operations and make sure that everything is headed in the right direction,

according to plan.

Aside from overseeing the project’s performance, project managers have

to monitor resources, manage risks, head status meetings, and reports,

etc. If unforeseen issues arise, the project manager may have to make

adjustments to the plans, as well as the project schedule.

5. Closing
The final phase of the project management life cycle known as the project

closure phase isn’t as simple as delivering the output itself. Project

managers have to record all deliverables, organize documents in a

centralized location, and hand over the project to the client or the team

responsible for overseeing its operations during the project closure phase.

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Not only that, but teams come together for a final meeting to discuss the

insights they’ve learned and to reward the hard work of each member.

https://kissflow.com/project/what-is-a-project/

file:///C:/Users/aksslh/Downloads/presentationresearchgate.pdf

3.1.3. Investment projects

In general, in order for businesses to be able continuing operations in the market continuously by
providing high quality products and services, they need to innovate in areas such as design and
development, processes, and products that lead to a comprehensive approach which includes
various investment projects. Nevertheless, many investment projects are done in terms of
creating new jobs. In these projects, the investments, which made by individuals and
organizations, are new. In other words, businesses did not exist from the beginning, but investors
defined new investment projects. Therefore, in these types of projects, investments are not
renovation and improvement, but they are new entities.

Accordingly, the investment project is a planning tool that allows making decisions about the
execution of capital resources, its use has commonly been developed for to generate new
businesses, but it is also applied in the improvement of different areas (logistics, occupational

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security and health, production, among others) of businesses in operation in order to satisfy both
internal and external customers (Valencia, Marín Chávez, & Lara Carhuancho, 2020). In other
definition, it can be defined as a set of interdependent tasks and activities, undertaken
by company to achieve defined economic or financial goals. The investment project should
include information on the purpose of the planned investment, the expenditure required for its
implementation, funding, criteria and methods for assessing the effectiveness and risks of
participants of the investment process and desired effects (results) (……………………).
Investment projects can be divided with regard to the objectives and functions for
several types.
 Expansive investment projects - are those whose purpose is the entrance to the hitherto
unexplored markets or develop products in the current markets. In the case of projects that result
with expansion of existing markets, the company typically launches new outlets and new
channels of distribution. These projects require strategic analysis of the demand and are usually
associated with high marketing expenses. They are among the riskiest. For this reason, managers
demand high minimum rate of return from that project. Expansive projects are developmental in
nature.
 Investment projects to preserve or replace current leading activities or cost reduction.
Such project belongs to the most common investment decisions, since involve the consumption
of machinery and equipment used in the production. If a company decides that it will develop
current technology, managers perform evaluation of the bids submitted by suppliers of machines
and equipment. In the second case, managers may find that the equipment used for the
production is outdated and its further exploitation may lead to a reduction in profits. In this case,
the company should make a detailed cost analysis. Examples of actions aimed at cost reductions
are reducing price for the semi-finished products, direct lobar, the amount of waste.
 Fine-tuning investment projects – focus on adapting the business to new legal regulations
relating to the protection of the environment. When deciding on adaptation social constraints are
of great importance. The investment project must meet established standards, and this is the main
purpose of the managers. Profit maximization for these projects is not a priority of the company,
it focuses on the fulfilment of certain requirements.
 Innovative investment projects - involve use of new technologies, and thus help maintain
the strong position of the company in the long run. These projects concern the introduction of

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new products or services (product innovation), as well as the introduction of new process, which
aims to fulfill needs of new customers (…………………….).
https://ceopedia.org/index.php/Investment_project

An investment project is a detailed plan of activities for future economic action , that is, for a
possible investment of some kind. It is a common type of document in business administration
and project management , arising from the need of a public or private economic actor (say, a
company ) to increase the return on their capital .

The investments that this type of project contemplates do not necessarily have organized
objectives and trajectories, but rather aim to increase the available financial resources, that is,
they are committed to profitability .

In that sense, the planning is essential in its development , as it enables organizations to

maximize or preserve their resources through different strategies possible investment, many of
which involve the freezing of funds long term.

Since they involve the mobilization of resources, investment projects usually undergo evaluation
processes that determine their convenience: their profitability , their risk margin and other
possible aspects, such as the environmental and legal and administrative aspects. Thus, the
evaluation of projects can take place through very different tools and from very different points
of view.

Types of investment projects

Investment projects can be classified in many ways, either by the economic sector to which
they refer ( primary , secondary , tertiary , quaternary), by the area of influence that would have
to be carried out (national, provincial, district, etc. .), or by the type of financial
elements involved: goods (tangible) or services (intangible).

