PMJ Oct Nov 2014.Ashx

Volume 45

Number 5

October/November 2014

5 Influence of Trade-Level Coordination Problems on Project ProductivityBon-Gang Hwang, Xianbo Zhao, and Thi Hong Van Do

15 Strategies for Improving Codes of Ethics Implementation in Construction OrganizationsT. Olugbenga Oladinrin and Christabel Man-Fong Ho

27 Perspectives on the Formal Authority Between Project Managers and Change ManagersJulien Pollack and Chivonne Algeo

44 Ambidexterity and Knowledge Strategy in Major Projects: A Framework and Illustrative Case StudyNeil Turner, Harvey Maylor, Liz Lee-Kelley,Tim Brady, Elmar Kutsch, and Stephen Carver

56 Value Management in Project Portfolios: Identifying and Assessing Strategic ValueMiia Martinsuo and Catherine P. Killen

71 Stakeholder Management Strategies and Practices During a Project CoursePernille Eskerod and Anne Live Vaagaasar

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EditorHans Georg Gemünden, Dr. rer. oec. habil.,

Chair for Technology and Innovation Management, Technische Universität Berlin,

Berlin, Germany

■

PublisherDonn Greenberg; [email protected]

Wiley Executive EditorMargaret Cummins;

[email protected] Editor

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Barbara Walsh; [email protected] Review Editor

Kenneth H. Rose, PMP

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2 October/November 2014 ■ Project Management Journal ■ DOI: 10.1002/pmj

Project Management Journal, Vol. 45, No. 5, 2–4© 2014 by the Project Management InstitutePublished online in Wiley Online Library (wileyonlinelibrary.com).DOI: 10.1002/pmj.21455

its environment, along with sophisticated methods for assess-ing feasibilities and usability early and frequently during the project life cycle. Specific managerial actions, organizational conditions, and work processes are derived from this study.

Hans Thamhain not only influenced the discipline of project management, he was also a very well-known pioneer in technology and innovation management. I met him nearly 20 years ago at an Academy of Management Conference; we had a very good personal relationship from the beginning, although we did not meet very often. I was aware of his seminal work on innovative R&D teams, because I also did research in this field. In my preparation for the World Café at the PMI® Research and Education Conference—where we discussed the initial results of our exploratory project management trends study—I found another excellent article by Hans Thamhain in Project Management—Circa 2025, edited by David Cleland and Bopaya Bidanda (PMI, 2009). In his article, “The Future of Team Leadership in Complex Project Environments,” Hans Thamhain predicts seven shifts, which were also confirmed in our study. We will sincerely miss him.

The October/November issue of PMJ presents six very interesting articles that address a wide variety of themes in project management.

The first paper by Bon-Gang Hwang, National University of Singapore; Xianbo Zhao, Central Queensland University, Sydney, Australia; and Thi Hong Van Do, 701 Search Pte Ltd Singapore, Singapore: “Influence of Trade-Level Coordination Problems on Project Productivity,” identifies coordination problems in glass and metal cur-tain wall installation in Singapore. The study assesses and explores the rework and waiting time caused by trade-level coordination problems and project productivity.

Research includes a questionnaire survey completed by a variety of companies, as well as interviews with industry practitioners. Findings identify six major coordination prob-lems, resulting in approximately 66 days of rework and 52 days of waiting. Late changes in design by clients lead to the longest rework and waiting time. Other problems include discrepancies between building structures, double handling of materials, or inefficient storage. Furthermore, findings show that the sums of rework and waiting time in large proj-ects are significantly longer than those in small projects. The authors conclude that the trade-level coordination problems negatively influence project productivity through their con-tribution to the total unproductive time.

I am writing this editorial just before leaving for PMI® Research and Education Conference 2014 in Portland, Ore-gon, USA. During this conference, we honored two people who have had a strong influence on project management research: Professor Dr. Rolf Lundin received the PMI Research Achievement Award 2014 and Professor Dr. Hans Thamhain was awarded the Project Management Journal® Paper of the Year Award postmortem.

Professor Rolf Lundin has been a very prominent mem-ber of the international project research community for over three decades. He is best known for his leadership role in the creation of the Scandinavian School of Project Studies and the International Research Network on Organizing by Projects (IRNOP) and for organizing their first conference in 1994. The central concept of the Scandinavian School is the project conceptualized as a temporary organization, drawing on concepts from the field of organization studies. Rolf has built bridges between the fields of organization and project studies, as witnessed by support for his nomination by prominent and longstanding members of the organiza-tion studies community. Outside Scandinavia, few people are aware that he was the founding editor of the Scandina-vian Journal of Management (1984–1987), founding dean of the Umeå Business School (1989–1993), and dean of the Jönköping International Business School (2001–2007).

Professor Hans Thamhain, PMI Research Achievement Award winner of 2006, received the Project Management Journal® Paper of the Year Award for his article, “Managing Risks in Complex Projects.” The prize was given postmortem, because Hans Thamhain died tragically on Friday, 11 July 2014, as a result of a biking accident. Hans’ very insightful article presents the results of a major field study into the risk manage-ment practices and business processes of 35 major product developments in 17 high-technology companies. The study shows that almost one half of the severe contingencies that occur in complex projects are not being detected before they impact project performance. However, there is a big variance between projects and companies, which can be explained by management interventions that go beyond simple analytical approaches. The high performers recognize and deal with risks early in their development; this requires broad involvement and collaboration across all segments of the project team and

From the EditorHans Georg Gemünden, Dr. rer. oec. habil., Chair for Technology and Innovation Management, Technische Universität Berlin, Berlin, Germany

Photo credit: Markus Bullick

October/November 2014 ■ Project Management Journal ■ DOI: 10.1002/pmj 3

should report to them, whereas the clear majority of change managers see the opposite. There is also some agreement that neither role should report to the other, rather they should work together in a partnership with joint responsibility for project success. This view is shared more often by change managers than by project managers.

More research is needed to find out how both roles cooper-ate and what the implication is for project performance. This kind of research clearly shows that project management has to find its position vis-à-vis other management disciplines, which also want to position themselves. The more the discipline of project management strives for strategic tasks, the more it will have to cope with conflicts. In an unpublished analysis of proj-ect portfolio coordinators, we found in our Berlin studies on project portfolio management that their empowerment of port-folio coordinators leads to more centralized activities granting more influence, which was taken away from line managers in middle management. This leads to the resistance of line man-agers against project portfolio management and is an issue that must be resolved in a shared leadership approach.

The fourth paper, “Ambidexterity and Knowledge Strat-egy in Major Projects: A Framework and Illustrative Case Study,” is from Neil Turner, Cranfield University, United Kingdom; Harvey Maylor, Oxford University, United King-dom; Liz Lee-Kelley, Cranfield University, United Kingdom; Tim Brady, University of Brighton, United Kingdom; Elmar Kutsch, Cranfield University, United Kingdom; and Stephen Carver, Cranfield University, United Kingdom. The article addresses the problem of ambidexterity, which is a critical challenge in major projects from a knowledge management perspective. Specifically, the authors deliver a framework for describing and evaluating knowledge strategies in major projects, which enable ambidextrous behavior in major proj-ects. This framework is applied and illustrated for the case of the delivery of the telecoms infrastructure for the London 2012 Olympics by British Telecom (BT). BT’s communications technology infrastructure for the London Games covered 94 locations and included 16,500 fixed telephone lines, 14,000 mobile SIM cards, 10,000 cable TV outlets, 3,400 miles of internal cabling, and 1,800 wireless access points. Provision was four times the network capacity of the Beijing Games.

For such a major project, it is reasonable to start with the assumption that it is impossible to know at the start of a long development process which of numerous design options will lead to the best solution. This problem has been described by Klein and Meckling (1958); their archetypal ‘Skeptical’ and ‘Optimizing’ approaches are still relevant as thought experi-ments for managers, yet current theorizations allow a more detailed conception of the nature of knowledge and learning requirements in major projects.

The current article describes such a concept and shows by which key questions exploitation and exploration of knowledge issues can be identified and disclosed, so that a

This research contributes to theory and practice by pro-viding a better understanding of the influence of coordination problems. Because few studies have focused on trade-level coordination problems and their influence on productivity, this study expands on the current literature relating to coor-dination and productivity.

The second article “Strategies for Improving Codes of Ethics Implementation in Construction Organizations,” is by T. Olugbenga Oladinrin, and Christabel Man-Fong Ho, from The Hong Kong Polytechnic University, Hong Kong. It describes an approach that will facilitate implementation of codes of ethics in construction organizations. In recent years, growing attention has been placed on ethical malpractice in many organizations around the world. Unethical problems at the corporate and operational levels of the construction industry have become common, including poor quality con-trol and quality of work, mismanagement of resources, cover pricing, bid cutting, and many others.

This paper employs the application of the European Foundation for Quality Management (EFQM) model and dis-cusses the organization enablers and the relevant attributes expected of any responsible construction organization for the proper management of ethics. A model for enabling codes implementation was hypothesized in this paper and based on literature review. The model is used to examine the efforts of construction organizations toward becoming an ethical orga-nization and developing action plans when necessary.

The third article, “Perspectives on Formal Authority Between Project Managers and Change Managers,” from Julien Pollack and Chivonne Algeo from University of Tech-nology, Sydney, Australia, documents the differing views of project managers and change managers on what their roles should be in change programs. Project management and change management are two disciplines that have the poten-tial to jointly make a contribution to the delivery of change initiatives in organizations. However, evidence in the litera-ture suggests a lack of consensus and even conflict regarding how these disciplines should work together to deliver orga-nizational change projects. The authors explain potential conflicts, with the differing origins of project management and change management, but they also see a convergence and overlap of both disciplines when analyzing the devel-opment of the literature. But their very interesting research question looks at the practices: “Do project managers and change managers hold different views about how these two roles should formally relate in practice?” The authors perform an online survey of project managers and change managers to find out how they perceive their roles. It turns out that project managers more often see themselves on an operational level, whereas change managers see themselves working on a stra-tegic level; this, however, does not imply that project manag-ers should report to change managers. The clear majority of project managers have the perception that change managers

From the Editor


Oslo, Norway documents the result of a very rigorous qualita-tive longitudinal study. The two authors analyze a complex development project in Scandinavia, which took five years. The project’s task was to develop a communication system for railways in accordance with the European standards for such communication. It was financed over the national budget and had high political visibility. The authors report the status of the relationship of the project team at three points in time—after a half year, after one and a half years, and after two and a half years. They focus their analysis on two key stakeholders: a key supplier for this system and their own base organization, specifically, senior management who is the economic owner of this project. The interesting thing here is that the relationship changes very much over time. The authors use a very powerful framework from Savage et al. (1991) to explain and assess the changing situations and the moves the team has made to man-age the stakeholder relationships. A key variable in the devel-opment is the establishment and loss of trust and the reasons for these changes. Compared with the often very abstract and generic frameworks (see Littau et al., 2010), this paper deliv-ers very thick and rich descriptions of these applied practices, along with their contexts and outcomes.

I want to close my editorial with a big thank you to my editorial team. The last issue of Project Management Journal® was edited by Jonas Söderlund and Ralf Müller, who also wrote the editorial for this issue, which contained a collection of the best papers from IRNOP 2013. In this issue, the review process for the first article was done by Catherine Killen; the second article was processed by Ralf Müller; the third by Monique Aubry; and the fourth by Serghei Floricel. I assumed departmental editorship for the last two articles. Working on a team is a wonderful experience—together everybody achieves more!

ReferencesAubry, M., & Lièvre, P. (2010). Ambidexterity as a competence of project leaders: A case study from two polar expeditions. Project Management Journal, 41(3), 32–44.

Leybourne, S. A., & Sainter, P. (2012). Advancing project man-agement: Authenticating the shift from process to ‘nuanced’ project-based management in the ambidextrous organization. Project Management Journal, 43(6), 5–15.

Littau, P., Jujagiri, N. J., & Adlbrecht, G. (2010). 25 years of project stakeholder theory in project management literature. Project Management Journal, 41(4), 17–29.

Liu, L., & Leitner, D. (2012). Simultaneous pursuit of innova-tion and efficiency in complex engineering projects: A study of the ant ecedents and impacts of ambidexterity in project teams. Project Management Journal, 43(6), 97–110.

Savage, G. T., Nix, T. W., Whithead, C. J., & Blair, J. D. (1991). Strategies for assessing and managing organizational stake-holders. Academy of Management Executives, 5(2), 61–75.

systematic discourse about strategic options can be triggered in the project team and with the project stakeholders.

Three focusing questions stimulate valuable discussions:

• What can we re-use from before?

• What do we need to develop or do differently?

• What should we avoid or stop doing for this work?

Applying these questions to both the product (‘what’) and process (‘how’), and answering these at the individual, social, and organizational levels can be powerful in generat-ing fresh and rich insight into the nature of a piece of work. Managers trying this exercise report that its use has revealed far more about their projects than they anticipated, and this is the power of the technique. Although straightforward, the multi-level ambidexterity approach demands careful thought and reflection.

In addition to delivering this new framework, the article also gives a good overview about ambidexterity research and its fruitful application in project management (e.g., Aubry & Lièvre, 2010; Leybourne & Sainter, 2012; Liu & Leitner, 2012).

The fifth article, “Value Management in Project Port-folios: Identifying and Assessing Strategic Value” by Miia Martinsuo, Tampere University of Technology, Finland and Catherine P. Killen, University of Technology Sydney, Aus-tralia, focuses on the non-commercial and long-term dimen-sions of value and how they are addressed in project portfolio management. Ecological, social, health and safety, societal influence, future business capability building, learning and knowledge development, and other non-financial dimensions of value are emerging as increasingly relevant topics in project-based management and product development management. However, the literature on project portfolio management has paid scant attention to value management concepts. In prac-tice, a better value orientation is needed: Project and portfolio managers are increasingly expected to be able to articulate value comprehensively; a focus on financial measures is not sufficient for long-term strategic decisions. The authors pose two research questions: (1) How and through what kinds of dimensions is strategic value assessed as part of project port-folio management frameworks? And (2) How should project portfolio management frameworks be modified to comprehen-sively account for strategic value? To answer these two research questions, the authors analyze how the creation of strategic value has been considered in empirical studies on managing project portfolios and on managing major single projects or programs. Their conceptual study offers many informative insights—about what has been researched already—and the long way we still have to go.

The sixth paper, “Stakeholder Management Strategies and Practices During a Project Course” by Pernille Eskerod, University of Southern Denmark, Slagelse, Denmark and Anne Live Vaagaasar, The Norwegian School of Management—BI,

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Project Management Journal, Vol. 45, No. 5, 5–14

© 2014 by the Project Management Institute

Published online in Wiley Online Library

(wileyonlinelibrary.com). DOI: 10.1002/pmj.21445


ABSTRACT ■This study aims to investigate the influ-

ence of coordination problems in glass and

metal curtain wall (GMCW) installation on

project productivity in Singapore. Trade-level

coordination problems in GMCW installa-

tion were identified through literature review

and included in a survey questionnaire. The

survey results indicated that, on average,

66.5 days of rework and 52.5 days of wait-

ing resulted from coordination problems,

and that “last-minute changes in design by

the client” led to the longest rework and

waiting time. Additionally, the rework and

waiting time caused by trade-level coordina-

tion problems were correlated with the total

rework and waiting time.

KEYWORDS: coordination; productivity;

rework; curtain wall

Influence of Trade-Level Coordination Problems on Project ProductivityBon-Gang Hwang, Department of Building, National University of Singapore, SingaporeXianbo Zhao, School of Engineering and Technology, Central Queensland University, Sydney, AustraliaThi Hong Van Do, 701 Search Pte Ltd, Singapore

INTRODUCTION ■

Coordination, which means unifying, harmonizing, and integrating different agencies involved in any industry with multiple objec-tives (Grigg, 1993), has been recognized as one of the three critical functions in a successful building process, together with design and

construction (Chitkara, 1998; Higgin & Jessop, 1965). In the project-based construction industry, every project has different scopes, the workforce is transient, multiple crafts are involved, projects are planned and worked in short time frames, and there is a tremendous variety of material and equip-ment projected for installation (Xia & Chan, 2011). Additionally, the low uncontrollability of construction work’s exposure to weather volatilities further proliferates the coordination challenge (Olsson, 1998). Given the complexity of the industry, construction success depends on the ways in which project participants collaborate and coordinate to enhance internal synergy and adapt to external changes (Walker, 1996). In addition, coordina-tion among project participants has been seen as an important function with considerable effects on project outcomes (Iyer & Jha, 2005; Jha & Iyer, 2006; Jha & Misra, 2007).

Productivity is a key factor, which companies should track to ensure their long-term viability and a real source of competitive advantage (Hwang & Soh, 2013). Construction productivity can be measured on three levels: task, project, and industry (Chapman & Butry, 2008). In Singapore, the construction industry has been plagued by the problem of low productivity (Hwang, Zhao, & Goh, 2013). According to the Building and Construction Authority of Singapore (BCA), overall construction industry productivity, measured by the constructed floor area (m2) per manday, has increased by only 3.7%, from 0.377 in 2008 to 0.391 in 2012 (BCA, 2013b). A number of studies have attempted to investigate the fac-tors influencing productivity, and coordination was identified as one of the most influential factors (Abdul-Kadir, Lee, Jaafar, & Ali, Sapuan, 2005; Dai, Goodrum, Maloney, & Srinivasan, 2009b). Nonetheless, the critical research on the impact of coordination on productivity is still lacking.

As a popular type of building façade, the curtain wall is defined as any building wall, of any material, that carries no superimposed vertical loads (Brock, 2005). Apart from plastics, glass is the only transparent cladding material that allows day lighting penetration and connection with the out-side world (Brock, 2005). Glass is usually supported by wall frames, most of which are extruded aluminum or steel. Together with glass, the metal frames make up a category called glass and metal curtain wall (GMCW). In addition to the technical factors impacting curtain wall installation, the non-technical factors, such as the coordination among different trades, are worth

Influence of Trade-Level Coordination Problems on Project Productivity


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and equipment transportation. Hence, these two activities can be seen as value-supporting activities. In addition, there seems to be an overlap between waiting and idle time. Idle time rep-resented a category in which the work could, but did not, progress, because the worker was not working (Christian & Hachey, 1995); however, if a worker is unable to perform a task because of an uncontrollable external delay, such as late concrete delivery, then the lost time is considered waiting time, not idle time. Christian and Hachey (1995) reported that waiting time represented a significant portion (33%) of unpro-ductive time, whereas idle time only took up 4%. Additionally, Zhao (2004) indicated that waiting was one of the most dominant wastes in Singapore, fol-lowed by rework; thus, this study treats unproductive time as a combination of rework and waiting time. As productive time represents the planned schedule that is usually fixed, project productivity is negatively influenced by rework time (RT) and waiting time (WT):

Project productivity ~ 1/UT = 1/(RT + WT)

Coordination

Coordination among major project players, including contractors, clients, and consultants, has been recognized as critical for ensuring construction proj-ect success (Jha & Misra, 2007; Lammie & Shah, 1980; Xia & Chan, 2010). Jha and Misra (2007) attempted to rank coordi-nation activities in Indian projects and reported that “regular monitoring of critical path activities”; “monitoring the budget on all activities and taking cor-rective action”; “application of sound technical practices”; and, “implementa-tion of all contractual commitments” were the most important coordina-tion activities. In addition, successful completion of construction projects involves the interconnected collabora-tion of various construction trades, such as waterproofing, stonework, cladding, carpentry, masonry, steel work, or roof-ing. Effective tools and processes are

area as the output to measure project productivity:

Project productivity = Total constructed floor area (m2)/Total number of site workers (manday)

The input in this formula is the time spent on construction activities. Accord-ing to Ghoddousi and Hosseini (2012), the time spent on construction activities consists of productive time (PT) and unproductive time (UT). Because the total constructed floor area is usually fixed for a project, it is the total project duration that indeed impacts the proj-ect productivity:

Project productivity ~ 1/Project duration = 1/(PT + UT)

Construction activities can be divided into value-adding, value-sup-porting, and non-value adding activities (Han, Lee, Fard, & Peña-Mora, 2007). Specifically, value-adding activities are directly involved in the actual process of construction or putting together or adding to a unit being constructed, whereas value-supporting activities are work elements that do not directly add value but are generally required and sometimes essential in carrying out an operation (Olomolaiye, Jayawardane, & Harris, 1998). By contrast, non-value-adding activities are those that absorb resources but create no value (Love, Mandal, & Li, 1999; Womack & Jones, 2010), including being idle or doing something that is unrelated to the oper-ation being carried out or in no way necessary to completing that operation. Han et al. (2007) deemed that non-value-adding activities were attributed to interruptions, productivity loss, and rework. Serpell, Venturi, and Contre-ras (1995) found that waiting time, idle time, and travelling time accounted for 87% of the total waste, whereas Chris-tian and Hachey (1995) indicated that unproductive time consisted of waiting and idle time.

Practically speaking, resting is a physiological need of workers, whereas travelling is necessary for tool, material,

attention. Because GMCW work typi-cally involves various parties, such as a main contractor, curtain wall sub-contractors and steel subcontractors, miscommunication and poor coordina-tion among these parties may result in faulty work (Hwang, Zhao, & Goh, 2013; Love, Mandal, & Li, 1999) that further causes rework, idling or waiting activi-ties, and finally impact project produc-tivity (Henderson, 2008). In addition, unproductive time causes more costs. According to Love, Smith, and Li (1999), an Australian residential building proj-ect experienced 69 days of unproduc-tive time, whose cost represented 3.2% of the original contract value.

The specific objectives of this study are to: (1) identify the coordination problems in GMCW installation in Sin-gapore; (2) assess the rework and wait-ing time caused by these trade-level coordination problems; (3) explore the relationship between these trade-level coordination problems and project pro-ductivity; and (4) provide possible solu-tions for these problems. The findings of this study provide project players, especially the curtain wall contractors, with an understanding of the influence of coordination problems. Because few studies have focused the trade-level coordination problems and their influ-ence on productivity, this study expands the literature relating to coordination and productivity.

BackgroundProductivity Measurement

Despite the lack of consensus on the definition, productivity is typically about the relationship between output produced and one or more of the inputs used in the production process (Hwang & Soh, 2013). In the construction indus-try, the basic concept for productivity measures is a comparison of the output of a task, project, or industry with the corresponding factors of production, which are known as the inputs required to generate that output (Chapman & Butry, 2008). In Singapore, the BCA (2013b) used the total constructed floor


installation. The project of choice must have been completed in the past three years so that the data are not outdated.

The questionnaire consisted of three parts. The first part was an introduction letter with the explanation of the ter-minologies used in the questionnaire, whereas the second part was meant to profile the respondents, their compa-nies, and the projects. In the third part, the respondents were asked to assess the rework and waiting time caused by the six coordination problems during GMCW installation, respectively. The rework and waiting time were assessed based on the actual project data or on the respondents’ assessment if the actual data were confidential or unavail-able. In practice, measuring work hours of trade is quite challenging and diffi-cult (Hwang & Soh, 2013). Complicated and labor-intensive trades pose greater difficulty in measuring work hours in order to calculate the specific trade pro-ductivity (Chang, 1991; Jarkas, 2012). Also, it is a common practice that work hours are measured based on estima-tors’ judgment or second-hand data (Chan & Kaka, 2004; Song & AbouRizk, 2008). Because the contractors in Singa-pore are required to report their project data to the BCA for productivity assess-ment, most of the time, data collected from the survey are based on actual project data.

Survey questionnaires were sent to general building contractors under either General Building Construction Workhead (CW01) and curtain wall con-tractors registered under the Curtain Walls category of Construction Related Workhead (CR16), and 48 completed questionnaires were returned from 48 different companies. The profiles of the companies, respondents, and proj-ects are indicated in Table 1. Accord-ing to the BCA grading system (BCA, 2013a), under the CW01, A1 contractors enjoy no tendering limit. A2, B1, and B2 contractors can bid for projects worth up to S$85 million, S$40 million, and S$13 million, respectively. Under the CR16, the tendering limits of L1, L2,

(2009) reported that direction and coor-dination was one of the most signifi-cant factors influencing productivity, from the craft workers’ perspectives. However, few studies have focused on the impact of trade-level coordination on productivity; thus, this study can expand the literature relating to coordi-nation and productivity.

Method and Data PresentationBased on the literature review, a pre-liminary set of coordination problems that would occur in GMCW installa-tion were identified (Abdul-Kadir, et al., 2005; Dai, et al., 2009 Maloney, & Srinivasan, 2009; Jha & Iyer, 2006; Jha & Misra, 2007); then, open-ended face-to-face interviews were performed with three industry practitioners (two proj-ect managers and one field supervi-sor) to validate the questionnaire. All of them had over 10 years of experience in the projects with GMCWs. The prelimi-nary set of coordination problems was presented to the interviewees, who were asked to identify whether such coor-dination problems happen frequently. It was found that there were several problems that were unlikely to occur or had no impact on construction, and hence should be filtered out from the list. Meanwhile, the interviewees also suggested adding some problems that they deemed significant in the indus-try. Finally, six coordination problems that they deemed as important were included in the questionnaire. This method has been used in a number of studies in the project management area (Deng, Low, & Zhao, 2014; Hwang, Zhao, & Ng, 2013; Hwang, Zhao, & Toh, 2014; Zhao, Hwang, & Yu, 2013).

A questionnaire survey was con-ducted to achieve the research objec-tives. The data relating to building projects with GMCWs were collected through contacting the contractors and subcontractors listed in the BCA’s directory of registered contractors and licensed builders. The respondents were asked to base their responses on one particular project with GMCW

thus required to coordinate trade work in order to ensure project success. In addition to the inter-trade coordination at the project level, contractors need to coordinate different activities that contribute to the completion of each individual trade because several sub-contractors are usually involved in one particular trade work.

Moreover, a trade subcontractor should not only focus on his or her work but also try to gain a thorough understanding of others’ work. Subcon-tractor performance is the key factor in determining the ability of the main contractor and consultants to deliver the project within time, quality, and cost targets (Mbachu, 2008). By subcon-tracting, contractors may bear certain risks, such as the losses of work quality and progress control unless the effi-cient management is in place (Cooke & Williams, 1998). Coordination problems between the main contractor and sub-contractor can pose a major hindrance to work progress. The common coordi-nation problems, such as late issuance of revised construction drawings to sub-contractor, resulted in rework (Abdul-Kadir, et al., 2005).

Some previous studies have inves-tigated the influence of coordination on productivity. Love, Mandal, and Li (1999) indicated that coordination failure was one of the main causes of rework, and that effective coordination and communication between contrac-tors and subcontractors could improve productivity. Abdul-Kadir et al. (2005) found that the coordination prob-lem between the main contractor and subcontractors was among the top five most frequent factors influencing labor productivity in Malaysian resi-dential projects. In addition, the U.S.-based Construction Industry Institute (CII, 2006) included the coordination between trades in the factors affecting labor productivity. Dai, Goodrum, and Maloney (2009) found that poor coordi-nation among management ranks con-tributed to poor planning, thus lowering craft workers’ productivity. Dai et al.



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2012) and the productive time is usu-ally the fixed planned duration, project productivity is negatively influenced by the unproductive time, which is the combination of rework and waiting time in this study. In the questionnaire survey, the respondents were asked to provide the total rework and waiting time of projects with GMCW installa-tion. It should be noted that the rework and waiting time do not necessarily result in schedule delay, because only the rework and waiting in the critical path will cause schedule delay. In this study, the rework and waiting time are used to analyze the project unproduc-tive time.

The respondents reported an aver-age of 221.2 days of rework time and 63.1 days of waiting time (see Table 2). This result indicated that projects in Sin-gapore were still plagued with rework issues, and substantiated the finding of Hwang, Zhao, and Goh (2013) that a majority of the Singapore-based build-ing projects experienced client-related rework. In addition, the independent-sample t-test was performed to check the differences in rework and waiting time between large and small projects. The results implied that large projects experienced significantly longer rework and waiting times than small projects. This may be because large projects are more complex and include more trades, thus facing more difficulty in coordinat-ing among project players.

Rework Time Caused by the Coordination Problems in GMCW Installation

Six problems caused by lack of proper coordination were identified and pre-sented in the questionnaire. The respondents were requested to assess

large projects, whereas the other ones fell into the category of small projects.

After the questionnaire survey, the results were presented to the three inter-viewees. According to their experience, they described how to response to these trade-level coordination problems.

