Moderating Influence of Quality Control On The Relationship between Contractors’ Capacity and Project Performance in Oil and Gas Sector

Abstract

Performance of oil and gas projects relies upon many factors including regular quality checks and contractor’s ability to carry out complex tasks. Contractors in oil and gas sector face challenges in performing well due to lack of capacity in terms of financial, technical and management skills. The study is aimed to determine and explain the effect of some important contractor capacity (CC) factors evaluated during tender award on project performance (PP) and moderating role of Quality control (QC) between CC and PP in oil and gas sector. Krejcie and Morgan table at 95% confidence interval and 5% margin of error was utilized in this thesis for allocating samples of 152 employees of oil and gas companies in Pakistan. Convenience sampling technique has been adopted to draw a sample of 104 higher level management employees for this study. The study followed quantitative research approach to analyze the data collected. Multiple regression was used to study the impact of contractor capacity factors on Project Performance. There is a positive impact of each analyzed contractor capacity factor on project performance. Management ability of contractor was found to be the key factor that determines project performance in oil and gas sector. Furthermore, the moderating influence of Quality control on the relationship between contractor’s capacity and project performance was analyzed with the help of Andrew F. Hayes SPSS macros. The significantly positive R-square change value of interaction effect of Contractor capacity and Quality control ( Int_1 : CC x QC) on Project Performance reflected the moderating role played by QC between the relationship of CC and PP. Increase in values of the slope of regression equation representing moderating relationship between CC and PP, at increasing level of QC also suggested moderating effect of QC. Hence, quality control was found to significantly moderate the relationship between contractor capacity and project performance. The implications for industry, limitations of the study and recommendations for future research were derived from the results and explained in this thesis.