Ultimately, the ranking of projects will depend on the concerns of the organization or the aspects
that its evaluators consider most important. It is possible, for example, to classify them as
profitable and unprofitable, according to what the organization is willing to invest and the return
it wants to obtain from the project.

Stages of an investment project

Typically, an investment project goes through the following stages:

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  Pre-feasibility . Project formulation and determination phase, which
includes setting general and specific goals , and gathering enough
information to submit the project to a prior evaluation. It is the
investigation and documentation stage, if you will.

 Design . Once the general investment plan is in place, a detailed design is

drawn up to carry it out. In other words, a second planning stage, but in
much greater detail, in which the concrete plan for each of the activities
that the investment project involves will be drawn up. At the end of this
stage there will surely be new controls and evaluations to ensure that the
design corresponds to what has been established.

 Operation and start-up . As its name implies, it is the stage in which the
team in charge of the project carries it out. This stage can be long or
short, depending on the case, and it can involve different feedback
mechanisms or feedback of information that will be useful in the next
stage.

 Evaluation or control . Whether or not the useful life of the project has
ended, it is normal for this cycle to close with an evaluation stage, in
which the information collected during the operation itself is used to
compare the results obtained with the initially proposed results, and thus
be able to take relevant decisions . In general, this stage will seek to
answer two questions:

o Were the initially proposed objectives achieved?

o How can the project design be improved for future

experiences?

https://whatdoesmean.net/what-is-an-investment-project/

3.2. The investment project environment

The environment has different definitions, but its meaning in the field of management and
organization is different from the natural environment that most people deal with. Organizational
environments are composed of forces or institutions surrounding an organization that affect

100
performance, operations, and resources. It includes all the elements that exist outside of the
organization's boundaries such as government regulatory agencies, competitors, customers,
suppliers, pressure from the public, etc. and have the potential to affect a portion or all the
organization. To manage the organization effectively, managers need to properly understand the
environment. Scholars have divided environmental factors into two parts: internal and external
environments.

An organization's internal environment consists of the entities, conditions, events, and factors
within the organization that influence choices and activities. It exposes the strengths and
weaknesses found within the organization. Factors that are frequently considered part of the
internal environment include the employee behavior, the organization's culture, mission
statement, and leadership styles. On the other hand, an organization's external environment
consists of the entities, conditions, events, and factors include customers, public opinion,
economic conditions, government regulations, and competition which surrounding the
organization that influence choices and activities and determine its opportunities and threats. It is
also called an operating environment.

Investment projects in any format and structure, whether individual or organizational, are carried
out in the form of businesses. Hence, investment projects are done in the real environments. If
the investment projects environment is considered a special or limited environment, it is done
within a larger environment that is influenced by both groups. In both groups of investment
project environments there are factors that strongly affect its success. These factors are the
environment of investment projects. Therefore, it can be said, the investment project
environment is anything that affects its success, but investor does not have much control over it.
Thus, it influences the investor’s activities and decision-making process.

3.2.1. Internal or Micro environment

Some environmental factors are very close to the business environment and business managers
experience them every day. These types of factors are called internal environmental factors.
Investment projects, which often lead to new businesses or the development of existing
businesses, are also affected by this environment. The most important internal factors in the
investment projects environment, in both real and financial investments, are as follow.

1.

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2.

3.2.2. External or Macro environment

Business managers usually do not neglect the analysis of the internal environment because this
environment and its factors are always in sight and influence decisions and actions every day but
there are some factors that are located at a farther distance and form the so-called external

102
environment. These factors are more likely to go unnoticed and be seen too late. It can be said
that environmental factors are macro factors that usually have no effect on a specific industry
and affect a wide range of industries and businesses.

https://www.bcci.bg/projects/latvia/pdf/8_IAPM_final.pdf

file:///C:/Users/aksslh/Downloads/Understanding_Investments_Theories_and_Strategies.pdf

http://www.scielo.org.co/scielo.php?script=sci_arttext&pid=S0120-46452020000100161

3.3. The investment project management components

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4. Methodology

The main purpose of this study is to develop a project investment model for Canadian minority
groups to help the country's policy on minority project investment and the effectiveness of
minority decision-making in this area by recognizing investment criteria from their perspective.
Since part of the research, especially the fundamentals of project investment management, is
based on literature review and deductive reasoning, and the other part should be obtained
through detailed observations and forming a generalization based on what is known or observed
(inductive reasoning), in this study, the researcher uses abductive reasoning to identify the main
components, categories and themes of the Canadian minority project investment management
model. Thus, in the research a combination of different arguments is used as the research
approach.