Data Analysis and DiscussionTotal Rework and Waiting Time

As the time spent on construction activi-ties includes productive time and unpro-ductive time (Ghoddousi & Hosseini,

and L3 contractors were S$0.65 million, S$1.3 million, and S$4 million, respec-tively. In terms of financial grades, 58.3% of the companies were under the CW01 category, whereas the remaining specialized in curtain wall work. As for the respondents, more than 80% held the project manager and director posi-tions, and 87.5% had more than 10 years of experience in the construction indus-try, thus ensuring the response quality. In addition, in the cases of project size and duration, 66.7% of the projects had gross floor areas over 15,000 m2, and 68.8% lasted over 360 days. As the floor area was used to measure project pro-ductivity in Singapore (BCA, 2013b), this study distinguished between large and small projects in terms of projects’ gross floor areas. The projects with the floor areas over 15,000 m2 were seen as

Characteristics N %

Company CW01

(General building)

A1 9 18.8%

A2 7 14.6%

B1 6 12.5%

B2 6 12.5%

CR16

(Curtain wall)

L1 11 22.9%

L2 6 12.5%

L3 3 6.3%

Respondent Designation Project director 18 37.5%

Project manager 22 45.8%

Field supervisor 8 16.7%

Years of experience < 10 6 12.5%

10–15 22 45.8%

15–20 13 27.1%

> 20 7 14.6%

Project Gross floor area (m2) 5,501–10,000 5 10.4%

10,001–15,000 11 22.9%

15,001–20,000 9 18.8%

20,001–25,000 12 25.0%

> 25,000 11 22.9%

Duration (day) < 180 5 10.4%

180–360 10 20.8%

360–540 26 54.2%

540–720 7 14.6%

Table 1: Profiles of companies, respondents, and projects.

Unproductive Time Overall Large (N = 32) Small (N = 16) p-Value

Rework time (day) 221.2 267.5 128.5 < 0.001a

Waiting time (day) 63.1 68.3 52.7 0.007a

aThe independent-sample t-test result is significant at the 0.05 level (2-tailed).

Table 2: Total rework and waiting time.



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problems negatively influenced project productivity through their contribution to the total unproductive time. Lastly, possible solutions of the trade-level coordination problems were garnered through face-to-face interviews.

This study has some limitations. First, the sample size was relatively small due to the low response rate. Sec-ond, the unproductive time was simpli-fied as the combination of rework and waiting time, without considering the idling time. In addition, the six coordi-nation problems may not be exhaustive, although literature review and inter-views were performed. Last, this study focused on the context of Singapore and the trade of GMCW installation, so the findings from this study may be differ-ent in other countries and other trades. Nonetheless, this study provides project participants, especially the curtain wall contractors, with an understanding of the influence of coordination problems on productivity and the possible solu-tions of these problems. As the research focused on the trade-level coordina-tion problems, and their influence on productivity remains lacking, this study expands the literature relating to coordination and productivity, and the method adopted in this study could also be used in other similar studies. In addition, the identified possible solu-tions can contribute to practices aimed at tackling the potential coordination problems.

As trade-level coordination would influence project performance, future research is recommended to investigate the relationship between trade-level coordination and project performance. Also, idling time would be included in the unproductive time to make the assessment more precise. In addition, to overcome the negative influence of the trade-level coordination problems on project performance and produc-tivity, the root causes of the trade-level coordination problems would be identified and the cost-benefit analy-sis of the possible solutions would be performed.

(Gao & Low, 2013; Low & Hui, 1999; Wu & Feng, 2014) can be adopted to manage the materials onsite to mini-mize the storage time of materials and enhance the efficiency of their delivery.

Conclusion and RecommendationsThis study recognized unproductive time as the combination of rework and waiting time and the productive time as the fixed planned duration; thus, project productivity could be negatively influenced by the rework and wait-ing time. Six trade-level coordination problems in GMCW installation identi-fied through literature review were vali-dated by three industry practitioners and included in the survey question-naire. The questionnaire survey results reported that the projects with GMCWs experienced an average of 221.2 days of rework time and 63.1 days of waiting time, and that the large projects had significantly longer rework and waiting time than small projects. At the trade level, 66.5 days of rework and 52.5 days of waiting time were caused by the six coordination problems in GMCW installation. Among the six problems, the changes in design by the client led to the longest rework (17.2 days) and waiting time (12.2 days). In terms of comparison between large and small projects, the sums of rework and wait-ing time in large projects were sig-nificantly longer than those in small projects, respectively. Also, there was significant agreement on the ranking of the rework time between the two proj-ect groups. Furthermore, the analysis results indicated that the six trade-level coordination problems contributed to the total unproductive time through their consequent rework time, wait-ing time, or both, and that the sums of the rework and waiting time caused by coordination problems in GMCW installation were significantly corre-lated with the total rework and waiting time, respectively. This study con-cluded that the trade-level coordination

sufficient foremen to supervise the workers, and ensure that the workers strictly follow the given procedures and meet the technical requirements.

3. To achieve a practical schedule, the main contractor should engage the stakeholders, such as the cur-tain wall contractors and building structure contractors to gather feed-back and obtain the most appropri-ate approach to planning, during the initial planning process. The project plan should take into account the lead time due to rework or waiting for approval.

4. If certain parts of the building are not well prepared for curtain wall instal-lation, the main contractor should proactively inform the curtain wall contractor of the delay. The commu-nication among the main contractors, material suppliers, curtain wall con-tractors, and building structure con-tractors should be kept smooth. The double handling of materials would be avoided and the materials would not be stored onsite for a long period of time.

5. If the materials need to be stored onsite, the main contractor should coordinate with the curtain wall contractor to keep the wall panels and other materials in reliable and well-equipped places, which are spacious, have adequate shelters, and employ necessary procedures to avoid moisture or direct heat. Furthermore, the lean production philosophy, which has its origin in the Toyota Production System (Wu & Low, 2012; Wu, Low, & Jin, 2013; Wu, Pienaar, & O’Brien, 2013) and has been used in the construction industry (Gao & Low, 2014), can be used to mitigate the coordination problems and enhance the produc-tivity because of the fact that curtain wall construction involves prefabri-cation. Among the lean techniques, the just-in-time (JIT) method that involves having the right items of the right quality and quantity in the right place and at the right time


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ABSTRACT ■It is necessary to reconsider the assumptions

upon which the process of implementing

compliance with ethical programs rests, in

both theoretical and practical terms. These

assumptions should hinge on organizational

enablers that allow embeddedness of codes

of ethics in the web of an organization’s

processes. This article sets out to describe

an approach that will facilitate implemen-

tation of codes of ethics in construction

organizations and a comprehensive litera-

ture survey approach is adopted to achieve

this. The paper equally employs the applica-

tion of the European Foundation for Quality

Management (EFQM) model as a tool to

stimulate ethical behavior in an organization,

with the focus on the enabler criterion of the

model. The authors discuss organizational

enablers in relation to the implementation

of ethical codes. The study demonstrates

how ethics can be managed in an organiza-

tion by proposing a framework to enhance

codes of ethics embeddedness in the web of

an organization. The paper indicates current

research gaps and future opportunities for

both academics and practitioners.

KEYWORDS: codes of ethics; implemen-

tation; construction; enablers; organization

Strategies for Improving Codes of Ethics Implementation in Construction OrganizationsT. Olugbenga Oladinrin, Department of Building and Real Estate, The Hong Kong Polytechnic University, Hong KongChristabel Man-Fong Ho, Department of Building and Real Estate, The Hong Kong Polytechnic University, Hong Kong

INTRODUCTION ■

One of the distinguishing prerequisites to any business is corporate ethics (Schnebel & Bienert, 2004). In the present era of growing atten-tion on ethical malpractice in many organizations around the world, the study of ethical code implementation is imperative. Unethical

problems both at the corporate and operational levels of the construction industry have become commonplace; thus, the industry is no stranger to issues of ethics (Kang, Price, Thorpe, & Edum-Fotwe, 2004). Some examples of these issues, as highlighted by previous researchers, include poor quality control and quality of work; mismanagement of client resources; improper relations with clients and other stakeholders; improper tendering practices such as withdrawal, bid cutting, cover pricing, compensation of tendering costs, and collusive tendering behavior (Jackson, 2005; Zarkada-Fraser & Skitmore, 2000; Ray, Homibrook, Skitmore, & Zarkada, 1999).

In the context of ethical code implementation in construction organiza-tions, a number of researchers have studied this issue (Vee & Skitmore, 2003; Ho, Drew, McGeorge, & Loosemore, 2004; Poon, 2004; Nawaz & Ikram, 2013; Ho, 2013). Apart from Vee and Skitmore (2003), who see no reason for any special approach for code implementation, these researchers suggest that two main reasons appear to be at the heart of the ethical problem: (1) inef-fective corporate code implementation and (2) deficiencies in code embed-ment in the web of organizational processes and routines. The existence of ethical codes alone is insufficient to ensure employees’ ethical behavior and they need to be complemented with the assignment of functional responsi-bility (Ho, 2003). The process of how the code is actually implemented and maintained in the workplace, however, remains understudied in the context of construction organization. This raises the question of “how to properly implement codes of ethics within an organization,” which must be resolved; otherwise, the gap between theory and practice will persist and the argument for maintaining the usefulness of corporate code will be inconclusive.

Within the construction industry, little attention has been given to the effective management of ethics (Kang et al., 2004). Addressing ethical issues at the industry level may be too wide a context to be easily captured. Due to the important roles played by construction companies in the actualization of an industry’s goals, coupled with the more public interest in physical projects mostly being handled by the construction companies, it makes a lot of sense to tackle ethical malpractice at the organizational level. Adnan, Hashim, Yusuwan, and Abmad (2012) argue that major blame relating to construction

Strategies for Improving Codes of Ethics Implementation in Construction Organizations


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Management in Engineering, the Inter-national Journal of Project Management, Automation in Construction, and Build-ing Research and Information (BRI) as employed by Lin and Shen (2007). Last, since a code of ethics is more of a busi-ness management tool, the search for relevant literature has focused on busi-ness management and ethics-related journals (Journal of Business Ethics, Jour-nal of Management and Business Review) with more focus on the Journal of Busi-ness Ethics. This journal ranked first among Business-Ethics-Centric (BEC) Journals (Beets, Lewis, & Brower, 2013). In searching for publications, first, the keywords associated with “code” were combined (“code of ethics,” “code of conduct,” “ethical code”) with keywords related to “ corporate/ business” (“busi-ness principles,” “corporate credo,” “cor-porate philosophy,” “business ethics,” and “corporate ethics statement”). These words are known to have been used in papers on ethical codes related issues.

Equally, the application of the Euro-pean Foundation for Quality Manage-ment (EFQM) model (with the focus on the enabler criteria of the model) was employed. The factors formed the indi-cators for code embeddedness and were systematically arranged based on the six processes of responsibilization pro-posed by Nijhof, Cludts, Fisscher, and Laan (2003) to develop a framework.

Ethics in an OrganizationKilcullen and Kooistra (1999) define business ethics as “a set of principles that guides business practices to reflect a concern for society as a whole while pursuing profits.” A code of ethics can therefore be described as written ethical policies or principles of conduct that for-malize an organization’s commitment to ethical conduct. Brimmer (2007) opines that ethics have become an organiza-tional priority and is neither a luxury nor an option. This is a result of growing impatience within society with selfish and irresponsible actions that deprive some, while enriching crafty and cunning

influence employee behavior within the organization. The implementation can be made possible by focusing on the enablers that will allow embedment of ethical codes into business processes and the enclosed working routines and tasks of construction organizations. This paper sets out a practical frame-work for embedding codes of ethics in the construction organization, with focus on the enablers for codes imple-mentation, to nurture a professional workforce such that ethics policies are properly integrated and not just a mere paper exercise.

Research Methodology

A comprehensive literature survey ap-proach was adopted in this study. In light of the extensive literature on the subject of ethics, the study commenced with identification of renowned schol-arly journals relevant to this research, which was extended beyond the bound-aries of construction studies. The idea is to use literature as input rather than in-terview or survey data (Harden & Thom-as, 2010). To achieve this, well-regarded construction journals were searched, coupled with prominent journals in the field of ethics. First, a computerized search of four databases (ASCE Library, ABI-INFORM complete new platform, EBSCOhost Business source complete, and Academic search premier), span-ning the years 1990 up to the present, was conducted. The search scope was expanded to include common search-es such as Google Scholar and several bookstores on the web. This approach was used by Jing, Shen, and Ho (2009) in their review studies on stakeholder management in the construction in-dustry.

Second, searches were conducted on the issues of high-quality journals that have published articles related to ethical issues in construction (Con-struction Management and Economics (CME), the ASCE Journal of Construction Engineering and Management (CEM), Engineering Construction and Architec-tural Management, the ASCE Journal of

faults and unethical practices are often directed toward the general contractors who execute such projects. In light of this, the construction industry in Hong Kong has taken a position following a report, which revealed incessant uneth-ical practices within construction orga-nizations, such as short piling case (Ho, 2003). The Hong Kong Housing Author-ity made it compulsory for all general contractors to develop written codes of ethics without which they are not quali-fied to tender for public works.

Ho (2011) notes that all attempts to improve ethical records in construction organizations will not be fully effective until ethical cultures are improved. Ho (2013) therefore calls for a systematic approach for implementing codes of ethics that have been adopted by sev-eral construction organizations in order to bring a positive change to ethical performance in the construction indus-try in general. Moreover, this intended change cannot be accomplished with-out a practical approach to attaining organizational ethical goals (Lloyd & Mey, 2010). Although the behavior of individuals can be shaped by the codes of conducts embraced by the profes-sions to which they belong, the values embraced by the organizations to which individual professionals are attached will supersede the influence emanat-ing from professional codes of conduct (Rampersad, 2006). For the above rea-sons, this study is framed within the organizational paradigm of ethics man-agement, that is, meso-level, rather than macro- or micro-level.

There is insufficient information about the codes of ethics implementa-tion approach in construction organi-zations, even if in some cases this was more by default than design. Subse-quently, more research in the area of business ethics and, particularly around codes of ethics implementation, is needed. Accordingly, the ethical values of an organization as contained in the codes of ethics must be carefully trans-mitted to employees by proper imple-mentation of the codes in a way that will



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Nijhof et al. (2003) conducted a study based on a process approach assess-ment method (PAAM), which integrated both “product” and “process,” to mea-sure the implementation of a corpo-rate code of conduct in the workplace. Their project presented an assessment method, based on the EFQM model, which is a process approach used to review the company management sys-tem to make sure that employees are encouraged to work in conformance with the corporate code of ethics. Nijhof et al. (2003) argue that implementing a corporate ethics codes in a work-place would be very much in line with models such as the EFQM. They claim that their PAAM allows organizations to discern clearly their strengths and areas in which improvement can be made, culminating in planned improvement actions, which are then monitored for progress.

In order to properly implement codes of ethics into the web of an orga-nization, there is a need to perform holistic assessment of the business sys-tem by looking at the basic components of the organization that contribute to the success of such implementation. The key components are described as organizational areas, which represent the ‘enablers’ criteria of EFQM and include:

1. Leadership;2. People/employees;3. Policy and strategy;4. Partnership and resources; and5. Processes.

Researchers and practitioners have been debating on the weightings of the EFQM Excellence Model due to per-ceived rigidity of the scoring system, which makes the model more prescrip-tive than descriptive; however, EFQM (2003) has cleared the air by declaring the model as a non-prescriptive frame-work that permits achieving sustainable excellence using diverse approaches. Similarly, Oakland (1999) opines that the weightings may be modified to

organizations. Similarly, Watson and Davis (2002) generate a methodology for EFQM implementation within the construction-related educational estab-lishment and affirm the possibility of attaining all the advocated advantages of EFQM. Vukomanovic, Ceric, & Radu-jkovic, (2007), in their study on the approach for benchmarking construc-tion performance, introduce an inte-grated model based on the EFQM and Balance Score Card (BSC). In the same vein, Westerveld (2003) relates criti-cal success factors to project success criteria using the Project Excellence Model, adapted from the EFQM model. Moreover, Chileshe (2005) examines the application of the EFQM model in the supply chain and tendering process within UK construction companies and concludes that the non-prescriptive and weighting arrangement of the model need to be validated and tested, hence introducing the Structural Equation Modelling (SEM) to validate the model.

The efforts of previous research-ers in implementing the EFQM model within construction organizations focus on quality attainment using the model as a tool to measure performance in this regard. Meanwhile, quality per-formance depends on a sound ethical standard within the organization. This aspect is neglected by various research-ers and forms the motivation for the current research. One of the objectives of this study is to implement codes of ethics in the web of construction orga-nization with the intention of using the EFQM model in a process approach assessment manner to cover both prod-uct and process. In the same manner, Buban (1995) notes that in building ethical standards into TQM concepts by organizations, the effects of ethics must constantly be measured; therefore, the implementation of codes within con-struction companies using the EFQM excellence management model will be measured in this current research. In summary, the EFQM model is based on TQM concepts, a self-assessment pro-cess, and a scoring approach.

44 countries and found that one third of those surveyed had experienced eco-nomic crime in one way or another; thus, corruption and bribery pose a big threat to the industry. Research from various countries in the world, for example in: the United States (Jackson, 2005), Australia (Vee & Skitmore, 2003), Malaysia (Adnan et al., 2012), Kenya (Mathenge, 2012), Pakistan (Nawaz & Ikram, 2013), the United Kingdom (Mason, 2009), China (Zou, 2006), and Nigeria (Ameh & Odusami, 2010) reveal the extent of unethical behavior mani-festing in different levels. Ethical issues have, to a great extent, affected not only the integrity of the construction industry but also its products (Rahman, Karim, Danuri, Berawi, & Yap, 2007). The construction industry is said to be characterized as one with a poor ethi-cal culture (Tow & Loosemore, 2009). All these anomalies call for a change in construction ethical practices to tackle ethical issues within the industry. A code of ethics is described as an effec-tive tool for managing ethics in an orga-nization but the efficiency of the tool hinges on proper implementation (Ho, 2010).

Code of Ethics Implementation Processes Using EFQM

The tremendous benefits contained in the European Foundation for Qual-ity Management (EFQM) model have made construction researchers adopt its implementation in various aspects of construction management. For exam-ple, the International Project Manage-ment Association (IPMA) has produced a model based on EFQM for project qual-ity assessment, and the model serves as the basis for the IPMA annual project management excellence award for the best project of the year (Koch, 2006). Watson (2002) studies the problems associated with the implementation of EFQM in construction companies, using a sample of fifty companies, and the result was used to produce a generic model that aids in implementation of the EFQM model in construction-related



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therefore suggested by the authors (Gottlieb & Sanzgiri, 1996) that an orga-nization’s leaders should act as contrib-utors and drivers to ethical management by playing their roles in the formulation of the ethical policy, communicating an ethical code of ethics as well as leading by example.

According to the report of the Con-struction Management Association of America (CMAA) in Russell and Den-nis (2004), there are some successes recorded against leadership devel-opment efforts in the construction industry. Notwithstanding, there is a significant need for leaders who are capable of fulfilling the current needs of the industry. One of the identified needs is the issue of ethical malpractice, which has dragged the industry in mire and therefore dented its image. What-ever culture an organization imbibes, flows from the top management down; therefore, successful implementation of a code of ethics will be determined by readiness and dedication of top management (Russell & Dennis, 2004). Unfortunately, construction organiza-tions have not been diligent and com-mitted to combatting the incessant unethical behaviors they are often bur-dened with.

As indicated in the framework (see Figure 1), leadership can basically be analyzed by six attributes, namely: top management commitment (Lloyd & Mey, 2010), acting as role model (Appelbaum, Deguire, & Lay, 2005), ethical training (Beeri, Dayan, Vigoda-Gadot, & Erner, 2013), leadership approach to value con-flicts (Svensson et al., 2009), functions of an ethics committee (Adam, 2005), and transparent report (Schwenke, 2007). Leadership is considered in construction as the main enabler in shaping ethical behavior (Ho, et al., 2004). The lead-ership referred to in this study covers both the corporate leaders (e.g., direc-tors) and project leaders (e.g., super-visors) who transmit an organization’s ethical value to the rest of the employ-ees. It is envisaged that the leadership enabler will assist leaders in facilitating

perspective, as discussed in the follow-ing sections.

Leadership

One of the important aspects of any business organization is leadership (Butler & Chinowsky, 2006). Leader-ship, as described by Pochron (2009), is an on-going process (embodied by responsible actors) that occurs as a result of formal and informal inter-actions within the organization. This dynamic process is initiated when-ever a leader recognizes the need for a change, perceives the possibilities for the change, and consequently takes action. Because of the diverse approach to describing leadership, however, researchers have not reached a consensus as to what it really means (Butler & Chinowsky, 2006). The ability to make a correct decision at the right time makes a leader a good one indeed and others can emulate such as a result of behavioral influence, because lead-ership is about exerting influence in a way that invigorates others to comply with a desired goal (Pochron, 2009; Wotruba, Chonko, & Loe, 2001). This calls for a significant mastery over the leaders’ behavior and attitudes in a sacrificial manner to be able to exer-cise the greatest infl uence on other employees.

Neergaard and Pedersen (2012) assert that managers as leaders in organiza-tions are crucial change agents capable of shaping responsible business prac-tices. Thus, the impact of leadership in making an ethical organization by adhering to codes of ethics cannot be overemphasized. As noted by Emiliani (2000, p. 261), ‘ethical behaviour to establish an ethical environment will begin with the leaders within the orga-nization as integrity, or the lack of it, flows from the top down.’ According to the study, reported by Gottlieb and Sanzgiri (1996), it was found that 75% of 8,000 respondents supported the fact that the organization’s leader plays the most significant role in ensuring ethical standards for the organization. It was

unit, or process forming part of a larger system and the functions of those enti-ties, acting together, are substantiated by their results (Watson & Howarth, 2011). In a system approach, every-thing is connected to one another and a change in one entity will invariably affect the others in the system; there-fore, to effectively and proactively accommodate the demands of inces-sant unethical behavior in the orga-nization, all system components must be addressed regarding decision mak-ing. Construction organization is char-acterized by disintegrated units (for example, management staff, including senior managers) are usually separated from the project teams (supervisors and front-line workers). Nevertheless, all of them are expected to work for the inter-est of the organization, expressing some kind of responsible behavior in support of the values embraced by the organiza-tion; thus, unethical practice from any end unit will affect the organization’s desired results.

In an attempt to address the issues of unethical behavior, many organiza-tions have developed or adopted codes of ethics. As effective as codes are (Ho, 2010), they are not enough to create an ethical organization. Loumbeva (2008) concludes that the mere existence of codes of ethics in an organization is not a justifiable prerequisite for ethi-cal behavior of such a company. This means that having codes of ethics by a company and their mere distribution to employees, does not translate to their effectiveness. In order to reap the full benefits derivable from codes of ethics implementation, it becomes imperative that the process of such implementation be enabled in the context of organiza-tional practice.

Watson and Howarth (2011) employ the approach of the European Founda-tion for Quality Management (EFQM) and group the components of orga-nization (enablers), which allow achievement of organization results in five criteria. This approach is bor-rowed for this study to achieve a clearer


full potential are released (based on organizational activities) toward the achievement of its policies and strate-gies as well as its processes (Chinda & Mohamed, 2008). This enabler consists of six attributes, namely: whistleblowing protection (Lloyd & Mey, 2010), initial employees’ ethical appraisal (Svensson, Wood, Singh, Payan, & Callaghan, 2011), communicating codes with employees (Ho, 2013), a reward system (Tow & Loosemore, 2009), employees’ ethical performance appraisal (Svensson et al., 2009), and employees’ critical self-evaluation (Loumbeva, 2008). Although the attributes are closely related and similar, each of them is important to ensure embeddedness of codes of ethics (Nijhof et al., 2003).

Partnership and Resources

Researchers have made an attempt to define what resources really mean. Bryson, Fran and Colin (2007) define resources as any assets that an orga-nization might take advantage of to achieve its target goals. According to Barney (1991), resources are specifically described as all assets, knowledge, capa-bilities, information, firm attributes, and organizational processes managed by an organization, which equip the firm to conceptualize and implement strategies for better and improved effi-ciency and effectiveness. Resources are any assets both tangible and intangible at the organization’s disposal for devel-oping and implementing its strategies (Ray, Barney, & Muhanna, 2004). Simi-larly, Hansen, Perry, and Reese (2004) categorize an organization’s resources into two broad concepts: produc-tive resources (resources needed for goal achievement) and administrative resources (resources governing the use of productive resources). In essence, strategic management calls for effective and efficient utilization of corporate resources in both the long and short-term (Kay & Popkin, 1998).

In this study, resources refer to the administrative assets that enable a construction organization to plan and

as people facilitate competitive advan-tage for organizations (Butler & Chi-nowsky, 2006; Brandenburg, Haas, & Byrom, 2006). Global competitiveness attempts by organizations will even-tually be hampered and frustrating if employees remain unethical (Lloyd & Mey, 2010). Employees are positioned right at the heart of any organization and a sound knowledge of their interaction with the whole organizational structure is a crucial ingredient for the success of any business. Roxburgh (2006) empha-sizes the importance of human factor in strategic decisions by organization. The researcher (Roxburgh, 2006) rec-ognizes impact of people’s behavior on economies and profitability of an orga-nization.

A successful operation of any organi-zation both real and perceived is linked to the ethical conduct of its employees (Lloyd & Mey, 2010). As noted by Brim-mer (2007), employees’ ethical conduct has been a common focus in the public eye recently and has led to emphasis being put on the impact of codes of ethics on the global competitiveness of business firms. Just as power concen-tration focusing on selected few indi-viduals in an organization does not aid profitability because it disables it from integrating in its immediate environ-ment, so too a centralized approach to codes of ethics would not enable an eth-ically sound organization (Loumbeva, 2008). In other words, a shared respon-sibility pertaining to code implementa-tion in an organizational environment will enlighten the focus on stakeholder needs and, as such, enables codes of ethics to be embedded effectively, which in turn create a positive impact on profitability. Loumbeva (2008) con-cluded that making an ethical decision unilateral is not the best approach in the context of organizational decision-making process.

The ‘people’ enabler indicates the means, by which an organization man-ages its human resources at all levels (individual, team-based, and organiza-tion) such that their knowledge and

the achievement of a mission and vision of ethics, establish required values for long-term success, and internalize them through proper actions and behaviors.

Policy and Strategy

Watson and Howarth (2011) describes policy and strategy as a means by which an organization implements its mission and vision through a clear stakeholder-focused strategy, supported by relevant policies, plans, objectives, targets, and processes. These are guidelines devel-oped to regulate decision making toward organizational required actions. The scope of all decisions that affect the organization are defined by business policy, such that employees can make decisions without necessarily making reference to top management for guid-ance and direction. Likewise, the roles and responsibilities of top management regarding issues that affect the suc-cess of organization are also defined. According to Kay and Popkin (1998), improving organizations’ profitability depends on enhancement of their deci-sion-making strategies by integrating ethics into their decisions.

This enabler refers to the means of implementing codes of ethics by responsible organizations via strat-egies, policies, plans, objectives, tar-gets, and processes that are centered on stakeholders’ requirements. It con-sists of code standards (Mamic, 2003; Messikomer & Cirka, 2010), a mecha-nism for code update (Sakyi & Bawole 2009), representativeness of a compa-ny’s vision in the code (Lloyd & Mey, 2010), creating forums for discussing ethical dilemmas (Brimmer, 2007), regular ethics audits (Svensson et al., 2009), and accounting for ethical fall-outs (Nijhof et al., 2003; Logsdon & Wood, 2005).

People/Employees

The mantra “our greatest asset is our people” contending that technology and tools alone cannot make the firms to accomplish their goals is common among many organizations these days



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Thus, a synergetic ethical performance can be attained at the project team level due to common behavioral processes. Certain attributes that can aid these processes in construction organizations are regarded as primary processes and are explained as follows.

This construct (primary processes) enables an organization to manage and improve its processes so as to aid its policy and strategies, maximize oppor-tunities, and generate increasing value for all the stakeholders. It also consists of six attributes, namely: risk inventory of behavioral bottlenecks (Rampersad, 2006); discussion of contemporary ethi-cal issues (Schwenke, 2007); empow-ering employees to make decisions (Nijhof et al., 2003); assessing individ-ual value during recruitment and selec-tion (Majluf & Navarrete, 2011; Joyner & Payne, 2002); introducing symptomatic indicators (Webley & Werner, 2008); and establishment of an open communica-tion system to challenge code themes (Nijhof et al., 2003). These processes are difficult to identify but are very impor-tant in ethics management in general and codes of ethics integration in par-ticular.

Practical Approach of the Study in Construction Organization

It is important to note that the approach proposed in this study is only suitable for an organization that has a written code of ethics already. Based on the EFQM self-evaluation mechanism, a self-assessment can be conducted via the framework using any conve-nient scale to assess the attributes. For example, Nijhof et al. (2003) suggest some scaling options to be used against each indicator. (For further reading, see Nijhof et al., 2003.)

The data gathered from this process can then be analyzed to reveal the cur-rent situation of the company. Recom-mendations based on the findings in relation to strength and areas requiring attention of management could then be made. It is expected that this approach will reveal the challenges inherent in

Primary Processes

Managers today are delighted about processes because of their suffer-ing from disjunctive departments, poor regulation, and limited lateral communication, which processes seem to address (Garvin, 1998). Processes are defined according to Garvin (1998) as series of tasks and activities that help organizations in transforming inputs into outputs and they are grouped into three categories: work processes, behav-ioral processes, and change processes. This study is concerned with behavioral processes that focus on ingrained behav-ioral patterns (e.g., decision-making and communication processes), which reflect the ways and manners of acting and interacting within an organization. Behavioral processes, although not inde-pendent of work processes, affect the ways work processes are carried out and they are the underlying determinants of operational process’s results (Wheel-wright & Clark, 1992).

