Influence Of Project Appraisal Approaches On An Organization’S Performance

Abstract

The role of project appraisal in the selection of the projects that an organization wishes to implement is very critical in order to determine if a project is worthy to be implemented. The link between project appraisal and performance of the project can therefore be said to be strong in pursuit of overall organizational performance. Project appraisal has been seen to take a central stage in any project cycle in order to establish the viability of the project with regards to its technical, market, institutional, financial and economic value in the organization. Ultimately, organizations want to receive good value for the funds it invests whilst meeting its objectives and reason for existence. Healthcare organizations are now increasingly becoming conscious that in order to remain competitive, careful selection and management of projects must be paramount. The study therefore aimed to determine the influence of project appraisal approaches on the performance of an organization with a distinct focus on a private teaching and referral healthcare institution. The study had four objectives: establish how economic appraisal approach influences the organizational performance, determine the extent to which financial appraisal approach influences the organizational performance, to assess how market appraisal approach influences the organizational performance and determine how the technical appraisal approach influences the organizational performance. The study was aimed at highlighting the benefits of using the holistic project appraisal approach in order to maximise organizational performance. This research study adopted a descriptive survey design in order to determine the influence of project appraisal approaches on the organizational performance of Aga Khan University Hospital in Kenya. The population of this study was 125 participants that were drawn from the management levels of Aga Khan University Hospital. Using Yamane’s formula of sample determination, 95 respondents formed the sample size and the selection from the population was done through stratified random sampling. A total of 70 respondents completed the questionnaires which represented a response rate of 74%. Of these, 19 respondents were incomplete and therefore could not be considered for analysis. This left only 51 responses that could be considered for analysis which represented 54% of the total sample. The primary data for this study was collected using a self-administered questionnaire that was sent out to the respondents. The collected data was analysed by using descriptive statistics, multiple regression and inferential analysis through the statistical package for social science (SPSS). The findings revealed that 70.1% of the organizational performance could be accounted for by the use of the four project appraisal approaches- economic, financial, market and technical appraisal approaches. This finding therefore showed that there exists a positive relationship between the study variables. The findings revealed that project appraisal approaches would be beneficial to the organization in screening projects that would be the best fit for implementation and therefore achieving the desired performance and meeting its overall objectives. Further studies recommended included an in-depth analysis on the factors that influence the performance of projects in the healthcare set up may be conducted. This would give greater insights on the subsequent performance of the organization as a result of sustained success of individual or a group of projects. Further research on the determinants of organizational performance with specific focus on healthcare organizations may be conducted. This is because most healthcare organizations provide essential services without consideration for making profits or surpluses yet they require meet their expenses and surpass these expenses for future sustainability provision as well as expansion of services.