Deductive reasoning in research begins with a theory which is narrowed down into more specific
hypotheses that can be tested. These are further narrowed down into observations that allow
researcher to test the hypothesis to confirm whether the data supports or rejects the hypothesis
(Bell, 2022; Ocholla & Le Roux, 2011). This approach helps the researcher to use existing
theories to predict the phenomena that occur. On the other hand, inductive reasoning works from
specific observations to broader generalisations and theories. It is a “bottom up” approach, a
more open-ended and exploratory approach (Malhotra, 2017). Hence, in this approach,
observations are made about specific events in a class or category, and then inferences are made
about all categories based on observations of events. In the abductive reasoning, a combination
of these two methods is used. Contrary to deductive reasoning, abductive reasoning gives a
plausible conclusion but does not confirm it positively. Its conclusions are thus qualified as

104
having a remnant of uncertainty or doubt, which is expressed in retreat terms such as "best
available" or "most likely" (………………). On the other hand, inductive reasoning allows
inference, and may give the researcher a very good reason to accept inference, but it does not
guarantee (……………………). Therefore, abductive reasoning covers the gaps. It typically
begins with an incomplete set of observations and proceeds to the likeliest possible explanation
for the set (Malhotra, 2017; McGregor, 2014). So, abductive reasoning can be understood as
inference to the best explanation. It yields the kind of daily decision-making that does its best
with the information at hand, which often is incomplete. Accordingly, its foundations are first
extracted based on a systematic study of the project investment management literature. Then,
grounded theory is used as the research strategy to seek the professionals, experts, investors, and
activists’ perspectives in the field of project investment management among Canadian
minorities.

Grounded theory is a research strategy that generates theory based on data. It is an inductive,
theory discovery methodology that allows the researcher to develop a theoretical account of the
general features of a topic while simultaneously grounding the account in empirical observations
or data (Martin & Turner, 1986). In one sense, grounded theory may be similar to what many
researchers do to study the past. They formulate new hypotheses to conform to the data. In the
strategy, however, the researcher does not pretend to have formulated the hypotheses because he/
she is barred from preconceived hypotheses.

Grounded theoryis consisted with research objective because grounded theory is an appropriate
method for emerging fields of research, and it gives the researchers the opportunity to discover
the truth and create a new theory based on the collected data. In other words, when the existing
theories do not address the research problem, this strategy produces a theory. Since this theory is
based on the data, it offers a better explanation than the theory adapted from the existing theories
because 1) it fits the situation; 2) it is really efficient in practice; 3) it considers the people in an
environment and understands their feelings; and 4) it can show all the complexities that are really
found in the process (Creswell, 2002).

105
In this research, interviewing participants with open-ended questions is the main method of data
collection which is done simultaneously with data analysis. This means that data collection and data
analysis are constantly blurred and intertwined. In other words, the researcher will not wait for all the
interviews to be completed, then start reading and analyzing the transcripts, but the data of the first 2 or 3
interviews is examined, then during the interviews, the probe questions are asked to determine what data
require further elaboration? And what data are surprising or unexpected? (……………….). Based on
these early analytic forays, the researcher modifies and refines the interview approach, and adds a follow-
up question here and a new probe there in order to explore more fully the ideas he see developing. The
process continues as more data are collected and examined, allowing nascent interpretations of data to be
tested with later interview participants.

Sampling

In purposeful sampling, researchers select the participant sampling criteria prior to conducting research.
In grounded theory studies, theoretical sampling occurs as the data collection progresses. After the
researcher identifies the research topic and question, they identify a small handful of people to interview
based on a set of criteria (much like in purposeful sampling). Then, they interview those people. This is
where theoretical and purposeful sampling diverge. Following these initial interviews in a grounded
theory study, the researcher will analyze these data. Based on the results from this round of data analysis,
the researcher will identify more people to interview. These might be people who will confirm what the

106
researcher has already found, but the researcher will also purposefully look for participants who can
disconfirm the previous findings. The researcher will conduct interviews with those newly selected
participants and then analyze them. Theoretical sampling continues like this, moving back and forth
between sampling, data collection, and analysis, until the researcher reaches data saturation, or the point
at which the researcher fails to collect new information with subsequent interviews.

Research stops when you have reached theoretical saturation: the point where you have sampled and
analyzed your data until you have exhausted all theories and uncovered all data.

https://www.statisticshowto.com/grounded-theory/

107
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