This means that behavioral pro-cesses inspire and form the way work is performed by regulating the behav-iors of individuals and groups. This is applied to a construction organization that is characterized with disaggregated units. With individual and interpersonal relationships that fit into a disaggre-gated model of the company, processes influence the implementation of any framework (Chinda & Mohamed, 2008) capable of molding behavior within a construction organization such that the firm’s objectives and goals are achieved. The necessity of behavioral processes is emphasized in this study as a result of the peculiarity of construction orga-nizations regarding ethical issues. Garvin (1998) asserts that all behav-ioral processes share common char-acteristics and have no independent existence but they affect how work is being carried out. In relation to the current study, it is believed that when an individual organization manages its behavioral processes well, it will bring about positive ethical results because they share common characteristics.

manage the behavior of its internal stakeholders/employees (Loumbeva, 2008) efficiently and effectively through the implementation of codes of ethics. These include personnel and finan-cial resources, as well as the relevant documents necessary for shaping the behavior of an organization’s employees. For example, if an organization targets a certain level of quality behavior, the spe-cific knowledge and information required to attain and maintain such a level of behavior are termed ‘resources’ in this context. Ethics has been identified as the shelter that accommodates moral, social, and legal issues; therefore, using compo-nents of ethical analysis as a foundation for decision making in an organization will amount to the best use of corporate resources (Kay & Popkin, 1998).

As Neergaard and Pedersen (2005) opine, managing quality social and environmental issues extends beyond the perimeter of the organization’s boundary. An important management task for a company is the collaboration and partnerships in connection with other companies along the supply chain (Neergaard & Pedersen, 2012). This implies that a construction company should ensure ethical conduct while collaborating with other stakeholders (e.g., suppliers, subcontractors, govern-ment, among others) as a result of a contractual arrangement.

This enabler shows how an orga-nization handles its external partner-ships, project participants, and other stakeholders in relation to the resources needed to aid its ethics policies and strategies via effective decision-making processes. This construct (partnership and resources enabler) is described by six attributes: financial aspect of eth-ics management (Schwenke, 2007); new employees receive codes with explana-tion (Svensson et al., 2009); stimulate acting in accordance with codes (Nijhof et al., 2003); the use of ethics officer/ombudsman (Mathenge, 2012); hotline/helpline system (Webley & Werner 2008), and relating codes to subcontractors and suppliers (Svensson et al., 2009).


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introduction of the EFQM excellence model poses another opportunity for the proper implementation of a code of ethics, which can be developed into an assessment tool.

In essence, it is considered far too early to give a conclusive comment on the likely outcomes of the proposed framework for implementing the code of ethics in the context of construc-tion organization. One limiting fac-tor of this study is that the attributes/variables are generated from wider literature search beyond the scope of construction research. Therefore, it is imperative to adapt the attributes to construction ethics practice by car-rying out an empirical study in this regard. This will validate the model for better understanding in theory and proper application in practice. Further research needs to be conducted on the relationship between the enablers and how they influence employee behavior in construction organizations. In this study, only the enabler criteria of the EFQM model were considered in rela-tion to code implementation, further study can examine the likely results of the enabling attributes. Moreover, further research in the context of code implementation at the project level is contemplated. The study therefore rec-ommends that further research explore the suggested areas for further study as indicated above.

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Conclusions and Suggestions for Further Research

Promoting ethical behavior requires that an organization focus on those fac-tors that can be controlled (Ho, 2011). There has been an increasing awareness of the critical need for ethics in the orga-nizational fabric, but a great deal exists for improvement. This paper discusses the organization enablers and the rel-evant attributes expected of any respon-sible construction organization for the proper management of ethics. A model for enabling codes implementation was hypothesized in this study based on a vast array of literature reviews. Position-ing the attributes of code implementa-tion under separate enablers is a step forward in construction management research. The attributes are categorized under five enablers, using the EFQM excellence model, which is commonly used in practice and is acknowledged to be a valuable tool.

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ABSTRACT ■

Project management and change manage-

ment both contribute to the management

and delivery of changes to organizations;

however, they are based on distinct bodies

of knowledge, and practitioners of these

disciplines have disparate views on how

change should be managed. There is a lack

of consensus about how these disciplines

should work together to deliver organiza-

tional change projects, which may result

in conflict. This research delves into practi-

tioners’ perspectives on formal authority,

the reporting relationship between these

disciplines, and also reveals the fundamental

differences in how practitioners of these dis-

ciplines view the practice of organizational

change.

KEYWORDS: project management;

change management; reporting; formal

authority; organizational change

Perspectives on the Formal Authority Between Project Managers and Change ManagersJulien Pollack, University of Technology, Sydney, AustraliaChivonne Algeo, University of Technology, Sydney, Australia

INTRODUCTION ■

Project management and change management are two disciplines that have the potential to jointly make a contribution to the delivery of change initiatives in organizations, and examples can be found in the normative and academic project management literature (Project

Management Institute, 2013a; Winch, Meunier, Head, & Russ, 2012; Boddy & Macbeth, 2000), change management literature (Change Management Institute, 2012; Griffith-Cooper & King, 2007; Leppitt, 2006; Leybourne, 2006), and the general management literature (Levasseur, 2010; Pádár, Pataki, & Sebestyen, 2011) to support this assertion.

Evidence in the literature suggests, however, a lack of consensus and even conflict regarding how these disciplines should work together to deliver organizational change projects (Crawford & Nahmais, 2010, p. 405; Jarocki, 2011, p. 69). This may partly be attributed to the different traditions, contextual backgrounds, and bodies of knowledge associated with these disciplines (Lehmann, 2010, pp. 331–332; Garfein & Sankaran, 2011, p. 4). For example, the early development of project management has been influenced by the aerospace industry (Morris, 2013, p. 13), drawing on hard systems approaches, such as systems engineering, systems analysis (Morris, 2002), cybernetics (Urli & Urli, 2000, p. 33), and emphasizing the use of quantitative techniques to control budget, schedule, and the quality of a delivered product (Yeo, 1993, p. 115).

By way of contrast, change management is a comparatively younger field, drawing on a rich literature on strategy, organizational development, and human relations (Crawford & Nahmais, 2010, p. 406), including work by Phillips (1983) and Connor (1993). There are many different approaches to change management (Mento, Jones, & Dirndorfer, 2002) and readers are referred to Cao and McHugh (2005) for a comprehensive review of the devel-opment of the discipline. Although both disciplines focus on creating change in organizations, when compared with the more traditional literature on project management, change management focuses less on control of delivery through a direct means–end orientation than on communication of a clear vision for a future state, engaging leadership in the change process, ensuring alignment with strategy, and the development of ownership of a change by an organization. In addition, Lehmann (2010, p. 328) notes that a key difference between the disciplines is that, while change management has focused on the underlying dynamics of change, project management has tended to place a greater emphasis on method and technique. The different foci of these dis-ciplines may be a source of conflict in the delivery of organizational change projects if practitioners hold contradictory views about how a change should be managed.

Perspectives on the Formal Authority Between Project Managers and Change Managers


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Do project managers and change managers hold different views about how these two roles should formally relate in practice?

Alternative Relationships Between the DisciplinesAs noted above, there is little in the research literature that discusses issues of formal positional authority and the reporting relationship between project managers and change managers; how-ever, review of the literature does reveal hints at various authors’ perspectives on this topic, suggesting four possible ways in which the roles could interact:

1. Project managers should report to change managers;

2. Change managers should report to project managers;

3. There should be a joint partnership between the roles, with no direct reporting relationship; and

4. The roles are entirely distinct with no need for partnership, with no direct reporting relationship.

Support for the first of these four positions can be seen in Kotter (1996), arguably one of the most influential works on the change management methods, which refers to project man-agement as being a component of the change management process. When describing an approach to change man-agement, he refers to “Project man-agement and leadership from below: Lower ranks in the hierarchy both pro-vide leadership for specific projects and manage those projects” (p. 143). Leppitt (2006, p. 238) could also be interpreted as implying that project management functions are at lower parts of an orga-nization than change management functions.

Support for the view that project managers should report to change man-agers can also be found in the proj-ect management literature. Gareis (2010, p. 316) has identified that the major program management stan-dards depict program managers and

in these fields are increasingly conver-gent. Indeed, it has been identified that there is an “. . . obvious overlap between the two disciplines . . .” (Jarocki, 2011, p. 69). The line between the disciplines appears to be blurring, at least from the perspective of what researchers write about. Differences in the literature do not then appear to be the likely source of any significant disciplinary conflict.

Nonetheless, it has been found that “. . . there is evidence of a degree of rivalry between Project Managers and Change Managers concerning who should be managing business change” (Crawford & Nahmais, 2010, p. 405). Given the increasing convergence in the literature, evidence of whether conflict between these disciplines exists may be less apparent in the literature than in the opinions of practitioners; this is where Project Managers and Change Manag-ers are finding ways to work together to deliver organizational change projects. As such, this research primarily delves into the opinions of practitioners; first to uncover whether there are differ-ences of opinion between practitioners of these disciplines; and second, to con-tribute to clarifying what the differences are, so that practitioners may be better able to manage any conflict resulting from these differences of opinion.

If the literature supporting these dis-ciplines increasingly overlaps, then there is the possibility of further confusion among practitioners about how these dis-ciplines should relate to each other. With both disciplines regarding themselves as experts in the delivery of organizational change projects, one key area of disagree-ment will likely relate to which disci-pline holds ownership over the process of organizational change, either in terms of specific parts of that change or authority over the process in its entirety. Both proj-ect management and change manage-ment claim to contribute to the delivery of organizational change, and yet there is little in the literature to suggest how these roles should relate in practice. In response, this paper addresses the fol-lowing research question:

Although the literature on these dis-ciplines may have once been clearly distinct, authors contributing to the project management literature appear to be increasingly drawing on, and writing about, issues more commonly associated with change management. For example, Leybourne (2007) has noted a move from project manage-ment research that focuses on process to research that focuses on people. Sim-ilarly, Kloppenborg and Opfer (2002) found an increasing trend toward people-related issues in project man-agement research, such as teams, lead-ership, and motivation, whereas Urli and Urli (2000) found project management research has increasingly extended itself toward organizational change. Project Management Institute’s recent inclusion of a tenth Knowledge Area, Project Stakeholder Management, in A Guide to the Project Management Body of Knowledge (PMBOK® Guide) (PMI, 2013b) can also be taken as evidence of a growing focus on people-related issues in the discipline. Conversely, Söderlund (2004) has identified that not only is project management research drawing on a broader range of sources, it is also being drawn upon by a wider range of sources, including the general management disciplines; a point sup-ported by Kwak and Anbari (2009).

This suggests that, although much of the project management literature may remain focused on technical issues of quantitative control and top-down management, there may be a narrowing divide between the works of literature in those parts where the project manage-ment literature deals directly with the management of organizational change, or in other management contexts where a response to ambiguity or stakeholder engagement remains the key to success. It is interesting to note that two com-parative reviews of the literature, one focusing on stakeholder roles (Pádár et al., 2011), and one on communication (Lehmann, 2010), found similarities between the literatures, with the latter study finding that recent publications


ing that the role of the change manager is superfluous.

There is also evidence of support for the third position of joint and equal responsibility for success, with the implication for no need for any direct reporting relation between project and change managers. Alsene (1998) has identified three case studies in which change agents held personal responsi-bility for project success, alongside the project manager. The Change Manage-ment Institute (CMI) also identifies the need for a change manager to under-stand “. . . the roles and relationships of the project manager, project team and other stakeholders and is able to com-petently manage those relationships” (2008, p. 4).

It is also common to refer to proj-ect management and change manage-ment as distinct activities, which may provide support for the fourth posi-tion, where there is no need for direct positional authority or partnership between the roles. The roles may have separate reporting arrangements, with a project manager responsible to a pro-gram manager, and a change manager responsible to a designated change owner (Stummer & Zuchi, 2010, p. 391), or through respective project and change management offices. The dis-tinction between the two disciplines has resulted in a situation where “. . . project management and change management have been, and in most cases are, sold, practiced, and managed as two almost mutually exclusive project disciplines” (Jarocki, 2011, p. 69). In this case, the lack of relationship may be due to a clear, distinct, and commonly under-stood task differentiation.

Such clear task differentiation may be possible if the skills required to prac-tice project management are different from those required to practice change management, and some authors have found this to be the case (e.g., Blake, 2009, p. 35; Baca, 2005; Alsene, 1998, p. 373; Garfein & Sankaran, 2011, p. 1). However, research has also supported a contrary perspective, that there are

communications, change management plans . . .” (p. 400), whereas Nelson (2011, p. 6) states that “. . . there should be linking milestones and activities that are common in both the Change Management Workplan and the mas-ter project workplan.” Both of the pre-ceding references suggest that change management activity is controlled to an overarching project management plan. Evidence is apparent in the works of other authors (e.g., Turner, Grude, & Thurloway, 1996; Boddy & Macbeth, 2000; Dover, 2002) implying that project managers are responsible for managing change issues, whereas Clarke (1999, p. 139) suggests that project manage-ment can be used by itself to manage change. Crawford and Nahmais (2010, p. 409) elaborate on this by suggesting that in any change project, other than those with a weak supportive culture and/or leadership and a high degree of required behavioral change, the change can be managed by a project manager with some change management skills, suggesting that in most cases change management is not needed or can be considered supplementary to project management.

A thorough reading of PMI’s Man-aging Change in Organizations: A Practice Guide (2013a) complicates this discussion, as the guide does not acknowledge the role of the change manager, treating change management as an abstract group of skills, foci, and activities, rather than as capabilities embodied in a distinct group of spe-cialists. The guide appears to consider change management to be more akin to portfolio and program management, because of their common interests in strategic alignment, benefits manage-ment, and distributed control, but does allow for change management activi-ties at the project level. With respect to the relationship between project man-agement and change management, the guide refers to change management activities being undertaken by port-folio, program, or project managers, which could be interpreted as suggest-

change managers sitting at comparable levels. Cowan-Sahadath (2010) pro-vides a complimentary view of this relationship, at one point describing project management as more relatable to operational performance and middle management, with change manage-ment as being alongside vision, strat-egy, and senior management (p. 399), and at another point depicting change ownership on the same level as pro-gram management, both of which are depicted as below leadership, but above the project teams (p. 400). In addition, Stummer and Zuchi (2010) wrote that the “. . . change manager is responsible for the overall change and is in charge of the transitions between the change processes. Where the responsibility of the program or project manager ends, the responsibility of the change man-ager begins” (2010, p. 391). One con-sistent theme is that those views from the project management literature that regard change management as being at a higher organizational level than proj-ect management regard change man-agement as being more equivalent to program management.

The view that project management is a lower level organizational activity than change management is far from consistent, and support for the second position is clearly evident in the lit-erature. In many sources, where there is some implication about a reporting relationship, the literature appears to suggest that Change Managers should report to Project Managers. For exam-ple, when describing the relationship between project management and change management, Lehmann (2010, p. 331) states that a “. . .project is con-ducted by a project manager . . . acting as a chief officer in command of a dedi-cated team”; this is similar to the view stated by Fiedler (2010, p. 377). It is also implied in some sources that change management is part of, or subservient to, project management. Cowan-Sahadath (2010) also describes the “. . . need for a proven, mature project management methodology that included effective



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However, it was also considered important to elicit respondents’ views of the relationship between the disci-plines. If there was conflict related to disciplinary ownership of the manage-ment or organizational change proj-ects, the authors considered that one area where this would manifest would be in terms of practitioners’ views of the reporting relationships between the disciplines. The second set of questions (Q3–6) directly delved into this topic, asking respondents for their opinions about the kinds of reporting relation-ships that should exist between project management and change management, reflecting the four types of relationships identified in the literature review. Cor-relation between these six questions and a selection of other questions were investigated, and a list of the questions relevant to this research is included at the end of this paper. Where two vari-ables were both ordinal, Spearman’s Correlation was used; where two vari-ables were nominal, or for the com-bination of a nominal with an ordinal variable, Fisher’s Exact Test was used.

DemographicsThe demographics of the respondents are as follows. The respondents were 66.2% male, with a median age of 45 years (9.2 year standard deviation). The majority (82.9%) identified Australia as the country where they gained most of their experience. This is consistent with the collection method given the loca-tion of the participating industry asso-ciations, although there were another 15 countries represented in the sample. The breakdown of industries is depicted in Figure 1 and can be seen to cover a broad cross-section of the industries in which these disciplines are practiced.

Survey participants were asked: “How do you primarily profession-ally identify yourself?” and were given selection of the following options: “Project manager (including junior, senior, committee, and sponsor posi-tions)”; change manager (including junior, senior, committee, and sponsor

perspective, which is most commonly assumed when using quantitative tech-niques. Interpretivism acknowledges that “. . . interpretation plays key, unac-knowledged roles in how quantita-tive methods are actually employed” (Westerman, 2006, p. 189). An inter-pretivist perspective was considered appropriate as this is research into the perspectives of the respondents on project management and change man-agement, and these perspectives will have been affected by a wide variety of diffuse factors, including their individ-ual interpretation of questions, their experiences working in these fields, their mood at the time of response, and other factors that the research-ers have no access to except through the survey questions asked. Interpre-tation of survey results has attempted to understand respondents’ views of the relationships between these fields, while it acknowledges that the find-ings are providing, not a description of an objective reality, but a constructed account of survey answers for which alternative interpretations may also be valid.

The survey questions were devel-oped in response to the literature review, starting with the assumption that there may be some conflict between prac-titioners of these disciplines, as other authors have identified. In response, two sets of questions were developed to help understand practitioners’ perspec-tives about the relationship between project management and change management. First, it was considered important to understand the different organizational levels at which practi-tioners of these disciplines work. The first set of questions (Q1–2) related to participants views of the levels at which project managers and change manag-ers should operate within an organiza-tion. These two questions treat project management and change management separately, allowing for independent classification. A full list of questions relevant to this research is provided in Appendix 1.

similarities in the project manager and change manager roles (Crawford, 2011, p. 7). One interpretation is that the roles may be separated by the project stages that project managers and change man-agers work on. For example, Ainscough, Neailey, and Tennant (2003, p. 425) note that change management may help with practice deployment in assistance to project management, suggesting that change management may be used as an antecedent to project management.

Review of the literature does not reveal a significant body of knowledge about how these roles relate in prac-tice. Where some insight is to be found, it is often only to be found through implication in what other authors have discussed, either through reference to the different stages to which project managers and change managers con-tribute, or an author’s perspective on how the author’s chosen field relates to another discipline. However, a per-spective that gives preference to the familiar and local, and views the other as lesser or subservient, suggests aca-demic imperialism of the sort that Reed (1985) describes, and so should be viewed with some caution. As such, it was considered significant to conduct a direct enquiry into practitioner per-spectives of these roles, to understand how practitioners feel the disciplines should relate.

MethodologyThe data for this research were collected using an online survey. Respondent anonymity was maintained. Three local industry association chapters assisted in survey distribution. A link to the survey was distributed through the research-ers’ professional networks and was also posted on the discussion boards of social media sites. This resulted in a convenience sample of 455 respondents. Data analysis was conducted using SPSS 19, statistical analysis software.

Although this is quantitative research, the authors have used an interpretivist perspective for analy-sis. This is in contrast to the positivist



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At What Level Should Change Managers Work?Respondents were also asked about their view of the level at which change managers should operate. The second dependent variable was:

Q2: “In general, at what level of your organization should change manage-ment personnel mainly operate?”

It was possible to identify a correla-tion (p < 0.01) using Fisher’s Exact Test between Q2 and the question: “How do you primarily professionally iden-tify yourself?” Response frequencies are provided in Table 3.

From the results in Table 3 it is appar-ent that change management is generally regarded as a strategic activity. This result is strongest among those who identified themselves as change managers. This group showed a clear tendency to regard change management as an activity that should operate at the strategic levels of an organization, not the tactical levels.

Taking Q1 and Q2 together, the perception that project management should be at the operational levels of an organization and that change manage-ment should be at the strategic levels of an organization may at first glance suggest that project managers should report to change managers. However,

the role of project manager a formal position title in the organization you currently work for?” and “The position of project manager has clear roles and responsibilities in my organization.” Cross-tabulated response frequen-cies are provided in Table 2. In these tables it is apparent that when the role of project manager was a formal position in the respondents’ organi-zation, and when project managers enjoyed clearly defined roles, respon-dents were particularly likely to regard project management as an operational activity.

Based on these correlations, it appears that the perception that proj-ect management should be used at an operational level of an organization is linked to acknowledgment within the organization and role clarity. It should be remembered that identification of a correlation does not indicate that one factor has caused a particular result; however, one interpretation is that an increase in the formalization and stan-dardization of the role of project man-agement in an organization has led to an increase in the consistency of responses. Of course, this interpretation assumes that the roles are consistent between organizations; an assumption that is neither confirmed nor denied by this research.

Respondents’ knowledge of project management and change management is depicted in Figure 2, as represented by these constructed variables. Respon-dents clearly considered that they were more knowledgeable about project management than change manage-ment, and this is consistent with the result above about the proportion of respondents with no education or train-ing in change management. It is also consistent with how the respondents nominated their professional identifi-cation and should be considered when interpreting the results presented as follows.

At What Level Should Project Managers Work?The first set of questions examines respondents’ views of the organiza-tional level at which project managers and change managers should operate. The first dependent variable was:

Q1: “In general, at what level of your organization should project manage-ment personnel mainly operate?”

Most responded that project man-agers should work at an operational level, rather than at strategic or tactical levels. A correlation was detected using Fisher’s Exact Test (p < 0.05) between answers to Q1 and the questions: “Is

Question 1: In general at what level of your organization should project management personnel mainly operate?

Strategic Operational Tactical Don’t Know Total

The position of project manager

has clear roles and responsibili-

ties in my organization.

Completely Agree 42 69 19 2 132

Agree 25 71 22 1 119

Somewhat Agree 9 28 10 1 48

Neither Agree nor Disagree 2 2 3 0 7

Somewhat Agree 6 5 4 1 16

Disagree 4 4 2 1 11

Completely Disagree 1 0 0 0 1

Is the role of project manager a

formal position title in the orga-

nization you currently work for?

Yes 85 168 54 4 311

No 5 13 6 1 25

Don’t Know 0 0 0 1 1

Table 2: Response frequencies for Question 1 and project management role clarity and position titles.


(Refer to Appendix 2) shows that lower levels of education or training in change management were correlated with a higher tendency to respond that change managers should report to project managers.

Similarly, a correlation (p < 0.01, coefficient = 0.163) was found between Q3 responses and respondents’ knowl-edge of change management. Again, respondents who identified themselves as having a lower knowledge of change management, tended to state that change managers should report to proj-ect managers (Table 5). An implication of these two correlations is that people who are less aware of change management are more likely to assume it should take on a subservient role, and are less likely to understand the potential it holds in managing organizational change.

Analysis revealed a weak correlation (p < 0.05, coefficient = −0.134) between answers to Q3 and respondents’ proj-ect management knowledge using Spearman’s Correlation (see Table 5). Respondents who identified themselves as having a greater knowledge of proj-ect management also tended to think that change managers should report to project managers. One interpreta-tion of these results is that core texts in project management may encourage a view that change managers should report to project managers; however, this was not found in our review of the literature. An alternative interpretation is that this is more generally reflective of a project management tendency to regard the project manager as the cen-tral point of accountability and control in a project, and that people who had a higher knowledge of project manage-ment knowledge were stronger adher-ents to this perspective.

A selection of organizational indica-tors was also correlated with responses to Q3. There was a weak correlation (p < 0.05, coefficient = 0.129) between Q3 and the clarity of the role of project manager, using Spearman’s Correlation (Refer to Appendix 3). Those working in organizations where project managers

this statement, but this was not consis-tently the case. When responses to this question were categorized into three groups: “agree,” “disagree,” and “ neither agree nor disagree” a correlation (p < 0.01) was apparent to responses to the question: “How do you primarily professionally identify yourself?” using Fisher’s exact test (Table 4).

Survey respondents who identi-fied themselves as a project manager were particularly likely to agree with the statement that change managers should report to project managers, whereas the change managers most frequently dis-agreed with the statement. If taken in isolation, and assuming that both of these disciplines are vying to assert a professional boundary around the man-agement of organizational change, this finding would be uncontentious.

A weak correlation (p < 0.01, coef-ficient = 0.166) was also apparent between responses to Q3 and respon-dents education and training in change management using Spearman’s Corre-lation. Review of the cross-tabulated frequencies of responses to Q3 and respondents’ education and training

the relationship between these disci-plines became more complex on analy-ses of questions that specifically delve into practitioner perspectives of what this reporting relationship should be.

Should Change Managers Report to Project Managers?If the responses to Q1 and Q2 suggest a position in which change managers are on a higher organizational level than project managers, it would be reasonable to assume that survey participants would also think that those in a higher organiza-tional position should supervise the work of those at lower organizational levels.

This was examined through responses to Q3–6, each of which will be treated separately. To see whether this assump-tion could be rejected, respondents were asked about their agreement with the fol-lowing statement on a seven-point scale.

Q3: “Change managers should report to project managers on all projects where change managers are required.”

It would be reasonable to assume that participants would disagree with

How do you primarily professionally identify yourself?

Project Manager Change Manager

Question 2: In general, at what

level of your organization should

change management personnel

mainly operate?

Strategic 105 (42.5)% 39 (61.9)%

Operational 85 (34.4)% 21 (33.3)%

Tactical 39 (15.8)% 1 (1.6)%

Don’t Know 18 (7.3)% 2 (3.2)%

Total 247 (100)% 63 (100)%

Table 3: Response frequencies for Question 2 and occupation.



Question 3: Change managers

should report to project managers

on all projects where change

managers are required

Agree 169 (66.0)% 14 (22.2)%

Neither 37 (14.5)% 10 (15.9)%

Disagree 50 (19.5)% 39 (61.9)%

Total 256 (100)% 63 (100)%




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perspective on the relationship between disciplines. Abbott (1988) considers that the move toward acknowledgment of a discipline’s professional bound-ary needs to be understood in terms of the “. . . complex facts of jurisdictional competition and inter-professional rela-tionships” (Abbott, 1988, p. 23). The process of claiming “. . . control of work in the workplace, before the public, and within the state [is] . . . determined by the ensemble of this melee of interac-tion” (Abbott, 2001, p. 12168); a melee that may become more complex if the different disciplines vying for control of an area of work are not sharing a com-mon meaning.

The differences between project management and change management hint at disagreement not only about the discipline that should be accountable for managing change, but also about how changes to organizations should be managed. This is not surprising, given that although some parts of the lit-erature may be converging, the early development of these disciplines was grounded in distinct literatures. Fun-damental concepts within the disci-pline of project management include unambiguous definition of single points of accountability for activities within a work breakdown structure. Despite many project managers working in envi-ronments typified by diffuse networks of influence and decision making, it is typically taken for granted that the proj-ect manager will assume responsibility for the success or failure of the proj-ect. When the roles of project manager and change manager are contrasted, a greater tendency for project managers to use a control agenda has been identi-fied (Crawford, 2011, p. 4), and a strong focus on structure is also apparent within key texts in the field (e.g., PMI, 2013b; OGC, 2009). Project manage-ment research has also suggested that successful management of organiza-tional change projects is associated with “. . . specific lines of authority linking the senior team to the operational team” (Boddy & Macbeth, 2000, p. 300).

particular, a lack of familiarity with a discipline was found to be associated with the assumption that the discipline should be of a lower status. The way these disciplines were perceived was found to not only be contingent upon the organizational setting, but also the way in which practitioners have been shaped by their education, training, and professional affiliation.

The different opinions on report-ing relationships between respondents who identified themselves as project managers or change managers suggests a difference in perspective that is sig-nificantly more complex than can be accounted for by a basic imperialist

been contingent upon a number of factors. Identifying the role with a formal position title and clearly defined roles and responsibilities within an organiza-tion were generally associated with the perception that one discipline should have managerial responsibility over the other discipline, whereas a lack of these factors was associated with a perception of subservience. Formalization of the position appears to raise its perceived status within an organization. In addi-tion, respondents’ education, knowl-edge of a discipline, and professional orientation were also factors that were frequently correlated with respondents’ perceptions of a discipline’s status. In



Question 6: Change and proj-

ect management personnel

should work together in part-

nership with joint responsibil-

ity for project success. There

is no need for direct reporting

between these roles

Completely Agree 50 (19.5)% 25 (39.7)%

Agree 72 (28.1)% 18 (28.6)%

Somewhat Agree 40 (15.6)% 10 (15.9)%

Neither Agree nor

Disagree24 (9.4)% 1 (1.6)%

Somewhat

Disagree15 (5.9)% 3 (4.8)%

Disagree 33 (12.9)% 4 (6.3)%

Completely

Disagree22 (8.6)% 2 (3.2)%

Total 256 (100)% 63 (100)%


140

120

100

80

60

40

20

0Completely

agreeSomewhat

agreeSomewhatdisagree

Completelydisagree

DisagreeNeitheragree nordisagree

Agree

Q3: change manager reporting to project manager Q5: Seperate scopeQ6: Joint scopeQ4: project manager reporting to change manager

Figure 3: Frequencies of responses to Questions 3 through 6.



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cultures, the way forward may be to focus on formalizing the role of the change manager, and focus on devel-oping awareness of what change man-agement is, and the benefits that it could provide within an organization. The publication of Managing Change in Organizations: A Practice Guide (PMI, 2013a) can be considered to be a step toward developing a broader awareness of change management in the project management community. However, the authors suggest that this work should be revisited with a view toward examining the role of the change manager, rather than treating change management as a disembod-ied skillset, enacted by unspecified individuals. For project managers, the implications of this research suggest a need to find some balance between the need for control and direction that comes with a single point of account-ability, and allowing change managers to have a distinct area of responsibil-ity that they can deliver in their own way, while maintaining coordination between the project management and change management aspects of organi-zational change projects.

ConclusionTo identify whether project manag-ers and change managers hold differ-ent views about how these two roles should formally relate in practice, and then understand whether this could contribute to any conflict between the disciplines, this research has studied the different ways in which practitio-ners holding these roles view possible reporting relationships between project management and change management. The responses show that although the project managers thought that change managers should be reporting to them, the change managers saw the rela-tionship as one of joint responsibility without a direct reporting relationship. The contrast between these perspec-tives hints at broader differences in the worldviews through which practitioners of these disciplines interpret the world,

suggesting much larger differences in opinion about how organizational change projects should be managed, and differences in the ways in which fundamental questions of manage-ment and engagement are understood, including what success is and the ways in which it should be achieved. These issues extend beyond the scope of this research.

An association was also apparent between the views that change manag-ers should report to project managers and lower levels of formalization and organizational support for change man-agement, and lower levels of knowl-edge, education, and training in change management. These results suggest that change managers who are facing enduring conflict about reporting rela-tionships should focus on increasing organizational understanding about change management, and developing structures within their organizations that support change management, such as a Center of Excellence or a change management office. It is unclear from these results whether the same would be true for project managers faced with these difficulties. These findings also suggest that for project managers who are sharing the delivery of organiza-tional change projects with change managers, there will be a need to main-tain a careful balance between the need for central coordination and control, while allowing change managers the space and autonomy to deliver their remit.

Project management was also found to be viewed primarily as an operational activity, whereas change management was generally regarded as a strategic activity. Review of the data suggests that this represents less an indicator of the relative levels of an organization at which these disciplines should work, than a description of the kinds of roles that these disciplines play in deliver-ing organizational changes. The exact nature of these activities or the stages of an organizational change that project managers and change managers should

and do engage with, remains a topic for future research.

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Blake, I. (2009). Project managing change: Practical tools and techniques to make change happen. New York, NY: Financial Times/Prentice Hall.

Boddy, D., & Macbeth, D. (2000). Prescriptions for managing change: A survey of their effects in projects to implement collaborative working between organisations. International Journal of Project Management, 18, 297–306.

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Clarke, A. (1999). A practical use of key success factors to improve the effectiveness of project management. International Journal of Project Management, 17, 139–145.

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Winch, G., Meunier, M., Head, J., & Russ, K. (2012). Projects as the content and process of change: The case of the health safety laboratory. International Journal of Project Management, 20, 141–152.

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Julien Pollack started working in project management in the Australian public sector delivering organizational change programs, where he completed an Action Research PhD on the ways in which systems thinking could be used with project management

to address complex projects. This research won national and international awards. After completing his PhD, Julien managed telecom-munications and heavy engineering projects before joining the University of Technology, Sydney in 2011 to teach in the Master of Project Management program. Julien has co-authored one book on project manage-ment, Tools for Complex Projects with Kaye Remington, and his numerous articles on a variety of aspects of project management have been published in the leading project management research journals and presented at project management conferences. He can be contacted at [email protected].

Chivonne Algeo, PhD, is an academic and researcher in the field of project manage-ment and has more than 20 years of experience delivering a variety of projects for major financial, insurance, and health organizations. In her role as Course Director for the postgraduate project management program at the University of Technology,

Sydney, Australia, Chivonne develops and delivers a range of subjects for students to advance their project management capability.

Chivonne’s research focuses on knowl-edge acquisition and exchange; environ-mental influences and the impact of project delivery; and the use of individual and group reflections to improve project outcomes; she also focuses on the management of project knowledge and how multiple and conflicting demands are managed in projects.

Chivonne is a member of the Project Management Institute (PMI) where she has worked on initiatives to promote educa-tion and research. She is also a Fellow and the Chairman of the Australian Institute of Project Management’s (AIPM) Council of Fellows. Chivonne has significant board experience in her roles as chair, company secretary, and director for a variety of organizations. She can be contacted at [email protected].


Primary questions• Q1: In general, at what level of your organization should project management personnel mainly operate?• Q2: In general, at what level of your organization should change management personnel mainly operate? In general, how much you agree with the following statements?• Q3: Change managers should report to project managers on all projects where change managers are required• Q4: Project managers should report to change managers on all projects where change managers are required• Q5: Change management and project management are independent roles and responsible for separate scopes of work. There is

no need for direct reporting between these roles• Q6: Change and project management personnel should work together in partnership with joint responsibility for project success.

There is no need for direct reporting between these rolesAncillary questions• In which industry did you primarily gain your experience?• How do you primarily professionally identify yourself?• For how many years have you identified yourself in this way?• What is your highest level of project management training or qualification?• What is your highest level of change management training or qualification?• How familiar are you with the role of a project manager?• How familiar are you with the PMBOK® Guide (PMI, 2008)?• How familiar are you with PRINCE2 (OGC, 2002)?• How familiar are you with the Project Management Institute (PMI)?• How familiar are you with the Australian Institute of Project Management (AIPM)?• How familiar are you with the role of a change manager?• How familiar are you with John Kotter’s work (Leading Change and other works)?• How familiar are you with Prosci and ADKAR (http://www.prosci.com)?• How familiar are you with the Change Management Institute?• Is the role of project manager a formal position title in the organization you currently work for?• The position of project manager has clear roles and responsibilities in my organization?• Is the role of change manager a formal position title in the organization you currently work for?• Does your organization have a unit focused on developing change management capability (e.g., CMO or CCME)?

Appendix 1: The Survey Questions Referred to in This Paper



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Appendix 2: Response Frequencies for Question 3 and Change Management Training

Select your highest level of change management qualification or training

No

tra

inin

g

In-h

ou

se o

r u

nc

ert

ifie

d t

rain

ing

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ica

te I

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a

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d D

iplo

ma

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ch

elo

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de

gre

e (

<50

% o

f c

ha

ng

e

ma

na

ge

me

nt

sub

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ts)

Ba

ch

elo

r’s

de

gre

e (

>50

% o

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ha

ng

e

ma

na

ge

me

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sub

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ts)

Gra

du

ate

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ica

te o

r G

rad

ua

te D

iplo

ma

(<

50%

of

ch

an

ge

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me

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(>

50%

of

ch

an

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ma

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ts)

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ste

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de

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e (

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)

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me

nt

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jec

ts)

Tota

l

Question 3: Change

Managers should report

to Project Managers on

all projects where Change

Managers are required

CA 23 23 3 3 0 1 1 1 1 6 0 62

A 31 34 1 3 1 2 1 3 1 2 1 80

SA 10 22 0 0 1 1 0 2 0 5 2 43

NA 20 15 0 1 1 2 0 3 5 3 0 50

SD 3 10 1 1 0 1 0 3 1 3 0 23

D 12 18 2 3 1 3 0 2 2 7 3 53

CD 5 6 0 0 0 2 0 1 2 0 1 17

Total 104 128 7 11 4 12 2 15 12 26 7 328

Appendix 3: Response Frequencies for Question 3 and Project Manager Role Clarity

The position of project manager has clear roles and responsibilities in my organization

CA A SA NA SD D CD Total

Question 3: Change

Managers should report to

Project Managers on all proj-

ects where Change Managers

are required

CA 37 16 7 1 0 1 1 63

A 30 35 11 0 4 2 0 82

SA 13 14 4 3 6 4 0 44

NA 20 20 6 2 1 2 0 51

SD 8 4 7 1 3 1 0 24

D 18 22 11 0 1 1 0 53

CD 6 8 2 0 1 0 0 17

Total 132 119 48 7 16 11 1 334


Appendix 4: Response Frequencies for Question 4 and Industry Sector

Co

mp

lete

ly A

gre

e

Ag

ree

So

me

wh

at

Ag

ree

Ne

ith

er

ag

ree

no

r d

isa

gre

e

So

me

wh

at

Dis

ag

ree

Dis

ag

ree

Co

mp

lete

ly

Dis

ag

ree

Tota

l

Question 4: Project managers should report to change managers on all projects where project managers are required

In w

hich

ind

ustr

y di

d yo

u pr

imar

ily g

ain

your

exp

erie

nce?

Aerospace 0 0 0 0 0 3 1 4

Agriculture/Forestry 1 0 0 0 0 0 0 1

Architecture/Design 0 0 1 1 0 0 2 4

Business Management Services 0 0 1 1 2 4 2 11

Coal/Gas/Oil 0 2 0 0 1 3 1 7

Construction: Commercial/industrial 0 5 3 6 2 3 5 24

Construction: Land development 0 0 0 0 1 0 0 1

Construction: Infrastructure devlopment 0 0 1 1 0 0 0 2

Culture/Arts 0 0 1 0 0 1 0 2

Defense 2 2 3 7 3 9 8 34

Education/Training 0 0 0 0 4 0 0 4

Finance/Insurance 1 2 3 4 6 20 14 50

Government/Public Administration 1 3 1 5 2 15 12 39

Health/Social Services 0 2 1 0 0 3 1 7

IT/Software/Hardware 1 4 4 6 8 27 19 69

Legal 0 0 0 0 0 1 0 1

Manufacturing 0 0 1 1 0 2 2 6

Mining 0 0 0 1 1 0 2 4

Pharmaceutical 0 0 0 0 0 1 0 1

Telecommunications 0 0 1 2 1 10 4 18

Tourism 0 0 1 1 0 0 0 2

Transport 0 0 0 2 1 3 1 7

Utilities 0 1 2 2 0 3 4 12

Other 0 1 2 1 3 7 2 16

Total 7 22 26 41 35 115 80 326

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ABSTRACT ■

We develop a framework to analyze the multi-

level knowledge requirements of complex,

major projects in terms of ambidexterity—the

ability to exploit (refine existing knowledge)

and explore (develop new knowledge). This

is an important theme within the wider lit-

erature, yet practical operationalization meth-

ods for managers and researchers are not

evident. We demonstrate the ambidexterity

view through an illustrative case study of

telecommunications delivery for the London

2012 Olympic Games and show how these

concepts can be used to create an effec-

tive knowledge strategy. We offer a structure

for the analysis of knowledge utilization in

projects.

KEYWORDS: ambidexterity; intellectual

capital; knowledge; case study; Olympics

INTRODUCTION ■

Two central tenets of 21st-century industry are that knowledge-intensive work is critical to modern economies and that, increasingly, organizational objectives are being implemented through projects. Projects, temporary organizations within organizations, are tasked

with undertaking research, developing new products, solving the technology needs of clients, instituting change, and a myriad of other purposes. As of yet, however, there has been minimal guidance on how to conceptualize and develop a knowledge strategy for major projects. In this article, we take a knowledge-based view (Grant, 1996), specifically using an intellectual capital perspective (framing knowledge as comprising human capital, social capital, and organizational capital, which will be detailed shortly). We develop the logic that an ambidextrous approach (deliberately combining both exploitation and exploration) is beneficial, and show what this actually means for managers and researchers in complex working environments. We show how to identify knowledge utilization at multiple levels (specifically, the individual, group, and organization) and present a framework for assessing knowledge strategy that allows key issues to be surfaced, shared, and actively managed. We follow Casselman and Samson (2007, p. 70) as understanding knowledge strategy in terms of “a number of key decisions related to knowledge that provide a context or strategic intent for the firm.” For researchers, it provides a powerful lens on project work, theoretically grounded and with accessible associated methods for analysis.

The article is structured as follows. First, we describe the ‘problem’ of knowledge in projects and review some of the major themes of ambidexter-ity. We develop a framework for capturing the knowledge requirements for a project at multiple organizational levels. We then demonstrate the frame-work, using an illustrative case study and indicating the practical challenges of using it with major projects. We then conclude with recommendations as to its utility for managers in project-based environments.

We start by considering projects in terms of a knowledge problem. Klein and Meckling (1958) looked at the performance of defense technology devel-opment programs and argued that it is impossible to know at the start of a long development process which of numerous design options will lead to the best solution (see Brady, Davies, & Nightingale, 2012, for a detailed discussion).

Ambidexterity and Knowledge Strategy in Major Projects: A Framework and Illustrative Case StudyNeil Turner, Cranfield University School of Management, United KingdomHarvey Maylor, Saïd Business School, University of Oxford, United KingdomLiz Lee-Kelley, Cranfield University School of Management, United KingdomTim Brady, Centre for Research in Innovation Management, Brighton Business School, University of Brighton, United KingdomElmar Kutsch, Cranfield University School of Management, United KingdomStephen Carver, Cranfield University School of Management, United Kingdom

Ambidexterity and Knowledge Strategy in Major Projects


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be separated, with one organizational unit focusing primarily on exploitation (e.g., manufacturing), another on explo-ration (e.g., R&D), with their integration occurring at the senior management level. Contextual ambidexterity (Gibson & Birkinshaw, 2004) relies on the behav-ioral choices made by individuals to demonstrate simultaneously these two aspects as they judge necessary within their work and day-to-day activities. Within contextual ambidexterity there is not necessarily a resource trade-off between exploitation and explora-tion (Cao, Gedajlovic, & Zhang, 2009; Gupta, Smith, & Shalley, 2006; Raisch, Birkinshaw, Probst, & Tushman, 2009), since individuals undertake both as they see fit, which offers the greatest relevance for most project domains.

The literature does not, however, fully account for ambidexterity in more complex forms of organizing, and there is limited guidance on the practical steps managers can take to act ambidex-trously and for researchers to concep-tualize knowledge work in this manner (Turner et al., 2013). Previous studies have identified the manifestation and benefits of organizational ambidexter-ity, yet far less is known about how this can actually be achieved in practice (O’Reilly & Tushman, 2011). The role of the manager is acknowledged as impor-tant (Birkinshaw & Gupta, 2013; Dover & Dierk, 2010; Lubatkin, Simsek, Ling, & Veiga, 2006; Mom, Van den Bosch,& Volberda, 2007, 2009; Nemanich & Vera, 2009), and although the project con-text has been used for research (e.g., Aubry & Lièvre, 2010; Eriksson, 2013; Leybourne & Sainter, 2012; Liu & Leit-ner, 2012), detailed guidance for project managers is not yet evident.

Application to Projects

Major projects are a particular chal-lenge in which the work cannot be structured ‘easily’ for ambidexterity, a clear path to final delivery is rarely evi-dent, and, as discussed, various forms of complexity are present. We consider ambidexterity in this context as the

argued that these can be considered as mutually exclusive if they compete for scarce resources (akin to Klein and Meckling’s two protagonists). An emerging body of work has shown, how-ever, that they can be simultaneously achieved by an ambidextrous organiza-tion (from the Latin, meaning ‘having two right [dominant] hands’). Numer-ous studies have shown the benefits that accrue in organizations that can achieve this state (e.g., He & Wong, 2004; Katila & Ahuja, 2002; Morgan & Berthon, 2008), and it has become a major theme in the literature, as organi-zations struggle to balance the demands of both exploitation and exploration (Birkinshaw & Gupta, 2013; Junni, Sarala, Taras, & Tarba, 2013; O’Reilly & Tushman, 2013; Turner, Swart, & Maylor, 2013). We argue that the project management context is an ideal one in which to study this because it necessar-ily involves blending the rigor of project management principles with the prac-tical problem-solving and innovation required to execute real-world projects, which are all, to some degree, unique (Turner & Lee-Kelley, 2013).

Forms of Ambidexterity

The major conceptions of ambidexter-ity have been at the organization level (Junni, et al., 2013; Turner, et al., 2013), rather than focused primarily on the knowledge aspects, and three dominant forms are described in the literature. Temporal ambidexterity (Tushman & O’Reilly, 1996) is when exploitation and exploration are separated in time, with the organization moving from one pre-vailing approach to the other. Examples could include an exploratory phase of new product development, then an exploitative one in which the organi-zation rolls out their new products to the market in a controlled manner. Alternatively, a period of exploitation in a declining market may need to be replaced with an exploratory period to identify new areas of growth. Structural ambidexterity (O’Reilly & Tushman, 2004) requires that these two modes

the divergence of opinions. This article develops a framework that enables such a description. Following, we describe the underlying theoretical basis and use an example case to illustrate its utility before offering recommendations for its use by managers.

We argue that there is a need to understand project management as covering the well-established ‘planning and control’ role, yet also incorporat-ing the knowledge-generation aspect, which rarely receives such acknowledg-ment. This seems especially relevant in complex projects (Geraldi, Maylor, & Williams, 2011) and we draw on the work of Maylor, Turner, and Murray-Webster (2013), who identify three forms of complexity: structural (pri-marily size, pace, technical challenge, and interconnectedness); socio-polit-ical (stakeholders, politics, power); and emergent (unexpected change) complexities. These forms of complex-ity can require revisions to the origi-nal plan and mid-project adaptations. We therefore argue that these types of projects are vehicles for learning and broadly favor the ‘skeptic’ approach. The wider knowledge and learning liter-ature offers valuable insights, yet these are not strongly evident in the modern lexicon of the industry. We draw on the ambidexterity literature as an appropri-ate way to think about knowledge in projects. We summarize this thinking, and introduce a structured approach to identify the challenges faced by the project in knowledge terms. We show what this means in practice through the fieldwork we undertook in the form of an illustrative case (specifically, in the London 2012 Olympic Games) and describe how this can be used both to assess and actively manage knowledge in project work.

Ambidexterity—The Ability Both to Exploit and ExploreMarch (1991) conceived of organiza-tional learning in terms of exploitation (refining existing knowledge) and explo-ration (developing new knowledge); he


recognize as important in their work. It is also an addition to the project learn-ing literature, which acknowledges the challenges of learning in the context of temporary organizational structures (e.g., Brady & Davies, 2004; Cooper, Lyneis, & Bryant, 2002; Dutton, Turner, & Lee-Kelley, 2014; Prencipe & Tell, 2001; Williams, 2003, 2008).

In order to develop the concepts of exploitation and exploration, along with the differentiation between the output and process aspects, into a practical strategy for the use of knowledge, we need to understand and identify orga-nizational knowledge. Davenport and Prusak (1998, p. 5) define this as:

“Knowledge is a fluid mix of framed experience, values, contextual infor-mation, and expert insight that pro-vides a framework for evaluating and incorporating new experiences and information. It originates and is applied in the mind of knowers. In organizations, it often becomes embedded not only in documents or repositories, but also in organiza-tional routines, practices, processes and norms.”

It is important to be able to turn this complicated and relatively abstract con-cept into a more meaningful set of iden-tifiable components and identify the location and nature of different forms of knowledge. To do this, we draw here on the extensive body of work on intel-lectual capital (e.g., Hsu & Wang, 2012; Kang & Snell, 2009; Swart, 2006). This necessarily takes a broad view of what constitutes ‘knowledge’ and identifies three major subcomponents. First, indi-viduals accumulate tacit and explicit knowledge (Polanyi, 1967) and bring

straightforward way to achieve align-ment is potentially valuable.

Project Learning and Knowledge

These are vital questions, central to the development of a knowledge strategy yet do not feature within the ambidexterity debate. The language of exploitation does not yet incorporate this selective choice aspect. Key discussions in other parts of the organizational learning lit-erature have focused on organizational forgetting (e.g., López & Sune, 2013; Schmitt, Borzillo, & Probst, 2012) and organizational unlearning (Hedberg, 1981; Huber, 1991). Tsang and Zahra (2008) review the unlearning literature and find a broad consensus that the term refers to the removal of knowl-edge, and they suggest that the term should be identified in terms of “the discarding of old routines to make way for new ones, if any” (2008, p. 1437). What we advocate here is not neces-sarily, therefore, ‘unlearning.’ Manag-ers should make deliberate choices in terms of knowledge strategy, with conscious decisions about including or excluding certain aspects of technology or process according to the particular circumstance. Neither is this necessarily a ‘renewal’ of resources, so the concept of dynamic capabilities, the reconfigu-ration of resources into new capabili-ties (e.g., Easterby-Smith & Prieto, 2008; Teece, Pisano, & Shuen, 1997), is not really appropriate either. Instead, we return to the ambidexterity concept and identify the managerial choice aspects as those of ‘selective exploitation’ (“What do we choose to re-use or not use?”). We believe this to be a new and valuable aspect within the ambidexter-ity field, and an area project managers

intelligent balancing of exploitation and exploration. This requires careful man-agement, and benefits from an under-standing of the different underlying forms of organizational knowledge. We now show how this can create the basis of an effective project knowledge strat-egy through which particular challenges can be articulated, shared, and actively managed.

Exploitation and exploration are important in terms of both the output (what is done) and the process (how it is done) (Geraldi, Kutsch, & Turner, 2011; Turner & Cochrane, 1993). Pertinent, high-level, questions for managers are provided in Table 1 and bring clarity to the (sometimes obscure) terminol-ogy of ambidexterity. Importantly, these necessitate not only deliberate choices about what to do, but also clear deci-sions about what not to do. This may involve, for instance, re-using an exist-ing technology, or deliberately choos-ing to develop a superior alternative. A ‘one-size-fits-all’ process approach may not be appropriate when differentiating between, for example, a new product development and an internal organiza-tional change project. This is especially important at the beginning phase(s) of the project for two reasons. First, it establishes (as clearly as is practicable) the answers to the questions regarding the re-use of existing knowledge and the requirement to develop new knowl-edge. Second, it allows these answers to be shared among members of the project team so that there is a consis-tent view among participants. We have seen projects in which (legitimate and understandable) differences in opinion among participants have led to conflict-ing approaches within a project, so a

Exploitation Exploration

Output (‘what’) What do we have that we can re-use (or modify or combine?) What do we need to develop?

What do we avoid? (e.g., obsolete technology)

Process (‘how’) What can we take from our ‘standard’ process set? What do we need to do differently?

What do we avoid? (e.g., tailoring)

Table 1: Questions for a project knowledge strategy.



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nal studies of eight major programs in the United Kingdom and across Europe to study how different programs evolve and the issues managers face. Areas of investigation included initia-tion, links with organizational strategy, governance, management of important relationships, capability development, and resourcing. One of the key areas of the study was in the use and genera-tion of knowledge, given the inherent uncertainties of multi-year pieces of work (including a focus on knowledge management systems and processes). Our interest was in how ambidexterity could be accommodated, which repre-sented a rich opportunity for investiga-tion because the work required both the exploitation of the existing expertise within the organization and the neces-sity for exploration given the once-in-a-lifetime challenge of the Olympics in London and the novelty of the imple-mentation. This provided the opportu-nity to examine the case longitudinally to understand the issues and complexi-ties as they unfolded.

We met and interviewed senior BT managers approximately quarterly, with regular communication and an addi-tional seven workshops (which included participation from other companies in the research program to discuss com-mon themes) in total between meetings, as well as key site visits in the run-up to the Games. Our interviews focused

projects (Table 2). Taking a multi-level (individual, group, organizational) approach explicitly breaks the require-ments into identifiable areas that allow focused discussion and identification based on the sub-components of intel-lectual capital.

In order to explain the utility of this framework and demonstrate its practical operationalization, we illus-trate its usefulness via a major case. We observed this case over several years in parallel with our development of the theoretical foundations shown in Tables 1 and 2 and our interpretations aided the development of the model.

Illustrative Case—BT and the London 2012 OlympicsWe investigated the balance between exploitation and exploration in terms of knowledge in one of the most promi-nent technology projects of recent years—the delivery by BT of the tele-coms infrastructure for the London 2012 Olympics. BT is a major com-munications service provider, deliver-ing fixed, mobile, broadband and TV services, and networked IT provision. London won the privilege to host the Games in 2005, allowing seven years to define and implement the technol-ogy. We followed BT’s progress for four years in their preparations for the Olym-pic Games. This was part of a wider research program involving longitudi-

this expertise to their work (‘human capital’); this can be their particular skills, experience, judgment, and so forth. Second, organizations have an extensive range of processes, systems, and data repositories (‘organizational capital’) which they can draw upon in their operations. Finally, a great deal of information is embedded in social relationships and networks. This ‘social capital’ is less identifiable and tangi-ble than the other aspects and conse-quently often appears to receive less attention; yet, we have found that this is frequently the ‘glue’ layer, linking indi-vidual and organizational knowledge to allow complexity to be more eas-ily accommodated. It can enable staff to use their skills effectively within a complex and evolving project environ-ment. The importance of this within the project and operations environment is recognized by Matthews and Marzec (2013). These forms of knowledge drive exploitative and exploratory practices at the individual, social/group, and organizational process levels (Burns & Stalker, 1961; Hansen & von Oetinger, 2001; Tiwana, 2008) and this allows greater granularity of understanding when applied to the project context (Turner & Lee-Kelley, 2013).

We used this knowledge-based per-spective (Grant, 1996) and the associ-ated literature to develop a framework with which to view and understand

Exploitation Exploration

Output Human capital (Individual)—Key (technical) skills. Human capital (Individual)—Innovation, creativity, wide experience to

draw on.

Social capital (Social)—Ability to share that (complex)

knowledge.

Social capital (Social)—Access to wide network of contacts/

stakeholders with diverse experiences.

Organizational capital (Organizational)—Beneficial history,

existing solutions.

Organizational capital (Organizational)—Flexibility to trial and

accommodate new solutions.

Process Human capital (Individual)—Process know-how. Human capital (Individual)—Clear understanding of context and goals;

experience of trade-offs.

Social capital (Social)—Common, shared understanding of

‘the rules’

Social capital (Social)—Clear, socialized (team) understanding of

approach.

Organizational capital (Organizational)—Appropriate

( selectable) ‘mechanistic’ process set.

Organizational capital (Organizational)—Reconfigurable ‘organic’

approach, accepts changes.

Table 2: Framework for a project knowledge strategy.


giving the Organizing Committee (LOCOG, London Organizing Commit-tee of the Olympic Games) confidence in early progress and forcing partici-pants to think through the work thor-oughly (the ‘Optimizer’ approach), even though the documentation produced may have been overkill. The manag-ers realized that their work and the individual event sub-projects were as shown on the right-hand side of Figure 1. The novelty and uncertainty for the participants were recognized from the outset. Some individuals with exten-sive experience from previous Games were brought in (i.e., for the exploita-tion of their human capital), but mostly the dedicated core team of around 60 (mostly chosen for their expertise) was new to the Olympics; they were, to a certain extent, ‘ring-fenced’ from the rest of the organization due to the different operational requirements—time-critical installations and repairs required working processes quite differ-ent from ‘normal’ organizational opera-tions. They were also co-located with other Olympic delivery organizations to aid communication in dealing with interdependencies between different Olympic sub-programs.

SIM cards, 10,000 cable TV outlets, 3,400 miles of internal cabling and 1,800 wireless access points. Provision was four times the network capacity of the Beijing Games. For a national telecoms provider, this involved a certain amount of ‘business-as-usual’ (exploitation), but the context was far from the norm. Specific challenges included the unique difficulties of the Games deployment (some of the venues, such as the mara-thon, were highly transient and only existed for a matter of hours, requir-ing new organizational capital to be developed), and the development of working relationships (social capital) with new organizations and functional structures. This required a more explor-atory approach.

Planning and Preparation

The initial work upon winning the con-tract involved detailed planning for London, taking lessons learned from previous Games, and sending senior staff to Beijing and Vancouver to expe-rience the Games delivery first-hand. This expanded the human capital of those involved and also added to orga-nizational capital. Extensive plans and design documents were developed,

on the unfolding ‘story’ of the program; their changing expectations; and emer-gent issues, incidents, and responses, which enabled us to understand their preparations and then their post-Games reflections in late 2012. Interviews (typi-cally with three to five of the senior managers) were recorded and fully tran-scribed for analysis, and the research team reviewed the data together as part of writing an evolving case study. Our development of Tables 1 and 2 occurred during this time, and we use this case data to populate Table 3.

The Challenge of the Games

Necessarily ‘right-first-time,’ any fail-ure would be apparent to a worldwide audience. The regularity of the sum-mer and winter Games should facilitate learning, but the change of host nation means that incumbent telecoms network providers inevitably face the challenge for the first time. The evolving nature of the technology requirements of every Olympic Games event also means new demands need to be accommodated.

BT’s communications technology infrastructure for the London Games covered 94 locations and included 16,500 fixed telephone lines, 14,000 mobile

Exploitation (Human Capital, Social Capital, Organizational Capital)

Exploration (Human Capital, Social Capital, Organizational Capital)

Output Careful selection of staff. Development of necessary understanding

through key individuals visiting Beijing and Vancouver Games.

Learning through documented material on the intranet site.

Selection and use of current technology and existing installation

capability. Locking down design choice > 1 year out.

Individual and team knowledge accumulation through simulations

and test events.

Coordinated control with other organizations as part of the Olympic

Technology Operations Centre.

Development of location-specific technology and installation plans.

Confidence in technical capability and capacity through extensive

trials.

Process Detailed planning, documented lessons learned from trials and

previous Games, extensive documented material online.

Co-location of key staff to enable more efficient communication and

relationship-building.

Customized context-specific operating procedures when standard

BT procedures were not adequate for the rapid deployment

necessary.

Adaptation to the requirements of working in an Olympic

environment. Localized venue-specific planning. On-the-ground

flexibility and adaptation to immediate issues as required.

Development of key relationships with an evolving network

of internal staff and external stakeholders (including London

Organizing Committee, International Olympic Committee,

broadcasters, venue owners).

Table 3: Examples of ambidexterity in the BT case.



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into the ways of working, since the repository was designed to help bring them ‘up to speed’ swiftly and build their human capital.

From the test events, the detailed planning and governance used for these individual activities was not deemed suitable to scale up to all the parallel venue requirements at the Games, so a more flexible model was adopted. The planning at each of the venues was geared toward a top-level set of milestones and a ‘template’ approach, which covered the aspects that needed to be addressed. The detailed planning was left more to each venue telecoms manager who worked as he or she found most effective in each location. This involved using previous experience (e.g., the test events), along with devel-oping key relationships to ‘get things done,’ which also necessitated follow-ing the structured process and adapt-ing and improvising when necessary, thereby incorporating both exploit-ative and exploratory working. As one senior manager observed, there could be too much emphasis on ‘dashboards,’ thereby losing sight of what was actually being done on the ground. With regard to Figure 1, these sub-projects were not readily amenable to being run purely with an ‘efficiency’ approach; a ‘learn-ing’ slant was also beneficial.

An Ambidextrous Approach

The Games delivery itself was highly successful. The detailed planning in the weeks and months leading up to the Opening Ceremony, along with the combination of test event experience and flexibility in the venue managers meant that the plans were executed and any minor technical issues that arose were accommodated and resolved swiftly. This capability was a result of the knowledge accumulation up to that point with a clear remit to both exploit and explore.

In summary, the work we observed exhibited ambidexterity throughout, both in the preparation phase, where business-as-usual was modified for the

sharing between the multiple delivery partners in various formal cross-organi-zational reviews.

Technical rehearsals were also held to try and break the processes, systems, and people under particularly challeng-ing simulated scenarios; again, these were aimed at developing learning and improving the organizational capital while changes could still be accommo-dated. Importantly, the detailed tech-nology design was finalized with over a year to go until the Games were to begin. Although some benefit was gained from studying the previous implementation, the time between the previous Games and the particular requirements for London meant that much of the details were developed specifically for 2012. Interestingly, newer solutions with which the team became familiar could have been implemented in the final 12 months, but this was a deliberate choice to de-risk the delivery. It is notable that this is an unusual example of selective exploitation because it discouraged the adoption of ‘new’ knowledge at this late stage in order to increase predictability (see Nightingale & Brady, 2011).

Delivery: Control and Flexibility

The simultaneous events during the Olympic and Paralympic Games neces-sitated a peak of expertise at the venues, which far exceeded the numbers of the core team. The staff grew to over 600 just before the Games, and this needed meticulous planning. The prestige of the Games meant that managers could choose from a wide range of volunteers, eager to be associated with such an extraordinary event, and pick the most suitable candidates. It was supported by an extensive knowledge management system. This system was developed as an easily searchable repository of all the information (documents, reports, plans, and other pertinent material) so that users could readily and rapidly access what they required—important when working in such a time-critical envi-ronment. It also significantly aided in inducting and training new members

Knowledge co-evolved with other delivery partners (exploration), as the Games plan and detailed venue requirements were defined and final-ized. Rather than testing the deploy-ment plan for the first time in front of billions of people, a series of full-scale test events were held in the preced-ing year to evaluate the venues and the technology. This included working with other major suppliers co-located in the Technology Operations Cen-tre and also working together at the various venues, allowing significant individual-to-individual, team-to-team and organization-to-organization rela-tionship-building and knowledge-sharing (building human capital, social capital, and organizational capital). These were successful, and detailed lessons-learned activities led to mul-tiple incremental improvements (the ‘Skeptic’ approach). This involved both exploitation in terms of refinement and also exploratory problem-solving. In addition to proving the technical and organizational preparedness, these test events gave the staff invaluable expe-rience of the real operating environ-ment as a precursor to ‘Games-Time.’ It gave those supervising the activities at each venue an understanding of the role not only of the technology operation, but also the stakeholder management required under such hectic conditions, along with an appreciation of the level of flexibility necessary to accommo-date any issues that could arise dur-ing the event. Indeed, venue telecoms managers were chosen based on their ability to negotiate these requirements successfully. The events helped build intra- and inter-organizational work-ing relationships in preparation for the summer of 2012. This testing was both exploitative (using previous knowl-edge and processes) and exploratory (identifying hitherto unknown issues, problem-solving, and developing new context-specific knowledge for this par-ticularly novel situation). This exploit-ative and exploratory learning was not only company-specific but there was


knowledge refinement and generation. Striving to separate these aspects is not necessarily helpful, but the structured approach identifies the key issues.

Several generations have passed since Mr. Optimizer and Mr. Skep-tic. Today’s project manager inhabits, arguably, an even more complex, ever-changing, world. This article provides managers and researchers with a frame-work (developed as Tables 1 and 2) to understand better the knowledge and learning requirements using the lens of ambidexterity. We have trialed this with managers in a wide range of public and private sector organizations (including finance, pharmaceuticals, healthcare, manufacturing, retail, IT services, trans-port infrastructure, power distribution, defense, telecoms, and the UK govern-ment). Three focused questions stimu-late valuable discussions:

• What can we re-use from before? • What do we need to develop or do

differently?• What should we avoid or stop doing for

this work?

Applying these questions to both the product (‘what’) and process (‘how’), and answering these at the individual, social, and organizational levels can be powerful in generating fresh and rich insight into the nature of a piece of work. Managers trying this exercise report that its use revealed far more about their projects than they anticipated, and this is the power of the technique. Although straightfor-ward, the multi-level ambidexterity approach demands careful thought and reflection.

We operationalize the framework in three stages (see Figure 2). First, members of the management or project team fill in the framework individually (see Table 2) to address the questions in Table 1, considering the whole project or an agreed, bounded, phase of it. Sec-ond, they share their analyses to com-pare perspectives (i.e., the framework is a template to frame the conversation).

with other organizations to ensure the overall objectives for the Games were achieved.

As we identified with the simple continuum of Figure 1, managers of projects recognize that, to a greater or lesser extent, there will always be uncer-tainties in their work. The future events in a complex project are not fully pre-dictable, so appropriate responses to unfolding situations and context-spe-cific problem-solving will be necessary. Generating new knowledge is required as part of their work, yet this is difficult to articulate systematically and mean-ingfully. The language of ambidexterity is useful for surfacing the exploitative and exploratory needs of the project, but this needs a structured approach to gain a shared understanding. By looking at the output and process aspects at the individual, group/social, and organiza-tional knowledge levels, we have devel-oped a simple yet effective framework to perform this analysis, including identi-fying what not to incorporate.

We derived these ideas from review-ing the pertinent literature and develop-ing the framework, which we applied to our study of the London 2012 Olym-pics to illustrate its utilization. Here we see that knowledge use and refinement (using existing expertise—exploitation) and knowledge generation (problem-solving, developing new solutions—exploration) are evident (i.e., the work incorporates ambidexterity). We can understand this at the individual, group, and organizational levels, allowing a way of classifying the necessarily com-plex and ‘messy’ reality of managers in such an environment. Classification of activities as ‘only’ one of the three levels, however, is not always possible, nor is an explicit distinction between exploitation and exploration (in line with Turner & Lee-Kelley, 2013). An example would be BT venue managers gaining experience at test events—this is not only an individual experience but is also intertwined with relation-ship building to develop the capability to deliver as a group, and covers both

highly unusual context, and in the deliv-ery of the Games themselves, where the planning and detailed preparation were augmented with the necessary reactive flexibility. Both phases con-tained considerable complexity not suited to ‘simple’ analysis. High-level examples from the BT case are pro-vided in the framework documented in Table 3, bringing together the concepts from Tables 1 and 2. These were identi-fied over the course of our study and serve to highlight how ambidexterity can be understood in practical terms using a knowledge lens. The range of aspects incorporated as ‘knowledge’ indicates the breadth of coverage and highlights key issues for both manag-ers and researchers, and how they can be considered in terms of exploitation and exploration. It should be noted that the practical population of such a table is not necessarily as clear-cut as we might like. The delineation between the elements (forms of intellectual capi-tal, output and process, and exploi-tation/exploration) can be challenging because themes can overlap, and some sections can be far more heavily popu-lated than others. The prevalence of the exploitative and exploratory aspects does, though, highlight both the attain-ment of ambidexterity and its compli-cated nature.

ImplicationsKlein and Meckling’s (1958) archetypal ‘Skeptical’ and ‘Optimizing’ approaches are still relevant as thought experiments for managers, but current theorizations allow a more detailed conception of the nature of knowledge and learn-ing requirements in major projects. The Olympics case does not fall neatly into either category, because the ini-tial, detailed plan (with an immovable end date) was augmented with new knowledge as part of its execution. The BT managers recognized that they were operating on the right-hand side of Fig-ure 1; to be effective in their delivery, they had to coordinate ongoing learning not only within their own teams but also


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exploitation and exploration. Managing this can provide a path to both indi-vidual and organizational advantage, and a way of treading that fine bal-ance to get the benefits of both skepti-cism and optimization. For researchers, this article has demonstrated the kinds of insights that such a theoretically grounded approach can provide.

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industry. His current research interests center on organizational learning in the context of complex projects and pro-grams (in which he obtained his PhD), with a focus on how managerial practices and organizational strategic choices can improve delivery performance. He can be contacted at [email protected]

Harvey Maylor is an Associate Fellow at Saïd Business School, University of Oxford, United Kingdom and a Visiting Fellow at Cranfield University, United Kingdom. For the past 25 years, he has worked as a researcher, writer, lecturer, and consultant in program and project management. He is the author of five management books, including the fourth edition of Project Management, Europe’s bestselling text on the subject, and more than 50 academic articles. His research interests are in the fields of management of complexity, organizational project competence, the (non) adoption of promising practices, and how organizations can gain competitive advantage from their program and project capabilities. He can be contacted at [email protected]

Liz Lee-Kelley is a Senior Lecturer at Cranfield University, United Kingdom. She has managed a range of projects, including coordinating mine clearance of the British sector in Kuwait; developing specially designed mobile laundry units for the Saudi Ministry of Defense; oversee-ing design, construction, and installation of an under-car recognition system for the Channel Tunnel; and overseeing design and

construction of mini remote vehicles for nuclear power plant decommissioning in the United States. Her research interest is in understanding the human dimensions of projects and programs. Having recently stepped down from her Course Director’s role, Liz is now Director of the International Centre for Programme Management at Cranfield’s School of Management, United Kingdom. She can be contacted at [email protected]

Tim Brady is Professor of Innovation in the Centre for Research in Innovation Management at Brighton Business School, University of Brighton and Visiting Professor in the Department of Industrial Engineering Management at the University of Oulu in Finland. His current research interests include the development of new business models for infrastructure, the management of complex projects and pro-grams, and learning and capability develop-ment in project-based business. He was a member of the EPSRC-funded Rethinking Project Management network, and Deputy Director of the ESRC funded Complex Product Systems (CoPS) Innovation Centre. He has published in management journals, including Sloan Management Review, Organization Studies, Industrial and Corporate Change, Research Policy, R&D Management, and Industrial Marketing Management and in project manage-ment journals including the International Journal of Project Management and The International Journal of Managing Projects in Business. He can be contacted at [email protected]

In order to raise enthusiasm for his expertise in managing risk and uncertainty, Elmar Kutsch engages widely with industry and advocates of project man-agement worldwide, including orga-nizations such as the Association for Project Management (APM) and Project Management Institute (PMI) to discuss the paradox of traditional risk management and essential behavioral capabilities for managing the unexpected. Over the past few years Elmar has become involved in the development of graduate programs and customized executive development, providing intuitive and deliverable-based learning methods. He is a visiting professor at IÉSEG (France) and is also associated with Umeå University (Sweden) as a guest researcher and publishes widely on the aspects of risk management, resilience, and mindfulness. He can be contacted at [email protected]

Stephen Carver is a Lecturer at Cranfield University School of Management, United Kingdom. Before joining the university in 1994, he worked for 16 years in the interna-tional oil business starting as an engineer and finally being made head of corporate program strategy reporting directly to the CEO. His current lecturing and research interests center on project/program com-plexity, resilience, and legacy; he is also a consultant to many global organizations ranging from banks to aircraft manufactur-ers. Stephen is an honorary Fellow of the APM and IRM. He can be contacted at [email protected]

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ABSTRACT ■

Projects are expected to bring value to their

constituents. Value management in project

portfolios has centered on the maximiza-

tion of commercial value and identification

of future business prospects. In this study,

the goal is increased understanding of the

identification and assessment of strategic,

non-commercial value in project portfolios.

We map the relevant dimensions of strategic

value and supplement previous frameworks

with the non-commercial aspects. Ecological,

societal, and learning values have only been

studied conceptually and qualitatively in ear-

lier research. We propose future research

on these values in quantitative settings and

exploring collective sensemaking as part of

project portfolio value management.

KEYWORDS: value management; project

portfolio management; strategic value

Value Management in Project Portfolios: Identifying and Assessing Strategic ValueMiia Martinsuo, Tampere University of Technology, FinlandCatherine P. Killen, Faculty of Engineering and IT, University of Technology, Sydney (UTS), Australia

INTRODUCTION ■

V alue management has been proposed as an appropriate way to enhance the benefits from projects, particularly when the involve-ment of multiple stakeholders causes complexity through their varied value expectations (Thiry, 2001). Where project-based management

has often been focused on well-defined problems and their rational analysis and solution, Thiry (2001) emphasizes that value management in real life requires sensemaking that is both individual and collective, and, therefore, is an interpretive activity grounded in the social processes of projects. When complexity increases, such as when decisions must be made for portfolios or programs, the need to comprehensively understand value triggers sensemak-ing. The literature highlights the need for guidance on understanding and measuring value—in particular strategic value—in order to manage project portfolio value. Collaborative sensemaking processes are integral to such value management.

Project portfolio management presents a complex set of challenges to decision makers; multiple projects must be configured and managed in a way to enhance the long-term strategic value of the portfolio while consid-ering multiple criteria and interdependencies. However, the literature on project portfolio management has paid scant attention to value manage-ment concepts. Increasingly, the need to widen the definitions of portfolio value is being proposed (Kopmann, 2013; Sanchez & Robert, 2010) and more comprehensive definitions of portfolio value are starting to be applied in empirical research (Teller & Kock, 2013; Voss & Kock, 2013; Killen, Hunt, & Kleinschmidt, 2006, 2008). Although these studies provide an important start in the recognition of the multiple dimensions of strategic value expected from a project portfolio, there is a need to delve deeper and continue to find better ways to comprehensively identify and measure strategic value.

Empirical research on project portfolio management has traditionally focused on measuring three main aspects of the portfolio to evaluate portfolio success levels; value maximization, balance, and strategic alignment, follow-ing Cooper, Edgett, and Kleinschmidt (1999). Most project portfolio manage-ment frameworks, as well as recent research studies, have emphasized the dimension of “strategic alignment” in terms of how the projects collectively fulfill the firm strategy, and “portfolio balance” among the different types of projects as a reflection of strategic priorities, risk management, and exploita-tion of synergies (Martinsuo & Lehtonen, 2007; Killen & Hunt, 2010; Jonas, Kock, & Gemünden, 2013; Teller, Unger, Kock, & Gemünden, 2012; Unger, Kock, Gemünden, & Jonas, 2012). The measure of “value maximization”


2. How should project portfolio man-agement frameworks be modified to comprehensively account for strategic value?

This is a conceptual study, and we aim to develop understanding of the issues based on a review of the previ-ous conceptual and empirical research associated with strategic value in proj-ects and portfolios. We first explore the concept of value in project portfolio management, and how strategic value and particularly its non-commercial dimensions, are incorporated on the single project level. We review project portfolio management studies broadly, to develop comprehensive knowledge on how strategic value has been studied both from commercial and non-com-mercial perspectives. No new empirical data are presented. We have scoured the literature for articles that consider the dimensions of non-economic value in product development projects and public/non-profit projects, as well as in project portfolio management in gen-eral; we then identify relevant areas for further empirical studies.

A number of studies have explored the “value of project management” from an organizational perspective (Eskerod & Riis, 2009; Thomas, Delisle, Jugdev, & Buckle, 2002; Thomas & Mullaly, 2007; Mullaly & Thomas, 2009). These stud-ies look at the “value” of the project management function in terms of orga-nizational performance, and in the role of project management in the develop-ment of value through organizational measures, such as knowledge develop-ment and sharing and employee sat-isfaction. Our approach is somewhat different: we focus on the value that is generated as an outcome of the projects in a firm’s portfolio.

Value in Project Portfolio ManagementValue maximization has been stated as one of the key goals in project portfo-lio management. The starting point for value measurement is often through

mercial and non-commercial organiza-tions stand to benefit from increased understanding of value and improved value management. In particular, it is the measures of strategic value that are important for long-term value creation.

Research Gap and Goals

In this study, we are particularly inter-ested in the non-commercial and long-term dimensions of value and how they are addressed in project portfolio management. Ecological, social, health and safety, societal influence, future business capability building, learning and knowledge development, and other non-financial dimensions of value are emerging as increasingly relevant topics in project-based management (Abidin & Pasquire, 2007; Edum-Fotwe & Price, 2009; Eweje, Turner, & Müller, 2012; Eskerod & Huemann, 2013) and product development management (Eppinger, 2011; Luchs, Brower, & Chitturi, 2012).

We use the term strategic value as the key concept in this study, referring to ecological, social, health and safety, soci-etal influence, learning and knowledge development, and longer term business value. Thus far, few studies have explic-itly covered how strategic value should be assessed when managing a project portfolio. Some studies include synergy (Jonas et al., 2013; Teller et al., 2012; Voss & Kock, 2013), sustainability (Luchs et al., 2012), future preparedness ( Meskendahl, 2010; Martinsuo & Poskela, 2011; Voss & Kock, 2013) and other related aspects as criteria for portfolio selection, balance or success; however, there is little guidance on practical project portfolio coordina-tion and control mechanisms for promot-ing such values further.

In this study, our intent is to increase the understanding of how stra-tegic value is identified and assessed in project portfolio management. We focus on two research questions:

1. How and through what kinds of dimen-sions is strategic value assessed as part of project portfolio management frameworks?

is almost always interpreted in terms of financial and business success (see for example, Cooper et al., 1999; Killen et al., 2008; Voss & Kock, 2013) and value for the customer (Voss & Kock, 2013).

Commercial environments, particu-larly R&D units developing new prod-ucts and services for future business, corporate IT units, and business units engaged in strategic and organizational change, have been the focus of most empirical research on project portfo-lio management. Various private sector industries, ranging from manufacturing and engineering to services, have been covered broadly. Studies have found that in the commercial product and ser-vice development context, a strong or exclusive focus on financial measures is associated with weaker portfolio value creation (Killen et al., 2008; Cooper et al.. 1999); however, recent research indicates that different aspects of value (or business case) are relevant at the different stages of projects (Kopmann, Kock, Killen, & Gemünden, 2014). By focusing only on the financial value of the project portfolio, organizations may not be allocating and developing their resources with a long-term vision and may be missing out on strategic oppor-tunities; hence, there is a need to com-plement financial dimensions of value with other, non-commercial aspects.

To date, project portfolio manage-ment research has largely ignored the non-profit or ‘public good’ project envi-ronments, which are faced with portfo-lio decision-making challenges as they seek to gain the best value from project investments. In these environments, financial value is rarely relevant and there is a pressing need for better value management methods (Killen, Young, & du Plessis, 2012; du Plessis & Killen, 2013). At the same time, project-based management is beginning to encompass ecological, social, health and safety, and other non-commercial aspects of strategic value, at least on the single project level (Abidin & Pasquire, 2007; Eskerod & Huemann, 2013). Both com-

Value Management in Project Portfolios: Identifying and Assessing Strategic Value


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terms of immediate financial measures because many of the expected benefits are intangible and evolve over time.

Strategic Value in ProjectsWinter and Szczepanek (2008) have pro-posed that projects and programs be considered as value-creating processes (instead of merely product-creating pro-cesses), and that researchers should take a more strategic approach to projects to understand their role in business (also Artto, Martinsuo, Dietrich, & Kujala, 2008). In particular, Winter and Szcz-epanek (2008) call attention to how an organization can mobilize its customers to create their own value from the project or program’s various offerings.

While the definition of project value is not universally agreed upon, the tra-ditional measure of value is the return on investment in financial terms. Finan-cial measures are attractive due to the ease of generation and comparison of data; however, it is well recognized that financial benefits are only a part of proj-ect value (e.g., Atkinson, 1999; Shenhar et al., 2001). According to the critical project management view, a notable shift is underway from project manage-ment success measures (the ‘iron trian-gle’ of cost, time, and scope) to project success (project outcomes and benefits realization) (Cicmil, Williams, Thomas, & Hodgson, 2006).

Strategic measures of value that have been investigated at the level of single projects include, for example, incorporation of sustainability princi-ples in projects, assessing the long-term benefits in projects, and consideration of societal and stakeholder influence on projects. Table 2 summarizes some single-project level research that has considered various dimensions of stra-tegic value, particularly emphasizing the non-commercial issues.

Ecological, environmental, and social values are becoming increasingly rel-evant, as part of studies concerning the value of single projects. Currently, many studies look at sustainability or social sustainability holistically, including

priorities; however, only generic terms are used and the nature of the strategies and how strategic value is measured are not discussed.

Portfolio balance, one of the goals for project portfolio management ( Cooper et al., 1999), is also discussed in broad categories in extant research. It is often noted that strategic values gener-ated by projects should be balanced to best reflect the importance and range of strategies. Portfolio balancing may also cover financial, commercial, and tech-nical issues. For example, Teller et al.’s (2012) questionnaire study explored balance in terms of new and old applica-tion areas and balance between oppor-tunities and risks (see also Voss & Kock, 2013). Voss and Kock’s (2013) question-naire included dimensions concerning portfolio balance in technology novelty, different project phases, and continuity of cash flow (see also Jonas et al., 2013).

From a portfolio perspective, strate-gic value has primarily been tackled in the form of long-term business success measures; in particular, Meskendahl (2010, largely referring to Shenhar, Dvir, Levy, & Maltz, 2001) has proposed that immediate portfolio management success must be separated from mea-sures of business success, and business success should cover both economic value and preparing for the future. The conceptual frameworks by Voss (2012), Kopmann (2013), and Mesken-dahl (2010) acknowledge the need for including ‘preparing for the future’ or ‘future preparedness’ as a measure of portfolio value creation. The empiri-cal, questionnaire-based study of Voss and Kock (2013) included the dimen-sion of future preparedness as a mea-sure of project portfolio management. Also, Killen et al. (2006, 2008) look into perceptions of new opportunity devel-opment through the portfolio, particu-larly in terms of new competencies and emergence of new product arenas or markets. Due to the long-term pursuits of project portfolios, Sanchez and Rob-ert (2010) assert that all performance of project portfolios cannot be assessed in

the firm’s objective of long-term profit, return on investment, likelihood of success, or some other strategic goal ( Cooper, Edgett, & Kleinschmidt, 1997a, 1997b). Some later studies by Cooper et al. (e.g., 1999, 2004a, 2004b) have then contrasted the high-performing firms with others in terms of revenues and profits from new products, rate of new product successes, time to market, and meeting of goals, with an intent to identify the best practices typical to high performers. Mikkola (2001) emphasizes that it is quite important for firms to be able to connect their competitive advantages with the customer benefits pursued through new products.

Table 1 summarizes some exam-ples of studies that cover dimensions of value in project portfolio management, primarily in connection with strategic fit and balance. Although the focus is clearly on commercial value, the stud-ies indicate the growing need to include non-commercial and future-oriented issues that may be more difficult to measure.

According to Cooper et al. (1997a, 1997b), a number of project portfolio management indexes and scoring and evaluation methods have been devel-oped with value maximization in mind, but they may fail in the balancing and strategic orientation of the portfolio, unless additional criteria and, for exam-ple, visual balancing tools are used as support (see also Mikkola, 2001). In fact, the majority of recent empirical proj-ect portfolio management research has focused on strategic alignment and bal-ance as the primary dependent variables in models concerning project portfo-lio management success. For example, strategic alignment (or fit) is regularly discussed in terms of aligning projects with strategy (Martinsuo & Lehtonen, 2007; Killen et al., 2008; Jonas et al., 2012; Teller et al., 2012; Unger et al., 2012; Voss & Kock, 2013). These stud-ies consider the projects’ contribution to business strategy at a portfolio level perspective and investigate whether the resource allocation reflects strategic


Authors Methodology and ContextWays of Identifying and

Assessing Strategic Value Findings for This Study

Cooper et al., 1997a,

1997b;

Cooper et al., 1999

Qualitative study of 35 portfolios;

quantitative—data on 205 port-

folios (new product development,

North America).

Investigates the promotion of strategic

value through methods that evaluate

strategic fit and spending breakdown

according to strategic goals.

Although strategic alignment methods cor-

relate to portfolio success measures (includ-

ing reported strategic alignment), specific

measures of strategic value are not included in

this study.

Dietrich and

Lehtonen, 2005

Quantitative study with 288 sur-

vey responses (Finland/Europe).

Successfulness in managing

strategic intentions through alignment of

project objectives with strategy.

Some findings on the linkages between the

projects and strategy formulation (revision of

objectives of ongoing projects with strategy

formulation, revision of portfolio composition

with strategy follow-up).

Killen et al., 2008;

Killen et al., 2006

Quantitative—data on 60 port-

folios (new product and service

development, Australia).

Perception measures of ‘opportunity’

development through the portfolio—how

well it develops existing technological

competencies; brings new technologies

to the organization; leads the organiza-

tion into new product arenas; or enables

the organization to enter new markets.

Findings support the use of strategic alignment

criteria to improve strategic opportunity value.

These value measures correlate with hard

measures of portfolio success, in addition,

organizations that used strategic methods for

portfolio evaluation reported higher perfor-

mance on these opportunity measures.

Kopmann, 2013 Conceptual paper based on

literature.

Project portfolio success comprising of

four sub-constructs: average project

success, future preparedness, strategy

integration, synergy exploitation.

Conceptual model proposes linkages between

the use of value-oriented goals and value-

based metrics and project portfolio success.

Also proposes the link between project portfo-

lio success and firm success.

Kopmann et al.,

2014

Quantitative, dual informant study

of 184 firms (Europe).

Project portfolio success as a second-

order construct with five sub-dimen-

sions: strategy implementation, future

preparedness, portfolio balance, average

project outcome, synergy exploitation.

Business case control (existence, monitoring,

tracking) is positively associated with project

portfolio success; accountability for benefits,

incentives, and external contingencies as

moderators.

Kock, Meskendahl,

and Gemünden,

2013

Quantitative—dual informant

study of 200 firms (Europe)—

building on conceptual paper by

Meskendahl (2010).

Portfolio performance is a second-order

construct that includes four sub-dimen-

sions: average project success, portfolio

balance, strategic fit, synergies.

Antecedents and strategic orientation as a

potential moderator of portfolio performance.

Sanchez and Robert,

2010

Conceptual paper describes

an approach for developing

indicators to measure strategic

performance.

Key performance indicators are devel-

oped based on strategic goals. A method

is outlined and a few examples provided,

such as compliance with environmental

regulation or measuring the rate of

delivery of new capabilities.

Highlights that strategic benefits are usually

intangible, not realized immediately, and can-

not be expressed in an adequate way using

financial measures. In addition, the interde-

pendencies between strategies and measures

must be considered for portfolio management.

Also highlighted is the need for continual

validation of strategic value measures.

Teller and Kock,

2013

Quantitative—dual informant

study of 176 firms (Europe).

Project portfolio success comprising six

sub-constructs: average project success,

average product success, strategic fit,

portfolio balance, preparing for the

future, and economic success.

Using the multi-dimensional construct of

project portfolio success, this study provides

evidence of the positive relationship between

risk management and portfolio success.

Voss and Kock, 2013 Quantitative—dual informant

study of 174 firms (Europe)—

building on conceptual paper by

Voss (2012).

Portfolio success as a second-order

construct includes six sub-dimensions:

overall business success, average project

success, future preparedness, portfolio

balance, strategic fit, use of synergies.

The creation of relationship value between

the customer and the project is found to cor-

relate positively with portfolio success (which

includes financial and strategic dimensions).

Table 1: Examples of studies covering value generally in project portfolio management.



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Authors Methodology and Context Dimensions of Value Findings for This Study

Abidin and

Pasquire,

2007

Qualitative; eleven interviews:

construction projects in the

United Kingdom.

Economic benefit, environmental protection,

social well-being.

Need for understanding the value drivers of

stakeholders, in deciding about sustainability

value. Need to include sustainability as part of

projects’ value management. Process for value

management at the project level.

Atkinson,

1999

Conceptual study from IT/IS

perspective.

The iron triangle (time, cost, quality, or

scope), the information system (reliability,

quality, use), benefit to the organization

(improved efficiency, profits, organizational

learning, reduce waste), and benefits to

stakeholders (social and environmental

impacts, user satisfaction and learning, com-

munity benefits).

Proposes that the iron triangle measures, while

relevant, miss many opportunities and do not

reflect project value sufficiently. Promotes

involvement of stakeholders and team members

with adequate authority and responsibility in the

development of value criteria.

Edum-Fotwe

and Price,

2009

Qualitative; Delphi workshops

in a small team and modeling;

construction projects in the

United Kingdom.

Sustainable development: economic, social,

environmental.

Mapping of categories relevant in assessing

social sustainability.

Eskerod and

Huemann,

2013

Conceptual study, based on stan-

dards and other literature.

Sustainable development: economic, social,

environmental; short-term, medium-term,

long-term.

Stakeholder issues are treated superficially

in project management standards, including

sustainability. Sustainable development is not,

yet, explicitly covered in project management

standards, but it does place new demands on

project-based management.

Eweje et al.,

2012

Quantitative; survey with

69 respondents, oil and gas

industry, geographically spread

broadly.

Strategic value: influence in the society;

health, safety, security and environmental

responsibility; economic profitability; stake-

holder admiration.

Information feed (particularly external) during

project execution contributes significantly to stra-

tegic value. Risk management better positions

the manager to make value-creating decisions.

Managers may easily prioritize efficiency over

other values, such as health and environmental

issues.

Klakegg et al.,

2009;

Klakegg, 2010

Qualitative and quantitative—79

surveys on project governance,

interviews, and 4 cases.

Public and non-profit project governance

explored on many dimensions (social, stra-

tegic, sustainability, legislation, ethics), but

without detail of specific indicators for value

measurement.

Highlights that there are projects where the main

purpose is for environmental benefit, to meet social

needs, or to improve sustainability, and financial

indicators are often not relevant. In such environ-

ments value must be measured in other ways: fund-

ing bodies require accountability and transparent

reporting to demonstrate the value achieved from

each dollar of investment from limited resources.

Luchs et al.,

2012

Quantitative; student sample of

119 and a U.S. sample of 308

respondents; online survey with

decision scenarios in consumer

businesses.

Sustainable as socially and environmentally

responsible (vs. functional performance).

Consumers tend to prioritize the functional

performance of the product over sustainable, but

such priorities depend on the consumers’ values

as well as the product aesthetics.

Martinsuo

et al., 2013

Quantitative; survey with 126

respondents in R&D organiza-

tions in Finland.

Managers’ perceptions of product

development projects’ organizational impacts,

in terms of financial, market, technology

value.

Managers prioritize financial value over market

and technology value. Managers’ assessment

of the projects’ organizational impact decreases

during the project.

Martinsuo

and Poskela,

2011


respondents in R&D portfolios

in Finland.

Competitive potential and future business

potential as measures of strategic opportunity

(new product development front end success).

The use of different criteria is differently

associated with the two measures of strategic

opportunity pursued in the front end of new

product development. Assessment formality is

not significant in the model.

Table 2: Examples of studies on strategic value in single projects. (Continues on the following page)


non-profit sectors face particular pres-sures to find ways to adequately iden-tify, assess, and deliver non-commercial benefits to society (e.g., Klakegg, 2010; Klakegg et al., 2009).

Identifying and Assessing Strategic Value in Project Portfolio ManagementThe above analysis shows that proj-ect portfolio management studies in the mainstream research have primar-ily incorporated future-oriented busi-ness benefits and customer benefits as a long-term oriented view to strategic value. Thiry (2002) argues that multi-project program management may feature more strategic aspects of value and account for strategic objectives, broader methodological approaches, and project interdependencies, but only if fundamental organization-wide and long-term implications are considered. Although many of the ‘best practice’ studies investigate the use of strategic measures during the project portfolio management process (Cooper et al., 1999), these studies do not include measures of the strategic value created through the portfolios.

At the single project level, the review shows that economical, ecological, and social values as well as societal and stakeholder influences are already being discussed. We, therefore, deep-ened our analysis and sought research examples that feature such dimensions at the project portfolio and business levels. We discovered some conceptual and qualitative studies, which include

stakeholder satisfaction to understand-ing project success. Concepts such as strategic opportunity (Martinsuo & Poskela, 2011) and strategic renewal (Poskela & Martinsuo, 2009) have been used as measures of longer term stra-tegic benefit, particularly at the front end of innovation in which new prod-uct concepts are selected for project implementation. Strategic opportunity is defined by Martinsuo and Poskela (2011) as a combination of competi-tive potential (creation of competitive advantage, offering unique features, and customer satisfaction) and future busi-ness potential (access to new markets, creation of new technical, and market know-how). Martinsuo, Suomala, and Kanniainen (2013) studied managers’ perceptions of organizational impacts as part of R&D project evaluations and discovered that managers’ assessments at the front end are strongly linked with their assessments after project comple-tion, even though there is a slight reduc-tion in criterion ratings.

Societal and stakeholder influence measures demonstrate that many proj-ects aim for a positive impact on the public and society, in addition to pro-viding benefits for the firms and their customers. Some of the environmen-tally oriented studies also emphasize societal and stakeholder issues (Abidin & Pasquire, 2007; Eskerod & Huemann, 2013) in the sense that stakeholders communicate their ecological needs and interests and thereby represent the institutional and societal goals for projects. Projects in the public and

ecological, social, health, and safety values together (Edum-Fotwe & Price, 2009; Klakegg, 2010; Klakegg, Williams, & Magnussen, 2009; Eskerod & Hue-mann, 2013). Eppinger (2011) pointed out that the practice of including envi-ronmental sustainability into product designs is “largely in the dark ages” and that product design practices must evolve more toward design for envi-ronment. In a review of project man-agement standards using a stakeholder and sustainability lens, Eskerod and Huemann (2013) noted that sustain-ability is not sufficiently covered in the practices and standards that guide project-based management. To feature ecological issues as part of the project, research has suggested that the value drivers of different stakeholders must be mapped and understood (Abidin & Pasquire, 2007), and that the various dimensions of sustainability must be mapped thoroughly to include their relevant components as part of each project (Edum-Fotwe & Price, 2009). Eweje et al. (2012), however, note that managers easily prioritize financial and efficiency issues over those concerning environmental and social issues.

Long-term business benefits are increasingly considered as factors to be pursued and assessed in project decision making. Shenhar et al. (2001) have included customer satisfaction, organizational benefits, and prepar-ing for the future among the success criteria in projects. Similarly, Atkinson (1999) emphasizes the importance of measuring organizational benefits and

Authors Methodology and Context Dimensions of Value Findings for This Study

Poskela and

Martinsuo,

2009


managers in R&D organizations

in Finland.

Strategic renewal as the measure of future

orientation (new product development front

end success).

Input control and the project team’s intrinsic task

motivation are the key mechanisms of manage-

ment control promoting strategic renewal at the

front end of innovation. Technology and market

uncertainty are important too.

Shenhar

et al., 2001

Qualitative 17 cases and quan-

titative findings for 126 projects

in a range of industries.

Four dimensions representing increasing

time frames: project efficiency, impact on the

customer, business success, and preparing for

the future.

The study confirmed the first three measures and

the fourth (preparing for the future) emerged and

included: creating a new market or product line

and developing a new technology.

Table 2: Examples of studies on strategic value in single projects.



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project assessment and prioritization in the front end, which must cover new dimensions (e.g., ecological and social) if strategic value is to be featured as part of the projects. The front end value definition of projects and programs is emphasized, for example, by Win-ter and Szczepanek (2008) and Barclay and Osei-Bryson (2009) whose studies indicate that customer and stakeholder perspectives need to be included in the assessment and decision frameworks of projects and programs. The dominant understanding is that strategic value can be developed into indicators and criteria that can be used to assess proj-ects. To ensure consistency in scoring projects, clear definitions of the dimen-sions of strategic value must be devel-oped for each performance level (Wu et al., 2012). To address similar goals, a guide for determining Social Return on Investment Network (SROI) was com-missioned by the UK Cabinet Office to create a common language and con-sistency in the application of criteria for evaluating social value. The SROI framework provides guidance on initial investment as well as on measuring performance and progress over time (SROI Network, 2012). The study by Unger et al. (2012) emphasizes that top managers have an important influence on portfolio performance also later on in the portfolio management process, when they terminate projects.

It is repeatedly recognized that each industry and each firm will need to develop a customized set of criteria to measure strategic value, although they may use similar kinds of processes and procedures to develop the crite-ria. Several publications aim to guide practitioners in the development of tailored strategic value measures and portfolio management frameworks. Papalexandris et al. (2005) propose stages through which strategic value can be included into the control sys-tems: Prepare, understand (including understanding strategic directions), identify (including identification of strategic objectives), select (including

through widening existing frameworks, such as the balanced scorecard. Brook and Pagnanelli (forthcoming) report that managers in an automotive firm expressed the need to include environ-mental sustainability along with social and economic sustainability in portfolio management; however, the effective-ness of their developed framework is not discussed, and the framework only includes one sustainability measure.

Another aspect of strategic value, documented in the literature, deals with the learning and knowledge develop-ment that takes place across projects and, more broadly, from the portfo-lio to the parent organization. Some value measurement frameworks include the dimension of learning, innovation, and growth, with detailed measures for specific environments (Barclay & Osei-Bryson, 2009; Papalexandris, Ioan-nou, Prastacos, & Soderquist, 2005). In addition, policy requirements may call attention to value dimensions of learn-ing (Wu, Wang, & Huang, 2012). A study of government research programs finds the strong use of bibliometric measures of research output, along with other measures of benefits to society, such as the creation of spin-offs, technology spillovers to other applications, and the number of scientists and students edu-cated (Cozzarin, 2006). Particularly in technology development, the learning requirements may be quite significant. For example, measures of outcomes of government-sponsored R&D consortia in Japan include items such as the accel-eration of technological development, increased awareness of R&D, and the increase in spillover effects (Sakakibara, 1997). Salter and Martin (2001, p. 528) suggest that “support for basic research should be seen as an investment in a society’s learning capabilities.” In fact, the more basic the research, the more difficult and the more questionable are the assumptions that are required to estimate financial return (Salter & Mar-tin, 2001).

Many of the above studies clearly suggest that the point of influence is

prospects for identifying and assessing strategic value at the portfolio level, as summarized in Table 3. Although some of the articles discuss organizational business, programs, or R&D invest-ments in general (instead of project portfolios), we have included all these multi-project views in our analysis. We discuss four main issues below, namely: the ways that sustainability principles are considered in project portfolio management; learning and knowledge development as intangible values in project portfolio management; the need to embed stakeholders and their needs and desires in the prioritization and selection of projects; and, the emphasis on customized criteria for firm-specific needs.

Some studies have proposed improve-ments in the ways that sustainability, environmental, ecological, social, and other related values are incorporated into frameworks of project selection and project portfolio prioritization. For example, the conceptual study by Andersson and Rydén (2006) suggests that project portfolios in the urban development context require specific criteria and methods of assessment and note that traditional project port-folio management frameworks do not include urban sustainability issues. In their case study, Meade and Presley (2002) propose that environmental and safety considerations should be taken into account in selecting new R&D projects. The Delphi study of Abbassi, Ashrafi, and Tashnizi (2014) indicates that various environmental, safety, and social issues could well be included in the criteria for assessing R&D invest-ments. Cunha, Ferreira, Araújo, and Ares (2012) conducted a qualitative study in the maritime industry and call for bet-ter methods to take the social impact of R&D investments into account in proj-ect selection decisions. Furthermore, based on their review, Figge, Hahn, Schaltegger, and Wagner (2002) pro-pose methods for the inclusion of envi-ronmental and social sustainability in the control systems of the organization


AuthorsMethodology and Context

Ways of Identifying and Assessing Strategic Value Findings for This Study

Abbassi et al.,

2014

Delphi questionnaire of about

20 experts in technical R&D

management, followed by

mathematical model creation

(model not tested)—Iran.

Endogenous: fit with strategy, capabil-

ity of research team, impact on innova-

tion, project timing, employee learning;

Exogenous: technology life cycle stage,

environmental and safety, international

sanctions, public support, barriers to

imitation, benefits to human life.

The study proposes a mathematical model for applying

the criteria to select the portfolio of projects. The

model considers the weighting of the criteria (also

including financial criteria), the project types and their

interdependencies. The main contribution to the under-

standing of strategic value is the Delphi-generated list

of criteria that represent a holistic view of value for

technology R&D projects.

Andersson and

Rydén, 2006

Proposed project portfolio

management framework for

urban sustainability initiatives.

No empirical findings.

Examples of tailored criteria to meet

sustainability strategies include

metrics, such as the percentage of

users of public transport or measures

of the level of polluting chemicals in

emissions.

Multiple strategies are used to develop value indica-

tors—such as strategies for urban space and flow;

and human resource strategies. An approach is

outlined. The approach suggests using cluster analysis

to group projects when setting priorities for urban

sustainability.

Barclay and Osei-

Bryson, 2009

Proposed framework for mea-

suring value—program level

perspective for IT/IS.

Framework outlines several dimensions

of value including learning and innova-

tion (number of patents, measure of

lessons learned from projects).

Highlights importance of stakeholders in defining

value, and suggests the active involvement of stake-

holders. The paper outlines a structure for defining and

measuring benefits including: Identifying stakeholders,

defining objectives, measures, priorities, analysis, and

realization.

Brook and

Pagnanelli (forth-

coming)

Single case example of design

and implementation of project

portfolio management frame-

work (automotive industry).

Framework includes eight mea-

sures—four are market/profit-oriented;

others are strategic fit, CO2 emission/

biomaterials, leveraging or strengthen-

ing technology capabilities, leveraging

alliances.

Framework designed and implemented through consul-

tation with managers. It is purported to be designed to

include economic, social, and environmental sustain-

ability measures; however, there is no discussion on

the effectiveness of the framework. It does not include

any social sustainability measures and includes only

one environmental measure.

Cozzarin, 2006 Qualitative—analysis of

11 government programs

aimed at supporting research

(Canada).

Measures of knowledge development

through measures such as publica-

tions, patents, citations, numbers of

scientists and students educated.

Notes the long-term nature of many measures of stra-

tegic value, emphasizes that research (basic research

especially) requires broad measures in order to evalu-

ate long-term socio-economic impact.

Cunha et al.,

2012

Qualitative primarily.

Exploratory study— two cases

in the private sector in the

Portuguese maritime industry.

Investigates the social impact of R&D

investments and how to assess social

return.

Criteria and indicators were identified; the most

important social measures in a technology research

environment were employment, learning and growth,

environmental impact, and social return vs. financial

return.

Figge et al., 2002;

Papalexandris

et al., 2005

Methodologies based on the

balanced score card (BSC)

drawing upon experience and

existing research.

Figge et al. (2002) augment the bal-

anced score card approach with a

‘non-market’ perspective to include

environmental and social sustainability

factors. Papalexandris et al. (2005)

provide possible measures for the

‘learning and growth’ perspective such

as employee turnover, knowledge shar-

ing, and adoption of corporate values.

These are examples of approaches to extend the

traditional balanced score card (BSC) to include further

criteria (often long-term strategic criteria). The non-

market perspective proposed by Figge et al. (2002)

aims to offer a method for placing value on aspects

that are not currently regulated by the market system

but reflect strategies and values of the stakeholders.

Meade and

Presley, 2002

Qualitative—single case

application of a decision

model for R&D project

selection.

Specific measures include technical

measures such as the probability of

technical success and the existence

of required competencies as well as

measures such as environmental con-

siderations and workplace safety.

The model incorporates multiple factors and interac-

tions for decision making at the R&D level—the paper

suggests that a similar approach could be developed

for decision making at the portfolio level.

Table 3: Examples of studies on (non-commercial) strategic value in project portfolios. (Continues on the following page)



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2001). Although project portfolio goals are considered to include value maxi-mization (e.g., Cooper et al., 1999), sur-prisingly little research deals with what that value actually is and how it should be assessed. The emphasis of empirical studies has been on strategic alignment and portfolio balance as key success dimensions, and for these factors, fairly robust measures have been developed and shared in the portfolio researcher community. Due to the long-term ori-entation of many project investments, it is understandable that financial value can be measured only over time and, therefore, it is difficult or even impos-sible to link with project portfolio man-agement at a given time. Our review shows that the future benefits and long-term views are currently being included in the success criteria through which the performance of project portfolio management is studied.

In this study, our intent has been to increase understanding on how strategic value is identified and assessed in proj-ect portfolio management. Although we reviewed project portfolio management research more broadly, our focus was

and concluded (p. 68) that: “There is no academic consensus as to how benefits either social or economic should be measured.” There is also a lack of con-sensus on the measurement of other types of strategic value such as that for environmental sustainability. The other studies are conceptual or limited to a single case (or two exploratory cases for Cunha et al., 2012). Although each example adds to our understanding, and may provide guidance for others, there is a lack of coherent empirical evidence that the case experiences out-lined may be transferable.

DiscussionValue management in project-based organizations represents an attempt to see beyond the immediate results and a way to bring stakeholder input into defining project and program scope. This orientation toward broader ben-efits has already been considered at the level of single projects, through the inclusion of customer benefits, organi-zational benefits, and future business benefits among project success criteria (e.g., Atkinson 1999; Shenhar et al.,

design of performance measures), oper-ationalize, and implement. Similarly, Barclay and Osei-Bryson (2009) outline a four-stage process: Identify stakehold-ers, definition process (including design and confirmation of value measurement criteria), analysis and monitoring, and assessment of the realization of the end objectives. Some studies promote the development of mathematical models to assist with portfolio management. Abbassi et al. (2014) used a Delphi study for the development of suitable crite-ria before constructing a mathematical model to construct the portfolio.

These studies on identifying and assessing strategic value in project port-folios provide a wide range of informa-tion. The only statistically strong study (Sakakibara, 1997) provides findings on measures of strategic value in high tech-nology consortia. Although the study is focused on the level of the firm rather than at the portfolio level, it is included here because it is one of the few studies that illustrate the use of strategic value measurements in a multi-project envi-ronment. The study of 11 programs by Cozzarin (2006) is exploratory in nature

AuthorsMethodology and Context

Ways of Identifying and Assessing Strategic Value Findings for This Study

Sakakibara, 1997 Data from 226 U.S. and

Japanese technology

firms and statistical and

econometric analysis.

Evaluation of items such as the accel-

eration of technological development,

increased awareness of R&D, and the

increase in spillover effects.

This study of high technology consortia is focused at

the level of the firm rather than at the portfolio, and

the measures have not been tested at the portfolio

level. The measures of strategic value are not used as

dependent variables.

Winter and

Szczepanek, 2008

Case study in food industry

outlining a comprehensive

strategic review and strategy

implementation program.

Value creation perspectives identifying

first-level and second-level relation-

ships. The first level looks at the

project/product output and the second-

level looks at value creation from a

shareholder or customer perspective.

Case findings suggest the need for strategic focus on

value creation and the second-level relationship. The

front-end definition of projects and programs needs to

take a higher perspective and consider the customer

and shareholder value.

Wu et al., 2012 Proposed project portfolio

management framework

based on the energy project

selection challenge in the

Chinese power industry (not

empirically tested).

Non-financial evaluation criteria

include energy improvement effects,

implementation of risk reduction,

production efficiency, user satisfaction,

improved power availability, and an

extended scope of the energy market.

The study posits that financial methods are appropri-

ate for some energy projects, such as the construction

of a new energy generation facility, but others such as

projects for national energy security, the development

of policy, and energy trading require the development

of weighted non-financial criteria to determine the

project’s contribution to strategic goals.

Table 3: Examples of studies on (non-commercial) strategic value in project portfolios.


complex settings, we wonder if there are alternative ways to negotiate and bar-gain strategic value between the organi-zation and its stakeholders, beside the rational and formal frameworks.

Including Strategic Value in Frameworks of Project Portfolio Management

As a second research question, we inquired how project portfolio manage-ment frameworks should be modified to account for strategic value properly. Our results have suggested that, in gen-eral, the non-commercial dimensions of strategic value should be included more broadly into the frameworks of project portfolio selection and success. Both managers and researchers should inves-tigate the ecological, social, and learn-ing dimensions of value, particularly if they are included as part of firm strat-egy. Where previous studies point out ways in which strategic value criteria can be embedded into assessment mod-els, research on the negotiated aspects of strategic value, and strategic value dimensions as project portfolio perfor-mance criteria is quite limited.

According to Thiry (2001, 2002), value management is about sensemak-ing that requires interaction and negoti-ation. The involvement of top managers has been noticed as important when projects are terminated to enhance proj-ect portfolio performance (Unger et al., 2012), and the credibility and value ori-entations of decision makers are likely to have a significant implication on project portfolio decisions. Discussions held in portfolio meetings portray man-agers’ value orientations that may not always be unanimous (Christiansen & Varnes, 2008). Martinsuo (2013) pro-posed that more research is needed on the issues that managers negotiate and bargain during project portfolio man-agement. Particularly when considering the dimensions of value that are diffi-cult to measure (ambiguous) and when there are multiple stakeholders (com-plexity), this implies the need for new kinds of approaches in project portfolio

technical criteria. In particular, the input of customers and stakeholders has been emphasized. Customer and stakeholder cooperation (Voss, 2012; Voss & Kock, 2013; Beringer, Jonas, & Kock, 2013) as well as consequent uncertainties (Petit, 2012; Petit & Hobbs, 2010) have only recently been included among project portfolio management studies. This track of research deserves further atten-tion as the focus has largely been on data from within the R&D unit, instead of the stakeholders directly. Also, the focus in previous research on project portfolio selection and its assessment criteria indicates that research has not been conducted sufficiently concerning the deployment of strategic value over time as the project portfolio evolves.

The earlier studies that we reviewed featured different frameworks, practical measures, and even balanced score-cards as means to assessing strategic value in project portfolios. In contrast to research that highlights the role of sen-semaking in translating rules to practice and collectively defining value (Chris-tiansen & Varnes, 2009; Thiry, 2001), project portfolio management research generally assumes that rather formal and rational means are used to incorpo-rate these measures of strategic value, along with the more traditional val-ues of financial, commercial and busi-ness benefits, strategic alignment, and balance. This may be in part because much of the empirical research on proj-ect portfolio management has relied on single or two-respondent ques-tionnaire responses, where the idea of “value” has been reduced to single or a few items, primarily covering finan-cial and customer value. However, as qualitative research on the decision making in project portfolio manage-ment boards suggests (e.g., Blichfeldt & Eskerod, 2008; Christiansen & Varnes, 2008), the practice of project portfo-lio management is much more interac-tive, political, and path dependent than anticipated ( Martinsuo, 2013). In line with Thiry’s (2001) arguments for sen-semaking concerning strategic value in

on the non-commercial dimensions of strategic value that have already been investigated to some degree in single project studies. Our findings at the sin-gle project level showed that various conceptual, qualitative, and quantita-tive studies have been conducted, and that they feature strategic value through the dimensions of ecological, environ-mental, and social values (or sustain-ability); long-term business benefits; and societal and stakeholder influence.

Identifying and Assessing Strategic Value in Project Portfolios

The first research question explored the dimensions through which strate-gic value is assessed as part of project portfolio management frameworks. In addition to the value of “preparing for the future” that was mentioned above both at the single project (e.g., Atkinson 1999; Shenhar et al., 2001) and the port-folio levels (Meskendahl, 2010; Voss, 2012; Voss & Kock, 2013), we outline some studies that have covered envi-ronmental and social values (or sustain-ability) and learning and knowledge development as prospective strategic value dimensions in project portfolios. Although many of the studies are con-ceptual or qualitative in their methodol-ogies and limited in their data, we have contributed by compiling such studies and showing the growing support for the consideration of these new value dimensions as part of project portfo-lio management frameworks. We have shown that firms’ strategies increasingly feature long-term and stakeholder-ori-ented interests of sustainability, soci-etal influence, and knowledge diffusion and state them as part of single project goals; therefore, it is also necessary to include these strategic value measure-ments as part of project portfolio man-agement.

Our results reveal how the various dimensions of strategic value are cur-rently being proposed as assessment and prioritization criteria at the front ends of projects, in an approach simi-lar to that used for commercial and



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ConclusionsContribution

This study has directed attention to stra-tegic value in project portfolio manage-ment, including ecological, social, health and safety, societal influence, learning and knowledge development, and lon-ger term business value. The study has contributed by integrating knowledge from conceptual and qualitative stud-ies conducted at the single project level with studies on measures and criteria for portfolio evaluation and success assessment. The results have revealed that project portfolios may have strate-gic value beyond financial benefits, but such value is not sufficiently accounted for in project portfolio evaluation frame-works and decision makers’ collective sensemaking. Directing attention toward non-commercial value may cause loss or destruction in the commercial aspects of value, thereby creating evident chal-lenges for sensemaking, negotiation, pri-oritization, and portfolio control. As the measurement of strategic value includes more uncertainty than financial and commercial measures, new approaches may need to be developed for project portfolio frameworks to enable the sensemaking and negotiation needed in assessing strategic value.

Managerial Implications and Limitations

This research highlights the momentum among project and portfolio manage-ment communities in the strengthen-ing of the understanding of project portfolio value and its measurement. This momentum is influenced by the increasing complexity and turbulence that managers face. Project and portfo-lio managers are increasingly expected to be able to articulate value compre-hensively; a focus on financial measures is not sufficient for long-term strategic decisions. Although the literature on non-commercial strategic value does not offer statistically significant find-ings for portfolio-level applications, the examples may serve to provide some

to be important aspects of defining and applying strategic value criteria. The strong impact of stakeholder input is highlighted by Klakegg’s (2010) finding from a single project perceptive—that the most important reason for lack of sustainability was the lack of commit-ment to sustainability issues by stake-holders.

Despite this emphasis on stake-holders as partners in defining value, Eskerod and Huemann (2013) find that the project portfolio standards are superficial in their approach to stake-holder input. They propose that the inclusion of sustainability factors in project management approaches will require a radical change in underpin-ning values. Similarly, underpinning values will need to change for project and portfolio management to embrace holistic strategic value measurement.

Achievement of such change could be enabled through purposeful sense-making activities, (Thiry, 2001, 2002), and could build upon some of the approaches outlined in the literature. For example, the identification and con-firmation of the involvement of the rele-vant stakeholders are the first steps in a structure for defining benefits proposed by Barclay and Osei-Bryson (2009). The identified stakeholders take a central role to ensure that the developed pro-cess will deliver the expected benefits to stakeholders. Winter and Szczepanek (2008) see customers as the most impor-tant stakeholder group and illustrate how value creation (in contrast with product creation) involves stakeholders in the creation of the value. Figge et al. (2002) take a wide perspective on stake-holders and promote the exploration of all potentially relevant stakeholder groups before obtaining input from the pertinent stakeholders. Abbassi et al. (2014) emphasize the requirement that stakeholders’ needs and desires must be integrated into the project portfolio selection process. Their model draws upon stakeholder input to classify projects and to determine evaluation criteria.

management (Thiry, 2001, 2002). Fur-ther empirical research is needed to explore the sensemaking processes associated with deriving, assessing, and prioritizing the non-commercial dimensions of strategic value.

None of the studies we found cov-ers environmental or social value dimensions among project portfolio criteria. In fact, the research suggests that firms direct scant attention to the consequences of project portfolio choices in general, particularly how the project portfolio is controlled after project selection. Although some stud-ies pay attention to project portfolio control practices (Müller, Martinsuo, & Blomquist, 2008), to different forms of business case control at the differ-ent stages of projects (Kopmann et al., 2014) and to changes required once uncertainties in the project portfolio context are realized (Petit, 2012; Petit & Hobbs, 2010), there is much room for further studies to explore project port-folio deployment and control incorpo-rating comprehensive measures of all value dimensions in project portfolio management. As our study centered on the non-commercial strategic value in project portfolios, we particularly encourage further studies that would explain why and how certain organiza-tions succeed in building environmen-tal and social values into their R&D portfolios. In line with traditional stud-ies that highlight the importance of strategic fit, the studies on non-com-mercial value also highlight the impor-tance of strategic fit. Importantly, some of these studies provide initial guidance on how to ensure strategic fit from a holistic ‘value’ perspective. Stakeholder involvement is emphasized in several of the studies. The stakeholders are shown to drive the identification of value and the development and moni-toring of evaluation criteria for strategic value (Klakegg, 2010; Abidin & Pas-quire, 2007; Andersson & Rydén, 2006; Atkinson, 1999; Barclay & Osei-Bryson, 2009; Figge et al., 2002). Stakeholder input and commitment are proposed


guidance for managers in their quests to improve the identification and assess-ment of strategic portfolio value. In par-ticular, this research has identified the relevant dimensions of non-commercial value both at the single project and portfolio levels; highlighted the impor-tance of stakeholder identification and involvement; and, identified how stake-holders are incorporated into some portfolio frameworks. In addition, this research highlights the relevant role of sensemaking processes in truly under-standing project and portfolio value; the managerial implications point to the use of collaborative sensemaking processes to truly and holistically understand and assess strategic value. Managers may be inspired to move beyond rational and rigid perspectives on portfolio value and to embrace processes of dialogue, interplay, and negotiation between stakeholders to best manage strategic value in project portfolios.

This study has been limited through its choice of conceptual approach. We used a snowball strategy in identify-ing relevant literatures, which may have caused disparate perspectives and neglect of some publication channels. Although we have attempted to find research relevant to the research ques-tion, it was slightly difficult to iden-tify all relevant studies on multi-project and portfolio management because they can be spread across multiple lit-erature fields. Our attempt was to draw together a range of literature previously not compiled, and highlight the trends and research gaps that would direct us and other researchers toward empiri-cal research. We are, therefore, propos-ing new research avenues both on the non-commercial evaluation and per-formance criteria for project portfolio management and the sensemaking pro-cesses needed for value management among stakeholders.

Ideas for Further Research

We propose future research to include strategic value more broadly into the frameworks of project portfolio selec-

tion and success. The following ideas are suggested as potential starting points for further research:

• Quantitative studies on the use of sus-tainability; environmental, ecological, social, and other related measures of strategic value of project portfolios; and analysis of their potential linkages with financial value.

• Quantitative studies on the use of vari-ous measures of learning and knowl-edge development in project portfolios, and analysis of their potential linkages with financial value.

• Development of strategic value criteria for project assessment and prioritiza-tion for project selection, and the study of their use and consequences in differ-ent contexts.

• Qualitative research on the processes and practices of value identification and legitimization as part of managers’ work, and credibility of managers in decision making.

• Qualitative research on the customiza-tion and use of portfolio evaluation and selection criteria in different contexts, particularly concerning strategic value.

• Exploratory research on the collective sensemaking among stakeholders as part of project portfolio value manage-ment.

• Exploratory research on the loss and destruction of commercial value, when non-commercial aspects of value are being considered.

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project termination: An empirical study on senior management involve-ment. International Journal of Project Management, 30(6), 675–685.

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Wu, Y., Li, J., Wang, J., & Huang, Y. (2012). Project portfolio management applied to building energy projects management system. Renewable and Sustainable Energy Reviews, 16(1) 718–724.

Miia Martinsuo is a professor of industrial management at Tampere University of Technology, Finland. Her field of research and teaching is industrial management, specifically project and service business; her current research interests include decision making in product development; steering and selecting product develop-ment project portfolios; the autonomy, control, and efficiency of product and service development projects; and service business innovation. She has co-authored over 100 articles, book chapters, and books and is an active lecturer and coach in continuing education programs. She holds a DSc (Tech.) degree in industrial engi-neering and management from Helsinki University of Technology, Finland. In addi-tion to her university experience, Professor Martinsuo has worked for almost ten years in industrial firms and has consulted with dozens of international firms and public organizations on strategy, business process



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benchmarking and improving their innova-tion processes. Catherine has a bachelor of science degree in mechanical engineering from the University of Virginia (USA), with high distinction; a master of engineering management degree from the University of Technology, Sydney; and a PhD from the Macquarie Graduate School of Management (MGSM) in Sydney, Australia. She can be contacted at [email protected]

portfolio management and has had more than 50 journal articles and conference papers in the area published. Her current research themes include the relationship between strategy and the project portfolio, organizational capabilities for survival in dynamic environments, and the manage-ment of project interdependencies within a project portfolio. Catherine also deliv-ers corporate workshops on technology management and assists organizations in

development, and management develop-ment, especially in the metal and engineer-ing industry. She can be contacted at [email protected]

Catherine P. Killen, PhD, is the coordina-tor for innovation programs in the Faculty of Engineering and IT at the University of Technology, Sydney (UTS), Australia. Catherine conducts research on innova-tion processes with a focus on project

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ABSTRACT ■

In stakeholder management, a key question

is: How can an actor/organization (e.g., a

project) under different contingencies apply

strategies to develop the relationship with

each stakeholder into a favorable one seen

from the focal organization’s perspective?

Based on an in-depth longitudinal case

study, we provide detailed descriptions of

how a project management team worked

with its stakeholder relationships. Applying

a practice approach, we explore how stake-

holder management practices emerged and

evolved as embedded actions and interpre-

tations related to perceptions of each stake-

holder’s harm and help potentials. We show

how trust was both input to and outcomes of

the managerial action.

KEYWORDS: stakeholder theory; trust;

practice approach; stakeholder manage-

ment strategies; help and harm potentials;

development project; case study

Stakeholder Management Strategies and Practices During a Project CoursePernille Eskerod, University of Southern Denmark, DenmarkAnne Live Vaagaasar, BI Norwegian Business School, Norway

Research Gap and Purpose of the ArticleA project can be seen as a temporary organization (Lundin & Söderholm, 1995), established to create benefits through transitions, and one that needs resources (Pfeffer & Salancik, 1978). Individuals, groups, or entities, which may affect or be affected by the project—the so-called ‘stakeholders’ (Free-man, 1984)—possess various sorts of resources (e.g., expertise, decision power, money, goodwill, influential contacts, and so forth). An important part of project management is to interact with the stakeholders in order to make them contribute what the project needs.

Normative project management literature (IPMA, 2006; PMI, 2008) emphasizes stakeholder identification, stakeholder analysis, and stakeholder management strategy decisions at the front-end of a project, even though it is recognized that neither a stakeholder management strategy for the whole project course, nor day-to-day stakeholder practices, can be wisely planned at the beginning of the project course (Andersen, 2008; Jepsen & Eskerod, 2009). As the project environments may be drifting (Kreiner, 1995), the way project management teams deal with and respond to stakeholders over time needs to be situated and flexible in order to stay adequate as the context changes (Vaagaasar, 2006).

Project stakeholder management literature relies to a great extent on stakeholder theory within strategic management (Eskerod & Huemann, 2013). The literature on stakeholder theory (Freeman, 1984; Savage, Nix, Whithead, & Blair, 1991; Jawahar & McLaughlin, 2001; Mitchell, Agle, & Wood, 1997; Parmar et al., 2010) suggests that the focal organization (i.e., the proj-ect) should apply certain stakeholder management strategies based on the assessment of the stakeholder at hand. The literature, however, has a number of limitations: It does not provide a very detailed description of the contents of the stakeholder management strategies; nor does it touch upon the chal-lenges and possibilities related to changing strategies during a time span in a detailed manner (Parmar et al., 2010). Further, it does not specifically relate the strategies to temporary organizations like projects (Littau, Jujagiri, & Adl-brecht, 2010).

Even though managing stakeholders is considered to be a key to project success (IPMA, 2006; PMI, 2008), project management research also suffers from the same weaknesses as mentioned above (Jepsen & Eskerod, 2009). In addition, empirical research exploring in depth how stakeholders are actually dealt with during a project course appears to be quite limited, even though exceptions exist (Aaltonen & Sivonen, 2009; Vaagaasar, 2011).

The purpose of this article is to contribute to the understanding of stakeholder management strategies and practices during a project course.

Our contribution is twofold. First, we discuss frameworks and concepts in the existing literature that are relevant when analyzing the stakeholder man-agement strategies and practices of projects and their stakeholders. We place emphasis on the project management team’s perceptions of the stakeholders’ potential for helping and/or harming the project’s processes and outcomes.

Stakeholder Management Strategies and Practices During a Project Course


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stakeholders. This is in line with Coff (1999), who states that ‘a firm generates rent [i.e., value] ‘when all stakeholders receive sufficient compensation to hold them in place (pay > or = opportunity costs) and some stakeholders get more than would be required to hold them in place (rent)’ (Coff, 1999, p. 121, italics and boldface in original text).

Each stakeholder is assumed to have a free will, in other words, a power of choice (Barnard, 1938), and there-fore, the project management team must work with the stakeholders to con-vince them to provide the contributions needed by the project. Further, the proj-ect management team only has limited resources (seen in a very broad sense in terms of money, time, management attention, and so forth) to spend on project stakeholder interactions. The project management team, thus, needs to make strategic choices on how to deal with each stakeholder. In addition, a differentiation can be made between internal and external stakeholders as seen from the focal organization’s view (Freeman, 1984), indicating that the focal organization has better means to impact the behavior of internal stake-holders. Savage et al. (1991) suggest that the project management team, for various issues related to the project, should identify and diagnose the stake-holders in order to decide on an over-all strategy for interacting with each of them. Inspired by Freeman (1984), they suggest that the diagnosis should be based on each stakeholder’s poten-tial to cooperate with the organization and the stakeholder’s potential to threa-then the organization (i.e., the help and harm potentials) on a certain issue. This framework highlights four different types of stakeholders: Supportive (high help potential, low harm potiential), Mixed Blessing (high help potential, high harm potential), Nonsupportive (low help potential, high harm poten-tial), and Marginal (low help potential, low harm potential) (Figure 1).

A core implication of the framework is that managerial resources should be

management (Cleland, 1985; Crawford, 2005; Aaltonen, 2010). The basic idea of project stakeholder management is that the project management team can increase the possibility of project suc-cess by influencing stakeholders (PMI, 2008). With this approach, the project management literature positions itself in the discourse within stakeholder management literature that applies an instrumental approach to stakeholder management in opposition to a norma-tive or ethical approach (Donaldson & Preston, 1995; Freeman, Harrison, & Wicks, 2007; Freeman, Harrison, Wicks, Parmar, & De Colle, 2010; Julian, Ofori-Dankwa, & Justis, 2008). An instrumen-tal approach implies seeing stakeholder management as a means to making the stakeholders contribute in a way aimed for by the focal organization, in other words, the project. Even though this seems rather manipulative, the emphasis on influencing stakeholders is accompanied by an assumption of the project management team acting as agent for the stakeholders (Ander-sen, 2008). The agency is governed by negotiations as well as contractual agreements in the front-end of the proj-ect in order to ensure that the project objectives, as well as the project plan, are incorporating the interests of the project stakeholders (Eskerod & Jepsen, 2013). It is, therefore, beneficial for both the project stakeholders and the proj-ect management team that the latter interacts with the project stakeholders in ways that make them contribute as needed by the project. The assump-tion of clear correspondence between the project stakeholders’ interests and the project management team’s inter-ests can be questioned, although this is outside the scope of this article.

Building on the resource depen-dency view of the organization (Pfeffer & Salancik, 1978), the project manage-ment literature envisions stakehold-ers as possessors of resources needed by the project in order for the proj-ect management team to create value for the same stakeholders and other

We specifically raise the issue of trust to understand the development of rela-tionships between a project manage-ment team and the project stakeholders.

Second, based on an in-depth longi-tudinal case study, we provide detailed descriptions of how two stakeholder relationships evolved over two and a half years in a complex technology development project. We describe the various activities that the project man-agement team actually undertook to cope with the stakeholders over time. Further, we describe how a number of factors were entwined and co-evolved, including: the team’s perception of the stakeholders’ harm and help potentials, the project management team’s actions as well as the stakeholders’ actions, technological problems, competence issues and, not the least, trust-related issues. We show how the stakeholder management in practice consisted of both planned and emergent actions and how trust developed, along with the stakeholder management practices, being both input to and outcomes of the practices that evolved. Our study shows the value of taking a practice approach to stakeholder management and the importance of performing longitudinal studies.

The outline of the article is as fol-lows: In the next section, we present the core concepts underlying the research; thereafter, we present the methodologi-cal approach. In the following section, we analyze two stakeholders at three points in time during the project course by applying the concepts presented in the first part of the article. The follow-ing section provides discussions of the findings. Finally, we conclude on the research, point to limitations, and offer suggestions for future research.

Theoretical BackgroundFreeman (1984, p. 46) originally defined stakeholders as: ‘any group or individ-ual who can affect or is affected by the achievement of the organization’s objec-tives.’ Since then, the stakeholder con-cept has become a salient part of project


is related to the future, as it is about anticipations of possibilities and uncer-tainties regarding outcomes as well as about the willingness to be vulnerable to results that have not yet taken place (Gustafsson, 2003), implying that the amount of trustworthiness is based on an on-going evaluation process. Trust is required when there are uncertain-ties (Smyth et al., 2010) and lack of knowledge. A number of questions exist from the project’s point of view: First of all: Do the stakeholders trust us? And how does this influence their behav-ior and expectations? Secondly: Do we trust a stakeholder? When and why do we trust a stakeholder and how does this influence our behavior and expec-tations toward this stakeholder? On the one hand, trust can help strengthen the relationship between the project management team and each project stakeholder in a manner that serves the project. The underlying assumption is that if we trust we open up, share more knowledge and, possibly, put in more effort than if we do not trust. This can increase the stakeholder’s sense of sat-isfaction (Bresnen & Marshall, 2000). On the other hand, lack of trust will often lead to actions to secure self-interest, for example, by both parties holding back information, developing extensive contracts, and linking them to economic consequences and working hard with documentation (Smyth et al., 2010).

Trust varies in ‘thickness’ (Hosmer, 1995; Luhmann, 1989; Mayer, Davis, & Schoorman, 1995). Luhmann (1989) suggests that actors that are thickly trusting act as if there were no risks—because they see the other person as trustworthy. Trust that is based on per-sonal relationships is commonly seen as the thickest one (Powell, 1996).

Building on the work of Barney and Hansen (1994), Koskinen and Pihlanto (2007) introduce four types of trust for a project setting: (1) deterrence based trust, (2) role based trust, (3) knowledge based trust, and (4) identification based trust.

the willingness and ability to contribute by stakeholders with high help poten-tials, and (2), the avoidance of adverse actions from stakeholders with high harm potentials.

Further, the framework by Savage et al. (1991) is in line with Savage et al. (2010), who suggest the use of ‘inte-grative strategies’ to create a win–win outcome for both the focal organization and the stakeholder. These strategies involve supportive attitudes or behav-iors toward the stakeholder. Teaching the stakeholder is an example of an integrative strategy. The alternative to integrative strategies is ‘distributive strategies’ (Savage et al., 2010) in which the focal organization tries to create a win–lose outcome at the expense of the stakeholder.

In addition to pieces of advice on how to diagnose the stakeholders and make strategic decisions on how to interact with each of them, it is widely acknowledged that the success of inter-organizational projects depends on trust between the focal organization and its stakeholders (Kadefors, 2004; Koskinen & Pihlanto, 2007; Maurer, 2010; Smyth, Gustafsson, & Ganskau, 2010). The notion of trust is, therefore, an important concept when studying relationships with stakeholders.

When participating in relationships we can never have all the information we need about the past and present, and certainly not about the future. To a great extent, the concept of trust

dedicated to stakeholders with high harm and/or help potential rather than equally distributed among all stakeholders. A Mixed Blessing stake-holder is especially important because this stakeholder may turn into a Sup-portive stakeholder or a Nonsupport-ive stakeholder over time, depending on the development of the relation-ship with the stakeholder. Savage et al. (1991) suggest that the strategy toward a Mixed Blessing stakeholder should be ‘to collaborate’; if maximal collab-oration exists, it is more difficult for the stakeholder to threaten the focal organization. Further, the authors sug-gest that a “fundamental stakeholder management strategy is to transform the stakeholder relationship from a less favorable to a more favorable one” (Sav-age et al., 1991, p. 71); in other words, to transform a Mixed Blessing stake-holder into a Supportive stakeholder. This can be done by using the strategy for the aimed-for stakeholder type; in other words, not only ‘to collaborate’ with the stakeholder but ‘to involve’ the stakeholder in decision making in the project work, as well as applying par-ticipatory management techniques. Our research intends to provide an empiri-cal answer to how these strategies can be practiced and how they may evolve over time and under what conditions. The conceptual contribution of Savage et al. (1991) makes very good sense in a project context, because the project cannot be accomplished without (1),

Stakeholder’s Potentialfor Threatening the Project

(= harm potential)

HIGH LOW

Stakeholder’sPotential for

Cooperation with theProject

(= help potential)

HIGHMIXED BLESSING

STRATEGY:COLLABORATE

SUPPORTIVESTRATEGY:INVOLVE

LOWNONSUPPORTIVE

STRATEGY:DEFEND

MARGINALSTRATEGY:MONITOR

Figure 1: Project stakeholder type framework (Adapted from Savage et al., 1991).



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atically with sensitizing questions (Strauss & Corbin, 1998) to make sense of the data, as well as discourse analyses (Potter & Wetherell, 1987). The details of the study have been published in a separate book, in which the entire story is presented at length (Vaagaasar, 2006; see also Acknowledgments). In this arti-cle, we focus on stakeholder strategies and practices toward two external key stakeholders, the main supplier and the project owner, because these provided a rich picture on how the relationships as well as the trust types between the project management team and some of the stakeholders changed significantly during the project course.

Descriptions and Analyses of Stakeholder Interactions in Practice In this section, we offer descriptions of interactions with the two chosen stake-holders at various times after the project started and integrated analyses are also presented (in italics):

• T1: After ½ year• T2: After 1½ years• T3: After 2½ years

The descriptions place emphasis on the actions and means applied by the project management team, the team’s perception of the stakeholders’ compe-tence, commitment and harm and help potentials, as well as how the interactions (for example, the communication inten-sity and level of interaction) evolved. To some extent, the responses of the stake-holders (as the project management team perceived them) are also captured.

At the time the project started the technical task was in focus, whereas relational activities with the stakehold-ers were not considered as much. The project management team seemed opti-mistic and eager with regard to efficiency and efficacy in project task solving. The belief in technological control was quite established; however, as the proj-ect progressed, it encountered great uncertainties related to technological

the ethnographic research approach. The case we studied was a five-year long complex development project in Scandinavia. The project’s task was to develop and implement a communica-tion system for railways, in accordance with the European standard for this type of communication; it was financed through the national state budget.

Our unit of analysis was the dual relationships between the project man-agement team and the project stake-holders as proposed by Parmar et al. (2010), mainly investigating them from the view of the focal project. We started out analyzing documents, such as the project handbook and external project documents. Document analysis was fol-lowed up by more than twenty open interviews (Kvale, 1996) with the project manager and various key stakehold-ers. This provided time and freedom to openly explore questions appearing to be important as the project unfolded. We combined the interviews by exten-sively observing, for more than one year, the weekly management meeting of the project management team. This meeting was the main arena for stake-holder interaction planning. Applying an inductive and explorative approach (Lincoln & Guba, 1985), we focused on (among other things): How does the project management team interact with the various stakeholders in order to make them contribute sufficiently?

Further, one of us participated as an observer at the monthly meet-ings between the project management team and the parent organization that “owned” the project; the monthly meetings between the project and its sub-contractors; the project council meetings; and meetings between the project and its different user groups. The observations were made with-out interfering with the interactions observed—to the extent possible.

Our data collection and data analy-ses have been entwined processes, in which data were analyzed in parallel with the data collection ( Hammersley & Atkinson, 1997). We worked system-

The deterrence based (or calculus based) trust is a fragile form of trust in which one violation can erode the rela-tionship. The parties in such a relation-ship act as anticipated because they fear negative consequences from not acting this way. The second type of trust is the so-called role based trust. This trust is based on the competence expectations of the other party related to the role this party possesses. It is an impersonal trust made on categorical assumptions; this type of trust is important in settings with limited time to build trust through get-ting to know each other. This may often be the case in projects in which the proj-ect management team and the project stakeholders need to interact immedi-ately. A third type of trust, the knowledge based trust, develops on the basis of the history of interaction. The fourth type, identification based trust, is the thickest form of trust (Koskinen & Pihlanto, 2007). This trust is based on an emotional con-nection between the parties and exists because the actors understand each oth-er’s intentions, expectations, and desires. Typically, a high and mutual commit-ment between the parties exists, as well as a good relationship that is intended to be a long-term one (even though the project itself is temporary). When this kind of trust is established, one party is allowed to act fully as an agent for the other. In sum, when we talk of deter-rence based trust we imply limited trust, whereas trust based on knowledge or due to identification implies quite extensive trust. In business environments, trust will be based on all four components and it will develop in long-term relationships between organizations that invest in this relationship and adapt to each other (Koskinen & Pihlanto, 2007).

Research Approach and Methods of AnalysisBecause we aimed to capture how stakeholder management practices evolve over time, we needed a lon-gitudinal study. We conducted a case study in which we followed a project for two and a half years, inspired by


contractual formalities, formal reporting, reporting meetings, kick-off meetings, as well as management meetings) and also between managers above the proj-ect level. A friendly atmosphere existed, and both parties expressed respect for each other’s competence and ‘way of doing things.’ Further, a strong sense of interdependence existed, because failure would have exposed both parties heavily in the media. Frequent communication took place, but mostly related to the established formal channels for planning and reporting. Informal communication was limited.

Both parties frequently referred to the other party in positive terms, often referring to the good reputation of the other party or to other good relation-ships at different hierarchical levels between the two companies. According to the project manager, this increased a positive ‘gut feeling’ and made it easier to establish yet another relationship with the supplier. Further, the project management team emphasized that the supplier possessed specialist compe-tence with regard to subject matters because it had been heavily involved in the development of the European standard for the system. Additionally, the project manager got assurance from prominent people in the supplier’s organization that they would stand up for the project.

Contractual work received massive attention, as both parties put exten-sive work into the development of contracts in order to secure their own interests. A mixture of securing self-interests and the idea that “we are in this together—and let’s make [positive] history together” was displayed.

Applying the framework by Savage et al. (1991), the main supplier at T1 could be categorized as a Supportive stakeholder. The help potential was high (as it was one of few possible experts for this particular task, and as it was willing and eager to be part of the project), whereas the harm potential was low (because the project team still had the opportunity to contract with another

throughout the previous year. Critical milestones had been met, although with minor delays. To achieve this, the proj-ect management team, along with the main supplier, had redefined the scope to a minimum to satisfy the needs of authorities. The functionality, which was required to maintaining the safety, was delivered and the first phase was considered a success. There were major challenges related to system design and implementation, which were postponed to the later phase. Due to the problems, which occurred in the deliveries up to this point, there were major contractual disputes going on.

In sum, the project management team succeeded with the project, deliv-ering a well-functioning system on time, within budget, and with satisfied stake-holders. The project manager said that one important reason for this was the ability they had developed to manage the stakeholders effectively.

In the next section, we track the project management team’s relation-ships with the project’s main supplier and the project owner across T1, T2, and T3 and relate the activities to the concepts presented earlier.

The Relationship With the Main Supplier

Next we will describe the relationship between the project management team and the main supplier, mostly from the perspective of the project management team.

Time T1

Only two possible suppliers for the sys-tem development existed. The supplier was chosen because it held a central position on a European level, and the project management team believed that the supplier’s technical competence was high. Additionally, other units within the base organization of the project held long-term relationships with other business units in the supplier’s organi-zation. The project management team planned various means for structuring the interactions with the supplier (e.g.,

development, supplier competence and, not the least, the relationships to various stakeholders. A multitude of stakeholders displayed a great variety of interests. Over time, the interaction with and management of stakeholders became a salient part of the project activities.

At Time T1, the main project framework and tools were in place; some procedures for the interactions were established, including extensive standards and specifications for the delivery. A main supplier had been con-tracted and the project management team had been mobilized. The proj-ect management team had identified salient stakeholders and decided upon some initial strategies for dealing with the stakeholders. The financing of the first phase of the project roll-out had been approved by the Ministry of Trans-portation.

At Time T2, the project was in the development phase for civil works, and extensive system design was on going. The design was delayed and incom-plete according to schedules and speci-fications, which were imposing great difficulties for project execution and threatening the fulfillment of major upcoming milestones. The budgeting process for the remaining phase of the roll-out was on going, and assumed to be dependent on successive delivery of the upcoming milestones. The proj-ect management team expressed a per-ception of extreme time pressure. Not making this delivery would draw exten-sive attention in the national media, with possible political consequences. It would have severe consequences for the reputation of the base organization (i.e., the project owner) and potentially jeopardize the national state funding of the project’s second phase (which was approximately half of the project’s total scope). If the design and implementa-tion of the system had failed, it could have led to potential close down of sec-tions of the national railroad network.

At Time T3, the project had made the critical parts of its deliveries



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help them with the planning. The project management team argued that this was a way of increasing the supplier’s com-petence in requested matters. Indirectly, it also provided the project management team with more control over the proj-ect because it could follow the suppli-er’s work very closely. Furthermore, the project management team significantly increased the staff within the technical disciplines in the focal project team itself in order to be able to engage more heav-ily in technical workshops and design reviews with the supplier.

In addition, the supplier replaced the project manager to improve their own efficiency and efficacy. This only seemed to help the relationship between the two organizations for a while, because the project management team found that the new project man-ager did not seem sufficiently compe-tent and confident in order to handle the challenges present at this critical point in time.

So, on the one hand, the project management team expressed disap-pointment about the supplier’s technical competence and ability to deliver, as well as uncertainty about their commit-ment. On the other hand, the project management team acknowledged that delivery was more complex and implied more ambiguity than they had expected, which presented a challenge for both parties. Yet, they also expressed some indignation with regard to the supplier’s lacking ability with regard to foreseeing some of the challenges on the road, stat-ing: ‘Had they been more competent, a lot of this could have been handled better.’

At this point in time, the commu-nication was intense both in formally established channels and informally between the base organizations at the middle and top management levels. The project management team undertook various collaboration efforts to manage the relationship; among others, they fre-quently contacted the supplier’s people, asking how they were doing with the deliveries. They initiated meetings at dif-ferent levels in the organization, from

efforts employed, to some extent, the relationship was eroding.

The supplier seemed unable to deliver the system to the technical specifications in a timely manner; in addition, their ability to plan work pro-cesses and design cycles was criticized by the project management team. The supplier, on the other hand, criticized the project management team, who was responsible for substantial contribu-tions and input to the different pro-cesses, for shortcomings and delays. Rigorous systems and routines were established with both parties to docu-ment deliverance and track progress.

At this point in time, the project management team expressed a weak-ened belief in the dedication of the sup-plier. Believing that they had troubles meeting their first major deadline, the project management team discussed how to tell this to the various stakehold-ers. In this discussion, it was mentioned several times how the project manage-ment team feared that if they would miss out on the deadline, and the sup-plier learned about this, the supplier would give priority to other tasks and other projects. This would have delayed the project even more. For example, the project manager said to the other project management team members: “Yes, and it is important that we do not reduce the pressure on the supplier (. . .)”. Another said: “The supplier also needs clear procedures for what is going to happen in the upcoming period.”

The supplier showed effort to main-tain the project management team’s belief in their commitment. They talked about how hard they worked, how com-mitted they were, and that, very soon, they would find the key to solving the problems. They made changes in their own project organization and processes for technical development. Reviews were also amended. Moreover, they accepted a number of interventions from the proj-ect management team: Two people from the focal project were placed in the sup-plier’s project organization two days a week, for a period of six months, to

main supplier instead, even if it might be burdensome).

In line with the recommendations offered by Savage et al. (1991), the proj-ect management team pursued a col-laboration strategy. This was done by plenty of communication between the two parties, but mainly formal, while at the same time paying massive atten-tion to developing contracts concern-ing the collaboration. The contractual work observed is expected behavior in large, public projects financed over the national state budget, yet it could also indicate that the project wanted to have a detailed contract to fall back on if the collaboration didn’t work out as expected. In addition, the project man-agement team tried to anchor this par-ticular relationship by referring to other well-functioning relationships (other projects and departments) between the two parties as well as anchoring the relationship to prominent persons in powerful positions.

The empirical material indicates that the project management team trusted the supplier. The trust present was mainly a role based trust (Koskinen & Pihlanto, 2007) as it was related to the professional role of the stakeholder (which can be seen by the references to the good public reputation as well as to the role that the supplier had taken in the development of the standards), rather than to the project management team’s own direct experience of the sup-plier as being trustworthy.

Time T2

One year later, the project management team and the supplier experienced a rather critical period. The project task solving was challenging, and the supplier had difficulties producing the required solutions with efficiency and efficacy. The project faced a possible delay with regard to its first major delivery. Miss-ing this delivery would mean severe consequences. The project management team displayed disappointment with regard to the technical competence of the supplier. Regardless of the collaboration


project management team, the project manager at the supplier was replaced with a project manager who proved to be highly competent in both technical and social matters. The strong interac-tion on a technical level gave the project management team a reason to believe that the major challenges eventually would be overcome.

At this point, well-established and agreed-on routines to communicate on a day-to-day basis existed. Because of the close relationship, most informa-tion was shared between the parties, contractual issues were not discussed at this level, and the communication was based on many shared views.

However, at the managerial level, the discussion on contractual conse-quences was difficult, and several top management meetings were held with-out much progress.

Applying the framework by Savage et al. (1991), the main supplier at T3 could still be categorized as a Mixed Blessing stakeholder, but with a much more positive attitude. The supplier was committed to creating shared success and worked hard to compensate for the lack of technical knowledge. Still, due to the lack of competence, the harm potential was also absolutely present.

In line with the statement of Sav-age et al. (1991), the involvement strat-egy in opposition to the collaboration strategy in T2 had improved the rela-tionship. There was less talk of contrac-tual agreements, blame, and economic consequences. The communication was less intense, and the project manage-ment team made less of an effort to monitor the supplier’s activities and decisions in a detailed manner. The project management team and the sup-plier interacted closely over time and the supplier had shown commitment in talk (‘we’re in this’), in actions (dedicat-ing more resources, changing key per-sonnel), and in providing transparency in work processes and their progress, and also showing actual progress. The supplier showed that when the project management team made strong requests

Applying the framework by Koski-nen and Pihlanto (2007), the role based trust was eroding, as there was less talk of the good reputations and the com-petent role the supplier could take. The assumptions on which the role based trust in T1 had been based seemed to be proven partly wrong, because the tech-nical deliveries were haunted by prob-lems and the supplier had problems solving these issues. The interventions aimed at increasing the competence of the supplier team also indicate erod-ing role based trust. As the role based trust decreased, the project manage-ment team was enforced to base the relationship on a deterrence based trust. This meant that the project man-agement team maintained the relation-ship with the supplier, however, severe control mechanisms were applied and information requested in order to be able to calculate and monitor the sup-plier’s actions and progress. In addition, the project management team’s explicit statement of the negative consequences of not delivering also corresponded with the deterrence based form of trust.

Time T3

One year later, a great deal of the tech-nical challenges had been resolved. The process in which they had been resolved, however, had not been char-acterized by the level of sufficiency and efficacy the project management team had expected. The project management team kept expressing that the supplier lacked the technical competence that was required.

The faith in the supplier’s commit-ment to the project, however, had been reinstalled; both expressed: “We will stand through thick and thin.” The sup-plier continued to work very hard and showed a strong commitment to creating success. They had managed to expand their competencies by collaborating with experts within the firm worldwide. Moreover, several of the changes the supplier made at T2 increased their ability to deliver as expected. Once again, after pressure from the focal

top management meetings to frequent meetings for technical discussions, and used reviews and workshops between the engineers extensively. Moreover, at this point in time, the project often made references to the contract (and so did the supplier). They hinted at the nega-tive consequences that would appear if the principles had been violated; for example, the negative economic con-sequences. Moreover, both parties put extensive effort into documenting their own work, making blueprints of contri-butions, and writing formal letters about the work processes, claims, and so forth.

Applying the framework by Savage et al. (1991), the main supplier at T2 could be categorized as a Mixed Bless-ing stakeholder with a partly negative attitude toward the project. The help potential was still considered high for the same reasons that were present at T1. However, the harm potential was also perceived as high. Project success depended on extensive collaboration/co-creation between the supplier and the focal project. Displaying lacking technical competence and vagueness with regard to their actual commitment, the supplier came to represent a great threat to project success.

In line with the recommendations of Savage et al. (1991), the project man-agement team worked hard to make the supplier re-enter a positive Mixed Blessing partner or even a Supportive stakeholder by pursuing an involvement strategy. This was done by supplement-ing the formal communication with massive informal communication, as well as involving managers at various levels in both organizations. This can also be interpreted as pursuing ‘inte-grative strategies’ in the framework of Savage et al. (2010). At the same time, the project management team also enforced control (as described above) and threatened the supplier with severe consequences and contrac-tually based penalties if they could not deliver as planned. This can be seen as a ‘distributional strategy’ in the frame-work of Savage et al. (2010).



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Applying the framework by Sav-age et al. (1991), the project owner at T1 could be categorized as a Mixed Blessing stakeholder. The project owner was a powerful stakeholder who had both high help and high harm poten-tials because he had a major impact on the project processes and the pri-orities given to the project within the base organization. The project owner displayed a partly negative attitude toward the project, but was not display-ing much effort either to help or harm the project. This indicates a possible extension of the framework of Savage et al. (1991) in the sense of intensity of engagement of a stakeholder in order to activate (exploit) its potentials. In the case study, the project owner could be characterized as passive in the first stage (i.e., low intensity of engagement).

Savage et al. (1991) suggest a col-laboration strategy toward such a stake-holder or even an involvement strategy in order to apply the strategy for the stakeholder type they want the rela-tionship to turn into (i.e., a Supportive stakeholder). However, the project man-agement team did not take much action to turn this stakeholder into a more positive Mixed Blessing stakeholder or even a Supportive stakeholder. Our interpretation is that this may have to do with the level and type of trust between the two parties.

Applying the framework by Koski-nen and Pihlanto (2007), the domi-nating trust type characterizing the relationship between the project man-agement team and the project owner at T1 seemed to be the role based trust. As previously mentioned, role based trust is based on the belief in the other party’s ability to perform one’s role competently. However, through talk and action, the project management team showed that they doubted this abil-ity; therefore, the role based trust was weak. This may also relate to the passive behavior of the project owner, in other words, not really filling out the project owner role in the opinion of the project management team.

and at the top management level was limited. There were numerous stake-holders in the base organization who were very committed and showed posi-tive interest in the project, but their help potential (as well as harm potential) was limited because they had limited ability to influence. At the same time, top management in the base organiza-tion appeared doubtful about the proj-ect—and was not very eager to give the project first priority, because the project would require extensive resources at the expense of other projects already run-ning. Some of the competencies required were scarce resources in the organiza-tion, and financing this project would reduce financing possibilities of other activities considered to be more criti-cal. The project was forced on the base organization by politicians, and no one from the base organization was strong internal supporters of the project. How-ever, a relevant area director of the con-struction department was assigned the formal role of project owner and held the overall responsibility for the project execution. The project was very different than the rest of the department’s project portfolio and represented novel technol-ogy and high complexity in the area of competence not familiar to this depart-ment. Furthermore, the project manage-ment team was already in place and had been recruited from other branches and all external to the organization. At this point, the project owner role was vague and the person holding it rather distant. As a consequence, the project manage-ment team experienced little support or governance and became a quite autono-mous part of the construction depart-ment.

At this point in time it did not seem like the project management team put much effort into improving the rela-tionship with the project owner. The team seemed to have a good connection at the political level, and this distant project owner gave the team room for maneuvering and freedom of choice related to strategies and solutions in the planning phase.

for action, the supplier was willing to do as the team demanded, in the manner it was capable of.

The project management team’s trust in the supplier’s abilities and com-mitments had increased dramatically. The project had experienced consis-tency between what the supplier com-municated and the actions it actually undertook. Applying the framework by Koskinen and Pihlanto (2007) indi-cates a knowledge based trust. More-over, there were some indications of identification based trust as they (both the project management team and the supplier) talked of co-creating success; additionally, they talked in ‘we’-form and seemed to act with the best inten-tions to materialize the process success-fully. This was at the project level but, as mentioned, at the top level in the orga-nizations T3 was a most troublesome period of contractual disputes among the two parties.

The Relationship Between the Project and the Project Owner

In this section, we describe the develop-ment of the relationship between the project management team and the proj-ect owner, mostly from the point of view of the project management team. The project owner role was placed within the construction department of the project’s base organization. This construction department had a high standing in the base organization with regard to project execution; yet, it had limited experience with technology development projects of this kind. In the following section, we describe the project management team’s relationship to more actors within the base organization, not only the project owner. This will provide the reader with contextual information in order to better understand the project owner’s actions and decisions.

Time T1

In its early phase, the project mainly received attention at the technical level from the base organization. The anchor-ing of the project in corporate strategy


Applying the framework by Savage et al. (1991), the project owner at T2 could be categorized as a Mixed Bless-ing stakeholder with a somewhat posi-tive attitude toward the project. The project management team had started to use an involvement strategy that, on the one hand, gained from the help potential by including the project owner sufficiently from the project’s perspec-tive; on the other hand, it reduced the harm potential by limiting the proj-ect owner’s influence (by framing and lobbying of decision alternatives). The project owner himself was still quite skeptical toward the project, yet he mainly expressed quite a positive atti-tude about the project. Therefore, the project owner’s potential for harming the project was decreasing compared with time T1. This development was enhanced by the political dedication to the project, but also due to the fact that the project management team believed to have developed a strategy that it found effective for the situation.

Applying the framework by Koski-nen and Pihlanto (2007), the domi-nating trust type characterizing the relationship between the project man-agement team and the project owner at T2 seemed to remain role based trust as in T1, but the descriptions above show how the project management team, in this critical phase, tried to enable the project owner in performing his role competently. The project manage-ment team enforced control by framed information in certain ways to have an impact on decisions and actions, as well as trying to actively intervene in the decision-making processes.

Time T3

One year later, the relationship between the project management team and its project owner had changed. The project owner appeared quite positive regarding the project. At this point, the project management team had brought about major parts of its deliveries and, most importantly, the milestones, which were critical to safety issues and

were afraid that he, because of the rel-evant lack of competence with regard to this project, would commit to decisions that would make it hard for the project organization to operate successfully. The project owner was not really a discussion partner, but had more of a distant report-ing function. For example, the project manager expressed in an interview that he and other team members on the proj-ect management team had ‘worked to keep the project owner and others [in the base organization] at an arm’s length.’ He explained that they often offered to do the deliberation work, ahead of the decisions important to them; as he saw it, this provided them with more control over the relevant decisions to be made by the project owner and top management.

‘We do the mapping of the case for them and suggest the solutions. Then we have to invest the resources required to make them accept the suggestion.” (The project manager)

The project manager further talked about the proactive decision making:

“(. . .) Often, the case may be that we need a clarification or a decision, but that we cannot make the decision ourselves. Then the staff holding this mandate neither has the competence nor the resources to do so. But as we can’t make the decision ourselves, we have to make sure that we have the right persons involved in order to have them make this decision and that the decision they make is [one] that we can live with. That’s what often happens; we have to make sure that those providing the premises make decisions at the right time and that they make the right decisions.” (The project manager)

During this period, the communi-cation was mainly directed to inter-nal cross-functional relationships in the base organization for technicians, future users, and middle management. The project management team used means such as formal and informal meetings, presentations, workshops, and user groups.

It was combined by deterrence based trust, because the project man-agement team believed that the project owner would involve himself enough to help the project by, for example, enforc-ing decisions when needed; in addition, he would not involve himself in the outcomes of the decision processes and not care whether the decisions would inhibit the probable project success (e.g., by imposing a lot of extra work).

Time T2

One year later, the project management team had developed quite an extensive set of relationships with several actors and departments within the base orga-nization. The project deliverance had an impact on many of the operating units, and after the project was decided on and beyond the point-of-no-return, the base organization’s dependence on and interrelation to the project grew rap-idly. Politicians gave high attention to the project, which seemed to affect the project’s anchoring in the base orga-nization as well. Gradually, the project received increasing attention; still, the project owner held quite a low profile and appeared vague. Due to the relative novelty of the project, the project owner displayed limited technical competence.

In this situation, the project man-agement team actively maneuvered to increase the competence and commit-ment to the project. Some of the activities it undertook were related to presenta-tions and informational meetings with management at several levels in the other units of the organization. Interactions and workshops on professional matters throughout the organization were used to a large extent. Several user groups were established to involve future users of the base organization; however, the project management team also worked to keep the project owner at a distance. The project manager explained that the person holding the project owner role initially had been quite negative toward the project. To some extent, this made the project management team fear his action and talk. More importantly, they



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DiscussionsIn this section, we discuss the find-ings from the analyses of the interac-tions between the project management team and the main supplier and project owner. A summary of the categorization of the stakeholder types and the trust types is presented in Table 1.

The Dynamics of Harm and Help Potentials

We have described how two salient stakeholder relationships, in the con-text of a complex development project, changed over time. By interpreting the actions and expressions of the proj-ect management team, we categorized these two stakeholders with regard to potential for threat (harm potential) and potential for cooperation (help potential) (Savage et al., 1991).

The main supplier moved from being a Supportive stakeholder in the early days to being a Mixed Blessing later on. The supplier appeared to be a partner in the creation of common suc-cess, although its technical competence remained insufficient throughout the entire course of the project. Despite this positive attitude, and general success of the project, the late phases of the proj-ect were characterized by heavy con-tractual discussions between the two parties (these mostly took place at the top management level).

The project owner represented a Mixed Blessing in the first two analyzed

more generally in public, the project management team consciously seemed to compare itself with other resembling projects and labeled their achievement as “world record.”

Applying the framework by Sav-age et al. (1991), the project owner at T3 could be categorized as a Support-ive stakeholder. He had the power and will to contribute to the project success (i.e., a high help potential); however, his potential for harming the project had decreased due to the fact that (1) other powerful stakeholders (e.g., the politicians) had expressed a very positive attitude toward the project and, hence, exerted extra pressure on the project owner to support the project; and (2) the project management team had learned to maneuver in a way that made the proj-ect owner less influential. This can be interpreted as an involvement strategy in the framework of Savage et al. (1991).

Applying the framework by Koski-nen and Pihlanto (2007), the domi-nating trust type characterizing the relationship between the project man-agement team and the project owner at T3 seemed to be knowledge based trust. As the project owner became more positive toward the project, the project management team experienced over time that the project owner tried (although not always succeeding) to act to facilitate project success. Also, the relationship with the project owner became less important as more power-ful stakeholders embraced the project.

politically sensitive, had been met. The uncertainties decreased. The attention from the politicians remained high. Also, the project owner (as well as the rest of top management in the base organization) spoke more about the project publicly and talked very favorably about the project. Numer-ous times, the project was framed as a ‘great adventure,’ ‘very successful proj-ect despite its high complexity,’ and to ‘represent the base organization of tomorrow.’ In the summary, in a chap-ter of the base organization’s annual report, the project was highlighted as a major success story.

This high level of support also mani-fested itself internally in the project’s base organization in the manner that the project management team expe-rienced a high level of trust in deci-sion-making processes, which made the project management team’s position easier. There were challenges in relation to the quality of the training of end users as well as failures on some equipment, but the standing of the project in the organization and the previous efforts made in user communications, work-shops, and network meetings made the project management team capable of handling these issues without much fuss. At this point in time the proj-ect management team mainly applied the means of user workshops, training camps, and formal report meetings. The interaction was characterized by formal reporting meetings in line with proce-dures for all the other projects of the department. The project management team at this point in time relied on open formal communication and focused on proving a perception of financial and contractual control. In communicat-ing with the project owner, the proj-ect management team narrated stories around how the milestones were met and placed emphasis on strong finan-cial control. Moreover, they publically celebrated milestones to be sure that the press, politicians, and management knew about their success. In its com-munication with the project owner, and

StakeholderAssessment

ItemTime T1

(after ½ year)Time T2

(after 1½ years)Time T3

(after 2½ years)

Main supplier Stakeholder

type

Supportive Mixed Blessing Mixed Blessing

Trust type Role based Deterrence based Knowledge based

+ Identification

based

Project owner Stakeholder

type

Mixed Blessing Mixed Blessing Supportive

Trust type Role based +

Deterrence based

Role based Knowledge based

Table 1: Development of stakeholder types (Savage et al., 1991) and trust types (Koskinen & Pihlanto, 2007).


relationship” (Smyth et al., 2010, p. 121, referring to Baier, 1994, and Smyth, 2008). In this case, enacting the vulner-ability paid off because they managed to successfully deliver the project and receive positive attention.

The analyses show how the proj-ect management team also engaged in knowledge work (integrating and devel-oping knowledge) with both the sup-plier and the project owner in order to reduce their harm potential. This joint knowledge work seemed to strengthen the role based trust in both stakeholder relationships.

Looking at the project management team–supplier relationship, at T1 there was role based trust. As the supplier dis-played less technical competence than the project management team expected, the trust eroded. Doubts became domi-nant; yet, this did not have severe conse-quences because the supplier managed to show social competence. It handled the situation well and gradually faith was installed. It has been argued (by Smyth et al., 2010) that social competence appears to be stronger than technical competence in enabling trust to mature. Socially oriented behavior that focuses on the needs of the project signals a strong commitment. This emerging commitment was seen in our analyses. It has also been indicated (by Smyth et al., 2010) that the lack of technical compe-tence over time destroys collaborative relationships, and that long-term rela-tionships depend on both technical and social competence. The project man-agement team actively seemed to work to increase the trustworthiness of both the supplier and the project owner by increasing their knowledge. The project management team seemed to assume that if it could contribute to increas-ing the knowledge level of the others, it could greatly rely on these in the future. In both relationships, the trust became thicker from T1 to T3. Quite thick trust developed in the relationship with the supplier; still, the project man-agement team seemed to keep an eye on both the supplier and the project owner

strategy—as proposed by Savage et al. (1991)—and more frequent communica-tion (including aspects of storytelling). In both cases, the project management team worked to increase the compe-tence of the stakeholders, enabling them to perform more competently (technical control for the supplier and decision making for the project owner). However, in both cases, efforts were also made to hold the other on a distance through troublesome times. In the supplier rela-tionship this was done with reference to the contracts; in the project owner relationship it was done by taking on the deliberation work and suggesting what would be the better decision alternative. Applying the framework of Savage et al. (2010), these practices represent both integrative strategies and distributive strategies simultaneously.

Stakeholder Relationships and Trust

In an earlier section, we indicated that trust is about the willingness to be vul-nerable. Starting out, the project owner did not seem to be very willing to expose himself to this vulnerability. According to the project manager, he had limited interest and belief in the project; as the project progressed well, the risk of fail-ure decreased.

The supplier was, from day one, willing to be vulnerable. It was a large contract and an interesting project with a high public profile. The willingness to be vulnerable can be seen as a social investment for both parties. Both the supplier and the project management team were willing to be vulnerable in our case; still, they also worked to secure their own interests (through the front-end contractual work as well as con-tract-related actions during the project course). The empirical material shows, however, that a strong interest in joint success developed over time. “Even if trust started as a mutual self-interest (. . .), as trust develops and confidence builds a switch occurs from primarily self-interest to having a greater social orientation (Lyons & Mehta, 1997)—looking to the other party in the future

periods of time; as the project went well and the relationship matured, he grew to be a Supportive stakeholder.

The description shows that the dimensions, potential for threat (i.e., harm potential), and potential for coop-eration (i.e., help potential) are use-ful to facilitate communication about stakeholder interactions. As we see it, however, it is very important to apply a dynamic perspective (especially in long-term projects) when these dimen-sions are used. The project manage-ment team’s perception of the changing actions and expressions indicate that both stakeholders changed their posi-tion over time. It was partly due to actions (planned and emergent) undertaken by the project management team. It was also partly due to difficulties in deliver-ing their contributions (as it became easier, both stakeholders increased their help potential) and partly due to other stakeholders’ changed positions (which could especially be seen in the case of the project owner because this stakeholder was clearly influenced by other powerful stakeholders being posi-tive toward the project).

Further, we suggest a more fine-grained analysis because we saw big dif-ferences in the attitudes within the same type of stakeholder position (e.g., the project owner was classified as a Mixed Blessing stakeholder in both T1 and T2). But the attitude toward the project and the project management team was much more positive in T2 than in T1, which had implications for the stakeholder management strategy applied by the project management team.

Also interesting to note is Savage et al. (1991) indicate that, in most cases, typically, Supportive stakeholders are the board of trustees, managers, staff employees, the parent company, and suppliers. For the project analyzed here, both the project owner and the main supplier were Mixed Blessing stake-holders over an extensive period of time. In both relationships, the project management team seemed to handle this situation through an involvement



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could be: How are stakeholder manage-ment strategies and practices enabling the development of an adequate type of trust and sufficient level of trust under various conditions? Further, it would be interesting not only to differenti-ate between the project management team and its base organization, as we have done in this article, but also more clearly between the project manage-ment team at the supplier’s organiza-tion and their base organization.

A limitation in this research is that the interactions were only seen and interpreted from the perspective of the project management team, as there was very limited data material collected directly on the stakeholders and tak-ing their perspectives. Still, our analy-ses show how stakeholder management is an emergent practice, which draws partly on more general strategies for stakeholder management.

Acknowledging that stakeholder management is an entangled process, we propose that the understanding of stakeholder management practices could be advanced by applying a process theoretical lens (for example, as pro-vided by Weick, 1979, 1995; Tsoukas & Chia, 2002; Czarniawska, 2004; Hernes, 2008). The main contribution would be shifting the lens from stability to fluidity in the investigation of stakeholder man-agement, looking for nested processes consisting of a multitude of entities that co-evolve. If the collisions of stakehold-ers are seen as fluid, it becomes obvious that actions need to be taken to stabilize these coalitions. The relevance of the actions undertaken becomes obvious in light of the responses they create by the other parties taking part in the pro-cess. The strategy emerges as the proj-ect management team acts to stabilize coalitions and the stakeholders respond to these actions—over and over again throughout the project processes. In other words, it means a clearer emphasis on how actions, and the interpretations of actions, become the basis for further actions and interpretations as well as the potential project outcome.

analyses indicate that these dimensions are useful for understanding how proj-ect management teams do stakeholder management and how practices emerge as stakeholders respond to the actions undertaken by the project manage-ment team. As the analyses show, these dimensions need to be applied in a flex-ible manner, because the positioning of the stakeholder changes over time; this changes the actions undertaken by the project management team, which, again, influences stakeholder responses and so on and so forth.

The analyses also show how dif-ferent forms of trust evolved in the relationships, also demonstrating the importance of relating trust to stake-holder management. Complex task solving is increasingly conducted in multi-actor projects. Due to the uncer-tainty and complexity of the task, the multitude of entwined organizational structures and interpretive repertoires being present in multi-actor projects, it is impossible to gain all the knowledge required and interpret it adequately. Lack of certain knowledge accentuates the need for building trust. Project pro-cesses are unclear due to several factors. Some knowledge is tacit (Polanyi, 1966), in the sense that some aspects and features that matter a great deal to both the project and the stakeholders cannot (easily) be expressed. There is experimental equivocality, where dual realities exist side by side. Each actor (stakeholders and project management teams) will interpret information due to their own construction of the real-ity. There is also a general systemic complexity we have difficulties seeing, because we tend to narrow down our approaches to the interested parties, to the exclusion of the wider context (Kreiner, 1995); therefore, processes are always blurred and we always lack the knowledge we need in practicing stakeholder management. Incorporat-ing more considerations related to the development of trust may make stake-holder management practicing more relevant. A question for future research

throughout the project. What was also clear was that the change of contextual conditions was important, particularly the progress of project performance and expected failure, and the expected suc-cess influenced stakeholder relation-ships and behaviors.

In the analysis, we have analyzed dyadic relationships of the project man-agement team with the two stakehold-ers; however, more analyses would have been relevant as well. It appears very clearly that the senior management of the focal organization puts pressure on the supplier because of the high attention of politicians and the media to the project. The supplier was most likely also affected by the indirect pres-sure from politicians and the media. An interesting analysis would be to consider how other stakeholders (poli-ticians, media, and citizens, such as the railway users) put pressure on both organizations; however, this is out of the scope for this article.

Conclusions, Reflections, and Future ResearchThis article contributes by offering exam-ples on how stakeholder management is practiced. The practices are interpreted by mainly using the frameworks of Savage et al. (1991) and Savage et al. (2010) on stakeholder management strategies and the framework of Koskinen and Pihlanto (2007) on trust types.

By analyzing interactions between the project management team and two key stakeholders, the main supplier and the project owner, we provided thick descriptions of how a project manage-ment team of a complex development project directed its activities toward the two stakeholders in order to make them contribute sufficiently to the proj-ect and not undertake adverse actions. The analysis revealed how each stake-holder’s ability to harm and help the project changed over time and that the project management team had to balance between planned interaction activities and emergent action patterns in order to cope with these changes. The


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We claim that taking the fluidity stance helps us remember the true meaning of the word potential (poten-tial of harm and help, as well as the potential project outcome). To have a potential is being capable of becoming something that is not yet in existence. This potential is negotiated in the inter-actions of stakeholders and projects, technologies, and competences.

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management of stakeholders. Professor Vaagaasar has published a number of articles and has contributed to more books on these issues. She has received several awards for her publications, among others, the award for best paper (innova-tion stream) at the International Research Network on Organizing by Projects (IRNOP) 2007 conference. She can be contacted at [email protected]

Anne Live Vaagaasar is associate professor and senior lecturer at the BI Norwegian Business School, where she is also academic director of a professional master’s program in project management. Her main research interests relate to three main topics within the field of project manage-ment: organizing of large, complex projects; learning; and competence development and

Martina Huemann and Claudia Weninger, WU-Vienna University of Economics and Business. The project is partly financed by Project Management Institute. In 2013, she co-authored Project Stakeholder Management (Gower) with Anna Lund Jepsen, University of Southern Denmark. The book was on Gower’s Top 20 bestseller list the first half of 2013. She can be contacted at [email protected]


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Volume 45

Number 5

October/November 2014

5 Influence of Trade-Level Coordination Problems on Project ProductivityBon-Gang Hwang, Xianbo Zhao, and Thi Hong Van Do

15 Strategies for Improving Codes of Ethics Implementation in Construction OrganizationsT. Olugbenga Oladinrin and Christabel Man-Fong Ho

27 Perspectives on the Formal Authority Between Project Managers and Change ManagersJulien Pollack and Chivonne Algeo

44 Ambidexterity and Knowledge Strategy in Major Projects: A Framework and Illustrative Case StudyNeil Turner, Harvey Maylor, Liz Lee-Kelley,Tim Brady, Elmar Kutsch, and Stephen Carver

56 Value Management in Project Portfolios: Identifying and Assessing Strategic ValueMiia Martinsuo and Catherine P. Killen

71 Stakeholder Management Strategies and Practices During a Project CoursePernille Eskerod and Anne Live Vaagaasar

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MISSION

The mission of the Journal is to provide infor-mation advancing the state of the art of the knowledge of project management. The Journal is devoted to both theory and practice in the field of project management. Authors are encouraged to submit original manuscripts that are derived from research-oriented studies as well as practitioner case studies. All articles in the Journal are the views of the authors and are not necessarily those of PMI. Subscription rate for members is $14 U.S. per year and is included in the annual dues.

PMI is a nonprofit professional organization whose mission is to serve the professional inter-ests of its collective membership by: advancing the state of the art in the leadership and practice of managing projects and programs; fostering pro-fessionalism in the management of projects; and advocating acceptance of project management as a profession and discipline. Membership in PMI is open to all at an annual dues of $129 U.S. For infor-mation on PMI programs and membership:

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The Project Management Journal (Print ISSN 8756-9728); Online ISSN 1938-9507 at Wiley Online Library (wileyonlinelibrary.com) is pub-lished six times a year by Wiley Subscription Services, Inc., a Wiley Company, 111 River Street, Hoboken, NJ 07030-5774.

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NONMEMBER SUBSCRIPTION INFORMATION

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MANUSCRIPTS

All manuscripts must be submitted electronically via the journal’s Manuscript Central site (http://mc.manuscriptcentral.com/pmj). Questions regarding submission guidelines and manuscript status should be sent to Barbara Walsh (barbara. walsh@ pmi.org).

All manuscripts submitted to the journal via Man uscript Central are assumed for publica-tion and become the copyright property of PMI if published.

© 2014 Project Management Institute, Inc. All rights reserved.

“PMI” the PMI logo, “Making project management indispensable for business results,” “PMI Today,” “PM Network,” “Project Management Journal,” “PMBOK,” “CAPM,” “Certified

Associate in Project Management (CAPM),” “PMP,” the PMP logo, “PgMP,” “Program Management Professional (PgMP),” “PMI-RMP,” “PMI Risk Management Professional (PMI-RMP),”

“PMISP,” “PMI Scheduling Professional (PMI-SP),” and “OPM3” are registered marks of Project Management Institute, Inc.

The PMI Educational Foundation logo and “Empowering the future of project management” are registered marks of The PMI Educational Foundation. For a comprehensive list of PMI

marks, contact the PMI Legal Department.

EditorHans Georg Gemünden, Dr. rer. oec. habil.,

Chair for Technology and Innovation Management, Technische Universität Berlin,

Berlin, Germany

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PublisherDonn Greenberg; [email protected]

Wiley Executive EditorMargaret Cummins;

[email protected] Editor

Roberta Storer; [email protected] Editor

Linda R. Garber; [email protected] Production Supervisor

Barbara Walsh; [email protected] Review Editor

Kenneth H. Rose, PMP

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Documents

PMJ Oct Nov 2014.Ashx